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Exhibit 10.11
EQUITY RESIDENTIAL PROPERTIES TRUST
AMENDED AND RESTATED
1993 SHARE OPTION AND SHARE AWARD PLAN
(AS LAST AMENDED JANUARY 1, 2000)
1. PURPOSES. The Equity Residential Properties Trust 1993 Share
Option and Share Award Plan (the "Plan") was established by Equity Residential
Properties Trust, a Maryland real estate investment trust (the "Company"), to
secure for the Company and its shareholders the benefits arising from capital
ownership by those key employees, officers, trustees and consultants of the
Company and its Subsidiaries (as defined below) who are and will be responsible
for its future growth and continued success. The Plan is hereby amended and
restated to further accomplish those objectives.
The Plan will provide a means whereby such individuals may: (i) receive
authorized common shares of beneficial interest of the Company ("Shares"),
subject to conditions and restrictions described herein and otherwise determined
by the Committee (defined below) ("Share Awards"); (ii) acquire Shares pursuant
to grants of options to purchase such Shares ("Options"); (iii) acquire Share
Appreciation Rights ("SARs") in tandem with or independent of Options referred
to in item (ii) above; or (iv) receive dividend equivalent rights with respect
to Shares ("Dividend Equivalents"). The term "Subsidiary" means each entity the
Company owns or controls directly or indirectly either through voting control or
as a general partner, provided that, for purposes of Incentive Stock Options (as
defined below) such term shall have the meaning given in Section 424 of the
Internal Revenue Code of 1986, amended (the "Code").
2. ADMINISTRATION. The authority to manage and control the
operation and administration of the Plan shall be vested in a Committee (the
"Committee") consisting of two or more members of the Board of Trustees of the
Company, each of whom is a "disinterested person" as such term is defined in
Section 16b-3(c)(2)(i) of the General Rules and Regulations promulgated under
the Securities Exchange Act of 1934 (the "Act") (except that, with respect to
grants of Options and SARs, such grant or award is made by a Committee
consisting of two or more "outside directors" as such term is defined in
Treasury Regulation Section 1.162-27(e)(3)), who shall be appointed by, and may
be removed by, such Board, provided that the Committee shall have no authority,
power or discretion to determine the number or timing of Options granted
pursuant to paragraph 3(b) below, or to alter the terms and conditions of
Options or Share Awards as set forth therein. Any interpretation of the Plan by
the Committee and any decision made by the Committee on any other matter within
its discretion is final and binding on all persons. No member of the Committee
shall be liable for any action or determination made with respect to the Plan.
The day-to-day administration of the Plan may be carried out by an Option
Coordinator designated by the General Counsel of the Company.
3. PARTICIPATION.
(a) Generally. Subject to the terms and conditions of the
Plan, the Committee shall determine and designate from time to time the key
employees, officers, trustees and consultants of the Company and its
Subsidiaries to whom Share Awards, Options, SARs or Dividend Equivalents are to
be granted ("Grantees" and individually, a "Grantee") and the number of Shares
subject to such Share Awards, Options, SARs or Dividend Equivalents to be
granted to the Grantees. Notwithstanding the foregoing, the maximum number of
Shares
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with respect to which Options and SARs may be granted during any calendar year
to any Grantee is 500,000 Shares.
(b) BOARD OF TRUSTEES. An Option to purchase 5,000 Shares
shall be awarded to each member of the Board of Trustees of the Company on the
date of each annual meeting of the Company's shareholders. A Trustee shall
become a Grantee in the Plan on the first date on which the Trustee is awarded
an Option under the Plan. Trustees who are not members of the Committee may, in
addition to Options awarded under this paragraph, also be entitled to Options
under paragraph 3(a).
(c) ANNUAL INCENTIVE BONUS PLAN. As of a date (the "Bonus
Date") selected by the Committee that is not less than 30 days before or after
the date on which a bonus (a "Bonus") is earned by an individual under the
Company's Annual Incentive Bonus Plan (the "Bonus Plan"), the Committee may, in
its discretion, elect to pay all or a portion of such Bonus in the form of a
Share Award, Option, SAR or Dividend Equivalent, or some combination thereof,
having an aggregate Grant Value (defined below), determined as of the Bonus
Date, equal to the cash amount of the Grantee's bonus being so replaced (the
"Award Portion"). All grants made pursuant to the foregoing shall be in full
satisfaction of the applicable portion of the Award Portion, shall be made
without other payment therefor, and shall be governed by paragraphs 5, 6, 7 or 8
hereof, as applicable. Such opportunity provided under this subparagraph (c) is
subject to compliance with all applicable federal and state securities laws.
(b) VALUE. For all purposes of the Plan:
(i) the "Grant Value" of grants made pursuant to
paragraph 3(c) shall equal (a) for a Share
Award, the Fair Market Value of a Share (as
defined below), as of the date of grant, (b)
for an Option or SAR, the difference between
the Fair Market Value of a Share and the
exercise or base price of the Option or SAR,
times the number of Shares subject to the
Option or SAR; and (c) for a Dividend
Equivalent, the Fair Market Value of a Share
times the number of Shares subject to the
Dividend Equivalent; and
(ii) the "Fair Market Value" of a Share as of any
date means the closing price of the Shares
on the New York Stock Exchange on such date.
4. SHARES SUBJECT TO THE PLAN. Subject to the provisions of
paragraph 13, (i) the aggregate number of Shares for which Share Awards, Options
and Dividend Equivalents may be granted under the Plan shall not exceed
12,500,000 Shares and (ii) no more than half of the number of Shares described
in clause (i) may be subject to Share Awards granted under the Plan. Shares
subject to the Plan may be authorized but unissued Shares, Shares now held in
the treasury of the Company or Shares hereafter acquired by the Company. In the
event that (i) any Option granted under the Plan expires unexercised or is
terminated, surrendered or canceled (other than in connection with the exercise
of a "Tandem SAR" (defined below)) without being exercised, in whole or in part,
for any reason, or (ii) any Tandem SAR grant under the Plan expires unexercised
or is terminated, surrendered or canceled (other than in connection with the
exercise of its related Option), or (iii) any "Non-Tandem SAR" (defined below)
granted under the Plan expires unexercised or is terminated, surrendered or
canceled without being exercised, in whole or in part, for any reason, then the
number of Shares then subject to the Option or SAR, or the unexercised,
terminated, surrendered, forfeited, canceled or reacquired portion thereof,
shall be
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added to the remaining number of Shares available for grant under the Plan
unless the Plan shall have terminated.
5. SHARE AWARDS. This paragraph 5 sets forth specific terms and
conditions applicable to Share Awards under the Plan.
(a) CONDITIONS AND RESTRICTIONS. Share Awards shall be
subject to the following conditions and/or restrictions:
(i) A Share Award granted under paragraph 3(a)
shall be subject to the conditions that it is subject to a minimum vesting
period of one year from the date of grant and it will be forfeited to the
Company upon the Grantee's termination of employment with the Company within one
year from the date of grant of the Share Award ("Date of Grant'), and may be
subject to such further conditions and restrictions established by the Committee
at the Date of Grant (including conditions requiring employment by the Grantee
for a period in excess of one year).
(ii) A Share Award granted under paragraph 3(c)
shall be forfeited to the Company upon the Grantee's termination of employment
with the Company within two years from the Date of Grant, unless (A) such
Grantee has five years of service for vesting purposes under the Equity
Residential Properties Trust Advantage Retirement Plan at the time of such
termination of employment, (B) such termination of employment occurs other than
involuntarily and for "cause" (as determined by the Committee in its
discretion), and (C) within one year following such termination of employment,
the Grantee does not become employed by a competitor of the Company.
(iii) The Committee may, but need not, establish
performance goals to be achieved within such performance periods as may be
selected by it in its sole discretion, using such measures of the performance of
the Company and/or its Subsidiaries as it may select. Performance-based Share
Awards will be fully vested in the Grantee at the discretion of the Committee,
but in no event earlier than upon the one-year anniversary of the date of the
grant, provided that the Grantee's employment with the Company has not been
terminated.
(iv) Notwithstanding the foregoing, the
restrictions set forth in the preceding paragraphs (i), (ii) and (iii) shall
immediately lapse such that they are of no effect: (A) in the event of the
termination of a Grantee's employment because of the Grantee's "Disability" (as
defined below) or death, (B) in connection with the Grantee's retirement at or
after age 62, (C) upon a "Change in Control" of the Company or (D) under
circumstances deemed to warrant such treatment by the Committee. For purposes of
the Plan, "Plan Administrator" shall mean the President and Chief Executive
Officer of the Company and any one member of the Committee, or the full
Committee. Notwithstanding the foregoing, where the affected Grantee is a
"covered employee" for purposes of Section 162(m) of the Code, (i) any authority
of the Plan Administrator under the Plan may only be exercised if the existence
of such authority would not cause the related Share Award, Option or SAR to fail
to constitute performance based compensation on its Date of Grant under Treasury
Regulation Section 1.162-27; and (ii) "Plan Administrator" shall mean only the
full Committee if the exercise of such authority by the President and Chief
Executive Officer and any one member of the Committee would adversely affect the
grant's status as performance based compensation and its exercise by the full
Committee would not so affect such status. For purposes of this Plan,
"Disability" shall mean a physical or mental condition that entitles a
Participant to benefits under the Employer-sponsored long-term disability plan
in which
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he or she participates, as determined by the Plan Administrator in its sole and
absolute discretion. For purposes of the Plan, a "Change in Control" shall mean
any of the following events:
(A) An acquisition (other than directly from the
Company) of any voting securities of the Company (the "Voting
Securities") by any "Person" (as the term person is used for
purposes of Section 13(d) or 14(d) of the Securities Exchange
Act of 1934, as amended (the "1934 Act")), immediately after
which such Person has "Beneficial Ownership" (within the
meaning of Rule 13d-3 promulgated under the 1934 Act) of 30%
or more of the combined voting power of the Company's then
outstanding Voting Securities; PROVIDED, HOWEVER, that in
determining whether a Change in Control has occurred, Voting
Securities which are acquired in a "Non-Control Acquisition"
(as hereinafter defined) shall not constitute an acquisition
which would cause a Change in Control. A "Non-Control
Acquisition" shall mean an acquisition by (i) an employee
benefit plan (or a trust forming a part thereof) maintained by
(x) the Company or (y) any corporation or other Person of
which a majority of its voting power or its equity securities
or equity interest is owned directly or indirectly by the
Company (a "Subsidiary"), (ii) the Company or any Subsidiary
or (iii) any Person in connection with a "Non-Control
Transaction" (as hereinafter defined);
(B) Approval by stockholders of the Company of:
(I) A merger, consolidation or
reorganization involving the Company, unless:
(a) the stockholders of the Company,
immediately before such merger,
consolidation or reorganization,
own, directly or indirectly,
immediately following such merger,
consolidation or reorganization, at
least seventy percent (70%) of the
combined voting power of the
outstanding Voting Securities of
the corporation resulting from such
merger or consolidation or
reorganization (the "Surviving
Corporation") in substantially the
same proportion as their ownership
of the Voting Securities
immediately before such merger,
consolidation or reorganization;
and
(b) the individuals who were members of
the Incumbent Board immediately
prior to the execution of the
agreement providing for such
merger, consolidation or
reorganization constitute at least
a majority of the members of the
board of directors of the Surviving
Corporation or a corporation
beneficially owning, directly or
indirectly, a majority of the
Voting Securities of the Surviving
Corporation;
(A transaction described in clauses
(a) and (b) shall herein be
referred to as a "Non-Control
Transaction);
(II) A complete liquidation or
dissolution of the Company; or
(III) An agreement for the sale or other
disposition of all or substantially all of the assets
of the Company to any Person (other than to
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an entity of which the Company directly or indirectly
owns at least 70% of the Voting Securities).
Notwithstanding the foregoing, a Change in Control shall not be deemed
to occur solely because any Person (the "Subject Person") acquired
Beneficial Ownership of more than the permitted amount of the
outstanding Voting Securities as a result of the acquisition of Voting
Securities by the Company which, by reducing the number of Voting
Securities outstanding, increases the proportional number of shares
Beneficially Owned by the Subject Person, provided that if a Change in
Control would occur (but for the operation of this sentence) as a
result of the acquisition of Voting Securities by the Company, and
after such share acquisition by the Company, the Subject Person becomes
the Beneficial Owner of any additional Voting Securities which
increases the percentage of the then outstanding Voting Securities
Beneficially Owned by the Subject Person, then a Change in Control
shall occur.
(C) The rejection by the voting Beneficial Owners of the
outstanding Shares of the entire slate of trustees that the Board
proposes at a single election of trustees; or
(D) The rejection by the voting Beneficial Owners of the
outstanding Shares of one-half or more of the trustees that the Board
proposes over any two or more consecutive elections of trustees.
(b) RIGHTS OF GRANTEE. The Grantee shall be entitled to
all of the rights of a shareholder with respect to the Share Awards including
the right to vote such Shares and to receive dividends and other distributions
payable with respect to such Shares from and after the Date of Grant; provided
that any securities or other property (but not cash) received in any such
distribution with respect to a Share Award that is still subject to the
restrictions in paragraphs (a)(i), (ii), (iii) or (iv) above, shall be subject
to all of the restrictions set forth herein with respect to such Share Award.
(c) ISSUANCE. Certificates for the Share Award shall be
issued in the Grantee's name and shall be held in escrow by the Company, with
stock powers for such Shares executed in blank by the Grantee, until all
restrictions lapse or such Shares are forfeited as provided herein. A
certificate or certificates representing a Share Award as to which restrictions
have lapsed shall be delivered to the Grantee upon such lapse.
6. SHARE OPTIONS. This paragraph 6 addresses specific terms and
conditions for Share Options.
(a) ISO/NQSO. Any Option to purchase Shares granted under
paragraph 3(a) that satisfies all of the requirements of Section 422 of the
Code, may be designated by the Committee as an "Incentive Stock Option." Options
that are not so designated, or that do not satisfy the requirements of Section
422 of the Code or that are granted under paragraph 3(b) shall not constitute
Incentive Stock Options and shall be Non-Qualified Share Options.
(b) EXERCISE PRICE. The Option price of an Incentive
Stock Option shall not be less than the Fair Market Value of a Share on the date
the Option is awarded under the Plan and, with respect to a Grantee who owns on
the Date of Grant more than 10% of the Company's Shares, shall not be less than
110% of its Fair Market Value on such date. The price at which a Share may be
purchased pursuant to the exercise of any Non-Qualified Share Option shall not
be less than 100% of its Fair Market Value on the date the Option is awarded
under the Plan.
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(c) GENERAL EXERCISABILITY. Each Option granted under
paragraph 3(a) shall be exercisable, either in whole or in part, at such time or
times as shall be determined by the Committee at the time the Option is granted
or at such earlier times as the Committee shall subsequently determine, but in
no event later than the Option's "Expiration Date" (defined below). The
Committee may establish performance goals to be achieved within such periods as
may be selected by it in its discretion using such measures of performance of
the Company and/or its subsidiaries as it may select. Unless the Committee
provides for earlier exercisability at the time of grant or subsequently, each
Option granted under paragraph 3(b) shall be exercisable, either in whole or in
part, (i) with respect to 1,667 of the Shares at any time on or after six (6)
months from the Date of Grant, (ii) with respect to an additional 1,667 of the
Shares at any time on or after the first anniversary of the Date of Grant and
(iii) with respect to the remaining Shares at any time on or after the second
anniversary of the Date of Grant, but, in each case, not after the Option's
Expiration Date. The "Expiration Date" with respect to an Option or any portion
thereof granted under paragraph 3(a) means the date established by the Committee
at the Date of Grant (subject to any earlier termination by the Committee), but
in no event later than the date which is ten (10) years after the date on which
the Option is granted. The Expiration Date with respect to an Option or any
portion thereof granted under paragraph 3(b) means the date which is ten (10)
years after the date on which the Option is granted. All rights to purchase
Shares pursuant to an Option shall cease as of the Option's Expiration Date.
(d) ISO EXERCISABILITY. Shares with respect to which
Incentive Stock Options are exercisable for the first time by a Grantee during
any calendar year may not exceed one hundred thousand dollars ($100,000). Any
Options that are intended to be Incentive Stock Options but that become
exercisable in excess of such amount shall be deemed to be a Non-Qualified Stock
Option to the extent of such excess.
(e) ACCELERATION. Notwithstanding the provisions of
paragraph (c), each Option granted under the Plan to an individual and as to
which the Expiration Date has not occurred shall be immediately and fully
exercisable, for the period indicated, in the event of (I) a Change in Control
of the Company (in which case, subject to clause (i) of paragraph 13, it shall
be exercisable until its Expiration Date), or (II) the termination of a
Grantee's "Service" (defined below):
(i) with respect to a Grantee who is an employee, because
of the Grantee's death (in which case it shall be
exercisable until the earlier of (A) the first
anniversary of such termination or (B) its Expiration
Date, and shall be exercisable by the person or
persons to whom the Grantee's right passes by will or
by the laws of descent and distribution), or
(ii) with respect to a Grantee who is an employee, because
of Disability, or in connection with his retirement
at or after age 62 (in which case it shall be
exercisable until its Expiration Date).
For purposes of the Plan, a Grantee's "Service" shall be terminated when the
Grantee is no longer an employee, consultant, trustee or director of the Company
or an entity designated as an "Extended Company" by the Committee.
(f) OTHER TERMINATION. If the Service of a Grantee who is
an employee terminates other than as described above and other than for "good
cause" (for purposes of the Plan, as determined by the Committee in its
reasonable discretion), or the Service of a Grantee who is a consultant or a
member of the Board of Trustees terminates for any reason other than for good
cause, his Option shall not become exercisable with respect to any additional
Shares
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unless the Committee accelerates the exercisability of the Option pursuant to
paragraph (c), and the Option shall be exercisable until the earlier of (i) 90
days after such termination unless extended by the Committee or (ii) its
Expiration Date.
(g) GOOD CAUSE. If the Service of a Grantee terminates
for good cause, his Option shall expire immediately. The Committee may establish
guidelines for determining whether a Grantee's Service has terminated for good
cause and communicate such guidelines in the Grantee's award agreement, or in
any other manner, including but not limited to such term sheets and supplements
hereto as are approved by the Committee from time to time.
(h) EXERCISE PROCEDURE. A Grantee may exercise an Option
by giving written notice thereof prior to the Option's expiration to the
Secretary of the Company at the principal executive offices of the Company.
Contemporaneously with the delivery of notice with respect to exercise of an
Option, the full purchase price of the Shares purchased pursuant to the exercise
of the Option, together with any required state or federal withholding taxes,
shall be paid in cash, by tender of share certificates in proper form for
transfer to the Company valued at the Fair Market Value of the Shares on the
preceding day, by any combination of the foregoing or with any other
consideration.
(i) SUSPENSION OF RIGHT. Notwithstanding any other
provision of this paragraph 6, the General Counsel of the Company, in his sole
and absolute discretion, may suspend the right of any person to exercise an
Option for up to 30 days if the Grantee's Service has been or, in the sole and
absolute judgment of the General Counsel of the Company, may be suspended or
terminated for any reason.
(j) PARTIES ENTITLED TO EXERCISE OPTIONS. An Option may
be exercised only by the Grantee (or by a legatee or legatees of such Option
under his last will), by his executors, personal representatives or
distributees, by an assignee or assignees, or by a transferee to the extent that
a transfer of the Option is permitted pursuant to paragraph 11(b).
7. SHARE APPRECIATION RIGHTS. The Committee may grant an SAR to a
Grantee who is awarded an Option under paragraph 3(a) or 3(b) or to any other
key employee, officer, trustee or consultant of the Company. Each SAR shall be
subject to such restrictions and conditions and other terms as the Committee may
specify when the SAR is granted.
(a) GRANT. An SAR granted at the time a related Option is
granted may be granted either in addition to the related Option ("Non-Tandem
SAR") or in tandem with the related Option ("Tandem SAR"). An SAR not related to
an Option will be subject to the provisions applicable to Non-Tandem SARs. At
the time a Non-Tandem SAR is granted, the Committee shall specify the base price
of the Shares to be used in connection with the calculation described in
subsection (b)(i) below. The base price of a Non-Tandem SAR shall be a
percentage (as low as zero) of the Fair Market Value of a Share on the date of
grant. The number of Shares subject to a Tandem SAR shall not exceed one for
each Share subject to the related Option. No Tandem SAR may be granted to a key
employee in connection with an Incentive Stock Option in a manner that will
disqualify the Incentive Stock Option under Section 422 of the Code unless the
key employee consents thereto.
(b) VALUE. Upon exercise, an SAR shall entitle the
Grantee to receive from the Company the number of Shares (or cash equivalent
thereof) having an aggregate Fair Market Value equal to the following:
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(i) in the case of a Non-Tandem SAR, the excess
of the Fair Market Value of one Share as of the date on which the SAR is
exercised over the base Share price specified in such SAR, multiplied by the
number of Shares then subject to the SAR, or the portion thereof being
exercised.
(ii) in the case of a Tandem SAR, the excess of
the Fair Market Value of one Share as of the date on which the SAR is exercised
over the exercise price per Share specified in such Option, multiplied by the
number of Shares then subject to the Option, or the portion thereof as to which
the SAR is being exercised.
Cash shall be delivered in lieu of any fractional shares. The Committee, in its
discretion, shall be entitled to cause the Company to elect to settle any part
or all of its obligation arising out of the exercise of an SAR by the payment of
cash in lieu of all or part of the Shares it would otherwise be obligated to
deliver in an amount equal to the Fair Market Value of such Shares on the date
of exercise. So long as the Grantee is subject to Section 16(b) of the
Securities Exchange Act of 1934 with respect to securities of the Company, the
Committee may not cause the Company to elect to settle any part or all of its
obligation arising out of the exercise of an SAR by the payment of cash pursuant
to this subparagraph, unless (A) such exercise occurs no earlier than six months
after the date of grant of the SAR, and (B) the Committee approves such form of
settlement.
(c) EXERCISE OF TANDEM SARS. A Tandem SAR shall be
exercisable during such time, and be subject to such restrictions and conditions
and other terms, as the Committee shall specify at the time such Tandem SAR is
granted which restrictions and conditions and other terms need not be the same
for all Grantees. Notwithstanding the preceding sentence, the Tandem SAR shall
be exercisable only at such time as the Option to which it relates is
exercisable and shall be subject to the restrictions and conditions and other
terms applicable to such Option. Upon the exercise of a Tandem SAR, the
unexercised Option, or the portion thereof to which the exercised portion of the
Tandem SAR is related, shall expire. The exercise of any Option shall cause the
expiration of the Tandem SAR related to such Option, or portion thereof, that is
exercised.
(d) NON-TANDEM SAR EXERCISABILTY. Each Non-Tandem SAR
granted under the Plan shall be exercisable, either in whole or in part, at such
time or times as shall be determined by the Committee at the time the Non-Tandem
SAR is granted or at such earlier times as the Committee shall subsequently
determine, but in no event later than the Non-Tandem SAR's "Expiration Date"
(defined below). The Committee may establish performance goals to be achieved
within such periods as may be selected by it in its discretion using such
measures of performance of the Company and/or its subsidiaries as it may
select." The "Expiration Date" with respect to a Non-Tandem SAR or any portion
thereof granted under the Plan means the date established by the Committee at
the Date of Grant (subject to any earlier termination by the Committee), but in
no event later than the date which is ten (10) years after the date on which the
Non-Tandem SAR is granted.
(e) ACCELERATION. Notwithstanding the above, each SAR
granted under the Plan to an individual and as to which the Expiration Date has
not occurred shall be immediately and fully exercisable, for the period
indicated, in the event of (I) a Change in Control of the Company (in which case
it shall be exercisable until its Expiration Date), or (II) the termination of a
Grantee's Service:
(i) with respect to a Grantee who is an
employee, because of the Grantee's death (in
which case it shall be exercisable until the
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earlier of (A) the first anniversary of such
termination or (B) its Expiration Date, and
shall be exercisable by the person or
persons to whom the Grantee's right passes
by will or by the laws of descent and
distribution), or
(ii) with respect to a Grantee who is an
employee, because of Disability, or in
connection with his retirement at or after
age 62 (in which case it shall be
exercisable until its Expiration Date).
(f) OTHER TERMINATION. If the Service of a Grantee who is
an employee terminates other than as described above and other than for good
cause, or the Service of a Grantee who is a consultant or a member of the Board
of Trustees terminates for any reason other than for good cause, his SAR shall
not become exercisable with respect to any additional Shares unless the
Committee accelerates the exercisability of the SAR pursuant to paragraph (d),
and the SAR shall be exercisable until the earlier of (i) 90 days after such
termination unless extended by the Committee or (ii) its Expiration Date.
(g) GOOD CAUSE. If the Service of a Grantee terminates
for good cause, his SAR shall expire immediately. The Committee may establish
guidelines for determining whether a Grantee's Service has terminated for good
cause and communicate such guidelines in the Grantee's award agreement, or in
any other manner, including but not limited to such term sheets and supplements
hereto as are approved by the Committee from time to time.
(h) EXERCISE PROCEDURE. A Grantee may exercise an SAR by
giving written notice thereof prior to the SAR expiration to the Secretary of
the Company at the principal executive offices of the Company. Contemporaneously
with the delivery of notice with respect to exercise of an SAR, any required
state or federal withholding taxes shall be paid in cash, by tender of share
certificates in proper form for transfer to the Company valued at the Fair
Market Value of the Shares on the preceding day, by any combination of the
foregoing or with any other consideration."
(i) PARTIES ENTITLED TO EXERCISE SARS. An SAR may be
exercised only by the Grantee (or by a legatee or legatees of such SAR under his
last will), by his executors, personal representatives or distributees, by an
assignee or assignees, or by a transferee to the extent that a transfer of the
SAR is permitted pursuant to paragraph 11(b).
(j) SETTLEMENT OF SARS. As soon as is reasonably
practicable after the exercise of an SAR, the Company shall (i) issue, in the
name of the Grantee, stock certificates representing the total number of full
Shares to which the Grantee is entitled pursuant to subparagraph 7(d) hereof and
cash in an amount equal to the Fair Market Value, as of the date of exercise, of
any resulting fractional Shares, and (ii) if the Committee causes the Company to
elect to settle all or part of its obligations arising out of the exercise of
the SAR in cash, deliver to the Grantee an amount in cash equal to the Fair
Market Value, as of the date of exercise, of the Shares it would otherwise be
obligated to deliver.
(k) SUSPENSION OF RIGHT. Notwithstanding any other
provisions of this paragraph 7, the General Counsel of the Company, in his sole
and absolute discretion, may suspend the right of any person to exercise an SAR
for up to 30 days if the Grantee's Service has been or, in the sole and absolute
judgment of the General Counsel of the Company, may be suspended or terminated
for any reason.
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(l) PARTIES ENTITLED TO EXERCISE SARS. An SAR may be
exercised only by the Grantee, or by a legatee or legatees of such SAR under his
last will, by his executors, personal representatives or distributees, or by a
transferee to the extent that a transfer of the SAR is permitted pursuant to
paragraph 11(b).
8. DIVIDEND EQUIVALENTS. A Dividend Equivalent shall be related
to a number of Shares specified at the time of grant and shall entitle the
holder to cash payments that equal the cash dividend, if any, paid with respect
to such Shares provided that the Dividend Equivalent is outstanding on the
record date thereof and that it is not subject to any condition limiting the
Grantee's right to receive such payments. A Dividend Equivalent shall be subject
to such restrictions and conditions and other terms including those relating to
expiration of forfeiture, as the Committee shall specify at the time such
Dividend Equivalent is granted. A Dividend Equivalent granted pursuant to
subsection 3(c) shall not be subject to any restriction or condition limiting
the Grantee's right to receive the cash payment discussed above from and after
the second anniversary of its Date of Grant. Notwithstanding the foregoing, any
restriction or condition (other than expiration or forfeiture) limiting the
Grantee's right to receive the cash payment described above shall lapse under
the same circumstances in which option exercisability accelerates as described
in paragraph 6(e) or (f).
9. WITHHOLDING. Whenever under the Plan a Grantee recognizes
income with respect to any Share Award, Option, SAR or Dividend Equivalent (the
"Award") hereunder, the Company shall have the right to withhold from amounts
payable to such recipient in any manner, as necessary to satisfy all federal,
state and local payroll tax withholding requirements. Without limiting the
generality of the foregoing, (i) a Grantee may elect to satisfy all or part of
the foregoing withholding requirements by delivery of unrestricted Shares owned
by the Grantee having a Fair Market Value (determined as of the date of such
delivery by the Grantee) equal to the amount to be so withheld; and (ii) the
Committee may permit any such delivery to be made by withholding Shares
otherwise issuable pursuant to the award giving rise to the tax withholding
obligation (in which event the date of delivery shall be deemed the date such
award was exercised). If Shares are being surrendered by or withheld for a
Grantee who is subject to Section 16 of the Act, the foregoing shall be
accomplished in a manner consistent with Rule 16b-3(e) thereunder.
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10. COMPLIANCE WITH APPLICABLE LAWS. Notwithstanding any other
provision in the Plan, the Company shall have no liability to issue any Shares
under the Plan unless such issuance would comply with all applicable laws and
applicable requirements of any securities exchange or similar entity. Prior to
the issuance of any Shares under the Plan, the Company may require a written
statement that the recipient is acquiring the Shares for investment and not for
the purpose of or with the intention of distributing the Shares. Notwithstanding
any other provision of the Plan, a Grantee or such other persons as are entitled
to exercise an Option or SAR (as described in paragraph 11(b)) will be
prohibited from exercising the Option or SAR to the extent that the General
Counsel of the Company has determined that purchases and sales of the Company
securities shall be restricted because of the existence or potential existence
of material nonpublic information concerning the Company, whether or not such
determination has been communicated to the Grantee or such persons. If the
General Counsel of the Company has made such a determination and the Grantee or
such persons give notice of an intent to exercise the Option or SAR (and satisfy
all other conditions to the exercise thereof), the General Counsel of the
Company shall advise the Grantee or such persons concerning such restrictions,
and the effective time of the Grantee's exercise shall be postponed to the
earlier of the date that the General Counsel of the Company determines that such
restriction is no longer necessary with respect to exercises of the Option or
SAR, or the day before the date that the Option or SAR expires.
11. TRANSFERABILITY. This paragraph 11 shall govern the
transferability of the various benefits under this Plan.
(a) SHARE AWARDS. The Shares subject to Share Awards
granted under paragraph 3(a) or 3(c) shall not be sold, assigned, pledged or
otherwise transferred, voluntarily or involuntarily, by the Grantee, while they
are subject to the restrictions described in paragraph 5(a).
(b) OPTIONS, SARS AND DIVIDEND EQUIVALENTS. Options, SARs
and Dividend Equivalents granted under the Plan are not transferable except (i)
by will or by the laws of descent and distribution or, to the extent not
inconsistent with the applicable provisions of the Code, pursuant to a qualified
domestic relations order (as that term is defined in the Code); and (ii) a
Grantee may transfer all or part of an Option that is not an Incentive Stock
Option, or an SAR, to the Grantee's spouse, child or children, grandchild or
grandchildren, or other relatives or to a trust for the benefit of the Grantee
and/or any of the foregoing; provided that the transferee thereof shall hold
such Option or SAR subject to all of the conditions and restrictions contained
herein and otherwise applicable to the Option or SAR, and that, as a condition
to such transfer, the Company may require the transferee to agree in writing (in
a form acceptable to the Company) that the transfer is subject to such
conditions and restrictions. Except as provided in paragraphs 6(e) and 7(f),
Options and SARs may be exercised during the lifetime of the Grantee only by the
Grantee or the Grantee's transferees as provided in this paragraph, and after
the death of the Grantee, only as provided herein.
12. EMPLOYMENT AND SHAREHOLDER STATUS. The Plan does not
constitute a contract of employment or continued service, and selection as a
Grantee will not give any employee or Grantee the right to be retained in the
employ of the Company or any Subsidiary or the right to continue as a trustee of
the Company. Any Option or a Share Award granted under the Plan shall not confer
upon the holder thereof any right as a shareholder of the Company prior to the
issuance of Shares pursuant to the exercise thereof. No person entitled to
exercise any Option or SAR granted under the Plan shall have any of the rights
or privileges of a shareholder of record with respect to any Shares issuable
upon exercise of such Option or SAR until certificates representing such Shares
have been issued and delivered. If the redistribution of Shares is
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restricted pursuant to paragraph 13, certificates representing such Shares may
bear a legend referring to such restrictions.
13. ADJUSTMENTS TO NUMBER OF SHARES SUBJECT TO THE PLAN AND TO
TERMS OF OPTIONS, SARS AND DIVIDEND EQUIVALENTS. Subject to the following
provisions of this paragraph 13, in the event of any change in the outstanding
Shares by reason of any share dividend, split, recapitalization, merger,
consolidation, combination, exchange of shares or other similar corporate
change, the aggregate number and kind of Shares reserved for issuance under the
Plan or subject to Options, SARs or Dividend Equivalents outstanding or to be
granted under the Plan shall be proportionately adjusted so that the value of
each such unit shall not be changed, and the terms of any outstanding Option,
SAR or Dividend Equivalent may be adjusted by the Committee in such manner as it
deems equitable, provided that, (i) if, in connection with a transaction, Shares
are changed into an ownership interest in the Company or another entity, which
interest is registered under the Act, then each such unit shall be converted
into an identical unit relating to such interest (it being the intent of the
Company that, upon a merger, consolidation or reorganization involving the
Company in which the Company's Shares are exchanged or otherwise converted into
publicly traded shares of the acquiring entity (or affiliates thereof)), all
Shares, Options, SARs and Dividend Equivalents granted under this Plan shall be
automatically converted into fully vested similar interests in the acquiring
entity (or affiliates thereof); (ii) in no event shall the Option price for a
Share be adjusted below the par value of such Share, and (iii) in no event shall
any fraction of a Share be issued upon the exercise of an Option. Shares subject
to a Share Award shall be treated in the same manner as other outstanding
Shares; provided that any conditions and restrictions applicable to a Share
Award shall continue to apply to any Shares, other security or other
consideration received in connection with the foregoing.
14. AGREEMENT WITH COMPANY. At the time of a grant, the Committee
may require a Grantee to enter into an agreement with the Company in a form
specified by the Committee agreeing to the terms and conditions of the Plan and
to such additional terms and conditions, not inconsistent with the Plan, as the
Committee may, in its sole discretion, prescribe.
15. TERM OF PLAN. The Plan was effective May 21, 1993. This
amendment and restatement is effective as of January 1, 2000. No Options, Share
Awards or Share Appreciation Rights may be granted under the Plan after May 21,
2003 or, if earlier, the date on which the Plan is terminated pursuant to
paragraph 16.
16. AMENDMENT AND TERMINATION OF PLAN. Subject to any approval of
the shareholders of the Company which may be required by law, the Board of
Trustees of the Company may at any time amend, suspend or terminate the Plan. No
amendment, suspension or termination of the Plan shall alter or impair any Share
Award, Option, SAR or Dividend Equivalent previously granted under the Plan
without the consent of the holder thereof. No amendment requiring shareholder
approval under Section 240.16b-3 of the Act, Treasury Regulation Section
1.162-27 or Section 422 of the Code shall be valid unless such shareholder
approval is secured as provided therein.
17. HEADINGS, REFERENCES AND CONSTRUCTION. The headings to
sections of this Plan have been included for the convenience of reference only.
This Plan shall be interpreted and construed in accordance with the laws of the
State of Maryland.
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