1995 KEY EMPLOYEES' STOCK OPTION PLAN
OF
DUKE REALTY INVESTMENTS, INC.
ARTICLE I
INTRODUCTION
1.1. PURPOSE. The 1995 Key Employees' Stock Option Plan of Duke Realty
Investments, Inc. (the "Plan") is designed to promote the interests of the
Company and its Subsidiaries by encouraging their officers and key employees,
upon whose judgment, initiative and industry the Company and its Subsidiaries
are largely dependent for the successful conduct and growth of their businesses,
to continue their association with the Company and its Subsidiaries by providing
additional incentive and opportunity for unusual industry and efficiency through
stock ownership, and by increasing their proprietary interest in the Company and
their personal interest in its continued success and progress. The Plan
provides for the granting of (i) incentive stock options ("ISO's") and
(ii) nonqualified stock options ("NSO's").
1.2. EFFECTIVE DATE AND DURATION. The Effective Date of the Plan is
October 1, 1995. Options may be granted under the Plan for a period of ten (10)
years commencing October 1, 1995; however, no options may be exercised until
this Plan has been approved by a majority of the shares of the Company
represented at the shareholders' meeting at which approval of the Plan is
considered. No options shall be granted after September 30, 2005. Upon that
date, the Plan shall expire except as to outstanding options, which options
shall remain in effect until they have been exercised or terminated or have
expired. ISO's must be granted within ten (10) years of the date the Plan is
adopted by the Board of Directors or approved by the shareholders of the
Company, whichever is earlier.
1.3. ADMINISTRATION. The Plan shall be administered by the Committee. The
Committee, from time to time, may adopt any rule or procedure it deems necessary
or desirable for the proper and efficient administration of the Plan provided it
is consistent with the terms of the Plan. The decision of a majority of the
Committee members shall constitute the decision of the Committee. Subject to
the provisions of the Plan, the Committee is authorized (i) to grant ISO's and
NSO's; (ii) to determine the employees to be granted ISO's and NSO's; (iii) to
determine the option period, the option price and, subject to the limitations of
Section 3.2, the number of shares subject to each option; (iv) to determine the
time or times at which options will be granted; (v) to determine the time or
times at which each option becomes exercisable and the duration of the exercise
period; (vi) to determine other conditions and limitations, if any, applicable
to the exercise of each option; and (vii) to determine the nature and duration
of the restrictions, if any, to be imposed upon the sale or other disposition of
shares acquired by any optionee upon exercise of an option, and the nature of
the events, if any, and the duration of the period, in or with respect to which
any optionee's rights to shares acquired upon exercise of an option may be
forfeited. Each option granted under the Plan shall be evidenced by a written
stock option agreement containing terms and conditions established by the
Committee consistent with the provisions of the Plan, including such terms as
the Committee shall deem advisable in
order that each ISO shall constitute an "incentive stock option" within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"). The Committee's determinations and interpretations with respect to the
Plan shall be final and binding on all parties. Any notice or document required
to be given to or filed with the Committee will be properly given or filed if
delivered or mailed by certified mail, postage prepaid, to the Committee at 8888
Keystone Crossing, Suite 1200, Indianapolis, Indiana 46240-2182.
1.4. DEFINITIONS. For purposes of this Plan, unless a different meaning is
clearly required by the context:
(a) "Board of Directors" means the board of directors of the Company.
(b) "Change in Control of the Company" means (i) any merger,
consolidation or similar transaction which involves the Company and in which
persons who are the shareholders of the Company immediately prior to such
transaction own, immediately after such transaction, shares of the surviving or
combined entity which possess voting rights equal to or less than fifty percent
(50%) of the voting rights of all shareholders of such entity, determined on a
fully diluted basis; (ii) any sale, lease, exchange, transfer or other
disposition of all or any substantial part of the consolidated assets of the
Company; (iii) any tender, exchange, sale or other disposition (other than
disposition of the stock of the Company or any Subsidiary in connection with
bankruptcy, insolvency, foreclosure, receivership or other similar transactions)
or purchases (other than purchases by the Company or any Company sponsored
employee benefit plan, or purchases by members of the Board of Directors of the
Company or any Subsidiary) of shares which represent more than twenty-five
percent (25%) of the voting power of the Company or any Subsidiary; (iv) during
any period of two (2) consecutive years, individuals who at the date of the
adoption of the Plan constitute the Company's Board of Directors cease for any
reason to constitute at least a majority thereof, unless the election of each
director at the beginning of such period has been approved by directors
representing at least a majority of the directors then in office who were
directors on the date of the adoption of the Plan; (v) a majority of the
Company's Board of Directors recommends the acceptance of or accept any
agreement, contract, offer or other arrangement providing for, or any series of
transactions resulting in, any of the transactions described above.
Notwithstanding the foregoing, a Change in Control of the Company (A) shall not
occur as a result of the issuance of stock by the Company in connection with any
public offering of its stock, or (B) be deemed to have occurred with respect to
any transaction unless such transaction has been approved or shares have been
tendered by a majority of the shareholders who are not Section 16 Grantees.
(c) "Code" means the Internal Revenue Code, as amended.
(d) "Committee" means the Executive Compensation Committee of the
Board of Directors of the Company.
(e) "Company" means Duke Realty Investments, Inc.
(f) "Effective Date" means October 1, 1995.
(g) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(h) "Fair Market Value" means the per share closing price for the
Company's common stock on the New York Stock Exchange on the date of
determination.
(i) "For Cause" means (i) the willful and continued failure of an
optionee to perform his required duties as an officer or employee of the Company
or any Subsidiary, (ii) any action by an optionee which involves willful
misfeasance or gross negligence, (iii) the requirement of or direction by a
federal or state regulatory agency which has jurisdiction over the Company or
any Subsidiary to terminate the employment of an optionee, (iv) the conviction
of an optionee of the commission of any criminal offense which involves
dishonesty or breach of trust, or (v) any intentional breach by an optionee of a
material term, condition or covenant of any agreement between the optionee and
the Company or any Subsidiary.
(j) "Permanent and Total Disability" or "Permanently and Totally
Disabled" means any disability that would qualify as a disability under Code
Section 22(c)(3).
(k) "Plan" means the stock option plan embodied herein, as amended
from time to time, known as the 1995 Key Employees' Stock Option Plan of Duke
Realty Investments, Inc.
(l) "Section 16 Grantee" means a person subject to potential
liability under Section 16(b) of the Exchange Act with respect to transactions
involving equity securities of the Company.
(m) "Subsidiary" or "Subsidiaries" means a corporation, partnership
or limited liability company, a majority of the outstanding voting stock,
general partnership interests or membership interests, as the case may be, of
which is owned or controlled, directly or indirectly, by the Company or by one
or more other Subsidiaries of the Company. For the purposes of this definition,
"voting stock" means stock having voting power for the election of directors, or
trustees, as the case may be, whether at all times or only so long as no senior
class of stock has such voting power by reason of any contingency.
ARTICLE II
ELIGIBILITY AND PARTICIPATION
Officers and other key employees of the Company or of any of its
Subsidiaries, as selected by the Committee, shall be eligible to receive grants
of ISO's and NSO's under the Plan. Committee members shall not be eligible to
receive grants of options under the Plan while serving as Committee members.
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ARTICLE III
BENEFITS
3.1. SHARES COVERED BY THE PLAN. The stock to be subject to options under
the Plan shall be shares of authorized common stock of the Company and may be
unissued shares or reacquired shares (including shares purchased in the open
market), or a combination of the two, or shares which are not issued in
connection with the Duke Realty Services Limited Partnership 1993 Stock Option
Plan, as the Committee may from time to time determine. Subject to the
provisions of Section 4.2 and the provisions of this Section 3.1, the maximum
number of shares to be delivered upon exercise of all options granted under the
Plan shall not exceed (i) Five Hundred Fifty-Eight Thousand Four Hundred
(558,400) shares and (ii) the number of shares authorized under the Duke Realty
Services Limited Partnership 1993 Stock Option Plan that become available due to
the lapse, forfeiture or other termination of stock options granted under such
plan. Provided, however, the total number of shares to be delivered upon
exercise of the options granted under the Plan under clause (ii) of the previous
sentence shall not exceed Four Hundred Thousand (400,000) shares. Shares
covered by an option that remains unpurchased upon the expiration or termination
of the option may be made subject to further options.
3.2. GRANT OF OPTIONS. The Committee shall be responsible for granting all
options under the Plan. The Committee shall also determine, in its sole
discretion, with respect to each optionee, whether the options granted shall be
ISO's or NSO's, or a combination of the two; and whether any employee shall be
given discretion to determine whether any options granted to him shall be ISO's
or NSO's or a combination of the two. Provided, however, notwithstanding any
other Plan provison, during any calendar year, no optionee shall be granted
options to acquire more than twenty five thousand (25,000) shares of Company
stock.
3.3. OPTION PRICE.
(a) ISO OPTION PRICE. The option price per share of stock under each
ISO shall be not less than one hundred percent (100%) of the Fair Market Value
of the share on the date on which the option is granted; provided, however, as
to officers and key employees who, at the time an ISO is granted, own, within
the meaning of Code Section 425(d), more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company or any Subsidiary
(referred to as "Shareholder-Employees"), the purchase price per share of stock
under each ISO shall be not less than one hundred ten percent (110%) of the Fair
Market Value of the stock on the date on which the option is granted.
(b) NSO OPTION PRICE. The option price per share of stock under each
NSO shall be determined by the Committee in its discretion; provided, however,
the option price per
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share shall not be less than one hundred percent (100%) of the Fair Market Value
of the share on the date on which the option is granted.
3.4. OPTION PERIOD. No option period shall exceed ten (10) years;
provided, however, the option period with respect to ISO's granted to
Shareholder-Employees shall not exceed five (5) years.
3.5. SPECIAL CALENDAR YEAR LIMITATION ON SHARES SUBJECT TO ISO'S. The
aggregate Fair Market Value (determined at the time of the grant of the ISO's)
of the stock with respect to which ISO's are exercisable for the first time by
an eligible employee during any calendar year (under all plans providing for the
grant of incentive stock options of the Company or any of its Subsidiaries)
shall not exceed One Hundred Thousand Dollars ($100,000.00).
3.6. SEQUENCE OF EXERCISING INCENTIVE STOCK OPTIONS. Any ISO granted to an
employee pursuant to the Plan shall be exercisable even if there are outstanding
previously granted but unexercised ISO's with respect to such employee.
3.7 VESTING OF OPTIONS. All options granted under the Plan shall vest,
and thereby become exercisable at such time or times as shall be determined by
the Committee in its sole discretion. The stock option agreement between the
Company and the optionee shall include the schedule under which the option shall
vest.
3.8 VESTING ON CHANGE IN CONTROL OR DEATH, RETIREMENT OR DISABILITY OF
OPTIONEE. Notwithstanding the provisions of Section 3.7, in the event of a
Change in Control of the Company or upon the death, Permanent and Total
Disability or retirement on or after attaining age sixty-five (65) of the
optionee, any options granted under this Plan may be exercised in full without
regard to any restrictions on the vesting of the options contained in the option
agreement between the Company and the optionee.
3.9. EARLY TERMINATION OF OPTION.
(a) TERMINATION OF EMPLOYMENT. All rights to exercise an option
shall terminate ninety (90) days after the effective date of the optionee's
termination of employment with the Company and its Subsidiaries, but not later
than the date the option expires pursuant to its terms, unless such termination
is For Cause or is on account of the Permanent and Total Disability or death of
the optionee. Transfer of employment from the Company to a Subsidiary, or vice
versa, or from one Subsidiary to another, shall not be deemed a termination of
employment. The Committee shall have the authority to determine in each case
whether a leave of absence on military or government service shall be deemed a
termination of employment for purposes of this subsection (a).
(b) FOR CAUSE TERMINATION. If an optionee's employment with the
Company and its Subsidiaries is terminated For Cause, no previously unexercised
option granted hereunder
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may be exercised. Rather, all unexercised options shall terminate effective on
the date the optionee receives notice of his termination For Cause.
(c) PERMANENT AND TOTAL DISABILITY OR DEATH OF OPTIONEE. If an
optionee's employment terminates due to Permanent and Total Disability or death,
his option shall terminate one (1) year after termination of his employment due
to his Permanent and Total Disability or death (but not later than the date the
option expires pursuant to its terms). During such period, subject to the
limitations of this Plan and the option agreement between the Company and the
optionee, the optionee, his guardian, attorney-in-fact or personal
representative, as the case may be, may exercise the option in full.
Notwithstanding the foregoing, in the case of an ISO, such option shall be
exercisable as an ISO only during the three (3) month period immediately
following the optionee's death and in no event later than the date specified in
the stock option agreement. During the remainder of such one (1) year period,
the option may be exercised as an NSO.
3.10. PAYMENT FOR STOCK. Full payment for shares purchased hereunder
shall be made at the time the option is exercised. Payment may be made by
delivering to the Company (a) cash; (b) at the discretion of the Committee,
whole shares of common stock of the Company ("Delivered Stock") which (i) has
been owned by the optionee for more than six (6) months and has been paid for,
within the meaning of SEC Rule 144 (and, if such stock was purchased from the
Company by use of a promissory note, such note has been fully paid with respect
to such stock), or (ii) was obtained by the optionee in the public market or
otherwise than through the exercise of an option under this Plan or under any
other stock option plan involving Company stock; (c) at the discretion of the
Committee, a combination of cash and Delivered Stock; or (d) provided that a
public market for the Company's common stock exists, (i) through a "same day
sale" commitment from the optionee and a broker-dealer that is a member of the
National Association of Securities Dealers ("NASD Dealer") whereby the optionee
irrevocably elects to exercise the option and to sell a portion of the common
stock so purchased in order to pay the option price, and whereby the NASD Dealer
irrevocably commits upon receipt of such stock to forward the option price
directly to the Company; or (ii) through a "margin" commitment from the optionee
and an NASD Dealer whereby the optionee irrevocably elects to exercise the
option and to pledge the stock so purchased to the NASD Dealer in a margin
account as security for a loan from the NASD Dealer in the amount of the option
price and whereby the NASD Dealer irrevocably commits upon receipt of such stock
to forward the option price directly to the Company. Delivered Stock shall be
valued by the Committee at its Fair Market Value determined as of the date of
the exercise of the option. No shares shall be issued until full payment for
them has been made, and an optionee shall have none of the rights of a
shareholder with respect to any shares until they are issued to him. Upon
payment of the full purchase price, and any required withholding taxes, the
Company shall issue a certificate or certificates to the optionee evidencing
ownership of the shares purchased pursuant to the exercise of the option which
contain(s) such terms, conditions and provisions as may be required and as are
consistent with the terms, conditions and provisions of the Plan and the stock
option agreement between the Company and the optionee.
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3.11. INCOME AND EMPLOYMENT TAX WITHHOLDING.
(a) PAYMENT BY OPTIONEE. The optionee shall be solely responsible
for paying to the Company all required federal, state, city and local taxes
applicable to his (i) exercise of an NSO under the Plan and (ii) disposition of
shares acquired pursuant to the exercise of an ISO in a disqualifying
disposition of the shares under Code Section 422(a)(1).
(b) NSO WITHHOLDING WITH COMPANY STOCK. Notwithstanding the
provisions of subsection (a), with respect to stock to be issued pursuant to the
exercise of an NSO, the Committee, in its discretion and subject to such rules
as it may adopt, may permit the optionee to satisfy, in whole or in part, any
withholding tax obligation which may arise in connection with the exercise of
the NSO by having the Company retain shares of stock which would otherwise be
issued in connection with the exercise of the NSO or accept delivery from the
optionee of shares of Company stock which have a Fair Market Value, determined
as of the date of the delivery of such shares, equal to the amount of the
withholding tax to be satisfied by that retention or delivery.
(c) ISO DISQUALIFYING DISPOSITION WITHHOLDING WITH COMPANY STOCK.
Notwithstanding the provisions of subsection (a), with respect to shares of
stock to be issued pursuant to the exercise of any ISO, the Committee, in its
discretion and subject to such rules as it may adopt, may permit the optionee to
satisfy, in whole or in part, any withholding tax obligation which may arise in
connection with the disqualifying disposition of the shares under Code Section
422(a)(1) by having the Company accept delivery from the optionee of shares of
stock having a Fair Market Value, determined as of the date of the delivery of
such shares, equal to the amount of the withholding tax to be satisfied by that
delivery.
3.12. NOTICE OF DISQUALIFYING DISPOSITION. Any ISO granted hereunder
shall require the optionee to notify the Committee of any disposition of any
stock issued pursuant to the exercise of the ISO under the circumstances
described in Section 421(b) of the Code (relating to certain disqualifying
dispositions), within ten (10) days of such disposition.
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ARTICLE IV
PLAN ADMINISTRATION AND INTERPRETATION
4.1. AMENDMENT AND TERMINATION. The Board of Directors or the Committee
may, at any time, without the approval of the stockholders of the Company
(except as otherwise required by applicable law, rule or regulations, or listing
requirements of any National Securities Exchange on which are listed any of the
Company's equity securities, including without limitation any shareholder
approval requirement of Rule 16b-3 or any successor safe harbor rule promulgated
under the Exchange Act ), alter, amend, modify, suspend or discontinue the Plan,
but may not, without the consent of the holder of an option, make any alteration
which would adversely affect an option previously granted under the Plan or,
without the approval of the stockholders of the Company, make any alteration
which would: (a) increase the aggregate number of shares subject to options
under the Plan, except as provided in Section 4.2; (b) decrease the minimum
option price, except as provided in Section 4.2; (c) permit any Committee member
to become eligible to receive grants of options under the Plan; (d) withdraw
administration of the Plan from the Committee or the Board of Directors; (e)
extend the term of the Plan or the maximum period during which any option may be
exercised; (f) change the manner of determining the option price; or (g) change
the class of individuals eligible for options under the Plan.
4.2. CHANGES IN STOCK.
(a) SUBSTITUTION OF STOCK AND ASSUMPTION OF PLAN. In the event of
any change in the common stock of the Company through stock dividends, split-
ups, recapitalizations, reclassifications, conversions, or otherwise, or in the
event that other stock shall be converted into or substituted for the present
common stock of the Company as the result of any merger, consolidation,
reorganization or similar transaction which results in a Change in Control of
the Company, then the Committee may make appropriate adjustment or substitution
in the aggregate number, price, and kind of shares available under the Plan and
in the number, price and kind of shares covered under any options granted or to
be granted under the Plan. The Committee's determination in this respect shall
be final and conclusive. Provided, however, that the Company shall not, and
shall not permit its Subsidiaries to, recommend, facilitate or agree or consent
to a transaction or series of transactions which would result in a Change of
Control of the Company unless and until the person or persons or the entity or
entities acquiring or succeeding to the assets or capital stock of the Company
or any of its Subsidiaries as a result of such transaction or transactions
agrees to be bound by the terms of the Plan so far as it pertains to options
theretofore granted but unexercised and agrees to assume and perform the
obligations of the Company hereunder. Notwithstanding the foregoing provisions
of this subsection (a), no adjustment shall be made which would operate to
reduce the option price of any ISO below the Fair Market Value of the stock
(determined on the date the option was granted) which is subject to an ISO.
(b) CONVERSION OF STOCK. In the event of a Change in Control of the
Company pursuant to which another person or entity acquires control of the
Company (such other person or entity being the "Successor"), the kind of shares
of common stock which shall be subject to the
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Plan and to each outstanding option, shall, automatically by virtue of such
Change in Control of the Company, be converted into and replaced by shares of
common stock, or such other class of securities having rights and preferences no
less favorable than common stock of the Successor, and the number of shares
subject to the option and the purchase price per share upon exercise of the
option shall be correspondingly adjusted, so that, by virtue of such Change in
Control of the Company, each optionee shall have the right to purchase (i) that
number of shares of common stock of the Successor which have a Fair Market Value
equal, as of the date of such Change in Control of the Company, to the Fair
Market Value, as of the date of such Change in Control, of the shares of common
stock of the Company theretofore subject to his option, and (ii) for a purchase
price per share which, when multiplied by the number of shares of common stock
of the Successor subject to the option, shall equal the aggregate exercise price
at which the optionee could have acquired all of the shares of common stock of
the Company previously optioned to the optionee.
4.3. INFORMATION TO BE FURNISHED BY OPTIONEES. Optionees, or any other
persons entitled to benefits under this Plan, must furnish to the Committee such
documents, evidence, data or other information as the Committee considers
necessary or desirable for the purpose of administering the Plan. The benefits
under the Plan for each optionee, and each other person who is entitled to
benefits hereunder, are to be provided on the condition that he furnish full,
true and complete data, evidence or other information, and that he will promptly
sign any document reasonably related to the administration of the Plan requested
by the Committee.
4.4. EMPLOYMENT RIGHTS. Neither the Plan nor any stock option agreement
executed under the Plan shall constitute a contract of employment and
participation in the Plan will not give an optionee the right to be rehired or
retained in the employ of the Company, nor will participation in the Plan give
any optionee any right or claim to any benefit under the Plan, unless such right
or claim has specifically accrued under the terms of the Plan.
4.5. EVIDENCE. Evidence required of anyone under the Plan may be by
certificate, affidavit, document or other information which the person relying
thereon considers pertinent and reliable, and signed, made or presented by the
proper party or parties.
4.6. GENDER AND NUMBER. Where the context admits, words in the masculine
gender shall include the feminine gender, the plural shall include the singular
and the singular shall include the plural.
4.7. ACTION BY COMPANY. Any action required of or permitted by the Company
under the Plan shall be by resolution of the Board of Directors or by a person
or persons authorized by resolution of the Board of Directors.
4.8. CONTROLLING LAWS. Except to the extent superseded by laws of the
United States, the laws of Indiana shall be controlling in all matters relating
to the Plan.
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4.9. MISTAKE OF FACT. Any mistake of fact or misstatement of fact shall be
corrected when it becomes known and proper adjustment made by reason thereof.
4.10. SEVERABILITY. In the event any provisions of the Plan shall be held
to be illegal or invalid for any reason, such illegality or invalidity shall not
affect the remaining parts of the Plan, and the Plan shall be construed and
endorsed as if such illegal or invalid provisions had never been contained in
the Plan.
4.11. EFFECT OF HEADINGS. The descriptive headings of the sections of this
Plan are inserted for convenience of reference and identification only and do
not constitute a part of this Plan for purposes of interpretation.
4.12. NONTRANSFERABILITY. No option shall be transferable, except by the
optionee's will or the laws of descent and distribution. During the optionee's
lifetime, his option shall be exercisable (to the extent exercisable) only by
him. The option and any rights and privileges pertaining thereto shall not be
transferred, assigned, pledged or hypothecated by him in any way, whether by
operation of law or otherwise and shall not be subject to execution, attachment
or similar process.
4.13. LIABILITY. No member of the Board of Directors or the Committee or
any officer or employee of the Company or its Subsidiaries shall be personally
liable for any action, omission or determination made in good faith in
connection with the Plan. Each optionee, in the stock option agreement between
him and the Company, shall agree to release and hold harmless the Company, the
Board of Directors, the Committee and all officers and employees of the Company
and its Subsidiaries from and against any tax liability, including without
limitation interest and penalties, incurred by the optionee in connection with
his participation in the Plan.
4.14. INVESTMENT REPRESENTATIONS. Unless the shares subject to an option
are registered under the Securities Act of 1933, each optionee, in the stock
option agreement between the Company and the optionee, shall agree for himself
and his legal representatives that any and all shares of common stock purchased
upon the exercise of the option shall be acquired for investment and not with a
view to, or for sale in connection with, any distribution of those shares. Any
share issued pursuant to an exercise of an option subject to this investment
representation shall bear a legend evidencing this restriction.
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4.15. USE OF PROCEEDS. The proceeds received by the Company from the sale
of stock pursuant to the Plan will be used for general corporate purposes,
including without limitation the purchase by the Company of additional limited
partnership units in Duke Realty Limited Partnership.
DUKE REALTY INVESTMENTS, INC.
DATED: 10/26/95 By: /s/ Thomas L. Hefner
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Thomas L. Hefner, President and Chief
Executive Officer
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