EXHIBIT 10.26
FEDERAL REALTY INVESTMENT TRUST
AMENDED AND RESTATED
1993 LONG-TERM INCENTIVE PLAN
Article I. Purpose and Adoption of the Plan
1.01 Purpose. The purpose of the Federal Realty Investment Trust Amended
and Restated 1993 Long-Term Incentive Plan (hereinafter referred to as the
"Plan") is to assist the Trust (as hereinafter defined) in attracting and
retaining individuals to serve as Trustees and highly competent personnel who
will contribute to the Trust's success and to act as an incentive in motivating
selected officers and key employees to achieve long-term objectives which will
inure to the benefit of all shareholders of the Trust. It is intended that this
purpose be achieved by extending to officers, employees, consultants, and
Trustees of the Trust and its Subsidiaries a long-term incentive for high levels
of performance and efforts through the grant of Options, Stock Appreciation
Rights, Dividend Equivalent Rights, Performance Awards and/or Restricted Shares
(as each such term is herein defined).
1.02 Adoption, Amendment and Term. The 1993 Long-Term Incentive Plan (the
"1993 Plan") was originally approved by the Trustees in 1993 and thereafter
approved by the Trust's shareholders at the 1993 Annual Meeting of Shareholders.
The first amendment and restatement of the 1993 Plan was approved by the
Trustees on March 24, 1997 subject to the approval of the Trust's shareholders
at the 1997 Annual Meeting of Shareholders. The 1993 Plan was amended and
restated at the 1997 Annual Meeting at which a quorum was present and a majority
of the votes cast at such meeting with respect to the Plan were cast in favor of
its approval (including, without limitation, abstentions to the extent
abstentions may be counted). The Plan was amended further by the Board of
Trustees on October 6, 1997. The Plan shall terminate without further action of
the Trustees and the shareholders on the tenth anniversary of the date on which
the 1993 Plan was approved by the shareholders.
Article II. Definitions
For purposes of this Plan, capitalized terms shall have the following
meanings:
2.01 Acceptance Date means the date, no later than the twentieth (20th)
Business Day after the Offer Date, on which a Participant accepts an offer to
purchase Shares made pursuant to a Stock Purchase Award.
2.02 Adjusted Fair Market Value means, in the event of a Change in Control,
the greater of (i) the highest price per Share paid to holders of the Shares in
any transaction (or series of transactions) constituting or resulting in a
Change in Control or (ii) the highest Fair Market Value of a Share during the
sixty (60) day period ending on the date of the Change in Control.
2.03 Annual Retainer means the total amount which is determined each year by
the Trustees to be payable to each Non-Employee Trustee for services during such
year as a Non-Employee Trustee and as a member of a committee or committees of
the Trustees.
2.04 Annual Retainer Payment Date means the date determined each year by the
Trustees as the date on which the Annual Retainer for such year shall be paid.
The Annual Retainer Payment Date for a year shall be at least six months after
the date on which the amount of the Annual Retainer for such year is determined.
2.05 Award means (a) any grant to a Participant of any one or a combination
of Non-Qualified Stock Options or Incentive Stock Options (with or without Stock
Appreciation Rights) described in Article VI, Dividend Equivalent Rights
described in Article VI, Restricted Shares described in Article VII, Performance
Awards described in Article VIII, or Stock Purchase Awards described in Article
IX or (b) any grant to a Non-Employee Trustee of a Non-Employee Trustee Award
described in Article X.
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2.06 Award Agreement means a written agreement between the Trust and a
Participant or a written acknowledgment from the Trust specifically setting
forth the terms and conditions of an Award granted to a Participant.
2.07 Award Period means, with respect to an Award, the period of time, if
any, set forth in the Award Agreement during which specified target performance
goals must be achieved or other conditions set forth in the Award Agreement must
be satisfied.
2.08 Beneficial Ownership means ownership within the meaning of Rule 13d-3
promulgated by the Securities and Exchange Commission under the Exchange Act.
2.09 Beneficiary means an individual, trust or estate who or which, by a
written designation of the Participant filed with the Trust or by operation of
law, succeeds to the rights and obligations of the Participant under the Plan
and an Award Agreement upon the Participant's death.
2.10 Business Day means any day on which the New York Stock Exchange is open
for trading.
2.11 Cause means (a) the definition set forth in the employment or other
agreement between the Participant and the Trust or, in absence thereof, (b)
Participant's: (i) failure (other than failure due to disability) to
substantially perform his duties with the Trust, which failure remains uncured
after written notice thereof and the expiration of a reasonable period of time
thereafter in which Participant is diligently pursuing cure; (ii) willful
misconduct which is demonstrably and materially injurious to the Trust or an
affiliate thereof, monetarily or otherwise; (iii) breach of fiduciary duty
involving personal profit; or (iv) willful violation in the course of performing
his duties for the Trust of any law, rule or regulation (other than traffic
violations or misdemeanor offenses). No act or failure to act shall be
considered willful unless done or omitted to be done in bad faith and without
reasonable belief that the action or omission was in the best interest of the
Trust.
2.12 Change in Capitalization means any increase or reduction in the number
of Shares, or any change (including, without limitation, a change in value) in
the Shares or exchange of Shares for a different number or kind of shares or
other securities of the Trust or another Person, by reason of a
reclassification, recapitalization, merger, consolidation, reorganization, spin-
off, split-up, issuance of warrants or rights or debentures, stock dividend,
stock split or reverse stock split, property dividend, combination or exchange
of shares, change in corporate structure or substantially similar event.
2.13 Change in Control means any of the events set forth below; provided,
however, that the Committee, in its sole discretion, may specify a more
restrictive definition of Change in Control in any Award Agreement and, in such
event, the definition of Change in Control set forth in the Award Agreement
shall apply to the Award granted under such Award Agreement:
(a) An acquisition in one or more transactions (other than directly from
the Trust or pursuant to options granted under this Plan or otherwise by the
Trust) of any Trust Voting Securities by any Person immediately after which
such Person has Beneficial Ownership of 20% or more of the combined voting
power of the then outstanding Trust Voting Securities; provided, however, in
determining whether a Change in Control has occurred, Trust 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 Trust
or (y) a Subsidiary, (ii) the Trust or any Subsidiary, or (iii) any Person in
connection with a "Non-Control Transaction" (as hereinafter defined);
(b) The individuals who, as of the date of this Plan, are members of the
Trustees (the "Incumbent Trustees"), cease for any reason to constitute at
least two-thirds of the Trustees; provided, however, that if the election, or
nomination for election by the Trust's shareholders, of any new member was
approved by a vote of at least two-thirds of the Incumbent Trustees, such new
member shall, for purposes of this Plan, be considered as a member of the
Incumbent Trustees; provided, further, however, that no individual shall be
considered a member of the Incumbent Trustees if such individual initially
assumed office as a result of either an actual or
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threatened "Election Contest" (as described in Rule 14a-11 promulgated under
the Exchange Act) or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Trustees (a "Proxy
Contest"), including, without limitation, by reason of any agreement intended
to avoid or settle any Election Contest or Proxy Contest; or
(c) Approval by shareholders of the Trust of
(1) A merger, consolidation or other reorganization involving the Trust,
unless:
(i) the shareholders of the Trust, immediately before such merger,
consolidation or reorganization, own, directly or indirectly immediately
following such merger, consolidation or other reorganization, at least a
majority of the combined voting power of the outstanding voting
securities of the Person resulting from such merger, consolidation or
other reorganization (the "Surviving Person") in substantially the
same proportion as their ownership of the Trust Voting Securities
immediately before such merger, consolidation or other reorganization,
(ii) the individuals who were members of the Incumbent Trustees
immediately prior to the execution of the agreement providing for such
merger, consolidation or other reorganization constitute at least two-
thirds of the members of the governing board of the Surviving Person,
(iii) no Person (other than the Trust or any Subsidiary, any employee
benefit plan (or any trust forming a part thereof) maintained by the
Trust or any Subsidiary, or any Person which, immediately prior to such
merger, consolidation, or other reorganization had Beneficial Ownership
of 20% or more of the then outstanding Trust Voting Securities) has
Beneficial Ownership of 20% or more of the combined voting power of the
Surviving Person's then outstanding voting securities, and
(iv) a transaction described in clauses (i) through (iii) shall
herein be referred to as a "Non-Control Transaction,"
(2) A complete liquidation or dissolution of the Trust; or
(3) An agreement for the sale or other disposition of all or
substantially all of the assets of the Trust to any Person (other than a
transfer to a Subsidiary).
Notwithstanding the foregoing, a Change in Control shall not be deemed to
occur (i) solely because any Person (the "Subject Person") acquired Beneficial
Ownership of more than the permitted amount of the outstanding Trust Voting
Securities as a result of the acquisition of Trust Voting Securities by the
Trust which, by reducing the number of Trust Voting Securities outstanding,
increases the proportional number of shares Beneficially Owned by the Subject
Person; provided, however, that if a Change in Control would occur (but for the
operation of this sentence) as a result of the acquisition of Trust Voting
Securities by the Trust, and after such share acquisition by the Trust, the
Subject Person becomes the Beneficial Owner of any additional Trust Voting
Securities which increases the percentage of the then outstanding Trust Voting
Securities Beneficially Owned by the Subject Person, then a Change in Control
shall occur, or (ii) if the Trust (a) establishes a wholly-owned subsidiary
("Holding Company"), (b) causes the Holding Company to establish a wholly-
owned subsidiary ("Merger Sub"), and (c) merges with Merger Sub, with the
Trust as the surviving entity (such transactions collectively are referred as
the "Reorganization"). Immediately following the completion of the
Reorganization, all references to the Trust Voting Securities shall be deemed to
refer to the voting securities of the Holding Company.
2.14 Code means the Internal Revenue Code of 1986, as amended from time to
time, or any successor thereto. References to a section of the Code shall
include that section and any comparable section or sections of any future
legislation that amends, supplements or supersedes said section.
2.15 Committee means a Committee designated by the Trustees having the power
and authority to administer the Plan in accordance with Section 3.01 and as
described in Section 3.02.
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2.16 Date of Grant means the date designated by the Committee as the date as
of which it grants an Award, which shall not be earlier than the date on which
the Committee approves the granting of such Award.
2.17 Disability means any physical or mental injury or disease which renders
a Participant incapable of meeting the requirements of the employment performed
by such Participant immediately prior to the commencement of such disability.
The determination of whether a Participant is disabled shall be made by the
Committee in its sole discretion. Notwithstanding the foregoing, if a
Participant's employment by the Trust terminates by reason of a disability, as
defined in an employment or other agreement between such Participant and the
Trust, such Participant shall be deemed to be disabled for purposes of the Plan.
2.18 Disability Date means the date which is six months after the date on
which a Participant is first absent from active employment with the Trust by
reason of a Disability.
2.19 Disinterested Person shall have the meaning set forth in Rule 16b-3, as
promulgated by the Securities and Exchange Commission under the Exchange Act.
2.20 Dividend Equivalent Right means a right, as described in Section 6.05,
to receive all or some portion of the cash dividends that are or would be
payable with respect to Shares.
2.21 Division means any of the operating units or divisions of the Trust or
a Subsidiary thereof designated as a Division by the Committee.
2.22 Exchange Act means the Securities Exchange Act of 1934, as amended.
2.23 Fair Market Value means, as of any given date, with respect to any
Awards granted hereunder, the closing trading price of the Shares on such date
as reported on the New York Stock Exchange or, if the Shares are not then traded
on the New York Stock Exchange, on such other national securities exchange on
which the Shares are admitted to trade, or, if none, on the National Association
of Securities Dealers Automated Quotation System if the Shares are admitted for
quotation thereon; provided, however, if there were no sales reported as of such
date, Fair Market Value shall be computed as of the last date preceding such
date on which a sale was reported; provided, further, that if any such exchange
or quotation system is closed on any day on which Fair Market Value is to be
determined, Fair Market Value shall be determined as of the first date
immediately preceding such date on which such exchange or quotation system was
open for trading.
2.24 Incentive Stock Option means an Option designated as an incentive stock
option and which satisfies the requirements of Section 422 of the Code.
2.25 Interest means the amount of interest accrued on a Purchase Loan or a
Tax Loan made to a Participant during the relevant period. Interest on a
Purchase Loan or a Tax Loan shall accrue at a fixed rate per annum during the
entire term of the relevant loan. The interest rate for a Purchase Loan shall be
calculated by dividing (i) the amount of cash dividend paid on one Share for the
calendar year preceding the Acceptance Date by (ii) the Share Price, or such
other interest rate as the Committee, in its sole discretion, determines. The
interest rate for a Tax Loan shall be identical to the interest rate charged on
the related Purchase Loan. In no event, however, shall such rates be greater
than the maximum rate chargeable to consumers under the usury laws of the State
of Maryland.
2.26 Non-Employee Trustee means each member of the Trustees who is not an
employee of the Trust.
2.27 Non-Employee Trustee Awards means Awards granted in accordance with
Article X.
2.28 Non-Qualified Stock Option means an Option which is not an Incentive
Stock Option.
2.29 Normal Retirement Date means the date on which a Participant terminates
active employment with the Trust on or after attainment of age 65, but does not
include termination by the Trust for Cause.
2.30 Offer Date means the date on which the Committee grants a Participant a
Stock Purchase Award.
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2.31 Options means any Incentive Stock Option or Non-Qualified Stock Option
granted pursuant to the Plan.
2.32 Optionee means a person to whom an Option has been granted under the
Plan.
2.33 Other Retirement Date means a date, on or after the Participant's
attainment of age 55 but earlier than the Participant's Normal Retirement Date,
which is specifically approved and designated in writing by the Committee to be
the date upon which a Participant retires for purposes of this Plan.
2.34 Outstanding Shares means, at any time, the issued and outstanding
Shares.
2.35 Participant shall mean any individual selected by the Committee to
receive an Award under the Plan in accordance with Article V and, solely to the
extent provided in Article X of the Plan, any Non-Employee Trustees of the
Trust.
2.36 Performance Award means Performance Units, Performance Shares or any
combination thereof.
2.37 Performance Shares means Shares issued or transferred to a Participant
under Section 8.03
2.38 Performance Target has the meaning set forth in Section 8.01.
2.39 Performance Units means Performance Units granted to a Participant
under Section 8.02.
2.40 Person means "person" as such term is used for purposes of Section
13(d) or 14(d) of the Exchange Act, including, without limitation, any
individual, firm, corporation, partnership, joint venture, association, trust or
other entity, or any group of Persons.
2.41 Plan means the Federal Realty Investment Trust Amended and Restated
1993 Long-Term Incentive Plan as set forth herein, and as the same may be
amended from time to time.
2.42 Pooling Transaction means an acquisition of the Trust in a transaction
which is intended to be treated as a "pooling of interests" under generally
accepted accounting principles.
2.43 Purchase Loan means the loan provided to a Participant by the Trust to
facilitate the Participant's purchase of Shares pursuant to a Stock Purchase
Award.
2.44 Purchase Loan Term means the period for repayment and satisfaction of a
Purchase Loan.
2.45 Reload Option shall have the meaning set forth in Section 6.03(f).
2.46 Restricted Shares means Shares subject to restrictions imposed in
connection with Awards granted under Article VII.
2.47 Rule 16b-3 means Rule 16b-3 promulgated by the Securities and Exchange
Commission under Section 16 of the Exchange Act, as the same may be amended from
time to time, and any successor rule.
2.48 Share Price means the price per share at which the Stock Purchase Award
shall be offered to a Participant, and shall be equal to the greater of (i) the
average of the closing price of a share in the New York Stock Exchange for the
twenty (20) trading days prior to the Offer Date or (ii) the Fair Market Value
of a Share on the Acceptance Date.
2.49 Shares mean the common shares of beneficial interest in the Trust, no
par value per share.
2.50 Stock Purchase Award means an Award, granted in accordance with Article
IX, of the right to acquire Shares.
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2.51 Stock Purchase Price means the number of Shares in a Participant's
Stock Purchase Award multiplied by the Share Price.
2.52 Stock Appreciation Rights means a right to receive all or some portion
of the increase in the value of the Shares as provided in Section 6.04.
2.53 Subsidiary means any Person of which a majority of its voting power or
equity securities or equity interests is owned directly or indirectly by the
Trust.
2.54 Tax Loan means a loan (or loans) offered to and accepted by a
Participant to offset all or a portion of federal and state taxes that a
Participant incurs as a result of the Trust's forgiveness of his Purchase Loan.
2.55 Termination of Employment means the voluntary or involuntary
termination of a Participant's employment with the Trust for any reason,
including, without limitation, death, Disability, retirement or as the result of
a Change in Control. Whether entering military or other government service shall
constitute Termination of Employment, and whether a Termination of Employment is
a result of Disability, shall be determined in each case by the Committee in its
sole discretion.
2.56 Trust means Federal Realty Investment Trust, a District of Columbia
unincorporated business trust, and its successors.
2.57 Trust Voting Securities means the combined voting power of all
outstanding voting securities of the Trust entitled to vote generally in the
election of the Trustees.
2.58 Trustees means the Board of Trustees of the Trust.
Article III. Administration
3.01 Authority of Committee.
(a) The Plan shall be administered by the Committee which shall have
exclusive and final authority in each determination, interpretation or other
action affecting the Plan and its Participants. The Committee shall have the
sole discretion to interpret the Plan, to select the officers, other
employees, consultants and Trustees (other than Non-Employee Trustees) to whom
Awards may be granted, to determine all claims for benefits under the Plan, to
impose such conditions and restrictions on Awards as it determines appropriate
and to take such steps in connection with the Plan and Awards granted
hereunder as it may deem necessary or advisable. The Committee may, with
respect to Participants who are not subject to Section 16(b) of the Exchange
Act, delegate such of its powers and authority under the Plan as it deems
appropriate to designated officers or employees of the Trust.
(b) Without limiting the Committee's authority under other provisions of
the Plan, but subject to any express limitations of the Plan, including,
without limitation, Section 11.13(b), the Committee shall have the authority
to accelerate an Award described in Section 2.05(a) and to waive restrictive
conditions for an Award described in Section 2.05(a) (including, without
limitation, any forfeiture conditions), in such circumstances as the Committee
deems appropriate. In the case of any acceleration of an Award described in
Section 2.05(a) after the attainment of the applicable Performance Target(s),
the amount payable shall be discounted to its present value using an interest
rate equal to Moody's Average Corporate Bond Yield for the month preceding the
month in which such acceleration occurs.
3.02 Committee. The Committee shall consist of at least two (2) members of
the Trustees and may consist of the entire Trustees; provided, however, that (A)
if the Committee consists of less than the entire Trustees, each member shall be
a "Non-Employee Director" within the meaning of Exchange Act Rule 16b-3 and
(B) to the extent necessary for any Award intended to qualify as performance-
based compensation under Section 162(m) of the Code
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to so qualify, each member of the Committee, whether or not it consists of the
entire Trustees, shall be an "outside director" within the meaning of Section
162(m) of the Code and the regulations promulgated thereunder. The Committee
shall hold meetings at such times as may be necessary for the proper
administration of the Plan. The Committee shall keep minutes of its meetings.
3.03 Requisite Action. A quorum shall consist of not fewer than two-thirds
of the members of the Committee and a majority of a quorum may authorize any
action. Any decision or determination reduced to writing and signed by a
majority of all of the members of the Committee shall be as fully effective as
if made by a majority vote at a meeting duly called and held.
3.04 Exculpation. No member of the Committee shall be liable for any
action, failure to act, determination or interpretation made in good faith with
respect to this Plan or any transaction hereunder, except for liability arising
from his own willful misfeasance, gross negligence or reckless disregard of his
duties. The Trust hereby agrees to indemnify each member of the Committee for
all costs and expenses and, to the extent permitted by applicable law, any
liability incurred in connection with defending against, responding to,
negotiating for the settlement of or otherwise dealing with any claim, cause of
action or dispute of any kind arising in connection with any actions in
administering this Plan or in authorizing or denying authorization to any
transaction hereunder.
Article IV. Awards
4.01 Performance Units Denominated in Dollars. The maximum dollar amount
that the Chief Executive Officer of the Trust may be awarded in any calendar
year in respect of Performance Units denominated in dollars is $3 million, and
the maximum dollar amount that any Participant (except the Chief Executive
Officer of the Trust) may be awarded in any calendar year in respect of
Performance Units denominated in dollars is $1 million.
4.02 Number of Shares Issuable. Subject to adjustments as provided in
Section 11.06, the maximum number of Shares that may be made the subject of
Awards granted under the Plan is 5,500,000; provided, however, that during the
term of the Plan (i) no Participant (other than the Chief Executive Officer of
the Trust) may be granted Awards (other than Performance Units denominated in
dollars and Dividend Equivalent Rights) in the aggregate in respect of more than
250,000 Shares per calendar year, (ii) the Chief Executive Officer of the Trust
may not be granted Awards (other than Performance Units denominated in dollars
and Dividend Equivalent Rights) in the aggregate in respect of more than 500,000
Shares per calendar year, (iii) no Participant (other then the Chief Executive
Officer of the Trust) may be granted Dividend Equivalent Rights with respect to
more than 250,000 Shares per calendar year, (iv) the Chief Executive Officer of
the Trust may not be granted Dividend Equivalent Rights with respect to more
than 500,000 Shares per calendar year, and (v) the aggregate Fair Market Value
of the Shares with respect to which Incentive Stock Options granted under the
Plan become exercisable for the first time by an Optionee during any calendar
year shall not exceed $100,000. The Trust shall reserve, for purposes of the
Plan, out of its authorized but unissued Shares or Shares held in the Trust's
treasury, or partly out of each, such number of Shares as shall be determined by
the Trustees.
4.03 Reduction. Solely for purposes of applying the Section 4.02 limit on
the maximum number of Shares that may be made the subject of Awards granted
under the Plan (but not for purposes of applying the Section 4.02 limits on the
number of Shares per calendar year that may be made the subject of Awards
granted to individual Participants), upon the granting of an Award, the maximum
number of Shares available under Section 4.02 for the granting of further Awards
shall be reduced as follows:
(a) In connection with the granting of an Award (other than the granting of
a Performance Unit denominated in dollars), the number of Shares shall be
reduced by the number of Shares in respect of which the Award is granted or
denominated.
(b) In connection with the granting of a Performance Unit denominated in
dollars, the number of Shares shall be reduced by an amount equal to the
quotient of (i) the dollar amount in which the Performance Unit is
denominated, divided by (ii) the Fair Market Value of a Share on the date the
Performance Unit is granted.
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4.04 Shares Subject to Terminated Awards. Solely for purposes of applying
the Section 4.02 limit on the maximum number of Shares that may be made the
subject of Awards granted under the Plan (but not for purposes of applying the
Section 4.02 limits on the number of Shares per calendar year that may be made
the subject of Awards granted to individual Participants), whenever any
outstanding Award or portion thereof expires, is canceled or is otherwise
terminated for any reason without having been exercised or payment having been
made in respect of the entire Award, the Shares allocable to the expired,
canceled or otherwise terminated portion of the Award may again be the subject
of Awards granted hereunder.
Article V. Participation
5.01 Eligible Participants. Participants in the Plan shall be such
officers, other employees, consultants and Trustees of the Trust and its
Subsidiaries as the Committee, in its sole discretion, may designate from time
to time. The Committee's designation of a Participant in any year shall not
require the Committee to designate such person to receive Awards or grants in
any other year. The designation of a Participant to receive Awards or grants
under one portion of the Plan shall not require the Committee to include such
Participant under other portions of the Plan. The Committee shall consider such
factors as it deems pertinent in selecting Participants and in determining the
type and amount of their respective Awards. More than one type of Award may be
granted to a Participant at one time or at different times. Non-Employee
Trustees shall receive Non-Employee Trustee Awards in accordance with Article X
of the Plan, the provisions of which are automatic and non-discretionary in
operation. Non-Employee Trustees shall not be eligible to receive any other
Awards under the Plan.
Article VI. Stock Options
6.01 Grant of Option. The Committee may grant Options to Participants
either alone or in addition to other Awards granted under the Plan. Any Option
granted under the Plan shall, subject to the provisions of the Plan, be in such
form as the Committee may, from time to time, approve, and the terms and
conditions of Option Awards need not be the same with respect to each
Participant. The Committee shall have the authority to grant to any Participant
one or more Incentive Stock Options, Non-Qualified Stock Options, or both types
of Options. To the extent that any Option does not qualify as an Incentive Stock
Option (whether because of its provisions or the time or manner of its exercise
or otherwise), such Option or the portion thereof which does not qualify shall
constitute a separate Non-Qualified Stock Option.
6.02 Incentive Stock Options. In the case of any grant of an Option,
designated by the Committee to be an Incentive Stock Option, each provision in
the Plan and in any related Award Agreement shall, to the maximum extent
possible, be interpreted in such a manner as to qualify the Option as an
Incentive Stock Option. If any provision of this Plan or such Award Agreement
shall be held not to comply with the requirements necessary to so qualify such
Option, then (i) such provision shall be deemed to have contained from the
outset such language as shall be necessary to qualify the Option as an Incentive
Stock Option, and (ii) all other provisions of this Plan and the Award Agreement
relating to such Option shall remain in full force and effect. If any Award
Agreement covering an Option designated by the Committee to be an Incentive
Stock Option shall not explicitly include any terms required to qualify such
Option as an Incentive Stock Option, all such terms shall be deemed implicit in
the designation of such Option and the Option shall be deemed to have been
granted subject to all such terms.
6.03 Terms of Options. Options granted under the Plan shall be subject to
the following terms and conditions and shall be in such form and contain such
additional terms and conditions, not inconsistent with the terms of this Plan,
as the Committee shall deem desirable:
(a) Option Price. The price per Share of an Option shall be determined by
the Committee at the Date of Grant but shall be not less than the Fair Market
Value of a Share on the Date of Grant.
(b) Option Term. The term of each Option shall be fixed by the Committee,
but no Option shall be exercisable more than ten years after the Date of
Grant. The Committee may, subsequent to the granting of any
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Option, extend the term thereof, but in no event shall the term so extended
exceed the maximum term provided for in the preceding sentence.
(c) Exercisability. Subject to Sections 6.03(g) and 6.03(h)(i) of the
Plan, (i) an Award Agreement with respect to Options may contain such
performance targets, waiting periods, exercise dates and restrictions on
exercise (including, without limitation, a requirement that an Option is
exercisable in periodic installments) as may be determined by the Committee at
the time of grant, and (ii) no Option may be exercised in whole or in part
prior to six months from the Date of Grant. To the extent not exercised,
installments shall accumulate and be exercisable, in whole or in part, at any
time after becoming exercisable, but not later than the date the Option
expires.
(d) Method of Exercise. Subject to whatever installment exercise and
waiting period provisions apply under subsection (c) above, Options may be
exercised in whole or in part at any time during the Award Period, only by
giving written notice of exercise delivered in person or by mail to the
Secretary of the Trust at the Trust's principal executive office. Such notice
shall specify the number of Shares to be purchased and shall be accompanied by
payment in full of the purchase price in such form as the Committee may accept
(including, without limitation, payment in accordance with a cashless exercise
program under which, if so instructed by the Participant, Shares may be issued
directly to the Participant's broker or dealer upon receipt of the purchase
price in cash from the broker or dealer). If and to the extent determined by
the Committee in its sole discretion at or after grant, payment in full or in
part may also be made in the form of Shares duly owned by the Participant (and
for which the Participant has good title, free and clear of any liens and
encumbrances) or, in the case of Non-Qualified Stock Options, of Restricted
Shares or by reduction in the number of Shares issuable upon such exercise
based, in each case, on the Fair Market Value of the Shares on the date the
Option is exercised (without regard to any forfeiture restrictions, applicable
to Restricted Shares). No Shares shall be issued until Participant shall
generally have the rights to dividends or other rights of a shareholder with
respect to Shares subject to the Option when the Participant has given written
notice of exercise and has paid for such Shares as provided herein.
Notwithstanding the foregoing, if payment in full or in part has been made in
the form of Restricted Shares, an equivalent number of Shares issued on
exercise of the Option shall be subject to the same restrictions and
conditions for the remainder of the Award Period applicable to the Restricted
Shares surrendered therefor.
(e) Alternative Method of Exercise. If the Fair Market Value of the
Shares with respect to which the Option is being exercised exceeds the
exercise price of such Option, an Optionee may, instead of exercising an
Option as provided in Section 6.03(d), request that the Committee authorize
payment to the Optionee of the difference between the Fair Market Value of
part or all of the Shares which are the subject of the Option and the exercise
price of the Option, such difference to be determined as of the date prior to
the date the Committee receives the request from the Optionee. The Committee,
in its sole discretion, may grant or deny such a request from an Optionee with
respect to part or all of the Shares as to which the Option is then
exercisable and, to the extent granted, shall direct the Trust to make the
payment to the Optionee either in cash or in Shares or in any combination
thereof; provided, however, that payment in Shares shall be made based upon
the Fair Market Value of Shares as of the date the Committee received the
request from the Optionee. An Option shall be deemed to have been exercised
and shall be canceled to the extent that the Committee grants a request
pursuant to this Section 6.03(e).
(f) Reload Options. On or before the date of the 1997 Annual Meeting of
Shareholders, the Committee shall have the authority to specify, at the time
of grant or, with respect to Non-Qualified Stock Options, at or after the time
of grant, that a Participant shall be granted a Non-Qualified Stock Option (a
"Reload Option") in the event such Participant exercises all or a part of an
Option (an "Original Option") by surrendering in accordance with Section
6.03(d) of the Plan already owned Shares in full or partial payment of the
purchase price under the Original Option, subject to the availability of
Shares under the Plan at the time of such exercise, and subject to the limits
provided for in Section 4.02; provided, however, that no Reload Option shall
be granted to a Non-Employee Trustee. Each Reload Option shall cover a number
of Shares equal to the number of Shares surrendered in payment of the purchase
price under such Original Option, shall have a purchase price per Share equal
to the Fair Market Value of a Share on the Date of Grant of such Reload Option
and shall expire on the stated expiration date of the Original Option. A
Reload Option shall be exercisable at any time
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and from time to time after the Date of Grant of such Reload Option (or, as
the Committee in its sole discretion shall determine at or after the time of
grant, at such time or times as shall be specified in the Reload Option);
provided, however, that a Reload Option granted to a Participant subject to
Section 16 of the Exchange Act shall not be exercisable during the first six
months from the Date of Grant of such Reload Option. Any Reload Option may
provide for the grant, when exercised, of subsequent Reload Options to the
extent and upon such terms and conditions, consistent with this Section
6.03(f), as the Committee in its sole discretion shall specify at or after the
time of grant of such Reload Option. A Reload Option shall contain such other
terms and conditions, which may include a restriction on the transferability
of the Shares received upon exercise of the Original Option representing at
least the after-tax profit received upon exercise of the Original Option, as
the Committee in its sole discretion shall deem desirable and which may be set
forth in rules or guidelines adopted by the Committee or in the Award
Agreements evidencing the Reload Options.
(g) Effect of Change in Control. In the event of a Change in Control, all
Options outstanding on the date of such Change in Control shall become
immediately and fully exercisable. In addition, in the sole discretion of the
Committee at the time of an Award, and to the extent set forth in an Award
Agreement evidencing the grant of an Option, an Optionee will be permitted to
surrender to the Trust for cancellation within sixty (60) days after such
Change in Control any Option or portion of an Option to the extent not yet
exercised and the Optionee will be entitled to receive a cash payment in an
amount equal to the excess, if any, of (x) (A) in the case of a Non-Qualified
Stock Option, the greater of (1) the Fair Market Value, on the date preceding
the date of surrender, of the Shares subject to the Option or portion thereof
surrendered or (2) the Adjusted Fair Market Value of the Shares subject to the
Option or portion thereof surrendered, or (B) in the case of an Incentive
Stock Option, the Fair Market Value, on the date preceding the date of
surrender, of the Shares subject to the Option or portion thereof surrendered
over (y) the aggregate purchase price for such Shares under the Option or
portion thereof surrendered.
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(h) Exercise of Options Upon Termination of Employment.
(i) Exercise of Vested Options Upon Termination of Employment.
(A) Termination. Subject to Section 6.03(b), unless the Committee,
in its sole discretion, provides otherwise, upon a Participant's
Termination of Employment other than by reason of death, Disability or
retirement on or after the Participant's Normal Retirement Date or
following a Change in Control, the Participant may, within three months
from the date of such Termination of Employment, or such longer period
as the Committee, in its sole discretion, provides, exercise all or any
part of his Options as were exercisable at the date of Termination of
Employment; provided, however, that if such Termination of Employment is
for Cause, the right of such Participant to exercise such Options shall
terminate at the date of Termination of Employment.
(B) Disability or Retirement. Subject to Section 6.03(b), unless
the Committee, in its sole discretion, provides otherwise, upon a
Participant's Disability Date or Termination of Employment by reason of
retirement on or after the Participant's Normal Retirement Date, the
Participant may, within two years after such Disability Date or
Termination of Employment, as the case may be, exercise all or a part of
his Options which were exercisable upon such Disability Date or
Termination of Employment (or which became exercisable at a later date
pursuant to Section 6.03(h)(ii)).
(C) Death. Subject to Section 6.03(b), unless the Committee, in its
sole discretion, provides otherwise, in the event of the death of a
Participant while employed by the Trust or within the additional period
of time described in Section 6.03(h)(i)(B) from the date of the
Participant's Disability Date or Termination of Employment by reason of
retirement on or after the Participant's Normal Retirement Date to the
extent all or any part of the Option was exercisable as of the
Disability Date or the date of such Termination of Employment and did
not expire during such additional period and prior to the Participant's
death, the right of the Participant's Beneficiary to exercise the Option
under the Plan shall expire upon the expiration of two years from the
date of the Participant's death (but in no event more than two years
from the Participant's Disability Date or the date of the Participant's
Termination of Employment, as the case may be) or on the date of
expiration of the Option determined pursuant to Section 6.03(b),
whichever is earlier. In all other cases of death following a
Participant's Termination of Employment, the Participant's Beneficiary
may exercise the Option within the time provided in 6.03(h)(i)(A),
above. In the event of the Participant's death, the Committee may, in
its sole discretion, accelerate the right to exercise all or any part of
an Option which would not otherwise be exercisable.
(D) Change in Control. Subject to Section 6.03(b), upon an
Optionee's Termination of Employment following a Change in Control, each
Option held by the Optionee that was exercisable as of the date of such
Termination of Employment shall remain exercisable for a period not
ending before the earlier of (A) the first anniversary of the
termination of the Optionee's employment or (B) the expiration of the
stated term of the Option.
(ii) Termination of Unvested Options Upon Termination of Employment.
Subject to Section 6.03(b), to the extent all or any part of an Option was
not exercisable as of the date of Termination of Employment, the right to
exercise such Option shall expire at the date of such Termination of
Employment. Notwithstanding the foregoing, and subject to Section 6.03(b),
the Committee, in its sole discretion and under such terms as it deems
appropriate, may permit a Participant who terminates employment on or after
the Participant's Normal Retirement Date or Other Retirement Date and who
will continue to render significant services to the Trust after his
Termination of Employment, to continue to accrue service with respect to
the right to exercise his Options during the period in which the individual
continues to render such services.
6.04 Stock Appreciation Rights.
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(a) Stock Appreciation Right Awards. The Committee may, in its sole
discretion, either alone or in connection with the grant of an Option, grant
Stock Appreciation Rights in accordance with the Plan, the terms and
conditions of which shall be set forth in an Award Agreement. If granted in
connection with an Option, a Stock Appreciation Right shall cover the same
Shares covered by the Option (or such lesser number of Shares as the Committee
may determine) and shall, except as provided in this Section 6.04, be subject
to the same terms and conditions as the related Option.
(b) Time of Grant. A Stock Appreciation Right may be granted (i) at any
time if unrelated to an Option, or (ii) if related to an Option, either at the
time of grant, or at any time thereafter during the term of the Option.
(c) Stock Appreciation Right Related to an Option.
(i) Exercise. Subject to Section 6.04(h), a Stock Appreciation Right
granted in connection with an Option shall be exercisable at such time or
times and only to the extent that the related Options are exercisable, and
will not be transferable except to the extent the related Option may be
transferable. A Stock Appreciation Right granted in connection with an
Incentive Stock Option shall be exercisable only if the Fair Market Value
of a Share on the date of exercise exceeds the purchase price specified in
the related Incentive Stock Option Agreement.
(ii) Amount Payable. Upon the exercise of a Stock Appreciation Right
related to an Option, the holder shall be entitled to receive an amount
determined by multiplying (A) the excess of the Fair Market Value of a
Share on the date preceding the date of exercise of such Stock Appreciation
Right over the per Share purchase price under the related Option, by (B)
the number of Shares as to which such Stock Appreciation Right is being
exercised. Notwithstanding the foregoing, the Committee may limit in any
manner the amount payable with respect to any Stock Appreciation Right by
including, without limitation, such a limit in the Agreement evidencing the
Stock Appreciation Right at the time it is granted.
(iii) Treatment of Related Options and Stock Appreciation Rights Upon
Exercise. Upon the exercise of a Stock Appreciation Right granted in
connection with an Option, the Option shall be canceled to the extent of
the number of Shares as to which the Stock Appreciation Right is exercised,
and upon the exercise of an Option granted in connection with a Stock
Appreciation Right, the Stock Appreciation Right shall be canceled to the
extent of the number of Shares as to which the Option is exercised or
surrendered.
(d) Stock Appreciation Right Unrelated to an Option. Stock Appreciation
Rights unrelated to Options shall contain such terms and conditions as to
exercisability (subject to Section 6.04(h)), vesting and duration as the
Committee shall determine, but in no event shall they have a term of greater
than ten (10) years. Upon exercise of a Stock Appreciation Right unrelated to
an Option, the Participant shall be entitled to receive an amount determined
by multiplying (A) the excess of the Fair Market Value of a Share on the date
preceding the date of exercise of such Stock Appreciation Right over the Fair
Market Value of a Share on the date the Stock Appreciation Right was granted,
by (B) the number of Shares as to which the Stock Appreciation Right is being
exercised. Notwithstanding the foregoing, the Committee may limit in any
manner the amount payable with respect to any Stock Appreciation Right by
including such a limit in the Agreement evidencing the Stock Appreciation
Right at the time it is granted.
(e) Method of Exercise. Stock Appreciation Rights shall be exercised by a
Participant only by a written notice delivered in person or by mail to the
Secretary of the Trust at the Trust's principal executive office, specifying
the number of Shares with respect to which the Stock Appreciation Right is
being exercised. If requested by the Trust, the Participant shall deliver the
Award Agreement evidencing the Stock Appreciation Right being exercised and
the Award Agreement evidencing any related Option to the Secretary of the
Trust who shall endorse thereon a notation of such exercise and return such
Agreement to the Participant.
(f) Form of Payment. Payment of the amount determined under Sections
6.04(c) and (d) may be made in the sole discretion of the Committee solely in
whole Shares in a number determined at their Fair Market Value on the date
preceding the date of exercise of the Stock Appreciation Right, or solely in
cash, or in a
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combination of cash and Shares. If the Committee decides to make full payment
in Shares and the amount payable results in a fractional Share, payment for
the fractional Share will be made in cash.
(g) Modification. No modification of an Award shall adversely alter or
impair any rights or obligations under the Award Agreement without the
Participant's consent.
(h) Effect of Change in Control. In the event of a Change in Control, all
Stock Appreciation Rights shall become immediately and fully exercisable. In
addition, in the sole discretion of the Committee at the time of an Award, and
to the extent set forth in an Award Agreement evidencing the grant of a Stock
Appreciation Right (but not with respect to any Stock Appreciation Right
granted in connection with an Incentive Stock Option), a Participant will be
entitled to receive a payment from the Trust in cash or Shares, in either
case, with a value equal to the excess, if any, of (A) the Adjusted Fair
Market Value, on the date preceding the date of exercise, of the Shares over
(B) the aggregate Fair Market Value, on the date the Stock Appreciation was
granted, of the Shares subject to the Stock Appreciation Right or portion
thereof exercised.
(i) Exercise of Stock Appreciation Rights Upon Termination of Employment.
(i) Exercise of Vested Stock Appreciation Rights Upon Termination of
Employment.
(A) Termination. Subject to Section 6.04(c) or (d), as the case may
be, unless the Committee, in its sole discretion, provides otherwise,
upon a Participant's Termination of Employment other than by reason of
death, Disability or retirement on or after the Participant's Normal
Retirement Date or following a Change in Control, the Participant may,
within three months from the date of such Termination of Employment, or
such longer period as the Committee, in its sole discretion, provides,
exercise all or any part of his Stock Appreciation Rights as were
exercisable at the date of Termination of Employment; provided, however,
that if such Termination of Employment is for Cause, the right of such
Participant to exercise such Stock Appreciation Rights shall terminate
at the date of Termination of Employment.
(B) Disability or Retirement. Subject to Section 6.04(c) or (d), as
the case may be, unless the Committee, in its sole discretion, provides
otherwise, upon a Participant's Disability Date or Termination of
Employment by reason of retirement on or after the Participant's Normal
Retirement Date, the Participant may, within two years after such
Disability Date or Termination of Employment, as the case may be,
exercise all or a part of his Stock Appreciation Rights which were
exercisable upon such Disability Date or Termination of Employment (or
which became exercisable at a later date pursuant to Section
6.04(i)(ii)).
(C) Death. Subject to Section 6.04(c) or (d), as the case may be,
unless the Committee, in its sole discretion, provides otherwise, in the
event of the death of a Participant while employed by the Trust or
within the additional period of time described in Section 6.04(i)(i)(B)
from the date of the Participant's Disability Date or Termination of
Employment by reason of retirement on or after the Participant's Normal
Retirement Date to the extent all or any part of the Stock Appreciation
Right was exercisable as of the Disability Date or the date of such
Termination of Employment did not expire during such additional period
and prior to the Participant's death, the right of the Participant's
Beneficiary to exercise the Stock Appreciation Right under the Plan
shall expire upon the earlier of (x) the expiration of two years from
the date of the Participant's death (but in no event more than two years
from the Participant's Disability Date or the date of the Participant's
Termination of Employment, as the case may be) or (y) the date of
expiration of the Stock Appreciation Right determined pursuant to
Section 6.04(c) or (d), as the case may be. In all other cases of death
following a Participant's Termination of Employment, the Participant's
Beneficiary may exercise the Stock Appreciation Right within the time
provided in 6.04(i)(i)(A), above. In the event of the Participant's
death, the Committee may, in its sole discretion, accelerate the right
to exercise all or any part of a Stock Appreciation Right which would
not otherwise be exercisable.
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(D) Change in Control. Subject to Section 6.04(c) or (d), as the
case may be, upon a Participant's Termination of Employment following a
Change in Control, each Stock Appreciation Right held by the Participant
that was exercisable as of the date of such Termination of Employment
shall remain exercisable for a period not ending before the earlier of
(A) the first anniversary of the termination of the Participant's
employment or (B) the expiration of the stated term of the Stock
Appreciation Right.
(ii) Termination of Unvested Stock Appreciation Rights Upon Termination
of Employment. Subject to Section 6.04(c) or (d), as the case may be, to
the extent all or any part of a Stock Appreciation Right was not
exercisable as of the date of Termination of Employment, the right to
exercise such Stock Appreciation Right shall expire at the date of such
Termination of Employment. Notwithstanding the foregoing, and subject to
Section 6.04(c) or (d), as the case may be, the Committee, in its sole
discretion and under such terms as it deems appropriate, may permit a
Participant who terminates employment on or after the Participant's Normal
Retirement Date or Other Retirement Date and who will continue to render
significant services to the Trust after his Termination of Employment, to
continue to accrue service with respect to the right to exercise his Stock
Appreciation Rights during the period in which the individual continues to
render such services.
6.05 Dividend Equivalent Rights. The Committee, in its sole discretion,
may grant to Participants Dividend Equivalent Rights in tandem with an Award.
The terms and conditions applicable to each Dividend Equivalent Right shall be
specified in the Award Agreement under which the Dividend Equivalent Right is
granted. Amounts payable in respect of Dividend Equivalent Rights may be payable
currently or deferred until the lapsing of restrictions on such Dividend
Equivalent Rights or until the vesting, exercise, payment, settlement or other
lapse of restrictions on the Award to which the Dividend Equivalent Rights
relate. In the event that the amount payable in respect of Dividend Equivalent
Rights are to be deferred, the Committee shall determine whether such amounts
are to be held in cash or reinvested in Shares or deemed (notionally) to be
reinvested in Shares. If amounts payable in respect of Dividend Equivalent
Rights are to be held in cash, there may be credited at the end of each year (or
portion thereof) interest on the amount of the account at the beginning of the
year at a rate per annum as the Committee, in its sole discretion, may
determine. Dividend Equivalent Rights may be settled in cash or Shares or a
combination thereof, in a single installment or multiple installments. With
respect to Dividend Equivalent Rights granted in tandem with an Option, the
Award Agreement may provide that the Participant may elect to have amounts
payable in respect of such Dividend Equivalent Rights applied against the
exercise price of such Option. To the extent necessary for any Dividend
Equivalent Right intended to qualify as performance-based compensation under
Section 162(m) of the Code to so qualify, the terms and conditions of the
Dividend Equivalent Right shall be such that payment of the Dividend Equivalent
Right is contingent upon the attainment of specified Performance Targets within
the Award Period, as provided for in Article VIII, and such Dividend Equivalent
Right shall be treated as a Performance Award for purposes of Section 11.13(b).
Article VII. Restricted Shares
7.01 Restricted Share Awards. The Committee, in its sole discretion, may
grant to Participants Restricted Shares, either alone or in addition to other
Awards. The Committee may grant to any Participant an Award of Restricted Shares
in such number, and subject to such terms and conditions relating to
forfeitability and restrictions on delivery and transfer (whether based on
performance standards, periods of service or otherwise) as the Committee shall
establish. The terms of any Restricted Share Award granted under this Plan shall
be set forth in an Award Agreement which shall contain provisions determined by
the Committee and not inconsistent with this Plan. The provisions of Restricted
Share Awards need not be the same for each Participant receiving such Awards.
(a) Issuance of Restricted Shares. As soon as practicable after the Date
of Grant of a Restricted Share Award, the Trust shall cause to be transferred
on the books of the Trust Shares, registered on behalf of the Participant in
nominee form, evidencing the Restricted Shares covered by the Award, but
subject to forfeiture to the Trust retroactive to the Date of Grant if an
Award Agreement delivered to the Participant by the Trust with respect to the
Restricted Shares covered by the Award is not duly executed by the Participant
and timely returned to the Trust. All Shares covered by Awards under this
Article VII shall be subject to the restrictions,
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terms and conditions contained in the Plan and the Award Agreement entered
into by and between the Trust and the Participant. Until the lapse or release
of all restrictions applicable to an Award of Restricted Shares, the stock
certificates representing such Restricted Shares shall be held in custody by
the Trust or its designee. Upon the lapse or release of all restrictions with
respect to an Award as described in Section 7.01(e), one or more stock
certificates, registered in the name of the Participant, for an appropriate
number of Shares as provided in Section 7.01(e), free of any restrictions set
forth in the Plan and the Award Agreement, shall be delivered to the
Participant.
(b) Shareholder Rights. Beginning on the Date of Grant of the Restricted
Share Award and subject to execution of the Award Agreement as provided in
Section 7.01(a), the Participant shall become a shareholder of the Trust with
respect to all Shares subject to the Award Agreement and shall have all of the
rights of a shareholder, subject to the provisions of Section 7.01(c).
(c) Treatment of Dividends. At the time an Award of Restricted Shares is
granted, the Committee may, in its sole discretion, determine that the payment
to the Participant of dividends, or a specified portion thereof, declared or
paid on such Restricted Shares shall be (i) deferred until the lapsing of the
restrictions imposed upon such Restricted Shares and (ii) held by the Trust
for the account of the Participant until such time. In the event that
dividends are to be deferred, the Committee shall determine whether such
dividends are to be reinvested in Shares (which shall be held as Restricted
Shares) or held in cash. If deferred dividends are to be held in cash, there
may be credited at the end of each year (or portion thereof) interest on the
amount of the account at the beginning of the year at a rate per annum as the
Committee, in its sole discretion, may determine. Payment of deferred
dividends in respect of Restricted Shares (whether held in cash or as
additional Shares of Restricted Shares), together with interest accrued
thereon, if any, shall be made upon the lapsing of restrictions imposed on the
Restricted Shares in respect of which the deferred dividends were paid, and
any dividends deferred (together with any interest accrued thereon) in respect
of any Restricted Shares shall be forfeited upon the forfeiture of such
Restricted Shares.
(d) No Pledge. None of the Restricted Shares may be pledged.
(e) Delivery of Shares Upon Release of Restrictions. Upon expiration or
earlier termination of the forfeiture period without a forfeiture and the
satisfaction of or release from any other conditions prescribed by the
Committee, the restrictions applicable to the Restricted Shares shall lapse.
As promptly as administratively feasible thereafter, subject to the
requirements of Section 11.06, the Trust shall deliver to the Participant or,
in case of the Participant's death, to the Participant's Beneficiary, one or
more stock certificates for the appropriate number of Shares, free of all such
restrictions, except for any restrictions that may be imposed by law.
(f) Effect of Change in Control. Unless the Committee shall determine
otherwise at the time of grant of an Award of Restricted Shares, any
restriction periods and restrictions imposed on Restricted Shares under the
Plan shall lapse upon a Change in Control and within ten (10) Business Days
the stock certificates representing Restricted Shares, without any such
restrictions, shall be delivered to the applicable Participant.
7.02 Terms of Restricted Shares.
(a) Forfeiture of Restricted Shares. Subject to Sections 7.01(f) and
7.02(b), all Restricted Shares shall be forfeited and returned to the Trust
and all rights of the Participant with respect to such Restricted Shares shall
terminate unless the Participant continues in the service of the Trust as an
employee until the expiration of the forfeiture period for such Restricted
Shares and satisfies any and all other conditions set forth in the Award
Agreement. The Committee, in its sole discretion, shall determine the
forfeiture period (which may, but need not, lapse in installments) and any
other terms and conditions applicable with respect to any Restricted Share
Award.
(b) Waiver of Forfeiture Period. Notwithstanding anything contained in
this Article VII to the contrary, the Committee may, in its sole discretion,
waive the forfeiture period and any other conditions set forth in any Award
Agreement under appropriate circumstances (including, without limitation, the
death, Disability or retirement of the Participant or a material change in
circumstances arising after the date of an Award) and
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subject to such terms and conditions (including, without limitation,
forfeiture of a proportionate number of the Restricted Shares) as the
Committee shall deem appropriate, provided that the Participant shall at that
time have completed at least one year of employment after the Date of Grant.
Article VIII. Performance Awards
8.01 Performance Targets.
(a) Performance Targets. Performance Targets for Performance Awards may
be expressed in terms of (i) earnings per Share, (ii) Share price, (iii) funds
from operations, (iv) pre-tax profits, (v) net earnings, (vi) return on equity
or assets, (vii) gross revenues, (viii) EBITDA, (ix) dividends, (x) market
share or market penetration or (xi) any combination of the foregoing, and may
be determined before or after accounting changes, special charges, foreign
currency effects, acquisitions, divestitures or other extraordinary events.
Performance Targets may be in respect of the performance of the Trust and its
Subsidiaries (which may be on a consolidated basis), a Subsidiary or a
Division. Performance Targets may be absolute or relative and may be expressed
in terms of a progression within a specified range. The Performance Targets
with respect to an Award Period shall be established in writing by the
Committee by the earlier of (i) the date on which a quarter of the Award
Period has elapsed or (ii) the date which is ninety (90) days after the
commencement of the Award Period, and, in any event while the performance
relating to the Performance Targets remain, substantially uncertain.
(b) Determination of Performance. Prior to the vesting, payment,
settlement or lapsing of any restrictions with respect to any Performance
Award made to a Participant who is subject to Section 162(m) of the Code, the
Committee shall certify in writing that the applicable Performance Targets
have been satisfied.
8.02 Performance Units. The Committee, in its sole discretion, may grant
Awards of Performance Units to Participants, the terms and conditions of which
shall be set forth in an Award Agreement between the Trust and the Participant.
Performance Units shall be denominated in Shares or a specified dollar amount
and, contingent upon the attainment of specified Performance Targets within the
Award Period, represent the right to receive payment as provided in Section
8.02(b) of the specified dollar amount or a percentage (which may not be more
than 100%) thereof depending on the level of Performance Target attainment. Each
Award Agreement shall specify either a fixed number of Performance Units to
which it relates or a formula pursuant to which the number of Performance Units
may be calculated, the Performance Targets which must be satisfied in order for
the Performance Units to vest and the Award Period within which such Performance
Targets must be satisfied.
(a) Vesting and Forfeiture. Subject to Sections 8.01(b) and 8.04, a
Participant shall become vested with respect to the Performance Units to the
extent that the Performance Targets set forth in the Agreement are satisfied
for the Award Period.
(b) Payment of Awards. Payment to Participants in respect of vested
Performance Units shall be made as soon as practicable after the last day of
the Award Period to which such Award relates unless the Award Agreement
evidencing the Award provides for the deferral of payment, in which event the
terms and conditions of the deferral shall be set forth in the Award
Agreement. Subject to Section 8.04, such payments may be made entirely in
Shares valued at their Fair Market Value as of the last day of the applicable
Award Period or such other date specified by the Committee, entirely in cash,
or in such combination of Shares and cash as the Committee in its sole
discretion shall determine at any time prior to such payment.
8.03 Performance Shares. The Committee, in its sole discretion, may grant
Awards of Performance Shares to Participants, the terms and conditions of which
shall be set forth in an Agreement between the Trust and the Participant. Each
Award Agreement may require that an appropriate legend be placed on Share
certificates. Awards of Performance Shares shall be subject to the following
terms and provisions:
(a) Rights of Participant. The Committee shall provide at the time an
Award of Performance Shares is made the time or times at which the actual
Shares represented by such Award shall be issued in the name of the
Participant; provided, however, that no Performance Shares shall be issued
until the Participant has executed an
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Award Agreement evidencing the Award, the appropriate blank stock powers and,
in the sole discretion of the Committee, an escrow agreement and any other
documents which the Committee may require as a condition to the issuance of
such Performance Shares. If a Participant shall fail to execute the Award
Agreement evidencing an Award of Performance Shares, the appropriate blank
stock powers and, in the sole discretion of the Committee, an escrow agreement
and any other documents which the Committee may require within the time period
prescribed by the Committee at the time the Award is granted, the Award shall
be null and void. At the sole discretion of the Committee, Shares issued in
connection with an Award of Performance Shares shall be deposited together
with the stock powers with an escrow agent (which may be the Trust) designated
by the Committee. Except as restricted by the terms of the Award Agreement,
and subject to Section 8.03(d), upon delivery of the Shares to the escrow
agent, the Participant shall have, in the sole discretion of the Committee,
all of the rights of a shareholder with respect to such Shares, including,
without limitation, the right to vote the Shares and to receive all dividends
or other distributions paid or made with respect to the Shares.
(b) Non-transferability. Subject to Section 11.04, until any restrictions
upon the Performance Shares awarded to a Participant shall have lapsed in the
manner set forth in Sections 8.03(c) or 8.04, such Performance Shares shall
not be sold, transferred or otherwise disposed of and shall not be pledged or
otherwise hypothecated, nor shall they be delivered to the Participant. The
Committee may also impose such other restrictions and conditions on the
Performance Shares, if any, as it deems appropriate.
(c) Lapse of Restrictions. Subject to Sections 8.01(b) and 8.04,
restrictions upon Performance Shares awarded hereunder shall lapse and such
Performance Shares shall become vested at such time or times and on such
terms, conditions and satisfaction of Performance Targets as the Committee
may, in its sole discretion, determine at the time an Award is granted.
(d) Treatment of Dividends. At the time the Award of Performance Shares
is granted, the Committee may, in its sole discretion, determine that the
payment to the Participant of dividends, or a specified portion thereof,
declared or paid on actual Shares represented by such Award which have been
issued by the Trust to the Participant shall be (i) deferred until the lapsing
of the restrictions imposed upon such Performance Shares and (ii) held by the
Trust for the account of the Participant until such time. In the event that
dividends are to be deferred, the Committee shall determine whether such
dividends are to be reinvested in Shares (which shall be held as additional
Performance Shares) or held in cash. If deferred dividends are to be held in
cash, there may be credited at the end of each year (or portion thereof)
interest on the amount of the account at the beginning of the year at a rate
per annum as the Committee, in its sole discretion, may determine. Payment of
deferred dividends in respect of Performance Shares (whether held in cash or
in additional Performance Shares), together with interest accrued thereon, if
any, shall be made upon the lapsing of restrictions imposed on the Performance
Shares in respect of which the deferred dividends were paid, and any dividends
deferred (together with any interest accrued thereon) in respect of any
Performance Shares shall be forfeited upon the forfeiture of such Performance
Shares.
(e) Delivery of Shares. Upon the lapse of the restrictions on Performance
Shares awarded, the Committee shall cause a stock certificate to be delivered
to the Participant, free of all restrictions hereunder.
8.04 Effect of Change in Control. In the event of a Change in Control:
(a) With respect to Performance Units, unless otherwise determined by the
Committee, the Participant shall (i) become vested in all Performance Units
and (ii) be entitled to receive in respect of all Performance Units which
become vested as a result of a Change in Control a cash payment within ten
(10) Business Days after such Change in Control in an amount as determined by
the Committee at the time of the Award of such Performance Unit and as set
forth in the Award Agreement.
(b) With respect to Performance Shares, unless otherwise determined by the
Committee, restrictions shall lapse immediately on all Performance Shares.
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(c) The Award Agreements evidencing Performance Shares and Performance
Units shall provide for the treatment of such Awards (or portions thereof)
which do not become vested as the result of a Change in Control, including,
without limitation, provisions for the adjustment of applicable Performance
Targets.
8.05 Termination. Except as provided in Section 8.04, and unless otherwise
provided by the Committee, in its sole discretion, in the Award Agreement, the
following provisions shall apply to Performance Awards:
(a) Termination of Employment. Unless otherwise provided below, in the
case of a Participant's Termination of Employment prior to the end of an Award
Period, the Participant will not be entitled to any Performance Awards, and
any Performance Shares shall be forfeited.
(b) Disability, Death or Retirement. Unless otherwise provided by the
Committee, in its sole discretion, in the Award Agreement, if a Participant's
Disability Date or Termination of Employment by reason of death or retirement
on or after the Normal Retirement Date or Other Retirement Date occurs
following at least twelve months of participation in any Award Period, but
prior to the end of an Award Period, the Participant or such Participant's
Beneficiary, as the case may be, shall be entitled to receive a pro-rata share
of his Performance Award as determined under Subsection (c).
(c) Pro-Rata Payment.
(i) Performance Units. With respect to Performance Units, the amount
of any payment made to a Participant (or Beneficiary) under circumstances
described in Section 8.05(b) will be the amount determined by multiplying
the amount of the Performance Units payable in Shares or dollars which
would have been earned, determined at the end of the Award Period, had such
employment not been terminated, by a fraction, the numerator of which is
the number of whole months such Participant was employed during the Award
Period, and the denominator of which is the total number of months of the
Award Period. Any such payment shall be made as soon as practicable after
the end of the respective Award Period, and shall relate to attainment of
Performance Targets over the entire Award Period.
(ii) Performance Shares. With respect to Performance Shares, the
amount of Performance Shares held by a Participant (or Beneficiary) with
respect to which restrictions shall lapse under circumstances described in
Section 8.05(b) will be the amount determined by multiplying the amount of
the Performance Shares with respect to which restrictions would have
lapsed, determined at the end of the Award Period, had such employment not
been terminated, by a fraction, the numerator of which is the number of
whole months such Participant was employed during the Award Period, and the
denominator of which is the total number of months of the Award Period. The
Committee shall determine the amount of Performance Shares with respect to
which restrictions shall lapse under this Section 8.05(c)(ii) as soon as
practicable after the end of the respective Award Period, and such
determination shall relate to attainment of Performance Targets over the
entire Award Period. At that time, all Performance Shares relating to that
Award Period with respect to which restrictions shall not lapse shall be
forfeited.
(d) Other Events. Notwithstanding anything to the contrary in this
Article VIII, the Committee may, in its sole discretion, determine to pay all
or any portion of a Performance Award to a Participant who has terminated
employment prior to the end of an Award Period under certain circumstances
(including, without limitation, a material change in circumstances arising
after the Date of Grant) and subject to such terms and conditions that the
Participant shall have completed, at his Termination of Employment, at least
one year of employment after the Date of Grant.
8.06 Modification or Substitution. Subject to the terms of the Plan, the
Committee may modify outstanding Performance Awards or accept the surrender of
outstanding Performance Awards and grant new Performance Awards in substitution
for them. Notwithstanding the foregoing, no modification of a Performance Award
shall adversely alter or impair any rights or obligations under the Agreement
without the Participant's consent.
Article IX. Stock Purchase Awards
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9.01 Grant of Stock Purchase Award. The Committee, in its sole discretion,
may grant Stock Purchase Awards to Participants either alone or in addition to
other Awards granted under the Plan. A Stock Purchase Award shall consist of the
right to purchase Shares of the Trust and to pay for such Shares either in cash
or through a Purchase Loan or a combination of both, in the Committee's sole
discretion. A Participant shall have until 5:00 P.M. on the twentieth (20th)
Business Day following his Offer Date to accept a Stock Purchase Award and sign
an Award Agreement relating to the Stock Purchase Award.
9.02 Terms of Purchase Loans and Tax Loans.
(a) Purchase Loan. The Trust shall provide to each Participant who
accepts a Stock Purchase Award a Purchase Loan in the principal amount equal
to the portion of the Stock Purchase Price designated by the Committee as not
payable in cash. Each Purchase Loan shall be evidenced by a promissory note.
The term of the Purchase Loan shall be such period of time as may be
determined by the Committee, in its sole discretion, but, payable in full upon
Termination of Employment subject to the terms of this Article IX, and the
proceeds of the Purchase Loan shall be used exclusively by the Participant for
payment of the Stock Purchase Price.
(i) Interest on Purchase Loan. From the Acceptance Date until the
Participant's Purchase Loan is forgiven, paid in full or otherwise
satisfied in full, Interest on the outstanding balance of the Purchase Loan
shall accrue and be payable quarterly in arrears on each date of payment of
a cash dividend on the Shares purchased by the Participant pursuant to a
Stock Purchase Award. If no quarterly cash dividend is paid on the Shares
for a quarter, Interest shall accrue (without any interest thereon) on the
last day of the quarter, and shall be satisfied from future cash dividends
paid on such Shares as provided for in Section 9.03(b) hereof. Any accrued
but unpaid Interest on a Purchase Loan shall be due on the last day of the
Purchase Loan Term.
(ii) Forgiveness of Purchase Loan. Subject to Section 9.02(a)(iii),
the Committee shall have the right, in its sole discretion, at the Offer
Date, to determine (i) the extent to which the Trust shall forgive the
repayment of all or a portion of a Purchase Loan and (ii) the terms of such
forgiveness. To the extent necessary for the forgiveness of a Purchase Loan
intended to qualify as performance-based compensation under Section 162(m)
of the Code to so qualify, the terms and conditions of the Purchase Loan
shall be such that forgiveness of the Purchase Loan is contingent upon the
attainment of specified Performance Targets within the Award Period, as
provided for in Article VIII, and such Purchase Loan shall be treated as a
Performance Award for purposes of Section 11.13(b).
(iii) Effect a Change in Control. In the event of a Change in Control,
the outstanding balance and Interest due on any Purchase Loan will be
completely forgiven as of the date of such Change in Control.
(b) Tax Loan. In order to provide a Participant cash to fulfill federal,
state and local tax obligations arising as a result of the forgiveness of a
Purchase Loan, the Committee may, in its sole discretion, offer a Tax Loan to
a Participant subject to such terms as the Committee, in its sole discretion,
determines. The Tax Loan shall be prepayable, in whole or in part, at any time
and from time to time, without penalty.
(i) Interest on Tax Loan. Each Tax Loan shall bear Interest at a rate
identical to the rate of Interest charged on the Participant's Purchase
Loan and shall be evidenced by a promissory note. Interest on each Tax
Loan, or any balance thereof, shall accrue and be payable quarterly in
arrears on the same date and in the same manner as Interest on a Purchase
Loan, as provided in Sections 9.02(a)(i) and 9.03(b) of the Plan, until
such Tax Loan is paid in full.
9.03 Security for Loans.
(a) Stock Power. Purchase Loans and Tax Loans granted to Participants
shall be secured by a pledge of the Shares acquired with a Purchase Loan
pursuant to a Stock Purchase Award. Except as the Committee may otherwise
determine, such loans shall be fully recourse with respect to a Participant.
The stock certificates for the Shares purchased by a Participant under the
Plan shall be issued in the Participant's name, but shall be held
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as security for repayment of the Participant's Purchase Loan and/or any Tax
Loan by the Chief Financial Officer of the Trust (or for a Stock Purchase
Award made to the Chief Financial Officer, by the Chief Executive Officer)
together with a stock power executed in blank by the Participant (the
execution and delivery of which by the Participant shall be a condition to the
issuance of the Stock Purchase Award). During the Purchase Loan Term, the
Participant shall be entitled to exercise all rights applicable to such
Shares, including, without limitation, the right to vote such Shares and,
subject to Section 9.03(b), the right to receive dividends paid on such
Shares. When the Purchase Loan and any accrued but unpaid Interest thereon has
been repaid or otherwise satisfied in full, the Chief Financial Officer (or
Chief Executive Officer, as the case may be) shall deliver to the Participant
the stock certificates for the Shares purchased by a Participant under the
Plan, other than the Shares, if any, retained as collateral for the Tax Loan
under Section 9.03(c), provided the Participant executes and delivers to the
Chief Financial Officer (or Chief Executive Officer, as the case may be) a
substitute stock power for any stock certificates representing the portion of
the Stock Purchase Award retained by the Trust to secure repayment of any Tax
Loan and any accrued but unpaid Interest thereon, as provided for in Section
9.03(c) of this Plan.
(b) Assignment of Dividends. To secure repayment of his Purchase Loan,
Tax Loan and Interest, each Participant shall also execute an assignment to
the Trust of all cash dividends paid on the Shares purchased by the
Participant with a Purchase Loan pursuant to a Stock Purchase Award. The Trust
shall deduct from each cash dividend paid by the Trust on such Shares an
amount equal to the Interest due to the Trust for that quarter on the
Participant's Purchase Loan, and Tax Loan, if any, and shall also deduct
accrued but unpaid Interest on the Purchase and Tax Loan, such deductions to
be made in the following order: (i) first to satisfy the Interest due on the
Purchase Loan for that quarter, (ii) second to satisfy the Interest due on the
Tax Loan for that quarter, (iii) third to satisfy any accrued but unpaid
Interest on the Purchase Loan, and (iv) fourth to satisfy any accrued but
unpaid Interest on the Tax Loan. To the extent that the cash dividend exceeds
the total of the foregoing subsections (i) through (iv), the Trust shall
distribute the remainder of the dividend to the Participant. In the event the
Interest due on the Participant's Purchase Loan and Tax Loan is greater than
the cash dividend paid that quarter on such Shares (or if the dividend is
insufficient to repay accrued but unpaid Interest from previous quarters),
such unpaid Interest shall accrue and be payable in each succeeding quarter
and then in accordance with Section 9.02(a)(i) (in the case of the Purchase
Loan), Section 9.02(b)(i) (in the case of the Tax Loan) and this Section 9.03.
(c) Release and Delivery of Stock Certificates at End of Purchase Loan
Term. The Trust shall release and deliver to each Participant certificates
for the Shares purchased by the Participant under the Plan at the end of the
Purchase Loan Term, provided the Participant has paid or otherwise satisfied
in full the balance of the Purchase Loan, any Tax Loan and any accrued but
unpaid Interest. In the event the balance of the Purchase Loan is not repaid,
forgiven or otherwise satisfied within ninety (90) days after the end of the
Purchase Loan Term (or such longer time as the Committee, in its sole
discretion, shall provide for repayment or satisfaction), the Trust shall
retain a portion of Shares purchased under the Stock Purchase Award, as
provided in Section 9.04(d).
If a Participant has not paid or otherwise satisfied the balance of the Tax
Loan and any accrued but unpaid Interest thereon at the end of the Purchase
Loan Term, the Trust shall retain as security for repayment of the Tax Loan
and any accrued but unpaid Interest thereon the stock certificates for a
portion of the Shares purchased by the Participant pursuant to a Stock
Purchase Award representing Shares that have a Fair Market Value (determined
as of the last day of the Purchase Loan Term) equal to 200% of the outstanding
balance of the Tax Loan and any accrued but unpaid Interest thereon as of the
last day of the Purchase Loan Term, such stock certificates to be retained in
the possession of the Chief Financial Officer, of the Trust (or the Chief
Executive Officer, as the case may be) as security for repayment of such
indebtedness.
For purposes of this Section, a Participant shall be considered to have
paid in full for that number of Shares acquired with a Purchase Loan
determined by multiplying the number of Shares covered by a Stock Purchase
Award by a fraction, the numerator of which is the sum of (i) the cumulative
amount of the Purchase Loan principal which has been forgiven under Section
9.02(c) on the date such calculation is made and (ii) the portion of the
Purchase Loan, if any, which has been prepaid by such date, and the
denominator of which is the original principal amount of the Purchase Loan.
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In the event of a Participant's Termination of Employment prior to the end
of the Purchase Loan Term, the stock certificates for the Shares purchased by
the Participant pursuant to a Stock Purchase Award shall be released and
delivered to the Participant (or his Beneficiary) or retained by the Trust,
depending upon whether the Participant has repaid the balance of the Purchase
Loan, Tax Loan and any accrued but unpaid Interest on the Purchase and Tax
Loans, in accordance with Section 9.04 of this Plan.
(d) Release and Delivery of Stock Certificates during Purchase Loan Term.
On January 31 of each year of a Purchase Loan Term, the Trust shall release
and deliver to each Participant certificates for a portion of the Shares
purchased by a Participant pursuant to a Stock Purchase Award, provided that
such Participant is employed by the Trust as of such date. The Trust shall
retain as security for repayment of the Purchase Loan, the Tax Loan and any
accrued but unpaid Interest thereon, a portion of the Shares purchased by a
Participant having a Fair Market Value (determined as of January 30 of each
year of the Purchase Loan Term) equal to 200% of the outstanding balance of
the Purchase Loan, Tax Loan and any accrued but unpaid Interest thereon as of
January 31 of each year during the Purchase Loan Term. Certificates
representing the remaining Shares purchased pursuant to a Stock Purchase Award
shall be delivered to such Participant. A Participant shall not transfer, sell
or otherwise dispose of Shares released pursuant to this Section during the
remainder of the Purchase Loan Term; provided, however, that such Shares may
be pledged as collateral for other indebtedness of the Participant; provided,
further, however, that in the event of a Change in Control, all such transfer
restrictions on such Shares shall lapse.
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9.04 Termination of Employment.
(a) Termination of Employment by Death or Disability. On the Offer Date,
the Committee, in its sole discretion, may provide for the forgiveness of a
Purchase Loan as of the date of Participant's Termination of Employment by
reason of death or Disability, in such an amount of the original principal
amount of the Purchase Loan as the Committee shall designate; provided that
the Participant (or his Beneficiary, in the case of the Participant's death)
shall first tender to the Trust within one hundred and eighty (180) days of
such Termination of Employment: (i) the amount of the Trust's minimum
withholding tax obligation which would be created as a result of the
forgiveness of the Purchase Loan and (ii) the amount of the balance of
Participant's Purchase Loan, Tax Loan and any accrued but unpaid Interest on
such Loans.
(b) Termination of Employment by Voluntary Resignation or Without Cause.
In the event of a Participant's Termination of Employment by voluntary
resignation, the Participant shall repay to the Trust the entire balance of
the Purchase Loan, the Tax Loan and any accrued but unpaid Interest on such
Loans, which shall be deemed immediately due and payable, within ninety (90)
days of the date of Participant's Termination of Employment by voluntary
resignation. In the event of a Participant's Termination of Employment by the
Trust without Cause, the Participant shall be obligated to repay the balance
of the Purchase Loan, Tax Loan and any accrued but unpaid Interest on the
Purchase and Tax Loans within twelve (12) months of the date of Participant's
Termination of Employment.
(c) Termination of Employment for Cause. In the event of a Participant's
Termination of Employment for Cause, the Participant's Purchase Loan, Tax
Loan, and accrued but unpaid Interest on such Loans, shall become due and
payable immediately upon the date of such Participant's Termination of
Employment.
(d) Retention of Stock Purchase Award. If a Participant fails to repay
the balance of the Purchase Loan, Tax Loan and accrued but unpaid Interest on
the Purchase and Tax Loans within the applicable time periods as provided in
the Participant's promissory notes and in this Section 9.04, the Trust shall
retain that portion of the Shares acquired through a Stock Purchase Award
which has a Fair Market Value (as of the last day of such applicable time
period) equal to the sum of the outstanding principal balance of Participant's
Purchase Loan and Tax Loan and accrued but unpaid Interest on the Purchase and
Tax Loans, and the Trust shall be obligated to distribute to the Participant
stock certificates for only that portion of the Stock Purchase Award which is
equal in value to the difference between the Fair Market Value of the Shares
covered by the Stock Purchase Award and the sum of the principal balance of
the Participant's Purchase Loan and Tax Loan and the accrued but unpaid
Interest on the Purchase and Tax Loans, such Fair Market Value and balance to
be determined as of the date such Purchase Loan, Tax Loan and Interest
payments are due as set forth in Participant's promissory notes and the
foregoing Section 9.04.
9.05 Restrictions on Transfer. Subject to Section 11.04, no Stock Purchase
Award or Shares purchased through such an Award and pledged to the Trust as
collateral security for the Participant's Purchase Loan, Tax Loan and accrued
but unpaid Interest thereon shall be transferable by the Participant other than
by will or by the laws of descent and distribution.
Article X. Non-Employee Trustee Awards
10.01 Grant of Non-Employee Trustee Awards. Each individual whose term as
a Trustee continues after the date of each annual meeting of shareholders of the
Trust, commencing with the 1997 annual meeting, and continuing until the date
this Plan terminates, shall as of the date of each such annual meeting of
shareholders be granted a Non-Employee Trustee Award consisting of an Option to
purchase 2,500 Shares. The exercise price for such Options shall be the Fair
Market Value of a Share on the Date of Grant. All such Options shall be
designated as Non-Qualified Stock Options and shall have a ten year term. Such
Options shall be fully exercisable six months after the Date of Grant, provided,
however, in the event of a Change in Control, such Options shall become
immediately and fully exercisable.
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If a Non-Employee Trustee's service with the Trust terminates by reason of
death or Disability, any Option held by such Non-Employee Trustee may be
exercised for a period of two years from the date of such termination or until
the expiration of the Option, whichever is shorter. If a Non-Employee Trustee's
service with the Trust terminates other than by reason of death or Disability,
under mutually satisfactory conditions, any Option held by such Non-Employee
Trustee may be exercised for a period of one year from the date of such
termination, or until the expiration of the stated term of the Option, whichever
is shorter. All applicable provisions of the Plan not inconsistent with this
Section 10.01 shall apply to Awards granted to Non-Employee Trustees; provided,
however, that the Committee may not exercise discretion under any provision of
the Plan with respect to Options granted under this Section 10.01 to the extent
that such discretion is inconsistent with Exchange Act Rule 16b-3.
10.02 Payment of Annual Retainer. During the term of this Plan, each Non-
Employee Trustee shall have the option of receiving his Annual Retainer in cash
or Shares or a combination of both. Each Non-Employee Trustee shall be required
to make an annual irrevocable election regarding the form of payment of his
Annual Retainer. The election must be in writing and must be delivered to the
Secretary of the Trust on or before the date on which the amount of the Annual
Retainer for a year is determined; provided, however, that for the Trust's 1997
fiscal year an election with respect to the form of payment of the Annual
Retainer was made on December 31, 1996, and the Annual Retainer Payment Date for
such fiscal year shall be June 30, 1997. If no election is made with respect to
a year, a Non-Employee Trustee's Annual Retainer for such year will
automatically be paid in Shares. The Annual Retainer for a year shall be paid to
the Trustees on the Annual Retainer Payment Date for such year. The total number
of Shares to be issued to a Non-Employee Trustee who receives Shares pursuant to
this Section 10.02 shall be determined by dividing the dollar amount of the
portion of the Annual Retainer payable in Shares for a particular year by the
Fair Market Value of a Share on the Business Day immediately preceding the
Annual Retainer Payment Date. In no event shall the Trust be required to issue
fractional Shares. Whenever under the terms of this Section a fractional Share
would otherwise be required to be issued, an amount in lieu thereof shall be
paid in cash based upon the Fair Market Value of such fractional Share. Shares
issued pursuant to this Section shall not be transferable for three years from
the date of their issuance, provided, however, in the event of a Change in
Control all such restrictions on such Shares shall lapse.
Article XI. Terms Applicable to All Awards Granted Under the Plan
11.01 Plan Provisions Control Award Terms Except Upon Termination.
(a) Termination. An employment or other agreement, if applicable, between
a Participant and the Trust shall govern with respect to the terms and
conditions applicable to Awards granted to such Participant under the Plan
upon a Termination of Employment; provided, however, that to the extent
necessary for an Award intended to qualify as performance-based compensation
under Section 162(m) of the Code to so qualify, the terms of the Plan shall
govern the Award; and, provided further, that the Committee shall have
reviewed and, in its sole discretion, approved the employment or other
agreement.
(b) Plan Provisions Control Generally. Except as provided in Section
11.01(a), the terms of the Plan shall govern all Awards granted under the
Plan, and in no event shall the Committee have the power to grant to a
Participant any Award under the Plan which is contrary to any provisions of
the Plan. In the event any provision of any Award granted under the Plan shall
conflict with any of the terms in the Plan as constituted on the Date of Grant
of such Award, the terms of the Plan as constituted on the Date of Grant of
such Award shall control. Except as provided in Section 3.01(b), Section 8.06
or Section 11.03 or unless otherwise provided by the Committee, in its sole
discretion, in the Award Agreement, the terms of any Award granted under the
Plan may not be changed after the Date of Grant of such Award so as to
materially decrease the value of the Award without the express written
approval of the Participant.
11.02 Award Agreement. No person shall have any rights under any Award
granted under the Plan unless and until the Trust and the Participant to whom
such Award shall have been granted shall have executed and delivered an Award
Agreement or received any other Award acknowledgment authorized by the Committee
expressly granting the Award to such person and containing provisions setting
forth the terms of the Award. If there
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is any conflict between the provisions of an Award Agreement and the terms of
the Plan, the terms of the Plan shall control.
11.03 Modification of Award After Grant. Except as provided in Section
3.01(b) or Section 8.06, or unless otherwise provided by the Committee, in its
sole discretion, in the Award Agreement, no Award granted under the Plan to a
Participant may be modified (unless such modification does not materially
decrease the value of the Award) after the Date of Grant except by express
written agreement between the Trust and the Participant; provided that any such
change (a) shall not be inconsistent with the terms of the Plan, and (b) shall
be approved by the Committee.
11.04 Limitation on Transfer. The rights and interest of a Participant in
any Award under the Plan may not be assigned or transferred other than by will
or the laws of descent and distribution or, in the Committee's sole discretion,
pursuant to a domestic relations order (within the meaning of Exchange Act Rule
16a-12). During the lifetime of a Participant, and except as the preceding
sentence provides, only the Participant personally may exercise rights under the
Plan. Except as otherwise specifically provided in the Plan, a Participant's
Beneficiary may exercise the Participant's rights only to the extent they were
exercisable under the Plan at the date of the death of the Participant and are
otherwise currently exercisable.
11.05 Taxes. The Trust shall be entitled, if the Committee deems it
necessary or desirable, to withhold (or secure payment from the Participant in
lieu of withholding) the amount of any withholding or other tax required by law
to be withheld or paid by the Trust with respect to any amount payable and/or
Shares issuable under such Participant's Award, or with respect to any income
recognized upon the lapse of restrictions applicable to an Award or upon a
disqualifying disposition of Shares received pursuant to the exercise of an
Incentive Stock Option, and the Trust may defer payment or issuance of the cash
or Shares upon the grant, exercise or vesting of an Award unless indemnified to
its satisfaction against any liability for any such tax. The amount of such
withholding or tax payment shall be determined by the Committee or its delegate
and shall be payable by the Participant at such time as the Committee
determines. The Committee shall prescribe in each Award Agreement one or more
methods by which the Participant will be permitted to satisfy his tax
withholding obligation, which methods may include, without limitation, the
payment of cash by the Participant to the Trust and the withholding from the
Award, at the appropriate time, of a number of Shares sufficient, based upon the
Fair Market Value of such Shares, to satisfy such tax withholding requirements.
The Committee shall be authorized, in its sole discretion, to establish such
rules and procedures relating to any such withholding methods as it deems
necessary or appropriate, including, without limitation, rules and procedures
relating to elections by Participants who are subject to the provisions of
Section 16 of the Exchange Act to have Shares withheld from an Award to meet
such withholding obligations.
11.06 Changes in Capitalization.
(a) In the event of a Change in Capitalization, the Committee shall
conclusively determine the appropriate adjustments, if any, to (i) the maximum
number and class of Shares or other securities with respect to which Awards
may be granted under the Plan, (ii) the maximum number and class of Shares or
other securities with respect to which Awards may be granted to any
Participant during any calendar year, (iii) the number and class of Shares or
securities which are subject to outstanding Awards granted under the Plan and
the purchase price therefor, if applicable, and (iv) the Performance Targets.
(b) Any such adjustment in the Shares or other securities subject to
outstanding Incentive Stock Options (including, without limitation, any
adjustments in the purchase price) shall be made in such manner as not to
constitute a modification as defined by Section 424(h)(3) of the Code and only
to the extent otherwise permitted by Sections 422 and 424 of the Code.
(c) If, by reason of a Change in Capitalization, a Participant shall be
entitled to exercise an Award with respect to, new, additional or different
shares of stock or securities, such new, additional or different shares shall
thereupon be subject to all of the conditions, restrictions and performance
criteria which were applicable to the Shares subject to the Award, as the case
may be, prior to such Change in Capitalization.
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(d) No adjustment of the number of Shares available under the Plan or to
which any Award relates that would otherwise be required under this Section
shall be made unless and until such adjustment either by itself or with other
adjustments not previously made under this Section would require an increase
or decrease of at least 1% in the number of Shares available under the Plan or
to which any Award relates immediately prior to the making of such adjustment
(the "Minimum Adjustment"). Any adjustment representing a change of less
than such minimum amount shall be carried forward and made as soon as such
adjustment together with other adjustments required by this Section and not
previously made would result in a Minimum Adjustment. Notwithstanding the
foregoing, any adjustment required by this Section which otherwise would not
result in a Minimum Adjustment shall be made with respect to Shares relating
to any Award immediately prior to exercise of such Award. No fractional Shares
or units of other securities shall be issued pursuant to any such adjustment,
and any fractions resulting from any such adjustment shall be eliminated in
each case by rounding downward to the nearest whole share.
11.07 Loans. The Trust shall be entitled, if the Committee in its sole
discretion deems it necessary or desirable, to lend money to a Participant for
purposes of (a) exercising his rights under an Award hereunder or (b) paying any
income tax liability related to an Award; provided, however, that Non-Employee
Trustees shall not be eligible to receive such loans. Such a loan shall be
evidenced by a promissory note payable to the order of the Trust executed by the
Participant and containing such other terms and conditions as the Committee may
deem desirable.
11.08 Surrender of Awards. Any Award granted to a Participant under the
Plan may be surrendered to the Trust for cancellation on such terms as the
Committee and such Participant approve.
11.09 No Right to Award; No Right to Employment. No employee or other
person shall have any claim of right to be granted an Award under this Plan.
Neither the Plan nor any action taken hereunder shall be construed as giving any
employee any right to be retained in the employ of the Trust.
11.10 Awards Not Includable for Benefit Purposes. Income recognized by a
Participant pursuant to the provisions of the Plan shall not be included in the
determination of benefits under any employee pension benefit plan (as such term
is defined in Section 3(2) of the Employee Retirement Income Security Act of
1974, as amended) or group insurance or other benefit plans applicable to the
Participant which are maintained by the Trust, except as may be provided under
the terms of such plans or determined by resolution of the Trustees.
11.11 Governing Law. The Plan and all determinations made and actions
taken pursuant to the Plan shall be governed by the laws of the District of
Columbia other than the conflict of laws provisions of such laws, and shall be
construed in accordance therewith.
11.12 No Strict Construction. No rule of strict construction shall be
implied against the Trust, the Committee, or any other person in the
interpretation of any of the terms of the Plan, any Award granted under the Plan
or any rule or procedure established by the Committee.
11.13 Interpretation.
(a) Rule 16b-3. The Plan is intended to comply with Exchange Act Rule
16b-3 and the Committee shall interpret and administer the provisions of the
Plan or any Award Agreement in a manner consistent therewith. Any provisions
inconsistent with such Rule shall be inoperative and shall not affect the
validity of the Plan. The Trustees are authorized to amend the Plan and to
make any such modifications to Award Agreements to comply with Exchange Act
Rule 16b-3, as it may be amended from time to time, and to make any other such
amendments or modifications deemed necessary or appropriate to better
accomplish the purposes of the Plan in light of any amendments made to
Exchange Act Rule 16b-3.
(b) Section 162(m) of the Code. Unless otherwise expressly stated in the
relevant Award Agreement, each Option, Stock Appreciation Right and
Performance Award granted under the Plan is intended to be performance-based
compensation within the meaning of Section 162(m)(4)(C) of the Code (except
that, in the event of a Change in Control, payment of Performance Awards to a
Participant who remains a "covered employee" with respect to such payment
within the meaning of Section 162(m)(3) of the Code may not qualify
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as performance-based compensation). The Committee shall not be entitled to
exercise any discretion otherwise authorized hereunder with respect to such
Awards if the ability to exercise such discretion or the exercise of such
discretion itself would cause the compensation attributable to such Awards to
fail to qualify as performance-based compensation. Notwithstanding anything to
the contrary in the Plan, the provisions of the Plan may at any time be
bifurcated by the Trustees or the Committee in any manner so that certain
provisions of the Plan or any Performance Award intended (or required in
order) to satisfy the applicable requirements of Section 162(m) of the Code
are only applicable to persons whose compensation is subject to Section
162(m).
11.14 Captions. The captions (i.e., all Section headings) used in the Plan
are for convenience only, do not constitute a part of the Plan, and shall not be
deemed to limit, characterize or affect in any way any provisions of the Plan,
and all provisions of the Plan shall be construed as if no captions have been
used in the Plan.
11.15 Severability. Whenever possible, each provision in the Plan and
every Award at any time granted under the Plan shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of the Plan or any Award at any time granted under the Plan shall be held to be
prohibited by or invalid under applicable law, then (a) such provision shall be
deemed amended to accomplish the objectives of the provision as originally
written to the fullest extent permitted by law and (b) all other provisions of
the Plan and every other Award at any time granted under the Plan shall remain
in full force and effect.
11.16 Regulations and Other Approvals.
(a) The obligation of the Trust to sell or deliver Shares with respect to
Awards granted under the Plan shall be subject to all applicable laws, rules
and regulations, including, without limitation, all applicable federal and
state securities laws, and the obtaining of such approvals by governmental
agencies as may be deemed necessary or appropriate by the Committee.
(b) Each Award is subject to the requirement that, if at any time the
Committee determines, in its sole discretion, that the listing, registration
or qualification of Shares issuable pursuant to the Plan is required by any
securities exchange or under any state or federal law, or the consent or
approval of any governmental regulatory body is necessary or desirable as a
condition of, or in connection with, the grant of an Award or the issuance of
Shares, no Awards shall be granted or payment made or Shares issues, in whole
or in part, unless listing, registration, qualification, consent or approval
has been effected or obtained free of any conditions as acceptable to the
Committee.
(c) Notwithstanding anything contained in the Plan or any Award Agreement
to the contrary, in the event that the disposition of Shares acquired pursuant
to the Plan is not covered by a then current registration statement under the
Securities Act of 1933, as amended (the "Securities Act"), and is not
otherwise exempt from such registration, such Shares shall be restricted
against transfer to the extent required by the Securities Act and Rule 144 or
other regulations thereunder. The Committee may require any individual
receiving Shares pursuant to an Award granted under the Plan, as a condition
precedent to receipt of such Shares, to represent and warrant to the Trust in
writing that the Shares acquired by the individual are acquired without a view
to any distribution thereof and will not be sold or transferred other than
pursuant to an effective registration thereof under said Act or pursuant to an
exemption applicable under the Securities Act or the rules and regulations
promulgated thereunder. The certificates evidencing any of such Shares shall
be appropriately amended to reflect their status as restricted securities as
aforesaid.
11.17 Construction. Whenever used herein, nouns in the singular shall
include the plural and the masculine pronouns shall include the feminine gender.
11.18 Pooling Transactions. Notwithstanding anything contained in the Plan
or any Agreement to the contrary, in the event of a Change in Control which is
also intended to constitute a Pooling Transaction, the Committee shall take such
actions, if any, as are specifically recommended by an independent accounting
firm retained by the Trust to the extent reasonably necessary in order to assure
that the Pooling Transaction will qualify as such, including, without
limitation, (i) deferring the vesting, exercise, payment, settlement or lapsing
of restrictions with respect to any Award, (ii) providing that the payment or
settlement in respect of any Award be
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made in the form of cash, Shares or securities of a successor or acquirer of the
Trust, or a combination of the foregoing, (iii) postponing or deferring the
forgiveness of any Loan hereunder, and (iv) providing for the extension of the
term of any Award to the extent necessary to accommodate the foregoing, but not
beyond the maximum term permitted for any Award.
11.19 Amendment and Termination.
(a) Amendment. The Trustees shall have complete power and authority to
amend the Plan at any time it is deemed necessary or appropriate: provided,
however, that the Trustees shall not, without the affirmative approval of
shareholders of the Trust, make any amendment that requires shareholder
approval under Section 162(m) of the Code or under any other applicable law,
unless the Trustees determine that compliance therewith is no longer desired.
No termination or amendment of the Plan may, without the consent of the
Participant to whom any Award shall theretofore have been granted under the
Plan, adversely affect the right of such individual under such Award;
provided, however, that the Committee may, in its sole discretion, change
Performance Targets as provided in Section 8.06 and make such provision in the
Award Agreement for amendments which, in its sole discretion, it deems
appropriate.
(b) Termination. The Trustees shall have the right and the power to
terminate the Plan at any time. No Award shall be granted under the Plan after
the termination of the Plan, but the termination of the Plan shall not have
any other effect and any Award outstanding at the time of the termination of
the Plan may be exercised after termination of the Plan at any time prior to
the expiration date of such Award to the same extent such Award would have
been exercisable had the Plan not terminated.
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