EXHIBIT 99.1
EXHIBIT A
HIGHWOODS PROPERTIES, INC.
EMPLOYEE STOCK PURCHASE PLAN
Highwoods Properties, Inc. (the "Company") hereby establishes an Employee
Stock Purchase Plan (the "Plan") granting Eligible Employees of the Company and
its Subsidiaries the opportunity to purchase Common Stock of the Company.
NOW, THEREFORE, the Company hereby establishes the Plan, the terms of which
are as follows:
SECTION 1. PURPOSE.
The purpose of this Plan is to give Eligible Employees of the Company and
its Subsidiaries, an opportunity to acquire shares of the Company's Common Stock
in order to increase their proprietary interest in the Company's success, to
encourage them to remain in the employ of the Company, and to continue to
promote the Company's best interests and enhance its long-term performance.
SECTION 2. DEFINITIONS.
Wherever used herein, the following words and phrases shall have the
meanings stated below unless a different meaning is plainly required by the
context:
(a) "ADMINISTRATOR" means First Union National Bank of North Carolina, or
such other third-party administrator appointed by the Committee to maintain the
records of the Plan and conduct such other duties as may be further described
herein.
(b) "AVAILABLE SHARES" means the aggregate number of shares of Common Stock
which may be purchased by Eligible Employees under the Plan, as described in
Section 5.
(c) "BOARD" means the Board of Directors of the Company.
(d) "CODE" means the Internal Revenue Code of 1986, as amended.
(e) "COMMITTEE" means a committee appointed by the Board and composed of
not less than three members of the Board to which the Board may delegate its
powers with respect to administration of the Plan pursuant to Section 6 hereof.
(f) "COMMON STOCK" means shares of the common stock of the Company, $.01
par value. Common stock hereunder includes both treasury stock and stock of
original issue.
(g) "COMPANY" means Highwoods Properties, Inc., a Maryland corporation.
(h) "COMPENSATION" means an Eligible Employee's regular base pay at the
rate in effect on the applicable Offering Date, but excludes any bonus, overtime
payment, sales commission or pre-tax contribution to any medical or retirement
plans qualified under Section 125 or 401(k) of the Code.
(i) "ELIGIBLE EMPLOYEE" means any individual who on any Offering Date is
employed by the Company or a Subsidiary on a regular full-time basis. A person
shall be considered employed on a regular full-time basis if he or she is
customarily employed by the Company or the Subsidiary, at least 20 hours per
week and is customarily employed for more than five 5 months per calendar year.
"Eligible Employee" shall not include any person who would own, immediately
after the Option was granted, stock possessing five percent or more of the total
combined voting power or value of any classes of stock of the Company, or any
Subsidiary. For purposes of this subsection 2(i), stock ownership of an
individual shall be determined under Section 424(d) of the Code, and stock that
the individual may purchase under outstanding options shall be treated as stock
owned by the individual.
(j) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
(k) "EXERCISE DATE" means September 30, 1997, and any subsequent December
31, March 31, June 30 and September 30 thereafter during the term of the Plan.
(l) "FAIR MARKET VALUE" of Common Stock as of any date means the average of
the closing or last prices of the Common Stock on the New York Stock Exchange or
other comparable reporting system for the five consecutive trading days
immediately preceding such applicable date. Notwithstanding any provision of the
Plan to the contrary, no determination made with
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respect to the Fair Market Value of Common Stock subject to an Option shall be
inconsistent with Section 423 of the Code or regulations thereunder.
(m) "OFFERING DATE" means July 1, 1997, and any subsequent October 1,
January 1, April 1 and July 1 thereafter during the term of the Plan.
(n) "OFFERING PERIOD" means the period commencing on an Offering Date
hereunder and ending on the next following Exercise Date. The Board may change
the duration and/or frequency of Offering Periods without stockholder approval
if such change is announced at least 10 days prior to the scheduled beginning of
the Offering Period to be affected.
(o) "OPTION" means an option granted hereunder which will entitle an
Eligible Employee to purchase shares of Common Stock.
(p) "OPTION PRICE" means the lesser of 90% of the Fair Market Value per
share of Common Stock as of the applicable Offering Date or 90% of the Fair
Market Value per share of Common Stock on the applicable Exercise Date.
(q) "PLAN" means the Highwoods Properties, Inc. Employee Stock Purchase
Plan as set forth herein and as subsequently amended.
(r) "PURCHASE ACCOUNT" means the book entry account maintained by the
Company or Administrator to record the funds withheld from each Eligible
Employee's payroll for the purchase of Common Stock and to record the shares of
Common Stock credited to each Eligible Employee under the Plan.
(s) "SUBSIDIARY" or "SUBSIDIARIES" means the corporation or corporations
meeting the requirements of Section 424(f) of the Code.
SECTION 3. BASIS OF PARTICIPATION AND GRANTING OF OPTIONS.
(a) Each Eligible Employee on any Offering Date, commencing with the
Offering Date which occurs on or after July 1, 1997 and, subject to earlier
termination of the Plan pursuant to subsection 14(c) hereof, ending with the
last Offering Date on which shares of Common Stock are available for grant
within the limitation set forth in Section 5, is granted an Option hereunder
which will entitle him or her to purchase, at the Option Price per share
applicable to such Offering Date, the largest number of whole shares of Common
Stock that may be obtained by having deducted from such Eligible Employee's
Compensation for each payroll period in the applicable Offering Period an amount
not less than one percent of the Eligible Employee's Compensation nor more than
the lesser of 15% of the Eligible Employee's Compensation and $7,500.
(b) If the number of shares of Common Stock for which Options are granted
pursuant to subsection 3(a) exceeds the applicable number set forth in Section
5, then the Options granted under the applicable paragraph to all Eligible
Employees shall, in a nondiscriminatory manner which shall be consistent with
subsection 13(c), be reduced in proportion to their respective Compensation, and
the balance of payroll deductions credited to the Purchase Account of each
Eligible Employee shall be returned without interest to each Eligible Employee
as soon as practicable.
(c) Payment for Common Stock purchased under the Option shall be made only
by payroll deductions over a designated Offering Period.
(d) Each Option under the Plan shall be granted on the condition that (i) a
registration statement under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the Common Stock subject to such Option has
become effective and a copy of the Prospectus has been delivered to the Eligible
Employee and (ii) the shares of Common Stock issuable hereunder have been
approved for listing by the New York Stock Exchange.
SECTION 4. PURCHASE ACCOUNT.
Each Eligible Employee shall notify the Company, on such forms as shall be
provided by the Company, at least 10 days before the applicable Offering Date,
of the percentage of Compensation which the Eligible Employee wishes to have
withheld ratably from the Eligible Employee's Compensation during the Offering
Period; provided that not withstanding anything to the contrary herein, with
respect to the Offering Period commencing July 1, 1997 and ending September 30,
1997 (the "Initial Offering Period"), the Eligible Employee may so notify the
Company up to July 1, 1997 and payroll deductions will commence July 7, 1997.
Each Eligible Employee shall authorize the Company and its Subsidiaries to
withhold from the Eligible Employee's after-tax compensation, beginning as soon
as practicable following the making of the election described in this Section 4
and continuing throughout the duration of the Offering Period unless terminated
sooner under Section 7. All withheld amounts may be used by the Company for
general corporate purposes. The Company or Administrator shall maintain a record
of each Eligible Employee's funds in the Eligible Employee's Purchase Account.
Such funds so accumulated within said Purchase
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Account may be returned to an Eligible Employee or beneficiary without interest
or applied toward the purchase of Common Stock only pursuant to the provisions
contained in this Plan.
SECTION 5. MAXIMUM LIMITATIONS.
The aggregate number of shares of Common Stock available for grant as
Options pursuant to this Plan shall not exceed 500,000, subject to adjustment
pursuant to Section 10 hereof. Shares of Common Stock granted pursuant to the
Plan may be either authorized but unissued shares or shares now or hereafter
held in the treasury of the Company. In the event that any Option granted
pursuant to subsection 3(a) expires or is terminated, surrendered or canceled
without being exercised, in whole or in part, for any reason, the number of
shares of Common Stock theretofore subject to such Option shall again be
available for grant as an Option pursuant to subsection 3(a) and shall not
reduce the aggregate number of shares of Common Stock available for grant as
such Options as set forth in the first sentence of this Section.
SECTION 6. ADMINISTRATION.
The Plan shall be administered by the Board, which, to the extent it shall
determine, may delegate its powers with respect to the administration of the
Plan (except its powers under subsection 14(c)) to the Committee. If the Board
chooses to appoint a Committee, references hereinafter to the Board (except in
subsection 14(c)) shall be deemed to refer to the Committee. Subject to the
express provisions of the Plan, the Board may interpret the Plan, prescribe,
amend and rescind rules and regulations relating to it, correct any defect or
omission or reconcile any inconsistency in the Plan, determine the terms and
provisions of the Options granted hereunder, determine and change the Offering
Periods, Offering Dates and Exercise Dates (except as otherwise limited herein)
and make all other determinations necessary or advisable for the administration
of the Plan. The determinations of the Board on all matters regarding the Plan
shall be conclusive. A member of the Board shall only be liable for any action
taken or determination made in bad faith.
SECTION 7. TERMS OF OPTIONS.
(a) Each Option shall, unless sooner expired pursuant to subsection 7(b),
(c) or (d), be exercised on the Exercise Date for the applicable Offering
Period. Each Option not exercised during an Offering Period shall expire on the
Exercise Date for the applicable Offering Period.
(b) An Eligible Employee may at any time at least 21 days before an
Exercise Date (or such other date as may be selected by the Committee) terminate
the Option in its entirety by written notice of such termination delivered in
the manner set forth in subsection 14(i). Such termination shall become
effective upon receipt of such notice by the Company or Administrator. As soon
as practical following such notice, all funds then in the Eligible Employee's
Purchase Account shall be returned to the Eligible Employee without interest and
the Eligible Employee's Purchase Account closed, and all rights and privileges
of the Eligible Employee granted pursuant to this Plan and the Option granted
hereunder shall be terminated. Such Eligible Employee may again elect to
participate in the Plan on the next Offering Date pursuant to Sections 3 and 4.
(c) An Option shall expire on the first to occur of the Exercise Date for
the applicable Offering Period and the date that the employment of the Eligible
Employee with the Company and its Subsidiaries terminates (as determined by the
Board) for any reason other than death or disability. In the event that the
Option expires because of termination of employment, all funds then on deposit
in the Eligible Employee's Purchase Account shall be returned without interest
to the Eligible Employee and the Eligible Employee's Purchase Account closed.
(d) An Option shall expire on the Exercise Date for the applicable Offering
Period if the Eligible Employee becomes disabled (as determined by the Board) or
dies during an Offering Period. The Eligible Employee's Purchase Account at the
date of such Eligible Employee's disability or death shall become the basis of
the exercise of the Option under Section 8.
SECTION 8. MANNER OF EXERCISE OF OPTIONS AND PAYMENT FOR COMMON STOCK.
(a) Except as provided in subsection 7(b), (c) or (d), each Eligible
Employee's Option shall be exercised automatically on the Exercise Date of each
Offering Period, and the maximum number of shares of Common Stock will be
purchased by the Administrator for each Eligible Employee with the entire
proceeds of each Eligible Employee's Purchase Account. The Common Stock
purchased under this Section 8 may be either treasury stock or stock of original
issue, in the discretion and at the direction of the Company.
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(b) Upon the written request of an Eligible Employee (or beneficiary, as
described in subsection 9(b)) following any Offering Period, the Administrator
shall deliver (or cause to be delivered) a certificate for the whole shares
purchased under subsection 8(a) to such Eligible Employee (or beneficiary). If
the number of shares purchased is not a whole number of shares, the number of
shares reflected on such certificate shall be rounded down to the next whole
number and the Company shall pay the difference to such Eligible Employee in
cash. Any remaining shares in such Eligible Employee's Purchase Account will
continue to be credited to such Eligible Employee's Purchase Account.
(c) An Eligible Employee may not make additional cash payments into such
Eligible Employee's Purchase Account.
SECTION 9. TRANSFERABILITY AND DESIGNATION OF BENEFICIARY.
(a) No Option may be transferred, assigned, pledged, or hypothecated
(whether by operation of law or otherwise), except as provided by will or the
applicable laws of descent or distribution, and no Option shall be subject to
execution, attachment or similar process. Any attempted assignment, transfer,
pledge, hypothecation or other disposition of an Option, or levy of attachment
or similar process upon the Option not specifically permitted herein shall be
null and void and without effect. An Option may be exercised only by the
Eligible Employee during his or her lifetime, or pursuant to subsection 7(c), by
his or her beneficiary (as described in subsection 9(b)), estate or the person
who acquires the right to exercise such Option upon his or her death by bequest
or inheritance.
(b) Each Eligible Employee may file a written designation of beneficiary
who is to receive any stock or cash in the event that such Eligible Employee
dies after the end of an Offering Period but before the issuance of the shares
or during an Offering Period but before the respective Exercise Date.
SECTION 10. ADJUSTMENT PROVISIONS.
The aggregate number of shares of Common Stock with respect to which
Options may be granted, the aggregate number of shares of Common Stock subject
to each outstanding Option, and the Option Price per share of each Option may
all be appropriately adjusted as the Board may determine for any increase or
decrease in the number of shares of issued Common Stock resulting from a
subdivision or consolidation of shares, whether through reorganization,
recapitalization, stock split-up, stock distribution or combination of shares,
or the payment of a share dividend or other increase or decrease in the number
of such shares outstanding effected without receipt of consideration by the
Company. Adjustments under this Section 10 shall be made according to the sole
discretion of the Board, and its decision shall be binding and conclusive.
SECTION 11. DISSOLUTION, MERGER AND CONSOLIDATION.
In the event of (i) the adoption of a plan of merger, consolidation, share
exchange or similar transaction of the Company with any other corporation as a
result of which the holders of the Common Stock of the Company in the aggregate
would receive less than 50% of the voting capital stock of the surviving or
resulting corporation; (ii) the approval by the Board of an agreement providing
for the sale or transfer (other than as security for obligations of the Company)
by the Company of a majority of the stock of a significant subsidiary of the
Company or substantially all of the assets of the Company or of a significant
subsidiary of the Company; (iii) the acquisition of more than 20% of the
Company's voting capital stock by any person within the meaning of Section
13(d)(3) of the Exchange Act, other than a person, or group including a person,
who beneficially owned, as of the most recent Offering Date, more than 5% of the
Company's securities, in the absence of a prior expression of approval of the
Board; (iv) during any period of two consecutive years, individuals who at the
beginning of such period constitute the Board cease for any reason to constitute
at least a majority thereof unless the election, or the nomination for election
by the Company's stockholders, of each new director was approved by the vote of
at least two-thirds of the directors then still in office who were directors at
the beginning of the period; or (v) any other change in control of the Company
of a nature that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A under the Exchange Act, then any Option granted
hereunder during the then-current Option Period shall remain exercisable until
the Exercise Date of the then-current Option Period, subject to all of the terms
hereof not inconsistent with this Section 11.
Anything contained herein to the contrary notwithstanding, upon the
dissolution or liquidation of the Company or the consummation of a merger or
consolidation in which the stockholders of the Company receive less than 50% of
the voting capital stock of the surviving or resulting corporation, each Option
granted under the Plan shall terminate, but the Eligible Employee shall have the
right, following the adoption of a plan of dissolution or liquidation or a plan
of merger or consolidation and in any event prior to such dissolution,
liquidation, merger or consolidation, to exercise his Option to purchase Common
Stock on the Exercise Date of the then-current Option Period, subject to all of
the other terms hereof not inconsistent with this Section 11.
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The grant of an Option pursuant to this Plan shall not affect in any way
the right or power of the Company to make adjustments, reclassifications,
reorganizations, or changes of its capital or business structure, or to merge or
consolidate, or to dissolve, liquidate or sell, or transfer all or any part of
the business or assets.
SECTION 12. CONDITIONS SUBSEQUENT TO EFFECTIVE DATE.
The Plan is subject to the approval of the Plan by the holders of a
majority of the outstanding shares of Common Stock of the Company within twelve
(12) months before or after the date of adoption of the Plan by the Board. The
Plan shall be null and void and of no effect if the foregoing condition is not
fulfilled.
SECTION 13. LIMITATION ON OPTIONS.
Notwithstanding any other provisions of the Plan:
(a) All Eligible Employees shall have the same rights and privileges under
the Plan, except that the amount of Common Stock which may be purchased under
Options granted pursuant to Section 3, shall bear a uniform relationship to the
compensation of Eligible Employees. All rules and determinations of the Board in
the administration of the Plan shall be uniformly and consistently applied to
all persons in similar circumstances.
(b) The term of said Plan shall be for a period of 10 years commencing on
July 1, 1997 and ending on December 31, 2007 unless terminated earlier by the
exhaustion of the Available Shares pursuant to Section 3 or 5 or as provided in
subsection 14(c).
(c) As a condition to the exercise of an Option, the Company may require
the person exercising such Option to represent that, at the time of any such
exercise, the shares are being purchased only for an investment and without any
present intention to sell or distribute such shares if, in the opinion of
counsel for the Company, such representation is required by any applicable
provisions of law.
SECTION 14. MISCELLANEOUS.
(a) LEGAL AND OTHER REQUIREMENTS. The obligations of the Company to sell
and deliver Common Stock under the Plan shall be subject to all applicable
foreign or domestic laws, regulations, rules and approvals, including, but not
by way of limitation, the effectiveness of a registration statement under the
Securities Act and the requirements of any stock exchange upon which the shares
of Common Stock may be listed if deemed necessary or appropriate by the Company.
Certificates for shares of Common Stock issued hereunder may be legended as the
Board shall deem appropriate.
(b) NO OBLIGATION TO EXERCISE OPTIONS. The granting of an Option shall
impose no obligation upon an Eligible Employee to exercise such Option unless
such Eligible Employee affirmatively elects to purchase Common Stock through
payroll withholding as described in Section 4.
(c) TERMINATION AND AMENDMENT OF PLAN. The Board, without further action on
the part of the stockholders of the Company, may from time to time alter, amend
or suspend the Plan or any Option granted hereunder or may at any time terminate
the Plan, except that it may not (except to the extent provided in Section 10):
(i) change the total number of shares of Common Stock available for grant under
the Plan; (ii) extend the duration of the Plan; (iii) increase the maximum term
of Options; (iv) change the Option Price; or (v) change the class of Eligible
Employees. No action taken by the Board under this subsection 14(c) may
materially and adversely affect any outstanding Option without the consent of
the holder thereof.
(d) APPLICATION OF FUNDS. The proceeds received by the Company from the
sale of Common Stock pursuant to Options will be used for general corporate
purposes.
(e) WITHHOLDING TAXES. Upon the exercise of any Option under the Plan, the
Company shall have the right to require the Eligible Employee to remit to the
Company an amount sufficient to satisfy all federal, state and local withholding
tax requirements prior to the delivery of any certificate or certificates for
shares of Common Stock.
(f) RIGHT TO TERMINATE EMPLOYMENT. Nothing in the Plan or any agreement
entered into pursuant to the Plan shall confer upon any Eligible Employee the
right to continue in the employment of the Company or any Subsidiary or affect
any right which the Company or any Subsidiary may have to terminate the
employment of such Eligible Employee.
(g) RIGHTS AS A STOCKHOLDER. No Eligible Employee shall have any right as a
stockholder unless and until certificates for shares of Common Stock are issued
to him or her.
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(h) LEAVES OF ABSENCE AND DISABILITY. The Board shall be entitled to make
such rules, regulations and determinations as it deems appropriate under the
Plan in respect of any leave of absence taken by or disability of any Eligible
Employee. Without limiting the generality of the foregoing, the Board shall be
entitled to determine (i) whether or not any such leave of absence shall
constitute a termination of employment within the meaning of the Plan, and (ii)
the impact, if any, of any such leave of absence on Options under the Plan
theretofore granted to any Eligible Employee who takes such leave of absence.
(i) NOTICES. Every direction, revocation or notice authorized or required
by the Plan shall be deemed delivered on the date it is delivered (i) to the
Administrator at First Union National Bank of North Carolina, 230 South Tryon
Street, Charlotte, North Carolina 27288-1179, or (ii) three business days after
it is sent by registered or certified mail, postage prepaid, addressed to the
Company, Attention: Director of Human Resources, at its principal office at 3100
Smoketree Court, Suite 600, Raleigh, N.C. 27604; and shall be deemed delivered
to an Eligible Employee (i) on the date it is personally delivered to him or her
or (ii) three (3) business days after it is sent by registered or certified
mail, postage prepaid, addressed to him or her at the last address shown for him
or her on the records of the Company or of any Subsidiary.
(j) APPLICABLE LAW. All questions pertaining to the validity, construction
and administration of the Plan and Options granted hereunder shall be determined
in conformity with the laws of the state of Maryland.
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