Exhibit 10.1
THE AMENDED AND RESTATED UNIT
OPTION PLAN FOR EMPLOYEES OF
TANGER PROPERTIES LIMITED PARTNERSHIP
Tanger Properties Limited Partnership, a partnership organized under the
laws of the state of North Carolina (the "Partnership") adopted the Partnership
Unit Option Plan for Executive and Key Employees of Tanger Properties Limited
Partnership (the "Plan") on May 28, 1993. The Plan has subsequently been amended
from time to time. In order to conform the Plan document to such amendments and
to further amend the Plan in certain respects, the Plan has been amended and
restated, effective as of July 29, 1998. This Amended and Restated Unit Option
Plan for Employees of Tanger Properties Limited Partnership constitutes a
complete amendment and restatement of the Plan in its entirety and a
continuation of the Plan. The purposes of this Plan are as follows:
(1) To further the growth, development and financial success of the
Partnership by providing additional incentives to certain of its Employees (as
defined below) who have been or will be given responsibility for the management
or administration of the Partnership's business affairs, by assisting them to
become owners of Units (as defined below) and thus to benefit directly from such
growth, development and financial success.
(2) To enable the Partnership to obtain and retain the services of the
types of professional, technical and managerial employees considered essential
to the long range success of the Partnership by providing and offering them an
opportunity to become owners of Units under options.
(3) To allow certain Employees the ability, at their election, upon the
simultaneous exercise of options under the Plan and of their conversion rights
under the Partnership Agreement (as defined below) to be issued and have
delivered to them directly from Tanger Factory Outlet Centers, Inc. (the
"Company") common shares of the Company.
ARTICLE I.
DEFINITIONS
Wherever the following terms are used in this Plan they shall have the
meanings specified below, unless the context clearly indicates otherwise. The
masculine pronoun shall include the feminine and neuter and the singular shall
include the plural, where the context so indicates.
Section 1.1. Award Limit
"Award Limit" shall mean 60,000 Common Shares.
Section 1.2. Board
"Board" shall mean the Board of Directors of the Company.
Section 1.3. Change in Control
(a) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")), (a "Person") of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of
either (i) the then outstanding Common Shares (the "Outstanding Common Shares")
or (ii) the combined voting power of the then outstanding "voting securities of
the Company") entitled to vote generally in the election of directors (the
"Outstanding Company Voting Securities"); provided, however, that for purposes
of this subsection (a), the following acquisitions shall not constitute a Change
in Control: (i) any acquisition directly from the Company, (ii) any acquisition
by the Company, (iii) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any corporation controlled by
the Company or (iv) any acquisition by any corporation pursuant to a transaction
which complies with clauses (i), (ii) and (iii) of subsection (c) of this
Section 1.3; or
(b) Individuals who, as of the date hereof, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual becoming a director subsequent to
the date hereof whose election, or nomination for election by the Company's
shareholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be considered as though such
individual were member of the Incumbent Board, but excluding, for this purpose,
any such individual whose initial assumption of office occurs as a result of an
actual or threatened election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or consents by
or on behalf of a Person other than the Board; or
(c) Consummation of a reorganization, merger or consolidation or sale or
other disposition of all or substantially all of the assets of the Company or
the acquisition of assets of another corporation (a "Business Combination"), in
each case, unless, following such Business Combination, (i) all or substantially
all of the individuals and entities who were the beneficial owners,
respectively, of the Outstanding Common Shares and Outstanding Company Voting
Securities immediately prior to such Business Combination beneficially own,
directly or indirectly, more than 50% of, respectively, the then outstanding
shares of common stock and the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of directors, as
the case may be, of the corporation resulting from such Business Combination
(including, without limitation, a corporation which as a result of such
transaction owns the Company or all or substantially all of the Company's assets
either directly or through one or more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to such Business Combination
of the Outstanding Common Shares and Outstanding Company Voting Securities, as
the case may be, (ii) no Person (excluding any corporation
- -2-
resulting from such Business Combination or any employee benefit plan (or
related trust) of the Company or such corporation resulting from such Business
Combination) beneficially owns, directly or indirectly, 20% or more of,
respectively, the then outstanding shares of common stock of the corporation
resulting from such Business Combination or the combined voting power of the
then outstanding voting securities of such corporation except to the extent that
such ownership existed prior to the Business Combination and (iii) at least a
majority of he members of the board of directors of the corporation resulting
from such Business Combination were members of the Incumbent Board at the time
of the execution of the initial agreement, or of the action of the Board,
providing for such Business Combination; or
(d) Approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.
For purposes of this Plan, the "Partnership Units" of the Tanger
Properties Limited Partnership shall be treated as, and aggregated with, the
Common Shares and/or the "voting securities of the Company" to the extent such
Partnership Units are convertible into Common Shares or voting securities,
respectively.
Section 1.4. Code
Code" shall mean the Internal Revenue Code of 1986, as amended.
Section 1.5. Committee
"Committee" shall mean the Share and Unit Option Committee of the Board,
appointed as provided in Section 6.1.
Section 1.6. Common Shares
"Common Shares" shall mean the Common Shares of the Company, par value
$0.01 per share.
Section 1.7. Company
"Company" shall mean Tanger Factory Outlet Centers, Inc., a North
Carolina corporation.
Section 1.8. Company Plan
"Company Plan" shall mean the Amended and Restated Share Option Plan for
Directors and Executive and Key Employees of Tanger Factory Outlet Centers,
Inc., as amended from time to time.
- -3-
Section 1.9. Director
"Director" shall mean a member of the Board.
Section 1.10. Employee
"Employee" shall mean any employee (as defined in accordance with
Section 3401(c) of the Code) of the Partnership or of any entity which is a
subsidiary of the Partnership.
Section 1.11. Exchange Act
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
Section 1.12. Fair Market Value
"Fair Market Value" of a Unit for purposes of this Plan as of a given
date shall be the fair market value of a Common Share into which it may be
converted, where the fair market value of a Common Share as of such date shall
mean (i) the closing price of the Common Shares on the principal exchange on
which Common Shares are trading on the trading day previous to such date, or, if
Common Shares were not traded on the day previous to such date, then on the next
preceding trading day during which a sale occurred; (ii) if such Common Shares
are not traded on an exchange but are quoted on NASDAQ or a successor quotation
system, (A) the last sales price (if the Common Shares are then listed as
National Market Issue under the NASD National Market System) or (B) the mean
between the closing representative bid and asked prices for the Common Shares on
the trading day previous to such date as reported by NASDAQ or such successor
quotation system; or (iii) if such Common Shares are is not publicly traded on
an exchange and not quoted on NASDAQ or a successor quotation system, the fair
market value of a Common Share as established by the Committee acting in good
faith.
Section 1.13. Option
"Option" shall mean an option to purchase a Unit and to receive cash to
be applied to such purchase, granted under Article III of this Plan. All Options
granted under this Plan shall be non-qualified options, not intended to conform
to the provisions of Section 422 of the Code.
Section 1.14. Optionee
"Optionee" shall mean an Employee granted an Option under this Plan.
Section 1.15. Partnership
"Partnership" shall mean Tanger Properties Limited Partnership, a
partnership organized under the laws of the state of North Carolina.
- -4-
Section 1.16. Partnership Agreement
"Partnership Agreement" shall mean the Amended and Restated Agreement of
Limited Partnership of Tanger Properties Limited Partnership dated as of
December 16, 1993, as amended from time to time.
Section 1.17. Partnership Unit; Unit
"Partnership Unit" shall have the meaning ascribed to such term in the
Partnership Agreement, and may be referred to herein as a "Unit."
Section 1.18. Plan
"Plan" shall mean the Amended and Restated Unit Option Plan for
Employees of Tanger Properties Limited Partnership.
Section 1.19. Rule 16b-3
"Rule 16b-3" shall mean that certain Rule 16b-3 under the Exchange Act,
as such Rule may be amended from time to time.
Section 1.20. Section 162(m) Participant
"Section 162(m) Participant" shall mean any Company Employee designated
by the Committee as a Company Employee whose compensation for the fiscal year in
which the Company Employee is so designated or a future fiscal year may be
subject to the limit on deductible compensation imposed by Section 162(m) of the
Code.
Section 1.21. Termination of Employment
"Termination of Employment" shall mean the time when the
employee-employer relationship between an Optionee and the Partnership, the
Company or any subsidiary of either of them is terminated for any reason, with
or without cause, including, but not by way of limitation, a termination by
resignation, discharge, death, disability or retirement; but excluding (i) a
termination where there is a simultaneous reemployment or continuing employment
of such Optionee by the Partnership, (ii) at the discretion of the Committee,
termination which results in a temporary severance of the employee-employer
relationship, and (iii) at the discretion of the Committee, a termination which
is followed by the simultaneous establishment of a consulting relationship by
the Partnership, the Company or any subsidiary of either of them with the former
employee. The Committee, in its sole discretion, shall determine the effect of
all matters and questions relating to Termination of Employment, including, but
not by way of limitation, the question of whether a Termination of Employment
resulted from a discharge for good cause, and all questions of whether a
particular leave of absence constitutes a Termination of Employment.
- -5-
Notwithstanding any other provision of this Plan, the Partnership or the Company
or the subsidiary has an absolute and unrestricted right to terminate an
Employee's employment at any time for any reason whatsoever, with or without
cause, except to the extent expressly provided otherwise in writing.
ARTICLE II.
UNITS SUBJECT TO PLAN
Section 2.1. Units Subject to Plan
The aggregate number of Units which may be issued upon exercise of
Options under the Plan shall not exceed 1,500,000; provided, that effective as
of the date of the next succeeding annual meeting of shareholders such number
shall be increased to 1,750,000 if the shareholders approve such increase at
such annual meeting. Such aggregate number shall be reduced by one for each
Common Share that is issued pursuant to the exercise of options under the
Company's Share Option Plan.
The maximum number of Units which may be subject to Options granted
under the Plan to any individual in any calendar year shall not exceed the Award
Limit. To the extent required by Section 162(m) of the Code, Units subject to
Options which are canceled continue to be counted against the Award Limit and
if, after grant of an Option, the price of Units subject to such Option is
reduced, the transaction will be treated as a cancellation of the Option and a
grant of a new Option and both the Option deemed to be canceled and the Option
deemed to be granted will be counted against the Award Limit.
Section 2.2. Add-back of Options
If any Option expires or is canceled without having been fully
exercised, the number of Units subject to such Option but as to which such
Option was not exercised prior to its expiration, cancellation or exercise may
again be optioned, granted or awarded hereunder, subject to the limitations of
Section 2.1. Units which are delivered by the Optionee or withheld by the
Partnership upon the exercise of any Option or other award under this Plan, in
payment of the exercise price thereof, may again be optioned, granted or awarded
hereunder, subject to the limitations of Section 2.1. Furthermore, any Units
subject to Options which are adjusted pursuant to Section 7.3 and become
exercisable with respect to equity interests of another entity shall be
considered canceled and may again be optioned, granted or awarded hereunder,
subject to the limitations of Section 2.1.
ARTICLE III.
GRANTING OF OPTIONS
Section 3.1. Eligibility
- -6-
Any Employee selected by the Committee pursuant to Section 3.2(a)(i)
shall be eligible to be granted an Option.
Section 3.2. Granting of Options
(a) The Committee shall from time to time, in its sole discretion, and
subject to applicable limitations of this Plan:
(i) Select from among the Employees (including Employees who have
previously received Options) such of them as in its opinion should be
granted Options;
(ii) Subject to the Award Limit, determine the number of shares
to be subject to such Options granted to the selected Employees;
(iii) Determine whether such Options are to qualify as
performance-based compensation as described in Section 162(m)(4)(C) of
the Code; and
(iv) Determine the terms and conditions of such Options,
consistent with this Plan; provided, however, that the terms and
conditions of Options intended to qualify as performance-based
compensation as described in Section 162(m)(4)(C) of the Code shall
include, but not be limited to, such terms and conditions as may be
necessary to meet the applicable provisions of Section 162(m) of the
Code.
(b) Upon the selection of an Employee to be granted an Option, the
Committee shall instruct the Partnership to issue the Option and may impose such
conditions on the grant of the Option as it deems appropriate. Without limiting
the generality of the preceding sentence, the Committee may, in its discretion
and on such terms as it deems appropriate, require as a condition on the grant
of an Option that the Optionee surrender for cancellation some or all of the
unexercised Options or other rights which have been previously granted to him
under this Plan or otherwise. An Option, the grant of which is conditioned upon
such surrender, may have an exercise price lower (or higher) than the exercise
price of such surrendered Option or other right, may cover the same (or a lesser
or greater) number of Units as such surrendered Option or other right, may
contain such other terms as the Committee deems appropriate, and shall be
exercisable in accordance with its terms, without regard to the number of Units,
exercise price, exercise period or any other term or condition of such
surrendered Option or other right.
ARTICLE IV.
TERMS OF OPTIONS
Section 4.1. Option Agreement
- -7-
Each Option shall be evidenced by a written Option Agreement, which
shall be executed by the Optionee and the Partnership and which shall contain
such terms and conditions as the Committee shall determine, and which may be
amended by agreement of the parties thereto, consistent with this Plan. Option
Agreements evidencing Options intended to qualify as performance-based
compensation as described in Section 162(m)(4)(C) of the Code shall contain such
terms and conditions as may be necessary to meet the applicable provisions of
Section 162(m) of the Code, and Option Agreements evidencing Incentive Share
Options shall contain such terms and conditions as may be necessary to meet the
applicable provisions of Section 422 of the Code.
Section 4.2. Exercise Price
The exercise price per Unit subject to each Option shall be set by the
Committee in its discretion; provided, however, that such price shall be no less
than the Fair Market Value of a Unit on the date the Option is granted.
Section 4.3. Option Term
The term of an Option shall be set by the Committee in its discretion;
provided, however, that, the Committee may extend the term of any outstanding
Option in connection with any Termination of Employment, or amend any other term
or condition of such Option relating to such a termination.
Section 4.4. Option Vesting
(a) The period during which the right to exercise an Option in whole or
in part vests in the Optionee shall be set by the Committee and the Committee
may determine that an Option may not be exercised in whole or in part for a
specified period after it is granted. At any time after grant of an Option, the
Committee may, in its sole discretion and subject to whatever terms and
conditions it selects, accelerate the period during which an Option vests.
(b) no portion of an Option which is unexercisable at Termination of
Employment shall thereafter become exercisable, except as may be otherwise
provided by the Committee either in the Option Agreement or by action of the
Committee following the grant of the Option.
(c) In the event of a Change in Control, each Option granted to an
Independent Director or to an Employee shall be exercisable as to all shares
covered thereby immediately prior to the consummation of such Change in Control
and subject to such consummation, notwithstanding anything to the contrary in
this Section 4.4 or the vesting schedule of such Option.
Section 4.5. Consideration
- -8-
In consideration of the granting of an Option, the Optionee shall agree,
in the written Option Agreement, to remain in the employ of the Partnership, the
Company, or a subsidiary of either of them for a period of one year from the
date of Option grant. Nothing in this Plan or in any Option Agreement hereunder
shall confer upon any Optionee any right to continue in the employ of the
Partnership, the Company or a subsidiary of either of them, or shall interfere
with or restrict in any way the rights of the Partnership, the Company or such
subsidiary, which are hereby expressly reserved, to discharge any Optionee at
any time for any reason whatsoever, with or without good cause.
ARTICLE V.
EXERCISE OF OPTIONS
Section 5.1. Partial Exercise
An exercisable Option may be exercised in whole or in part. However, an
Option shall not be exercisable with respect to fractional Units and the
Committee may require that, by the terms of the Option, a partial exercise be
with respect to a minimum number of Units.
Section 5.2. Payment Upon Exercise
As part of the exercise of an Option pursuant to this Section 5.2, the
Partnership shall pay to the Optionee, as additional compensation for his
services to the Partnership, cash (the "Appreciation Consideration") equal to
the excess, if any, of the Fair Market Value of a Unit on the date of exercise
and the exercise price of the Option. In addition to the exercise price, the
Appreciation Consideration shall be applied to the purchase of a Unit pursuant
to Section 5.3(d).
Section 5.3. Manner of Exercise
All or a portion of an exercisable Option shall be deemed exercised upon
delivery of all of the following to the Partnership prior to the time when such
Option or such portion becomes unexercisable under the Plan or the applicable
Option Agreement:
(a) A written notice complying with the applicable rules established by
the Committee stating that the Option, or a portion thereof, is exercised. The
notice shall be signed by the Optionee or other person then entitled to exercise
the Option or such portion of the Option;
(b) Such representations and documents as the Committee in its sole
discretion, deems necessary or advisable to effect compliance with all
applicable provisions of the Securities Act of 1933, as amended, and any other
federal or state securities laws or regulations. The Committee may, in its sole
discretion, also take whatever additional actions it deems appropriate to effect
such compliance including, without limitation, placing legends on share
certificates and issuing stop-transfer notices to agents and registrars;
- -9-
(c) In the event that the Option shall be exercised pursuant to Section
7.1 by any person or persons other than the Optionee, appropriate proof of the
right of such person or persons to exercise the Option; and
(d) Full cash payment to the Partnership for the Units with respect to
which the Option, or portion thereof, is exercised (which payment shall consist
of the entire Appreciation Consideration and the exercise price). However, the
Committee, may in its discretion (i) allow a delay in payment up to thirty (30)
days from the date the Option, or portion thereof, is exercised; (ii) allow
payment, in whole or in part, through the delivery of Units owned by the
Optionee, duly endorsed for transfer to the Partnership with a Fair Market Value
on the date of delivery equal to the aggregate exercise price of the Option or
exercised portion thereof; (iii) allow payment, in whole or in part, through the
surrender of Units then issuable upon exercise of the Option having a Fair
Market Value on the date of Option exercise equal to the aggregate exercise
price of the Option or exercised portion thereof; (iv) allow payment, in whole
or in part, through the delivery of property of any kind which constitutes good
and valuable consideration; (v) allow payment, in whole or in part, through the
delivery of a full recourse promissory note bearing interest (at no less than
such rate as shall then preclude the imputation of interest under the Code) and
payable upon such terms as may be prescribed by the Committee; or (vi) allow
payment through any combination of the consideration provided in the foregoing
subparagraphs (ii), (iii), (iv) and (v). In the case of a promissory note, the
Committee may also prescribe the form of such note and the security to be given
for such note. The Option may not be exercised, however, by delivery of a
promissory note or by a loan from the Partnership when or where such loan or
other extension of credit is prohibited by law.
- -10-
Section 5.4. Conditions to Issuance of Unit Certificates
The Partnership shall not be required to issue or deliver any
certificate for Units purchased upon the exercise of any Option or portion
thereof prior to fulfillment of all of the following conditions:
(a) The admission of such Units to listing on all stock exchanges on
which such series or class of Units is then listed;
(b) The completion of any registration or other qualification of such
Units under any state or federal law, or under the rulings or regulations of the
Securities and Exchange Commission or any other governmental regulatory body
which the Committee or Board shall, in its sole discretion, deem necessary or
advisable;
(c) The obtaining of any approval or other clearance from any state or
federal governmental agency which the Committee shall, in its sole discretion,
determine to be necessary or advisable;
(d) The lapse of such reasonable period of time following the exercise
of the Option as the Committee may establish from time to time for reasons of
administrative convenience; and
(e) The receipt by the Partnership of full payment for such Units,
including payment of any applicable withholding tax; provided that under no
circumstance may an Optionee exercise an Option and acquire a Unit, and if an
Optionee does exercise an Option, such exercise shall be null and void and of no
effect, if such exercise could, in the sole discretion of the Committee, result
in income to the Company which, when considered in light of the Company's other
income, could cause the Company to fail to satisfy the gross income limitations
set forth in Code Section 856(c) or otherwise impair the Company's status as a
REIT.
Section 5.5. Rights as Limited Partners
The holders of Options shall not be, nor have any of the rights or
privileges of, limited partners of the Partnership in respect of any Units
purchasable upon the exercise of any part of an Option unless and until
certificates representing such Units have been issued to such holders; PROVIDED,
HOWEVER, that the Partnership shall provide to Optionees, on an annual basis,
such financial and other information as the Partnership provides to its limited
partners.
Section 5.6. Ownership and Transfer Restrictions
The Committee, in its sole discretion, may impose such restrictions on
the ownership and transferability of the Units purchasable upon the exercise of
an Option as it deems appropriate. Any such restriction shall be set forth in
the respective Option Agreement or other written agreement between the
Partnership and the Optionee and may be referred to on the certificates
- -11-
evidencing such Units. All Options and Units shall be subject to any applicable
transfer restrictions required to preserve the Company's status as a REIT under
the Code and to the restrictions on transfer set forth in the Partnership
Agreement.
ARTICLE VI.
ADMINISTRATION
Section 6.1. Share and Unit Option Committee
The Share and Unit Option Committee shall consist of two or more
Directors, appointed by and holding office at the pleasure of the Board, none of
whom shall be an employee of the Company and each of whom is both a
"non-employee director" as defined by Rule 16b-3 and an "outside director" for
purposes of Section 162(m) of the Code. Appointment of Committee members shall
be effective upon acceptance of appointment. Committee members may resign at any
time by delivering written notice to the Board. Vacancies in the Committee may
be filled by the Board.
Section 6.2. Duties and Powers of Committee
It shall be the duty of the Committee to conduct the general
administration of this Plan in accordance with its provisions. The Committee
shall have the power to interpret this Plan, the Option Agreements and to adopt
such rules for the administration, interpretation and application of this Plan
as are consistent therewith and to interpret, amend or revoke any such rules.
Any grant or Option under this Plan need not be the same with respect to each
Optionee. In its sole discretion, the Board may at any time and from time to
time exercise any and all rights and duties of the Committee under this Plan
except with respect to matters which under Rule 16b-3 or Section 162(m) of the
Code (as each may be applicable), or any regulations or rules issued thereunder,
are required to be determined in the sole discretion of the Committee.
Section 6.3. Majority Rule
The Committee shall act by a majority of its members in attendance at a
meeting where quorum is present or by a memorandum or other written instrument
signed by all members of the Committee.
Section 6.4. Compensation; Professional Assistance; Good Faith Actions
Members of the Committee shall receive such compensation for their
services as members as may be determined by the Board. All expenses and
liabilities which members of the Committee incur in connection with the
administration of this Plan shall be borne by the Company. The Committee may,
with the approval of the Board, employ attorneys, consultants, accountants,
appraisers, brokers or other persons. The Committee, the Partnership, the
Company and the Company's officers and Directors shall be entitled to rely upon
the advice, opinions or
- -12-
valuations of any such persons. All actions taken and all interpretations and
determinations made by the Committee or the Board in good faith shall be final
and binding upon all Optionees, the Partnership and all other interested
persons. No members of the Committee or the Board shall be personally liable for
any action, determination or interpretation made in good faith with respect to
this Plan or any Option, and all members of the Committee and the Board shall be
fully protected by the Company in respect of any such action, determination or
interpretation.
ARTICLE VII.
MISCELLANEOUS PROVISIONS
Section 7.1. Not Transferable
(a) Options under this Plan may not be sold, pledged, assigned, or
transferred in any manner other than by will or the laws of descent and
distribution or, with the consent of the Committee, pursuant to a transfer to
the spouse and/or lineal descendants of the Optionee or to a trust, partnership
or other entity the sole beneficiaries, partners or other members of which are
members of the Optionee's spouse and/or lineal descendants, unless and until
such Options have been exercised, or the Units underlying such Options have been
issued, and all restrictions applicable to such Units have lapsed. No Option or
interest or right therein shall be liable for the debts, contracts or
engagements of the Optionee or his successors in interest or shall be subject to
disposition by transfer, alienation, anticipation, pledge, encumbrance,
assignment or any other means whether such disposition be voluntary or
involuntary or by operation of law by judgment, levy, attachment, garnishment or
any other legal or equitable proceedings (including bankruptcy), and any
attempted disposition thereof shall be null and void and of no effect, except to
the extent that such disposition is permitted by the preceding sentence.
(b) During the lifetime of the Optionee, only he may exercise an Option
(or any portion thereof) granted to him under the Plan, unless it has been
disposed of pursuant to the foregoing paragraph. After the death of the Optionee
(or transferee), any exercisable portion of an Option may, prior to the time
when such portion becomes unexercisable under the Plan or the applicable Option
Agreement or other agreement, be exercised by the personal representative of, or
by any person empowered to do so under, the deceased Optionee's (or
transferee's) will or under the then applicable laws of descent and
distribution.
Section 7.2. Amendment, Suspension or Termination of this Plan
Except as otherwise provided in this Section 7.2, this Plan may be
wholly or partially amended or otherwise modified, suspended or terminated at
any time or from time to time by the Committee. However, without approval of the
Company's shareholders given within twelve months before or after the action by
the Committee, no action of the Committee may, except as provided in Section
7.3, increase the limits imposed in Section 2.1 on the maximum number of Units
which may be issued under this Plan, and no action of the Committee may be taken
that would otherwise require shareholder approval as a matter of applicable law,
regulation or rule.
- -13-
The Award Limit may be increased by the Committee at any time and from time to
time, and Options may be granted with respect to a number of Units not in excess
of such increased Award Limit; provided, however, that no such increase of the
Award Limit shall be effective unless and until such increase is approved by the
Company's shareholders and if such approval is not obtained all Options granted
with respect to a number of Units in excess of the Award Limit in effect prior
to such increase shall be canceled and shall become null and void. No amendment,
suspension or termination of this Plan shall, without the consent of the
Optionee alter or impair any rights or obligations under any Options theretofore
granted, unless the Option Agreement itself otherwise expressly so provides. No
Option may be granted during any period of suspension or after termination of
this Plan.
Section 7.3. Changes in Securities or Assets of the Company or the
Partnership, Acquisition or Liquidation of the Company or the
Partnership and Other Events
(a) in the event that the Committee determines that any dividend or
other distribution (whether in the form of cash, Units, Common Shares, other
securities, or other property), recapitalization, reclassification, share split,
reverse share split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase, liquidation, dissolution, or sale, transfer, exchange
or other disposition of all or substantially all of the assets of the
Partnership or the Company (including, but not limited to, a Change in Control),
or exchange of Units or Common Shares or other securities of the Partnership or
the Company, issuance of warrants or other rights to purchase Units or Common
Shares or other securities of the Partnership or the Company, or other similar
transaction or event, in the Committee's sole discretion, affects the Units or
Common Shares such that an adjustment is determined by the Committee to be
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan or with respect
to an Option, then the Committee shall, in such manner as it may deem equitable,
adjust any or all of
(i) the number and kind of Units (or other securities or
property) with respect to which Options may be granted (including, but
not limited to, adjustments of the limitations in Section 2.1 on the
maximum number and kind of Units which may be issued and adjustments to
the Award Limit),
(ii) the number and kind of Units (or other securities or
property) subject to outstanding Options, and
(iii) the grant or exercise price with respect to any Option.
(b) Subject to Section 7.3(d) the event of any Change in Control or
other transaction or event described in Section 7.3(a) or any unusual or
nonrecurring transactions or events affecting the Partnership, the Company, any
affiliate of the either of them, or the financial statements of the Partnership,
the Company or any such affiliate, or of changes in applicable laws,
regulations, or accounting principles, the Committee in its discretion is hereby
authorized
- -14-
to take any one or more of the following actions whenever the Committee
determines that such action is appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
under the Plan or with respect to any Option, to facilitate such transactions or
events or to give effect to such changes in laws, regulations or principles:
(i) In its sole discretion, and on such terms and conditions as
it deems appropriate, the Committee may provide, either by the terms of
the Option Agreement or by action taken prior to the occurrence of such
transaction or event and either automatically or upon the request of the
Optionee, for either the purchase of any such Option for an amount of
cash equal to the amount that could have been attained upon the exercise
of such Option had such Option been currently exercisable or payable or
fully vested or the replacement of such Option with other rights or
property selected by the Committee in its sole discretion;
(ii) In its sole discretion, the Committee may provide, either by
the terms of such Option or by action taken prior to the occurrence of
such transaction or event that it cannot be exercised after such event;
(iii) In its sole discretion, and on such terms and conditions as
it deems appropriate, the Committee may provide, either by the terms of
such Option or by action taken prior to the occurrence of such
transaction or event, that for a specified period of time prior to such
transaction or event, such Option shall be exercisable as to all Units
covered thereby, notwithstanding anything to the contrary in (i) Section
4.4 or (ii) the provisions of such Option;
(iv) In its sole discretion, and on such terms and conditions as
it deems appropriate, the Committee may provide, either by the terms of
such Option or by action taken prior to the occurrence of such
transaction or event, that upon such event, such Option be assumed by
the successor or survivor corporation, or a parent or subsidiary
thereof, or shall be substituted for by similar options covering the
equity securities of the successor or survivor corporation, or a parent
or subsidiary thereof, with appropriate adjustments as to the number and
kind of securities and prices; and
(v) In its sole discretion, and on such terms and conditions as
it deems appropriate, the Committee may make adjustments in the number
and type of Units (or other securities or property) subject to
outstanding Options and/or in the terms and conditions of (including the
grant or exercise price), and the criteria included in, outstanding
Options and Options which may be granted in the future.
(c) Subject to Section 7.3(d) and 7.6, the Committee may, in its
discretion, include such further provisions and limitations in any Option
agreement or certificate, as it may deem equitable and in the best interests of
the Company.
- -15-
(d) With respect to any Option granted to any Section 162(m) Participant
that is intended to qualify as performance-based compensation under Section
162(m)(4)(C), no adjustment or action described in this Section 7.3 or in any
other provision of the Plan shall be authorized to the extent that such
adjustment or action would cause such Option to fail to so qualify under Section
162(m)(4)(C), or any successor provision thereto unless the Committee determines
that such Option should no longer so qualify. Furthermore, no such adjustment or
action shall be authorized to the extent such adjustment or action would result
in short-swing profits liability under Section 16 or violate the exemptive
conditions of Rule 16b-3 unless the Committee determines that the Option is not
to comply with such exemptive conditions. The number of Units subject to any
Option shall always be rounded to the next whole number.
Section 7.4. Tax Withholding
The Partnership shall be entitled to require payment in cash or
deduction from other compensation payable to each Optionee of any sums required
by federal, state or local tax law to be withheld with respect to the issuance,
vesting, exercise or payment of any Option. The Committee may in its discretion
and in satisfaction of the foregoing requirement allow such Optionee to elect to
have the Partnership withhold Units otherwise issuable under such Option (or
allow the return of Units) having a Fair Market Value equal to the sums required
to be withheld.
Section 7.5. Loans
The Committee may, in its discretion, extend one or more loans to
Employees in connection with the exercise or receipt of an Option granted under
this Plan. The terms and conditions of any such loan shall be set by the
Committee.
Section 7.6. Limitations Applicable to Section 16 Persons and Performance-
Based Compensation
Notwithstanding any other provision of this Plan, this Plan, and any
Option granted to any individual who is then subject to Section 16 of the
Exchange Act, shall be subject to any additional limitations set forth in any
applicable exemptive rule under Section 16 of the Exchange Act (including any
amendment to Rule 16b-3 of the Exchange Act) that are requirements for the
application of such exemptive rule. To the extent permitted by applicable law,
the Plan and Options granted hereunder shall be deemed amended to the extent
necessary to conform to such applicable exemptive rule. Furthermore,
notwithstanding any other provision of this Plan, any Option which is granted to
a Section 162(m) Participant and is intended to qualify as performance-based
compensation as described in Section 162(m)(4)(C) of the Code shall be subject
to any additional limitations set forth in Section 162(m) of the Code (including
any amendment to Section 162(m) of the Code) or any regulations or rulings
issued thereunder that are requirements for qualification as performance-based
compensation as described in Section
- -16-
162(m)(4)(C) of the Code, and this Plan shall be deemed amended to the extent
necessary to conform to such requirements.
Section 7.7 Effect of Plan Upon Options and Compensation Plans
The adoption of this Plan shall not affect any other compensation or
incentive plans in effect for the Partnership or any subsidiary. Nothing in this
Plan shall be construed to limit the right of the Partnership or any subsidiary
(i) to establish any other forms of incentives or compensation for Employees
(ii) to grant or assume Options or other rights or awards otherwise than under
this Plan in connection with any proper purpose including but not by way of
limitation, the grant or assumption of Options in connection with the
acquisition by purchase, lease, merger, consolidation or otherwise, of the
business, securities or assets of any corporation, partnership, limited
liability company, firm or association.
Section 7.8. Compliance with Laws
This Plan, the granting and vesting of Options under this Plan and the
issuance and delivery of Units and the payment of money under this Plan or under
Options granted hereunder are subject to compliance with all applicable federal
and state laws, rules and regulations (including but not limited to state and
federal securities law and federal margin requirements) and to such approvals by
any listing, regulatory or governmental authority as may, in the opinion of
counsel for the Partnership, be necessary or advisable in connection therewith.
Any securities delivered under this Plan shall be subject to such restrictions,
and the person acquiring such securities shall, if requested by the Partnership,
provide such assurances and representations to the Partnership as the
Partnership may deem necessary or desirable to assure compliance with all
applicable legal requirements. To the extent permitted by applicable law, the
Plan and Options granted hereunder shall be deemed amended to the extent
necessary to conform to such laws, rules and regulations.
Section 7.9. Titles
Titles are provided herein for convenience only and are not to serve as
a basis for interpretation or construction of this Plan.
Section 7.10. Governing Law.
This Plan and any agreements hereunder shall be administered,
interpreted and enforced under the internal laws of the State of North Carolina
without regard to conflicts of laws thereof.