SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement [ ] Confidential, For Use of the Commission
[X] Definitive proxy statement only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
EQUITY ONE, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
EQUITY ONE, INC.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on the table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by
registration statement number, or the form or schedule and the date
of its filing.
- --------------------------------------------------------------------------------
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date Filed:
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EQUITY ONE, INC.
1600 N.E. MIAMI GARDENS DRIVE, SUITE 200
NORTH MIAMI BEACH, FLORIDA 33179
-------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 23, 2000
-------------------
To the Stockholders of EQUITY ONE, INC.:
Equity One, Inc. will hold its 2000 Annual Meeting of Stockholders at
the Courtyard Marriott Hotel, 2825 N.E. 191st Street, Aventura, Florida 33180,
on Friday, June 23, 2000, at 10:00 a.m., local time, to:
/bullet/ Elect one Director to hold office until Equity One's 2002
Annual Meeting of Stockholders and elect two Directors to hold
office until Equity One's 2003 Annual Meeting of Stockholders;
/bullet/ Approve and ratify Equity One's 2000 Executive Incentive
Compensation Plan; and
/bullet/ Transact such other business as may properly come before the
Annual Meeting.
If you own shares of Equity One common stock as of the close of
business on May 5, 2000 (the "Record Date"), you can vote those shares by proxy
or at the meeting.
By Order of the Board of Directors
ALAN J. MARCUS
SECRETARY
North Miami Beach, Florida
May 19, 2000
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, PLEASE COMPLETE, SIGN
AND DATE THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED POSTAGE-PAID
ENVELOPE SO THAT YOUR SHARES WILL BE REPRESENTED. STOCKHOLDERS WHO EXECUTE A
PROXY CARD MAY NEVERTHELESS ATTEND THE MEETING, REVOKE THEIR PROXY AND VOTE
THEIR SHARES IN PERSON.
2000 ANNUAL MEETING OF STOCKHOLDERS
OF
EQUITY ONE, INC.
---------------------
PROXY STATEMENT
---------------------
The Board of Directors of Equity One, Inc., a Maryland corporation
("Equity One"), is soliciting proxies from the holders of Equity One's common
stock, par value $.01 per share (the "Common Stock"), to be voted at the 2000
Annual Meeting of Stockholders of Equity One to be held at the Courtyard
Marriott Hotel, 2825 N.E. 191st Street, Aventura, Florida 33180, on June 23,
2000 at 10:00 a.m., local time, or at any adjournment(s) or postponement(s)
thereof (the "Annual Meeting"). We are sending this Proxy Statement in
connection with the proxy solicitation.
Equity One is making its first mailing of this Proxy Statement and the
enclosed form of proxy on May 19, 2000. You should review the information
provided herein in conjunction with Equity One's 1999 Annual Report, which
accompanies this Proxy Statement. Equity One's principal executive office is
currently located at 1600 N.E. Miami Gardens Drive, Suite 200, North Miami
Beach, Florida 33179, and its telephone number is (305) 947-1664.
INFORMATION CONCERNING PROXY
The enclosed proxy is solicited on behalf of Equity One's Board of
Directors. The giving of a proxy does not preclude the right to vote in person
should any stockholder giving the proxy so desire. Stockholders have an
unconditional right to revoke their proxy at any time prior to the exercise
thereof, either in person at the Annual Meeting or by filing with Equity One's
Secretary at Equity One's headquarters a written revocation or duly executed
proxy bearing a later date; however, no such revocation will be effective until
written notice of the revocation is received by Equity One at or prior to the
Annual Meeting.
The cost of preparing, assembling and mailing this Proxy Statement, the
Notice of Annual Meeting of Stockholders and the enclosed proxy is to be borne
by Equity One. In addition to the use of mail, employees of Equity One may
solicit proxies personally and by telephone. Equity One's employees will receive
no compensation for soliciting proxies other than their regular salaries. Equity
One may request banks, brokers and other custodians, nominees and fiduciaries to
forward copies of the proxy material to their principals and to request
authority for the execution of proxies. Equity One may reimburse such persons
for their expenses in so doing.
PURPOSES OF THE MEETING
At the Annual Meeting, Equity One's stockholders will consider and vote
upon the following matters:
(1) The election of one director for the term expiring at the 2002
Annual Meeting of Stockholders and two directors for terms
expiring at the 2003 Annual Meeting of Stockholders, or until
their respective successors are duly elected and qualified;
(2) The approval and ratification of Equity One's 2000 Executive
Incentive Compensation Plan; and
(3) Such other business as may properly come before the Annual
Meeting, including any adjournments or postponements thereof.
Unless contrary instructions are indicated on the enclosed proxy, all
shares represented by valid proxies received pursuant to this solicitation (and
which have not been revoked in accordance with the procedures set forth above)
will be voted FOR the election of the one nominee for Class I director and the
two nominees for Class II directors named below and FOR the approval and
ratification of the 2000 Executive Incentive Compensation Plan. In the event a
stockholder specifies a different choice by means of the enclosed proxy, his or
her shares will be
voted in accordance with the specification so made. The Board of Directors does
not know of any other matters that may be brought before the Annual Meeting nor
does it foresee or have reason to believe that proxy holders will have to vote
for substitute or alternate nominees. In the event that any other matter should
come before the Annual Meeting or any nominee is not available for election, the
persons named in the enclosed Proxy will have discretionary authority to vote
all proxies not marked to the contrary with respect to such matters in
accordance with their best judgment.
OUTSTANDING VOTING SECURITIES AND VOTING RIGHTS
WHO CAN VOTE
Only stockholders of record at the close of business on May 5, 2000
will be entitled to notice of and to vote at the Annual Meeting or any
adjournment thereof. On that date, there were 11,683,842 shares of Common Stock
issued and outstanding, all of which are entitled to be voted at the Annual
Meeting.
GENERAL INFORMATION ON VOTING
Each share of Common Stock is entitled to one vote on each matter
submitted to stockholders for approval at the Annual Meeting. Stockholders do
not have the right to cumulate their votes for directors.
In order for business to be conducted, a quorum must be represented at
the meeting. A quorum is 50% of the shares entitled to vote. The election of the
director nominees must be approved by a plurality of the votes cast by the
shares of Common Stock represented in person or by proxy at the Annual Meeting.
If less than a majority of outstanding shares entitled to vote are represented
at the Annual Meeting, a majority of the shares so represented may adjourn the
Annual Meeting to another date, time or place, and notice need not be given of
the new date, time or place if the new date, time or place is announced at the
meeting before an adjournment is taken.
Prior to the Annual Meeting, Equity One will select one or more
inspectors of election for the meeting. Such inspector(s) shall determine the
number of shares of Common Stock represented at the meeting, the existence of a
quorum and the validity and effect of proxies, and shall receive, count and
tabulate ballots and votes and determine the results thereof.
Pursuant to Maryland law, abstentions and broker non-votes are counted
as present for purposes of determining the presence of a quorum. However,
abstentions are treated as present and entitled to vote, but are not counted as
votes cast "for" or "against" any matter. A broker non-vote on a matter is
considered not entitled to vote on that matter and thus is not counted in
determining whether a matter requiring approval of a majority of the shares
present and entitled to vote has been approved or whether a plurality of the
shares present and entitled to vote has been voted.
A list of stockholders entitled to vote at the Annual Meeting will be
available at Equity One's principal executive offices, 1600 N.E. Miami Gardens
Drive, Suite 200, North Miami Beach, Florida 33179, for a period of ten days
prior to the Annual Meeting and at the Annual Meeting itself for examination by
any stockholder. On or about June 1, 2000 Equity One will relocate its principal
executive offices to 1696 N.E. Miami Gardens Drive, North Miami Beach, Florida
33179.
2
SECURITY OWNERSHIP
The following table sets forth, as of April 24, 2000, the number of
shares of Common Stock of Equity One which were owned beneficially by (i) each
person who is known by Equity One to own beneficially more than 5% of its Common
Stock, (ii) each director and nominee for director, (iii) the Named Executive
Officers (as defined in "Executive Compensation") and (iv) all directors and
executive officers of Equity One as a group:
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENTAGE OF OUTSTANDING
BENEFICIAL OWNER(1) BENEFICIAL OWNERSHIP(2)(3) SHARES OWNED
- ---------------------------------------------------- -------------------------- -------------------------
Chaim Katzman(4).................................... 8,411,817 72.0%
Gazit-Globe (1982) Ltd.(5).......................... 7,714,289 66.0%
M.G.N. (USA), Inc................................... 3,437,019 29.4%
Gazit (1995), Inc................................... 3,188,067 27.3%
Doron Valero(6)..................................... 512,365 4.4%
Howard M. Sipzner................................... 7,613 *
Randy Flick......................................... 7,500 *
Ronald Chase........................................ 5,000 *
Robert Cooney....................................... 5,000 *
Noam Ben-Ozer....................................... 2,002 *
Alan J. Marcus...................................... 2,002 *
Shaiy Pilpel........................................ 2,000 *
All executive officers and directors of Equity One as 8,955,299 76.6%
a group (9 persons)..............................
- ------------------------------
<FN>
* Represents ownership of less than 1.0%
(1) Unless otherwise indicated, the address of each beneficial owner is Equity One, Inc., 1600 N.E. Miami
Gardens Drive, Suite 200, North Miami Beach, Florida 33179.
(2) A person is deemed to be the beneficial owner of securities that can be acquired by such persons within
60 days from the date hereof upon the exercise of options and warrants or purchasable pursuant to an
executory contract to acquire Common Stock. Each beneficial owner's percentage ownership is determined
by assuming that options and warrants and shares purchasable under an executory contract that are held
by such person (but not those held by any other person) and that are exercisable or purchasable within
60 days from the date hereof have been exercised or purchased. For purposes of this table, a beneficial
owner of securities includes any person who, directly or indirectly, through any contract, arrangement,
understanding, relationship or otherwise has or shares (i) voting power which includes the power to
vote, or direct the voting of, such security and/or (ii) investment power which includes the power to
dispose, or to direct the disposition of, such security.
(3) Unless otherwise noted, Equity One believes that all persons named in the table have sole voting and
investment power with respect to all shares of Common Stock beneficially owned by them.
(4) Includes (i) 3,188,067 shares of Common Stock owned by Gazit (1995), Inc. ("Gazit (1995)") which Mr.
Katzman may be deemed to control; (ii) 3,437,019 shares of Common Stock of M.G.N. (USA), Inc. ("M.G.N.")
which Mr. Katzman may be deemed to control; (iii) 1,089,203 shares of Common Stock owned by Gazit-Globe
(1982) Ltd. ("Gazit-Globe (1982)"); (iv) 344,850 shares of Common Stock owned by Mr. Katzman; (v)
287,984 shares of Common Stock issuable to Mr. Katzman under the 1995 Stock Option Plan, which options
are currently exercisable and (vi) 64,694 shares of common stock for which Mr. Katzman is custodian for
his minor children.
(5) Includes (i) 1,089,203 shares of Common Stock owned by Gazit-Globe (1982), (ii) 3,437,019 shares of
Common Stock owned by M.G.N. and (iii) 3,188,067 shares of Common Stock owned by Gazit (1995).
(6) Includes (i) 297,018 shares of Common Stock owned by Mr. Valero, (ii) 215,347 shares of Common Stock
upon the exercise of options granted to Mr. Valero under the 1995 Stock Option Plan, which Options are
currently exercisable.
</FN>
3
ELECTION OF DIRECTORS
Equity One's Board of Directors is divided into three classes: Class I,
Class II and Class III. Each director serves for a term ending at the third
annual meeting of stockholders following the annual meeting at which he was
elected, except that any director appointed by the Board of Directors serves,
subject to election by the stockholders at the next annual meeting after
appointed, for a term ending at the annual meeting of stockholders at which the
term of the class to which the director was appointed ends. Each director serves
until his successor is elected and qualified or until his or her earlier death,
resignation or removal.
At this meeting, directors in two classes have been nominated. Ronald
S. Chase has been nominated as a Class I director for the term expiring at the
2002 Annual Meeting. The abbreviated term is to balance the classes following
the retirement of a Class I director after the 1999 Annual Meeting. Chaim
Katzman and Doron Valero have been nominated as Class II directors for terms
expiring at the 2003 Annual Meeting.
Information is provided below with respect to the one nominee for Class
I director, the two nominees for Class II directors, as well as those other
directors whose terms will continue after the 2000 Annual Meeting.
Each director nominee now serves as a director of Equity One. The Board
of Directors has no reason to believe that such nominees will refuse or be
unable to accept election; however, in the event that any nominee is unable to
accept election or if any other unforeseen contingencies should arise, each
proxy that does not direct otherwise will be voted for such other persons as may
be designated by the Board of Directors.
MANAGEMENT
EXECUTIVE OFFICERS AND DIRECTORS
The executive officers and directors of Equity One are as follows:
NAME AGE POSITION
- -------------------------------------------------- --- ---------------------------------------
Chaim Katzman..................................... 50 Chairman of the Board, President, Chief
Executive Officer
Doron Valero...................................... 43 Senior Vice President, Chief Operating Officer
and Director
Howard M. Sipzner................................. 38 Chief Financial Officer
Alan J. Marcus.................................... 43 Secretary
Noam Ben-Ozer..................................... 35 Director
Robert L. Cooney.................................. 65 Director
Ronald Chase...................................... 54 Director
Shaiy Pilpel...................................... 48 Director
NOMINEES FOR ELECTION - CLASS I DIRECTOR (TERM TO EXPIRE IN 2002) AND CLASS II
DIRECTORS (TERM TO EXPIRE IN 2003)
CLASS I DIRECTOR (TERM TO EXPIRE IN 2002)
RONALD S. CHASE has served as a director of Equity One since 1998. Mr.
Chase has been the President and owner of Chase Holdings & Advisory Services,
Inc., which provides financial advisory services to corporations and litigation
attorneys, since June 1991. In addition, Mr. Chase is the owner and has served
as President of each of RSC Development, Inc., a residential developer, and CFAT
H20, Inc., a water treatment facility, both of which are located in Ocala,
Florida, since approximately November 1993. Mr. Chase is a certified public
accountant who formerly served as Managing Partner of Deloitte & Touche, LLP.
Mr. Chase has served as a director of Capital Factors Holding, Inc., a publicly
traded company, and Capital Factors, Inc., since September 1992, and as a
director
4
of Union Planters Bank of Florida, formerly Capital Bank, since July 1993. Mr.
Chase received his B.S. in Business Administration from the University of
California in 1965.
CLASS II DIRECTORS (TERM TO EXPIRE IN 2003)
CHAIM KATZMAN has served as President, Chairman of the Board and Chief
(1995) Executive Officer and a director of Equity One since its formation in
1992, and has been involved in the purchase, development and management of
commercial and residential real estate in the southeastern United States since
1980. Mr. Katzman received an LL.B. from Tel Aviv University Law School in 1973.
In 1991, Mr. Katzman purchased the controlling interest of Gazit (1995). Mr.
Katzman has served as Chairman of the Board and Chief Executive Officer of Gazit
(1995) since May 1991 and remains its largest stockholder and has served as a
director of Gazit-Globe (1982) since 1994 and its Chairman since 1998. A
licensed real estate broker in Florida, Mr. Katzman is a member of NAREIT and
the ICSC.
DORON VALERO has served as Senior Vice President, Chief Operating
Officer and a director of Equity One since 1994. Mr. Valero manages Equity One's
portfolio of properties and is also responsible for the development of new
properties. Prior to joining Equity One, Mr. Valero served as President and
Chief Executive Officer of Global Fund Investment, Inc., a real estate
investment and management company, from 1990 to 1993. A licensed mortgage broker
in Florida, Mr. Valero is a member of NAREIT and ICSC. Mr. Valero received a
B.S.E. from Nova University in 1986.
CONTINUING BOARD MEMBERS
CLASS III DIRECTORS (TERM TO EXPIRE IN 2001)
NOAM BEN-OZER has been a director of Equity One since 1996. Mr.
Ben-Ozer obtained an M.B.A. from Harvard University in 1994, and has served as a
consultant for Bain & Company since 1994. From 1993 to 1994 Mr. Ben-Ozer served
as an outside consultant to Lemout & Hauspie Speech Products. Mr. Ben-Ozer is a
certified public accountant in Israel.
ROBERT L. COONEY was elected as a director in November 1997. Mr. Cooney
served as a Managing Director of Equity Capital Markets of Credit Suisse First
Boston Corporation from 1978 to 1996. Mr. Cooney obtained an M.B.A. from Harvard
University in 1962 and a B.S. from College of the Holy Cross in 1956. Mr. Cooney
has over 35 years experience in capital markets and investment banking.
CLASS I DIRECTOR (TERM TO EXPIRE IN 2002)
DR. SHAIY PILPEL has served as a director of Equity One since 1996. Dr.
Pilpel heads the trading operation at Wexford Management, an investment firm.
From 1995 to 1996, Dr. Pilpel was a managing director of Canadian Imperial Bank
of Commerce where he headed the Mortgage Arbitrage and Quantitative Strategies
proprietary trading group, and prior thereto, a portfolio manager for Steinhardt
Partners. Dr. Pilpel received a B.S. in mathematics and B.A. in philosophy from
Tel Aviv University, an M.Sc. in mathematics from the Hebrew University in
Jerusalem, a Ph.D. in Statistics from the University of California at Berkeley
and an M.B.A. from Columbia University.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
During the fiscal year ended December 31, 1999, Equity One's Board of
Directors held two meetings. Each director of Equity One attended at least 75%
of the aggregate of (i) the number of the meetings of the Board which were held
during the period that such person served on the Board and (ii) the number of
meetings of committees of the Board of Directors held during the period that
such person served on such committee.
Equity One has three committees: the Executive Committee, the Audit and
Review Committee and the Compensation Committee. Equity One does not have a
nominating committee.
The Executive Committee is authorized to perform all functions which
may be lawfully delegated by the Board of Directors, provided, however, that the
Executive Committee can only act based on a unanimous vote and
5
that the Executive Committee may only approve acquisitions of property similar
to that in Equity One's portfolio requiring an initial equity investment of up
to $15.0 million and acquisitions of vacant land having an initial equity
investment of up to $5.0 million in the aggregate. The Executive Committee is
comprised of Chaim Katzman, Doron Valero and Ronald Chase. The Executive
Committee met two times during the year ended December 31, 1999, and took action
four additional times by unanimous written consent.
The Audit and Review Committee is currently composed of Shaiy Pilpel,
Robert Cooney and Ronald Chase. The Audit Committee's functions include
recommending to the Board of Directors the engagement of Equity One's
independent certified public accountants, reviewing with such accountants the
plan and results of their audit of Equity One's financial statements and
determining the independence of such accountants. The Audit and Review Committee
met two times during the year ended December 31, 1999.
The Compensation Committee is currently comprised of Shaiy Pilpel,
Robert Cooney and Ronald Chase. The Compensation Committee's functions consist
of administering Equity One's 1995 Stock Option Plan (the "Plan"), recommending
and approving grants of stock options under the Plan, and recommending,
reviewing and approving the salary and fringe benefits policies of Equity One,
including compensation of executive officers of Equity One. The Compensation
Committee met two times during the year ended December 31, 1999.
DIRECTORS' COMPENSATION
Non-employee directors are eligible to receive options under the
Company's 1995 Stock Option Plan. The 1995 Stock Option Plan formerly provided
for the granting to non-employee directors of options to purchase 6,000 shares
of Common Stock upon election to the Board of Directors and annually thereafter.
In January, 2000, the Company's Board of Directors adopted an amendment
to the 1995 Stock Option Plan. Beginning in 2000, the Company will grant each
non-employee director 2,000 shares of common stock of the Company annually,
which shares shall vest on the following schedule: 1,000 shares on December 31
of the year of the grant and 1,000 shares on December 31 of the following year.
In addition, each non-employee director will receive a fee of $1,000 for each
Board of Directors meeting or committee meeting attended in person, plus
reimbursement for reasonable expenses incurred in attending the meeting and a
fee of $250 for each telephonic meeting attended. Officers of Equity One who are
directors will not be paid any directors' fees.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires Equity
One's directors and executive officers, and persons who own more than ten
percent of Equity One's outstanding Common Stock, to file with the Securities
and Exchange Commission (the "SEC") initial reports of ownership and reports of
changes in ownership of Common Stock. Such persons are required by SEC
regulation to furnish Equity One with copies of all such reports they file.
To Equity One's knowledge, based solely on a review of the copies of
such reports furnished to Equity One and written representations that no other
reports are required, all Section 16(a) filing requirements applicable to its
officers, directors and greater than ten percent beneficial owners have been
complied with during the fiscal year ended December 31, 1999.
6
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following compensation table sets forth, for the fiscal years ended
December 31, 1997, 1998 and 1999, the cash and certain other compensation paid
or accrued by Equity One to Equity One's Chief Executive Officer, and Equity
One's other executive officer whose total 1999 salary exceeded $100,000
(collectively, the "Named Executive Officers").
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS(2)
-------------------------------------------- --------------
OTHER ANNUAL SECURITIES
COMPENSATION UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS(3) ($) OPTIONS
- ----------------------------------- -------------- -------------- -------------- ---------------- ----------------
Chaim Katzman...................... 1999 $ 286,000 $ 118,254 (1)
Chairman of the Board, President 1998 $ 269,000 $ 75,000 (1) 287,994(4)(5)
and Chief Executive Officer 1997 $ 254,000 $ 0 (1) --
Doron Valero....................... 1999 $ 214,000 $ 88,690 (1)
Senior Vice President and Chief 1998 $ 202,000 $ 75,000 (1) 215,347(4)(5)
Operating Officer 1997 $ 190,800 $ 100,000 (1) 30,000(4)
Alan Merkur........................ 1999 $ 130,000 $ 51,713 (1) --
Director of Acquisitions
- -----------------------------
<FN>
(1) The aggregate amount of perquisites and other personal benefits provided to such Named Officer is less than 10%
of the total annual salary and bonus of such officer.
(2) Does not include grants of 45,000 shares of restricted stock to each of Chaim Katzman and Doron Valero as
additional compensation by the Board of Directors, which shares were issued on January 1, 2000. One-third of
such shares vest on each of December 31, 2000, December 31, 2001, and December 31, 2002.
(3) Includes bonuses paid and/or accrued but not paid during the periods indicated.
(4) Represents options granted under the 1995 Stock Option Plan.
(5) These options were granted and repriced during 1998. See "Option Adjustment."
</FN>
OPTIONS/SAR GRANTS TABLE
There were no options granted to the Named Executive Officers during
the fiscal year ended December 31, 1999.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUE
TABLE
The following table sets forth certain information concerning (i) the
exercise of stock options by the Named Executive Officers during the fiscal year
ended December 31, 1999 and (ii) unexercised stock options held by the Named
Executive Officers as of December 31, 1999.
7
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS HELD AT IN-THE-MONEY OPTIONS AT
SHARES DECEMBER 31, 1999 DECEMBER 31, 1999(1)
ACQUIRED ON VALUE ------------------------------ ------------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ----------------------------- ------------- ------------ ------------- --------------- ------------- ---------------
Chaim Katzman 0 $0 215,988 71,996 $94,495 $31,498
Doron Valero 0 $0 161,511 53,836 $70,661 $23,553
Alan Merkur 0 $0 0 0 $0 $0
- --------------------
<FN>
(1) The closing price of the Common Stock on December 31, 1999 as reported by The New York Stock Exchange was $10.4375
per share. Value is calculated by multiplying (a) the difference between $10.4375 and the option exercise price by
(b) the number of shares of Common Stock underlying the option. All of the options held by Chaim Katzman and Doron
Valero have an exercise price lower than the closing price of the Common Stock on December 31, 1999, and are
reported in the above table.
</FN>
COMPENSATION COMMITTEE AND INSIDER PARTICIPATION
The Compensation Committee is responsible for determining salaries,
incentives and other forms of compensation for officers of Equity One.
8
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee is generally responsible for determining the
compensation of Equity One's executive officers. The Compensation Committee is
comprised of three of Equity One's outside directors, Shaiy Pilpel, Robert
Cooney and Ronald Chase.
The Compensation Committee's general philosophy with respect to the
compensation of Equity One's executive officers is to offer competitive
compensation programs designed to (i) attract and retain key executives critical
to Equity One's long-term success, (ii) reward an individual's contribution and
personal performance and (iii) to align the interests of Equity One's executives
with Equity One's stockholders. The three components of Equity One's executive
compensation program are base salary, cash bonus and long-term incentive
compensation consisting of options and/or grants of restricted stock.
Chaim Katzman, Equity One's Chairman of the Board, President and Chief
Executive Officer; Doron Valero, Equity One's Senior Vice President and Chief
Operating Officer; and Howard Sipzner, Equity One's Chief Financial Officer,
receive compensation pursuant to employment agreements which have been approved
by Equity One's Board of Directors.
In determining the base salary of Equity One's executives, the
Compensation Committee takes into account a number of factors, including the
executive's position and responsibilities, compensation levels at other
companies generally and Equity One's performance. Increases in base salary are
based primarily on individual performances as well as competitive conditions and
Company performance.
Equity One believes that stock options and grants of restricted stock
are important long-term incentives to its executive officers to remain with
Equity One and to improve performance. Equity One maintains the 1995 Stock
Option Plan which is designed to attract and retain executive officers and other
employees of Equity One and to reward them for delivering long-term value to
Equity One. Stock options permit executive officers to share, to a certain
extent, in the stockholders' return on equity.
Equity One's 1995 Stock Option Plan provides for the granting of both
"incentive stock options" (as defined in Section 422A of the Internal Revenue
Code) and non-statutory stock options. Options may be granted under the Stock
Option Plan at such prices as the Committee may determine, provided that the per
share exercise price of incentive stock options may not be less than the fair
market value of the Common Stock on the date of the grant. Options typically
vest in staggered amounts over a period of four years. In determining grants of
stock options, the Compensation Committee considers a number of factors,
including the employee's position, responsibilities and performance, the number
of outstanding options held by the employee and competitive practices of other
companies generally.
Shaiy Pilpel
Robert Cooney
Ronald Chase
9
PERFORMANCE GRAPH
The following graph compares the cumulative total stockholder return on
Equity One's Common Stock since May 14, 1998, the date the Common Stock began
trading on the New York Stock Exchange, with the (i) the New York Stock Exchange
index prepared by Media General Financial Services ("Media General"), (ii) Media
General's index for companies with similar Standard Industry Codes ("SIC") as
Equity One and (iii) the NAREIT Equity Index.
[OBJECT OMITTED]
============================================================================================================
5/14/98 6/30/98 9/30/98 12/30/98 3/31/99 6/30/99 9/30/99 12/31/99
- ------------------ ---------- ---------- ---------- ---------- ----------- ---------- --------- ------------
Equity One, Inc. 100.0 93.20 82.82 88.10 85.62 99.75 110.61 110.87
- ------------------ ---------- ---------- ---------- ---------- ----------- ---------- --------- ------------
NYSE Stock 100.0 99.56 89.49 89.49 82.68 91.81 82.18 80.35
Index
- ------------------ ---------- ---------- ---------- ---------- ----------- ---------- --------- ------------
NYSE Stock SIC 100.0 100.56 87.61 87.61 106.32 114.26 104.46 115.46
Index
- ------------------ ---------- ---------- ---------- ---------- ----------- ---------- --------- ------------
NAREIT Equity 100.0 98.44 88.47 86.36 82.12 90.40 83.13 82.29
Index
- ------------------ ---------- ---------- ---------- ---------- ----------- ---------- --------- ------------
<FN>
NOTES:
A. The lines represent quarterly index levels derived from compounded daily returns that include all
dividends.
B. The indexes are reweighted daily, using the market capitalization on the previous tracking day.
C. If the monthly interval, based on the fiscal year-end, is not a trading day, the preceding trading day
is used.
D. The index level for all series was set to $100.0 on 5/14/98.
============================================================================================================
</FN>
10
CERTAIN TRANSACTIONS
LOANS TO EXECUTIVE OFFICERS
In June 1999, Equity One made a loan to Chaim Katzman, Equity One's
Chairman, President and Chief Executive Officer, in the principal amount of
$297,000, bearing interest at an annual rate of 6.35%. The funds advanced to Mr.
Katzman were used to exercise certain warrants to purchase an aggregate of
36,000 shares of Common Stock which are being pledged as collateral for the
loan. Interest on the loan is payable quarterly and the loan matures December
30, 2002, at which time the entire principal balance and any accrued interest is
due and payable.
In June 1999, Equity One made a loan to Doron Valero, Senior Vice
President and Chief Operating Officer, in the principal amount of $247,500
bearing interest at an annual rate of 6.35%. The funds advanced to Mr. Valero
were used to exercise certain warrants to purchase an aggregate of 30,000 shares
of Common Stock which are being pledged as collateral for the loan. Interest on
the loan is payable quarterly and the loan matures December 30, 2002, at which
time the entire principal balance and any accrued interest is due and payable.
TRANSFER OF ASSETS AND RELATED IN-KIND DISTRIBUTION
In May, 1998 Equity One transferred certain assets to a newly-formed
limited partnership (the "Partnership") in exchange for limited partnership
interests (the "Partnership Interests"). A limited liability company of which
Gazit-Globe (1982) and Gazit (1995) are members is the general partner of the
Partnership. As part of this transaction, the Partnership granted Equity One an
option, exercisable until May, 2003, to purchase certain real property assets
transferred by Equity One to the Partnership. Additionally, Equity One assigned
to the Partnership a promissory note from Chaim Katzman, Equity One's Chairman
of the Board, President and Chief Executive Officer, in the original principal
amount of $1.1 million, and a promissory note from Doron Valero, in the original
principal amount of $396,000, together with the rights to the Common Stock
securing such notes. Immediately prior to the consummation of the Offering,
Equity One distributed all of the Partnership Interests to its stockholders pro
rata in proportion to their ownership of Common Stock (the "In-Kind
Distribution"). In December, 1998, Equity One paid $1.7 million to exercise the
option to purchase a vacant land parcel adjacent to the Equity One office
building, one of the three real property assets transferred by Equity One to the
Partnership.
REGISTRATION RIGHTS
Pursuant to the terms of each of Messrs. Katzman's and Valero's
Employment Agreements, such executives were granted registration rights with
respect to the shares of Common Stock issuable to such executives under options
granted pursuant to such employment agreements.
Pursuant to the terms of the Series C Warrants, the holders of the
Series C Warrants were granted registration rights for the shares of Common
Stock issuable upon the exercise of such warrants. Pursuant to a Registration
Rights Agreement, Equity One has granted both demand and piggyback Registration
Rights to each of Chaim Katzman, Gazit (1995), Gazit-Globe (1982), and Doron
Valero with respect to the shares of Common Stock owned by them (the
"Registration Rights Agreement").
SERVICE AGREEMENT
On January 1, 1996, Equity One and Gazit (1995) entered into an
agreement whereby Chaim Katzman, or any employee of Gazit (1995) or its
affiliates, may use Equity One's facilities, equipment, supplies and personnel
to conduct Gazit (1995)'s and Mr. Katzman's business affairs for a quarterly
user fee of $2,500. Since the commencement of this agreement an aggregate of
$40,000 has been paid by Gazit (1995) to Equity One.
CONSULTING AGREEMENT
Equity One has entered into a consulting agreement with Noam Ben-Ozer,
a member of the Board of Directors of Equity One, to assist Equity One in the
development of its strategic business plan and to review the
11
information and non-information systems to determine the Year 2000 compliance of
such systems. Mr. Ben-Ozer was paid an aggregate of $35,000 during the year
ended December 31, 1999 under such consulting agreement.
OTHER
Equity One paid legal fees in the approximate amount of $49,678,
$149,000 and $36,575 during the years ended December 31, 1997, 1998 and 1999,
respectively, to the Law Office of Alan J. Marcus, the Secretary of Equity One.
Robert L. Cooney, a director, served as a Managing Director of Equity
Capital Markets of Credit Suisse First Boston from 1978 to 1996.
PROPOSAL TO APPROVE AND RATIFY THE
EQUITY ONE 2000 EXECUTIVE INCENTIVE COMPENSATION PLAN
BACKGROUND AND PURPOSE
On April 24, 2000, the Board of Directors adopted the Equity One 2000
Executive Incentive Compensation Plan (the "2000 Plan") and recommended that it
be submitted to the Company's stockholders for their approval at the Annual
Meeting. The terms of the 2000 Plan provide for grants of stock options, stock
appreciation rights ("SARs"), restricted stock, deferred stock, other
stock-related awards and performance or annual incentive awards that may be
settled in cash, stock or other property (collectively, "Awards"). The effective
date of the 2000 Plan is April 24, 2000 (the "Effective Date"). No Awards have
been made under the 2000 Plan as of the date of this Proxy Statement, and no
Awards will be granted under the 2000 Plan unless the 2000 Plan is approved by
the Company's stockholders at the Annual Meeting.
Stockholder approval of the Plan is required (i) for purposes of
compliance with certain exclusions from the limitations of Section 162(m) of the
Internal Revenue Code of 1986, as amended (the "Code"), which are further
described below, (ii) in order for the 2000 Plan to be eligible under the "plan
lender" exemption from the margin requirements of Regulation G promulgated under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and (iii)
by the rules of the New York Stock Exchange.
Although certain types of Awards authorized under the 2000 Plan are
similar to those under the 1995 Stock Option Plan, the Board determined to adopt
an entirely new plan in order to broaden the types of performance goals that may
be set and the types of Awards that may be granted by the Committee and
otherwise to add flexibility to annual incentive awards and other
performance-based awards intended to qualify for corporate tax deductions under
Section 162(m), to increase the number of shares of Common Stock that may be
subject to Awards, and to otherwise adopt provisions intended to enable the
Committee to better promote the goals of the Company's compensation policies and
programs, as discussed above. See "Executive Compensation and Other
Information-Compensation Committee Report on Executive Compensation."
The following is a summary of certain principal features of the 2000
Plan. This summary is qualified in its entirety by reference to the complete
text of the 2000 Plan, which is attached to this Proxy Statement as Exhibit A.
Stockholders are urged to read the actual text of the 2000 Plan in its entirety.
SHARES AVAILABLE FOR AWARDS; ANNUAL PER-PERSON LIMITATIONS
Under the 2000 Plan, the total number of shares of Common Stock that
may be subject to the granting of Awards under the 2000 Plan at any time during
the term of the Plan shall be equal to 1,000,000 shares, plus the number of
shares with respect to which options previously granted under the 1995 Stock
Option Plan terminate without being exercised, and the number of shares that are
surrendered in payment of any Awards or any tax withholding requirements.
12
In addition, the 2000 Plan imposes individual limitations on the amount
of certain Awards in part to comply with Code Section 162(m). Under these
limitations, during any fiscal year the number of options, SARs, restricted
shares of Common Stock, deferred shares of Common Stock, shares as a bonus or in
lieu of other Company obligations, and other stock-based Awards granted to any
one participant may not exceed 150,000 shares for each type of such Award,
subject to adjustment in certain circumstances. The maximum amount that may be
paid out as an annual incentive Award or other cash Award in any fiscal year to
any one participant is $2,000,000, and the maximum amount that may be earned as
a performance Award or other cash Award in respect of a performance period by
any one participant is $5,000,000.
The Committee is authorized to adjust the limitations described in the
two preceding paragraphs and is authorized to adjust outstanding Awards
(including adjustments to exercise prices of options and other affected terms of
Awards) in the event that a recapitalization, forward or reverse split,
reorganization, merger, consolidation, spin-off, combination, repurchase, share
exchange or other similar corporate transaction or event affects the Common
Stock so that an adjustment is appropriate in order to prevent dilution or
enlargement of the rights of participants. The Committee is also authorized to
adjust performance conditions and other terms of Awards in response to these
kinds of events or in response to changes in applicable laws, regulations or
accounting principles.
ELIGIBILITY
The persons eligible to receive Awards under the 2000 Plan are the
officers, directors, employees and independent contractors of the Company and
its subsidiaries. An employee on leave of absence may be considered as still in
the employ of the Company or a subsidiary for purposes of eligibility for
participation in the 2000 Plan.
ADMINISTRATION
The Compensation Committee of the Board has been appointed as the
Committee for the 2000 Plan. Subject to the terms of the 2000 Plan, the
Committee or the Board is authorized to select eligible persons to receive
Awards, determine the type and number of Awards to be granted and the number of
shares of Common Stock to which Awards will relate, specify times at which
Awards will be exercisable or settleable (including performance conditions that
may be required as a condition thereof), set other terms and conditions of
Awards, prescribe forms of Award agreements, interpret and specify rules and
regulations relating to the 2000 Plan, and make all other determinations that
may be necessary or advisable for the administration of the 2000 Plan.
STOCK OPTIONS AND SARS
The Committee or the Board is authorized to grant stock options,
including both incentive stock options ("ISOs"), which can result in potentially
favorable tax treatment to the participant, and non-qualified stock options, and
SARs entitling the participant to receive the amount by which the fair market
value of a share of Common Stock on the date of exercise (or defined "change in
control price" following a change in control) exceeds the grant price of the
SAR. The exercise price per share subject to an option and the grant price of an
SAR are determined by the Committee, but in the case of an ISO must not be less
than the fair market value of a share of Common Stock on the date of grant. For
purposes of the 2000 Plan, the term "fair market value" means the fair market
value of Common Stock, Awards or other property as determined by the Committee
or the Board or under procedures established by the Committee or the Board.
Unless otherwise determined by the Committee or the Board, the fair market value
of Common Stock as of any given date shall be the closing sales price per share
of Common Stock as reported on the principal stock exchange or market on which
Common Stock is traded on the date as of which such value is being determined
or, if there is no sale on that date, then on the last previous day on which a
sale was reported. The maximum term of each option or SAR, the times at which
each option or SAR will be exercisable, and provisions requiring forfeiture of
unexercised options or SARs at or following termination of employment generally
are fixed by the Committee or the Board, except that no option or SAR may have a
term exceeding ten years. Options may be exercised by payment of the exercise
price in cash, shares that have been held for at least 6 months, outstanding
Awards or other property having a fair market value equal to the exercise price,
as the Committee or the Board may determine from time to time. Methods of
exercise and settlement and other terms of the SARs are determined by the
Committee or the Board. SARs granted under the 2000 Plan may include "limited
SARs" exercisable for a stated period of time following a change in control of
the Company, as discussed below.
13
RESTRICTED AND DEFERRED STOCK
The Committee or the Board is authorized to grant restricted stock and
deferred stock. Restricted stock is a grant of shares of Common Stock which may
not be sold or disposed of, and which may be forfeited in the event of certain
terminations of employment, prior to the end of a restricted period specified by
the Committee or the Board. A participant granted restricted stock generally has
all of the rights of a stockholder of the Company, unless otherwise determined
by the Committee or the Board. An Award of deferred stock confers upon a
participant the right to receive shares of Common Stock at the end of a
specified deferral period, subject to possible forfeiture of the Award in the
event of certain terminations of employment prior to the end of a specified
restricted period. Prior to settlement, an Award of deferred stock carries no
voting or dividend rights or other rights associated with share ownership,
although dividend equivalents may be granted, as discussed below.
DIVIDEND EQUIVALENTS
The Committee or the Board is authorized to grant dividend equivalents
conferring on participants the right to receive, currently or on a deferred
basis, cash, shares of Common Stock, other Awards or other property equal in
value to dividends paid on a specific number of shares of Common Stock or other
periodic payments. Dividend equivalents may be granted alone or in connection
with another Award, may be paid currently or on a deferred basis and, if
deferred, may be deemed to have been reinvested in additional shares of Common
Stock, Awards or otherwise as specified by the Committee or the Board.
BONUS STOCK AND AWARDS IN LIEU OF CASH OBLIGATIONS
The Committee or the Board is authorized to grant shares of Common
Stock as a bonus free of restrictions, or to grant shares of Common Stock or
other Awards in lieu of Company obligations to pay cash under the 2000 Plan or
other plans or compensatory arrangements, subject to such terms as the Committee
or the Board may specify.
OTHER STOCK-BASED AWARDS
The Committee or the Board is authorized to grant Awards that are
denominated or payable in, valued by reference to, or otherwise based on or
related to shares of Common Stock. Such Awards might include convertible or
exchangeable debt securities, other rights convertible or exchangeable into
shares of Common Stock, purchase rights for shares of Common Stock, Awards with
value and payment contingent upon performance of the Company or any other
factors designated by the Committee or the Board, and Awards valued by reference
to the book value of shares of Common Stock or the value of securities of or the
performance of specified subsidiaries or business units. The Committee or the
Board determines the terms and conditions of such Awards.
PERFORMANCE AWARDS, INCLUDING ANNUAL INCENTIVE AWARDS
The right of a participant to exercise or receive a grant or settlement
of an Award, and the timing thereof, may be subject to such performance
conditions (including subjective individual goals) as may be specified by the
Committee or the Board. In addition, the 2000 Plan authorizes specific annual
incentive Awards, which represent a conditional right to receive cash, shares of
Common Stock or other Awards upon achievement of certain preestablished
performance goals and subjective individual goals during a specified fiscal
year. Performance Awards and annual incentive Awards granted to persons whom the
Committee expects will, for the year in which a deduction arises, be "covered
employees" (as defined below) will, if and to the extent intended by the
Committee, be subject to provisions that should qualify such Awards as
"performance-based compensation" not subject to the limitation on tax
deductibility by the Company under Code Section 162(m). For purposes of Section
162(m), the term "covered employee" means the Company's chief executive officer
and each other person whose compensation is required to be disclosed in the
Company's filings with the SEC by reason of that person being among the four
highest compensated officers of the Company as of the end of a taxable year. If
and to the extent required under Section 162(m) of the Code, any power or
authority relating to a performance Award or annual incentive Award intended to
qualify under Section 162(m) of the Code is to be exercised by the Committee and
not the Board.
14
Subject to the requirements of the 2000 Plan, the Committee or the
Board will determine performance Award and annual incentive Award terms,
including the required levels of performance with respect to specified business
criteria, the corresponding amounts payable upon achievement of such levels of
performance, termination and forfeiture provisions and the form of settlement.
In granting annual incentive or performance Awards, the Committee or the Board
may establish unfunded award "pools," the amounts of which will be based upon
the achievement of a performance goal or goals based on one or more of certain
business criteria described in the 2000 Plan (including, for example, percentage
growth in per share funds from operations of Equity One as compared to the per
share funds from operations percentage growth of a peer group of industry
competitors). During the first 90 days of a fiscal year or performance period,
the Committee or the Board will determine who will potentially receive annual
incentive or performance Awards for that fiscal year or performance period,
either out of the pool or otherwise.
After the end of each fiscal year or performance period, the Committee
or the Board will determine (i) the amount of any pools and the maximum amount
of potential annual incentive or performance Awards payable to each participant
in the pools and (ii) the amount of any other potential annual incentive or
performance Awards payable to participants in the 2000 Plan. The Committee or
the Board may, in its discretion, determine that the amount payable as an annual
incentive or performance Award will be reduced from the amount of any potential
Award.
OTHER TERMS OF AWARDS
Awards may be settled in the form of cash, shares of Common Stock,
other Awards or other property, in the discretion of the Committee or the Board.
The Committee or the Board may require or permit participants to defer the
settlement of all or part of an Award in accordance with such terms and
conditions as the Committee or the Board may establish, including payment or
crediting of interest or dividend equivalents on deferred amounts, and the
crediting of earnings, gains and losses based on deemed investment of deferred
amounts in specified investment vehicles. The Committee or the Board is
authorized to place cash, shares of Common Stock or other property in trusts or
make other arrangements to provide for payment of the Company's obligations
under the 2000 Plan. The Committee or the Board may condition any payment
relating to an Award on the withholding of taxes and may provide that a portion
of any shares of Common Stock or other property to be distributed will be
withheld (or previously acquired shares of Common Stock or other property be
surrendered by the participant) to satisfy withholding and other tax
obligations. Awards granted under the 2000 Plan generally may not be pledged or
otherwise encumbered and are not transferable except by will or by the laws of
descent and distribution, or to a designated beneficiary upon the participant's
death, except that the Committee or the Board may, in its discretion, permit
transfers for estate planning or other purposes subject to any applicable
restrictions under Rule 16b-3.
Awards under the 2000 Plan are generally granted without a requirement
that the participant pay consideration in the form of cash or property for the
grant (as distinguished from the exercise), except to the extent required by
law. The Committee or the Board may, however, grant Awards in exchange for other
Awards under the 2000 Plan, awards under other Company plans, or other rights to
payment from the Company, and may grant Awards in addition to and in tandem with
such other Awards, rights or other awards.
ACCELERATION OF VESTING; CHANGE IN CONTROL
The Committee or the Board may, in its discretion, accelerate the
exercisability, the lapsing of restrictions or the expiration of deferral or
vesting periods of any Award, and such accelerated exercisability, lapse,
expiration and if so provided in the Award agreement, vesting shall occur
automatically in the case of a "change in control" of the Company, as defined in
the 2000 Plan (including the cash settlement of SARs and "limited SARs" which
may be exercisable in the event of a change in control). In addition, the
Committee or the Board may provide in an Award agreement that the performance
goals relating to any performance based Award will be deemed to have been met
upon the occurrence of any "change in control." Upon the occurrence of a change
in control, if so provided in the Award agreement, stock options and limited
SARs (and other SARs which so provide) may be cashed out based on a defined
"change in control price," which will be the higher of (i) the cash and fair
market value of property that is the highest price per share paid (including
extraordinary dividends) in any reorganization, merger, consolidation,
liquidation, dissolution or sale of substantially all assets of the Company, or
(ii) the highest fair market value per share (generally based on market prices)
at any time during the 60 days before and 60 days after a change in control.
15
For purposes of the 2000 Plan, the term "change in control" generally means (a)
approval by stockholders of any reorganization, merger or consolidation or other
transaction or series of transactions if persons who were stockholders
immediately prior to such reorganization, merger or consolidation or other
transaction do not, immediately thereafter, own more than [50]% of the combined
voting power of the reorganized, merged or consolidated company's then
outstanding, voting securities, or a liquidation or dissolution of the Company
or the sale of all or substantially all of the assets of the Company (unless the
reorganization, merger, consolidation or other corporate transaction,
liquidation, dissolution or sale is subsequently abandoned), or (b) a change in
the composition of the Board such that the persons constituting the Board on the
date the Award is granted (the "Incumbent Board"), and subsequent directors
approved by the Incumbent Board (or approved by such subsequent directors),
cease to constitute at least a majority of the Board, or (c) the acquisition by
any person, entity or "group", within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act, of more than 50% of either the then
outstanding shares of the Company's Common Stock or the combined voting power of
the Company's then outstanding voting securities entitled to vote generally in
the election of directors (hereinafter referred to as the ownership of a
"Controlling Interest") excluding, for this purpose, any acquisitions by (1) the
Company or its Subsidiaries, (2) any person, entity or "group" that as of the
date on which the Award is granted owns beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Securities Exchange Act) of a Controlling
Interest or (3) any employee benefit plan of the Company or its Subsidiaries.
AMENDMENT AND TERMINATION
The Board of Directors may amend, alter, suspend, discontinue or
terminate the 2000 Plan or the Committee's authority to grant Awards without
further stockholder approval, except stockholder approval must be obtained for
any amendment or alteration if such approval is required by law or regulation or
under the rules of any stock exchange or quotation system on which shares of
Common Stock are then listed or quoted. Thus, stockholder approval may not
necessarily be required for every amendment to the 2000 Plan which might
increase the cost of the 2000 Plan or alter the eligibility of persons to
receive Awards. Stockholder approval will not be deemed to be required under
laws or regulations, such as those relating to ISOs, that condition favorable
treatment of participants on such approval, although the Board may, in its
discretion, seek stockholder approval in any circumstance in which it deems such
approval advisable. Unless earlier terminated by the Board, the 2000 Plan will
terminate at such time as no shares of Common Stock remain available for
issuance under the 2000 Plan and the Company has no further rights or
obligations with respect to outstanding Awards under the 2000 Plan.
SECURITIES ACT REGISTRATION
The Company intends to register the shares of Common Stock available
for Awards under the 2000 Plan pursuant to a Registration Statement on Form S-8
filed with the SEC.
FEDERAL INCOME TAX CONSEQUENCES OF AWARDS OF OPTIONS
The following is a brief description of the federal income tax
consequences generally arising with respect to Awards of options under the 2000
Plan.
The grant of an option will create no tax consequences for the
participant or the Company. A participant will not have taxable income upon
exercising an ISO (except that the alternative minimum tax may apply). Upon
exercising an option other than an ISO, the participant must generally recognize
ordinary income equal to the difference between the exercise price and the fair
market value of the freely transferable and non-forfeitable shares of Common
Stock acquired on the date of exercise.
Upon a disposition of shares of Common Stock acquired upon exercise of
an ISO before the end of the applicable ISO holding periods, the participant
must generally recognize ordinary income equal to the lesser of (i) the fair
market value of the shares of Common Stock at the date of exercise of the ISO
minus the exercise price, or (ii) the amount realized upon the disposition of
the ISO shares of Common Stock minus the exercise price. Otherwise, a
participant's disposition of shares of Common Stock acquired upon the exercise
of an option (including an ISO for which the ISO holding periods are met)
generally will result in short-term or long-term capital gain or loss measured
by the difference between the sale price and the participant's tax basis in such
shares of Common
16
Stock (the tax basis generally being the exercise price plus any amount
previously recognized as ordinary income in connection with the exercise of the
option).
The Company generally will be entitled to a tax deduction equal to the
amount recognized as ordinary income by the participant in connection with an
option. The Company generally is not entitled to a tax deduction relating to
amounts that represent a capital gain to a participant. Accordingly, the Company
will not be entitled to any tax deduction with respect to an ISO if the
participant holds the shares of Common Stock for the ISO holding periods prior
to disposition of the shares.
The Omnibus Budget Reconciliation Act of 1993 added Section 162(m) to
the Code, which generally disallows a public company's tax deduction for
compensation to covered employees in excess of $1 million in any tax year
beginning on or after January 1, 1994. Compensation that qualifies as
"performance-based compensation" is excluded from the $1 million deductibility
cap, and therefore remains fully deductible by the company that pays it. As
discussed above, the Company intends that options and certain other Awards
granted to employees whom the Committee expects to be covered employees at the
time a deduction arises in connection with such Awards, qualify as such
"performance-based compensation," so that such Awards will not be subject to the
Section 162(m) deductibility cap of $1 million. Future changes in Section 162(m)
or the regulations thereunder may adversely affect the ability of the Company to
ensure that options or other Awards under the 2000 Plan will qualify as
"performance-based compensation" that is fully deductible by the Company under
Section 162(m).
The foregoing discussion, which is general in nature and is not
intended to be a complete description of the federal income tax consequences of
the 2000 Plan, is intended for the information of stockholders considering how
to vote at the Annual Meeting and not as tax guidance to participants in the
2000 Plan. This discussion does not address the effects of other federal taxes
or taxes imposed under state, local or foreign tax laws. Participants in the
2000 Plan should consult a tax advisor as to the tax consequences of
participation.
The Company believes that Awards granted under the 2000 Plan will be
granted primarily to those persons who possess a capacity to contribute
significantly to the successful performance of the Company. Because persons to
whom Awards may be made are to be determined from time to time by the Committee
in its discretion, it is impossible at this time to indicate the precise number,
name or positions of persons who will hereafter receive Awards or the nature and
terms of such Awards.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE PROPOSAL
TO APPROVE AND RATIFY THE 2000 EXECUTIVE INCENTIVE COMPENSATION PLAN.
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at Equity One's 2001
Annual Meeting of Stockholders pursuant to the provisions of Rule 14a-8 of the
Securities and Exchange Commission promulgated under the Securities Exchange Act
of 1934, as amended, must be received by Equity One at its executive offices by
January 19, 2001 for inclusion in Equity One's proxy statement and form of proxy
relating to such meeting.
17
Rule 14a of the Securities and Exchange Commission's proxy rules allows
a company to use discretionary voting authority to vote on matters coming before
an annual meeting of stockholders, if the company does not have notice of the
matter at least 45 days before the date corresponding to the date on which the
company first mailed its proxy materials for the prior year's annual meeting of
stockholders or the date specified by an overriding advance notice provision in
the company's bylaws. The Company's bylaws require at least 60 days, but not
more than 90 days, advance notice of business to be brought before an annual
meeting of stockholders. Accordingly, for Equity One's 2001 Annual Meeting of
Stockholders, a stockholder must submit such written notice to the Corporate
Secretary on or before March 20, 2001.
By Order Of The Board of Directors
ALAN J. MARCUS
SECRETARY
North Miami Beach, Florida
May 19, 2000
18
EXHIBIT A
EQUITY ONE, INC.
2000 EXECUTIVE INCENTIVE COMPENSATION PLAN
EQUITY ONE, INC.
2000 EXECUTIVE INCENTIVE COMPENSATION PLAN
1. Purpose..................................................................................................1
2. Definitions..............................................................................................1
3. Administration...........................................................................................4
(a) Authority of the Committee......................................................................4
(b) Manner of Exercise of Committee Authority.......................................................5
(c) Limitation of Liability.........................................................................5
4. Stock Subject to Plan....................................................................................6
(a) Limitation on Overall Number of Shares Subject to Awards........................................6
(b) Application of Limitations......................................................................6
5. Eligibility; Per-Person Award Limitations................................................................6
6. Specific Terms of Awards.................................................................................6
(a) General.........................................................................................6
(b) Options.........................................................................................7
(c) Stock Appreciation Rights.......................................................................8
(d) Restricted Stock................................................................................9
(e) Deferred Stock.................................................................................11
(f) Bonus Stock and Awards in Lieu of Obligations..................................................12
(g) Dividend Equivalents...........................................................................12
(h) Other Stock-Based Awards.......................................................................12
7. Certain Provisions Applicable to Awards.................................................................13
(a) Stand-Alone, Additional, Tandem, and Substitute Awards.........................................13
(b) Term of Awards.................................................................................13
(c) Form and Timing of Payment Under Awards; Deferrals.............................................13
(d) Exemptions from Section 16(b) Liability........................................................14
8. Performance and Annual Incentive Awards.................................................................14
(a) Performance Conditions.........................................................................14
(b) Performance Awards Granted to Designated Covered Employees.....................................14
(c) Annual Incentive Awards Granted to Designated Covered Employees................................16
(d) Written Determinations.........................................................................17
(e) Status of Section 8(b) and Section 8(c) Awards Under Code Section 162(m).......................17
9. Change in Control.......................................................................................18
(a) Effect of "Change in Control...................................................................18
(b) Definition of "Change in Control...............................................................18
(c) Definition of "Change in Control Price.........................................................19
10. General Provisions......................................................................................19
(a) Compliance With Legal and Other Requirements...................................................19
(b) Limits on Transferability; Beneficiaries.......................................................20
(c) Adjustments....................................................................................20
(d) Taxes..........................................................................................21
(e) Changes to the Plan and Awards.................................................................21
(f) Limitation on Rights Conferred Under Plan......................................................22
(g) Unfunded Status of Awards; Creation of Trusts..................................................22
(h) Nonexclusivity of the Plan.....................................................................22
(i) Payments in the Event of Forfeitures; Fractional Shares........................................23
(j) Governing Law..................................................................................23
(k) Plan Effective Date and Stockholder Approval; Termination of Plan..............................23
EQUITY ONE, INC.
2000 EXECUTIVE INCENTIVE COMPENSATION PLAN
1. PURPOSE. The purpose of this 2000 EXECUTIVE INCENTIVE COMPENSATION
PLAN (the "Plan") is to assist EQUITY ONE, INC., a Maryland corporation (the
"Company") and its subsidiaries in attracting, motivating, retaining and
rewarding high-quality executives and other employees, officers, directors and
independent contractors by enabling such persons to acquire or increase a
proprietary interest in the Company in order to strengthen the mutuality of
interests between such persons and the Company's stockholders, and providing
such persons with annual and long term performance incentives to expend their
maximum efforts in the creation of shareholder value. In the event that the
Company is or becomes a Publicly Held Corporation (as hereinafter defined), the
Plan is intended to qualify certain compensation awarded under the Plan for tax
deductibility under Section 162(m) of the Code (as hereafter defined) to the
extent deemed appropriate by the Committee (or any successor committee) of the
Board of Directors of the Company.
2. DEFINITIONS. For purposes of the Plan, the following terms shall be
defined as set forth below, in addition to such terms defined in Section 1
hereof.
(a) "Annual Incentive Award" means a conditional right granted to a
Participant under Section 8(c) hereof to receive a cash payment, Stock or other
Award, unless otherwise determined by the Committee, after the end of a
specified fiscal year.
(b) "Award" means any Option, SAR (including Limited SAR),
Restricted Stock, Deferred Stock, Stock granted as a bonus or in lieu of another
award, Dividend Equivalent, Other Stock-Based Award, Performance Award or Annual
Incentive Award, together with any other right or interest, granted to a
Participant under the Plan.
(c) "Beneficiary" means the person, persons, trust or trusts which
have been designated by a Participant in his or her most recent written
beneficiary designation filed with the Committee to receive the benefits
specified under the Plan upon such Participant's death or to which Awards or
other rights are transferred if and to the extent permitted under Section 10(b)
hereof. If, upon a Participant's death, there is no designated Beneficiary or
surviving designated Beneficiary, then the term Beneficiary means the person,
persons, trust or trusts entitled by will or the laws of descent and
distribution to receive such benefits.
(d) "Beneficial Owner", "Beneficially Owning" and "Beneficial
Ownership" shall have the meanings ascribed to such terms in Rule 13d-3 under
the Exchange Act and any successor to such Rule.
(e) "Board" means the Company's Board of Directors.
(f) "Cause" shall, with respect to any Participant, have the
equivalent meaning (or the same meaning as "cause" or "for cause") set forth in
any employment agreement between the Participant and the Company or Parent
Corporation or Subsidiary or, in the absence of any such agreement, such term
shall mean (i) the failure by the Participant to perform his or her duties as
assigned by the Company (or Parent Corporation or Subsidiary) in a reasonable
manner, (ii) any violation or breach by the Participant of his or her employment
agreement with the Company (or Parent Corporation or Subsidiary), if any, (iii)
any violation or breach by the Participant of his or her non-competition and/or
non-disclosure agreement with the Company (or Parent Corporation or Subsidiary),
if any, (iv) any act by the Participant of dishonesty or bad faith with respect
to the Company (or Parent Corporation or Subsidiary), (v) chronic addition to
alcohol, drugs or other similar substances affecting the Participant's work
performance, or (vi) the commission by the Participant of any act, misdemeanor,
or crime reflecting unfavorably upon the Participant or the Company. The good
faith determination by the Committee of whether the Participant's employment was
terminated by the Company for "Cause" shall be final and binding for all
purposes hereunder.
(g) "Change in Control" means a Change in Control as defined with
related terms in Section 9 of the Plan.
(h) "Change in Control Price" means the amount calculated in
accordance with Section 9(c) of the Plan.
(i) "Code" means the Internal Revenue Code of 1986, as amended from
time to time, including regulations thereunder and successor provisions and
regulations thereto.
(j) "Committee" means a committee designated by the Board to
administer the Plan; provided, however, that the Committee shall consist of at
least two directors, and, in the event the Company is or becomes a Publicly Held
Corporation (as hereinafter defined), each member of which shall be (i) a
"non-employee director" within the meaning of Rule 16b-3 under the Exchange Act,
unless administration of the Plan by "non-employee directors" is not then
required in order for exemptions under Rule 16b-3 to apply to transactions under
the Plan, and (ii) an "outside director" within the meaning of Section 162(m) of
the Code, unless administration of the Plan by "outside directors" is not then
required in order to qualify for tax deductibility under Section 162(m) of the
Code.
(k) "Corporate Transaction" means a Corporate Transaction as defined
in Section 9(b)(i) of the Plan.
(l) "Covered Employee" means an Eligible Person who is a Covered
Employee as specified in Section 8(e) of the Plan.
(m) "Deferred Stock" means a right, granted to a Participant under
Section 6(e) hereof, to receive Stock, cash or a combination thereof at the end
of a specified deferral period.
(n) "Director" means a member of the Board.
2
(o) "Disability" means a permanent and total disability (within the
meaning of Section 22(e) of the Code), as determined by a medical doctor
satisfactory to the Committee.
(p) "Dividend Equivalent" means a right, granted to a Participant
under Section 6(g) hereof, to receive cash, Stock, other Awards or other
property equal in value to dividends paid with respect to a specified number of
shares of Stock, or other periodic payments.
(q) "Effective Date" means the effective date of the Plan, which
shall be April 24, 2000.
(r) "Eligible Person" means each Executive Officer of the Company
(as defined under the Exchange Act) and other officers, Directors and employees
of the Company or of any Subsidiary, and independent contractors with the
Company or any Subsidiary. The foregoing notwithstanding, only employees of the
Company or any Subsidiary shall be Eligible Persons for purposes of receiving
any Incentive Stock Options. An employee on leave of absence may be considered
as still in the employ of the Company or a Subsidiary for purposes of
eligibility for participation in the Plan.
(s) "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, including rules thereunder and successor provisions
and rules thereto.
(t) "Executive Officer" means an executive officer of the Company as
defined under the Exchange Act.
(u) "Fair Market Value" means the fair market value of Stock, Awards
or other property as determined by the Committee or the Board, or under
procedures established by the Committee or the Board. Unless otherwise
determined by the Committee or the Board, the Fair Market Value of Stock as of
any given date shall be the closing sale price per share reported on a
consolidated basis for stock listed on the principal stock exchange or market on
which Stock is traded on the date as of which such value is being determined or,
if there is no sale on that date, then on the last previous day on which a sale
was reported.
(v) "Incentive Stock Option" or "ISO" means any Option intended to
be designated as an incentive stock option within the meaning of Section 422 of
the Code or any successor provision thereto.
(w) "Incumbent Board" means the Incumbent Board as defined in
Section 9(b)(ii) of the Plan.
(x) "Limited SAR" means a right granted to a Participant under
Section 6(c) hereof.
(y) "Option" means a right granted to a Participant under Section
6(b) hereof, to purchase Stock or other Awards at a specified price during
specified time periods.
3
(z) "Other Stock-Based Awards" means Awards granted to a Participant
under Section 6(h) hereof.
(aa) "Parent Corporation" means any corporation (other than the
Company) in an unbroken chain of corporations ending with the Company, if each
of the corporations in the chain (other than the Company) owns stock possessing
50% or more of the combined voting power of all classes of stock in one of the
other corporations in the chain.
(bb) "Participant" means a person who has been granted an Award
under the Plan which remains outstanding, including a person who is no longer an
Eligible Person.
(cc) "Performance Award" means a right, granted to an Eligible
Person under Section 8 hereof, to receive Awards based upon performance criteria
specified by the Committee or the Board.
(dd) "Person" shall have the meaning ascribed to such term in
Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d)
thereof, and shall include a "group" as defined in Section 13(d) thereof.
(ee) "Publicly Held Corporation" shall mean a publicly held
corporation as that term is used under Section 162(m)(2) of the Code.
(ff) "Restricted Stock" means Stock granted to a Participant under
Section 6(d) hereof, that is subject to certain restrictions and to a risk of
forfeiture.
(gg) "Rule 16b-3" and "Rule 16a-1(c)(3)" means Rule 16b-3 and Rule
16a-1(c)(3), as from time to time in effect and applicable to the Plan and
Participants, promulgated by the Securities and Exchange Commission under
Section 16 of the Exchange Act.
(hh) "Stock" means the Company's Common Stock, and such other
securities as may be substituted (or resubstituted) for Stock pursuant to
Section 10(c) hereof.
(ii) "Stock Appreciation Rights" or "SAR" means a right granted to a
Participant under Section 6(c) hereof.
(jj) "Subsidiary" means any corporation or other entity in which the
Company has a direct or indirect ownership interest of 50% or more of the total
combined voting power of the then outstanding securities or interests of such
corporation or other entity entitled to vote generally in the election of
directors or in which the Company has the right to receive 50% or more of the
distribution of profits or 50% or more of the assets on liquidation or
dissolution.
3. ADMINISTRATION.
(a) AUTHORITY OF THE COMMITTEE. The Plan shall be administered by
the Committee; provided, however, that except as otherwise expressly provided in
this Plan or, during the period that the Company is a Publicly Held Corporation,
in order to comply with
4
Code Section 162(m) or Rule 16b-3 under the Exchange Act, the Board may exercise
any power or authority granted to the Committee under this Plan. The Committee
or the Board shall have full and final authority, in each case subject to and
consistent with the provisions of the Plan, to select Eligible Persons to become
Participants, grant Awards, determine the type, number and other terms and
conditions of, and all other matters relating to, Awards, prescribe Award
agreements (which need not be identical for each Participant) and rules and
regulations for the administration of the Plan, construe and interpret the Plan
and Award agreements and correct defects, supply omissions or reconcile
inconsistencies therein, and to make all other decisions and determinations as
the Committee or the Board may deem necessary or advisable for the
administration of the Plan. In exercising any discretion granted to the
Committee or the Board under the Plan or pursuant to any Award, the Committee or
the Board shall not be required to follow past practices, act in a manner
consistent with past practices, or treat any Eligible Person in a manner
consistent with the treatment of other Eligible Persons.
(b) MANNER OF EXERCISE OF COMMITTEE AUTHORITY. In the event that the
Company is or becomes a Publicly Held Corporation, the Committee, and not the
Board, shall exercise sole and exclusive discretion on any matter relating to a
Participant then subject to Section 16 of the Exchange Act with respect to the
Company to the extent necessary in order that transactions by such Participant
shall be exempt under Rule 16b-3 under the Exchange Act. Any action of the
Committee or the Board shall be final, conclusive and binding on all persons,
including the Company, its subsidiaries, Participants, Beneficiaries,
transferees under Section 10(b) hereof or other persons claiming rights from or
through a Participant, and stockholders. The express grant of any specific power
to the Committee or the Board, and the taking of any action by the Committee or
the Board, shall not be construed as limiting any power or authority of the
Committee or the Board. The Committee or the Board may delegate to officers or
managers of the Company or any subsidiary, or committees thereof, the authority,
subject to such terms as the Committee or the Board shall determine, (i) to
perform administrative functions, (ii) with respect to Participants not subject
to Section 16 of the Exchange Act, to perform such other functions as the
Committee or the Board may determine, and (iii) with respect to Participants
subject to Section 16, to perform such other functions of the Committee or the
Board as the Committee or the Board may determine to the extent performance of
such functions will not result in the loss of an exemption under Rule 16b-3
otherwise available for transactions by such persons, in each case to the extent
permitted under applicable law and subject to the requirements set forth in
Section 8(d). The Committee or the Board may appoint agents to assist it in
administering the Plan.
(c) LIMITATION OF LIABILITY. The Committee and the Board, and each
member thereof, shall be entitled to, in good faith, rely or act upon any report
or other information furnished to him or her by any executive officer, other
officer or employee of the Company or a Subsidiary, the Company's independent
auditors, consultants or any other agents assisting in the administration of the
Plan. Members of the Committee and the Board, and any officer or employee of the
Company or a subsidiary acting at the direction or on behalf of the Committee or
the Board, shall not be personally liable for any action or determination taken
or made in good faith with respect to the Plan, and shall, to the extent
permitted by law, be fully indemnified and protected by the Company with respect
to any such action or determination.
5
4. STOCK SUBJECT TO PLAN.
(a) LIMITATION ON OVERALL NUMBER OF SHARES SUBJECT TO AWARDS.
Subject to adjustment as provided in Section 10(c) hereof, the total number of
shares of Stock reserved and available for delivery in connection with Awards
under the Plan shall be the sum of (i) 1,000,000, plus (ii) the number of shares
with respect to Awards previously granted under the Plan that terminate without
being exercised, expire, are forfeited or canceled, and the number of shares of
Stock that are surrendered in payment of any Awards or any tax withholding with
regard thereto. Any shares of Stock delivered under the Plan may consist, in
whole or in part, of authorized and unissued shares or treasury shares.
(b) APPLICATION OF LIMITATIONS. The limitation contained in Section
4(a) shall apply not only to Awards that are settleable by the delivery of
shares of Stock but also to Awards relating to shares of Stock but settleable
only in cash (such as cash-only SARs). The Committee or the Board may adopt
reasonable counting procedures to ensure appropriate counting, avoid double
counting (as, for example, in the case of tandem or substitute awards) and make
adjustments if the number of shares of Stock actually delivered differs from the
number of shares previously counted in connection with an Award.
5. ELIGIBILITY; PER-PERSON AWARD LIMITATIONS. Awards may be granted
under the Plan only to Eligible Persons. In each fiscal year during any part of
which the Plan is in effect, an Eligible Person may not be granted Awards
relating to more than 500,000 shares of Stock, subject to adjustment as provided
in Section 10(c), under each of Sections 6(b), 6(c), 6(d), 6(e), 6(f), 6(g),
6(h), 8(b) and 8(c). In addition, the maximum amount that may be earned as an
Annual Incentive Award or other cash Award in any fiscal year by any one
Participant shall be $2,000,000, and the maximum amount that may be earned as a
Performance Award or other cash Award in respect of a performance period by any
one Participant shall be $5,000,000.
6. SPECIFIC TERMS OF AWARDS.
(a) GENERAL. Awards may be granted on the terms and conditions set
forth in this Section 6. In addition, the Committee or the Board may impose on
any Award or the exercise thereof, at the date of grant or thereafter (subject
to Section 10(e)), such additional terms and conditions, not inconsistent with
the provisions of the Plan, as the Committee or the Board shall determine,
including terms requiring forfeiture of Awards in the event of termination of
employment by the Participant and terms permitting a Participant to make
elections relating to his or her Award. The Committee or the Board shall retain
full power and discretion to accelerate, waive or modify, at any time, any term
or condition of an Award that is not mandatory under the Plan. Except in cases
in which the Committee or the Board is authorized to require other forms of
consideration under the Plan, or to the extent other forms of consideration must
be paid to satisfy the requirements of Maryland law, no consideration other than
services may be required for the grant (but not the exercise) of any Award.
6
(b) OPTIONS. The Committee and the Board each is authorized to grant
Options to Participants on the following terms and conditions:
(i) EXERCISE PRICE. The exercise price per share of
Stock purchasable under an Option shall be determined by the
Committee or the Board, provided that such exercise price shall not,
in the case of Incentive Stock Options, be less than 100% of the
Fair Market Value of the Stock on the date of grant of the Option
and shall not, in any event, be less than the par value of a share
of Stock on the date of grant of such Option. If an employee owns or
is deemed to own (by reason of the attribution rules applicable
under Section 424(d) of the Code) more than 10% of the combined
voting power of all classes of stock of the Company or any Parent
Corporation or Subsidiary and an Incentive Stock Option is granted
to such employee, the option price of such Incentive Stock Option
(to the extent required by the Code at the time of grant) shall be
no less than 110% of the Fair Market Value of the Stock on the date
such Incentive Stock Option is granted.
(ii) TIME AND METHOD OF EXERCISE. The Committee or the
Board shall determine the time or times at which or the
circumstances under which an Option may be exercised in whole or in
part (including based on achievement of performance goals and/or
future service requirements), the time or times at which Options
shall cease to be or become exercisable following termination of
employment or upon other conditions, the methods by which such
exercise price may be paid or deemed to be paid (including in the
discretion of the Committee or the Board a cashless exercise
procedure), the form of such payment, including, without limitation,
cash, Stock, other Awards or awards granted under other plans of the
Company or any subsidiary, or other property (including notes or
other contractual obligations of Participants to make payment on a
deferred basis), and the methods by or forms in which Stock will be
delivered or deemed to be delivered to Participants.
(iii) ISOS. The terms of any ISO granted under the Plan
shall comply in all respects with the provisions of Section 422 of
the Code. Anything in the Plan to the contrary notwithstanding, no
term of the Plan relating to ISOs (including any SAR in tandem
therewith) shall be interpreted, amended or altered, nor shall any
discretion or authority granted under the Plan be exercised, so as
to disqualify either the Plan or any ISO under Section 422 of the
Code, unless the Participant has first requested the change that
will result in such disqualification. Thus, if and to the extent
required to comply with Section 422 of the Code, Options granted as
Incentive Stock Options shall be subject to the following special
terms and conditions:
(A) the Option shall not be exercisable more than ten
years after the date such Incentive Stock Option is granted;
provided, however, that if a Participant owns or is deemed to own
(by reason of the attribution rules of Section
7
424(d) of the Code) more than 10% of the combined voting power of
all classes of stock of the Company or any Parent Corporation and
the Incentive Stock Option is granted to such Participant, the term
of the Incentive Stock Option shall be (to the extent required by
the Code at the time of the grant) for no more than five years from
the date of grant; and
(B) The aggregate Fair Market Value (determined as of
the date the Incentive Stock Option is granted) of the shares of
stock with respect to which Incentive Stock Options granted under
the Plan and all other option plans of the Company or its Parent
Corporation during any calendar year exercisable for the first time
by the Participant during any calendar year shall not (to the extent
required by the Code at the time of the grant) exceed $100,000.
(iv) REPURCHASE RIGHTS. The Committee and the Board
shall have the discretion to grant Options which are exercisable for
unvested shares of Common Stock. Should the Optionee cease to be
employed with or perform services to the Company (or a Parent
Corporation or Subsidiary) while holding such unvested shares, the
Company shall have the right to repurchase, at the exercise price
paid per share, any or all of those unvested shares. The terms upon
which such repurchase right shall be exercisable (including the
period and procedure for exercise and the appropriate vesting
schedule for the purchased shares) shall be established by the
Committee or the Board and set forth in the document evidencing such
repurchase right.
(c) STOCK APPRECIATION RIGHTS. The Committee and the Board each is
authorized to grant SAR's to Participants on the following terms and conditions:
(i) RIGHT TO PAYMENT. A SAR shall confer on the
Participant to whom it is granted a right to receive, upon exercise
thereof, the excess of (A) the Fair Market Value of one share of
stock on the date of exercise (or, in the case of a "Limited SAR"
that may be exercised only in the event of a Change in Control, the
Fair Market Value determined by reference to the Change in Control
Price, as defined under Section 9(c) hereof), over (B) the grant
price of the SAR as determined by the Committee or the Board. The
grant price of an SAR shall not be less than the Fair Market Value
of a share of Stock on the date of grant except as provided under
Section 7(a) hereof.
(ii) OTHER TERMS. The Committee or the Board shall
determine at the date of grant or thereafter, the time or times at
which and the circumstances under which a SAR may be exercised in
whole or in part (including based on achievement of performance
goals and/or future service requirements), the time or times at
which SARs shall cease to be or become exercisable following
termination of employment or upon other conditions, the method of
exercise, method of settlement, form of consideration payable in
settlement, method by or
8
forms in which Stock will be delivered or deemed to be delivered to
Participants, whether or not a SAR shall be in tandem or in
combination with any other Award, and any other terms and conditions
of any SAR. Limited SARs that may only be exercised in connection
with a Change in Control or other event as specified by the
Committee or the Board, may be granted on such terms, not
inconsistent with this Section 6(c), as the Committee or the Board
may determine. SARs and Limited SARs may be either freestanding or
in tandem with other Awards.
(d) RESTRICTED STOCK. The Committee and the Board each is authorized
to grant Restricted Stock to Participants on the following terms and conditions:
(i) GRANT AND RESTRICTIONS. Restricted Stock shall be
subject to such restrictions on transferability, risk of forfeiture
and other restrictions, if any, as the Committee or the Board may
impose, which restrictions may lapse separately or in combination at
such times, under such circumstances (including based on achievement
of performance goals and/or future service requirements), in such
installments or otherwise, as the Committee or the Board may
determine at the date of grant or thereafter. Except to the extent
restricted under the terms of the Plan and any Award agreement
relating to the Restricted Stock, a Participant granted Restricted
Stock shall have all of the rights of a stockholder, including the
right to vote the Restricted Stock and the right to receive
dividends thereon (subject to any mandatory reinvestment or other
requirement imposed by the Committee or the Board). During the
restricted period applicable to the Restricted Stock, subject to
Section 10(b) below, the Restricted Stock may not be sold,
transferred, pledged, hypothecated, margined or otherwise encumbered
by the Participant.
(ii) FORFEITURE. Except as otherwise determined by the
Committee or the Board at the time of the Award, upon termination of
a Participant's employment during the applicable restriction period,
the Participant's Restricted Stock that is at that time subject to
restrictions shall be forfeited and reacquired by the Company;
provided that the Committee or the Board may provide, by rule or
regulation or in any Award agreement, or may determine in any
individual case, that restrictions or forfeiture conditions relating
to Restricted Stock shall be waived in whole or in part in the event
of terminations resulting from specified causes, and the Committee
or the Board may in other cases waive in whole or in part the
forfeiture of Restricted Stock.
(iii) CERTIFICATES FOR STOCK. Restricted Stock granted
under the Plan may be evidenced in such manner as the Committee or
the Board shall determine. If certificates representing Restricted
Stock are registered in the name of the Participant, the Committee
or the Board may require that such certificates bear an appropriate
legend referring to the terms, conditions and restrictions
applicable to such Restricted Stock, that the Company retain
physical possession of the
9
certificates, and that the Participant deliver a stock power to the
Company, endorsed in blank, relating to the Restricted Stock.
(iv) DIVIDENDS AND SPLITS. As a condition to the grant
of an Award of Restricted Stock, the Committee or the Board may
require that any cash dividends paid on a share of Restricted Stock
be automatically reinvested in additional shares of Restricted Stock
or applied to the purchase of additional Awards under the Plan.
Unless otherwise determined by the Committee or the Board, Stock
distributed in connection with a Stock split or Stock dividend, and
other property distributed as a dividend, shall be subject to
restrictions and a risk of forfeiture to the same extent as the
Restricted Stock with respect to which such Stock or other property
has been distributed.
(v) AUTOMATIC RESTRICTED STOCK GRANTS TO NON-EMPLOYEE
DIRECTORS. Non-Employee Directors shall be eligible to receive
Restricted Stock Awards under this Section 6(d)(v).
(A) INITIAL GRANTS. On the date that an eligible
Non-Employee Director is first elected to the Board, such
Non-Employee Director shall receive 2,000 shares of Restricted Stock
(an "Initial Grant"); PROVIDED that any Non-Employee Director who is
a member of the Board as of the Effective Date of this Plan shall be
entitled to received an Initial Grant. The Initial Grant shall be
subject to the availability and adjustment of shares of Stock
issuable under the Plan pursuant to Section 4 and shall not be
subject to the discretion of any person or persons.
(B) SERVICE GRANTS. On each January 1 while the Plan
remains in effect, each then Non-Employee Director shall be granted
an additional 2,000 shares of Restricted Stock (a "Service Grant"),
subject to the availability and adjustment of shares of Stock
issuable under the Plan pursuant to Section 4 and shall not be
subject to the discretion of any person or persons.
(C) TERMS OF INITIAL GRANTS AND SERVICE GRANTS.
Unless otherwise determined by the Committee or in any Restricted
Stock Agreement, each Restricted Stock Award granted pursuant to
this Section 6(d)(v) shall be subject to the following terms:
(1) each such Restricted Stock Award shall have
a term of ten (10) years from the date on which the Option is
granted; and
(2) each such Restricted Stock Award shall vest
in two (2) equal installments of 1,000 shares of Stock on the first
and second December 31 subsequent to the date on which the shares of
Restricted Stock are granted.
10
(e) DEFERRED STOCK. The Committee and the Board each is authorized to
grant Deferred Stock to Participants, which are rights to receive Stock, cash,
or a combination thereof at the end of a specified deferral period, subject to
the following terms and conditions:
(i) AWARD AND RESTRICTIONS. Satisfaction of an Award of
Deferred Stock shall occur upon expiration of the deferral period
specified for such Deferred Stock by the Committee or the Board (or,
if permitted by the Committee or the Board, as elected by the
Participant). In addition, Deferred Stock shall be subject to such
restrictions (which may include a risk of forfeiture) as the
Committee or the Board may impose, if any, which restrictions may
lapse at the expiration of the deferral period or at earlier
specified times (including based on achievement of performance goals
and/or future service requirements), separately or in combination,
in installments or otherwise, as the Committee or the Board may
determine. Deferred Stock may be satisfied by delivery of Stock,
cash equal to the Fair Market Value of the specified number of
shares of Stock covered by the Deferred Stock, or a combination
thereof, as determined by the Committee or the Board at the date of
grant or thereafter. Prior to satisfaction of an Award of Deferred
Stock, an Award of Deferred Stock carries no voting or dividend or
other rights associated with share ownership.
(ii) FORFEITURE. Except as otherwise determined by the
Committee or the Board, upon termination of a Participant's
employment during the applicable deferral period thereof to which
forfeiture conditions apply (as provided in the Award agreement
evidencing the Deferred Stock), the Participant's Deferred Stock
that is at that time subject to deferral (other than a deferral at
the election of the Participant) shall be forfeited; provided that
the Committee or the Board may provide, by rule or regulation or in
any Award agreement, or may determine in any individual case, that
restrictions or forfeiture conditions relating to Deferred Stock
shall be waived in whole or in part in the event of terminations
resulting from specified causes, and the Committee or the Board may
in other cases waive in whole or in part the forfeiture of Deferred
Stock.
(iii) DIVIDEND EQUIVALENTS. Unless otherwise determined
by the Committee or the Board at date of grant, Dividend Equivalents
on the specified number of shares of Stock covered by an Award of
Deferred Stock shall be either (A) paid with respect to such
Deferred Stock at the dividend payment date in cash or in shares of
unrestricted Stock having a Fair Market Value equal to the amount of
such dividends, or (B) deferred with respect to such Deferred Stock
and the amount or value thereof automatically deemed reinvested in
additional Deferred Stock, other Awards or other investment
vehicles, as the Committee or the Board shall determine or permit
the Participant to elect.
(f) BONUS STOCK AND AWARDS IN LIEU OF OBLIGATIONS. The Committee and
the Board each is authorized to grant Stock as a bonus, or to grant Stock or
other Awards in lieu of
11
Company obligations to pay cash or deliver other property under the Plan or
under other plans or compensatory arrangements, provided that, in the case of
Participants subject to Section 16 of the Exchange Act, the amount of such
grants remains within the discretion of the Committee to the extent necessary to
ensure that acquisitions of Stock or other Awards are exempt from liability
under Section 16(b) of the Exchange Act. Stock or Awards granted hereunder shall
be subject to such other terms as shall be determined by the Committee or the
Board.
(g) DIVIDEND EQUIVALENTS. The Committee and the Board each is
authorized to grant Dividend Equivalents to a Participant entitling the
Participant to receive cash, Stock, other Awards, or other property equal in
value to dividends paid with respect to a specified number of shares of Stock,
or other periodic payments. Dividend Equivalents may be awarded on a
free-standing basis or in connection with another Award. The Committee or the
Board may provide that Dividend Equivalents shall be paid or distributed when
accrued or shall be deemed to have been reinvested in additional Stock, Awards,
or other investment vehicles, and subject to such restrictions on
transferability and risks of forfeiture, as the Committee or the Board may
specify.
(h) OTHER STOCK-BASED AWARDS. The Committee and the Board each is
authorized, subject to limitations under applicable law, to grant to
Participants such other Awards that may be denominated or payable in, valued in
whole or in part by reference to, or otherwise based on, or related to, Stock,
as deemed by the Committee or the Board to be consistent with the purposes of
the Plan, including, without limitation, convertible or exchangeable debt
securities, other rights convertible or exchangeable into Stock, purchase rights
for Stock, Awards with value and payment contingent upon performance of the
Company or any other factors designated by the Committee or the Board, and
Awards valued by reference to the book value of Stock or the value of securities
of or the performance of specified subsidiaries or business units. The Committee
or the Board shall determine the terms and conditions of such Awards. Stock
delivered pursuant to an Award in the nature of a purchase right granted under
this Section 6(h) shall be purchased for such consideration (including without
limitation loans from the Company or a Parent Corporation or a Subsidiary), paid
for at such times, by such methods, and in such forms, including, without
limitation, cash, Stock, other Awards or other property, as the Committee or the
Board shall determine. The Committee and the Board shall have the discretion to
grant such other Awards which are exercisable for unvested shares of Common
Stock. Should the Optionee cease to be employed with or perform services to the
Company (or a Parent Corporation or Subsidiary) while holding such unvested
shares, the Company shall have the right to repurchase, at the exercise price
paid per share, any or all of those unvested shares. The terms upon which such
repurchase right shall be exercisable (including the period and procedure for
exercise and the appropriate vesting schedule for the purchased shares) shall be
established by the Committee or the Board and set forth in the document
evidencing such repurchase right. Cash awards, as an element of or supplement to
any other Award under the Plan, may also be granted pursuant to this Section
6(h).
12
7. CERTAIN PROVISIONS APPLICABLE TO AWARDS.
(a) STAND-ALONE, ADDITIONAL, TANDEM, AND SUBSTITUTE AWARDS. Awards
granted under the Plan may, in the discretion of the Committee or the Board, be
granted either alone or in addition to, in tandem with, or in substitution or
exchange for, any other Award or any award granted under another plan of the
Company, any subsidiary, or any business entity to be acquired by the Company or
a subsidiary, or any other right of a Participant to receive payment from the
Company or any subsidiary. Such additional, tandem, and substitute or exchange
Awards may be granted at any time. If an Award is granted in substitution or
exchange for another Award or award, the Committee or the Board shall require
the surrender of such other Award or award in consideration for the grant of the
new Award. In addition, Awards may be granted in lieu of cash compensation,
including in lieu of cash amounts payable under other plans of the Company or
any subsidiary, in which the value of Stock subject to the Award is equivalent
in value to the cash compensation (for example, Deferred Stock or Restricted
Stock), or in which the exercise price, grant price or purchase price of the
Award in the nature of a right that may be exercised is equal to the Fair Market
Value of the underlying Stock minus the value of the cash compensation
surrendered (for example, Options granted with an exercise price "discounted" by
the amount of the cash compensation surrendered).
(b) TERM OF AWARDS. The term of each Award shall be for such period
as may be determined by the Committee or the Board; provided that in no event
shall the term of any Option or SAR exceed a period of ten years (or such
shorter term as may be required in respect of an ISO under Section 422 of the
Code).
(c) FORM AND TIMING OF PAYMENT UNDER AWARDS; DEFERRALS. Subject to
the terms of the Plan and any applicable Award agreement, payments to be made by
the Company or a subsidiary upon the exercise of an Option or other Award or
settlement of an Award may be made in such forms as the Committee or the Board
shall determine, including, without limitation, cash, other Awards or other
property, and may be made in a single payment or transfer, in installments, or
on a deferred basis. The settlement of any Award may be accelerated, and cash
paid in lieu of Stock in connection with such settlement, in the discretion of
the Committee or the Board or upon occurrence of one or more specified events
(in addition to a Change in Control). Installment or deferred payments may be
required by the Committee or the Board (subject to Section 10(e) of the Plan) or
permitted at the election of the Participant on terms and conditions established
by the Committee or the Board. Payments may include, without limitation,
provisions for the payment or crediting of a reasonable interest rate on
installment or deferred payments or the grant or crediting of Dividend
Equivalents or other amounts in respect of installment or deferred payments
denominated in Stock.
(d) EXEMPTIONS FROM SECTION 16(B) LIABILITY. If and to the extent
that the Company is or becomes a Publicly Held Corporation, it is the intent of
the Company that this Plan comply in all respects with applicable provisions of
Rule 16b-3 or Rule 16a-1(c)(3) to the extent necessary to ensure that neither
the grant of any Awards to nor other transaction by a Participant who is subject
to Section 16 of the Exchange Act is subject to liability under Section
13
16(b) thereof (except for transactions acknowledged in writing to be non-exempt
by such Participant). Accordingly, if any provision of this Plan or any Award
agreement does not comply with the requirements of Rule 16b-3 or Rule
16a-1(c)(3) as then applicable to any such transaction, such provision will be
construed or deemed amended to the extent necessary to conform to the applicable
requirements of Rule 16b-3 or Rule 16a-1(c)(3) so that such Participant shall
avoid liability under Section 16(b). In addition, the purchase price of any
Award conferring a right to purchase Stock shall be not less than any specified
percentage of the Fair Market Value of Stock at the date of grant of the Award
then required in order to comply with Rule 16b-3.
8. PERFORMANCE AND ANNUAL INCENTIVE AWARDS.
(a) PERFORMANCE CONDITIONS. The right of a Participant to exercise
or receive a grant or settlement of any Award, and the timing thereof, may be
subject to such performance conditions as may be specified by the Committee or
the Board. The Committee or the Board may use such business criteria and other
measures of performance as it may deem appropriate in establishing any
performance conditions, and may exercise its discretion to reduce the amounts
payable under any Award subject to performance conditions, except as limited
under Sections 8(b) and 8(c) hereof in the case of a Performance Award or Annual
Incentive Award intended to qualify under Code Section 162(m). At such times as
the Company is a Publicly Held Corporation, if and to the extent required under
Code Section 162(m), any power or authority relating to a Performance Award or
Annual Incentive Award intended to qualify under Code Section 162(m), shall be
exercised by the Committee and not the Board.
(b) PERFORMANCE AWARDS GRANTED TO DESIGNATED COVERED EMPLOYEES. If
and to the extent that the Committee determines that a Performance Award to be
granted to an Eligible Person who is designated by the Committee as likely to be
a Covered Employee should qualify as "performance-based compensation" for
purposes of Code Section 162(m), the grant, exercise and/or settlement of such
Performance Award shall be contingent upon achievement of preestablished
performance goals and other terms set forth in this Section 8(b).
(i) PERFORMANCE GOALS GENERALLY. The performance goals
for such Performance Awards shall consist of one or more business
criteria and a targeted level or levels of performance with respect
to each of such criteria, as specified by the Committee consistent
with this Section 8(b). Performance goals shall be objective and
shall otherwise meet the requirements of Code Section 162(m) and
regulations thereunder including the requirement that the level or
levels of performance targeted by the Committee result in the
achievement of performance goals being "substantially uncertain."
The Committee may determine that such Performance Awards shall be
granted, exercised and/or settled upon achievement of any one
performance goal or that two or more of the performance goals must
be achieved as a condition to grant, exercise and/or settlement of
such Performance Awards. Performance goals may differ for
Performance Awards granted to any one Participant or to different
Participants.
14
(ii) BUSINESS CRITERIA. The following business criterion
for the Company, on a consolidated basis, and/or specified
subsidiaries or business units of the Company (except with respect
to the total stockholder return and earnings per share criteria),
shall be used exclusively by the Committee in establishing
performance goals for such Performance Awards: percentage growth in
per share funds from operations of the Company as compared to the
per share funds from operations percentage growth of a peer group of
industry competitors selected by the Compensation Committee. The
foregoing business criterion shall also be exclusively used in
establishing performance goals for Annual Incentive Awards granted
to a Covered Employee under Section 8(c) hereof that are intended to
qualify as "performanced-based compensation" under Code Section
162(m).
(iii) PERFORMANCE PERIOD; TIMING FOR ESTABLISHING
PERFORMANCE GOALS. Achievement of performance goals in respect of
such Performance Awards shall be measured over a performance period
of up to ten years, as specified by the Committee. Performance goals
shall be established not later than 90 days after the beginning of
any performance period applicable to such Performance Awards, or at
such other date as may be required or permitted for
"performance-based compensation" under Code Section 162(m).
(iv) PERFORMANCE AWARD POOL. The Committee may establish
a Performance Award pool, which shall be an unfunded pool, for
purposes of measuring Company performance in connection with
Performance Awards. The amount of such Performance Award pool shall
be based upon the achievement of a performance goal or goals based
on one or more of the business criteria set forth in Section
8(b)(ii) hereof during the given performance period, as specified by
the Committee in accordance with Section 8(b)(iii) hereof. The
Committee may specify the amount of the Performance Award pool as a
percentage of any of such business criteria, a percentage thereof in
excess of a threshold amount, or as another amount which need not
bear a strictly mathematical relationship to such business criteria.
(v) SETTLEMENT OF PERFORMANCE AWARDS; OTHER TERMS.
Settlement of such Performance Awards shall be in cash, Stock, other
Awards or other property, in the discretion of the Committee. The
Committee may, in its discretion, reduce the amount of a settlement
otherwise to be made in connection with such Performance Awards. The
Committee shall specify the circumstances in which such Performance
Awards shall be paid or forfeited in the event of termination of
employment by the Participant prior to the end of a performance
period or settlement of Performance Awards.
(c) ANNUAL INCENTIVE AWARDS GRANTED TO DESIGNATED COVERED EMPLOYEES.
The Committee may, within its discretion, grant one or more Annual Incentive
Awards to any Eligible Person, subject to the terms and conditions set forth in
this Section 8(c).
15
(i) ANNUAL INCENTIVE AWARD POOL. The Committee may
establish an Annual Incentive Award pool, which shall be an unfunded
pool, for purposes of measuring Company performance in connection
with Annual Incentive Awards. In the case of Annual Incentive Awards
intended to qualify as "performance-based compensation" for purposes
of Code Section 162(m), the amount of such Annual Incentive Award
pool shall be based upon the achievement of a performance goal or
goals based on one or more of the business criteria set forth in
Section 8(b)(ii) hereof during the given performance period, as
specified by the Committee in accordance with Section 8(b)(iii)
hereof. The Committee may specify the amount of the Annual Incentive
Award pool as a percentage of any such business criteria, a
percentage thereof in excess of a threshold amount, or as another
amount which need not bear a strictly mathematical relationship to
such business criteria.
(ii) POTENTIAL ANNUAL INCENTIVE AWARDS. Not later than
the end of the 90th day of each fiscal year, or at such other date
as may be required or permitted in the case of Awards intended to be
"performance-based compensation" under Code Section 162(m), the
Committee shall determine the Eligible Persons who will potentially
receive Annual Incentive Awards, and the amounts potentially payable
thereunder, for that fiscal year, either out of an Annual Incentive
Award pool established by such date under Section 8(c)(i) hereof or
as individual Annual Incentive Awards. In the case of individual
Annual Incentive Awards intended to qualify under Code Section
162(m), the amount potentially payable shall be based upon the
achievement of a performance goal or goals based on one or more of
the business criteria set forth in Section 8(b)(ii) hereof in the
given performance year, as specified by the Committee; in other
cases, such amount shall be based on such criteria as shall be
established by the Committee. In all cases, the maximum Annual
Incentive Award of any Participant shall be subject to the
limitation set forth in Section 5 hereof.
(iii) PAYOUT OF ANNUAL INCENTIVE AWARDS. After the end
of each fiscal year, the Committee shall determine the amount, if
any, of (A) the Annual Incentive Award pool, and the maximum amount
of potential Annual Incentive Award payable to each Participant in
the Annual Incentive Award pool, or (B) the amount of potential
Annual Incentive Award otherwise payable to each Participant. The
Committee may, in its discretion, determine that the amount payable
to any Participant as an Annual Incentive Award shall be reduced
from the amount of his or her potential Annual Incentive Award,
including a determination to make no Award whatsoever. The Committee
shall specify the circumstances in which an Annual Incentive Award
shall be paid or forfeited in the event of termination of employment
by the Participant prior to the end of a fiscal year or settlement
of such Annual Incentive Award.
16
(d) WRITTEN DETERMINATIONS. All determinations by the Committee as
to the establishment of performance goals, the amount of any Performance Award
pool or potential individual Performance Awards and as to the achievement of
performance goals relating to Performance Awards under Section 8(b), and the
amount of any Annual Incentive Award pool or potential individual Annual
Incentive Awards and the amount of final Annual Incentive Awards under Section
8(c), shall be made in writing in the case of any Award intended to qualify
under Code Section 162(m). The Committee may not delegate any responsibility
relating to such Performance Awards or Annual Incentive Awards if and to the
extent required to comply with Code Section 162(m).
(e) STATUS OF SECTION 8(B) AND SECTION 8(C) AWARDS UNDER CODE
SECTION 162(M). It is the intent of the Company that Performance Awards and
Annual Incentive Awards under Section 8(b) and 8(c) hereof granted to persons
who are designated by the Committee as likely to be Covered Employees within the
meaning of Code Section 162(m) and regulations thereunder shall, if so
designated by the Committee, constitute "qualified performance-based
compensation" within the meaning of Code Section 162(m) and regulations
thereunder. Accordingly, the terms of Sections 8(b), (c), (d) and (e), including
the definitions of Covered Employee and other terms used therein, shall be
interpreted in a manner consistent with Code Section 162(m) and regulations
thereunder. The foregoing notwithstanding, because the Committee cannot
determine with certainty whether a given Participant will be a Covered Employee
with respect to a fiscal year that has not yet been completed, the term Covered
Employee as used herein shall mean only a person designated by the Committee, at
the time of grant of Performance Awards or an Annual Incentive Award, as likely
to be a Covered Employee with respect to that fiscal year. If any provision of
the Plan or any agreement relating to such Performance Awards or Annual
Incentive Awards does not comply or is inconsistent with the requirements of
Code Section 162(m) or regulations thereunder, such provision shall be construed
or deemed amended to the extent necessary to conform to such requirements.
9. CHANGE IN CONTROL.
(a) EFFECT OF "CHANGE IN CONTROL." If and to the extent provided in the
Award, in the event of a "Change in Control," as defined in Section 9(b):
(i) The Committee may, within its discretion, accelerate
the vesting and exercisability of any Award carrying a right to
exercise that was not previously vested and exercisable as of the
time of the Change in Control, subject to applicable restrictions
set forth in Section 10(a) hereof;
(ii) The Committee may, within its discretion,
accelerate the exercisability of any limited SARs (and other SARs if
so provided by their terms) and provide for the settlement of such
SARs for amounts, in cash, determined by reference to the Change in
Control Price;
(iii) The Committee may, within its discretion, lapse
the restrictions, deferral of settlement, and forfeiture conditions
applicable to any other Award
17
granted under the Plan and such Awards may be deemed fully vested as
of the time of the Change in Control, except to the extent of any
waiver by the Participant and subject to applicable restrictions set
forth in Section 10(a) hereof; and
(iv) With respect to any such outstanding Award subject
to achievement of performance goals and conditions under the Plan,
the Committee may, within its discretion, deem such performance
goals and other conditions as having been met as of the date of the
Change in Control.
(b) DEFINITION OF "CHANGE IN CONTROL. A "Change in Control" shall be
deemed to have occurred upon:
(i) Approval by the stockholders of the Company of (x) a
reorganization, merger, consolidation or other form of corporate
transaction or series of transactions, in each case, with respect to
which persons who were the stockholders of the Company immediately
prior to such reorganization, merger or consolidation or other
transaction do not, immediately thereafter, own more than 26% of the
combined voting power entitled to vote generally in the election of
directors of the reorganized, merged or consolidated company's then
outstanding voting securities, in substantially the same proportions
as their ownership immediately prior to such reorganization, merger,
consolidation or other transaction, or (y) a liquidation or
dissolution of the Company or (z) the sale of all or substantially
all of the assets of the Company (unless such reorganization,
merger, consolidation or other corporate transaction, liquidation,
dissolution or sale is subsequently abandoned);
(ii) Individuals who, as of the Effective Date,
constitute the Board (the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board, provided (i) that any
person becoming a director subsequent to the Effective Date whose
election, or nomination for election by the Company's stockholders,
was approved by a vote of at least a majority of the directors then
comprising the Incumbent Board (other than an election or nomination
of an individual whose initial assumption of office is in connection
with an actual or threatened election contest relating to the
election of the Directors of the Company, as such terms are used in
Rule 14a-11 of Regulation 14A promulgated under the Securities
Exchange Act) or (ii) any individual appointed to the Board by the
Incumbent Board shall be, for purposes of this Agreement, considered
as though such person were a member of the Incumbent Board; or
(iii) the acquisition (other than from the Company) by
any person, entity or "group", within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act, of more than
35% of either the then outstanding shares of the Company's Common
Stock or the combined voting power of
18
the Company's then outstanding voting securities entitled to vote
generally in the election of directors (hereinafter referred to as
the ownership of a "Controlling Interest") excluding, for this
purpose, any acquisitions by (1) the Company or its Subsidiaries, or
(2) any person, entity or "group" that as of the Effective Date owns
beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Securities Exchange Act) of a Controlling Interest or any
affiliate of such person, entity or "group."
(c) DEFINITION OF "CHANGE IN CONTROL PRICE." The "Change in Control
Price" means an amount in cash equal to the higher of (i) the amount of cash and
fair market value of property that is the highest price per share paid
(including extraordinary dividends) in any Corporate Transaction triggering the
Change in Control under Section 9(b)(i) hereof or any liquidation of shares
following a sale of substantially all of the assets of the Company, or (ii) the
highest Fair Market Value per share at any time during the 60-day period
preceding and the 60-day period following the Change in Control.
10. GENERAL PROVISIONS.
(a) COMPLIANCE WITH LEGAL AND OTHER REQUIREMENTS. The Company may,
to the extent deemed necessary or advisable by the Committee or the Board,
postpone the issuance or delivery of Stock or payment of other benefits under
any Award until completion of such registration or qualification of such Stock
or other required action under any federal or state law, rule or regulation,
listing or other required action with respect to any stock exchange or automated
quotation system upon which the Stock or other Company securities are listed or
quoted, or compliance with any other obligation of the Company, as the Committee
or the Board, may consider appropriate, and may require any Participant to make
such representations, furnish such information and comply with or be subject to
such other conditions as it may consider appropriate in connection with the
issuance or delivery of Stock or payment of other benefits in compliance with
applicable laws, rules, and regulations, listing requirements, or other
obligations. The foregoing notwithstanding, in connection with a Change in
Control, the Company shall take or cause to be taken no action, and shall
undertake or permit to arise no legal or contractual obligation, that results or
would result in any postponement of the issuance or delivery of Stock or payment
of benefits under any Award or the imposition of any other conditions on such
issuance, delivery or payment, to the extent that such postponement or other
condition would represent a greater burden on a Participant than existed on the
90th day preceding the Change in Control.
(b) LIMITS ON TRANSFERABILITY; BENEFICIARIES. No Award or other
right or interest of a Participant under the Plan, including any Award or right
which constitutes a derivative security as generally defined in Rule 16a-1(c)
under the Exchange Act, shall be pledged, hypothecated or otherwise encumbered
or subject to any lien, obligation or liability of such Participant to any party
(other than the Company or a Subsidiary), or assigned or transferred by such
Participant otherwise than by will or the laws of descent and distribution or to
a Beneficiary upon the death of a Participant, and such Awards or rights that
may be exercisable
19
shall be exercised during the lifetime of the Participant only by the
Participant or his or her guardian or legal representative, except that Awards
and other rights (other than ISOs and SARs in tandem therewith) may be
transferred to one or more Beneficiaries or other transferees during the
lifetime of the Participant, and may be exercised by such transferees in
accordance with the terms of such Award, but only if and to the extent such
transfers and exercises are permitted by the Committee or the Board pursuant to
the express terms of an Award agreement (subject to any terms and conditions
which the Committee or the Board may impose thereon, and further subject to any
prohibitions or restrictions on such transfers pursuant to Rule 16b-3). A
Beneficiary, transferee, or other person claiming any rights under the Plan from
or through any Participant shall be subject to all terms and conditions of the
Plan and any Award agreement applicable to such Participant, except as otherwise
determined by the Committee or the Board, and to any additional terms and
conditions deemed necessary or appropriate by the Committee or the Board.
(c) ADJUSTMENTS. In the event that any dividend or other
distribution (whether in the form of cash, Stock, or other property),
recapitalization, forward or reverse split, reorganization, merger,
consolidation, spin-off, combination, repurchase, share exchange, liquidation,
dissolution or other similar corporate transaction or event affects the Stock
such that a substitution or adjustment is determined by the Committee or the
Board to be appropriate in order to prevent dilution or enlargement of the
rights of Participants under the Plan, then the Committee or the Board shall, in
such manner as it may deem equitable, substitute or adjust any or all of (i) the
number and kind of shares of Stock which may be delivered in connection with
Awards granted thereafter, (ii) the number and kind of shares of Stock by which
annual per-person Award limitations are measured under Section 5 hereof, (iii)
the number and kind of shares of Stock subject to or deliverable in respect of
outstanding Awards and (iv) the exercise price, grant price or purchase price
relating to any Award and/or make provision for payment of cash or other
property in respect of any outstanding Award. In addition, the Committee (and
the Board if and only to the extent such authority is not required to be
exercised by the Committee to comply with Code Section 162(m)) is authorized to
make adjustments in the terms and conditions of, and the criteria included in,
Awards (including Performance Awards and performance goals, and Annual Incentive
Awards and any Annual Incentive Award pool or performance goals relating
thereto) in recognition of unusual or nonrecurring events (including, without
limitation, events described in the preceding sentence, as well as acquisitions
and dispositions of businesses and assets) affecting the Company, any Subsidiary
or any business unit, or the financial statements of the Company or any
Subsidiary, or in response to changes in applicable laws, regulations,
accounting principles, tax rates and regulations or business conditions or in
view of the Committee's assessment of the business strategy of the Company, any
Subsidiary or business unit thereof, performance of comparable organizations,
economic and business conditions, personal performance of a Participant, and any
other circumstances deemed relevant; provided that no such adjustment shall be
authorized or made if and to the extent that such authority or the making of
such adjustment would cause Options, SARs, Performance Awards granted under
Section 8(b) hereof or Annual Incentive Awards granted under Section 8(c) hereof
to Participants designated by the Committee as Covered Employees and intended to
qualify as "performance-based compensation" under Code Section 162(m) and the
regulations
20
thereunder to otherwise fail to qualify as "performance-based compensation"
under Code Section 162(m) and regulations thereunder.
(d) TAXES. The Company and any Subsidiary is authorized to withhold
from any Award granted, any payment relating to an Award under the Plan,
including from a distribution of Stock, or any payroll or other payment to a
Participant, amounts of withholding and other taxes due or potentially payable
in connection with any transaction involving an Award, and to take such other
action as the Committee or the Board may deem advisable to enable the Company
and Participants to satisfy obligations for the payment of withholding taxes and
other tax obligations relating to any Award. This authority shall include
authority to withhold or receive Stock or other property and to make cash
payments in respect thereof in satisfaction of a Participant's tax obligations,
either on a mandatory or elective basis in the discretion of the Committee.
(e) CHANGES TO THE PLAN AND AWARDS. The Board may amend, alter,
suspend, discontinue or terminate the Plan, or the Committee's authority to
grant Awards under the Plan, without the consent of stockholders or
Participants, except that any amendment or alteration to the Plan shall be
subject to the approval of the Company's stockholders not later than the annual
meeting next following such Board action if such stockholder approval is
required by any federal or state law or regulation (including, without
limitation, Rule 16b-3 or Code Section 162(m)) or the rules of any stock
exchange or automated quotation system on which the Stock may then be listed or
quoted, and the Board may otherwise, in its discretion, determine to submit
other such changes to the Plan to stockholders for approval; provided that,
without the consent of an affected Participant, no such Board action may
materially and adversely affect the rights of such Participant under any
previously granted and outstanding Award. The Committee or the Board may waive
any conditions or rights under, or amend, alter, suspend, discontinue or
terminate any Award theretofore granted and any Award agreement relating
thereto, except as otherwise provided in the Plan; provided that, without the
consent of an affected Participant, no such Committee or the Board action may
materially and adversely affect the rights of such Participant under such Award.
Notwithstanding anything in the Plan to the contrary, if any right under this
Plan would cause a transaction to be ineligible for pooling of interest
accounting that would, but for the right hereunder, be eligible for such
accounting treatment, the Committee or the Board may modify or adjust the right
so that pooling of interest accounting shall be available, including the
substitution of Stock having a Fair Market Value equal to the cash otherwise
payable hereunder for the right which caused the transaction to be ineligible
for pooling of interest accounting.
(f) LIMITATION ON RIGHTS CONFERRED UNDER PLAN. Neither the Plan nor
any action taken hereunder shall be construed as (i) giving any Eligible Person
or Participant the right to continue as an Eligible Person or Participant or in
the employ of the Company or a Subsidiary; (ii) interfering in any way with the
right of the Company or a Subsidiary to terminate any Eligible Person's or
Participant's employment at any time, (iii) giving an Eligible Person or
Participant any claim to be granted any Award under the Plan or to be treated
uniformly with other Participants and employees, or (iv) conferring on a
Participant any of the rights of a
21
stockholder of the Company unless and until the Participant is duly issued or
transferred shares of Stock in accordance with the terms of an Award.
(g) UNFUNDED STATUS OF AWARDS; CREATION OF TRUSTS. The Plan is
intended to constitute an "unfunded" plan for incentive and deferred
compensation. With respect to any payments not yet made to a Participant or
obligation to deliver Stock pursuant to an Award, nothing contained in the Plan
or any Award shall give any such Participant any rights that are greater than
those of a general creditor of the Company; provided that the Committee may
authorize the creation of trusts and deposit therein cash, Stock, other Awards
or other property, or make other arrangements to meet the Company's obligations
under the Plan. Such trusts or other arrangements shall be consistent with the
"unfunded" status of the Plan unless the Committee otherwise determines with the
consent of each affected Participant. The trustee of such trusts may be
authorized to dispose of trust assets and reinvest the proceeds in alternative
investments, subject to such terms and conditions as the Committee or the Board
may specify and in accordance with applicable law.
(h) NONEXCLUSIVITY OF THE PLAN. Neither the adoption of the Plan by
the Board nor its submission to the stockholders of the Company for approval
shall be construed as creating any limitations on the power of the Board or a
committee thereof to adopt such other incentive arrangements as it may deem
desirable including incentive arrangements and awards which do not qualify under
Code Section 162(m).
(i) PAYMENTS IN THE EVENT OF FORFEITURES; FRACTIONAL SHARES. Unless
otherwise determined by the Committee or the Board, in the event of a forfeiture
of an Award with respect to which a Participant paid cash or other
consideration, the Participant shall be repaid the amount of such cash or other
consideration. No fractional shares of Stock shall be issued or delivered
pursuant to the Plan or any Award. The Committee or the Board shall determine
whether cash, other Awards or other property shall be issued or paid in lieu of
such fractional shares or whether such fractional shares or any rights thereto
shall be forfeited or otherwise eliminated.
(j) GOVERNING LAW. The validity, construction and effect of the
Plan, any rules and regulations under the Plan, and any Award agreement shall be
determined in accordance with the laws of the State of Maryland without giving
effect to principles of conflicts of laws, and applicable federal law.
(k) PLAN EFFECTIVE DATE AND STOCKHOLDER APPROVAL; TERMINATION OF
PLAN. The Plan shall become effective on the Effective Date, subject to
subsequent approval within 12 months of its adoption by the Board by
stockholders of the Company eligible to vote in the election of directors, by a
vote sufficient to meet the requirements of Code Sections 162(m) (if applicable)
and 422, Rule 16b-3 under the Exchange Act (if applicable), applicable New York
Stock Exchange requirements, and other laws, regulations, and obligations of the
Company applicable to the Plan. Awards may be granted subject to stockholder
approval, but may not be exercised or otherwise settled in the event stockholder
approval is not obtained. The Plan shall
22
terminate at such time as no shares of Common Stock remain available for
issuance under the Plan and the Company has no further rights or obligations
with respect to outstanding Awards under the Plan.
23
EQUITY ONE, INC.
1600 N.E. MIAMI GARDENS DRIVE, SUITE 200
NORTH MIAMI BEACH, FLORIDA 33179
THIS PROXY IS SOLICITED ON BEHALF OF EQUITY ONE'S BOARD OF DIRECTORS
COMMON STOCK
The undersigned hereby appoints Chaim Katzman and Doron Valero, and
each of them, as proxies for the undersigned, each with full power of
substitution, for and in the name of the undersigned to act for the undersigned
and to vote, as designated below, all of the shares of Common Stock, $.01 par
value per share, of Equity One, Inc., a Maryland corporation (the "Company"),
that the undersigned is entitled to vote at the 2000 Annual Meeting of
Stockholders of Equity One, to be held on Friday, June 23, 2000, at 10:00 a.m.,
local time, at Courtyard Marriott Hotel, 2825 N.E. 191st Street, Aventura,
Florida 33180, and at any adjournment(s) or postponement(s) thereof.
PROPOSAL 1. Election of Ronald Chase, Chaim Katzman and Doron Valero as
directors of the Company.
[ ] VOTE FOR all nominees listed above, except vote
withheld from the following nominees (if any):
_____________________________________________________
[ ] VOTE WITHHELD from all nominees.
PROPOSAL 2. To approve the 2000 Executive Incentive Compensation Plan.
[ ] FOR
[ ] AGAINST
[ ] ABSTAIN
In their discretion, the proxies are authorized to vote upon such other business
as may properly come before the Annual Meeting, and any adjournments or
postponements thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED "FOR" THE ELECTION OF THE DIRECTOR NOMINEE LISTED IN
PROPOSAL (1) ABOVE AND "FOR" PROPOSAL (2) ABOVE.
The undersigned hereby acknowledges receipt of (i) the Notice of Annual
Meeting, (ii) the Proxy Statement and (iii) the Company's 1999 Annual Report.
Dated: _____________, 2000
_________________________________________
(Signature)
_________________________________________
(Signature if held jointly)
IMPORTANT: Please sign exactly as your
name appears hereon and mail it promptly
even though you may plan to attend the
meeting. When shares are held by joint
tenants, both should sign. When signing
as attorney, executor, administrator,
trustee or guardian, please give full
title as such. If a corporation, please
sign in full corporate name by president
or other authorized officer. If a
partnership, please sign in partnership
name by authorized person.
PLEASE MARK, SIGN AND DATE THIS PROXY
CARD AND PROMPTLY RETURN IT IN THE
ENVELOPE PROVIDED. NO POSTAGE NECESSARY
IF MAILED IN THE UNITED STATES.