As filed with the Securities and Exchange Commission on April 20, 1998
Registration No. 333-_____
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FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
TOWER REALTY TRUST, INC.
(Exact name of registrant as specified in its charter)
Maryland 13-3938558
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
292 Madison Avenue, 3rd Floor, New York, New York 10017
(Address of principal executive offices) (Zip Code)
Tower Realty Trust, Inc. 1997 Incentive Plan
Tower Realty Trust, Inc. Non-Employee Directors' Incentive Plan
(Full title of the plan)
Lawrence H. Feldman
Chairman, Chief Executive Officer and President
Tower Realty Trust, Inc.
292 Madison Avenue, 3rd Floor
New York, New York 10017
(Name and address of agent for service)
(212) 448-1864
(Telephone number, including area code, of agent for service)
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
<S> <C> <C> <C> <C>
Proposed
maximum
Proposed aggregate Amount of
Amount to be maximum offering registration
Title of securities to be registered registered offering price(1) price(1) fee
Common Stock, par value $.01 per share 1,970,147 $26.00 $49,612,012 $14,636
================================================= ================== ==================== ================ ===============
</TABLE>
(1) Of the 1,970,147 shares to be registered, as of March 31, 1998, 1,015,000
shares had been offered at $26 per share. The remaining 955,147 shares are
to be offered at prices not presently determinable. The offering price of
such shares is estimated solely for the purpose of determining the
registration fee and is based on the average of the high and low prices of
the Registrant's Common Stock on April 15, 1998 on the New York Stock
Exchange Composite Transactions Tape.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information.
The documents containing the information specified in this Item will be
sent or given to individuals who have been awarded options or shares of Common
Stock under the Tower Realty Trust, Inc. 1997 Incentive Plan (the "1997 Plan")
and the Tower Realty Trust, Inc. Non-Employee Directors' Plan (the "Directors'
Plan"), and, in accordance with the rules and regulations of the Securities and
Exchange Commission (the "Commission"), are not being filed with, or included
in, this Registration Statement on Form S-8 (the "Registration Statement").
Item 2. Registrant Information and Employee Plan Annual Information.
The documents containing the information specified in this Item will be
sent or given to individuals who have been awarded options or shares of Common
Stock under the 1997 Plan and the Directors' Plan and are not being filed with,
or included in, this Registration Statement in accordance with the rules and
regulations of the Commission.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed by Tower Realty Trust, Inc. (the "Company"
or "Registrant") with the Commission are incorporated herein by reference:
(1) The Registrant's Annual Report on Form 10-K for the year
ended December 31, 1997, filed with the Commission on March 31,
1998 pursuant to Section 13(a) of the Securities Exchange Act of
1934, as amended (the "Exchange Act").
All documents subsequently filed by the Company pursuant to Section 13,
14 or 15(d) of the Exchange Act, prior to the filing of a post-effective
amendment which indicates that all securities offered have been sold or which
deregisters all securities then remaining unsold, shall be deemed to be
incorporated herein by reference and to be a part hereof from the date of filing
of such documents.
Item 4. Description of Securities.
Not Applicable.
Item 5. Interest of Named Experts and Counsel.
Not Applicable.
Item 6. Indemnification of Directors and Officers.
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<PAGE>
The Maryland General Corporation Law ("MGCL") permits a Maryland
corporation to include in its charter a provision limiting the liability of its
directors and officers to the corporation and its stockholders for money damages
except for liability resulting from (a) actual receipt of an improper benefit or
profit in money, property or services or (b) active and deliberate dishonesty
established by a final judgment as being material to the cause of action. The
charter of the Company (the "Charter") contains such a provision which
eliminates such liability to the maximum extent permitted by Maryland law.
The Charter authorizes the Company, to the maximum extent permitted by
Maryland law, to obligate itself to indemnify and to pay or reimburse reasonable
expenses in advance of final disposition of a proceeding to (a) any present or
former director or officer or (b) any individual who, while a director of the
Company and at the request of the Company, serves or has served another
corporation, real estate investment trust, partnership, joint venture, trust,
employee benefit plan or any other enterprise as a director, officer, partner or
trustee of such corporation, real estate investment trust, partnership, joint
venture, trust, employee benefit plan or other enterprise from and against any
claim or liability to which such person may become subject or which such person
may incur by reason of his or her status as a present or former director or
officer of the Company. The Bylaws of the Company obligate it, to the maximum
extent permitted by Maryland law, to indemnify and to pay or reimburse
reasonable expenses in advance of final disposition of a proceeding to (a) any
present or former director or officer who is made a party to the proceeding by
reason of his service in that capacity or (b) any individual who, while a
director of the Company and at the request of the Company, serves or has served
another corporation, real estate investment trust, partnership, joint venture,
trust, employee benefit plan or any other enterprise as a director, officer,
partner or trustee of such corporation, real estate investment trust,
partnership, joint venture, trust, employee benefit plan or other enterprise and
who is made a party to the proceeding by reason of his service in that capacity,
against any claim or liability to which he may become subject by reason of such
status. The Charter and Bylaws also permit the Company to indemnify and advance
expenses to any person who served a predecessor of the Company in any of the
capacities described above and to any employee or agent of the Company or a
predecessor of the Company.
The MGCL requires a Maryland corporation (unless its charter provides
otherwise, which the Company's Charter does not) to indemnify a director or
officer who has been successful, on the merits or otherwise, in the defense of
any proceeding to which he is made a party by reason of his service in that
capacity. The MGCL permits a Maryland corporation to indemnify its present and
former directors and officers, among others, against judgments, penalties,
fines, settlements and reasonable expenses actually incurred by them in
connection with any proceeding to which they may be made a party by reason of
their service in those or other capacities unless it is established that (a) the
act or omission of the director or officer was material to the matter giving
rise to the proceeding and (i) was committed in bad faith or (ii) was the result
of active and deliberate dishonesty, (b) the director or officer actually
received an improper personal benefit in money, property or services or (c) in
the case of any criminal proceeding, the director or officer had reasonable
cause to believe that the act or omission was unlawful. However, under the MGCL,
a Maryland corporation may not indemnify for an adverse judgment in a suit by or
in the right of the corporation or in any proceeding in which the director was
adjudged to be liable on the basis that personal benefit was improperly
received, unless in either case a court orders indemnification and then only for
expenses. In addition, the MGCL permits a corporation to advance reasonable
expenses to a director or officer upon the corporation's receipt of (a) a
written affirmation by the director or officer of his good faith belief that he
has met the standard of conduct necessary for indemnification by the corporation
and (b) a written undertaking by or on his behalf to repay the amount paid or
reimbursed by the corporation if it shall ultimately be determined that the
standard of conduct was not met. Indemnification under the provisions of the
MGCL is not deemed exclusive of any other rights, by indemnification or
otherwise, to which an officer or director may be entitled under the Company's
Charter or Bylaws, resolutions of
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<PAGE>
stockholders or directors, contract or otherwise. However, it is the position of
the Commission that indemnification of directors and officers for liabilities
arising under the Securities Act of 1933, as amended (the "Securities Act"), is
against public policy and is unenforceable pursuant to Section 14 of the
Securities Act.
The Company also has purchased and maintains insurance on behalf of all
of its directors and executive officers against liability asserted against or
incurred by them in their official capacities with the Company, whether or not
the Company is required or has the power to indemnify them against the same
liability.
The Company has entered into indemnification agreements with each of
its executive officers and directors. The indemnification agreements require,
among other matters, that the Company indemnify its executive officers and
directors to the fullest extent permitted by law and advance to the executive
officers and directors all related expenses, subject to reimbursement if it is
subsequently determined that indemnification is not permitted. Under the
agreements, the Company must also indemnify and advance all expenses incurred by
executive officers and directors seeking to enforce their rights under the
indemnification agreements and may cover executive officers and directors under
the Company's directors' and officers' liability insurance. Although the form of
indemnification agreement offers substantially the same scope of coverage
afforded by law, it provides greater assurance to directors and executive
officers that indemnification will be available, because, as a contract, it
cannot be modified unilaterally in the future by the Board of Directors or the
stockholders to eliminate the rights it provides.
Item 7. Exemption from Registration Claimed.
Not Applicable.
Item 8. Exhibits.
4.1 Tower Realty Trust, Inc. 1997 Incentive Plan
4.2 Tower Realty Trust, Inc. Non-Employee Directors' Incentive
Plan
5 Opinion of Ballard Spahr Andrews & Ingersoll regarding the
legality of securities being registered.
23.1 Consent of Coopers & Lybrand L.L.P.
23.2 Consent of Ballard Spahr Andrews & Ingersoll (contained in its
opinion filed as Exhibit 5 hereto).
Item 9. Undertakings.
The Company hereby undertakes:
1. To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement to include any
material information with respect to the Director's Plan of distribution not
previously disclosed in the registration statement or any material change to
such information in the registration statement.
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<PAGE>
2. That for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at the time shall be deemed to be the initial bona
fide offering thereof.
3. To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
4. That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report pursuant to Section
13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
5. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable. In the event that a
claim or indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person in the successful defense of any action, suit or proceedings) is asserted
by such director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, State of New York, on April 20, 1998.
TOWER REALTY TRUST, INC.
(Registrant)
By: /s/ Lawrence H. Feldman
---------------------------------------
Lawrence H. Feldman
Chairman of the Board
Chief Executive Officer and
President
Pursuant to the requirements of the Securities Exchange Act of 1933,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
By: /s/ Lawrence H. Feldman Chairman of the Board, Chief April 20, 1998
---------------------------- Executive Officer and President
Lawrence H. Feldman
By: /s/ Lester S. Garfinkel Executive Vice President - Finance April 20, 1998
---------------------------- and Management, Chief Financial
Lester S. Garfinkel Officer and Director
By: /s/ Robert L. Cox Executive Vice President, Chief April 20, 1998
---------------------------- Operating Officer and Director
Robert L. Cox
By: /s/ Robert M. Adams Director April 20, 1998
----------------------------
Robert M. Adams
By: /s/ Esko I. Korhonen Director April 20, 1998
----------------------------
Esko I. Korhonen
By: /s/ Stephen B. Siegel Director April 20, 1998
----------------------------
Stephen B. Siegel
By: /s/ Richard M. Wisely Director April 20, 1998
----------------------------
Richard M. Wisely
By: /s/ Francis X. Tansey Director April 20, 1998
----------------------------
Francis X. Tansey
By: /s/ Russell C. Platt Director April 20, 1998
----------------------------
Russell C. Platt
</TABLE>
<PAGE>
EXHIBIT INDEX
Exhibit Number Description
- ------ ------ -----------
4.1 Tower Realty Trust, Inc. 1997 Incentive Plan.
4.2 Tower Realty Trust, Inc. Non-Employee Directors' Incentive Plan.
5 Opinion of Ballard Spahr Andrews & Ingersoll regarding the
legality of securities being registered.
23.1 Consent of Coopers & Lybrand L.L.P.
23.2 Consent of Ballard Spahr Andrews & Ingersoll (contained in its
opinion filed as Exhibit 5 hereto).
<PAGE>
<PAGE>
TOWER REALTY TRUST, INC.
1997 INCENTIVE PLAN
<PAGE>
ARTICLE I
DEFINITIONS...........................................................1
1.1 Affiliate.......................................................1
1.2 Agreement.......................................................1
1.3 Award...........................................................1
1.4 Board...........................................................1
1.5 Code............................................................1
1.6 Committee.......................................................1
1.7 Common Stock....................................................1
1.8 Company.........................................................1
1.9 Exchange Act....................................................1
1.10 Fair Market Value...............................................1
1.11 Incentive Award.................................................2
1.12 Option..........................................................2
1.13 Participant.....................................................2
1.14 Performance Shares..............................................2
1.15 Permitted Family Members........................................2
1.16 Plan............................................................2
1.17 Stock Award.....................................................2
1.18 Ten Percent Shareholder.........................................2
ARTICLE II
PURPOSES..............................................................2
ARTICLE III
ADMINISTRATION........................................................3
ARTICLE IV
ELIGIBILITY...........................................................4
ARTICLE V
STOCK SUBJECT TO PLAN.................................................4
5.1 Shares Issued....................................................4
5.2 Aggregate Limit..................................................4
5.3 Reallocation of Shares...........................................4
ARTICLE VI
OPTIONS...............................................................5
6.1 Award............................................................5
6.2 Option Price.....................................................5
6.3 Maximum Option Period............................................5
6.4 Nontransferability...............................................5
6.5 Transferable Options.............................................5
<PAGE>
6.6 Employee Status..................................................6
6.7 Exercise.........................................................6
6.8 Payment..........................................................6
6.9 Shareholder Rights...............................................6
6.10 Disposition of Stock.............................................6
ARTICLE VII
STOCK AWARDS..........................................................7
7.1 Award............................................................7
7.2 Vesting..........................................................7
7.3 Performance Objectives...........................................7
7.4 Employee Status..................................................7
7.5 Shareholder Rights...............................................7
ARTICLE VIII
PERFORMANCE SHARE AWARDS..............................................8
8.1 Award............................................................8
8.2 Earning the Award................................................8
8.3 Payment..........................................................8
8.4 Shareholder Rights...............................................8
8.5 Nontransferability...............................................8
8.6 Transferable Performance Shares..................................9
8.7 Employee Status..................................................9
ARTICLE IX
INCENTIVE AWARDS......................................................9
9.1 Award............................................................9
9.2 Terms and Conditions.............................................9
9.3 Nontransferability..............................................10
9.4 Transferable Incentive Awards...................................10
9.5 Employee Status.................................................10
9.6 Shareholder Rights..............................................10
ARTICLE X
ADJUSTMENT UPON CHANGE IN COMMON STOCK...............................10
ARTICLE XI
COMPLIANCE WITH LAW AND
APPROVAL OF REGULATORY BODIES; GOVERNING LAW.........................11
ARTICLE XII
GENERAL PROVISIONS...................................................12
12.1 Effect on Employment and Service...............................12
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12.2 Unfunded Plan..................................................12
12.3 Rules of Construction..........................................12
ARTICLE XIII
AMENDMENT............................................................12
ARTICLE XIV
DURATION OF PLAN.....................................................12
ARTICLE XV
EFFECTIVE DATE OF PLAN...............................................13
iii
ARTICLE I
DEFINITIONS
1.1 Affiliate means any "subsidiary" or "parent" corporation
(within the meaning of Section 424 of the Code) of the Company.
1.2 Agreement means a written agreement (including any
amendment or supplement thereto) between the Company and a Participant
specifying the terms and conditions of a Stock Award, an award of Performance
Shares or an Option or Incentive Award granted to such Participant.
1.3 Award means any of an Incentive Award, an Option, an award
of Performance Shares, or a Stock Award.
1.4 Board means the Board of Directors of the Company.
1.5 Code means the Internal Revenue Code of 1986, and any
amendments thereto.
1.6 Committee means the Compensation Committee of the Board or
a subcommittee thereof comprised of at least two (2) directors each of whom is a
non-employee director within the meaning of Securities and Exchange Commission
Rule 16b-3.
1.7 Common Stock means the common stock, $0.01 par value, of
the Company.
1.8 Company means Tower Realty Trust, Inc., a Maryland
corporation.
1.9 Exchange Act means the Securities Exchange Act of 1934, as
amended and as in effect on the effective date of this Plan.
1.10 Fair Market Value means, on any given date, the current
fair market value of the shares of Common Stock as determined below:
If the Common Stock is not listed on an established stock
exchange, the Fair Market Value shall be the average of the final bid and asked
quotations on the over-the-counter market in which the Common Stock is traded
or, if applicable, the reported "closing" price of a share of Common Stock in
the New York over-the-counter market as reported by the National Association of
Securities Dealers, Inc. If the Common Stock is listed on one or more
established stock exchanges, Fair Market Value shall be deemed to be the highest
closing price of a share of Common Stock reported on any such exchange. In any
case, if no sale of Common Stock is made on any stock exchange or
over-the-counter market on that date, then Fair Market Value shall be determined
as of the next preceding day on which there was a sale. If the Common Stock is
not traded, Fair Market Value shall be determined by the Board using any
reasonable method in good faith.
<PAGE>
1.11 Incentive Award means an award which, subject to such
terms and conditions as may be prescribed by the Administrator, entitles the
Participant to receive a cash payment from the Company or an Affiliate.
1.12 Option means a stock option that entitles the holder to
purchase from the Company a stated number of shares of Common Stock at the price
set forth in an Agreement.
1.13 Participant means an employee of the Company or an
Affiliate, including an employee who is a member of the Board, or an individual
whose efforts contribute to the performance or success of the Company or an
Affiliate, who satisfies the requirements of Article IV and is selected by the
Committee to receive a Stock Award, an Option, an Incentive Award, an award of
Performance Shares or a combination thereof.
1.14 Performance Shares means an award, in the amount
determined by the Committee and specified in an Agreement, stated with reference
to a specified number of shares of Common Stock, that entitles the holder to
receive a payment for each specified share equal to the Fair Market Value of
Common Stock on the date of payment.
1.15 Permitted Family Members shall have the meaning set forth
in Section 6.5.
1.16 Plan means the Tower Realty Trust, Inc. 1997 Incentive
Plan.
1.17 Stock Award means Common Stock awarded to a Participant
under Article VII.
1.18 Ten Percent Shareholder means any individual owning more
than ten percent (10%) of the total combined voting power of all classes of
stock of the Company or of an Affiliate. An individual shall be considered to
own any voting stock owned (directly or indirectly) by or for his brothers,
sisters, spouse, ancestors or lineal descendants and shall be considered to own
proportionately any voting stock owned (directly or indirectly) by or for a
corporation, partnership, estate or trust of which such individual is a
shareholder, partner or beneficiary.
ARTICLE II
PURPOSES
The Plan is intended to assist the Company and its Affiliates
in recruiting and retaining individuals with ability and initiative by enabling
such persons to participate in the future success of the Company and its
Affiliates and to associate their interests with those of the Company and its
stockholders. The Plan is intended to permit the grant of both Options
qualifying under Section 422 of the Code ("incentive stock options") and Options
not so qualifying, and the grant of Stock Awards, Performance Shares and
Incentive Awards. No
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Option that is intended to be an incentive stock option shall be invalid for
failure to qualify as an incentive stock option. The proceeds received by the
Company from the sale of Common Stock pursuant to this Plan shall be used for
general corporate purposes.
ARTICLE III
ADMINISTRATION
The Plan shall be administered by the Committee. The Committee
shall have authority to grant Stock Awards, Performance Shares, Incentive Awards
and Options upon such terms (not inconsistent with the provisions of this Plan)
as the Committee may consider appropriate. Such terms may include conditions (in
addition to those contained in this Plan) on the exercisability of all or any
part of an Option or on the transferability or forfeitability of a Stock Award,
Incentive Award or Performance Shares. Notwithstanding any such conditions, the
Committee may, in its discretion, accelerate the time at which any Option may be
exercised, or the time at which a Stock Award may become transferable or
nonforfeitable or the time at which an Incentive Award or Performance Shares may
be settled. In addition, the Committee shall have complete authority to
interpret all provisions of this Plan; to prescribe the form of Agreements; to
adopt, amend, and rescind rules and regulations pertaining to the administration
of the Plan; and to make all other determinations necessary or advisable for the
administration of this Plan. The express grant in the Plan of any specific power
to the Committee shall not be construed as limiting any power or authority of
the Committee. Any decision made, or action taken, by the Committee or in
connection with the administration of this Plan shall be final and conclusive.
Neither the Committee nor any member of the Committee shall be liable for any
act done in good faith with respect to this Plan or any Agreement, Option, Stock
Award, Incentive Award or award of Performance Shares. All expenses of
administering this Plan shall be borne by the Company.
The Committee, in its discretion, may delegate to one or more
officers of the Company all or part of the Committee's authority and duties with
respect to grants and awards to individuals who are not subject to the reporting
and other provisions of Section 16 of the Exchange Act; provided, however, the
Committee shall not delegate its authority (i) to appoint delegates or its
authority to amend or revoke any delegation, (ii) under Articles X and XI hereof
and (iii) to accelerate the exercisability of Options, the transferability of
Stock Awards or the time at which Incentive Awards or awards of Performance
Shares may be settled. The Committee may revoke or amend the terms of a
delegation at any time but such action shall not invalidate any prior actions of
the Committee's delegate or delegates that were consistent with the terms of the
Plan.
ARTICLE IV
ELIGIBILITY
Any employee of the Company or an Affiliate (including a
corporation that becomes an Affiliate after the adoption of this Plan) or a
person whose efforts contribute to the
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performance or success of the Company or an Affiliate (including a corporation
that becomes an Affiliate after the adoption of this Plan) is eligible to
participate in this Plan if the Committee, in its sole discretion, determines
that such person has contributed significantly or can be expected to contribute
significantly to the profits or growth of the Company or an Affiliate. Directors
of the Company who are employees of the Company or an Affiliate may be selected
to participate in this Plan. However, no person may participate in the 1997 Plan
while he is a member of the Committee.
ARTICLE V
STOCK SUBJECT TO PLAN
5.1 Shares Issued. Upon the award of shares of Common Stock
pursuant to a Stock Award or the settlement of a Performance Share award, the
Company may issue shares of Common Stock from its authorized but unissued Common
Stock. Upon the exercise of an Option, the Company may deliver to the
Participant (or the Participant's broker if the Participant so directs), shares
of Common Stock from its authorized but unissued Common Stock.
5.2 Aggregate Limit. The maximum aggregate number of shares of
Common Stock that may be issued pursuant to Awards granted under the Plan shall
be the sum of (i) 9.5 percent of the total number of issued and outstanding
shares of Common Stock (on a fully diluted basis assuming the exchange of all
securities convertible into Common Stock) on the date of the closing of the
initial public offering of the Company's Common Stock plus (ii) as of January 1,
1998, 9.5 percent of any net increase since the Company's initial public
offering in the total number of shares of Common Stock actually outstanding (on
a fully diluted basis); plus (iii) as of each January 1 thereafter, 9.5 percent
of any net increase since the preceding January 1 in the total number of shares
of Common Stock actually outstanding (on a fully diluted basis). Notwithstanding
the foregoing, the maximum number of shares of Stock for which incentive stock
options may be granted under the Plan shall not exceed 1,000,000 shares of
Common Stock. The maximum aggregate number of shares that may be issued under
this Plan shall be subject to adjustment as provided in Article X.
5.3 Reallocation of Shares. If an Award is terminated (for any
reason other than its exercise), forfeited or expires unexercised, the number of
shares of Common Stock allocated to the Award or portion thereof which was
terminated, forfeited or expired unexercised may be reallocated to other Awards
to be granted under this Plan.
ARTICLE VI
OPTIONS
6.1 Award. In accordance with the provisions of Article IV,
the Committee will designate each individual to whom an Option is to be granted
and will specify the number of
4
<PAGE>
shares of Common Stock covered by such awards; provided, however, that no
individual may be granted Options in any calendar year covering more than
250,000 shares of Common Stock.
6.2 Option Price. The price per share for Common Stock
purchased on the exercise of an Option shall be determined by the Committee on
the date of grant; provided, however, that the price per share for Common Stock
purchased on the exercise of any Option shall not be less than the Fair Market
Value on the date of grant. Notwithstanding the preceding sentence, the price
per share for Common Stock purchased on the exercise of any Option that is an
incentive stock granted to an individual who is a Ten Percent Shareholder on the
date such option is granted, shall not be less than one hundred ten (110%)
percent of the Fair Market Value on the date the Option is granted.
6.3 Maximum Option Period. The maximum period in which an
Option may be exercised shall be determined by the Committee on the date of
grant, except that no Option that is an incentive stock option shall be
exercisable after the expiration of ten years from the date such Option was
granted. In the case of an incentive stock option that is granted to a
Participant who is a Ten Percent Shareholder on the date of grant, such Option
shall not be exercisable after the expiration of five years from the date of
grant. The terms of any Option that is an incentive stock option may provide
that it is exercisable for a period less than such maximum period.
6.4 Nontransferability. Except as provided in Section 6.5,
each Option granted under this Plan shall be nontransferable except by will or
by the laws of descent and distribution. During the lifetime of the Participant
to whom the option is granted, the Option may be exercised only by the
Participant. No right or interest of a Participant in any Option shall be liable
for, or subject to, any lien, obligation, or liability of such Participant.
6.5 Transferable Options. Section 6.4 to the contrary
notwithstanding, if the Agreement provides, an Option that is not an incentive
stock option may be transferred by a Participant to the Participant's children,
grandchildren, spouse, one or more trusts for the benefit of such family members
or a partnership in which such family members are the only partners
(collectively, "Permitted Family Members"); provided, however, that the
Participant may not receive any consideration for the transfer. The holder of an
Option transferred pursuant to this section shall be bound by the same terms and
conditions that governed the Option during the period that it was held by the
Participant.
6.6 Employee Status. For purposes of determining the
applicability of Section 422 of the Code (relating to incentive stock options),
or in the event that the terms of any Option provide that it may be exercised
only during employment or within a specified period of time after termination of
employment, the Committee may decide to what extent leaves of absence for
5
<PAGE>
governmental or military service, illness, temporary disability, or other
reasons, shall not be deemed interruptions of continuous employment.
6.7 Exercise. Subject to the provisions of this Plan and the
applicable Agreement, an Option shall become exercisable in such installments
(which need not be equal) and at such times as may be designated by the
Committee and set forth in the Agreement; provided, however, that incentive
stock options (granted under the Plan and all plans of the Company and its
Affiliates) may not be first exercisable in a calendar year for stock having a
Fair Market Value (determined as of the date an option is granted) exceeding
$100,000. To the extent not exercised, installments shall accumulate and be
exercisable, in whole or in part, at any time after becoming exercisable, but
not later than the date the Option expires in accordance with Section 6.3
hereof. An Option granted under this Plan may be exercised with respect to any
number of whole shares less than the full number for which the Option could be
exercised. A partial exercise of an Option shall not affect the right to
exercise the Option from time to time in accordance with this Plan and the
applicable Agreement with respect to the remaining shares subject to the Option.
6.8 Payment. Unless otherwise provided by the Agreement,
payment of the Option price shall be made in cash or a cash equivalent
acceptable to the Committee. If the Agreement provides, payment of all or part
of the Option price may be made by surrendering shares of Common Stock to the
Company. If Common stock is used to pay all or part of the Option price, the sum
of the cash and cash equivalent and the Fair Market Value (determined as of the
day preceding the date of exercise) of the shares surrendered must not be less
than the Option price of the shares for which the Option is being exercised.
6.9 Shareholder Rights. No Participant shall have any rights
as a shareholder with respect to shares subject to his Option until the date of
exercise of such Option.
6.10 Disposition of Stock. A Participant shall notify the
Company of any sale or other disposition of Common Stock acquired pursuant to an
Option that was an incentive stock option if such sale or disposition occurs:
(i) within two years of the grant of an Option or
(ii) within one year of the issuance of the
Common Stock to the Participant.
Such notice shall be in writing and directed to the Secretary of the Company.
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ARTICLE VII
STOCK AWARDS
7.1 Award. In accordance with the provisions of Article IV,
the Committee will designate each individual to whom a Stock Award is to be made
and will specify the number of shares of Common Stock covered by such awards;
provided, however, that no individual may receive Stock Awards with respect to
more than 100,000 shares of Common Stock in any calendar year.
7.2 Vesting. The Committee, on the date of the award, may
prescribe that a Participant's rights in the Stock Award shall be forfeitable or
otherwise restricted for a period of time or subject to such conditions as may
be set forth in the Agreement. Except with respect to Stock Awards any portion
of which are immediately vested, the period of restriction shall be at least
three years; provided, however, that the minimum period of restriction shall be
at least one year in the case of a Stock Award that will become transferable and
nonforfeitable on account of the satisfaction of performance objectives
prescribed by the Committee.
7.3 Performance Objectives. In accordance with Section 7.2,
the Committee may prescribe that Stock Awards will be vested based on objectives
stated with respect to the Company's, an Affiliate's or an operating unit's
return on equity, earnings per share, total earnings, earnings growth, return on
capital, return on assets, funds from operations or Fair Market Value. If the
Committee, on the date of award, prescribes that a Stock Award shall become
nonforfeitable and transferable only upon the attainment of performance
objectives stated with respect to one or more of the foregoing criteria, the
shares subject to such Stock Award shall become nonforfeitable and transferable
only to the extent that the Committee certifies that such objectives have been
achieved.
7.4 Employee Status. In the event that the terms of any Stock
Award provide that shares may become transferable and nonforfeitable thereunder
only after completion of a specified period of employment, the Committee may
decide in each case to what extent leaves of absence for governmental or
military service, illness, temporary disability, or other reasons shall not be
deemed interruptions of continuous employment.
7.5 Shareholder Rights. Prior to their forfeiture (in
accordance with the applicable Agreement and while the shares of Common Stock
granted pursuant to the Stock Award may be forfeited or are nontransferable), a
Participant will have all rights of a shareholder with respect to a Stock Award,
including the right to receive dividends and vote the shares; provided, however,
that during such period (i) a Participant may not sell, transfer, pledge,
exchange, hypothecate, or otherwise dispose of shares of Common Stock granted
pursuant to a Stock Award, (ii) the Company shall retain custody of the
certificates evidencing shares of Common Stock granted pursuant to a Stock
Award, and (iii) the Participant will deliver to the Company a stock power,
endorsed in blank, with respect to each Stock Award. The limitations set forth
in the preceding
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sentence shall not apply after the shares of Common Stock granted under the
Stock Award are transferable and are no longer forfeitable.
ARTICLE VIII
PERFORMANCE SHARE AWARDS
8.1 Award. In accordance with the provisions of Article IV,
the Committee will designate each individual to whom an award of Performance
Shares is to be made and will specify the number of shares of Common Stock
covered by such awards; provided, however, that no Participant may receive an
award of Performance Shares in any calendar year for more than 25,000 shares of
Common Stock.
8.2 Earning the Award. The Committee, on the date of the grant
of an award, may prescribe that the Performance Shares, or portion thereof, will
be earned, and the Participant will be entitled to receive payment pursuant to
the award of Performance Shares only upon the satisfaction of certain
requirements or the attainment of certain objectives. By way of example and not
of limitation, the restrictions may provide that Performance Shares will be
forfeited without payment if the Participant separates from the service of the
Company and its Affiliates before the expiration of a stated term or unless the
Company, an Affiliate or an operating unit achieves objectives stated with
reference to the Company's, an Affiliate's or an operating unit's return on
equity, earnings per share, total earnings, earnings growth, return on capital,
return on assets, funds from operations or Fair Market Value. If the Committee,
on the date of award, prescribes that no payments will be made with respect to
Performance Shares unless performance objectives stated with respect to the
foregoing criteria are attained, no such payment will be made unless, and then
only to the extent that, the Committee certifies that such objectives have been
achieved.
8.3 Payment. In the discretion of the Committee, the amount
payable when an award of Performance Shares is earned may be settled in cash, by
the issuance of Common Stock or a combination of cash and Common Stock. A
fractional share shall not be deliverable when an award of Performance Shares is
earned, but a cash payment will be made in lieu thereof.
8.4 Shareholder Rights. No Participant shall, as a result of
receiving an award of Performance Shares, have any rights as a shareholder until
and to the extent that the award of Performance Shares is earned and settled by
the issuance of Common Stock. After an award of Performance Shares is earned, if
settled completely or partially in Common Stock, a Participant will have all the
rights of a shareholder with respect to such Common Stock.
8.5 Nontransferability. Except as provided in Section 8.6,
Performance Shares granted under this Plan shall be nontransferable except by
will or by the laws of descent and distribution. No right or interest of a
Participant in any Performance Shares shall be liable for, or subject to, any
lien, obligation, or liability of such Participant.
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8.6 Transferable Performance Shares. Section 8.5 to the
contrary notwithstanding, the Committee may grant Performance Shares which are
transferable to Permitted Family Members to the extent that, and on such terms
and conditions as may be permitted by, Securities Exchange Commission Rule 16b-3
as in effect from time to time. The holder of Performance Shares transferred
pursuant to this section shall be bound by the same terms and conditions that
governed the Performance Shares during the period that they were held by the
Participant.
8.7 Employee Status. In the event that the terms of any
Performance Share award provide that no payment will be made unless the
Participant completes a stated period of employment, the Committee may decide to
what extent leaves of absence for government or military service, illness,
temporary disability, or other reasons shall not be deemed interruptions of
continuous employment.
ARTICLE IX
INCENTIVE AWARDS
9.1 Award. In accordance with the provisions of Article IV,
the Committee shall designate Participants to whom Incentive Awards are made.
All Incentive Awards shall be finally determined exclusively by the Committee
under the procedures established by the Committee; provided, however, that no
Participant may receive an Incentive Award payment in any calendar year that
exceeds the lesser of (i) one hundred (100%) percent of the Participant's base
salary (prior to any salary reduction or deferral elections) as of the date of
grant of the Incentive Award or (ii) $250,000.
9.2 Terms and Conditions. The Committee, at the time an
Incentive Award is made, shall specify the terms and conditions which govern the
award. Such terms and conditions shall prescribe that the Incentive Award shall
be earned only to the extent that the Company, an Affiliate or an operating
unit, during a performance period of at least one year, achieves objectives
stated with respect to the Company's, an Affiliate's or an operating unit's
return on equity, earnings per share, total earnings, earnings growth, return on
capital, return on assets, funds from operations or Fair Market Value. Such
terms and conditions also may include other limitations on the payment of
Incentive Awards including, by way of example and not of limitation,
requirements that the Participant complete a specified period of employment with
the Company or an Affiliate or that the Company, an Affiliate, or the
Participant attain stated objectives or goals (in addition to those prescribed
in accordance with the preceding sentence) as a prerequisite to payment under an
Incentive Award. The Committee, at the time an Incentive Award is made, shall
also specify when amounts shall be payable under the Incentive Award and whether
amounts shall be payable in the event of the Participant's death, disability, or
retirement. No payment shall be made under
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an Incentive Award except to the extent that the Committee certifies that the
objectives governing such award have been achieved.
9.3 Nontransferability. Except as provided in Section 9.4,
Incentive Awards granted under this Plan shall be nontransferable except by will
or by the laws of descent and distribution. No right or interest of a
Participant in an Incentive Award shall be liable for, or subject to, any lien,
obligation, or liability of such Participant.
9.4 Transferable Incentive Awards. Section 9.3 to the contrary
notwithstanding, the Committee may grant Incentive Awards which are transferable
to Permitted Family Members to the extent that, and on such terms and conditions
as may be permitted by, Securities Exchange Commission Rule 16b-3 as in effect
from time to time. The holder of an Incentive Award transferred pursuant to this
section shall be bound by the same terms and conditions that governed the
Incentive Award during the period that it was held by the Participant.
9.5 Employee Status. If the terms of an Incentive Award
provide that a payment will be made thereunder only if the Participant completes
a stated period of employment, the Committee may decide to what extent leaves of
absence for governmental or military service, illness, temporary disability or
other reasons shall not be deemed interruptions of continuous employment.
9.6 Shareholder Rights. No Participant shall, as a result of
receiving an Incentive Award, have any rights as a shareholder of the Company or
any Affiliate on account of such award.
ARTICLE X
ADJUSTMENT UPON CHANGE IN COMMON STOCK
The maximum number of shares as to which Options, Stock Awards
and Performance Shares may be granted under this Plan, the terms of outstanding
Stock Awards, Options, Performance Share awards and Incentive Awards, and the
per individual limitations on the number of shares for which Options, Stock
Awards and Performance Shares may be granted, shall be adjusted as the Committee
shall determine to be equitably required in the event that there is an increase
or reduction in the number of shares of Common Stock, or any change (including,
but not limited to, a change in value) in the shares of Common Stock or exchange
of shares of Common Stock for a different number or kind of shares or other
securities of the Company by reason of a reclassification, recapitalization,
merger, consolidation, reorganization, spin-off, split-up, subdivision or
consolidation of shares, extraordinary dividend, change in corporate structure
or otherwise. Any determination made under this Article X by the Committee shall
be final and conclusive.
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The issuance by the Company of shares of stock of any class,
or securities convertible into shares of stock of any class, for cash or
property, or for labor or services, either upon direct sale or upon the exercise
of rights or warrants to subscribe therefor, or upon conversion of shares or
obligations of the Company convertible into such shares or other securities,
shall not affect, and no adjustment by reason thereof shall be made with respect
to, the maximum number of shares as to which Options, Stock Awards and
Performance Shares may be granted, the per individual limitations on the number
of shares for which Options, Stock Awards and Performance Shares may be granted
or the terms of outstanding Stock Awards, Options, Incentive Awards or
Performance Shares.
The Committee may make Stock Awards and may grant Options,
Incentive Awards and Performance Shares in substitution for performance shares,
phantom shares, stock awards, stock options, stock appreciation rights, or
similar awards held by an individual who becomes an employee of the Company or
an Affiliate in connection with a transaction described in the first paragraph
of this Article X. Notwithstanding any provision of the Plan (other than the
limitation of Section 5.2), the terms of such substituted Stock Awards, Option,
Incentive Awards or Performance Share grants shall be as the Committee, in its
discretion, determines is appropriate.
ARTICLE XI
COMPLIANCE WITH LAW AND
APPROVAL OF REGULATORY BODIES; GOVERNING LAW
No Option shall be exercisable, no Common Stock shall be
issued, no certificates for shares of Common Stock shall be delivered, and no
payment shall be made under this Plan except in compliance with all applicable
federal and state laws and regulations (including, without limitation,
withholding tax requirements), any listing agreement to which the Company is a
party, and the rules of all domestic stock exchanges on which the Company's
shares may be listed. The Company shall have the right to rely on an opinion of
its counsel as to such compliance. Any share certificate issued to evidence
Common Stock when a Stock Award is granted or for which an option is exercised
or a Performance Share settled may bear such legends and statements as the
Committee may deem advisable to assure compliance with federal and state laws
and regulations. No Option shall be exercisable, no Stock Award shall be
granted, no Common Stock shall be issued, no certificate for shares shall be
delivered, and no payment shall be made under this Plan until the Company has
obtained such consent or approval as the Committee may deem advisable from
regulatory bodies having jurisdiction over such matters. Except as to matters of
federal law, this Plan and the rights of all persons claiming hereunder shall be
construed and determined in accordance with the laws of the State of New York
without giving effect to conflicts of law principles.
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ARTICLE XII
GENERAL PROVISIONS
12.1 Effect on Employment and Service. Neither the adoption of
this Plan, its operation, nor any documents describing or referring to this Plan
(or any part thereof) shall confer upon any individual any right to continue in
the employ or service of the Company or an Affiliate or in any way affect any
right and power of the Company or an Affiliate to terminate the employment or
service of any individual at any time with or without assigning a reason
therefor.
12.2 Unfunded Plan. The Plan, insofar as it provides for
grants, shall be unfunded, and the Company shall not be required to segregate
any assets that may at any time be represented by grants under this Plan. Any
liability of the Company to any person with respect to any grant under this Plan
shall be based solely upon any contractual obligations that may be created
pursuant to this Plan. No such obligation of the Company shall be deemed to be
secured by any pledge of, or other encumbrance on, any property of the Company.
12.3 Rules of Construction. Headings are given to the articles
and sections of this Plan solely as a convenience to facilitate reference. The
reference to any statute, regulation, or other provision of law shall be
construed to refer to any amendment to or successor of such provision of law.
ARTICLE XIII
AMENDMENT
The Board may amend or terminate this Plan from time to time;
provided, however, that no amendment may become effective until shareholder
approval would be required to be approved by shareholders under Section 422 of
the Code with respect to incentive stock options or the rules of the stock
exchange on which the shares of Common Stock are listed. is obtained if the
amendment (i) materially increases the aggregate number of shares of Common
Stock that may be issued under the Plan or (ii) would be required to be approved
by shareholders under Section 422 of the Code with respect to incentive stock
options or the rules of the stock exchange on which the shares of Common Stock
are listed. No amendment shall, without a Participant's consent, adversely
affect any rights of such Participant under any outstanding Stock Award, Option,
Incentive Award or Performance Share award outstanding at the time such
amendment is made.
ARTICLE XIV
DURATION OF PLAN
No Stock Award, Option, Incentive Award or Performance Share
award may be granted under this Plan more than ten years after the earlier of
the date this Plan is adopted by the Board or the date this Plan is approved by
stockholders in accordance with Article XV. Stock
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Awards, Options, Incentive Awards and Performance Share awards granted before
that date shall remain valid in accordance with their terms.
ARTICLE XV
EFFECTIVE DATE OF PLAN
Options, Incentive Awards and Performance Share awards may be
granted under this Plan upon its adoption by the Board, provided that no Option,
Incentive Award or Performance Share award shall be effective or exercisable
unless this Plan is approved by a majority of the votes entitled to be cast by
the Company's stockholders, voting either in person or by proxy, at a duly held
stockholders' meeting or by unanimous consent of the Company's stockholders.
Stock Awards may be granted under this Plan upon the later of its adoption by
the Board or its approval by stockholders in accordance with the preceding
sentence.
13
TOWER REALTY TRUST, INC.
NON-EMPLOYEE DIRECTORS' INCENTIVE PLAN
ARTICLE I
DEFINITIONS
1.1 Award Date means (i) with respect to each Founding
Director, the IPO Closing Date, and (ii) with respect to each Non-Founding
Director, the date of the commencement of the term of office of each
Non-Founding Director.
1.2 Board means the Board of Directors of the Company.
1.3 Committee means the committee appointed by the Board
to administer the Plan.
1.4 Common Stock means the common stock of the Company.
1.5 Company means Tower Realty Trust, Inc., a Maryland
corporation.
1.6 Fair Market Value means, on any given date, the
current fair market value of a share of Common Stock as determined pursuant to
subsection (a) or (b) below.
(a) The Fair Market Value on the Award Date for Founding
Directors shall be the initial public offering price of the Common Stock.
(b) Except as provided in subsection (a), Fair Market
Value shall be determined as follows: if the Common Stock is not listed on an
established stock exchange, Fair Market Value shall be the average of the final
bid and asked quotations on the over-the-counter market in which the Common
Stock is traded or, if applicable, the reported "closing" price of a share of
Common Stock in the New York over-the-counter market as reported by the National
Association of Securities Dealers, Inc. If the Common Stock is listed on one or
more established stock exchanges, Fair Market Value shall be deemed to be the
highest closing price of a share of Common Stock reported on any of such
exchanges. In any case, if no sale of Common Stock is
<PAGE>
made on any stock exchange or over-the-counter market on that date, then Fair
Market Value shall be determined as of the next preceding day on which there was
a sale.
1.7 Founding Director means a Participant who is a member
of the Board on the IPO Closing Date.
1.8 Internal Revenue Code means the Internal Revenue Code
of 1986, as amended.
1.9 IPO Closing Date means the date on which the
Company's initial public offering of common stock, par value $.01 per share, is
consummated.
1.10 Non-Founding Director means a Participant who is not
Founding Director.
1.11 Option means a stock option that entitles the holder
to purchase shares of Common Stock from the Company on the terms set forth in
Article IV of this Plan.
1.12 Participant means a member of the Board who, on
the First Award Date or applicable Award Date, is not an employee or officer of
the Company or any "subsidiary" or "parent" corporation of the Company within
the meaning of Section 424 of the Internal Revenue Code.
1.13 Plan means the Tower Realty Trust, Inc. Non-Employee
Directors' Incentive Plan.
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ARTICLE II
PURPOSES
The Plan is intended to (i) assist the Company in recruiting
and retaining non-employee directors and (ii) promote a greater identity of
interest between Participants and stockholders by enabling Participants to
participate in the Company's future success.
ARTICLE III
ADMINISTRATION
The Plan shall be administered by the Committee. The Committee
shall have complete authority to interpret all provisions of the Plan; to adopt,
amend, and rescind rules and regulations pertaining to the administration of the
Plan and to make all other determinations necessary or advisable for the
administration of the Plan. The express grant in the Plan of any specific power
to the Committee shall not be construed as limiting any power or authority of
the Committee. Any decision made, or action taken, by the Committee in
connection with the administration of the Plan shall be final and conclusive. No
member of the Committee shall be liable for any act done in good faith with
respect to the Plan. All expenses of administering the Plan shall be borne by
the Company.
ARTICLE IV
OPTIONS
4.1 Grant of Options. Each Participant shall be granted
an Option for 20,000 shares of Common Stock on the applicable Award Date. All
Options shall be evidenced by
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Agreements that shall be subject to the applicable provisions of this Plan and
to such other provisions as the Committee may adopt which are not inconsistent
with the provisions of this Plan.
4.2 Option Price. The price per share of Common Stock
purchased on the exercise of an Option shall be the Fair Market Value on the
date that the Option is granted.
4.3 Maximum Option Period. The maximum period during
which an Option may be exercised shall be ten years from the date of grant.
4.4 Exercise of Options. All Options granted under the
Plan shall vest in five equal annual installments (4,000 shares each) beginning
on the first anniversary of the date of grant (each, a "Vesting Date"), provided
the Participant continues to serve as a director of the Company on such Vesting
Date.
4.5 Effect of Termination of Services or Death. If a
Participant ceases to serve as a director of the Company for any reason, the
Options that have been previously granted to that Participant and that are not
vested as of that date shall be forfeited. Options that have vested as of the
date of such cessation of services may be exercised by the Participant, in
accordance with and subject to the terms of the Plan, after the date such
Participant ceases to be a director of the Company. If a Participant dies, the
Options that have been previously granted to that Participant and that are
vested as of the date of death may be exercised by the administrator of the
Participant's estate, or by the person to whom such Options are transferred by
will or the laws of descent and distribution. In no event, however, may any
Option be exercised after the expiration date of such Option. Any Option or
portion thereof that is not exercised during the applicable
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time period specified above shall be deemed terminated at the end of the
applicable time period for purposes of Article V hereof.
4.6 Payment of Option Price. Payment of the Option price
shall be made in cash, cash equivalent acceptable to the Committee, by the
surrender of shares of Common Stock, or a combination thereof. If shares of
Common Stock are surrendered in payment of the Option price, the shares
surrendered must have an aggregate Fair Market Value (determined as of the day
preceding the exercise date) that, together with any cash or cash equivalent
paid, is not less than the Option price for the number of shares of Common Stock
for which this Option is being exercised.
4.7 Nontransferability. Each Option granted under this
Plan shall be nontransferable except by will or by the laws of descent and
distribution. During the lifetime of the Participant to whom an Option is
granted, the Option may be exercised only by the Participant. No right or
interest of a Participant in any Option shall be liable for, or subject to, any
lien, obligation, or liability of such Participant.
4.8 Shareholder Rights. No Participant shall have any
rights as a shareholder with respect to shares of Common Stock subject to his or
her Option until the date of exercise of such option.
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ARTICLE V
STOCK SUBJECT TO PLAN
5.1 Shares Issued. Upon the exercise of an Option, the
Company may deliver to the Participant (or the Participant's broker if the
Participantso directs), shares of Common Stock from its authorized but unissued
Common Stock.
5.2 Aggregate Limit. The maximum aggregate number of
shares of Common Stock that may be issued under this Plan is 200,000 shares. The
maximum aggregate number of shares that may be issued under this Plan shall be
subject to adjustment as provided in Article VI.
5.3 Reallocation of Shares. If an Option is terminated,
in whole or in part, for any reason other than its exercise, the number of
shares of Common Stock allocated to the Option or portion thereof may be
reallocated to other Options to be granted under this Plan.
ARTICLE VI
ADJUSTMENT UPON CHANGE IN COMMON STOCK
The provisions of this Plan and the terms of outstanding
Options shall be adjusted as the Committee shall determine to be equitably
required in the event that there is an increase or reduction in the number of
shares of Common Stock, or any change (including, but not limited to, a change
in value) in the shares of Common Stock or exchange of shares of Common Stock
for a different number or kind of shares or other securities of the Company by
reason of a reclassification, recapitalization, merger, consolidation,
reorganization, spin-off, split-up, subdivision or consolidation of shares,
extraordinary dividend, change in corporate structure or
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otherwise. Any determination made under this Article VI by the Committee shall
be final and conclusive.
The issuance by the Company of shares of any class, or
securities convertible into shares of any class, for cash or property, or for
labor or services, either upon direct sale or upon the exercise of rights or
warrants to subscribe therefor, or upon conversion of shares of obligations of
the Company convertible into such shares or other securities, shall not affect,
and no adjustment by reason thereof shall be made with respect to, the
provisions of this Plan or the terms of outstanding Options.
ARTICLE VII
COMPLIANCE WITH LAW AND
APPROVAL OF REGULATORY BODIES; GOVERNING LAW
No Common Stock shall be issued and no certificates for shares
of Common Stock shall be delivered under the Plan except in compliance with all
applicable federal and state laws and regulations, any listing agreement to
which the Company is a party, and the rules of all domestic stock exchanges on
which the Company's Common Stock may be listed. The Company shall have the right
to rely on an opinion of its counsel as to such compliance. Any certificate
issued to evidence Common Stock issued upon the exercise of an Option granted
under the Plan may bear such legends and statements as the Committee may deem
advisable to assure compliance with federal and state laws and regulations. No
Common Stock shall be issued and no certificate for shares of Common Stock shall
be delivered upon the exercise of an Option granted under the Plan until the
Company has obtained such consent or approval as the Committee may deem
7
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advisable from regulatory bodies having jurisdiction over such matters. Except
as to matters of federal law, this Plan and the rights of all persons claiming
hereunder shall be construed and determined in accordance with the laws of the
State of New York without giving effect to conflicts of law principles.
ARTICLE VIII
GENERAL PROVISIONS
8.1 Unfunded Plan. The Plan, insofar as it provides for
awards, shall be unfunded, and the Company shall not be required to segregate
any assets that may at any time be represented by awards under the Plan. Any
liability of the Company to any person with respect to any award to be made
under the Plan shall be based solely upon any contractual obligations that may
be created pursuant to the Plan. No such obligation of the Company shall be
deemed to be secured by any pledge of, or other encumbrance on, any property of
the Company.
8.2 Rules of Construction. Headings are given to the
articles and sections of the Plan solely as a convenience to facilitate
reference. The reference to any statute, regulation, or other provision of law
shall be construed to refer to any amendment to or successor of such provision
of law.
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ARTICLE IX
AMENDMENT
The Board may amend from time to time or terminate the Plan at
any time; provided, however, that no amendment may become effective until
shareholder approval is obtained if the amendment (i) materially increases the
aggregate number of shares of Common Stock that may be issued under this Plan
(other than an adjustment authorized under Article VI), or (ii) would be
required to be approved by shareholders under the rules of the stock exchange on
which the shares of Common Stock are listed. No amendment shall, without a
Participant's consent, adversely affect any rights of such Participant under any
outstanding Option or award of shares with Common Stock.
ARTICLE X
DURATION OF PLAN
No Option or award of Common Stock may be made under this Plan
after December 31, 2007. Options and awards of Common Stock made before that
date shall remain valid in accordance with their terms.
9
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ARTICLE XII
EFFECTIVE DATE OF PLAN
Options may be granted under this Plan upon its adoption by
the Board, provided that no Option shall be effective or exercisable unless this
Plan is approved by a majority of the votes entitled to be cast by the Company's
stockholders, voting either in person or by proxy, at a duly held stockholders'
meeting or by unanimous consent of the Company's stockholders. Awards of Common
Stock may be granted under this Plan upon the later of its adoption by the Board
or its approval by stockholders in accordance with the preceding sentence.
10
Ballard Spahr Andrews & Ingersoll, LLP
Suite 1900
Baltimore, Maryland 21202-3268
(410) 528-5600
April 17, 1998
Tower Realty Trust, Inc.
292 Madison Avenue, Third Floor
New York, New York 10017
Re: Registration Statement on Form S-8
dated April 20, 1997
Ladies and Gentlemen:
We have served as Maryland counsel to Tower Realty Trust, Inc., a Maryland
corporation (the "Company"), in connection with certain matters of Maryland law
arising out of the registration of 1,970,147 shares (the "Shares") of Common
Stock, $.01 par value per share, of the Company ("Common Stock") covered by the
above-referenced Registration Statement (the "Registration Statement"), under
the Securities Act of 1933, as amended (the "1933 Act"). The Shares are to be
issued by the Company pursuant to the Company's 1997 Incentive Plan (the
"Incentive Plan") and the Company's Non-Employee Directors' Incentive Plan (the
"Director's Plan") and together with the Incentive Plan, the "Plans").
Capitalized terms used but not defined herein shall have the meanings given to
them in the Registration Statement.
In connection with our representation of the Company, and as a basis for
the opinion hereinafter set forth, we have examined originals, or copies
certified or otherwise identified to our satisfaction, of the following
documents (hereinafter collectively referred to as the "Documents"):
1. The Registration Statement, filed with the Securities and Exchange
Commission (the "Commission"), pursuant to the Securities Act of 1933, as
amended (the "1933 Act"), and the related form of prospectus in the form in
which it will be
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Tower Realty Trust, Inc.
April 17, 1998
Page 2
sent or given to employees of the Company in accordance with Rule
428(b)(1) under the 1933 Act;
2. The charter of the Company (the "Charter"), certified as of a recent
date by the State Department of Assessments and Taxation of Maryland (the
"SDAT");
3. The Bylaws of the Company, certified as of a recent date by its
Secretary;
4. Resolutions adopted by the Board of Directors of the Company relating to
(i) the approval of the Incentive Plan and the Director's Plan and (ii) the
issuance and registration of the Shares, certified as of a recent date by an
officer of the Company;
5. Resolutions adopted by the stockholders of the Company relating to the
approval of the Plan, certified as of a recent date by an officer of the
Company;
6. A specimen of the certificate representing a share of Common Stock,
certified as of a recent date by the Secretary of the Company;
7. A certificate of the SDAT as to the good standing of the Company, dated
as of a recent date;
8. A certificate executed by an officer of the Company, dated the date
hereof;
9. The Incentive Plan;
10. The Directors' Plan; and
11. Such other documents and matters as we have deemed necessary or
appropriate to express the opinion set forth in this letter, subject to the
assumptions, limitations and qualifications stated herein.
In expressing the opinion set forth below, we have assumed, and so far as
is known to us there are no facts inconsistent with, the following:
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Tower Realty Trust, Inc.
April 17, 1998
Page 3
1. Each individual executing any of the Documents, whether on behalf of
such individual or another person, is legally competent to do so.
2. Each individual executing any of the Documents on behalf of a party
(other than the Company) is duly authorized to do so.
3. Each of the parties (other than the Company) executing any of the
Documents has duly and validly executed and delivered each of the Documents to
which such party is a signatory, and such party's obligations set forth therein
are legal, valid and binding and are enforceable in accordance with all stated
terms.
4. All Documents submitted to us as originals are authentic. All Documents
submitted to us as certified or photostatic copies conform to the original
documents. All signatures on all such Documents are genuine. All public records
reviewed or relied upon by us or on our behalf are true and complete. All
statements and information contained in the Documents are true and complete.
There has been no oral or written modification or amendment to the Documents, or
waiver of any of the provision of any of the Documents, by action or omission of
the parties or otherwise.
5. The Shares will not be issued in violation of any restriction or
limitation contained in Article VII of the Charter.
6. The sum of (i) all shares of Common Stock issued as of the date hereof,
(ii) any shares of Common Stock issued between the date hereof and any date on
which the Shares are actually issued (not including the Shares) and (iii) the
Shares will not exceed the total number of shares of Common Stock that the
Company is authorized to issue.
The phrase "known to us" is limited to the actual knowledge, without
independent inquiry, of the lawyers at our firm who have performed legal
services in connection with the issuance of this opinion.
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Tower Realty Trust, Inc.
April 17, 1998
Page 4
Based upon the foregoing, and subject to the assumptions, limitations and
qualifications stated herein, it is our opinion that:
1. The Company is a corporation duly incorporated and existing under and by
virtue of the laws of the State of Maryland and is in good standing with the
SDAT.
2. The Shares have been duly authorized for issuance pursuant to the Plans
and, when and if issued and delivered against payment therefor in the manner
described in the Plans, will be validly issued, fully paid and nonassessable.
The foregoing opinion is limited to the substantive laws of the State of
Maryland and we do not express any opinion herein concerning any other law.
We express no opinion as to compliance with the securities (or "blue sky")
laws or the real estate syndication laws of the State of Maryland.
We assume no obligation to supplement this opinion if any applicable law
changes after the date hereof or if we become aware of any fact that might
change the opinion expressed herein after the date hereof.
This opinion is being furnished to you for submission to the Securities and
Exchange Commission as an exhibit to the Registration Statement and,
accordingly, may not be relied upon by, quoted in any manner to, or delivered to
any other person or entity without, in each instance, our prior written consent.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of the name of our firm therein. In giving
this consent, we do not admit that we are within the category of persons whose
consent is required by Section 7 of this 1933 Act.
Very truly yours,
/s/ Ballard Spahr Andrews & Ingersoll, LLP
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration Statement
on Form S-8 of our report dated February 26, 1998 on our audit of the
consolidated financial statements and financial statement schedule of Tower
Realty Trust, Inc. (the "Company") as of December 31, 1997 and for the period
from March 27, 1997 (date of inception) to December 31, 1997 and the combined
financial statements of Tower Predecessor for the period from January 1, 1997
through October 15, 1997 and as of December 31, 1996 and for the years ended
December 31, 1996 and 1995, which report is included in the Annual Report on
Form 10-K of the Company, filed on March 31, 1998.
/s/ Coopers & Lybrand L.L.P.
New York, New York
April 17, 1998
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