<PAGE> 1
As filed with the Securities and Exchange Commission on August 13, 1997
File No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
EQUITY OFFICE PROPERTIES TRUST
(Exact name of Registrant as specified in its charter)
<TABLE>
<CAPTION>
<S> <C>
Maryland 36-4151656
(State or other jurisdiction of Incorporation of Organization) (I.R.S. Employer Identification No.)
</TABLE>
Two North Riverside Plaza, Suite 2200, Chicago, Illinois 60606 (312) 474-1300
(Address of Principal Executive Offices)
EQUITY OFFICE PROPERTIES TRUST
1997 SHARE OPTION AND SHARE AWARD PLAN
(Full Title of the Plan)
Stanley M. Stevens
Chief Legal Counsel
Two North Riverside Plaza, Suite 2200
Chicago, Illinois 60606
(Name and Address of Agent for Service)
(312) 466-3300
(Telephone Number, Including Area Code, of Agent for Service)
Copies to:
Ruth Pinkham Haring, Esq.
Rosenberg & Liebentritt, P.C.
Two North Riverside Plaza, Suite 1600
Chicago, Illinois 60606
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Maximum Proposed Maximum
Amount to be Aggregate Price Aggregate Amount of
Title of Securities to be Registered Registered Per Share (1) Offering Price (1) Registration Fee
<S> <C> <C> <C> <C>
Common Shares of Beneficial Interest,
$.01 par value....................... 11,121,786 $ 30.41 $338,213,512.26 $102,490.00
</TABLE>
(1) Estimated solely for purposes of calculating the amount of the
registration fee based upon the average high and low prices reported for
such shares on the New York Stock Exchange on August 6, 1997, pursuant to
Rule 457(h)(1).
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents, which have heretofore been filed by the
Registrant with the Securities and Exchange Commission (the "Commission")
pursuant to the Securities Act of 1933, as amended (the "Securities Act"), and
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), are
incorporated by reference in this Registration Statement and shall be deemed to
be a part hereof:
(a) Report on Form 8-A dated June 19, 1997 (File No. 1-13115).
All documents subsequently filed by the Registrant with the Commission
pursuant to Section 13(a), 13(c), 14 and 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 shall be
deemed a part hereof from the date of filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Sheli Z. Rosenberg, a principal of Rosenberg & Liebentritt, P.C., is a
trustee of Equity Office Properties Trust (the "Company"). Rosenberg &
Liebentritt, P.C. received legal fees from predecessors of the Company of
approximately $273,400, $827,100, $3,480,500 and $3,230,100 for the three
months ended March 31, 1997 and 1996 and the years ended December 31, 1996 and
1995, respectively. Attorneys for Rosenberg & Liebentritt, P.C. beneficially
own less than 1% of the outstanding Common Shares of Beneficial Interest, par
value $.01 per share, of the Company, either directly or upon the exercise of
options.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company's officers and trustees are and will be indemnified under
Maryland and Delaware law, the Declaration of Trust and Bylaws of the Company
and the Partnership Agreement of the Operating Partnership against certain
liabilities. The Declaration of Trust of the Company requires it to indemnify
its trustees and officers to the fullest extent permitted from time to time
under Maryland law.
The Declaration of Trust of the Company authorizes it, 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 trustee or officer or (b) any individual who,
while a trustee of the Company and at the request of the Company, serves or has
served as a director, officer, partner, trustee, employee or agent of another
corporation, partnership, joint venture, trust, employee benefit plan or any
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 trustee 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 trustee or officer who
is made party to the proceeding by reason of his service in that capacity or
(b) any individual who, while a trustee or officer of the Company and at the
request of the Company, serves or has served another real estate investment
trust, corporation, partnership, joint venture, trust, employee benefit plan or
any other enterprise as a trustee, director, officer or partner of such real
estate investment trust, corporation, 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
Declaration of Trust 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 Bylaws require the Company to indemnify a
trustee 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.
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The Maryland REIT Law permits a Maryland real estate investment trust to
indemnify and advance expenses to its trustees, officers, employees and agents
to the same extent as permitted by the MGCL for directors and officers of
Maryland corporations. The MGCL permits a 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 of 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 for a judgment of
liability on the basis that a personal benefit was improperly received, unless,
in either case, a court orders indemnification and then only for expenses.
Under the MGCL, as a condition to advancing expenses, as required by the
Bylaws, the Company must first receive (a) a written affirmation by the trustee
or officer of his good faith belief that he has met the standard of conduct
necessary for indemnification by the Company and (b) a written statement by or
on his behalf to repay the amount paid or reimbursed by the Company if it shall
ultimately be determined that the standard of conduct was not met.
The Company has entered into indemnification agreements with each of its
trustees and executive officers. The indemnification agreements require, among
other things, that the Company indemnify its trustees and executive officers to
the fullest extent permitted by law and advance to the trustees and executive
officers all related expenses, subject to reimbursement if it subsequently
determined that indemnification is not permitted. Under these agreements, the
Company must also indemnify and advance all expenses incurred by trustees and
executive officers seeking to enforce their rights under the indemnification
agreements and may cover trustees and executive officers under the Company's
trustees and officers' liability insurance. Although the form of
indemnification agreement offers substantially the same scope of coverage
afforded by law, as a traditional form of contract it may provide greater
assurance to trustees and executive officers that indemnification will be
available.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
See Exhibit Index which is incorporated herein by reference.
ITEM 9. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in this registration
statement. Notwithstanding the foregoing, any increase or
decrease in volume of Offered Shares (if the total dollar
value of Offered Shares would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form
of the prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price
represent no more than a 20 percent change in the maximum
aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration
statement;
(iii) To include any material information with respect
to the plan of distribution not previously disclosed in the
registration statement or any material change to such
information in this registration statement;
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provided, however, that subparagraphs (i) and (ii) above do not apply if
the registration statement is on Form S-3, Form S-8 or Form F-3, and the
information required to be included in a post-effective amendment by
those paragraphs is contained in the periodic reports filed with or
furnished to the Commission by the Registrant pursuant to Section 13 or
Section 15(d) of the Securities and Exchange Act of 1934 that are
incorporated by reference in this registration statement.
(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 Offered
Shares offered herein, and the offering of such Offered Shares at
that 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 Offered Shares being registered which remain
unsold at the termination of the offering.
The undersigned Registrant hereby further undertakes that, for the
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 this registration statement shall be deemed to be a new registration
statement relating to the Offered Shares offered herein, and the offering of
such Offered Shares at that time shall be deemed to be the initial bona fide
offering thereof.
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 existing provisions or arrangements whereby the
registrant may indemnify a trustee, officer or controlling person of the
registrant against liabilities arising under the Securities Act of 1933, 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 Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a trustee, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such trustee, 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 Act and
will be governed by the final adjudication of such issue.
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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 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 Chicago, State of Illinois, on August 13, 1997.
EQUITY OFFICE PROPERTIES TRUST
By: /s/ Timothy H. Callahan
-------------------------------------------------------
Timothy H. Callahan, President, Chief Executive Officer
and Trustee
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below, hereby constitutes and appoints Timothy H. Callahan and Sheli Z.
Rosenberg, or either of them, his attorneys-in-fact and agents, with full power
of substitution and resubstitution for him in any and all capacities, to sign
any or all amendments or post-effective amendments to this Registration
Statement, and to file the same, with all exhibits thereto and other documents
in connection therewith or in connection with the registration of the
Securities under the Exchange Act, with the Securities and Exchange Commission,
granting unto each of such attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and
necessary in connection with such matters as fully to all intents and purposes
as he might or could do in person, hereby ratifying and confirming all that
each of such attorneys-in-fact and agents or his substitute or substitutes may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
Name Title Date
- ---- ----- ----
<S> <C> <C>
/s/ Samuel Zell
- --------------- Chairman of the Board of Trustees August 13, 1997
Samuel Zell
/s/ Timothy H. Callahan
- ----------------------- President, Chief Executive Officer and Trustee August 13, 1997
Timothy H. Callahan
/s/ Richard Kincaid Chief Financial Officer (principal financial
- ------------------- officer and principal accounting officer) August 13, 1997
Richard Kincaid
/s/ Sheli Z. Rosenberg
- ---------------------- Trustee August 13, 1997
Sheli Z. Rosenberg
/s/ James D. Harper, Jr.
- ------------------------ Trustee August 13, 1997
James D. Harper, Jr.
- ------------------------
Thomas E. Dobrowski Trustee August , 1997
/s/ Peter Linneman
- ------------------ Trustee August 13, 1997
Peter Linneman
/s/ Jerry M. Reinsdorf
- ---------------------- Trustee August 13, 1997
Jerry M. Reinsdorf
- ----------------------
William M. Goodyear Trustee August , 1997
/s/ David K. McKown
- ------------------- Trustee August 13, 1997
David K. McKown
</TABLE>
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Sequentially
Exhibit Exhibit Numbered
Number Description Page
- ------- ----------- ------------
<S> <C> <C> <C>
4.1 * Articles of Amendment and Restatement
of Declaration of Trust
4.2 * Bylaws
4.3 Equity Office Properties Trust 1997
Share Option and Share Award Plan
5 Opinion of Rosenberg & Liebentritt, P.C.
23.1 Consent of Rosenberg & Liebentritt,
P.C. (included in Exhibit 5)
24 Power of Attorney (filed as part of the
signature page to the Registration
Statement)
</TABLE>
- -------------
* Included as an exhibit to the Registrant's Current Report on Form 8-K
dated August 5, 1997, and incorporated herein by reference.
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<PAGE> 1
EXHIBIT 4.3
EQUITY OFFICE PROPERTIES TRUST
1997 SHARE OPTION AND SHARE AWARD PLAN
1. Purposes. The Equity Office Properties Trust 1997 Share Option and
Share Award Plan (the "Plan") is hereby established by Equity Office Properties
Trust, a Maryland real estate investment trust (the "Company"), to secure for
the Company and its shareholders the benefits arising from capital ownership by
those key employees, officers, trustees and consultants of the Company and its
Subsidiaries (as defined below) who are and will be responsible for its future
growth and continued success.
The Plan will provide a means whereby such individuals may: (i) receive
authorized common shares of beneficial interest of the Company ("Shares"),
subject to conditions and restrictions described herein and otherwise
determined by the Committee (defined below) ("Share Awards"); (ii) acquire
Shares pursuant to grants of options to purchase such Shares ("Options"); (iii)
acquire Share Appreciation Rights ("SARs") in tandem with or independent of
Options referred to in item (ii) above; or (iv) receive dividend equivalent
rights with respect to Shares ("Dividend Equivalents"). The term "Subsidiary"
means each entity the Company owns or controls directly or indirectly either
through voting control or as a general partner or managing member, provided
that, for purposes of Incentive Stock Options (as defined below) such term
shall have the meaning given in Section 424 of the Internal Revenue Code of
1986, amended (the "Code").
2. Administration. The authority to manage and control the operation and
administration of the Plan shall be vested in a Committee (the "Committee")
consisting of two or more members of the Board of Trustees of the Company, each
of whom is a "disinterested person" as such term is defined in Section
16b-3(c)(2)(i) of the General Rules and Regulations promulgated under the
Securities Exchange Act of 1934 (the "Act") (except that, with respect to
grants of Options and SARs, such grant or award is made by a Committee
consisting of two or more "outside directors" as such term is defined in
Treasury Regulation Section 1.162-27(e)(3)), who shall be appointed by, and may
be removed by, such Board, provided that the Committee shall have no authority,
power or discretion to determine the number or timing of Options granted
pursuant to paragraph 3(b) below, or to alter the terms and conditions of
Options or Share Awards as set forth therein. Any interpretation of the Plan
by the Committee and any decision made by the Committee on any other matter
within its discretion is final and binding on all persons. No member of the
Committee shall be liable for any action or determination made with respect to
the Plan.
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3. Participation.
(a) Generally. Subject to the terms and conditions of the Plan, the
Committee shall determine and designate from time to time the key employees,
officers and consultants of the Company and its Subsidiaries to whom Share
Awards, Options, SARs or Dividend Equivalents are to be granted ("Grantees" and
individually, a "Grantee") and the number of Shares subject to such Share
Awards, Options, SARs or Dividend Equivalents to be granted to the Grantees.
Notwithstanding the foregoing, the maximum number of Shares with respect to
which Options and SARs may be granted during any calendar year to any Grantee
is 1,000,000 Shares.
(b) Board of Trustees. An Option to purchase 10,000 Shares (plus
Options to purchase an additional 500 Shares for each committee of the Board on
which such Trustee serves for all or any portion of the prior year) shall be
awarded to each member of the Board of Trustees of the Company immediately
subsequent to the completion of the Company's initial public offering of Shares
as of the date of the commencement of the Company's initial public offering of
Shares and at each annual meeting thereafter of the Company's shareholders. As
to the awards granted as of the date of the initial public offering, the Option
price shall be the per Share initial public offering price. A Trustee shall
become a Grantee in the Plan on the first date on which the Trustee is awarded
an Option under the Plan. Trustees who are not members of the Committee may,
in addition to Options awarded under this paragraph, also be entitled to
Options under paragraph 3(a). The fees paid to all Trustees shall be payable
in Shares issued under the Plan. The number of such Shares shall be determined
based on the closing price of the Shares on the New York Stock Exchange on the
date set by the Committee.
(c) Management By Objectives Bonus Plan. As of a date (the "Bonus Date")
selected by the Committee that is not less than 30 days before or after the
date on which a cash distribution (a "Bonus") is earned by an individual under
the Company's annual bonus plan (the "Bonus Plan"), the Committee may, in its
discretion, grant each such individual a Share Award, Option, SAR or Dividend
Equivalent, or some combination thereof, with an aggregate Grant Value (defined
below), as of the Bonus Date, in an amount equal to any portion of such Bonus
(the "Award Portion") as the Committee deems appropriate, which will be made in
lieu of such portion of the Bonus otherwise payable to such individual. All
grants made pursuant to the foregoing shall be in full satisfaction of the
applicable portion of the Award Portion, shall be made without other payment
therefor, and shall be governed by paragraph 5 hereof. If approved by the
Committee, each individual who participates in the Bonus Plan will be given an
opportunity to elect to receive all or a portion of the non-Award portion of
the Bonus in one of the forms of grant described in the first sentence of this
subparagraph pursuant to procedures established by the Committee. Such
opportunity provided under this subparagraph is subject to compliance with all
applicable federal and state securities laws.
(d) Value. For all purposes of the Plan (i) the "Grant Value" of grants
made pursuant to paragraph 3(c) shall equal (a) for a Share Award, the Fair
Market Value of a Share (as defined below) as of the date of grant, (b) for an
Option or an SAR (I) if the Company has complied with the disclosure
requirements described in Item 402(c) of Regulation S-K under the Act by
disclosing the present value of options under the Black-Scholes or binomial
option pricing model or another valuation method (any of the foregoing
constituting a "Valuation Method"), the value of such Option or SAR calculated
based on the Valuation Method and assumptions contained in the most recent
document used by the Company to satisfy those requirements; or (II) if the
Company has not so disclosed the present value of options, then "Grant Value"
shall, at the
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election of the Committee either be calculated using a Valuation Method and
assumptions that would satisfy such requirements, or shall equal the
difference between the Fair Market Value of a Share as of the date of grant and
the exercise or base price of the Option or SAR, times the number of Shares
subject to the Option or SAR; and (c) for a Dividend Equivalent, the Fair Market
Value of a Share as of the date of grant times the number of Shares subject to
the Dividend Equivalent; and (ii) the "Fair Market Value" of a Share as of any
date means the closing price of the Shares on the New York Stock Exchange on the
date of grant.
4. Shares Subject to the Plan. Subject to the provisions of paragraph 13,
the aggregate number of Shares for which Share Awards, Options and SARs may be
granted under the Plan shall not exceed 6.8% of the outstanding Shares, on a
fully diluted basis on the date of the closing of the initial public offering
of the Company's Common Shares. In the event that (i) any Option granted under
the Plan expires unexercised or is terminated, surrendered or canceled (other
than in connection with the exercise of a "Tandem" (defined below) SAR) without
being exercised, in whole or in part, for any reason, or (ii) any "Non-Tandem"
(defined below) SAR granted under the Plan expires unexercised or is
terminated, surrendered or canceled without being exercised, in whole or in
part, for any reason, then the number of Shares then subject to the Option or
SAR, or the unexercised, terminated, surrendered, forfeited, canceled or
reacquired portion thereof, shall be added to the remaining number of Shares
available for grant under the Plan unless the Plan shall have terminated.
5. Share Awards. This paragraph 5 sets forth specific terms and
conditions applicable to Share Awards under the Plan.
(a) Conditions and Restrictions. Share Awards shall be subject to the
following conditions and/or restrictions:
(i) A Share Award granted under paragraph 3(a) shall be subject to the
condition that it will be forfeited to the Company upon the Grantee's
termination of employment with the Company within one year from the date of
grant of the Share Award ("Date of Grant'), and may be subject to such further
conditions and restrictions established by the Board of Trustees of the Company
at the Date of Grant (including conditions requiring employment by the Grantee
for a period in excess of one year).
(ii) A Share Award granted under paragraph 3(c) shall be forfeited to the
Company upon the Grantee's termination of employment with the Company within
two years from the Date of Grant.
(iii) The Committee may, but need not, establish performance goals to be
achieved within such performance periods as may be selected by it in its sole
discretion, using such measures of the performance of the Company and/or its
Subsidiaries as it may select.
(iv) Notwithstanding the foregoing, the restrictions set forth in the
preceding paragraphs (i), (ii) and (iii) shall immediately lapse such that they
are of no effect in the event of the termination of a Grantee's employment (A)
because of the Grantee's "Disability" (as defined in the Equity Office
Properties Trust Advantage Retirement Plan) or death, (B) in connection with
the Grantee's retirement at or after age 62, or (C) upon a "Change in Control"
of the Company. For purposes of this Plan, a "Change in Control" shall be
deemed to occur upon: (I) the acquisition by any entity, person, or group of
more than 50% of the outstanding Shares
3
<PAGE> 4
from the holders thereof; (II) a merger or consolidation of the Company with one
or more other entities as a result of which the ultimate holders of
outstanding Shares immediately prior to such merger hold less than 50% of the
shares of beneficial ownership of the surviving or resulting corporation; or
(III) a direct or indirect transfer of substantially all of the property of the
Company other than to an entity of which the Company directly or indirectly owns
at least 50% of the shares of beneficial ownership.
(b) Rights of Grantee. The Grantee shall be entitled to all of the rights
of a shareholder with respect to the Share Awards including the right to vote
such Shares and to receive dividends and other distributions payable with
respect to such Shares from and after the Date of Grant; provided that any
securities or other property (but not cash) received in any such distribution
with respect to a Share Award that is still subject to the restrictions in
paragraph (a)(i), (ii) or (iii) above, shall be subject to all of the
restrictions set forth herein with respect to such Share Award.
(c) Issuance. Certificates for the Share Award shall be issued in the
Grantee's name and shall be held in escrow by the Company, with stock powers
for such Shares executed in blank by the Grantee, until all restrictions lapse
or such Shares are forfeited as provided herein. A certificate or certificates
representing a Share Award as to which restrictions have lapsed shall be
delivered to the Grantee upon such lapse.
6. Share Options. This paragraph 6 addresses specific terms and
conditions for Share Options.
(a) ISO/NQSO. Any Option to purchase Shares granted under paragraph 3(a)
that satisfies all of the requirements of Section 422 of the Code, may be
designated by the Committee as an "Incentive Share Option." Options that are
not so designated, or that do not satisfy the requirements of Section 422 of
the Code or that are granted under paragraph 3(b) shall not constitute
Incentive Share Options and shall be Non-Qualified Share Options.
(b) Exercise Price. The Option price of an Incentive Share Option shall
not be less than the Fair Market Value of a Share on the date the Option is
awarded under the Plan and, with respect to an employee who owns on the Date of
Grant more than 10% of the Company's Shares, shall not be less than 110% of its
Fair Market Value on such date. The price at which a Share may be purchased
pursuant to the exercise of any Non-Qualified Share Option shall not be less
than 100% of its Fair Market Value on the date the Option is awarded under the
Plan.
(c) Expiration Date. Subject to earlier termination as provided in
paragraph 16, the "Expiration Date" with respect to an Option or any portion
thereof granted under paragraph 3(a) means the date established by the
Committee at the Date of Grant, but in no event later than the date which is 10
years after the date on which the Option is granted. If the employment of a
Grantee who is an employee of the Company or any of its Subsidiaries terminates
for cause (as determined by the Committee in its discretion), his Option shall
expire immediately. If such employment terminates other than for cause and
other than because of circumstances described in the last sentence of paragraph
(d)(i) below, his Option shall not thereafter become exercisable with respect
to any additional Shares, and his Option shall expire three months after the
date on which his employment terminated, but no later than the Expiration Date.
If such employment terminates because of the employee's death, his Option
shall be exercisable by the person or persons to whom that right passes by will
or by the laws of decent and distribution for a period of
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<PAGE> 5
12 months after the date of death (at which time it will expire), but no later
than the Expiration Date. The Expiration Date with respect to an Option or
any portion thereof granted under paragraph 3(b) means the date which is 10
years after the date on which the Option is granted. All rights to purchase
Shares pursuant to an Option shall cease as of the Option's Expiration Date.
(d) Exercise of Options. The following paragraphs address specific terms
that control a Grantee's right to exercise Options:
(i) Each Option granted under paragraph 3(a) shall be exercisable, either
in whole or in part, at such time or times as shall be determined by the
Committee at the time the Option is granted or at such earlier times as the
Committee shall subsequently determine, but in no event later than the Option's
Expiration Date. The Committee may establish performance goals to be achieved
within such periods as may be selected by it in its sole discretion, using such
measures of the performance of the Company and/or its Subsidiaries as it may
select. Notwithstanding the foregoing, an Option granted under the Plan shall
be immediately exercisable in the event of the termination of a Grantee's
employment (A) because of the Grantee's Disability or death, (B) in connection
with the Grantee's retirement at or after age 62, or (C) upon a Change in
Control.
(ii) Shares with respect to which Incentive Share Options are exercisable
for the first time by a Grantee during any calendar year may not exceed
$100,000. Any Options that become exercisable in excess of such amount shall
be deemed to be a Non-Qualified Share Option to the extent of such excess.
(iii) Each Option granted under paragraph 3(b) shall be exercisable,
either in whole or in part, (A) with respect to one-third (1/3) of the Shares
subject to such Option (rounded to the nearest whole share) at any time on or
after six months from the Date of Grant, (B) with respect to an additional
one-third (1/3) of the Shares subject to such Option (rounded to the nearest
whole share) at any time on or after the first anniversary of the Date of
Grant, and (C) with respect to the remaining Shares, at any time on or after
the second anniversary of the Date of Grant, but in each case, no later than
the Option's Expiration Date.
(iv) Subject to the foregoing, a Grantee may exercise an Option or SAR by
giving written notice thereof prior to the Option's Expiration Date to the
Secretary of the Company at the principal executive offices of the Company.
Contemporaneously with the delivery of notice with respect to exercise of an
Option, the full purchase price of the Shares purchased pursuant to the
exercise of the Option, together with any required state or federal withholding
taxes, shall be paid in cash, by tender of share certificates in proper form
for transfer to the Company valued at the Fair Market Value of the Shares on
the preceding day, by any combination of the foregoing, or with any other
consideration reasonably acceptable to the Committee.
(e) Parties Entitled to Exercise Options. An Option may be exercised only
by the Grantee, or by a legatee or legatees of such Option under his last will,
by his executors, personal representatives or distributees, by an assignee or
assignees, or by a transferee to the extent that a transfer of the Option is
permitted pursuant to paragraph 11(b).
7. Share Appreciation Rights. The Committee may grant an SAR to a
Grantee who is awarded an Option under paragraph 3(a) or 3(b) or to any other
key employee, officer, trustee
5
<PAGE> 6
or consultant of the Company. Each SAR shall be subject to such
restrictions and conditions and other terms as the Committee may specify when
the SAR is granted.
(a) Grant. An SAR granted at the time a related Option is granted may be
granted either in addition to the related Option ("Non-Tandem SAR") or in
tandem with the related Option ("Tandem SAR"). An SAR not related to an Option
will be subject to the provisions applicable to Non-Tandem SARs. At the time a
Non-Tandem SAR is granted, the Committee shall specify the base price of the
Shares to be used in connection with the calculation described in subsection
(b)(i) below. The base price of a Non-Tandem SAR shall be a percentage (as low
as zero) of the Fair Market Value of a Share on the date of grant. The number
of Shares subject to a Tandem SAR shall not exceed one for each Share subject
to the related Option. No Tandem SAR may be granted to a key employee in
connection with an Incentive Share Option in a manner that will disqualify the
Incentive Share Option under Section 422 of the Code unless the key employee
consents thereto.
(b) Value. Upon exercise, an SAR shall entitle the Grantee to receive
from the Company the number of Shares (or cash equivalent thereof) having an
aggregate Fair Market Value equal to the following:
(i) in the case of a Non-Tandem SAR, the excess of the Fair Market Value
of one Share as of the date on which the SAR is exercised over the base Share
price specified in such SAR, multiplied by the number of Shares then subject to
the SAR, or the portion thereof being exercised.
(ii) in the case of a Tandem SAR, the excess of the Fair Market Value of
one Share as of the date on which the SAR is exercised over the exercise price
per Share specified in such Option, multiplied by the number of Shares then
subject to the Option, or the portion thereof as to which the SAR is being
exercised.
Cash shall be delivered in lieu of any fractional shares. The Committee, in
its discretion, shall be entitled to cause the Company to elect to settle any
part or all of its obligation arising out of the exercise of an SAR by the
payment of cash in lieu of all or part of the Shares it would otherwise be
obligated to deliver in an amount equal to the Fair Market Value of such Shares
on the date of exercise.
(c) Exercise of Tandem SARs. A Tandem SAR shall be exercisable during
such time, and be subject to such restrictions and conditions and other terms,
as the Committee shall specify at the time such Tandem SAR is granted which
restrictions and conditions and other terms need not be the same for all
Grantees. Notwithstanding the preceding sentence, the Tandem SAR shall be
exercisable only at such time as the Option to which it relates is exercisable
and shall be subject to the restrictions and conditions and other terms
applicable to such Option. Upon the exercise of a Tandem SAR, the unexercised
Option, or the portion thereof to which the exercised portion of the Tandem SAR
is related, shall expire. The exercise of any Option shall cause the
expiration of the Tandem SAR related to such Option, or portion thereof, that
is exercised.
6
<PAGE> 7
(d) Exercise of Non-Tandem SARs.
(i) A Non-Tandem SAR granted under the Plan shall be exercisable during
such time, and shall be subject to such restrictions and conditions and other
terms, as the Committee shall specify at the time the Non-Tandem SAR is
granted. The Committee may establish performance goals to be achieved within
such periods as may be selected by it in its sole discretion, using such
measures of the performance of the Company and/or its Subsidiaries as it may
select. Without limiting the generality of the foregoing, the Committee may
specify a minimum number of full shares with respect to which any exercise of a
Non-Tandem SAR must be made.
(ii) Subject to earlier termination as provided in the last sentence of
this paragraph, a Non-Tandem SAR granted under the Plan shall expire on the
date specified by the Committee, provided that such date shall not be more than
10 years after the Date of Grant. The Committee shall specify at the time each
Non-Tandem SAR is granted, the time during which the Non-Tandem SAR may be
exercised prior to its expiration and other provisions relevant to the SAR.
The Committee, in its discretion, shall have the power to accelerate the dates
for exercise of any or all Non-Tandem SARs or any part thereof, granted under
the Plan. Notwithstanding the foregoing, any Non-Tandem SAR shall expire,
notwithstanding any restrictions and conditions that the Committee may impose,
following a termination of his employment with the Company or its Subsidiaries
in the same manner as an Option held by such Grantee would expire pursuant to
the provisions of paragraph 6(c).
(e) Acceleration. Notwithstanding any restrictions or conditions imposed
on an SAR pursuant to paragraphs (c) or (d)(i) above, an SAR granted under the
Plan shall be immediately exercisable in the event of the termination of the
Grantee's employment (A) because of the Grantee's Disability or death, (B) in
connection with the Grantee's retirement at or after age 62, or (C) upon a
Change in Control.
(f) Parties Entitled to Exercise SARs. An SAR may be exercised only by
the Grantee, or by a legatee or legatees of such SAR under his last will, by
his executors, personal representatives or distributees, by an assignee or
assignees, or by a transferee to the extent that a transfer of the SAR is
permitted pursuant to paragraph 11(b).
(g) Settlement of SARs. As soon as is reasonably practicable after the
exercise of an SAR, the Company shall (i) issue, in the name of the Grantee,
Share certificates representing the total number of full Shares to which the
Grantee is entitled pursuant to subparagraph 7(b) hereof and cash in an amount
equal to the Fair Market Value, as of the date of exercise, of any resulting
fractional Shares, and (ii) if the Committee causes the Company to elect to
settle all or part of its obligations arising out of the exercise of the SAR in
cash, deliver to the Grantee an amount in cash equal to the Fair Market Value,
as of the date of exercise, of the Shares it would otherwise be obligated to
deliver.
8. Dividend Equivalents. A Dividend Equivalent shall be related to a
number of Shares specified at the time of grant and shall entitle the holder to
cash payments that equal the cash dividend, if any, paid with respect to such
Shares provided that the Dividend Equivalent is outstanding on the record date
thereof and that it is not subject to any condition limiting the Grantee's
right to receive such payments. A Dividend Equivalent shall be subject to such
restrictions and conditions and other terms including those relating to
expiration or forfeiture, as
7
<PAGE> 8
the Committee shall specify at the time such Dividend Equivalent is granted.
A Dividend Equivalent granted pursuant to subsection 3(c) shall not be subject
to any restriction or condition limiting the Grantee's right to receive the cash
payment discussed above from and after the second anniversary of its Date of
Grant. Notwithstanding the foregoing, any restriction or condition (other than
expiration or forfeiture) limiting the Grantee's right to receive the cash
payment described above shall lapse in the event of (A) the termination of the
Grantee's employment because of the Grantee's Disability or death, (B) the
termination of the Grantee's employment in connection with the Grantee's
retirement at or after age 62, or (C) upon a Change in Control.
9. Withholding. Whenever under the Plan a Grantee recognizes income with
respect to any Share Awards, Options, SARs or Dividend Equivalents (the
"Award") hereunder, the Company shall have the right to withhold from amounts
payable to such recipient in any manner, as necessary to satisfy all federal,
state and local payroll tax withholding requirements. Without limiting the
generality of the foregoing, (i) a Grantee may elect to satisfy all or part of
the foregoing withholding requirements by delivery of unrestricted Shares owned
by the Grantee having a Fair Market Value (determined as of the date of such
delivery by the Grantee) equal to the amount to be so withheld; and (ii) the
Committee may permit any such delivery to be made by withholding Shares
otherwise issuable pursuant to the award giving rise to the tax withholding
obligation (in which event the date of delivery shall be deemed the date such
award was exercised). If Shares are being surrendered by or withheld for a
Grantee who is subject to Section 16 of the Act, the foregoing shall be
accomplished in a manner consistent with Rule 16b-3e thereunder.
10. Compliance with Applicable Laws. Notwithstanding any other provision
in the Plan, the Company shall have no liability to issue any Shares under the
Plan unless such issuance would comply with all applicable laws and applicable
requirements of any securities exchange or similar entity. Prior to the
issuance of any Shares under the Plan, the Company may require a written
statement that the recipient is acquiring the Shares for investment and not for
the purpose of or with the intention of distributing the Shares.
11. Transferability. This paragraph 11 shall govern the transferability
of the various benefits under this Plan.
(a) Share Awards. The Shares subject to Share Awards granted under
paragraph 3(a) or 3(c) shall not be sold, assigned, pledged or otherwise
transferred, voluntarily or involuntarily, by the Grantee, while they are
subject to the restrictions described in paragraph 5(a).
(b) Options, SARs and Dividend Equivalents. Options, SARs and Dividend
Equivalents granted under the Plan are not transferable except (i) by will or
by the laws of descent and distribution or, to the extent not inconsistent with
the applicable provisions of the Code, pursuant to a qualified domestic
relations order (as that term is defined in the Code); and (ii) a Grantee may
transfer all or part of an Option that is not an Incentive Share Option, or an
SAR, to the Grantee's spouse, child or children, grandchild or grandchildren,
or other relatives or to a trust for the benefit of the Grantee and/or any of
the foregoing; provided that the transferee thereof shall hold such Option or
SAR subject to all of the conditions and restrictions contained herein and
otherwise applicable to the Option or SAR, and that, as a condition to such
transfer, the Company may require the transferee to agree in writing (in a form
acceptable to the Company) that the transfer is subject to such conditions and
restrictions. Except as provided in paragraphs 6(e) and
8
<PAGE> 9
7(f), Options and SARs may be exercised during the lifetime of the Grantee only
by the Grantee and, after the death of the Grantee, only as provided herein.
12. Employment and Shareholder Status. The Plan does not constitute a
contract of employment or continued service, and selection as a Grantee will
not give any employee or Grantee the right to be retained in the employ of the
Company or any Subsidiary or the right to continue as a trustee of the Company.
Any Option or a Share Award granted under the Plan shall not confer upon the
holder thereof any right as a shareholder of the Company prior to the issuance
of Shares pursuant to the exercise thereof. No person entitled to exercise any
Option or SAR granted under the Plan shall have any of the rights or privileges
of a shareholder of record with respect to any Shares issuable upon exercise of
such Option or SAR until certificates representing such Shares have been issued
and delivered. If the redistribution of Shares is restricted pursuant to
paragraph 13, certificates representing such Shares may bear a legend referring
to such restrictions.
13. Adjustments to Number of Shares Subject to the Plan and to Terms of
Options, SARs and Dividend Equivalents. Subject to the following provisions of
this paragraph 13, in the event of any change in the outstanding Shares by
reason of any share dividend, split, recapitalization, merger, consolidation,
combination, exchange of shares or other similar corporate change, the
aggregate number and kind of Shares reserved for issuance under the Plan or
subject to Options, SARs or Dividend Equivalents outstanding or to be granted
under the Plan shall be proportionately adjusted so that the value of each such
unit shall not be changed, and the terms of any outstanding Option, SAR or
Dividend Equivalent may be adjusted by the Committee in such manner as it deems
equitable, provided that in no event shall the Option price for a Share be
adjusted below the par value of such Share, nor shall any fraction of a Share
be issued upon the exercise of an Option. Shares subject to a Share Award
shall be treated in the same manner as other outstanding Shares; provided that
any conditions and restrictions applicable to a Share Award shall continue to
apply to any Shares, other security or other consideration received in
connection with the foregoing.
14. Agreement with Company. At the time of a grant, the Committee may
require a Grantee to enter into an agreement with the Company in a form
specified by the Committee agreeing to the terms and conditions of the Plan and
to such additional terms and conditions, not inconsistent with the Plan, as the
Committee may, in its sole discretion, prescribe.
15. Term of Plan. The Plan is effective July 1, 1997. No Incentive Share
Options may be granted under the Plan after July 1, 2007 or, if earlier, the
date on which the Plan is terminated pursuant to paragraph 16.
16. Amendment and Termination of Plan. Subject to any approval of the
shareholders of the Company which may be required by law, the Board of Trustees
of the Company may at any time amend, suspend or terminate the Plan. No
amendment, suspension or termination of the Plan shall alter or impair any
Share Award, Option, SAR or Dividend Equivalent previously granted under the
Plan without the consent of the holder thereof. No amendment requiring
shareholder approval under Section 240.16b-3 of the Act, Treasury Regulation
Section 1.162-27 or Section 422 of the Code shall be valid unless such
shareholder approval is secured as provided therein.
9
<PAGE> 1
Exhibit 5
[Rosenberg & Liebentritt, P.C. Letterhead]
August 13, 1997
Board of Trustees
Equity Office Properties Trust
Two North Riverside Plaza
Suite 2200
Chicago, Illinois 60606
Ladies and Gentlemen:
We have acted as counsel for Equity Office Properties Trust, a Maryland
real estate investment trust (the "Company"), in connection with the proposed
issuance by the Company of awards of, or options to purchase, 11,121,786 common
shares of beneficial interest of the Company, $0.01 par value per share (the
"Common Shares"), in connection with the adoption by the Company of the Equity
Office Properties Trust 1997 Share Option and Share Award Plan (the "Plan"),
all of which Common Shares are being registered pursuant to the filing of a
Registration Statement on Form S-8 (the "Registration Statement") under the
Securities Act of 1933, as amended, with the Securities and Exchange
Commission. This opinion letter is furnished to you at your request to enable
the Company to fulfill the requirements of Item 601(b)(5) of Regulation S-K, 17
C.F.R. Section 229.601(b)(5), in connection with the Registration Statement.
For purposes of this opinion letter, we have examined copies of the
following documents:
1. An executed copy of the Registration Statement.
2. The Articles of Amendment and Restatement of Declaration of Trust of
the Company.
3. The Bylaws of the Company.
4. The Plan.
5. Certain minutes or unanimous written consents of the Board of Trustees
and the shareholders of the Company relating to the Plan.
6. The forms of option agreements (the "Option Agreements") and Share
Awards (as defined in the Plan).
<PAGE> 2
Board of Trustees
Equity Office Properties Trust
August 13, 1997
Page 2
7. Such other records, certificates, documents and matters of law as we
have deemed necessary to render this opinion.
In our examination of the aforesaid documents, we have assumed the
genuineness of all signatures, the legal capacity of natural persons, the
authenticity, accuracy and completeness of all document submitted to us, the
authenticity of all original documents and the conformity to authentic original
documents of all documents submitted to us as copies (including telecopies).
This opinion letter is given and all statements herein are made, in the context
of the foregoing.
We call your attention to the fact that our firm only requires lawyers to
be qualified to practice law in the State of Illinois and, in rendering the
opinions set forth herein, we express no opinion with respect to any laws
relevant to this opinion other than the laws and regulations identified herein.
With respect to the opinion below that relates to the laws of the State of
Maryland, with your consent, we rely solely on the opinion of Hogan & Hartson
L.L.P., a copy of which is attached hereto as Exhibit A.
Based upon, subject to and limited by the foregoing, we are of the opinion
that, when issued in accordance with the terms of the Plan, and, with respect
to Share Awards, subject to the forfeiture provisions set forth in Section 5 of
the Plan, the Common Shares will be validly issued, fully paid and
nonassessable under Title 8 of the Corporations and Associations Article of the
Annotated Code of Maryland.
We assume no obligation to advise you of any changes in the foregoing
subsequent to the delivery of this opinion letter. This opinion letter has
been prepared solely for your use in connection with the filing of the
Registration Statement on the date of this opinion letter and should not be
quoted in whole or in part or otherwise be referred to, nor filed with or
furnished to any governmental agency or other person or entity, without the
prior written consent of this firm.
We hereby consent to the filing of this opinion letter as Exhibit 5 to the
Registration Statement. In giving this consent, we do not thereby admit that
we are an "expert" within the meaning of the Securities Act of 1933, as
amended.
Very truly yours,
ROSENBERG & LIEBENTRITT, P.C.
/s/ Ruth Pinkham Haring
-----------------------
Vice President
<PAGE> 3
EXHIBIT A
Hogan & Hartson L.L.P.
555 Thirteenth Street, N.W.
Washington, D.C. 20004-1109
August 13, 1997
Rosenberg & Liebentritt, P.C.
Two North Riverside Plaza
Suite 1600
Chicago, Illinois 60606
Ladies and Gentlemen:
We are acting as special Maryland counsel to Equity Office Properties
Trust, a Maryland real estate investment trust (the "Company"), in connection
with its registration statement on Form S-8 (the "Registration Statement"),
filed with the Securities and Exchange Commission relating to 11,121,786 shares
of the Company's common shares of beneficial interest, par value $.01 per share
(the "Shares"), issuable in connection with the Company's 1997 Share Option and
Share Award Plan (the "1997 Option Plan"). This opinion letter is furnished to
you at your request to enable the Company to fulfill the requirements of Item
601(b)(5) of Regulation S-K, 17 C.F.R. Section 229.601(b)(5), in connection
with the Registration Statement.
For purposes of this opinion letter, we have examined copies of the
following documents:
1. A copy of the Registration Statement.
2. The Articles of Amendment and Restatement of Declaration of
Trust of the Company (the "Declaration of Trust"), as certified by the
Maryland State Department of Assessments and Taxation on July 9, 1997,
and the Assistant Secretary of the Company on the date hereof as being
complete, accurate and in effect.
3. The Bylaws of the Company, as certified by the Assistant
Secretary of the Company on the date hereof as being complete,
accurate and in effect.
<PAGE> 4
Rosenberg & Liebentritt, P.C.
August 13, 1997
Page 2
4. Resolution of the Board of Trustees of the Company dated May 5,
1997 and consent of the sole shareholder dated June 12, 1997, as
certified by the Assistant Secretary of the Company on the date hereof
as being complete, accurate and in effect, approving and adopting the
1997 Option Plan.
In our examination of the aforesaid documents, we have assumed the
genuineness of all signatures, the legal capacity of natural persons, the
authenticity, accuracy and completeness of all documents submitted to us, the
authenticity of all original documents and the conformity to authentic original
documents of all documents submitted to us as copies (including telecopies).
This opinion letter is given, and all statements herein are made, in the
context of the foregoing.
This opinion letter is based as to matters of law solely on Title 8 of the
Corporations and Associations Article of the Annotated Code of Maryland (the
"Maryland REIT Statute"). We express no opinion herein as to any other laws,
statutes, regulations, or ordinances.
Based upon, subject to and limited by the foregoing, we are of the opinion
that, when issued in accordance with the terms of the 1997 Option Plan, and,
with respect to Share Awards (as defined in the 1997 Option Plan), subject to
the forfeiture provisions set forth in Section 5 of the 1997 Option Plan, the
Shares will be validly issued, fully paid and nonassessable under the Maryland
REIT Statute.
We assume no obligation to advise you of any changes in the foregoing
subsequent to the delivery of this opinion letter. This opinion letter has
been prepared solely for your use in connection with the filing of the
Registration Statement on the date of this opinion letter and should not be
quoted in whole or in part or otherwise be referred to, nor filed with or
furnished to any governmental agency or other person or entity, without the
prior written consent of this firm.
<PAGE> 5
Rosenberg & Liebentritt, P.C.
August 13, 1997
Page 3
We hereby consent to the filing of this opinion letter as Exhibit 5 to the
Registration Statement. In giving this consent, we do not thereby admit that
we are an "expert" within the meaning of the Securities Act of 1933, as
amended.
Very truly yours,
HOGAN & HARTSON L.L.P.
