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As filed with the Securities and Exchange Commission on June 30, 1998
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- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): MAY 15, 1998
EQUITY OFFICE PROPERTIES TRUST
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
MARYLAND 1-13115 36-4151656
(STATE OR OTHER JURISDICTION (COMMISSION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) FILE NUMBER) IDENTIFICATION NO.)
TWO NORTH RIVERSIDE PLAZA, SUITE 2200
CHICAGO, ILLINOIS 60606
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrant's telephone number, including area code: (312) 466-3300
NOT APPLICABLE
(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
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ITEM 5. OTHER EVENTS.
On March 30, 1998, the Board of Trustees (the "Board") of Equity Office
Properties Trust (the "Company") approved Amendment No. 1 to the Company's
Amended and Restated 1997 Share Option and Share Award Plan (the "Plan").
Amendment No. 1 to the Plan increases the maximum number of the Company's
common shares of beneficial interest ("Shares") for which Share Awards,
Options, SARs and Dividend Equivalents may be granted under the Plan to 6.8%
of the outstanding Shares calculated on a fully-diluted basis on the first
day of each calendar year, subject to adjustment upon the occurrence of
certain events (the "Maximum Number"). On May 15, 1998, the Company's
shareholders approved Amendment No. 1 to the Plan. Also on May 15, 1998, the
Board approved Amendment No. 2 to the Plan which limits the number of Shares
that may be subject to Share Awards under the Plan to no more than one half
of the Maximum Number of Shares.
A copy of the Plan, including Amendment Nos. 1 and 2, is attached hereto
as exhibit 99.1. All capitalized terms used in this report but not otherwise
defined herein have the meanings ascribed to such terms in the attached Plan.
On May 15, 1998, the Board approved Amendment No. 1 to the Company's
Bylaws, which specifies certain committees of the Board. A copy of the
Amended Bylaws, including Amendment No. 1, is attached hereto as Exhibit 3.2.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
Exhibit
Number Exhibit
------- -------
3.2 Amended Bylaws of Equity Office Properties Trust,
including Amendment No. 1 to the Bylaws Effective May 15,
1998
99.1 Amended and Restated Equity Office Properties Trust 1997
Share Option and Share Award Plan (as Amended and
Restated Effective July 1, 1997), including Amendment
No. 1 and Amendment No. 2 to the Plan, each Effective
May 15, 1998.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
EQUITY OFFICE PROPERTIES TRUST
Date: June 30, 1998 By: /s/ Richard D. Kincaid
-----------------------------------
Richard D. Kincaid, Executive Vice
President and Chief Financial Officer
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EXHIBIT 3.2
EQUITY OFFICE PROPERTIES TRUST
BYLAWS *
ARTICLE I
OFFICES
Section 1. PRINCIPAL OFFICE. The principal office of Equity Office
Properties Trust (the "Trust") shall be located at such place or places as the
Trustees may designate.
Section 2. ADDITIONAL OFFICES. The Trust may have additional offices at
such places as the Trustees may from time to time determine or the business of
the Trust may require.
ARTICLE II
MEETINGS OF SHAREHOLDERS
Section 1. PLACE. All meetings of shareholders shall be held at the
principal office of the Trust or at such other place within the United States as
shall be stated in the notice of the meeting.
Section 2. ANNUAL MEETING. An annual meeting of the shareholders for the
election of Trustees and the transaction of any business within the powers of
the Trust shall be held during the month of May of each year, after the delivery
of the annual report referred to in Section 12 of this Article II, at a
convenient location and on proper notice, on a date and at the time set by the
Trustees, beginning with the year 1998. Failure to hold an annual meeting does
not invalidate the Trust's existence or affect any otherwise valid acts of the
Trust.
Section 3. SPECIAL MEETINGS. The chairman of the board or the president
or one-third of the Trustees may call special meetings of the shareholders.
Special meetings of shareholders shall also be called by the secretary upon the
written request of the holders of shares entitled to cast not less than a
majority of all the votes entitled to be cast at such meeting. Such request
shall state the purpose of such meeting and the matters proposed to be acted on
at such meeting. Within ten (10) days of the receipt of such a request, the
secretary shall inform such shareholders of the reasonably estimated cost of
preparing and mailing notice of the meeting (including all proxy materials that
may be required in connection therewith) and, upon payment by such shareholders
to the Trust of such costs, the secretary shall, within thirty (30) days of
- -------------------
* As amended by Amendment No. 1 on May 15, 1998
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such payment, or such longer period as may be necessitated by compliance with
any applicable statutory or regulatory requirements, give notice to each
shareholder entitled to notice of the meeting.
Unless requested by shareholders entitled to cast a majority of all the
votes entitled to be cast at such meeting, a special meeting need not be called
to consider any matter which is substantially the same as a matter voted on at
any meeting of the shareholders held during the preceding twelve months.
Section 4. NOTICE. Not less than ten nor more than 90 days before each
meeting of shareholders, the secretary shall give to each shareholder
entitled to vote at such meeting and to each shareholder not entitled to vote
who is entitled to notice of the meeting written or printed notice stating
the time and place of the meeting and, in the case of a special meeting or as
otherwise may be required by any statute, the purpose for which the meeting
is called, either by mail or by presenting it to such shareholder personally
or by leaving it at his residence or usual place of business. If mailed,
such notice shall be deemed to be given when deposited in the United States
mail addressed to the shareholder at his post office address as it appears on
the records of the Trust, with postage thereon prepaid.
Section 5. SCOPE OF NOTICE. Any business of the Trust may be
transacted at an annual meeting of shareholders without being specifically
designated in the notice, except such business as is required by any statute
to be stated in such notice. No business shall be transacted at a special
meeting of shareholders except as specifically designated in the notice.
Section 6. ORGANIZATION. At every meeting of the shareholders, the
Chairman of the Board, if there be one, shall conduct the meeting or, in the
case of vacancy in office or absence of the Chairman of the Board, one of the
following officers present shall conduct the meeting in the order stated: the
Vice Chairman of the Board, if there be one, the President, the Vice
Presidents in their order of rank and seniority, or a Chairman chosen by the
shareholders entitled to cast a majority of the votes which all shareholders
present in person or by proxy are entitled to cast, shall act as Chairman,
and the Secretary, or, in his absence, an assistant secretary, or in the
absence of both the Secretary and assistant secretaries, a person appointed
by the Chairman shall act as Secretary.
Section 7. QUORUM. At any meeting of shareholders, the presence in
person or by proxy of shareholders entitled to cast a majority of all the
votes entitled to be cast at such meeting shall constitute a quorum; but this
section shall not affect any requirement under any statute or the declaration
of trust ("Declaration of Trust") for the vote necessary for the adoption of
any measure. If, however, such quorum shall not be present at any meeting of
the shareholders, the shareholders entitled to vote at such meeting, present
in person or by proxy, shall have the power to adjourn the meeting from time
to time to a date not more than 120 days after the original record date
without notice other than announcement at the meeting. At such adjourned
meeting at which a quorum shall be present, any business may be transacted
which might have been transacted at the meeting as originally notified.
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Section 8. VOTING. A plurality of all the votes cast at a meeting of
shareholders duly called and at which a quorum is present shall be sufficient
to elect a Trustee. Each share may be voted for as many individuals as there
are Trustees to be elected and for whose election the share is entitled to be
voted. A majority of the votes cast at a meeting of shareholders duly called
and at which a quorum is present shall be sufficient to approve any other
matter which may properly come before the meeting, unless more than a
majority of the votes cast is required herein or by statute or by the
Declaration of Trust. Unless otherwise provided in the Declaration of Trust,
each outstanding share, regardless of class, shall be entitled to one vote on
each matter submitted to a vote at a meeting of shareholders.
Section 9. PROXIES. A shareholder may cast the votes entitled to be cast
by the shares owned of record by him either in person or by proxy executed in
writing by the shareholder or by his duly authorized attorney in fact. Such
proxy shall be filed with the Secretary of the Trust before or at the time of
the meeting. No proxy shall be valid after eleven months from the date of its
execution, unless otherwise provided in the proxy.
Section 10. VOTING OF SHARES BY CERTAIN HOLDERS. Shares of the Trust
registered in the name of a corporation, partnership, trust or other entity,
if entitled to be voted, may be voted by the president or a vice president, a
general partner or trustee thereof, as the case may be, or a proxy appointed
by any of the foregoing individuals, unless some other person who has been
appointed to vote such shares pursuant to a bylaw or a resolution of the
governing board of such corporation or other entity or agreement of the
partners of the partnership presents a certified copy of such bylaw,
resolution or agreement, in which case such person may vote such shares. Any
trustee or other fiduciary may vote shares registered in his name as such
fiduciary, either in person or by proxy.
Shares of the Trust directly or indirectly owned by it shall not be voted
at any meeting and shall not be counted in determining the total number of
outstanding shares entitled to be voted at any given time, unless they are held
by it in a fiduciary capacity, in which case they may be voted and shall be
counted in determining the total number of outstanding shares at any given time.
The Trustees may adopt by resolution a procedure by which a shareholder
may certify in writing to the Trust that any shares registered in the name of
the shareholder are held for the account of a specified person other than the
shareholder. The resolution shall set forth the class of shareholders who
may make the certification, the purpose for which the certification may be
made, the form of certification and the information to be contained in it; if
the certification is with respect to a record date or closing of the share
transfer books, the time after the record date or closing of the share
transfer books within which the certification must be received by the Trust;
and any other provisions with respect to the procedure which the Trustees
consider necessary or desirable. on receipt of such certification, the person
specified in the certification shall be regarded as, for the purposes set
forth in the certification, the shareholder of record of the specified shares
in place of the shareholder who makes the certification.
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Notwithstanding any other provision contained herein or in the
Declaration of Trust or these Bylaws, Title 3, Subtitle 7 of the Corporations
and Associations Article of the Annotated Code of Maryland (or any successor
statute) shall not apply to any acquisition by any person of shares of
beneficial interest of the Trust. This section may be repealed, in whole or
in part, at any time, whether before or after an acquisition of control
shares and, upon such repeal, may, to the extent provided by any successor
bylaw, apply to any prior or subsequent control share acquisition.
Section 11. INSPECTORS. At any meeting of shareholders, the chairman
of the meeting may appoint one or more persons as inspectors for such
meeting. Such inspectors shall ascertain and report the number of shares
represented at the meeting based upon their determination of the validity and
effect of proxies, count all votes, report the results and perform such other
acts as are proper to conduct the election and voting with impartiality and
fairness to all the shareholders.
Each report of an inspector shall be in writing and signed by him or by
a majority of them if there is more than one inspector acting at such
meeting. If there is more than one inspector, the report of a majority shall
be the report of the inspectors. The report of the inspector or inspectors
on the number of shares represented at the meeting and the results of the
voting shall be PRIMA FACIE evidence thereof.
Section 12. REPORTS TO SHAREHOLDERS. The Trustees shall submit to the
shareholders at or before the annual meeting of shareholders a report of the
business and operations of the Trust during such fiscal year, containing a
balance sheet and a statement of income and surplus of the Trust, accompanied
by the certification of an independent certified public accountant, and such
further information as the Trustees may determine is required pursuant to any
law or regulation to which the Trust is subject. Within the earlier of 20
days after the annual meeting of shareholders or 120 days after the end of
the fiscal year of the Trust, the Trustees shall place the annual report on
file at the principal office of the Trust and with any governmental agencies
as may be required by law and as the Trustees may deem appropriate.
Section 13. NOMINATIONS AND PROPOSALS BY SHAREHOLDERS.
(a) ANNUAL MEETINGS OF SHAREHOLDERS. (1) Nominations of
persons for election to the Board of Trustees and the proposal of business to
be considered by the shareholders may be made at an annual meeting of
shareholders (i) pursuant to the Trust's notice of meeting, (ii) by or at the
direction of the Trustees or (iii) by any shareholder of the Trust who was a
shareholder of record both at the time of giving of notice provided for in
this Section 13 (a) and at the time of the annual meeting, who is entitled to
vote at the meeting and who complied with the notice procedures set forth in
this Section 13(a).
(2) For nominations or other business to be properly brought
before an annual meeting by a shareholder pursuant to clause (iii) of
paragraph (a) (1) of this Section 13, the shareholder must have given timely
notice thereof in writing to the Secretary of the Trust and such other
business must otherwise be a proper matter for action by shareholders. To be
timely, a shareholder's notice shall be delivered to the Secretary at the
principal executive offices of the Trust not later than the close of
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business on the 60th day nor earlier than the close of business on the 90th
day prior to the first anniversary of the preceding year's annual meeting;
provided, however, that in the event that the date of the annual meeting is
advanced by more than 30 days or delayed by more than 60 days from such
anniversary date or if the Trust has not previously held an annual meeting,
notice by the shareholder to be timely must be so delivered not earlier than
the close of business on the 90th day prior to such annual meeting and not
later than the close of business on the later of the 60th day prior to such
annual meeting or the tenth day following the day on which public
announcement of the date of such meeting is first made by the Trust. In no
event shall the public announcement of a postponement or adjournment of an
annual meeting to a later date or time commence a new time period for the
giving of a shareholder's notice as described above. Such shareholder's
notice shall set forth as to each person whom the shareholder proposes to
nominate for election or reelection as a Trustee all information relating to
such person that is required to be disclosed in solicitations of proxies for
election of Trustees in an election contest, or is otherwise required, in
each case pursuant to Regulation 14A under the Securities Exchange Act of
1934, as amended (the "Exchange Act") (including such person's written
consent to being named in the proxy statement as a nominee and to serving as
a Trustee if elected); (ii) as to any other business that the shareholder
proposes to bring before the meeting, a brief description of the business
desired to be brought before the meeting, the reasons for conducting such
business at the meeting and any material interest in such business of such
shareholder and of the beneficial owner, if any, on whose behalf the proposal
is made; and (iii) as to the shareholder giving the notice and the beneficial
owner, if any, on whose behalf the nomination or proposal is made, (x) the
name and address of such shareholder, as they appear on the Trust's books,
and of such beneficial owner and (y) the number of each class of shares of
the Trust which are owned beneficially and of record by such shareholder and
such beneficial owner.
(3) Notwithstanding anything in the second sentence of
paragraph (a) (2) of this Section 13 to the contrary, in the event that the
number of Trustees to be elected to the Board of Trustees is increased and
there is no public announcement by the Trust naming all of the nominees for
Trustee or specifying the size of the increased Board of Trustees at least 70
days prior to the first anniversary of the preceding year's annual meeting, a
shareholder's notice required by this Section 13(a) shall also be considered
timely, but only with respect to nominees for any new positions created by
such increase, if it shall be delivered to the secretary at the principal
executive offices of the Trust not later than the close of business on the
tenth day following the day on which such public announcement is first made
by the Trust.
(b) SPECIAL MEETINGS OF SHAREHOLDERS. Only such business shall
be conducted at a special meeting of shareholders as shall have been brought
before the meeting pursuant to the Trust's notice of meeting. Nominations of
persons for election to the Board of Trustees may be made at a special
meeting of shareholders at which Trustees are to be elected (i) pursuant to
the Trusts notice of meeting (ii) by or at the direction of the Board of
Trustees or (iii) provided that the Board of Trustees has determined that
Trustees shall be elected at such special meeting, by any shareholder of the
Trust who was a shareholder of record both at the time of giving of notice
provided for in this Section 13(b) and at the time of the special meeting,
who is entitled to vote at the meeting and who complied with the notice
procedures set forth in this Section 13 (b). In
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the event the Trust calls a special meeting of shareholders for the purpose
of electing one or more Trustees to the Board of Trustees, any such
shareholder may nominate a person or persons (as the case may be) for
election to such position as specified in the Trust's notice of meeting, if
the shareholder's notice containing the information required by paragraph (a)
(2) of this Section 13 shall be delivered to the Secretary at the principal
executive offices of the Trust not earlier than the close of business on the
90th day prior to such special meeting and not later than the close of
business on the later of the 60th day prior to such special meeting or the
tenth day following the day on which public announcement is first made of the
date of the special meeting and of the nominees proposed by the Trustees to
be elected at such meeting. In no event shall the public announcement of a
postponement or adjournment of a special meeting to a later date or time
commence a new time period for the giving of a shareholder's notice as
described above.
(c) GENERAL. (1) Only such persons who are nominated in
accordance with the procedures set forth in this Section 13 shall be eligible
to serve as Trustees and only such business shall be conducted at a meeting
of shareholders as shall have been brought before the meeting in accordance
with the procedures set forth in this Section 13. The chairman of the
meeting shall have the power and duty to determine whether a nomination or
any business proposed to be brought before the meeting was made or proposed,
as the case may be, in accordance with the procedures set forth in this
Section 13 and, if any proposed nomination or business is not in compliance
with this Section 13, to declare that such nomination or proposal shall be
disregarded.
(2) For purposes of this Section 13, "public announcement"
shall mean disclosure in a press release reported by the Dow Jones News
Service, Associated Press or comparable news service or in a document
publicly filed by the Trust with the Securities and Exchange Commission
pursuant to Section 13, 14 or 15(d) of the Exchange Act.
(3) Notwithstanding the foregoing provisions of this Section
13, a shareholder shall also comply with all applicable requirements of state
law and of the Exchange Act and the rules and regulations thereunder with
respect to the matters set forth in this Section 13. Nothing in this Section
13 shall be deemed to affect any rights of shareholders to request inclusion
of proposals in, nor any of the rights of the Trust to omit a proposal from,
the Trust's proxy statement pursuant to Rule 14a-8 under the Exchange Act.
Section 14. INFORMAL ACTION BY SHAREHOLDERS. Notwithstanding the
provisions of Section 13 of this Article II, any action required or permitted
to be taken at a meeting of shareholders may be taken without a meeting if a
consent in writing, setting forth such action, is signed by shareholders
entitled to cast a sufficient number of votes to approve the matter, as
required by statute, the Declaration of Trust of the Trust or these Bylaws,
and such consent is filed with the minutes of proceedings of the shareholders.
Section 15. VOTING BY BALLOT. Voting on any question or in any
election may be VIVA VOCE unless the presiding officer shall order or any
shareholder shall demand that voting be by ballot.
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ARTICLE III
TRUSTEES
Section 1. GENERAL POWERS; QUALIFICATIONS; TRUSTEES HOLDING OVER. The
business and affairs of the Trust shall be managed under the direction of its
Board of Trustees. A Trustee shall be an individual at least 21 years of age
who is not under legal disability. In case of failure to elect Trustees at
an annual meeting of the shareholders, the Trustees holding over shall
continue to direct the management of the business and affairs of the Trust
until their successors are elected and qualify.
Section 2. NUMBER. At any regular meeting or at any special meeting
called for that purpose, a majority of the entire Board of Trustees may
establish, increase or decrease the number of Trustees, subject to any
limitations on the number of Trustees set forth in the Declaration of Trust.
Except during the period when a vacancy exists, at least two-thirds of the
Trustees shall be persons who are not executive officers of the Trust or
persons affiliated with Samuel Zell or his affiliates ("Independent
Trustees"). For purposes of this Section, the terms "executive officers" and
"affiliated" shall have the definitions set forth in Rule 405 under the
Securities Act of 1933, as amended.
Section 3. ANNUAL AND REGULAR MEETINGS. An annual meeting of the
Trustees shall be held immediately after and at the same place as the annual
meeting of shareholders, no notice other than this Bylaw being necessary.
The Trustees may provide, by resolution, the time and place, either within or
without the State of Maryland, for the holding of regular meetings of the
Trustees without other notice than such resolution.
Section 4. SPECIAL MEETINGS. Special meetings of the Trustees may be
called by or at the request of the chairman of the board or the president or
by a majority of the Trustees then in office. The person or persons
authorized to call special meetings of the Trustees may fix any place, either
within or without the State of Maryland, as the place for holding any special
meeting of the Trustees called by them.
Section 5. NOTICE. Notice of any special meeting shall be given by
written notice delivered personally, telegraphed, facsimile-transmitted or
mailed to each Trustee at his business or residence address. Personally
delivered or telegraphed notices shall be given at least two days prior to
the meeting. Notice by mail shall be given at least five days prior to the
meeting. Telephone or facsimile-transmission notice shall be given at least
24 hours prior to the meeting. If mailed, such notice shall be deemed to be
given when deposited in the United States mail properly addressed, with
postage thereon prepaid. If given by telegram, such notice shall be deemed
to be given when the telegram is delivered to the telegraph company.
Telephone notice shall be deemed given when the Trustee is personally given
such notice in a telephone call to which he is a party.
Facsimile-transmission notice shall be deemed given upon completion of the
transmission of the message to the number given to the Trust by the Trustee
and receipt of a completed answer-back indicating receipt. Neither the
business to be
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transacted at, nor the purpose of, any annual, regular or
special meeting of the Trustees need be stated in the notice, unless
specifically required by statute or these Bylaws.
Section 6. QUORUM. A majority of the Trustees shall constitute a
quorum for transaction of business at any meeting of the Trustees, provided
that, if less than a majority of such Trustees are present at said meeting, a
majority of the Trustees present may adjourn the meeting from time to time
without further notice, and provided further that if, pursuant to the
Declaration of Trust or these Bylaws, the vote of a majority of a particular
group of Trustees is required for action, a quorum must also include a
majority of such group.
The Trustees present at a meeting which has been duly called and convened
may continue to transact business until adjournment, notwithstanding the
withdrawal of enough Trustees to leave less than a quorum.
Section 7. VOTING. The action of the majority of the Trustees present at
a meeting at which a quorum is present shall be the action of the Trustees,
unless the concurrence of a greater proportion is required for such action by
applicable statute.
Section 8. TELEPHONE MEETINGS. Trustees may participate in a meeting
by means of a conference telephone or similar communications equipment if all
persons participating in the meeting can hear each other at the same time.
Participation in a meeting by these means shall constitute presence in person
at the meeting.
Section 9. INFORMAL ACTION BY TRUSTEES. Any action required or permitted
to be taken at any meeting of the Trustees may be taken without a meeting, if a
consent in writing to such action is signed by each Trustee and such written
consent is filed with the minutes of proceedings of the Trustees.
Section 10. VACANCIES. If for any reason any or all of the Trustees
cease to be Trustees, such event shall not terminate the Trust or affect
these Bylaws or the powers of the remaining Trustees hereunder (even if fewer
than two Trustees remain). Any vacancy (including a vacancy created by an
increase in the number of Trustees) shall be filled, at any regular meeting
or at any special meeting called for that purpose, by a majority of the
Trustees. Any individual so elected as Trustee shall hold office until the
next annual meeting of shareholders.
Section 11. COMPENSATION; FINANCIAL ASSISTANCE.
(a) COMPENSATION. Trustees shall not receive any stated salary
for their services as Trustees but, by resolution of the Trustees, may
receive fixed sums per year and/or per meeting and/or per visit to real
property owned or to be acquired by the Trust and for any service or activity
they performed or engaged in as Trustees. Such fixed sums may be paid either
in cash or in shares of the Trust. Trustees may be reimbursed for expenses
of attendance, if any, at each annual, regular or special meeting of the
Trustees or of any committee thereof; and for their expenses, if any, in
connection with each property visit and any other service or activity
performed or engaged in as Trustees; but nothing herein contained shall be
construed to preclude any Trustees from serving the Trust in any other
capacity and receiving compensation therefor.
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(b) FINANCIAL ASSISTANCE TO TRUSTEES. The Trust may lend money
to, guarantee an obligation of or otherwise assist a Trustee or a trustee or
director of a direct or indirect subsidiary of the Trust; provided, however,
that such Trustee or other person is also an executive officer of the Trust
or of such subsidiary, or the loan, guarantee or other assistance is in
connection with the purchase of Shares. The loan, guarantee or other
assistance may be with or without interest, unsecured, or secured in any
manner that the Board of Trustees approves, including a pledge of shares.
Section 12. REMOVAL OF TRUSTEES. The shareholders may, at any time,
remove any Trustee in the manner provided in the Declaration of Trust.
Section 13. LOSS OF DEPOSITS. No Trustee shall be liable for any loss
which may occur by reason of the failure of the bank, trust company, savings
and loan association, or other institution with whom moneys or shares have
been deposited.
Section 14. SURETY BONDS. Unless required by law, no Trustee shall be
obligated to give any bond or surety or other security for the performance of
any of his duties.
Section 15. RELIANCE. Each Trustee, officer, employee and agent of the
Trust shall, in the performance of his duties with respect to the Trust, be
fully justified and protected with regard to any act or failure to act in
reliance in good faith upon the books of account or other records of the Trust,
upon an opinion of counsel or upon reports made to the Trust by any of its
officers or employees or by the adviser, accountants, appraisers or other
experts or consultants selected by the Trustees or officers of the Trust,
regardless of whether such counsel or expert may also be a Trustee.
Section 16. INTERESTED TRUSTEE TRANSACTIONS. Section 2-419 of the
Maryland General Corporation Law (the "MGCL") shall be available for and apply
to any contract or other transaction between the Trust and any of its Trustees
or between the Trust and any other trust, corporation, firm or other entity in
which any of its Trustees is a trustee or director or has a material financial
interest.
Section 17. CERTAIN RIGHTS OF TRUSTEES, OFFICERS, EMPLOYEES AND AGENTS.
The Trustees shall have no responsibility to devote their full time to the
affairs of the Trust. Any Trustee or officer, employee or agent of the Trust
(other than a full-time officer, employee or agent of the Trust), in his
personal capacity or in a capacity as an affiliate, employee, or agent of any
other person, or otherwise, may have business interests and engage in business
activities similar or in addition to those of or relating to the Trust.)
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ARTICLE IV **
COMMITTEES
Section 1. NUMBER, TENURE AND QUALIFICATION. The Trustees may appoint
from among its members an Audit Committee, a Compensation Committee and other
committees, each composed of at least three Trustees, to serve at the pleasure
of the Trustees. A majority of the Trustees on the Compensation Committee and
all of the Trustees on the Audit Committee shall be Independent Trustees. In
addition, the Trustees may from time to time appoint from among its members a
Pricing Committee composed of one or more Trustees to serve at the pleasure of
the Trustees.
Section 2. POWERS. The Trustees may delegate to committees appointed
under Section 1 of this Article any of the powers of the Trustees, except as
prohibited by law.
Section 3. MEETINGS. In the absence of any member of any such
committee, the members thereof present at any meeting, whether or not they
constitute a quorum, may appoint another Trustee to act in the place of such
absent member. Notice of committee meetings shall be given in the same manner
as notice for special meetings of the Board of Trustees.
One-third, but not less than two (except for one-member committees), of
the members of any committee shall be present in person at any meeting of
such committee in order to constitute a quorum for the transaction of
business at such meeting, and the act of a majority present shall be the act
of such committee. The Board of Trustees may designate a chairman of any
committee, and such chairman or any two members of any committee (except for
one-member committees) may fix the time and place of its meetings unless the
Board shall otherwise provide. In the absence or disqualification of any
member of any such committee, the members thereof present at any meeting and
not disqualified from voting, whether or not they constitute a quorum, may
unanimously appoint another Trustee to act at the meeting in the place of
such absent or disqualified members.
Each committee shall keep minutes of its proceedings and shall report
the same to the Board of Trustees at the next succeeding meeting, and any
action by the committee shall be subject to revision and alteration by the
Board of Trustees, provided that no rights of third persons shall be affected
by any such revision or alteration.
Section 4. TELEPHONE MEETINGS. Members of a committee of the Trustees
may participate in a meeting by means of a conference telephone or similar
communications equipment if all persons participating in the meeting can hear
each other at the same time. Participation in a meeting by these means shall
constitute presence in person at the meeting.
- ----------------
** This section was amended on May 15, 1998. Please see Amendment No. 1
attached hereto.
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Section 5. INFORMAL ACTION BY COMMITTEES. Any action required or
permitted to be taken at any meeting of a committee of the Trustees may be
taken without a meeting, if a consent in writing to such action is signed by
each member of the committee and such written consent is filed with the
minutes of proceedings of such committee.
Section 6. VACANCIES. Subject to the provisions hereof, the Board of
Trustees shall have the power at any time to change the membership of any
committee, to fill all vacancies, to designate alternate members to replace
any absent or disqualified member or to dissolve any such committee.
ARTICLE V
OFFICERS
Section 1. GENERAL PROVISIONS. The officers of the Trust shall include
a president, a secretary and a treasurer and may include a chairman of the
board, a vice chairman of the board, a chief executive officer, a chief
operating officer, a chief financial officer, a chief legal counsel, one or
more vice presidents, one or more assistant secretaries and one or more
assistant treasurers. In addition, the Trustees may from time to time
appoint such other officers with such powers and duties as they shall deem
necessary or desirable. The officers of the Trust shall be elected annually
by the Trustees at the first meeting of the Trustees held after each annual
meeting of shareholders. If the election of officers shall not be held at
such meeting, such election shall be held as soon thereafter as may be
convenient. Each officer shall hold office until his successor is elected
and qualifies or until his death, resignation or removal in the manner
hereinafter provided. Any two or more offices except president and vice
president may be held by the same person. In their discretion, the Trustees
may leave unfilled any office except that of president and secretary.
Election of an officer or agent shall not of itself create contract rights
between the Trust and such officer or agent.
Section 2. REMOVAL AND RESIGNATION. Any officer or agent of the Trust
may be removed by the Trustees if in their judgment the best interests of the
Trust would be served thereby, but such removal shall be without prejudice to
the contract rights, if any, of the person so removed. Any officer of the
Trust may resign at any time by giving written notice of his resignation to
the Trustees, the chairman of the board, the president or the secretary. Any
resignation shall take effect at any time subsequent to the time specified
therein or, if the time when it shall become effective is not specified
therein, immediately upon its receipt. The acceptance of a resignation shall
not be necessary to make it effective unless otherwise stated in the
resignation. Such resignation shall be without prejudice to the contract
rights, if any, of the Trust.
Section 3. VACANCIES. A vacancy in any office may be filled by the
Trustees for the balance of the term.
Section 4. CHIEF EXECUTIVE OFFICER. The Trustees may designate a chief
executive officer from among the elected officers. The chief executive
officer shall have
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responsibility for implementation of the policies of the Trust, as
determined by the Trustees, and for the administration of the business
affairs of the Trust. In the absence of both the chairman and vice chairman
of the board, the chief executive officer shall preside over the meetings of
the Trustees and of the shareholders at which he shall be present.
Section 5. CHIEF OPERATING OFFICER. The Trustees may designate a chief
operating officer from among the elected officers. Said officer will have
the responsibilities and duties as set forth by the Trustees or the chief
executive officer.
Section 6. CHIEF FINANCIAL OFFICER. The Trustees may designate a chief
financial officer from among the elected officers. Said officer will have
the responsibilities and duties as set forth by the Trustees or the chief
executive officer.
Section 7. CHIEF LEGAL COUNSEL. The Trustees may designate a chief
legal counsel from among the elected officers. Said officer will have the
responsibilities and duties as set forth by the trustees or the chief
executive officer.
Section 8. CHAIRMAN AND VICE CHAIRMAN OF THE BOARD. The chairman of
the board shall preside over the meetings of the Trustees and of the
shareholders at which he shall be present and shall in general oversee all of
the business and affairs of the Trust. In the absence of the chairman of the
board, the vice chairman of the board shall preside at such meetings at which
he shall be present. The chairman and the vice chairman of the board may
execute any deed, mortgage, bond, contract or other instrument, except in
cases where the execution thereof shall be expressly delegated by the
Trustees or by these Bylaws to some other officer or agent of the Trust or
shall be required by law to be otherwise executed. The chairman of the board
and the vice chairman of the board shall perform such other duties as may be
assigned to him or them by the Trustees.
Section 9. PRESIDENT. In the absence of the chairman, the vice
chairman of the board and the chief executive officer, the president shall
preside over the meetings of the Trustees and of the shareholders at which he
shall be present. In the absence of a designation of a chief executive
officer by the Trustees, the president shall be the chief executive officer
and shall be ex officio a member of all committees that may, from time to
time, be constituted by the Trustees. The president may execute any deed,
mortgage, bond, contract or other instrument, except in cases where the
execution thereof shall be expressly delegated by the Trustees or by these
Bylaws to some other officer or agent of the Trust or shall be required by
law to be otherwise executed; and in general shall perform all duties
incident to the office of president and such other duties as may be
prescribed by the Trustees from time to time.
Section 10. VICE PRESIDENTS. In the absence of the president or in the
event of a vacancy in such office, the vice president (or in the event there
be more than one vice president, the vice presidents in the order designated
at the time of their election or, in the absence of any designation, then in
the order of their election) shall perform the duties of the president and
when so acting shall have all the powers of and be subject to all the
restrictions upon the president; and shall perform such other duties as from
time to time may be assigned to him by the president or by the Trustees. The
Trustees may
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designate one or more vice presidents as executive vice president, senior
vice president or as vice president for particular areas of responsibility.
Section 11. SECRETARY. The secretary shall (a) keep the minutes of the
proceedings of the shareholders, the Trustees and committees of the Trustees
in one or more books provided for that purpose; (b) see that all notices are
duly given in accordance with the provisions of these Bylaws or as required
by law; (c) be custodian of the trust records and of the seal of the Trust;
(d) keep a register of the post office address of each shareholder which
shall be furnished to the secretary by such shareholder; (e) have general
charge of the share transfer books of the Trust; and (f) in general perform
such other duties as from time to time may be assigned to him by the chief
executive officer, the president or by the Trustees.
Section 12. TREASURER. The treasurer shall have the custody of the
funds and securities of the Trust and shall keep full and accurate accounts
of receipts and disbursements in books belonging to the Trust and shall
deposit all moneys and other valuable effects in the name and to the credit
of the Trust in such depositories as may be designated by the Trustees.
He shall disburse the funds of the Trust as may be ordered by the
Trustees, taking proper vouchers for such disbursements, and shall render to
the president and Trustees, at the regular meetings of the Trustees or
whenever they may require it, an account of all his transactions as treasurer
and of the financial condition of the Trust.
If required by the Trustees, he shall give the Trust a bond in such sum
and with such surety or sureties as shall be satisfactory to the Trustees for
the faithful performance of the duties of his office and for the restoration
to the Trust, in case of his death, resignation, retirement or removal from
office, of all books, papers, vouchers, moneys and other property of whatever
kind in his possession or under his control belonging to the Trust.
Section 13. ASSISTANT SECRETARIES AND ASSISTANT TREASURERS. The
assistant secretaries and assistant treasurers, in general, shall perform
such duties as shall be assigned to them by the secretary or treasurer,
respectively, or by the president or the Trustees. The assistant treasurers
shall, if required by the Trustees, give bonds for the faithful performance
of their duties in such sums and with such surety or sureties as shall be
satisfactory to the Trustees.
Section 14. SALARIES. The salaries and other compensation of the
officers shall be fixed from time to time by the Trustees and no officer
shall be prevented from receiving such salary or other compensation by reason
of the fact that he is also a Trustee.
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ARTICLE VI
CONTRACTS, LOANS, CHECKS AND DEPOSITS
Section 1. CONTRACTS. The Trustees may authorize any officer or agent
to enter into any contract or to execute and deliver any instrument in the
name of and on behalf of the Trust and such authority may be general or
confined to specific instances. Any agreement, deed, mortgage, lease or
other document executed by one or more of the Trustees or by an authorized
person shall be valid and binding upon the Trustees and upon the Trust when
authorized or ratified by action of the Trustees.
Section 2. CHECKS AND DRAFTS. All checks, drafts or other orders for
the payment of money, notes or other evidences of indebtedness issued in the
name of the Trust shall be signed by such officer or agent of the Trust in
such manner as shall from time to time be determined by the Trustees.
Section 3. DEPOSITS. All funds of the Trust not otherwise employed
shall be deposited from time to time to the credit of the Trust in such
banks, trust companies or other depositories as the Trustees may designate.
ARTICLE VII
SHARES
Section 1. CERTIFICATES. Each shareholder shall be entitled to a
certificate or certificates which shall represent and certify the number of
shares of each class of beneficial interest held by him in the Trust. Each
certificate shall be signed by the chief executive officer, the president or
a vice president and countersigned by the secretary or an assistant secretary
or the treasurer or an assistant treasurer and may be sealed with the seal,
if any, of the Trust. The signatures may be either manual or facsimile.
Certificates shall be consecutively numbered; and if the Trust shall, from
time to time, issue several classes of shares, each class may have its own
number series. A certificate is valid and may be issued whether or not an
officer who signed it is still an officer when it is issued. Each
certificate representing shares which are restricted as to their
transferability or voting powers, which are preferred or limited as to their
dividends or as to their allocable portion of the assets upon liquidation or
which are redeemable at the option of the Trust, shall have a statement of
such restriction, limitation, preference or redemption provision, or a
summary thereof, plainly stated on the certificate. In lieu of such
statement or summary, the Trust may set forth upon the face or back of the
certificate a statement that the Trust will furnish to any shareholder, upon
request and without charge, a full statement of such information.
Section 2. TRANSFERS. Certificates shall be treated as negotiable and
title thereto and to the shares they represent shall be transferred by
delivery thereof to the same extent as those of a Maryland stock corporation.
Upon surrender to the Trust or the transfer agent of the Trust of a share
certificate duly endorsed or accompanied by proper evidence of succession,
assignment or authority to transfer, the Trust shall issue
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a new certificate to the person entitled thereto, cancel the old certificate
and record the transaction upon its books.
The Trust shall be entitled to treat the holder of record of any share
or shares as the holder in fact thereof and, accordingly, shall not be bound
to recognize any equitable or other claim to or interest in such share or
shares on the part of any other person, whether or not it shall have express
or other notice thereof, except as otherwise provided by the laws of the
State of Maryland.
Notwithstanding the foregoing, transfers of shares of beneficial
interest of the Trust will be subject in all respects to the Declaration of
Trust and all of the terms and conditions contained therein.
Section 3. REPLACEMENT CERTIFICATE. Any officer designated by the
Trustees may direct a new certificate to be issued in place of any
certificate previously issued by the Trust alleged to have been lost, stolen
or destroyed upon the making of an affidavit of that fact by the person
claiming the certificate to be lost, stolen or destroyed. When authorizing
the issuance of a new certificate, an officer designated by the Trustees may,
in his discretion and as a condition precedent to the issuance thereof,
require the owner of such lost, stolen or destroyed certificate or the
owner's legal representative to advertise the same in such manner as he shall
require and/or to give bond, with sufficient surety, to the Trust to
indemnify it against any loss or claim which may arise as a result of the
issuance of a new certificate.
Section 4. CLOSING OF TRANSFER BOOKS OR FIXING OF RECORD DATE. The
Trustees may set, in advance, a record date for the purpose of determining
shareholders entitled to notice of or to vote at any meeting of shareholders
or determining shareholders entitled to receive payment of any dividend or
the allotment of any other rights, or in order to make a determination of
shareholders for any other proper purpose. Such date, in any case, shall not
be prior to the close of business on the day the record date is fixed and
shall be not more than 90 days and, in the case of a meeting of shareholders
not less than ten days, before the date on which the meeting or particular
action requiring such determination of shareholders of record is to be held
or taken.
In lieu of fixing a record date, the Trustees may provide that the share
transfer books shall be closed for a stated period but not longer than 20
days. If the share transfer books are closed for the purpose of determining
shareholders entitled to notice of or to vote at a meeting of shareholders,
such books shall be closed for at least ten days before the date of such
meeting.
If no record date is fixed and the share transfer books are not closed
for the determination of shareholders, (a) the record date for the
determination of shareholders entitled to notice of or to vote at a meeting
of shareholders shall be at the close of business on the day on which the
notice of meeting is mailed or the 30th day before the meeting, whichever is
the closer date to the meeting; and (b) the record date for the determination
of shareholders entitled to receive payment of a dividend or an allotment of
any other rights shall be the close of business on the day on which the
resolution of the Trustees, declaring the dividend or allotment of rights, is
adopted.
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When a determination of shareholders entitled to vote at any meeting of
shareholders has been made as provided in this section, such determination
shall apply to any adjournment thereof, except when (i) the determination has
been made through the closing of the transfer books and the stated period of
closing has expired or (ii) the meeting is adjourned to a date more than 120
days after the record date fixed for the original meeting, in either of which
case a new record date shall be determined as set forth herein.
Section 5. STOCK LEDGER. The Trust shall maintain at its principal
office or at the office of its counsel, accountants or transfer agent, an
original or duplicate share ledger containing the name and address of each
shareholder and the number of shares of each class held by such shareholder.
Section 6. FRACTIONAL SHARES; ISSUANCE OF UNITS. The Trustees may
issue fractional shares or provide for the issuance of scrip, all on such
terms and under such conditions as they may determine. Notwithstanding any
other provision of the Declaration of Trust or these Bylaws, the Trustees may
issue units consisting of different securities of the Trust. Any security
issued in a unit shall have the same characteristics as any identical
securities issued by the Trust, except that the Trustees may provide that for
a specified period securities of the Trust issued in such unit may be
transferred on the books of the Trust only in such unit.
ARTICLE VIII
ACCOUNTING YEAR
The Trustees shall have the power, from time to time, to fix the fiscal
year of the Trust by a duly adopted resolution.
ARTICLE IX
DISTRIBUTIONS
Section 1. AUTHORIZATION. Dividends and other distributions upon the
shares of beneficial interest of the Trust may be authorized and declared by
the Trustees, subject to the provisions of law and the Declaration of Trust.
Dividends and other distributions may be paid in cash, property or shares of
the Trust, subject to the provisions of law and the Declaration of Trust.
Section 2. CONTINGENCIES. Before payment of any dividends or other
distributions, there may be set aside out of any funds of the Trust available
for dividends or other distributions such sum or sums as the Trustees may
from time to time, in their absolute discretion, think proper as a reserve
fund for contingencies, for equalizing dividends or other distributions, for
repairing or maintaining any property of the Trust or for such other purpose
as the Trustees shall determine to be in the best interest of the
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Trust, and the Trustees may modify or abolish any such reserve in the manner
in which it was created.
ARTICLE X
PROHIBITED INVESTMENTS AND ACTIVITIES;
INVESTMENT POLICIES
Notwithstanding anything to the contrary in the Declaration of Trust,
the Trust shall not enter into any transaction referred to in (i), (ii) or
(iii) below which it does not believe is in the best interests of the Trust,
and will not, without the approval of a majority of the disinterested
Trustees, (i) acquire from or sell to any Trustee, officer or employee of the
Trust, any corporation, partnership, joint venture, trust, employee benefit
plan or other enterprise in which a Trustee, officer or employee of the Trust
owns more than a one percent interest or any affiliate of any of the
foregoing, any of the assets or other property of the Trust, except for the
acquisition directly or indirectly of certain properties or interest therein,
directly or indirectly, through entities in which it owns an interest in
connection with the initial public offering of shares by the Trust or
pursuant to agreements entered into in connection with such offering, which
properties shall be described in the prospectus relating to such initial
public offering, (ii) make any loan to or borrow from any of the foregoing
persons or (iii) engage in any other transaction with any of the foregoing
persons. Each such transaction will be in all respects on such terms as are,
at the time of the transaction and under the circumstances then prevailing,
fair and reasonable to the Trust. Subject to the foregoing and the
provisions of the Declaration of Trust, the Board of Trustees may from time
to time adopt, amend, revise or terminate any policy or policies with respect
to investments by the Trust as it shall deem appropriate in its sole
discretion.
ARTICLE XI
SEAL
Section 1. SEAL. The Trustees may authorize the adoption of a seal by
the Trust. The seal shall have inscribed thereon the name of the Trust and
the year of its formation. The Trustees may authorize one or more duplicate
seals and provide for the custody thereof.
Section 2. AFFIXING SEAL. Whenever the Trust is permitted or required
to affix its seal to a document, it shall be sufficient to meet the
requirements of any law, rule or regulation relating to a seal to place the
word "(SEAL)" adjacent to the signature of the person authorized to execute
the document on behalf of the Trust.
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ARTICLE XII
INDEMNIFICATION AND ADVANCE OF EXPENSES
To the maximum extent permitted by Maryland law in effect from time to
time, the Trust shall indemnify (a) any Trustee, officer or shareholder or
any former Trustee, officer or shareholder (including among the foregoing,
for all purposes of this Article XII and without limitation, any individual
who, while a Trustee, officer or shareholder and at the express request of
the Trust, serves or has served another corporation, partnership, joint
venture, trust, employee benefit plan or any other enterprise as a director,
officer, shareholder, partner or trustee of such corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise) who has been
successful, on the merits or otherwise, in the defense of a proceeding to
which he was made a party by reason of service in such capacity, against
reasonable expenses incurred by him in connection with the proceeding, (b)
any Trustee or officer or any former Trustee or officer against any claim or
liability to which he may become subject by reason of such status unless it
is established that (i) his act or omission was material to the matter giving
rise to the proceeding and was committed in bad faith or was the result of
active and deliberate dishonesty, (ii) he actually received an improper
personal benefit in money, property or services or (iii) in the case of a
criminal proceeding, he had reasonable cause to believe that his act or
omission was unlawful and (c) each shareholder or former shareholder against
any claim or liability to which he may become subject by reason of such
status. In addition, the Trust shall, without requiring a preliminary
determination of the ultimate entitlement to indemnification, pay or
reimburse, in advance of final disposition of a proceeding, reasonable
expenses incurred by a Trustee, officer or shareholder or former Trustee,
officer or shareholder made a party to a proceeding by reason such status,
provided that, in the case of a Trustee or officer, the Trust shall have
received (i) a written affirmation by the Trustee or officer of his good
faith belief that he has met the applicable standard of conduct necessary for
indemnification by the Trust as authorized by these Bylaws and (ii) a written
undertaking by or on his behalf to repay the amount paid or reimbursed by the
Trust if it shall ultimately be determined that the applicable standard of
conduct was not met. The Trust may, with the approval of its Trustees,
provide such indemnification or payment or reimbursement of expenses to any
Trustee, officer or shareholder or any former Trustee, officer or shareholder
who served a predecessor of the Trust and to any employee or agent of the
Trust or a predecessor of the Trust. Neither the amendment nor repeal of
this Article, nor the adoption or amendment of any other provision of the
Declaration of Trust or these Bylaws inconsistent with this Article, shall
apply to or affect in any respect the applicability of this Article with
respect to any act or failure to act which occurred prior to such amendment,
repeal or adoption.
Any indemnification or payment or reimbursement of the expenses
permitted by these Bylaws shall be furnished in accordance with the
procedures provided for indemnification or payment or reimbursement of
expenses, as the case may be, under Section 2-418 of the MGCL for directors
of Maryland corporations. The Trust may provide to Trustees, officers and
shareholders such other and further indemnification or payment or
reimbursement of expenses, as the case may be, to the fullest extent
permitted by the MGCL, as in effect from time to time, for directors of
Maryland corporations.
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ARTICLE XIII
WAIVER OF NOTICE
Whenever any notice is required to be given pursuant to the Declaration
of Trust or Bylaws or pursuant to applicable law, a waiver thereof in
writing, signed by the person or persons entitled to such notice, whether
before or after the time stated therein, shall be deemed equivalent to the
giving of such notice. Neither the business to be transacted at nor the
purpose of any meeting need be set forth in the waiver of notice, unless
specifically required by statute. The attendance of any person at any
meeting shall constitute a waiver of notice of such meeting, except where
such person attends a meeting for the express purpose of objecting to the
transaction of any business on the ground that the meeting is not lawfully
called or convened.
ARTICLE XIV
AMENDMENT OF BYLAWS
The Trustees shall have the power to adopt, alter or repeal any
provision of these Bylaws and to make new Bylaws; provided, however, that
Article II, Section 2 of Article III and this Article XIV of these Bylaws
shall not be amended without the consent of shareholders by a vote of a
majority of the votes cast at a meeting of shareholders duly called and at
which a quorum is present.
ARTICLE XV
MISCELLANEOUS
All references to the Declaration of Trust shall include any amendments
thereto.
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AMENDMENT NO. 1 TO THE BYLAWS OF
EQUITY OFFICE PROPERTIES TRUST
EFFECTIVE MAY 15, 1998
This will confirm that, effective as of May 15, 1998, the Bylaws of
Equity Office Properties Trust have been amended in order to add Sections 7,
8, 9 and 10 to Article IV as follows:
Section 7. EXECUTIVE COMMITTEE. The Executive Committee shall be
composed of not less than three Trustees and, subject to the exceptions
hereafter described, established for the purpose of undertaking or
authorizing, on behalf of the Board, any and all actions which might be
undertaken or authorized by the Board itself; provided that, in the absence
of further resolution from the Board, the Executive Committee shall not be
empowered (i) to bind the Trust in respect to an acquisition or disposition
or series of acquisitions or dispositions which have not been approved by or
reported to the Board at a duly-called meeting of the Board and any one of
which exceeds Fifty Million Dollars ($50,000,000) individually or
Seventy-Five Million Dollars ($75,000,000), when aggregated with all other
such unreported or unapproved acquisitions or dispositions; (ii) to approve
any merger or other re-organization of the Trust; (iii) to make any
recommendation to the shareholders of the Trust; (iv) to elect any individual
to an office of executive vice-president or higher of the Trust; (v) to amend
the Bylaws of the Trust; (vi) to undertake any action which is within the
jurisdiction of any other committee of the Board; (vii) to authorize (x) the
Trust to issue shares of beneficial interest or other securities or (y) the
Operating Partnership to issue OP Units or other equity securities which, in
the case of either (x) or (y), exceed Fifty Million Dollars, ($50,000,000) in
one transaction, or Seventy-Five Million Dollars ($75,000,000) in a series of
transactions which have not been approved by the Board or reported to the
Board in writing as described above for acquisitions or dispositions; (viii)
to enter into any transaction in which any member of the Executive Committee
has a financial interest which is adverse to the Trust; or (ix) to borrow or
enter into agreements to borrow in excess of One Hundred Million Dollars
($100,000,000) individually or in the aggregate, in loans which have not been
reported to or approved by the Board; and provided further that the Executive
Committee is expressly empowered, upon its determination that any such
increase is required in order to close a given transaction, to increase any
purchase price previously approved by the Board by an amount not greater than
the lesser of (x) five percent (5%) of the purchase price previously approved
by the Board or (y) Fifty Million Dollars ($50,000,000).
Section 8. SPECIAL CONFLICTS COMMITTEE.
8.1 The Special Conflicts Committee shall be composed of not less than
three (3) members, all of whom shall be Independent Trustees. The chair and
other members of the Special Conflicts Committee shall be appointed by the
Board of Trustees, with the affirmative vote of at least a majority of the
Independent Trustees.
8.2 The Special Conflicts Committee shall have the power to consider
and approve any transaction to which the Trust is or is proposed to be a
party and as to which any Trustee knows at the time of commitment that any of
the following persons
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either is or is entitled to be a party, whether directly or indirectly, to
the transaction or has a sufficiently material beneficial interest that the
interest might reasonably be expected to exert an influence on the Trustee's
judgment if he were called upon to vote on the transaction: (a) any Trustee
or any Related Person of any Trustee; (b) any person (other than the Trust)
of which the Trustee is the owner of more than 5% of any class of equity
securities or is a director, trustee, general partner, agent or employee; (c)
any person that controls one or more of the persons specified in clause (b)
or a person that is controlled by, or is under common control with, one or
more of the persons specified in clause (b); or (d) an individual who is a
general partner, principal or employer of the trustee.
8.3 Any Trustee who knows of a transaction covered by Section 8.2 shall
immediately notify and provide all material information about the transaction
to the Special Conflicts Committee, which shall thereafter promptly consider
the transaction. The Board of Trustees, any Trustee or any officer of the
Trust may notify the Special Conflicts Committee about any transaction that
it has reason to believe is covered by Section 8.2 and, upon request, such
Trustee shall provide to the Special Conflicts Committee all relevant
information known or in the control of the referring person. Upon receipt of
notice pursuant to this paragraph, the Special Conflicts Committee shall
notify the Chairman of the Board and the Secretary of the Trust in order
that the Board of Trustees which, absent the Board's determination that such
notice was improper, shall take no further action with respect to the
transaction unless and until approved by the Special Conflicts Committee.
The Trust shall not enter into such transaction without the approval or
ratification of the Special Conflicts Committee acting by unanimous written
consent or by the affirmative vote of a majority of its members present and
voting at any meeting thereof (excluding any members disqualified pursuant to
Section 8.4). Nothing in this Section 8 shall require approval of fees or
other compensation to Independent Trustees for their service as Trustees.
8.4. Any member of the Special Conflicts Committee who is a party to or
who has an interest in the transaction of the type described in Section 8.2
shall take no part in the deliberations of the Special Conflicts Committee on
the transaction.
8.5. For purposes of this Section 8, the following terms shall have the
followings meanings:
"Affiliate" means a person or entity that directly or
indirectly controls, or is controlled by, or is under common
control with, a specified person or entity.
"Control", including the terms "controlling" or "under
common control with," means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and
policies of a person, whether by ownership of voting securities, by
contract or otherwise. The beneficial ownership of ten percent or
more of securities entitled to be voted generally in the election
of directors creates a presumption of control.
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"Independent Trustee" shall mean a Trustee who is not an officer,
employee or agent of the Trust or an Affiliate of the Trust. For
these purposes, Equity Group Investments, L.L.C. and its Affiliates
shall be deemed to be Affiliates of the Trust until such time, if any,
as the Board shall determine otherwise.
"Time of commitment" as to a transaction means the time when the
transaction is consummated or, if made pursuant to contract, the time
when the Trust becomes contractually obligated so that its unilateral
withdrawal from the transaction would entail significant loss,
liability or other damage.
"Related Person" of a Trustee means (a) the spouse (or a parent
or sibling thereof) of the Trustee, or a child, grandchild, sibling,
parent (or spouse of any thereof) of the Trustee, or an individual
sharing the same residence as the Trustee, or a Trust or estate of
which a Trustee or an individual specified in this definition is a
substantial beneficiary or (b) a trust, estate, incompetent,
conservatee or minor of which the Trustee is a fiduciary.
Section 9. AUDIT COMMITTEE. The Audit Committee shall be composed of
not less than three Trustees. The function of the Audit Committee shall be
(i) to review the professional services and independence of the Trust's
independent auditors, (ii) to ensure that the scope of the annual external
audit by the independent auditors of the Trust is sufficiently comprehensive,
(iii) to review, in consultation with the independent auditors and the
internal auditors, the plan and results of the annual external audit, the
adequacy of the Trust's internal control systems and the results of the
Trust's internal audits, (iv) to review, with management and the independent
auditors, the Trust's annual financial statements, financial reporting
practices and the results of each external audit and (v) to undertake
reasonably related activities to those set forth in clauses (i) through (iv)
of this Section. The Audit Committee shall also have the authority to
consider the qualification of the Trust's independent auditors, to make
recommendations to the Board as to their selection and to review and resolve
disputes between such independent auditors and management relating to the
preparation of the annual financial statements.
Section 10. COMPENSATION AND OPTION COMMITTEE. The Compensation and
Option Committee shall be composed of not less than three Trustees. The
Compensation and Option Committee shall be authorized to establish the
compensation and benefit arrangements for the officers and key employees of
the Trust and to establish general policy relating to compensation and
benefit arrangements of employees of the Trust. The Compensation and Option
Committee shall also administer the share plans and compensation programs of
the Trust. The Compensation and Option Committee shall discharge the duties
of a Compensation Committee under the Proxy Rules established by the
Securities and Exchange Commission.
The Compensation and Option Committee shall be authorized to establish
awards under and administer the Trust's Supplemental Retirement Savings
Plan and compensation programs of the Trust insofar as they relate to
executive officers
3
<PAGE>
of the Trust so that any such award or component that is intended to qualify
under Rule 16b-3 under the Exchange Act or that any share plan or executive
compensation program (or a component thereof) or other form of compensation
that is intended to qualify for an exception under such Section 162 (m) (or
any successor provision) of the Code does qualify for such exception.
Composition of the Compensation and Option Committee shall satisfy
requirements set forth under Rule 16(b)(3) under the Exchange Act and Section
162(m) under the Internal Revenue Code.
4
<PAGE>
EXHIBIT 99.1
EQUITY OFFICE PROPERTIES TRUST
1997 SHARE OPTION AND SHARE AWARD PLAN
(AS AMENDED AND RESTATED EFFECTIVE JULY 1, 1997)*
- -------------------
* As amended by Amendment No. 1 and Amendment No. 2, each effective as of
May 15, 1998.
<PAGE>
TABLE OF CONTENTS
- ------------------------------------------------------------------------------
SECTION Page
- ------------------------------------------------------------------------------
1. Purposes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Administration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
3. Participation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
4. Shares Subject to the Plan. . . . . . . . . . . . . . . . . . . . . . . 3
5. Share Awards. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
6. Share Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
7. Share Appreciation Rights . . . . . . . . . . . . . . . . . . . . . . . 7
8. Dividend Equivalents. . . . . . . . . . . . . . . . . . . . . . . . . . 9
9. Withholding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
10. Compliance with Applicable Laws and Policies. . . . . . . . . . . . . .10
11. Transferability.. . . . . . . . . . . . . . . . . . . . . . . . . . . .11
12. Service and Shareholder Status. . . . . . . . . . . . . . . . . . . . .11
13. Adjustments to Number of Shares Subject to the Plan and to Terms of
Options, SARs and Dividend Equivalents. . . . . . . . . . . . . . . . .11
14. Agreement with Company. . . . . . . . . . . . . . . . . . . . . . . . .11
15. Term of Plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
16. Amendment and Termination of Plan . . . . . . . . . . . . . . . . . . .12
17. Headings, References and Construction . . . . . . . . . . . . . . . . .12
<PAGE>
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") was 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 Related Companies who are and will be responsible for its future growth
and continued success. (The Plan is hereby amended and restated to further
accomplish those objectives.) The term "Related Company" means Equity Office
Properties Management Corp. and each other company determined by the
Committee (as defined below) from time to time and set forth on Exhibit A
hereto, as it may be amended.
The Plan will provide a means whereby such individuals may receive:
(a) authorized common shares of beneficial interest of the Company
("Shares"), subject to conditions and restrictions described herein and
otherwise determined by the Committee ("Share Awards"); (b) options to
purchase Shares ("Options"); (c) Share Appreciation Rights ("SARs") in tandem
with or independent of Options; or (d) dividend equivalent rights with
respect to Shares ("Dividend Equivalents").
2. ADMINISTRATION. (a) 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 (the "Board"), 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")
(and, in addition, with respect to any grant of an Option or SAR, or the
determination of conditions and restrictions intended to make the grant or
award subject thereto constitute "performance-based compensation" within the
meaning of Section 162(m)(4)(C) of the Internal Revenue Code, as amended
("Code"), such grant, award or determination 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, and may
be removed, by such Board. 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.
(b) The day-to-day administration of the Plan may be carried out by
an Option Coordinator designated by the Chief Legal Counsel of the Company.
3. PARTICIPATION.
(a) GENERALLY. Subject to the terms and conditions of the Plan, the
Committee shall determine and designate from time to time the employees,
officers, trustees and consultants of the Company and its Related Companies to
whom Share Awards, Options, SARs or Dividend Equivalents are to be granted
("Grantees" and individually, a "Grantee"), the terms of such grants and the
number of Shares subject to
<PAGE>
such grants. 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.
(i) Each member of the Board shall automatically receive the
following awards under the Plan:
(A) if he or she is a member of the Board on the tenth
(10th) day after the Company's initial public offering of Shares, an Option to
purchase 10,000 Shares at the per Share initial public offering price; and
(B) immediately following each annual meeting of the
Company's shareholders thereafter, an Option to purchase 10,000 Shares shall be
awarded to each member of the Board. Effective January 1, 1998, if an
individual first becomes a member of the Board other than at an annual meeting
of the Company's shareholders, an Option will be granted to him or her covering
a number of Shares equal to 10,000 multiplied by a fraction, the numerator of
which is the number of days such individual will serve until the next annual
meeting of the Company's shareholders (as determined by the Committee) and the
denominator of which is 365. The exercise price of the Options described in the
preceding two sentences shall be the Fair Market Value (as defined in paragraph
6(b)) of a Share on the date of grant.
(ii) Board and Committee fees paid to each Trustee shall,
unless the Committee otherwise determines, be payable in Share Awards issued
under the Plan having a Grant Value (as defined in subparagraph (d) below) as
of the date the fees are payable equal to the amount of such fees. A
Trustee who is not otherwise a Grantee shall become a Grantee on the first
date on which the Trustee is awarded an Option or a Share Award pursuant to
this subparagraph (b). Trustees may, in addition to Share Awards and Options
awarded under this subparagraph (b), also be awarded Share Awards, Options,
SARs and Dividend Equivalents under paragraph 3(a).
(c) ANNUAL INCENTIVE 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 incentive bonus plan (the "Bonus Plan"), the
Committee may, in its discretion, elect to pay all or a portion of such Bonus
in the form of a Share Award, Option or SAR having an aggregate Grant Value,
determined as of the Bonus Date, equal to the cash amount of the Grantee's
Bonus being so replaced (the "Award Portion"). All awards made under this
subparagraph (c) shall be governed by paragraphs 5, 6 or 7 hereof, as
applicable. If approved by the Committee, each individual who participates
in the Bonus Plan and who receives a Share Award under this subparagraph (c)
will be given an opportunity to elect, in accordance with procedures
established by the Committee, to have all or a portion of his Bonus in excess
of the Award Portion paid in the form of a Share Award so as to increase the
total Award Portion. Such opportunity provided under this subparagraph (c)
is subject to compliance with all applicable federal and state securities
laws.
2
<PAGE>
(d) VALUE. For all purposes of the Plan:
(i) the "Grant Value" of grants made pursuant to paragraph
3(b) or 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 SAR
(1) 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 (2) if the Company has not so
disclosed the present value of Options, then "Grant Value" shall, at the
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
(ii) except as provided in paragraph 6(b), the "Fair Market
Value" of a Share shall equal the closing price paid for Shares on the New York
Stock Exchange on the first trading day immediately preceding the date for which
Fair Market Value is being determined.
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 Shares. Shares subject to the Plan may be
authorized but unissued Shares, Shares now held in the treasury of the
Company or Shares hereafter acquired by the Company. In the event that (a)
any Option granted under the Plan expires unexercised or is terminated,
surrendered or canceled (other than in connection with the exercise of a
"Tandem" (as defined in paragraph 7 below) SAR) without being exercised, in
whole or in part, for any reason, (b) any Tandem SAR granted under the Plan
expires unexercised or is terminated, surrendered or canceled (other than in
connection with the exercise of its related Option), or (c) any "Non-Tandem"
(as defined in paragraph 7 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.
- -------------------
** The first sentence of this Section 4 was amended on May 15,
1998. Please see Amendment No. 1 and Amendment No. 2 attached
hereto.
3
<PAGE>
(a) CONDITIONS AND RESTRICTIONS ON CERTAIN AWARDS. Share Awards
granted under paragraph 3(a) shall be subject to the following conditions
and/or restrictions:
(i) A Share Award will be forfeited to the Company upon the
termination of the Grantee's Service (as defined below) before a date
established by the Committee that may not be earlier than six (6) months
after the date of grant of the Share Award ("Date of Grant'), and may be
subject to such further conditions and restrictions established by the
Committee at the Date of Grant. An individual's "Service" shall continue
until he or she is no longer an employee, officer, trustee, director or
consultant of the Company or an Extended Company. The term "Extended
Company" means a Related Company or each other company designated by the
Committee that has provided that awards provided to its employees and other
persons, which are comparable to the awards provided under the Plan, will not
expire if such employees or other persons terminate their relationship with
such company and immediately become employees, officers, trustees, directors
or consultants of the Company. The Extended Companies shall be set forth in
Exhibit B, as it may be amended from time to time upon the determination of
the Committee.
(ii) 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 one (1) or more of its Related Companies as it may select.
(iii) Notwithstanding the foregoing, the restrictions
described in the preceding subparagraphs (i) and (ii) that are contained in
the terms of any grant made pursuant to paragraph 3(a) shall immediately
lapse and be of no effect in the event of the termination of a Grantee's
Service (A) because of the Grantee's "Disability" (as defined below) or
death, (B) with respect to a Grantee who is an employee or officer, in
connection with his retirement at or after age 62, (C) with respect to a
Grantee who is a consultant, in connection with his retirement (as determined
by the Committee in its discretion), (D) with respect to a Grantee who is a
Trustee, in connection with his failure to be re-elected to the Board, or (E)
following a "Change in Control" of the Company (as defined below). For
purposes of this Plan, "Disability" shall mean a physical or mental
condition that entitles a Participant to benefits under the
Employer-sponsored long-term disability plan in which he or she participates,
as determined by the Plan Administrator in its sole and absolute discretion.
In addition, for purposes of this Plan, a "Change in Control" shall be deemed
to occur upon: (1) the acquisition by any entity, person, or group of more
than 50% of the outstanding Shares from the holders thereof; (2) a merger or
consolidation of the Company with one (1) 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 (3) 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.
4
<PAGE>
(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 subparagraphs (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. If certificates for the Share Award have been
issued, such certificates shall be held in escrow by the Company. Except in
the case of a Share Award under paragraph 3(b), stock powers for such Shares
shall be 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. Notwithstanding any provision of the Plan to the
contrary, for purposes of this paragraph (b), the "Fair Market Value" of a
Share shall equal the lesser of: (i) the average closing price of the Shares
on the New York Stock Exchange for the five (5) trading days immediately
preceding (but not including) the date on which Fair Market Value is
determined, and (ii) the closing price paid for Shares on the New York Stock
Exchange on the first trading day immediately preceding the date of grant;
provided that the Committee, in good faith, determines that such price
accurately reflects the fair market value of a Share.
(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 that
is ten (10) years after the date on which the Option is granted and, with
respect to an Incentive Share Option granted to an employee who owns on the
Date of Grant, more than 10% of the Company's Shares, in no event later than
the date that is five (5) years from the date on which the Option is granted.
If the Service of a Grantee terminates for cause (as determined by the
Committee in its discretion), his Option shall expire immediately. The
Committee may
5
<PAGE>
establish guidelines for determining whether a Grantee's Service has
terminated for cause and communicate such guidelines in the Grantee's award
agreement. If the Grantee's Service 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 Service terminated, but no later than the
Expiration Date. If such Service terminates because of the Grantee's death,
his Option shall be exercisable by the person or persons to whom that right
passes by will or by the laws of descent and distribution for a period of 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 later, 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 a Related Company 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 Service (A) because of the Grantee's Disability
or death, (B) with respect to a Grantee who is an employee or officer, in
connection with his retirement at or after age 62, (C) with respect to a Grantee
who is a consultant, in connection with his retirement (as determined by the
Committee in its discretion), (D) with respect to a Grantee who is a Trustee, in
connection with his failure to be re-elected to the Board, or (E) following a
Change in Control.
(ii) 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.
(iii) The Fair Market Value of 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 Incentive Share Options that
become exercisable in excess of such amount shall be deemed to be Non-Qualified
Share Options to the extent of such excess.
6
<PAGE>
(iv) An Incentive Share Option may be exercised during the
lifetime of the Grantee only by the Grantee and, after the death of the Grantee,
only by the individuals or entities described in paragraph 6(f).
(v) Notwithstanding the foregoing, at any time following the
grant of an Option, the Committee, in its sole discretion, may elect to
accelerate the date as of which the Grantee may exercise the Option with respect
to all or a portion of the Shares subject thereto.
(vi) Subject to the foregoing, a Grantee may exercise an Option
by giving written notice thereof prior to the Option's Expiration Date to the
Option Coordinator at the principal executive offices of the Company, or to such
other person or entity and/or at such other location, as designated by the Chief
Legal Counsel 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) SUSPENSION OF RIGHT. Notwithstanding any other provision of
this paragraph 6, the Chief Legal Counsel of the Company, in his sole and
absolute discretion, may suspend the right of any person to exercise an
Option for up to 30 days if the Grantee's Service has been or, in the sole
and absolute judgment of the Chief Legal Counsel of the Company, may be
suspended or terminated for any reason.
(f) PARTIES ENTITLED TO EXERCISE OPTIONS. An Option may be exercised
only by the Grantee, or by his legatee or legatees of such Option under his last
will, by his executors, personal representatives or distributees, 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 or to any other key employee,
officer, trustee, director or consultant of the Company or a Related 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 an 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 granted other than at the time
an Option is granted 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.
7
<PAGE>
(b) VALUE. Upon exercise, an SAR shall entitle the Grantee to
receive from the Company the number of Shares 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 the related 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.
(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 a
Related Company 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 subparagraph, 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-
8
<PAGE>
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 the Grantee's Service 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 subparagraphs (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 Service (A) because of the Grantee's Disability or death, (B)
with respect to a Grantee who is an employee or officer, in connection with his
retirement at or after age 62, (C) with respect to a Grantee who is a
consultant, in connection with his retirement (as determined by the Committee in
its discretion), (D) with respect to a Grantee who is a Trustee, in connection
with his failure to be re-elected to the Board, or (E) following a Change in
Control. In addition, at any time following the grant of an SAR, the Committee,
in its sole discretion, may elect to accelerate the date as of which the Grantee
may exercise the SAR.
(f) SUSPENSION OF RIGHT. Notwithstanding any other provisions of
this paragraph 7, the Chief Legal Counsel of the Company, in his sole and
absolute discretion, may suspend the right of any person to exercise an Option
for up to 30 days if the Grantee's Service has been or, in the sole and absolute
judgment of the Chief Legal Counsel of the Company, may be suspended or
terminated for any reason.
(g) 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, or by a transferee to
the extent that a transfer of the SAR is permitted pursuant to paragraph 11(b).
(h) 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,
Shares 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 the Committee shall specify at the time such
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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 Service because of the Grantee's
Disability or death, (B) with respect to a Grantee who is an employee or
officer, his retirement at or after age 62, (C) with respect to a Grantee who is
a consultant, his retirement (as determined by the Committee in its discretion),
(D) with respect to a Grantee who is a Trustee, his failure to be re-elected to
the Board, or (E) following a Change in Control.
9. WITHHOLDING. Whenever under the Plan a Grantee recognizes income with
respect to any Share Award, Option, SAR or Dividend Equivalent (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-3(e) thereunder.
10. COMPLIANCE WITH APPLICABLE LAWS AND POLICIES. 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.
Notwithstanding any other provision of the Plan, a Grantee or such other persons
as are entitled to exercise an Option or SAR (as described in paragraph 11(b))
will be prohibited from exercising the Option or SAR to the extent that the
Chief Legal Counsel of the Company has determined that purchases and sales of
Company securities should be restricted because of the existence or potential
existence of material nonpublic information concerning the Company, whether or
not such determination has been communicated to the Grantee or such persons. If
the Chief Legal Counsel of the Company has made such a determination and the
Grantee or such persons give notice of an intent to exercise the Option or SAR
(and satisfy all other conditions to the exercise thereof), the Chief Legal
Counsel of the Company shall advise the Grantee or such persons concerning such
restrictions, and the effective time of the Grantee's exercise shall be
postponed to the earlier of the date that the Chief Legal Counsel of the Company
determines that such restriction is no longer necessary with respect to
exercises of the Option or SAR, or the day before the date that the Option or
SAR expires.
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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 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.
12. SERVICE 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 other than individual the right to be retained as
an employee, officer, trustee, director or consultant of the Company or any
Extended Company. 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 such Shares have been issued. 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
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terms and conditions, not inconsistent with the Plan, as the Committee may,
in its sole discretion, prescribe.
15. TERM OF PLAN. This amended and restated 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.
17. HEADINGS, REFERENCES AND CONSTRUCTION. The headings to sections of
this Plan have been included for the convenience of reference only. This Plan
shall be interpreted and construed in accordance with the laws of the State of
Maryland.
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APPENDIX A
RELATED COMPANIES
Equity Office Properties Management Corp.
EOP Operating Limited Partnership
EOPMC of California, Inc.
EOPMC of Florida, Inc.
APPENDIX B
EXTENDED COMPANIES
Equity Group Investments, LLC
Equity Residential Properties Trust and its affiliated companies
Manufactured Home Communities, Inc. and its affiliated companies
Rosenberg & Liebentritt, PC
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AMENDMENT NO. 1 TO THE EQUITY OFFICE PROPERTIES TRUST
AMENDED AND RESTATED 1997 SHARE OPTION AND SHARE AWARD PLAN
WHEREAS, Equity Office Properties Trust (the "Trust") has reserved the
right to amend the Amended and Restated 1997 Share Option and Share Award Plan
(the "Plan"); and
WHEREAS, the Trust desires to amend the Plan to increase the number of
Shares for which Share Awards, Option, SARs and Dividend Equivalents may be
granted under the Plan.
RESOLVED, that the first sentence of Paragraph 4 of the Equity Office Trust
Amended and Restated 1997 Share Option and Share Award Plan is hereby amended to
read in its entirety as follows:
4. SHARES SUBJECT TO THE PLAN. Subject to the provisions of paragraph 13,
the maximum number of Shares for which Share Awards, Options, SARs and Dividend
Equivalents may be granted under the Plan shall equal 6.8% of the outstanding
Shares from time-to-time, calculated on a fully diluted basis, determined
annually on the first day of each calendar year.
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AMENDMENT NO. 2 TO EQUITY OFFICE PROPERTIES TRUST
AMENDED AND RESTATED 1997 SHARE OPTION AND SHARE AWARD PLAN
WHEREAS, Equity Office Properties Trust (the "Trust") has adopted the
Equity Office Properties Trust Amended and Restated 1997 Share Option and Share
Award Plan as amended on May 15, 1998 (the "Plan"), and has reserved the right
to amend the Plan; and
WHEREAS, the Trust desires to amend the Plan to limit the number of Shares
that may be subject to Share Awards thereunder.
NOW, THEREFORE, the Trust hereby amends the Plan, effective as of May 15,
1998, in the following respects:
1. The first sentence of paragraph 4 is amended to read as follows:
"Subject to the provisions of paragraph 13, (i) the maximum number of Shares for
which Share Awards, Options, SARs and Dividend Equivalents may be granted under
the Plan shall equal 6.8% of the outstanding Shares from time-to-time,
calculated on a fully diluted basis, determined annually on the first day of
each calendar year; and (ii) no more than half of the number of Shares described
in clause (i) may be subject to Share Awards granted under the Plan."
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