<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 11, 1997
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
AMB PROPERTY CORPORATION
(Exact name of registrant as specified in its charter)
MARYLAND 94-3281941
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
505 MONTGOMERY STREET
SAN FRANCISCO, CALIFORNIA 94111
(Address of principal executive officers) (Zip Code)
THE 1997 STOCK OPTION AND INCENTIVE PLAN
(Full Title of the Plan)
S. DAVIS CARNIGLIA
CHIEF FINANCIAL OFFICER
505 MONTGOMERY STREET
SAN FRANCISCO, CALIFORNIA 94111
(415) 394-9000
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
Copies to:
Edward Sonnenschein, Jr., Esq.
J. Scott Hodgkins, Esq.
Latham & Watkins
633 West Fifth Street, Suite 4000
Los Angeles, California 90071
(213) 485-1234
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ------------------------ ---------------------- ---------------------- ----------------------- ----------------------
Title of Amount Proposed Maximum Proposed Maximum
Securities to be Offering Price Aggregate Offering Amount of
to be Registered Registered (1) Per Share (2) Price (2) Registration Fee
- ------------------------ ---------------------- ---------------------- ----------------------- ----------------------
<S> <C> <C> <C> <C>
Common Stock 5,750,000 $21.00 $125,878,747 $38,145
$.01 par value $ .01
$23.03
- ------------------------ ---------------------- ---------------------- ----------------------- ----------------------
</TABLE>
(1) The 1997 Stock Option and Incentive Plan (the "Plan") authorizes the
issuance of a maximum of 5,750,000 shares of common stock, par value $.01
per share (the "Common Stock"), of AMB Property Corporation (the
"Company"). Of such shares, 3,158,750 are subject to presently
outstanding options granted under the Plan, and 5,712 shares have been
granted as restricted shares of Common Stock, as of the date hereof.
(2) Pursuant to Rule 457(h), the Proposed Maximum Offering Price Per Share is
based upon (a)(i) the exercise price per share ($21.00) of outstanding
options for 3,158,750 shares of Common Stock, and (ii) the grant price
per share ($.01) for 5,712 restricted shares of Common Stock, and (b) for
the remaining 2,585,538 shares of Common Stock, the average of the high
and low sales price per share ($23.03) of the Company's Common Stock on
the New York Stock Exchange on December 4, 1997.
<PAGE> 2
PART I
INFORMATION REQUIRED IN THE
SECTION 10(A) PROSPECTUS
The documents containing the information specified in Part I
of Form S-8 (plan information and registrant information) will be sent or given
to plan participants as specified by Rule 428(b)(1) of the Securities Act of
1933, as amended, (the "Securities Act"). Such documents need not be filed with
the Securities and Exchange Commission either as part of this Registration
Statement or as prospectuses or prospectus supplements pursuant to Rule 424 of
the Securities Act. These documents, which include the statement of availability
required by Item 2 of Form S-8, and the documents incorporated by reference in
this Registration Statement pursuant to Item 3 of Form S-8 (Part II hereof),
taken together, constitute a prospectus that meets the requirements of Section
10(a) of the Securities Act.
PART II
INFORMATION REQUIRED IN THE
REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The registrant, AMB Property Corporation, a Maryland
corporation (the "Company"), hereby incorporates the following documents in this
Registration Statement by reference:
(a) Description of the Company's Common Stock contained in
the Registration Statement on Form S-11 filed with the
Securities and Exchange Commission (the "Commission")
pursuant to the Securities Act on September 18, 1997
(Registration No. 333-35915); as amended by Amendment
No. 1 filed with the Commission on October 24, 1997; as
amended by Amendment No. 2 filed with the Commission on
November 4, 1997; as amended by Amendment No. 3 filed
with the Commission on November 14, 1997 and as amended
by Amendment No. 4 filed with the Commission on November
20, 1997.
(b) A Registration Statement pursuant to Rule 462(b) of the
Securities Act filed on November 21, 1997 in connection
with the Registration Statement referred to in item 3(a)
above (Registration No. 333-40763).
(c) The Company's Prospectus dated November 21, 1997 filed
in connection with the Registration Statement referred
to in item 3(a) above pursuant to Rule 424(b) under the
Securities Act.
All documents filed by the Company pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), prior to the filing of a post-effective amendment which
indicates that all securities offered have been sold or which deregisters all
securities then remaining unsold, are incorporated by reference in this
registration statement and are a part hereof from the date of filing such
documents. Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Registration
Statement.
Page 2 of 6 pages
<PAGE> 3
ITEM 4. DESCRIPTION OF SECURITIES
The Company's Common Stock is registered pursuant to Section
12 of the Exchange Act and, therefore, the description of securities is omitted.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 2-418 of the Maryland General Corporation Law ("MGCL")
permits a corporation to indemnify its directors and officers and certain other
parties against judgments, penalties, fines, settlements, and reasonable
expenses actually incurred by them in connection with any proceeding to which
they may be made a party by reason of their service in those or other capacities
unless it is established that (i) the act or omission of the director or officer
was material to the matter giving rise to the proceeding and (a) was committed
in bad faith or (b) was the result of active and deliberate dishonesty; (ii) the
director or officer actually received an improper personal benefit in money,
property or services; or (iii) in the case of any criminal proceeding, the
director or officer had reasonable cause to believe that the act or omission was
unlawful. Indemnification may be made against judgments, penalties, fines,
settlements and reasonable expenses actually incurred by the director or officer
in connection with the proceeding; provided, however, that if the proceeding is
one by or in the right of the corporation, indemnification may not be made with
respect to any proceeding in which the director or officer has been adjudged to
be liable to the corporation. In addition, a director or officer may not be
indemnified with respect to any proceeding charging improper personal benefit to
the director or officer, whether or not involving action in the director's or
officer's official capacity, in which the director or officer was adjudged to be
liable on the basis that personal benefit was received. The termination of any
proceeding by conviction, or upon a plea of nolo contendere or its equivalent,
or an entry of any order of probation prior to judgment, creates a rebuttable
presumption that the director or officer did not meet the requisite standard of
conduct required for indemnification to be permitted.
In addition, Section 2-418 of the MGCL requires that, unless
prohibited by its charter, a corporation may indemnify any director or officer
who is made a party to any proceeding by reason of service in that capacity
against reasonable expenses incurred by the director or officer in connection
with the proceeding, in the event that the director or officer is successful, on
the merits or otherwise, in the defense of the proceeding.
The Company's Charter and Bylaws provide in effect for the
indemnification by the Company of the directors and officers of the Company to
the fullest extent permitted by applicable law. The Company has purchased
directors' and officers' liability insurance for the benefit of its directors
and officers.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIM
Not applicable.
ITEM 8. EXHIBITS
3.1 Articles of Incorporation of the Company1.
3.2 Bylaws of the Company1.
3.3 Specimen of Common Stock Certificate of the Company1.
*4.2 1997 Stock Option and Incentive Plan of the Company.
*5.1 Opinion of Ballard Spahr Andrews & Ingersoll regarding
the validity of the Common Stock being registered.
*23.1 Consent of Arthur Andersen LLP.
*23.2 Consent of Ballard Spahr Andrews & Ingersoll (included
in Exhibit 5.1 filed herewith).
*24.1 Power of Attorney (included on page 5).
----------
* Filed herewith
1 Incorporated by reference to the Company's Registration
Statement on Form S-11 (No. 333-35915) declared effective
on November 20 , 1997.
Page 3 of 6 pages
<PAGE> 4
ITEM 9. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(a) To include any prospectus required by
Section 10(a)(3) of the Securities Act;
(b) To reflect in the prospectus any facts or
events arising after the effective date of this Registration
Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the
Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high
end of the estimated maximum offering range may be reflected
in the form of prospectus filed with the Commission pursuant
to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration
statement;
(c) To include any material information with
respect to the plan of distribution not previously disclosed
in the Registration Statement or any material change to such
information in the Registration Statement;
provided, however, that paragraphs (1)(a) and (1)(b) shall not apply if the
registration statement is on Form S-3 or Form S-8 and the information required
to be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed with or furnished to the Commission by the registrant
pursuant to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act, each filing of
the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in this Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
Page 4 of 6 pages
<PAGE> 5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the Registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in San Francisco, State of California, on this 10th day of
December 1997.
/S/ HAMID R. MOGHADAM
--------------------------------------
Hamid R. Moghadam
President, Chief Executive Officer and
Director
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints Douglas D. Abbey, Hamid R.
Moghadam, T. Robert Burke and S. Davis Carniglia, and each of them, as his or
her true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him or her and in his or her name, place
and stead, in any and all capacities, to sign any or all amendments (including
post-effective amendments) to this Registration Statement, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
foregoing, as fully to all intents and purposes as he or she might or could do
in person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or their substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Exchange Act of
1933, as amended, this report has been signed below by the following persons on
behalf of the Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/S/ T. ROBERT BURKE Chairman of the Board and December 10, 1997
- -----------------------------------
T. Robert Burke Director
/S/ HAMID R. MOGHADAM President, Chief Executive December 10, 1997
- ----------------------------------
Hamid R. Moghadam Officer and Director (Principal
Executive Officer)
/S/ DOUGLAS D. ABBEY Chairman of Investment December 10, 1997
- ----------------------------------
Douglas D. Abbey Committee and Director
/S/ S. DAVIS CARNIGLIA Chief Financial Officer and December 10, 1997
- ----------------------------------
S. Davis Carniglia General Counsel (Principal
Financial Officer and Principal
Accounting Officer)
/S/ DANIEL H. CASE, III Director December 10, 1997
- ----------------------------------
Daniel H. Case, III
</TABLE>
Page 5 of 6 pages
<PAGE> 6
<TABLE>
<S> <C> <C>
/S/ ROBERT H. EDELSTEIN, PH.D. Director December 10, 1997
- ----------------------------------
Robert H. Edelstein, Ph.D.
/S/ LYNN M. SEDWAY Director December 10, 1997
- ----------------------------------
Lynn M. Sedway
/S/ PAUL P. SHEPHERD Director December 10, 1997
- ----------------------------------
Paul P. Shepherd
/S/ JEFFREY L. SKELTON, PH.D. Director December 10, 1997
- ----------------------------------
Jeffrey L. Skelton, Ph.D.
/S/ THOMAS W. TUSHER Director December 10, 1997
- ----------------------------------
Thomas W. Tusher
/S/ CARYL B. WELBORN, ESQ. Director December 10, 1997
- ----------------------------------
Caryl B. Welborn, Esq.
</TABLE>
Page 6 of 6 pages
<PAGE> 7
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT PAGE
- ------- ----
<S> <C> <C>
3.1 Articles of Incorporation of the Company1.
3.2 Bylaws of the Company1.
3.3 Specimen of Common Stock Certificate of the Company1.
*4.2 1997 Stock Option and Incentive Plan of the Company.
*5.1 Opinion of Ballard Spahr Andrews & Ingersoll regarding
the validity of the Common Stock being registered.
*23.1 Consent of Arthur Andersen LLP.
*23.2 Consent of Ballard Spahr Andrews & Ingersoll (included
in Exhibit 5.1 filed herewith).
*24.1 Power of Attorney (included on page 5).
</TABLE>
- ---------
* Filed herewith
1 Incorporated by reference to the Company's Registration Statement on Form
S-11 (Registration No. 333-35915) declared effective on November 20, 1997.
<PAGE> 1
Exhibit 4.2
THE 1997 STOCK OPTION AND INCENTIVE PLAN
OF
AMB PROPERTY CORPORATION AND ITS SUBSIDIARIES
AND AMB INSTITUTIONAL REALTY ADVISORS, INC.
AMB Property Corporation, a Maryland corporation (the
"Company"), and AMB Institutional Realty Advisors, Inc., a Maryland corporation
(the "Investment Management Company"), has adopted The 1997 Stock Option and
Incentive Plan of AMB Property Corporation and AMB Institutional Realty
Advisors, Inc. and their respective Subsidiaries (the "Plan"), effective
November 26, 1997, for the benefit of its eligible employees, consultants and
directors and those of its Subsidiaries (as such term is defined below). The
Plan consists of two plans, one for the benefit of employees, consultants and
independent directors of the Company and one for the benefit of the employees,
consultants and independent directors of the Investment Management Company.
The purposes of this Plan are as follows:
(1) To provide an additional incentive for directors, key
Employees and consultants to further the growth, development and financial
success of the Company by personally benefiting through the ownership of Company
stock and/or rights which recognize such growth, development and financial
success.
(2) To enable the Company and the Investment Management
Company, and their respective Subsidiaries, to obtain and retain the services of
directors, key Employees and consultants considered essential to the long range
success of the Company by offering them an opportunity to own stock in the
Company and/or rights which will reflect the growth, development and financial
success of the Company.
ARTICLE I.
DEFINITIONS
1.1. General. Wherever the following terms are used in this
Plan they shall have the meanings specified below, unless the context clearly
indicates otherwise.
1.2. Award Limit. "Award Limit" shall mean 1 million
shares of Common Stock, as adjusted pursuant to Section 10.3.
1.3. Board. "Board" shall mean the Board of Directors of
the Company.
1.4. Cause. "Cause," unless otherwise defined in an
Employee's employment agreement, or a consultant's consulting agreement, with
the Company or one of its Subsidiaries, shall mean (i) gross negligence or
willful misconduct, (ii) an uncured breach of any of the
<PAGE> 2
employee's material duties under their employment agreement, (iii) fraud or
other conduct against the material best interests of the Company or (iv) a
conviction of a felony if such conviction has a material adverse effect on the
Company.
1.5. Change in Control. "Change in Control" shall mean a
change in ownership or control of the Company effected through either of the
following transactions:
(a) any person or related group of persons (other than
the Company or a person that directly or indirectly controls, is controlled by,
or is under common control with, the Company) directly or indirectly acquires
beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act)
of securities possessing more than fifty percent (50%) of the total combined
voting power of the Company's outstanding securities pursuant to a tender or
exchange offer made directly to the Company's stockholders which the Board does
not recommend such stockholders to accept; or
(b) there is a change in the composition of the Board
over a period of thirty-six (36) consecutive months (or less) such that a
majority of the Board members (rounded up to the nearest whole number) ceases,
by reason of one or more proxy contests for the election of Board members, to be
comprised of individuals who either (i) have been Board members continuously
since the beginning of such period or (ii) have been elected or nominated for
election as Board members during such period by at least a majority of the Board
members described in clause (i) who were still in office at the time such
election or nomination was approved by the Board.
1.6. Code. "Code" shall mean the Internal Revenue Code of
1986, as amended.
1.7. Committee. "Committee" shall mean, with respect to
the Company and any Company Subsidiary, the Compensation Committee of the Board,
or another committee or subcommittee of the Board, appointed as provided in
Section 9.1 and, with respect to the Investment Management Company, the
Compensation Committee of its board of directors or another committee or
subcommittee of such board, if any, appointed by the Board of Directors of the
Investment Management Company in a manner consistent with Section 9.1 hereof
(except that references to the Board in such Section shall mean the board of
directors of the Investment Management Company) or the Investment Management
Company's board of directors; provided, however, that in the case of a person
who is an "officer or director of the issuer" within the meaning of Rule 16-3(a)
under the Securities Exchange Act of 1934, as amended, the grant of any award
under this Plan to such person shall be made by the Compensation Committee of
the Board.
1.8. Common Stock. "Common Stock" shall mean the common
stock of the Company, par value $.01 per share, and any equity security of the
Company issued or authorized to be issued in the future, but excluding any
preferred stock and any warrants, options or other rights to purchase Common
Stock. Debt securities of the Company convertible into Common Stock shall be
deemed equity securities of the Company.
2
<PAGE> 3
1.9. Company. "Company" shall mean AMB Property
Corporation, a Maryland corporation.
1.10. Company Employee. "Company Employee" shall mean
any officer or other employee (as defined in accordance with Section 3401(c) of
the Code) of the Company or of any Company Subsidiary.
1.11. Company Subsidiary. "Company Subsidiary" shall mean
(i) a corporation, association or other business entity of which 50% or more of
the total combined voting power of all classes of capital stock is owned,
directly or indirectly, by the Company or by one or more Company Subsidiaries or
by the Company and one or more Company Subsidiaries, (ii) any partnership or
limited liability company of which 50% or more of the capital and profits
interests is owned, directly or indirectly, by the Company or by one or more
Company Subsidiaries or by the Company and one or more Company Subsidiaries, and
(iii) any other entity not described in clauses (i) or (ii) above of which 50%
or more of the ownership and the power, pursuant to a written contract or
agreement, to direct the policies and management or the financial and the other
affairs thereof, are owned or controlled by the Company or by one or more other
Company Subsidiaries or by the Company and one or more Company Subsidiaries.
1.12. Corporate Transaction. "Corporate Transaction"
shall mean any of the following stockholder-approved transactions to which the
Company is a party:
(a) a merger or consolidation in which the Company is not
the surviving entity, except for a transaction the principal purpose of which is
to change the State in which the Company is incorporated, form a holding company
or effect a similar reorganization as to form whereupon this Plan and all
Options are assumed by the successor entity;
(b) the sale, transfer, exchange or other disposition of
all or substantially all of the assets of the Company, in complete liquidation
or dissolution of the Company in a transaction not covered by the exceptions to
clause (a), above; or
(c) any reverse merger in which the Company is the
surviving entity but in which securities possessing more than fifty percent
(50%) of the total combined voting power of the Company's outstanding securities
are transferred or issued to a person or persons different from those who held
such securities immediately prior to such merger.
1.13. Deferred Stock. "Deferred Stock" shall mean Common
Stock awarded under Article VII of this Plan.
1.14. Director. "Director" shall mean an Independent
Director, an Investment Management Company Director or a Non-Employee Director.
1.15. Dividend Equivalent. "Dividend Equivalent" shall mean
a right to receive the equivalent value (in cash or Common Stock) of dividends
or regular cash distributions paid on Common Stock, awarded under Article VII of
this Plan.
3
<PAGE> 4
1.16. Employee. "Employee" shall mean any Company
Employee or any Investment Management Company Employee.
1.17. Exchange Act. "Exchange Act" shall mean the
Securities Exchange Act of 1934, as amended.
1.18. Fair Market Value. "Fair Market Value" of a share of
Common Stock as of a given date shall be (i) the closing price of a share of
Common Stock on the principal exchange on which shares of Common Stock are then
trading, if any (or as reported on any composite index which includes such
principal exchange), on the trading day previous to such date, or if shares were
not traded on the trading day previous to such date, then on the next preceding
date on which a trade occurred, or (ii) if Common Stock is not traded on an
exchange but is quoted on Nasdaq or a successor quotation system, the mean
between the closing representative bid and asked prices for the Common Stock on
the trading day previous to such date as reported by Nasdaq or such successor
quotation system; or (iii) if Common Stock is not publicly traded on an exchange
and not quoted on Nasdaq or a successor quotation system, the Fair Market Value
of a share of Common Stock as established by the Committee (or the Board, in the
case of Options granted to Independent Directors) acting in good faith.
Notwithstanding anything to the contrary herein, the Fair Market Value at the
time of grant of a share of Common Stock underlying an option grant or other
award made under this Plan and in connection with the initial public offering of
the Company shall be the initial offering price per share.
1.19. General Partner Interest. "General Partner Interest"
shall mean an ownership interest in the Partnership that is a general partner
interest and includes any and all benefits to which the holder of such an
interest may be entitled as provided in the Partnership Agreement, together with
all obligations of such holder to comply with the terms and provisions of such
agreement.
1.20. Grantee. "Grantee" shall mean an Employee or
consultant granted a Performance Award, Dividend Equivalent, Stock Payment or
Stock Appreciation Right, or an award of Deferred Stock, under this Plan.
1.21. Incentive Stock Option. "Incentive Stock Option"
shall mean an option which conforms to the applicable provisions of Section 422
of the Code and which is designated as an Incentive Stock Option by the
Committee.
1.22. Initial Independent Director. "Initial Independent
Director" shall have the meaning given to such term in Section 3.4(d) hereof.
1.23. Independent Director. "Independent Director" shall
mean a member of the Board who is not an employee, officer or affiliate of the
Company or a subsidiary or division thereof, or a relative of a principal
executive officer, and who is not an individual member of an organization acting
as an advisor, consultant or legal counsel receiving compensation on a
continuing basis from the Company in addition to director's fees.
4
<PAGE> 5
1.24. Investment Management Company. "Investment
Management Company" shall mean AMB Institutional Realty Advisors, Inc., a
Maryland corporation.
1.25. Investment Management Company Employee. "Investment
Management Company Employee" shall mean any officer or other employee (as
defined in accordance with Section 3401(c) of the Code) of the Investment
Management Company, or any corporation or partnership which is then an
Investment Management Company Subsidiary.
1.26. Investment Management Company Independent Director.
"Investment Management Company Independent Director" shall mean a member of the
Investment Management Company Board who is not (i) an employee, officer, or
affiliates of the Company, the Investment Management Company or a subsidiary or
division of the foregoing, or a relative of a principal executive officer, and
who is not an individual member of an organization acting as an advisor,
consultant or legal counsel receiving compensation on a continuing basis from
the company or the Services company in addition to director's fees or (b) an
Independent Director.
1.27. Investment Management Company Purchase Price.
"Investment Management Company Purchase Price" shall have the meaning set forth
in Section 5.5 hereof.
1.28. Investment Management Company Purchased Shares.
"Investment Management Company Purchased Shares" shall have the meaning set
forth in Section 5.5 hereof.
1.29. Investment Management Company Subsidiary. "Investment
Management Company Subsidiary" shall mean (i) a corporation, association or
other business of which 50% or more of the total combined voting power of all
classes of capital stock is owned, directly or indirectly, by the Investment
Management Company or by one or more Investment Management Company Subsidiaries
or by the Investment Management Company and one or more Investment Management
Company Subsidiaries, (ii) any partnership or limited liability company of which
50% or more of the capital and profits interests is owned, directly or
indirectly, by the Investment Management Company or by one or more Investment
Management Company Subsidiaries or by the Investment Management Company and one
or more Investment Management Company Subsidiaries and (iii) any other entity
not described in clauses (i) or (ii) above of which 50% or more of the ownership
and the power, pursuant to a written contract or agreement, to direct the
policies and management or the financial and the other affairs thereof, are
owned or controlled by the Investment Management Company or by one or more
Investment Management Company Subsidiaries or by the Investment Management
Company and one or more Investment Management Company Subsidiaries.
1.30. Non-Employee Director. "Non-Employee Director"
shall mean a member of the Board of the Investment Management Company Board who
is not an Independent Director, an Investment Management Services Company
Director or an Employee.
1.31. Non-Qualified Stock Option. "Non-Qualified Stock
Option" shall mean an Option which is not designated as an Incentive Stock
Option by the Committee.
5
<PAGE> 6
1.32. Option. "Option" shall mean a stock option granted
under Article III of this Plan. An Option granted under this Plan shall, as
determined by the Committee, be either a Non-Qualified Stock Option or an
Incentive Stock Option; provided, however, that Options granted to anyone other
than Company Employees shall be Non-Qualified Stock Options.
1.33. Optionee. "Optionee" shall mean an Employee,
consultant or Director granted an Option under this Plan.
1.34. Partnership. "Partnership" shall mean AMB Property,
L.P., a Delaware limited partnership.
1.35. Partnership Agreement. "Partnership Agreement" shall
mean the Amended and Restated Agreement of Limited Partnership of the
Partnership, as the same may be amended, modified or restated from time to time.
1.36. Partnership Employee. "Partnership Employee" shall
mean any officer, other employee (as defined in accordance with Section 3401(c)
of the Code) of the Partnership, or any entity which is then a Partnership
Subsidiary.
1.37. Partnership Purchase Price. "Partnership Purchase
Price" shall have the meaning set forth in Section 5.4
1.38. Partnership Purchased Shares. "Partnership Purchased
Shares" shall have the meaning set forth in Section 5.4.
1.39. Partnership Subsidiary. "Partnership Subsidiary"
shall mean (i) a corporation, association or other business entity of which 50%
or more of the total combined voting power of all classes of capital stock is
owned, directly or indirectly, by the Partnership or by one or more Partnership
Subsidiaries or by the Partnership and one or more Partnership Subsidiaries,
(ii) any partnership or limited liability company of which 50% or more of the
capital and profits interests is owned, directly or indirectly, by the
Partnership or by one or more Partnership Subsidiaries or by the Partnership and
one or more Partnership Subsidiaries, and (iii) any other entity not described
in clauses (i) or (ii) above of which 50% or more of the ownership and the
power, pursuant to a written contract or agreement, to direct the policies and
management or the financial and the other affairs thereof, are owned or
controlled by the Partnership or by one or more other Partnership Subsidiaries
or by the Partnership and one or more Partnership Subsidiaries.
1.40. Performance Award. "Performance Award" shall mean a
cash bonus, stock bonus or other performance or incentive award that is paid in
cash, Common Stock or a combination of both, awarded under Article VII of this
Plan.
1.41. Plan. "Plan" shall mean The 1997 Stock Option and
Incentive Plan of AMB Property Corporation and its Subsidiaries.
6
<PAGE> 7
1.42. QDRO. "QDRO" shall mean a qualified domestic
relations order as defined by the Code or Title I of the Employee Retirement
Income Security Act of 1974, as amended, or the rules thereunder.
1.43. Restricted Stock. "Restricted Stock" shall mean
Common Stock awarded under Article VI of this Plan.
1.44. Restricted Stockholder. "Restricted Stockholder"
shall mean an Employee or consultant granted an award of Restricted Stock under
Article VI of this Plan.
1.45. Rule 16b-3. "Rule 16b-3" shall mean that certain Rule
16b-3 under the Exchange Act, as such Rule may be amended from time to time.
1.46. Section 162(m) Participant. "Section 162(m)
Participant" shall mean any key Employee designated by the Committee as a key
Employee whose compensation for the fiscal year in which the key Employee is so
designated or a future fiscal year may be subject to the limit on deductible
compensation imposed by Section 162(m) of the Code.
1.47. Stock Appreciation Right. "Stock Appreciation Right"
shall mean a stock appreciation right granted under Article VIII of this Plan.
1.48. Stock Payment. "Stock Payment" shall mean (i) a
payment in the form of shares of Common Stock, or (ii) an option or other right
to purchase shares of Common Stock, as part of a deferred compensation
arrangement, made in lieu of all or any portion of the compensation, including
without limitation, salary, bonuses and commissions, that would otherwise become
payable to a key Employee or consultant in cash, awarded under Article VII of
this Plan.
1.49. Subsidiary. "Subsidiary" shall mean any Company
Subsidiary or Subsidiary.
1.50. Termination of Consultancy. "Termination of
Consultancy" shall mean the time when the engagement of an Optionee, Grantee or
Restricted Stockholder as a consultant to the Company, a Company Subsidiary, the
Investment Management Company, an Investment Management Company Subsidiary, the
Partnership or a Partnership Subsidiary is terminated for any reason, with or
without Cause, including, but not by way of limitation, by resignation,
discharge, death or retirement; but excluding terminations where there is a
simultaneous commencement of employment with the Company, a Company Subsidiary,
the Investment Management Company, an Investment Management Company Subsidiary,
the Partnership or a Partnership Subsidiary. The Committee, in its absolute
discretion, shall determine the effect of all matters and questions relating to
Termination of Consultancy, including, but not by way of limitation, the
question of whether a Termination of Consultancy resulted from a discharge for
Cause, and all questions of whether a particular leave of absence constitutes a
Terminations of Consultancy. Notwithstanding any other provision of this Plan,
the Company, a Company Subsidiary, the Investment Management Company, an
Investment Management Company
7
<PAGE> 8
Subsidiary, the Partnership or a Partnership Subsidiary has an absolute and
unrestricted right to terminate a consultant's service at any time for any
reason whatsoever, with or without Cause, except to the extent expressly
provided otherwise in writing.
1.51. Termination of Directorship. "Termination of
Directorship" shall mean the time when an Optionee, Grantee or Restricted
Stockholder who is an Independent Director or a Management Investment Company
Independent Director ceases to be a Director for any reason, including, but not
by way of limitation, a termination by resignation, failure to be elected, death
or retirement; but excluding, at the discretion of the Committee, terminations
(i) where there is a simultaneous reemployment or continuing employment of an
Optionee, Grantee or Restricted Stockholder by the Company, a Company
Subsidiary, the Investment Management Company, an Investment Management Company
Subsidiary, the Partnership or a Partnership Subsidiary and (ii) which are
followed by the simultaneous establishment of a directorship with the Company, a
Company Subsidiary, the Investment Management Company, an Investment Management
Company Subsidiary, the Partnership or a Partnership Subsidiary. The Board, in
its sole and absolute discretion, shall determine the effect of all matters and
questions relating to Termination of Directorship with respect to Independent
Directors or Management Investment Company Independent Directors in accordance
with the Company's bylaws.
1.52. Termination of Employment. "Termination of
Employment" shall mean the time when the employee-employer relationship between
an Optionee, Grantee or Restricted Stockholder and the Company, Investment
Management Company or Partnership, or any of their respective Subsidiaries, is
terminated for any reason, with or without Cause, including, but not by way of
limitation, a termination by resignation, discharge, death, disability or
retirement; but excluding (i) terminations where there is a simultaneous
reemployment or continuing employment of an Optionee, Grantee or Restricted
Stockholder by the Company, a Company Subsidiary, the Investment Management
Company, an Investment Management Company Subsidiary, the Partnership or a
Partnership Subsidiary, (ii) at the discretion of the Committee, terminations
which result in a temporary severance of the employee-employer relationship, and
(iii) at the discretion of the Committee, terminations which are followed by the
simultaneous establishment of a consulting relationship by the Company, a
Company Subsidiary, the Investment Management Company, an Investment Management
Company Subsidiary, the Partnership or a Partnership Subsidiary with the former
employee. The Committee, in its absolute discretion, shall determine the effect
of all matters and questions relating to Termination of Employment, including,
but not by way of limitation, the question of whether a Termination of
Employment resulted from a discharge for Cause, and all questions of whether a
particular leave of absence constitutes a Termination of Employment; provided,
however, that, with respect to Incentive Stock Options unless otherwise
determined by the Committee in its discretion, a leave of absence, change in
status from an employee to an independent contractor or other change in the
employee-employer relationship shall constitute a Termination of Employment if,
and to the extent that, such leave of absence, change in status or other change
interrupts employment for the purposes of Section 422(a)(2) of the Code and the
then applicable regulations and revenue rulings under said Section.
Notwithstanding any other provision of this Plan, the Company, a Company
Subsidiary, the Investment Management Company, an
8
<PAGE> 9
Investment Management Company Subsidiary, the Partnership or a Partnership
Subsidiary has an absolute and unrestricted right to terminate an Employee's
employment at any time for any reason whatsoever, with or without Cause, except
to the extent expressly provided otherwise in writing.
ARTICLE II.
SHARES SUBJECT TO PLAN
2.1. Shares Subject to Plan.
(a) The shares of stock subject to Options, awards of
Restricted Stock, Performance Awards, Dividend Equivalents, awards of Deferred
Stock, Stock Payments or Stock Appreciation Rights shall be shares of Common
Stock. The aggregate number of such shares which may be issued upon exercise of
such Options or rights or upon any such awards under the Plan shall not exceed
Five Million Seven Hundred Fifty Thousand (5,750,000). The shares of Common
Stock issuable upon exercise of such Options or rights or upon any such awards
may be either previously authorized but unissued shares or treasury shares.
(b) The maximum number of shares which may be subject to
Options, awards of Restricted Stock, Performance Awards, Dividend Equivalents,
awards of Deferred Stock, Stock Payments or Stock Appreciation Rights granted
under the Plan to any individual in any calendar year shall not exceed the Award
Limit. To the extent required by Section 162(m) of the Code, shares subject to
Options which are canceled continue to be counted against the Award Limit and
if, after grant of an Option, the price of shares subject to such Option is
reduced, the transaction is treated as a cancellation of the Option and a grant
of a new Option and both the Option deemed to be canceled and the Option deemed
to be granted are counted against the Award Limit. Furthermore, to the extent
required by Section 162(m) of the Code, if, after grant of a Stock Appreciation
Right, the base amount on which stock appreciation is calculated is reduced to
reflect a reduction in the Fair Market Value of the Common Stock, the
transaction is treated as a cancellation of the Stock Appreciation Right and a
grant of a new Stock Appreciation Right and both the Stock Appreciation Right
deemed to be canceled and the Stock Appreciation Right deemed to be granted are
counted against the Award Limit.
2.2. Add-back of Options and Other Rights. If any Option,
or other right to acquire shares of Common Stock under any other award under
this Plan, expires or is canceled without having been fully exercised, or is
exercised in whole or in part for cash as permitted by this Plan, the number of
shares subject to such Option or other right but as to which such Option or
other right was not exercised prior to its expiration, cancellation or exercise
may again be optioned, granted or awarded hereunder, subject to the limitations
of Section 2.1. Furthermore, any shares subject to Options or other awards which
are adjusted pursuant to Section 10.3 and become exercisable with respect to
shares of stock of another corporation shall be considered canceled and may
again be optioned, granted or awarded hereunder, subject to the limitations of
Section 2.1. Shares of Common Stock which are delivered by the Optionee or
Grantee or
9
<PAGE> 10
withheld by the Company upon the exercise of any Option or other award under
this Plan, in payment of the exercise price thereof, may again be optioned,
granted or awarded hereunder, subject to the limitations of Section 2.1. If any
share of Restricted Stock is forfeited by the Grantee or repurchased by the
Company pursuant to Section 6.6 hereof, such share may again be optioned,
granted or awarded hereunder, subject to the limitations of Section 2.1.
Notwithstanding the provisions of this Section 2.2, no shares of Common Stock
may again be optioned, granted or awarded if such action would cause an
Incentive Stock Option to fail to qualify as an incentive stock option under
Section 422 of the Code.
ARTICLE III.
GRANTING OF OPTIONS
3.1. Eligibility. Any Employee or consultant selected by
the Committee pursuant to Section 3.4(a)(i) shall be eligible to be granted an
Option. Each Non-Employee Director of the Company shall be eligible to be
granted Options at the times and in the manner set forth in Section 3.4(d).
3.2. Disqualification for Stock Ownership. No person may
be granted an Incentive Stock Option under this Plan if such person, at the time
the Incentive Stock Option is granted, owns stock possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of the
Company or any then existing Subsidiary or parent corporation (within the
meaning of Section 422 of the Code) unless such Incentive Stock Option conforms
to the applicable provisions of Section 422 of the Code.
3.3. Qualification of Incentive Stock Options. No
Incentive Stock Option shall be granted to any person who is not an Employee, or
to any Employee of a Subsidiary which does not constitute a "subsidiary
corporation" within Section 424(f) of the Code.
3.4. Granting of Options
(a) The Committee shall from time to time, in its
absolute discretion, and subject to applicable limitations of this Plan:
(i) Determine which Employees are key Employees and
select from among the key Employees, consultants and Non-Employee
Directors (including Employees, consultants and Non-Employee Directors
who have previously received Options or other awards under this Plan)
such of them as in its opinion should be granted Options;
(ii) Subject to the Award Limit, determine the number
of shares to be subject to such Options granted to the selected key
Employees or consultants;
(iii) Subject to Section 3.3, determine whether such
Options are to be Incentive Stock Options or Non-Qualified Stock
Options and whether such Options are to
10
<PAGE> 11
qualify as performance-based compensation as described in Section
162(m)(4)(C) of the Code; and
(iv) Determine the terms and conditions of such
Options, consistent with this Plan; provided, however, that the terms
and conditions of Options intended to qualify as performance-based
compensation as described in Section 162(m)(4)(C) of the Code shall
include, but not be limited to, such terms and conditions as may be
necessary to meet the applicable provisions of Section 162(m) of the
Code.
(b) Upon the selection of a key Employee or consultant to
be granted an Option, the Committee shall instruct the Secretary of the Company
to issue the Option and may impose such conditions on the grant of the Option as
it deems appropriate. Without limiting the generality of the preceding sentence,
the Committee may, in its discretion and on such terms as it deems appropriate,
require as a condition on the grant of an Option to an Employee or consultant
that the Employee or consultant surrender for cancellation some or all of the
unexercised Options, awards of Restricted Stock or Deferred Stock, Performance
Awards, Stock Appreciation Rights, Dividend Equivalents or Stock Payments or
other rights which have been previously granted to him under this Plan or
otherwise. An Option, the grant of which is conditioned upon such surrender, may
have an Option price lower (or higher) than the exercise price of such
surrendered Option or other award, may cover the same (or a lesser or greater)
number of shares as such surrendered Option or other award, may contain such
other terms as the Committee deems appropriate, and shall be exercisable in
accordance with its terms, without regard to the number of shares, price,
exercise period or any other term or condition of such surrendered Option or
other award.
(c) Any Incentive Stock Option granted under this Plan
may be modified by the Committee, with the consent of the Optionee, to
disqualify such Option from treatment as an "incentive stock option" under
Section 422 of the Code.
(d) During the term of the Plan, each person who is named
as an Independent Director in the Company's registration statement in connection
with the Company's initial public offering of its Common Stock (an "Initial
Independent Director") as of the date upon which such Independent Director's
term as a director commences, automatically shall be granted (i) an Option to
purchase twenty-six thousand two hundred fifty (26,250) shares of Common Stock
(subject to adjustment as provided in Section 10.3) on the date of such initial
public offering and (ii) an Option to purchase fifteen thousand (15,000) shares
of Common Stock (subject to adjustment as provided in Section 10.3) on the date
of each annual meeting of stockholders after such initial public offering at
which the Independent Director is reelected to the Board commencing with the
annual meeting to be held in 1999. During the term of the Plan, a person, other
than an Initial Independent Director, who is initially elected to the Board
after the consummation of the initial public offering of Common Stock and who is
an Independent Director at the time of such initial election automatically shall
be granted (i) an Option to purchase twenty thousand (20,000) shares of Common
Stock (subject to adjustment as provided in Section 10.3) on the date of such
initial election and (ii) an Option to purchase fifteen
11
<PAGE> 12
thousand (15,000) shares of Common Stock (subject to adjustment as provided in
Section 10.3) on the date of each annual meeting of stockholders after such
initial election at which the Independent Director is reelected to the Board.
Members of the Board who are employees of the Company who subsequently retire
from the Company and remain on the Board will not receive an initial Option
grant pursuant to clause (i) of the preceding sentence, but to the extent that
they are otherwise eligible, will receive, after retirement from employment with
the Company, Options as described in clause (ii) of the preceding sentence. All
the foregoing Option grants authorized by this Section 3.4(d) are subject to
stockholder approval of the Plan.
ARTICLE IV.
TERMS OF OPTIONS
4.1. Option Agreement. Each Option shall be evidenced by a
written Stock Option Agreement, which shall be executed by the Optionee and an
authorized officer of the Company and which shall contain such terms and
conditions as the Committee (or the Board, in the case of Options granted to
Independent Directors) shall determine, consistent with this Plan. Stock Option
Agreements evidencing Options intended to qualify as performance-based
compensation as described in Section 162(m)(4)(C) of the Code shall contain such
terms and conditions as may be necessary to meet the applicable provisions of
Section 162(m) of the Code. Stock Option Agreements evidencing Incentive Stock
Options shall contain such terms and conditions as may be necessary to meet the
applicable provisions of Section 422 of the Code.
4.2. Option Price. The price per share of the shares
subject to each Option shall be set by the Committee; provided, however, that
(i) in the case of Incentive Stock Options such price shall not be less than
100% of the Fair Market Value of a share of Common Stock on the date the Option
is granted (or the date the Option is modified, extended or renewed for purposes
of Section 424(h) of the Code); (ii) in the case of Incentive Stock Options
granted to an individual then owning (within the meaning of Section 424(d) of
the Code) more than 10% of the total combined voting power of all classes of
stock of the Company or any Subsidiary or parent corporation thereof (within the
meaning of Section 422 of the Code), such price shall not be less than 110% of
the Fair Market Value of a share of Common Stock on the date the Option is
granted (or the date the Option is modified, extended or renewed for purposes of
Section 424(h) of the Code); (iii) in the case of Options granted to Independent
Directors, such price shall equal 100% of the Fair Market Value of a share of
Common Stock on the date the Option is granted; provided, however, that the
price of each share subject to each Option granted to Initial Independent
Directors pursuant to Section 3.4(d) hereof shall equal the initial public
offering price per share of Common Stock; and (iv) in the case of all other
Options granted, such price shall be not less than 100% of the Fair Market Value
of a share of Common Stock on the date the Option is granted.
4.3. Option Term. The term of an Option shall be set by
the Committee in its discretion; provided, however, that, (i) in the case of
Options granted to Independent Directors, the term shall be ten (10) years from
the date the Option is granted, without variation or
12
<PAGE> 13
acceleration hereunder, but subject to Section 5.6, and (ii) in the case of
Incentive Stock Options, the term shall not be more than ten (10) years from the
date the Incentive Stock Option is granted, or five (5) years from such date if
the Incentive Stock Option is granted to an individual then owning (within the
meaning of Section 424(d) of the Code) more than 10% of the total combined
voting power of all classes of stock of the Company or any Subsidiary or parent
corporation thereof (within the meaning of Section 422 of the Code). Except as
limited by requirements of Section 422 of the Code and regulations and rulings
thereunder applicable to Incentive Stock Options, the Committee may extend the
term of any outstanding Option in connection with any Termination of Employment
or Termination of Consultancy of the Optionee, or amend any other term or
condition of such Option relating to such a termination.
4.4. Option Vesting
(a) The period during which the right to exercise an
Option in whole or in part vests in the Optionee shall be set by the Committee
and the Committee may determine that an Option may not be exercised in whole or
in part for a specified period after it is granted; provided, however, that,
unless the Committee otherwise provides in the terms of the Option or otherwise,
no Option shall be exercisable by any Optionee who is then subject to Section 16
of the Exchange Act within the period ending six months and one day after the
date the Option is granted; and provided, further, that, unless the Committee
otherwise provides in the terms of the Options or otherwise, Options granted to
Independent Directors shall become exercisable in cumulative annual installments
of 331/3% on each of the first, second and third anniversaries of the date of
Option grant, without variation or acceleration hereunder except as provided in
Section 10.3(b). At any time after grant of an Option, the Committee may, in its
sole and absolute discretion and subject to whatever terms and conditions it
selects, accelerate the period during which an Option (except an Option granted
to an Independent Director) vests.
(b) No portion of an Option which is unexercisable at
Termination of Employment, Termination of Directorship or Termination of
Consultancy, as applicable, shall thereafter become exercisable, except as may
be otherwise provided by the Committee in the case of Options granted to
Employees or consultants either in the Stock Option Agreement or by action of
the Committee following the grant of the Option.
(c) To the extent that the aggregate Fair Market Value of
stock with respect to which "incentive stock options" (within the meaning of
Section 422 of the Code, but without regard to Section 422(d) of the Code) are
exercisable for the first time by an Optionee during any calendar year (under
the Plan and all other incentive stock option plans of the Company and any
parent or subsidiary corporation (within the meaning of Section 422 of the Code)
of the Company) exceeds $100,000, such Options shall be treated as Non-Qualified
Options to the extent required by Section 422 of the Code. The rule set forth in
the preceding sentence shall be applied by taking Options into account in the
order in which they were granted. For purposes of this Section 4.4(c), the Fair
Market Value of stock shall be determined as of the time the Option with respect
to such stock is granted.
13
<PAGE> 14
4.5. Consideration. In consideration of the granting of an
Option, the Optionee shall agree, in the written Stock Option Agreement, to
remain in the employ of (or to consult for or to serve as an Independent
Director of, as applicable) the Company, a Company Subsidiary, the Investment
Management Company, an Investment Management Company Subsidiary, the Partnership
or a Partnership Subsidiary for a period of at least one year (or such shorter
period as may be fixed in the Stock Option Agreement or by action of the
Committee following grant of the Option) after the Option is granted (or, in the
case of an Independent Director, until the next annual meeting of stockholders
of the Company). Nothing in this Plan or in any Stock Option Agreement hereunder
shall (i) confer upon any Optionee any right to (a) continue in the employ of,
or as a consultant for, the Company, a Company Subsidiary, the Investment
Management Company, an Investment Management Company Subsidiary, the Partnership
or a Partnership Subsidiary, or as a Director, or (b) receive any severance pay
from the Company, a Company Subsidiary, the Investment Management Company, an
Investment Management Company Subsidiary, the Partnership or a Partnership
Subsidiary or (ii) interfere with or restrict in any way the rights of the
Company, a Company Subsidiary, the Investment Management Company, an Investment
Management Company Subsidiary, the Partnership or a Partnership Subsidiary,
which are hereby expressly reserved, to discharge any Optionee at any time for
any reason whatsoever, with or without Cause.
ARTICLE V.
EXERCISE OF OPTIONS
5.1. Partial Exercise. An exercisable Option may be
exercised in whole or in part. However, an Option shall not be exercisable with
respect to fractional shares and the Committee (or the Board, in the case of
Options granted to Independent Directors) may require that, by the terms of the
Option, a partial exercise be with respect to a minimum number of shares.
5.2. Manner of Exercise. All or a portion of an
exercisable Option shall be deemed exercised upon delivery of all of the
following to the Secretary of the Company (or such other officer as identified
in the applicable Stock Option Agreement):
(a) A written notice complying with the applicable rules
established by the Committee (or the Board, in the case of Options granted to
Independent Directors) stating that the Option, or a portion thereof, is
exercised. The notice shall be signed by the Optionee or other person then
entitled to exercise the Option or such portion of the Option;
(b) Such representations and documents as the Committee
(or the Board, in the case of Options granted to Independent Directors), in its
absolute discretion, deems necessary or advisable to effect compliance with all
applicable provisions of the Securities Act of 1933, as amended, and any other
federal or state securities laws or regulations. The Committee or Board may, in
its absolute discretion, also take whatever additional actions it deems
appropriate to
14
<PAGE> 15
effect such compliance including, without limitation, placing legends on share
certificates and issuing stop-transfer notices to agents and registrars;
(c) In the event that the Option shall be exercised
pursuant to Section 10.1 by any person or persons other than the Optionee,
appropriate proof of the right of such person or persons to exercise the Option;
and
(d) Full cash payment to the Secretary of the Company for
the shares with respect to which the Option, or portion thereof, is exercised.
However, the Committee (or the Board, in the case of Options granted to
Independent Directors), may in its discretion (i) allow a delay in payment up to
thirty (30) days from the date the Option, or portion thereof, is exercised;
(ii) allow payment, in whole or in part, through the delivery of shares of
Common Stock owned by the Optionee, duly endorsed for transfer to the Company
with a Fair Market Value on the date of delivery equal to the aggregate exercise
price of the Option or exercised portion thereof; (iii) allow payment, in whole
or in part, through the surrender of shares of Common Stock then issuable upon
exercise of the Option having a Fair Market Value on the date of Option exercise
equal to the aggregate exercise price of the Option or exercised portion
thereof; (iv) allow payment, in whole or in part, through the delivery of a full
recourse promissory note bearing interest (at no less than such rate as shall
then preclude the imputation of interest under the Code) and payable upon such
terms as may be prescribed by the Committee or the Board; or (v) allow payment
through any combination of the consideration provided in the foregoing
subparagraphs (ii), (iii) and (iv). In the case of a promissory note, the
Committee (or the Board, in the case of Options granted to Independent
Directors) may also prescribe the form of such note and the security to be given
for such note. The Option may not be exercised, however, by delivery of a
promissory note or by a loan from the Company when or where such loan or other
extension of credit is prohibited by law.
5.3. Transfer of Shares to a Company Employee, Consultant
or Independent Director. As soon as practicable after receipt by the Company,
pursuant to Section 5.2(d), of payment for the shares with respect to which an
Option (which in the case of a Company Employee, consultant or Independent
Director was issued to and is held by such Optionee in such capacity), or
portion thereof, is exercised by an Optionee who is a Company Employee,
Independent Director or a consultant to the Company, with respect to each such
exercise, the Company shall transfer to the Optionee the number of shares equal
to
(a) The amount of the payment made by the Optionee to the
Company pursuant to Section 5.2(d), divided by
(b) The price per share of the shares subject to the
Option as determined pursuant to Section 4.2.
5.4. Transfer of Shares to a Partnership Employee,
Consultant or Independent Director. (a) At the time that an Optionee who is an
Employee, Independent Director or consultant of the Partnership or a Partnership
Subsidiary exercises all or any part of an Option pursuant to the terms of this
Plan, such Optionee shall remit to the Partnership or the Partnership
15
<PAGE> 16
Subsidiary, as the case may be, an amount equal to the product of the exercise
price per share of such Option and the number of shares with respect to such
Option being exercised by such Optionee.
(b) As soon as practicable after receipt by the Operating
Partnership of a notice of the exercise of shares with respect to which an
Option (which was issued to and is held by a Partnership Employee, consultant or
Independent Director in such capacity), or portion thereof, is exercised by an
Optionee who is a Partnership Employee, Independent Director or consultant, with
respect to each such exercise the Company shall sell to the Partnership, or the
Partnership Subsidiary in the case of an Optionee who is an Employee, consultant
or Independent Director of Partnership Subsidiary, the number of shares (the
"Partnership Purchased Shares") equal to the number of shares subject to such
exercise by such Optionee at a purchase price equal to the Fair Market Value of
a share of Common Stock at the time of the exercise (the "Partnership Purchase
Price");
(c) As soon as practicable after receipt of the
Partnership Purchased Shares by the Partnership, or the Partnership Subsidiary
in the case of an Optionee who is an Employee, Independent Director or
consultant of a Partnership Subsidiary, the Partnership or the Partnership
Subsidiary, as the case may be, shall transfer such shares to the Optionee at no
additional cost.
5.5. Transfer of Shares to an Investment Management
Company Employee, Consultant or Independent Director. (a) At the time that an
Optionee who is an Employee, Independent Director or consultant of the
Investment Management Company or an Investment Management Company Subsidiary
exercises all or any part of an Option pursuant to the terms of this Plan, such
Optionee shall remit to the Investment Management Company or the Investment
Management Company Subsidiary, as the case may be, an amount equal to the
product of the exercise price per share of such Option and the number of shares
with respect to such Option being exercised by such Optionee.
(b) As soon as practicable after receipt by the
Investment Management Company, of a notice of the exercise of shares with
respect to which an Option (which in the case of an Investment Management
Company Employee, consultant or Independent Director was issued to and is held
by such Optionee in such capacity), or portion thereof, is exercised by an
Optionee who is an Investment Management Company Employee, an Investment
Management Company Independent Director or consultant, with respect to each such
exercise the Company shall sell to the Investment Management Company, or the
Investment Management Company Subsidiary in the case of an Optionee who is an
Employee, consultant or Independent Director of an Investment Management Company
Subsidiary, the number of shares (the "Investment Management Company Purchased
Shares") equal to the number of shares subject to such exercise by such Optionee
at a purchase price equal to the Fair Market Value of a share of Common Stock at
the time of the exercise (the "Investment Management Company Purchase Price");
16
<PAGE> 17
(c) As soon as practicable after receipt of the
Investment Management Company Purchased Shares by the Investment Management
Company, or the Investment Management Company Subsidiary in the case of an
Optionee who is an Employee, Independent Director or consultant of a Investment
Management Company Subsidiary, the Investment Management Company or such
Investment Management Company Subsidiary, as the case may be, shall transfer
such shares to the Optionee at no additional cost.
5.6. Transfer of Payment to the Partnership. As soon as
practicable after receipt by the Company of the amount described in Section
5.2(d), 5.4(b) and 5.5(b) the Company shall contribute to the Partnership an
amount of cash equal to such payment and the Partnership shall issue an
additional interest in the Partnership on the terms set forth in the Partnership
Agreement.
5.7. Conditions to Issuance of Stock Certificates. The
Company shall not be required to issue or deliver any certificate or
certificates for shares of stock purchased upon the exercise of any Option or
portion thereof prior to fulfillment of all of the following conditions:
(a) The admission of such shares to listing on all stock
exchanges on which such class of stock is then listed;
(b) The completion of any registration or other
qualification of such shares under any state or federal law, or under the
rulings or regulations of the Securities and Exchange Commission or any other
governmental regulatory body which the Committee or Board shall, in its absolute
discretion, deem necessary or advisable;
(c) The obtaining of any approval or other clearance from
any state or federal governmental agency which the Committee (or Board, in the
case of Options granted to Independent Directors) shall, in its absolute
discretion, determine to be necessary or advisable;
(d) The lapse of such reasonable period of time following
the exercise of the Option as the Committee (or Board, in the case of Options
granted to Independent Directors) may establish from time to time for reasons of
administrative convenience; and
(e) The receipt by the Company of full payment for such
shares, including payment of any applicable withholding tax.
5.8. Rights as Stockholders. The holders of Options shall
not be, nor have any of the rights or privileges of, stockholders of the Company
in respect of any shares purchasable upon the exercise of any part of an Option
unless and until certificates representing such shares have been issued by the
Company to such holders.
5.9. Ownership and Transfer Restrictions. The Committee
(or Board, in the case of Options granted to Independent Directors), in its
absolute discretion, may impose such restrictions on the ownership and
transferability of the shares purchasable upon the exercise of an Option as it
deems appropriate. Any such restriction shall be set forth in the respective
Stock
17
<PAGE> 18
Option Agreement and may be referred to on the certificates evidencing such
shares. The Committee may require the Employee to give the Company prompt notice
of any disposition of shares of Common Stock acquired by exercise of an
Incentive Stock Option within (i) two years from the date of granting (including
the date the Option is modified, extended or renewed for purposes of Section
424(h) of the Code) such Option to such Employee or (ii) one year after the
transfer of such shares to such Employee. The Committee may direct that the
certificates evidencing shares acquired by exercise of an Option refer to such
requirement to give prompt notice of disposition.
5.10. Limitations on Exercise of Options Granted to an
Optionee. The Committee (or the Board, in the case of Options granted to
Independent Directors), in its absolute discretion, may impose such limitations
and restrictions on the exercise of Options as it deems appropriate. Any such
limitation shall be set forth in the respective Stock Option Agreement.
Notwithstanding the foregoing, an Option is not exercisable if in the sole and
absolute discretion of the Committee the exercise of such Option would likely
result in any of the following:
(a) the Optionee's or any other person's ownership of
capital stock being in violation of the Stock Ownership Limit (as defined in the
Company's Articles of Incorporation); or
(b) income to the Company that could impair the Company's
status as a real estate investment trust, within the meaning of Sections 856
through 860 of the Code.
ARTICLE VI.
AWARD OF RESTRICTED STOCK
6.1. Eligibility. Subject to the Award Limit, Restricted
Stock may be awarded to any Employee who the Committee determines is a key
Employee or any Director or consultant whom the Committee determines should
receive such an award.
6.2. Award of Restricted Stock
(a) The Committee may from time to time, in its absolute
discretion:
(i) Determine which Employees are key Employees and
select from among the key Employees, Directors or consultants
(including Employees, Directors or consultants who have previously
received other awards under this Plan) such of them as in its opinion
should be awarded Restricted Stock; and
(ii) Determine the purchase price, if any, and other
terms and conditions (including, without limitation, in the case of
awards to Employees, consultants or Independent Directors of the
Partnership, any Partnership Subsidiary, the Investment Management
Company or any Investment Management Company Subsidiary, the
18
<PAGE> 19
mechanism for the transfer of the Restricted Stock and payment therefor
and, in the case of the repurchase of shares of Restricted Stock
subject to restrictions in effect at the time of the Termination of
Employment, Directorship or Consultancy of such Employee, Director or
consultant, as the case may be) applicable to such Restricted Stock,
consistent with this Plan.
(b) The Committee shall establish the purchase price, if
any, and form of payment for Restricted Stock; provided, however, that such
purchase price shall be no less than the par value of the Common Stock to be
purchased, unless otherwise permitted by applicable state law. In all cases,
legal consideration shall be required for each issuance of Restricted Stock.
(c) Upon the selection of a key Employee or consultant to
be awarded Restricted Stock, the Committee shall instruct the Secretary of the
Company to issue such Restricted Stock and may impose such conditions on the
issuance of such Restricted Stock as it deems appropriate.
6.3. Restricted Stock Agreement. Restricted Stock shall be
issued only pursuant to a written Restricted Stock Agreement, which shall be
executed by the selected key Employee or consultant and an authorized officer of
the Company and which shall contain such terms and conditions as the Committee
shall determine, consistent with this Plan.
6.4. Consideration. As consideration for the issuance of
Restricted Stock, in addition to payment of any purchase price, the Restricted
Stockholder shall agree, in the written Restricted Stock Agreement, to remain in
the employ of, or to consult for, the Company, a Company Subsidiary, the
Investment Management Company, an Investment Management Company Subsidiary, the
Partnership or a Partnership Subsidiary for a period of at least one year after
the Restricted Stock is issued (or such shorter period as may be fixed in the
Restricted Stock Agreement or by action of the Committee following grant of the
Restricted Stock) or, in the case of a Director, complete the remainder of such
Director's elected term. Nothing in this Plan or in any Restricted Stock
Agreement hereunder shall (i) confer on any Restricted Stockholder any right to
(a) continue in the employ of, as a Director of or as a consultant for, the
Company, a Company Subsidiary, the Investment Management Company, an Investment
Management Company Subsidiary, the Partnership or a Partnership Subsidiary or
(b) receive any severance pay from the Company, a Company Subsidiary, the
Investment Management Company, an Investment Management Company Subsidiary, the
Partnership or a Partnership Subsidiary or (ii) interfere with or restrict in
any way the rights of the Company, a Company Subsidiary, the Investment
Management Company, an Investment Management Company Subsidiary, the Partnership
or a Partnership Subsidiary, which are hereby expressly reserved, to discharge
the Employee or consultant at any time for any reason whatsoever, with or
without Cause, or any Director pursuant to the Company's bylaws.
6.5. Rights as Stockholders. Subject to Section 6.6, upon
delivery of the shares of Restricted Stock to the escrow holder pursuant to
Section 6.8, the Restricted Stockholder shall have, unless otherwise provided by
the Committee, all the rights of a
19
<PAGE> 20
stockholder with respect to said shares, subject to the restrictions in his
Restricted Stock Agreement, including the right to receive all dividends and
other distributions paid or made with respect to the shares; provided, however,
that in the discretion of the Committee, any extraordinary distributions with
respect to the Common Stock shall be subject to the restrictions set forth in
Section 6.6.
6.6. Restriction. All shares of Restricted Stock issued
under this Plan (including any shares received by holders thereof with respect
to shares of Restricted Stock as a result of stock dividends, stock splits or
any other form of recapitalization) shall, in the terms of each individual
Restricted Stock Agreement, be subject to such restrictions as the Committee
shall provide, which restrictions may include, without limitation, restrictions
concerning voting rights and transferability and restrictions based on duration
of employment with the Company, Company performance and individual performance;
provided, however, that, unless the Committee otherwise provides in the terms of
the Restricted Stock Agreement or otherwise, no share of Restricted Stock
granted to a person subject to Section 16 of the Exchange Act shall be sold,
assigned or otherwise transferred until at least six months and one day have
elapsed from the date on which the Restricted Stock was issued, and provided,
further, that, except with respect to shares of Restricted Stock granted
pursuant to Section 6.10, by action taken after the Restricted Stock is issued,
the Committee may, on such terms and conditions as it may determine to be
appropriate, remove any or all of the restrictions imposed by the terms of the
Restricted Stock Agreement. Restricted Stock may not be sold or encumbered until
all restrictions are terminated or expire. If no consideration was paid by the
Restricted Stockholder upon issuance, a Restricted Stockholder's rights in
unvested Restricted Stock shall lapse upon a Termination of Employment or, if
applicable, upon a Termination of Directorship or a Termination of Consultancy;
provided, however, that the Committee in its sole and absolute discretion may
provide that such rights shall not lapse in the event of a Termination of
Employment or Termination of Directorship following a "change of ownership
control" (within the meaning of Treasury Regulation Section 1.62-27(e)(2)(v) or
any successor regulation thereto) of the Company or because of the Restricted
Stockholder's death or disability.
6.7. Repurchase of Restricted Stock. The Committee shall
provide in the terms of each individual Restricted Stock Agreement that the
Company shall have the right to repurchase from the Restricted Stockholder the
Restricted Stock then subject to restrictions under the Restricted Stock
Agreement immediately upon a Termination of Employment or, if applicable, upon a
Termination of Director or a Termination of Consultancy, at a cash price per
share equal to the price paid by the Restricted Stockholder for such Restricted
Stock; provided, however, that the Committee in its sole and absolute discretion
may provide that no such right of repurchase shall exist in the event of a
Termination of Employment, Termination of Directorship or Termination of
Consultancy following a "change of ownership or control" (within the meaning of
Treasury Regulation Section 1.162-27(e)(2)(v) or any successor regulation
thereto) of the Company or because of the Restricted Stockholder's death or
disability; provided, further, that, except with respect to shares of Restricted
Stock granted pursuant to Section 6.10, the Committee in its sole and absolute
discretion may provide that no such right of repurchase shall exist in the event
of a Termination of Employment, Termination of Directorship or a Termination
20
<PAGE> 21
of Consultancy without Cause, following any change in control or ownership of
the Company, because of the Restricted Stockholder's retirement, or otherwise.
6.8. Escrow. The Secretary of the Company or such other
escrow holder as the Committee may appoint shall retain physical custody of each
certificate representing Restricted Stock until all of the restrictions imposed
under the Restricted Stock Agreement with respect to the shares evidenced by
such certificate expire or shall have been removed.
6.9. Legend. In order to enforce the restrictions imposed
upon shares of Restricted Stock hereunder, the Committee shall cause a legend or
legends to be placed on certificates representing all shares of Restricted Stock
that are still subject to restrictions under Restricted Stock Agreements, which
legend or legends shall make appropriate reference to the conditions imposed
thereby.
6.10. Provisions Applicable to Section 162(m) Participants.
(a) Notwithstanding anything in the Plan to the contrary,
the Committee may grant Restricted Stock to a Section 162(m) Participant the
restrictions with respect to which lapse upon the attainment of performance
goals for the Company which are related to one or more of the following business
criteria: (i) pre-tax income, (ii) operating income, (iii) cash flow, (iv)
earnings per share, (v) return on equity, (vi) return on invested capital or
assets, (vii) cost reductions or savings, (viii) funds from operations, (ix)
appreciation in the fair market value of Common Stock and (x) earnings before
any one or more of the following items: interest, taxes, depreciation or
amortization.
(b) To the extent necessary to comply with the
performance-based compensation requirements of Section 162(m)(4)(C) of the Code,
with respect to Restricted Stock which may be granted to one or more Section
162(m) Participants, no later than ninety (90) days following the commencement
of any fiscal year in question or any other designated fiscal period or period
of service (or such other time as may be required or permitted by Section 162(m)
of the Code), the Committee shall, in writing, (i) designate one or more Section
162(m) Participants, (ii) select the performance goal or goals applicable to the
fiscal year or other designated fiscal period or period of service, (iii)
establish the various targets and amounts of Restricted Stock which may be
earned for such fiscal year or other designated fiscal period or period of
service and (iv) specify the relationship between performance goals and targets
and the amounts of Restricted Stock to be earned by each Section 162(m)
Participant for such fiscal year or other designated fiscal period or period of
service. Following the completion of each fiscal year or other designated fiscal
period or period of service, the Committee shall certify in writing whether the
applicable performance targets have been achieved for such fiscal year or other
designated fiscal period or period of service. In determining the amount earned
by a Section 162(m) Participant, the Committee shall have the right to reduce
(but not to increase) the amount payable at a given level of performance to take
into account additional factors that the Committee may deem relevant to the
assessment of individual or corporate performance for the fiscal year or other
designated fiscal period or period of service.
21
<PAGE> 22
ARTICLE VII.
PERFORMANCE AWARDS, DIVIDEND EQUIVALENTS,
DEFERRED STOCK, STOCK PAYMENTS
7.1. Eligibility. Subject to the Award Limit, one or more
Performance Awards, Dividend Equivalents, awards of Deferred Stock, and/or Stock
Payments may be granted to any Employee whom the Committee determines is a key
Employee or any consultant or Independent Director whom the Committee determines
should receive such an award.
7.2. Performance Awards. Any key Employee, consultant or
Independent Director selected by the Committee may be granted one or more
Performance Awards. The value of such Performance Awards may be linked to the
market value, book value, net profits or other measure of the value of Common
Stock or other specific performance criteria determined appropriate by the
Committee, in each case on a specified date or dates or over any period or
periods determined by the Committee, or may be based upon the appreciation in
the market value, book value, net profits or other measure of the value of a
specified number of shares of Common Stock over a fixed period or periods
determined by the Committee. In making such determinations, the Committee shall
consider (among such other factors as it deems relevant in light of the specific
type of award) the contributions, responsibilities and other compensation of the
particular key Employee or consultant.
7.3. Dividend Equivalents. Any key Employee, consultant or
Independent Director selected by the Committee may be granted Dividend
Equivalents based on the dividends declared on Common Stock, to be credited as
of dividend payment dates, during the period between the date an Option, Stock
Appreciation Right, Deferred Stock or Performance Award is granted, and the date
such Option, Stock Appreciation Right, Deferred Stock or Performance Award is
exercised, vests or expires, as determined by the Committee. Such Dividend
Equivalents shall be converted to cash or additional shares of Common Stock by
such formula and at such time and subject to such limitations as may be
determined by the Committee. With respect to Dividend Equivalents granted with
respect to Options intended to be qualified performance-based compensation for
purposes of Section 162(m) of the Code, such Dividend Equivalents shall be
payable regardless of whether such Option is exercised.
7.4. Stock Payments. Any key Employee, consultant or
Independent Director selected by the Committee may receive Stock Payments in the
manner determined from time to time by the Committee. The number of shares shall
be determined by the Committee and may be based upon the Fair Market Value, book
value, net profits or other measure of the value of Common Stock or other
specific performance criteria determined appropriate by the Committee,
determined on the date such Stock Payment is made or on any date thereafter.
7.5. Deferred Stock. Any key Employee, consultant or
Independent Director selected by the Committee may be granted an award of
Deferred Stock in the manner determined from time to time by the Committee. The
number of shares of Deferred Stock shall be
22
<PAGE> 23
determined by the Committee and may be linked to the market value, book value,
net profits or other measure of the value of Common Stock or other specific
performance criteria determined to be appropriate by the Committee, in each case
on a specified date or dates or over any period or periods determined by the
Committee. Common Stock underlying a Deferred Stock award will not be issued
until the Deferred Stock award has vested, pursuant to a vesting schedule or
performance criteria set by the Committee. Unless otherwise provided by the
Committee, a Grantee of Deferred Stock shall have no rights as a Company
stockholder with respect to such Deferred Stock until such time as the award has
vested and the Common Stock underlying the award has been issued.
7.6. Performance Award Agreement, Dividend Equivalent
Agreement, Deferred Stock Agreement, Stock Payment Agreement. Each Performance
Award, Dividend Equivalent, award of Deferred Stock and/or Stock Payment shall
be evidenced by a written agreement, which shall be executed by the Grantee and
an authorized Officer of the Company and which shall contain such terms and
conditions (including, without limitation, in the case of awards to Employees,
consultants or Independent Directors of the Partnership, any Partnership
Subsidiary, the Investment Management Company or any Investment Management
Company Subsidiary, the mechanism for the transfer or rights under such awards)
as the Committee shall determine, consistent with this Plan.
7.7. Term. The term of a Performance Award, Dividend
Equivalent, award of Deferred Stock and/or Stock Payment shall be set by the
Committee in its discretion.
7.8. Exercise or Purchase Price. The Committee may
establish the exercise or purchase price of a Performance Award, shares of
Deferred Stock, or shares received as a Stock Payment; provided, however, that
such price shall not be less than the par value for a share of Common Stock,
unless otherwise permitted by applicable state law.
7.9. Exercise Upon Termination of Employment. A
Performance Award, Dividend Equivalent, award of Deferred Stock and/or Stock
Payment is exercisable or payable only while the Grantee is an Employee or
consultant; provided, however, that the Committee in its sole and absolute
discretion may provide that the Performance Award, Dividend Equivalent, award of
Deferred Stock and/or Stock Payment may be exercised or paid subsequent to a
Termination of Employment following a "change of control or ownership" (within
the meaning of Section 1.162-27(e)(2)(v) or any successor regulation thereto) of
the Company; provided, further, that except with respect to Performance Awards
granted pursuant to Section 7.12, the Committee in its sole and absolute
discretion may provide that the Performance Awards may be exercised or paid
following a Termination of Employment or a Termination of Consultancy without
cause, or following a change in control of the Company, or because of the
Grantee's retirement, death or disability, or otherwise.
7.10. Payment on Exercise. Payment of the amount
determined under Section 7.1 or 7.2 above shall be in cash, in Common Stock or a
combination of both, as determined by
23
<PAGE> 24
the Committee. To the extent any payment under this Article VII is effected in
Common Stock, it shall be made subject to satisfaction of all provisions of
Section 5.3.
7.11. Consideration. In consideration of the granting of a
Performance Award, Dividend Equivalent, award of Deferred Stock and/or Stock
Payment, the Grantee shall agree, in a written agreement, to remain in the
employ of, or to consult for, the Company, a Company Subsidiary, the Investment
Management Company, an Investment Management Company Subsidiary, the Partnership
or a Partnership Subsidiary for a period of at least one year after such
Performance Award, Dividend Equivalent, award of Deferred Stock and/or Stock
Payment is granted (or such shorter period as may be fixed in such agreement or
by action of the Committee following such grant). Nothing in this Plan or in any
agreement hereunder shall (i) confer on any Grantee any right to (a) continue in
the employ of, or as a consultant for, the Company, a Company Subsidiary, the
Investment Management Company, an Investment Management Company Subsidiary, the
Partnership or a Partnership Subsidiary or (b) receive any severance pay from
the Company, a Company Subsidiary, the Investment Management Company, an
Investment Management Company Subsidiary, the Partnership or a Partnership
Subsidiary or (ii) interfere with or restrict in any way the rights of the
Company, a Company Subsidiary, the Investment Management Company, an Investment
Management Company Subsidiary, the Partnership or a Partnership Subsidiary,
which are hereby expressly reserved, to discharge any Grantee at any time for
any reason whatsoever, with or without Cause.
7.12. Provisions Applicable to Section 162(m) Participants.
(a) Notwithstanding anything in the Plan to the contrary,
the Committee may grant any performance or incentive awards described in Article
VII to a Section 162(m) Participant that vest or become exercisable or payable
upon the attainment of performance goals for the Company which are related to
one or more of the following business criteria: (i) pre-tax income, (ii)
operating income, (iii) cash flow, (iv) earnings per share, (v) return on
equity, (vi) return on invested capital or assets, (vii) cost reductions or
savings, (viii) funds from operations, (ix) appreciation in the fair market
value of Common Stock and (x) earnings before any one or more of the following
items: interest, taxes, depreciation or amortization.
(b) To the extent necessary to comply with the
performance-based compensation requirements of Section 162(m)(4)(C) of the Code,
with respect to performance or incentive awards described in Article VII which
may be granted to one or more Section 162(m) Participants, no later than ninety
(90) days following the commencement of any fiscal year in question or any other
designated fiscal period or period of service (or such other time as may be
required or permitted by Section 162(m) of the Code), the Committee shall, in
writing, (i) designate one or more Section 162(m) Participants, (ii) select the
performance goal or goals applicable to the fiscal year or other designated
fiscal period or period of service, (iii) establish the various targets and
bonus amounts which may be earned for such fiscal year or other designated
fiscal period or period of service and (iv) specify the relationship between
performance goals and targets and the amounts to be earned by each Section
162(m) Participant for such fiscal year or other designated fiscal period or
period of service. Following the
24
<PAGE> 25
completion of each fiscal year or other designated fiscal period or period of
service, the Committee shall certify in writing whether the applicable
performance targets have been achieved for such fiscal year or other designated
fiscal period or period of service. In determining the amount earned by a
Section 162(m) Participant, the Committee shall have the right to reduce (but
not to increase) the amount payable at a given level of performance to take into
account additional factors that the Committee may deem relevant to the
assessment of individual or corporate performance for the fiscal year or other
designated fiscal period or period of service.
ARTICLE VIII.
STOCK APPRECIATION RIGHTS
8.1. Grant of Stock Appreciation Rights. A Stock
Appreciation Right may be granted to any key Employee or consultant selected by
the Committee. A Stock Appreciation Right may be granted (i) in connection and
simultaneously with the grant of an Option, (ii) with respect to a previously
granted Option, or (iii) independent of an Option. A Stock Appreciation Right
shall be subject to such terms and conditions (including, without limitation, in
the case of awards to Employees, consultants or Independent Directors of the
Partnership, any Partnership Subsidiary, the Investment Management Company or
any Investment Management Company Subsidiary, the mechanism for the transfer or
rights under such awards) not inconsistent with this Plan as the Committee shall
impose and shall be evidenced by a written Stock Appreciation Right Agreement,
which shall be executed by the Grantee and an authorized officer of the Company.
The Committee, in its discretion, may determine whether a Stock Appreciation
Right is to qualify as performance-based compensation as described in Section
162(m)(4)(C) of the Code and Stock Appreciation Right Agreements evidencing
Stock Appreciation Rights intended to so qualify shall contain such terms and
conditions as may be necessary to meet the applicable provisions of Section
162(m) of the Code. Without limiting the generality of the foregoing, the
Committee may, in its discretion and on such terms as it deems appropriate,
require as a condition of the grant of a Stock Appreciation Right to an Employee
or consultant that the Employee or consultant surrender for cancellation some or
all of the unexercised Options, awards of Restricted Stock or Deferred Stock,
Performance Awards, Stock Appreciation Rights, Dividend Equivalents or Stock
Payments, or other rights which have been previously granted to him under this
Plan or otherwise. A Stock Appreciation Right, the grant of which is conditioned
upon such surrender, may have an exercise price lower (or higher) than the
exercise price of the surrendered Option or other award, may cover the same (or
a lesser or greater) number of shares as such surrendered Option or other award,
may contain such other terms as the Committee deems appropriate, and shall be
exercisable in accordance with its terms, without regard to the number of
shares, price, exercise period or any other term or condition of such
surrendered Option or other award.
25
<PAGE> 26
8.2. Coupled Stock Appreciation Rights
(a) A Coupled Stock Appreciation Right ("CSAR") shall be
related to a particular Option and shall be exercisable only when and to the
extent the related Option is exercisable.
(b) A CSAR may be granted to the Grantee for no more than
the number of shares subject to the simultaneously or previously granted Option
to which it is coupled.
(c) A CSAR shall entitle the Grantee (or other person
entitled to exercise the Option pursuant to this Plan) to surrender to the
Company unexercised a portion of the Option to which the CSAR relates (to the
extent then exercisable pursuant to its terms) and to receive from the Company
in exchange therefor an amount determined by multiplying the difference obtained
by subtracting the Option exercise price from the Fair Market Value of a share
of Common Stock on the date of exercise of the CSAR by the number of shares of
Common Stock with respect to which the CSAR shall have been exercised, subject
to any limitations the Committee may impose.
8.3. Independent Stock Appreciation Rights
(a) An Independent Stock Appreciation Right ("ISAR")
shall be unrelated to any Option and shall have a term set by the Committee. An
ISAR shall be exercisable in such installments as the Committee may determine.
An ISAR shall cover such number of shares of Common Stock as the Committee may
determine; provided, however, that unless the Committee otherwise provides in
the terms of the ISAR or otherwise, no ISAR granted to a person subject to
Section 16 of the Exchange Act shall be exercisable until at least six months
have elapsed from (but excluding) the date on which the Option was granted. The
exercise price per share of Common Stock subject to each ISAR shall be set by
the Committee. An ISAR is exercisable only while the Grantee is an Employee or
consultant; provided that the Committee may determine that the ISAR may be
exercised subsequent to Termination of Employment or Termination of Consultancy
without cause, or following a change in control of the Company, or because of
the Grantee's retirement, death or disability, or otherwise.
(b) An ISAR shall entitle the Grantee (or other person
entitled to exercise the ISAR pursuant to this Plan) to exercise all or a
specified portion of the ISAR (to the extent then exercisable pursuant to its
terms) and to receive from the Company an amount determined by multiplying the
difference obtained by subtracting the exercise price per share of the ISAR from
the Fair Market Value of a share of Common Stock on the date of exercise of the
ISAR by the number of shares of Common Stock with respect to which the ISAR
shall have been exercised, subject to any limitations the Committee may impose.
8.4. Payment and Limitations on Exercise
(a) Payment of the amount determined under Section 8.2(c)
and 8.3(b) above shall be in cash, in Common Stock (based on its Fair Market
Value as of the date the Stock
26
<PAGE> 27
Appreciation Right is exercised) or a combination of both, as determined by the
Committee. To the extent such payment is effected in Common Stock it shall be
made subject to satisfaction of all provisions of Section 5.3 above pertaining
to Options.
(b) Grantees of Stock Appreciation Rights may be required
to comply with any timing or other restrictions with respect to the settlement
or exercise of a Stock Appreciation Right, including a window-period limitation,
as may be imposed in the discretion of the Board or Committee.
8.5. Consideration. In consideration of the granting of a
Stock Appreciation Right, the Grantee shall agree, in the written Stock
Appreciation Right Agreement, to remain in the employ of, or to consult for, the
Company, a Company Subsidiary, the Investment Management Company, an Investment
Management Company Subsidiary, the Partnership or a Partnership Subsidiary for a
period of at least one year after the Stock Appreciation Right is granted (or
such shorter period as may be fixed in the Stock Appreciation Right Agreement or
by action of the Committee following grant of the Restricted Stock). Nothing in
this Plan or in any Stock Appreciation Right Agreement hereunder shall (i)
confer on any Grantee any right to (a) continue in the employ of, or as a
consultant for, the Company, a Company Subsidiary, the Investment Management
Company, an Investment Management Company Subsidiary, the Partnership or a
Partnership Subsidiary or (b) receive any severance pay from the Company, a
Company Subsidiary, the Investment Management Company, an Investment Management
Company Subsidiary, the Partnership or a Partnership Subsidiary or (ii)
interfere with or restrict in any way the rights of the Company, a Company
Subsidiary, the Investment Management Company, an Investment Management Company
Subsidiary, the Partnership or a Partnership Subsidiary, which are hereby
expressly reserved, to discharge any Grantee at any time for any reason
whatsoever, with or without Cause.
ARTICLE IX.
ADMINISTRATION
9.1. Compensation Committee. Prior to the Company's
initial registration of Common Stock under Section 12 of the Exchange Act, the
Compensation Committee shall consist of the entire Board. Following such
registration, the Compensation Committee (or another committee or a subcommittee
of the Board assuming the functions of the Committee under this Plan) shall
consist solely of two or more Independent Directors appointed by and holding
office at the pleasure of the Board, each of whom is both a "non-employee
director" as defined by Rule 16b-3 and an "outside director" for purposes of
Section 162(m) of the Code. Appointment of Committee members shall be effective
upon acceptance of appointment. Committee members may resign at any time by
delivering written notice to the Board. Vacancies in the Committee may be filled
by the Board.
9.2. Duties and Powers of Committee. It shall be the duty
of the Committee to conduct the general administration of this Plan in
accordance with its provisions. The
27
<PAGE> 28
Committee shall have the power to interpret this Plan and the agreements
pursuant to which Options, awards of Restricted Stock or Deferred Stock,
Performance Awards, Stock Appreciation Rights, Dividend Equivalents or Stock
Payments are granted or awarded, and to adopt such rules for the administration,
interpretation, and application of this Plan as are consistent therewith and to
interpret, amend or revoke any such rules. Notwithstanding the foregoing, the
full Board, acting by a majority of its members in office, shall conduct the
general administration of the Plan with respect to Options granted to
Independent Directors. Any such grant or award under this Plan need not be the
same with respect to each Optionee, Grantee or Restricted Stockholder. Any such
interpretations and rules with respect to Incentive Stock Options shall be
consistent with the provisions of Section 422 of the Code. In its absolute
discretion, the Board may at any time and from time to time exercise any and all
rights and duties of the Committee under this Plan except with respect to
matters which under Rule 16b-3 or Section 162(m) of the Code, or any regulations
or rules issued thereunder, are required to be determined in the sole discretion
of the Committee.
9.3. Majority Rule; Unanimous Written Consent. The
Committee shall act by a majority of its members in attendance at a meeting at
which a quorum is present or by a memorandum or other written instrument signed
by all members of the Committee.
9.4. Compensation; Professional Assistance; Good Faith
Actions. Members of the Committee shall receive such compensation, if any, for
their services as members as may be determined by the Board. All expenses and
liabilities which members of the Committee incur in connection with the
administration of this Plan shall be borne by the Company. The Committee may,
with the approval of the Board, employ attorneys, consultants, accountants,
appraisers, brokers, or other persons. The Committee, the Company and the
Company's officers and Directors shall be entitled to rely upon the advice,
opinions or valuations of any such persons. All actions taken and all
interpretations and determinations made by the Committee or the Board in good
faith shall be final and binding upon all Optionees, Grantees, Restricted
Stockholders, the Company and all other interested persons. No members of the
Committee or Board shall be personally liable for any action, determination or
interpretation made in good faith with respect to this Plan, Options, awards of
Restricted Stock or Deferred Stock, Performance Awards, Stock Appreciation
Rights, Dividend Equivalents or Stock Payments, and all members of the Committee
and the Board shall be fully protected by the Company in respect of any such
action, determination or interpretation.
ARTICLE X.
MISCELLANEOUS PROVISIONS
10.1. Not Transferable. Options, Restricted Stock awards,
Deferred Stock awards, Performance Awards, Stock Appreciation Rights, Dividend
Equivalents or Stock Payments under this Plan may not be sold, pledged,
assigned, or transferred in any manner other than by will or the laws of descent
and distribution or pursuant to a QDRO, unless and until such rights or awards
have been exercised, or the shares underlying such rights or awards have been
28
<PAGE> 29
issued, and all restrictions applicable to such shares have lapsed. No Option,
Restricted Stock award, Deferred Stock award, Performance Award, Stock
Appreciation Right, Dividend Equivalent or Stock Payment or interest or right
therein shall be liable for the debts, contracts or engagements of the Optionee,
Grantee or Restricted Stockholder or his successors in interest or shall be
subject to disposition by transfer, alienation, anticipation, pledge,
encumbrance, assignment or any other means whether such disposition be voluntary
or involuntary or by operation of law by judgment, levy, attachment, garnishment
or any other legal or equitable proceedings (including bankruptcy), and any
attempted disposition thereof shall be null and void and of no effect, except to
the extent that such disposition is permitted by the preceding sentence.
During the lifetime of the Optionee or Grantee, only he may
exercise an Option or other right or award (or any portion thereof) granted to
him under the Plan, unless it has been disposed of pursuant to a QDRO. After the
death of the Optionee or Grantee, any exercisable portion of an Option or other
right or award may, prior to the time when such portion becomes unexercisable
under the Plan or the applicable Stock Option Agreement or other agreement, be
exercised by his personal representative or by any person empowered to do so
under the deceased Optionee's or Grantee's will or under the then applicable
laws of descent and distribution.
10.2. Amendment, Suspension or Termination of this Plan.
Except as otherwise provided in this Section 10.2, this Plan may be wholly or
partially amended or otherwise modified, suspended or terminated at any time or
from time to time by the Board or the Committee. However, without approval of
the Company's stockholders given within twelve months before or after the action
by the Board or the Committee, no action of the Board or the Committee may,
except as provided in Section 10.3, increase the limits imposed in Section 2.1
on the maximum number of shares which may be issued under this Plan or increase
the Award Limit, and no action of the Board or the Committee may be taken that
would otherwise require stockholder approval as a matter of applicable law,
regulation or rule. No amendment, suspension or termination of this Plan shall,
without the consent of the holder of Options, Restricted Stock awards, Deferred
Stock awards, Performance Awards, Stock Appreciation Rights, Dividend
Equivalents or Stock Payments, alter or impair any rights or obligations under
any Options, Restricted Stock awards, Deferred Stock awards, Performance Awards,
Stock Appreciation Rights, Dividend Equivalents or Stock Payments theretofore
granted or awarded, unless the award itself otherwise expressly so provides. No
Options, Restricted Stock, Deferred Stock, Performance Awards, Stock
Appreciation Rights, Dividend Equivalents or Stock Payments may be granted or
awarded during any period of suspension or after termination of this Plan, and
in no event may any Incentive Stock Option be granted under this Plan after the
first to occur of the following events:
(a) The expiration of ten years from the date the Plan is
adopted by the Board; or
(b) The expiration of ten years from the date the Plan is
approved by the Company's stockholders under Section 10.4.
29
<PAGE> 30
10.3. Changes in Common Stock or Assets of the Company,
Acquisition or Liquidation of the Company and Other Corporate Events.
(a) Subject to Section 10.3(d), in the event that the
Committee (or the Board, in the case of Options granted to Independent
Directors) determines that any dividend or other distribution (whether in the
form of cash, Common Stock, other securities, or other property),
recapitalization, reclassification, stock split, reverse stock split,
reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, liquidation, dissolution, or sale, transfer, exchange or other
disposition of all or substantially all of the assets of the Company (including,
but not limited to, a Corporate Transaction), or exchange of Common Stock or
other securities of the Company, issuance of warrants or other rights to
purchase Common Stock or other securities of the Company, or other similar
corporate transaction or event, in the Committee's sole discretion (or in the
case of Options granted to Independent Directors, the Board's sole discretion),
affects the Common Stock such that an adjustment is determined by the Committee
to be appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan or with respect
to an Option, Restricted Stock award, Performance Award, Stock Appreciation
Right, Dividend Equivalent, Deferred Stock award or Stock Payment, then the
Committee (or the Board, in the case of Options granted to Independent
Directors) shall, in such manner as it may deem equitable, adjust any or all of
(i) the number and kind of shares of Common Stock (or
other securities or property) with respect to which Options,
Performance Awards, Stock Appreciation Rights, Dividend Equivalents or
Stock Payments may be granted under the Plan, or which may be granted
as Restricted Stock or Deferred Stock (including, but not limited to,
adjustments of the limitations in Section 2.1 on the maximum number and
kind of shares which may be issued and adjustments of the Award Limit),
(ii) the number and kind of shares of Common Stock
(or other securities or property) subject to outstanding Options,
Performance Awards, Stock Appreciation Rights, Dividend Equivalents, or
Stock Payments, and in the number and kind of shares of outstanding
Restricted Stock or Deferred Stock, and
(iii) the grant or exercise price with respect to any
Option, Performance Award, Stock Appreciation Right, Dividend
Equivalent or Stock Payment.
(b) Subject to Section 10.3(d), in the event of any
Corporate Transaction or other transaction or event described in Section 10.3(a)
or any unusual or nonrecurring transactions or events affecting the Company, any
affiliate of the Company, or the financial statements of the Company or any
affiliate, or of changes in applicable laws, regulations, or accounting
principles, the Committee (or the Board, in the case of Options granted to
Independent Directors) in its discretion is hereby authorized to take any one or
more of the following actions whenever the Committee (or the Board, in the case
of Options granted to Independent Directors) determines that such action is
appropriate or desirable:
30
<PAGE> 31
(i) In its sole and absolute discretion, and on such
terms and conditions as it deems appropriate, the Committee (or the
Board, in the case of Options granted to Independent Directors) may
provide, either by the terms of the agreement or by action taken prior
to the occurrence of such transaction or event and either automatically
or upon the optionee's request, for either the purchase of any such
Option, Performance Award, Stock Appreciation Right, Dividend
Equivalent, or Stock Payment, or any Restricted Stock or Deferred Stock
for an amount of cash equal to the amount that could have been attained
upon the exercise of such option, right or award or realization of the
optionee's rights had such option, right or award been currently
exercisable or payable or fully vested or the replacement of such
option, right or award with other rights or property selected by the
Committee (or the Board, in the case of Options granted to Independent
Directors) in its sole discretion;
(ii) In its sole and absolute discretion, the
Committee (or the Board, in the case of Options granted to Independent
Directors) may provide, either by the terms of such Option, Performance
Award, Stock Appreciation Right, Dividend Equivalent, or Stock Payment,
or Restricted Stock or Deferred Stock or by action taken prior to the
occurrence of such transaction or event that it cannot vest, be
exercised or become payable after such event;
(iii) In its sole and absolute discretion, and on
such terms and conditions as it deems appropriate, the Committee (or
the Board, in the case of Options granted to Independent Directors) may
provide, either by the terms of such Option, Performance Award, Stock
Appreciation Right, Dividend Equivalent, or Stock Payment, or
Restricted Stock or Deferred Stock or by action taken prior to the
occurrence of such transaction or event, that for a specified period of
time prior to such transaction or event, such option, right or award
shall be exercisable as to all shares covered thereby, notwithstanding
anything to the contrary in (i) Section 4.4 or (ii) the provisions of
such Option, Performance Award, Stock Appreciation Right, Dividend
Equivalent, or Stock Payment, or Restricted Stock or Deferred Stock;
(iv) In its sole and absolute discretion, and on such
terms and conditions as it deems appropriate, the Committee (or the
Board, in the case of Options granted to Independent Directors) may
provide, either by the terms of such Option, Performance Award, Stock
Appreciation Right, Dividend Equivalent, or Stock Payment, or
Restricted Stock or Deferred Stock or by action taken prior to the
occurrence of such transaction or event, that upon such event, such
option, right or award be assumed by the successor or survivor
corporation, or a parent or subsidiary thereof, or shall be substituted
for by similar options, rights or awards covering the stock of the
successor or survivor corporation, or a parent or subsidiary thereof,
with appropriate adjustments as to the number and kind of shares and
prices;
(v) In its sole and absolute discretion, and on such
terms and conditions as it deems appropriate, the Committee (or the
Board, in the case of Options
31
<PAGE> 32
granted to Independent Directors) may make adjustments in the number
and type of shares of Common Stock (or other securities or property)
subject to outstanding Options, Performance Awards, Stock Appreciation
Rights, Dividend Equivalents, or Stock Payments, and in the number and
kind of outstanding Restricted Stock or Deferred Stock and/or in the
terms and conditions of (including the grant or exercise price), and
the criteria included in, outstanding options, rights and awards and
options, rights and awards which may be granted in the future; and
(vi) In its sole and absolute discretion, and on such
terms and conditions as it deems appropriate, the Committee may provide
either by the terms of a Restricted Stock award or Deferred Stock award
or by action taken prior to the occurrence of such event that, for a
specified period of time prior to such event, the restrictions imposed
under a Restricted Stock Agreement or a Deferred Stock Agreement upon
some or all shares of Restricted Stock or Deferred Stock may be
terminated, and, in the case of Restricted Stock, some or all shares of
such Restricted Stock may cease to be subject to repurchase under
Section 6.6 or forfeiture under Section 6.5 after such event.
(c) Subject to Section 10.3(d) and 10.8, the Committee
(or the Board, in the case of Options granted to Independent Directors) may, in
its discretion, include such further provisions and limitations in any Option,
Performance Award, Stock Appreciation Right, Dividend Equivalent, or Stock
Payment, or Restricted Stock or Deferred Stock agreement or certificate, as it
may deem equitable and in the best interests of the Company.
(d) With respect to Options, Restricted Stock, Deferred
Stock, Stock Appreciation Rights and performance or incentive awards described
in Article VII which are granted to Section 162(m) Participants and are intended
to qualify as performance-based compensation under Section 162(m)(4)(C), no
adjustment or action described in this Section 10.3 or in any other provision of
the Plan shall be authorized to the extent that such adjustment or action would
cause the Plan to violate Section 422(b)(1) of the Code or would cause such
option or stock appreciation right to fail to so qualify under Section
162(m)(4)(C), as the case may be, or any successor provisions thereto.
Furthermore, no such adjustment or action shall be authorized to the extent such
adjustment or action would result in short-swing profits liability under Section
16 or violate the exemptive conditions of Rule 16b-3 unless the Committee (or
the Board, in the case of Options granted to Independent Directors) determines
that the option or other award is not to comply with such exemptive conditions.
The number of shares of Common Stock subject to any option, right or award shall
always be rounded to the next whole number.
10.4. Approval of Plan by Stockholders. This Plan will be
submitted for the approval of the Company's stockholders within twelve months
after the date of the Board's initial adoption of this Plan. Options,
Performance Awards, Stock Appreciation Rights, Dividend Equivalents or Stock
Payments may be granted and Restricted Stock or Deferred Stock may be awarded
prior to such stockholder approval, provided that such Options, Performance
Awards, Stock Appreciation Rights, Dividend Equivalents or Stock Payments shall
not be exercisable and such Restricted Stock or Deferred Stock shall not vest
prior to the time when this
32
<PAGE> 33
Plan is approved by the stockholders, and provided further that if such approval
has not been obtained at the end of said twelve-month period, all Options,
Performance Awards, Stock Appreciation Rights, Dividend Equivalents or Stock
Payments previously granted and all Restricted Stock or Deferred Stock
previously awarded under this Plan shall thereupon be canceled and become null
and void.
10.5. Tax Withholding. The Company shall be entitled to
require payment in cash or deduction from other compensation payable to each
Optionee, Grantee or Restricted Stockholder of any sums required by federal,
state or local tax law to be withheld with respect to the issuance, vesting,
exercise or payment of any Option, Restricted Stock, Deferred Stock, Performance
Award, Stock Appreciation Right, Dividend Equivalent or Stock Payment. The
Committee (or the Board, in the case of Options granted to Independent
Directors) may in its discretion and in satisfaction of the foregoing
requirement allow such Optionee, Grantee or Restricted Stockholder to elect to
have the Company withhold shares of Common Stock otherwise issuable under such
Option or other award (or allow the return of shares of Common Stock) having a
Fair Market Value equal to the sums required to be withheld.
10.6. Loans. The Committee may, in its discretion, extend
one or more loans to key Employees in connection with the exercise or receipt of
an Option, Performance Award, Stock Appreciation Right, Dividend Equivalent or
Stock Payment granted under this Plan, or the issuance of Restricted Stock or
Deferred Stock awarded under this Plan. The terms and conditions of any such
loan shall be set by the Committee.
10.7. Forfeiture Provisions. Pursuant to its general
authority to determine the terms and conditions applicable to awards under the
Plan, the Committee (or the Board, in the case of Options granted to Independent
Directors) shall have the right (to the extent consistent with the applicable
exemptive conditions of Rule 16b-3) to provide, in the terms of Options or other
awards made under the Plan, or to require the recipient to agree by separate
written instrument, that (i) any proceeds, gains or other economic benefit
actually or constructively received by the recipient upon any receipt or
exercise of the award, or upon the receipt or resale of any Common Stock
underlying such award, must be paid to the Company, and (ii) the award shall
terminate and any unexercised portion of such award (whether or not vested)
shall be forfeited, if (a) a Termination of Employment, Termination of
Consultancy or Termination of Directorship occurs prior to a specified date, or
within a specified time period following receipt or exercise of the award, or
(b) the recipient at any time, or during a specified time period, engages in any
activity in competition with the Company, or which is inimical, contrary or
harmful to the interests of the Company, as further defined by the Committee (or
the Board, as applicable).
10.8. Limitations Applicable to Section 16 Persons and
Performance-Based Compensation. Notwithstanding any other provision of this
Plan, this Plan, and any Option, Performance Award, Stock Appreciation Right,
Dividend Equivalent or Stock Payment granted, or Restricted Stock or Deferred
Stock awarded, to any individual who is then subject to Section 16 of the
Exchange Act, shall be subject to any additional limitations set forth in any
applicable
33
<PAGE> 34
exemptive rule under Section 16 of the Exchange Act (including any amendment to
Rule 16b-3 of the Exchange Act) that are requirements for the application of
such exemptive rule. To the extent permitted by applicable law, the Plan,
Options, Performance Awards, Stock Appreciation Rights, Dividend Equivalents,
Stock Payments, Restricted Stock and Deferred Stock granted or awarded hereunder
shall be deemed amended to the extent necessary to conform to such applicable
exemptive rule. Furthermore, notwithstanding any other provision of this Plan,
any Option, Stock Appreciation Right or performance or incentive award described
in Article VII which is granted to a Section 162(m) Participant and is intended
to qualify as performance-based compensation as described in Section
162(m)(4)(C) of the Code shall be subject to any additional limitations set
forth in Section 162(m) of the Code (including any amendment to Section 162(m)
of the Code) or any regulations or rulings issued thereunder that are
requirements for qualification as performance-based compensation as described in
Section 162(m)(4)(C) of the Code, and this Plan shall be deemed amended to the
extent necessary to conform to such requirements.
10.9. Effect of Plan Upon Options and Compensation Plans.
The adoption of this Plan shall not affect any other compensation or incentive
plans in effect for the Company or any Subsidiary. Nothing in this Plan shall be
construed to limit the right of the Company (i) to establish any other forms of
incentives or compensation for Employees, Directors or Consultants of the
Company or any Subsidiary or (ii) to grant or assume options or other rights or
awards otherwise than under this Plan in connection with any proper corporate
purpose including but not by way of limitation, the grant or assumption of
options in connection with the acquisition by purchase, lease, merger,
consolidation or otherwise, of the business, stock or assets of any corporation,
partnership, limited liability company, firm or association.
10.10. Section 83(b) Election Prohibited. No Grantee,
Optionee or Restricted Stockholder may make an election under Section 83(b) of
the Code with respect to any award or grant under this Plan, without the
Company's consent.
10.11. Compliance with Laws. This Plan, the granting and
vesting of Options, Restricted Stock awards, Deferred Stock awards, Performance
Awards, Stock Appreciation Rights, Dividend Equivalents or Stock Payments under
this Plan and the issuance and delivery of shares of Common Stock and the
payment of money under this Plan or under Options, Performance Awards, Stock
Appreciation Rights, Dividend Equivalents or Stock Payments granted or
Restricted Stock or Deferred Stock awarded hereunder are subject to compliance
with all applicable federal and state laws, rules and regulations (including but
not limited to state and federal securities law and federal margin requirements)
and to such approvals by any listing, regulatory or governmental authority as
may, in the opinion of counsel for the Company, be necessary or advisable in
connection therewith. Any securities delivered under this Plan shall be subject
to such restrictions, and the person acquiring such securities shall, if
requested by the Company, provide such assurances and representations to the
Company as the Company may deem necessary or desirable to assure compliance with
all applicable legal requirements. To the extent permitted by applicable law,
the Plan, Options, Restricted Stock awards, Deferred Stock awards, Performance
Awards, Stock Appreciation Rights, Dividend Equivalents or Stock
34
<PAGE> 35
Payments granted or awarded hereunder shall be deemed amended to the extent
necessary to conform to such laws, rules and regulations.
10.12. Titles. Titles are provided herein for convenience
only and are not to serve as a basis for interpretation or construction of this
Plan.
10.13. Governing Law. This Plan and any agreements hereunder
shall be administered, interpreted and enforced under the internal laws of the
State of California without regard to conflicts of laws thereof.
10.14. Conflicts with Company's Articles of Incorporation.
Notwithstanding any other provision of this Plan, no Optionee, Grantee or
Restricted Stockholder shall acquire or have any right to acquire any Common
Stock, and shall not have other rights under this Plan, which are prohibited
under the Company's Articles of Incorporation.
[Remainder of Page Intentionally Left Blank.]
35
<PAGE> 36
I hereby certify that the foregoing Plan was duly adopted by
the Board of Directors of AMB Property Corporation on November 24, 1997.
Executed on this 26th day of November, 1997.
/s/ S. DAVIS CARNIGLIA
--------------------------------
S. Davis Carniglia
Secretary
S-1
<PAGE> 1
Exhibit 5.1
[LETTERHEAD OF BALLARD SPAHR ANDREWS & INGERSOLL]
December 10, 1997
AMB Property Corporation
505 Montgomery Street
San Francisco, California 94111
Re: AMB Property Corporation, a Maryland corporation (the
"Company") - Registration Statement on Form S-8, pertaining to
Five Million Seven Hundred Fifty Thousand (5,750,000) Shares
(the "Plan Shares") of common stock of the Company, par value
one cent per share ("Common Stock"), to be issued pursuant to
The 1997 Stock Option and Incentive Plan of the Company and
its Subsidiaries and AMB Institutional Realty Advisors, Inc.
(the "Plan")
------------------------------------------------------------
Ladies and Gentlemen:
In connection with the registration of the Plan Shares under the
Securities Act of 1933, as amended, by the Company on Form S-8 filed or to be
filed with the Securities and Exchange Commission (the "Commission") on or
about December 11, 1997 (the "Registration Statement"), you have requested our
opinion with respect to the matters set forth below.
We have acted as special Maryland corporate counsel to the Company in
connection with the matters described herein. In our capacity as special
Maryland corporate counsel to the Company, we have reviewed and are familiar
with proceedings taken and proposed to be taken by the Company in connection
with the authorization, issuance and sale of the Plan Shares, and for purposes
of this opinion have assumed such proceedings will be timely completed in the
manner presently proposed. In addition, we have relied upon certificates and
advice from the officers of the Company upon which we believe we are justified
in relying and on various certificates from, and documents recorded with, the
State Department of Assessments and Taxation of Maryland (the "SDAT"), including
the charter of the Company, consisting of Articles of Incorporation filed by the
Company with the SDAT on NOvember 24, 1997. We have
<PAGE> 2
BALLARD SPAHR ANDREWS & INGERSOLL
AMB Property Corporation
December 10, 1997
Page 2
also examined the Bylaws of the Company as adopted on November 24, 1997 (the
"Bylaws") and resolutions of the Board of Directors of the Company adopted on or
before the date hereof and in full force and effect on the date hereof and such
other laws, records, documents, certificates, opinions and instruments as we
have deemed necessary to render this opinion.
We have examined the genuineness of all signatures, the authenticity of
all documents submitted to us as originals and the conformity to the originals
of all documents submitted to us as certified, photostatic or conformed copies.
In addition, we have assumed that each person executing any instrument, document
or certificate referred to herein on behalf of any party is duly authorized to
do so. We have also assumed that none of the Plan Shares will be issued or
transferred in violation of Section E of Article IV or the Charter entitled
"Restrictions on Ownership and Transfer to Preserve Tax Benefits."
Based on the foregoing, and subject to the assumptions and
qualifications set forth herein, it is our opinion that the Plan Shares have
been duly reserved for issuance by the Company as direct stock awards or upon
the exercise of options granted under the Plan, and when such Plan Shares are
duly authorized for issuance by the Board of Directors of the Company and are
issued and delivered as direct stock awards or upon the exercise of options
under the Plan and the consideration for such Plan Shares has been received in
full by the Company, all in accordance with the Plan and any such options, such
Plan Shares will be validly issued, fully paid and non-assessable.
We consent to your filing this opinion as an exhibit to the
Registration Statement, and further consent to the filing of this opinion as an
exhibit to the applications to securities commissioners for the various states
of the United States for registration of the Plan Shares. We also consent to
the identification of our firm as Maryland counsel to the Company in the
section of the Prospectus (which is part of the Registration Statement) entitled
"Legal Matters."
The opinions expressed herein are limited to the laws of the State of
Maryland and we express no opinion concerning any laws other than the laws of
the State of Maryland. Furthermore, the opinions presented in this letter are
limited to the matters specifically set forth herein and no other opinion shall
be inferred beyond the matters expressly stated.
Very truly yours,
/s/ Ballard Spahr Andrews & Ingersoll
<PAGE> 1
Exhibit 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this registration statement of our reports, AMB
Contributed Properties, dated October 17, 1997, AMB Institutional Realty
Advisors, Inc., dated October 17, 1997, Pending Acquisition Properties dated
October 29, 1997, 1997 Acquired Properties, dated October 17, 1997, and 1996
Acquired Properties, dated November 7, 1997, all included in AMB Property
Corporation's Registration Statement on Form S-11 (Registration No. 333-35915)
and to all references to our firm included in this registration statement of AMB
Property Corporation on Form S-8.
/s/ ARTHUR ANDERSEN LLP
December 8, 1997
