<PAGE> 1
As filed with the Securities and Exchange Commission on May 19, 1999
Registration No. 333-
================================================================================
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)
<TABLE>
<S> <C> <C>
Maryland 505 Montgomery Street 94-3281941
(State or Other Jurisdiction San Francisco, California 94111 (I.R.S. Employer Identification No.)
of Incorporation or Organization) (Address of Principal Executive Offices)
</TABLE>
-----------------------
The Second Amended and Restated 1997 Stock Option and
Incentive Plan of AMB Property Corporation,
AMB Investment Management, Inc.
and Their Respective Subsidiaries
(Full Title of the Plan)
-----------------------
David S. Fries
Chief Administrative Officer, Managing Director and General Counsel
AMB Property Corporation
505 Montgomery Street
San Francisco, California 94111
(415) 394-9000
(Name, Address and Telephone Number, Including Area Code, of Agent for Service)
Copies to:
Jeffrey T. Pero, Esq.
Laura L. Gabriel, Esq.
Latham & Watkins
505 Montgomery Street, Suite 1900
San Francisco, California 94111
(415) 391-0600
-----------------------
Calculation of Registration Fee
<TABLE>
<CAPTION>
=================================================================================================
Proposed
Proposed Maximum
Number of Maximum Aggregate Amount of
Title of Securities to be Shares to be Offering Price Offering Registration
Registered Registered Per Share(1) Price(1) Fee(1)
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $0.01 par value...... 3,200,000 $22.34375 $71,500,000 $19,877.00
==================================================================================================
</TABLE>
(1) Estimated for the purpose of calculating the registration fee pursuant
to Rule 457(h) under the Securities Act of 1933, based on the average of
the high and low prices of the common stock as reported on the New York
Stock Exchange on May 17, 1999.
<PAGE> 2
By a Registration Statement on Form S-8 filed with the
Securities and Exchange Commission on December 11, 1997, Registration File No.
333-42015, AMB Property Corporation, a Maryland corporation (the "Registrant")
previously registered 5,750,000 shares of its common stock, par value $.01 per
share ("Common Stock") reserved for issuance from time to time in connection
with the Registrant's 1997 Stock Option and Incentive Plan (the "Plan"). The
Plan has been amended as the Second Amended and Restated 1997 Stock Option and
Incentive Plan and the number of shares of Common Stock issuable thereunder has
been increased to 8,950,000. Under this Registration Statement, Registrant is
registering the additional 3,200,000 shares of Common Stock issuable under the
Plan.
The following documents which have been filed with the
Securities and Exchange Commission by the Registrant are hereby incorporated by
reference in this Registration Statement:
1. Registration Statement on Form S-8 filed with the
Securities and Exchange Commission on December 11, 1997;
2. Annual Report on Form 10-K for the year ended December
31, 1998 (including items incorporated by reference from
the Registrant's Proxy Statement for its 1999 Annual
Meeting of Stockholders);
3. Quarterly Report on Form 10-Q for the quarterly period
ended March 31, 1999;
4. the reports, financial statements and pro forma
financial statements for the Amberjack Portfolio, the
Willow Lake Portfolio, the Willow Park Portfolio,
National Distribution Portfolio and the Mahwah Portfolio
from the Registrant's Form 8-K filed on December 2,
1998;
5. Current Report on Form 8-K filed on January 7, 1999;
6. Current Report on Form 8-K filed on April 8, 1999;
7. the reports and financial statements for the AMB
Contributed Properties, the Boston Industrial Portfolio,
the Jamesburg Property, Orlando Central Park, Totem Lake
Malls, Dallas Warehouse Portfolio (Garland Industrial
Portfolio), Twin Cities Office/Showroom Portfolio
(Minnetonka Industrial Portfolio), Crysen Corridor
Warehouse, Cabot Industrial Portfolio, Cabot Business
Park, Manhattan Village Shopping Center, Weslayan Plaza
and Silicon Valley R&D Portfolio and the pro forma
financial statements from the Registrant's Registration
Statement on Form S-11 (No. 333-58107);
8. the description of the Registrant's common stock
contained in its Registration Statement on Form 8-A
filed with the Securities and Exchange Commission on
October 28, 1997; and
9. all documents filed by the Registrant with the
Securities and Exchange Commission pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act
of 1934, as amended, after the date of this Registration
Statement and prior to the filing of a post-effective
amendment which indicates that all securities offered
have been sold or
<PAGE> 3
which deregisters all securities then remaining unsold,
shall be deemed to be incorporated into this
Registration Statement.
Item 8.
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<CAPTION>
Exhibit
Number Exhibits
------- --------
<S> <C>
4.1 Articles of Incorporation of the Registrant (incorporated by
reference to Exhibit 3.1 of the Registrant's Registration
Statement on Form S-11 (No. 333-35915)).
4.2 Articles Supplementary establishing and fixing the rights and
preferences of the 8 1/2% Series A Cumulative Redeemable
Preferred Stock (incorporated by reference to Exhibit 3.4(4) of
the Company's Quarterly Report on Form 10-Q for the quarterly
period ended June 30, 1998).
4.3 Certificate of Correction of the Registrant's Articles
Supplementary establishing and fixing the rights and preferences
of the 8 1/2% Series A Cumulative Redeemable Preferred Stock
(incorporated by reference to Exhibit 3.2 of the Company's
Annual Report on Form 10-K for the year ended December 31,
1998).
4.4 Articles Supplementary establishing and fixing the rights and
preferences of the 8 5/8% Series B Cumulative Redeemable
Preferred Stock (incorporated by reference to Exhibit 3.1 of the
Registrant's current report on Form 8-K filed on January 7,
1999).
4.5 Articles Supplementary establishing and fixing the rights and
preferences of the 8.75% Series C Cumulative Redeemable
Preferred Stock (incorporated by reference to Exhibit 3.2 of the
Registrant's current report on Form 8-K filed on January 7,
1999).
4.6 Articles Supplementary establishing and fixing the rights and
preferences of the 7.75% Series D Cumulative Redeemable
Preferred Stock (incorporated by reference to Exhibit 3.1 of the
Company's Quarterly Report on Form 10-Q for the quarterly period
ended March 31, 1999).
4.7 First Amended and Restated Bylaws of the Registrant
(incorporated by reference to Exhibit 3.5 of the Registrant's
Annual Report for the year ended December 31, 1998).
4.8 Specimen common stock certificate (incorporated by reference to
Exhibit 3.3 of the Registrant's Registration Statement on Form
S-11 (No. 333-35915)).
4.9 Indenture dated as of June 30, 1998 by and among the Operating
Partnership, the Company and State Street Bank and Trust Company
of California, N.A., as trustee (incorporated by reference to
Exhibit 4.1 of the Registrant's Registration Statement on Form
S-11 (No. 333-49163)).
4.10 First Supplemental Indenture dated as of June 30, 1998 by and
among
</TABLE>
<PAGE> 4
<TABLE>
<CAPTION>
Exhibit
Number Exhibits
------- --------
<S> <C>
the Operating Partnership, the Company and State Street Bank and
Trust Company of California, N.A., as trustee (incorporated by
reference to Exhibit 4.2 to the Company's Registration Statement
on Form S-11 (No. 333-49163)).
4.11 Second Supplemental Indenture dated as of June 30, 1998 by and
among the Operating Partnership, the Company and State Street
Bank and Trust Company of California, N.A., as trustee
(incorporated by reference to Exhibit 4.3 to the Company's
Registration Statement on Form S-11 (No. 333-49163)).
4.12 Third Supplemental Indenture dated as of June 30, 1998 by and
among the Operating Partnership, the Company and State Street
Bank and Trust Company of California, N.A., as trustee
(incorporated by reference to Exhibit 4.4 to the Company's
Registration Statement on Form S-11 (No. 333-49163)).
4.13 Specimen of 7.10% Notes due 2008 (included in the First
Supplemental Indenture incorporated by reference as Exhibit 4.2
to the Company's Registration Statement on Form S-11 (No.
333-49163)).
4.14 Specimen of 7.50% Notes due 2018 (included in the Second
Supplemental Indenture incorporated by reference as Exhibit 4.3
to the Company's Registration Statement on Form S-11 (No.
333-49163)).
4.15 Specimen of 6.90% Reset Put Securities due 2015 (included in the
Third Supplemental Indenture incorporated by reference as
Exhibit 4.4 to the Company's Registration Statement on Form S-11
(No. 333-49163)).
4.16 The Second Amended and Restated 1997 Stock Option and Incentive
Plan.
5.1 Opinion of Ballard, Spahr, Andrews & Ingersoll, LLP.
23.1 Consent of Ballard, Spahr, Andrews & Ingersoll, LLP (included in
Exhibit 5.1).
23.2 Consent of Arthur Andersen LLP.
24.1 Power of Attorney (included on signature page of this
Registration Statement).
</TABLE>
<PAGE> 5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned thereunto duly
authorized in the City of San Francisco, State of California, on the 19th day of
May, 1999.
AMB PROPERTY CORPORATION
By: /s/ Hamid R. Moghadam
-------------------------------------
Hamid R. Moghadam
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints jointly and severally, Hamid R.
Moghadam, David S. Fries, John T. Roberts, Jr. and Michael A. Coke and each of
them, his attorney-in-fact, each with the power of substitution, for him in any
and all capacities, to sign any and all amendments to this Registration
Statement on Form S-8 (including post-effective amendments) 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 Act of 1933, as
amended, this Registration Statement has been signed by the following persons on
behalf of the Registrant and in the capacities and on the dates indicated.
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Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ T. Robert Burke Chairman of the Board and Director May 19, 1999
- -----------------------------------
T. Robert Burke
/s/ Hamid R. Moghadam President, Chief Executive Officer May 19, 1999
- ----------------------------------- and Director (Principal
Hamid R. Moghadam Executive Officer)
/s/ Douglas D. Abbey Chairman of Investment Committee May 19, 1999
- ----------------------------------- and Director
Douglas D. Abbey
/s/ Michael A. Coke Vice President and Chief Financial May 19, 1999
- ----------------------------------- Officer (Principal Financial
Michael A. Coke Officer and Principal
Accounting Officer)
/s/ Daniel H. Case, III Director May 19, 1999
- -----------------------------------
Daniel H. Case, III
</TABLE>
<PAGE> 6
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
Director
- -----------------------------------
Robert H. Edelstein, Ph.D.
/s/ Lynn M. Sedway Director May 19, 1999
- -----------------------------------
Lynn M. Sedway
/s/ Jeffrey L. Skelton, Ph.D. Director May 19, 1999
- -----------------------------------
Jeffrey L. Skelton, Ph.D.
Director
- -----------------------------------
Thomas W. Tusher
/s/ Caryl B. Welborn Director May 19, 1999
- -----------------------------------
Caryl B. Welborn
</TABLE>
<PAGE> 7
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Exhibits
------ --------
<S> <C>
4.1 Articles of Incorporation of the Registrant (incorporated by
reference to Exhibit 3.1 of the Registrant's Registration
Statement on Form S-11 (No. 333-35915)).
4.2 Articles Supplementary establishing and fixing the rights and
preferences of the 8 1/2% Series A Cumulative Redeemable
Preferred Stock (incorporated by reference to Exhibit 3.4(4) of
the Company's Quarterly Report on Form 10-Q for the quarterly
period ended June 30, 1998).
4.3 Certificate of Correction of the Registrant's Articles
Supplementary establishing and fixing the rights and preferences
of the 8 1/2% Series A Cumulative Redeemable Preferred Stock
(incorporated by reference to Exhibit 3.2 of the Company's
Annual Report on Form 10-K for the year ended December 31,
1998).
4.4 Articles Supplementary establishing and fixing the rights and
preferences of the 8 5/8% Series B Cumulative Redeemable
Preferred Stock (incorporated by reference to Exhibit 3.1 of the
Registrant's current report on Form 8-K filed on January 7,
1999).
4.5 Articles Supplementary establishing and fixing the rights and
preferences of the 8.75% Series C Cumulative Redeemable
Preferred Stock (incorporated by reference to Exhibit 3.2 of the
Registrant's current report on Form 8-K filed on January 7,
1999).
4.6 Articles Supplementary establishing and fixing the rights and
preferences of the 7.75% Series D Cumulative Redeemable
Preferred Stock (incorporated by reference to Exhibit 3.1 of the
Company's Quarterly Report on Form 10-Q for the quarterly period
ended March 31, 1999).
4.7 First Amended and Restated Bylaws of the Registrant
(incorporated by reference to Exhibit 3.5 of the Registrant's
Annual Report for the year ended December 31, 1998).
4.8 Specimen common stock certificate (incorporated by reference to
Exhibit 3.3 of the Registrant's Registration Statement on Form
S-11 (No. 333-35915)).
4.9 Indenture dated as of June 30, 1998 by and among the Operating
Partnership, the Company and State Street Bank and Trust Company
of California, N.A., as trustee (incorporated by reference to
Exhibit 4.1 of the Registrant's Registration Statement on Form
S-11 (No. 333-49163)).
4.10 First Supplemental Indenture dated as of June 30, 1998 by and
among the Operating Partnership, the Company and State Street
Bank and Trust
</TABLE>
<PAGE> 8
<TABLE>
<CAPTION>
Exhibit
Number Exhibits
------ --------
<S> <C>
Company of California, N.A., as trustee (incorporated by
reference to Exhibit 4.2 to the Company's Registration Statement
on Form S-11 (No. 333-49163)).
4.11 Second Supplemental Indenture dated as of June 30, 1998 by and
among the Operating Partnership, the Company and State Street
Bank and Trust Company of California, N.A., as trustee
(incorporated by reference to Exhibit 4.3 to the Company's
Registration Statement on Form S-11 (No. 333-49163)).
4.12 Third Supplemental Indenture dated as of June 30, 1998 by and
among the Operating Partnership, the Company and State Street
Bank and Trust Company of California, N.A., as trustee
(incorporated by reference to Exhibit 4.4 to the Company's
Registration Statement on Form S-11 (No. 333-49163)).
4.13 Specimen of 7.10% Notes due 2008 (included in the First
Supplemental Indenture incorporated by reference as Exhibit 4.2
to the Company's Registration Statement on Form S-11 (No.
333-49163)).
4.14 Specimen of 7.50% Notes due 2018 (included in the Second
Supplemental Indenture incorporated by reference as Exhibit 4.3
to the Company's Registration Statement on Form S-11 (No.
333-49163)).
4.15 Specimen of 6.90% Reset Put Securities due 2015 (included in the
Third Supplemental Indenture incorporated by reference as
Exhibit 4.4 to the Company's Registration Statement on Form S-11
(No. 333-49163)).
4.16 The Second Amended and Restated 1997 Stock Option and Incentive
Plan.
5.1 Opinion of Ballard, Spahr, Andrews & Ingersoll, LLP.
23.1 Consent of Ballard, Spahr, Andrews & Ingersoll, LLP (included in
Exhibit 5.1).
23.2 Consent of Arthur Andersen LLP.
24.1 Power of Attorney (included on signature page of this
Registration Statement).
</TABLE>
<PAGE> 1
EXHIBIT 4.16
THE SECOND AMENDED AND RESTATED
1997 STOCK OPTION AND INCENTIVE PLAN
OF
AMB PROPERTY CORPORATION
AND AMB INVESTMENT MANAGEMENT, INC.
AND THEIR RESPECTIVE SUBSIDIARIES
AMB Property Corporation, a Maryland corporation (the "Company")
and AMB Investment Management, Inc., a Maryland corporation (the "Investment
Management Company") adopted The 1997 Stock Option and Incentive Plan of AMB
Property Corporation and AMB Investment Management, Inc. and their Respective
Subsidiaries (as such term is defined below), effective November 26, 1997, for
the benefit of their eligible employees, consultants and directors and those of
their Subsidiaries. The 1997 Stock Option and Incentive Plan of AMB Property
Corporation and AMB Investment Management, Inc. and their Respective
Subsidiaries was amended and restated in its entirety in the form of the First
Amended and Restated 1997 Stock Option and Incentive Plan of AMB Property
Corporation and AMB Investment Management, Inc. and their Respective
Subsidiaries, effective March 5, 1999, as amended by the First Amendment to the
First Amended and Restated 1997 Stock Option and Incentive Plan, effective March
5, 1999 (as amended, the "First Amended and Restated 1997 Stock Option and
Incentive Plan"). The First Amended and Restated 1997 Stock Option and Incentive
Plan is hereby amended and restated in its entirety in the form of this Second
Amended and Restated 1997 Stock Option and Incentive Plan of AMB Property
Corporation and AMB Investment Management, Inc. and their Respective
Subsidiaries (as amended and restated, the "Plan"), effective as of May 7, 1999.
The Plan consists of two plans, one for the benefit of employees, consultants
and independent directors of the Company and its Subsidiaries and one for the
benefit of the employees, consultants and independent directors of the
Investment Management Company and its Subsidiaries.
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.
<PAGE> 2
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 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
2
<PAGE> 3
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.
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. Consultant. "consultant" shall mean any consultant or
adviser if:
(a) the consultant or adviser renders bona fide services to
the Company, the Investment Management Company or their respective subsidiaries;
(b) the services rendered by the consultant or adviser are
not in connection with the offer or sale of securities in a capital-raising
transaction and do not directly or indirectly promote or maintain a market for
the securities of the Company, the Investment Management Company or their
respective subsidiaries; and
(c) the consultant or adviser is a natural person who has
contracted directly with the Company, the Investment Management Company or their
respective subsidiaries, as applicable, to render such services.
3
<PAGE> 4
1.13. 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.
1.14. Deferred Stock. "Deferred Stock" shall mean Common Stock
awarded under Article VII of this Plan.
1.15. Director. "Director" shall mean an Independent Director,
an Investment Management Company Director or a Non-Employee Director.
1.16. 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.
1.17. Employee. "Employee" shall mean any Company Employee or
any Investment Management Company Employee.
1.18. Exchange Act. "Exchange Act" shall mean the Securities
Exchange Act of 1934, as amended.
1.19. 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
4
<PAGE> 5
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.
1.20. 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.
1.21. 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.
1.22. 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.
1.23. Initial Independent Director. "Initial Independent
Director" shall have the meaning given to such term in Section 3.4(d) hereof.
1.24. 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.
1.25. Investment Management Company. "Investment Management
Company" shall mean AMB Investment Management, Inc., a Maryland corporation.
1.26. 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.
1.27. 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 Investment Management Company in addition to director's fees
or (b) an Independent Director.
5
<PAGE> 6
1.28. Investment Management Company Purchase Price.
"Investment Management Company Purchase Price" shall have the meaning set forth
in Section 5.5 hereof.
1.29. Investment Management Company Purchased Shares.
"Investment Management Company Purchased Shares" shall have the meaning set
forth in Section 5.5 hereof.
1.30. 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.
1.31. Non-Employee Director. "Non-Employee Director" shall
mean a member of the Board or the Investment Management Company Board who is not
an Independent Director, an Investment Management Company Independent Director
or an Employee.
1.32. Non-Qualified Stock Option. "Non-Qualified Stock Option"
shall mean an Option which is not designated as an Incentive Stock Option by the
Committee.
1.33. 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.
1.34. Optionee. "Optionee" shall mean an Employee, consultant
or Director granted an Option under this Plan.
1.35. Partnership. "Partnership" shall mean AMB Property,
L.P., a Delaware limited partnership.
1.36. 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.
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1.37. 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.
1.38. Partnership Purchase Price. "Partnership Purchase Price"
shall have the meaning set forth in Section 5.4
1.39. Partnership Purchased Shares. "Partnership Purchased
Shares" shall have the meaning set forth in Section 5.4.
1.40. 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.
1.41. 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.
1.42. Plan. "Plan" shall mean the Second Amended and Restated
1997 Stock Option and Incentive Plan of AMB Property Corporation and AMB
Investment Management, Inc. and their Respective Subsidiaries.
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.
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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 Investment Management Company 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 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
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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 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
Eight Million Nine Hundred Fifty Thousand (8,950,000). The shares of
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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.
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 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, consultant or Non-Employee
Director selected by the Committee pursuant to Section 3.4(a)(i) shall be
eligible to be granted an Option. Independent Directors 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.
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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 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.
(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
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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 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. Notwithstanding
any other provision of this Plan to the contrary, the Committee shall not have
the authority to amend the terms of any outstanding Option to reduce its
exercise price.
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4.3. Option Term. The term of an Option shall be set by the
Committee in its discretion; provided, however, that, (i) no Option shall be
granted with a term of more than ten (10) years from the date the Option is
granted, (ii) in the case of Options granted to Independent Directors, the term
shall be ten (10) years from the date the Option is granted, and (iii) in the
case of Incentive Stock Options, the term shall not be more than five (5) years
from the date the Incentive Stock Option is granted, 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 Board otherwise
provides in the terms of the Options or otherwise, Options granted to
Independent Directors shall become fully exercisable on first anniversary of the
date of Option grant, 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
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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.
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
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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
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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");
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(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
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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 mechanism
for the transfer of the Restricted Stock and payment therefor and, in
the case
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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 stockholder with respect to said shares,
subject to the restrictions in his Restricted Stock
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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
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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.
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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
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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
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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
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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,
the mechanism for the transfer of 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.
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.
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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 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
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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 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.
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<PAGE> 28
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.
9.5. Delegation of Authority to Grant Awards. The Committee
may, but need not, delegate from time to time to a committee consisting of one
or more members of the Committee or of one or more officers of the Company some
or all of the Committee's authority to grant awards under this Plan to eligible
recipients; provided, however, that each such recipient must be an individual
other than an "officer," "director" or "beneficial owner of more than ten per
centum of any class of any equity security" within the meaning of each such term
as it is used under Section 16(b) of the Exchange Act. Any delegation hereunder
shall be subject to the restrictions and limits that the Committee specifies at
the time of such delegation of authority and may be rescinded at any time by the
Committee. At all times, any committee appointed under this Section 9.5 shall
serve in such capacity at the pleasure of the Committee.
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, unless and until such rights or awards have been exercised, or
the shares underlying such rights or awards have been 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.
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<PAGE> 29
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. 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 1997 Stock
Option and Incentive Plan of AMB Property Corporation and AMB Investment
Management, Inc. and their Respective Subsidiaries was adopted by the Board; or
(b) The expiration of ten years from the date the 1997 Stock
Option and Incentive Plan of AMB Property Corporation and AMB Investment
Management, Inc. and their Respective Subsidiaries was approved by the Company's
stockholders under Section 10.4.
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,
29
<PAGE> 30
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:
(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
30
<PAGE> 31
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 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, and the criteria
included in, outstanding options, rights and awards and options, rights
and awards which may be granted in the future; and
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<PAGE> 32
(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 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
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<PAGE> 33
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 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
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<PAGE> 34
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 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.
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<PAGE> 35
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 May 7, 1999.
Executed on this 7th day of May, 1999.
----------------------------------------
David S. Fries
Chief Administrative Officer,
Managing Director and General Counsel
S-1
<PAGE> 37
IN WITNESS WHEREOF, the parties below have caused the foregoing
Plan to be approved by their officers duly authorized on this 7th day of May,
1999.
AMB PROPERTY, L.P.,
a Delaware limited partnership
By: AMB Property Corporation
its general partner
By:
-------------------------------------
David S. Fries
Chief Administrative Officer,
Managing Director and General Counsel
AMB PROPERTY II, L.P.,
a Delaware limited partnership
By: AMB Property Holding Corporation
its general partner
By:
-------------------------------------
John T. Roberts
Vice President
S-2
<PAGE> 38
AMB INVESTMENT MANAGEMENT, INC.,
a Maryland corporation
By:
-------------------------------------
Barbara J. Linn
President
AMB INVESTMENT MANAGEMENT
LIMITED PARTNERSHIP
By: AMB Investment Management, Inc.
its general partner
By:
-------------------------------------
Barbara J. Linn
President
S-3
<PAGE> 1
EXHIBIT 5.1
[Letterhead of Ballard Spahr Andrews & Ingersoll LLP]
May 19, 1999
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 3,200,000 Shares (the "Plan Shares") of
common stock of the Company, par value one cent per
share ("Common Stock"), to be issued pursuant to the
Second Amended and Restated 1997 Stock Option and
Incentive Plan of AMB Property Corporation, AMB
Investment Management, Inc. and their Respective
Subsidiaries (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
May 19, 1999 (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 (i) Articles of Incorporation filed by
the Company with the SDAT on November 24, 1997, (ii) Articles Supplementary,
filed with
<PAGE> 2
BALLARD SPAHR ANDREWS & INGERSOLL LLP
AMB Property Corporation
May 19, 1999
Page 2
the SDAT on July 23, 1998, (iii) Articles Supplementary, filed with the SDAT on
November 12, 1998, (iv) Articles Supplementary, filed with the SDAT on November
25, 1998, (v) Articles Supplementary filed with the SDAT on May 5, 1999, and
(vi) a Certificate of Correction, filed with the SDAT on March 18, 1999
(correcting the Articles Supplementary filed on July 23, 1998). We have also
examined the Amended and Restated Bylaws of the Company as adopted on March 5,
1999 (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 (the "Resolutions") and such other laws, records, documents,
certificates, opinions and instruments as we have deemed necessary to render
this opinion.
We have assumed 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 of 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 issuance of the Plan
Shares pursuant to the Plan has been duly authorized by the Board of Directors
and, when issued in accordance with the Plan and the Resolutions against payment
in full of the consideration therefor established pursuant to the Plan and the
Resolutions, such Plan Shares will be validly issued, fully paid and
non-assessable (assuming that upon such issuance the total number of Shares of
the Company's Common Stock issued and outstanding will not exceed the number of
Shares of Common Stock that the Company is then authorized to issue under the
Charter).
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
<PAGE> 3
BALLARD SPAHR ANDREWS & INGERSOLL LLP
AMB Property Corporation
May 19, 1999
Page 3
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 LLP
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our reports dated as follows:
<TABLE>
<S> <C>
- - AMB Property Corporation and subsidiaries February 2, 1999
- - AMB Contributed Properties March 27, 1998
- - Crysen Corridor Warehouse February 24, 1998
- - Boston Industrial Portfolio March 27,1998
- - The Jamesburg Property March 27, 1998
- - Orlando Central Park March 27, 1998
- - Totem Lake Malls March 27, 1998
- - Dallas Warehouse Portfolio (Garland Industrial Portfolio) April 21, 1998
- - Twin Cities Office/Showroom Portfolio (Minnetonka Industrial Portfolio) May 1, 1998
- - Willow Park Portfolio June 8, 1998
- - Amberjack Portfolio July 9, 1998
- - Willow Lake Portfolio July 21, 1998
- - National Distribution Portfolio July 31, 1998
- - Mawah Portfolio July 31, 1998
- - Cabot Industrial Portfolio October 29, 1997
- - Cabot Business Park October 29, 1997
- - Manhattan Village Shopping Center October 17, 1997
- - Weslayan Plaza October 17, 1997
- - Silicon Valley R&D Portfolio October 17, 1997
</TABLE>
and to all references to our Firm included in this registration statement.
San Francisco, California /s/ ARTHUR ANDERSEN LLP
May 19, 1999
