As filed with the Securities and Exchange Commission on July 24, 1998
Registration No. 333-_______________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933
-------------------------
Cornerstone Properties Inc.
(Exact name of Registrant as specified in its charter)
Nevada 74-2170858
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
Tower 56, 126 East 56th Street
New York, New York 10022
(Address of Principal Executive Offices)
Cornerstone Properties Inc.
1998 Long Term Incentive Plan
1995 Stock Option Agreements Between
Cornerstone Properties Inc. and Certain Management and Key Executives
1997 Stock Option Agreements Between
Cornerstone Properties Inc. and Certain Management and Key Executives
1998 Stock Option Agreements Between
Cornerstone Properties Inc. and Certain Management and Key Executives
1995 Restricted Share Agreements Between
Cornerstone Properties Inc. and Certain Management and Key Executives
1997 Restricted Share Agreements Between
Cornerstone Properties Inc. and Certain Management and Key Executives
1998 Restricted Share Agreements Between
Cornerstone Properties Inc. and Certain Management and Key Executives
Stock Option Certificates For
Certain Directors
Director Share Agreements Between
Cornerstone Properties Inc. and Certain Directors
(Full title of the plans)
-------------------------
John S. Moody
Chairman and Chief Executive Officer
Cornerstone Properties Inc.
Tower 56, 126 East 56th Street
New York, New York 10022
(Name and address of agent for service)
(212) 605-7100
(Telephone number, including area code, of agent for service)
-------------------------
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
===========================================================================================================
<CAPTION>
Title of Amount Proposed Maximum Proposed Maximum Amount of
Securities to be to be Offering Price Per Aggregate Registration
Registered Registered Share Offering Price Fee
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock 2,087,000 $14.8939 (1) $31,083,500 (1) $ 9,169.63
no par value
Common Stock 3,314,592 $17.71875 (2) $58,730,427 (2) $17,325.48
no par value ----------
$26,498.11
- -----------------------------------------------------------------------------------------------------------
<FN>
(1) The proposed maximum offering price per share and proposed aggregate offering price with respect to
777,000 shares being offered pursuant to options under the Registrant's 1995 Stock Option Agreements,
950,000 shares being offered pursuant to options under the Registrant's 1997 Stock Option Agreements,
270,000 shares being offered pursuant to options under the Registrant's 1998 Stock Option Agreements
and 90,000 shares being offered pursuant to the Registrant's Stock Option Certificates for Certain
Directors are based on the weighted average exercise price in accordance with Rule 457(h).
(2) The proposed maximum offering price per share and proposed aggregate offering price with respect to
3,000,000 shares being offered pursuant to the Registrant's 1998 Long-Term Incentive Plan, 167,622
shares being offered pursuant to the Registrant's 1995 Restricted Share Agreements, 112,500 shares
being offered pursuant to the Registrant's 1997 Restricted Share Agreements, 31,678 shares being
offered pursuant to the Registrant's 1998 Restricted Share Agreements and 2,792 being offered pursuant
to the Registrant's Director Share Agreements are based on the average of the high and low prices of the
Common Stock on the New York Stock Exchange consolidated reporting system on July 23, 1998, in
accordance with Rule 457(c) and are being utilized solely for purposes of calculating the registration fee.
</FN>
</TABLE>
<PAGE>
Part I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information.*
Item 2. Registrant Information and Employee Plan Annual Information.*
- --------------------
* Information required by Part I to be contained in the Section 10(a)
prospectus is omitted from this Registration Statement in accordance
with Rule 428 under the Securities Act, and the "Note" to Part I of
Form S-8.
<PAGE>
2
Part II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents are incorporated by reference in this
Registration Statement:
(a) the Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1997;
(b) the Registrant's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1998.
(c) the Registrant's Current Reports on Form 8-K filed January 14,
1998, February 5, 1998, March 27, 1998 (two reports) and April 2, 1998; and
(d) the description of the Registrant's common stock, no par value,
contained in the Registrant's Registration Statement on Form 8-A (File No.
001-12861) for registration of such common stock under the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
All documents subsequently filed by the Registrant pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of
a post-effective amendment which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold, shall be deemed
to be incorporated by reference in this Registration Statement and to be part
hereof from the date of filing of such documents.
Item 4. Description of Securities.
Not applicable.
<PAGE>
3
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
Subsection 1 of Section 78.7502 of Chapter 78 of the Nevada Revised
Statutes (the "NRS") empowers a corporation to indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation or other enterprise,
against expenses (including attorney's fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement or conviction or upon
a plea of nolo contendere or its equivalent does not, of itself, create a
presumption that the person did not act in good faith or in a manner which he
reasonably believed to be in or not opposed to the best interests of the
corporation or that, with respect to any criminal action or proceeding, he had
reasonable cause to believe his actions were unlawful.
Subsection 2 of Section 78.7502 of the NRS empowers a corporation to
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that such
person acted in any of the capacities set forth above against expenses,
including attorneys' fees, actually and reasonably incurred by him in connection
with the defense or settlement of such action or suit if he acted under similar
standards to those described above except that no indemnification may be made in
respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable to the corporation or for amounts paid in settlement to
the corporation unless and only to the extent that the court in which such
action or suit was brought determines that, despite the adjudication of
liability, such person is fairly and reasonably entitled to indemnity for such
expenses as the court deems proper.
Section 78.7502 of the NRS further provides that to the extent a
director or officer of a corporation has been successful in the defense of any
action, suit or proceeding referred to in subsections (1) and (2) or in the
defense of any claim, issue or matter therein, he shall be indemnified against
expenses (including attorneys' fees) actually and reasonably
<PAGE>
4
incurred by him in connection therewith. Section 78.751 of the NRS provides that
nay indemnification provided for by Section 78.7502 of the NRS (by court order
or otherwise) shall not be deemed exclusive of any other rights to which the
indemnified party may be entitled and that the scope of indemnification shall
continue as to directors, officers, employees or agents who have ceased to hold
such positions, and to their heirs, executors and administrators. Section 78.752
empowers the corporation to purchase and maintain insurance on behalf of a
director, officer, employee or agent of the corporation against any liability
asserted against him or incurred by him in any such capacity or arising out of
his status as such whether or not the corporation would have the power to
indemnify him against such liabilities under Section 78.7502.
Article IX of the Bylaws of the Registrant provides for
indemnification of its officers and Directors, substantially identical in scope
to that permitted under Section 78.7502 of the NRS. The Bylaws provide, pursuant
to Subsection 2 of Section 78.7502 of the NRS, that the expenses of officers and
Directors incurred in defending any action, suit or proceeding, whether civil,
criminal, administrative or investigative, must be paid by the Registrant as
they are incurred and in advance of the final disposition of the action, suit or
proceeding, upon receipt of any undertaking by or on behalf of the Director or
officer to repay such amounts unless it shall ultimately be determined that he
is entitled to be indemnified by the Registrant pursuant to Article IX of the
Bylaws.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
The following exhibits are filed as part of this Registration
Statement:
4.1 Cornerstone Properties Inc. 1998 Long-Term Incentive Plan
4.2 Form of 1995 Stock Option Agreements, as amended.
4.3 Form of 1997 Stock Option Agreements, as amended.
4.4 Form of 1998 Stock Option Agreements.
4.5 Form of 1995 Restricted Share Agreements.
4.6 Form of 1997 Restricted Share Agreements.
<PAGE>
5
4.7 Form of 1998 Restricted Share Agreements.
4.8 Form of Director Stock Option Certificates.
4.9 Form of Director Share Agreements.
4.10 Restated Articles of Incorporation of the Registrant (incorporated by
reference to Exhibit 3.1 to Registrant's Annual Report on Form 10-K
for the year ended December 31, 1996 (File No. 0-10421)).
4.11 Certificate of Amendment of Restated Articles of Incorporation of the
Registrant, dated October 27, 1997 (incorporated by reference from the
Registration Statement on Form S-3, as filed with the Commission on
March 2, 1998 (Registration No. 333-47149)).
4.12 Certificate of Amendment of Restated Articles of Incorporation of the
Registrant, dated July 10, 1998 (incorporated by reference from the
Registrant's Registration Statement on Form S-3, as filed with the
Commission on July 16, 1998 (Registration No. 333-59259)).
4.13 Bylaws of the Registrant (incorporated by reference to Exhibit 3.5 to
the Registrant's Annual Report on Form 10-K for the year ended
December 31, 1995 (File No. 0-10421)).
5 Opinion of Lionel Sawyer & Collins regarding the legality of the
common stock being registered hereby.
23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of Lionel Sawyer & Collins (included in Exhibit 5).
23.3 Consent of Grant Thornton LLP.
23.4 Consent of Arthur Andersen LLP.
24 Powers of Attorney (included on signature page).
Item 9. Undertakings.
(a) The undersigned Registrant hereby undertakes:
<PAGE>
6
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement to include
any material information with respect to the plan of distribution not
previously disclosed in the Registration Statement or any material change
to such information in the Registration Statement;
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof; and
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby further undertakes that, for
purposes of determining any liability under the Securities Act, each filing of
the Registrant's annual report pursuant to Section 13(a) or 15(d) of the
Exchange Act that is incorporated by reference in the Registration Statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
<PAGE>
7
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the Registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of New York, State of New York on the 24th day of
July, 1998.
CORNERSTONE PROPERTIES INC.
By: /s/ John S. Moody
-------------------
Name: John S. Moody
Title: Chairman and Chief Executive Officer
POWER OF ATTORNEY
Each of the undersigned whose signature appears below hereby
constitutes and appoints John S. Moody, Thomas P. Loftus and Kevin P. Mahoney
his/her true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him/her and in his/her name, place and
stead, in any and all capacities to sign any and all amendments (including
post-effective amendments) and supplements to this Registration Statement and
any and all related registration statements necessary to register additional
securities, and to file the same, with all exhibits thereto, and other documents
in connection therewith, with the Securities and Exchange Commission, granting
unto said attorney-in-fact and agent full power and authority to do and perform
each and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he/she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agent, or his/her substitute or 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 below by the following
persons in the indicated capacities on July 24, 1998.
Signature Title
/s/ John S. Moody
- ------------------- Chairman, Chief Executive Officer,
John S. Moody and Director (Principal Executive Officer)
<PAGE>
8
/s/ Tomas P. Lofton Chief Administrative Officer,
- ------------------------ Secretary and Controller
Thomas P. Loftus (Principal Accounting Officer)
/s/ Kevin P. Mahoney Senior Vice President and Chief Financial
- ------------------------ Officer (Principal Financial Officer)
Kevin P. Mahoney
/s/ Cecil D. Conlee Director
- ------------------------
Cecil D. Conlee
/s/ Rodney C. Dimock Director
- ------------------------
Rodney C. Dimock
/s/ Blake Eagle Director
- ------------------------
Blake Eagle
/s/ Karl-Ludwig Hermann Director
- ------------------------
Dr. Karl-Ludwig Hermann
/s/ Hans C. Mautner Director
- ------------------------
Hans C. Mautner
/s/ Lutz Mellinger Director
- ------------------------
Dr. Lutz Mellinger
Director
- ------------------------
Craig R. Stapleton
Director
- ------------------------
Michael J.G. Topham
<PAGE>
9
Director
- ------------------------
Dick van den Bos
Director
- ------------------------
Jan van der Vlist
<PAGE>
10
Exhibit Index
Exhibit No. Description of Document
4.1 Cornerstone Properties Inc. 1998 Long-Term Incentive Plan
4.2 Form of 1995 Stock Option Agreements, as amended.
4.3 Form of 1997 Stock Option Agreements, as amended.
4.4 Form of 1998 Stock Option Agreements.
4.5 Form of 1995 Restricted Share Agreements.
4.6 Form of 1997 Restricted Share Agreements.
4.7 Form of 1998 Restricted Share Agreements.
4.8 Form of Director Stock Option Certificate.
4.9 Form of Director Share Agreements.
4.10 Restated Articles of Incorporation of the Registrant
(incorporated by reference to Exhibit 3.1 to Registrant's
Annual Report on Form 10-K for the year ended December 31,
1996 (File No. 0-10421)).
4.11 Certificate of Amendment of Restated Articles of Incorporation
of the Registrant, dated October 27, 1997 (incorporated by
reference from the Registration Statement on Form S-3, as
filed with the Commission on March 2, 1998 (Registration No.
333-47149)).
4.12 Certificate of Amendment of Restated Articles of Incorporation
of the Registrant, dated July 10, 1998 (incorporated by
reference from the Registrant's Registration Statement on Form
S-3, as filed with the Commission on July 16, 1998
(Registration No. 333-59259)).
4.13 Bylaws of the Registrant (incorporated by reference to Exhibit
3.5 to the Registrant's Annual Report on Form 10-K for the
year ended December 31, 1995 (File No. 0-10421)).
5 Opinion of Lionel Sawyer & Collins regarding the legality of
the common stock being registered hereby.
<PAGE>
11
23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of Lionel Sawyer & Collins (included in Exhibit 5).
23.3 Consent of Grant Thornton LLP.
23.4 Consent of Arthur Andersen LLP.
24 Powers of Attorney (included on signature page).
EXHIBIT A
CORNERSTONE PROPERTIES INC.
1998 LONG-TERM INCENTIVE PLAN
1. Purposes. The purposes of the Plan are to advance the
interests of the Company and its stockholders by attracting and retaining
officers and key employees and to reward officers and key employees for
contributing to the success of the Company and the creation of stockholder
value. The Plan permits the Committee to make Awards which constitute "qualified
performance-based compensation" for purposes of Section 162(m) of the Code.
2. Definitions and Rules of Construction.
(a) Definitions. For purposes of the Plan, the following
capitalized words shall have the meanings set forth below:
"Award" means a Stock Award, RSU, Option, SAR,
Dividend Equivalent, Other Award, Performance Award or any combination
of the foregoing.
"Award Document" means an agreement, certificate or
other type or form of document or documentation approved by the
Committee which sets forth the terms and conditions of an Award. An
Award Document may be in written, electronic or other media, may be
limited to a notation on the books and records of the Company and,
unless the Committee requires otherwise, need not be signed by a
representative of the Company or a Participant.
"Beneficiary" means the person designated in writing
by the Participant to exercise or to receive an Award or payments or
other amounts in respect thereof in the event of the Participant's
death or, if no such person has been designated in writing by the
Participant prior to the date of death, the Participant's estate. No
Beneficiary designation under the Plan shall be effective unless it is
in writing and is received by the Company prior to the date of death of
the applicable Participant.
"Board" means the Board of Directors of the Company.
"Code" means the Internal Revenue Code of 1986, as
amended from time to time, and the rulings and regulations promulgated
thereunder.
"Committee" means the Compensation Committee of the
Board, or such other committee of the Board as may be designated by the
Board to administer the Plan.
"Common Stock" means the common stock, no par value
per share, of the Company.
<PAGE>
"Companies" means the Company and each Subsidiary.
"Company" means Cornerstone Properties Inc., a Nevada
corporation.
"Deferred Compensation Account" means the account
established on the books and records of the Company to record the
amount of deferred compensation payable under the Plan to a
Participant.
"Dividend Equivalent" means a right granted in
accordance with Section 12 to receive a payment in cash, shares of
Common Stock or other property equal in value to the dividends declared
and paid on a specified number of shares of Common Stock. A Dividend
Equivalent may constitute a free-standing Award or may be granted in
connection with another type of Award.
"Effective Date" means February 4, 1998.
"Eligible Individual" means an individual described
in Section 4(a).
"Exchange Act" means the Securities Exchange Act of
1934, as amended from time to time, and the rulings and regulations
promulgated thereunder.
"Fair Market Value" means, with respect to a share of
Common Stock, the fair market value thereof as of the relevant date of
determination, as determined in accordance with a valuation methodology
approved by the Committee. In the absence of any alternative valuation
methodology approved by the Committee, the Fair Market Value of a share
of Common Stock shall equal the closing price of a share of Common
Stock on the New York Stock Exchange, or such other national securities
exchange as may be designated by the Committee.
"GAAP" means U.S. Generally Accepted Accounting
Principles.
"Incentive Stock Option" means an Option which meets
the requirements of Section 422 of the Code.
"Nonqualified Stock Option" means any Option which is
not an Incentive Stock Option.
"Option" means an Option granted under Section 9 of
the Plan, including an Incentive Stock Option and a Nonqualified Stock
Option.
"Other Award" means an Award granted under the Plan
in accordance with Section 13.
2
<PAGE>
"Participant" means an Eligible Individual who holds
an outstanding Award under the Plan.
"Performance Award" means the right of a Participant
to receive a specified amount following the completion of a Performance
Period based upon performance in respect of one or more of the
Performance Goals applicable to such period.
"Performance Goal" means any of the following: funds
from operations, funds from operations per share, earnings per share,
net income, net operating income, pretax profits, pretax operating
income, revenue growth, return on sales, return on equity, return on
assets managed, return on investment, increase in the Fair Market Value
of a share of Common Stock, total return to stockholders, cash flow or
economic value added. A Performance Goal may be measured over a
Performance Period on a periodic, annual, cumulative or average basis
and may be established on a corporate-wide basis or established with
respect to one or more operating units, divisions, Subsidiaries,
acquired businesses, minority investments, partnerships or joint
ventures. To the extent that there is a change in GAAP during a
Performance Period, the Committee may calculate any Performance Goal
with or without regard to such change.
"Performance Period" means a period of time
designated by the Committee over which one or more Performance Goals
are measured.
"Performance Unit" means an Award granted pursuant to
Section 11.
"Plan" means this Cornerstone Properties Inc. 1998
Long Term Incentive Plan, as the same may be amended from time to time.
"Restoration Option" means an Option that is awarded
upon the exercise of an Option earlier awarded under the Plan or any
other plan of the Company (an "Underlying Option") for which the
exercise price is paid in whole or in part by tendering shares of
Common Stock previously owned by the Participant, where such
Restoration Option (i) covers a number of shares of Common Stock no
greater than the number of previously owned shares tendered in payment
of the exercise price of the Underlying Option plus the number of
shares withheld to pay taxes arising upon such exercise, (ii) the
expiration date of the Restoration Option is no later than the
expiration date of the Underlying Option and (iii) the exercise price
per share of the Restoration Option is no less than the Fair Market
Value per share of Common Stock on the date of exercise of the
Underlying Option.
"Restricted Shares" means shares of Common Stock
subject to a Stock Award that have not vested or remain subject to
forfeiture, transfer or other restrictions in accordance with Section 7
and the applicable Award Document.
3
<PAGE>
"RSU" means a restricted stock unit award granted in
accordance with Section 8.
"SAR" means a stock appreciation right or limited
stock appreciation right granted in accordance with Section 10.
"Stock Award" means a grant of shares of Common Stock
in accordance with Section 7.
"Subsidiary" means (i) a corporation or other entity
with respect to which the Company, directly or indirectly, has the
power, whether through the ownership of voting securities, by contract
or otherwise, to elect at least a majority of the members of such
corporation's board of directors or analogous governing body, or (ii)
any other corporation or other entity in which the Company, directly or
indirectly, has an equity or similar interest and which the Committee
designates as a Subsidiary for purposes of the Plan. For purposes of
determining eligibility for the grant of Incentive Stock Options under
the Plan, the term "Subsidiary" shall be defined in the manner required
by Section 424(f) of the Code.
"Substitute Award" means an Award granted upon
assumption of, or in substitution for, outstanding awards previously
granted by a company or other entity in connection with a corporate
transaction, such as a merger, combination, consolidation or
acquisition of property or stock.
"Target" means the target performance objective set
by the Committee for a Performance Goal.
"Target Payment" means the amount payable to a
Participant for a Performance Period upon the achievement of one of
more Targets set by the Committee for that period.
(b) Rules of Construction. The masculine pronoun shall be
deemed to include the feminine pronoun and the singular form of a word shall be
deemed to include the plural form, unless the context requires otherwise. Unless
the text indicates otherwise, references to sections are to sections of the
Plan.
3. Administration.
(a) Authority of the Committee. The Plan shall be administered
by the Committee, no member of which shall be eligible to participate in the
Plan. The Committee shall have full and final authority, in each case subject to
and consistent with the provisions of the Plan, (i) to select the Participants,
(ii) to grant Awards, (iii) to determine the type, number and other terms and
conditions of, and all other matters related to, Awards, (iv) to prescribe Award
4
<PAGE>
Documents (which need not be identical for each Participant), (v) to establish
rules and regulations for the administration of the Plan, (vi) to construe and
interpret the Plan and the forms of Award Documents and to correct defects,
supply omissions or reconcile inconsistencies therein, (vii) to make factual
determinations in connection with the administration or interpretation of the
Plan, and (viii) to make all other decisions or interpretations as the Committee
may deem necessary or advisable for the administration of the Plan. Any decision
of the Committee in the administration of the Plan shall be final and conclusive
on all interested persons.
(b) Delegation. The Committee may delegate its responsibility
with respect to the administration of the Plan to one or more officers of the
Company, to one or more members of the Committee or to one or more members of
the Board; provided, however, that the Committee may not delegate its
responsibility (i) to make Awards to individuals who are subject to Section 16
of the Exchange Act, (ii) to make Awards under Section 14 which are intended to
constitute "qualified performance-based compensation" under Section 162(m) of
the Code or (iii) to amend or terminate the Plan in accordance with Section 20.
The Committee may also appoint agents to assist in the day-to-day administration
of the Plan and may delegate the authority to execute documents under the Plan
to one or more members of the Committee or to one or more officers of any of the
Companies.
(c) Termination of Employment and Change in Control. The
Committee shall also have full authority to determine and specify in the
applicable Award Document the effect, if any, that a Participant's termination
of employment for any reason will have on the vesting, exercisability, payment
or lapse of restrictions applicable to an Award. The date of a Participant's
termination of employment for any reason shall be determined in the sole
discretion of the Committee. Similarly, the Committee shall have full authority
to determine the effect, if any, of a change in control of the Company on the
vesting, exercisability, payment or lapse of restrictions applicable to an
Award, which effect may be specified in the applicable Award Document or
determined at a subsequent time.
(d) Reliance and Indemnification. The Committee shall be
entitled to rely in good faith upon any report or other information furnished to
it by any officer or employee of the Companies or from the financial,
accounting, legal or other advisers of any of the Companies. Each member of the
Committee, each individual to whom the Committee delegates authority hereunder,
each individual designated by the Committee to administer the Plan and each
other person acting at the direction of or on behalf of the Committee shall not
be liable for any determination or anything done or omitted to be done by him or
by any other member of the Committee or any other such individual in connection
with the Plan, except for his own willful misconduct or as expressly provided by
statute, and, to the extent permitted by law and the bylaws of the Company,
shall be fully indemnified and protected by the Company with respect to such
determination, act or omission.
5
<PAGE>
4. Participation.
(a) Eligible Individuals. Only officers and key employees of
one of the Companies (or a division or operating unit thereof) or any individual
who has accepted an offer of employment with any of the Companies as an officer
or key employee shall be eligible to participate in the Plan and to receive
Awards under the Plan.
(b) Awards to Participants. The Committee shall have no
obligation to grant any Eligible Individual an Award or to designate an Eligible
Individual as a Participant for a Performance Period solely by reason of such
Eligible Individual having received a prior Award or having been designated as a
Participant for any prior Performance Period. The Committee may grant more than
one Award to a Participant at the same time or may designate an Eligible
Individual as a Participant in Performance Periods that begin on the same date
or that cover overlapping periods of time.
5. Common Stock Subject to the Plan.
(a) Plan Limit. Subject to adjustment in accordance with the
terms of Section 18, the Company is authorized to issue up to 3,000,000 shares
of Common Stock (the "Plan Limit"). Such shares of Common Stock may be newly
issued shares of Common Stock or re-acquired shares of Common Stock held in the
treasury of the Company. Any shares issued in connection with Substitute Awards
shall not be counted against the Plan Limit and shall not be subject to Section
5(d).
(b) Rules Applicable to Determining Shares Available for
Issuance. For purposes of determining the number of shares of Common Stock that
remian available for ussuance, the following shares shall be added back to the
Plan Limit and again be available for Awards:
(i) The number of shares tendered to pay the exercise price of
an Option or other Award or to satify a Participant's tax withholding
obligations; and
(ii) The number of shares withheld from any Award to satify a
Participant's tax withholding obligations or, if applicable, to pay the
exercise price of an Option or other form of Award.
(c) Reserve. In administering the Plan, the Committee may
establish reserves against the Plan Limit for amounts payable in settlement of
Awards or in settlement of Deferred Compensation Accounts. The Committee may
also promulgate additional rules and procedures for calculating the portion of
the Plan Limit available for Awards. This Section 5 shall be applied and
construed by the Committee so that no share of Common Stock is counted more than
once for purpose of any debit or credit to the plan limit.
(d) Special Limits. Anything to the contrary in Section 5(a)
notwithstanding, but subject to Section 18(b), the following special limits
shall apply to shares of Common Stock available for Awards under the Plan:
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<PAGE>
(i) The maximum number of shares of Common Stock that may be
subject to Options or free-standing SARs granted to any Eligible
Individual in any calendar year shall equal 1,000,000 shares, plus any
shares which were available under this Section 5(d)(i) for Awards of
Options or free-standing SARs to such Eligible Individual in any prior
calendar year but which were not covered by such Awards.
(ii) In no event will the number of shares of Common Stock
issued in connection with the grant of Incentive Stock Options exceed
3,000,000 shares.
6. Awards in General. Awards under the Plan may consist of
Stock Awards, RSUs, Options, SARs, Performance Units, Dividend Equivalents,
Other Awards, Performance Awards or any combination of the foregoing. Any Award
may be granted singly or in combination or tandem with any other Award, as the
Committee may determine. Awards may be made in combination with or as
alternatives to grants or rights under any other compensation or benefit plan of
the Companies, including the plan of any acquired entity. The terms and
conditions of each Award shall be set forth in an Award Document in a form
approved by the Committee for such Award, which shall contain terms and
conditions not inconsistent with the Plan. Except in connection with a
transaction or event described in Section 18(b) or in connection with the grant
of Substitute Awards, nothing in the Plan shall be construed as permitting the
Company to reduce the exercise price of Options previously granted under this
Plan or options previously granted under any other plan of the Companies without
stockholder approval.
7. Stock Awards.
(a) Form of Award. The Committee is authorized to grant shares
of Common Stock to an Eligible Individual as a Stock Award for no consideration
other than the provision of services or at a purchase price determined by the
Committee. Stock Awards may be granted in lieu of other compensation or benefits
payable to a Participant or in settlement of previously granted Awards. Shares
of Common Stock granted pursuant to this Section 7 shall be subject to such
restrictions on transfer or other incidents of ownership for such periods of
time, and shall be subject to such conditions of vesting, as the Committee may
determine. If shares of Common Stock are offered for sale under the Plan, the
purchase price shall be payable in cash, or, in the sole discretion of the
Committee or as set forth in the applicable Award Document, in shares of Common
Stock already owned by the Participant or other consideration acceptable to the
Committee or in any combination of cash, shares of Common Stock or such other
consideration.
(b) Share Certificates; Rights and Privileges. At the time
Restricted Shares are granted or sold to a Participant, share certificates
representing the appropriate number of Restricted Shares shall be registered in
the name of the Participant but shall be held by the Company in custody for the
account of such person. The certificates shall bear a legend restricting their
transferability as provided herein. Except for such restrictions on transfer or
other incidents of ownership as may be determined by the Committee and set forth
in the Agreement
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<PAGE>
relating to an award or sale of Restricted Shares, a Participant shall have the
rights of a stockholder as to such Restricted Shares, including the right to
receive dividends and the right to vote in accordance with applicable law.
(c) Distributions. Unless the Committee determines otherwise
at or after the time of grant, any shares of Common Stock or other securities of
the Company received by a Participant to whom Restricted Shares have been
granted or sold as a result of a non-cash distribution to holders of Common
Stock or as a stock dividend on Common Stock shall be subject to the same terms,
conditions and restrictions as such Restricted Shares.
8. RSUs. The Committee is authorized to grant RSUs to Eligible
Individuals. Each RSU shall entitle the holder thereof to receive, as determined
by the Committee at or after the time of grant, one share of Common Stock or
cash and other property with a value equal to the Fair Market Value of a share
of Common Stock on the date of settlement of the RSU. RSUs shall be subject to
such vesting, payment and settlement terms and restrictions as the Committee
shall impose. RSUs may be granted in lieu of other compensation or benefits
payable to a Participant or in settlement of previously granted Awards.
9. Stock Options.
(a) Form of Award. The Committee is authorized to grant
Options to Eligible Individuals. An Option shall entitle a Participant to
purchase a specified number of shares of Common Stock during a specified time at
an exercise price that is fixed at the time of grant or for which the method of
determining the exercise price is specified at the time of grant, all as the
Committee may determine; provided, however, that, except in the case of Options
which are Substitute Awards, the exercise price per share shall be no less than
100% of the Fair Market Value per share on the date of grant (or if the exercise
price is not fixed on the date of grant, then on such date as the exercise price
is fixed). An Option may be an Incentive Stock Option or a Nonqualified Stock
Option as determined by the Committee and set forth in the applicable Award
Document. Payment of the exercise price of an Option shall be made in cash, or,
to the extent provided by the Committee at or after the time of grant, in shares
of Common Stock (including shares already owned by the Participant or to be
issued to the Participant upon exercise of the Option) or in any combination of
cash and shares of Common Stock. An Option may also be exercised through a
"cashless exercise" procedure facilitated by a broker approved by the Company,
and in accordance with procedures established by the Committee, for this
purpose. An Option shall be effective for such term as shall be determined by
the Committee and set forth in the Award Document relating to such Option, and
the Committee may extend the term of an Option after the time of grant;
provided, however, that the term of an Option may in no event extend beyond the
tenth anniversary of the date of grant of such Option. The Committee may also
provide at or after the time of grant that a Participant shall have the right to
receive a Restoration Option upon the exercise through the tendering of shares
of Common Stock of an Option or an option granted under another plan of the
Company.
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<PAGE>
(b) Incentive Stock Options. Each Option granted pursuant to
the Plan shall be designated at the time of grant as either an Incentive Stock
Option or as a Nonqualified Stock Option. No Incentive Stock Option may be
issued pursuant to the Plan to any individual who, at the time the Option is
granted, owns stock possessing more than 10% of the total combined voting power
of all classes of stock of the Company or any of its Subsidiaries, unless (A)
the exercise price determined as of the date of grant is at least 110% of the
Fair Market Value on the date of grant of the shares of Common Stock subject to
such Option, and (B) the Incentive Stock Option is not exercisable more than
five years from the date of grant thereof. No Incentive Stock Option may be
granted under the Plan after the tenth anniversary of the Effective Date.
10. Stock Appreciation Rights.
(a) Form of Award. The Committee is authorized to grant SARs
to Eligible Individuals. An SAR shall entitle a Participant to receive, upon
exercise, (i) an amount in cash equal to the excess, if any, of the Fair Market
Value on the exercise date of the number of shares of Common Stock for which the
stock appreciation right is exercised, over the Fair Market Value of such number
of shares on the date of grant (or, in the case of an SAR granted in tandem with
an Option, the aggregate exercise price which the Participant would otherwise
have been required to pay under the terms of the Option in order to purchase
such shares), (ii) a number of shares of Common Stock having an aggregate Fair
Market Value, as of the date of exercise, equal to the amount determined as in
the preceding clause (i), or (iii) a combination of cash and shares having an
aggregate value equal to the amount determined as in the preceding clause (i).
An SAR may be granted on a free-standing basis or in tandem with another Award.
Notwithstanding the foregoing, the exercise price of an SAR that is a Substitute
Award may be less than the Fair Market Value of a share of Common Stock on the
date of grant.
(b) Exercisability. The Committee shall determine at or after
the time of grant whether payments in respect of an SAR shall be in cash, shares
of Common Stock or a combination thereof. An SAR shall be exercisable at the
time or times established by the Committee at or after the time of grant.
(c) Tandem SARs. If an SAR is granted in tandem with an
Option, the SAR shall not be exercisable prior to or later than the time the
related Option could be exercised. An SAR granted in tandem with an Option may
be granted either at the same time as such Option or subsequent thereto. If
granted in tandem with an Option, an SAR shall cover the same number of shares
of Common Stock as covered by the Option (or such lesser number of shares as the
Committee may determine) and shall be exercisable only at such time or times and
to the extent the related Option shall be exercisable, and shall have the same
term and exercise price as the related Option (which, in the case of an SAR
granted after the grant of the related Option, may be less than the Fair Market
Value per share on the date of grant of the tandem SAR). Upon exercise of an SAR
granted in tandem with an Option, the related Option shall be canceled
automatically to the extent of the number of shares covered by such exercise;
conversely, if the related Option is exercised as to some or all of the shares
covered by the
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<PAGE>
tandem grant, the tandem SAR shall be canceled automatically to the extent of
the number of shares covered by the Option exercise.
11. Performance Units. The Committee is authorized to grant
Performance Units to Eligible Individuals. Performance Units may be granted as
fixed or variable share- or dollar-denominated units subject to such conditions
of vesting and time of payment as the Committee may determine and as shall be
set forth in the applicable Award Document relating to such Performance Units.
Performance Units may be paid in cash, Common Stock, Awards, other property or
any combination thereof, as the Committee may determine at or after the time of
grant.
12. Dividend Equivalents. The Committee is authorized to grant
Dividend Equivalents to a Participant, entitling the Participant to receive
cash, Common Stock, Awards or other property equal in value to the dividends
paid in respect of a specified number of shares of Common Stock. Dividend
Equivalents may be awarded on a free-standing basis or in connection with
another Award. The Committee may provide that Dividend Equivalents will be paid
or distributed when accrued or will be deemed reinvested in additional shares of
Common Stock, Awards, or other investment vehicles as the Committee may specify.
Dividend Equivalents may be subject to the same terms and conditions as any
Award granted in connection therewith or to such other terms and conditions as
the Committee specifies in connection with the granting of the Dividend
Equivalents.
13. Other Awards. The Committee is authorized to grant Other
Awards in addition to the Awards as described in Sections 6 through 12 pursuant
to which cash, Common Stock or other securities of the Company, other property
or any combination thereof is, or in the future may be, acquired by a
Participant. Other Awards may be valued in whole or in part with reference to,
or otherwise based upon or related to one or more Performance Goals, the value
of a share of Common Stock or the value of other securities of the Company,
including preferred stock, debentures, notes, convertible or exchangeable debt
securities, rights or warrants, the value of any asset or property of the
Company or such other criteria as the Committee shall specify. Other Awards may
consist solely of cash bonuses or supplemental cash payments to a Participant,
including without limitation, payments to permit the Participant to pay some or
all of the tax liability incurred in connection with the vesting, exercise,
payment or settlement of an Award. Other Awards may be granted in lieu of other
compensation or benefits payable to a Participant or in settlement of previously
granted Awards.
14. Performance Awards.
(a) Form of Award. Subject to the further provisions of this
Section 14, the Committee is authorized to grant Performance Awards under this
Section 14 which shall provide for Target Payments to Participants for a
Performance Period upon the achievement of the Target or Targets established by
the Committee for such Performance Period. Target Payments may be made in cash,
Common Stock, Awards, other property or any combination thereof. The provisions
of this Section 14 shall be construed and administered by the Committee in a
manner
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<PAGE>
which complies with the requirements under Section 162(m) of the Code applicable
to "qualified performance-based compensation."
(b) Performance Goals and Targets. The Performance Goals and
Targets applicable to a Performance Period shall be established by the Committee
prior to, or reasonably promptly following the inception of, a Performance
Period but, to the extent required by Section 162(m) of the Code and the
regulations thereunder, by no later than the earlier of the date that is ninety
days after the commencement of the Performance Period or the day prior to the
date on which twenty-five percent of the Performance Period has elapsed. At the
time that the Committee specifies the Performance Goals and Targets applicable
to a Performance Period, the Committee shall also specify (i) the Target Payment
payable for the Performance Period if the applicable Target or Targets are
achieved, (ii) the amount, if any, payable in excess of the Target Payment if
actual performance exceeds the Target or Targets and (iii) the amount by which
the Target Payment will be reduced if actual performance is less than the Target
or Targets established for the Performance Period. The Committee may also
establish the minimum level of performance on one or more Performance Goals for
a Performance Period below which no amounts will be payable for the Performance
Period.
(c) Additional Provisions Applicable to Performance Periods.
More than one Performance Goal may apply to a given Performance Period and the
payment in connection with a Performance Award for a given Performance Period
may be made based upon (i) the attainment of the performance Targets for only
one Performance Goal or for any one of the Performance Goals applicable to that
Performance Period or (ii) performance related to two or more Performance Goals,
whether assessed individually or in combination with each other. The Committee
may, in connection with the establishment of Performance Goals and Targets for a
Performance Period, establish a matrix setting forth the relationship between
performance on two or more Performance Goals and the amount of the Award payable
for that Performance Period.
(d) Duration of the Performance Period. The Committee shall
establish the duration of each Performance Period at the time that it sets the
Performance Goals and Targets applicable to that period. The Committee shall be
authorized to permit overlapping or consecutive Performance Periods.
(e) Certification. Following the completion of each
Performance Period, the Committee shall certify, in accordance with the
requirements in the regulations under Section 162(m) of the Code, whether the
criteria for paying amounts in respect of each Performance Award related to that
Performance Period have been achieved. Unless the Committee determines
otherwise, no amounts payable in respect of Performance Awards shall be paid for
a Performance Period until the Performance Period has ended and the Committee
has certified the amount of the Awards payable for the Performance Period in
accordance with Section 162(m) of the Code.
(f) Discretion. The Committee is authorized at any time during
or after a Performance Period to reduce or eliminate the amount payable in
respect of a Performance Award
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<PAGE>
to any Participant, for any reason, including, without limitation, (i) in
recognition of unusual or nonrecurring events affecting the Company, any
Subsidiary, or any business division or unit or the financial statements of the
Company or any Subsidiary, or in response to changes in applicable laws,
regulations, or accounting principles, (ii) to take into account a change in the
position or duties of a Participant during the Performance Period or a change in
the Participant's employment status during the Performance Period or (iii) to
take into account subjective or objective performance factors not otherwise set
forth in the Plan or applicable Award Documents.
(g) Timing of Payment. Subject to Section 14(e), the amounts,
if any, payable in respect of Performance Awards for a Performance Period will
generally be paid within ninety days following the end of the applicable
Performance Period.
(h) Maximum Amount Payable Per Participant Under This Section
14. The maximum aggregate value of the cash and other property in settlement of
a Performance Award (prior to adjustment in accordance with Section 14(i))
payable per Participant for any Performance Period of twelve months may not
exceed $2,000,000 (the "Performance Dollar Limit"). If the Target Payment in
connection with a Performance Award payable to a Participant for a Performance
Period of twelve months is expressed as a percentage of the Participant's base
salary, then, in addition to the limit set forth in the previous sentence, the
maximum aggregate value of the cash and other property (prior to adjustment in
accordance with Section 14(i)) payable to such Participant in respect of the
Performance Award for such Performance Period shall not exceed 300% (the "Salary
Limit") of the Participant's annual rate of base salary as of the start of the
Performance Period. If a Performance Period is greater than or less than twelve
months, the applicable Performance Dollar Limit or Salary Limit, as the case may
be, shall be determined by multiplying the applicable twelve-month limit by a
fraction, the numerator of which is the number of whole and partial months in
the Performance Period and the denominator of which is twelve.
(i) Payment of Performance Awards in Shares of Common Stock.
In the event that the Company settles a Performance Award through the payment of
Common Stock that is subject to either forfeiture or transfer restrictions, the
Company may apply a reasonable discount to the then Fair Market Value of the
stock in determining the number of shares issued in settlement of such portion
of the award; provided, however, that the amount of the discount applied to the
Fair Market Value of a share of Common Stock may not exceed twenty-five percent.
15. Vesting; Forfeiture; Termination of Employment and Change
in Control. The Committee shall specify at or after the time of grant of an
Award the vesting, forfeiture and other conditions applicable to the Award and
the provisions governing the disposition of an Award in the event of a
Participant's termination of employment with the Companies. In connection with a
Participant's termination of employment, the Committee may vary the vesting,
exercisability and settlement provisions of an Award relative to the
circumstances resulting in such termination of employment. The Committee shall
have the discretion to accelerate the vesting or exercisability of, eliminate
the restrictions and conditions
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<PAGE>
applicable to, or extend the post-termination exercise period of an outstanding
Award. Similarly, the Committee shall have full authority to determine the
effect, if any, of a change in control of the Company on the vesting,
exercisability, payment or lapse of restrictions applicable to an Award, which
effect may be specified in the applicable Award Document or determined at a
subsequent time.
16. Acceleration and Deferral.
(a) Acceleration. The Committee may accelerate the payment or
settlement of an Award and may apply a reasonable discount to the amount
delivered to the Participant to reflect such accelerated payment or settlement.
If the Committee accelerates the payment or settlement of a Performance Award,
the amount of the discount applied to such accelerated payment or settlement
shall meet the requirements of the regulations under Section 162(m) of the Code.
(b) Deferral. In accordance with rules and procedures
established by the Committee, the Committee (i) may permit a Participant at or
after the time of grant to defer receipt of payment or settlement of some or all
of an Award to one or more dates elected by the Participant, subsequent to the
date on which such Award is payable or otherwise to be settled, or (ii) may
require at or after the time of grant that the portion of an Award in excess of
an amount specified by the Committee be mandatorily deferred until one or more
dates specified by the Committee. Amounts deferred in accordance with the
preceding sentence shall be noted in a bookkeeping account maintained by the
Company for this purpose and may periodically be credited with notional interest
or earnings in accordance with procedures established by the Committee from time
to time. Deferred amounts shall be paid in cash, Common Stock or other property,
as determined by the Committee at or after the time of deferral, on the date or
dates elected by the Participant or, in the case of amounts which are
mandatorily deferred, on the date or dates specified by the Committee.
17. General Provisions.
(a) Non-transferability of Award. Unless the Committee
determines otherwise, no Award or amount payable under, or interest in, the Plan
shall be transferable by a Participant except by will or the laws of descent and
distribution or otherwise be subject in any manner to anticipation, alienation,
sale, transfer, assignment, pledge, encumbrance or charge; provided, however,
that the Committee may, in its discretion and subject to such terms and
conditions as it shall specify, permit the transfer of an Award for no
consideration to a Participant's family members or to one or more trusts or
partnerships established in whole or in part for the benefit of one or more of
such family members (collectively, "Permitted Transferees"); and provided
further that this sentence shall not preclude a Participant from designating a
Beneficiary to receive the Participant's outstanding Award following the death
of the Participant. Any Award transferred to a Permitted Transferee shall be
further transferable only by will or the laws of descent and distribution or,
for no consideration, to another Permitted Transferee of the Participant. The
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<PAGE>
Committee, may in its discretion, permit transfers of Awards other than those
contemplated by this Section 17(a). During the lifetime of the Participant, an
Option, SAR or similar-type Other Award shall be exercisable only by the
Participant or by a Permitted Transferee to whom such Option, SAR or Other Award
has been transferred in accordance with this Section 17(a).
(b) Rights with Respect to Shares. A Participant shall have no
rights as a stockholder with respect to shares of Common Stock covered by an
Award until the date the Participant or his nominee becomes the holder of record
of such shares, and, except as provided in Section 12, no adjustments shall be
made for cash dividends or other distributions or other rights as to which there
is a record date preceding the date such person becomes the holder of record of
such shares.
(c) No Right to Continued Employment. Neither the creation of
the Plan nor the granting of Awards thereunder shall be deemed to create a
condition of employment or right to continued employment with the Company, and
each Participant shall be and shall remain subject to discharge by the Company
as though the Plan had never come into existence.
(d) Consent to Plan. By accepting any Award or other benefit
under the Plan, each Participant and each person claiming under or through him
shall be conclusively deemed to have indicated his acceptance and ratification
of, and consent to, any action taken under the Plan by the Company, the Board or
the Committee.
(e) Wage and Tax Withholding. The Company or any Subsidiary is
authorized to withhold from any Award or any compensation or other payment to a
Participant amounts of withholding and other taxes due in connection with any
Award, and to take such other action as the Committee may deem necessary or
advisable to enable the Company and the Participants to satisfy obligations for
the payment of withholding taxes and other tax obligations relating to any
Award. This authority shall include authority for the Company to withhold or
receive Common Stock or other property and to make cash payments in respect
thereof in satisfaction of a Participant's tax obligations, either on a
mandatory or elective basis in the discretion of the Committee.
(f) Compliance with Securities Laws. An Award may not be
exercised, and no shares of Common Stock may be issued in connection with an
Award, unless the issuance of such shares has been registered under the
Securities Act of 1933, as amended, and qualified under applicable state "blue
sky" laws, or the Company has determined that an exemption from registration and
from qualification under such state "blue sky" laws is available.
(g) Unfunded Plan. The Plan is intended to constitute an
"unfunded" plan for incentive compensation. Nothing contained in the Plan (or in
any Award Documents or other documentation related thereto) shall give any
Participant any rights that are greater than those of a general creditor of the
Company; provided, however, that the Committee may authorize the creation of
trusts and deposit therein cash, shares of Common Stock, or other property or
make
14
<PAGE>
other arrangements, to meet the Company's obligations under the Plan. Such
trusts or other arrangements shall be consistent with the "unfunded" status of
the Plan unless the Committee determines otherwise. The trustee of such trusts
may be authorized to dispose of trust assets and reinvest the proceeds in
alternative investments, subject to such terms and conditions as the Committee
may specify.
(h) Other Employee Benefit Plans. Payments received by a
Participant under any Award made pursuant to the Plan shall not be included in,
nor have any effect on, the determination of benefits under any other employee
benefit plan or similar arrangement provided by the Company, unless otherwise
specifically provided for under the terms of such plan or arrangement or by the
Committee.
(i) Compliance with Rule 16b-3. Notwithstanding anything
contained in the Plan or in any Award Document to the contrary, if the
consummation of any transaction under the Plan would result in the possible
imposition of liability on a Participant pursuant to Section 16(b) of the
Exchange Act, the Committee shall have the right, in its sole discretion, but
shall not be obligated, to defer such transaction or the effectiveness of such
action to the extent necessary to avoid such liability, but in no event for a
period longer than six months.
(j) Expenses. The costs and expenses of administering and
implementing the Plan shall be borne by the Company.
(k) Application of Funds. The proceeds received by the Company
from the sale of Common Stock or other securities pursuant to Award will be used
for general corporate purposes.
18. Recapitalization or Reorganization.
(a) Authority of the Company and Stockholders. The existence
of the Plan, the Award Documents and the Awards granted hereunder shall not
affect or restrict in any way the right or power of the Company or the
stockholders of the Company to make or authorize any adjustment,
recapitalization, reorganization or other change in the Company's capital
structure or its business, any merger or consolidation of the Company, any issue
of stock or of options, warrants or rights to purchase stock or of bonds,
debentures, preferred or prior preference stocks whose rights are superior to or
affect the Common Stock or the rights thereof or which are convertible into or
exchangeable for Common Stock, or the dissolution or liquidation of the Company,
or any sale or transfer of all or any part of its assets or business, or any
other corporate act or proceeding, whether of a similar character or otherwise.
(b) Change in Capitalization. Notwithstanding any provision of
the Plan or any Award Document, the number and kind of shares authorized for
issuance under Section 5(a), including the maximum number of shares available
under the special limits provided for in Section 5(d), may be equitably adjusted
in the sole discretion of the Committee in the event of a stock split, stock
dividend, recapitalization, reorganization, merger, consolidation,
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<PAGE>
extraordinary dividend, split-up, spin-off, combination, exchange of shares,
warrants or rights offering to purchase Common Stock at a price substantially
below Fair Market Value or other similar corporate event affecting the Common
Stock in order to preserve, but not increase, the benefits or potential benefits
intended to be made available under the Plan. In addition, upon the occurrence
of any of the foregoing events, the number of outstanding Awards and the number
and kind of shares subject to any outstanding Award and the purchase price per
share, if any, under any outstanding Award may be equitably adjusted (including
by payment of cash to a Participant) in the sole discretion of the Committee in
order to preserve the benefits or potential benefits intended to be made
available to Participants granted Awards. Such adjustments shall be made by the
Committee, whose determination as to what adjustments shall be made, and the
extent thereof, shall be final. Unless otherwise determined by the Committee,
such adjusted Awards shall be subject to the same vesting schedule and
restrictions to which the underlying Award is subject.
19. Effective Date. The Plan shall become effective on the
Effective Date, subject to subsequent approval thereof by the Company's
stockholders at the first annual meeting of stockholders to occur after the
Effective Date, and shall remain in effect until it has been terminated pursuant
to Section 20. If the Plan is not approved by the stockholders at such annual
meeting, the Plan and all interests in the Plan awarded to Participants before
the date of such annual meeting shall be void ab initio and of no further force
and effect. Section 14 of the Plan and the definition of "Performance Goal"
shall be submitted to the Company's stockholders at the first stockholder
meeting that occurs in the fifth year following the year in which the Plan was
last approved by stockholders (or any earlier meeting designated by the Board),
in accordance with the requirements of Section 162(m) of the Code and the
regulations thereunder. If stockholder approval of the Plan is not obtained at
any such meeting, then no further Performance Awards shall be made under Section
14 after the date of such annual meeting, but the remainder of the Plan shall
continue in effect until terminated in accordance with Section 20.
20. Amendment and Termination. Notwithstanding anything herein
to the contrary, the Board or the Committee may, at any time, terminate or, from
time to time, amend, modify or suspend the Plan; provided, however, that no
amendment which (i) increases the Plan Limit or increases limits set forth in
Section 5(d) (except as otherwise contemplated by the terms of the Plan as
approved by stockholders), (ii) allows for grants of Options (other than
Substitute Awards) at an exercise price less than Fair Market Value at the time
of grant or (iii) amends the last sentence of Section 6 in a manner that would
permit a reduction in the exercise price of Options (or options granted under
another plan of the Companies), under circumstances other than those stated in
such sentence, shall be effective without stockholder approval.
21. Governing Law. The validity, construction and effect of
the Plan, any rules and regulations relating to the Plan, and any Award shall be
determined in accordance with the laws of the State of Nevada applicable to
contracts to be performed entirely within such state and without giving effect
to principles of conflicts of laws.
16
ARICO AMERICA REALESTATE INVESTMENT COMPANY
EMPLOYEE STOCK OPTION
Agreement, dated _________, 1995, between ARICO AMERICA
REALESTATE INVESTMENT COMPANY, a Nevada corporation (hereinafter called the
"Company"), and _____________________ (hereinafter called "Optionee").
WHEREAS, the Optionee is now employed by the Company or a
Subsidiary in a key capacity and the Company desires to have him remain in the
employment of the Company or a Subsidiary and to afford him the opportunity to
acquire or enlarge his stock ownership in the Company so that he may have a
direct proprietary interest in its success (the term "Subsidiary" meaning any
corporation in which the Company owns, directly or indirectly, stock possessing
50% or more of the total combined voting power of all classes of stock);
NOW, THEREFORE, in consideration of the mutual covenants and
agreements hereinafter set forth, the parties hereto do hereby mutually agree as
follows:
1. This Agreement shall not be deemed to limit or restrict the
right of the Company or any Subsidiary to terminate the Optionee's employment at
any time, for any reason, with or without cause, or to limit or restrict the
right of the Optionee to terminate his employment with the Company or any
Subsidiary at any time. In the event of termination of the Optionee's employment
by the Company, subject to Section 4, such employee shall only be
<PAGE>
2
eligible to exercise or surrender options on the number of shares that have
become available for purchase pursuant to Section 2 hereof at the time of
termination.
2. Subject to the terms and conditions set forth herein, the
Company hereby grants to the Optionee the option, exercisable during the period
commencing on the date hereof and ending on ________, 2005, to purchase from the
Company, from time to time, as hereinafter more specifically stated, at a price
of $_______ per share, up to but not exceeding in the aggregate ___________
shares of the Company's Common Stock. Such option shall vest and become
exercisable as to 20% of such shares on each of the first five anniversaries of
the date hereof.
3. The option hereby granted shall be exercised by the
delivery to the Controller of the Company, from time to time, of written notice,
signed by the Optionee, specifying the number of shares the Optionee then
desires to purchase, together with cash, certified check, bank draft or postal
or express money order to the order of the Company for an amount in United
States dollars equal to the option price of such shares, plus an amount
sufficient to satisfy any federal, state or local withholding tax requirements.
If the written notice is mailed, the date of its receipt by the Controller of
the Company shall be considered the date of exercise of the option by the
Optionee.
Within 30 business days after any such exercise of the option
as a whole or in part by the Optionee, the Company shall deliver to the Optionee
a certificate or certificates, which may be legended to reflect restrictions on
the transferability thereof, representing the
<PAGE>
3
aggregate number of shares with respect to which such option shall be so
exercised, registered in the Optionee's name.
No fractional shares of Common Stock shall be issued and in
lieu thereof, if a fractional share of Common Stock would otherwise be
deliverable to the Optionee, the Optionee shall be paid in cash an amount equal
to the same fraction of the fair market value of a share of Common Stock.
"Fair market value" as used in this Section 3 shall mean the
mean between the high and low sales prices of the Common Stock on the day
preceding the date of surrender on the principal securities exchange on which
the Common Stock is listed or admitted to trading on which prices are quoted in
U.S. dollars or, if no sale of stock shall have been made on that date on such
exchange, on the next preceding day on which there was a sale of the stock.
Notwithstanding anything to the contrary in this Agreement,
this option shall not be exercisable unless the offer and sale of the shares of
Common Stock subject thereto have been registered under the Securities Act of
1933 and qualified under applicable state "blue sky" laws, or the Company has
determined that an exemption from registration under such Act and from
qualification under such state "blue sky" laws is available. The Company may
require, as a condition to the exercise of this option, that the Optionee make
certain representations and warranties as to the Optionee's investment intent
with respect to the option shares. Notwithstanding anything to the contrary in
this Agreement, if the consummation of any transaction under this Agreement
would result in the possible imposition of liability to the Optionee pursuant to
Section 16(b) of the Securities Exchange Act of 1934, the Board of
<PAGE>
4
Directors or the Audit Committee shall have the right, in its sole discretion,
but shall not be obligated, to defer such transaction to the extent necessary to
avoid such liability, but in no event for a period in excess of 180 days.
4. The option hereby granted shall terminate and be of no
force or effect upon the happening of the first to occur of the following
events:
(a) The expiration of the time allowed for exercise of this
option as specified in this Agreement.
(b) Termination of the Optionee's employment by the Company or
a Subsidiary for cause or without the consent of the
Company (in each case as determined by the Audit
Committee).
(c) The expiration of 365 days after the date of the
termination of the Optionee's employment by the Company or
a Subsidiary other than for cause or without the consent
of the Company; provided, that during such 365-day period,
the Optionee shall have the right to exercise this option
with respect to any or all shares which were vested and
available for purchase by him on the date of such
termination of employment and, in the event of his death
after termination of employment and during such 365-day
period, his estate, personal representative or beneficiary
shall have the right, within such period, to exercise this
option with respect to any or all shares which were vested
and available for purchase by the Optionee on the date of
his termination of employment and which had not been
purchased by him prior to his death.
(d) The expiration of 365 days after the date of the
Optionee's retirement after a period of continuous
employment by the Company or a Subsidiary which includes
the date on which this option was granted; provided, that
during such 365-day period, the Optionee shall have the
right to exercise this option with respect to any or all
shares which were vested and available for purchase by him
on the date of such retirement and, in the event of his
death after retirement and during such 365-day period, his
estate, personal representative or beneficiary shall have
the right, within such period, to exercise this option
with respect to any or all shares which were vested and
available for purchase by the Optionee on the
<PAGE>
5
date of his retirement and which had not been purchased
by him prior to his death.
(e) The expiration of 365 days after the date of death of the
Optionee during a period of continuous employment by the
Company or a Subsidiary which includes the date on which
this option was granted; provided, that during such
365-day period, his estate, personal representative or
beneficiary shall have the right to exercise this option
with respect to any or all shares which were vested and
available for purchase by the Optionee on the date of his
death.
The Audit Committee shall have absolute and uncontrolled
discretion to determine whether the Optionee's termination of employment is
without the consent of the Company or is to be regarded as for cause or as
retirement and whether an authorized leave of absence or absence on military or
government service shall constitute a termination of employment for the purposes
of this Agreement.
Upon termination of the Optionee's employment for any reason,
this option, to the extent it has not theretofore vested, shall be forfeited and
cancelled.
5. Whenever the word "Optionee" is used in any provision of
this Agreement under circumstances where the provision should logically be
construed to apply to the executors, the administrators, or the person or
persons to whom this option may be transferred by will or by the laws of descent
and distribution, it shall be deemed to include such person or persons.
6. This option is not transferable by the Optionee otherwise
than by will or the laws of descent and distribution and, during the Optionee's
lifetime, may be exercised only by him or his legal guardian or representative.
No assignment or transfer of this option or the
<PAGE>
6
rights represented thereby, whether voluntary, involuntary, or by operation of
law or otherwise, except by will or the laws of descent and distribution, shall
vest in the assignee or transferee any interest or right herein whatsoever, but
immediately upon any attempt to assign or transfer this option, the same shall
terminate and be of no force or effect.
7. The Optionee shall not be deemed for any purpose to be a
stockholder of the Company with respect to any shares optioned by this Agreement
until the option hereby granted shall have been exercised and payment and
delivery for the shares purchased upon exercise shall have been made as herein
provided. No adjustment shall be made for dividends or other rights for which
the record date is prior to the date the shares are issued or transferred to
Optionee.
8. The existence of this option shall not affect in any way
the right or power of the Company or its stockholders to make or authorize any
and all adjustments, recapitalizations, reorganizations or other changes in the
Company's capital structure or its business, or any merger or consolidation of
the Company, or any issue of bonds, debentures, preferred or preference stocks
ahead of or affecting the Common Stock or the rights thereof, or the dissolution
or liquidation of the Company, or any sale or transfer of all or part of its
assets or business, or any other corporate act or proceeding, whether of a
similar character or otherwise.
9. The shares with respect to which this option is granted are
shares of the Common Stock of the Company as constituted on the date of this
Agreement, but if, and whenever, hereafter and prior to the delivery by the
Company of all of the shares of Common
<PAGE>
7
Stock with respect to which this option is granted, the Company shall effect a
subdivision or consolidation of shares, or other capital readjustment, the
payment of a stock dividend, or other increase or reduction of the number of
shares of Common Stock outstanding, without the receipt of consideration by the
Company, then (a), in the event of any increase in the number of such shares
outstanding, the number of shares of Common Stock then remaining subject to
option hereunder shall be proportionately increased, and the cash consideration
payable per share shall be proportionately reduced, and (b), in the event of a
reduction in the number of such shares outstanding, the number of shares of
Common Stock then remaining subject to option hereunder shall be proportionately
reduced, and the cash consideration payable per share shall be proportionately
increased.
10. Anything in this Agreement to the contrary
notwithstanding, if, at any time specified herein for the exercise of this
option or the delivery of shares to the Optionee, any law or regulations of any
governmental authority having jurisdiction in the matter shall require either
the company or the Optionee to take any action or refrain from action in
connection therewith or to delay such exercise, then the delivery of such shares
on such exercise shall be deferred until such action shall have been taken or
such restriction on action shall have been removed.
11. As conditions precedent to the granting of the option and
all other rights provided hereunder, the Optionee and any other person who
acquires any rights hereunder, agrees that any dispute or disagreement which
shall arise under, or as a result of, or pursuant to, this Agreement may be
determined, either by the Audit Committee or by the Company's
<PAGE>
8
Board of Directors in the Audit Committee's or the Board's absolute and
uncontrolled discretion; and that any such determination or interpretation of
the terms of this Agreement or any other determination by either such Committee
or the Board of Directors of the Company shall be final, binding and conclusive
on all persons affected thereby.
12. Any notice which either party hereto may be required or
permitted to give to the other shall be in writing, and may be delivered
personally or by mail, postage prepaid, addressed as follows: Thomas P. Loftus,
Controller, ARICO America Realestate Investment Company, 31 West 52nd Street,
New York, N.Y. 10019, (212) 474-7576, or at such other address as the Company,
by notice to the Optionee, may designate in writing from time to time; to the
Optionee at the address indicated in the Optionee's then current personnel
records, or at such other address as the Optionee, by notice to Mr. Loftus at
the above address, may designate in writing from time to time.
13. Notwithstanding any other provision of this Agreement to
the contrary:
(a) In the event of a merger in which the Company is not the
survivor, a sale or transfer of all or substantially all
of the assets of the Company, or a liquidation or
reorganization of the Company, the Optionee shall have
the right, commencing 30 days prior to such merger, sale
or transfer of assets, or liquidation or reorganization
to immediately exercise on a fully-vested basis each
option which was granted to him at least six months
prior to the date of such exercise.
(b) In the event that a Change in Control shall occur, the
Optionee shall have the right immediately after the
effective date of such Change in Control, until such
time as the option would otherwise expire according to
Section 4 of this Agreement, to exercise on a
fully-vested basis each option which was granted to him
under this Agreement at least six months prior to the
date of exercise. As used in this Agreement, a "Change
in Control" shall mean a change in control of a nature
that would be
<PAGE>
9
required to be reported in response to Item 5(f) of
Schedule 14A of Regulation 14A promulgated under the
Securities Exchange Act of 1934, as amended (the
"Exchange Act"), whether or not the Company is then
subject to such reporting requirement; provided that,
without limitation, a Change in Control shall be deemed
to have occurred if (A) any individual, partnership,
firm, corporation, association, trust, unincorporated
organization or other entity, or any syndicate or group
deemed to be a person under Section 14(d)(2) of the
Exchange Act, is or becomes the "beneficial owner" (as
defined in Rule 13d-3 of the General Rules and
Regulations under the Exchange Act), directly or
indirectly, of securities of the Company representing
25% or more of the combined voting power of the
Company's then outstanding securities entitled to vote
in the election of directors of the Company; or (B)
during any period of two consecutive years, individuals
who at the beginning of such period constituted the
Board of Directors and any new directors, whose election
by the Board of Directors or nomination for election by
the Company's stockholders was approved by a vote of at
least three-quarters of the directors then still in
office who either were directors at the beginning of the
period or whose selection or nomination for election was
previously so approved, cease for any reason to
constitute a majority thereof; provided, further, that a
change in control shall not be deemed to be a Change in
Control for purposes of this Agreement if the Board of
Directors has approved such change in control prior to
either (x) the occurrence of any of the events described
in the foregoing clauses (A) and (B) or (y) the
commencement by any person other than the Company of a
tender offer for the Common Stock not approved by the
Board of Directors prior to such commencement.
14. In the event that a Change in Control (as defined in
Section 14 above) shall occur, the Optionee shall have the right to elect to
receive from the Company an amount in cash, in a lump sum, for each share of
Common Stock covered by the Optionee's options granted hereunder, equal to the
difference between the then current exercise price of such option and the
greater of: (i) the highest price per share paid for the purchase of Common
Stock in connection with the Change in Control and (ii) the highest closing
price per share paid for the purchase of Common Stock on the principal exchange
on which the Common Stock is
<PAGE>
10
listed during the 90-day period immediately preceding the Change in Control. The
Optionee may elect to receive such cash payment only during the 30-day period
commencing upon the effective date of the Change in Control, and such election
shall be effective with respect to all options which were granted at least six
months prior to the date of exercise. Upon an election to receive such cash
payment, the option to which such cash payment relates shall no longer be
exercisable to the extent of the number of shares covered by the option for
which such cash payment was received.
15. In the event that Section 13 or 14 of this Agreement shall
become applicable, Section 11 of this Agreement shall not be effective.
<PAGE>
11
IN WITNESS WHEREOF, the Company has caused this Agreement to
be executed by its duly authorized officers, under its corporate seal, and the
Optionee has hereunder set his hand and seal, as of this day and year first
above written.
ARICO AMERICA REALESTATE
INVESTMENT COMPANY
By:
---------------------------------
Name:
Title:
By:
---------------------------------
Name:
Title:
ATTEST:
- ------------------------
-------------------------------------
Optionee
CORNERSTONE PROPERTIES INC.
EMPLOYEE STOCK OPTION
Agreement, dated __________, 1997, between CORNERSTONE
PROPERTIES INC., a Nevada corporation (hereinafter called the "Company"), and
_____________________ (hereinafter called "Optionee").
WHEREAS, the Optionee is now employed by the Company or a
Subsidiary in a key capacity and the Company desires to have him remain in the
employment of the Company or a Subsidiary and to afford him the opportunity to
acquire or enlarge his stock ownership in the Company so that he may have a
direct proprietary interest in its success (the term "Subsidiary" meaning any
corporation in which the Company owns, directly or indirectly, stock possessing
50% or more of the total combined voting power of all classes of stock);
NOW, THEREFORE, in consideration of the mutual covenants and
agreements hereinafter set forth, the parties hereto do hereby mutually agree as
follows:
1. This Agreement shall not be deemed to limit or restrict the
right of the Company or any Subsidiary to terminate the Optionee's employment at
any time, for any reason, with or without cause, or to limit or restrict the
right of the Optionee to terminate his employment with the Company or any
Subsidiary at any time. In the event of termination of the Optionee's employment
by the Company, subject to Section 4, such employee shall only be
<PAGE>
2
eligible to exercise or surrender options on the number of shares that have
become available for purchase pursuant to Section 2 hereof at the time of
termination.
2. Subject to the terms and conditions set forth herein, the
Company hereby grants to the Optionee the option, exercisable during the period
commencing on the date hereof and ending on __________, 2005, to purchase from
the Company, from time to time, as hereinafter more specifically stated, at a
price of $_____ per share, up to but not exceeding in the aggregate ___________
shares of the Company's Common Stock. Such option shall vest and become
exercisable as to 20% of such shares on each of the first five anniversaries of
the date hereof.
3. The option hereby granted shall be exercised by the
delivery to the Controller of the Company, from time to time, of written notice,
signed by the Optionee, specifying the number of shares the Optionee then
desires to purchase, together with cash, certified check, bank draft or postal
or express money order to the order of the Company for an amount in United
States dollars equal to the option price of such shares, plus an amount
sufficient to satisfy any federal, state or local withholding tax requirements.
If the written notice is mailed, the date of its receipt by the Controller of
the Company shall be considered the date of exercise of the option by the
Optionee.
Within 30 business days after any such exercise of the option
as a whole or in part by the Optionee, the Company shall deliver to the Optionee
a certificate or certificates, which may be legended to reflect restrictions on
the transferability thereof, representing the
<PAGE>
3
aggregate number of shares with respect to which such option shall be so
exercised, registered in the Optionee's name.
No fractional shares of Common Stock shall be issued and in
lieu thereof, if a fractional share of Common Stock would otherwise be
deliverable to the Optionee, the Optionee shall be paid in cash an amount equal
to the same fraction of the fair market value of a share of Common Stock.
"Fair market value" as used in this Section 3 shall mean the
mean between the high and low sales prices of the Common Stock on the day
preceding the date of surrender on the principal securities exchange on which
the Common Stock is listed or admitted to trading on which prices are quoted in
U.S. dollars or, if no sale of stock shall have been made on that date on such
exchange, on the next preceding day on which there was a sale of the stock.
Notwithstanding anything to the contrary in this Agreement,
this option shall not be exercisable unless the offer and sale of the shares of
Common Stock subject thereto have been registered under the Securities Act of
1933 and qualified under applicable state "blue sky" laws, or the Company has
determined that an exemption from registration under such Act and from
qualification under such state "blue sky" laws is available. The Company may
require, as a condition to the exercise of this option, that the Optionee make
certain representations and warranties as to the Optionee's investment intent
with respect to the option shares. Notwithstanding anything to the contrary in
this Agreement, if the consummation of any transaction under this Agreement
would result in the possible imposition of liability to the Optionee pursuant to
Section 16(b) of the Securities Exchange Act of 1934, the Board of
<PAGE>
4
Directors or the Audit Committee shall have the right, in its sole discretion,
but shall not be obligated, to defer such transaction to the extent necessary to
avoid such liability, but in no event for a period in excess of 180 days.
4. The option hereby granted shall terminate and be of no
force or effect upon the happening of the first to occur of the following
events:
(a) The expiration of the time allowed for exercise of
this option as specified in this Agreement.
(b) Termination of the Optionee's employment by the
Company or a Subsidiary for cause or without the
consent of the Company (in each case as determined by
the Audit Committee).
(c) The expiration of 365 days after the date of the
termination of the Optionee's employment by the
Company or a Subsidiary other than for cause or
without the consent of the Company; provided, that
during such 365-day period, the Optionee shall have
the right to exercise this option with respect to any
or all shares which were vested and available for
purchase by him on the date of such termination of
employment and, in the event of his death after
termination of employment and during such 365-day
period, his estate, personal representative or
beneficiary shall have the right, within such period,
to exercise this option with respect to any or all
shares which were vested and available for purchase
by the Optionee on the date of his termination of
employment and which had not been purchased by him
prior to his death.
(d) The expiration of 365 days after the date of the
Optionee's retirement after a period of continuous
employment by the Company or a Subsidiary which
includes the date on which this option was granted;
provided, that during such 365-day period, the
Optionee shall have the right to exercise this option
with respect to any or all shares which were vested
and available for purchase by him on the date of such
retirement and, in the event of his death after
retirement and during such 365-day period, his
estate, personal representative or beneficiary shall
have the right, within such period, to exercise this
option with respect to any or all shares which were
vested and available for purchase by the Optionee on
the
<PAGE>
5
date of his retirement and which had not been
purchased by him prior to his death.
(e) The expiration of 365 days after the date of death of
the Optionee during a period of continuous employment
by the Company or a Subsidiary which includes the
date on which this option was granted; provided, that
during such 365-day period, his estate, personal
representative or beneficiary shall have the right to
exercise this option with respect to any or all
shares which were vested and available for purchase
by the Optionee on the date of his death.
The Audit Committee shall have absolute and uncontrolled
discretion to determine whether the Optionee's termination of employment is
without the consent of the Company or is to be regarded as for cause or as
retirement and whether an authorized leave of absence or absence on military or
government service shall constitute a termination of employment for the purposes
of this Agreement.
Upon termination of the Optionee's employment for any reason,
this option, to the extent it has not theretofore vested, shall be forfeited and
cancelled.
5. Whenever the word "Optionee" is used in any provision of
this Agreement under circumstances where the provision should logically be
construed to apply to the executors, the administrators, or the person or
persons to whom this option may be transferred by will or by the laws of descent
and distribution, it shall be deemed to include such person or persons.
6. This option is not transferable by the Optionee otherwise
than by will or the laws of descent and distribution and, during the Optionee's
lifetime, may be exercised only by him or his legal guardian or representative.
No assignment or transfer of this option or the
<PAGE>
6
rights represented thereby, whether voluntary, involuntary, or by operation of
law or otherwise, except by will or the laws of descent and distribution, shall
vest in the assignee or transferee any interest or right herein whatsoever, but
immediately upon any attempt to assign or transfer this option, the same shall
terminate and be of no force or effect.
7. The Optionee shall not be deemed for any purpose to be a
stockholder of the Company with respect to any shares optioned by this Agreement
until the option hereby granted shall have been exercised and payment and
delivery for the shares purchased upon exercise shall have been made as herein
provided. No adjustment shall be made for dividends or other rights for which
the record date is prior to the date the shares are issued or transferred to
Optionee.
8. The existence of this option shall not affect in any way
the right or power of the Company or its stockholders to make or authorize any
and all adjustments, recapitalizations, reorganizations or other changes in the
Company's capital structure or its business, or any merger or consolidation of
the Company, or any issue of bonds, debentures, preferred or preference stocks
ahead of or affecting the Common Stock or the rights thereof, or the dissolution
or liquidation of the Company, or any sale or transfer of all or part of its
assets or business, or any other corporate act or proceeding, whether of a
similar character or otherwise.
9. The shares with respect to which this option is granted are
shares of the Common Stock of the Company as constituted on the date of this
Agreement, but if, and whenever, hereafter and prior to the delivery by the
Company of all of the shares of Common
<PAGE>
7
Stock with respect to which this option is granted, the Company shall effect a
subdivision or consolidation of shares, or other capital readjustment, the
payment of a stock dividend, or other increase or reduction of the number of
shares of Common Stock outstanding, without the receipt of consideration by the
Company, then (a), in the event of any increase in the number of such shares
outstanding, the number of shares of Common Stock then remaining subject to
option hereunder shall be proportionately increased, and the cash consideration
payable per share shall be proportionately reduced, and (b), in the event of a
reduction in the number of such shares outstanding, the number of shares of
Common Stock then remaining subject to option hereunder shall be proportionately
reduced, and the cash consideration payable per share shall be proportionately
increased.
10. Anything in this Agreement to the contrary
notwithstanding, if, at any time specified herein for the exercise of this
option or the delivery of shares to the Optionee, any law or regulations of any
governmental authority having jurisdiction in the matter shall require either
the company or the Optionee to take any action or refrain from action in
connection therewith or to delay such exercise, then the delivery of such shares
on such exercise shall be deferred until such action shall have been taken or
such restriction on action shall have been removed.
11. As conditions precedent to the granting of the option and
all other rights provided hereunder, the Optionee and any other person who
acquires any rights hereunder, agrees that any dispute or disagreement which
shall arise under, or as a result of, or pursuant to, this Agreement may be
determined, either by the Audit Committee or by the Company's
<PAGE>
8
Board of Directors in the Audit Committee's or the Board's absolute and
uncontrolled discretion; and that any such determination or interpretation of
the terms of this Agreement or any other determination by either such Committee
or the Board of Directors of the Company shall be final, binding and conclusive
on all persons affected thereby.
12. Any notice which either party hereto may be required or
permitted to give to the other shall be in writing, and may be delivered
personally or by mail, postage prepaid, addressed as follows: Thomas P. Loftus,
Chief Administrative Officer, 126 East 56th Street, New York, N.Y. 10022, (212)
605-7100, or at such other address as the Company, by notice to the Optionee,
may designate in writing from time to time; to the Optionee at the address
indicated in the Optionee's then current personnel records, or at such other
address as the Optionee, by notice to Mr. Loftus at the above address, may
designate in writing from time to time.
13. Notwithstanding any other provision of this Agreement to
the contrary:
(a) In the event of a merger in which the Company is not
the survivor, a sale or transfer of all or
substantially all of the assets of the Company, or a
liquidation or reorganization of the Company, the
Optionee shall have the right, commencing 30 days
prior to such merger, sale or transfer of assets, or
liquidation or reorganization to immediately exercise
on a fully-vested basis each option which was granted
to him at least six months prior to the date of such
exercise.
(b) In the event that a Change in Control shall occur,
the Optionee shall have the right immediately after
the effective date of such Change in Control, until
such time as the option would otherwise expire
according to Section 4 of this Agreement, to exercise
on a fully-vested basis each option which was granted
to him under this Agreement at least six months prior
to the date of exercise. As used in this Agreement, a
"Change in Control" shall mean a change in control of
a nature that would be
<PAGE>
9
required to be reported in response to Item 5(f) of
Schedule 14A of Regulation 14A promulgated under the
Securities Exchange Act of 1934, as amended (the
"Exchange Act"), whether or not the Company is then
subject to such reporting requirement; provided that,
without limitation, a Change in Control shall be
deemed to have occurred if (A) any individual,
partnership, firm, corporation, association, trust,
unincorporated organization or other entity, or any
syndicate or group deemed to be a person under
Section 14(d)(2) of the Exchange Act, is or becomes
the "beneficial owner" (as defined in Rule 13d-3 of
the General Rules and Regulations under the Exchange
Act), directly or indirectly, of securities of the
Company representing 25% or more of the combined
voting power of the Company's then outstanding
securities entitled to vote in the election of
directors of the Company; or (B) during any period of
two consecutive years, individuals who at the
beginning of such period constituted the Board of
Directors and any new directors, whose election by
the Board of Directors or nomination for election by
the Company's stockholders was approved by a vote of
at least three-quarters of the directors then still
in office who either were directors at the beginning
of the period or whose selection or nomination for
election was previously so approved, cease for any
reason to constitute a majority thereof; provided,
further, that a change in control shall not be deemed
to be a Change in Control for purposes of this
Agreement if the Board of Directors has approved such
change in control prior to either (x) the occurrence
of any of the events described in the foregoing
clauses (A) and (B) or (y) the commencement by any
person other than the Company of a tender offer for
the Common Stock not approved by the Board of
Directors prior to such commencement.
14. In the event that a Change in Control (as defined in
Section 14 above) shall occur, the Optionee shall have the right to elect to
receive from the Company an amount in cash, in a lump sum, for each share of
Common Stock covered by the Optionee's options granted hereunder, equal to the
difference between the then current exercise price of such option and the
greater of: (i) the highest price per share paid for the purchase of Common
Stock in connection with the Change in Control and (ii) the highest closing
price per share paid for the purchase of Common Stock on the principal exchange
on which the Common Stock is
<PAGE>
10
listed during the 90-day period immediately preceding the Change in Control. The
Optionee may elect to receive such cash payment only during the 30-day period
commencing upon the effective date of the Change in Control, and such election
shall be effective with respect to all options which were granted at least six
months prior to the date of exercise. Upon an election to receive such cash
payment, the option to which such cash payment relates shall no longer be
exercisable to the extent of the number of shares covered by the option for
which such cash payment was received.
15. In the event that Section 13 or 14 of this Agreement shall
become applicable, Section 11 of this Agreement shall not be effective.
<PAGE>
11
IN WITNESS WHEREOF, the Company has caused this Agreement to
be executed by its duly authorized officers, under its corporate seal, and the
Optionee has hereunder set his hand and seal, as of this day and year first
above written.
CORNERSTONE PROPERTIES INC.
By:
------------------------
Name:
Title:
By:
------------------------
Name:
Title:
ATTEST:
- ------------------------
----------------------------------
Optionee
CORNERSTONE PROPERTIES INC.
EMPLOYEE STOCK OPTION
Agreement, dated____________, 1998, between CORNERSTONE
PROPERTIES INC., a Nevada corporation (hereinafter called the "Company"), and
_____________________ (hereinafter called "Optionee").
WHEREAS, the Optionee is now employed by the Company or a
Subsidiary in a key capacity and the Company desires to have him remain in the
employment of the Company or a Subsidiary and to afford him the opportunity to
acquire or enlarge his stock ownership in the Company so that he may have a
direct proprietary interest in its success (the term "Subsidiary" meaning any
corporation in which the Company owns, directly or indirectly, stock possessing
50% or more of the total combined voting power of all classes of stock);
NOW, THEREFORE, in consideration of the mutual covenants and
agreements hereinafter set forth, the parties hereto do hereby mutually agree as
follows:
1. This Agreement shall not be deemed to limit or restrict the
right of the Company or any Subsidiary to terminate the Optionee's employment at
any time, for any reason, with or without cause, or to limit or restrict the
right of the Optionee to terminate his employment with the Company or any
Subsidiary at any time. In the event of termination of the Optionee's employment
by the Company, subject to Section 4, such employee shall only be
<PAGE>
2
eligible to exercise or surrender options on the number of shares that have
become available for purchase pursuant to Section 2 hereof at the time of
termination.
2. Subject to the terms and conditions set forth herein, the
Company hereby grants to the Optionee the option, exercisable during the period
commencing on the date hereof and ending on_________, 2005, to purchase from the
Company, from time to time, as hereinafter more specifically stated, at a price
of $_____ per share, up to but not exceeding in the aggregate ___________ shares
of the Company's Common Stock. Such option shall vest and become exercisable as
to 20% of such shares on each of the first five anniversaries of the date
hereof.
3. The option hereby granted shall be exercised by the
delivery to the Controller of the Company, from time to time, of written notice,
signed by the Optionee, specifying the number of shares the Optionee then
desires to purchase, together with cash, certified check, bank draft or postal
or express money order to the order of the Company for an amount in United
States dollars equal to the option price of such shares, plus an amount
sufficient to satisfy any federal, state or local withholding tax requirements.
If the written notice is mailed, the date of its receipt by the Controller of
the Company shall be considered the date of exercise of the option by the
Optionee.
Within 30 business days after any such exercise of the option
as a whole or in part by the Optionee, the Company shall deliver to the Optionee
a certificate or certificates, which may be legended to reflect restrictions on
the transferability thereof, representing the
<PAGE>
3
aggregate number of shares with respect to which such option shall be so
exercised, registered in the Optionee's name.
No fractional shares of Common Stock shall be issued and in
lieu thereof, if a fractional share of Common Stock would otherwise be
deliverable to the Optionee, the Optionee shall be paid in cash an amount equal
to the same fraction of the fair market value of a share of Common Stock.
"Fair market value" as used in this Section 3 shall mean the
mean between the high and low sales prices of the Common Stock on the day
preceding the date of surrender on the principal securities exchange on which
the Common Stock is listed or admitted to trading on which prices are quoted in
U.S. dollars or, if no sale of stock shall have been made on that date on such
exchange, on the next preceding day on which there was a sale of the stock.
Notwithstanding anything to the contrary in this Agreement,
this option shall not be exercisable unless the offer and sale of the shares of
Common Stock subject thereto have been registered under the Securities Act of
1933 and qualified under applicable state "blue sky" laws, or the Company has
determined that an exemption from registration under such Act and from
qualification under such state "blue sky" laws is available. The Company may
require, as a condition to the exercise of this option, that the Optionee make
certain representations and warranties as to the Optionee's investment intent
with respect to the option shares. Notwithstanding anything to the contrary in
this Agreement, if the consummation of any transaction under this Agreement
would result in the possible imposition of liability to the Optionee pursuant to
Section 16(b) of the Securities Exchange Act of 1934, the Board of
<PAGE>
4
Directors or the Audit Committee shall have the right, in its sole discretion,
but shall not be obligated, to defer such transaction to the extent necessary to
avoid such liability, but in no event for a period in excess of 180 days.
4. The option hereby granted shall terminate and be of no
force or effect upon the happening of the first to occur of the following
events:
(a) The expiration of the time allowed for exercise of
this option as specified in this Agreement.
(b) Termination of the Optionee's employment by the
Company or a Subsidiary for cause or without the
consent of the Company (in each case as determined by
the Audit Committee).
(c) The expiration of 365 days after the date of the
termination of the Optionee's employment by the
Company or a Subsidiary other than for cause or
without the consent of the Company; provided, that
during such 365-day period, the Optionee shall have
the right to exercise this option with respect to any
or all shares which were vested and available for
purchase by him on the date of such termination of
employment and, in the event of his death after
termination of employment and during such 365-day
period, his estate, personal representative or
beneficiary shall have the right, within such period,
to exercise this option with respect to any or all
shares which were vested and available for purchase
by the Optionee on the date of his termination of
employment and which had not been purchased by him
prior to his death.
(d) The expiration of 365 days after the date of the
Optionee's retirement after a period of continuous
employment by the Company or a Subsidiary which
includes the date on which this option was granted;
provided, that during such 365-day period, the
Optionee shall have the right to exercise this option
with respect to any or all shares which were vested
and available for purchase by him on the date of such
retirement and, in the event of his death after
retirement and during such 365-day period, his
estate, personal representative or beneficiary shall
have the right, within such period, to exercise this
option with respect to any or all shares which were
vested and available for purchase by the Optionee on
the
<PAGE>
5
date of his retirement and which had not been
purchased by him prior to his death.
(e) The expiration of 365 days after the date of death of
the Optionee during a period of continuous employment
by the Company or a Subsidiary which includes the
date on which this option was granted; provided, that
during such 365-day period, his estate, personal
representative or beneficiary shall have the right to
exercise this option with respect to any or all
shares which were vested and available for purchase
by the Optionee on the date of his death.
The Audit Committee shall have absolute and uncontrolled
discretion to determine whether the Optionee's termination of employment is
without the consent of the Company or is to be regarded as for cause or as
retirement and whether an authorized leave of absence or absence on military or
government service shall constitute a termination of employment for the purposes
of this Agreement.
Upon termination of the Optionee's employment for any reason,
this option, to the extent it has not theretofore vested, shall be forfeited and
cancelled.
5. Whenever the word "Optionee" is used in any provision of
this Agreement under circumstances where the provision should logically be
construed to apply to the executors, the administrators, or the person or
persons to whom this option may be transferred by will or by the laws of descent
and distribution, it shall be deemed to include such person or persons.
6. This option is not transferable by the Optionee otherwise
than by will or the laws of descent and distribution and, during the Optionee's
lifetime, may be exercised only by him or his legal guardian or representative.
No assignment or transfer of this option or the
<PAGE>
6
rights represented thereby, whether voluntary, involuntary, or by operation of
law or otherwise, except by will or the laws of descent and distribution, shall
vest in the assignee or transferee any interest or right herein whatsoever, but
immediately upon any attempt to assign or transfer this option, the same shall
terminate and be of no force or effect.
7. The Optionee shall not be deemed for any purpose to be a
stockholder of the Company with respect to any shares optioned by this Agreement
until the option hereby granted shall have been exercised and payment and
delivery for the shares purchased upon exercise shall have been made as herein
provided. No adjustment shall be made for dividends or other rights for which
the record date is prior to the date the shares are issued or transferred to
Optionee.
8. The existence of this option shall not affect in any way
the right or power of the Company or its stockholders to make or authorize any
and all adjustments, recapitalizations, reorganizations or other changes in the
Company's capital structure or its business, or any merger or consolidation of
the Company, or any issue of bonds, debentures, preferred or preference stocks
ahead of or affecting the Common Stock or the rights thereof, or the dissolution
or liquidation of the Company, or any sale or transfer of all or part of its
assets or business, or any other corporate act or proceeding, whether of a
similar character or otherwise.
9. The shares with respect to which this option is granted are
shares of the Common Stock of the Company as constituted on the date of this
Agreement, but if, and whenever, hereafter and prior to the delivery by the
Company of all of the shares of Common
<PAGE>
7
Stock with respect to which this option is granted, the Company shall effect a
subdivision or consolidation of shares, or other capital readjustment, the
payment of a stock dividend, or other increase or reduction of the number of
shares of Common Stock outstanding, without the receipt of consideration by the
Company, then (a), in the event of any increase in the number of such shares
outstanding, the number of shares of Common Stock then remaining subject to
option hereunder shall be proportionately increased, and the cash consideration
payable per share shall be proportionately reduced, and (b), in the event of a
reduction in the number of such shares outstanding, the number of shares of
Common Stock then remaining subject to option hereunder shall be proportionately
reduced, and the cash consideration payable per share shall be proportionately
increased.
10. Anything in this Agreement to the contrary
notwithstanding, if, at any time specified herein for the exercise of this
option or the delivery of shares to the Optionee, any law or regulations of any
governmental authority having jurisdiction in the matter shall require either
the company or the Optionee to take any action or refrain from action in
connection therewith or to delay such exercise, then the delivery of such shares
on such exercise shall be deferred until such action shall have been taken or
such restriction on action shall have been removed.
11. As conditions precedent to the granting of the option and
all other rights provided hereunder, the Optionee and any other person who
acquires any rights hereunder, agrees that any dispute or disagreement which
shall arise under, or as a result of, or pursuant to, this Agreement may be
determined, either by the Audit Committee or by the Company's
<PAGE>
8
Board of Directors in the Audit Committee's or the Board's absolute and
uncontrolled discretion; and that any such determination or interpretation of
the terms of this Agreement or any other determination by either such Committee
or the Board of Directors of the Company shall be final, binding and conclusive
on all persons affected thereby.
12. Any notice which either party hereto may be required or
permitted to give to the other shall be in writing, and may be delivered
personally or by mail, postage prepaid, addressed as follows: Thomas P. Loftus,
Chief Administrative Officer, 126 East 56th Street, New York, N.Y. 10022, (212)
605-7100, or at such other address as the Company, by notice to the Optionee,
may designate in writing from time to time; to the Optionee at the address
indicated in the Optionee's then current personnel records, or at such other
address as the Optionee, by notice to Mr. Loftus at the above address, may
designate in writing from time to time.
13. Notwithstanding any other provision of this Agreement to
the contrary:
(a) In the event of a merger in which the Company is not
the survivor, a sale or transfer of all or
substantially all of the assets of the Company, or a
liquidation or reorganization of the Company, the
Optionee shall have the right, commencing 30 days
prior to such merger, sale or transfer of assets, or
liquidation or reorganization to immediately exercise
on a fully-vested basis each option which was granted
to him at least six months prior to the date of such
exercise.
(b) In the event that a Change in Control shall occur,
the Optionee shall have the right immediately after
the effective date of such Change in Control, until
such time as the option would otherwise expire
according to Section 4 of this Agreement, to exercise
on a fully-vested basis each option which was granted
to him under this Agreement at least six months prior
to the date of exercise. As used in this Agreement, a
"Change in Control" shall mean a change in control of
a nature that would be
<PAGE>
9
required to be reported in response to Item 5(f) of
Schedule 14A of Regulation 14A promulgated under the
Securities Exchange Act of 1934, as amended (the
"Exchange Act"), whether or not the Company is then
subject to such reporting requirement; provided that,
without limitation, a Change in Control shall be
deemed to have occurred if (A) any individual,
partnership, firm, corporation, association, trust,
unincorporated organization or other entity, or any
syndicate or group deemed to be a person under
Section 14(d)(2) of the Exchange Act, is or becomes
the "beneficial owner" (as defined in Rule 13d-3 of
the General Rules and Regulations under the Exchange
Act), directly or indirectly, of securities of the
Company representing 25% or more of the combined
voting power of the Company's then outstanding
securities entitled to vote in the election of
directors of the Company; or (B) during any period of
two consecutive years, individuals who at the
beginning of such period constituted the Board of
Directors and any new directors, whose election by
the Board of Directors or nomination for election by
the Company's stockholders was approved by a vote of
at least three-quarters of the directors then still
in office who either were directors at the beginning
of the period or whose selection or nomination for
election was previously so approved, cease for any
reason to constitute a majority thereof; provided,
further, that a change in control shall not be deemed
to be a Change in Control for purposes of this
Agreement if the Board of Directors has approved such
change in control prior to either (x) the occurrence
of any of the events described in the foregoing
clauses (A) and (B) or (y) the commencement by any
person other than the Company of a tender offer for
the Common Stock not approved by the Board of
Directors prior to such commencement.
14. In the event that a Change in Control (as defined in
Section 14 above) shall occur, the Optionee shall have the right to elect to
receive from the Company an amount in cash, in a lump sum, for each share of
Common Stock covered by the Optionee's options granted hereunder, equal to the
difference between the then current exercise price of such option and the
greater of: (i) the highest price per share paid for the purchase of Common
Stock in connection with the Change in Control and (ii) the highest closing
price per share paid for the purchase of Common Stock on the principal exchange
on which the Common Stock is
<PAGE>
10
listed during the 90-day period immediately preceding the Change in Control. The
Optionee may elect to receive such cash payment only during the 30-day period
commencing upon the effective date of the Change in Control, and such election
shall be effective with respect to all options which were granted at least six
months prior to the date of exercise. Upon an election to receive such cash
payment, the option to which such cash payment relates shall no longer be
exercisable to the extent of the number of shares covered by the option for
which such cash payment was received.
15. In the event that Section 13 or 14 of this Agreement shall
become applicable, Section 11 of this Agreement shall not be effective.
<PAGE>
11
IN WITNESS WHEREOF, the Company has caused this Agreement to
be executed by its duly authorized officers, under its corporate seal, and the
Optionee has hereunder set his hand and seal, as of this day and year first
above written.
CORNERSTONE PROPERTIES INC.
By:______________________________
Name:
Title:
By:______________________________
Name:
Title:
ATTEST:
______________________________
_________________________________
Optionee
[DATE]
Dear :
On behalf of the Board of Directors, I am pleased to notify
you that ARICO America Realestate Investment Company (the "Company") has awarded
you, subject to your acceptance of the terms and conditions of this letter
agreement (this "Agreement"), ____________ shares of the Company's Common Stock
(the "Restricted Shares").
Grants of Restricted Shares are being made to those officers
who have had, and who are expected to continue to have, a significant impact on
the Company's performance, and the Company's Audit Committee (the "Committee")
has designated the participating officers.
Your award of Restricted Shares is subject to the following
terms and conditions:
1. Definitions. For purposes of this Agreement, the following
terms shall have the meanings indicated:
(a) Termination for "Cause" means a termination of employment
with the Company or any of the Company's subsidiaries which, as
determined by the Committee, is by reason of (i) the commission by the
Participant of a felony or perpetration by the Participant of a
dishonest act, material misrepresentation or common law fraud against
the Company or any subsidiary thereof, (ii) any other act or omission
which is materially injurious to the financial condition or business
reputation of the Company or any subsidiary thereof or (iii) the wilful
failure or refusal of the
<PAGE>
2
Participant to substantially perform the material duties of his
position with the Company or any subsidiary thereof.
(b) "Change in Control" shall mean the occurrence of one or
more of the following events: (i) a merger in which the Company is not
the survivor; (ii) a sale or transfer of all or substantially all of
the assets of the Company; (iii) a liquidation or reorganization of the
Company; or (iv) a change in control of a nature that would be required
to be reported in response to Item 5(f) of Schedule 14A of Regulation
14A promulgated under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), whether or not the Company is then subject to
such reporting requirement; provided that, without limitation, a Change
in Control shall be deemed to have occurred if (A) any individual,
partnership, firm, corporation, association, trust, unincorporated
organization or other entity, or any syndicate or group deemed to be a
person under Section 14(d)(2) of the Exchange Act, is or becomes the
"beneficial owner" (as defined in Rule 13d-3 of the General Rules and
Regulations under the Exchange Act), directly or indirectly, of
securities of the Company representing 25% or more of the combined
voting power of the Company's then outstanding securities entitled to
vote in the election of directors of the Company; or (B) during any
period of two consecutive years, individuals who at the beginning of
such period constituted the Board of Directors and any new directors,
whose election by the Board of Directors or nomination for election by
the Company's stockholders was approved by a vote of at least
three-quarters of the directors then still in office who either were
directors at the
<PAGE>
3
beginning of the period or whose selection or nomination for election
was previously so approved, cease for any reason to constitute a
majority thereof; provided, further, that a change in control shall not
be deemed to be a Change in Control for purposes of this Agreement if
the Board of Directors has approved such change in control prior to
either (x) the occurrence of any of the events described in the
foregoing clauses (A) and (B) or (y) the commencement by any person
other than the Company of a tender offer for the Common Stock not
approved by the Board of Directors prior to such commencement.
(c) "Participant" shall mean any officer of the Company or one
of its subsidiaries to whom a grant of Restricted Shares has been made
and is outstanding.
(d) "Permanent Disability" shall mean a physical or mental
condition of a Participant that, in the judgment of the Committee,
after consultation with a duly licensed physician, permanently prevents
such Participant from being able to serve as an active employee of the
Company and its subsidiaries. For purposes of determining the day on
which a Participant becomes Permanently Disabled, the Committee may
select the day on which such Participant first becomes eligible for
long-term disability benefits under the Company's long-term disability
insurance plan then in effect.
(e) "Restricted Period" shall mean a period of five
consecutive years, commencing with June 30 of the year in which
Restricted Shares are granted, during which restrictions on such
Restricted Shares are in effect.
2. Award. Upon your acceptance of this Agreement, the Company
shall register in your name share certificates representing your Restricted
Shares, which certificates
<PAGE>
4
will be held by the Company for your account. These certificates will bear a
legend in substantially the following form, as determined by the Committee:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
TERMS AND CONDITIONS OF A RESTRICTED SHARE AGREEMENT BETWEEN
ARICO AMERICA REALESTATE INVESTMENT COMPANY AND THE BENEFICIAL
OWNER HEREOF, INCLUDING RESTRICTIONS ON SALE, TRANSFER AND
ENCUMBRANCE.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ISSUED
WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933. UNLESS
ARICO AMERICA REALESTATE INVESTMENT COMPANY DETERMINES
OTHERWISE, NO TRANSFER OF SUCH SECURITIES MAY BE MADE WITHOUT
AN OPINION OF COUNSEL, SATISFACTORY TO ARICO AMERICA
REALESTATE INVESTMENT COMPANY, THAT SUCH TRANSFER MAY PROPERLY
BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933
OR THAT SUCH SECURITIES HAVE BEEN SO REGISTERED UNDER A
REGISTRATION STATEMENT WHICH IS IN EFFECT AT THE DATE OF SUCH
TRANSFER.
COPIES OF THE RESTRICTED SHARE AGREEMENT ARE ON FILE AT THE
OFFICE OF THE SECRETARY AND MAY BE INSPECTED DURING NORMAL
BUSINESS HOURS.
3. Restrictions on Transferability of Shares. Your Restricted
Shares are subject to certain restrictions on transferability. More
specifically, your Restricted Shares may not be sold, exchanged, transferred,
assigned, pledged, or otherwise encumbered or disposed of before June 30, 19__
(the "Full Vesting Date"). These restrictions will, however, subject to
paragraph 4 below, terminate with respect to 13.333% (i.e., ___________) of your
Restricted Shares on June 30 of each of __________, ___________, ____________
and _________, and with respect to 46.668% (i.e., ___________) of your
Restricted Shares on June 30, .
<PAGE>
5
Subject to paragraph 4 below, all of your Restricted Shares will be free of
these restrictions as of the Full Vesting Date. As the restrictions on your
Restricted Shares lapse, certificates for the appropriate number of shares of
the Company's Common Stock will be issued to you.
4. Termination of Employment or Occurrence of a Change in
Control. If, prior to the Full Vesting Date, (i) you cease to be an employee of
the Company due to death, Permanent Disability (as defined above), retirement,
or termination by the Company without Cause (as defined above), or (ii) a Change
in Control (as defined above) occurs with respect to the Company, all
restrictions on your Restricted Shares shall terminate, and certificates for the
appropriate number of shares of the Company's Common Stock will be issued to
you. If you cease to be an employee prior to the Full Vesting Date for any other
reason, you will immediately forfeit all Restricted Shares which are still
subject to restriction.
5. Voting and Dividend Rights During Restricted Period. After
share certificates representing your Restricted Shares are registered in your
name, you shall have the right to vote your Restricted Shares and to receive all
dividends payable with respect thereto (so long as such shares are not forfeited
as described in paragraph 4 above).
6. Investment Representation - Registration. In order to
comply with any applicable securities laws, the Company may require you (i) to
furnish evidence satisfactory to the Company (including a written and signed
representation letter) to the effect that all of your Restricted Shares were
acquired for investment only and not for resale or distribution and (ii) to
agree that all such Restricted Shares shall only be sold by you following
registration under the Securities Act of 1933 or pursuant to an exemption
therefrom.
<PAGE>
6
7. No Assignment. Your rights under this Agreement may not be
assigned, pledged or otherwise transferred except to the extent permitted
hereunder.
8. Compliance with Law and Regulations. Once your Restricted
Shares are no longer subject to restriction, any sale, exchange, transfer,
assignment, pledge, encumbrance or other disposition, directly or indirectly,
whether or not for value, and whether or not voluntarily, of your share
certificates shall be made in compliance with any applicable constitution, rule
or regulation of, or any applicable policy of, any of the exchanges on which the
Common Stock is listed, and any applicable law, rule or regulation of any
governmental agency having jurisdiction.
9. Designation of Beneficiary. You should designate in writing
on forms prescribed by and filed with the Committee a beneficiary or
beneficiaries to receive, in the event of your death, any rights to which you
are entitled hereunder. A designation of beneficiary may be replaced by a new
designation or may be revoked by you at any time on forms prescribed by and
filed with the Committee.
10. No Rights to Continue Employment. Nothing in this
Agreement shall be construed as giving you any right to continue in the employ
of the Company or any of its subsidiaries.
11. Changes in Capitalization. If any change shall occur in or
affect the Common Stock on account of a merger, consolidation, reorganization,
stock dividend, stock split or combination, reclassification, recapitalization,
or distribution to holders of the Common Stock (other than regular dividends)
or, if in the opinion of the Committee, after
<PAGE>
7
consultation with the Company's independent public accountants, changes in the
Company's accounting policies, acquisitions, divestitures, distributions, or
other unusual or extraordinary items have disproportionately and materially
affected the value of the Restricted Shares, the Committee shall make such
adjustments, if any, that it may deem, in its sole discretion, necessary or
equitable in the number of shares of Common Stock subject to your Restricted
Share grant. In the event of any other change affecting the Common Stock, such
adjustment shall be made as may be deemed equitable by the Committee to give
proper effect to such event.
12. Nontransferability of Rights. Your rights hereunder,
including the right to any amounts or Common Stock payable, may not be assigned,
pledged, or otherwise transferred except, in the event of your death, to your
designated beneficiary or, in the absence of such a designation, by will or the
laws of descent and distribution.
13. Withholding. The Company shall have the right, before any
payment is made or a certificate for any Common Stock is delivered, to deduct or
withhold from any payment to you to satisfy any Federal, state, or local taxes,
including transfer taxes, required by law to be withheld or to require you or
your beneficiary or estate, as the case may be, to pay any amount, or the
balance of any amount, required to be withheld.
14. Relationship to Other Benefits. No payment hereunder shall
be taken into account in determining any benefits under any pension, retirement,
profit sharing, group insurance or other benefit plan of the Company or any
subsidiary of the Company.
<PAGE>
8
15. No Trust or Fund Created. The grant made hereunder shall
not create or be construed to create a trust or separate fund of any kind or a
fiduciary relationship between the Company or any of its subsidiaries and you or
any other person. Your rights hereunder shall be no greater than the rights of
any unsecured general creditor of the Company.
16. Consent Under Local Law. This award shall be conditioned
upon the making of any filing and the receipt of any consents or authorizations
required to comply with, or required to be obtained under, applicable local
laws.
17. Governing Law. This Agreement and the legal relations
between the parties shall be governed by and construed in accordance with the
laws of the State of New York.
Please indicate your acceptance of this Agreement by signing
and returning the duplicate copy of this letter to Thomas P. Loftus.
Sincerely,
ARICO AMERICA REALESTATE
INVESTMENT COMPANY
By:__________________________
Name:
Title:
By:__________________________
Name:
Title:
ACCEPTED:____________, 19__
______________________
Participant
[DATE]
Dear :
On behalf of the Board of Directors, I am pleased to notify
you that Cornerstone Properties Inc. (the "Company") has awarded you, subject to
your acceptance of the terms and conditions of this letter agreement (this
"Agreement"), ____________ shares of the Company's Common Stock (the "Restricted
Shares").
Grants of Restricted Shares are being made to those officers
who have had, and who are expected to continue to have, a significant impact on
the Company's performance, and the Company's Audit Committee (the "Committee")
has designated the participating officers.
Your award of Restricted Shares is subject to the following
terms and conditions:
1. Definitions. For purposes of this Agreement, the following
terms shall have the meanings indicated:
(a) Termination for "Cause" means a termination of employment
with the Company or any of the Company's subsidiaries which, as
determined by the Committee, is by reason of (i) the commission by the
Participant of a felony or perpetration by the Participant of a
dishonest act, material misrepresentation or common law fraud against
the Company or any subsidiary thereof, (ii) any other act or omission
which is materially injurious to the financial condition or business
reputation of the Company or any subsidiary thereof or (iii) the wilful
failure or refusal of the
<PAGE>
2
Participant to substantially perform the material duties of his
position with the Company or any subsidiary thereof.
(b) "Change in Control" shall mean the occurrence of one or
more of the following events: (i) a merger in which the Company is not
the survivor; (ii) a sale or transfer of all or substantially all of
the assets of the Company; (iii) a liquidation or reorganization of the
Company; or (iv) a change in control of a nature that would be required
to be reported in response to Item 5(f) of Schedule 14A of Regulation
14A promulgated under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), whether or not the Company is then subject to
such reporting requirement; provided that, without limitation, a Change
in Control shall be deemed to have occurred if (A) any individual,
partnership, firm, corporation, association, trust, unincorporated
organization or other entity, or any syndicate or group deemed to be a
person under Section 14(d)(2) of the Exchange Act, is or becomes the
"beneficial owner" (as defined in Rule 13d-3 of the General Rules and
Regulations under the Exchange Act), directly or indirectly, of
securities of the Company representing 25% or more of the combined
voting power of the Company's then outstanding securities entitled to
vote in the election of directors of the Company; or (B) during any
period of two consecutive years, individuals who at the beginning of
such period constituted the Board of Directors and any new directors,
whose election by the Board of Directors or nomination for election by
the Company's stockholders was approved by a vote of at least
three-quarters of the directors then still in office who either were
directors at the
<PAGE>
3
beginning of the period or whose selection or nomination for election
was previously so approved, cease for any reason to constitute a
majority thereof; provided, further, that a change in control shall not
be deemed to be a Change in Control for purposes of this Agreement if
the Board of Directors has approved such change in control prior to
either (x) the occurrence of any of the events described in the
foregoing clauses (A) and (B) or (y) the commencement by any person
other than the Company of a tender offer for the Common Stock not
approved by the Board of Directors prior to such commencement.
(c) "Participant" shall mean any officer of the Company or one
of its subsidiaries to whom a grant of Restricted Shares has been made
and is outstanding.
(d) "Permanent Disability" shall mean a physical or mental
condition of a Participant that, in the judgment of the Committee,
after consultation with a duly licensed physician, permanently prevents
such Participant from being able to serve as an active employee of the
Company and its subsidiaries. For purposes of determining the day on
which a Participant becomes Permanently Disabled, the Committee may
select the day on which such Participant first becomes eligible for
long-term disability benefits under the Company's long-term disability
insurance plan then in effect.
(e) "Restricted Period" shall mean a period of five
consecutive years, commencing with June 30 of the year in which
Restricted Shares are granted, during which restrictions on such
Restricted Shares are in effect.
2. Award. Upon your acceptance of this Agreement, the Company
shall register in your name share certificates representing your Restricted
Shares, which certificates
<PAGE>
4
will be held by the Company for your account. These certificates will bear a
legend in substantially the following form, as determined by the Committee:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
TERMS AND CONDITIONS OF A RESTRICTED SHARE AGREEMENT BETWEEN
CORNERSTONE PROPERTIES INC. AND THE BENEFICIAL OWNER HEREOF,
INCLUDING RESTRICTIONS ON SALE, TRANSFER AND ENCUMBRANCE.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ISSUED
WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933. UNLESS
CORNERSTONE PROPERTIES INC. DETERMINES OTHERWISE, NO TRANSFER
OF SUCH SECURITIES MAY BE MADE WITHOUT AN OPINION OF COUNSEL,
SATISFACTORY TO CORNERSTONE PROPERTIES INC., THAT SUCH
TRANSFER MAY PROPERLY BE MADE WITHOUT REGISTRATION UNDER THE
SECURITIES ACT OF 1933 OR THAT SUCH SECURITIES HAVE BEEN SO
REGISTERED UNDER A REGISTRATION STATEMENT WHICH IS IN EFFECT
AT THE DATE OF SUCH TRANSFER.
COPIES OF THE RESTRICTED SHARE AGREEMENT ARE ON FILE AT
THE OFFICE OF THE SECRETARY AND MAY BE INSPECTED DURING
NORMAL BUSINESS HOURS.
3. Restrictions on Transferability of Shares. Your Restricted
Shares are subject to certain restrictions on transferability. More
specifically, your Restricted Shares may not be sold, exchanged, transferred,
assigned, pledged, or otherwise encumbered or disposed of before June 30, 19__
(the "Full Vesting Date"). These restrictions will, however, subject to
paragraph 4 below, terminate with respect to 13.333% (i.e., ___________) of your
Restricted Shares on June 30 of each of __________, ___________, ____________
and _________, and with respect to 46.668% (i.e., ___________) of your
Restricted Shares on June 30, ___.
<PAGE>
5
Subject to paragraph 4 below, all of your Restricted Shares will be free of
these restrictions as of the Full Vesting Date. As the restrictions on your
Restricted Shares lapse, certificates for the appropriate number of shares of
the Company's Common Stock will be issued to you.
4. Termination of Employment or Occurrence of a Change in
Control. If, prior to the Full Vesting Date, (i) you cease to be an employee of
the Company due to death, Permanent Disability (as defined above), retirement,
or termination by the Company without Cause (as defined above), or (ii) a Change
in Control (as defined above) occurs with respect to the Company, all
restrictions on your Restricted Shares shall terminate, and certificates for the
appropriate number of shares of the Company's Common Stock will be issued to
you. If you cease to be an employee prior to the Full Vesting Date for any other
reason, you will immediately forfeit all Restricted Shares which are still
subject to restriction.
5. Voting and Dividend Rights During Restricted Period. After
share certificates representing your Restricted Shares are registered in your
name, you shall have the right to vote your Restricted Shares and to receive all
dividends payable with respect thereto (so long as such shares are not forfeited
as described in paragraph 4 above).
6. Investment Representation - Registration. In order to
comply with any applicable securities laws, the Company may require you (i) to
furnish evidence satisfactory to the Company (including a written and signed
representation letter) to the effect that all of your Restricted Shares were
acquired for investment only and not for resale or distribution and (ii) to
agree that all such Restricted Shares shall only be sold by you following
registration under the Securities Act of 1933 or pursuant to an exemption
therefrom.
<PAGE>
6
7. No Assignment. Your rights under this Agreement may not be
assigned, pledged or otherwise transferred except to the extent permitted
hereunder.
8. Compliance with Law and Regulations. Once your Restricted
Shares are no longer subject to restriction, any sale, exchange, transfer,
assignment, pledge, encumbrance or other disposition, directly or indirectly,
whether or not for value, and whether or not voluntarily, of your share
certificates shall be made in compliance with any applicable constitution, rule
or regulation of, or any applicable policy of, any of the exchanges on which the
Common Stock is listed, and any applicable law, rule or regulation of any
governmental agency having jurisdiction.
9. Designation of Beneficiary. You should designate in writing
on forms prescribed by and filed with the Committee a beneficiary or
beneficiaries to receive, in the event of your death, any rights to which you
are entitled hereunder. A designation of beneficiary may be replaced by a new
designation or may be revoked by you at any time on forms prescribed by and
filed with the Committee.
10. No Rights to Continue Employment. Nothing in this
Agreement shall be construed as giving you any right to continue in the employ
of the Company or any of its subsidiaries.
11. Changes in Capitalization. If any change shall occur in or
affect the Common Stock on account of a merger, consolidation, reorganization,
stock dividend, stock split or combination, reclassification, recapitalization,
or distribution to holders of the Common Stock (other than regular dividends)
or, if in the opinion of the Committee, after
<PAGE>
7
consultation with the Company's independent public accountants, changes in the
Company's accounting policies, acquisitions, divestitures, distributions, or
other unusual or extraordinary items have disproportionately and materially
affected the value of the Restricted Shares, the Committee shall make such
adjustments, if any, that it may deem, in its sole discretion, necessary or
equitable in the number of shares of Common Stock subject to your Restricted
Share grant. In the event of any other change affecting the Common Stock, such
adjustment shall be made as may be deemed equitable by the Committee to give
proper effect to such event.
12. Nontransferability of Rights. Your rights hereunder,
including the right to any amounts or Common Stock payable, may not be assigned,
pledged, or otherwise transferred except, in the event of your death, to your
designated beneficiary or, in the absence of such a designation, by will or the
laws of descent and distribution.
13. Withholding. The Company shall have the right, before any
payment is made or a certificate for any Common Stock is delivered, to deduct or
withhold from any payment to you to satisfy any Federal, state, or local taxes,
including transfer taxes, required by law to be withheld or to require you or
your beneficiary or estate, as the case may be, to pay any amount, or the
balance of any amount, required to be withheld.
14. Relationship to Other Benefits. No payment hereunder shall
be taken into account in determining any benefits under any pension, retirement,
profit sharing, group insurance or other benefit plan of the Company or any
subsidiary of the Company.
<PAGE>
8
15. No Trust or Fund Created. The grant made hereunder shall
not create or be construed to create a trust or separate fund of any kind or a
fiduciary relationship between the Company or any of its subsidiaries and you or
any other person. Your rights hereunder shall be no greater than the rights of
any unsecured general creditor of the Company.
16. Consent Under Local Law. This award shall be conditioned
upon the making of any filing and the receipt of any consents or authorizations
required to comply with, or required to be obtained under, applicable local
laws.
17. Governing Law. This Agreement and the legal relations
between the parties shall be governed by and construed in accordance with the
laws of the State of New York.
Please indicate your acceptance of this Agreement by signing
and returning the duplicate copy of this letter to Thomas P. Loftus.
Sincerely,
CORNERSTONE PROPERTIES INC.
By:__________________________
Name:
Title:
By:__________________________
Name:
Title:
ACCEPTED:____________, 19__
__________________________
Participant
Dear :
On behalf of the Board of Directors, I am pleased to notify
you that Cornerstone Properties Inc. (the "Company") has awarded you, subject to
your acceptance of the terms and conditions of this letter agreement (this
"Agreement"), ____________ shares of the Company's Common Stock (the "Restricted
Shares").
Grants of Restricted Shares are being made to those officers
who have had, and who are expected to continue to have, a significant impact on
the Company's performance, and the Company's Audit Committee (the "Committee")
has designated the participating officers.
Your award of Restricted Shares is subject to the following
terms and conditions:
1. Definitions. For purposes of this Agreement, the following
terms shall have the meanings indicated:
(a) Termination for "Cause" means a termination of employment
with the Company or any of the Company's subsidiaries which, as
determined by the Committee, is by reason of (i) the commission by the
Participant of a felony or perpetration by the Participant of a
dishonest act, material misrepresentation or common law fraud against
the Company or any subsidiary thereof, (ii) any other act or omission
which is materially injurious to the financial condition or business
reputation of the Company or any subsidiary thereof or (iii) the wilful
failure or refusal of the
<PAGE>
2
Participant to substantially perform the material duties of his
position with the Company or any subsidiary thereof.
(b) "Change in Control" shall mean the occurrence of one or
more of the following events: (i) a merger in which the Company is not
the survivor; (ii) a sale or transfer of all or substantially all of
the assets of the Company; (iii) a liquidation or reorganization of the
Company; or (iv) a change in control of a nature that would be required
to be reported in response to Item 5(f) of Schedule 14A of Regulation
14A promulgated under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), whether or not the Company is then subject to
such reporting requirement; provided that, without limitation, a Change
in Control shall be deemed to have occurred if (A) any individual,
partnership, firm, corporation, association, trust, unincorporated
organization or other entity, or any syndicate or group deemed to be a
person under Section 14(d)(2) of the Exchange Act, is or becomes the
"beneficial owner" (as defined in Rule 13d-3 of the General Rules and
Regulations under the Exchange Act), directly or indirectly, of
securities of the Company representing 25% or more of the combined
voting power of the Company's then outstanding securities entitled to
vote in the election of directors of the Company; or (B) during any
period of two consecutive years, individuals who at the beginning of
such period constituted the Board of Directors and any new directors,
whose election by the Board of Directors or nomination for election by
the Company's stockholders was approved by a vote of at least
three-quarters of the directors then still in office who either were
directors at the
<PAGE>
3
beginning of the period or whose selection or nomination for election
was previously so approved, cease for any reason to constitute a
majority thereof; provided, further, that a change in control shall not
be deemed to be a Change in Control for purposes of this Agreement if
the Board of Directors has approved such change in control prior to
either (x) the occurrence of any of the events described in the
foregoing clauses (A) and (B) or (y) the commencement by any person
other than the Company of a tender offer for the Common Stock not
approved by the Board of Directors prior to such commencement.
(c) "Participant" shall mean any officer of the Company or one
of its subsidiaries to whom a grant of Restricted Shares has been made
and is outstanding.
(d) "Permanent Disability" shall mean a physical or mental
condition of a Participant that, in the judgment of the Committee,
after consultation with a duly licensed physician, permanently prevents
such Participant from being able to serve as an active employee of the
Company and its subsidiaries. For purposes of determining the day on
which a Participant becomes Permanently Disabled, the Committee may
select the day on which such Participant first becomes eligible for
long-term disability benefits under the Company's long-term disability
insurance plan then in effect.
(e) "Restricted Period" shall mean a period of five
consecutive years, commencing with June 30 of the year in which
Restricted Shares are granted, during which restrictions on such
Restricted Shares are in effect.
2. Award. Upon your acceptance of this Agreement, the Company
shall register in your name share certificates representing your Restricted
Shares, which certificates
<PAGE>
4
will be held by the Company for your account. These certificates will bear a
legend in substantially the following form, as determined by the Committee:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
THE TERMS AND CONDITIONS OF A RESTRICTED SHARE
AGREEMENT BETWEEN CORNERSTONE PROPERTIES INC. AND THE
BENEFICIAL OWNER HEREOF, INCLUDING RESTRICTIONS ON SALE,
TRANSFER AND ENCUMBRANCE.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ISSUED
WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933. UNLESS
CORNERSTONE PROPERTIES INC. DETERMINES OTHERWISE, NO TRANSFER
OF SUCH SECURITIES MAY BE MADE WITHOUT AN OPINION OF COUNSEL,
SATISFACTORY TO CORNERSTONE PROPERTIES INC., THAT SUCH
TRANSFER MAY PROPERLY BE MADE WITHOUT REGISTRATION UNDER THE
SECURITIES ACT OF 1933 OR THAT SUCH SECURITIES HAVE BEEN SO
REGISTERED UNDER A REGISTRATION STATEMENT WHICH IS IN EFFECT
AT THE DATE OF SUCH TRANSFER.
COPIES OF THE RESTRICTED SHARE AGREEMENT ARE ON FILE AT
THE OFFICE OF THE SECRETARY AND MAY BE INSPECTED DURING
NORMAL BUSINESS HOURS.
3. Restrictions on Transferability of Shares. Your Restricted
Shares are subject to certain restrictions on transferability. More
specifically, your Restricted Shares may not be sold, exchanged, transferred,
assigned, pledged, or otherwise encumbered or disposed of before June 30, 19__
(the "Full Vesting Date"). These restrictions will, however, subject to
paragraph 4 below, terminate with respect to 13.333% (i.e., ___________) of your
Restricted Shares on June 30 of each of __________, ___________, ____________
and _________, and with respect to 46.668% (i.e., ___________) of your
Restricted Shares on June 30, __________. Subject to paragraph 4 below, all of
your Restricted Shares will be free of these
<PAGE>
5
restrictions as of the Full Vesting Date. As the restrictions on your Restricted
Shares lapse, certificates for the appropriate number of shares of the Company's
Common Stock will be issued to you.
4. Termination of Employment or Occurrence of a Change in
Control. If, prior to the Full Vesting Date, (i) you cease to be an employee of
the Company due to death, Permanent Disability (as defined above), retirement,
or termination by the Company without Cause (as defined above), or (ii) a Change
in Control (as defined above) occurs with respect to the Company, all
restrictions on your Restricted Shares shall terminate, and certificates for the
appropriate number of shares of the Company's Common Stock will be issued to
you. If you cease to be an employee prior to the Full Vesting Date for any other
reason, you will immediately forfeit all Restricted Shares which are still
subject to restriction.
5. Voting and Dividend Rights During Restricted Period. After
share certificates representing your Restricted Shares are registered in your
name, you shall have the right to vote your Restricted Shares and to receive all
dividends payable with respect thereto (so long as such shares are not forfeited
as described in paragraph 4 above).
6. Investment Representation - Registration. In order to
comply with any applicable securities laws, the Company may require you (i) to
furnish evidence satisfactory to the Company (including a written and signed
representation letter) to the effect that all of your Restricted Shares were
acquired for investment only and not for resale or distribution and (ii) to
agree that all such Restricted Shares shall only be sold by you following
registration under the Securities Act of 1933 or pursuant to an exemption
therefrom.
<PAGE>
6
7. No Assignment. Your rights under this Agreement may not be
assigned, pledged or otherwise transferred except to the extent permitted
hereunder.
8. Compliance with Law and Regulations. Once your Restricted
Shares are no longer subject to restriction, any sale, exchange, transfer,
assignment, pledge, encumbrance or other disposition, directly or indirectly,
whether or not for value, and whether or not voluntarily, of your share
certificates shall be made in compliance with any applicable constitution, rule
or regulation of, or any applicable policy of, any of the exchanges on which the
Common Stock is listed, and any applicable law, rule or regulation of any
governmental agency having jurisdiction.
9. Designation of Beneficiary. You should designate in writing
on forms prescribed by and filed with the Committee a beneficiary or
beneficiaries to receive, in the event of your death, any rights to which you
are entitled hereunder. A designation of beneficiary may be replaced by a new
designation or may be revoked by you at any time on forms prescribed by and
filed with the Committee.
10. No Rights to Continue Employment. Nothing in this
Agreement shall be construed as giving you any right to continue in the employ
of the Company or any of its subsidiaries.
11. Changes in Capitalization. If any change shall occur in or
affect the Common Stock on account of a merger, consolidation, reorganization,
stock dividend, stock split or combination, reclassification, recapitalization,
or distribution to holders of the Common Stock (other than regular dividends)
or, if in the opinion of the Committee, after
<PAGE>
7
consultation with the Company's independent public accountants, changes in the
Company's accounting policies, acquisitions, divestitures, distributions, or
other unusual or extraordinary items have disproportionately and materially
affected the value of the Restricted Shares, the Committee shall make such
adjustments, if any, that it may deem, in its sole discretion, necessary or
equitable in the number of shares of Common Stock subject to your Restricted
Share grant. In the event of any other change affecting the Common Stock, such
adjustment shall be made as may be deemed equitable by the Committee to give
proper effect to such event.
12. Nontransferability of Rights. Your rights hereunder,
including the right to any amounts or Common Stock payable, may not be assigned,
pledged, or otherwise transferred except, in the event of your death, to your
designated beneficiary or, in the absence of such a designation, by will or the
laws of descent and distribution.
13. Withholding. The Company shall have the right, before any
payment is made or a certificate for any Common Stock is delivered, to deduct or
withhold from any payment to you to satisfy any Federal, state, or local taxes,
including transfer taxes, required by law to be withheld or to require you or
your beneficiary or estate, as the case may be, to pay any amount, or the
balance of any amount, required to be withheld.
14. Relationship to Other Benefits. No payment hereunder shall
be taken into account in determining any benefits under any pension, retirement,
profit sharing, group insurance or other benefit plan of the Company or any
subsidiary of the Company.
<PAGE>
8
15. No Trust or Fund Created. The grant made hereunder shall
not create or be construed to create a trust or separate fund of any kind or a
fiduciary relationship between the Company or any of its subsidiaries and you or
any other person. Your rights hereunder shall be no greater than the rights of
any unsecured general creditor of the Company.
16. Consent Under Local Law. This award shall be conditioned
upon the making of any filing and the receipt of any consents or authorizations
required to comply with, or required to be obtained under, applicable local
laws.
17. Governing Law. This Agreement and the legal relations
between the parties shall be governed by and construed in accordance with the
laws of the State of New York.
Please indicate your acceptance of this Agreement by signing
and returning the duplicate copy of this letter to Thomas P. Loftus.
Sincerely,
CORNERSTONE PROPERTIES INC.
By:__________________________
ACCEPTED:_____________________, 19__
__________________________________
Participant
STOCK OPTION CERTIFICATE
This STOCK OPTION CERTIFICATE sets forth the terms and
provisions of the grant of a stock option to ____________ (the "Director") by
Cornerstone Properties Inc., a Nevada corporation (the "Company").
W I T N E S S E T H :
WHEREAS, the Company wishes to retain the services of
qualified persons who are not employees of the Company or its subsidiaries to
serve as members of the Board of Directors of the Company (the "Board"); and
WHEREAS, the Company wishes to provide for the grant of
options to purchase shares of common stock, without par value, of the Company
(the "Common Stock") to persons who are members of the Board and not employees
or officers of the Company or any of its subsidiaries (the "Outside Directors");
and
WHEREAS, the Director is one of the Outside Directors eligible
for grant under the terms and provisions of the Plan.
TERMS AND PROVISIONS OF OPTION
1. Grant of Option. The Company hereby grants to the Director,
effective as of __________ (the "Date of Grant"), an option (the "Option") to
purchase all or any portion of shares of Common Stock at a per share exercise
price of $ (the "Option Price").
2. Vesting; Exercise. The Option shall become exercisable as
to 50% of the shares on the first anniversary of the Date of Grant and as to the
remaining 50% of the shares on the second anniversary of the Date of Grant and
shall thereafter be exercisable as a whole or in part until the earliest to
occur of (i) the tenth anniversary of the Date of Grant, (ii) the first
anniversary of the date of the Director's resignation, removal or termination
(including by death) as a member of the Board and (iii) the date of the
Director's removal from the Board for cause (the "Option Exercise Period");
provided, that, in the case of resignation, removal or other termination on or
after the first anniversary of the Date of Grant, but prior to the second
anniversary, the Option shall only be exercisable as to 50% of the shares (or
less). The Option shall terminate and be of no further force and effect at the
expiration of the Option Exercise Period.
<PAGE>
2
3. Method of Exercise. The Director may exercise the Option
during the Option Exercise Period by notifying the Company in writing of the
number of shares in respect of which the Option has been exercised and by
tendering to the Company the aggregate Option Price for such shares of Common
Stock in cash (including a certified check, teller's check or wire transfer of
funds). The date of exercise of the Option shall be the date the written notice
of exercise from the Director is received by the Company. As soon as practicable
following receipt of the written notice of exercise and payment of the aggregate
Option Price, the Company will issue share certificates for the number of shares
for which the Option has been duly exercised in the name of the Director, unless
the Director has specified in the written notice of exercise that such share
certificates should be issued in some other name.
4. Nontransferable. The Option shall be nontransferable other
than by will or the laws of descent and distribution and, during the life of the
Director, shall be exercisable only by the Director. The Director may designate
in writing to the Company a person or persons who shall be entitled to exercise
the Option during the Option Exercise Period in the event of the Director's
death, and if no such designation is made by the Director, the Option shall be
exercisable during the Option Exercise Period in the event of the Director's
death by the Director's estate.
5. Special Rules. Notwithstanding the other terms and
provisions of this Certificate, the following provisions shall apply:
(a) Change in Control. In the event of a Change in Control of
the Company, the Option shall become exercisable as a whole or in part,
if it has not already become so, on the date of the Change in Control;
provided, however, that the shares of Common Stock acquired upon
exercise of the Option in such event shall not be transferable by the
Director until the expiration of the six-month period beginning on the
Date of Grant. "Change in Control" shall mean a change in control of a
nature that would be required to be reported in response to Item 5(f)
of Schedule 14A of Regulation 14A promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), whether or not
the Company is then subject to such reporting requirement; provided
that, without limitation, a Change in Control shall be deemed to have
occurred if (A) any individual, partnership, firm, corporation,
association, trust, unincorporated organization or other entity, or any
syndicate or group deemed to be a person under Section 14(d)(2) of the
Exchange Act, is or becomes the "beneficial owner" (as defined in Rule
13d-3 of the General Rules and Regulations under the Exchange Act),
directly or indirectly, of securities of the Company representing 25%
or more of the combined voting power of the Company's then outstanding
securities entitled to vote in the election of directors of the
Company; or (B) during any period of two consecutive years, individuals
who at the beginning of such period constituted the Board of Directors
and any new directors, whose election by the Board of Directors or
nomination for election by the Company's stockholders was
<PAGE>
3
approved by a vote of at least three-quarters of the directors then
still in office who either were directors at the beginning of the
period or whose selection or nomination for election was previously so
approved, cease for any reason to constitute a majority thereof;
provided, further, that a change in control shall not be deemed to be a
Change in Control for purposes of this Agreement if the Board of
Directors has approved such change in control prior to either (x) the
occurrence of any of the events described in the foregoing clauses (A)
and (B) or (y) the commencement by any person other than the Company of
a tender offer for the Common Stock not approved by the Board of
Directors prior to such commencement.
(b) Securities Act Registration or Exemption. The Option shall
not be exercisable and no transfer of the shares of Common Stock
underlying the Option (the "Underlying Shares") may be made to the
Director, and any attempt to exercise the Option or to transfer the
Underlying Shares to the Director shall be void and of no effect,
unless and until (i) a registration statement under the Securities Act
of 1933, as amended (the "Securities Act"), has been duly filed and
declared effective pertaining to the Underlying Shares and the
Underlying Shares have been duly qualified under applicable state
securities or blue sky laws or (ii) the Audit Committee of the Board,
in its sole discretion after securing the advice of counsel,
determines, or the Director provides an opinion of counsel satisfactory
to the Audit Committee, that such registration or qualification is not
required as a result of the availability of an exemption from
registration or qualification under such laws.
(c) No Right to Reelection. Nothing in this Certificate shall
be deemed to create any obligation on the part of the Board to nominate
the Director for reelection by the Company's stockholders, nor confer
upon the Director the right to remain a member of the Board for any
period of time, or at any particular rate of compensation.
(d) No Stockholder Rights. The Director shall have no rights
as a stockholder with respect to the Underlying Shares until a
certificate or certificates evidencing such shares have been issued to
the Director, and no adjustment shall be made for dividends or
distributions or other rights in respect of any share for which the
record date is prior to the date upon which the Director shall become
the holder of record thereof.
(e) Company's Rights Not Affected. The existence of the Option
shall not affect in any way the right or power of the Company or its
stockholders to make or authorize any and all adjustments,
recapitalizations, reorganizations or other changes in the Company's
capital structure or its business, or any merger or consolidation of
the Company, or any issue of bonds, debentures, preferred or preference
stocks ahead of or affecting the Common Stock or the rights thereof, or
the dissolution or liquidation of the Company, or
<PAGE>
4
any sale or transfer of all or part of its assets or business, or any
other corporate act or proceeding, whether of a similar character or
otherwise.
(f) Adjustment of Option Shares. The shares with respect to
which the Option is granted are shares of the Common Stock of the
Company as constituted on the date of this Agreement, but if, and
whenever, hereafter and prior to the delivery by the Company of all of
the shares of Common Stock with respect to which the Option is granted,
the Company shall effect a subdivision or consolidation of shares, or
other capital readjustment, the payment of a stock dividend, or other
increase or reduction of the number of shares of Common Stock
outstanding, without the receipt of consideration by the Company, then
(a), in the event of any increase in the number of such shares
outstanding, the number of shares of Common Stock then remaining
subject to option hereunder shall be proportionately increased, and the
cash consideration payable per share shall be proportionately reduced,
and (b), in the event of a reduction in the number of such shares
outstanding, the number of shares of Common Stock then remaining
subject to option hereunder shall be proportionately reduced, and the
cash consideration payable per share shall be proportionately
increased.
(g) Deferral of Delivery of Shares. Anything in this
Certificate to the contrary notwithstanding, if, at any time specified
herein for the exercise of the Option or the delivery of shares to the
Director, any law or regulations of any governmental authority having
jurisdiction in the matter shall require either the Company or the
Director to take any action or refrain from action in connection
therewith or to delay such exercise, then the delivery of such shares
on such exercise shall be deferred until such action shall have been
taken or such restriction on action shall have been removed.
(h) Resolution of Disputes. As conditions precedent to the
granting of the Option and all other rights provided hereunder, the
Director and any other person who acquires any rights hereunder, agrees
that any dispute or disagreement which shall arise under, or as a
result of, or pursuant to, this Certificate may be determined, either
by the Audit Committee or by the Board in the Audit Committee's or the
Board's absolute and uncontrolled discretion, and that any such
determination or interpretation of the terms of this Certificate or any
other determination by either such Committee or the Board shall be
final, binding and conclusive on all persons affected thereby.
6. Governing Law. This Certificate and the grant of the Option
shall be governed by, and construed in accordance with, the laws of the State of
Nevada.
<PAGE>
5
IN WITNESS WHEREOF, the Company has duly executed and
delivered this Certificate as of this ___ day of _______, ______.
CORNERSTONE PROPERTIES INC.
By:__________________________________
Name:
Title:
By:__________________________________
Name:
Title
CORNERSTONE PROPERTIES INC.
126 East 56th Street
New York, NY 10022
Telephone (212) 605-7100 Facsimile (212) 605-7199
[Date]
DIRECTOR SHARES
Dear ________,
This letter agreement (this "Agreement") will evidence and set
forth the terms and conditions of the grant to you of 349 shares (the "1996
Director Shares") of Common Stock of the Company in part payment for your
services as a non-employee Director of the Company in 1996, all pursuant to the
resolution relating to Board compensation adopted by the Board of Directors of
the Company on December 8, 1995. The 1996 Director Shares were determined by
dividing (i) the amount equal to 50% of the annual retainer fee otherwise
payable to non-employee Directors for 1996 by (ii) $_____, with the fractional
share resulting from such calculation to be paid in cash in an amount equal to
such fractional amount times $_____.
In future years, so long as you remain a non-employee
Director, you will automatically receive shares (the "Director Shares") of
Common Stock of the Company in part payment for your services as a non-employee
Director of the Company with the number of such Director Shares being determined
by dividing (i) the amount equal to 50% of the annual retainer fee otherwise
payable to non-employee Directors for the relevant fiscal year by (ii) the Fair
Market Value of one share of Common Stock as of the last day of the preceding
fiscal year. Any fractional shares resulting from such calculation shall not be
granted, but instead shall be paid in cash in an amount equal to such fractional
amount times the Fair Market Value of one share of Common Stock as of the last
day of the relevant preceding fiscal year.
Your grant of Director Shares is subject to the following
terms and conditions:
1. Definitions: For purposes of this Agreement, the following
terms shall have the meanings indicated:
(a) "Annual retainer fee" means only the annual fee otherwise
payable to a non-employee Director for service on the Board of
Directors (not including for service on a committee of the Board) of
the Company and no other fees or expenses; provided, that
<PAGE>
2
if you serve as a non-employee Director during only a portion of 1996
or any future fiscal year, annual retainer fee shall mean only a pro
rata portion of such annual fee.
(b) "Fair Market Value" on any day shall mean the reported
last sales price on such day or, in case no such sale takes place on
such day, the average of the reported closing bid and asked prices, in
each case on the principal securities exchange on which the Common
Stock is listed or admitted to trading on which prices are quoted in
U.S. dollars, or, if not listed or admitted to trading on any such
securities exchange, the average of the closing bid and asked prices as
furnished in U.S. dollars by any broker/dealer selected from time to
time by the Board of Directors for that purpose. If the Common Stock
was not traded on the applicable securities market on such day, Fair
Market Value shall be determined in the same way on the next preceding
day on which the Common Stock was traded.
2. Award. The Company will register in your name share
certificates representing your Director Shares, which certificates will be held
by the Company for your account. These certificates will bear a legend in
substantially the following form, as determined by the Compensation Committee:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND
CONDITIONS OF A RESTRICTED SHARE AGREEMENT BETWEEN CORNERSTONE
PROPERTIES INC. AND THE BENEFICIAL OWNER HEREOF, INCLUDING RESTRICTIONS
ON SALE, TRANSFER AND ENCUMBRANCE.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ISSUED WITHOUT
REGISTRATION UNDER THE SECURITIES ACT OF 1933. UNLESS CORNERSTONE
PROPERTIES INC. DETERMINES OTHERWISE, NO TRANSFER OF SUCH SECURITIES
MAY BE MADE WITHOUT AN OPINION OF COUNSEL, SATISFACTORY TO CORNERSTONE
PROPERTIES INC., THAT SUCH TRANSFER MAY PROPERLY BE MADE WITHOUT
REGISTRATION UNDER THE SECURITIES ACT OF 1933 OR THAT SUCH SECURITIES
HAVE BEEN SO REGISTERED UNDER A REGISTRATION STATEMENT WHICH IS IN
EFFECT AT THE DATE OF SUCH TRANSFER.
COPIES OF THE RESTRICTED SHARE AGREEMENT ARE ON FILE AT THE OFFICE OF
THE SECRETARY AND MAY BE INSPECTED DURING NORMAL BUSINESS HOURS.
As soon as practicable following the earlier of:
<PAGE>
3
(a) your sale in accordance with this Agreement and applicable
Federal securities law of any Director Shares as to which the
restrictions provided for in paragraph 3 below have expired; and
(b) the third month anniversary of the date on which you cease
to be a member of the Board,
a non-legended share certificate (or certificates) will be delivered to you (or
to your estate, as the case may be) for, in the case of clause (a) above, the
number of Director Shares sold and, in the case of clause (b) above, the number
of Director Shares which have been granted to you and for which a certificate
has not previously been delivered.
3. Restrictions on Transferability of Shares. Your Director
Shares may not be sold, exchanged, transferred, assigned, pledged, or otherwise
encumbered or disposed of until the date which is one year after the date of
grant.
4. Voting and Dividend Rights During Restricted Period. After
share certificates representing your Director Shares are registered in your
name, you shall have the right to vote your Director Shares and to receive all
dividends payable with respect thereto.
5. Investment Representation - Registration. In order to
comply with any applicable securities laws, the Company may require you (i) to
furnish evidence satisfactory to the Company (including a written and signed
representation letter) to the effect that all of your Director Shares were
acquired for investment only and not for resale or distribution and (ii) to
agree that all such Director Shares shall only be sold by you following
registration under the Securities Act of 1933 or pursuant to an exemption
therefrom.
6. Compliance with Law and Regulations. Once your Restricted
Shares are no longer subject to restriction, any sale, exchange, transfer,
assignment, pledge, encumbrance or other disposition, directly or indirectly,
whether or not for value, and whether or not voluntarily, of your share
certificates shall be made in compliance with any applicable constitution, rule
or regulation of, or any applicable policy of, any of the exchanges on which the
Common Stock is listed, and any applicable law, rule or regulation of any
governmental agency having jurisdiction.
7. Designation of Beneficiary. You should designate in writing
on forms prescribed by and filed with the Secretary, a beneficiary or
beneficiaries to receive, in the event of your death, any rights to which you
are entitled hereunder. A designation of beneficiary may be replaced by a new
designation or may be revoked by you at any time on forms prescribed by and
filed with the Secretary.
<PAGE>
4
8. No Right to Reelection. Nothing in this Agreement shall be
deemed to create any obligation on the part of the Board to nominate any of its
members for reelection by the Company's stockholders, nor confer upon any
non-employee Director the right to remain a member of the Board for any period
of time, or at any particular rate of compensation.
9. Changes in Capitalization. If any change shall occur in or
affect the Common Stock on account of a merger, consolidation, reorganization,
stock dividend, stock split or combination, reclassification, recapitalization,
or distribution to holders of the Common Stock (other than regular dividends)
or, if in the opinion of the Compensation Committee, after consultation with the
Company's independent public accountants, changes in the Company's accounting
policies, acquisitions, divestitures, distributions, or other unusual or
extraordinary items have disproportionately and materially affected the value of
the Director Shares, the Committee shall make such adjustments, if any, that it
may deem, in its sole discretion, necessary or equitable in the number of shares
of Common Stock subject to your Director Share grant. In the event of any other
change affecting the Common Stock, such adjustment shall made as may be deemed
equitable by the Compensation Committee to give proper effect to such event.
10. Nontransferability of Rights. Your rights hereunder,
including the right to any amounts or Common Stock payable, may not be assigned,
pledged, or otherwise transferred except, in the event of your death, to your
designated beneficiary or, in the absence of such a designation, by will or the
laws of descent and distribution.
11. Withholding. The Company shall have the right, before any
payment is made or a certificate for any Common Stock is delivered, to deduct or
withhold from any payment to you to satisfy any Federal, state, or local taxes,
including transfer taxes, required by law to be withheld or to require you or
your beneficiary or estate, as the case may be, to pay any amount, or the
balance of any amount, required to be withheld.
12. No Trust or Fund Created. The grant made hereunder shall
not create or be construed to create a trust or separate fund of any kind or a
fiduciary relationship between the Company or any of its subsidiaries and you or
any other person. Your rights hereunder shall be no greater than the rights of
any unsecured general creditor of the Company.
13. Consent Under Local Law. This award shall be conditioned
upon the making of any filing and the receipt of any consents or authorizations
required to comply with, or required to be obtained under, applicable local
laws.
14. Governing Law. This Agreement and the legal relations
between the parties shall be governed by and construed in accordance with the
laws of the State of New York.
<PAGE>
5
Please indicate your acceptance of this Agreement by signing
and returning the duplicate copy of this letter to the Secretary.
Sincerely,
By:_____________________________
By:_____________________________
ACCEPTED:________________, 1996
_______________________________
July 24, 1998
Cornerstone Properties Inc.
126 East 56th Street
New York, New York 10022
RE: Cornerstone Properties Inc.
Registration Statement on Form S-8
Dear Sirs:
We have acted as special Nevada counsel for Cornerstone Properties
Inc., a Nevada corporation (the "Company"), in connection with the preparation
of a Registration Statement on Form S-8 ("Registration Statement"), being filed
by the Company with the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended (the "Act"), with respect to the
registration by the Company of 5,401,592 shares ("Shares") of Common Stock, no
par value per share (the "Common Stock"), under the Stock Plans (as defined
below). Capitalized terms used in this Opinion Letter and not defined herein
shall have the meaning given to them in the Registration Statement.
We have examined originals or copies certified or otherwise identified
to our satisfaction of such corporate records and certificates of public
officials as we have deemed necessary or appropriate for the purposes of this
opinion, including without limitation, the:
1. Registration Statement.
2. Company's 1998 Long Term Incentive Plan (the "1998 Plan").
3. Form of 1995 Stock Option Agreements between the Company and
Certain Management and Key Executives (the "1995 Option
Plans").
4. Form of 1997 Stock Option Agreements between the Company and
Certain Management and Key Executives (the "1997 Option
Plans").
5. Form of 1998 Stock Option Agreements between the Company and
Certain Management and Key Executives (the "1998 Option
Plans").
<PAGE>
Cornerstone Properties Inc. Page 2
July 24, 1998
6. Form of 1995 Restricted Share Agreements between the Company
and Certain Management and Key Executives (the "1995
Restricted Plans").
7. Form of 1997 Restricted Share Agreements between the Company
and Certain Management and Key Executives (the "1997
Restricted Plans").
8. Form of 1998 Restricted Share Agreements between the Company
and Certain Management and Key Executives (the "1998
Restricted Plans").
9. Form of Stock Option Certificates for Certain Directors.
10. Form of Director Share Agreements between the Company and
Certain Directors (the "Share Agreements").
11. Articles of Incorporation of the Company certified by the
Nevada Secretary of State on July 10, 1998, and certified as
of the date hereof by the Secretary of the Company.
12. Bylaws of the Company, dated as of December 8, 1995, certified
as of the date hereof by the Secretary of the Company.
13. Resolutions of the Board of Directors, dated June 19, 1995,
November 13, 1995 and December 8, 1995, certified as of the
date hereof by the Secretary of the Company.
14. Resolutions of the Board of Directors, dated March 14, 1997
and November 26, 1997, certified as of the date hereof by the
Secretary of the Company.
15. Resolutions of the Board of Directors, dated February 4, 1998
and March 5, 1998, certified as of the date hereof by the
Secretary of the Company.
The 1998 Plan, 1995 Option Plans, 1997 Option Plans, 1998 Option Plans,
1995 Restricted Plans, 1997 Restricted Plans, 1998 Restricted Plans, and Share
Agreements are each referred to as a "Stock Plan" and are collectively referred
to as the "Stock Plans."
We have assumed the authenticity of all documents submitted to us as
originals, the genuineness of all signatures, the legal capacity of natural
persons and the conformity to originals of all copies of all documents submitted
to us. We have relied upon the certificates of all public officials and
corporate officers with respect to the accuracy of all matters contained
therein, including without limitation, the certificate of the Company's
Secretary, a copy of which has been previously provided to you.
<PAGE>
Cornerstone Properties Inc. Page 3
July 24, 1998
Based upon and subject to the foregoing, and subject to the
qualifications, limitations, restrictions and assumptions set forth below, we
are of the opinion that:
1. The Company is a corporation duly incorporated, validly existing,
and in good standing under the laws of the State of Nevada.
2. The Company has the authority to issue up to Two Hundred Fifty
Million (250,000,000) shares of Common Stock.
3. The Shares have been duly authorized by the Company.
4. The Shares previously issued by the Company pursuant to the 1995
Restricted Plans, the 1997 Restricted Plans, the 1998 Restricted Plans and the
Share Agreements have been validly issued and are fully paid and nonassessable.
5. Assuming the conformity of the certificates representing the Shares
issued by the Company under the respective Stock Plans to the form of the
respective specimens examined by us and the due execution and delivery of such
certificates, the Shares, when issued and delivered by the Company and upon
receipt by the Company of the consideration described under each respective
Plan, will be validly issued, fully paid, and nonassessable.
Nothing herein shall be deemed an opinion as to the laws of any other
jurisdiction other than the State of Nevada. We express no opinion concerning
any securities law or rule of any jurisdiction.
This opinion is intended solely for the use of the Company in
connection with the Registration Statement. It may not be relied upon by any
other person or for any other purpose, or reproduced or filed publicly by any
person without the written consent of this firm; provided, we hereby consent to
the filing of this opinion as an exhibit to the Registration Statement. In
giving consent, we do not hereby admit that we are in a category of persons
whose consent is required pursuant to Section 7 of the Act or the rules and
regulations of the Commission promulgated thereunder, and we disclaim liability
as an expert under the securities laws of the United States or any other
jurisdiction.
Very truly yours,
/s/ Lionel Sawyer & Collins
LIONEL SAWYER & COLLINS
[LETTERHEAD OF PRICEWATERHOUSECOOPERS LLP]
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration Statement on
Form S-8 of our report dated February 24, 1998, on our audits of the
consolidated financial statements and financial statement schedules of
Cornerstone Properties Inc. (the "Company") as of December 31, 1997 and 1996 and
for each of the three years in the period ended December 31, 1997, which report
is included in the Annual Report on Form 10-K of the Company for the year ended
December 31, 1997.
/s/ PricewaterhouseCoopers LLP
New York New York
July 24, 1998
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Registration Statement
on Form S-8 of Cornerstone Properties Inc. of our report dated January 8, 1998,
with respect to the Statement of Revenue and Certain Expenses of Corporate 500
Centre, Phase I and II for the year ended December 31, 1996, included in the
Current Report on Form 8-K dated January 14, 1998, both filed with the
Securities and Exchange Commission.
/s/ Grant Thornton LLP
GRANT THORNTON LLP
Chicago, Illinois
July 24, 1998
[LETTERHEAD OF ARTHUR ANDERSEN LLP]
Exhibit 23.4
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Registration Statement on Form S-8 of Cornerstone Properties,
Inc. of our report dated January 7, 1998, with respect to the Statement of
Revenue and Certain Expenses of 60 State Street Associates Limited Partnership
for the year ended December 31, 1996, included in the current Reports on Form
8-K, dated January 14, 1998, filed with the Securities and Exchange Commission.
/s/ Arthur Andersen LLP
Boston, Massachusettes
July 23, 1998
