As filed with the Securities and Exchange Commission
on July 13, 1994
Registration No. 33-
=================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
_________________
KOLL REAL ESTATE GROUP, INC.
(Exact name of issuer as specified in its charter)
DELAWARE
(State or other jurisdiction of 02-0426634
incorporation or organization) (I.R.S. Employer
Identification No.)
4343 VON KARMAN AVENUE
NEWPORT BEACH, CALIFORNIA 92660
(Address of Principal Executive Office) (Zip Code)
KOLL REAL ESTATE GROUP, INC.
1993 STOCK OPTION/STOCK ISSUANCE PLAN
(Full Title of the Plan)
PRENTICE-HALL LEGAL & FINANCIAL SERVICES
18200 VON KARMAN AVENUE
IRVINE, CALIFORNIA 92715
(Name and address of agent for service)
(800) 688-7792
(Telephone number, including area code, of agent for service)
______________________
Sales of the registered securities will begin as soon as
reasonably practicable after the effective date of the
Registration Statement.
______________________
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION
FEE
=================================================================
============================================
PROPOSED PROPOSED
TITLE OF
MAXIMUM MAXIMUM AMOUNT OF
SECURITIES TO AMOUNT TO BE
OFFERING PRICE AGGREGATE REGISTRATION
BE REGISTERED REGISTERED<F1> PER
SHARE<F2> OFFERING PRICE<F2> FEE
<S> <C> <C>
<C> <C>
1993 STOCK OPTION/STOCK ISSUANCE PLAN:
Options to Purchase Class A Common Stock 7,500,000 N/A
N/A N/A
Class A Common Stock, $0.05 par value 7,500,000
$0.234375 $1,757,812.50 $606.14
Options to Purchase Series A Convertible
Redeemable Preferred Stock 7,500,000 N/A
N/A N/A
Series A Convertible Redeemable Preferred
Stock, $0.01 par value 7,500,000
$0.234375 $1,757,812.50 $606.14
=================================================================
============================================
<FN>
<F1> This Registration Statement shall also cover any additional
shares of Common Stock which become issuable under the
1993 Stock Option/Stock Issuance Plan set forth herein by reason
of any stock dividend, stock split, recapitalization or
any other similar transaction without receipt of consideration
which results in an increase in the number of outstanding
shares of Common Stock of Koll Real Estate Group, Inc.
<F2> Calculated solely for the purpose of this offering under
Rule 457(h) of the Securities Act of 1933, as amended, on
the basis of the high and low selling prices per share of Common
Stock of Koll Real Estate Group, Inc. on July 6, 1994,
as reported by the Nasdaq National Market.
</TABLE>
<PAGE>
PROSPECTUS
126,856 SHARES
KOLL REAL ESTATE GROUP, INC.
CLASS A COMMON STOCK
($0.05 PAR VALUE PER SHARE)
_________________
This Prospectus relates to the offer and sale of up to
126,856 shares of the Class A Common Stock, $0.05 par value per
share (the "Shares"), of Koll Real Estate Group, Inc., a Delaware
corporation (the "Company"), by certain of the Company's
stockholders (the "Selling Stockholders"). Each of the Selling
Stockholders is a member of the Company's Board of Directors (the
"Board"), and the Shares were acquired by such individuals under
the Company's 1993 Stock Option/Stock Issuance Plan pursuant to
their election to receive the Shares in lieu of a portion of the
retainer fee otherwise payable to them in cash for their service
on the Board during the 1994 calendar year. The Shares were
issued pursuant to an exemption from the registration
requirements of the Securities Act of 1933, as amended (the
"Securities Act"), provided by Section 4(2) thereof.
The Shares may be offered by the Selling Stockholders from
time to time in broker-dealer transactions effected through the
Nasdaq National Market at market prices prevailing at the time of
the sale. For further information concerning such sales, see the
section below entitled "Plan of Distribution." The Company will
not receive any of the proceeds from the sale of the Shares
offered hereby.
The Company's Class A Common Stock is quoted on the Nasdaq
National Market under the symbol KREG. On July 6, 1994 the
average of the high and low selling prices of the Class A Common
Stock was $0.234375 per share.
_______________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
_______________________________
THE DATE OF THIS PROSPECTUS IS JULY 12, 1994
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and in accordance therewith files reports, proxy
statements, information statements and other information with the
Securities and Exchange Commission (the "Commission"). Reports,
proxy statements and other information filed by the Company may
be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the Commission's Regional
Offices located at 75 Park Place, New York, New York 10007 and
500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511. Copies of such material can be obtained by mail from
the Public Reference Branch of the Commission at Room 1024,
Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates.
The Class A Common Stock of the Company is quoted on the Nasdaq
National Market, and such material may also be inspected at the
offices of Nasdaq Operations, 1735 K Street, N.W. Washington,
D.C. 20006.
The Company has filed with the Commission a registration
statement on Form S-8 (herein, together with all amendments and
exhibits, referred to as the "Registration Statement") under the
Securities Act with respect to the Class A Common Stock issuable
under the Company's 1993 Stock Option/Stock Issuance Plan (the
"Plan"), including the Shares offered hereby. This Prospectus
does not contain all of the information set forth in the
Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. For
further information regarding the Company, the Class A Common
Stock offered hereby and the Plan, reference is hereby made to
the Registration Statement and to the exhibits and schedules
filed therewith. The Registration Statement, including the
exhibits and schedules thereto, may be inspected at the public
reference facilities maintained by the Commission at Room 1024,
450 Fifth Street, N.W., Washington, D.C. 20549 and copies of all
or any part thereof may be obtained from such office upon payment
of the prescribed fees.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission (File No.
0-17189) pursuant to the Exchange Act are incorporated herein by
reference:
1. The Company's Quarterly Report on Form 10-Q for the
fiscal quarter ended March 31, 1994;
2. The Company's Current Report on Form 8-K dated
December 17, 1993;
3. The Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1993;
4. The Company's Proxy Statement dated April 11, 1994 for
the 1994 Annual Stockholders Meeting in which the material
features of the 1993 Stock Option/Stock Issuance Plan are
summarized;
5. The description of the Company's outstanding Series A
Convertible Redeemable Preferred Stock, $0.01 par value per
share, and Class A Common Stock, $0.05 par value per share,
contained in the Registration Statement on Form 8-A filed by the
Company on June 22, 1992, including any amendment or report filed
for the purpose of updating such description; and
6. All other documents filed by the Company pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent
to the date of this Prospectus and prior to the termination of
the offering of the Shares.
2
<PAGE>
The Company will provide without charge to each person to
whom a copy of this Prospectus is delivered, upon the request of
any such person, a copy of any or all of the documents which are
incorporated herein by reference (other than exhibits to such
information, unless such exhibits are specifically incorporated
by reference into the information this Prospectus incorporates).
Requests should be directed to Koll Real Estate Group, Inc.,
4343 Van Karman Avenue, Newport Beach, California, 92660,
Attention Raymond J. Pacini, Executive Vice President, Chief
Financial Officer and Secretary, telephone (714) 833-3030.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO
MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFERING MADE HEREBY, AND IF
GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY, ANY SELLING
STOCKHOLDER OR BY ANY OTHER PERSON. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT INFORMATION HEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION
OF AN OFFER TO BUY ANY SECURITY OTHER THAN THE SECURITIES COVERED
BY THIS PROSPECTUS, NOR DOES IT CONSTITUTE AN OFFER TO OR
SOLICITATION OF ANY PERSON IN ANY JURISDICTION IN WHICH SUCH
OFFER OR SOLICITATION MAY NOT LAWFULLY BE MADE.
THE COMPANY
Koll Real Estate Group, Inc. (the "Company") is a real
estate development company organized and existing under the laws
of the State of Delaware. The Company's principal executive
offices are located at 4343 Von Karman Avenue, Newport Beach,
California, 92660, and the Company's telephone number is (714)
833-3030.
SELLING STOCKHOLDERS
The table below sets forth the number of shares of Class A
Common Stock owned by each of the Selling Stockholders as of
July 1, 1994, the number of Shares to be sold pursuant to this
offering, and the number of shares of Class A Common Stock to be
retained by each of the Selling Stockholders if all the Shares
offered hereby are in fact sold. Except as indicated, none of
the Selling Stockholders has had a material relationship with the
Company within the past three years other than as a result of
(i) the ownership of the Shares or other securities of the
Company and (ii) service as a member of the Company's Board of
Directors. The Shares were issued to the Selling Stockholders
pursuant to their election under the Company's 1993 Stock
Option/Stock Issuance Plan to receive the Shares in lieu of a
portion of the retainer fee otherwise payable to the Selling
Stockholders in cash for their service as Board members during
the 1994 calendar year.
The number of Shares issued to each of the Selling
Stockholders pursuant to such election was determined by dividing
the portion of the retainer fee elected to be received in Class A
Common Stock by the closing market price of the Class A Common
Stock on the January 3, 1994 issue date of such Shares. The
Selling Stockholders will vest in the Shares in four equal
quarterly installments upon their upon completion of each
calendar quarter of Board service during the 1994 calendar year.
The Shares were initially held in escrow by the Company and will
be released at quarterly intervals as the Selling Stockholders
vest in those Shares. Accordingly, only fully-vested Shares will
be offered for sale pursuant to this Prospectus.
The Shares subject to this Prospectus may be offered from
time to time for sale by the Selling Stockholders named below:
3
<PAGE>
<TABLE>
<CAPTION>
Number of
Shares Number
of
Number of Shares Offered for Shares
Name of Owned Before Sale to be
Owned
Selling Stockholder Sale Hereby after
Sale
<S> <C> <C> <C>
Paul C. Hegness<F1> 110,571<F3>* 68,571 42,000*
Marco F. Vitulli<F1> 121,000<F3>* 24,000 97,000*
Harold A. Ellis, Jr.<F2> 43,263<F3>* 34,285 8,978*
_______ _______ _______
Total 274,834 126,856 147,978
__________________
* Less than one percent.
<FN>
<F1> Messrs. Hegness and Vitulli have been members of the
Company's Board of Directors since March 1993.
<F2> Mr. Ellis has been a member of the Company's Board of
Directors since August 1993.
<F3> Includes 2,000 shares of Class A Common Stock granted
pursuant to the Company's Restricted Stock Plan for Non-
Employee Directors, which shares are subject to certain
restrictions on vesting and disposition.
</TABLE>
PLAN OF DISTRIBUTION
The Company will receive no proceeds from the sale of the
Shares pursuant to this offering. The Shares offered hereby may
be sold by the Selling Stockholders from time to time through
broker-dealer transactions effected on the Nasdaq National Market
at market prices prevailing at the time of sale. The broker-
dealers participating in such transactions may act as agent or
may acquire the Shares as principal. Any broker-dealer acting as
agent may receive commissions from the Selling Stockholders
and/or the purchasers of the Shares for whom such broker-dealers
are acting as agent. Usual and customary brokerage fees will be
paid by the Selling Stockholders. Broker-dealers may agree with
the Selling Stockholders to sell a specified number of Shares at
a stipulated price per Share and, to the extent such broker-
dealer is unable to do so as agent for the Selling Stockholders,
to purchase as principal any unsold Shares at the price required
to fulfill the broker-dealer commitment to the Selling
Stockholders. Broker-dealers who acquire the Shares as principal
may subsequently resell such Shares from time to time (including
sales to or through other broker-dealers) in transactions
effected on the Nasdaq National Market or through negotiated
transactions or otherwise, at market prices prevailing at the
time of sale or at negotiated prices. In connection with such
resales, the broker-dealer may pay to or receive from the
purchasers of the Shares compensation in the form of discounts,
concessions or commissions, which may, as to a particular broker-
dealer, be in excess of customary commissions.
In order to comply with the securities laws of certain
states, if applicable, the Shares will be sold in such
jurisdictions only through registered or licensed broker-dealers.
In addition, in certain states the Shares may not be sold unless
they have been registered or qualified for sale in the applicable
state or unless there has been compliance with an applicable
exemption from such registration or qualification requirements.
4
<PAGE>
The Selling Stockholders and any broker-dealers who
participate with the Selling Stockholders in the distribution of
the Shares may under certain circumstances be deemed to be
"underwriters" within the meaning of the Securities Act. In such
event, the Selling Stockholders may indemnify any such broker-
dealer against certain liabilities, including liabilities arising
under the Securities Act. Any commissions received by the
broker-dealers participating in the distribution and any profit
on the resale of the Shares purchased by them may be deemed to be
underwriting commissions or discounts under the Securities Act.
Pursuant to applicable rules and regulations under the
Exchange Act, any person engaged in the distribution of the
Shares may not simultaneously engage in market making activities
with respect to the Company's Class A Common Stock for a period
of two business days prior to the commencement of such
distribution. In addition and without limiting the foregoing,
each Selling Stockholder will be subject to applicable provisions
of the Exchange Act and the rules and regulations thereunder,
including (without limitation) Rules 10b-6 and 10b-7.
Accordingly, each of the Selling Stockholders shall not, during
the period such Selling Stockholder may be engaged in a
distribution of the Shares offered hereby, (i) engage in any
stabilization activity in connection with the Company's
securities or (ii) bid for or purchase any of the Company's
securities or any rights to acquire such securities or attempt to
induce any person to purchase any of the Company's securities or
rights to acquire such securities, other than as permitted under
the Exchange Act.
Each of the Selling Stockholders shall furnish each broker-
dealer through whom the Shares offered hereby may be sold such
copies of this Prospectus as such person may require.
5
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. INCORPORATION OF DOCUMENTS BY REFERENCE
Koll Real Estate Group, Inc. (the "Registrant") hereby
incorporates by reference into this Registration Statement the
following documents previously filed with the Securities and
Exchange Commission (the "SEC"):
(a) The Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1993;
(b) The Registrant's Quarterly Report on Form 10-Q for the
fiscal quarter ended March 31, 1994;
(c) The Registrant's report on Form 10-C filed with the SEC on
October 6, 1993;
(d) The Registrant's report on Form 8-K filed with the SEC on
December 28, 1993; and
(e) The Registrant's Registration Statement No. 0-017189 on
Form 8-A filed with the SEC on June 22, 1992, as amended by
Form 8 filed with the SEC on July 13, 1992, in which there is
described the terms, rights and provisions applicable to the
Corporation's outstanding Series A Convertible Redeemable
Preferred Stock and Class A Common Stock.
All reports and definitive proxy or information statements
filed pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934 (the "1934 Act") after the date
of this Registration Statement and prior to the filing of a post-
effective amendment which indicates that all securities offered
hereby have been sold or which deregisters all securities then
remaining unsold shall be deemed to be incorporated by reference
into this Registration Statement and to be a part hereof from the
date of filing of such documents.
Item 4. DESCRIPTION OF SECURITIES
Not Applicable.
Item 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not Applicable.
Item 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
As authorized by the Delaware General Corporation Law, as
amended (the "Delaware Law"), the Registrant's charter documents
provide that no director of the Registrant will be personally
liable to the Registrant or its stockholders for monetary damages
for breach of fiduciary duty as a director except for liability
(i) for any breach of the director's duty of loyalty to the
Registrant or its stockholders, (ii) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing
violation of law, (iii) in respect of certain unlawful dividend
payments or stock redemptions or repurchases and (iv) for any
transaction from which the director derives an improper personal
benefit. The effect of this provision is to eliminate the rights
of the Registrant and its stockholders (through stockholders'
derivative suits on behalf of the Registrant) to recover monetary
damages against a director for breach of the fiduciary duty of
care as a director (including breaches resulting from negligent
or grossly negligent behavior) except in the situations described
in clauses (i) through (iv) above. This provision does not limit
or eliminate the rights of the
<PAGE>
Registrant or any stockholder to seek nonmonetary relief such as
an injunction or rescission in the event of a breach of a
director's duty of care. In addition, the Registrant's charter
documents provide for indemnification of the directors and
officers of the Registrant to the fullest extent authorized under
Delaware Law, and that if the Delaware Law is amended to
authorize broader indemnification of officers and directors or
the further elimination or limitation of the liability of a
director, then such indemnification shall be increased and such
liability shall be eliminated or limited to the fullest extent
permitted by the Delaware Law, as so amended.
Item 7. EXEMPTION FROM REGISTRATION CLAIMED
Not Applicable.
Item 8. EXHIBITS
EXHIBIT NUMBER EXHIBIT
5 Opinion and consent of Brobeck, Phleger & Harrison.
23.1 Consent of Deloitte & Touche, Independent Auditors.
23.2 Consent of Kenneth Leventhal & Company, Independent
Auditors.
23.3 Consent of Brobeck, Phleger & Harrison is contained in
Exhibit 5.
24 Power of Attorney. Reference is made to page II.4 of
this Registration Statement.
99.1 Koll Real Estate Group, Inc. 1993 Stock Option/Stock
Issuance Plan.
99.2 Form of Notice of Grant: Series A Preferred Stock to be
generally used in connection with the 1993 Stock Option/Stock
Issuance Plan.
99.3 Form of Stock Option Agreement: Series A Preferred
Stock to be generally used in connection with the 1993 Stock
Option/Stock Issuance Plan.
99.4 Form of Addendum to Stock Option Agreement (Limited
Stock Appreciation Rights).
99.5 Form of Notice of Grant: Class A Common Stock to be
generally used in connection with the 1993 Stock Option/Stock
Issuance Plan.
99.6 Form of Stock Option Agreement: Class A Common Stock to
be generally used in connection with the 1993 Stock Option/Stock
Issuance Plan.
99.7 Form of Addendum to Stock Option Agreement (Limited
Stock Appreciation Rights).
99.8 Form of Notice of Grant of Automatic Stock Option:
Series A Preferred Stock to be generally used in connection with
the 1993 Stock Option/Stock Issuance Plan.
99.9 Form of Automatic Stock Option Agreement: Series A
Preferred Stock to be generally used in connection with the 1993
Stock Option/Stock Issuance Plan.
99.10 Form of Notice of Grant of Automatic Stock Option:
Class A Common Stock to be generally used in connection with the
1993 Stock Option/Stock Issuance Plan.
99.11 Form of Automatic Stock Option Agreement: Class A
Common Stock to be generally used in connection with the 1993
Stock Option/Stock Issuance Plan.
99.12 Form of Stock Issuance Agreement: Series A Preferred
Stock to be generally used in connection with the 1993 Stock
Option/Stock Issuance Plan - Director Fee Program.
99.13 Form of Stock Issuance Agreement: Class A Common Stock
to be generally used in connection with the 1993 Stock
Option/Stock Issuance Plan - Director Fee Program.
II-2
<PAGE>
Item 9. UNDERTAKINGS
A. The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement
(i) to include any prospectus required by Section 10(a)(3) of the
1933 Act, (ii) to reflect in the prospectus any facts or events
arising after the effective date of this Registration Statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in this Registration Statement and
(iii) to include any material information with respect to the
plan of distribution not previously disclosed in this
Registration Statement or any material change to such information
in this Registration Statement; provided, however, that clauses
(1)(i) and (1)(ii) shall not apply if the information required to
be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the Registrant pursuant to
Section 13 or Section 15(d) of the 1934 Act that are incorporated
by reference into this Registration Statement; (2) That for the
purpose of determining any liability under the 1933 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 termina-
tion of the Registrant's 1993 Stock Option/Stock Issuance Plan.
B. The undersigned Registrant hereby undertakes
that, for purposes of determining any liability under the 1933
Act, each filing of the registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the 1934 Act that is
incorporated by reference into this Registration Statement shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
C. Insofar as indemnification for liabilities
arising under the 1933 Act may be permitted to directors,
officers or controlling persons of the Registrant pursuant to the
foregoing provisions, or otherwise, the Registrant has been
informed that in the opinion of the SEC such indemnification is
against public policy as expressed in the 1933 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 1933 Act and will be governed by the
final adjudication of such issue.
II-3
<PAGE>
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 Newport Beach, State of
California, on this 12th day of July, 1994.
KOLL REAL ESTATE GROUP, INC.
By: /s/ RAYMOND J. PACINI
_______________________________
Raymond J. Pacini, Executive
Vice President, Chief Financial
Officer and Secretary
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned officers and directors of Koll
Real Estate Group, Inc., a Delaware corporation, do hereby
constitute and appoint Raymond J. Pacini the lawful attorney-in-
fact and agent, with full power and authority to do any and all
acts and things and to execute any and all instruments which said
attorney and agent, determine may be necessary or advisable or
required to enable said corporation to comply with the Securities
Act of 1933, as amended, and any rules or regulation or
requirements of the Commission in connection with this
Registration Statement. Without limiting the generality of the
foregoing power and authority, the powers granted include the
power and authority to sign the names of the undersigned officers
and directors in the capacities indicated below to this
Registration Statement, to any and all amendments, both pre-
effective and post-effective, and supplements to this
Registration Statement and to any and all instruments or
documents filed as part of or in conjunction with this
Registration Statement or amendments or supplements thereof, and
each of the undersigned hereby ratifies and confirms all that
said attorneys and agents, or any one of them, shall do or cause
to be done by virtue hereof. This Power of Attorney may be
signed in several counterparts.
IN WITNESS WHEREOF, each of the undersigned has
executed this Power of Attorney as of the date indicated.
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 capacities and on the dates
indicated.
SIGNATURES TITLE DATE
/s/ RAY WIRTA Vice Chairman of the Board July 12, 1994
_____________________ and Chief Executive Officer
Ray Wirta (Principal Executive Officer)
/s/ RICHARD ORTWEIN President July 12, 1994
_____________________
Richard Ortwein
II-4
<PAGE>
/s/ RAYMOND J. PACINI Executive Vice President, July 12, 1994
_____________________ Chief Financial
Raymond J. Pacini Officer and Secretary
(Principal Financial and
Accounting Officer)
/s/ DONALD M. KOLL Chairman of the Board July 12, 1994
_____________________
Donald M. Koll
/s/ HAROLD A. ELLIS, JR. Director July 12, 1994
_____________________
Harold A. Ellis, Jr.
/s/ PAUL C. HEGNESS Director July 12, 1994
_____________________
Paul C. Hegness
/s/ J. THOMAS TALBOT Director July 12, 1994
_____________________
J. Thomas Talbot
/s/ MARCO F. VITULLI Director July 12, 1994
_____________________
Marco F. Vitulli
II-5
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
EXHIBITS
TO
FORM S-8
UNDER
SECURITIES ACT OF 1933
KOLL REAL ESTATE GROUP, INC.
PAGE>
EXHIBIT INDEX
EXHIBIT SEQUENTIALLY NUMBERED
NUMBER EXHIBIT PAGE
5 Opinion and consent of Brobeck, Phleger & Harrison.
23.1 Consent of Deloitte & Touche, Independent Auditors.
23.2 Consent of Kenneth Leventhal & Company, Independent
Auditors.
23.3 Consent of Brobeck, Phleger & Harrison is contained in
Exhibit 5.
24 Power of Attorney. Reference is made to page II-4. of
this Registration Statement.
99.1 Koll Real Estate Group, Inc. 1993 Stock Option/Stock
Issuance Plan.
99.2 Form of Notice of Grant: Series A Preferred Stock to be
generally used in connection with the 1993 Stock Option/Stock
Issuance Plan.
99.3 Form of Stock Option Agreement: Series A Preferred
Stock to be generally used in connection with the 1993 Stock
Option/Stock Issuance Plan.
99.4 Form of Addendum to Stock Option Agreement (Limited
Stock Appreciation Rights).
99.5 Form of Notice of Grant: Class A Common Stock to be
generally used in connection with the 1993 Stock Option/Stock
Issuance Plan.
99.6 Form of Stock Option Agreement: Class A Common Stock to
be generally used in connection with the 1993 Stock Option/Stock
Issuance Plan.
99.7 Form of Addendum to Stock Option Agreement (Limited
Stock Appreciation Rights).
99.8 Form of Notice of Grant of Automatic Stock Option:
Series A Preferred Stock to be generally used in connection with
the 1993 Stock Option/Stock Issuance Plan.
99.9 Form of Automatic Stock Option Agreement: Series A
Preferred Stock to be generally used in connection with the 1993
Stock Option/Stock Issuance Plan.
99.10 Form of Notice of Grant of Automatic Stock Option:
Class A Common Stock to be generally used in connection with the
1993 Stock Option/Stock Issuance Plan.
99.11 Form of Automatic Stock Option Agreement: Class A
Common Stock to be generally used in connection with the 1993
Stock Option/Stock Issuance Plan.
99.12 Form of Stock Issuance Agreement: Series A Preferred
Stock to be generally used in connection with the 1993 Stock
Option/Stock Issuance Plan - Director Fee Program.
99.13 Form of Stock Issuance Agreement: Class A Common Stock
to be generally used in connection with the 1993 Stock
Option/Stock Issuance Plan - Director Fee Program.
<PAGE>
EXHIBIT 5
Opinion and consent of Brobeck, Phleger & Harrison
Brobeck, Phleger & Harrison
Two Embarcadero Place
2200 Geng Road
Palo Alto, CA 94303-0913
Telephone: (415) 424-0160
Facsimile: (415) 496-2885
July 12, 1994
Koll Real Estate Group, Inc.
4343 Von Karman Avenue
Newport Beach, California 92660
Re: Koll Real Estate Group, Inc. (the "Company")
--Registration Statement for Offering of
Shares of Series A Convertible Redeemable
Preferred and Class A Common Stock
Dear Ladies and Gentlemen:
We refer to your registration on Form S-8 (the
"Registration Statement") under the Securities Act of 1933, as
amended, of (i) 7,500,000 shares of Series A Convertible
Redeemable Preferred Stock and (ii) 7,500,000 shares of Class A
Common Stock under the Company's 1993 Stock Option/Stock Issuance
Plan (the "Plan"). We advise you that, in our opinion, when such
shares have been issued and sold pursuant to the applicable
provisions of such Plan and in accordance with the Registration
Statement, such shares will be validly issued, fully paid and
non-assessable shares of the Company's Series A Convertible
Redeemable Preferred and Class A Common Stock.
We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement.
Very truly yours,
/s/ BROBECK, PHLEGER & HARRISON
<PAGE>
EXHIBIT 23.1
Consent of Deloitte & Touche, Independent Auditors
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration
Statement of Koll Real Estate Group, Inc. on Form S-8 of our
report dated February 15, 1994 (March 28, 1994 as to the last
paragraph of Note 9) (which expresses an unqualified opinion and
includes explanatory and emphasis paragraphs that (i) describe
the uncertainties inherent in estimating the amount that will
ultimately be realized from the Bolsa Chica Project and
(ii) describe the settlement of an alleged tax deficiency
relating to a predecessor company in which the Company is being
charged with a net obligation of approximately $21 million)
appearing in the Annual Report on Form 10-K of Koll Real Estate
Group, Inc. for the year ended December 31, 1993.
/s/ DELOITTE & TOUCHE
San Diego, California
July 6, 1994
<PAGE>
EXHIBIT 23.2
Consent of Kenneth Leventhal & Company, Independent Auditors.
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Koll Real Estate Group, Inc.
We consent to the incorporation by reference in this Registration
Statement on Form S-8 (the "Registration Statement") of our
report dated February 3, 1992 on the financial statements of
Henley Properties, Inc. for the year ended December 31, 1991.
/s/ KENNETH LEVENTHAL & COMPANY
Newport Beach, California
July 6, 1994
<PAGE>
EXHIBIT 23.3
Consent of Brobeck, Phleger & Harrison is contained in Exhibit 5
<PAGE>
EXHIBIT 24
Power of Attorney. Reference is made to page II-4. of this
Registration Statement
<PAGE>
EXHIBIT 99.1
Koll Real Estate Group, Inc. 1993 Stock Option/Stock Issuance
Plan
<PAGE>
KOLL REAL ESTATE GROUP
1993 STOCK OPTION/STOCK ISSUANCE PLAN
ARTICLE ONE
GENERAL
I. PURPOSE OF THE PLAN
A. This 1993 Stock Option/Stock Issuance Plan
("Plan") is intended to promote the interests of Koll Real Estate
Group, a Delaware corporation (the "Corporation"), by providing
(i) key employees (including officers) of the Corporation (or its
parent or subsidiary corporations) who are responsible for the
management, growth and financial success of the Corporation (or
its parent or subsidiary corporations), (ii) the non-employee
members of the Board and (iii) consultants and other independent
contractors who provide valuable services to the Corporation (or
its parent or subsidiary corporations) with the opportunity to
acquire a proprietary interest, or otherwise increase their
proprietary interest, in the Corporation as an incentive for them
to remain in the service of the Corporation (or its parent or
subsidiary corporations).
B. The Plan shall become effective immediately upon
adoption by the Board on November 29, 1993. Such date is hereby
designated as the Effective Date of the Plan.
C. The Corporation was formerly known as The Bolsa
Chica Company, and this Plan shall serve as the successor to the
1988 Stock Plan of The Bolsa Chica Company (the "Predecessor
Plan"). No further option grants or share issuances shall be
made under the Predecessor Plan from and after the Effective Date
of this Plan. All outstanding stock options under the
Predecessor Plan on the Effective Date are hereby incorporated
into this Plan and shall accordingly be treated as outstanding
stock options under this Plan. However, each outstanding option
grant so incorporated shall continue to be governed solely by the
express terms and conditions of the instrument evidencing such
grant, and no provision of this Plan shall be deemed to affect or
otherwise modify the rights or obligations of the holders of such
incorporated options with respect to their acquisition of shares
of the Corporation's Series A Preferred Stock or Class A Common
Stock thereunder.
II. DEFINITIONS
A. For purposes of the Plan, the following
definitions shall be in effect:
<PAGE>
BOARD: the Corporation's Board of Directors.
CHANGE IN CONTROL: a change in ownership or control of
the Corporation effected through either of the following
transactions:
a. any person or related group of persons (other
than the Corporation or a person that directly or indirectly
controls, is controlled by, or is under common control with, the
Corporation) directly or indirectly acquires beneficial ownership
(within the meaning of Rule 13d-3 of the 1934 Act) of securities
possessing more than fifty percent (50%) of the total combined
voting power of the Corporation's outstanding securities pursuant
to a tender or exchange offer made directly to the Corporation's
stockholders which the Board does not recommend such stockholders
to accept; or
b. a change in the composition of the Board over
a period of thirty-six (36) consecutive months or less such that
a majority of the Board members (rounded up to the next whole
number) ceases, by reason of one or more contested elections for
Board membership, to be comprised of individuals who either (A)
have been Board members continuously since the beginning of such
period or (B) have been elected or nominated for election as
Board members during such period by at least a majority of the
Board members described in clause (A) who were still in office at
the time such election or nomination was approved by the Board.
CLASS A COMMON STOCK: shares of the Corporation's
Class A Common Stock, par value $.05 per share.
CODE: the Internal Revenue Code of 1986, as amended.
COMMITTEE: the committee of two (2) or more non-
employee Board members appointed by the Board to administer the
Plan.
CORPORATE TRANSACTION: any of the following
stockholder-approved transactions to which the Corporation is a
party:
a. a merger or consolidation in which the
Corporation is not the surviving entity, except for a transaction
the principal purpose of which is to change the state in which
the Corporation is incorporated,
b. the sale, transfer or other disposition of
all or substantially all of the assets of the Corporation in
complete liquidation or dissolution of the Corporation, or
2.
<PAGE>
c. any reverse merger in which the Corporation
is the surviving entity but in which securities possessing more
than fifty percent (50%) of the total combined voting power of
the Corporation's outstanding securities are transferred to a
person or persons different from the persons holding those
securities immediately prior to such merger.
EMPLOYEE: an individual who performs services while in
the employ of the Corporation or one or more parent or subsidiary
corporations, subject to the control and direction of the
employer entity not only as to the work to be performed but also
as to the manner and method of performance.
EXERCISE DATE: the date on which the Corporation shall
have received written notice of the option exercise.
FAIR MARKET VALUE: the Fair Market Value per share of
Series A Preferred Stock or Class A Common Stock determined in
accordance with the following provisions:
a. If the Series A Preferred Stock or Class A
Common Stock is not at the time listed or admitted to trading on
any national securities exchange but is traded on the Nasdaq
National Market, the Fair Market Value shall be the closing
selling price per share of that security on the date in question,
as such price is reported by the National Association of
Securities Dealers through the Nasdaq National Market or any
successor system. If there is no reported closing selling price
for the Series A Preferred Stock or Class A Common Stock on the
date in question, then the closing selling price per share of
that security on the last preceding date for which such quotation
exists shall be determinative of Fair Market Value.
b. If the Series A Preferred Stock or Class A
Common Stock is at the time listed or admitted to trading on any
national stock exchange, then the Fair Market Value shall be the
closing selling price per share of that security on the date in
question on the exchange serving as the primary market for the
Series A Preferred Stock or the Class A Common Stock, as such
price is officially quoted in the composite tape of transactions
on such exchange. If there is no reported sale of Series A
Preferred Stock or Class A Common Stock on such exchange on the
date in question, then the Fair Market Value shall be the closing
selling price per share of that security on the exchange on the
last preceding date for which such quotation exists.
3.
<PAGE>
HOSTILE TAKE-OVER: a change in ownership of the
Corporation effected through the following transaction:
a. any person or related group of persons (other
than the Corporation or a person that directly or indirectly
controls, is controlled by, or is under common control with, the
Corporation) directly or indirectly acquires beneficial ownership
(within the meaning of Rule 13d-3 of the 1934 Act) of securities
possessing more than fifty percent (50%) of the total combined
voting power of the Corporation's outstanding securities pursuant
to a tender or exchange offer made directly to the Corporation's
stockholders which the Board does not recommend such stockholders
to accept, and
b. more than fifty percent (50%) of the
securities so acquired in such tender or exchange offer are
accepted from holders other than the officers and directors of
the Corporation subject to the short-swing profit restrictions of
Section 16 of the 1934 Act.
INCENTIVE OPTION: a stock option which satisfies the
requirements of Code Section 422.
1934 ACT: the Securities and Exchange Act of 1934, as
amended.
NON-STATUTORY OPTION: a stock option not intended to
meet the requirements of Code Section 422.
OPTIONEE: any person to whom an option is granted
under the Discretionary Option Grant or Automatic Option Grant
Program in effect under the Plan.
PERMANENT DISABILITY OR PERMANENTLY DISABLED: the
inability of the Optionee or the Participant to engage in any
substantial gainful activity by reason of any medically
determinable physical or mental impairment expected to result in
death or to be of continuous duration of twelve (12) months or
more.
PLAN ADMINISTRATOR: the Committee in its capacity as
the administrator of the Plan.
SERIES A PREFERRED STOCK: shares of the Corporation's
Series A Convertible Redeemable Preferred Stock, par value $.01
per share.
SERVICE: the performance of services on a periodic
basis to the Corporation (or any parent or subsidiary
corporation) in the capacity of an Employee, a non-employee
member of the board of
4.
<PAGE>
directors or an independent consultant or advisor, except to the
extent otherwise specifically provided in the applicable stock
option or stock issuance agreement.
TAKE-OVER PRICE: the greater of (a) the Fair Market
Value per share of the Series A Preferred Stock or the Class A
Common Stock subject to the particular option surrendered to the
Corporation in connection with a Hostile Take-Over on the date
such option surrender is effected or (b) the highest reported
price per share of that security paid by the tender offeror in
effecting such Hostile Take-Over. However, if the surrendered
option is an Incentive Option, the Take-Over Price shall not
exceed the clause (a) price per share.
B. The following provisions shall be applicable in
determining the parent and subsidiary corporations of the
Corporation:
- Any corporation (other than the Corporation)
in an unbroken chain of corporations ending with the Corporation
shall be considered to be a PARENT of the Corporation, provided
each such corporation in the unbroken chain (other than the
Corporation) owns, at the time of the determination, stock
possessing fifty percent (50%) or more of the total combined
voting power of all classes of stock in one of the other
corporations in such chain.
- Each corporation (other than the Corporation)
in an unbroken chain of corporations which begins with the
Corporation shall be considered to be a SUBSIDIARY of the
Corporation, provided each such corporation in the unbroken chain
(other than the last corporation) owns, at the time of the
determination, stock possessing fifty percent (50%) or more of
the total combined voting power of all classes of stock in one of
the other corporations in such chain.
III. STRUCTURE OF THE PLAN
A. STOCK PROGRAMS. The Plan shall be divided into
three (3) separate components: the Discretionary Option Grant
Program specified in Article Two, the Automatic Option Grant
Program specified in Article Three and the Director Fee Program
specified in Article Four. Under the Discretionary Option Grant
Program, eligible individuals may, at the discretion of the Plan
Administrator, be granted options to purchase shares of Series A
Preferred Stock or Class A Common Stock in accordance with the
provisions of Article Two. Under the Automatic Option Grant
Program, non-employee Board members shall at periodic intervals
receive special option grants to purchase shares of Series A
5.
<PAGE>
Preferred Stock and Class A Common Stock in accordance with the
provisions of Article Three. Under the Director Fee Program,
each non-employee Board member may, in accordance with the
provisions of Article Four, elect to apply all or any portion of
his or her annual retainer fee to the acquisition of unvested
shares of Series A Preferred Stock or Class A Common Stock.
B. GENERAL PROVISIONS. Unless the context clearly
indicates otherwise, the provisions of Articles One and Five
shall apply to the Discretionary Option Grant Program, the
Automatic Option Grant Program and the Director Fee Program and
shall accordingly govern the interests of all individuals under
the Plan.
IV. ADMINISTRATION OF THE PLAN
A. The Discretionary Option Grant Program shall be
administered by the Committee in its capacity as Plan
Administrator. No non-employee Board member shall be eligible to
serve on the Committee if such individual has, within the twelve
(12)-month period immediately preceding the date of his or her
appointment to the Committee, received an option grant or direct
stock issuance under this Plan or any other stock plan of the
Corporation (or any parent or subsidiary corporation), other than
pursuant to the Automatic Option Grant or Director Fee Program.
B. Members of the Committee shall serve for such
period of time as the Board may determine and shall be subject to
removal by the Board at any time.
C. The Committee as Plan Administrator shall have
full power and authority (subject to the express provisions of
the Plan) to establish rules and regulations for the proper
administration of the Discretionary Option Grant Program and to
make such
determinations under, and issue such interpretations of, the
provisions of such program and any outstanding option grants
thereunder as it may deem necessary or advisable. Decisions of
the Plan Administrator shall be final and binding on all parties
who have an interest in the Discretionary Option Grant Program or
any outstanding option or unvested share issuance thereunder.
D. Administration of the Automatic Option Grant and
Director Fee Programs shall be self-executing in accordance with
the express terms and conditions of Article Three and Article
Four, respectively, and the Committee as Plan Administrator shall
exercise no discretionary functions with respect to option grants
or share issuances made pursuant to those programs.
6.
<PAGE>
V. OPTION GRANTS AND STOCK ISSUANCES
A. The persons eligible to participate in the
Discretionary Option Grant Program under Article Two shall be
limited to the following:
- officers and other key employees of the
Corporation (or its parent or subsidiary corporations) who render
services which contribute to the management, growth and financial
success of the Corporation (or its parent or subsidiary
corporations);
- members of the Board or the members of the
board of directors of any parent or subsidiary corporation; and
- those consultants or other independent
contractors who provide valuable services to the Corporation (or
its parent or subsidiary corporations).
B. Non-employee Board members who serve as Plan
Administrator shall not, during their period of service as such,
be eligible to participate in the Discretionary Option Grant
Program or in any other stock option, stock purchase, stock bonus
or other stock plan of the Corporation (or its parent or
subsidiary corporations), other than the Automatic Option Grant
and Director Fee Programs, to the extent they are eligible for
participation in those latter programs in accordance with the
provisions of Articles Three and Four.
C. The Plan Administrator shall have full authority
to determine which eligible individuals are to receive option
grants under the Discretionary Option Grant Program, the number
of shares to be covered by each such grant, the status of the
granted option as either an Incentive Option or a Non-Statutory
Option, the time or times at which each granted option is to
become exercisable and the maximum term for which the option is
to remain outstanding.
VI. STOCK SUBJECT TO THE PLAN
A. Shares of Series A Preferred Stock and Class A
Common Stock shall be available for issuance under the Plan and
shall be drawn from either the Corporation's authorized but
unissued shares of Series A Preferred Stock and Class A Common
Stock or from reacquired shares of Series A Preferred Stock and
Class A Common Stock, including shares repurchased by the
Corporation on the open market. 7,500,000 shares of Series A
Preferred Stock and 7,500,000 shares of Class A Common Stock may
be issued over the term of the Plan, subject to adjustment from
time to time in accordance with the provisions of this Section
VI. Such authorized share reserve is comprised of (i) the number
of shares
7.
<PAGE>
of Series A Preferred Stock and Class A Common Stock which
remained available for issuance, as of the Effective Date, under
the Predecessor Plan, including the shares subject to the
outstanding options incorporated into this Plan and any other
shares which remained available for future option grant under the
Predecessor Plan (estimated to be 3,000,000 shares of Class A
Common Stock and 3,000,000 shares of Series A Preferred Stock),
plus (ii) an additional increase of 4,500,000 shares of Series A
Preferred Stock and (iii) an additional increase of 4,500,000
shares of Class A Common Stock.
B. Upon each redemption or conversion of the
outstanding shares of Series A Preferred Stock, the number of
shares of Series A Preferred Stock at the time available for
issuance under the Plan and the number of shares of Series A
Preferred Stock subject to stock options at the time outstanding
under the Plan shall be decreased by the same percentage by which
the number of outstanding shares of Series A Preferred Stock is
decreased by reason of such redemption or conversion, and the
number of shares of Class A Common Stock at the time available
for issuance under the Plan and the number of shares of Class A
Common Stock subject to stock options at the time outstanding
under the Plan which would otherwise be exercisable for Series A
Preferred Stock shall be correspondingly increased by the number
of shares obtained by multiplying (i) the number of shares of
Series A Preferred Stock no longer issuable under the Plan or no
longer subject to each such outstanding stock option by (ii) the
number of shares of Class A Common Stock into which each such
redeemed or converted share of Series A Preferred Stock was at
the time convertible on a per-share basis. In addition, the
option exercise price per share of Series A Preferred Stock in
effect under each outstanding option shall, upon each redemption
or conversion of the outstanding shares of Series A Preferred
Stock, be adjusted by dividing (i) such exercise price per share
(as such price relates to the shares of Class A Common Stock
issuable under the option in place of the Series A Preferred
Stock) by (ii) the number of shares of Class A Common Stock into
which each such redeemed or converted share of Series A Preferred
Stock was at the time convertible on a per-share basis.
C. In no event shall there be issued over the term of
the Plan more than (i) 15,000,000 shares in the aggregate of
Series A Preferred Stock and Class A Common Stock plus (ii) any
additional shares of Class A Common Stock which become issuable
under Section B of this Article VI by reason of the conversion or
redemption of the outstanding shares of Series A Preferred Stock,
to the extent each such Series A share was convertible for more
than one share of Class A Common Stock at the time of such
conversion or redemption. The foregoing share limitations shall
be subject to periodic adjustment in accordance with the
provisions of Section G of this Article VI.
8.
<PAGE>
D. In no event may the aggregate number of shares of
Series A Preferred Stock and Class A Common Stock for which any
one individual participating in this Plan may be granted stock
options, separately exercisable stock appreciation rights and
direct share issuances exceed 5,000,000 shares over the term of
this Plan.
E. To the extent one or more outstanding options
under the Predecessor Plan which have been incorporated into this
Plan are subsequently exercised, the number of shares of Series A
Preferred Stock or Class A Common Stock issued with respect to
each such option shall reduce, on a share-for-share basis, the
number of shares of Series A Preferred Stock or Class A Common
Stock (as the case may be) available for subsequent issuance
under this Plan.
F. Should one or more outstanding options under this
Plan (including outstanding options under the Predecessor Plan
incorporated into this Plan) expire or terminate for any reason
prior to exercise in full then the shares subject to the portion
of each option not so exercised shall be available for subsequent
issuance under the Plan. Shares subject to any option or portion
thereof surrendered in accordance with Section IV of Article Two
and all share issuances under the Plan, whether or not the shares
are subsequently repurchased by the Corporation pursuant to its
repurchase rights under the Plan, shall reduce on a share-for-
share basis the number of shares of Series A Preferred Stock and
Class A Common Stock available for subsequent issuance under the
Plan. In addition, should the exercise price of an outstanding
option under the Plan (including any option incorporated from the
Predecessor Plan) be paid with shares of Series A Preferred Stock
or Class A Common Stock or should shares of Series A Preferred
Stock or Class A Common Stock otherwise issuable under the Plan
be withheld by the Corporation in satisfaction of the withholding
taxes incurred in connection with the exercise of an outstanding
option under the Plan or the vesting of a direct share issuance
made under the Plan, then the number of shares of Series A
Preferred Stock or Class A Common Stock (as the case may be)
available for issuance under the Plan shall be reduced by the
gross number of shares for which the option is exercised or which
vest under the share issuance, and not by the net number of
shares of Series A Preferred Stock or Class A Common Stock
actually issued to the holder of such option or share issuance.
G. Should any change be made to the Series A
Preferred Stock or Class A Common Stock issuable under the Plan
by reason of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change
affecting the outstanding Series A Preferred Stock or Class A
Common Stock as a class without the Corporation's receipt of
consideration, then appropriate adjustments shall be made to
(i) the maximum number and/or class of securities issuable under
the Plan, (ii) the maximum number and/or class of securities in
the aggregate for
9.
<PAGE>
which any one individual participating in the Plan may be granted
stock options, separately exercisable stock appreciation rights
and direct share issuances over the term of the Plan, (iii) the
number and/or class of securities for which automatic option
grants or share issuances are subsequently to be made to each
newly-elected or continuing non-employee Board member under the
Automatic Option Grant or Director Fee Program, (iv) the number
and/or class of securities and price per share in effect under
each option outstanding under the Discretionary Option Grant or
Automatic Option Grant Program and (v) the number and/or class of
securities and price per share in effect under each outstanding
option incorporated into this Plan from the Predecessor Plan.
Such adjustments to the outstanding options are to be effected in
a manner which shall preclude the enlargement or dilution of
rights and benefits under such options. The adjustments
determined by the Plan Administrator shall be final, binding and
conclusive.
10.
<PAGE>
ARTICLE TWO
DISCRETIONARY OPTION GRANT PROGRAM
I. TERMS AND CONDITIONS OF OPTIONS
Options granted pursuant to the Discretionary Option
Grant Program shall be authorized by action of the Plan
Administrator and may, at the Plan Administrator's discretion, be
either Incentive Options or Non-Statutory Options. Individuals
who are not Employees of the Corporation or its parent or
subsidiary corporations may only be granted Non-Statutory
Options. Each granted option shall be evidenced by one or more
instruments in the form approved by the Plan Administrator;
provided, however, that each such instrument shall comply with
the terms and conditions specified below. Each instrument
evidencing an Incentive Option shall, in addition, be subject to
the applicable provisions of Section II of this Article Two.
A. EXERCISE PRICE.
1. The exercise price per share of Series A
Preferred Stock or Class A Common Stock subject to any option
granted under this Article Two shall be fixed by the Plan
Administrator at the time of the grant, but in no event shall
such exercise price be less than one hundred percent (100%) of
the Fair Market Value per share of that security on the grant
date.
2. The exercise price shall become immediately
due upon exercise of the option and, subject to the provisions of
Section I of Article Five and the instrument evidencing the
grant, shall be payable in one of the following alternative forms
specified below:
a. full payment in cash or check made
payable to the Corporation's order;
b. full payment in shares of Series A
Preferred Stock or Class A Common Stock held for the requisite
period necessary to avoid a charge to the Corporation's earnings
for financial reporting purposes and valued at Fair Market Value
on the Exercise Date;
c. full payment in a combination of shares
of Series A Preferred Stock or Class A Common Stock held for the
requisite period necessary to avoid a charge to the Corporation's
earnings for financial reporting purposes and valued at Fair
Market Value on the
11.
<PAGE>
Exercise Date and cash or check drawn to the Corporation's order;
or
d. to the extent the option is exercised for
vested shares, full payment through a broker-dealer sale and
remittance procedure pursuant to which the Optionee shall
concurrently provide irrevocable written instructions to (i) a
Corporation-designated brokerage firm to effect the immediate
sale of the purchased shares and remit to the Corporation, out of
the sale proceeds available on the settlement date, sufficient
funds to cover the aggregate exercise price payable for the
purchased shares plus all applicable Federal, state and local
income and employment taxes required to be withheld by the
Corporation in connection with such purchase and (ii) the
Corporation to deliver the certificates for the purchased shares
directly to such brokerage firm in order to complete the sale
transaction.
Except to the extent the sale and remittance procedure
is utilized in connection with the exercise of the option for
vested shares, payment of the exercise price for the purchased
shares must accompany the exercise notice.
B. TERM AND EXERCISE OF OPTIONS.
Each option granted under this Discretionary Option
Grant Program shall be exercisable at such time or times and
during such period as is determined by the Plan Administrator and
set forth in the instrument evidencing the grant. No such
option, however, shall have a maximum term in excess of ten (10)
years from the grant date. During the lifetime of the Optionee,
the option, together with any stock appreciation rights
pertaining to such option, shall be exercisable only by the
Optionee and shall not be assignable or transferable by the
Optionee except for a transfer of the option effected by will or
by the laws of descent and distribution following the Optionee's
death.
C. TERMINATION OF SERVICE.
1. The following provisions shall govern the
exercise period applicable to any outstanding options under this
Article Two held by the Optionee at the time of cessation of
Service or death.
- Should an Optionee cease Service for any
reason (including death or Permanent Disability) while holding
one or more outstanding options under this Article Two, then none
of those options shall (except to the extent otherwise provided
pursuant to subparagraph 3 below) remain exercisable for more
than a thirty-six (36)-month period (or such shorter period
determined by
12.
<PAGE>
the Plan Administrator and set forth in the instrument evidencing
the grant) measured from the date of such cessation of Service.
- Any option held by the Optionee under this
Article Two and exercisable in whole or in part on the date of
his or her death may be subsequently exercised by the personal
representative of the Optionee's estate or by the person or
persons to whom the option is transferred pursuant to the
Optionee's will or in accordance with the laws of descent and
distribution. The right to exercise such option, however, shall
lapse upon the earlier of (i) the third anniversary of the date
of the Optionee's death (or such shorter period determined by the
Plan Administrator and set forth in the instrument evidencing the
grant) or (ii) the specified expiration date of the option term.
Accordingly, upon the occurrence of the earlier event, the option
shall terminate and cease to be outstanding.
- During the applicable post-Service exercise
period, the option may not be exercised in the aggregate for more
than the number of shares (if any) in which the Optionee is
vested at the time of his or her cessation of Service. Upon the
expiration of the limited post-Service exercise period or (if
earlier) upon the specified expiration date of the option term,
each such option shall terminate and cease to be outstanding with
respect to any vested shares for which the option has not
otherwise been exercised. However, each outstanding option shall
immediately terminate and cease to be outstanding, at the time of
the
Optionee's cessation of Service, with respect to any shares for
which the option is not otherwise at that time exercisable or in
which the Optionee is not otherwise vested.
- Under no circumstances shall any such option
be exercisable after the specified expiration date of the option
term.
- Should (i) the Optionee's Service be
terminated for misconduct (including, but not limited to, any act
of dishonesty, willful misconduct, fraud or embezzlement) or
(ii) the Optionee make any unauthorized use or disclosure of
confidential information or trade secrets of the Corporation or
its parent or subsidiary corporations, then in any such event all
outstanding options held by the Optionee under this Article Two
shall terminate immediately and cease to be outstanding.
13.
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2. The Plan Administrator shall have complete
discretion, exercisable either at the time the option is granted
or at any time while the option remains outstanding, to permit
one or more options held by the Optionee under this Article Two
to be exercised, during the limited post-Service exercise period
applicable under subparagraph 1 above, not only with respect to
the number of vested shares of Series A Preferred Stock or Class
A Common Stock for which each such option is exercisable at the
time of the Optionee's cessation of Service but also with respect
to one or more subsequent installments of vested shares for which
the option would otherwise have become exercisable had such
cessation of Service not occurred.
3. The Plan Administrator shall also have full
power and authority, exercisable either at the time the option is
granted or at any time while the option remains outstanding, to
extend the period of time for which the option is to remain
exercisable following the Optionee's cessation of Service or
death from the limited period in effect under subparagraph 1
above to such greater period of time as the Plan Administrator
shall deem appropriate. In no event, however, shall such option
be exercisable after the specified expiration date of the option
term.
D. STOCKHOLDER RIGHTS. An Optionee shall have no
stockholder rights with respect to any shares covered by the
option until such individual shall have exercised the option and
paid the exercise price for the purchased shares.
E. REPURCHASE RIGHTS. The shares of Series A
Preferred Stock or Class A Common Stock acquired upon the
exercise of any Article Two option grant may be subject to
repurchase by the Corporation in accordance with the following
provisions:
- The Plan Administrator shall have the
discretion to authorize the issuance of unvested shares of Series
A Preferred Stock or Class A Common Stock under this Article Two.
Should the Optionee cease Service while holding such unvested
shares, the Corporation shall have the right to repurchase any or
all of those unvested shares at the exercise price paid per
share. The terms and conditions upon which such repurchase right
shall be exercisable (including the period and procedure for
exercise and the appropriate vesting schedule for the purchased
shares) shall be established by the Plan Administrator and set
forth in the instrument evidencing such repurchase right.
- All of the Corporation's outstanding
repurchase rights under this Article Two shall automatically
terminate, and all shares subject to such terminated rights shall
immediately vest in full, upon
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the occurrence of a Corporate Transaction, except to the extent:
(i) any such repurchase right is expressly assigned to the
successor corporation (or parent thereof) in connection with the
Corporate Transaction or (ii) such termination is precluded by
other limitations imposed by the Plan Administrator at the time
the repurchase right is issued.
- The Plan Administrator shall have the
discretionary authority, exercisable either before or after the
Optionee's cessation of Service, to cancel the Corporation's
outstanding repurchase rights with respect to one or more shares
purchased or purchasable by the Optionee under this Discretionary
Option Grant Program and thereby accelerate the vesting of such
shares in whole or in part at any time.
II. INCENTIVE OPTIONS
The terms and conditions specified below shall be
applicable to all Incentive Options granted under this Article
Two. Incentive Options may only be granted to individuals who
are Employees of the Corporation. Options which are specifically
designated as Non-Statutory Options when issued under the Plan
shall not be subject to such terms and conditions.
A. DOLLAR LIMITATION. The aggregate Fair Market
Value (determined as of the respective date or dates of grant) of
the Series A Preferred Stock and Class A Common Stock for which
one or more options granted to any Employee under this Plan (or
any other option plan of the Corporation or its parent or
subsidiary
corporations) may for the first time become exercisable as
incentive stock options under the Federal tax laws during any one
calendar year shall not exceed the sum of One Hundred Thousand
Dollars ($100,000). To the extent the Employee holds two (2) or
more such options which become exercisable for the first time in
the same calendar year, the foregoing limitation on the
exercisability of such options as incentive stock options under
the Federal tax laws shall be applied on the basis of the order
in which such options are granted. Should the number of shares
of Series A Preferred Stock or Class A Common Stock for which any
Incentive Option first becomes exercisable in any calendar year
exceed the applicable One Hundred Thousand Dollar ($100,000)
limitation, then that option may nevertheless be exercised in
that calendar year for the excess number of shares as a non-
statutory option under the Federal tax laws.
B. 10% STOCKHOLDER. If any individual to whom an
Incentive Option is granted is the owner of stock (as determined
under Section 424(d) of the Code) possessing ten percent (10%) or
more of the total combined voting power of all classes of stock
of
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the Corporation or any one of its parent or subsidiary
corporations, then the exercise price per share or the Series A
Preferred Stock or Class A Common Stock subject to that option
shall not be less than one hundred and ten percent (110%) of the
Fair Market Value per share of that security on the grant date,
and the option term shall not exceed five (5) years, measured
from the grant date.
Except as modified by the preceding provisions of this
Section II, the provisions of Articles One, Two and Five of the
Plan shall apply to all Incentive Options granted hereunder.
III. CORPORATE TRANSACTIONS/CHANGES IN CONTROL
A. In the event of any Corporate Transaction, each
option which is at the time outstanding under this Article Two
shall automatically accelerate so that each such option shall,
immediately prior to the specified effective date for the
Corporate Transaction, become fully exercisable for all of the
shares of Series A Preferred Stock or Class A Common Stock at the
time subject to such option and may be exercised for all or any
portion of such shares. However, an outstanding option under
this Article Two shall NOT so accelerate if and to the extent:
(i) such option is, in connection with the Corporate Transaction,
either to be assumed by the successor corporation or parent
thereof or to be replaced with a comparable option to purchase
shares of the capital stock of the successor corporation or
parent thereof, (ii) such option is to be replaced with a cash
incentive program of the successor corporation which preserves
the option spread existing at the time of the Corporate
Transaction and provides for subsequent payout in accordance with
the same vesting schedule applicable to such option or (iii) the
acceleration of such option is subject to other limitations
imposed by the Plan Administrator at the time of the option
grant. The determination of option comparability under clause
(i) above shall be made by the Plan Administrator, and its
determination shall be final, binding and conclusive.
B. Immediately following the consummation of the
Corporate Transaction, all outstanding options under this Article
Two shall terminate and cease to be outstanding, except to the
extent assumed by the successor corporation or its parent
company.
C. Each outstanding option under this Article Two
which is assumed in connection with the Corporate Transaction or
is otherwise to continue in effect shall be appropriately
adjusted, immediately after such Corporate Transaction, to apply
and pertain to the number and class of securities which would
have been issued to the option holder, in consummation of such
Corporate Transaction, had such person exercised the option
immediately prior to such Corporate Transaction. Appropriate
adjustments shall also be made to the exercise price payable per
share, provided the
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aggregate exercise price payable for such securities shall remain
the same. In addition, the class and number of securities
available for issuance under the Plan on both an aggregate and
per participant basis following the consummation of the Corporate
Transaction shall be appropriately adjusted.
D. The Plan Administrator shall have the discretion,
exercisable either at the time the option is granted or at any
time while the option remains outstanding, to provide (upon such
terms as it may deem appropriate) for both (i) the automatic
acceleration of one or more outstanding options granted under
this Article Two Plan which are assumed or replaced in a
Corporate Transaction and do not otherwise accelerate at that
time and (ii) the immediate termination of one or more of the
Corporation's outstanding repurchase rights which are assigned in
connection with such Corporate Transaction and do not otherwise
terminate at that time, in the event the Optionee's Service
should subsequently terminate within a designated period
following the effective date of such Corporate Transaction.
E. The Plan Administrator shall have the
discretionary authority, exercisable either in advance of any
actually-
anticipated Change in Control or at the time of an actual Change
in Control, to provide for the automatic acceleration of one or
more outstanding options under this Article Two (and the
immediate termination of one or more of the Corporation's
outstanding repurchase rights under this Article Two) upon the
occurrence of the Change in Control. The Plan Administrator
shall also have full power and authority to condition any such
option acceleration (and the termination of any outstanding
repurchase rights) upon the subsequent termination of the
Optionee's Service within a specified period following the Change
in Control.
F. Any options accelerated in connection with the
Change in Control shall remain fully exercisable until the
expiration or sooner termination of the option term.
G. The grant of options under this Article Two shall
in no way affect the right of the Corporation to adjust,
reclassify, reorganize or otherwise change its capital or
business structure or to merge, consolidate, dissolve, liquidate
or sell or transfer all or any part of its business or assets.
H. The exercisability as incentive stock options
under the Federal tax laws of any options accelerated under this
Section III in connection with a Corporate Transaction or Change
in Control shall remain subject to the dollar limitation of
Section II of this Article Two. To the extent such dollar
limitation is exceeded, the accelerated option shall be
exercisable as a non-statutory option under the Federal tax laws.
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IV. STOCK APPRECIATION RIGHTS
A. Provided and only if the Plan Administrator
determines in its discretion to implement the stock appreciation
right provisions of this Section IV, one or more Optionees may be
granted the right, exercisable upon such terms and conditions as
the Plan Administrator may establish, to surrender all or part of
an unexercised option under this Article Two in exchange for a
distribution from the Corporation in an amount equal to the
excess of (i) the Fair Market Value (on the option surrender
date) of the number of shares of Series A Preferred Stock or
Class A Common Stock in which the Optionee is at the time vested
under the surrendered option (or surrendered portion thereof)
over (ii) the aggregate exercise price payable for such vested
shares.
B. No surrender of an option shall be effective
hereunder unless it is approved by the Plan Administrator. If
the surrender is so approved, then the distribution to which the
Optionee shall accordingly become entitled under this Section IV
may be made in shares of Series A Preferred Stock or Class A
Common Stock valued at Fair Market Value on the option surrender
date, in cash, or partly in shares and partly in cash, as the
Plan Administrator shall in its sole discretion deem appropriate.
C. If the surrender of an option is rejected by the
Plan Administrator, then the Optionee shall retain whatever
rights the Optionee had under the surrendered option (or
surrendered portion thereof) on the option surrender date and may
exercise such rights at any time prior to the later of (i) five
(5) business days after the receipt of the rejection notice or
(ii) the last day on which the option is otherwise exercisable in
accordance with the terms of the instrument evidencing such
option, but in no event may such rights be exercised more than
ten (10) years after the date of the option grant.
D. One or more officers of the Corporation subject to
the short-swing profit restrictions of the Federal securities
laws may, in the Plan Administrator's sole discretion, be granted
limited stock appreciation rights with respect to their
outstanding options under the Plan. Upon the occurrence of a
Hostile Take-Over, the officer shall have a thirty (30)-day
period in which he or she may surrender any outstanding options
with such a limited stock appreciation right in effect for at
least six (6) months to the Corporation, to the extent such
option is at the time exercisable for fully-vested shares of
Series A Preferred Stock or Class A Common Stock. The officer
shall in return be entitled to a cash distribution from the
Corporation in an amount equal to the excess of (i) the Take-Over
Price of the vested shares of Series A Preferred Stock or Class A
Common Stock at the time subject to each surrendered option (or
surrendered portion of such option) over (ii) the aggregate
exercise price payable for such shares. The
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cash distribution payable upon such option surrender shall be
made within five (5) days following the date the option is
surrendered to the Corporation. Neither the approval of the Plan
Administrator nor the consent of the Board shall be required in
connection with such option surrender and cash distribution. Any
unsurrendered portion of the option shall continue to remain
outstanding and become exercisable in accordance with the terms
of the instrument evidencing such grant.
E. The shares of Series A Preferred Stock or Class A
Common Stock subject to any option surrendered for an
appreciation distribution pursuant to this Section IV shall NOT
be available for subsequent issuance under the Plan.
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ARTICLE THREE
AUTOMATIC OPTION GRANT PROGRAM
I. ELIGIBILITY
The individuals eligible to receive automatic option
grants pursuant to the provisions of this Article Three program
shall be limited to the following individuals:
- each individual serving as a non-employee
Board member on the Effective Date; and
- each individual who is first elected or
appointed as a non-employee Board member after the Effective
Date, whether through appointment by the Board or election by the
Corporation's stockholders.
II. TERMS AND CONDITIONS OF AUTOMATIC OPTION GRANTS
A. GRANT DATES. Each individual serving as a non-
employee Board member on the Effective Date shall automatically
be granted on such Effective Date a Non-Statutory Option to
purchase 125,000 shares of Class A Common Stock and a Non-
Statutory Option to purchase 125,000 shares of Series A Preferred
Stock upon the terms and conditions of this Article Three. Each
individual who is first elected or appointed as a non-employee
Board member after the Effective Date shall automatically be
granted, on the date of such initial election or appointment, a
Non-Statutory Option to purchase 125,000 shares of Class A Common
Stock and a Non-Statutory Option to purchase 125,000 shares of
Series A Preferred Stock upon the terms and conditions of this
Article Three. In no event, however, shall any non-employee
Board member be eligible to receive any such automatic option
grant if such individual has previously been in the employ of the
Corporation or any parent or subsidiary corporation.
Upon each redemption or conversion of the outstanding
shares of Series A Preferred Stock, the number of shares of
Series A Preferred Stock at the time subject to the outstanding
stock options under this Automatic Option Grant Program and the
number of shares of Series A Preferred Stock for which automatic
option grants are subsequently to be made to each newly-elected
non-employee Board member shall be decreased by the same
percentage by which the number of outstanding shares of Series A
Preferred Stock is decreased by reason of such redemption or
conversion, and both (A) the number of shares of Class A Common
Stock at the time subject to outstanding stock options under this
Automatic Option Grant Program which would otherwise be
exercisable for Series A
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Preferred Stock and (B) the number of shares of Class A Common
Stock for which automatic option grants are subsequently to be
made to each newly-elected non-employee Board member shall be
correspondingly increased by the number of shares obtained by
multiplying (i) the number of shares of Series A Preferred Stock
no longer subject to each such outstanding stock option or no
longer issuable in the future per newly-elected non-employee
Board member by (ii) the number of shares of Class A Common Stock
into which each such redeemed or converted share of Series A
Preferred Stock was at the time convertible on a per-share basis.
In addition, the option exercise price per share of Series A
Preferred Stock in effect under each outstanding automatic option
grant shall, upon each redemption or conversion of the
outstanding shares of Series A Preferred Stock, be adjusted by
dividing (i) such exercise price per share (as such price relates
to the shares of Class A Common Stock issuable under the option
in place of the Series A Preferred Stock) by (ii) the number of
shares of Class A Common Stock into which each such redeemed or
converted share of Series A Preferred Stock was at the time
convertible on a per-share basis.
B. EXERCISE PRICE. The exercise price per share of
Series A Preferred Stock or Class A Common Stock subject to each
automatic option grant made under this Article Three shall be
equal to one hundred percent (100%) of the Fair Market Value per
share of that security on the automatic grant date.
C. PAYMENT. The exercise price shall be payable in
one of the alternative forms specified below:
1. full payment in cash or check made payable to
the Corporation's order;
2. full payment in shares of Series A Preferred
Stock or Class A Common Stock held for the requisite period
necessary to avoid a charge to the Corporation's reported
earnings and valued at Fair Market Value on the Exercise Date;
3. full payment in a combination of shares of
Series A Preferred Stock or Class A Common Stock held for the
requisite period necessary to avoid a charge to the Corporation's
reported earnings and valued at Fair Market Value on the Exercise
Date and cash or check payable to the Corporation's order; or
4. to the extent the option is exercised for
vested shares, full payment through a sale and remittance
procedure pursuant to which the non-employee Board member shall
concurrently provide irrevocable written instructions to (i) a
Corporation-designated brokerage firm to effect the immediate
sale of the purchased shares
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and remit to the Corporation, out of the sale proceeds available
on the settlement date, sufficient funds to cover the aggregate
exercise price payable for the purchased shares and (ii) the
Corporation to deliver the certificates for the purchased shares
directly to such brokerage firm in order to complete the sale
transaction.
Except to the extent the sale and remittance procedure
specified above is utilized in connection with the exercise of
the option for vested shares, payment of the exercise price must
accompany the exercise notice. However, if the option is
exercised for any unvested shares, then the optionee must also
execute and deliver to the Corporation, at time of such exercise,
a stock purchase agreement for those unvested shares which
provides the Corporation with the right to repurchase, at the
exercise price paid per share, any unvested shares held by the
optionee at the time of cessation of Board service and which
precludes the sale, transfer or other disposition of any shares
purchased under the option while those shares remain subject to
the Corporation's repurchase right.
D. OPTION TERM. Each automatic grant under this
Article Three shall have a maximum term of ten (10) years
measured from the automatic grant date.
E. EXERCISABILITY/VESTING. Each automatic grant
shall be immediately exercisable for any or all of the option
shares. However, any shares purchased under the option shall be
subject to repurchase by the Corporation, at the exercise price
paid per share, upon the Optionee's cessation of Board service
prior to vesting in those shares. The option shares shall vest,
and the Corporation's repurchase right shall lapse, as follows:
- Forty percent (40%) of the option shares
shall vest upon the Optionee's completion of one (1) year of
Board service measured from the automatic grant date.
- An additional thirty percent (30%) of the
option shares shall vest upon the Optionee's completion of two
(2) years of Board service measured from the automatic grant
date.
- The remaining thirty percent (30%) of the
option shares shall vest upon the Optionee's completion of three
(3) years of Board service measured from the automatic grant
date.
Vesting of the option shares shall be subject to
acceleration as provided in Section II.G and Section III of this
Article Three. In no event, however, shall any additional option
shares vest after the Optionee's cessation of Board service.
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F. NON-TRANSFERABILITY. During the lifetime of the
Optionee, each automatic option grant, together with the limited
stock appreciation right pertaining to such option, shall be
exercisable only by the Optionee and shall not be assignable or
transferable by the Optionee other than a transfer of the option
effected by will or by the laws of descent and distribution
following Optionee's death.
G. EFFECT OF TERMINATION OF BOARD SERVICE.
- Should the Optionee cease to serve as a Board
member for any reason (other than death or Permanent Disability)
while holding an automatic option grant under this Article Three,
then such individual shall have a six (6)-month period following
the date of such cessation of Board service in which to exercise
such option for any or all of the option shares in which the
Optionee is vested at the time of such cessation of Board
service. The option shall immediately terminate and cease to be
outstanding, at the time of such cessation of Board service, with
respect to any option shares in which the Optionee is not
otherwise at that time vested.
- Should the Optionee die within six (6) months
after cessation of Board service, then any automatic option grant
held by the Optionee at the time of death may subsequently be
exercised, for any or all of the option shares in which the
Optionee is vested at the time of his or her cessation of Board
service (less any option shares subsequently purchased by the
Optionee prior to death), by the personal representative of the
Optionee's estate or by the person or persons to whom the option
is transferred pursuant to the Optionee's will or in accordance
with the laws of descent and distribution. The right to exercise
such option shall lapse upon the expiration of the (12)-month
period measured from the date of the Optionee's death.
- Should the Optionee die or become Permanently
Disabled while serving as a Board member, then the shares of
Series A Preferred Stock and Class A Common Stock at the time
subject to any automatic option grant held by such Optionee under
this Article Three shall immediately vest in full, and the
Optionee (or the representative of the Optionee's estate or the
person or persons to whom the options are transferred upon the
Optionee's death) shall have a twelve (12)-month period following
the date of the Optionee's cessation of Board service in which to
exercise such option for any or all of those vested shares of
Series A Preferred Stock or Class A Common Stock.
- In no event shall any automatic grant under
this Article Three remain exercisable after the expiration date
of the ten (10)-year option term. Upon the expiration of the
applicable post-service exercise period above or (if earlier)
upon
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the expiration of the ten (10)-year option term, the automatic
grant shall terminate and cease to be outstanding for any option
shares in which the Optionee was vested at the time of his or her
cessation of Board service but for which the option was not
otherwise exercised.
H. STOCKHOLDER RIGHTS. The holder of an automatic
option grant under this Article Three shall have none of the
rights of a stockholder with respect to any shares subject to
such option until such individual shall have exercised the option
and paid the exercise price for the purchased shares.
I. REMAINING TERMS. The remaining terms and
conditions of each automatic option grant shall be as set forth
in the form Automatic Stock Option Agreements attached as
Exhibits A and B.
III. CORPORATE TRANSACTION/CHANGE IN CONTROL/HOSTILE
TAKE-OVER
A. In the event of any Corporate Transaction, the
shares of Series A Preferred Stock or Class A Common Stock at the
time subject to each outstanding option under this Article Three
but not otherwise vested shall automatically vest in full, and
the Corporation's repurchase right with respect to those shares
shall terminate, so that each such option shall, immediately
prior to the specified effective date for the Corporate
Transaction, become fully exercisable for all of the shares of
Series A Preferred Stock or Class A Common Stock at the time
subject to that option and may be exercised for all or any
portion of such shares as fully vested shares. Immediately
following the consummation of the Corporate Transaction, all
automatic option grants under this Article Three shall terminate
and cease to be outstanding, except to the extent assumed by the
successor entity (or parent thereof).
B. In connection with any Change in Control of the
Corporation, the shares of Series A Preferred Stock or Class A
Common Stock at the time subject to each outstanding option under
this Article Three but not otherwise vested shall automatically
vest in full, and the Corporation's repurchase right with respect
to those shares shall terminate, so that each such option shall,
immediately prior to the specified effective date for the Change
in Control, become fully exercisable for all of the shares of
Series A Preferred Stock or Class A Common Stock at the time
subject to that option and may be exercised for all or any
portion of such shares as fully vested shares. Each such option
shall remain so exercisable following the Change in Control until
the expiration or sooner termination of the option term.
C. Upon the occurrence of a Hostile Take-Over, the
Optionee shall have a thirty (30)-day period in which to
surrender any option held by him or her under this Article Three
to the
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Corporation, to the extent such option has been outstanding for a
period of at least six (6) months. The Optionee shall in return
be entitled to a cash distribution from the Corporation in an
amount equal to the excess of (i) the Take-Over Price of the
shares of Series A Preferred Stock or Class A Common Stock at the
time subject to the surrendered option (whether or not the
Optionee is otherwise at the time vested in those shares) over
(ii) the aggregate exercise price payable for such shares. Such
cash distribution shall be paid within five (5) days following
the surrender of the option to the Corporation. Neither the
approval of the Plan Administrator nor the consent of the Board
shall be required in connection with such option surrender and
cash distribution.
D. The shares of Series A Preferred Stock or Class A
Common Stock subject to each option surrendered in connection
with the Hostile Take-Over shall NOT be available for subsequent
issuance under the Plan.
E. The automatic option grants outstanding under this
Article Three shall in no way affect the right of the Corporation
to adjust, reclassify, reorganize or otherwise change its capital
or business structure or to merge, consolidate, dissolve,
liquidate or sell or transfer all or any part of its business or
assets.
IV. AMENDMENT OF THE AUTOMATIC GRANT PROVISIONS
A. LIMITED AMENDMENTS. The provisions of this
Automatic Option Grant Program, together with the automatic
option grants outstanding under this Article Three, may not be
amended at intervals more frequently than once every six (6)
months, other than to the extent necessary to comply with
applicable Federal income tax laws and regulations.
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ARTICLE FOUR
DIRECTOR FEE PROGRAM
I. ELIGIBILITY
Each individual serving as a non-employee Board member
shall be eligible to apply all or any portion of the annual
retainer fee otherwise payable to him or her in cash to the
acquisition of unvested shares of Class A Common Stock or Series
A Preferred Stock under this Article Four Program.
II. ELECTION PROCEDURE
A. FILING. The non-employee Board member must make
the stock-in-lieu-of-fee election prior to the start of the
calendar year for which the election is to be effective. The
first calendar year for which any such election may be filed
shall be the 1994 calendar year. The election must be filed with
the Plan Administrator on the appropriate form provided for this
purpose, and the election, once filed, shall be irrevocable. The
election for any upcoming calendar year may be filed at any time
prior to the start of that year, but in no event later than
December 31 of the immediately preceding calendar year. The non-
employee Board member may file a standing election to be in
effect for two or more consecutive calendar years or to remain in
effect indefinitely until revoked by written instrument filed
with the Plan Administrator at least six (6) months prior to the
start of the first calendar year for which such standing election
is no longer to remain in effect.
B. ELECTION FORM. On the election form, the non-
employee Board member must indicate the percentage or dollar
amount of his or her annual retainer fee to be applied to the
acquisition of unvested shares under this Article Four Program
and the type of shares (Series A Preferred Stock or Class A
Common Stock) to be issued in lieu of such fee. The non-employee
Board member may elect to apply a portion of the fee to the
acquisition of Series A Preferred Stock and a portion to the
acquisition of Class A Common Stock.
III. SHARE ISSUANCE
A. ISSUE DATE. On the first trading day in January
of the calendar year for which the election is effective, the
portion of the retainer fee subject to such election shall
automatically be applied to the acquisition of the selected
shares of Series A Preferred Stock or Class A Common Stock by
dividing the elected dollar amount by the Fair Market Value per
share of the Class A Common Stock or Series A Preferred Stock (as
the case may be) on that trading day. The number of issuable
shares shall be rounded
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down to the next whole share, and the issued shares shall be held
in escrow by the Secretary of the Corporation until the non-
employee Board member vests in those shares. The non-employee
Board member shall have full stockholder rights, including
voting, dividend and liquidation rights, with respect to all
issued shares held in escrow on his or her behalf, but such
shares shall not be assignable or transferable while they remain
unvested.
B. VESTING. Upon completion of each calendar quarter
of Board service during the year for which the election is in
effect, the non-employee Board member shall vest in one-fourth of
the issued shares, and the stock certificate for those shares
shall be released from escrow. Immediate vesting in all the
issued shares shall occur in the event (i) the non-employee Board
member should die or become Permanently Disabled during his or
her period of Board service or (ii) there should occur a
Corporate Transaction or Change in Control while such individual
remains in Board service. Should such individual cease Board
service prior to vesting in one or more quarterly installments of
the issued shares, then those unvested shares shall immediately
be surrendered to the Corporation for cancellation, and the non-
employee Board member shall not be entitled to any cash payment
or other consideration from the Corporation with respect to the
cancelled shares and shall have no further stockholder rights
with respect to such shares.
IV. AMENDMENT OF THE AUTOMATIC GRANT PROVISIONS
A. LIMITED AMENDMENTS. The provisions of this
Director Fee Program, together with the unvested share issuances
outstanding under this Article Four, may not be amended at
intervals more frequently than once every six (6) months, other
than to the extent necessary to comply with applicable Federal
income tax laws and regulations.
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ARTICLE FIVE
MISCELLANEOUS
I. LOANS OR INSTALLMENT PAYMENTS
A. The Plan Administrator may, in its discretion,
assist any Optionee (including an officer of the Corporation) in
the exercise of one or more options granted to such Optionee
under the Discretionary Option Grant Program, including the
satisfaction of any Federal, state and local income and
employment tax obligations arising therefrom, by (i) authorizing
the extension of a loan from the Corporation to such Optionee or
(ii) permitting the Optionee to pay the exercise price for the
purchased shares in installments over a period of years. The
terms of any loan or installment method of payment (including the
interest rate and terms of repayment) shall be upon such terms as
the Plan Administrator specifies in the applicable option
agreement or otherwise deems appropriate under the circumstances.
Loans or installment payments may be authorized with or without
security or collateral. However, the maximum credit available to
the Optionee may not exceed the exercise price of the acquired
shares (less the par value of such shares) plus any Federal,
state and local income and employment tax liability incurred by
the Optionee in connection with the acquisition of such shares.
B. The Plan Administrator may, in its absolute
discretion, determine that one or more loans extended under this
financial assistance program shall be subject to forgiveness by
the Corporation in whole or in part upon such terms and
conditions as the Plan Administrator may deem appropriate.
II. AMENDMENT OF THE PLAN AND AWARDS
A. The Board has complete and exclusive power and
authority to amend or modify the Plan (or any component thereof)
in any or all respects whatsoever. However, (i) no such
amendment or modification shall adversely affect rights and
obligations with respect to options at the time outstanding under
the Plan, unless the Optionee consents to such amendment, and
(ii) any amendment made to the Automatic Option Grant or Director
Fee Program (or any stock options or share issuances outstanding
thereunder) shall be in compliance with the limitation of Section
IV of Article Three and Section IV of Article Four. In addition,
the Board may not, without the approval of the Corporation's
stockholders, amend the Plan to (i) materially increase the
maximum number of shares issuable under the Plan, increase the
number of shares issuable per newly-elected non-employee Board
member under the Automatic Option Grant Program or increase the
maximum number of shares of Series A
28.
<PAGE>
Preferred Stock and Class A Common Stock for which any one
participant may receive stock options, separately exercisable
stock appreciation rights and direct share issuances over the
term of the Plan, except for permissible adjustments under
Section VI.G and Section VI. H of Article One, (ii) materially
modify the eligibility requirements for plan participation or
(iii) materially increase the benefits accruing to plan
participants.
B. Options to purchase shares of Series A Preferred
Stock and Class A Common Stock may be granted under the
Discretionary Option Grant Program, which are in excess of the
number of shares then available for issuance under the Plan,
provided any excess shares actually issued under the
Discretionary Option Grant Program are held in escrow until
stockholder approval is obtained for a sufficient increase in the
number of shares available for issuance under the Plan. If such
stockholder approval is not obtained within twelve (12) months
after the date the first such excess option grants are made, then
(i) any unexercised excess options shall terminate and cease to
be exercisable and (ii) the Corporation shall promptly refund the
purchase price paid for any excess shares actually issued under
the Plan and held in escrow, together with interest (at the
applicable Short Term Federal Rate) for the period the shares
were held in escrow.
III. TAX WITHHOLDING
A. The Corporation's obligation to deliver shares of
Series A Preferred Stock and Class A Common Stock upon the
exercise of stock options for such shares or the vesting of such
shares under the Plan shall be subject to the satisfaction of all
applicable Federal, state and local income and employment tax
withholding requirements.
B. The Plan Administrator may, in its discretion and
in accordance with the provisions of this Section III of Article
Five and such supplemental rules as the Plan Administrator may
from time to time adopt (including the applicable safe-harbor
provisions of Securities and Exchange Commission Rule 16b-3),
provide any or all holders of Non-Statutory Options (other than
the automatic option grants made pursuant to Article Three of the
Plan) or unvested shares (other than the unvested shares issued
under the Director Fee Program) with the right to use shares of
the Corporation's Series A Preferred Stock and Class A Common
Stock in satisfaction of all or part of the Federal, state and
local income and
employment tax liabilities incurred by such holders in connection
with the exercise of their options or the vesting of their shares
(the "Taxes"). Such right may be provided to any such holder in
either or both of the following formats:
29.
<PAGE>
STOCK WITHHOLDING: The holder of the Non-Statutory
Option or unvested shares may be provided with the election to
have the Corporation withhold, from the shares of Series A
Preferred Stock or Class A Common Stock otherwise issuable upon
the exercise of such Non-Statutory Option or the vesting of the
shares, a portion of those shares with an aggregate Fair Market
Value equal to the percentage of the applicable Taxes (not to
exceed one hundred percent (100%)) designated by the holder.
STOCK DELIVERY: The Plan Administrator may, in its
discretion, provide the holder of the Non-Statutory Option or the
unvested shares with the election to deliver to the Corporation,
at the time the Non-Statutory Option is exercised or the shares
vest, one or more shares of Series A Preferred Stock or Class A
Common Stock previously acquired by such individual (other than
in connection with the option exercise triggering the Taxes) with
an aggregate Fair Market Value equal to the percentage of the
Taxes incurred in connection with such option exercise or share
vesting (not to exceed one hundred percent (100%)) designated by
the holder.
IV. EFFECTIVE DATE AND TERM OF PLAN
A. This Plan shall become effective immediately upon
adoption by the Board, and the initial stock options may be made
under the Plan immediately upon the November 29, 1993 Effective
Date. However, no stock options granted under the Plan shall
become exercisable, and no share issuances under the Plan shall
vest, unless and until the Plan is approved by the Corporation's
stockholders at the 1994 Annual Meeting. Should such stockholder
approval not be obtained, then all stock options and share
issuances initially made under this Plan shall terminate and
cease to be outstanding, and no further stock option grants or
share issuances shall be made under this Plan. However, in such
event, the Predecessor Plan shall automatically be reinstated, as
of the date of the 1994 Annual Stockholders Meeting, in
accordance with the provisions of the plan document as last
approved by the Corporation's stockholders (including the
available share reserve thereunder), and all options incorporated
into this Plan from the Predecessor Plan shall be retransferred
to the reinstated
Predecessor Plan.
B. Each stock option grant outstanding under the
Predecessor Plan immediately prior to the Effective Date shall be
incorporated into this Plan and treated as an outstanding option
under this Plan, but each such option shall continue to be
governed solely by the terms and conditions of the instrument
evidencing such grant, and nothing in this Plan shall be deemed
to affect or otherwise modify the rights or obligations of the
holders of such options with respect to their acquisition of
shares of Series A Preferred Stock or Class A Common Stock
thereunder.
30.
<PAGE>
C. The option/vesting acceleration provisions of
Section III of Article Two relating to Corporate Transactions and
Changes in Control may, in the Plan Administrator's discretion,
be extended to one or more stock options which are outstanding
under the Predecessor Plan on the Effective Date but which do not
otherwise provide for such acceleration.
D. The Plan shall terminate upon the earlier of
(i) November 28, 2003 or (ii) the date on which all shares
available for issuance under the Plan shall have been issued or
cancelled pursuant to the exercise, surrender or cash-out of the
options granted under the Plan or the issuance of shares (whether
vested or unvested) under the Director Fee Program. If the date
of termination is determined under clause (i) above, then all
option grants and unvested share issuances outstanding on such
date shall thereafter continue to have force and effect in
accordance with the provisions of the instruments evidencing such
grants or issuances.
V. USE OF PROCEEDS
Any cash proceeds received by the Corporation from the
sale of shares pursuant to option grants or share issuances under
the Plan shall be used for general corporate purposes
VI. REGULATORY APPROVALS
A. The implementation of the Plan, the granting of
any option under the Plan, the issuance of any shares under the
Director Fee Program and the issuance of Series A Preferred Stock
or Class A Common Stock upon the exercise or surrender of the
option grants made hereunder shall be subject to the
Corporation's procurement of all approvals and permits required
by regulatory authorities having jurisdiction over the Plan, the
options granted under it and the Series A Preferred Stock and
Class A Common Stock issued pursuant to it.
B. No shares of Series A Preferred Stock or Class A
Common Stock or other assets shall be issued or delivered under
this Plan unless and until there shall have been compliance with
all applicable requirements of Federal and state securities laws,
including the filing and effectiveness of the Form S-8
registration statement for the shares of Series A Preferred Stock
and Class A Common Stock issuable under the Plan, and all
applicable listing requirements of any securities exchange on
which the Series A Preferred Stock or Class A Common Stock is
then listed for trading.
VII. NO EMPLOYMENT/SERVICE RIGHTS
Neither the action of the Corporation in establishing
the Plan, nor any action taken by the Plan Administrator
hereunder, nor any provision of the Plan shall be construed so as
to grant any
31.
<PAGE>
individual the right to remain in the Service of the Corporation
(or any parent or subsidiary corporation) for any period of
specific duration, and the Corporation (or any parent or
subsidiary corporation retaining the services of such individual)
may terminate such individual's Service at any time and for any
reason, with or without cause.
VIII. MISCELLANEOUS PROVISIONS
A. Except to the extent otherwise expressly provided
under the Plan, the right to acquire Series A Preferred Stock or
Class A Common Stock or other assets under the Plan may not be
assigned, encumbered or otherwise transferred by any Optionee or
Participant.
B. The provisions of the Plan relating to the
exercise of options and the vesting of shares shall be governed
by the laws of the State of California, as such laws are applied
to contracts entered into and performed in such State.
C. The provisions of the Plan shall inure to the
benefit of, and be binding upon, the Corporation and its
successors or assigns, whether by Corporate Transaction or
otherwise, and the Optionees and any holders of unvested shares
under the Plan, the legal representatives of their respective
estates, their respective heirs or legatees and their permitted
assignees.
32.
<PAGE>
EXHIBIT 99.2
Form of Notice of Grant: Series A Preferred Stock to be generally
used in connection with the 1993 Stock Option/Stock Issuance Plan
<PAGE>
KOLL REAL ESTATE GROUP
NOTICE OF GRANT OF STOCK OPTION
Notice is hereby given of the following stock option
grant (the "Option") to purchase shares of the Series A
Convertible Redeemable Preferred Stock of Koll Real Estate Group
(the "Corporation"):
OPTIONEE:
GRANT DATE:
OPTION EXERCISE PRICE: $____ per share
NUMBER OF OPTION SHARES: ___ shares of Series A
Convertible Redeemable Preferred Stock
EXPIRATION DATE: ___
TYPE OF OPTION: X Incentive Stock Option
Non-Statutory Option
EXERCISE SCHEDULE: The Option shall become exercisable for
(i) fifty percent (50%) of the Option Shares upon Optionee's
completion of two (2) years of Service (as defined in the
attached Stock Option Agreement) measured from the Grant Date,
and (ii) the remaining fifty percent (50%) of the Option Shares
upon the Optionee's completion of three (3) years of Service
measured from the Grant Date. In no event shall the Option
become exercisable for any additional Option Shares following the
Optionee's cessation of Service.
Optionee understands and agrees that the Option is
granted subject to and in accordance with the express terms and
conditions of the Koll Real Estate Group 1993 Stock Option/Stock
Issuance Plan (the "Plan"). Optionee further agrees to be bound
by the terms and conditions of the Plan and the terms and
conditions of the Option as set forth in the Stock Option
Agreement attached hereto as Exhibit A. Optionee also
acknowledges receipt of a copy of the official prospectus for the
Plan attached hereto as Exhibit B. A copy of the Plan is also
available upon request made to the Corporate Secretary at the
Corporate Offices at 4343 Von Karman Boulevard, Newport Beach, CA
92660.
<PAGE>
NO EMPLOYMENT OR SERVICE CONTRACT. Nothing in this
Agreement or in the Plan shall confer upon Optionee any right to
continue in Service for any period of specific duration or
interfere with or otherwise restrict in any way the rights of the
Corporation (or any parent or subsidiary employing Optionee) or
Optionee, which rights are hereby expressly reserved by each, to
terminate Optionee's Service at any time for any reason
whatsoever, with or without cause.
DATED: __________, 199__
KOLL REAL ESTATE GROUP
______________________
By:
Title:
_______________, OPTIONEE
Address:
ATTACHMENTS
EXHIBIT A: STOCK OPTION AGREEMENT
EXHIBIT B: PLAN PROSPECTUS
2.
<PAGE>
EXHIBIT A
STOCK OPTION AGREEMENT
<PAGE>
EXHIBIT B
PLAN PROSPECTUS
<PAGE>
EXHIBIT 99.3
Form of Stock Option Agreement: Series A Preferred Stock to be
generally used in connection with the 1993 Stock Option/Stock
Issuance Plan
<PAGE>
KOLL REAL ESTATE GROUP
STOCK OPTION AGREEMENT
WITNESSETH:
RECITALS
A. The Corporation's Board of Directors (the "Board")
has adopted the Corporation's 1993 Stock Option/Stock Issuance
Plan (the "Plan") for the purpose of attracting and retaining the
services of key employees (including officers and directors),
non-employee Board members and consultants and other independent
advisors.
B. Optionee is an individual who is to render
valuable services to the Corporation or one or more parent or
subsidiary corporations, and this Agreement is executed pursuant
to, and is intended to carry out the purposes of, the Plan in
connection with the Corporation's grant of a stock option to
purchase shares of the Corporation's Series A Convertible
Redeemable Preferred Stock ("Series A Preferred Stock").
NOW, THEREFORE, it is hereby agreed as follows:
1. GRANT OF OPTION. Subject to and upon the terms
and conditions set forth in this Agreement, the Corporation
hereby grants to Optionee, as of the grant date (the "Grant
Date") specified in the accompanying Notice of Grant of Stock
Option (the "Grant Notice"), a stock option to purchase up to
that number of shares of the Series A Preferred Stock (the
"Option Shares") as is specified in the Grant Notice. Such
Option Shares shall be purchasable from time to time during the
option term at the option exercise price (the "Option Exercise
Price") specified in the Grant Notice.
2. OPTION TERM. This option shall expire at the
close of business on the expiration date (the "Expiration Date")
specified in the Grant Notice, unless sooner terminated in
accordance with Paragraph 5 or 6.
3. LIMITED TRANSFERABILITY. This option shall be
exercisable only by Optionee during Optionee's lifetime and shall
not be transferable or assignable by Optionee other than by will
or by the laws of descent and distribution following Optionee's
death.
4. DATES OF EXERCISE. This option shall become
exercisable for the Option Shares in accordance with the
installment schedule specified in the Grant Notice. As the
option
<PAGE>
becomes exercisable for one or more installments, those
installments shall accumulate, and the option shall remain
exercisable for the accumulated installments until the Expiration
Date or sooner termination of the option term under Paragraph 5
or 6 of this Agreement. In no event shall this option become
exercisable for any additional Option Shares following Optionee's
cessation of Service (as defined in Paragraph 5 below).
5. CESSATION OF SERVICE. The option term specified
in Paragraph 2 shall terminate (and this option shall cease to
remain outstanding) prior to the Expiration Date in accordance
with the following provisions:
a. Upon Optionee's cessation of Service for any
reason, this option shall immediately terminate and cease to
remain outstanding for any Option Shares for which it is not
otherwise at that time exercisable.
b. Should Optionee cease Service for any reason other
than death or permanent disability while this option remains
outstanding, then Optionee shall have a three (3)-month period
measured from the date of such cessation of Service in which to
exercise this option for any or all of the Option Shares for
which this option is exercisable at the time of such cessation of
Service. In no event, however, may this option be exercised at
any time after the specified Expiration Date of the option term.
Upon the expiration of such three (3)-month period or (if
earlier) upon the specified Expiration Date of the option term,
this option shall terminate and cease to remain outstanding for
any vested Option Shares for which this option has not otherwise
been exercised.
c. Should Optionee die while in Service or within the
three (3)-month period following his or her cessation of Service,
then the personal representative of Optionee's estate or the
person or persons to whom this option is transferred pursuant to
Optionee's will or in accordance with the laws of descent and
distribution shall have the right to exercise the option for any
or all of the Option Shares for which this option is exercisable
at the time of Optionee's cessation of Service, less any Option
Shares subsequently purchased by Optionee prior to death. Such
right shall lapse, and this option shall terminate and cease to
remain outstanding for any vested Option Shares for which this
option has not otherwise been exercised, upon the earlier of
(i) the first anniversary of the date of Optionee's death or
(ii) the Expiration Date.
2.
<PAGE>
d. Should Optionee become permanently disabled and
cease by reason thereof to remain in Service at any time during
the option term, then Optionee shall have a twelve (12)-month
period commencing with the date of such cessation of Service in
which to exercise this option for any or all of the Option Shares
for which this option is exercisable at the time of such
cessation of Service. In no event, however, may this option be
exercised at any time after the specified Expiration Date of the
option term. Upon the expiration of such limited period of
exercisability or (if earlier) upon the Expiration Date, this
option shall terminate and cease to remain outstanding for any
vested Option Shares for which this option has not otherwise been
exercised.
e. Should (i) Optionee's Service be terminated for
misconduct (including, but not limited to, any act of dishonesty,
willful misconduct, fraud or embezzlement) or (ii) Optionee make
any unauthorized use or disclosure of confidential information or
trade secrets of the Corporation or any parent or subsidiary,
then in any such event this option shall terminate immediately
and cease to remain outstanding.
f. During the limited period of post-Service
exercisability applicable pursuant to subparagraphs b. through d.
above, this option may not be exercised in the aggregate for more
than the number of Option Shares (if any) for which this option
is, at the time of the Optionee's cessation of Service,
exercisable in accordance with either the normal exercise
provisions specified in the Grant Notice or the special
acceleration provisions of Paragraph 6 of this Agreement.
g. For purposes of this Agreement, the following
definitions shall be in effect:
- Optionee shall be deemed to remain in SERVICE
for so long as such individual performs services on a periodic
basis to the Corporation (or any parent or subsidiary
corporation) in the capacity of an Employee, a non-employee
member of the Board or an independent consultant or advisor.
- Optionee shall be considered to be an
EMPLOYEE for so long as such individual performs services while
in the employ of the Corporation or one or more parent or
subsidiary corporations, subject to the control
3.
<PAGE>
and direction of the employer entity not only as to the work to
be performed but also as to the manner and method of performance.
- Optionee shall be deemed to be PERMANENTLY
DISABLED and to have incurred a PERMANENT DISABILITY if Optionee
is unable to engage in any substantial gainful activity by reason
of any medically determinable physical or mental impairment
expected to result in death or to be of continuous duration of
twelve (12) months or more.
- A corporation shall be considered to be a
SUBSIDIARY of the Corporation if it is a member of an unbroken
chain of corporations which begins with the Corporation, provided
each such corporation in the unbroken chain (other than the last
corporation) owns, at the time of determination, stock possessing
fifty percent (50%) or more of the total combined voting power of
all classes of stock in one of the other corporations in such
chain.
- A corporation shall be considered to be a
PARENT of the Corporation if it is a member of an unbroken chain
of corporations ending with the Corporation, provided each such
corporation in the unbroken chain (other than the Corporation)
owns, at the time of determination, stock possessing fifty
percent (50%) or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain.
6. CORPORATE TRANSACTION.
A. In the event of any of the following stockholder-
approved transactions to which the Corporation is a party (a
"Corporate Transaction"):
- a merger or consolidation in which the Corporation
is not the surviving entity, except for a transaction the
principal purpose of which is to change the state in which the
Corporation is incorporated,
- the sale, transfer or other disposition of all or
substantially all of the assets of the Corporation in complete
liquidation or dissolution of the Corporation, or
4.
<PAGE>
- any reverse merger in which the Corporation is the
surviving entity but in which securities possessing more than
fifty percent (50%) of the total combined voting power of the
Corporation's outstanding securities are transferred to a person
or persons different from the persons holding those securities
immediately prior to such merger,
this option, to the extent outstanding at such
time but not otherwise fully exercisable, shall automatically
accelerate so that this option shall, immediately prior to the
specified effective date for the Corporate Transaction, become
fully exercisable for all the Option Shares at the time subject
to this option and may be exercised for all or any portion of
such shares as fully-vested shares of Series A Preferred Stock.
No such acceleration of this option, however, shall occur if and
to the extent: (i) this option is, in connection with the
Corporate Transaction, either to be assumed by the successor
corporation or parent thereof or to be replaced with a comparable
option to purchase shares of the capital stock of the successor
corporation or parent thereof or (ii) such option is to be
replaced with a cash incentive program of the successor
corporation which preserves the option spread existing at the
time of the Corporate Transaction (the excess of the Fair Market
Value (as such term is defined in Paragraph 9.B. below) of the
Option Shares at the time subject to this option over the
aggregate Option Exercise Price payable for such shares) and
provides for subsequent pay-out in accordance with the same
vesting schedule in effect for the option pursuant to the option
exercise schedule set forth in the Grant Notice. The
determination of option comparability under clause (i) shall be
made by the Plan Administrator, and such determination shall be
final, binding and conclusive.
B. Any portion of this option accelerated in
connection with any Corporate Transaction shall remain
exercisable as an incentive stock option under the Federal tax
laws (if the option is designated as such in the Grant Notice)
only to the extent the applicable dollar limitation of Paragraph
17 is not exceed in the calendar year of such Corporate
Transaction.
C. This option, to the extent not previously
exercised, shall terminate and cease to be outstanding
immediately following the consummation of such Corporate
Transaction, unless it is expressly assumed by the successor
corporation or parent thereof.
D. This Agreement shall not in any way affect the
right of the Corporation to adjust, reclassify, reorganize or
otherwise make changes in its capital or business structure or to
merge,
5.
<PAGE>
consolidate, dissolve, liquidate or sell or transfer all or any
part of its business or assets.
7. ADJUSTMENT IN OPTION SHARES.
A. In the event any change is made to the Series A
Preferred Stock issuable under the Plan by reason of any stock
split, stock dividend, recapitalization, combination of shares,
exchange of shares or other change affecting the outstanding
Series A Preferred Stock as a class effected without the
Corporation's receipt of consideration (other than the redemption
or conversion of such Series A shares), the Plan Administrator
shall make appropriate adjustments to (i) the number and/or class
of securities subject to this option and (ii) the Option Exercise
Price payable per share in order to prevent any dilution or
enlargement of benefits hereunder. Such adjustments shall be
final, binding and conclusive.
B. Upon each redemption or conversion of the
Corporation's outstanding shares of Series A Preferred Stock, the
number of shares of Series A Preferred Stock at the time subject
to this option shall automatically be decreased by the same
percentage by which the number of outstanding shares of Series A
Preferred Stock is decreased by reason of such redemption or
conversion, and in lieu of such Series A shares, the securities
subject to this option shall automatically be converted into that
number of shares of the Corporation's Class A Common Stock
obtained by multiplying (i) the number of shares of Series A
Preferred Stock no longer subject to this option by (ii) the
number of shares of Class A Common Stock into which each such
redeemed or converted share of Series A Preferred Stock was at
the time convertible on a per-share basis. In addition, the
Option Exercise Price payable per share of the Class A Common
Stock which becomes subject to this option shall be determined by
dividing (i) the Option Exercise Price per share in effect for
the Series A Preferred Stock immediately prior to the redemption
or conversion of such Series A shares by (ii) the number of
shares of Class A Common Stock into which each such redeemed or
converted share of Series A Preferred Stock was at the time
convertible on a per-share basis. To the extent this option
becomes exercisable for shares of Class A Common Stock, all
references in this Agreement to the Series A Preferred Stock
shall automatically be converted into references to shares of the
Class A Common Stock.
C. If this option is assumed in connection with any
Corporate Transaction under Paragraph 6 or is otherwise to
continue outstanding, then this option shall, immediately after
such Corporate Transaction, be appropriately adjusted to apply
and pertain to the number and class of securities which would
have been
6.
<PAGE>
issued to Optionee in the consummation of such Corporate
Transaction had the option been exercised immediately prior to
such Corporate Transaction. Appropriate adjustments shall also
be made to the Option Exercise Price payable per share, provided
the aggregate Option Exercise Price payable hereunder shall
remain the same.
8. PRIVILEGE OF STOCK OWNERSHIP. The holder of this
option shall not have any of the rights of a stockholder with
respect to the Option Shares until such individual shall have
exercised the option and paid the Option Exercise Price for the
purchased Option Shares. The purchased Option Shares shall
possess all the rights, preferences and privileges and shall be
subject to all the restrictions and limitations applicable to the
Corporation's Series A Preferred Stock, as set forth in the
Certificate of Determination for the Series A Preferred Stock.
9. MANNER OF EXERCISING OPTION.
A. In order to exercise this option with respect to
all or any part of the Option Shares for which this option is at
the time exercisable, Optionee (or in the case of exercise after
Optionee's death, Optionee's executor, administrator, heir or
legatee, as the case may be) must take the following actions:
- Deliver to the Corporate Secretary of the
Corporation an executed notice of exercise in substantially the
form of Exhibit I to this Agreement (the "Exercise Notice") in
which there is specified the number of Option Shares which are to
be purchased under the exercised option.
- Pay the aggregate Option Exercise Price for the
purchased shares through one or more of the following
alternatives:
(a) full payment in cash or by check made payable
to the Corporation's order;
(b) full payment in shares of Series A Preferred
Stock held for the requisite period necessary to avoid a charge
to the Corporation's earnings for financial reporting purposes
and valued at Fair Market Value on the Exercise Date (as such
term is defined below);
(c) full payment in a combination of shares of
Series A Preferred Stock held for the requisite period necessary
to avoid a charge to the Corporation's
7.
<PAGE>
reported earnings and valued at Fair Market Value on the Exercise
Date and cash or check payable to the Corporation's order; or
(d) full payment effected through a broker-dealer
sale and remittance procedure pursuant to which Optionee shall
concurrently provide irrevocable written instructions to (i) a
Corporation-designated brokerage firm to effect the immediate
sale of the purchased shares and remit to the Corporation, out of
the sale proceeds available on the settlement date, sufficient
funds to cover the aggregate Option Exercise Price payable for
the purchased shares plus all applicable Federal, state and local
income and employment taxes required to be withheld in connection
with such purchase and (ii) the Corporation to deliver the
certificates for the purchased shares directly to such brokerage
firm in order to complete the sale transaction.
- Furnish to the Corporation appropriate
documentation that the person or persons exercising the option
(if other than Optionee) have the right to exercise this option.
B. For purposes of this Agreement, the EXERCISE DATE
shall be the date on which the executed Exercise Notice shall
have been delivered to the Corporation. Except to the extent the
sale and remittance procedure specified above is utilized in
connection with the option exercise, payment of the Exercise
Price for the purchased shares must accompany such Exercise
Notice. For all valuation purposes under this Agreement, the
FAIR MARKET VALUE per share of Series A Preferred Stock on any
relevant date shall be the closing selling price per share of
that security on the date in question, as such price is reported
by the National Association of Securities Dealers through the
NASDAQ National Market System or any successor system. If there
is no such reported price on the date in question, then the Fair
Market Value shall be the closing selling price per share of the
Series A Preferred Stock on the last preceding date for which
such quotation exists.
C. As soon as practical after receipt of the Exercise
Notice, the Corporation shall mail or deliver to or on behalf of
Optionee (or any other person or persons exercising this option
in accordance herewith) a certificate or certificates
representing the purchased Option Shares.
D. In no event may this option be exercised for any
fractional shares.
8.
<PAGE>
10. GOVERNING LAW. The interpretation, performance
and enforcement of this Agreement shall be governed by the laws
of the State of California without resort to that State's
conflict-of-laws rules.
11. COMPLIANCE WITH LAWS AND REGULATIONS. The
exercise of this option and the issuance of Option Shares upon
such exercise shall be subject to compliance by the Corporation
and Optionee with all applicable requirements of law relating
thereto and with all applicable regulations of any stock exchange
on which shares of Series A Preferred Stock may be listed for
trading at the time of such exercise and issuance.
12. SUCCESSORS AND ASSIGNS. Except to the extent
otherwise provided in Paragraph 3 or 6, the provisions of this
Agreement shall inure to the benefit of, and be binding upon, the
successors, administrators, heirs and legal representatives of
Optionee and the successors and assigns of the Corporation.
13. LIABILITY OF CORPORATION.
A. If the Option Shares covered by this Agreement
exceed, as of the Grant Date, the number of shares which may
without stockholder approval be issued under the Plan, then this
option shall be void with respect to such excess shares unless
stockholder approval of an amendment sufficiently increasing the
number of shares issuable under the Plan is obtained in
accordance with the provisions of Section II of Article Six of
the Plan.
B. The inability of the Corporation to obtain
approval from any regulatory body having authority deemed by the
Corporation to be necessary to the lawful issuance and sale of
any Series A Preferred Stock pursuant to this option shall
relieve the Corporation of any liability with respect to the non-
issuance or sale of the Series A Preferred Stock as to which such
approval shall not have been obtained. The Corporation however,
shall use its best efforts to obtain all such approvals.
14. NO EMPLOYMENT/SERVICE CONTRACT. Nothing in this
Agreement or in the Plan shall confer upon Optionee any right to
continue in the Service of the Corporation (or any parent or
subsidiary employing or retaining Optionee) for any period of
specific duration or interfere with or otherwise restrict in any
way the rights of the Corporation (or any such parent or
subsidiary) or Optionee, which rights are hereby expressly
reserved by each party, to terminate Optionee's Service at any
time for any reason whatsoever, with or without cause.
9.
<PAGE>
15. NOTICES. Any notice required to be given or
delivered to the Corporation under the terms of this Agreement
shall be in writing and addressed to the Corporation in care of
the Corporate Secretary at the Corporation's principal offices at
4343 Von Karman Boulevard, Newport Beach, CA 92660. Any notice
required to be given or delivered to Optionee shall be in writing
and addressed to Optionee at the address indicated on the Grant
Notice. All notices shall be deemed to have been given or
delivered upon personal delivery or upon deposit in the U.S.
mail, by registered or certified mail, postage prepaid and
properly addressed to the party to be notified.
16. CONSTRUCTION. This Agreement and the option
evidenced hereby are made and granted pursuant to the Plan and
are in all respects limited by and subject to the express terms
and provisions of the Plan. All decisions of the Plan
Administrator with respect to any question or issue arising under
the Plan or this Agreement shall be conclusive and binding on all
persons having an interest in this option.
17. ADDITIONAL TERMS APPLICABLE TO AN INCENTIVE STOCK
OPTION. In the event this option is designated an incentive
stock option in the Grant Notice, the following terms and
conditions shall also apply to the grant:
a. This option shall cease to qualify for
favorable tax treatment as an incentive stock option under the
Federal tax laws if (and to the extent) this option is exercised
for one or more Option Shares: (i) more than three (3) months
after the date Optionee ceases to be an Employee for any reason
other than death or permanent disability (as defined in Paragraph
5) or (ii) more than one (1) year after the date Optionee ceases
to be an Employee by reason of permanent disability.
b. If this option is to become exercisable in a
series of installments as indicated in the Grant Notice, no such
installment shall qualify for favorable tax treatment as an
incentive stock option under the Federal tax laws if (and to the
extent) the aggregate Fair Market Value (determined at the Grant
Date) of the Series A Preferred Stock for which such installment
first becomes exercisable hereunder will, when added to the
aggregate fair market value (determined as of the respective date
or dates of grant) of the Series A Preferred Stock or other
securities (including, without limitation, the Corporation's
Class A Common Stock) for which this option or one or more other
incentive stock options granted to Optionee prior to the Grant
Date
10.
<PAGE>
(whether under the Plan or any other option plan of the
Corporation or any parent or subsidiary) first become exercisable
during the same calendar year, exceed One Hundred Thousand
Dollars ($100,000) in the aggregate. Should the number of shares
of Series A Preferred Stock for which this option first becomes
exercisable in any calendar year exceed the applicable One
Hundred Thousand Dollar ($100,000) limitation, the option may
nevertheless be exercised for those excess shares in such
calendar year as a non-statutory option.
c. Should the exercisability of this option be
accelerated upon a Corporate Transaction in accordance with
Paragraph 6, then this option shall qualify for favorable tax
treatment as an incentive stock option under the Federal tax laws
only to the extent the aggregate Fair Market Value (determined at
the Grant Date) of the Series A Preferred Stock for which this
option first becomes exercisable in the calendar year in which
the Corporate Transaction occurs does not, when added to the
aggregate fair market value (determined as of the respective date
or dates of grant) of the Series A Preferred Stock or other
securities (including, without limitation, the Corporation's
Class A Common Stock) for which this option or one or more other
incentive stock options granted to Optionee prior to the Grant
Date (whether under the Plan or any other option plan of the
Corporation or any parent or subsidiary) first become exercisable
during the same calendar year, exceed One Hundred Thousand
Dollars ($100,000) in the aggregate. Should the number of shares
of Series A Preferred Stock for which this option first becomes
exercisable in the calendar year of such Corporate Transaction
exceed the applicable One Hundred Thousand Dollar ($100,000)
limitation, the option may nevertheless be exercised for the
excess shares in such calendar year as a non-statutory option.
d. Should the Optionee hold, in addition to this
option, one or more other options to purchase Series A Preferred
Stock or other securities which become exercisable for the first
time in the same calendar year as this option, then the foregoing
limitations on the exercisability of such options as incentive
stock options under the Federal tax laws shall be applied on the
basis of the order in which such options are granted.
11.
<PAGE>
e. To the extent this option should fail to
qualify as an incentive stock option under the Federal tax laws,
Optionee will recognize compensation income in connection with
the acquisition of one or more Option Shares hereunder, and
Optionee must make appropriate arrangements for the satisfaction
of all Federal, state and local income and employment tax
withholding requirements applicable to such compensation income.
18. ADDITIONAL TERMS APPLICABLE TO A NON-STATUTORY
STOCK OPTION. In the event this option is designated a
non-statutory stock option in the Grant Notice, Optionee shall
make appropriate arrangements with the Corporation or any parent
or subsidiary employing Optionee for the satisfaction of all
Federal, state and local income and employment tax withholding
requirements applicable to the exercise of this option.
19. STOCKHOLDER APPROVAL. Notwithstanding any
provision to the contrary in this Agreement, this option may not
be exercised in whole or in part at any time prior to the
approval of the Plan by the Corporation's stockholders at the
1994 Annual Meeting. In the event such stockholder approval is
not obtained, this option shall thereupon terminate and cease to
remain outstanding without ever becoming exercisable for any of
the Option Shares.
12.
<PAGE>
EXHIBIT I
NOTICE OF EXERCISE OF STOCK OPTION
I hereby notify Koll Real Estate Group (the
"Corporation") that I elect to purchase __________ shares of the
Corporation's Series A Convertible Redeemable Preferred Stock
(the "Purchased Shares") at the option exercise price of
$___________ per share (the "Option Exercise Price") pursuant to
that certain option (the "Option") granted to me under the
Corporation's 1993 Stock Option/Stock Issuance Plan on
____________________, 199___.
Concurrently with the delivery of this Exercise Notice
to the Corporate Secretary of the Corporation, I shall hereby pay
to the Corporation the Option Exercise Price for the Purchased
Shares in accordance with the provisions of my agreement with the
Corporation evidencing the Option and shall deliver whatever
additional documents may be required by such agreement as a
condition for exercise. Alternatively, I may utilize the special
broker-dealer sale and remittance procedure specified in my
agreement to effect the payment of the Option Exercise Price for
the Purchased Shares.
___________________, 199__
Date
__________________________
Optionee
Address:
Print name in exact manner
it is to appear on the
stock certificate: __________________________
Address to which certificate
is to be sent, if different
from address above: _________________________
_________________________
Social Security Number: _________________________
Employee Number: _________________________
<PAGE>
EXHIBIT 99.4
Form of Addendum to Stock Option Agreement
(Limited Stock Appreciation Rights)
<PAGE>
ADDENDUM
TO
STOCK OPTION AGREEMENT
The following provisions are hereby incorporated into,
and are hereby made a part of, that certain Stock Option
Agreement dated ___________________, 199___ (the "Option
Agreement") by and between Koll Real Estate Group, Inc. (the
"Corporation") and ________________________________ ("Optionee")
evidencing the stock option granted on such date to Optionee
under the terms of the Corporation's 1993 Stock Option/Stock
Issuance Plan, and such provisions shall be effective
immediately. All capitalized terms used in this Addendum, to the
extent not otherwise specifically defined herein, shall have the
meanings assigned to such terms in the Option Agreement.
LIMITED STOCK APPRECIATION RIGHT
Optionee is hereby granted a limited stock appreciation
right in tandem with the option, exercisable upon the terms and
conditions set forth below:
(i) Should a Hostile Take-Over occur at any time
after the option has been outstanding for a period of at least
six (6) months measured from the Effective Date of this Addendum
indicated below, then Optionee shall have the unconditional right
(exercisable during the thirty (30)-day period immediately
following the consummation of such Hostile Take-Over) to
surrender the option to the Corporation, to the extent such
option is at the time exercisable for vested shares of Series A
Preferred Stock. In return for the surrendered option, Optionee
shall receive a cash distribution from the Corporation in an
amount equal to the excess of (A) the Take-Over Price of the
shares of Series A Preferred Stock at the time vested under the
surrendered option (or surrendered portion) over (B) the
aggregate Option Price payable for such vested shares.
(ii) To exercise this limited stock appreciation
right, Optionee must provide the Corporation with written notice
of the option surrender during the applicable thirty (30)-day
exercise period, and such notice must be accompanied by the
return of Optionee's copy of the Option Agreement, together with
any written amendments to such Agreement. The cash distribution
shall be paid to Optionee within five (5) days following such
delivery date, and neither the approval of the Plan Administrator
nor the consent of the Board shall be required in connection with
such option surrender and cash
<PAGE>
distribution. Upon receipt of such cash distribution, this
option shall be cancelled with respect to the vested shares
subject to the surrendered option (or the surrendered portion),
and Optionee shall cease to have any further right to acquire
those vested Option Shares under the Option Agreement. The
option shall, however, remain outstanding for the balance of the
Option Shares (if any) in accordance with the terms and
provisions of the Option Agreement, and the Corporation shall
issue to the Optionee a new Option Agreement for those remaining
Option Shares in substantially the same form as the surrendered
Option Agreement.
(iii) For purposes of this limited stock
appreciation right, the following definitions shall be in effect:
- A HOSTILE TAKE-OVER shall be deemed to
occur in the event any person or related group of persons (other
than the Corporation or a person that directly or indirectly
controls, is controlled by, or is under common control with, the
Corporation) directly or indirectly acquires beneficial ownership
(within the meaning of Rule 13d-3 of the Securities Exchange Act
of 1934, as amended) of securities possessing more than fifty
percent (50%) of the total combined voting power of the
Corporation's outstanding securities pursuant to a tender or
exchange offer made directly to the Corporation's stockholders
which the Board does not recommend such stockholders to accept,
and
- more than fifty percent (50%) of the
securities so acquired in such tender or exchange offer are
accepted from holders other than the officers and directors of
the Corporation subject to the short-swing profit restrictions of
Section 16 of the Securities Exchange Act of 1934, as amended.
- The TAKE-OVER PRICE per share shall be
deemed to be equal to the greater of (A) the Fair Market Value
per share of Series A Preferred Stock on the option surrender
date, as determined in accordance with the valuation provisions
of Paragraph 9.b. of the Option Agreement, or (B) the highest
reported price per share paid by the tender offeror in effecting
the Hostile Take-Over. However, if the surrendered option is
designated as an Incentive Option in the Grant Notice, then the
Take-Over Price shall not exceed the clause (A) price per share.
<PAGE>
(iv) In no event may this limited stock
appreciation right be exercised when there is not a positive
spread between the Fair Market Value of the Option Shares and the
aggregate Option Price payable for such shares. This limited
stock appreciation right shall in all events terminate upon the
expiration or sooner termination of the option term and may not
be assigned or transferred by Optionee.
IN WITNESS WHEREOF, Koll Real Estate Group, Inc. has
caused this Addendum to be executed by its duly-authorized
officer, and Optionee has executed this Addendum, all as of the
Effective Date specified below.
KOLL REAL ESTATE GROUP, INC.
By__________________________
Title
______________, OPTIONEE
EFFECTIVE DATE: ______________, 199__
<PAGE>
EXHIBIT 99.5
Form of Notice of Grant: Class A Common Stock to be generally
used in connection with the 1993 Stock Option/Stock Issuance
Plan.
<PAGE>
KOLL REAL ESTATE GROUP
NOTICE OF GRANT OF STOCK OPTION
Notice is hereby given of the following stock option
grant (the "Option") to purchase shares of the Class A Common
Stock of Koll Real Estate Group (the "Corporation"):
OPTIONEE:
GRANT DATE:
OPTION EXERCISE PRICE: $_______ per share
NUMBER OF OPTION SHARES: ______ shares of Class A
Common Stock
EXPIRATION DATE:
TYPE OF OPTION: X Incentive Stock Option
Non-Statutory Option
EXERCISE SCHEDULE: The Option shall become exercisable for
(i) fifty percent (50%) of the Option Shares upon Optionee's
completion of two (2) years of Service (as defined in the
attached Stock Option Agreement) measured from the Grant Date,
and (ii) the remaining fifty percent (50%) of the Option Shares
upon the Optionee's completion of three (3) years of Service
measured from the Grant Date. In no event shall the Option
become exercisable for any additional Option Shares following the
Optionee's cessation of Service.
Optionee understands and agrees that the Option is
granted subject to and in accordance with the express terms and
conditions of the Koll Real Estate Group 1993 Stock Option/Stock
Issuance Plan (the "Plan"). Optionee further agrees to be bound
by the terms and conditions of the Plan and the terms and
conditions of the Option as set forth in the Stock Option
Agreement attached hereto as Exhibit A. Optionee also
acknowledges receipt of a copy of the official prospectus for the
Plan attached hereto as Exhibit B. A copy of the Plan is also
available upon request made to the Corporate Secretary at the
Corporate Offices at 4343 Von Karman Boulevard, Newport Beach, CA
92660.
<PAGE>
NO EMPLOYMENT OR SERVICE CONTRACT. Nothing in this
Agreement or in the Plan shall confer upon Optionee any right to
continue in Service for any period of specific duration or
interfere with or otherwise restrict in any way the rights of the
Corporation (or any parent or subsidiary employing Optionee) or
Optionee, which rights are hereby expressly reserved by each, to
terminate Optionee's Service at any time for any reason
whatsoever, with or without cause.
DATED: __________, 199__
KOLL REAL ESTATE GROUP
______________________
By:
Title:
____________, OPTIONEE
Address:
ATTACHMENTS
EXHIBIT A: STOCK OPTION AGREEMENT
EXHIBIT B: PLAN PROSPECTUS
2.
<PAGE>
EXHIBIT A
STOCK OPTION AGREEMENT
<PAGE>
EXHIBIT B
PLAN PROSPECTUS
<PAGE>
EXHIBIT 99.6
Form of Stock Option Agreement: Class A Common Stock to be
generally used in connection with the 1993 Stock Option/Stock
Issuance Plan
<PAGE>
KOLL REAL ESTATE GROUP
STOCK OPTION AGREEMENT
WITNESSETH:
RECITALS
A. The Corporation's Board of Directors (the "Board")
has adopted the Corporation's 1993 Stock Option/Stock Issuance
Plan (the "Plan") for the purpose of attracting and retaining the
services of key employees (including officers and directors),
non-employee Board members and consultants and other independent
advisors.
B. Optionee is an individual who is to render
valuable services to the Corporation or one or more parent or
subsidiary corporations, and this Agreement is executed pursuant
to, and is intended to carry out the purposes of, the Plan in
connection with the Corporation's grant of a stock option to
purchase shares of the Corporation's Class A Common Stock ("Class
A Common Stock").
NOW, THEREFORE, it is hereby agreed as follows:
1. GRANT OF OPTION. Subject to and upon the terms
and conditions set forth in this Agreement, the Corporation
hereby grants to Optionee, as of the grant date (the "Grant
Date") specified in the accompanying Notice of Grant of Stock
Option (the "Grant Notice"), a stock option to purchase up to
that number of shares of the Class A Common Stock (the "Option
Shares") as is specified in the Grant Notice. Such Option Shares
shall be purchasable from time to time during the option term at
the option exercise price (the "Option Exercise Price") specified
in the Grant Notice.
2. OPTION TERM. This option shall expire at the
close of business on the expiration date (the "Expiration Date")
specified in the Grant Notice, unless sooner terminated in
accordance with Paragraph 5 or 6.
3. LIMITED TRANSFERABILITY. This option shall be
exercisable only by Optionee during Optionee's lifetime and shall
not be transferable or assignable by Optionee other than by will
or by the laws of descent and distribution following Optionee's
death.
4. DATES OF EXERCISE. This option shall become
exercisable for the Option Shares in accordance with the
installment schedule specified in the Grant Notice. As the
option becomes exercisable for one or more installments, those
<PAGE>
installments shall accumulate, and the option shall remain
exercisable for the accumulated installments until the Expiration
Date or sooner termination of the option term under Paragraph 5
or 6 of this Agreement. In no event shall this option become
exercisable for any additional Option Shares following Optionee's
cessation of Service (as defined in Paragraph 5 below).
5. CESSATION OF SERVICE. The option term specified
in Paragraph 2 shall terminate (and this option shall cease to
remain outstanding) prior to the Expiration Date in accordance
with the following provisions:
a. Upon Optionee's cessation of Service for any
reason, this option shall immediately terminate and cease to
remain outstanding for any Option Shares for which it is not
otherwise at that time exercisable.
b. Should Optionee cease Service for any reason other
than death or permanent disability while this option remains
outstanding, then Optionee shall have a three (3)-month period
measured from the date of such cessation of Service in which to
exercise this option for any or all of the Option Shares for
which this option is exercisable at the time of such cessation of
Service. In no event, however, may this option be exercised at
any time after the specified Expiration Date of the option term.
Upon the expiration of such three (3)-month period or (if
earlier) upon the specified Expiration Date of the option term,
this option shall terminate and cease to remain outstanding for
any vested Option Shares for which this option has not otherwise
been exercised.
c. Should Optionee die while in Service or within the
three (3)-month period following his or her cessation of Service,
then the personal representative of Optionee's estate or the
person or persons to whom this option is transferred pursuant to
Optionee's will or in accordance with the laws of descent and
distribution shall have the right to exercise the option for any
or all of the Option Shares for which this option is exercisable
at the time of Optionee's cessation of Service, less any Option
Shares subsequently purchased by Optionee prior to death. Such
right shall lapse, and this option shall terminate and cease to
remain outstanding for any vested Option Shares for which this
option has not otherwise been exercised, upon the earlier of
(i) the first anniversary of the date of Optionee's death or
(ii) the Expiration Date.
2.
<PAGE>
d. Should Optionee become permanently disabled and
cease by reason thereof to remain in Service at any time during
the option term, then Optionee shall have a twelve (12)-month
period commencing with the date of such cessation of Service in
which to exercise this option for any or all of the Option Shares
for which this option is exercisable at the time of such
cessation of Service. In no event, however, may this option be
exercised at any time after the specified Expiration Date of the
option term. Upon the expiration of such limited period of
exercisability or (if earlier) upon the Expiration Date, this
option shall terminate and cease to remain outstanding for any
vested Option Shares for which this option has not otherwise been
exercised.
e. Should (i) Optionee's Service be terminated for
misconduct (including, but not limited to, any act of dishonesty,
willful misconduct, fraud or embezzlement) or (ii) Optionee make
any unauthorized use or disclosure of confidential information or
trade secrets of the Corporation or any parent or subsidiary,
then in any such event this option shall terminate immediately
and cease to remain outstanding.
f. During the limited period of post-Service
exercisability applicable pursuant to subparagraphs b. through d.
above, this option may not be exercised in the aggregate for more
than the number of Option Shares (if any) for which this option
is, at the time of the Optionee's cessation of Service,
exercisable in accordance with either the normal exercise
provisions specified in the Grant Notice or the special
acceleration provisions of Paragraph 6 of this Agreement.
g. For purposes of this Agreement, the following
definitions shall be in effect:
- Optionee shall be deemed to remain in SERVICE
for so long as such individual performs services on a periodic
basis to the Corporation (or any parent or subsidiary
corporation) in the capacity of an Employee, a non-employee
member of the Board or an independent consultant or advisor.
- Optionee shall be considered to be an
EMPLOYEE for so long as such individual performs services while
in the employ of the Corporation or one or more parent or
subsidiary corporations, subject to the control
3.
<PAGE>
and direction of the employer entity not only as to the work to
be performed but also as to the manner and method of performance.
- Optionee shall be deemed to be PERMANENTLY
DISABLED and to have incurred a PERMANENT DISABILITY if Optionee
is unable to engage in any substantial gainful activity by reason
of any medically determinable physical or mental impairment
expected to result in death or to be of continuous duration of
twelve (12) months or more.
- A corporation shall be considered to be a
SUBSIDIARY of the Corporation if it is a member of an unbroken
chain of corporations which begins with the Corporation, provided
each such corporation in the unbroken chain (other than the last
corporation) owns, at the time of determination, stock possessing
fifty percent (50%) or more of the total combined voting power of
all classes of stock in one of the other corporations in such
chain.
- A corporation shall be considered to be a
PARENT of the Corporation if it is a member of an unbroken chain
of corporations ending with the Corporation, provided each such
corporation in the unbroken chain (other than the Corporation)
owns, at the time of determination, stock possessing fifty
percent (50%) or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain.
6. CORPORATE TRANSACTION.
A. In the event of any of the following stockholder-
approved transactions to which the Corporation is a party (a
"Corporate Transaction"):
- a merger or consolidation in which the Corporation
is not the surviving entity, except for a transaction the
principal purpose of which is to change the state in which the
Corporation is incorporated,
- the sale, transfer or other disposition of all or
substantially all of the assets of the Corporation in complete
liquidation or dissolution of the Corporation, or
4.
<PAGE>
- any reverse merger in which the Corporation is the
surviving entity but in which securities possessing more than
fifty percent (50%) of the total combined voting power of the
Corporation's outstanding securities are transferred to a person
or persons different from the persons holding those securities
immediately prior to such merger,
this option, to the extent outstanding at such
time but not otherwise fully exercisable, shall automatically
accelerate so that this option shall, immediately prior to the
specified effective date for the Corporate Transaction, become
fully exercisable for all the Option Shares at the time subject
to this option and may be exercised for all or any portion of
such shares as fully-vested shares of Class A Common Stock. No
such acceleration of this option, however, shall occur if and to
the extent: (i) this option is, in connection with the Corporate
Transaction, either to be assumed by the successor corporation or
parent thereof or to be replaced with a comparable option to
purchase shares of the capital stock of the successor corporation
or parent thereof or (ii) such option is to be replaced with a
cash incentive program of the successor corporation which
preserves the option spread existing at the time of the Corporate
Transaction (the excess of the Fair Market Value (as such term is
defined in Paragraph 9.B. below) of the Option Shares at the time
subject to this option over the aggregate Option Exercise Price
payable for such shares) and provides for subsequent pay-out in
accordance with the same vesting schedule in effect for the
option pursuant to the option exercise schedule set forth in the
Grant Notice. The determination of option comparability under
clause (i) shall be made by the Plan Administrator, and such
determination shall be final, binding and conclusive.
B. Any portion of this option accelerated in
connection with a Corporate Transaction shall remain exercisable
as an incentive stock option under the Federal tax laws (if the
option is designated as such in the Grant Notice) only to the
extent the applicable dollar limitation of Paragraph 17 is not
exceed in the calendar year of such Corporate Transaction.
C. This option, to the extent not previously
exercised, shall terminate and cease to be outstanding
immediately following the consummation of such Corporate
Transaction, unless it is expressly assumed by the successor
corporation or parent thereof.
D. This Agreement shall not in any way affect the
right of the Corporation to adjust, reclassify, reorganize or
otherwise make changes in its capital or business structure or to
merge,
5.
<PAGE>
consolidate, dissolve, liquidate or sell or transfer all or any
part of its business or assets.
7. ADJUSTMENT IN OPTION SHARES.
A. In the event any change is made to the Class A
Common Stock issuable under the Plan by reason of any stock
split, stock dividend, recapitalization, combination of shares,
exchange of shares or other change affecting the outstanding
Class A Common Stock as a class effected without the
Corporation's receipt of consideration, the Plan Administrator
shall make appropriate adjustments to (i) the number and/or class
of securities subject to this option and (ii) the Option Exercise
Price payable per share in order to prevent any dilution or
enlargement of benefits hereunder. Such adjustments shall be
final, binding and conclusive.
B. No adjustments shall be made to either the number
of Option Shares or the Option Exercise Price payable per share,
in the event the Corporation's outstanding shares of Series A
Convertible Redeemable Preferred Stock are converted into shares
of the Class A Common Stock or are redeemed for consideration
payable in such Class A shares or in cash or other securities.
C. If this option is assumed in connection with any
Corporate Transaction under Paragraph 6 or is otherwise to
continue outstanding, then this option shall, immediately after
such Corporate Transaction, be appropriately adjusted to apply
and pertain to the number and class of securities which would
have been issued to Optionee in the consummation of such
Corporate Transaction had the option been exercised immediately
prior to such Corporate Transaction. Appropriate adjustments
shall also be made to the Option Exercise Price payable per
share, provided the aggregate Option Exercise Price payable
hereunder shall remain the same.
8. PRIVILEGE OF STOCK OWNERSHIP. The holder of this
option shall not have any of the rights of a stockholder with
respect to the Option Shares until such individual shall have
exercised the option and paid the Option Exercise Price for the
purchased Option Shares.
9. MANNER OF EXERCISING OPTION.
A. In order to exercise this option with respect to
all or any part of the Option Shares for which this option is at
the time exercisable, Optionee (or in the case of exercise after
Optionee's death, Optionee's executor, administrator, heir or
legatee, as the case may be) must take the following actions:
6.
<PAGE>
- Deliver to the Corporate Secretary of the
Corporation an executed notice of exercise in substantially the
form of Exhibit I to this Agreement (the "Exercise Notice") in
which there is specified the number of Option Shares which are to
be purchased under the exercised option.
- Pay the aggregate Option Exercise Price for the
purchased shares through one or more of the following
alternatives:
(a) full payment in cash or by check made payable
to the Corporation's order;
(b) full payment in shares of Class A Common
Stock held for the requisite period necessary to avoid a charge
to the Corporation's earnings for financial reporting purposes
and valued at Fair Market Value on the Exercise Date (as such
term is defined below);
(c) full payment in a combination of shares of
Class A Common Stock held for the requisite period necessary to
avoid a charge to the Corporation's reported earnings and valued
at Fair Market Value on the Exercise Date and cash or check
payable to the Corporation's order; or
(d) full payment effected through a broker-dealer
sale and remittance procedure pursuant to which Optionee shall
concurrently provide irrevocable written instructions to (i) a
Corporation-designated brokerage firm to effect the immediate
sale of the purchased shares and remit to the Corporation, out of
the sale proceeds available on the settlement date, sufficient
funds to cover the aggregate Option Exercise Price payable for
the purchased shares plus all applicable Federal, state and local
income and employment taxes required to be withheld in connection
with such purchase and (ii) the Corporation to deliver the
certificates for the purchased shares directly to such brokerage
firm in order to complete the sale transaction.
- Furnish to the Corporation appropriate
documentation that the person or persons exercising the option
(if other than Optionee) have the right to exercise this option.
7.
<PAGE>
B. For purposes of this Agreement, the EXERCISE DATE
shall be the date on which the executed Exercise Notice shall
have been delivered to the Corporation. Except to the extent the
sale and remittance procedure specified above is utilized in
connection with the option exercise, payment of the Exercise
Price for the purchased shares must accompany such Exercise
Notice. For all valuation purposes under this Agreement, the
FAIR MARKET VALUE per share of Class A Common Stock on any
relevant date shall be the closing selling price per share of
that security on the date in question, as such price is reported
by the National Association of Securities Dealers through the
NASDAQ National Market System or any successor system. If there
is no such reported price on the date in question, then the Fair
Market Value shall be the closing selling price per share of the
Class A Common Stock on the last preceding date for which such
quotation exists.
C. As soon as practical after receipt of the Exercise
Notice, the Corporation shall mail or deliver to or on behalf of
Optionee (or any other person or persons exercising this option
in accordance herewith) a certificate or certificates
representing the purchased Option Shares.
D. In no event may this option be exercised for any
fractional shares.
10. GOVERNING LAW. The interpretation, performance
and enforcement of this Agreement shall be governed by the laws
of the State of California without resort to that State's
conflict-of-laws rules.
11. COMPLIANCE WITH LAWS AND REGULATIONS. The
exercise of this option and the issuance of Option Shares upon
such exercise shall be subject to compliance by the Corporation
and Optionee with all applicable requirements of law relating
thereto and with all applicable regulations of any stock exchange
on which shares of Class A Common Stock may be listed for trading
at the time of such exercise and issuance.
12. SUCCESSORS AND ASSIGNS. Except to the extent
otherwise provided in Paragraph 3 or 6, the provisions of this
Agreement shall inure to the benefit of, and be binding upon, the
successors, administrators, heirs and legal representatives of
Optionee and the successors and assigns of the Corporation.
13. LIABILITY OF CORPORATION.
A. If the Option Shares covered by this Agreement
exceed, as of the Grant Date, the number of shares which may
without stockholder approval be issued under the Plan, then this
8.
<PAGE>
option shall be void with respect to such excess shares unless
stockholder approval of an amendment sufficiently increasing the
number of shares issuable under the Plan is obtained in
accordance with the provisions of Section II of Article Six of
the Plan.
B. The inability of the Corporation to obtain
approval from any regulatory body having authority deemed by the
Corporation to be necessary to the lawful issuance and sale of
any Class A Common Stock pursuant to this option shall relieve
the Corporation of any liability with respect to the non-issuance
or sale of the Class A Common Stock as to which such approval
shall not have been obtained. The Corporation however, shall use
its best efforts to obtain all such approvals.
14. NO EMPLOYMENT/SERVICE CONTRACT. Nothing in this
Agreement or in the Plan shall confer upon Optionee any right to
continue in the Service of the Corporation (or any parent or
subsidiary employing or retaining Optionee) for any period of
specific duration or interfere with or otherwise restrict in any
way the rights of the Corporation (or any such parent or
subsidiary) or Optionee, which rights are hereby expressly
reserved by each party, to terminate Optionee's Service at any
time for any reason whatsoever, with or without cause.
15. NOTICES. Any notice required to be given or
delivered to the Corporation under the terms of this Agreement
shall be in writing and addressed to the Corporation in care of
the Corporate Secretary at the Corporation's principal offices at
4343 Von Karman Boulevard, Newport Beach, CA 92660. Any notice
required to be given or delivered to Optionee shall be in writing
and addressed to Optionee at the address indicated on the Grant
Notice. All notices shall be deemed to have been given or
delivered upon personal delivery or upon deposit in the U.S.
mail, by registered or certified mail, postage prepaid and
properly addressed to the party to be notified.
16. CONSTRUCTION. This Agreement and the option
evidenced hereby are made and granted pursuant to the Plan and
are in all respects limited by and subject to the express terms
and provisions of the Plan. All decisions of the Plan
Administrator with respect to any question or issue arising under
the Plan or this Agreement shall be conclusive and binding on all
persons having an interest in this option.
17. ADDITIONAL TERMS APPLICABLE TO AN INCENTIVE STOCK
OPTION. In the event this option is designated an incentive
stock option in the Grant Notice, the following terms and
conditions shall also apply to the grant:
9.
<PAGE>
a. This option shall cease to qualify for
favorable tax treatment as an incentive stock option under the
Federal tax laws if (and to the extent) this option is exercised
for one or more Option Shares: (i) more than three (3) months
after the date Optionee ceases to be an Employee for any reason
other than death or permanent disability (as defined in Paragraph
5) or (ii) more than one (1) year after the date Optionee ceases
to be an Employee by reason of permanent disability.
b. If this option is to become exercisable in a
series of installments as indicated in the Grant Notice, no such
installment shall qualify for favorable tax treatment as an
incentive stock option under the Federal tax laws if (and to the
extent) the aggregate Fair Market Value (determined at the Grant
Date) of the Class A Common Stock for which such installment
first becomes exercisable hereunder will, when added to the
aggregate fair market value (determined as of the respective date
or dates of grant) of the Class A Common Stock or other
securities (including, without limitation, the Corporation's
Series A Convertible Redeemable Preferred Stock) for which this
option or one or more other incentive stock options granted to
Optionee prior to the Grant Date (whether under the Plan or any
other option plan of the Corporation or any parent or subsidiary)
first become exercisable during the same calendar year, exceed
One Hundred Thousand Dollars ($100,000) in the aggregate. Should
the number of shares of Class A Common Stock for which this
option first becomes exercisable in any calendar year exceed the
applicable One Hundred Thousand Dollar ($100,000) limitation, the
option may nevertheless be exercised for those excess shares in
such calendar year as a non-statutory option.
c. Should the exercisability of this option be
accelerated upon a Corporate Transaction in accordance with
Paragraph 6, then this option shall qualify for favorable tax
treatment as an incentive stock option under the Federal tax laws
only to the extent the aggregate Fair Market Value (determined at
the Grant Date) of the Class A Common Stock for which this option
first becomes exercisable in the calendar year in which the
Corporate Transaction occurs does not, when added to the
aggregate fair market value (determined as of the respective date
or dates of grant) of the Class A Common Stock or other
securities (including, without limitation, the Corporation's
Series A Convertible Redeemable
10.
<PAGE>
Preferred Stock) for which this option or one or more other
incentive stock options granted to Optionee prior to the Grant
Date (whether under the Plan or any other option plan of the
Corporation or any parent or subsidiary) first become exercisable
during the same calendar year, exceed One Hundred Thousand
Dollars ($100,000) in the aggregate. Should the number of shares
of Class A Common Stock for which this option first becomes
exercisable in the calendar year of such Corporate Transaction
exceed the applicable One Hundred Thousand Dollar ($100,000)
limitation, the option may nevertheless be exercised for the
excess shares in such calendar year as a non-statutory option.
d. Should the Optionee hold, in addition to this
option, one or more other options to purchase Class A Common
Stock or other securities which become exercisable for the first
time in the same calendar year as this option, then the foregoing
limitations on the exercisability of such options as incentive
stock options under the Federal tax laws shall be applied on the
basis of the order in which such options are granted.
e. To the extent this option should fail to
qualify as an incentive stock option under the Federal tax laws,
Optionee will recognize compensation income in connection with
the acquisition of one or more Option Shares hereunder, and
Optionee must make appropriate arrangements for the satisfaction
of all Federal, state and local income and employment tax
withholding requirements applicable to such compensation income.
18. ADDITIONAL TERMS APPLICABLE TO A NON-STATUTORY
STOCK OPTION. In the event this option is designated a non-
statutory stock option in the Grant Notice, Optionee shall make
appropriate arrangements with the Corporation or any parent or
subsidiary employing Optionee for the satisfaction of all
Federal, state and local income and employment tax withholding
requirements applicable to the exercise of this option.
19. STOCKHOLDER APPROVAL. Notwithstanding any
provision to the contrary in this Agreement, this option may not
be exercised in whole or in part at any time prior to the
approval of the Plan by the Corporation's stockholders at the
1994 Annual Meeting. In the event such stockholder approval is
not obtained, this option shall thereupon terminate and cease to
remain outstanding without ever becoming exercisable for any of
the Option Shares.
11.
<PAGE>
EXHIBIT I
NOTICE OF EXERCISE OF STOCK OPTION
I hereby notify Koll Real Estate Group (the
"Corporation") that I elect to purchase __________ shares of the
Corporation's Class A Common Stock (the "Purchased Shares") at
the option exercise price of $___________ per share (the "Option
Exercise Price") pursuant to that certain option (the "Option")
granted to me under the Corporation's 1993 Stock Option/Stock
Issuance Plan on ____________________, 199___.
Concurrently with the delivery of this Exercise Notice
to the Corporate Secretary of the Corporation, I shall hereby pay
to the Corporation the Option Exercise Price for the Purchased
Shares in accordance with the provisions of my agreement with the
Corporation evidencing the Option and shall deliver whatever
additional documents may be required by such agreement as a
condition for exercise. Alternatively, I may utilize the special
broker-dealer sale and remittance procedure specified in my
agreement to effect the payment of the Option Exercise Price for
the Purchased Shares.
______________, 199__
Date
_______________________
Optionee
Address:
Print name in exact manner
it is to appear on the
stock certificate: __________________________
Address to which certificate
is to be sent, if different
from address above: _________________________
_________________________
Social Security Number: _________________________
Employee Number: _________________________
<PAGE>
EXHIBIT 99.7
Form of Addendum to Stock Option Agreement
(Limited Stock Appreciation Rights)
<PAGE>
ADDENDUM
TO
STOCK OPTION AGREEMENT
The following provisions are hereby incorporated into,
and are hereby made a part of, that certain Stock Option
Agreement dated __________________, 199___ (the "Option
Agreement") by and between Koll Real Estate Group (the
"Corporation") and ________________________________ ("Optionee")
evidencing the stock option granted on such date to Optionee
under the terms of the Corporation's 1993 Stock Option/Stock
Issuance Plan, and such provisions shall be effective
immediately. All capitalized terms used in this Addendum, to the
extent not otherwise specifically defined herein, shall have the
meanings assigned to such terms in the Option Agreement.
LIMITED STOCK APPRECIATION RIGHT
Optionee is hereby granted a limited stock appreciation
right in tandem with the option, exercisable upon the terms and
conditions set forth below:
(i) Should a Hostile Take-Over occur at any time
after the option has been outstanding for a period of at least
six (6) months measured from the Effective Date of this Addendum
indicated below, then Optionee shall have the unconditional right
(exercisable during the thirty (30)-day period immediately
following the consummation of such Hostile Take-Over) to
surrender the option to the Corporation, to the extent such
option is at the time exercisable for vested Option Shares. In
return for the surrendered option, Optionee shall receive a cash
distribution from the Corporation in an amount equal to the
excess of (A) the Take-Over Price of the Option Shares at the
time vested under the surrendered option (or surrendered portion)
over (B) the aggregate Option Exercise Price payable for such
vested shares.
(ii) To exercise this limited stock appreciation
right, Optionee must provide the Corporation with written notice
of the option surrender during the applicable thirty (30)-day
exercise period, and such notice must be accompanied by the
return of Optionee's copy of the Option Agreement, together with
any written amendments to such Agreement. The cash distribution
shall be paid to Optionee within five (5) days following such
delivery date, and neither the approval of the Plan Administrator
nor the consent of the Board shall be required in connection with
such option surrender and cash distribution. Upon receipt of
such cash distribution, this
<PAGE>
option shall be cancelled with respect to the vested Option
Shares subject to the surrendered option (or the surrendered
portion), and Optionee shall cease to have any further right to
acquire those vested Option Shares under the Option Agreement.
The option shall, however, remain outstanding for the balance of
the Option Shares (if any) in accordance with the terms and
provisions of the Option Agreement, and the Corporation shall
issue to the Optionee a new Option Agreement for those remaining
Option Shares in substantially the same form as the surrendered
Option Agreement.
(iii) For purposes of this limited stock
appreciation right, the following definitions shall be in effect:
- A HOSTILE TAKE-OVER shall be deemed to
occur in the event any person or related group of persons (other
than the Corporation or a person that directly or indirectly
controls, is controlled by, or is under common control with, the
Corporation) directly or indirectly acquires beneficial ownership
(within the meaning of Rule 13d-3 of the Securities Exchange Act
of 1934, as amended) of securities possessing more than thirty
percent (30%) of the total combined voting power of the
Corporation's outstanding securities pursuant to a tender or
exchange offer made directly to the Corporation's stockholders
which the Board does not recommend such stockholders to accept,
AND
- more than fifty percent (50%) of the
securities so acquired in such tender or exchange offer are
accepted from holders other than the officers and directors of
the Corporation subject to the short-swing profit restrictions of
Section 16 of the Securities Exchange Act of 1934, as amended.
- The TAKE-OVER PRICE per share shall be
deemed to be equal to the greater of (A) the Fair Market Value
per Option Share on the option surrender date, as determined in
accordance with the valuation provisions of Paragraph 9.B. of the
Option Agreement, or (B) the highest reported price per share the
tender offeror paid for the same security in effecting the
Hostile Take-Over. However, if the surrendered option is
designated as an Incentive Option in the Grant Notice, then the
Take-Over Price shall not exceed the clause (A) price per share.
<PAGE>
(iv) In no event may this limited stock
appreciation right be exercised when there is not a positive
spread between the Fair Market Value of the Option Shares and the
aggregate Option Exercise Price payable for such shares. This
limited stock appreciation right shall in all events terminate
upon the expiration or sooner termination of the option term and
may not be assigned or transferred by Optionee.
IN WITNESS WHEREOF, Koll Real Estate Group has caused
this Addendum to be executed by its duly-authorized officer, and
Optionee has executed this Addendum, all as of the Effective Date
specified below.
KOLL REAL ESTATE GROUP
By____________________
Title:
____________, OPTIONEE
EFFECTIVE DATE: _______________, 199__
<PAGE>
EXHIBIT 99.8
Form of Notice of Grant of Automatic Stock Option: Series A
Preferred Stock to be generally used in connection with the
1993 Stock Option/Stock Issuance Plan
<PAGE>
ANNUAL GRANT
KOLL REAL ESTATE GROUP
NOTICE OF GRANT OF
AUTOMATIC STOCK OPTION
Notice is hereby given of the following stock option
(the "Option") to purchase shares of the Series A Convertible
Redeemable Preferred Stock of Koll Real Estate Group (the
"Corporation") which has been granted pursuant to the automatic
grant program in effect under the Corporation's 1993 Stock
Option/Stock Issuance Plan ( the "Plan"):
OPTIONEE:
GRANT DATE:
TYPE OF OPTION: Non-Statutory Stock Option
OPTION EXERCISE PRICE: $_________ per share
NUMBER OF OPTION SHARES: 12,500 shares of Series A
Convertible Redeemable Preferred Stock
EXPIRATION DATE:
EXERCISE SCHEDULE: The option is immediately
exercisable for all the Option Shares.
VESTING SCHEDULE: The Option Shares shall be unvested
and subject to repurchase by the Corporation, at the Option
Exercise Price paid per share, upon Optionee's cessation of
service as a member of the Corporation's Board of Directors (the
"Board"). Optionee shall acquire a vested interest in, and the
Corporation's repurchase right shall lapse with respect to: (i)
forty percent (40%) of the Option Shares upon Optionee's
completion of one (1) year of Board service measured from the
Grant Date, (ii) an additional thirty percent (30%) of the Option
Shares upon the Optionee's completion of two (2) years of Board
service measured from the Grant Date, and (iii) the remaining
thirty percent (30%) of the Option Shares upon the Optionee's
completion of three (3) years of Board service measured from the
Grant Date. In no event shall any additional Option Shares vest
following Optionee's cessation of Board service.
<PAGE>
Optionee understands and agrees that the Option is
granted subject to and in accordance with the express terms and
conditions of the Plan governing automatic option grants made to
non-employee Board members. Optionee further agrees to be bound
by the terms and conditions of the Plan and the terms and
conditions of the Option as set forth in the Automatic Stock
Option Agreement attached hereto as Exhibit A.
Optionee hereby acknowledges receipt of a copy of the
official Plan Summary and Prospectus attached hereto as Exhibit
B. A copy of the Plan is also available upon request made to the
Corporate Secretary at the Corporate Offices at 4343 Von Karman
Boulevard, Newport Beach, CA 92660.
REPURCHASE RIGHT. OPTIONEE HEREBY AGREES THAT ALL
UNVESTED OPTION SHARES ACQUIRED UPON THE EXERCISE OF THE OPTION
SHALL NOT BE TRANSFERRABLE AND SHALL BE SUBJECT TO REPURCHASE BY
THE CORPORATION AND ITS ASSIGNS, AT THE OPTION PRICE PAID PER
SHARE, UPON OPTIONEE'S TERMINATION OF BOARD SERVICE. THE TERMS
AND CONDITIONS OF SUCH REPURCHASE RIGHT SHALL BE SET FORTH IN A
STOCK PURCHASE AGREEMENT, IN FORM AND SUBSTANCE SATISFACTORY TO
THE CORPORATION, EXECUTED BY OPTIONEE AT THE TIME OF THE OPTION
EXERCISE.
No provision of this Notice of Grant or the attached
Automatic Stock Option Agreement shall in any way be construed or
interpreted so as to affect adversely or otherwise impair the
right of the Corporation or the stockholders to remove Optionee
from the Board at any time in accordance with the provisions of
applicable law.
DATED: _____________, 199__
KOLL REAL ESTATE GROUP
By: _________________
Title:
OPTIONEE _____________
Address:
ATTACHMENTS:
EXHIBIT A: Stock Option Agreement
EXHIBIT B: Plan Summary and Prospectus
<PAGE>
EXHIBIT 99.9
Form of Automatic Stock Option Agreement: Series A Preferred
Stock to be generally used in connection with the 1993 Stock
Option/Stock Issuance Plan
II-15.
<PAGE>
KOLL REAL ESTATE GROUP
AUTOMATIC STOCK OPTION AGREEMENT
RECITALS
A. The Corporation has approved and implemented an
automatic option grant program under the 1993 Stock Option/Stock
Issuance Plan (the "Plan") pursuant to which eligible non-
employee members of the Corporation's Board of Directors (the
"Board") will automatically receive special option grants at
periodic intervals over their period of Board service in order to
provide such individuals with a meaningful incentive to continue
to serve as Board members.
B. Optionee is an eligible non-employee Board member,
and this Agreement is executed pursuant to, and is intended to
carry out the purposes of, the Plan in connection with the
automatic grant of a stock option to purchase shares of the
Corporation's Series A Convertible Redeemable Preferred Stock
("Series A Preferred Stock) under the Plan.
C. The granted option is intended to be a non-
statutory option which does not meet the requirements of
Section 422 of the Internal Revenue Code.
NOW, THEREFORE, it is hereby agreed as follows:
1. GRANT OF OPTION. Subject to and upon the terms
and conditions set forth in this Agreement, there is hereby
granted to Optionee, as of the date of grant (the "Grant Date")
specified in the accompanying Notice of Grant of Automatic Stock
Option (the "Grant Notice"), a stock option to purchase up to the
number of shares of Series A Preferred Stock (the "Option
Shares") specified in the Grant Notice. The Option Shares shall
be purchasable from time to time during the option term at the
price per share (the "Option Exercise Price") specified in the
Grant Notice.
2. OPTION TERM. This option shall have a maximum
term of ten (10) years measured from the Grant Date and shall
expire at the close of business on the expiration date specified
in the Grant Notice ("Expiration Date"), unless sooner terminated
pursuant to Paragraph 5, 7 or 8.
3. LIMITED TRANSFERABILITY. This option, together
with the special stock appreciation right provided under
Paragraph 8.B., shall be neither transferable nor assignable by
Optionee, other
<PAGE>
than a transfer of this option effected by will or by the laws of
descent and distribution following Optionee's death, and may be
exercised, during Optionee's lifetime, only by Optionee.
4. EXERCISABILITY. This option shall be immediately
exercisable for any or all of the Option Shares, whether or not
the Option Shares are vested in accordance with the Vesting
Schedule set forth in the Grant Notice and shall remain so
exercisable until the expiration or sooner termination of the
option term. In no event, however, shall any additional Option
Shares vest following Optionee's cessation of service as a Board
member.
5. CESSATION OF BOARD SERVICE. Should Optionee's
service as a Board member cease while this option remains
outstanding, then the option term specified in Paragraph 2 shall
terminate (and this option shall cease to remain outstanding)
prior to the Expiration Date in accordance with the following
provisions:
- Should Optionee cease to serve as a Board member
for any reason (other than death or permanent disability) while
holding this option, then the period for exercising this option
shall be reduced to a six (6)-month period commencing with the
date of such cessation of Board service, but in no event shall
this option be exercisable at any time after the Expiration Date.
During such limited period of exercisability, this option may not
be exercised for more than the number of Option Shares (if any)
in which the Optionee is vested on the date Optionee ceases
service as a Board member. Upon the earlier of (i) the
expiration of such six (6)-month period or (ii) the specified
Expiration Date, the option shall terminate and cease to remain
outstanding with respect to any vested Option Shares for which
the option has not otherwise been exercised.
- Should Optionee die during the six (6)-month
period following his or her cessation of Board service, then the
personal representative of Optionee's estate or the person or
persons to whom the option is transferred pursuant to Optionee's
will or in accordance with the laws of descent and distribution
shall have the right to exercise this option for any or all of
the Option Shares in which the Optionee is vested at the time of
Optionee's cessation of Board service (less any Option Shares
subsequently purchased by Optionee but prior to death). Such
right of exercise shall terminate, and this option shall
accordingly cease to remain outstanding with respect to all
vested Option Shares for which this option has not otherwise been
exercised, upon the earlier of (i) the expiration of the twelve
(12)-month period measured from the date of Optionee's death or
(ii) the specified Expiration Date of the option term.
2.
<PAGE>
- Should Optionee die or become permanently disabled
while serving as a Board member, then all the Option Shares
subject to this option at the time of such cessation of Board
service shall immediately vest, and Optionee, or the personal
representative of Optionee's estate or the person or persons to
whom the option is transferred pursuant to Optionee's will or in
accordance with the laws of descent and distribution, shall have
the right to exercise this option for any or all of those vested
Option Shares. Such right of exercise shall terminate, and this
option shall cease to remain outstanding with respect to all
Option Shares for which this option has not otherwise been
exercised, upon the earlier of (i) the expiration of the twelve
(12)-month period measured from the date on which Optionee dies
or becomes permanently disabled or (ii) the specified Expiration
Date of the option term.
- Upon Optionee's cessation of Board service for any
reason other than death or permanent disability, this option
shall immediately terminate and cease to be outstanding with
respect to any and all Option Shares in which the Optionee is not
otherwise at that time vested in accordance with the Vesting
Schedule set forth in the Grant Notice or the special vesting
acceleration provisions of Paragraph 7 or 8.
- Optionee shall be deemed to be PERMANENTLY
DISABLED if Optionee is unable to engage in any substantial
gainful activity by reason of any medically determinable physical
or mental impairment expected to result in death or to be of
continuous duration of twelve (12) months or more.
6. ADJUSTMENT IN OPTION SHARES.
A. Should any change be made to the Series A
Preferred Stock issuable under the Plan by reason of any stock
split, stock dividend, recapitalization, combination of shares,
exchange of shares or other change affecting such Series A
Preferred Stock as a class without the Corporation's receipt of
consideration (other than the redemption or conversion of such
Series A shares), then the number and class of securities
purchasable under this option and the Option Exercise Price
payable per share shall be appropriately adjusted to prevent the
dilution or enlargement of Optionee's rights hereunder; provided,
however, the aggregate Option Exercise Price shall remain the
same.
B. Upon each redemption or conversion of the
Corporation's outstanding shares of Series A Preferred Stock, the
number of shares of Series A Preferred Stock at the time subject
to this option shall automatically be decreased by the same
percentage by which the number of outstanding shares of Series A
Preferred Stock is decreased by reason of such redemption or
conversion, and
3.
<PAGE>
this option shall, in lieu of such Series A shares, automatically
become exercisable for that number of shares of the Corporation's
Class A Common Stock obtained by multiplying (i) the number of
shares of Series A Preferred Stock no longer subject to this
option by (ii) the number of shares of Class A Common Stock into
which each such redeemed or converted share of Series A Preferred
Stock was at the time convertible on a per-share basis. In
addition, the Option Exercise Price payable per share of the
Class A Common Stock which becomes subject to this option shall
be determined by dividing (i) the Option Exercise Price per share
in effect for the Series A Preferred Stock immediately prior to
the redemption or conversion of such Series A shares by (ii) the
number of shares of Class A Common Stock into which each such
redeemed or converted share of Series A Preferred Stock was at
the time convertible on a per-share basis. To the extent this
option becomes exercisable for shares of Class A Common Stock,
all references in this Agreement to the Series A Preferred Stock
shall automatically be converted into references to shares of the
Class A Common Stock.
C. To the extent this option is assumed in connection
with any Corporate Transaction under Paragraph 7 or is otherwise
to continue in effect, this option shall be appropriately
adjusted, immediately after such Corporate Transaction, to apply
and pertain to the number and class of securities which would
have been issued to the Optionee, in consummation of such
Corporate Transaction, had this option been exercised immediately
prior to such Corporate Transaction. Appropriate adjustments
shall also be made to the Exercise Price payable per share,
provided the aggregate exercise price payable for such securities
shall remain the same.
7. CORPORATE TRANSACTION. In the event of any of the
following stockholder-approved transactions to which the
Corporation is a party (a "Corporate Transaction"):
a. a merger or consolidation in which the
Corporation is not the surviving entity, except for a transaction
the principal purpose of which is to change the state in which
the Corporation is incorporated,
b. the sale, transfer or other disposition of
all or substantially all of the assets of the Corporation in
complete liquidation or dissolution of the Corporation, or
c. any reverse merger in which the Corporation
is the surviving entity but in which securities possessing more
than fifty percent (50%) of the total combined voting power of
the Corporation's outstanding securities are transferred to a
person or
4.
<PAGE>
persons different from the persons holding those securities
immediately prior to such merger,
all Option Shares at the time subject to this option
but not otherwise vested shall automatically vest so that this
option shall, immediately prior to the specified effective date
for the Corporate Transaction, become fully exercisable for all
of the Option Shares at the time subject to this option and may
be exercised for all or any portion of such shares as fully-
vested shares of Series A Preferred Stock. Immediately following
the consummation of the Corporate Transaction, this option shall
terminate and cease to be outstanding, except to the extent
assumed by the successor entity (or parent thereof).
8. CHANGE IN CONTROL/HOSTILE TAKEOVER.
A. All Option Shares subject to this option at the
time of a Change in Control (as defined below) but not otherwise
vested shall automatically vest so that this option shall,
immediately prior to the effective date of such Change in
Control, become fully exercisable for all of the Option Shares at
the time subject to this option and may be exercised for all or
any portion of such shares as fully-vested shares of Series A
Preferred Stock. This option shall remain exercisable for such
fully-vested Option Shares until the earliest to occur of (i) the
specified Expiration Date of the option term, (ii) the sooner
termination of this option in accordance with Paragraph 5 or 7 or
(iii) the surrender of this option under Paragraph 8.B.
B. Provided this option has been outstanding for at
least six (6) months prior to the occurrence of a Hostile Take-
Over (as defined below), Optionee shall have the unconditional
right (exercisable during the thirty (30)-day period immediately
following the consummation of such Hostile Take-Over) to
surrender this option to the Corporation in exchange for a cash
distribution from the Corporation in an amount equal to the
excess of (i) the Take-Over Price (as defined below) of the
Option Shares at the time subject to the surrendered option
(whether or not those Option Shares are at the time vested) over
(ii) the aggregate Option Exercise Price payable for such shares.
To exercise this limited stock appreciation right,
Optionee must, during the applicable thirty (30)-day exercise
period, provide the Corporation with written notice of the option
surrender in which there is specified the number of Option Shares
as to which the Option is being surrendered. Such notice must be
accompanied by the return of Optionee's copy of this Agreement,
together with any written amendments to such Agreement. The cash
distribution shall be paid to Optionee within five (5) days
5.
<PAGE>
following such delivery date, and neither the approval of the
Plan Administrator nor the consent of the Board shall be required
in connection with such option surrender and cash distribution.
Upon receipt of such cash distribution, this option shall be
cancelled with respect to the shares subject to the surrendered
option (or the surrendered portion), and Optionee shall cease to
have any further right to acquire those Option Shares under this
Agreement. In the event this option is surrendered for only a
portion of the Option Shares at the time subject thereto, the
Corporation shall issue a new stock option agreement
(substantially in the form of this Agreement) for the balance of
the Option Shares for which this option is not surrendered.
This limited stock appreciation right shall in all
events terminate upon the expiration or sooner termination of the
option term and may not be assigned or transferred by Optionee.
C. DEFINITIONS: For purposes of this Agreement, the
following definitions shall be in effect:
A CHANGE IN CONTROL shall be deemed to occur in the
event:
(1) any person or related group of persons (other
than the Corporation or a person that directly or indirectly
controls, is controlled by, or is under common control with, the
Corporation) directly or indirectly acquires beneficial ownership
(within the meaning of Rule 13d-3 of the Securities Exchange Act
of 1934 (the "1934 Act")) of securities possessing more than
fifty percent (50%) of the total combined voting power of the
Corporation's outstanding securities pursuant to a tender or
exchange offer made directly to the Corporation's stockholders
which the Board does not recommend such stockholders to accept;
or
(2) there is a change in the composition of the
Board over a period of thirty-six (36) consecutive months or less
such that a majority of the Board members (rounded up to the next
whole number) ceases, by reason of one or more contested
elections for Board membership, to be comprised of individuals
who either (A) have been Board members continuously since the
beginning of such period or (B) have been elected or nominated
for election as Board members during such period by at least a
majority of the Board members described in clause (A) who were
still in office at the time such election or nomination was
approved by the Board.
6.
<PAGE>
A HOSTILE TAKE-OVER shall be deemed to occur in the
event (i) any person or related group of persons (other than the
Corporation or a person that directly or indirectly controls, is
controlled by, or is under common control with, the Corporation)
directly or indirectly acquires beneficial ownership (within the
meaning of Rule 13d-3 of the 1934 Act) of securities possessing
more than fifty percent (50%) of the total combined voting power
of the Corporation's outstanding securities pursuant to a tender
or exchange offer made directly to the Corporation's stockholders
which the Board does not recommend such stockholders to accept
and (ii) more than fifty percent (50%) of the securities so
acquired in such tender or exchange offer are accepted from
holders other than officers and directors of the Corporation
subject to the short-swing profit restrictions of Section 16 of
the 1934 Act.
The TAKE-OVER PRICE per share shall be deemed to be
equal to the greater of (i) the Fair Market Value per share of
Series A Preferred Stock on the option surrender date, as
determined in accordance with the valuation provisions of
Paragraph 9.B. or (ii) the highest reported price per share of
Series A Preferred Stock paid by the tender offeror in effecting
the Hostile Take-Over.
9. MANNER OF EXERCISING OPTION.
A. In order to exercise this option for all or any
part of the Option Shares for which the option is at the time
exercisable, Optionee (or in the case of exercise after
Optionee's death, Optionee's executor, administrator, heir or
legatee, as the case may be) must take the following actions:
- To the extent the option is exercised for
vested Option Shares, the Secretary of the Corporation shall be
provided with written notice of the option exercise (the
"Exercise Notice"), in substantially the form of Exhibit I
attached hereto, in which there is specified the number of vested
Option Shares which are to be purchased under the exercised
option. To the extent the option is exercised for one or more
unvested Option Shares, the Optionee (or other person exercising
the option) shall deliver to the Secretary of the Corporation a
stock purchase agreement in form and substance satisfactory to
the Corporation (the "Purchase Agreement") which grants the
Corporation the right to repurchase, at the Option Exercise
Price, any and all
7.
<PAGE>
unvested Option Shares held by the Optionee at the time of his or
her cessation of Board service and which precludes the sale,
transfer or other disposition of any purchased Option Shares
subject to such repurchase right.
- The aggregate Option Exercise Price for the
purchased Option Shares shall be paid in one of the following
alternative forms:
(a) full payment in cash or check made
payable to the Corporation's order; or
(b) full payment in shares of Series A
Preferred Stock held by Optionee for the requisite period
necessary to avoid a charge to the Corporation's reported
earnings and valued at Fair Market Value (as defined below) on
the Exercise Date (as defined below); or
(c) full payment in a combination of
shares of Series A Preferred Stock held for the requisite period
necessary to avoid a charge to the Corporation's reported
earnings and valued at Fair Market Value on the Exercise Date and
cash or check made payable to the Corporation's order; or
(d) to the extent the option is
exercised for vested Option Shares, full payment through a
broker-dealer sale and remittance procedure pursuant to which
Optionee shall concurrently provide irrevocable written
instructions to (i) a Corporation-designated brokerage firm to
effect the immediate sale of the vested shares purchased under
the option and remit to the Corporation, out of the sale proceeds
available on the settlement date, sufficient funds to cover the
aggregate Option Exercise Price payable for those shares and
(ii) the Corporation to deliver the certificates for the
purchased shares directly to such brokerage firm in order to
complete the sale.
- Appropriate documentation evidencing the
right to exercise this option shall be furnished the Corporation
if the person or persons exercising the option is other than the
Optionee.
B. For all other valuation purposes under this
Agreement, the FAIR MARKET VALUE per share of Series A Preferred
Stock on any relevant date shall be the determined in accordance
with the following provisions:
8.
<PAGE>
- If the Series A Preferred Stock is not at the
time listed or admitted to trading on any national stock exchange
but is traded on the Nasdaq National Market, the Fair Market
Value shall be the closing selling price per share on the date in
question, as such price is reported by the National Association
of Securities Dealers through the Nasdaq National Market or any
successor system. If there is no reported closing selling price
for the Series A Preferred Stock on the date in question, then
the closing selling price on the last preceding date for which
such quotation exists shall be determinative of Fair Market
Value.
- If the Series A Preferred Stock is at the
time listed or admitted to trading on any national stock
exchange, then the Fair Market Value shall be the closing selling
price per share on the date in question on the exchange serving
as the primary market for the Series A Preferred Stock, as such
price is officially quoted in the composite tape of transactions
on such exchange. If there is no reported sale of Series A
Preferred Stock on such exchange on the date in question, then
the Fair Market Value shall be the closing selling price on the
exchange on the last preceding date for which such quotation
exists.
C. The EXERCISE DATE shall be the date on which the
Exercise Notice is delivered to the Secretary of the Corporation,
together with the appropriate Purchase Agreement for any unvested
shares acquired under the option. Except to the extent the sale
and remittance procedure specified above is utilized in
connection with the exercise of the option for vested Option
Shares, payment of the Option Exercise Price for the purchased
shares must accompany such notice.
D. As soon as practical after the Exercise Date, the
Corporation shall issue to or on behalf of Optionee (or other
person or persons exercising this option) a certificate or
certificates representing the purchased Option Shares. To the
extent any such Option Shares are unvested, the certificates for
those Option Shares shall be endorsed with an appropriate legend
evidencing the Corporation's repurchase rights and may be held in
escrow with the Corporation until such shares vest.
E. In no event may this option be exercised for any
fractional share.
9.
<PAGE>
10. STOCKHOLDER RIGHTS. The holder of this option
shall not have any of the rights of a stockholder with respect to
the Option Shares until such individual shall have exercised this
option and paid the Option Exercise Price for the purchased
shares. The purchased Option Shares shall possess all the
rights, preferences and privileges and shall be subject to all
the restrictions and limitations applicable to the Corporation's
Series A Preferred Stock, as set forth in the Certificate of
Determination for the Series A Preferred Stock.
11. NO IMPAIRMENT OF RIGHTS. This Agreement shall not
in any way affect the right of the Corporation to adjust,
reclassify, reorganize or otherwise make changes in its capital
or business structure or to merge, consolidate, dissolve,
liquidate or sell or transfer all or any part of its business or
assets. Nor shall this Agreement in any way be construed or
interpreted so as to affect adversely or otherwise impair the
right of the Corporation or the stockholders to remove Optionee
from the Board at any time in accordance with the provisions of
applicable law.
12. COMPLIANCE WITH LAWS AND REGULATIONS. The
exercise of this option and the issuance of the Option Shares
upon such exercise shall be subject to compliance by the
Corporation and Optionee with all applicable requirements of law
relating thereto and with all applicable regulations of any stock
exchange on which shares of the Series A Preferred Stock may be
listed for trading at the time of such exercise and issuance.
13. SUCCESSORS AND ASSIGNS. Except to the extent
otherwise provided in Paragraph 3 or 7, the provisions of this
Agreement shall inure to the benefit of, and be binding upon, the
successors, administrators, heirs, legal representatives and
assigns of Optionee and the Corporation's successors and assigns.
14. DISCHARGE OF LIABILITY. The inability of the
Corporation to obtain approval from any regulatory body having
authority deemed by the Corporation to be necessary to the lawful
issuance and sale of any Series A Preferred Stock pursuant to
this option shall relieve the Corporation of any liability with
respect to the non-issuance or sale of the Series A Preferred
Stock as to which such approval shall not have been obtained.
However, the Corporation shall use its best efforts to obtain all
such applicable approvals.
15. NOTICES. Any notice required to be given or
delivered to the Corporation under the terms of this Agreement
shall be in writing and addressed to the Corporation in care of
the Corporate Secretary at the Corporate Offices at 4343 Von
Karman Boulevard, Newport Beach, CA 92660. Any notice required
to be
10.
<PAGE>
given or delivered to Optionee shall be in writing and addressed
to Optionee at the address indicated below Optionee's signature
line on the Grant Notice. All notices shall be deemed to have
been given or delivered upon personal delivery or upon deposit in
the U.S. mail, postage prepaid and properly addressed to the
party to be notified.
16. CONSTRUCTION/GOVERNING LAW. This Agreement and
the option evidenced hereby are made and granted pursuant to the
Plan and are in all respects limited by and subject to the
express terms and provisions of the Plan, including the automatic
option grant provisions of Article Three of the Plan. The
interpretation, performance, and enforcement of this Agreement
shall be governed by the laws of the State of California without
resort to that State's conflict-of-laws rules.
17. STOCKHOLDER APPROVAL. Notwithstanding any
provision to the contrary in this Agreement, this option may not
be exercised in whole or in part at any time prior to the
approval of the Plan by the Corporation's stockholders at the
1994 Annual Meeting. In the event such stockholder approval is
not obtained, this option shall thereupon terminate and cease to
remain outstanding without ever becoming exercisable for any of
the Option Shares.
11.
<PAGE>
EXHIBIT I
NOTICE OF EXERCISE OF
NON-STATUTORY AUTOMATIC STOCK OPTION
I hereby notify Koll Real Estate Group (the
"Corporation") that I elect to purchase _________ shares of
Series A Convertible Redeemable Preferred Stock of the
Corporation (the "Purchased Shares") at the option exercise
price of $________ per share (the "Option Exercise Price")
pursuant to that certain option (the "Option") granted to me
under the Corporation's 1993 Stock Option/Stock Issuance Plan on
___________, 199_.
Concurrently with the delivery of this Exercise Notice
to the Secretary of the Corporation, I shall hereby pay to the
Corporation the Option Exercise Price for the Purchased Shares in
accordance with the provisions of my agreement with the
Corporation evidencing the Option and shall deliver whatever
additional documents may be required by such agreement as a
condition for exercise. Alternatively, I may utilize the special
broker/dealer sale and remittance procedure specified in my
agreement to effect payment of the Option Exercise Price for any
Purchased Shares in which I am vested at the time of exercise.
____________________________
Date ______________ Optionee
Address:
Print name in exact manner
it is to appear on the
stock certificate: ____________________________
Address to which certificate
is to be sent, if different
from address above: ____________________________
____________________________
Social Security Number: ____________________________
<PAGE>
EXHIBIT 99.10
Form of Notice of Grant of Automatic Stock Option: Class A Common
Stock to be generally used in connection with the 1993 Stock
Option/Stock Issuance Plan
<PAGE>
ANNUAL GRANT
KOLL REAL ESTATE GROUP
NOTICE OF GRANT OF
AUTOMATIC STOCK OPTION
Notice is hereby given of the following stock option
(the "Option") to purchase shares of the Class A Common Stock of
Koll Real Estate Group (the "Corporation") which has been granted
pursuant to the automatic grant program in effect under the
Corporation's 1993 Stock Option/Stock Issuance Plan ( the
"Plan"):
OPTIONEE:
GRANT DATE:
TYPE OF OPTION: Non-Statutory Stock Option
OPTION EXERCISE PRICE: $ per share
NUMBER OF OPTION SHARES: 12,500 shares of Class A
Common Stock
EXPIRATION DATE:
EXERCISE SCHEDULE: The option is immediately
exercisable for all the Option Shares.
VESTING SCHEDULE: The Option Shares shall be unvested
and subject to repurchase by the Corporation, at the Option
Exercise Price paid per share, upon Optionee's cessation of
service as a member of the Corporation's Board of Directors (the
"Board"). Optionee shall acquire a vested interest in, and the
Corporation's repurchase right shall lapse with respect to: (i)
forty percent (40%) of the Option Shares upon Optionee's
completion of one (1) year of Board service measured from the
Grant Date, (ii) an additional thirty percent (30%) of the Option
Shares upon the Optionee's completion of two (2) years of Board
service measured from the Grant Date, and (iii) the remaining
thirty percent (30%) of the Option Shares upon the Optionee's
completion of three (3) years of Board service measured from the
Grant Date. In no event shall any additional Option Shares vest
following Optionee's cessation of Board service.
<PAGE>
Optionee understands and agrees that the Option is
granted subject to and in accordance with the express terms and
conditions of the Plan governing automatic option grants made to
non-employee Board members. Optionee further agrees to be bound
by the terms and conditions of the Plan and the terms and
conditions of the Option as set forth in the Automatic Stock
Option Agreement attached hereto as Exhibit A.
Optionee hereby acknowledges receipt of a copy of the
official Plan Summary and Prospectus attached hereto as Exhibit
B. A copy of the Plan is also available upon request made to the
Corporate Secretary at the Corporate Offices at 4343 Von Karman
Boulevard, Newport Beach, CA 92660.
REPURCHASE RIGHT. OPTIONEE HEREBY AGREES THAT ALL
UNVESTED OPTION SHARES ACQUIRED UPON THE EXERCISE OF THE OPTION
SHALL NOT BE TRANSFERRABLE AND SHALL BE SUBJECT TO REPURCHASE BY
THE CORPORATION AND ITS ASSIGNS, AT THE OPTION PRICE PAID PER
SHARE, UPON OPTIONEE'S TERMINATION OF BOARD SERVICE. THE TERMS
AND CONDITIONS OF SUCH REPURCHASE RIGHT SHALL BE SET FORTH IN A
STOCK PURCHASE AGREEMENT, IN FORM AND SUBSTANCE SATISFACTORY TO
THE CORPORATION, EXECUTED BY OPTIONEE AT THE TIME OF THE OPTION
EXERCISE.
No provision of this Notice of Grant or the attached
Automatic Stock Option Agreement shall in any way be construed or
interpreted so as to affect adversely or otherwise impair the
right of the Corporation or the stockholders to remove Optionee
from the Board at any time in accordance with the provisions of
applicable law.
DATED: _________________, 199__
KOLL REAL ESTATE GROUP
By: __________________
Title:
____________, OPTIONEE
Address:
ATTACHMENTS:
EXHIBIT A: Stock Option Agreement
EXHIBIT B: Plan Summary and Prospectus
<PAGE>
EXHIBIT 99.11
Form of Automatic Stock Option Agreement: Class A Common Stock to
be generally used in connection with the 1993 Stock Option/Stock
Issuance Plan.
<PAGE>
KOLL REAL ESTATE GROUP
AUTOMATIC STOCK OPTION AGREEMENT
RECITALS
A. The Corporation has approved and implemented an
automatic option grant program under the 1993 Stock Option/Stock
Issuance Plan (the "Plan") pursuant to which eligible non-
employee members of the Corporation's Board of Directors (the
"Board") will automatically receive special option grants at
periodic intervals over their period of Board service in order to
provide such individuals with a meaningful incentive to continue
to serve as Board members.
B. Optionee is an eligible non-employee Board member,
and this Agreement is executed pursuant to, and is intended to
carry out the purposes of, the Plan in connection with the
automatic grant of a stock option to purchase shares of the
Corporation's Class A Common Stock ("Class A Common Stock) under
the Plan.
C. The granted option is intended to be a non-
statutory option which does not meet the requirements of Section
422 of the Internal Revenue Code.
NOW, THEREFORE, it is hereby agreed as follows:
1. GRANT OF OPTION. Subject to and upon the terms
and conditions set forth in this Agreement, there is hereby
granted to Optionee, as of the date of grant (the "Grant Date")
specified in the accompanying Notice of Grant of Automatic Stock
Option (the "Grant Notice"), a stock option to purchase up to the
number of shares of Class A Common Stock (the "Option Shares")
specified in the Grant Notice. The Option Shares shall be
purchasable from time to time during the option term at the price
per share (the "Option Exercise Price") specified in the Grant
Notice.
2. OPTION TERM. This option shall have a maximum
term of ten (10) years measured from the Grant Date and shall
expire at the close of business on the expiration date specified
in the Grant Notice ("Expiration Date"), unless sooner terminated
pursuant to Paragraph 5, 7 or 8.
3. LIMITED TRANSFERABILITY. This option, together
with the special stock appreciation right provided under
Paragraph 8.B., shall be neither transferable nor assignable by
Optionee, other
<PAGE>
than a transfer of this option effected by will or by the laws of
descent and distribution following Optionee's death, and may be
exercised, during Optionee's lifetime, only by Optionee.
4. EXERCISABILITY. This option shall be immediately
exercisable for any or all of the Option Shares, whether or not
the Option Shares are vested in accordance with the Vesting
Schedule set forth in the Grant Notice and shall remain so
exercisable until the expiration or sooner termination of the
option term. In no event, however, shall any additional Option
Shares vest following Optionee's cessation of service as a Board
member.
5. CESSATION OF BOARD SERVICE. Should Optionee's
service as a Board member cease while this option remains
outstanding, then the option term specified in Paragraph 2 shall
terminate (and this option shall cease to remain outstanding)
prior to the Expiration Date in accordance with the following
provisions:
- Should Optionee cease to serve as a Board member
for any reason (other than death or permanent disability) while
holding this option, then the period for exercising this option
shall be reduced to a six (6)-month period commencing with the
date of such cessation of Board service, but in no event shall
this option be exercisable at any time after the Expiration Date.
During such limited period of exercisability, this option may not
be exercised for more than the number of Option Shares (if any)
in which the Optionee is vested on the date Optionee ceases
service as a Board member. Upon the earlier of (i) the
expiration of such six (6)-month period or (ii) the specified
Expiration Date, the option shall terminate and cease to remain
outstanding with respect to any vested Option Shares for which
the option has not otherwise been exercised.
- Should Optionee die during the six (6)-month
period following his or her cessation of Board service, then the
personal representative of Optionee's estate or the person or
persons to whom the option is transferred pursuant to Optionee's
will or in accordance with the laws of descent and distribution
shall have the right to exercise this option for any or all of
the Option Shares in which the Optionee is vested at the time of
Optionee's cessation of Board service (less any Option Shares
subsequently purchased by Optionee but prior to death). Such
right of exercise shall terminate, and this option shall
accordingly cease to remain outstanding with respect to all
vested Option Shares for which this option has not otherwise been
exercised, upon the earlier of (i) the expiration of the twelve
(12)-month period measured from the date of Optionee's death or
(ii) the specified Expiration Date of the option term.
2.
<PAGE>
- Should Optionee die or become permanently disabled
while serving as a Board member, then all the Option Shares
subject to this option at the time of such cessation of Board
service shall immediately vest, and Optionee, or the personal
representative of Optionee's estate or the person or persons to
whom the option is transferred pursuant to Optionee's will or in
accordance with the laws of descent and distribution, shall have
the right to exercise this option for any or all of those vested
Option Shares. Such right of exercise shall terminate, and this
option shall accordingly cease to remain outstanding with respect
to all Option Shares for which this option has not otherwise been
exercised, upon the earlier of (i) the expiration of the twelve
(12)-month period measured from the date on which Optionee dies
or becomes permanently disabled or (ii) the specified Expiration
Date of the option term.
- Upon Optionee's cessation of Board service for any
reason other than death or permanent disability, this option
shall immediately terminate and cease to be outstanding with
respect to any and all Option Shares in which the Optionee is not
otherwise at that time vested in accordance with the Vesting
Schedule set forth in the Grant Notice or the special vesting
acceleration provisions of Paragraph 7 or 8.
- Optionee shall be deemed to be PERMANENTLY
DISABLED if Optionee is unable to engage in any substantial
gainful activity by reason of any medically determinable physical
or mental impairment expected to result in death or to be of
continuous duration of twelve (12) months or more.
6. ADJUSTMENT IN OPTION SHARES.
A. Should any change be made to the Class A Common
Stock issuable under the Plan by reason of any stock split, stock
dividend, recapitalization, combination of shares, exchange of
shares or other change affecting such Class A Common Stock as a
class without the Corporation's receipt of consideration, then
the number and class of securities purchasable under this option
and the Option Exercise Price payable per share shall be
appropriately adjusted to prevent the dilution or enlargement of
Optionee's rights hereunder; provided, however, the aggregate
Option Exercise Price shall remain the same.
B. No adjustments shall be made to either the number
of Option Shares or the Option Exercise Price payable per share,
in the event the Corporation's outstanding shares of Series A
Convertible Redeemable Preferred Stock are converted into shares
of the Class A Common Stock or are redeemed for consideration
payable in such Class A shares or in cash or other securities.
3.
<PAGE>
C. To the extent this option is assumed in connection
with any Corporate Transaction under Paragraph 7 or is otherwise
to continue in effect, this option shall be appropriately
adjusted, immediately after such Corporate Transaction, to apply
and pertain to the number and class of securities which would
have been issued to the Optionee, in consummation of such
Corporate Transaction, had this option been exercised immediately
prior to such Corporate Transaction. Appropriate adjustments
shall also be made to the Exercise Price payable per share,
provided the aggregate exercise price payable for such securities
shall remain the same.
7. CORPORATE TRANSACTION. In the event of any of the
following stockholder-approved transactions to which the
Corporation is a party (a "Corporate Transaction"):
a. a merger or consolidation in which the
Corporation is not the surviving entity, except for a transaction
the principal purpose of which is to change the state in which
the Corporation is incorporated,
b. the sale, transfer or other disposition of
all or substantially all of the assets of the Corporation in
complete liquidation or dissolution of the Corporation, or
c. any reverse merger in which the Corporation
is the surviving entity but in which securities possessing more
than fifty percent (50%) of the total combined voting power of
the Corporation's outstanding securities are transferred to a
person or persons different from the persons holding those
securities immediately prior to such merger,
all Option Shares at the time subject to this option
but not otherwise vested shall automatically vest so that this
option shall, immediately prior to the specified effective date
for the Corporate Transaction, become fully exercisable for all
of the Option Shares at the time subject to this option and may
be exercised for all or any portion of such shares as
fully-vested shares of Class A Common Stock. Immediately
following the consummation of the Corporate Transaction, this
option shall terminate and cease to be outstanding, except to the
extent assumed by the successor entity (or parent thereof).
8. CHANGE IN CONTROL/HOSTILE TAKEOVER.
A. All Option Shares subject to this option at the
time of a Change in Control (as defined below) but not otherwise
vested
4.
<PAGE>
shall automatically vest so that this option shall, immediately
prior to the effective date of such Change in Control, become
fully exercisable for all of the Option Shares at the time
subject to this option and may be exercised for all or any
portion of such shares as fully-vested shares of Class A Common
Stock. This option shall remain exercisable for such fully-
vested Option Shares until the earliest to occur of (i) the
specified Expiration Date of the option term, (ii) the sooner
termination of this option in accordance with Paragraph 5 or 7 or
(iii) the surrender of this option under Paragraph 8.B.
B. Provided this option has been outstanding for at
least six (6) months prior to the occurrence of a Hostile Take-
Over (as defined below), Optionee shall have the unconditional
right (exercisable during the thirty (30)-day period immediately
following the consummation of such Hostile Take-Over) to
surrender this option to the Corporation in exchange for a cash
distribution from the Corporation in an amount equal to the
excess of (i) the Take-Over Price (as defined below) of the
Option Shares at the time subject to the surrendered option
(whether or not those Option Shares are at the time vested) over
(ii) the aggregate Option Exercise Price payable for such shares.
To exercise this limited stock appreciation right,
Optionee must, during the applicable thirty (30)-day exercise
period, provide the Corporation with written notice of the option
surrender in which there is specified the number of Option Shares
as to which the Option is being surrendered. Such notice must be
accompanied by the return of Optionee's copy of this Agreement,
together with any written amendments to such Agreement. The cash
distribution shall be paid to Optionee within five (5) days
following such delivery date, and neither the approval of the
Plan Administrator nor the consent of the Board shall be required
in connection with such option surrender and cash distribution.
Upon receipt of such cash distribution, this option shall be
cancelled with respect to the shares subject to the surrendered
option (or the surrendered portion), and Optionee shall cease to
have any further right to acquire those Option Shares under this
Agreement. In the event this option is surrendered for only a
portion of the Option Shares at the time subject thereto, the
Corporation shall issue a new stock option agreement
(substantially in the form of this Agreement) for the balance of
the Option Shares for which this option is not surrendered.
This limited stock appreciation right shall in all
events terminate upon the expiration or sooner termination of the
option term and may not be assigned or transferred by Optionee.
5.
<PAGE>
C. DEFINITIONS: For purposes of this Agreement, the
following definitions shall be in effect:
A CHANGE IN CONTROL shall be deemed to occur in the
event:
(1) any person or related group of persons (other
than the Corporation or a person that directly or indirectly
controls, is controlled by, or is under common control with, the
Corporation) directly or indirectly acquires beneficial ownership
(within the meaning of Rule 13d-3 of the Securities Exchange Act
of 1934 (the "1934 Act")) of securities possessing more than
fifty percent (50%) of the total combined voting power of the
Corporation's outstanding securities pursuant to a tender or
exchange offer made directly to the Corporation's stockholders
which the Board does not recommend such stockholders to accept;
or
(2) there is a change in the composition of the
Board over a period of thirty-six (36) consecutive months or less
such that a majority of the Board members (rounded up to the next
whole number) ceases, by reason of one or more contested
elections for Board membership, to be comprised of individuals
who either (A) have been Board members continuously since the
beginning of such period or (B) have been elected or nominated
for election as Board members during such period by at least a
majority of the Board members described in clause (A) who were
still in office at the time such election or nomination was
approved by the Board.
A HOSTILE TAKE-OVER shall be deemed to occur in the
event (i) any person or related group of persons (other than the
Corporation or a person that directly or indirectly controls, is
controlled by, or is under common control with, the Corporation)
directly or indirectly acquires beneficial ownership (within the
meaning of Rule 13d-3 of the 1934 Act) of securities possessing
more than fifty percent (50%) of the total combined voting power
of the Corporation's outstanding securities pursuant to a tender
or exchange offer made directly to the Corporation's stockholders
which the Board does not recommend such stockholders to accept
and (ii) more than fifty percent (50%) of the securities so
acquired in such tender or exchange offer are accepted from
holders other than officers and directors of the Corporation
subject to the short-swing profit restrictions of Section 16 of
the 1934 Act.
6.
<PAGE>
The TAKE-OVER PRICE per share shall be deemed to be
equal to the greater of (i) the Fair Market Value per share of
Class A Common Stock on the option surrender date, as determined
in accordance with the valuation provisions of Paragraph 9.B. or
(ii) the highest reported price per share of Class A Common Stock
paid by the tender offeror in effecting the Hostile Take-Over.
9. MANNER OF EXERCISING OPTION.
A. In order to exercise this option for all or any
part of the Option Shares for which the option is at the time
exercisable, Optionee (or in the case of exercise after
Optionee's death, Optionee's executor, administrator, heir or
legatee, as the case may be) must take the following actions:
- To the extent the option is exercised for
vested Option Shares, the Secretary of the Corporation shall be
provided with written notice of the option exercise (the
"Exercise Notice"), in substantially the form of Exhibit I
attached hereto, in which there is specified the number of vested
Option Shares which are to be purchased under the exercised
option. To the extent the option is exercised for one or more
unvested Option Shares, the Optionee (or other person exercising
the option) shall deliver to the Secretary of the Corporation a
stock purchase agreement in form and substance satisfactory to
the Corporation (the "Purchase Agreement") which grants the
Corporation the right to repurchase, at the Option Exercise
Price, any and all unvested Option Shares held by the Optionee at
the time of his or her cessation of Board service and which
precludes the sale, transfer or other disposition of any
purchased Option Shares subject to such repurchase right.
- The aggregate Option Exercise Price for the
purchased Option Shares shall be paid in one of the following
alternative forms:
(a) full payment in cash or check made
payable to the Corporation's order; or
(b) full payment in shares of Class A
Common Stock held by Optionee for the requisite period necessary
to avoid a charge to the Corporation's reported earnings and
valued at Fair Market Value (as defined below) on the Exercise
Date (as defined below); or
7.
<PAGE>
(c) full payment in a combination of
shares of Class A Common Stock held for the requisite period
necessary to avoid a charge to the Corporation's reported
earnings and valued at Fair Market Value on the Exercise Date and
cash or check made payable to the Corporation's order; or
(d) to the extent the option is
exercised for vested Option Shares, full payment through a
broker-dealer sale and remittance procedure pursuant to which
Optionee shall concurrently provide irrevocable written
instructions to (i) a Corporation-designated brokerage firm to
effect the immediate sale of the vested shares purchased under
the option and remit to the Corporation, out of the sale proceeds
available on the settlement date, sufficient funds to cover the
aggregate Option Exercise Price payable for those shares and
(ii) the Corporation to deliver the certificates for the
purchased shares directly to such brokerage firm in order to
complete the sale.
- Appropriate documentation evidencing the
right to exercise this option shall be furnished the Corporation
if the person or persons exercising the option is other than the
Optionee.
B. For purposes of subparagraph 9.B. above and for
all other valuation purposes under this Agreement, the FAIR
MARKET VALUE per share of Class A Common Stock on any relevant
date shall be the determined in accordance with the following
provisions:
- If the Class A Common Stock is not at the
time listed or admitted to trading on any national stock exchange
but is traded on the Nasdaq National Market, the Fair Market
Value shall be the closing selling price per share on the date in
question, as such price is reported by the National Association
of Securities Dealers through the Nasdaq National Market or any
successor system. If there is no reported closing selling price
for the Class A Common Stock on the date in question, then the
closing selling price on the last preceding date for which such
quotation exists shall be determinative of Fair Market Value.
- If the Class A Common Stock is at the time
listed or admitted to trading on any national stock exchange,
then the Fair Market Value shall be the closing selling price per
share on the date in question on the exchange serving as the
primary market for the Class A
8.
<PAGE>
Common Stock, as such price is officially quoted in the composite
tape of transactions on such exchange. If there is no reported
sale of Class A Common Stock on such exchange on the date in
question, then the Fair Market Value shall be the closing selling
price on the exchange on the last preceding date for which such
quotation exists.
C. The EXERCISE DATE shall be the date on which the
Exercise Notice is delivered to the Secretary of the Corporation,
together with the appropriate Purchase Agreement for any unvested
shares acquired under the option. Except to the extent the sale
and remittance procedure specified above is utilized in
connection with the exercise of the option for vested Option
Shares, payment of the Option Exercise Price for the purchased
shares must accompany such notice.
D. As soon as practical after the Exercise Date, the
Corporation shall issue to or on behalf of Optionee (or other
person or persons exercising this option) a certificate or
certificates representing the purchased Option Shares. To the
extent any such Option Shares are unvested, the certificates for
those Option Shares shall be endorsed with an appropriate legend
evidencing the Corporation's repurchase rights and may be held in
escrow with the Corporation until such shares vest.
E. In no event may this option be exercised for any
fractional share.
10. STOCKHOLDER RIGHTS. The holder of this option
shall not have any of the rights of a stockholder with respect to
the Option Shares until such individual shall have exercised this
option and paid the Option Exercise Price for the purchased
shares.
11. NO IMPAIRMENT OF RIGHTS. This Agreement shall not
in any way affect the right of the Corporation to adjust,
reclassify, reorganize or otherwise make changes in its capital
or business structure or to merge, consolidate, dissolve,
liquidate or sell or transfer all or any part of its business or
assets. Nor shall this Agreement in any way be construed or
interpreted so as to affect adversely or otherwise impair the
right of the Corporation or the stockholders to remove Optionee
from the Board at any time in accordance with the provisions of
applicable law.
12. COMPLIANCE WITH LAWS AND REGULATIONS. The
exercise of this option and the issuance of the Option Shares
upon such exercise shall be subject to compliance by the
Corporation and Optionee with all applicable requirements of law
relating thereto and with all applicable regulations of any stock
exchange on which
9.
<PAGE>
shares of the Class A Common Stock may be listed for trading at
the time of such exercise and issuance.
13. SUCCESSORS AND ASSIGNS. Except to the extent
otherwise provided in Paragraph 3 or 7, the provisions of this
Agreement shall inure to the benefit of, and be binding upon, the
successors, administrators, heirs, legal representatives and
assigns of Optionee and the Corporation's successors and assigns.
14. DISCHARGE OF LIABILITY. The inability of the
Corporation to obtain approval from any regulatory body having
authority deemed by the Corporation to be necessary to the lawful
issuance and sale of any Class A Common Stock pursuant to this
option shall relieve the Corporation of any liability with
respect to the non-issuance or sale of the Class A Common Stock
as to which such approval shall not have been obtained. However,
the Corporation shall use its best efforts to obtain all such
applicable approvals.
15. NOTICES. Any notice required to be given or
delivered to the Corporation under the terms of this Agreement
shall be in writing and addressed to the Corporation in care of
the Corporate Secretary at the Corporate Offices at 4343 Von
Karman Boulevard, Newport Beach, CA 92660. Any notice required
to be given or delivered to Optionee shall be in writing and
addressed to Optionee at the address indicated below Optionee's
signature line on the Grant Notice. All notices shall be deemed
to have been given or delivered upon personal delivery or upon
deposit in the U.S. mail, postage prepaid and properly addressed
to the party to be notified.
16. CONSTRUCTION/GOVERNING LAW. This Agreement and
the option evidenced hereby are made and granted pursuant to the
Plan and are in all respects limited by and subject to the
express terms and provisions of the Plan, including the automatic
option grant provisions of Article Three of the Plan. The
interpretation, performance, and enforcement of this Agreement
shall be governed by the laws of the State of California without
resort to that State's conflict-of-laws rules.
17. STOCKHOLDER APPROVAL. Notwithstanding any
provision to the contrary in this Agreement, this option may not
be exercised in whole or in part at any time prior to the
approval of the Plan by the Corporation's stockholders at the
1994 Annual Meeting. In the event such stockholder approval is
not obtained, this option shall thereupon terminate and cease to
remain outstanding without ever becoming exercisable for any of
the Option Shares.
10.
<PAGE>
EXHIBIT I
NOTICE OF EXERCISE OF
NON-STATUTORY AUTOMATIC STOCK OPTION
I hereby notify Koll Real Estate Group (the
"Corporation") that I elect to purchase _________ shares of Class
A Common Stock of the Corporation (the "Purchased Shares") at the
option exercise price of $______________ per share (the "Option
Exercise Price") pursuant to that certain option (the "Option")
granted to me under the Corporation's 1993 Stock Option/Stock
Issuance Plan on ___________, 199_.
Concurrently with the delivery of this Exercise Notice
to the Secretary of the Corporation, I shall hereby pay to the
Corporation the Option Exercise Price for the Purchased Shares in
accordance with the provisions of my agreement with the
Corporation evidencing the Option and shall deliver whatever
additional documents may be required by such agreement as a
condition for exercise. Alternatively, I may utilize the special
broker/dealer sale and remittance procedure specified in my
agreement to effect payment of the Option Exercise Price for any
Purchased Shares in which I am vested at the time of exercise.
____________________________
Date ___________ Optionee
Address:
Print name in exact manner
it is to appear on the
stock certificate: _____________________________
Address to which certificate
is to be sent, if different
from address above: _____________________________
_____________________________
Social Security Number: _____________________________
<PAGE>
EXHIBIT 99.12
Form of Stock Issuance Agreement: Series A Preferred Stock to be
generally used in connection with the 1993 Stock Option/Stock
Issuance Plan-Director Fee Program
<PAGE>
KOLL REAL ESTATE GROUP
STOCK ISSUANCE AGREEMENT
AGREEMENT made as of this _____ day of _________, 199_
by and between Koll Real Estate Group, a Delaware corporation
(the "Corporation"), and ____________________________________, a
non-employee member of the Corporation's Board of Directors
("Board") and a participant ("Director") in the special Director
Fee Program in effect under the Corporation's 1993 Stock
Option/Stock Issuance Plan (the "Plan").
I. ISSUANCE OF SHARES
1.1 ISSUANCE. In accordance with the Director's
election to receive shares of the Corporation's Series A
Convertible Redeemable Preferred Stock (the "Series A Preferred
Stock") in lieu of $____________ of the annual retainer fee
otherwise payable to such Director in cash for his or her service
as a Board member during the 199 calendar year, the Corporation
hereby issues to Director __________ shares of Series A Preferred
Stock (the "Series A Shares") pursuant to the provisions of the
Plan and this Agreement.
1.2 DELIVERY OF CERTIFICATES. The Series A Shares
issued under this Agreement are unvested and are subject to
cancellation by the Corporation upon the Director's cessation of
Board service prior to vesting in such Series A Shares. The
certificates representing the unvested Series A Shares issued
hereunder shall be held in escrow by the Secretary of the
Corporation in accordance with the provisions of Article V of
this Agreement, and the Director shall deliver to the Secretary
of the Corporation, concurrently with the execution of this
Agreement, a duly-executed Assignment Separate from Certificate
(in the form attached hereto as Exhibit I) with respect to the
unvested Series A Shares. The issued Shares shall possess all
the rights, preferences and privileges and shall be subject to
all the restrictions and limitations applicable to the
Corporation's outstanding shares of Series A Preferred Stock, as
set forth in the Certificate of Determination for such Series A
Preferred Stock.
1.3 STOCKHOLDER RIGHTS. Until such time as the Series
A Shares issued under this Agreement are cancelled by the
Corporation upon the Director's cessation of Board service prior
to vesting in those Series A Shares, the Director shall have all
the rights of a stockholder (including voting, dividend and
liquidation rights) with respect to the Series A Shares, subject,
however, to the transfer restrictions of Article IV.
<PAGE>
1.4 COMPLIANCE WITH LAW. Under no circumstances shall
shares of the Series A Preferred Stock or other assets be issued
or delivered to the Director pursuant to the provisions of this
Agreement unless and until, in the opinion of counsel for the
Corporation or its successors, there shall have been compliance
with all applicable requirements of the Federal and state
securities laws, all applicable listing requirements of any
securities exchange on which shares of the Series A Preferred
Stock are then listed for trading and all other requirements of
law or of any regulatory bodies having jurisdiction over such
issuance and delivery.
II. VESTING
2.1 SCHEDULE. The Director shall acquire a vested
interest in the Series A Shares in four equal and successive
quarterly installments upon the Director's completion of each
calendar quarter of Board service during the 199__ calendar year.
All the Series A Shares issued under this Agreement shall
immediately vest in full in the event (i) the Director should die
or become Permanently Disabled during his or her period of Board
service or (ii) there should occur a Corporate Transaction or
Change in Control while such individual remains in Board service.
2.2 DEFINITIONS. For purposes of this Agreement, the
following definitional provisions shall be in effect:
CHANGE IN CONTROL: a change in ownership or
control of the Corporation effected through either of the
following transactions:
(i) any person or related group of persons
(other than the Corporation or a person that directly or
indirectly controls, is controlled by, or is under common control
with, the Corporation) directly or indirectly acquires beneficial
ownership (within the meaning of Rule 13d-3 of the 1934 Act) of
securities possessing more than fifty percent (50%) of the total
combined voting power of the Corporation's outstanding securities
pursuant to a tender or exchange offer made directly to the
Corporation's stockholders which the Board does not recommend
such stockholders to accept; or
(ii) a change in the composition of the Board
over a period of thirty-six (36) consecutive months or less such
that a majority of the Board members (rounded up to the next
whole number) ceases, by reason of one or more contested
elections for Board membership,
2.
<PAGE>
to be comprised of individuals who either (A) have been Board
members continuously since the beginning of such period or (B)
have been elected or nominated for election as Board members
during such period by at least a majority of the Board members
described in clause (A) who were still in office at the time such
election or nomination was approved by the Board.
CORPORATE TRANSACTION: any of the following
stockholder-approved transactions to which the Corporation is a
party:
(i) a merger or consolidation in which the
Corporation is not the surviving entity, except for a transaction
the principal purpose of which is to change the State in which
the Corporation is incorporated,
(ii) the sale, transfer or other disposition
of all or substantially all of the assets of the Corporation in
complete liquidation and dissolution of the Corporation, or
(iii) any reverse merger in which the
Corporation is the surviving entity but in which securities
possessing more than fifty percent (50%) of the total combined
voting power of the Corporation's outstanding securities are
transferred to person or persons different from the persons
holding those securities immediately prior to such merger.
PERMANENT DISABILITY OR PERMANENTLY DISABLED: the
inability of the Director to engage in any substantial gainful
activity by reason of any medically determinable physical or
mental impairment expected to result in death or to be of
continuous duration of twelve (12) months or more.
III. AUTOMATIC CANCELLATION
3.1 CANCELLATION. Should the Director cease Board
service prior to vesting in one or more quarterly installments of
the Series A Shares, then those unvested Series A Shares shall
immediately be surrendered to the Corporation for cancellation,
and the Director shall not be entitled to any cash payment or
other consideration from the Corporation with respect to the
cancelled Series A Shares and shall have no further stockholder
rights with respect to such Series A Shares.
3.
<PAGE>
3.2 ADDITIONAL SHARES OR SUBSTITUTED SECURITIES.
A. In the event of any stock split, stock dividend,
recapitalization, combination of shares, exchange of shares or
other change affecting the outstanding Series A Preferred Stock
as a class without the Corporation's receipt of consideration
(other than the redemption or conversion of the Series A
Preferred Stock), any new, substituted or additional securities
or other property (including money paid other than as a regular
cash dividend) which is by reason of any such transaction
distributed with respect to the unvested Series A Shares at the
time subject to this Agreement shall be immediately delivered to
the Corporation to be held subject to the provisions of this
Agreement, including (without limitation) the provisions
governing the automatic surrender and cancellation of such
securities or property upon the Director's cessation of Board
service prior to vesting in such securities or property.
B. In the event of the redemption or conversion of
any unvested Series A Shares at the time subject to this
Agreement, the new, substituted or additional securities
(including any shares of the Corporation's Class A Common Stock
issued in conversion of the Series A Shares) or other property
(including money or any debt or equity securities issued in
redemption of the Series A Shares) which is paid or issued in
connection with such redemption or conversion shall be
immediately delivered to the Corporation to be held subject to
all of the provisions of this Agreement, including (without
limitation) the provisions governing the automatic surrender and
cancellation of such securities or property upon the Director's
cessation of Board service prior to vesting in such securities or
property. To the extent shares of the Corporation's Class A
Common Stock are issued in conversion or redemption of the
unvested Series A Shares subject to this Agreement, all
references to such unvested Series A Shares in this Agreement
shall automatically be converted into references to those
unvested shares of the Class A Common Stock.
IV. TRANSFER RESTRICTIONS
4.1 RESTRICTION ON TRANSFER. The Director shall not
transfer, assign, encumber or otherwise dispose of any of the
unvested Series A Shares which are subject to the automatic
cancellation provisions of Article III.
4.2 RESTRICTIVE LEGENDS. The stock certificates for
the unvested Series A Shares subject to this Agreement shall be
endorsed with the following restrictive legend:
4.
<PAGE>
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE UNVESTED AND ARE
SUBJECT TO TRANSFER RESTRICTIONS AND CANCELLATION IN THE EVENT
THE REGISTERED HOLDER CEASES TO REMAIN IN THE CORPORATION'S
SERVICE. SUCH TRANSFER RESTRICTIONS AND THE TERMS AND CONDITIONS
OF SUCH CANCELLATION ARE SET FORTH IN A STOCK ISSUANCE AGREEMENT
BETWEEN THE CORPORATION AND THE REGISTERED HOLDER OF THE SHARES
WHICH IS DATED ______________, 199__. A COPY OF SUCH AGREEMENT
IS ON FILE AT THE CORPORATION'S PRINCIPAL OFFICES.
V. ESCROW
5.1 DEPOSIT. The certificates for the unvested Series
A Shares issued hereunder shall be immediately deposited in
escrow with the Secretary of the Corporation to be held in
accordance with the provisions of this Article V. Each deposited
certificate shall be accompanied by a duly-executed Assignment
Separate from Certificate in the form of Exhibit I. The
deposited certificates, together with any other assets or
securities from time to time deposited with the Secretary of the
Corporation pursuant to the requirements of this Agreement, shall
remain in escrow until such time or times as the certificates (or
other assets and securities ) are to be released or otherwise
surrendered for cancellation in accordance with paragraph 5.3.
Upon delivery of the certificates (or other assets and
securities) to the Secretary of the Corporation, the Director
shall be issued an instrument of deposit acknowledging the number
of unvested Series A Shares (or other assets and securities)
delivered in escrow.
5.2 RECAPITALIZATION. All regular cash dividends on
the unvested Series A Shares (or on any other securities at the
time held in escrow) shall be paid directly to the Director and
shall not be held in escrow. However, in the event of (i) any
stock dividend, stock split, recapitalization, combination of
shares, exchange of shares or other change affecting the
Corporation's outstanding Series A Preferred Stock as a class
effected without the Corporation's receipt of consideration,
(ii) any reorganization of the Corporation (including, without
limitation, a Corporate Transaction) or (iii) the redemption or
conversion of the unvested Series A Shares at the time subject to
this Agreement, any new, substituted or additional securities or
other property (including money paid other than as a regular cash
dividend) which is by reason of such transaction distributed,
paid or issued with respect to the unvested Series A Shares at
the time subject to this Agreement (including any shares of the
Corporation's Class A Common Stock issued in conversion of such
Series A Shares or any money or debt or equity securities issued
in redemption of such Series A Shares) shall be immediately
delivered to the Secretary of the Corporation to be held in
escrow under this Article V.
5.
<PAGE>
5.3 RELEASE/SURRENDER. The unvested Series A Shares,
together with any other assets or securities held in escrow
hereunder, shall be subject to the following terms and conditions
relating to their release from escrow or their surrender to the
Corporation for cancellation:
(i) Upon the Director's cessation of Board
service for any reason other than death or Permanent Disability,
the escrowed certificates for the unvested Series A Shares at the
time subject to this Agreement (together with any other assets or
securities attributable thereto) shall be delivered to the
Corporation for cancellation, and the Director shall immediately
cease to have any further rights or claims with respect to such
unvested Series A Shares (or other assets or securities
attributable to those unvested shares).
(ii) As the interest of the Director in the Series
A Shares issued under this Agreement (or any other assets or
securities attributable thereto) vests in accordance with the
provisions of Article II, the certificates for those vested
shares (as well as all other vested assets and securities) shall
be released from escrow and delivered to the Director.
VI. SPECIAL TAX ELECTION
6.1 SECTION 83(B) ELECTION. The Director shall be
subject to income taxation with respect to the unvested Series A
Shares in accordance with the applicable tax principles of
Section 83 of the Internal Revenue Code (the "Code"). The
Director accordingly understands that there will be no taxation
of the unvested Series A Shares at the time of issuance under
this Agreement, but as the Director's interest in such Series A
Shares vests in quarterly increments over the Director's period
of Board service, the fair market value of the Series A Shares
which vest on each such quarterly date will be reportable as
ordinary income. Director understands, however, that he or she
may elect under Code Section 83(b) to be taxed at the time the
unvested Series A Shares are issued under this Agreement, rather
than when and as the Series A Shares subsequently vest. Such
election must be filed with the Internal Revenue Service within
thirty (30) days after the date of this Agreement. THE FORM FOR
MAKING THIS ELECTION IS ATTACHED AS EXHIBIT II HERETO. DIRECTOR
UNDERSTANDS THAT FAILURE TO MAKE THIS FILING WITHIN THE THIRTY
(30)-DAY PERIOD WILL RESULT IN THE RECOGNITION OF ORDINARY INCOME
BY THE DIRECTOR UPON THE VESTING OF HIS OR HER INTEREST IN THE
SERIES A SHARES ISSUED HEREUNDER.
6.
<PAGE>
6.2 DIRECTOR RESPONSIBILITY. DIRECTOR ACKNOWLEDGES
THAT IT IS DIRECTOR'S SOLE RESPONSIBILITY, AND NOT THE
CORPORATION'S, TO FILE A TIMELY ELECTION UNDER CODE SECTION
83(B), EVEN IF DIRECTOR REQUESTS THE CORPORATION OR ITS
REPRESENTATIVES TO MAKE THIS FILING ON HIS OR HER BEHALF.
VII. GENERAL PROVISIONS
7.1 NO IMPAIRMENT OF RIGHTS. This Agreement shall not
in any way affect the right of the Corporation to adjust,
reclassify, reorganize or otherwise make changes in its capital
or business structure or to merge, consolidate, dissolve,
liquidate or sell or transfer all or any part of its business or
assets. Nor shall this Agreement in any way be construed or
interpreted so as to affect adversely or otherwise impair the
right of the Corporation or the stockholders to remove Optionee
from the Board at any time in accordance with the provisions of
applicable law.
7.2 NOTICES. Any notice required in connection with
this Agreement shall be given in writing and shall be deemed
effective upon personal delivery or upon deposit in the United
States mail, registered or certified, postage prepaid and
addressed to the party entitled to such notice at the address
indicated below such party's signature line on this Agreement or
at such other address as such party may designate by ten (10)
days advance written notice under this paragraph 7.2 to all other
parties to this Agreement.
VIII. MISCELLANEOUS PROVISIONS
8.1 DIRECTOR UNDERTAKING. Director hereby agrees to
take whatever additional action and execute whatever additional
documents the Corporation may in its judgment deem necessary or
advisable in order to carry out or effect one or more of the
obligations or restrictions imposed on either the Director or the
Series A Shares pursuant to the express provisions of this
Agreement.
8.2 AGREEMENT IS ENTIRE CONTRACT. This Agreement
constitutes the entire contract between the parties hereto with
regard to the subject matter hereof. This Agreement is made
pursuant to the provisions of the Plan and shall in all respects
be construed in conformity with the express terms and provisions
of the Plan.
7.
<PAGE>
8.3 GOVERNING LAW. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of
California, as such laws are applied to contracts entered into
and performed in such State without resort to that State's
conflict-of-laws provisions.
8.4 SUCCESSORS AND ASSIGNS. The provisions of this
Agreement shall inure to the benefit of, and be binding upon, the
Corporation and its successors and assigns and the Director and
the Director's legal representatives, heirs, legatees,
distributees, assigns and transferees by operation of law,
whether or not any such person shall have become a party to this
Agreement and have agreed in writing to join herein and be bound
by the terms and conditions hereof.
8.5 COUNTERPARTS. This Agreement may be executed in
one or more counterparts. Each such counterpart shall be deemed
to be an original and all such counterparts shall together
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this
Agreement on the day and year first indicated above.
KOLL REAL ESTATE GROUP
By: ______________________________
Title: ___________________________
Address: _________________________
__________________________________
DIRECTOR
Address: _________________________
8.
<PAGE>
EXHIBIT I
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED _____________________________________
hereby assign(s) and transfer(s) unto Koll Real Estate Group (the
"Corporation"), _____________________________ (_______) shares of
the Series A Convertible Redeemable Preferred Stock of the
Corporation standing in ________________ name on the books of the
Corporation represented by Certificate No. _____________ herewith
and do hereby irrevocably constitute and appoint ________________
Attorney to transfer the said stock on the books of the
Corporation with full power of substitution in the premises.
Dated: ___________________
Signature_______________________
INSTRUCTION: Please do not fill in any blanks other than the
signature line. The purpose of this assignment is to enable the
Corporation to automatically cancel unvested shares in the event
of the Director's termination of Board service in accordance with
the Agreement without requiring additional signatures on the part
of the Director.
<PAGE>
EXHIBIT II
SECTION 83(B) TAX ELECTION
This statement is being made under Section 83(b) of the Internal
Revenue Code, pursuant to Treas. Reg. Section 1.83-2.
(1) The taxpayer who performed the services is:
Name:
Address:
Taxpayer Ident. No.:
(2) The property with respect to which the election is being
made is ____________ shares of the Series A Convertible
Redeemable Preferred Stock of Koll Real Estate Group.
(3) The property was issued on January ____, 199__.
(4) The taxable year in which the election is being made is the
calendar year 199__.
(5) The property is subject to a substantial risk of forfeiture
pursuant to which the taxpayer's right to the property will be
cancelled if taxpayer's service with the issuer is terminated for
any reason other than death or disability. The property will
cease to be subject to such forfeiture risk and will vest in four
quarterly installments at the end of each calendar quarter during
the 199__ calendar year.
(6) The fair market value at the time of transfer (determined
without regard to any restriction other than a restriction which
by its terms will never lapse) is $_____________ per share.
(7) The amount paid for such property is $_________ per share.
(8) A copy of this statement was furnished to Koll Real Estate
Group for whom taxpayer rendered the services underlying the
transfer of property.
(9) This statement is executed as of: _________________, 199__.
_______________ _______________________________
Spouse (if any) Taxpayer
This form must be filed with the Internal Revenue Service Center
with which taxpayer files his/her Federal income tax returns.
The filing must be made within 30 days after the execution date
of the Stock Issuance Agreement and should be made by registered
or certified mail, return receipt requested. Director must
retain two (2) copies of the completed form for filing with his
or her Federal and State tax returns for the current tax year and
an additional copy for his or her records.
<PAGE>
EXHIBIT 99.13
Form of Stock Issuance Agreement: Class A Common Stock to be
generally used in connection with the 1993 Stock Option/Stock
Issuance Plan - Director Fee Program
<PAGE>
KOLL REAL ESTATE GROUP
STOCK ISSUANCE AGREEMENT
AGREEMENT made as of this ___ day of _________, 199_
by and between Koll Real Estate Group, a Delaware corporation
(the "Corporation"), and ________, a non-employee member of the
Corporation's Board of Directors ("Board") and a participant
("Director") in the special Director Fee Program in effect under
the Corporation's 1993 Stock Option/Stock Issuance Plan (the
"Plan").
I. ISSUANCE OF SHARES
1.1 ISSUANCE. In accordance with the Director's
election to receive shares of the Corporation's Class A Common
Stock in lieu of $___ of the annual retainer fee otherwise
payable to such Director in cash for his or her service as a
Board member during the _____ calendar year, the Corporation
hereby issues to Director _____ shares of Class A Common Stock
(the "Class A Shares") pursuant to the provisions of the Plan and
this Agreement.
1.2 DELIVERY OF CERTIFICATES. The Class A Shares
issued under this Agreement are unvested and are subject to
cancellation by the Corporation upon the Director's cessation of
Board service prior to vesting in such Class A Shares. The
certificates representing the unvested Class A Shares issued
hereunder shall be held in escrow by the Secretary of the
Corporation in accordance with the provisions of Article V of
this Agreement, and the Director shall deliver to the Secretary
of the Corporation, concurrently with the execution of this
Agreement, a duly-executed Assignment Separate from Certificate
(in the form attached hereto as Exhibit I) with respect to the
unvested Class A Shares.
1.3 STOCKHOLDER RIGHTS. Until such time as the Class
A Shares issued under this Agreement are cancelled by the
Corporation upon the Director's cessation of Board service prior
to vesting in those Class A Shares, the Director shall have all
the rights of a stockholder (including voting, dividend and
liquidation rights) with respect to the Class A Shares, subject,
however, to the transfer restrictions of Article IV.
1.4 COMPLIANCE WITH LAW. Under no circumstances shall
shares of the Series A Preferred Stock or other assets be issued
or delivered to the Director pursuant to the provisions of this
Agreement unless and until, in the opinion of counsel for the
Corporation or its successors, there shall have been compliance
with all applicable requirements of the Federal and state
securities laws, all applicable listing requirements of any
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securities exchange on which shares of the Corporation's Class A
Common Stock are then listed for trading and all other
requirements of law or of any regulatory bodies having
jurisdiction over such issuance and delivery.
II. VESTING
2.1 SCHEDULE. The Director shall acquire a vested
interest in the Class A Shares in four equal and successive
quarterly installments upon the Director's completion of each
calendar quarter of Board service during the _____ calendar year.
All the Class A Shares issued under this Agreement shall
immediately vest in full in the event (i) the Director should die
or become Permanently Disabled during his or her period of Board
service or (ii) there should occur a Corporate Transaction or
Change in Control while such individual remains in Board service.
2.2 DEFINITIONS. For purposes of this Agreement, the
following definitional provisions shall be in effect:
CHANGE IN CONTROL: a change in ownership or
control of the Corporation effected through either of the
following transactions:
(i) any person or related group of persons
(other than the Corporation or a person that directly or
indirectly controls, is controlled by, or is under common control
with, the Corporation) directly or indirectly acquires beneficial
ownership (within the meaning of Rule 13d-3 of the 1934 Act) of
securities possessing more than fifty percent (50%) of the total
combined voting power of the Corporation's outstanding securities
pursuant to a tender or exchange offer made directly to the
Corporation's stockholders which the Board does not recommend
such stockholders to accept; or
(ii) a change in the composition of the Board
over a period of thirty-six (36) consecutive months or less such
that a majority of the Board members (rounded up to the next
whole number) ceases, by reason of one or more contested
elections for Board membership, to be comprised of individuals
who either (A) have been Board members continuously since the
beginning of such period or (B) have been elected or nominated
for election as Board members during such period by at least a
majority of the Board members described in clause (A) who were
still in office at the time such election or nomination was
approved by the Board.
CORPORATE TRANSACTION: any of the following
stockholder-approved transactions to which the Corporation is a
party:
2.
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(i) a merger or consolidation in which the
Corporation is not the surviving entity, except for a transaction
the principal purpose of which is to change the State in which
the Corporation is incorporated,
(ii) the sale, transfer or other disposition
of all or substantially all of the assets of the Corporation in
complete liquidation and dissolution of the Corporation, or
(iii) any reverse merger in which the
Corporation is the surviving entity but in which securities
possessing more than fifty percent (50%) of the total combined
voting power of the Corporation's outstanding securities are
transferred to person or persons different from the persons
holding those securities immediately prior to such merger.
PERMANENT DISABILITY OR PERMANENTLY DISABLED: the
inability of the Director to engage in any substantial gainful
activity by reason of any medically determinable physical or
mental impairment expected to result in death or to be of
continuous duration of twelve (12) months or more.
III. AUTOMATIC CANCELLATION
3.1 CANCELLATION. Should the Director cease Board
service prior to vesting in one or more quarterly installments of
the Class A Shares, then those unvested Class A Shares shall
immediately be surrendered to the Corporation for cancellation,
and the Director shall not be entitled to any cash payment or
other consideration from the Corporation with respect to the
cancelled Class A Shares and shall have no further stockholder
rights with respect to such Class A Shares.
3.2 ADDITIONAL SHARES OR SUBSTITUTED SECURITIES.
A. In the event of any stock split, stock dividend,
recapitalization, combination of shares, exchange of shares or
other change affecting the outstanding Class A Common Stock as a
class without the Corporation's receipt of consideration, any
new, substituted or additional securities or other property
(including money paid other than as a regular cash dividend)
which is by reason of any such transaction distributed with
respect to the unvested Class A Shares at the time subject to
this Agreement shall
3.
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be immediately delivered to the Corporation to be held subject to
the provisions of this Agreement, including (without limitation)
the provisions governing the automatic surrender and cancellation
of such securities or property upon the Director's termination of
Board service prior to vesting in such securities or property.
B. Neither the redemption nor the conversion of the
shares of the Corporation's outstanding Series A Convertible
Redeemable Preferred Stock shall have any effect or impact upon
the unvested Class A Shares at the time subject to this Agreement
or any other securities or property held in escrow pursuant to
the provisions of Article V.
IV. TRANSFER RESTRICTIONS
4.1 RESTRICTION ON TRANSFER. The Director shall not
transfer, assign, encumber or otherwise dispose of any of the
unvested Class A Shares which are subject to the automatic
cancellation provisions of Article III.
4.2 RESTRICTIVE LEGENDS. The stock certificates for
the unvested Class A Shares subject to this Agreement shall be
endorsed with the following restrictive legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE UNVESTED AND ARE
SUBJECT TO TRANSFER RESTRICTIONS AND CANCELLATION IN THE EVENT
THE REGISTERED HOLDER CEASES TO REMAIN IN THE CORPORATION'S
SERVICE. SUCH TRANSFER RESTRICTIONS AND THE TERMS AND CONDITIONS
OF SUCH CANCELLATION ARE SET FORTH IN A STOCK ISSUANCE AGREEMENT
BETWEEN THE CORPORATION AND THE REGISTERED HOLDER OF THE SHARES
WHICH IS DATED ______________, 199__. A COPY OF SUCH AGREEMENT
IS ON FILE AT THE CORPORATION'S PRINCIPAL OFFICES.
V. ESCROW
5.1 DEPOSIT. The certificates for the unvested Class
A Shares issued hereunder shall be immediately deposited in
escrow with the Secretary of the Corporation to be held in
accordance with the provisions of this Article V. Each deposited
certificate shall be accompanied by a duly-executed Assignment
Separate from Certificate in the form of Exhibit I. The
deposited certificates, together with any other assets or
securities from time to time deposited with the Secretary of the
Corporation pursuant to the requirements of this Agreement, shall
remain in escrow until such time or times as the certificates (or
other assets and securities ) are to be released or otherwise
surrendered for cancellation in accordance with paragraph 5.3.
Upon delivery of the certificates (or other assets and
securities) to the Secretary of the
4.
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Corporation, the Director shall be issued an instrument of
deposit acknowledging the number of unvested Class A Shares (or
other assets and securities) delivered in escrow.
5.2 RECAPITALIZATION. All regular cash dividends on
the unvested Class A Shares (or on any other securities at the
time held in escrow) shall be paid directly to the Director and
shall not be held in escrow. However, in the event of (i) any
stock dividend, stock split, recapitalization, combination of
shares, exchange of shares or other change affecting the
Corporation's outstanding Series A Preferred Stock as a class
effected without the Corporation's receipt of consideration or
(ii) any reorganization of the Corporation (including, without
limitation, a Corporate Transaction), any new, substituted or
additional securities or other property (including money paid
other than as a regular cash dividend) which is by reason of such
transaction distributed with respect to the unvested Class A
Shares at the time subject to this Agreement shall be immediately
delivered to the Secretary of the Corporation to be held in
escrow under this Article V.
5.3 RELEASE/SURRENDER. The unvested Class A Shares,
together with any other assets or securities held in escrow
hereunder, shall be subject to the following terms and conditions
relating to their release from escrow or their surrender to the
Corporation for cancellation:
(i) Upon the Director's cessation of Board
service for any reason other than death or Permanent Disability,
the escrowed certificates for the unvested Class A Shares at the
time subject to this Agreement (together with any other assets or
securities attributable thereto) shall be delivered to the
Corporation for cancellation, and the Director shall immediately
cease to have any further rights or claims with respect to such
unvested Class A Shares (or other assets or securities
attributable to those unvested shares).
(ii) As the interest of the Director in the Class
A Shares issued under this Agreement (or any other assets or
securities attributable thereto) vests in accordance with the
provisions of Article II, the certificates for those vested
shares (as well as all other vested assets and securities) shall
be released from escrow and delivered to the Director.
5.
<PAGE>
VI. SPECIAL TAX ELECTION
6.1 SECTION 83(B) ELECTION. The Director shall be
subject to income taxation with respect to the unvested Class A
Shares in accordance with the applicable tax principles of
Section 83 of the Internal Revenue Code (the "Code"). The
Director accordingly understands that there will be no taxation
of the unvested Class A Shares at the time of issuance under this
Agreement, but as the Director's interest in such Class A Shares
vests in quarterly increments over the Director's period of Board
service, the fair market value of the Class A Shares which vest
on each such quarterly date will be reportable as ordinary
income. Director understands, however, that he or she may elect
under Code Section 83(b) to be taxed at the time the unvested
Class A Shares are issued under this Agreement, rather than when
and as the Class A Shares subsequently vest. Such election must
be filed with the Internal Revenue Service within thirty (30)
days after the date of this Agreement. THE FORM FOR MAKING THIS
ELECTION IS ATTACHED AS EXHIBIT II HERETO. DIRECTOR UNDERSTANDS
THAT FAILURE TO MAKE THIS FILING WITHIN THE THIRTY (30)-DAY
PERIOD WILL RESULT IN THE RECOGNITION OF ORDINARY INCOME BY THE
DIRECTOR UPON THE VESTING OF HIS OR HER INTEREST IN THE CLASS A
SHARES ISSUED HEREUNDER.
6.2 DIRECTOR RESPONSIBILITY. DIRECTOR ACKNOWLEDGES
THAT IT IS DIRECTOR'S SOLE RESPONSIBILITY, AND NOT THE
CORPORATION'S, TO FILE A TIMELY ELECTION UNDER CODE SECTION
83(B), EVEN IF DIRECTOR REQUESTS THE CORPORATION OR ITS
REPRESENTATIVES TO MAKE THIS FILING ON HIS OR HER BEHALF.
VII. GENERAL PROVISIONS
7.1 NO IMPAIRMENT OF RIGHTS. This Agreement shall not
in any way affect the right of the Corporation to adjust,
reclassify, reorganize or otherwise make changes in its capital
or business structure or to merge, consolidate, dissolve,
liquidate or sell or transfer all or any part of its business or
assets. Nor shall this Agreement in any way be construed or
interpreted so as to affect adversely or otherwise impair the
right of the Corporation or the stockholders to remove Optionee
from the Board at any time in accordance with the provisions of
applicable law.
7.2 NOTICES. Any notice required in connection with
this Agreement shall be given in writing and shall be deemed
effective upon personal delivery or upon deposit in the United
States mail, registered or certified, postage prepaid and
addressed to the party entitled to such notice at the address
indicated below such party's signature line on this Agreement or
at such other address as such party may designate by ten (10)
days advance written notice under this paragraph 7.2 to the other
party.
6.
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VIII. MISCELLANEOUS PROVISIONS
8.1 DIRECTOR UNDERTAKING. Director hereby agrees to
take whatever additional action and execute whatever additional
documents the Corporation may in its judgment deem necessary or
advisable in order to carry out or effect one or more of the
obligations or restrictions imposed on either the Director or the
Class A Shares pursuant to the express provisions of this
Agreement.
8.2 AGREEMENT IS ENTIRE CONTRACT. This Agreement
constitutes the entire contract between the parties hereto with
regard to the subject matter hereof. This Agreement is made
pursuant to the provisions of the Plan and shall in all respects
be construed in conformity with the express terms and provisions
of the Plan.
8.3 GOVERNING LAW. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of
California, as such laws are applied to contracts entered into
and performed in such State without resort to that State's
conflict-of-laws rules.
8.4 SUCCESSORS AND ASSIGNS. The provisions of this
Agreement shall inure to the benefit of, and be binding upon, the
Corporation and its successors and assigns and the Director and
the Director's legal representatives, heirs, legatees,
distributees, assigns and transferees by operation of law,
whether or not any such person shall have become a party to this
Agreement and have agreed in writing to join herein and be bound
by the terms and conditions hereof.
8.5 COUNTERPARTS. This Agreement may be executed in
one or more counterparts. Each such counterpart shall be deemed
to be an original and all such counterparts shall together
constitute one and the same instrument.
7.
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IN WITNESS WHEREOF, the parties have executed this
Agreement on the day and year first indicated above.
KOLL REAL ESTATE GROUP
By: ______________________________
Title: ___________________________
Address: _________________________
__________________________________
_______________, DIRECTOR
Address:
8.
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EXHIBIT I
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED ______________ hereby assign(s) and
transfer(s) unto Koll Real Estate Group (the "Corporation"),
_________________________________ (_______) shares of the Class A
Common Stock of the Corporation standing in _____________ name on
the books of the Corporation represented by Certificate No.
___________________ herewith and do hereby irrevocably constitute
and appoint ________________________________ Attorney to transfer
the said stock on the books of the Corporation with full power of
substitution in the premises.
Dated: ________________
____________________________
Signature
INSTRUCTION: Please do not fill in any blanks other than the
signature line. The purpose of this assignment is to enable the
Corporation to automatically cancel unvested shares in the event
of the Director's termination of Board service in accordance with
the Agreement without requiring additional signatures on the part
of the Director.
<PAGE>
EXHIBIT II
SECTION 83(B) TAX ELECTION
This statement is being made under Section 83(b) of the Internal
Revenue Code, pursuant to Treas. Reg. Section 1.83-2.
(1) The taxpayer who performed the services is:
Name:
Address:
Taxpayer Ident. No.:
(2) The property with respect to which the election is being
made is _____ shares of the Class A Common Stock of Koll Real
Estate Group.
(3) The property was issued on January ______.
(4) The taxable year in which the election is being made is the
calendar year _____.
(5) The property is subject to a substantial risk of forfeiture
pursuant to which the taxpayer's right to the property will be
cancelled if taxpayer's service with the issuer is terminated for
any reason other than death or disability. The property will
cease to be subject to such forfeiture risk and will vest in four
quarterly installments at the end of each calendar quarter during
the ___ calendar year.
(6) The fair market value at the time of transfer (determined
without regard to any restriction other than a restriction which
by its terms will never lapse) is $______ per share.
(7) The amount paid for such property is $_______ per share.
(8) A copy of this statement was furnished to Koll Real Estate
Group for whom taxpayer rendered the services underlying the
transfer of property.
(9) This statement is executed as of: ___________, 199__.
______________________ _______________________________
Spouse (if any) Taxpayer
This form must be filed with the Internal Revenue Service Center
with which taxpayer files his/her Federal income tax returns.
The filing must be made within 30 days after the execution date
of the Stock Issuance Agreement and should be made by registered
or certified mail, return receipt requested. Director must
retain two (2) copies of the completed form for filing with his
or her Federal and State tax returns for the current tax year and
an additional copy for his or her records.
