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SCHEDULE 14A
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Amendment No. 1)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] Confidential, for Use of the Commission Only (as permitted by Rule 14a-
6(e)(2))
[_] Definitive Proxy Statement
[X] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
NATIONAL GOLF PROPERTIES, INC.
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(Name of Registrant as Specified in its Charter)
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(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11:
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which the transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
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The following 1997 Equity Participation Plan of National Golf Properties,
Inc., National Golf Operating Partnership, L.P. and American Golf Corporation is
an appendix to the proxy statement of National Golf Properties, Inc. filed April
4, 1997.
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THE 1997 EQUITY PARTICIPATION PLAN
OF
NATIONAL GOLF PROPERTIES, INC.,
NATIONAL GOLF OPERATING PARTNERSHIP, L.P.
AND
AMERICAN GOLF CORPORATION
National Golf Properties, Inc., a Maryland corporation (the
"Company"), National Golf Operating Partnership, L.P., a Delaware limited
partnership (the "Partnership"), and American Golf Corporation, a California
corporation ("AGC") have adopted The 1997 Equity Participation Plan of National
Golf Properties, Inc., National Golf Operating Partnership, L.P. and American
Golf Corporation (the "Plan"), effective May 6, 1997 (subject to the approval of
the Plan by the Company's stockholders on such date), for the benefit of their
eligible employees. The Plan consists of two plans, one for the benefit of key
Employees (as such term is defined below) of National Golf Properties, Inc. and
its subsidiaries (other than National Golf Operating Partnership, L.P.) and one
for the benefit of key Employees of National Golf Operating Partnership, L.P.
and American Golf Corporation and their subsidiaries.
The purposes of this Plan are as follows:
(1) To provide an additional incentive for key Employees to further
the growth, development and financial success of the Company by personally
benefiting through the ownership of Company stock and/or rights which recognize
such growth, development and financial success.
(2) To enable the Company, AGC, the Partnership and their respective
subsidiaries to obtain and retain the services of key Employees considered
essential to the long range success of the Company by offering them an
opportunity to own stock in the Company and/or rights which will reflect the
growth, development and financial success of the Company.
ARTICLE I
DEFINITIONS
1.1 General. Wherever the following terms are used in this Plan they
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shall have the meanings specified below, unless the context clearly indicates
otherwise.
1.2 AGC. "AGC" shall mean American Golf Corporation, a California
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corporation.
1.3 AGC Employee. "AGC Employee" shall mean any officer or other
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employee (as defined in accordance with Section 3401(c) of the Code) of AGC, or
of any corporation which is then an AGC Subsidiary; provided, however, that any
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officer or other employee of AGC, or of any AGC Subsidiary shall not be an AGC
Employee for purposes of
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granting Options, Performance Awards or rights to acquire Restricted Stock if
there are less than 10 golf course leases in effect between the Company or the
Partnership, as landlord, and AGC, as tenant.
1.4 AGC Optionee Purchased Shares. "AGC Optionee Purchased Shares"
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shall have the meaning set forth in Section 5.4.
1.5 AGC Partnership Purchase Price. "AGC Partnership Purchase Price"
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shall have the meaning set forth in Section 5.4.
1.6 AGC Partnership Purchased Shares. "AGC Partnership Purchased
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Shares" shall have the meaning set forth in Section 5.4.
1.7 AGC Subsidiary. "AGC Subsidiary" shall mean any corporation in
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an unbroken chain of corporations beginning with AGC if each of the corporations
other than the last corporation in the unbroken chain then owns stock possessing
50 percent or more of the total combined voting power of all classes of stock in
one of the other corporations in such chain. "AGC Subsidiary" shall also mean
any partnership in which AGC and/or any AGC Subsidiary owns more than 50 percent
of the capital or profits interests.
1.8 Award Limit. "Award Limit" shall mean 100,000 shares of Common
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Stock, as adjusted pursuant to Section 9.3.
1.9 Board. "Board" shall mean the Board of Directors of the Company.
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1.10 Code. "Code" shall mean the Internal Revenue Code of 1986, as
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amended.
1.11 Committee. "Committee" shall mean the Compensation Committee of
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the Board, or another committee or subcommittee of the Board, appointed as
provided in Section 8.1.
1.12 Common Stock. "Common Stock" shall mean the common stock of the
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Company, par value $0.01 per share, and any equity security of the Company
issued or authorized to be issued in the future, but excluding any preferred
stock and any warrants, options or other rights to purchase Common Stock. Debt
securities of the Company convertible into Common Stock shall be deemed equity
securities of the Company.
1.13 Company. "Company" shall mean National Golf Properties, Inc., a
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Maryland corporation.
1.14 Company Employee. "Company Employee" shall mean any officer or
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other employee (as defined in accordance with Section 3401(c) of the Code) of
the Company, or of any corporation which is a Company Subsidiary.
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1.15 Company Subsidiary. "Company Subsidiary" shall mean any
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corporation in an unbroken chain of corporations beginning with the Company if
each of the corporations other than the last corporation in the unbroken chain
then owns stock possessing 50 percent or more of the total combined voting power
of all classes of stock in one of the other corporations in such chain. Except
with respect to Incentive Stock Options, "Company Subsidiary" shall also mean
any partnership in which the Company and/or any Company Subsidiary owns more
than 50 percent of the capital or profits interests; provided, however, that
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"Company Subsidiary" shall not include the Partnership nor any Partnership
Subsidiary.
1.16 Corporate Transaction. "Corporate Transaction" shall mean any of
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the following stockholder-approved transactions to which the Company is a party:
(a) a merger or consolidation in which the Company is not the
surviving entity, except for a transaction the principal purpose of which
is to change the State in which the Company is incorporated, form a holding
company or effect a similar reorganization as to form whereupon this Plan
and all Options are assumed by the successor entity;
(b) the sale, transfer, exchange or other disposition of all or
substantially all of the assets of the Company, in complete liquidation or
dissolution of the Company in a transaction not covered by the exceptions
to clause (a), above; or
(c) any reverse merger in which the Company is the surviving entity
but in which securities possessing more than fifty percent (50%) of the
total combined voting power of the Company's outstanding securities are
transferred or issued to a person or persons different from those who held
such securities immediately prior to such merger.
1.17 Director. "Director" shall mean a member of the Board.
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1.18 Employee. "Employee" shall mean any Company Employee, AGC
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Employee or Partnership Employee.
1.19 Exchange Act. "Exchange Act" shall mean the Securities Exchange
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Act of 1934, as amended.
1.20 Fair Market Value. "Fair Market Value" of a share of Common
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Stock as of a given date shall be (i) the closing price of a share of Common
Stock on the principal exchange on which shares of Common Stock are then
trading, if any (or as reported on any composite index which includes such
principal exchange), on the trading day previous to such date, or if shares were
not traded on the trading day previous to such date, then on the next preceding
date on which a trade occurred, or (ii) if Common Stock is not traded on an
exchange but is quoted on NASDAQ or a successor quotation system, the mean
between the closing representative bid and asked prices for the Common Stock on
the trading day previous to such date as reported by NASDAQ or such successor
quotation system; or (iii) if Common Stock is not publicly traded on an exchange
and
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not quoted on NASDAQ or a successor quotation system, the Fair Market Value of a
share of Common Stock as established by the Committee acting in good faith.
1.21 General Partner Interest. "General Partner Interest" shall mean
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an ownership interest in the Partnership that is a general partnership interest
and includes any and all benefits to which the holder of such an interest may be
entitled as provided in the Partnership Agreement, together with all obligations
of such holder to comply with the terms and provisions of such agreement.
1.22 Grantee. "Grantee" shall mean an Employee granted a Performance
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Award under this Plan.
1.23 Incentive Stock Option. "Incentive Stock Option" shall mean an
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option which conforms to the applicable provisions of Section 422 of the Code
and which is designated as an Incentive Stock Option by the Committee.
1.24 Independent Director. "Independent Director" shall mean a member
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of the Board who is not a Company Employee.
1.25 Non-Qualified Stock Option. "Non-Qualified Stock Option" shall
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mean an Option which is not designated as an Incentive Stock Option by the
Committee.
1.26 Option. "Option" shall mean a stock option granted under Article
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III of this Plan. An Option granted under this Plan shall, as determined by the
Committee, be either a Non-Qualified Stock Option or an Incentive Stock Option;
provided, however, that Options granted to AGC Employees and Partnership
- -------- -------
Employees shall be Non-Qualified Stock Options unless such individual is also a
Company Employee.
1.27 Optionee. "Optionee" shall mean an Employee granted an Option
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under this Plan.
1.28 Ownership Limit. "Ownership Limit" shall mean 9.8% (by value or
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by number of shares, whichever is more restrictive) of the outstanding "common
stock" (as defined in the Company's Articles of Incorporation) of the Company
or, to the extent shares of other classes of Common Stock are issued pursuant to
this Plan, any limit established with respect to such other Common Stock
pursuant to the organizational documents of the Company.
1.29 Partnership. "Partnership" shall mean National Golf Operating
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Partnership, L.P., a Delaware limited partnership.
1.30 Partnership Agreement. "Partnership Agreement" shall mean the
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Agreement of Limited Partnership of National Golf Operating Partnership, L.P.,
dated as of August 18, 1993, as it may be amended, modified, or restated from
time to time.
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1.31 Partnership Employee. "Partnership Employee" shall mean any
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officer or other employee (as defined in accordance with Section 3401(c) of the
Code) of the Partnership or any entity which is then a Partnership Subsidiary.
1.32 Partnership Optionee Purchased Shares. "Partnership Optionee
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Purchased Shares" shall have the meaning set forth in Section 5.5.
1.33 Partnership Purchased Price. "Partnership Purchased Price" shall
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have the meaning set forth in Section 5.5.
1.34 Partnership Purchased Shares. "Partnership Purchased Shares"
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shall have the meaning set forth in Section 5.5.
1.35 Partnership Subsidiary. "Partnership Subsidiary" shall mean any
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partnership in an unbroken chain of partnerships beginning with the Partnership
if each of the partnerships other than the last partnership in the unbroken
chain then owns more than 50 percent of the capital or profits interests in one
of the other partnerships. "Partnership Subsidiary" shall also mean any
corporation in which the Partnership and/or any Partnership Subsidiary owns
stock possessing 50 percent or more of the total combined voting power of all
classes of stock.
1.36 Performance Award. "Performance Award" shall mean a cash bonus,
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stock bonus or other performance or incentive award that is paid in cash, Common
Stock or a combination of both, awarded under Article VII of this Plan.
1.37 Plan. "Plan" shall mean The 1997 Equity Participation Plan of
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National Golf Properties, Inc., National Golf Operating Partnership, L.P. and
American Golf Corporation.
1.38 QDRO. "QDRO" shall mean a qualified domestic relations order as
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defined by the Code or Title I of the Employee Retirement Income Security Act of
1974, as amended, or the rules thereunder.
1.39 Restricted Stock. "Restricted Stock" shall mean Common Stock
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awarded under Article VI of this Plan.
1.40 Restricted Stockholder. "Restricted Stockholder" shall mean an
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Employee granted an award of Restricted Stock under Article VI of this Plan.
1.41 Rule 16b-3. "Rule 16b-3" shall mean that certain Rule 16b-3
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under the Exchange Act, as such Rule may be amended from time to time.
1.42 Section 162(m) Participant. "Section 162(m) Participant" shall
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mean any key Employee designated by the Committee as a key Employee whose
compensation for the fiscal year in which the key Employee is so designated or a
future fiscal year may be subject to the limit on deductible compensation
imposed by Section 162(m) of the Code.
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1.43 Termination of Employment. "Termination of Employment" shall
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mean the time when the employee-employer relationship between an Optionee,
Grantee or Restricted Stockholder and the Company, a Company Subsidiary, AGC, an
AGC Subsidiary, the Partnership or a Partnership Subsidiary is terminated for
any reason, with or without cause, including, but not by way of limitation, a
termination by resignation, discharge, death, disability or retirement; but
excluding (i) terminations where there is a simultaneous reemployment or
continuing employment of an Optionee, Grantee or Restricted Stockholder by the
Company, a Company Subsidiary, AGC, an AGC Subsidiary, the Partnership or a
Partnership Subsidiary and (ii) at the discretion of the Committee, terminations
which result in a temporary severance of the employee-employer relationship.
With respect to AGC Employees, "Termination of Employment" shall also mean the
time when there are less than 10 golf course leases in effect between the
Company or the Partnership, as landlord, and AGC, as tenant. The Committee, in
its absolute discretion, shall determine the effect of all matters and questions
relating to Termination of Employment, including, but not by way of limitation,
the question of whether a Termination of Employment resulted from a discharge
for good cause, and all questions of whether particular leaves of absence
constitute Terminations of Employment; provided, however, that, with respect to
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Incentive Stock Options, unless otherwise determined by the Committee in its
discretion, a leave of absence or other change in the employee-employer
relationship shall constitute a Termination of Employment if, and to the extent
that, such leave of absence or other change interrupts employment for the
purposes of Section 422(a)(2) of the Code and the then applicable regulations
and revenue rulings under said Section. Notwithstanding any other provision of
this Plan, each of the Company, a Company Subsidiary, AGC, an AGC Subsidiary,
the Partnership or a Partnership Subsidiary has an absolute and unrestricted
right to terminate an Employee's employment with such entity at any time for any
reason whatsoever, with or without cause, except to the extent expressly
provided otherwise in writing.
ARTICLE II
SHARES SUBJECT TO PLAN
2.1 Shares Subject to Plan.
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(a) The shares of stock subject to Options, awards of Restricted
Stock or Performance Awards, shall be Common Stock, initially shares of the
Company's Common Stock, par value $0.01 per share. The aggregate number of such
shares which may be issued upon exercise of such Options or upon any such awards
under the Plan shall not exceed eight hundred thousand (800,000). The shares of
Common Stock issuable upon exercise of such Options or upon any such awards may
be either previously authorized but unissued shares or treasury shares.
(b) The maximum number of shares which may be subject to Options,
awards of Restricted Stock or Performance Awards granted under the Plan to any
individual in any calendar year shall not exceed the Award Limit. To the extent
required by Section 162(m) of the Code, shares subject to Options which are
canceled continue to be counted against the Award Limit and if, after grant of
an Option, the price of shares subject to such Option is reduced, the
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transaction is treated as a cancellation of the Option and a grant of a new
Option and both the Option deemed to be canceled and the Option deemed to be
granted are counted against the Award Limit.
2.2 Add-back of Options and Other Rights. If any Option, or other
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right to acquire shares of Common Stock under any other award under this Plan,
expires or is canceled without having been fully exercised, or is exercised in
whole or in part for cash as permitted by this Plan, the number of shares
subject to such Option or other right but as to which such Option or other right
was not exercised prior to its expiration, cancellation or exercise may again be
optioned, granted or awarded hereunder, subject to the limitations of Section
2.1. Furthermore, any shares subject to Options or other awards which are
adjusted pursuant to Section 9.3 and become exercisable with respect to shares
of stock of another corporation shall be considered cancelled and may again be
optioned, granted or awarded hereunder, subject to the limitations of Section
2.1. Shares of Common Stock which are delivered by the Optionee or Grantee or
withheld by the Company upon the exercise of any Option or other award under
this Plan, in payment of the exercise price thereof, may again be optioned,
granted or awarded hereunder, subject to the limitations of Section 2.1. If any
share of Restricted Stock is forfeited by the Grantee or repurchased by the
Company pursuant to Section 6.7 hereof, such share may again be optioned,
granted or awarded hereunder, subject to the limitations of Section 2.1.
Notwithstanding the provisions of this Section 2.2, no shares of Common Stock
may again be optioned, granted or awarded if such action would cause an
Incentive Stock Option to fail to qualify as an "incentive stock option" under
Section 422 of the Code.
ARTICLE III
GRANTING OF OPTIONS
3.1 Eligibility. Subject to the Award Limit and the Ownership Limit,
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any Employee selected by the Committee pursuant to Section 3.4(a)(i) shall be
eligible to be granted an Option.
3.2 Disqualification for Stock Ownership. No person may be granted
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an Incentive Stock Option under this Plan if such person, at the time the
Incentive Stock Option is granted, owns stock possessing more than ten percent
(10%) of the total combined voting power of all classes of stock of the Company
or any then existing subsidiary or parent corporation thereof (within the
meaning of Section 422 of the Code) unless such Incentive Stock Option conforms
to the applicable provisions of Section 422 of the Code.
3.3 Qualification of Incentive Stock Options. No Incentive Stock
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Option shall be granted to any person who is not a Company Employee.
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3.4 Granting of Options
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(a) The Committee shall from time to time, in its absolute
discretion, and subject to applicable limitations of this Plan:
(i) Determine which Employees are key Employees and select
from among the key Employees (including Employees who have previously received
Options or other awards under this Plan) such of them as in its opinion should
be granted Options;
(ii) Subject to the Award Limit and the Ownership Limit,
determine the number of shares to be subject to such Options granted to the
selected key Employees;
(iii) Subject to Section 3.3, determine whether such Options
are to be Incentive Stock Options or Non-Qualified Stock Options; provided,
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however, that any Option granted to any AGC Employee or any Partnership
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Employee shall be a Non-Qualified Stock Option unless such individual is also a
Company Employee; and
(iv) Determine the terms and conditions of such Options,
consistent with this Plan; provided, however, that the terms and conditions of
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Options intended to qualify as performance-based compensation as described in
Section 162(m)(4)(C) of the Code shall include, but not be limited to, such
terms and conditions as may be necessary to meet the applicable provisions of
Section 162(m) of the Code.
(b) Upon the selection of a key Employee to be granted an Option, the
Committee shall instruct the Secretary of the Company to issue the Option and
may impose such conditions on the grant of the Option as it deems appropriate.
Without limiting the generality of the preceding sentence, the Committee may, in
its discretion and on such terms as it deems appropriate, require as a condition
on the grant of an Option to an Employee that the Employee surrender for
cancellation some or all of the unexercised Options, awards of Restricted Stock
or Performance Awards or other rights which have been previously granted to him
under this Plan or otherwise. An Option, the grant of which is conditioned upon
such surrender, may have an Option price lower (or higher) than the exercise
price of such surrendered Option or other award, may cover the same (or a lesser
or greater) number of shares as such surrendered Option or other award, may
contain such other terms as the Committee deems appropriate, and shall be
exercisable in accordance with its terms, without regard to the number of
shares, price, exercise period or any other term or condition of such
surrendered Option or other award.
(c) Any Incentive Stock Option granted under this Plan may be
modified by the Committee to disqualify such Option from treatment as an
"incentive stock option" under Section 422 of the Code.
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ARTICLE IV
TERMS OF OPTIONS
4.1 Option Agreement. Each Option shall be evidenced by a written
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Stock Option Agreement, which shall be executed by the Optionee and an
authorized officer of the Company and which shall contain such terms and
conditions as the Committee shall determine, consistent with this Plan. Stock
Option Agreements evidencing Options intended to qualify as performance-based
compensation as described in Section 162(m)(4)(C) of the Code shall contain such
terms and conditions as may be necessary to meet the applicable provisions of
Section 162(m) of the Code. Stock Option Agreements evidencing Incentive Stock
Options shall contain such terms and conditions as may be necessary to meet the
applicable provisions of Section 422 of the Code.
4.2 Option Price. The price per share of the shares subject to each
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Option shall be set by the Committee; provided, however, that such price shall
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be no less than the par value of a share of Common Stock, unless otherwise
permitted by applicable state law, and (i) in the case of Options intended to
qualify as performance-based compensation as described in Section 162(m)(4)(C)
of the Code such price shall not be less than 100% of the Fair Market Value of a
share of Common Stock on the date the Option is granted, (ii) in the case of
Incentive Stock Options such price shall not be less than 100% of the Fair
Market Value of a share of Common Stock on the date the Option is granted (or
the date the Option is modified, extended or renewed for purposes of Section
424(h) of the Code); and (iii) in the case of Incentive Stock Options granted to
an individual then owning (within the meaning of Section 424(d) of the Code)
more than 10% of the total combined voting power of all classes of stock of the
Company or any parent or subsidiary corporation thereof (within the meaning of
Section 422 of the Code), such price shall not be less than 110% of the Fair
Market Value of a share of Common Stock on the date the Option is granted (or
the date the Option is modified, extended or renewed for purposes of Section
424(h) of the Code).
4.3 Option Term. The term of an Option shall be set by the
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Committee in its discretion; provided, however, that in the case of Incentive
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Stock Options, the term shall not be more than ten (10) years from the date the
Incentive Stock Option is granted, or five (5) years from such date if the
Incentive Stock Option is granted to an individual then owning (within the
meaning of Section 424(d) of the Code) more than 10% of the total combined
voting power of all classes of stock of the Company or any subsidiary or parent
corporation thereof (within the meaning of Section 422 of the Code). Except as
limited by requirements of Section 422 of the Code and regulations and rulings
thereunder applicable to Incentive Stock Options, the Committee may extend the
term of any outstanding Option in connection with any Termination of Employment
of the Optionee, or amend any other term or condition of such Option relating to
such a termination.
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4.4 Option Vesting
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(a) The period during which the right to exercise an Option in whole
or in part vests in the Optionee shall be set by the Committee and the Committee
may determine that an Option may not be exercised in whole or in part for a
specified period after it is granted. At any time after grant of an Option, the
Committee may, in its sole and absolute discretion and subject to whatever terms
and conditions it selects, accelerate the period during which an Option vests.
(b) No portion of an Option which is unexercisable at Termination of
Employment shall thereafter become exercisable, except as may be otherwise
provided by the Committee in either in the Stock Option Agreement or by action
of the Committee following the grant of the Option.
(c) To the extent that the aggregate Fair Market Value of stock with
respect to which "incentive stock options" (within the meaning of Section 422 of
the Code, but without regard to Section 422(d) of the Code) are exercisable for
the first time by an Optionee during any calendar year (under the Plan and all
other incentive stock option plans of the Company and any parent or subsidiary
corporation (within the meaning of Section 422 of the Code) of the Company)
exceeds $100,000, such Options shall be treated as Non-Qualified Options to the
extent required by Section 422 of the Code. The rule set forth in the preceding
sentence shall be applied by taking Options into account in the order in which
they were granted. For purposes of this Section 4.4(c), the Fair Market Value
of stock shall be determined as of the time the Option with respect to such
stock is granted.
4.5 Consideration. In consideration of the granting of an Option,
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the Optionee shall agree, in the written Stock Option Agreement, to remain in
the employ of the Company, a Company Subsidiary, AGC, an AGC Subsidiary, the
Partnership or a Partnership Subsidiary, as the case may be, for a period of at
least one year (or such shorter period as may be fixed in the Stock Option
Agreement or by action of the Committee following grant of the Option) after the
Option is granted. Nothing in this Plan or in any Stock Option Agreement
hereunder shall confer upon any Optionee any right to continue in the employ of
the Company, a Company Subsidiary, AGC, an AGC Subsidiary, the Partnership or a
Partnership Subsidiary, or shall interfere with or restrict in any way the
rights of the Company, any Company Subsidiary, AGC, any AGC Subsidiary, the
Partnership and any Partnership Subsidiary, which are hereby expressly reserved,
to discharge any Optionee at any time for any reason whatsoever, with or without
good cause.
4.6 Limitation on Grants of Options. The Company may not grant an
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Option that would result in a violation of Section 9.15.
ARTICLE V
EXERCISE OF OPTIONS
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5.1 Partial Exercise. An exercisable Option may be exercised in
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whole or in part. However, an Option shall not be exercisable with respect to
fractional shares and the Committee may require that, by the terms of the
Option, a partial exercise be with respect to a minimum number of shares.
5.2 Manner of Exercise. All or a portion of an exercisable Option
------------------
shall be deemed exercised upon delivery of all of the following to the Secretary
of the Company or his office:
(a) A written notice complying with the applicable rules established
by the Committee stating that the Option, or a portion thereof, is exercised.
The notice shall be signed by the Optionee or other person then entitled to
exercise the Option or such portion of the Option;
(b) Such representations and documents as the Committee, in its
absolute discretion, deems necessary or advisable to effect compliance with all
applicable provisions of the Securities Act of 1933, as amended, and any other
federal or state securities laws or regulations. The Committee may, in its
absolute discretion, also take whatever additional actions it deems appropriate
to effect such compliance including, without limitation, placing legends on
share certificates and issuing stop-transfer notices to agents and registrars;
(c) In the event that the Option shall be exercised pursuant to
Section 9.1 by any person or persons other than the Optionee, appropriate proof
of the right of such person or persons to exercise the Option; and
(d) Full cash payment to the Secretary of the Company for the shares
with respect to which the Option, or portion thereof, is exercised. However,
the Committee may in its discretion (i) allow a delay in payment up to thirty
(30) days from the date the Option, or portion thereof, is exercised; (ii) allow
payment, in whole or in part, through the delivery of shares of Common Stock
owned by the Optionee, duly endorsed for transfer to the Company with a Fair
Market Value on the date of delivery equal to the aggregate exercise price of
the Option or exercised portion thereof; (iii) allow payment, in whole or in
part, through the surrender of shares of Common Stock then issuable upon
exercise of the Option having a Fair Market Value on the date of Option exercise
equal to the aggregate exercise price of the Option or exercised portion
thereof; (iv) allow payment, in whole or in part, through the delivery of
property of any kind which constitutes good and valuable consideration; (v)
allow payment, in whole or in part, through the delivery of a full recourse
promissory note bearing interest (at no less than such rate as shall then
preclude the imputation of interest under the Code) and payable upon such terms
as may be prescribed by the Committee or the Board; (vi) allow payment, in whole
or in part, through the delivery of a notice that the Optionee has placed a
market sell order with a broker with respect to shares of Common Stock then
issuable upon exercise of the Option, and that the broker has been directed to
pay a sufficient portion of the net proceeds of the sale to the Company in
satisfaction of the Option exercise price; or (vii) allow payment through any
combination of the consideration provided in the foregoing subparagraphs (ii),
(iii), (iv), (v) and (vi). In the case of a promissory note, the Committee may
also prescribe the form of such note and the security to be given for such
12
<PAGE>
note. The Option may not be exercised, however, by delivery of a promissory note
or by a loan from the Company when or where such loan or other extension of
credit is prohibited by law.
5.3 Transfer of Shares to a Company Employee. As soon as practicable
----------------------------------------
after receipt by the Company, pursuant to Section 5.2(d), of payment for the
shares with respect to which an Option which was issued to and is held by a
Company Employee in his or her capacity as a Company Employee, or portion
thereof, is exercised, with respect to each such exercise, the Company shall
transfer to the Optionee the number of shares equal to
(a) the amount of the payment made by the Optionee to the Company
pursuant to Section 5.2(d), divided by
------- --
(b) the price per share of the shares subject to the Option as
determined pursuant to Section 4.2.
5.4 Transfer of Shares to an AGC Employee. As soon as practicable
-------------------------------------
after receipt by the Company, pursuant to Section 5.2(d), of payment for the
shares with respect to which an Option which was issued to and is held by an AGC
Employee in his or her capacity as an AGC Employee, or portion thereof, is
exercised, with respect to each such exercise:
(a) the Company shall transfer to the Optionee the number of shares
equal to (A) the amount of the payment made by the Optionee to the Company
pursuant to Section 5.2(d) divided by (B) the Fair Market Value of a share of
----------
Common Stock at the time of exercise (the "AGC Optionee Purchased Shares"); and
(b) the Company shall sell to the Partnership the number of shares
(the "AGC Partnership Purchased Shares") equal to the excess of (A) the amount
obtained by dividing (i) the amount of the payment made by the Optionee to the
Company pursuant to Section 5.2(d) by (ii) the price per share of the shares
subject to the Option as determined pursuant to Section 4.2., over (B) the AGC
Optionee Purchased Shares;
The price to be paid by the Partnership to the Company for the AGC
Partnership Purchased Shares (the "AGC Partnership Purchase Price") shall be an
amount equal to the product of (A) the number of AGC Partnership Purchased
Shares multiplied by (B) the Fair Market Value of a share of Common Stock at the
---------- --
time of the exercise;
(c) As soon as practicable after receipt of the AGC Partnership
Purchased Shares by the Partnership, the Partnership shall transfer such shares
to AGC.
(d) As soon as practicable after receipt of the AGC Partnership
Purchased Shares by AGC, AGC shall transfer such shares to the Optionee at no
additional cost, as additional compensation.
13
<PAGE>
5.5 Transfer of Shares to a Partnership Employee. As soon as
--------------------------------------------
practicable after receipt by the Company, pursuant to Section 5.2(d), of payment
for the shares with respect to which an Option which was issued to and is held
by a Partnership Employee in his or her capacity as a Partnership Employee, or
portion thereof, is exercised, with respect to each such exercise:
(a) the Company shall transfer to the Optionee the number of shares
equal to (A) the amount of the payment made by the Optionee to the Company
pursuant to Section 5.2(d) divided by (B) the Fair Market Value of a share of
----------
Common Stock at the time of exercise (the "Partnership Optionee Purchased
Shares"); and
(b) the Company shall sell to the Partnership the number of shares
(the "Partnership Purchased Shares") equal to the excess of (A) the amount
obtained by dividing (i) the amount of the payment made by the Optionee to the
Company pursuant to Section 5.2(d) by (ii) the price per share of the shares
subject to the Option as determined pursuant to Section 4.2., over (B) the
Partnership Optionee Purchased Shares;
The price to be paid by the Partnership to the Company for the
Partnership Purchased Shares (the "Partnership Purchase Price") shall be an
amount equal to the product of (A) the number of Partnership Purchased Shares
multiplied by (B) the Fair Market Value of a share of Common Stock at the time
- ---------- --
of the exercise;
(c) As soon as practicable after receipt of the Partnership Purchased
Shares by the Partnership, the Partnership shall transfer such shares to the
Optionee at no additional cost, as additional compensation.
5.6 Transfer of Payment to the Partnership. As soon as practicable
--------------------------------------
after receipt by the Company (i) of the amount described in Section 5.2(d), (ii)
the AGC Partnership Purchase Price described in Section 5.4 and (iii) the
Partnership Purchase Price described in Section 5.5, the Company may contribute
to the Partnership an amount of cash equal to such payment and the Partnership
shall issue an additional General Partner Interest to the Company on the terms
set forth in the Partnership Agreement.
5.7 Conditions to Issuance of Stock Certificates. The Company, AGC
--------------------------------------------
or the Partnership shall not be required to issue or deliver any certificate or
certificates for shares of stock purchased upon the exercise of any Option or
portion thereof prior to fulfillment of all of the following conditions:
(a) The admission of such shares to listing on all stock exchanges
on which such class of stock is then listed;
(b) The completion of any registration or other qualification of
such shares under any state or federal law, or under the rulings or regulations
of the Securities and Exchange Commission or any other governmental regulatory
body which the Committee shall, in its absolute discretion, deem necessary or
advisable;
14
<PAGE>
(c) The obtaining of any approval or other clearance from any state
or federal governmental agency which the Committee shall, in its absolute
discretion, determine to be necessary or advisable;
(d) The lapse of such reasonable period of time following the
exercise of the Option as the Committee may establish from time to time for
reasons of administrative convenience; and
(e) The receipt by the Company, AGC, or the Partnership of full
payment for such shares, including payment of any applicable withholding tax.
5.8 Rights as Stockholders. The holders of Options shall not be,
----------------------
nor have any of the rights or privileges of, stockholders of the Company in
respect of any shares purchasable upon the exercise of any part of an Option
unless and until certificates representing such shares have been issued by the
Company to such holders.
5.9 Ownership and Transfer Restrictions. Shares acquired through
-----------------------------------
the exercise of an Option shall be subject to the restrictions on ownership and
transfer set forth in the Company's Articles of Incorporation and the limits set
forth in Section 9.15. The Committee, in its absolute discretion, may impose
such additional restrictions on the ownership and transferability of the shares
purchasable upon the exercise of an Option as it deems appropriate. Any such
restriction shall be set forth in the respective Stock Option Agreement and may
be referred to on the certificates evidencing such shares. The Committee may
require the Employee to give the Company prompt notice of any disposition of
shares of Common Stock acquired by exercise of an Incentive Stock Option within
(i) two years from the date of granting (including the date the Option is
modified, extended or renewed for purposes of Section 424(h) of the Code) such
Option to such Employee or (ii) one year after the transfer of such shares to
such Employee. The Committee may direct that the certificates evidencing shares
acquired by exercise of an Option refer to such requirement to give prompt
notice of disposition.
ARTICLE VI
AWARD OF RESTRICTED STOCK
6.1 Eligibility. Subject to the Award Limit and the Ownership
-----------
Limit, Restricted Stock may be awarded to any Employee whom the Committee
determines is a key Employee.
6.2 Award of Restricted Stock
-------------------------
(a) The Committee may from time to time, in its absolute discretion:
15
<PAGE>
(i) Determine which Employees are key Employees and select from
among the key Employees (including Employees who have previously received other
awards under this Plan) such of them as in its opinion should be awarded
Restricted Stock; and
(ii) Determine the purchase price, if any, and other terms and
conditions (including, without limitation, in the case of awards to Partnership
Employees and AGC Employees, the mechanism for the transfer of the Restricted
Stock) applicable to such Restricted Stock, consistent with this Plan.
(b) The Committee shall establish the purchase price, if any, and
form of payment for Restricted Stock; provided, however, that such purchase
-------- -------
price shall be no less than the par value of the Common Stock to be purchased,
unless otherwise permitted by applicable state law. In all cases, legal
consideration shall be required for each issuance of Restricted Stock.
(c) Upon the selection of a key Employee to be awarded Restricted
Stock, the Committee shall instruct the Secretary of the Company to issue such
Restricted Stock and may impose such conditions on the issuance of such
Restricted Stock as it deems appropriate.
6.3 Restricted Stock Agreement. Restricted Stock shall be issued
--------------------------
only pursuant to a written Restricted Stock Agreement, which shall be executed
by the selected key Employee and an authorized officer of the Company and which
shall contain such terms and conditions as the Committee shall determine,
consistent with this Plan.
6.4 Consideration. As consideration for the issuance of Restricted
-------------
Stock, in addition to payment of any purchase price, the Restricted Stockholder
shall agree, in the written Restricted Stock Agreement, to remain in the employ
of, the Company, Company Subsidiary, AGC, an AGC Subsidiary, the Partnership, or
a Partnership Subsidiary for a period of at least one year after the Restricted
Stock is issued (or such shorter period as may be fixed in the Restricted Stock
Agreement or by action of the Committee following grant of the Restricted
Stock). Nothing in this Plan or in any Restricted Stock Agreement hereunder
shall confer on any Restricted Stockholder any right to continue in the employ
of, the Company, Company Subsidiary, AGC, an AGC Subsidiary, the Partnership, or
a Partnership Subsidiary or shall interfere with or restrict in any way the
rights of the Company, any Company Subsidiary, AGC, any AGC Subsidiary, the
Partnership, and any Partnership Subsidiary which are hereby expressly reserved,
to discharge any Restricted Stockholder from employment with such entity at any
time for any reason whatsoever, with or without good cause.
6.5 Rights as Stockholders. Subject to Section 6.6, upon delivery
----------------------
of the shares of Restricted Stock to the escrow holder pursuant to Section 6.8,
the Restricted Stockholder shall have, unless otherwise provided by the
Committee, all the rights of a stockholder with respect to said shares, subject
to the restrictions in his Restricted Stock Agreement, including the right to
receive all dividends and other distributions paid or made with respect to the
shares.
16
<PAGE>
6.6 Restriction. All shares of Restricted Stock issued under this
-----------
Plan (including any shares received by holders thereof with respect to shares of
Restricted Stock as a result of stock dividends, stock splits or any other form
of recapitalization) shall, in the terms of each individual Restricted Stock
Agreement, be subject to such restrictions as the Committee shall provide, which
restrictions may include, without limitation, restrictions concerning voting
rights and transferability and restrictions based on duration of employment with
the Company, Company performance and individual performance; provided, however,
-------- -------
that, except with respect to shares of Restricted Stock granted pursuant to
Section 6.10, by action taken after the Restricted Stock is issued, the
Committee may, on such terms and conditions as it may determine to be
appropriate, remove any or all of the restrictions imposed by the terms of the
Restricted Stock Agreement. Restricted Stock may not be sold or encumbered
until all restrictions are terminated or expire. If no consideration was paid
by the Restricted Stockholder upon issuance, a Restricted Stockholder's rights
in unvested Restricted Stock shall lapse upon Termination of Employment;
provided, however, that the Committee in its sole and absolute discretion may
- -------- -------
provide that such rights shall not lapse in the event of a Termination of
Employment following a "change of ownership or control" (within the meaning of
Treasury Regulation Section 1.162-27(e)(2)(v) or any successor regulation
thereto) of the Company or because of the Restricted Stockholder's death or
disability; provided, further, that, except with respect to shares of Restricted
-------- -------
Stock granted pursuant to Section 6.10, the Committee in its sole and absolute
discretion may provide that such rights shall not lapse in the event of a
Termination of Employment without cause or following any change in control or
ownership of the Company or because of the Restricted Stockholder's retirement,
or otherwise.
6.7 Repurchase of Restricted Stock. The Committee shall provide in
------------------------------
the terms of each individual Restricted Stock Agreement that the Company shall
have the right to repurchase from the Restricted Stockholder the Restricted
Stock then subject to restrictions under the Restricted Stock Agreement
immediately upon a Termination of Employment, at a cash price per share equal to
the price paid by the Restricted Stockholder for such Restricted Stock;
provided, however, that the Committee in its sole and absolute discretion may
- -------- -------
provide that no such right of repurchase shall exist in the event of a
Termination of Employment following a "change of ownership or control" (within
the meaning of Treasury Regulation Section 1.162-27(e)(2)(v) or any successor
regulation thereto) of the Company or because of the Restricted Stockholder's
death or disability; provided, further, that, except with respect to shares of
-------- -------
Restricted Stock granted pursuant to Section 6.10, the Committee in its sole and
absolute discretion may provide that no such right of repurchase shall exist in
the event of a Termination of Employment without cause or following any change
in control or ownership of the Company or because of the Restricted
Stockholder's retirement, or otherwise.
6.8 Escrow. The Secretary of the Company or such other escrow
------
holder as the Committee may appoint shall retain physical custody of each
certificate representing Restricted Stock until all of the restrictions imposed
under the Restricted Stock Agreement with respect to the shares evidenced by
such certificate expire or shall have been removed.
17
<PAGE>
6.9 Legend. In order to enforce the restrictions imposed upon
------
shares of Restricted Stock hereunder, the Committee shall cause a legend or
legends to be placed on certificates representing all shares of Restricted Stock
that are still subject to restrictions under Restricted Stock Agreements, which
legend or legends shall make appropriate reference to the conditions imposed
thereby.
6.10 Provisions Applicable to Section 162(m) Participants.
----------------------------------------------------
(a) Notwithstanding anything in the Plan to the contrary, the
Committee may grant Restricted Stock to a Section 162(m) Participant the
restrictions with respect to which lapse upon the attainment of performance
goals for the Company which are related to one or more of the following business
criteria: (i) pre-tax income, (ii) operating income, (iii) cash flow, (iv)
earnings per share, (v) return on equity, (vi) return on invested capital or
assets, (vii) cost reductions or savings, (viii) funds from operations, (ix)
appreciation in the fair market value of Common Stock and (x) earnings before
any one or more of the following items: interest, taxes, depreciation or
amortization.
(b) To the extent necessary to comply with the performance-based
compensation requirements of Section 162(m)(4)(C) of the Code, with respect to
Restricted Stock which may be granted to one or more Section 162(m)
Participants, no later than ninety (90) days following the commencement of any
fiscal year in question or any other designated fiscal period or period of
service (or such other time as may be required or permitted by Section 162(m) of
the Code), the Committee shall, in writing, (i) designate one or more Section
162(m) Participants, (ii) select the performance goal or goals applicable to the
fiscal year or other designated fiscal period or period of service, (iii)
establish the various targets and amounts of Restricted Stock which may be
earned for such fiscal year or other designated fiscal period or period of
service and (iv) specify the relationship between performance goals and targets
and the amounts of Restricted Stock to be earned by each Section 162(m)
Participant for such fiscal year or other designated fiscal period or period of
service. Following the completion of each fiscal year or other designated
fiscal period or period of service, the Committee shall certify in writing
whether the applicable performance targets have been achieved for such fiscal
year or other designated fiscal period or period of service. In determining the
amount earned by a Section 162(m) Participant, the Committee shall have the
right to reduce (but not to increase) the amount payable at a given level of
performance to take into account additional factors that the Committee may deem
relevant to the assessment of individual or corporate performance for the fiscal
year or other designated fiscal period or period of service.
6.11 Limitation on Awards of Restricted Stock. The Company shall not
----------------------------------------
award Restricted Stock that would result in a violation of Section 9.15.
6.12 Ownership and Transfer Restrictions. Shares of Restricted Stock,
-----------------------------------
the restrictions with respect to which lapse, shall be subject to the
restrictions on ownership and transfer set forth in the Company's Articles of
Incorporation and the limits set forth in Section 9.15.
18
<PAGE>
ARTICLE VII
PERFORMANCE AWARDS
7.1 Eligibility. Subject to the Award Limit and the Ownership Limit,
-----------
one or more Performance Awards may be granted to any Employee whom the Committee
determines is a key Employee.
7.2 Performance Awards. Any key Employee selected by the Committee
------------------
may be granted one or more Performance Awards. The value of such Performance
Awards may be linked to the market value, book value, net profits or other
measure of the value of Common Stock or cash flow, funds from operations,
earnings or other specific performance criteria determined appropriate by the
Committee, in each case on a specified date or dates or over any period or
periods determined by the Committee, or may be based upon the appreciation in
the market value, book value, net profits or the increase in cash flow or other
measure of the value of a specified number of shares of Common Stock over a
fixed period or periods determined by the Committee. In making such
determinations, the Committee shall consider (among such other factors as it
deems relevant in light of the specific type of award) the contributions,
responsibilities and other compensation of the particular key Employee whose
Performance Award is at issue.
7.3 Performance Award Agreement. Each Performance Award shall be
---------------------------
evidenced by a written agreement, which shall be executed by the Grantee and an
authorized officer of the Company and which shall contain such terms and
conditions (including, without limitation, in the case of awards to Partnership
Employees and AGC Employees, the mechanism for the transfer of rights under such
awards) as the Committee shall determine, consistent with this Plan.
7.4 Term. The term of a Performance Award shall be set by the
----
Committee in its discretion.
7.5 Exercise or Purchase Price. The Committee may establish the
--------------------------
exercise or purchase price of a Performance Award; provided, however, that such
price shall be no less than the par value of a share of Common Stock, unless
otherwise permitted by applicable state law.
7.6 Exercise Upon Termination of Employment. A Performance Award is
---------------------------------------
exercisable or payable only while the Grantee is an Employee; provided, however,
-------- -------
that the Committee in its sole and absolute discretion may provide that the
Performance Award may be exercised or paid subsequent to a Termination of
Employment following a "change of ownership or control" (within the meaning of
Treasury Regulation Section 1.162-27(e)(2)(v) or any successor regulation
thereto) of the Company or because of the Grantee's death or disability;
provided, further, that, except with respect to Performance Awards granted
- -------- -------
pursuant to Section 7.9, the Committee in its sole and absolute discretion may
provide that the Performance Award may be exercised or paid subsequent to a
Termination of Employment without cause or following any
19
<PAGE>
change in control or ownership of the Company or because of the Grantee's
retirement, or otherwise.
7.7 Payment on Exercise. Payment of the amount determined under
-------------------
Section 7.2 above shall be in cash, in Common Stock or a combination of both, as
determined by the Committee. To the extent any payment under this Article VII
is effected in Common Stock, it shall be made subject to satisfaction of all
provisions of Section 5.7.
7.8 Consideration. In consideration of the granting of a Performance
-------------
Award, the Grantee shall agree, in a written agreement, to remain in the employ
of the Company, any Company Subsidiary, AGC, any AGC Subsidiary, the Partnership
or any Partnership Subsidiary for a period of at least one year after such
Performance Award is granted (or such shorter period as may be fixed in such
agreement or by action of the Committee following such grant). Nothing in this
Plan or in any agreement hereunder shall confer on any Grantee any right to
continue in the employ of, the Company, any Company Subsidiary, AGC, any AGC
Subsidiary, the Partnership, or any Partnership Subsidiary or shall interfere
with or restrict in any way the rights of the Company, any Company Subsidiary,
AGC, any AGC Subsidiary, the Partnership, and any Partnership Subsidiary, which
are hereby expressly reserved, to discharge any Grantee at any time for any
reason whatsoever, with or without good cause.
7.9 Provisions Applicable to Section 162(m) Participants.
----------------------------------------------------
(a) Notwithstanding anything in the Plan to the contrary, the
Committee may grant Performance Awards to a Section 162(m) Participant that vest
or become exercisable or payable upon the attainment of performance goals for
the Company which are related to one or more of the following business criteria:
(i) pre-tax income, (ii) operating income, (iii) cash flow, (iv) earnings per
share, (v) return on equity, (vi) return on invested capital or assets, (vii)
cost reductions or savings, (viii) funds from operations, (ix) appreciation in
the fair market value of Common Stock and (x) earnings before any one or more of
the following items: interest, taxes, depreciation or amortization.
(b) To the extent necessary to comply with the performance-based
compensation requirements of Section 162(m)(4)(C) of the Code, with respect to
Performance Awards which may be granted to one or more Section 162(m)
Participants, no later than ninety (90) days following the commencement of any
fiscal year in question or any other designated fiscal period or period of
service (or such other time as may be required or permitted by Section 162(m) of
the Code), the Committee shall, in writing, (i) designate one or more Section
162(m) Participants, (ii) select the performance goal or goals applicable to the
fiscal year or other designated fiscal period or period of service, (iii)
establish the various targets and bonus amounts which may be earned for such
fiscal year or other designated fiscal period or period of service and (iv)
specify the relationship between performance goals and targets and the amounts
to be earned by each Section 162(m) Participant for such fiscal year or other
designated fiscal period or period of service. Following the completion of each
fiscal year or other designated fiscal period or period of service, the
Committee shall certify in writing whether the applicable performance targets
have
20
<PAGE>
been achieved for such fiscal year or other designated fiscal period or period
of service. In determining the amount earned by a Section 162(m) Participant,
the Committee shall have the right to reduce (but not to increase) the amount
payable at a given level of performance to take into account additional factors
that the Committee may deem relevant to the assessment of individual or
corporate performance for the fiscal year or other designated fiscal period or
period of service.
7.10 Limitation on Grants of Performance Awards. The Company may not
------------------------------------------
grant a Performance Award that would result in a violation of Section 9.15.
7.11 Ownership and Transfer Restrictions. Shares acquired through
-----------------------------------
the exercise or payment of a Performance Award shall be subject to the
restrictions on ownership and transfer set forth in the Company's Articles of
Incorporation and the limits set forth in Section 9.15. The Committee, in its
absolute discretion, may impose such additional restrictions on the ownership
and transferability of the shares purchasable upon the exercise or payment of a
Performance Award as it deems appropriate. Any such restriction shall be set
forth in the respective Performance Award Agreement and may be referred to on
the certificates evidencing such shares.
ARTICLE VIII
ADMINISTRATION
8.1 Compensation Committee. The Compensation Committee (or another
----------------------
committee or a subcommittee of the Board assuming the functions of the Committee
under this Plan) shall consist solely of two or more Independent Directors
appointed by and holding office at the pleasure of the Board, each of whom is
both a "non-employee director" as defined by Rule 16b-3 and an "outside
director" for purposes of Section 162(m) of the Code. Appointment of Committee
members shall be effective upon acceptance of appointment. Committee members may
resign at any time by delivering written notice to the Board. Vacancies in the
Committee may be filled by the Board.
8.2 Duties and Powers of Committee. It shall be the duty of the
------------------------------
Committee to conduct the general administration of this Plan in accordance with
its provisions. The Committee shall have the power to interpret this Plan, the
Options, the Performance Awards, and the Restricted Stock, and the agreements
pursuant to which the Options, the Performance Awards, and the Restricted Stock,
are granted or awarded, and to adopt such rules for the administration,
interpretation, and application of this Plan as are consistent therewith and to
interpret, amend or revoke any such rules. Any such grant or award under this
Plan need not be the same with respect to each Optionee, Grantee or Restricted
Stockholder. Any such interpretations and rules with respect to Incentive Stock
Options shall be consistent with the provisions of Section 422 of the Code. In
its absolute discretion, the Board may at any time and from time to time
exercise any and all rights and duties of the Committee under this Plan except
with respect to matters which under Rule 16b-3 or Section 162(m) of the Code, or
any regulations or rules issued thereunder, are required to be determined in the
sole discretion of the Committee.
21
<PAGE>
8.3 Majority Rule; Unanimous Written Consent. The Committee shall
----------------------------------------
act by a majority of its members in attendance at a meeting at which a quorum is
present or by a memorandum or other written instrument signed by all members of
the Committee.
8.4 Compensation; Professional Assistance; Good Faith Actions.
---------------------------------------------------------
Members of the Committee shall receive such compensation, if any, for their
services as members as may be determined by the Board. All expenses and
liabilities which members of the Committee incur in connection with the
administration of this Plan shall be borne by the Company. The Committee may,
with the approval of the Board, employ attorneys, consultants, accountants,
appraisers, brokers, or other persons. The Committee, the Company and the
Company's officers and Directors shall be entitled to rely upon the advice,
opinions or valuations of any such persons. All actions taken and all
interpretations and determinations made by the Committee or the Board in good
faith shall be final and binding upon all Optionees, Grantees, Restricted
Stockholders, the Company, AGC, the Partnership and their subsidiaries and all
other interested persons. No members of the Committee or Board shall be
personally liable for any action, determination or interpretation made in good
faith with respect to this Plan, Options, awards of Restricted Stock or
Performance Awards, and all members of the Committee and the Board shall be
fully protected by the Company in respect of any such action, determination or
interpretation.
8.5 Delegation of Authority. The Committee may in its discretion
-----------------------
delegate to the Chief Financial Officer of the Company or the Secretary of the
Company, or both, any or all of the administrative duties and authority of the
Committee under this Plan, other than the authority to make grants or awards
under this Plan, to determine the price, timing or amount of such grants or
awards or to determine any other matter required by Rule 16b-3 or Section 162(m)
of the Code to be determined in the sole discretion of the Committee.
ARTICLE IX
MISCELLANEOUS PROVISIONS
9.1 Not Transferable. Options, Restricted Stock awards or
----------------
Performance Awards under this Plan may not be sold, pledged, assigned, or
transferred in any manner other than by will or the laws of descent and
distribution or pursuant to a QDRO, unless and until such Options or awards have
been exercised, or the shares underlying such Options or awards have been
issued, and all restrictions applicable to such shares have lapsed. No Option,
Restricted Stock award or Performance Award or interest or right therein shall
be liable for the debts, contracts or engagements of the Optionee, Grantee or
Restricted Stockholder or his successors in interest or shall be subject to
disposition by transfer, alienation, anticipation, pledge, encumbrance,
assignment or any other means whether such disposition be voluntary or
involuntary or by operation of law by judgment, levy, attachment, garnishment or
any other legal or equitable proceedings (including bankruptcy), and any
attempted disposition thereof shall be null and void and of no effect, except to
the extent that such disposition is permitted by the preceding sentence.
22
<PAGE>
During the lifetime of the Optionee or Grantee, only he may exercise
an Option or other award (or any portion thereof) granted to him under the Plan,
unless it has been disposed of pursuant to a QDRO. After the death of the
Optionee or Grantee, any exercisable portion of an Option or other award may,
prior to the time when such portion becomes unexercisable under the Plan or the
applicable Stock Option Agreement or other agreement, be exercised by his
personal representative or by any person empowered to do so under the deceased
Optionee's or Grantee's will or under the then applicable laws of descent and
distribution.
9.2 Amendment, Suspension or Termination of this Plan. Except as
-------------------------------------------------
otherwise provided in this Section 9.2, this Plan may be wholly or partially
amended or otherwise modified, suspended or terminated at any time or from time
to time by the Board or the Committee. However, without approval of the
Company's stockholders given within twelve months before or after the action by
the Board or the Committee, no action of the Board or the Committee may, except
as provided in Section 9.3, increase the limits imposed in Section 2.1 on the
maximum number of shares which may be issued under this Plan or modify the Award
Limit, and no action of the Board or the Committee may be taken that would
otherwise require stockholder approval as a matter of applicable law, regulation
or rule. No amendment, suspension or termination of this Plan shall, without
the consent of the holder of Options, Restricted Stock awards or Performance
Awards, alter or impair any rights or obligations under any Options, Restricted
Stock awards or Performance Awards, theretofore granted or awarded, unless the
award itself otherwise expressly so provides. No Options, Restricted Stock or
Performance Awards may be granted or awarded during any period of suspension or
after termination of this Plan, and in no event may any Incentive Stock Option
be granted under this Plan after the first to occur of the following events:
(a) The expiration of ten years from the date the Plan is adopted by
the Board; or
(b) The expiration of ten years from the date the Plan is approved
by the Company's stockholders under Section 9.4.
9.3 Changes in Common Stock or Assets of the Company, Acquisition
-------------------------------------------------------------
or Liquidation of the Company and Other Corporate Events.
- --------------------------------------------------------
(a) Subject to Section 9.3(e), in the event that the Committee
determines that any dividend or other distribution (whether in the form of cash,
Common Stock, other securities, or other property), recapitalization,
reclassification, stock split, reverse stock split, reorganization, merger,
consolidation, split-up, spin-off, combination, repurchase, liquidation,
dissolution, or sale, transfer, exchange or other disposition of all or
substantially all of the assets of the Company (including, but not limited to, a
Corporate Transaction), or exchange of Common Stock or other securities of the
Company, issuance of warrants or other rights to purchase Common Stock or other
securities of the Company, or other similar corporate transaction or event, in
the Committee's sole discretion, affects the Common Stock such that an
adjustment is determined by the Committee to be appropriate in order to prevent
dilution or enlargement of the benefits or
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potential benefits intended to be made available under the Plan or with respect
to an Option, Restricted Stock award or Performance Award, then the Committee
shall, in such manner as it may deem equitable, adjust any or all of
(i) the number and kind of shares of Common Stock (or other
securities or property) with respect to which Options or Performance Awards may
be granted under the Plan, or which may be granted as Restricted Stock
(including, but not limited to, adjustments of the limitations in Section 2.1 on
the maximum number and kind of shares which may be issued and adjustments of the
Award Limit),
(ii) the number and kind of shares of Common Stock (or other
securities or property) subject to outstanding Options or Performance Awards,
and in the number and kind of shares of outstanding Restricted Stock, and
(iii) the grant or exercise price with respect to any Option or
Performance Award.
(b) Subject to Section 9.3(e), in the event of any Corporate
Transaction or other transaction or event described in Section 9.3(a) or any
unusual or nonrecurring transactions or events affecting the Company, any
affiliate of the Company, or the financial statements of the Company or any
affiliate, or of changes in applicable laws, regulations, or accounting
principles, the Committee in its discretion is hereby authorized to take any one
or more of the following actions whenever the Committee determines that such
action is appropriate in order to prevent dilution or enlargement of the
benefits or potential benefits intended to be made available under the Plan or
with respect to any Option or other award under this Plan, to facilitate such
transactions or events or to give effect to such changes in laws, regulations or
principles:
(i) In its sole and absolute discretion, and on such terms and
conditions as it deems appropriate, the Committee may provide, either by the
terms of the agreement or by action taken prior to the occurrence of such
transaction or event and either automatically or upon the Optionee's request,
for either the purchase of any such Option or Performance Award or any
Restricted Stock for an amount of cash equal to the amount that could have been
attained upon the exercise of such Option or award or realization of the
grantee's rights had such Option or award been currently exercisable or payable
or fully vested or the replacement of such Option or award with other rights or
property selected by the Committee in its sole discretion;
(ii) In its sole and absolute discretion, the Committee may
provide, either by the terms of such Option, Performance Award or Restricted
Stock or by action taken prior to the occurrence of such transaction or event
that it cannot vest, be exercised or become payable after such event;
(iii) In its sole and absolute discretion, and on such terms and
conditions as it deems appropriate, the Committee may provide, either by the
terms of such Option,
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Performance Award or Restricted Stock or by action taken prior to the occurrence
of such transaction or event, that for a specified period of time prior to such
transaction or event, such Option or award shall be exercisable as to all shares
covered thereby, notwithstanding anything to the contrary in (i) Section 4.4 or
(ii) the provisions of such Option, Performance Award or Restricted Stock;
(iv) In its sole and absolute discretion, and on such terms and
conditions as it deems appropriate, the Committee may provide, either by the
terms of such Option, Performance Award or Restricted Stock or by action taken
prior to the occurrence of such transaction or event, that upon such event, such
Option or award be assumed by the successor or survivor corporation, or a parent
or subsidiary thereof, or shall be substituted for by similar Options or awards
covering the stock of the successor or survivor corporation, or a parent or
subsidiary thereof, with appropriate adjustments as to the number and kind of
shares and prices; and
(v) In its sole and absolute discretion, and on such terms and
conditions as it deems appropriate, the Committee may make adjustments in the
number and type of shares of Common Stock (or other securities or property)
subject to outstanding Options or Performance Awards, and in the number and kind
of outstanding Restricted Stock and/or in the terms and conditions of (including
the grant or exercise price), and the criteria included in, outstanding Options
and awards and Options and awards which may be granted in the future.
(vi) In its sole and absolute discretion, and on such terms and
conditions as it deems appropriate, the Committee may provide either by the
terms of a Restricted Stock award or by action taken prior to the occurrence of
such event that, for a specified period of time prior to such event, the
restrictions imposed under a Restricted Stock Agreement upon some or all shares
of Restricted Stock may be terminated, and that some or all shares of such
Restricted Stock may cease to be subject to repurchase under Section 6.7 or
forfeiture under Section 6.6 after such event.
(c) Subject to Section 9.3(e), in the event of any Corporate
Transaction, each outstanding Option, Performance Award and Restricted Stock
award shall, immediately prior to the effective date of the Corporate
Transaction, automatically become fully exercisable or payable for all of the
shares of Common Stock at the time subject to such Options, Performance Awards
and Restricted Stock awards or fully vested, as applicable, and may be exercised
for any or all of those shares as fully-vested shares of Common Stock. However,
an outstanding Option, Performance Award or Restricted Stock award shall not so
accelerate if and to the extent: (i) such Option, Performance Award or
Restricted Stock award is, in connection with the Corporate Transaction, either
to be assumed by the successor or survivor corporation (or parent thereof) or to
be replaced with a comparable right with respect to shares of the capital stock
of the successor or survivor corporation (or parent thereof) or (ii) the
acceleration of exercisability or vesting of such Option, Performance Award or
Restricted Stock award is subject to other limitations imposed by the Committee
at the time of grant. The determination of comparability of rights under clause
(i)
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<PAGE>
above shall be made by the Committee, and its determination shall be final,
binding and conclusive.
(d) Subject to Section 9.3(e) and 9.8, the Committee may, in its
discretion, include such further provisions and limitations in any Option or
Performance Award or Restricted Stock agreement or certificate, as it may deem
equitable and in the best interests of the Company.
(e) No adjustment or action described in this Section 9.3 or in any
other provision of the Plan shall be authorized to the extent that such
adjustment or action would cause the Plan to violate Section 422(b)(1) of the
Code, or any successor provisions thereto. With respect to Options intended to
qualify as performance-based compensation Section 162(m)(4)(C) of the Code and
Restricted Stock and Performance Awards which are granted to Section 162(m)
Participants and are intended to qualify as performance-based compensation under
Section 162(m)(4)(C) of the Code, no adjustment or action described in this
Section 9.3 or in any other provision of the Plan shall be authorized to the
extent that such adjustment or action would cause such Option, Restricted Stock
or Performance Award to fail to so qualify under Section 162(m)(4)(C) of the
Code or any successor provisions thereto except that, to the extent permitted by
Section 162(m) of the Code or the regulations thereunder, Options, Performance
Awards and awards of Restricted Stock may, as determined by the Committee in its
sole and absolute discretion, become exercisable or payable or may vest upon a
"change of ownership or control" (within meaning of Treasury Regulation Section
1.162-27(e)(2)(v) or any successor regulation thereto) of the Company.
Furthermore, no such adjustment or action shall be authorized to the extent such
adjustment or action would result in short-swing profits liability under Section
16 or violate the exemptive conditions of Rule 16b-3 unless the Committee
determines that the Option or other award is not to comply with such exemptive
conditions. The number of shares of Common Stock subject to any Option or award
shall always be rounded to the next whole number.
9.4 Approval of Plan by Stockholders. This Plan will be submitted
--------------------------------
for the approval of the Company's stockholders within twelve months after the
date of the Board's initial adoption of this Plan. Options or Performance
Awards may be granted and Restricted Stock may be awarded prior to such
stockholder approval, provided that such Options or Performance Awards shall not
be exercisable and such Restricted Stock shall not vest prior to the time when
this Plan is approved by the stockholders, and provided further that if such
approval has not been obtained at the end of said twelve-month period, all
Options and Performance Awards previously granted and all Restricted Stock
previously awarded under this Plan shall thereupon be canceled and become null
and void.
9.5 Tax Withholding. The Company, AGC and the Partnership shall be
---------------
entitled to require payment in cash or deduction from other compensation payable
to each Optionee, Grantee or Restricted Stockholder of any sums required by
federal, state or local tax law to be withheld with respect to the issuance,
vesting, exercise or payment of any Option, Restricted Stock or Performance
Award. The Committee may in its discretion and in satisfaction of the foregoing
requirement allow such Optionee, Grantee or Restricted Stockholder to elect to
have the Company, AGC or the Partnership withhold shares of Common Stock
otherwise issuable
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under such Option or other award (or allow the return of shares of Common Stock)
having a Fair Market Value equal to the sums required to be withheld.
9.6 Loans. The Committee may, in its discretion, extend one or more
-----
loans to key Employees in connection with the exercise or receipt of outstanding
Options or Performance Awards, or the issuance of Restricted Stock awarded under
this Plan. The terms and conditions of any such loan shall be set by the
Committee.
9.7 Forfeiture Provisions. Pursuant to its general authority to
---------------------
determine the terms and conditions applicable to awards under the Plan, the
Committee shall have the right (to the extent consistent with the applicable
exemptive conditions of Rule 16b-3) to provide, in the terms of Options or other
awards made under the Plan, or to require the recipient to agree by separate
written instrument, that (i) any proceeds, gains or other economic benefit
actually or constructively received by the recipient upon any receipt or
exercise of the award, or upon the receipt or resale of any Common Stock
underlying such award, must be paid to the Company, AGC, or the Partnership and
(ii) the award shall terminate and any unexercised portion of such award
(whether or not vested) shall be forfeited, if (a) a Termination of Employment
occurs prior to a specified date, or within a specified time period following
receipt or exercise of the award, or (b) the recipient at any time, or during a
specified time period, engages in any activity in competition with the Company,
AGC, or the Partnership or which is inimical, contrary or harmful to the
interests of the Company, AGC, or the Partnership, as further defined by the
Committee.
9.8 Limitations Applicable to Section 16 Persons and Performance-
------------------------------------------------------------
Based Compensation. Notwithstanding any other provision of this Plan, this
- ------------------
Plan, and any Option or Performance Award or Restricted Stock awarded, to any
key Employee who is then subject to Section 16 of the Exchange Act, shall be
subject to any additional limitations set forth in any applicable exemptive rule
under Section 16 of the Exchange Act (including any amendment to Rule 16b-3 of
the Exchange Act) that are requirements for the application of such exemptive
rule. To the extent permitted by applicable law, the Plan, Options, Performance
Awards and Restricted Stock granted or awarded hereunder shall be deemed amended
to the extent necessary to conform to such applicable exemptive rule.
Furthermore, notwithstanding any other provision of this Plan, any Option which
is intended to qualify as performance-based compensation as described in Section
162(m)(4)(C) of the Code and any Restricted Stock or Performance Award which is
granted to a Section 162(m) Participant and is intended to qualify as
performance-based compensation as described in Section 162(m)(4)(C) of the Code
shall be subject to any additional limitations set forth in Section 162(m) of
the Code (including any amendment to Section 162(m) of the Code) or any
regulations or rulings issued thereunder that are requirements for qualification
as performance-based compensation as described in Section 162(m)(4)(C) of the
Code, and this Plan shall be deemed amended to the extent necessary to conform
to such requirements.
9.9 Effect of Plan Upon Options and Compensation Plans. The
--------------------------------------------------
adoption of this Plan shall not affect any other compensation or incentive plans
in effect for the Company, any Company Subsidiary, AGC, any AGC Subsidiary, the
Partnership or any Partnership Subsidiary. Nothing in this Plan shall be
construed to limit the right of the Company, AGC or the Partnership
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<PAGE>
(i) to establish any other forms of incentives or compensation for Employees of
the Company, any Company Subsidiary, AGC, any AGC Subsidiary, the Partnership or
any Partnership Subsidiary or (ii) to grant or assume options or other rights or
awards otherwise than under this Plan in connection with any proper corporate or
partnership purpose including but not by way of limitation, the grant or
assumption of options in connection with the acquisition by purchase, lease,
merger, consolidation or otherwise, of the business, stock or assets of any
corporation, partnership, limited liability company, firm or association.
9.10 Section 83(b) Election Prohibited. No Grantee, Optionee or
---------------------------------
Restricted Stockholder may make an election under Section 83(b) of the Code with
respect to any award or grant under this Plan without the consent of the
Company.
9.11 Compliance with Laws. This Plan, the granting and vesting of
--------------------
Options, Restricted Stock awards or Performance Awards under this Plan and the
issuance and delivery of shares of Common Stock and the payment of money under
this Plan or under Options, Performance Awards granted or Restricted Stock
awarded hereunder are subject to compliance with all applicable federal and
state laws, rules and regulations (including but not limited to state and
federal securities law and federal margin requirements) and to such approvals by
any listing, regulatory or governmental authority as may, in the opinion of
counsel for the Company, be necessary or advisable in connection therewith. Any
securities delivered under this Plan shall be subject to such restrictions, and
the person acquiring such securities shall, if requested by the Company, provide
such assurances and representations to the Company as the Company may deem
necessary or desirable to assure compliance with all applicable legal
requirements. To the extent permitted by applicable law, the Plan, Options,
Restricted Stock awards or Performance Awards granted or awarded hereunder shall
be deemed amended to the extent necessary to conform to such laws, rules and
regulations.
9.12 Titles. Titles are provided herein for convenience only and are
------
not to serve as a basis for interpretation or construction of this Plan.
9.13 Governing Law. This Plan and any agreements hereunder shall be
-------------
administered, interpreted and enforced under the internal laws of the State of
Maryland without regard to conflicts of laws thereof.
9.14 Conflicts with Company's Articles of Incorporation.
--------------------------------------------------
Notwithstanding any other provision of this Plan, no Optionee, Grantee, or
Restricted Stockholder shall acquire or have any right to acquire any Common
Stock, and shall not have other rights under this Plan, which are prohibited
under the Company's Articles of Incorporation.
9.15 Restrictions with Respect to Options, Performance Awards, and
-------------------------------------------------------------
Restricted Stock. Notwithstanding any provision herein to the contrary, an
- ----------------
Option or Performance Award shall not be exercisable, a Performance Award shall
not be payable, Restricted Stock shall not be awarded and restrictions on
Restricted Stock shall not lapse if the exercise of such Option or Performance
Award, or the payment of the Performance Award or the award of such Restricted
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<PAGE>
Stock or the lapse of the restrictions on the Restricted Stock, would result or,
in the sole and absolute discretion of the Committee, would likely result, in
any of the following:
(a) The Optionee's, Grantee's, Restricted Stockholder's or any other
person's ownership of Common Stock being in violation of the Ownership Limit;
(b) Income to the Company that could impair the Company's status as a
real estate investment trust, within the meaning of Sections 856 through 860 of
the Code; or
(c) A transfer, at any one time, of more than 0.1% (measured in value
or in number of shares, whichever is more restrictive) of the Company's total
Common Stock (as defined in the Company's Articles of Incorporation) from the
Company to the Partnership pursuant to the provisions of the Plan.
[signature page follows]
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers duly authorized on this ____ day of
_______________, 1997.
AMERICAN GOLF CORPORATION, a
California Corporation
By: ___________________________________
Title:___________________________________
NATIONAL GOLF PROPERTIES, INC.,
a Maryland Corporation
By: ___________________________________
Title:___________________________________
NATIONAL GOLF OPERATING
PARTNERSHIP, L.P., a Delaware limited
partnership
By: ___________________________________
Title:___________________________________
On Behalf of National Golf
Properties, Inc., a Maryland
Corporation, in its Capacity as
General Partner
30
