<PAGE>
As filed with the Securities and Exchange Commission on August 7, 1995
Registration No. 33-
--------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
______________________
SHURGARD STORAGE CENTERS, INC.
(Exact name of Registrant as specified in its charter)
Delaware 91-1603837
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1201 Third Avenue
Suite 2200
Seattle, Washington 98101
(Address of Principal Executive Offices)(Zip Code)
SHURGARD STORAGE CENTERS, INC.
AMENDED AND RESTATED STOCK OPTION PLAN FOR NONEMPLOYEE DIRECTORS
SHURGARD STORAGE CENTERS, INC.
1995 LONG-TERM INCENTIVE COMPENSATION PLAN
(Full title of the plans)
CHARLES K. BARBO
Chairman of the Board, President and Chief Executive Officer
SHURGARD STORAGE CENTERS, INC.
1201 Third Avenue
Suite 2200
Seattle, Washington 98101
(206) 624-8100
(Name, address and telephone number of agent for service)
______________________
Copy to:
Linda A. Schoemaker
PERKINS COIE
1201 Third Avenue, 40th Floor
Seattle, Washington 98101-3099
(206) 583-8888
______________________
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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Title of Securities Number to Be Proposed Maximum Proposed Maximum Amount of
to Be Registered Registered Offering Price Per Share(1) Aggregate Offering Price(1) Registration Fee
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A Common Stock, par 1,940,000 (3) $23.375 $45,347,500 $15,637
value $.001 per share (2)
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
<FN>
(1) Estimated pursuant to Rule 457(h) solely for the purpose of calculating the
amount of the registration fee. The price per share is estimated to be
$23.375 based on the average of the high ($23.50) and low ($23.25) sales
prices for the Common Stock as traded on the New York Stock Exchange on
August 2, 1995.
(2) Including the associated Preferred Share Purchase Rights.
<PAGE>
(3) Of this number, 1,760,000 shares are being registered for issuance under
the 1995 Long-Term Incentive Compensation Plan and 180,000 shares are being
registered for issuance under the Stock Option Plan for Nonemployee
Directors, together with an indeterminate number of additional shares
(including the associated Preferred Share Purchase Rights) which may be
necessary to adjust the number of shares reserved for issuance pursuant to
the 1995 Long-Term Incentive Compensation Plan and the Stock Option Plan
for Nonemployee Directors as the result of any future stock split, stock
dividend or similar adjustment of the outstanding Class A Common Stock of
the Company.
</TABLE>
ii
<PAGE>
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents are hereby incorporated by reference in this
Registration Statement:
(a) The Company's Annual Report on Form 10-K for the year ended
December 31, 1994;
(b) All other reports by the Company filed pursuant to Section 13(a)
or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), since December 31, 1994; and
(c) The description of the Class A Common Stock contained in the
Registrant's Registration Statement on Form 8-A dated April 19,
1995, as amended by Amendment No. 1 on Form 8-A/A dated April 26,
1995 and the description of the Preferred Share Purchase Rights
contained in the Registrant's Registration Statement on Form 8-A
dated April 19, 1995, as amended by Amendment No. 1 on Form 8-A/A
dated April 26, 1995, under Section 12(g) of the Exchange Act
(Commission file no. 1-11455), including any amendments or
reports filed for the purpose of updating such descriptions.
All documents filed by the Registrant pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Exchange Act after the date hereof and prior to the filing of a
post-effective amendment, which indicates that the securities offered hereby
have been sold or which deregisters the securities covered hereby then remaining
unsold, shall also be deemed to be incorporated by reference into this
Registration Statement and to be a part hereof commencing on the respective
dates on which such documents are filed.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article 13 of the Registrant's Certificate of Incorporation provides that
directors of the Registrant shall not be liable to the Registrant or its
stockholders for monetary damages for their conduct as directors to the full
extent permitted by the Delaware General Corporation Law ("Delaware Law") as it
existed at the time the Certificate of Incorporation was adopted, and as it may
thereafter be amended. Any amendment to or repeal of Article 13 shall apply
only to acts or omissions of directors occurring after such amendment or repeal.
The Registrant's By-Laws provide that the Registrant shall indemnify and
hold harmless its directors and officers to the fullest extent permitted under
Delaware Law or by any other applicable law against all litigation expenses,
judgments, fines and settlement amounts incurred in connection with their
service or status as directors and officers. Such indemnification also extends
to liabilities arising from actions taken by directors or officers when serving
at the request of the Registrant as a director, officer, employee or agent of
another corporation or of a partnership, joint venture, trust or other
enterprise.
Section 145 of Delaware Law, as currently in effect, sets forth the
indemnification rights of directors and officers of Delaware corporations.
Under such provision, a director or officer of a corporation (i) shall be
indemnified by the corporation for all expenses of litigation or other legal
proceedings when he or she is successful on the merits or otherwise, (ii) may be
indemnified by the corporation for the expenses, judgments, fines and amounts
paid in settlement of such litigation (other than a derivative suit), even if he
or she is not successful on the merits, if he or she acted in good faith and in
a manner he or she reasonably believed to be in or not opposed to the best
interests of the corporation (and, in the case of a criminal proceeding, had no
reason to believe his or her conduct was unlawful), and (iii) may be indemnified
by the corporation for the expenses of a derivative suit (a suit by a
stockholder alleging a breach by a director or an officer of a duty owed to the
corporation), even if he or she is not successful on the merits, if he or she
acted in good faith and in a manner he or she reasonably believed to be in or
not opposed to the best interests of the corporation, provided that no such
indemnification may be made in accordance with this clause (iii) if the director
or officer is adjudged liable to the corporation, unless a court determines
that, despite such adjudication but in view of all the circumstances, he or she
is fairly and reasonably entitled to indemnification of such expenses. The
indemnification described in clauses (ii) and (iii) above shall be made only
upon a determination by (A) a majority of a quorum of disinterested directors,
(B) independent
II-1
<PAGE>
legal counsel in a written opinion, or (C) the stockholders, that
indemnification is proper because the applicable standard of conduct has been
met.
The effect of the indemnification provisions contained in the Registrant's
By-Laws is to require the Registrant to indemnify its directors and officers
under circumstances where such indemnification would otherwise be discretionary
and to extend to the Registrant's directors and officers the benefits of
Delaware Law dealing with director and officer indemnification, as well as any
future changes that might occur under Delaware Law in this area.
The Registrant's By-Laws state that the indemnification rights granted
thereunder are not exclusive of any other indemnification rights to which the
director or officer may otherwise be entitled. As permitted by Section 145(g)
of Delaware Law, the By-Laws also authorize the Registrant to purchase directors
and officers insurance for the benefit of its directors and officers,
irrespective of whether the Registrant has the power to indemnify such persons
under Delaware Law. The Registrant currently maintains such insurance as
allowed by these provisions.
ITEM 8. EXHIBITS
Exhibit
Number Description
----------- -------------------------------------------------------------------
5.1 Opinion of Perkins Coie regarding legality of the Class A Common
Stock being registered
23.1 Consent of Deloitte & Touche (included on page II-5)
23.2 Consent of Perkins Coie (included in opinion filed as Exhibit 5.1)
24.1 Powers of Attorney (see Signature Page)
99.1 1995 Long-Term Incentive Compensation Plan
99.2 Amended and Restated Stock Option Plan for Nonemployee Directors
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
Securities 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 paragraphs (1)(i) and (1)(ii) above do 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 Exchange Act that are incorporated by
reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
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<PAGE>
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
B. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefits plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in this Registration Statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
C. Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
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<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 Seattle, State of Washington, on the 26th day of
July, 1995.
SHURGARD STORAGE CENTERS, INC.
By CHARLES K. BARBO
----------------------------------------
Charles K. Barbo,
Chairman of the Board, President and
Chief Executive Officer
POWER OF ATTORNEY
Each person whose individual signature appears below hereby authorizes and
appoints Charles K. Barbo and Harrell L. Beck, and each of them, with full power
of substitution and full power to act without the other, as his true and lawful
attorney-in-fact and agent to act in his name, place and stead and to execute in
the name and on behalf of each person, individually and in each capacity stated
below, and to file, any and all amendments to this Registration Statement,
including any and all post-effective amendments with the Securities and Exchange
Commission or any regulatory authority.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities indicated below on the 26th day of July, 1995.
SIGNATURE TITLE
--------- -----
Charles K. Barbo Chairman of the Board, President and Chief
------------------------------ Executive Officer
CHARLES K. BARBO (Principal Executive Officer)
Harrell L. Beck Senior Vice President, Chief Financial Officer,
------------------------------ Treasurer and Director
HARRELL L. BECK (Principal Financial and Accounting Officer)
Dan Kourkoumelis Director
------------------------------
DAN KOURKOUMELIS
Donald W. Lusk Director
------------------------------
DONALD W. LUSK
Wendell J. Smith Director
------------------------------
WENDELL J. SMITH
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<PAGE>
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement
of Shurgard Storage Centers, Inc. on Form S-8 of our report dated February 9,
1995 (March 24, 1995 as to Notes E and N), appearing in the Annual Report on
Form 10-K of Shurgard Storage Centers, Inc. for the year ended December 31,
1994.
DELOITTE & TOUCHE LLP
Seattle, Washington
August 4, 1995
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<PAGE>
INDEX TO EXHIBITS
Exhibit
Number Description
----------- -------------------------------------------------------------------
5.1 Opinion of Perkins Coie regarding legality of the Class A Common
Stock being registered. . . . . . . . . . . . . . . . . . . . . . .
23.1 Consent of Deloitte & Touche (included on page II-5). . . . . . . .
23.2 Consent of Perkins Coie (included in Exhibit 5.1) . . . . . . . . .
24.1 Power of Attorney (see Signature Page). . . . . . . . . . . . . . .
99.1 1995 Long-Term Incentive Compensation Plan. . . . . . . . . . . . .
99.2 Amended and Restated Stock Option Plan for Nonemployee Directors. .
<PAGE>
EXHIBIT 5.1
August 3, 1995
Shurgard Storage Centers, Inc.
Suite 2200
1201 Third Avenue
Seattle, WA 98101
RE: 1,940,000 SHARES OF CLASS A COMMON STOCK, PAR VALUE $.001 PER
SHARE, OF SHURGARD STORAGE CENTERS, INC. (THE "COMPANY")
Ladies and Gentlemen:
We have acted as counsel to you in connection with the preparation of a
Registration Statement on Form S-8 (the "Registration Statement") pursuant to
the Securities Act of 1933, as amended (the "Act"), which you are filing with
the Securities and Exchange Commission with respect to (a) 1,760,000 shares of
Class A Common Stock, par value $.001 per share (the "Common Stock"), to be
issued pursuant to the Shurgard Storage Centers, Inc. 1995 Long-Term Incentive
Compensation Plan (the "LTIP") and (b) 180,000 shares of Common Stock to be
issued pursuant to the Shurgard Storage Centers, Inc. Amended and Restated Stock
Option Plan for Nonemployee Directors (the "NED Plan"), which plans are
hereinafter collectively referred to as the "Plans." The shares of Common Stock
issuable under or pursuant to the Plans are hereinafter collectively referred to
as the "Shares."
We have examined the Registration Statement and such documents and records
of the Company and other documents as we have deemed necessary for the purpose
of this opinion. In giving this opinion, we are assuming the authenticity of
all instruments presented to us as originals, the conformity with originals of
all instruments presented to us as copies and the genuineness of all signatures.
Based upon and subject to the foregoing, we are of the opinion that the
Shares that will be issued pursuant to the Plans, upon the due execution by the
Company and
<PAGE>
Shurgard Storage Centers, Inc.
August 3, 1995
Page 2
the registration by its registrar of the Shares and the issuance thereof by the
Company in accordance with the respective terms of the Plans, and the receipt of
consideration therefor in accordance with the respective terms of the Plans,
will be validly issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving such consent, we do not admit that we are in
the category of persons whose consent is required under Section 7 of the Act.
Very truly yours,
Perkins Coie
<PAGE>
SHURGARD STORAGE CENTERS, INC.
1995 LONG-TERM INCENTIVE COMPENSATION PLAN
SECTION 1. PURPOSE
The purpose of the Shurgard Storage Centers, Inc. 1995 Long-Term Incentive
Compensation Plan (the "Plan") is to enhance the long-term profitability and
stockholder value of Shurgard Storage Centers, Inc., a Delaware corporation (the
"Company"), by offering incentives and rewards to those employees, consultants
and agents of the Company and its Subsidiaries (as defined in Section 2 below)
who are key to the Company's growth and success, and to encourage them to remain
in the service of the Company and its Subsidiaries and to acquire and maintain
stock ownership in the Company.
SECTION 2. DEFINITIONS
For purposes of the Plan, the following terms shall be defined as set forth
below:
2.1 AWARD
"Award" means an award or grant made to a Participant pursuant to the Plan,
including, without limitation, awards or grants of Options, Stock Appreciation
Rights, Stock Awards, Performance Awards, Other Stock-Based Awards, Dividend
Equivalent Rights or any combination of the foregoing.
2.2 BOARD
"Board" means the Board of Directors of the Company.
2.3 CAUSE
"Cause" means dishonesty, fraud, misconduct, unauthorized use or disclosure
of confidential information or trade secrets, or conviction or confession of a
crime punishable by law (except minor violations), in each case as determined by
the Plan Administrator, whose determination shall be conclusive and binding.
2.4 CODE
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
2.5 COMMON STOCK
"Common Stock" means the Class A Common Stock, par value $.001 per share,
of the Company.
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<PAGE>
2.6 CORPORATE TRANSACTION
"Corporate Transaction" means any of the following events:
(a) Approval by the holders of the Common Stock of any merger or
consolidation of the Company in which the Company is not the continuing or
surviving corporation or pursuant to which shares of the Common Stock are
converted into cash, securities or other property, other than a merger of the
Company in which the holders of the Common Stock immediately prior to the merger
have substantially the same proportionate ownership of common stock of the
surviving corporation immediately after the merger;
(b) Approval by the holders of the Common Stock of any sale, lease,
exchange or other transfer in one transaction or a series of related
transactions of all or substantially all of the Company's assets other than a
transfer of the Company's assets to a majority-owned subsidiary (as the term
"subsidiary" is defined in Section 8.3 of the Plan) of the Company; or
(c) Approval by the holders of the Common Stock of any plan or
proposal for the liquidation or dissolution of the Company.
2.7 DISABILITY
"Disability" means "disability" as that term is defined for purposes of the
Company's Long-Term Disability Plan or other similar successor plan applicable
to salaried employees.
2.8 DIVIDEND EQUIVALENT RIGHT
"Dividend Equivalent Right" means a right, granted to a Participant under
Section 13 of the Plan, to receive cash, shares of Common Stock, other Awards or
other property equal in value to dividends paid with respect to a specified
number of shares of Common Stock.
2.9 EARLY RETIREMENT
"Early Retirement" means retirement as that term is defined by the Plan
Administrator from time to time for purposes of the Plan.
2.10 EXCHANGE ACT
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
2.11 FAIR MARKET VALUE
"Fair Market Value" means the closing price of the Common Stock as
reported in THE WALL STREET JOURNAL for the New York Stock Exchange--Composite
Transactions (or similar successor consolidated transactions reports) for a
single trading day. If no sales of Common Stock were made on the New York Stock
Exchange on the transaction date, Fair Market Value shall mean the closing price
of a share of Common Stock as reported for the next preceding day on which sales
of Common Stock were made on the New York Stock Exchange.
-2-
<PAGE>
2.12 GOOD REASON
"Good Reason" means the occurrence of any of the following events or
conditions:
(a) a change in the Holder's status, title, position or
responsibilities (including reporting responsibilities) that, in the Holder's
reasonable judgment, represents a substantial reduction of the status, title,
position or responsibilities as in effect immediately prior thereto; the
assignment to the Holder of any duties or responsibilities that, in the Holder's
reasonable judgment, are inconsistent with such status, title, position or
responsibilities; or any removal of the Holder from or failure to reappoint or
reelect the Holder to any of such positions, except in connection with the
termination of the Holder's employment for Cause, for Disability or as a result
of his or her death, or by the Holder other than for Good Reason;
(b) a reduction in the Holder's annual base salary, unless such
reduction is part of a reduction in salary applicable to substantially all or
certain classes of Company employees;
(c) the Company's requiring the Holder (without the Holder's consent)
to be based at any place outside a 35-mile radius of his or her place of
employment prior to a Corporate Transaction, except for reasonably required
travel on the Company's business that is not materially greater than such travel
requirements prior to the Corporate Transaction;
(d) the Company's failure to (i) continue in effect any material
compensation or benefit plan (or the substantial equivalent thereof) in which
the Holder was participating at the time of a Corporate Transaction, including,
but not limited to, the Plan, or (ii) provide the Holder with compensation and
benefits at least equal (in terms of benefit levels and/or reward opportunities)
to those provided for under each employee benefit plan, program and practice as
in effect immediately prior to the Corporate Transaction (or as in effect
following the Corporate Transaction, if greater), unless such reduction in
benefits as set forth in (i) and (ii) above is part of a reduction in benefits
applicable to substantially all or certain classes of Company employees;
(e) any material breach by the Company of any provision of the Plan;
or
(f) any purported termination of the Holder's employment or service
for Cause by the Company that does not comply with the terms of the Plan.
2.13 GRANT DATE
"Grant Date" means the date designated in a resolution of the Plan
Administrator as the date an Award is granted. If the Plan Administrator does
not designate a Grant Date in the resolution, the Grant Date shall be the date
the Plan Administrator adopted the resolution.
2.14 HOLDER
"Holder" means the Participant to whom an Award is granted, or the
personal representative of a Holder who has died.
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<PAGE>
2.15 INCENTIVE STOCK OPTION
"Incentive Stock Option" means an option to purchase Common Stock granted
under Section 7 of the Plan with the intention that it qualify as an "incentive
stock option" as that term is defined in Section 422 of the Code.
2.16 NONQUALIFIED STOCK OPTION
"Nonqualified Stock Option" means an option to purchase Common Stock
granted under Section 7 of the Plan other than an Incentive Stock Option.
2.17 OPTION
"Option" means the right to purchase Common Stock granted under Section 7
of the Plan.
2.18 OTHER STOCK-BASED AWARD
"Other Stock-Based Award" means an Award granted under Section 12 of the
Plan.
2.19 PARTICIPANT
"Participant" means an individual who is a Holder of an Award or, as the
context may require, any employee, consultant or agent of the Company or a
Subsidiary who has been designated by the Plan Administrator as eligible to
participate in the Plan.
2.20 PERFORMANCE AWARD
"Performance Award" means an Award granted under Section 11 of the Plan
the payout of which is subject to achievement through a performance period of
performance goals prescribed by the Plan Administrator.
2.21 PLAN ADMINISTRATOR
"Plan Administrator" means any committee of the Board designated to
administer the Plan under Section 3.1 of the Plan.
2.22 RESTRICTED STOCK
"Restricted Stock" means shares of Common Stock granted under Section 10
of the Plan the rights of ownership of which are subject to restrictions
prescribed by the Plan Administrator.
2.23 RETIREMENT
"Retirement" means retirement as of the individual's normal retirement
date under the Shurgard Employees Retirement Savings Plan or other similar
successor plan applicable to salaried employees.
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<PAGE>
2.24 STOCK APPRECIATION RIGHT
"Stock Appreciation Right" means an Award granted under Section 9 of the
Plan.
2.25 STOCK AWARD
"Stock Award" means an Award granted under Section 10 of the Plan.
2.26 SUBSIDIARY
"Subsidiary," except as expressly provided otherwise, means any entity
that is directly or indirectly controlled by the Company or in which the
Company has a significant ownership interest, as determined by the Plan
Administrator, and any entity that may become a direct or indirect parent of
the Company.
2.27 WINDOW PERIOD
"Window Period" means a period of 10 days on which there is trading in the
Common Stock on the New York Stock Exchange, beginning with the third trading
day after disclosure by the Company to the public of its earnings for the fiscal
period just ended and ending with the twelfth such day.
2.28 WINDOW PERIOD FAIR MARKET VALUE
"Window Period Fair Market Value" means the highest Fair Market Value
during a Window Period.
SECTION 3. ADMINISTRATION
3.1 PLAN ADMINISTRATOR
The Plan shall be administered by the Compensation Committee of the Board,
except to the extent the Board appoints another committee or committees (which
term includes subcommittees) consisting of one or more members of the Board to
administer the Plan. The Board may delegate the responsibility for
administering the Plan with respect to designated classes of eligible
Participants to different committees, subject to such limitations as the Board
deems appropriate. Committee members shall serve for such term as the Board may
determine, subject to removal by the Board at any time. The composition of any
committee responsible for administering the Plan with respect to officers and
directors of the Company who are subject to Section 16 of the Exchange Act with
respect to securities of the Company shall comply with the requirements of Rule
16b-3 under Section 16(b) of the Exchange Act as then in effect. Currently,
Rule 16b-3 requires that the selection of officers and directors who are subject
to Section 16 of the Exchange Act for participation and decisions concerning the
number or maximum number of shares granted or allocated or made subject to
options or stock appreciation awards, must be made by a committee which consists
of not less than three disinterested directors of the Company.
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<PAGE>
3.2 ADMINISTRATION AND INTERPRETATION BY THE PLAN ADMINISTRATOR
Except for the terms and conditions explicitly set forth in the Plan, the
Plan Administrator shall have exclusive authority, in its discretion, to
determine all matters relating to Awards under the Plan, including the selection
of individuals to be granted Awards, the type of Awards, the number of shares of
Common Stock subject to an Award, all terms, conditions, restrictions and
limitations, if any, of an Award and the terms of any instrument that evidences
the Award. The Plan Administrator shall also have exclusive authority to
interpret the Plan and may from time to time adopt, and change, rules and
regulations of general application for the Plan's administration. The Plan
Administrator's interpretation of the Plan and its rules and regulations, and
all actions taken and determinations made by the Plan Administrator pursuant to
the Plan, shall be conclusive and binding on all parties involved or affected.
The Plan Administrator may delegate administrative duties to such of the
Company's officers as it so determines.
SECTION 4. STOCK SUBJECT TO THE PLAN
4.1 AUTHORIZED NUMBER OF SHARES
For each calendar year from and including 1995, a number of shares of
Common Stock equal to an amount of up to two percent of the adjusted average
common shares outstanding of the Company used to calculate fully diluted
earnings per share as reported in the annual report to stockholders for the
preceding year shall become available for issuance under the Plan. In addition,
any shares of Common Stock available for issuance under the Plan in previous
years but not actually issued shall be added to the aggregate number of shares
of Common Stock available for issuance in that calendar year under the Plan. No
further awards shall be made under the Company's 1993 Stock Option Plan after
the effective date of the Plan. Shares issued under the Plan shall be drawn
from authorized and unissued shares or shares now held or subsequently acquired
by the Company as treasury shares.
4.2 LIMITATIONS
(a) Subject to adjustment as provided in Section 16.1 of the Plan, (i) not
more than an aggregate of 1,840,000 shares of Common Stock shall be issued
pursuant to the exercise of Incentive Stock Options awarded under the Plan and
(ii) not more than an aggregate of 610,000 shares of Common Stock shall be
available for issuance pursuant to grants of Stock Awards or Other Stock-Based
Awards under the Plan.
(b) Subject to adjustment from time to time as provided in Section 16.1 of
the Plan, not more than 200,000 shares of Common Stock may be made subject to
Options or Stock Appreciation Rights under the Plan to any individual
Participant in any one fiscal year of the Company, such limitation to be applied
in a manner consistent with the requirements of, and only to the extent required
for compliance with, the exclusion from the limitation on deductibility of
compensation under Section 162(m) of the Code.
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<PAGE>
4.3 REUSE OF SHARES
Any shares of Common Stock that have been made subject to an Award that
cease to be subject to the Award (other than by reason of exercise or payment of
the Award to the extent it is exercised for or settled in shares), including,
without limitation, in connection with the expiration, surrender, cancellation
or termination of an Award, shall again be available for issuance in connection
with future grants of Awards under the Plan. Shares that are subject to tandem
Awards shall be counted only once.
SECTION 5. ELIGIBILITY
Awards may be granted under the Plan to those officers and key employees
(including directors who are also employees) of the Company and its Subsidiaries
as the Plan Administrator from time to time selects. Awards may also be made to
consultants and agents who provide services to the Company and its Subsidiaries.
SECTION 6. AWARDS
6.1 FORM AND GRANT OF AWARDS
The Plan Administrator shall have the authority, in its sole discretion, to
determine the type or types of Awards to be made under the Plan. Such Awards
may include, but are not limited to, Incentive Stock Options, Nonqualified Stock
Options, Stock Appreciation Rights, Stock Awards, Performance Awards, Other
Stock-Based Awards and Dividend Equivalent Rights. Awards may be granted
singly, in combination or in tandem so that the settlement or payment of one
automatically reduces or cancels the other. Awards may also be made in
combination or in tandem with, as alternatives to, or as the payment form for,
grants or rights under any other employee or compensation plan of the Company.
6.2 ACQUIRED COMPANY AWARDS
Notwithstanding anything in the Plan to the contrary, the Plan
Administrator may grant Awards under the Plan in substitution for awards issued
under other plans, or assume under the Plan awards issued under other plans, if
the other plans are or were plans of other entities ("Acquired Entities") (or
the parent of the Acquired Entity) and the new Award is substituted, or the old
award is assumed, by reason of a merger, consolidation, acquisition of property
or of stock, reorganization or liquidation (the "Acquisition Transaction"). In
the event that a written agreement pursuant to which the Acquisition Transaction
is completed is approved by the Board and said agreement sets forth the terms
and conditions of the substitution for or assumption of outstanding awards of
the Acquired Entity, said terms and conditions shall be deemed to be the action
of the Plan Administrator without any further action by the Plan Administrator,
except as may be required for compliance with Rule 16b-3 under the Exchange Act,
and the persons holding such Awards shall be deemed to be Participants and
Holders.
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SECTION 7. AWARDS OF OPTIONS
7.1 GRANT OF OPTIONS
The Plan Administrator is authorized under the Plan, in its sole
discretion, to issue Options as Incentive Stock Options or as Nonqualified Stock
Options, which shall be appropriately designated.
7.2 OPTION EXERCISE PRICE
The exercise price for shares purchased under an Option shall be as
determined by the Plan Administrator, but shall not be less than 100% of the
Fair Market Value of the Common Stock on the Grant Date with respect to
Incentive Stock Options and not less than 85% of the Fair Market Value of the
Common Stock on the Grant Date with respect to Nonqualified Stock Options.
7.3 TERM OF OPTIONS
The term of each Option shall be as established by the Plan Administrator
or, if not so established, shall be 10 years from the Grant Date.
7.4 EXERCISE OF OPTIONS
The Plan Administrator shall establish and set forth in each instrument
that evidences an Option the time at which or the installments in which the
Option shall become exercisable, which provisions may be waived or modified by
the Plan Administrator at any time. If not so established in the instrument
evidencing the Option, the Option will become exercisable according to the
following schedule, which may be waived or modified by the Plan Administrator at
any time:
PERIOD OF HOLDER'S
CONTINUOUS EMPLOYMENT
OR SERVICE WITH THE
COMPANY OR ITS PERCENT OF TOTAL
SUBSIDIARIES FROM THE OPTION THAT
OPTION GRANT DATE IS EXERCISABLE
------------------------- ---------------------------
after one year 20%
after two years 40%
after three years 60%
after four years 80%
after five years 100%
To the extent that the right to purchase shares has accrued thereunder, an
Option may be exercised from time to time by written notice to the Company, in
accordance with procedures established by the Plan Administrator, setting forth
the number of shares with respect to which the Option is being exercised and
accompanied by payment in full as described in Section 7.5 of the Plan. In no
case may an Option be exercised as to less than 100 shares at any one time (or
the lesser number of remaining shares covered by the Option).
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7.5 PAYMENT OF EXERCISE PRICE
The exercise price for shares purchased under an Option shall be paid in
full to the Company by delivery of consideration equal to the product of the
Option exercise price and the number of shares purchased. Such consideration
must be paid in cash, except that the Plan Administrator may, either at the time
the Option is granted or at any time before it is exercised and subject to such
limitations as the Plan Administrator may determine, authorize payment in cash
and/or one or more of the following alternative forms: (i) Common Stock already
owned by the Holder for at least six months (or any shorter period necessary to
avoid a charge to the Company's earnings for financial reporting purposes)
having a Fair Market Value on the day prior to the exercise date equal to the
aggregate Option exercise price; (ii) a promissory note authorized pursuant to
Section 14 of the Plan; (iii) delivery of a properly executed exercise notice,
together with irrevocable instructions, to (a) a brokerage firm designated by
the Company to deliver promptly to the Company the aggregate amount of sale or
loan proceeds to pay the Option exercise price and any withholding tax
obligations that may arise in connection with the exercise and (b) the Company
to deliver the certificates for such purchased shares directly to such brokerage
firm, all in accordance with the regulations of the Federal Reserve Board; or
(iv) such other consideration as the Plan Administrator may permit.
7.6 POST-TERMINATION EXERCISES
The Plan Administrator shall establish and set forth in each instrument
that evidences an Option whether the Option will continue to be exercisable, and
the terms and conditions of such exercise, if a Holder ceases to be employed by,
or to provide services to, the Company or its Subsidiaries, which provisions may
be waived or modified by the Plan Administrator at any time. If not so
established in the instrument evidencing the Option, the Option will be
exercisable according to the following terms and conditions, which may be waived
or modified by the Plan Administrator at any time. In case of termination of
the Holder's employment or services other than by reason of death or Cause, the
Option shall be exercisable, to the extent of the number of shares purchasable
by the Holder at the date of such termination, only: (i) within three years if
the termination of the Holder's employment or services are coincident with
Retirement, Early Retirement at the Company's request or Disability or
(ii) within three months after the date the Holder ceases to be an employee,
consultant or agent of the Company or a Subsidiary if termination of the
Holder's employment or services is for any reason other than Retirement, Early
Retirement at the Company's request or Disability, but in no event later than
the remaining term of the Option. Any Option exercisable at the time of the
Holder's death may be exercised, to the extent of the number of shares
purchasable by the Holder at the date of the Holder's death, by the personal
representative of the Holder's estate entitled thereto at any time or from time
to time within three years after the date of death, but in no event later than
the remaining term of the Option. In case of termination of the Holder's
employment or services for Cause, the Option shall automatically terminate upon
first notification to the Holder of such termination, unless the Plan
Administrator determines otherwise. If a Holder's employment or services with
the Company are suspended pending an investigation of whether the Holder shall
be terminated for Cause, all the Holder's rights under any Option likewise shall
be suspended during the period of investigation. A transfer of employment or
services between or among the Company and its Subsidiaries shall not be
considered a termination of employment or services. Unless the Plan
Administrator determines
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otherwise, a leave of absence approved in accordance with Company procedures
shall not be considered a termination of employment or services, except that
with respect to Incentive Stock Options such leave of absence shall be subject
to any requirements of Section 422 of the Code.
SECTION 8. INCENTIVE STOCK OPTION LIMITATIONS
To the extent required by Section 422 of the Code, Incentive Stock Options
shall be subject to the following additional terms and conditions:
8.1 DOLLAR LIMITATION
To the extent the aggregate Fair Market Value (determined as of the Grant
Date) of Common Stock with respect to which Incentive Stock Options are
exercisable for the first time during any calendar year (under the Plan and all
other stock option plans of the Company) exceeds $100,000, such portion in
excess of $100,000 shall be treated as a Nonqualified Stock Option. In the
event the Participant holds two or more such Options that become exercisable for
the first time in the same calendar year, such limitation shall be applied on
the basis of the order in which such Options are granted.
8.2 10% STOCKHOLDERS
If a Participant owns 10% or more of the total voting power of all classes
of the Company's stock, then the exercise price per share of an Incentive Stock
Option shall not be less than 110% of the Fair Market Value of the Common Stock
on the Grant Date and the Option term shall not exceed five years.
8.3 ELIGIBLE EMPLOYEES
Individuals who are not employees of the Company or one of its parent
corporations or subsidiary corporations may not be granted Incentive Stock
Options. For purposes of this Section 8.3 of the Plan, "parent corporation" and
"subsidiary corporation" shall have the meanings attributed to those terms for
purposes of Section 422 of the Code.
8.4 TERM
The term of an Incentive Stock Option shall not exceed 10 years.
8.5 EXERCISABILITY
An Option designated as an Incentive Stock Option must be exercised within
three months after termination of employment for reasons other than death or
Disability to qualify for Incentive Stock Option tax treatment. In the case of
termination of employment or services due to Disability, the Option must be
exercised within one year after such termination to qualify for Incentive Stock
Option tax treatment.
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SECTION 9. STOCK APPRECIATION RIGHTS
9.1 GRANT OF STOCK APPRECIATION RIGHTS
The Plan Administrator may grant a Stock Appreciation Right separately or
in tandem with a related Option.
9.2 TANDEM STOCK APPRECIATION RIGHTS
A Stock Appreciation Right granted in tandem with a related Option will
give the Holder the right to surrender to the Company all or a portion of the
related Option and to receive an appreciation distribution (in shares of Common
Stock or cash or any combination of shares and cash, as the Plan Administrator
shall determine at any time) in an amount equal to the excess of the Fair Market
Value on the date the Stock Appreciation Right is exercised over the exercise
price per share of the right, which shall be the same as the exercise price of
the related Option, except that if the right is exercised during a Window
Period, the amount will be equal to the excess of the Window Period Fair Market
Value for the Window Period during which the Stock Appreciation Right is
exercised over the exercise price per share of the right. A tandem Stock
Appreciation Right will have the same other terms and provisions as the related
Option. Upon and to the extent a tandem Stock Appreciation Right is exercised,
the related Option will terminate.
9.3 STAND-ALONE STOCK APPRECIATION RIGHTS
A Stock Appreciation Right granted separately and not in tandem with an
Option will give the Holder the right to receive an appreciation distribution in
an amount equal to the excess of the Fair Market Value for the date the Stock
Appreciation Right is exercised over the exercise price per share of the right,
except that if the right is exercised during a Window Period, the amount will be
equal to the excess of the Window Period Fair Market Value for the Window Period
during which the right is exercised over the exercise price per share of the
right. A stand-alone Stock Appreciation Right will have such terms as the Plan
Administrator may determine, except that the exercise price per share of the
right must be at least equal to 85% of the Fair Market Value on the Grant Date
and the term of the right, if not otherwise established by the Plan
Administrator, shall be 10 years from the Grant Date.
9.4 EXERCISE OF STOCK APPRECIATION RIGHTS
Unless otherwise provided by the Plan Administrator in the instrument that
evidences the Stock Appreciation Right, the provisions of Section 7.6 of the
Plan relating to the termination of a Holder's employment or services shall
apply equally, to the extent applicable, to the Holder of a Stock Appreciation
Right. Stock Appreciation Rights held by Participants who are subject to
Section 16 of the Exchange Act may be exercised solely in accordance with the
requirements for compliance with Rule 16b-3 under the Exchange Act.
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SECTION 10. STOCK AWARDS
10.1 GRANT OF STOCK AWARDS
The Plan Administrator is authorized to make Awards of Common Stock to
Participants on such terms and conditions and subject to such restrictions, if
any (whether based on performance standards, periods of service or otherwise),
as the Plan Administrator shall determine, which terms, conditions and
restrictions shall be set forth in the instrument evidencing the Award. The
terms, conditions and restrictions that the Plan Administrator shall have the
power to determine shall include, without limitation, the manner in which shares
subject to Stock Awards are held during the periods they are subject to
restrictions and the circumstances under which forfeiture of Restricted Stock
shall occur by reason of termination of the Holder's services.
10.2 ISSUANCE OF SHARES
Upon the satisfaction of any terms, conditions and restrictions prescribed
in respect to a Stock Award, or upon the Holder's release from any terms,
conditions and restrictions of a Stock Award, as determined by the Plan
Administrator, the Company shall deliver, as soon as practicable, to the Holder
or, in the case of the Holder's death, to the personal representative of the
Holder's estate or as the appropriate court directs, a stock certificate for the
appropriate number of shares of Common Stock.
10.3 WAIVER OF RESTRICTIONS
Notwithstanding any other provisions of the Plan, the Plan Administrator
may, in its sole discretion, waive the forfeiture period and any other terms,
conditions or restrictions on any Restricted Stock under such circumstances and
subject to such terms and conditions as the Plan Administrator shall deem
appropriate.
SECTION 11. PERFORMANCE AWARDS
11.1 PLAN ADMINISTRATOR AUTHORITY
Performance Awards may be denominated in cash, shares of Common Stock or
any combination thereof. The Plan Administrator is authorized to grant
Performance Awards and shall determine the nature, length and starting date of
the performance period for each Performance Award and the performance objectives
to be used in valuing Performance Awards and determining the extent to which
such Performance Awards have been earned. Performance objectives and other
terms may vary from Participant to Participant and between groups of
Participants. Performance objectives may include, but shall not be limited to,
profits, profit growth, profit-related return ratios, cash flow, total return to
stockholders, funds from operations, customer service, employee satisfaction or
performance against budget, whether applicable to the Company or any relevant
Subsidiary or business unit, comparisons with competitor companies or groups and
with stock market indices, or any combination thereof, as the Plan Administrator
may deem appropriate. Performance periods may overlap and Participants may
participate simultaneously with respect to Performance Awards that are subject
to different performance periods and different performance factors and criteria.
The Plan Administrator shall determine for
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each Performance Award the range of dollar values or number of shares of Common
Stock (which may, but need not, be shares of Restricted Stock pursuant to
Section 10 of the Plan), or a combination thereof, to be received by the
Participant at the end of the performance period if and to the extent that the
relevant measures of performance for such Performance Awards are met. The
earned portion of a Performance Award may be paid currently or on a deferred
basis with such interest or earnings equivalent as may be determined by the Plan
Administrator. Payment shall be made in the form of cash, whole shares of
Common Stock (which may, but need not, be shares of Restricted Stock pursuant to
Section 10 of the Plan), Options or any combination thereof, either in a single
payment or in annual installments, all as the Plan Administrator shall
determine.
11.2 ADJUSTMENT OF AWARDS
The Plan Administrator may adjust the performance goals and measurements
applicable to Performance Awards to take into account changes in law and
accounting and tax rules and to make such adjustments as the Plan Administrator
deems necessary or appropriate to reflect the inclusion or exclusion of the
impact of extraordinary or unusual items, events or circumstances. The Plan
Administrator also may adjust the performance goals and measurements applicable
to Performance Awards and thereby reduce the amount to be received by any
Participant pursuant to such Awards if and to the extent that the Plan
Administrator deems it appropriate.
11.3 PAYOUT UPON TERMINATION
The Plan Administrator shall establish and set forth in each instrument
that evidences a Performance Award whether the Award will be payable, and the
terms and conditions of such payment, if a Holder ceases to be employed by, or
to provide services to, the Company or its Subsidiaries, which provisions may be
waived or modified by the Plan Administrator at any time. If not so established
in the instrument evidencing the Performance Award, the Award will be payable
according to the following terms and conditions, which may be waived or modified
by the Plan Administrator at any time. If during a performance period a
Participant's employment or services with the Company terminate by reason of the
Participant's Retirement, Early Retirement at the Company's request, Disability
or death, such Participant shall be entitled to a payment with respect to each
outstanding Performance Award at the end of the applicable performance period
(i) based, to the extent relevant under the terms of the Award, on the
Participant's performance for the portion of such performance period ending on
the date of termination and (ii) prorated for the portion of the performance
period during which the Participant was employed by the Company, all as
determined by the Plan Administrator. The Plan Administrator may provide for an
earlier payment in settlement of such Performance Award discounted at a
reasonable interest rate and otherwise in such amount and under such terms and
conditions as the Plan Administrator deems appropriate. Except as otherwise
provided in Section 16 of the Plan or in the instrument evidencing the
Performance Award, if during a performance period a Participant's employment or
services with the Company terminate other than by reason of the Participant's
Retirement, Early Retirement at the Company's request, Disability or death, then
such Participant shall not be entitled to any payment with respect to the
Performance Awards relating to such performance period, unless the Plan
Administrator shall otherwise determine. The provisions of Section 7.6 of
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the Plan regarding leaves of absence and termination for Cause shall apply to
Performance Awards.
SECTION 12. OTHER STOCK-BASED AWARDS
The Plan Administrator may grant other Awards under the Plan pursuant to
which shares of Common Stock (which may, but need not, be shares of Restricted
Stock pursuant to Section 10 of the Plan) are or may in the future be acquired,
or Awards denominated in stock units, including ones valued using measures other
than market value. Such Other Stock-Based Awards may be granted alone or in
addition to or in tandem with any Award of any type granted under the Plan and
must be consistent with the Plan's purpose.
SECTION 13. DIVIDEND EQUIVALENT RIGHTS
The Plan Administrator is authorized to make Awards of Dividend Equivalent
Rights. The Plan Administrator shall establish such rules and procedures
governing the crediting of Dividend Equivalent Rights, including the timing,
form of payment and payment contingencies of such Dividend Equivalent Rights, as
it deems are appropriate or necessary.
SECTION 14. LOANS, LOAN GUARANTEES AND INSTALLMENT
PAYMENTS
To assist a Holder (including a Holder who is an officer or director of the
Company) in acquiring shares of Common Stock pursuant to an Award granted under
the Plan, the Plan Administrator may authorize, either at the Grant Date or at
any time before the acquisition of Common Stock pursuant to the Award, (i) the
extension of a loan to the Holder by the Company, (ii) the payment by the Holder
of the purchase price, if any, of the Common Stock in installments, or (iii) the
guarantee by the Company of a loan obtained by the grantee from a third party.
The terms of any loans, installment payments or guarantees, including the
interest rate and terms of repayment, will be subject to the Plan
Administrator's discretion. Loans, installment payments and guarantees may be
granted with or without security. The maximum credit available is the purchase
price, if any, of the Common Stock acquired plus the maximum federal and state
income and employment tax liability that may be incurred in connection with the
acquisition.
SECTION 15. ASSIGNABILITY
No Option, Stock Appreciation Right, Performance Award, Other Stock-Based
Award or Dividend Equivalent Right granted under the Plan may be assigned or
transferred by the Holder other than by will or by the laws of descent and
distribution, and during the Holder's lifetime, such Awards may be exercised
only by the Holder. Notwithstanding the foregoing, and to the extent permitted
by Rule 16b-3 under the Exchange Act and Section 422 of the Code, the Plan
Administrator, in its sole discretion, may permit such assignment, transfer and
exercisability and may permit a Holder of such Awards to designate a beneficiary
who may exercise the Award or receive compensation under the Award after the
Holder's death.
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SECTION 16. ADJUSTMENTS
16.1 ADJUSTMENT OF SHARES
In the event that at any time or from time to time a stock dividend, stock
split, spin-off, combination or exchange of shares, recapitalization, merger,
consolidation, distribution to stockholders other than a normal cash dividend,
or other change in the Company's corporate or capital structure results in
(i) the outstanding shares, or any securities exchanged therefor or received in
their place, being exchanged for a different number or class of securities of
the Company or of any other corporation or (ii) new, different or additional
securities of the Company or of any other corporation being received by the
holders of shares of Common Stock of the Company, then the Plan Administrator,
in its sole discretion, shall make such equitable adjustments as it shall deem
appropriate in the circumstances in (a) the maximum number of and class of
securities subject to the Plan as set forth in Section 4.1 of the Plan, (b) the
maximum number and class of securities that may be made subject to Awards to any
individual Participant as set forth in Section 4.2 of the Plan, and (c) the
number and class of securities that are subject to any outstanding Award and the
per share price of such securities, without any change in the aggregate price to
be paid therefor. The determination by the Plan Administrator as to the terms
of any of the foregoing adjustments shall be conclusive and binding.
16.2 CORPORATE TRANSACTION
Except as otherwise provided in the instrument that evidences the Award, in
the event of any Corporate Transaction, each Option, Stock Appreciation Right or
Stock Award that is at the time outstanding shall automatically accelerate so
that each such Award shall, immediately prior to the specified effective date
for the Corporate Transaction, become 100% vested, except that such acceleration
will not occur if in the opinion of the Company's accountants it would render
unavailable "pooling of interest" accounting for a Corporate Transaction that
would otherwise qualify for such accounting treatment. Such Award shall not so
accelerate, however, if and to the extent: (i) such Award 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 award for the
purchase of shares of the capital stock of the successor corporation or its
parent corporation, (ii) such Award is to be replaced with a cash incentive
program of the successor corporation that preserves the spread existing at the
time of the Corporate Transaction and provides for subsequent payout in
accordance with the same vesting schedule applicable to such Award, or (iii) the
acceleration of such Award is subject to other limitations imposed by the
instrument evidencing the Award. The determination of Award comparability under
clause (i) above shall be made by the Plan Administrator, and its determination
shall be conclusive and binding. All such Awards shall terminate and cease to
remain outstanding immediately following the consummation of the Corporate
Transaction, except to the extent assumed by the successor corporation or its
parent corporation. Any such Awards that are assumed or replaced in the
Corporate Transaction pursuant to clauses (i) or (ii) above and do not otherwise
accelerate at that time shall be accelerated in the event the Holder's
employment or services should subsequently terminate within two years following
such Corporate Transaction, unless such employment or services are terminated by
the Company for Cause or by the Holder voluntarily without Good Reason.
Notwithstanding the foregoing, no Incentive Stock Option shall become
exercisable pursuant to
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this Section 16.2 without the Holder's consent, if the result would be to cause
such Option not to be treated as an Incentive Stock Option (whether by reason of
the annual limitation described in Section 8.1 of the Plan or otherwise).
16.3 FURTHER ADJUSTMENT OF AWARDS
Without limiting the preceding Section 16.2 of the Plan, and subject to the
limitations set forth in Section 11 of the Plan, the Plan Administrator shall
have the discretion, exercisable at any time before a sale, merger,
consolidation, reorganization, liquidation or change in control of the Company,
as defined by the Plan Administrator, to take such further action as it
determines to be necessary or advisable, and fair and equitable to Participants,
with respect to Awards. Such authorized action may include (but shall not be
limited to) establishing, amending or waiving the type, terms, conditions or
duration of, or restrictions on, Awards so as to provide for earlier, later,
extended or additional time for exercise, payment or settlement or lifting
restrictions, differing methods for calculating payments or settlements,
alternate forms and amounts of payments and settlements and other modifications,
and the Plan Administrator may take such actions with respect to all
Participants, to certain categories of Participants or only to individual
Participants. The Plan Administrator may take such actions before or after
granting Awards to which the action relates and before or after any public
announcement with respect to such sale, merger, consolidation, reorganization,
liquidation or change in control that is the reason for such action.
16.4 LIMITATIONS
The grant of Awards will in no way affect the Company's right 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.
SECTION 17. WITHHOLDING OF TAXES
The Company may require the Holder to pay to the Company the amount of any
withholding taxes that the Company is required to withhold with respect to the
grant, exercise, payment or settlement of any Award. In such instances, the
Plan Administrator may, in its discretion and subject to the Plan and applicable
law, permit the Holder to satisfy withholding obligations, in whole or in part,
by paying cash, by electing to have the Company withhold shares of Common Stock
or by transferring shares of Common Stock to the Company, in such amounts as are
equivalent to the Fair Market Value of the withholding obligation.
SECTION 18. AMENDMENT AND TERMINATION OF PLAN
18.1 AMENDMENT OF PLAN
The Plan may be amended by the stockholders of the Company. The Board may
also amend the Plan in such respects as it shall deem advisable; however, to the
extent required for compliance with Rule 16b-3 under the Exchange Act,
Section 422 of the Code or any applicable law or regulation, stockholder
approval will be required for any amendment that will (i) increase the total
number of shares as to which Options may be granted or which may be used in
payment
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of Stock Appreciation Rights, Performance Awards, Other Stock-Based Awards or
Dividend Equivalent Rights under the Plan or that may be issued as Restricted
Stock, (ii) materially modify the class of persons eligible to receive Awards,
(iii) materially increase the benefits accruing to Participants under the Plan,
or (iv) otherwise require stockholder approval under any applicable law or
regulation.
18.2 TERMINATION OF PLAN
The Company's stockholders or the Board may suspend or terminate the Plan
at any time. Unless the Plan shall theretofore have been terminated by the
Company's stockholders or the Board, the Plan shall terminate on, and no Awards
shall be made after July 26, 2000, except that such termination shall have no
effect on Awards made prior thereto.
18.3 CONSENT OF HOLDER
The amendment or termination of the Plan shall not, without the consent of
the Holder of any Award under the Plan, alter or impair any rights or
obligations under any Award theretofore granted under the Plan.
SECTION 19. GENERAL
19.1 CONTINUED EMPLOYMENT OR SERVICES; RIGHTS IN AWARDS
Neither the Plan, participation in the Plan as a Participant nor any action
of the Plan Administrator taken under the Plan shall be construed as giving any
Participant or employee of the Company any right to be retained in the employ of
the Company or limit the Company's right to terminate the employment or services
of the Participant.
19.2 REGISTRATION; CERTIFICATES FOR SHARES
The Company shall be under no obligation to any Participant to register for
offering or resale under the Securities Act of 1933, as amended, or register or
qualify under state securities laws, any shares of Common Stock, security or
interest in a security paid or issued under, or created by, the Plan. The
Company may issue certificates for shares with such legends and subject to such
restrictions on transfer and stop-transfer instructions as counsel for the
Company deems necessary or desirable for compliance by the Company with federal
and state securities laws.
19.3 NO RIGHTS AS A STOCKHOLDER
No Option, Stock Appreciation Right, Performance Award or Other Stock-Based
Award shall entitle the Holder to any dividend (except to the extent provided in
an Award of Dividend Equivalent Rights), voting or other right of a stockholder
unless and until the date of issuance under the Plan of the shares that are the
subject of such Awards, free of all applicable restrictions.
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19.4 COMPLIANCE WITH LAWS AND REGULATIONS
It is the Company's intention that, so long as any of the Company's equity
securities are registered pursuant to Section 12(b) or 12(g) of the Exchange
Act, the Plan shall comply in all respects with Rule 16b-3 under the Exchange
Act and, if any Plan provision is later found not to be in compliance with such
Rule, the provision shall be deemed null and void, and in all events the Plan
shall be construed in favor of its meeting the requirements of Rule 16b-3.
Notwithstanding anything in the Plan to the contrary, the Board, in its sole
discretion, may bifurcate the Plan so as to restrict, limit or condition the use
of any provision of the Plan to Participants who are officers or directors
subject to Section 16 of the Exchange Act without so restricting, limiting or
conditioning the Plan with respect to other Participants. Additionally, in
interpreting and applying the provisions of the Plan, any Option granted as an
Incentive Stock Option pursuant to the Plan shall, to the extent permitted by
law, be construed as an "incentive stock option" within the meaning of
Section 422 of the Code.
19.5 NO TRUST OR FUND
The Plan is intended to constitute an "unfunded" plan. Nothing contained
herein shall require the Company to segregate any monies or other property, or
shares of Common Stock, or to create any trusts, or to make any special deposits
for any immediate or deferred amounts payable to any Participant, and no
Participant shall have any rights that are greater than those of a general
unsecured creditor of the Company.
19.6 SEVERABILITY
If any provision of the Plan or any Award is determined to be invalid,
illegal or unenforceable in any jurisdiction, or as to any person, or would
disqualify the Plan or any Award under any law deemed applicable by the Plan
Administrator, such provision shall be construed or deemed amended to conform to
applicable laws, or, if it cannot be so construed or deemed amended without, in
the Plan Administrator's determination, materially altering the intent of the
Plan or the Award, such provision shall be stricken as to such jurisdiction,
person or Award, and the remainder of the Plan and any such Award shall remain
in full force and effect.
SECTION 20. EFFECTIVE DATE
The Plan's effective date is the date on which it is approved by the
Company's stockholders.
ADOPTED BY THE BOARD ON MAY 9, 1995 AND APPROVED BY THE COMPANY'S
STOCKHOLDERS ON JULY 26, 1995.
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SHURGARD STORAGE CENTERS, INC.
AMENDED AND RESTATED STOCK OPTION PLAN FOR
NONEMPLOYEE DIRECTORS
SECTION 1. PURPOSES
The purposes of the Shurgard Storage Centers, Inc. Stock Option Plan for
Nonemployee Directors (the "Plan") are to attract and retain the services of
experienced and knowledgeable nonemployee directors of Shurgard Storage Centers,
Inc. (the "Corporation") and to provide an incentive for such directors to
increase their proprietary interests in the Corporation's long-term success and
progress.
SECTION 2. SHARES SUBJECT TO THE PLAN
Subject to adjustment in accordance with Section 6 hereof, the total number
of shares of the Corporation's Class A Common Stock, $0.001 par value per share
(the "Common Stock"), for which options may be granted under the Plan is 200,000
(the "Shares"). The Shares shall be shares presently authorized but unissued or
subsequently acquired by the Corporation and shall include shares representing
the unexercised portion of any option granted under the Plan that expires or
terminates without being exercised in full.
SECTION 3. ADMINISTRATION OF THE PLAN
The administrator of the Plan (the "Plan Administrator") shall be the Board
of Directors of the Corporation (the "Board"). Subject to the terms of the
Plan, the Plan Administrator shall have the power to construe the provisions of
the Plan, to determine all questions arising thereunder and to adopt and amend
such rules and regulations for the administration of the Plan as it may deem
desirable. No member of the Plan Administrator shall participate in any vote by
the Plan Administrator on any matter materially affecting the rights of any such
member under the Plan.
SECTION 4. PARTICIPATION IN THE PLAN
4.1 ELIGIBILITY
Each member of the Board elected or appointed who is not otherwise an
employee of the Corporation or any parent or subsidiary corporation (an
"Eligible Director") shall be eligible to participate in the Plan.
4.2 ORIGINAL GRANTS
Each person who becomes an Eligible Director prior to the first Annual
Meeting of Stockholders held after the consolidating transaction among up to 17
limited partnerships sponsored by Shurgard Incorporated as described in the
Registration Statement on Form S-4
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(No. 33-57794) filed with the Securities Exchange Commission on February 2,
1993, as amended (the "Consolidation"), shall automatically receive the grant of
an option (an "Original Option") to purchase 400 Shares upon their election or
appointment to the Board, such option to vest and become exercisable upon the
optionee's continued service as a director until the first anniversary of the
date of grant.
Each person who is an Eligible Director on May 9, 1995 shall automatically
receive a grant of an option to purchase 3,000 Shares, such option to vest and
become exercisable upon the optionee's continued service until the 1995 Annual
Meeting (as hereinafter defined).
4.3 ANNUAL GRANTS
In addition, each Eligible Director shall automatically receive the grant
of an option (an "Annual Option") to purchase 3,000 Shares immediately following
each Annual Meeting of Stockholders commencing with the first Annual Meeting of
Stockholders held after the Consolidation, such option to vest and become
exercisable upon the optionee's continued service as a director until the next
Annual Meeting of Stockholders after the date of grant.
SECTION 5. OPTION TERMS
Each option granted to an Eligible Director under the Plan and the issuance
of Shares thereunder shall be subject to the following terms:
5.1 OPTION AGREEMENT
Each option granted under the Plan shall be evidenced by an option
agreement (an "Agreement") duly executed on behalf of the Corporation. Each
Agreement shall comply with and be subject to the terms and conditions of the
Plan. Any Agreement may contain such other terms, provisions and conditions not
inconsistent with the Plan as may be determined by the Plan Administrator.
5.2 OPTION EXERCISE PRICE
The option exercise price for each Annual Option granted under the Plan
shall be the fair market value of the Shares covered by the option at the time
the option is granted. For purposes of the Plan, "fair market value" as of a
given date shall be: (i) the closing price of a share of the Common Stock on
the principal exchange on which the Common Stock is then trading, if any, on the
day previous to such date or, if no Common Stock was traded on such date, on the
next preceding date on which Common Stock was so traded; or (ii) if the Common
Stock is not traded on an exchange, the average of the high and low sales prices
at which the Common Stock was sold on the day previous to such date as reported
by the NASDAQ National Market on such date or, if no Common Stock was traded on
such date, on the next preceding date on which Common Stock was so traded. The
option exercise price for each Original Option granted under the Plan shall be
the average fair market value of the
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Shares covered by the option during the 30 business days immediately after the
date the Common Stock is first publicly traded.
5.3 HOLDING PERIOD
If a person subject to Section 16 of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), sells shares of Common Stock obtained upon the
exercise of any option granted under the Plan within six months after the date
the option was granted, the option grant will no longer be deemed a nonexempt,
matchable purchase under Section 16 as of the date of the option grant.
5.4 TIME AND MANNER OF EXERCISE OF OPTION
Each option may be exercised in whole or in part at any time and from time
to time; provided, however, that no fewer than 50 Shares (or the remaining
Shares then purchasable under the option, if less than 50 Shares) may be
purchased upon any exercise of option rights hereunder and that only whole
Shares will be issued pursuant to the exercise of any option.
Any option may be exercised by giving written notice, signed by the person
exercising the option, to the Corporation stating the number of Shares with
respect to which the option is being exercised, accompanied by payment in full
for such Shares, which payment may be in whole or in part (i) in cash or by
check, (ii) in shares of Common Stock already owned for at least six months by
the person exercising the option, valued at fair market value at the time of
such exercise, or (iii) by delivery of a properly executed exercise notice,
together with irrevocable instructions to a broker, to properly deliver to the
Corporation the amount of sale or loan proceeds to pay the exercise price, all
in accordance with the regulations of the Federal Reserve Board.
5.5 TERM OF OPTIONS
Each option shall expire ten years from the date of the granting thereof,
but shall be subject to earlier termination as follows:
(a) In the event that an optionee ceases to be a director of the
Corporation for any reason other than the death of the optionee, the vested
portion of the options granted to such optionee may be exercised by him or
her only within one year after the date such optionee ceases to be a
director of the Corporation.
(b) In the event of the death of an optionee, whether during the
optionee's service as a director or during the one-year period referred to
in Section 5.5(a), the vested portion of the options granted to such
optionee shall be exercisable, and such options shall expire unless
exercised within one year after the date of the optionee's death, by the
legal representatives or the estate of such optionee, by any person or
persons whom the optionee shall have designated in writing on forms
prescribed by and filed with the Corporation or, if no such designation has
been made, by the person
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or persons to whom the optionee's rights have passed by will or the laws of
descent and distribution.
5.6 TRANSFERABILITY
During an optionee's lifetime, an option may be exercised only by the
optionee. Options granted under the Plan and the rights and privileges
conferred thereby shall not be subject to execution, attachment or similar
process and may not be transferred, assigned, pledged or hypothecated in any
manner (whether by operation of law or otherwise) other than by will or by the
applicable laws of descent and distribution except that, to the extent permitted
by applicable law and Rule 16b-3 promulgated under Section 16(b) of the Exchange
Act, the Plan Administrator may permit a recipient of an option to designate in
writing during the optionee's lifetime a beneficiary to receive and exercise
options in the event of the optionee's death (as provided in Section 5.5(b)).
Any attempt to transfer, assign, pledge, hypothecate or otherwise dispose of any
option under the Plan or of any right or privilege conferred thereby, contrary
to the provisions of the Plan, or the sale or levy or any attachment or similar
process upon the rights and privileges conferred hereby, shall be null and void.
5.7 PARTICIPANT'S OR SUCCESSOR'S RIGHTS AS STOCKHOLDER
Neither the recipient of an option under the Plan nor the optionee's
successor(s) in interest shall have any rights as a stockholder of the
Corporation with respect to any Shares subject to an option granted to such
person until such person becomes a holder of record of such Shares.
5.8 LIMITATION AS TO DIRECTORSHIP
Neither the Plan, nor the granting of an option, nor any other action taken
pursuant to the Plan shall constitute or be evidence of any agreement or
understanding, express or implied, that an optionee has a right to continue as a
director for any period of time or at any particular rate of compensation.
5.9 REGULATORY APPROVAL AND COMPLIANCE
The Corporation shall not be required to issue any certificate or
certificates for Shares upon the exercise of an option granted under the Plan,
or record as a holder of record of Shares the name of the individual exercising
an option under the Plan, without obtaining to the complete satisfaction of the
Plan Administrator the approval of all regulatory bodies deemed necessary by the
Plan Administrator, and without complying, to the Plan Administrator's complete
satisfaction, with all rules and regulations under federal, state or local law
deemed applicable by the Plan Administrator.
SECTION 6. CAPITAL ADJUSTMENTS
The aggregate number and class of Shares with respect to which options may
be granted under the Plan, as provided in Section 2, the number and class of
Shares covered by
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each automatic grant and each outstanding option and the exercise price per
share thereof (but not the total price), shall all be proportionately adjusted
for any stock dividends, stock splits, recapitalizations, combinations or
exchanges of shares, split-ups, spinoffs or other similar changes in
capitalization. Upon the effective date of a dissolution or liquidation of the
Corporation, or of a reorganization, merger or consolidation of the Corporation
with one or more corporations that results in more than 80% of the outstanding
voting shares of the Corporation being owned by one or more affiliated
corporations or other affiliated entities, or of a transfer of all or
substantially all of the assets or more than 80% of the then outstanding shares
of the Corporation to another corporation or other entity, this Plan and all
options granted hereunder shall terminate. In the event of such dissolution,
liquidation, reorganization, merger, consolidation, transfer of assets or
transfer of stock, each optionee shall be entitled, for a period of 20 days
prior to the effective date of such transaction, to purchase the full number of
Shares under his or her option that he or she otherwise would have been entitled
to purchase during the remaining term of such option.
Adjustment under this Section 6 shall be made by the Plan Administrator,
whose determination shall be final. In the event of any adjustment in the
number of Shares covered by any option, any fractional Shares resulting from
such adjustment shall be disregarded and each such option shall cover only the
number of full Shares resulting from such option.
SECTION 7. EXPENSES OF THE PLAN
All costs and expenses of the adoption and administration of the Plan shall
be borne by the Corporation; none of such expenses shall be charged to any
optionee.
SECTION 8. EFFECTIVE DATE AND DURATION OF THE PLAN
The Plan shall be effective on upon approval of the Corporation's
shareholders. The Plan shall continue in effect until it is terminated by
action of the Board or the Corporation's shareholders, but such termination
shall not affect the then-outstanding terms of any options.
SECTION 9. TERMINATION AND AMENDMENT OF THE PLAN
The Board may amend, terminate or suspend the Plan at any time, in its sole
and absolute discretion; provided, however, that if required to qualify the Plan
under Rule 16b-3 promulgated under Section 16(b) of the Exchange Act, no
amendment may be made more than once every six months that would change the
amount, price, timing or vesting of the options, other than to comport with
changes in the Internal Revenue Code of 1986, as amended, or the rules and
regulations promulgated thereunder; and provided, further, that to the extent
required for compliance with applicable law or regulation, the Board may not
amend the Plan without the approval of the Corporation's stockholders, including
any amendment that would: (a) materially increase the number of shares that may
be issued under the Plan, (b) materially modify the requirements as to
eligibility for participation in the Plan to add a class of participants who are
subject to Section 16 of the Exchange Act; or
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(c) otherwise materially increase the benefits accruing under the Plan to
participants who are subject to Section 16 of the Exchange Act.
SECTION 10. COMPLIANCE WITH RULE 16b-3
It is the intention of the Corporation that the Plan comply in all respects
with Rule 16b-3 promulgated under Section 16(b) of the Exchange Act and that
Plan participants remain disinterested persons ("disinterested persons") for
purposes of administering other employee benefit plans of the Corporation and
having such other plans be exempt from Section 16(b) of the Exchange Act.
Therefore, if any Plan provision is later found not to be in compliance with
Rule 16b-3 or if any Plan provision would disqualify Plan participants from
remaining disinterested persons, that provision shall be deemed null and void,
and in all events the Plan shall be construed in favor of its meeting the
requirements of Rule 16b-3.
Adopted by the Corporation's Board of Directors on July 24, 1993 and
approved by the Corporation's shareholders on July 24, 1993. Amended by the
Corporation's Board of Directors on May 9, 1995 and amendment approved by the
Corporation's shareholders on July 26, 1995.
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