As filed with the Securities and Exchange Commission on July 31, 1998
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
Colonial Properties Trust
(Exact name of Registrant as specified in its charter)
Alabama 59-7007599
(State or other (IRS Employer
jurisdiction of Identification
incorporation or 2101 Sixth Avenue North Number)
organization) Suite 750
Birmingham, Alabama 35202
(205) 250-8700
(Address of Principal Executive
Offices) (Zip Code)
Colonial Properties Trust Second Amended and Restated Employee Share Option and
Restricted Share Plan
(Full title of the plan)
Thomas H. Lowder
President and Chief Executive Officer
Colonial Properties Trust
2101 Sixth Avenue North
Suite 750
Birmingham, Alabama 35202
(Name and address of agent for service)
(205) 250-8700
(Telephone number, including area code, of agent for service)
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Copy to:
Alan L. Dye
Hogan & Hartson L.L.P.
555 Thirteenth Street, N.W.
Washington, D.C. 20004-1109
(202) 637-5600
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CALCULATION OF REGISTRATION FEE
- ---------------------------------------------------------------------------
Title of securities Amount to be Proposed maximum Proposed Amount
to be registered offering price maximum of
registered per aggregate
offering registration
share (1) price (1) fee
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Common shares of
benefi- 2,525,000 $28.59375 $72,199,218.75 $21,299
cial interest, par
value $.01
per share
- ----------------------------------------------------------------------------
(1) Estimated pursuant to Rule 457(c) and (h) under the Securities Act of 1933,
as amended, solely for the purpose of calculating the registration fee, based on
the average of the high and low prices per share of the common shares of
beneficial interest of Colonial Properties Trust, par value $.01 per share, on
July 29, 1998, as reported on the New York Stock Exchange.
This Registration Statement incorporates by reference the information contained
in the earlier registration statements relating to the Colonial Properties Trust
Employee Share Option and Restricted Share Plan, filed on September 29, 1994,
(Registration No. 33-84510), and May 15, 1997 (Registration No. 333-27203).
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The Exhibit Index is on Page 3.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Birmingham, State of Alabama, as of July 30, 1998.
Colonial Properties Trust
By: /s/ Thomas H Lowder
Thomas H. Lowder
President, Chief Executive
Officer and Chairman of the Board
POWER OF ATTORNEY
We, the undersigned trustees and officers of Colonial Properties
Trust, do hereby constitute and appoint Thomas H. Lowder and Howard B. Nelson,
Jr., jointly and severally, each in his own capacity, as true and lawful
attorneys-in-fact and agents, to do any and all acts and things in our names and
on our behalf in our capacities as trustees and officers and to execute any and
all instruments for us and in our names in the capacities indicated below, which
said attorneys and agents, or either of them, may deem necessary or advisable to
enable said Company to comply with the Securities Act of 1933, as amended, and
any rules, regulations and requirements of the Securities and Exchange
Commission, in connection with this registration statement, or any registration
statement for this offering that is to be effective upon filing pursuant to Rule
462(b) under the Securities Act of 1933, including specifically, but without
limitation, any and all amendments (including post-effective amendments) hereto;
and we hereby ratify and confirm all that said attorneys and agents, or either
of them, shall do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated as of July 30, 1998:
SIGNATURE TITLE
/s/ Thomas H. Lowder President, Chief Executive Officer
Thomas H. Lowder and Chairman of the Board
(Principal Executive Officer)
/s/ Howard B. Nelson, Jr. Chief Financial Officer and Secretary
Howard B. Nelson, Jr. (Principal Financial Officer)
/s/ Kenneth E. Howell_____________ Controller
Kenneth E. Howell (Principal Accounting Officer)
1.
<PAGE>
/s/ James K. Lowder Trustee
James K. Lowder
/s/ Carl F. Bailey Trustee
Carl F. Bailey
/s/ M. Miller Gorrie Trustee
M. Miller Gorrie
/s/ Donald T. Senterfitt Trustee
Donald T. Senterfitt
/s/ Claude B. Nielsen Trustee
Claude B. Nielsen
/s/ Harold W. Ripps Trustee
Harold W. Ripps
/s/ Herbert A. Meisler Trustee
Herbert A. Meisler
/s/ William M. Johnson Trustee
William M. Johnson
2.
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
5.1 Opinion of Hogan & Hartson L.L.P.
5.2 Opinion of Sirote & Permutt, P.C., regarding matters of
Alabama law
15 Letter from PricewaterhouseCoopers LLP regarding unaudited interim
financial information.
23.1 Consent of Hogan & Hartson L.L.P. (included as part of
Exhibit 5.1).
23.2 Consent of Sirote & Permutt, P.C. (included as part of
Exhibit 5.2).
23.3
Consent of PricewaterhouseCoopers LLP
24 Power of Attorney (included as part of signature page).
99.1 Colonial Properties Trust Second Amended and Restated
Employee Share Option and Restricted Share Plan.
3.
<PAGE>
Exhibit 5.1
Opinion of Hogan & Hartson L.L.P.
<PAGE>
HOGAN & HARTSON, L.L.P
Columbia Square
555 Thirteenth Street, N.W.
Washington, D.C. 20004-1109
(202)-637-5600
(202) 637-5910
July 30, 1998
Board of Trustees
Colonial Properties Trust
2101 Sixth Avenue North
Suite 750
Birmingham, Alabama 35202
Ladies and Gentlemen:
This firm has acted as counsel to Colonial Properties Trust, an
Alabama real estate investment trust (the "Registrant"), in connection with its
registration statement on Form S-8 (the "Form S-8"), filed with the Securities
and Exchange Commission, of an additional 2,525,000 common shares of beneficial
interest, par value $.01 per share (the "Shares"), issuable in connection with
the Registrant's Second Amended and Restated Employee Share Option and
Restricted Share Plan (the "Plan"). This letter is furnished to you pursuant to
the requirements of Item 601(b)(5) of Regulation S-K, 17 C.F.R. ss.
229.601(b)(5), in connection with such registration.
For purposes of this opinion, we have examined copies of the
following documents:
1. An executed copy of the Form S-8.
2. A copy of the Plan, as certified on the date hereof by the
Secretary of the Registrant as being complete, accurate and in
effect.
3. The Declaration of Trust of the Registrant, dated August 21,
1995, as certified on the date hereof by the Secretary of the
Registrant as being complete, accurate and in effect.
4. The Bylaws of the Registrant, as certified on the date hereof
by the Secretary of the Registrant as being complete, accurate
and in effect.
5. Resolutions of the Board of Trustees of the Registrant adopted
at a meeting held on January 24, 1998, as certified by the
Secretary of the Registrant on the date hereof as being
complete, accurate and in effect, relating to the adoption of
the Plan, subject to approval by the Company's shareholders.
6. A certificate of the Secretary of the Company dated the date
hereof, certifying that the resolutions relating to the
approval of the Plan were submitted to the Company's
shareholders and approved at the annual meeting of
shareholders held on April 23, 1997.
7. Opinion of Sirote & Permutt, P.C. of even date herewith.
In our examination of the aforesaid documents, we have assumed the
genuineness of all signatures, the legal capacity of all natural persons, the
accuracy and completeness of all documents submitted to us, the authenticity of
all original documents and the conformity to authentic original documents of all
documents submitted to us as copies (including telecopies). This opinion letter
is given, and all statements herein are made, in the context of the foregoing.
<PAGE>
Board of Trustees
Colonial Properties Trust
July 30, 1998
Page 2
This opinion letter is based as to matters of law solely on the
Alabama Real Estate Investment Trust Act of 1995, and we express no opinion
herein as to any other laws, statutes, regulations or ordinances. In rendering
this opinion letter, we are relying, to the extent that the laws of Alabama are
relevant (without any independent verification or investigation), upon the
opinion letter of Sirote & Permutt, P.C., special counsel to the Company in the
State of Alabama, described in paragraph 7 above, with respect to the matters
addressed therein.
Based upon, subject to, and limited by the foregoing, we are of the
opinion that the Shares, when issued and delivered in the manner and on the
terms described in the Form S-8 and the Plan (assuming receipt by the Company of
the consideration therefor, the form of which is in accordance with applicable
law), will be legally issued, fully paid and non-assessable.
We assume no obligation to advise you of any changes in the
foregoing subsequent to the delivery of this opinion letter. This opinion letter
has been prepared solely for you use in connection with the filing of the Form
S-8 on the date of this letter, and should not be quoted in whole or in part or
otherwise be referred to, nor be filed with or furnished to any governmental
agency or other person or entity, without the prior written consent of the firm.
We hereby consent to the filing of this opinion letter as an exhibit
to the Form S-8. In giving this consent, we do not thereby admit that we are an
"expert" within the meaning of the Securities Act of 1933, as amended.
Very truly yours,
/s/ Hogan & Hartson L.L.P.
HOGAN & HARTSON L.L.P.
<PAGE>
Exhibit 5.2
Opinion of Sirote & Permutt, P.C.
<PAGE>
July 30, 1998
Board of Trustees
Colonial Properties Trust
2101 Sixth Avenue North
Suite 750
Birmingham, AL 35202
RE: Colonial Properties Trust
Ladies and Gentlemen:
We have acted as special Alabama counsel to Colonial Properties Trust, an
Alabama real estate investment trust (the "Company"), in connection with its
registration statement on Form S-8 (the "Registration Statement"), filed with
the Securities and Exchange Commission, relating to the registration of an
additional 2,525,000 common shares of beneficial interest, par value $.01 per
share (the "Shares"), issuable in connection with the Company's Second Amended
and Restated Employee Share Option and Restricted Share Plan (the "Plan"). This
opinion letter is furnished to you at your request to enable you to fulfill the
requirements of Item 601(b)(5) of Regulations S-K, 17 C.F.R. ss.229.601(b)(5),
in connection with the Registration Statement.
For purposes of this opinion letter, we have examined copies of the following
documents:
1. An executed copy of the Registration Statement.
2. A copy of the Plan, as certified on the date hereof by the Secretary of the
Company as being complete, accurate and in effect.
3. The Declaration of Trust of the Company, as amended, as certified by the
Secretary of the Company on the date hereof as then being complete, accurate and
in effect.
<PAGE>
Board of Trustees
Colonial Properties Trust
July 30, 1998
Page 2
4. The Bylaws of the Company, as certified by the Secretary of the Company on
the date hereof as then being complete, accurate and in effect.
5. Certain resolutions of the Board of Trustees of the Company adopted at a
meeting held on January 24, 1998, approving and ratifying the preparation,
execution and filing of the Registration Statement, as certified by the
Secretary of the Company on the date hereof as being complete, accurate and in
effect.
6. A Secretary's Certificate, as certified by the Secretary of the Company on
the date hereof as being complete, accurate and in effect, certifying that a
resolution relating to the approval of the Plan was submitted to the Company's
shareholders and approved at the annual meeting of shareholders held on April
23, 1998.
7. Opinion Letter, of even date herewith, of Hogan & Hartson L.L.P., counsel to
the Company.
We have not, except as specifically identified above, made any independent
review or investigation of factual or other matters, including the organization,
existence, good standing, assets, business or affairs of the Company. In our
examination of the aforesaid documents, we have assumed the genuineness of all
signatures, the legal capacity of natural persons, the authenticity, accuracy
and completeness of all documents submitted to us as originals, the conformity
to the original documents of all documents submitted to us as certified,
telecopied, photostatic, or reproduced copies, and the authenticity, accuracy
and completeness of the originals of such latter documents. This opinion letter
is given, and all statements herein are made, in the context of the foregoing.
This opinion letter is based as to matters of law solely on the Alabama Real
Estate Investment Trust Act of 1995 and we express no opinion herein as to any
other laws, statutes, regulations, or ordinances.
Based upon, subject to, and limited by the foregoing, we are of the opinion that
the Shares, when issued and delivered in the manner and on the terms described
in the Registration Statement and the Plan (assuming receipt by the Company of
the consideration therefor, the form of which is in accordance with applicable
law), will be validly issued, fully paid and non-assessable under the Alabama
Real Estate Investment Trust Act of 1995.
<PAGE>
In accordance with the general policies of this law firm in rendering legal
opinions, we have assumed for the purposes of the opinions expressed herein that
no fraud exists with respect to any of the matters relevant to the opinions
expressed herein, although we have no reason to believe that there exists any
fraud which would render invalid the opinions expressed below.
We are members of the Bar of the State of Alabama, and we do not express any
opinion concerning any law other than the law of the State of Alabama and the
Federal law of the United States. We assume no obligation to advise you of any
changes in the foregoing subsequent to delivery of this opinion letter. This
opinion letter has been prepared solely in connection with the filing by the
Company of a Current Report on Form 8-K on the date hereof, which Form 8-K will
be incorporated by reference into the Registration Statement. This opinion
letter should not be quoted in whole or in part or otherwise be referred to, nor
filed with or furnished to any governmental agency or other person or entity,
without the prior written consent of this firm.
We hereby consent to the filing of this opinion letter as Exhibit 5.2 to the
Form 8-K of the Company and to the reference to this firm in the Registration
Statement. In giving this consent, we do not thereby admit that we are an
"expert" within the meaning of the Securities Act of 1933, as amended.
Very truly yours,
/s/ Sirote & Permutt, P.C.
SIROTE & PERMUTT, P.C.
<PAGE>
Exhibit 15
Letter from PricewaterhouseCoopers LLP
Regarding Unaudited Interim
Financial Information
<PAGE>
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Colonial Properties Trust
Registration Statement on Form S-8
We are aware that our report dated April 22, 1998 on our review of interim
financial information of Colonial Properties Trust (the "Company") for the
period ended March 31, 1998 and included in the Company's quarterly report on
Form 10-Q for the quarter then ended, is incorporated by reference in the
Company's registration statement on Form S-8 relating to the registration of
2,525,000 additional common shares of beneficial interest pursuant to the
Colonial Properties Trust Second Amended and Restated Employee Share Option and
Restricted Share Plan. Pursuant to Rule 436(c) under the Securities Act of 1933,
as amended (the "Act"), this report should not be considered a part of the
registration statement prepared or certified by us within the meaning of
Sections 7 and 11 of the Act.
/s/ PricewaterhouseCoopers LLP
PRICEWATERHOUSECOOPERS LLP
Birmingham, Alabama
July 30, 1998
<PAGE>
Exhibit 23.2
Consent of PricewaterhouseCoopers LLP
<PAGE>
Consent of Independent Accountants
We consent to the incorporation by reference in this registration statement of
Colonial Properties Trust on Form S-8 relating to the Colonial Properties Trust
Second Amended and Restated Employee Share Option and Restricted Share Plan of
our report, dated January 19, 1998 (except for Note 14 thereto, as to which the
date is February 17, 1998), on our audits of the consolidated financial
statements and financial statement schedules of Colonial Properties Trust as of
December 31, 1997 and 1996, and for the years ended December 31, 1997, 1996, and
1995, which report is included in the 1997 Annual Report on Form 10-K
incorporated by reference in such Registration Statement.
/s/ PricewaterhouseCoopers LLP
PRICEWATERHOUSECOOPERS LLP
Birmingham, Alabama
July 30, 1998
<PAGE>
Exhibit 99.1
Colonial Properties Trust
Second Amended and Restated Employee
Share Option and Restricted Share Plan
<PAGE>
COLONIAL PROPERTIES TRUST
SECOND AMENDED AND RESTATED
EMPLOYEE SHARE OPTION AND RESTRICTED SHARE PLAN
This Colonial Properties Trust Second Amended and Restated Employee Share
Option and Restricted Share Plan (the "Plan") amends and restates in its
entirety the Colonial Properties Trust Employee Share Option and Restricted
Share Plan, which was duly adopted by the Board of Trustees of Colonial
Properties Trust (the "Company") and approved by the shareholders of the
Company, on September 28, 1993. Set forth herein are all of the terms of the
three plans comprising the Plan, one for the benefit of the employees of the
Company (the "Company Plan"), one for the benefit of employees of Colonial
Realty Limited Partnership (the "Operating Partnership") its general partner and
any Affiliate of the Operating Partnership (the "Operating Partnership Plan")
and one for the benefit of employees of Colonial Properties Services, Inc. (the
"Management Company") and any Affiliate of the Management Company (the
"Management Company Plan").
1. PURPOSE
The Plan is intended to advance the interests of the Company, the
Operating Partnership and the Management Company by providing eligible
individuals (as designated pursuant to Section 5 below) with an opportunity to
acquire or increase a proprietary interest in the Company by granting them
options, bonuses and restricted shares in accordance with the terms stated
herein, which thereby will create a stronger incentive to expend maximum effort
for the growth and success of the Company, the Operating Partnership and the
Management Company, and encourage such eligible individuals to continue to serve
the Company, the Operating Partnership or the Management Company. Each share
option granted under the Plan is intended to be an "incentive stock option"
except (i) to the extent that any such Option would exceed the limitations set
forth in Section 9 below, (ii) for Options granted to an employee other than an
employee of the Company or any Subsidiary of the Company and (iii) for Options
specifically designated at the time of grant as not being "incentive stock
options".
2. DEFINITIONS
For purposes of interpreting the Plan and related documents (including
Share Option Agreements and Restricted Share Agreements), the following
definitions shall apply:
"Affiliate" means with respect to an entity, any company or other trade or
business that is controlled by or under common control with such entity
(determined in accordance with the principles of Section 414(b) and 414(c) of
the Code and the regulations thereunder) or is an affiliate of such entity
within the meaning of Rule 405 of Regulation C under the 1933 Act.
"Agreement" means a written agreement that sets out the terms and
conditions of the grant of an Incentive Award.
<PAGE>
"Applicable Committee" means, with respect to the Company Plan and the
Operating Partnership Plan, the Company Committee, and, with respect to the
Management Company Plan, the Management Company Committee.
"Board of Directors" means the Board of Directors of Colonial
Properties Services, Inc.
"Board of Trustees" means the Board of Trustees of the Company.
"Bonus Shares" means Shares awarded to eligible individuals pursuant to
Section 15 of the Plan.
"Code" means the Internal Revenue Code of 1986, as now in effect or as
hereafter amended.
"Company" means Colonial Properties Trust.
"Company Committee" means the Executive Compensation Committee of the
Board of Trustees, which must consist of no fewer than two members of such board
and shall be appointed by such board, or such other committee as the Board of
Trustees or the Plan shall designate.
"Company Plan" means the Plan as administered pursuant to Section 3.1
hereof for the benefit of employees of the Company.
"Effective Date" means September 28, 1993.
"Employer" means the Company, the Operating Partnership or its general
partner, the Management Company, or any Affiliate of the Management Company, in
their capacity as Employers of persons eligible to be designated recipients of
Incentive Awards.
"Exchange Act" means the Securities Exchange Act of 1934, as now in effect
or as hereafter amended.
"Exercise Price" means the Option Price multiplied by the number of Shares
purchased pursuant to the exercise of an Option.
"Expiration Date" means the tenth (10th) anniversary of the Grant Date,
or, if earlier, the termination of the Option pursuant to Section 20.3 hereof.
"Fair Market Value" means the value of each Share subject to the Plan
determined as follows: if on the Grant Date or other determination date the
Shares are listed on an established national or regional stock exchange, are
admitted to quotation on the National Association of Securities Dealers
Automated Quotation System, or are publicly traded on an established securities
market, the Fair Market Value of the Shares shall be the closing price of the
Shares on such exchange or in such market (the highest such closing price if
there is more than one such exchange or market) on the trading day immediately
preceding the Grant Date or such other determination date (or if there is no
<PAGE>
such reported closing price, the Fair Market Value shall be the mean between the
highest bid and lowest asked prices or between the high and low sale prices on
such trading day) or, if no sale of the Shares is reported for such trading day,
on the next preceding day on which any sale shall have been reported. If the
Shares are not listed on such an exchange, quoted on such System or traded on
such a market, Fair Market Value shall be determined by the Board of Trustees in
good faith.
"General Partner" means Colonial Properties Holding Company, the
general partner of Colonial Realty Limited Partnership.
"Grant Date" means, as determined by the Applicable Committee, (i) the
date as of which the Applicable Committee approves the grant, (ii) the date as
of which the Optionee or Holder and the Employer enter into the relationship
resulting in the Optionee or Holder being eligible for grants, or (iii) such
other date as the Applicable Committee shall determine.
"Grantee" means a person who is awarded Bonus Shares under the Plan.
"Granting Employer" means the Company, the Operating Partnership or the
Management Company, each with respect to Incentive Awards made pursuant to the
Company Plan, the Operating Partnership Plan and the Management Company Plan,
respectively, unless the Applicable Committee as to any grant designates another
Employer as the Granting Employer.
"Holder" means a person who holds Restricted Shares under the Plan.
"Immediate Family Members" means the spouse, ex-spouse, children,
step-children or grandchildren of the Optionee.
"Incentive Award" means an award of an Option, Bonus Shares or Restricted
Shares under the Plan.
"Incentive Share Option" means an "incentive stock option" within the
meaning of Section 422 of the Code.
"Limited Partnership Agreement" means the agreement of limited partnership
of Colonial Realty Limited Partnership, as now in effect or as hereafter
amended.
"Management Company" means Colonial Properties Services, Inc.
"Management Company Committee" means the Board of Directors of the
Management Company or any committee thereof appointed by such board or
designated in the Plan to administer the Management Company Plan.
"Management Company Plan" means the Plan as administered pursuant to
Section 3.3 hereof for the benefit of the employees of the Management Company or
its Affiliates.
"Operating Partnership" means Colonial Realty Limited Partnership.
<PAGE>
"Operating Partnership Plan" means the Plan as administered pursuant to
Section 3.2 hereof for the benefit of the employees of the Operating
Partnership, its general partner and its Affiliates.
"Option" means an option to purchase one or more Shares pursuant to the
Plan.
"Option Agreement" means the written agreement evidencing the grant of
an Option hereunder.
"Optionee" means a person who holds an Option under the Plan.
"Option Period" means the period during which Options may be exercised as
defined in Section 12.
"Option Price" means the purchase price for each Share subject to an
Option.
"Partnership Agreement" means the Second Amended and Restated Agreement
of Limited Partnership of Colonial Realty Limited Partnership, as amended.
"Plan" means this Second Amended and Restated Employee Share Option and
Restricted Share Plan (which encompasses the Company Plan, the Operating
Partnership Plan and the Management Company Plan), as the same may be hereafter
amended from time to time.
"Reporting Person" means a person who is required to file reports under
Section 16(a) of the Exchange Act with respect to the Company or the Operating
Partnership.
"Restricted Shares" means Shares which are subject to a risk of forfeiture
pursuant to the Plan.
"Restricted Share Agreement" means the written agreement evidencing the
grant of Restricted Shares hereunder.
"Restricted Share Award" means an award of restricted Shares granted
pursuant to Section 13 of this Plan.
"1933 Act" means the Securities Act of 1933, as now in effect or as
hereafter amended.
"Shares" mean the common shares of beneficial interest, par value $.01 per
Share, of the Company.
"Share Option Agreement" means the written agreement evidencing the grant
of an Option hereunder.
"Subsidiary" means any "subsidiary corporation" of the Company within the
meaning of Section 425(f) of the Code.
<PAGE>
"Units" means units of partnership interest of the Operating Partnership
(but does not include preferred interests in the Operating Partnership).
"Unit Option" means an option to purchase one or more Units pursuant to
the Plan.
3. ADMINISTRATION
3.1. Company Plan.
The Company Plan shall be administered by the Company Committee, which
shall be appointed by the Board of Trustees. Each member of the Company
Committee must qualify in all respects as a "non-employee director" as defined
in Rule 16b-3 under the Exchange Act and as an "outside director" as defined in
Treasury Regulations ss. 1.162-27(e)(3). The Company Committee shall have such
powers and authorities related to the administration of the Company Plan as are
consistent with the Company's declaration of trust and by-laws and with
applicable law. The Company Committee shall have the full power and authority
(subject to any restrictions imposed by the Board of Trustees, the Company's
declaration of trust or by-laws or applicable law) to take all actions and to
make all determinations required or provided for under the Company Plan, any
Incentive Award granted by the Company Committee under the Company Plan and any
Agreement entered into in connection therewith and shall have the full power and
authority to take all such other actions and determinations not inconsistent
with the specific terms and provisions of the Company Plan that the Company
Committee deems to be necessary or appropriate to the administration of the
Company Plan, any Incentive Award granted by the Company Committee under the
Company Plan and any Agreement entered into in connection therewith. The
interpretation and construction by the Company Committee of any provision of the
Company Plan, any Incentive Award granted by the Company Committee under the
Company Plan and any Agreement entered into in connection therewith shall be
final and conclusive. In addition, the Chief Executive Officer of the Company,
acting as a committee of the Board of Trustees, shall have the authority to make
awards of Bonus Shares pursuant to Section 15 hereof to any employee of the
Company other than a Reporting Person, and to make Incentive Awards to new
employees of the Company (other than awards of Reporting Persons) in connection
with their assuming employment with the Company.
3.2. Operating Partnership Plan.
The Operating Partnership Plan shall be administered by the Company
Committee, which shall be appointed by the Board of Trustees. Each member of the
Company Committee must qualify in all respects as a "non-employee director" as
defined in Rule 16b-3 under the Exchange Act. The Company Committee shall have
the full power and authority (subject to any restrictions imposed on such
Company Committee by Section 3.1 hereof) to take all actions and to make all
determinations required or provided for under the Operating Partnership Plan,
any Incentive Award granted by the Company Committee under the Operating
Partnership Plan and any Agreement entered into in connection therewith and
shall have the full power and authority to take all such other actions and
<PAGE>
determinations not inconsistent with the specific terms and provisions of the
Operating Partnership Plan that the Company Committee deems to be necessary or
appropriate to the administration of the Operating Partnership Plan, any
Incentive Award granted by the Company Committee under the Operating Partnership
Plan and any Agreement entered into in connection therewith. The interpretation
and construction by the Company Committee of any provision of the Operating
Partnership Plan, any Incentive Award granted by the Company Committee under the
Operating Partnership Plan and any Agreement entered into in connection
therewith shall be final and conclusive. In addition, the Chief Executive
Officer of the Company, acting as a committee of the Board of Trustees, shall
have the authority to make awards of Bonus Shares pursuant to Section 15 hereof
to any employee of the Operating Partnership other than a Reporting Person, and
to make Incentive Awards to new employees of the Operating Partnership or its
affiliates (other than Reporting Persons) in connection with their assuming
employment with the Operating Partnership or its affiliates.
3.3. Management Company Plan.
The Management Company Plan shall be administered by the Management
Company Committee. The Management Company Committee shall have such powers and
authorities related to the administration of the Management Company Plan as are
consistent with the Management Company's articles of incorporation and by-laws
and with applicable law. The Management Company Committee shall have the full
power and authority (subject to any restrictions imposed by the Board of
Directors of the Management Company, the Management Company's articles of
incorporation or by-laws or applicable law) to take all actions and to make all
determinations required or provided for under the Management Company Plan, any
Incentive Award granted by the Management Company Committee under the Management
Company Plan and any Agreement entered into in connection therewith and shall
have the full power and authority to take all such other actions and
determinations not inconsistent with the specific terms and provisions of the
Management Company Plan that the Management Company Committee deem to be
necessary or appropriate to the administration of the Management Company Plan,
any Incentive Award granted by the Management Company Committee under the
Management Company Plan and any Agreement entered into in connection therewith.
The interpretation and construction by the Management Company Committee of any
provision of the Management Company Plan, any Incentive Award granted by the
Management Company Committee under the Management Company Plan and any Agreement
entered into in connection therewith shall be final and conclusive. In addition,
the Chief Executive Officer of the Management Company, acting as a committee of
the Board of Directors, shall have the authority to make awards of Bonus Shares
pursuant to Section 15 hereof to any employee of the Company other than a
Reporting Person, and to make Incentive Awards to new employees of the
Management Company (other than Reporting Persons) in connection with their
assuming employment with the Management Company.
3.4. No Liability.
No member of the Company Committee or the Management Company Committee
shall be liable to any Optionee, Holder or Grantee or to the Company, the
<PAGE>
Operating Partnership, or the Management Company or any their Subsidiaries,
Affiliates, employees, shareholders, or partners for any action or determination
made in good faith with respect to the Plan or any Incentive Award granted or
Agreement entered into hereunder.
3.5. Applicability of Rule 16b-3.
Those provisions of the Plan that make express reference to Rule 16b-3
shall apply only to Reporting Persons.
4. SHARES
The Shares that are the subject of an Incentive Award may be (i) issued
and outstanding Shares owned or acquired by the Granting Employer, (ii) treasury
Shares (to the extent permitted by applicable law) or (iii) authorized but
unissued Shares. The aggregate total number of Shares that may be issued
pursuant to Incentive Awards under the Plan shall be 3,200,000, as increased
from time to time to equal ten percent (10%) of the number of issued and
outstanding Shares and Units (excluding Units held by the General Partner),
provided that no more than 3,200,000 Shares may be issued pursuant to Incentive
Share Options and no more than 750,000 Restricted Shares may be issued pursuant
to Restricted Share Awards. If any Incentive Award expires, terminates, or is
terminated or canceled for any reason prior to exercise or vesting in full, the
Shares that were subject to the unexercised, forfeited, or terminated portion of
such Incentive Award shall be available immediately for future grants of
Incentive Awards under the Plan.
5. ELIGIBILITY
5.1. Designated Recipients.
Incentive Awards may be granted under the Plan to (i) any full-time
employee of the Company, the Operating Partnership or its general partner, any
Affiliate of the Operating Partnership, the Management Company or any Affiliate
of the Management Company, as the Applicable Committee shall determine and
designate from time to time (including officers, trustees or directors of the
Company, the Operating Partnership or its general partner, any Affiliate of the
Operating Partnership or the Management Company or any Affiliate of the
Management Company, except that no officer, trustee or director of the Company,
the General Partner or the Management Company shall be eligible to receive
grants of Bonus Shares) or (ii) any other individual whose participation in the
Plan is determined by the Company Committee to be in the best interests of the
Company and is so designated by the Company Committee.
5.2. Successive Grants.
An individual may hold more than one Incentive Award, subject to such
restrictions as are provided herein.
<PAGE>
6. EFFECTIVE DATE AND TERM OF THE PLAN
6.1. Effective Date.
The Plan is effective as of the Effective Date.
6.2. Term.
The Plan has no termination date; provided, however, that no Incentive
Share Option may be granted on or after the tenth anniversary of the Effective
Date.
7. PARACHUTE LIMITATIONS
Notwithstanding any other provision of this Plan or of any other
agreement, contract, or understanding heretofore or hereafter entered into by
the Optionee, Grantee or Holder with any Employer that is not an agreement,
contract, or understanding entered into after the Effective Date that expressly
modifies or excludes application of this paragraph (an "Other Agreement"), and
notwithstanding any formal or informal plan or other arrangement for the direct
or indirect provision of compensation by the Employers to the Optionee, Grantee
or Holder (including groups or classes of participants or beneficiaries of which
the Optionee, Grantee or Holder is a member), whether or not such compensation
is deferred, is in cash, or is in the form of a benefit to or for the Optionee,
Grantee or Holder (a "Benefit Arrangement"), if the Optionee, Grantee or Holder
is a "disqualified individual," as defined in Section 280G(c) of the Code, any
Option held by that Optionee and any right to receive any payment or other
benefit under this Plan shall not become exercisable or vested (i) to the extent
that such right to exercise, vesting, payment, or benefit, taking into account
all other rights, payments, or benefits to or for the Optionee, Grantee or
Holder under this Plan, all Other Agreements, and all Benefit Arrangements,
would cause any payment or benefit to the Optionee, Grantee or Holder under this
Plan to be considered a "parachute payment" within the meaning of Section
280G(b)(2) of the Code as then in effect (a "Parachute Payment") and (ii) if, as
a result of receiving a Parachute Payment, the aggregate after-tax amounts
received by the Optionee, Grantee or Holder from all Employers under this Plan,
all Other Agreements, and all Benefit Arrangements would be less than the
maximum after-tax amount that could be received by the Optionee, Grantee or
Holder without causing any such payment or benefit to be considered a Parachute
Payment. In the event that the receipt of any such right to exercise, vesting,
payment, or benefit under this Plan, in conjunction with all other rights,
payments, or benefits to or for the Optionee, Grantee or Holder under any Other
Agreement or any Benefit Arrangement would cause the Optionee, Grantee or Holder
to be considered to have received a Parachute Payment under this Plan that would
have the effect of decreasing the after-tax amount received by the Optionee,
Grantee or Holder as described in clause (ii) of the preceding sentence, then
the Optionee, Grantee or Holder shall have the right, in the Optionee's,
Grantee's or Holder's sole discretion, to designate those rights, payments, or
benefits under this Plan, any Other Agreements, and any Benefit Arrangements
that should be reduced or eliminated so as to avoid having the payment or
benefit to the Optionee, Grantee or Holder under this Plan be deemed to be a
Parachute Payment.
<PAGE>
8. GRANT OF OPTIONS
8.1. General.
Subject to the terms and conditions of the Plan, the Company Committee and
the Management Company Committee may from time to time grant to such eligible
individuals as the Applicable Committee may determine, Options to purchase such
number of Shares on such terms and conditions as the Applicable Committee may
determine, including any terms or conditions which may be necessary to qualify
such Options as Incentive Share Options. Such authority specifically includes
the authority, in order to effectuate the purposes of the Plan but without
amending the Plan, to modify grants to eligible individuals who are foreign
nationals or are individuals who are employed outside the United States to
recognize differences in local law, tax policy, or custom.
8.2. Limitation on Grants of Options to Executives.
The maximum number of Shares subject to Options that can be awarded under
the Plan to any executive officer of the Company, the Operating Partnership or
its general partner or the Management Company, or to any other person eligible
for a grant of an Incentive Award under Section 5.1 hereof in any calendar year,
is 500,000 Shares.
9. LIMITATION OF INCENTIVE SHARE OPTIONS
An Option (other than an Option described in exceptions (ii) or (iii) of
Section 1) shall constitute an Incentive Share Option to the extent that the
aggregate fair market value (determined at the time the Option is granted) of
the Shares with respect to which Incentive Share Options are exercisable for the
first time by any Optionee during any calendar year (under the Plan and all
other plans of the Optionee's employer and its parent and Subsidiary) does not
exceed $100,000. This limitation shall be applied by taking Options into account
in the order in which they were granted.
10. SHARE OPTION AGREEMENTS
All Options granted pursuant to the Plan shall be evidenced by Share
Option Agreements, to be executed by the Granting Employer and by the Optionee,
in such form or forms as the Applicable Committee shall from time to time
determine. Share Option Agreements covering Options granted from time to time or
at the same time need not contain similar provisions; provided, however, that
all such Option Agreements shall comply with all terms of the Plan.
<PAGE>
11. OPTION PRICE
The Option Price shall be fixed by the Applicable Committee and stated in
each Share Option Agreement. The Option Price shall not be less than the Fair
Market Value of the Shares on the Grant Date of the Option; provided, however,
that in the event the Optionee would otherwise be ineligible to receive an
Incentive Share Option by reason of the provisions of Sections 422(b)(6) and
424(d) of the Code (relating to stock ownership of more than ten percent), the
Option Price of an Option that is intended to be an Incentive Share Option shall
be not less than the greater of par value or 110 percent of the Fair Market
Value of a Share at the time such Option is granted.
12. TERM AND EXERCISE OF OPTIONS
12.1. Term.
Each Option granted under the Plan shall terminate and all rights to
purchase shares thereunder shall cease upon the expiration of ten years from the
date such Option is granted, or on such date prior thereto as may be fixed by
the Applicable Committee and stated in the Share Option Agreement relating to
such Option; provided, however, that in the event the Optionee would otherwise
be ineligible to receive an Incentive Share Option by reason of the provisions
of Sections 422(b)(6) and 424(d) of the Code (relating to stock ownership of
more than ten percent), an Option granted to such Optionee that is intended to
be an Incentive Share Option shall in no event be exercisable after the
expiration of five years from the date it is granted.
12.2. Option Period and Limitations on Exercise.
Each Option granted under the Plan shall be exercisable, in whole or in
part, at any time and from time to time over a period commencing on or after the
Grant Date and ending upon the expiration or termination of the Option, as the
Applicable Committee shall determine and set forth in the Share Option Agreement
relating to such Option. Without limiting the foregoing, the Applicable
Committee, subject to the terms and conditions of the Plan, may in its sole
discretion provide that an Option may not be exercised in whole or in part for a
stated period or periods of time during which such Option is outstanding;
provided, however, that any such limitation on the exercise of an Option
contained in any Share Option Agreement may be rescinded, modified or waived by
the Applicable Committee, in its sole discretion, at any time and from time to
time after the Grant Date of such Option, so as to accelerate the time at which
the Option may be exercised.
12.3. Termination of Employment.
Upon the termination of the employment of an Optionee with the Granting
Employer, other than by reason of the death or "permanent and total disability"
(within the meaning of Section 22(e)(3) of the Code), any Option granted to an
Optionee pursuant to the Plan shall terminate, and such Optionee shall have no
<PAGE>
further right to purchase Shares pursuant to such Option; provided further, that
the Applicable Committee may provide, by inclusion of appropriate language in
any Share Option Agreement, that an Optionee may (subject to the general
limitations on exercise set forth in Section 12.2 above), in the event of
termination of employment of the Optionee with the Granting Employer, exercise
an Option, in whole or in part, at any time subsequent to such termination of
employment and prior to termination of the Option pursuant to Section 12.2
above, either subject to or without regard to any installment limitation on
exercise imposed pursuant to Section 12.2 above, as the Applicable Committee, in
its sole and absolute discretion, shall determine and set forth in the Share
Option Agreement. Whether a leave of absence or leave on military or government
service shall constitute a termination of employment for purposes of the Plan,
shall be determined by the Applicable Committee, which determination shall be
final and conclusive. For purposes of the Plan, a termination of employment with
the Granting Employer shall not be deemed to occur if the Optionee is
immediately thereafter employed with any other Employer.
12.4. Rights in the Event of Death.
If an Optionee dies while employed by the Granting Employer, the executors
or administrators or legatees or distributees of such Optionee's estate shall
have the right (subject to the general limitations on exercise set forth in
Section 12.2 above), at any time within one year after the date of such
Optionee's death and prior to termination of the Option pursuant to Section 12.1
above, to exercise any Option held by such Optionee at the date of such
Optionee's death, whether or not such Option was exercisable immediately prior
to such Optionee's death; provided, however, that the Applicable Committee may
provide by inclusion of appropriate language in any Share Option Agreement that,
in the event of the death of an Optionee, the executors or administrators or
legatees or distributees of such Optionee's estate may exercise an Option
(subject to the general limitations on exercise set forth in Section 12.2
above), in whole or in part, at any time subsequent to such Optionee's death and
prior to termination of the Option pursuant to Section 12.1 above, either
subject to or without regard to any installment limitation on exercise imposed
pursuant to Section 12.2 above, as the Applicable Committee, in its sole and
absolute discretion, shall determine and set forth in the Share Option
Agreement.
12.5. Rights in the Event of Disability.
If an Optionee terminates employment with the Granting Employer by reason
of the "permanent and total disability" (within the meaning of Section 22(e)(3)
of the Code) of such Optionee, then such Optionee shall have the right (subject
to the general limitations on exercise set forth in Section 12.2 above), at any
time within one year after such termination of employment and prior to
termination of the Option pursuant to Section 12.1 above, to exercise, in whole
or in part, any Option held by such Optionee at the date of such termination of
employment, whether or not such Option was exercisable immediately prior to such
termination of employment; provided, however, that the Applicable Committee may
provide, by inclusion of appropriate language in any Share Option Agreement,
that an Optionee may (subject to the general limitations on exercise set forth
<PAGE>
in Section 12.2 above), in the event of the termination of employment of the
Optionee with the Granting Employer by reason of the "permanent and total
disability" (within the meaning of Section 22(e)(3) of the Code) of such
Optionee, exercise an Option, in whole or in part, at any time subsequent to
such termination of employment and prior to termination of the Option pursuant
to Section 12.1 above, either subject to or without regard to any installment
limitation on exercise imposed pursuant to Section 12.2 above, as the Applicable
Committee, in its sole and absolute discretion, shall determine and set forth in
the Share Option Agreement. Whether a termination of employment is to be
considered by reason of "permanent and total disability" for purposes of this
Plan shall be determined by the Applicable Committee, which determination shall
be final and conclusive.
12.6. Limitations on Exercise of Option.
Notwithstanding the foregoing Sections, in no event may the Option be
exercised, in whole or in part, after ten years following the date upon which
the Option is granted, as set forth in Section 1 above, or after the occurrence
of an event referred to in Section 20.3 below which results in termination of
the Option. In no event may the Option be exercised for a fractional Share.
12.7. Method of Exercise.
An Option that is exercisable hereunder may be exercised by the Optionee's
delivery to the Granting Employer of written notice of the exercise and the
number of Shares for which the Option is being exercised. Such delivery shall
occur on any business day, at the Granting Employer's principal office,
addressed to the attention of the Applicable Committee. Such notice shall
specify the number of Shares with respect to which the Option is being exercised
and shall be accompanied by payment in full of the Option Price of the Shares
for which the Option is being exercised. The minimum number of Shares with
respect to which an Option may be exercised, in whole or in part, at any time
shall be the lesser of (i) 100 shares or such lesser number set forth in the
Share Option Agreement and (ii) the maximum number of Shares available for
purchase under the Option at the time of exercise. Payment of the Option Price
for the Shares purchased pursuant to the exercise of an Option shall be made (i)
in cash or in cash equivalents; (ii) through the tender to the Granting Employer
of Shares, which Shares, if acquired from the Company or any of its Affiliates,
<PAGE>
have been held for at least six months and which Shares shall be valued, for
purposes of determining the extent to which the Option Price has been paid
thereby, at their Fair Market Value on the date of exercise; or (iii) by a
combination of the methods described in (i) and (ii). The Applicable Committee
may provide, by inclusion of appropriate language in a Share Option Agreement,
that payment in full of the Option Price need not accompany the written notice
of exercise provided the notice of exercise directs that the Share certificate
or certificates for the Shares for which the Option is exercised be delivered to
a licensed broker acceptable to the Granting Employer as the agent for the
individual exercising the Option and, at the time such Share certificate or
certificates are delivered, the broker tenders to the Granting Employer cash (or
cash equivalents acceptable to the Granting Employer) equal to the Option Price
for the Shares purchased pursuant to the exercise of the Option plus the amount
(if any) of federal and/or other taxes which the Granting Employer may in its
judgment, be required to withhold with respect to the exercise of the Option. An
attempt to exercise any Option granted hereunder other than as set forth above
shall be invalid and of no force and effect. Unless otherwise stated in the
applicable Share Option Agreement, an individual holding or exercising an Option
shall have none of the rights of a shareholder (for example, the right to
receive cash or dividend payments attributable to the subject Shares or to
direct the voting of the subject Shares) until the Shares covered thereby are
fully paid and issued to him or her. Except as provided in Section 20 below, no
adjustment shall be made for dividends or other rights for which the record date
is prior to the date of such issuance.
12.8. Transfer of Shares to Employee.
Promptly after the exercise of a Share Option by an employee of the
Company and the payment in full of the Option Price of the Shares covered
thereby, the individual exercising the Option shall be entitled to the issuance
of a Share certificate or Share certificates evidencing his or her ownership of
such Shares.
12.9. Transfer of Shares to Other Employees
(a) Promptly after the exercise of a Share Option by an employee of
an Employer that is not the Company and the payment in full of the Option Price
of the Shares covered thereby:
(i) The Company shall sell to the Employer employing the
Optionee the number of Shares as to which the Option was
exercised for a price equal to the Fair Market Value of
such Shares.
(ii) The Employer shall deliver to the individual exercising
the Option a Share certificate or Share certificates
evidencing his or her ownership of such Shares.
13. GRANT AND EXERCISE OF UNIT OPTIONS
13.1. Issuance of Unit Options
Upon the issuance of an Option, and in accordance with Section 4.2(B) of
the Partnership Agreement, the General Partner shall be deemed automatically to
have caused the Operating Partnership to issue to the General Partner a
corresponding Unit Option on terms identical to those of such Option.
<PAGE>
13.2. Exercise of Unit Options.
A Unit Option shall be deemed exercised automatically, upon the exercise
by an Optionee of the corresponding Option, as to the number of Units equal to
the number of Shares for which such Option is exercised. The General Partner
shall then cause the Operating Partnership to issue such Units to the General
Partner, and the Company shall remit payment for such Units to the General
Partner, which shall then remit payment to the Operating Partnership, all in
accordance with Section 4.2(B) of the Partnership Agreement.
13.3. Termination of Unit Options.
Upon the termination of an Option, the corresponding Unit Option also
shall terminate.
14. GRANT OF RESTRICTED SHARES
14.1. Restricted Share Awards.
(a) The Company Committee and the Management Company Committee may
from time to time, and subject to the provisions of the Plan and such other
terms and conditions as the Applicable Committee may determine, grant Restricted
Share Awards under the Plan. Each Restricted Share Award shall be evidenced by a
written instrument which shall state the number of Shares covered by the award
and the terms and conditions which the Applicable Committee shall have
determined with respect to such award. Upon the grant of each Restricted Share
Award, subject to Sections 14.1(d) and 14.3 hereof, the Company shall cause a
certificate representing the Shares covered by the award to be registered in the
name of the Holder and to be delivered to the Holder without payment on his part
(unless such Shares are newly issued Shares granted under the Company Plan, in
which case the Company may require a payment equal to the par value of each
Share for each Share issued). The Holder shall generally have the rights and
privileges of a shareholder of the Company with respect to such Shares,
including the right to vote and to receive dividends, subject to the
restrictions specified in paragraphs (b) and (c) hereof.
(b) The Applicable Committee shall determine a period of time
("Limitation Period") during which restrictions shall apply to the Shares
transferred to a Holder with respect to each Restricted Share Award, provided
that in no event shall the Limitation Period be less than two years. Except as
otherwise determined by the Applicable Committee, the Holder may not sell,
transfer, assign, pledge or otherwise encumber or dispose of the Shares covered
by such Restricted Share Award during the Limitation Period applicable with
respect to such Restricted Share Award. The Applicable Committee in its
discretion may prescribe conditions for the incremental lapse of the preceding
<PAGE>
restrictions during the Limitation Period, and for the lapse or termination of
such restrictions upon the occurrence of certain events before the expiration of
the Limitation Period. The Applicable Committee in its discretion also may
shorten or terminate the Limitation Period or waive any conditions for the lapse
or termination of the restrictions with respect to all or any portion of the
Shares covered by the Restricted Share Award. The restrictions applicable to a
Restricted Share Award shall lapse upon the earliest of the following: (1) the
expiration of the Limitation Period applicable to the Restricted Share Award;
(2) the occurrence of an event prescribed by the Applicable Committee which
results in the lapse of the restrictions; or (3) such other time as the
Applicable Committee may determine.
(c) The Shares covered by a Restricted Share Award shall be
forfeited by the Holder upon termination of the Holder's employment with the
Granting Employer for any reason before the occurrence of any of the events
described in the last sentence of paragraph (b) hereof. The Holder shall
thereupon immediately transfer the Shares to his or her Granting Employer
without payment by the Granting Employer. If the Granting Employer is not the
Company or the Operating Partnership, the Company and the Operating Partnership
shall have the right to purchase any such forfeited Shares from such Granting
Employer at a price equal to Fair Market Value at any time subsequent to such
forfeiture.
(d) Promptly after the grant of a Restricted Share Award by the
Operating Partnership or its general partner, any Affiliate of the Operating
Partnership, the Management Company or an Affiliate of the Management Company,
such company shall notify the Company of the grant and of the recipient's name,
address and social security number, and shall either (i) pay or cause to be paid
to the Company an amount equal to the Fair Market Value of the Shares which are
subject to the Restricted Share Award or (ii) deliver free and clear of any
liens or encumbrances certificates representing outstanding Shares in an amount
equivalent to the number of Shares granted.
14.2. Restricted Share Agreement.
All Restricted Share Awards granted pursuant to the Plan shall be
evidenced by Restricted Share Agreements, to be executed by the Granting
Employer and by the Holder, in such form or forms as the Applicable Committee
shall from time to time determine. Restricted Share Agreements covering
Restricted Shares granted from time to time or at the same time need not contain
similar provisions; provided, however, that all such Restricted Share Agreements
shall comply with all terms of the Plan.
14.3. Certificates for Restricted Shares.
The Applicable Committee may require that the certificates evidencing the
grant of a Restricted Share Award hereunder be held in escrow until such
restrictions have expired. The Company shall also cause a legend to be placed on
such certificates that complies with the applicable securities laws and
regulations and makes appropriate reference to the restrictions to which the
Shares are subject. Upon attainment of the specified objectives and requirements
(or, to the extent specified in the grant, the portion of such Shares earned by
partial attainment of the objectives and requirements, as applicable), a
certificate for the number of Shares with respect to which restrictions have
lapsed shall be delivered to the Holder free of restrictions upon submission of
the certificate originally issued with respect to such Shares.
<PAGE>
15. AWARDS OF UNRESTRICTED BONUS SHARES
The Chief Executive Officer of the Company, on behalf of the Board of
Trustees, and the Chief Executive Officer of the Management Company, on behalf
of the Board of Directors, may from time to time, as frequently as once a month,
subject to the provisions of the Plan, grant up to ten Bonus Shares to such
eligible individuals as he or she may designate. Upon the grant of Bonus Shares,
the Company, the General Partner or the Management Company, as appropriate,
shall cause a certificate representing the Bonus Shares to be registered in the
name of the Grantee and delivered to the Grantee. Upon delivery to the Grantee,
Bonus Shares shall be deemed validly issued, fully paid, and nonassessable, and
the Grantee shall have all the rights of a shareholder with respect to such
Bonus Shares.
16. TRANSFERABILITY OF OPTIONS AND RESTRICTED SHARES
16.1. Transferability of Options.
During the lifetime of the Optionee, only such Optionee (or, in the event
of legal incapacity or incompetency, the guardian or legal representative of the
Optionee), may exercise the Option, except that the Applicable Committee may, in
its discretion, authorize all or a portion of the Option (other than an
Incentive Share Option) to be granted to an Optionee on terms which permit
transfer by such Optionee during his or her lifetime to Immediate Family
Members, (ii) a trust or trusts for the exclusive benefit of such Immediate
Family Members or (iii) a partnership in which such Immediate Family Members are
the only partners, provided that the Share Option Agreement pursuant to which
such Options are granted is approved by the Applicable Committee and expressly
provides for transferability in a manner consistent with this Section 15.1, in
which case such transferees may exercise the Option. Except as noted in the
preceding sentence, transfers of Options shall be prohibited except by will or
the laws of descent and distribution. Following transfer, any such Options shall
continue to be subject to the same terms and conditions as were applicable
immediately prior to transfer, provided that for purposes of Section 12 hereof
(excluding Sections 12.3, 12.4 and 12.5), the term "Optionee" shall be deemed to
refer to the transferee. The events of termination of employment, death and
disability set forth in Sections 12.3, 12.4 and 12.5 hereof, respectively, shall
continue to be applied with respect to the original Optionee, following which
the Options shall be exercisable by the transferee only to the extent and for
the periods specified in Section 12. Except as may be provided in the Share
Option Agreement, no Option shall be pledged or hypothecated (by law or
otherwise) or subject to execution, attachment or similar processes.
16.2. Transferability of Restricted Shares.
No Restricted Shares shall be assignable or transferable, other than by
will or the laws of descent and distribution, before the satisfaction of
applicable performance and service requirements with respect to such Shares, as
set forth in the applicable Restricted Share Agreement.
<PAGE>
17. USE OF PROCEEDS
The proceeds received by the Company from the sale of Shares pursuant to
Incentive Awards granted under the Plan shall constitute general funds of the
Company. As soon as practicable after receipt by the Company of the amount
described in Sections 12.9(a)(i) and 14.1(d) above, the Company shall contribute
an amount of cash equal to such payment to the wholly owned subsidiary that owns
its interests in the Operating Partnership, which in turn will contribute such
cash to the Operating Partnership, and the Operating Partnership shall issue
additional partnership interests to such subsidiary with a value equal to the
amount of such contribution.
18. REQUIREMENTS OF LAW
18.1. General.
The Company shall not be required to sell or issue any Shares under any
Incentive Award if the sale or issuance of such Shares would constitute a
violation by the Optionee, the Holder, the Grantee or the Company of any
provisions of any law or regulation of any governmental authority, including
without limitation any federal or state securities laws or regulations. If at
any time the Company shall determine, in its discretion, that the listing,
registration or qualification of any Shares subject to an Option upon any
securities exchange or under any governmental regulatory body, is necessary or
desirable as a condition of, or in connection with, the issuance or purchase of
Shares hereunder, the Option may not be exercised in whole or in part unless
such listing registration, qualification, consent or approval shall have been
effected or obtained free of any conditions not acceptable to the Company, as
applicable, and any delay caused thereby shall in no way affect the date of
termination of the Option. Specifically in connection with the 1933 Act, at the
time of grant of Restricted Shares or Bonus Shares, or when such Restricted
Shares become vested, or upon the exercise of any Option, unless a registration
statement under such Act is in effect with respect to the Shares covered by the
Option, the Company shall not be required to sell or issue such Shares unless
the Company Committee has received evidence satisfactory to it that the
Optionee, Holder or Grantee may acquire such Shares pursuant to an exemption
from registration under such Act. Any determination in this connection by the
Company Committee shall be final, binding, and conclusive. The Company may, but
shall in no event be obligated to, register any securities covered hereby
pursuant to the 1933 Act. The Company shall not be obligated to take any
affirmative action in order to cause the exercise of an Option or the issuance
of Shares pursuant thereto, the issuance of Bonus Shares or the issuance of
Shares pursuant to a Restricted Share Award to comply with any law or regulation
of any governmental authority. As to any jurisdiction that expressly imposes the
requirement that an Option shall not be exercisable or that Shares may not be
issued pursuant to a grant of Bonus Shares or Restricted Shares unless and until
the Shares covered by such Option or grant are registered or are exempt from
registration, the exercise of such Option or the issuance of Shares pursuant to
such grant (under circumstances in which the laws of such jurisdiction apply)
shall be deemed conditioned upon the effectiveness of such registration or the
availability of such an exemption. <PAGE>
18.2. Rule 16b-3.
The intent of this Plan is to qualify for the exemption provided by Rule
16b-3 under the Exchange Act. To the extent any provision of the Plan or action
by the Plan administrators does not comply with the requirements of Rule 16b-3,
it shall be deemed inoperative, to the extent permitted by law and deemed
advisable by the Plan administrators, and shall not affect the validity of the
Plan. In the event Rule 16b-3 is revised or replaced, the Board of Trustees may
exercise discretion to modify this Plan in any respect necessary to satisfy the
requirements of the revised exemption or its replacement.
18.3. REIT Qualification.
The Company shall not be required to sell or issue any Shares under any
Incentive Award if the sale or issuance of such Shares would cause the Company
to fail to qualify as a real estate investment trust for Federal income tax
purposes or would result in the Optionee's, Grantee's or Holder's ownership of
Shares in violation of the restrictions on ownership and transfer of Shares set
forth in the Company's declaration of trust.
19. AMENDMENT AND TERMINATION OF THE PLAN
The Board of Trustees may, at any time and from time to time, amend,
suspend, or terminate the Plan as to any Shares as to which Incentive Awards
have not been granted; provided, however, no amendment that materially affects
the terms of Incentive Awards under the Operating Partnership Plan shall be
effective with respect to the Operating Partnership Plan without the approval of
the Board of Directors of the Operating Partnership, and no amendment that
materially affects the terms of Restricted Share Awards under the Management
Company Plan shall be effective with respect to the Management Company Plan
without the approval of the Board of Directors of the Management Company. The
Employer may retain the right in an Agreement to cause a forfeiture of the
Options or the Shares or gain realized by a Holder on account of the Optionee or
Holder taking actions prohibited by the applicable Agreement. Except as
permitted under this Section 19 or Section 20 hereof, no amendment, suspension,
or termination of the Plan shall, without the consent of the Optionee, Grantee
or Holder, alter or impair rights or obligations under any Incentive Award
theretofore granted under the Plan.
20. EFFECT OF CHANGES IN CAPITALIZATION
20.1. Changes in Shares.
If the number of outstanding Shares is increased or decreased or the
Shares are changed into or exchanged for a different number or kind of Shares or
other securities of the Company, in each case on account of any
recapitalization, reclassification, Share split, reverse split, combination of
Shares, exchange of Shares, Share dividend or other distribution payable in
<PAGE>
capital stock, or other increase or decrease in such Shares effected without
receipt of consideration by the Company, occurring after the Effective Date of
the Plan, the number and kinds of Shares for the issuance of which Restricted
Share Awards or awards of Bonus Shares may be granted and Shares for the
acquisition of which Options may be granted under the Plan shall be adjusted
proportionately and accordingly by the Company. In addition, the number and kind
of Shares for which Restricted Share Awards or Options are outstanding shall be
adjusted proportionately and accordingly so that the proportionate interest of
the Holder of the Restricted Share Awards or Optionee immediately following such
event shall, to the extent practicable, be the same as immediately before such
event. Any such adjustment in outstanding Options shall not change the aggregate
Option Price payable with respect to Shares that are subject to the unexercised
portion of the Option outstanding but shall include a corresponding
proportionate adjustment in the Option Price per Share.
20.2. Reorganization in Which the Company Is the Surviving Entity.
Subject to Section 20.3 hereof, if the Company shall be the surviving
entity in any reorganization, merger, or consolidation of the Company with one
or more other entities, any Option theretofore granted pursuant to the Plan
shall pertain to and apply to the securities to which a holder of the number of
Shares subject to such Option would have been entitled immediately following
such reorganization, merger, or consolidation, with a corresponding
proportionate adjustment of the Option Price per Share so that the aggregate
Option Price thereafter shall be the same as the aggregate Option Price of the
Shares remaining subject to the Option immediately prior to such reorganization,
merger, or consolidation. Subject to any contrary language in the applicable
Restricted Share Agreement, any restrictions that were applicable to any
previously granted Restricted Share Award shall apply as well to any replacement
shares received by the Holder as a result of such reorganization, merger, or
consolidation.
20.3. Reorganization in Which the Company Is Not the Surviving Entity or Sale
of Assets or Shares.
Upon the dissolution or liquidation of the Company, or upon a merger,
consolidation, or reorganization of the Company with one or more other entities
in which the Company is not the surviving entity, or upon a sale of
substantially all of the assets of the Company to another entity, or upon any
transaction (including, without limitation, a merger or reorganization in which
the Company is the surviving entity) approved by the Board of Trustees that
results in any person or entity (or person or entities acting as a group or
otherwise in concert) owning 80 percent or more of the combined voting power of
all classes of securities of the Company (other than the Company or wholly owned
subsidiaries of the Company), the Plan and all Options outstanding hereunder
<PAGE>
shall terminate, except to the extent provision is made in writing in connection
with such transaction for the continuation of the Plan or the assumption of such
Options theretofore granted, or for the substitution for such Options of new
options covering the stock of a successor Company, or a parent or subsidiary
thereof, with appropriate adjustments as to the number and kinds of shares and
exercise prices, in which event the Plan and Options theretofore granted shall
continue in the manner and under the terms so provided. In the event of any such
termination of the Plan, each individual holding an Option shall have the right
(subject to the prior expiration of such Option in accordance with its terms)
immediately before the occurrence of such termination and during such period
occurring before such termination as the Company Committee in its sole
discretion shall determine and designate, to exercise such Option in whole or in
part, whether or not such Option was otherwise exercisable at the time such
termination occurs. Any exercise of an Option during such period shall be
conditioned upon the consummation of the event and shall be effective only
immediately before the consummation of the event. The Company Committee shall
send written notice of an event that will result in such a termination to all
individuals who hold Options not later than the time at which the Company gives
notice thereof to its shareholders. Unvested Restricted Share Awards shall be
vested in the case of an event described in this Section 20.3.
20.4. Adjustments.
Adjustments under this Section 20 related to Shares or securities of the
Company shall be made by the Company Committee, whose determination in that
respect shall be final, binding, and conclusive. No fractional Shares or units
of other securities shall be issued pursuant to any such adjustment, and any
fractions resulting from any such adjustment shall be eliminated in each case by
rounding downward to the nearest whole Share.
20.5. No Limitations on Company.
The grant of Incentive Awards pursuant to the Plan shall not affect or limit in
any way the right or power of the Company to make adjustments,
reclassifications, reorganizations, or changes of its capital or business
structure or to merge, consolidate, dissolve, or liquidate, or to sell or
transfer all or any part of its business or assets.
21. DISCLAIMER OF RIGHTS
No provision in the Plan or in any Incentive Award granted or Agreement
entered into pursuant to the Plan shall be construed to confer upon any
individual the right to remain in the employ or service of any Employer, or to
interfere in any way with any contractual or other right or authority of any
Employer either to increase or decrease the compensation or other payments to
any individual at any time, or to terminate any employment or other relationship
between any individual and such Employer. In addition, notwithstanding anything
contained in the Plan to the contrary, unless otherwise stated in the applicable
Agreement, no Incentive Award granted under the Plan shall be affected by any
change of duties or position of the Optionee, Grantee or Holder (including a
transfer to or from any Employer), so long as such Optionee, Grantee or Holder
continues to be a trustee, director, officer, consultant, employee, or
independent contractor (as the case may be) of any Employer (the "Successor
Granting Employer"). The Plan shall in no way be interpreted to require any
Employer to transfer any Shares to a third party trustee or otherwise hold any
Shares in trust or escrow for any participant or beneficiary under the terms of
the Plan. <PAGE>
22. NONEXCLUSIVITY OF THE PLAN
Neither the adoption of the Plan nor the submission of the Plan to the
shareholders of the Company for approval shall be construed as creating any
limitations upon the right and authority of the Company, the Operating
Partnership or its general partner or the Management Company or any Affiliate of
the Operating Partnership or the Management Company to adopt such other
incentive compensation arrangements (which arrangements may be applicable either
generally to a class or classes of individuals or specifically to a particular
individual or particular individuals) as such entities in their discretion
determine desirable.
23. CAPTIONS
The use of captions in this Plan or any Agreement is for the convenience
of reference only and shall not affect the meaning of any provision of the Plan
or such Agreement.
24. WITHHOLDING TAXES
24.1. Withholding.
The Granting Employer shall have the right to deduct from payments of any
kind otherwise due to an Optionee, Grantee or Holder any Federal, state, or
local taxes of any kind required by law to be withheld with respect to any
Shares issued upon the exercise of an Option, to any Bonus Shares or to the
termination of the Limitation Period for Restricted Share Awards. At the time of
termination of the Limitation Period, the Holder shall pay to the Granting
Employer any amount that the Granting Employer may reasonably determine to be
necessary to satisfy such withholding obligation. Subject to the prior approval
of the Granting Employer, which may be withheld by the Granting Employer (and/or
the Successor Granting Employer) in its sole discretion, the Optionee, Grantee
or Holder may elect to satisfy such obligations, in whole or in part, (i) by
causing such Granting Employer to withhold Shares otherwise issuable pursuant to
the exercise of an Option or (ii) by delivering to such Granting Employer Shares
already owned by the Optionee, Grantee or Holder. The Shares so delivered or
withheld shall have a Fair Market Value equal to such withholding obligations,
determined as of the date that the amount of tax to be withheld is to be
determined. An Optionee, Grantee or Holder who has made an election pursuant to
this Section 24.1 may satisfy his or her withholding obligation only with Shares
that are not subject to any repurchase, forfeiture, unfulfilled vesting, or
other similar requirements.
24.2. Limitations for Reporting Person.
Notwithstanding the foregoing, in the case of a Reporting Person, no
election to use Shares for the payment of withholding taxes shall be effective
unless made in compliance with any applicable requirements under Rule 16b-3(e)
or any successor rule under the Exchange Act. <PAGE>
25. OTHER PROVISIONS
Each Incentive Award granted under the Plan may contain such other terms
and conditions not inconsistent with the Plan as may be determined by the
Applicable Committee, in its sole discretion.
26. NUMBER AND GENDER
With respect to words used in this Plan, the singular form shall include
the plural form, the masculine gender shall include the feminine gender, etc.,
as the context requires.
27. SEVERABILITY
If any provision of the Plan or any Agreement shall be determined to be
illegal or unenforceable by any court of law in any jurisdiction, the remaining
provisions hereof and thereof shall be severable and enforceable in accordance
with their terms, and all provisions shall remain enforceable in any other
jurisdiction.
28. GOVERNING LAW
The validity and construction of this Plan and the instruments evidencing
the Incentive Awards granted hereunder shall be governed by the laws of the
State of Maryland.
