SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (the "Exchange Act")
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
[X] Definitive Proxy Statement Commission Only (as permitted
[ ] Definitive Additional Materials by Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
AMREIT, INC.
(Name of Registrant as Specified in Its Charter)
Not Applicable
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how it
was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement no.:
(3) Filing Party:
(4) Date Filed:
AMREIT, INC.
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AMREIT, INC.
8 Greenway Plaza, Suite 824
Houston, Texas 77046
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
June 23, 1999
To Our Stockholders:
You are invited to attend the annual meeting of stockholders of AmREIT,
Inc., which will be held at 8 Greenway Plaza, Suite 824, Houston, Texas, on
Wednesday, June 23, 1999, at 10:00 a.m., Houston time. The purpose of the
meeting is to vote on the following proposals:
Proposal 1: To elect three directors to serve for a one year
term, and until their successors are elected and
qualified.
Proposal 2: To approve the AmREIT, Inc. 1999 Flexible Incentive Plan.
Proposal 3: To ratify the selection of Deloitte & Touche LLP
as our independent auditors for the fiscal year
ending December 31, 1999.
Proposal 4: To transact any other business that may properly
be brought before the annual meeting or any
adjournments thereof.
The Board of Directors has fixed the close of business on April 15,
1999 as the record date for determining stockholders entitled to notice of and
to vote at the annual meeting. A form of proxy card and a copy of our annual
report to stockholders for the fiscal year ended December 31, 1998 are enclosed
with this notice of annual meeting and proxy statement.
Your proxy vote is important. Accordingly, you are asked to complete,
date, sign and return the accompanying proxy whether or not you plan to attend
the annual meeting. If you plan to attend the annual meeting to vote in person
and your shares are in the name of a broker or bank, you must secure a proxy
from the broker or bank assigning voting rights to you for your shares.
BY ORDER OF THE BOARD OF DIRECTORS
/s/H. Kerr Taylor
H. Kerr Taylor
Chairman of the Board, Chief Executive
Officer, President and Secretary
April 30, 1999
Houston, Texas
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PROXY STATEMENT
AmREIT, Inc.
8 Greenway Plaza, Suite 824
Houston, Texas 77046
ANNUAL MEETING OF STOCKHOLDERS
June 23, 1999
The Board of Directors of AmREIT, Inc. is soliciting proxies to be used
at the 1999 annual meeting of stockholders to be held at 8 Greenway Plaza, Suite
824, Houston, Texas, on Wednesday, June 23, 1999, at 10:00 a.m., Houston time.
This proxy statement, accompanying proxy and annual report to stockholders for
the fiscal year ended December 31, 1998 are first being mailed to stockholders
on or about April 30, 1999. Although the annual report is being mailed to
stockholders with this proxy statement, it does not constitute part of this
proxy statement.
Who Can Vote
Only stockholders of record as of the close of business on April 15,
1999, are entitled to notice of and to vote at the annual meeting. As of April
15, 1999, we had 2,372,744 shares of common stock outstanding. Each common
stockholder of record on the record date is entitled to one vote on each matter
properly brought before the annual meeting for each share of common stock held.
How You Can Vote
Stockholders cannot vote at the annual meeting unless the stockholder
is present in person or represented by proxy. You are urged to complete, sign,
date and promptly return the proxy in the enclosed postage-paid envelope after
reviewing the information contained in this proxy statement and in the annual
report. Valid proxies will be voted at the annual meeting and at any
adjournments of the annual meeting as you direct in the proxy.
You may revoke your proxy at any time before it is exercised by:
o writing to our Secretary, H. Kerr Taylor, at AmREIT, Inc.,
8 Greenway Plaza, Suite 824, Houston, Texas, 77046;
o timely delivering a properly executed, later-dated proxy; or
o voting in person at the annual meeting.
Voting by proxy will in no way limit your right to vote at the annual
meeting if you later decide to attend in person. If your shares are held in the
name of a bank, broker or other holder of record, you must obtain a proxy,
executed in your favor, to be able to vote at the annual meeting. If no
direction is given and the proxy is validly executed, the shares represented by
the proxy will be voted as recommended by our board of directors. The persons
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authorized under the proxies will vote upon any other business that may properly
come before the annual meeting according to their best judgment to the same
extent as the person delivering the proxy would be entitled to vote. At the time
of mailing this proxy statement, we did not anticipate that any other matters
would be raised at the annual meeting.
Required Vote
The presence, in person or represented by proxy, of the holders of a
majority of our common stock (1,186,372 shares) entitled to vote at the annual
meeting is necessary to constitute a quorum at the annual meeting. However, if a
quorum is not present at the annual meeting, a majority of the stockholders,
present in person or represented by proxy, have the power to adjourn the annual
meeting until a quorum is present or represented.
The affirmative vote of the holders of a majority of the shares of our
common stock present in person or represented by proxy is required to elect
directors. All of the nominees for director served as our directors in 1998.
The affirmative vote of the holders of a majority of the shares of our
common stock present in person or represented by proxy is required to approve
all other matters to be voted upon at our annual meeting.
Cost of Proxy Solicitation
The cost of soliciting proxies will be borne by us. Proxies may be
solicited on our behalf by our directors, officers or employees in person, by
telephone, facsimile or by other electronic means.
In accordance with SEC regulations, we will also reimburse brokerage
firms and other custodians, nominees and fiduciaries for their expenses incurred
in sending proxies and proxy materials and soliciting proxies from the
beneficial owners of shares of our common stock.
GOVERNANCE OF THE COMPANY
Pursuant to our articles of incorporation and our bylaws, our business,
property and affairs are managed under the direction of our board of directors.
Members of our board are kept informed of our business through discussions with
the Chairman of the Board and officers, by reviewing materials provided to them
and by participating in meetings of our board and its committees. During fiscal
year 1998, our board of directors held five meetings. No director attended less
than 80% of the total number of board of directors and committee meetings.
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Committees of the Board of Directors
Executive Audit Compensation
Name Board Officer Committee Committee
- ---- ----- ------- --------- ---------
H. Kerr Taylor x* x x
Robert S. Cartwright, Jr. x x x
George A. McCanse, Jr. x x
_______
* Chairman
During fiscal year 1998, our board of directors had two ongoing
committees: an audit committee and a compensation committee.
The audit committee consists of one independent director, Robert S.
Cartwright, Jr. The functions of the audit committee include recommending to our
board the appointment of independent auditors, approving the services provided
by the independent auditors, reviewing the range of audit and nonaudit fees and
considering the adequacy of our internal accounting controls.
The compensation committee consists of three directors. The functions
of the compensation committee include establishing the compensation of executive
officers and key employees and administering management incentive compensation
plans.
Compensation of Directors
During fiscal year 1998, each non-employee director received a monthly
fee of $750 for their services. We also paid each non-employee director an
additional $9,000 in 1998 in recognition of the additional time and effort
expended in consideration of certain potential acquisitions. In addition, we
reimbursed all of our directors for travel and other expenses incurred in
connection with their duties as directors.
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SHARE OWNERSHIP OF MAJOR STOCKHOLDERS,
DIRECTORS AND MANAGEMENT
The following table sets forth certain information regarding the
beneficial ownership of our common stock as of April 15, 1999 by (1) each person
known by us to own beneficially more than 5% of our outstanding common stock,
(2) each current director, (3) each current named executive officer, and (4) all
current directors and current named executive officers as a group. Unless
otherwise indicated, the shares listed in the table are owned directly by the
individual, or by both the individual and the individual's spouse. Except as
otherwise noted, the individual had sole voting and investment power as to
shares shown or, the voting power is shared with the individual's spouse.
Amount and Nature of
Name Beneficial Ownership Percent of Class
---- -------------------- ----------------
H. Kerr Taylor 262,061 11.04%
George A. McCanse, Jr. 770 *
Robert S. Cartwright, Jr. 2,166 *
L. Larry Mangum 5 *
(All directors and executive 265,002 11.17%
officers as a group)
_________
* Less than 1%.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires our directors and executive officers and persons who own more than 10%
of a registered class of our equity securities, to file reports of holdings and
transactions in our securities with the SEC. Executive officers, directors and
greater than 10% beneficial owners are required by applicable regulations to
furnish us with copies of all Section 16(a) forms they file with the SEC.
Based solely upon a review of the reports furnished to us with respect
to fiscal year 1998, we believe that all SEC filing requirements applicable to
our directors and executive officers were satisfied.
PROPOSAL ONE
ELECTION OF DIRECTORS
At the annual meeting, three directors will be elected by the
stockholders to serve until his successor has been duly elected and qualified,
or until the earliest of his death, resignation or retirement.
The persons named in the enclosed proxy will vote your shares as you
specify on the enclosed proxy form. If you return your properly executed proxy
but fail to specify how you want your shares voted, the shares will be voted in
favor of the nominees listed below. Our board of directors has proposed the
following nominees for election as directors at the annual meeting. Each of the
nominees is currently a member of our board.
Nominees
H. Kerr Taylor, Chairman of the Board of Directors, Chief Executive
Officer and President since August 1993. Mr. Taylor was president, director and
sole shareholder of American Asset Advisers Realty Corp. from 1989 to June 1998.
Mr. Taylor is a graduate of Trinity University. Mr. Taylor also received a
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Masters of Business Degree from Southern Methodist University and a Doctor of
Jurisprudence from South Texas College of Law. Mr. Taylor has over twenty years
experience and has participated in over 300 real estate transactions. Mr.
Taylor has served on a board and governing bodies of a bank, numerous private
and public corporations and charitable institutions. Mr. Taylor is a member of
the National Board of Realtors, the Texas Association of Realtors and the Texas
Bar Association. Age: 48.
Robert S. Cartwright, Jr., Director since 1993. Mr. Cartwright is a
Professor of Computer Science at Rice University. Mr. Cartwright earned a
bachelor's degree magna cum laude in Applied Mathematics from Harvard College in
1971 and a doctoral degree in Computer Science from Standard University in 1977.
Mr. Cartwright has been a member of the Rice faculty since 1980 and twice served
as department Chair. Professor Cartwright has compiled an extensive record of
professional service. He is a Fellow of the Association for Computing Machinery
(ACM) and chair of the ACM Pre-College Education Committee. He is also a member
of the Board of Directors of the Computing Research Association, an umbrella
organization representing academic and industrial computing researchers.
Professor Cartwright has served as a charter member of the editorial boards of
two professional journals and has chaired several major ACM conferences. From
1991-1996, he was a member of the ACM Turing Award Committee, which selects the
annual recipient of the most prestigious international prize for computer
science research. Age: 49.
George A. McCanse, Jr., Director since 1993. Mr. McCanse is the
President of Valuation OnLine, Inc., an Internet data access service for the
commercial real estate valuation industry. Mr. McCanse also advises owners of
investment real estate and invests in commercial real estate for his own
account. Mr. McCanse is a member of the Appraisal Institute (MAI designation)
and the International Council of Shopping Centers. He was formally a member of
the Valuation Committee of the National Council of Real Estate Investment
Fiduciaries. Mr. McCanse resides in Austin, Texas. He holds a BBA degree from
the University of Texas and has pursued graduate level study in real estate,
architecture and finance. He has also been involved in real estate investing and
development, including the acquisition and sale of over $150 million of real
estate during the 1970s and 1980s. Age: 45.
The Board of Directors unanimously recommends that you vote FOR the
election of directors as set forth in Proposal One. Proxies solicited by the
Board of Directors will be so voted unless you specify otherwise in your proxy.
PROPOSAL TWO
APPROVAL OF THE AMREIT, INC. 1999 FLEXIBLE INCENTIVE PLAN
General. Our board of directors has adopted, subject to stockholder
approval, the AmREIT, Inc. 1999 Flexible Incentive Plan, which provides for the
grant of various types of stock-based compensation to our directors, officers,
employees, consultants, advisors and those of our subsidiaries. Subject to
stockholder approval, certain awards have been made under the plan, as described
below. The plan is designed to comply with the requirements for
"performance-based compensation" under Section 162(m) of the Internal Revenue
Code and the conditions for exemption from the short-swing profit recovery rules
under Rule 16b-3 of the Securities Exchange Act of 1934, as amended. The
principal features of the plan are summarized below. All statements made in this
summary of the plan are qualified by reference to the full text of the plan
which is attached to this proxy statement as Annex A. You are encouraged to read
the plan in its entirety.
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The Plan. The purpose of the plan is to reinforce the long-term
commitment to our success, the success of our subsidiaries, directors, officers,
employees, consultants and advisors who are or will be responsible for such
success; to facilitate the ownership of our common stock by such individuals,
thereby reinforcing the identity of their interests with those of our
stockholders; and to assist us in attracting and retaining directors, officers
and other employees with experience and ability.
The plan provides for the granting of incentive stock options,
non-qualified stock options or both. The plan also provides for the granting of
restricted stock, dividend equivalent rights, phantom stock awards, stock
appreciation rights and performance awards. In addition, the plan permits the
compensation committee to authorize loans to plan participants in connection
with the grant of awards, on terms and conditions determined solely by the
compensation committee. All awards will be evidenced by an agreement setting
forth the terms and conditions applicable thereto.
Eligibility. Options, dividend equivalent rights, restricted stock,
phantom stock awards, stock appreciation rights and performance awards may be
granted to any of our or our subsidiaries' directors, officers, other employees,
consultants or advisors who the compensation committee determines may contribute
to our long-term success, provided that incentive stock options may only be
granted to our employees.
The plan is administered by the compensation committee of our Board of
Directors, the composition of which will at all times comply with the
requirements of Rule 16b-3 under the Exchange Act.
Securities Subject to the Plan. The plan covers 6% of the shares of our
common stock outstanding as of the date of determination. The shares may be
authorized but unissued shares or shares we reacquired. The plan provides for
adjustments to the aggregate number of shares subject to the plan and any award
thereunder, and to the purchase price to be paid and/or the number of shares
issuable upon the exercise of any option or pursuant to restricted awards. The
compensation committee has the authority, in the event of any such adjustment,
to provide for the cancellation of any outstanding award in exchange for payment
in cash or other property.
Terms and Conditions of Options. The compensation committee will
determine the option exercise price per share of common stock purchasable
pursuant to an option; provided, however, that incentive stock options cannot be
granted for less than 100% of the fair market value of the common stock on the
date of grant. Additionally, any plan participant who owns or is deemed to own
(by reason of the attribution rules applicable under Section 424(d) of the
Internal Revenue Code) more than 10% of the combined voting power of all classes
of our stock and an incentive stock option is granted to such employee, the
option exercise price of such incentive stock option (to the extent required by
the Code at the time of the grant) will not be less than 110% of the fair market
value of the common stock on the date of grant. The term of each option shall be
fixed by the compensation committee, provided that if any plan participant owns
or is deemed to own (by reason of the attribution rule of Section 424(d) of the
Internal Revenue Code) more than 10% of the combined voting power of all classes
of our stock and an incentive stock option is granted to such employee, the term
of an incentive stock option (to the extent required by the Internal Revenue
Code at the time of grant) shall be no more than five years from the date of
grant. We may make loans available to option holders in connection with the
exercise of outstanding options granted under the plan.
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Reload Options. An option grant may include a "reload option," which
provides that upon the exercise of an option, a replacement option, with an
exercise price equal to the then fair market value of a share of common stock
and the same expiration date as the option exercised, covering a number of
shares equal to the number of shares tendered to pay the exercise price, or
equal to the number of shares issued upon exercise, will be granted to the
optionee. The plan permits us to allow an optionee, upon exercise of an option
or vesting of an award, to satisfy any applicable federal income tax
requirements in the form of either cash or common stock, including common stock
issuable upon exercise of the option.
Restricted Awards. A restricted stock award is an award of common stock
that may not be sold, assigned, transferred, pledged, hypothecated or otherwise
disposed of for a period of ten years, or any shorter period as the compensation
committee shall determine, from the date on which the award is granted. The
compensation committee may also impose such other restrictions and conditions on
an award as it deems appropriate. The compensation committee may provide that
the foregoing restrictions will lapse with respect to specified percentages of
the awarded shares on successive anniversaries of the date of the award. In
addition, the compensation committee has the authority to cancel all or any
portion of any restrictions prior to the expiration of the granted period.
Performance awards are shares of common stock subject to restrictions based upon
the attainment of performance measures of our performance. In addition,
performance goals may be based upon a participant's attainment of specific
objectives we set for the participant's performance. Phantom stock awards are
rights awarded to participants that entitle the participant to receive shares of
common stock or cash equivalent to the fair market value of the common stock
without any payment by the participant.
Upon the award of any restricted stock or performance award, the holder
will have the rights of a stockholder with respect to the shares, including
dividend rights, subject to the conditions and restrictions generally applicable
to restricted stock or specifically set forth in the participant's award
agreement.
Dividend Equivalent Rights. Dividend equivalent rights may be granted
separately or in conjunction with options. The value of a dividend equivalent
right is equal to the product of (1) the number of shares of common stock as to
which the dividend equivalent right relates and (2) the cash dividend payable
per share of common stock. Dividend equivalent rights may be payable either in
cash or in shares of common stock, and payment may occur either as the dividend
equivalent right accrues or at such later time as the related option is
exercised. Dividend equivalent rights expire at the time specified in the award
agreement, and no dividends are payable or credited with respect to the dividend
equivalent rights.
Stock Appreciation Rights. The compensation committee has the
discretion to grant a stock appreciation right in tandem with any option or may
grant the SAR independently. A stock appreciation right entitles a participant
to surrender the stock appreciation right to us and to receive in exchange the
number of shares of common stock having an aggregate value equal to the excess
of the fair market value of one share on the date of exercise over the purchase
price per share specified in the stock appreciation right, times the number of
shares called for by the stock appreciation right (or portion thereof)
surrendered. The compensation committee may elect to settle any stock
appreciation right obligation in cash. Any stock appreciation right granted in
tandem with an option is only exercisable to the extent that the related option
is exercisable. Further, a stock appreciation right is only exercisable upon
consent of the compensation committee. Limited stock appreciation rights payable
upon the occurrence of a change in control may be granted under the plan.
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Death; Termination of Employment; Restrictions on Transfer. The
compensation committee will provide in the award agreements whether and to what
extent awards will be exercisable upon termination of employment or service for
any reason, including death or disability, of any participant in the plan. In no
event may any option be exercisable more than ten years from the date it is
granted. Except as otherwise determined by the compensation committee in
accordance with Federal securities laws, options are not transferable and are
exercisable during the recipient's lifetime only by the recipient.
Amendment: Termination. Our board of directors may terminate or amend
the plan at any time, except that stockholder approval is required for any
amendment to the plan which would be required to fulfill the conditions of
Federal securities laws, Section 162(m) of the Internal Revenue Code and such
other applicable statutory rules and regulations and only if we intend to
fulfill such conditions. Termination or amendment of the plan will not affect
previously granted awards, which will continue in effect in accordance with
their terms.
Certain Federal Income Tax Consequences. Under current Federal income
tax laws, awards under the plan will generally have the following tax
consequences:
Non-Qualified Stock Options. A participant will generally not be taxed
upon the grant of a non-qualified stock option. Rather, at the time of exercise
of such non-qualified stock option, the participant will recognize ordinary
income for Federal income tax purposes in an amount equal to the excess, if any,
of the fair market value of the shares purchased over the option exercise price
and will have a tax basis in such shares equal to the amount paid by the
participant upon exercise plus the amount taxable as ordinary income to the
participant. We will generally be entitled to a deduction against taxable income
at such time and in the same amount that the participant recognizes ordinary
income.
If shares acquired upon exercise of a non-qualified stock option are
later sold or exchanged, then the difference between the sales price and the tax
basis of such stock as determined on the date that ordinary income was
recognized with respect thereto will generally be taxable as long-term or
short-term capital gain or loss (if the stock is a capital asset of the
participant) depending upon the length of time the stock has been held.
Incentive Stock Options. A participant will not be in receipt of
taxable income upon the grant of an incentive stock option or upon its timely
exercise. Exercise of an incentive stock option will be timely if made during
its term and if the participant remains our employee at all times during the
period beginning on the date of grant of the incentive stock option and ending
on the date three months before the date of exercise (or one year before the
date of exercise in the case of a disabled employee). Exercise of an incentive
stock option will also be timely if made by the legal representative of a
participant who dies (1) while employed by us or (2) within three months after
termination of employment. The tax consequences of an untimely exercise of an
incentive stock option will be determined in accordance with the rules
applicable to non-qualified stock options, above.
If stock acquired pursuant to a timely exercised incentive stock option
is later disposed of, the participant will, except as noted below with respect
to a "disqualifying disposition," recognize long-term capital gain or loss at
the time of the disposition (if the stock is a capital asset of the employee)
equal to the difference between the amount realized upon such sale and the
option exercise price. Under these circumstances, we will not be entitled to any
Federal income tax deduction in connection with either the exercise of the
incentive stock option or the sale of such stock by the participant.
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If, however, a participant disposes of stock acquired pursuant to the
exercise of an incentive stock option prior to the expiration of two years from
the date of grant of the incentive stock option or within one year from the date
such stock is transferred to him upon exercise (a "disqualifying disposition")
generally (1) the participant will realize ordinary income at the time of the
disposition in an amount equal to the excess, if any, of the fair market value
of the stock at the time of exercise (or, if less, the amount realized on such
disqualifying disposition) over the option exercise price, and (2) if the stock
is a capital asset of the participant, any additional gain recognized by the
participant will be taxed as short-term or long-term capital gain. Any capital
gain recognized by the participant who has held the underlying common stock for
more than one year will be taxed at the 20% long-term capital gain rate. Capital
gain on stock held twelve months or less will be short-term. At the time of such
disqualifying disposition, we may claim a deduction for Federal income tax
purposes only for the amount taxable to the participant as ordinary income.
The amount by which the fair market value of the capital gain on the
exercise date of an incentive stock option exceeds the option exercise price
will be an item of adjustment for purposes of the "alternative minimum tax"
imposed by Section 55 of the Internal Revenue Code.
The Board of Directors unanimously recommends that you vote FOR this
proposal. Proxies solicited by the Board of Directors will be so voted unless
you specify otherwise in your proxy.
PROPOSAL THREE
RATIFICATION OF INDEPENDENT AUDITORS
Based upon the recommendation of the audit committee, the stockholders
are urged to ratify the appointment by our board of directors of Deloitte &
Touche LLP as independent auditors for the fiscal year ending December 31, 1999.
Deloitte & Touche has served as our independent auditor since our inception in
August, 1993 and is familiar with our affairs and financial procedures.
Representatives of Deloitte & Touche are not expected to be present at the
annual meeting.
The Board of Directors unanimously recommends that you vote FOR this
proposal. Proxies solicited by the Board of Directors will be so voted unless
you specify otherwise in your proxy.
EXECUTIVE OFFICERS
Name Age Principal Occupation Officer of the Company Since
H. Kerr Taylor 48 Chairman of the Board, 1993
Chief Executive Officer,
President and Secretary
L. Larry Mangum 34 Chief Financial Officer
and Treasurer 1996
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Business Experience
For a description of the business experience of Mr. Taylor, see
"Election of Directors" above.
L. Larry Mangum, Chief Financial Officer and Treasurer. Mr. Mangum is
responsible for the financial accounting, reporting, planning, budgeting and
debt placement. He has over eleven years of accounting experience, including
four years with a public accounting firm. Mr. Mangum previously worked for
American General Corporation as part of a team responsible for supervising
reporting activities from 1991-1996. Mr. Mangum received a B.B.A. degree in
accounting from Stephen F. Austin State University and subsequently earned the
CPA designation.
Compensation of Executive Officers
Mr. Taylor, our Chairman of the Board, Chief Executive Officer and
President, received a salary of $12,500 during fiscal year ended December 31,
1998. None of our other executive officers received salary or bonus in excess of
$100,000 during the fiscal year ended December 31, 1998. In fiscal years ended
December 31, 1997 and 1996, none of our executive officers received any salary
or bonus.
Employment Agreement
We entered into a three year employment agreement with Mr. Taylor in
June 1998, which provides for an annual base salary of $25,000 and $30,000,
respectively, for the first two years. His compensation for the third year, as
well as any cash or non-cash bonuses which may be paid to him during the term of
the agreement will be determined in the discretion of our Board of Directors. He
will also be entitled to such group life, hospitalization and disability
insurance as we may provide to our other senior executives. The agreement
provides for severance payments in the event of his death or disability, if we
terminate him without cause or if he terminates the agreement for good reason.
In any such event, he will be entitled to receive a cash payment equal to his
annual base salary at the time of termination, health benefits for a period of
twelve months following such termination and immediate vesting of any of our
stock options then held by him. In addition, his termination would obligate us
to repurchase his stock. For the purposes of the agreement, "cause" for
termination by us includes his conviction or nolo contendere to any felony or
misdemeanor involving moral turpitude or the indictment therefore which is not
discharged or otherwise resolved within eighteen months, his commission of an
act of fraud, theft or dishonesty, his willful or continuing failure to perform
his duties, any material violation of his employment covenants or his willful
and continuing uncured breach of his employment terms. "Good reason" for his
termination of the agreement includes the material reduction of his duties or
responsibilities or assignment to him of duties materially inconsistent with his
position or positions with us, a reduction in his base salary, the occurrence of
an event of acceleration (as described in the employment agreement) in payment
of the share balance as discussed above, or our uncured material and willful
breach of his employment terms. He will not be entitled to receive any
additional compensation, except that which was due and payable to him through
the date of termination, in the event he is terminated by us for cause or he
terminates his employment without good reason.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On August 31, 1998, Mr. Taylor accepted 9,811 shares of our common
stock in repayment of $100,563 then owing on our promissory note payable to him.
The shares were valued at $10.25 per share for the purposes of payment. We paid
the unpaid balance of $65,860 on the note to Mr. Taylor on October 5, 1998.
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On July 30, 1998, we invested approximately $356,000 in 100% of the
preferred stock of AmREIT Realty Investment Corporation, a newly formed Texas
corporation. AmREIT Realty Investment Corporation was organized to acquire,
develop, hold and sell real estate and to provide related real estate
development and management services to unrelated parties. The preferred stock
entitles us to dividends equal to 95% of the net income of AmREIT Realty
Investment Corporation. All of the outstanding common stock is owned by Mr. H.
Kerr Taylor, our President.
On June 5, 1998, our shareholders voted to approve an agreement and
plan of merger with American Asset Advisers Realty Corp., whereby Mr. Taylor,
the sole stockholder of American Asset Advisers Realty Corp., agreed to exchange
100% of the outstanding common stock of American Asset Advisers Realty Corp. for
up to 900,000 shares of our common stock. As a result of the merger, we became a
fully integrated, self-administered real estate investment trust. Effective June
5, 1998, we issued Mr. Taylor 213,260 shares of common stock and he has the
right to receive up to an additional 686,740 shares of our common stock over a
six year period, to the extent certain goals are achieved after the merger.
Since June 5, 1998, Mr. Taylor has not earned any of the additional 686,740
shares of our common stock.
On May 10, 1998, Mr. Taylor accepted 18,789 shares of our common stock
as payment in full of our note payable to him with the unpaid balance of
approximately $171,500.
STOCKHOLDER PROPOSALS
Any stockholder who intends to present a proposal at the annual meeting
in the year 2000, and who wishes to have the proposal included in our proxy
statement for that meeting, must deliver the proposal to our corporate
secretary, H. Kerr Taylor, at 8 Greenway Plaza, Suite 824, Houston, Texas 77046
by February 1, 2000. All proposals must meet the requirements set forth in the
rules and regulations of the SEC in order to be eligible for inclusion in the
proxy statement for that meeting.
ANNUAL REPORT
We have provided without charge a copy of the annual report to
stockholders for fiscal year 1998 to each person being solicited by this proxy
statement. Upon the written request by any person being solicited by this proxy
statement, we will provide without charge a copy of the Annual Report on Form
10-K as filed with the SEC (excluding exhibits, for which a reasonable charge
shall be imposed). All requests should be directed to: H. Kerr Taylor, Chairman
of the Board, Chief Executive Officer, President and Secretary at AmREIT, Inc.,
8 Greenway Plaza, Suite 824, Houston, Texas 77046.
BY ORDER OF THE BOARD OF DIRECTORS
/s/H. Kerr Taylor
H. Kerr Taylor
Chairman of the Board, Chief Executive Officer,
President and Secretary
April 30, 1999
Houston, Texas
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ANNEX A
AMREIT, INC.
1999 FLEXIBLE INCENTIVE PLAN
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SECTION 1. PURPOSE OF THIS PLAN
The purposes of the AmREIT, Inc. Flexible Incentive Plan are to (i)
promote the interests of AmREIT, Inc. (the "Company") and its stockholders by
enabling the Company and each of its Subsidiaries (as hereinafter defined) to
(A) attract, motivate and retain their respective employees and Non-Employee
Directors (as hereinafter defined) by offering such employees and Non-Employee
Directors performance-based stock incentives and other equity interests in the
Company and other incentive awards and (B) compensate Consultants (as
hereinafter defined) by offering such Consultants performance-based stock
incentives and other equity interests in the Company and other incentive awards
that recognize the creation of value for the stockholders of the Company and
(ii) promote the Company's long-term growth and success. To achieve these
purposes, eligible Persons may receive Stock Options, Restricted Stock,
Performance Awards and any other Awards (as such terms are hereinafter defined),
or any combination thereof.
SECTION 2. DEFINITIONS
As used in this Plan, the following terms shall have the meanings set
forth below unless the context otherwise requires:
2.1 "Award" shall mean the grant of a Stock Option, Restricted Stock,
a Performance Award, a Dividend Equivalent, an SAR, a Phantom Stock Award or any
other grant of incentive compensation pursuant to this Plan.
2.2 "Book Value" shall mean the excess of the value of the assets of
an entity over the liabilities of such entity (determined in accordance with
United States generally accepted accounting principles, consistently applied).
2.3 "Board" shall mean the Board of Directors of the Company, as the
same may be constituted from time to time.
2.4 "Cause" shall mean termination of a Participant's employment with
the Company or a Subsidiary upon the occurrence of one or more of the following
events:
(a) The Participant's failure to substantially perform such
Participant's duties with the Company or any Subsidiary as determined
by the Committee or the Board following receipt by the Participant of
written notice of such failure and the Participant's failure to remedy
such failure within thirty (30) days after receipt of such notice
(other than a failure resulting from the Participant's incapacity
during physical or mental illness);
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(b) The Participant's willful failure or refusal to perform
specific directives of the Board, which directives are consistent with
the scope and nature of the Participant's duties and responsibilities,
and which are not remedied by the Participant within thirty (30) days
after being notified in writing of such Participant's failure by the
Board;
(c) The Participant's conviction of a felony; or
(d) A breach of the Participant's fiduciary duty to the
Company or any Subsidiary or willful violation in the course of
performing the Participant's duties for the Company or any Subsidiary
of any law, rule or regulation (other than traffic violations or other
minor offenses). No act or failure to act on the Participant's part
shall be considered willful unless done or omitted to be done in bad
faith and without reasonable belief that the action or omission was in
the best interest of the Company;
provided, however, that for each employee of the Company who has entered into an
employment agreement with the Company, "Cause" shall have the meaning provided
in such employment agreement.
2.5 "Change in Control" shall mean, after the Effective Date, (i) a
Corporate Transaction is consummated, other than a Corporate Transaction that
would result in substantially all of the holders of voting securities of the
Company outstanding immediately prior thereto owning (directly or indirectly and
in substantially the same proportions relative to each other) not less than
fifty percent (50%) of the combined voting power of the voting securities of the
issuing/surviving/resulting entity outstanding immediately after such Corporate
Transaction or (ii) an agreement for the sale or other disposition of all or
substantially all of the Company's assets (evaluated on a consolidated basis,
without regard to whether the sale or disposition is effected via a sale or
disposition of assets of the Company, the sale or disposition of the securities
of one or more Subsidiaries or the sale or disposition of the assets of one or
more Subsidiaries) is consummated.
2.6 "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time (or any successor to such legislation).
2.7 "Committee" shall mean the Compensation Committee of the Board as
such Compensation Committee may be constituted from time to time; provided,
however, the Committee will consist of not less than three (3) Directors. All
members of the Committee will serve at the pleasure of the Board.
2.8 "Common Stock" shall mean the Common Stock, par value $0.01 per
share, of the Company.
2.9 "Company" shall have the meaning set forth in Section 1 of this
Plan.
2.10 "Consultant" shall mean any Person who or which is engaged by the
Company or any Subsidiary to render consulting services.
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2.11 "Corporate Transaction" shall mean any recapitalization (other
than a transaction contemplated by Section 15.1 of this Plan) merger,
consolidation or conversion involving the Company or any exchange of securities
involving the Common Stock (other than a transaction contemplated by Section
15.1 of this Plan), provided that a primary issuance of shares of Common Stock
shall not be deemed to be a "Corporate Transaction."
2.12 "Designated Beneficiary" shall mean the beneficiary designated
by a Participant, in a manner authorized by the Committee or the Board, to
exercise the rights of such Participant in the event of such Participant's
death. In the absence of an effective designation by a Participant, the
Designated Beneficiary shall be such Participant's estate.
2.13 "Director" shall mean any member of the Board.
2.14 "Disability" shall mean permanent and total inability to engage
in any substantial gainful activity, even with reasonable accommodation, by
reason of any medically determinable physical or mental impairment which has
lasted or can reasonably be expected to last without material interruption for a
period of not less than twelve (12) months, as determined in the sole discretion
of the Committee or the Board.
2.15 "Dividend Equivalent" shall mean an award granted pursuant to
Section 10 of this Plan of a right to receive certain payments with respect to
Shares.
2.16 "Effective Date" shall mean April 29, 1999.
2.17 "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended from time to time (or any successor to such legislation).
2.18 "Fair Market Value" shall mean with respect to the Shares, as of
any date, the value established by the Board. Fair market value shall be
determined without regard to any restriction other than a restriction which, by
its terms, will never lapse.
2.19 "Incentive Stock Option" shall mean any option to purchase
Shares awarded pursuant to this Plan which qualifies as an "Incentive Stock
Option" pursuant to Section 422 of the Code.
2.20 "Non-Employee Director" shall have the meaning set forth in Rule
16b-3 (or any successor to such rule) promulgated under the Exchange Act) who is
also an "outside director," as required pursuant to Section 162(m) of the Code
and such Treasury regulations as may be promulgated thereunder.
2.21 "Non-Qualified Stock Option" shall mean any option to purchase
Shares awarded pursuant to this Plan that does not qualify as an Incentive Stock
Option, including, without limitation, any option to purchase Shares originally
designated as or intended to qualify as an Incentive Stock Option but which does
not (for whatever reason) qualify as an Incentive Stock Option.
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2.22 "Non-Share Method" shall have the meaning set forth in Section
6.6(c) of this Plan.
2.23 "Optionee" shall mean any Participant who has been granted and
holds a Stock Option awarded pursuant to this Plan.
2.24 "Participant" shall mean any Person who has been granted and
holds an Award granted pursuant to this Plan.
2.25 "Performance Award" shall mean any Award granted pursuant to
this Plan of Shares, rights based upon, payable in or otherwise related to
Shares (including Restricted Stock) or cash, as the Committee or Board may
determine, at the end of a specified performance period established by the
Committee or Board and may include, without limitation, Performance Shares or
Performance Units.
2.26 "Performance Shares" shall have the meaning set forth in Section
11.1 of this Plan.
2.27 "Performance Units" shall have the meaning set forth in Section
11.1 of this Plan.
2.28 "Permitted Modification" shall be deemed to be any modification
of an Award which is made in connection with a Corporate Transaction and which
provides, in connection with a Stock Option, that subsequent to the consummation
of the Corporate Transaction (i) the exercise price of such Stock Option will be
proportionately adjusted to reflect the exchange ratio applicable to the
particular Corporate Transaction and/or (ii) the nature and amount of
consideration to be received upon exercise of the Stock Option will be the same
(on a per share basis) as was received by Persons who were holders of shares of
Common Stock immediately prior to the consummation of the Corporate Transaction.
2.29 "Person" shall mean an individual, partnership, limited
liability company, corporation, joint stock company, trust, estate, joint
venture, association or unincorporated organization or any other form of
business organization.
2.30 "Phantom Stock Award" means a right awarded to a participant
that, in accordance with the terms of the granting agreement, entitles the
holder to receive Shares or cash in an amount equal to the Fair Market Value
thereof, as determined by the Committee, without payment of any amounts by the
holder.
2.31 "Plan" shall mean this AmREIT, Inc. 1999 Flexible Incentive
Plan as it may be amended from time to time.
2.32 "Purchase Loan" shall have the meaning set forth in Section 12.1
of this Plan.
2.33 "Reload Option" shall mean a Stock Option as defined in Section
6.6(b) of this Plan.
2.34 "Reorganization" shall mean any stock split, stock dividend,
reverse stock split, combination of Shares or any other similar increase or
decrease in the number of Shares issued and outstanding.
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2.35 "Restricted Stock" shall mean any Shares granted pursuant to
this Plan that are subject to restrictions or substantial risk of forfeiture.
2.36 "Retirement" shall mean termination of employment of an employee
of the Company or any Subsidiary, other than discharge for Cause, after age 65
or on or before age 65 if pursuant to the terms of any retirement plan
maintained by the Company or any Subsidiary in which such employee participates.
2.37 "Securities Act" shall mean the Securities Act of 1933, as
amended from time to time (or any successor to such legislation).
2.38 "Share Retention Method" shall have the meaning set forth in
Section 6.6(c) of this Plan.
2.39 "Shares" shall mean shares of the Common Stock and any shares of
capital stock or other securities hereafter issued or issuable upon, in respect
of or in substitution or exchange for shares of Common Stock.
2.40 "SAR" shall mean a stock appreciation right granted pursuant to
an agreement that entitles the holder to receive, with respect to each Share
encompassed by the exercise of such SAR, an amount determined by the Committee.
In the absence of such determination, the holder shall be entitled to receive,
with respect to such Share encompassed by the exercise of such SAR, the excess
of its Fair Market Value on the date of exercise over the value on the date of
the grant.
2.41 "Stock Option" shall mean any Incentive Stock Option or
Non-Qualified Stock Option.
2.42 "Subsidiary" shall mean a subsidiary corporation of the Company,
as defined in Section 424(f) of the Code.
2.43 "Transactional Consideration" shall have the meaning set forth
in Section 15.2 of this Plan.
SECTION 3. ADMINISTRATION OF THIS PLAN
3.1 Committee/Board. This Plan shall be administered and
interpreted by the Committee and/or the Board.
3.2 Awards.
(a) Subject to the provisions of this Plan and directions from the
Board, the Committee is authorized to:
(i) determine the Persons to whom Awards are to be granted;
(ii) determine the types and combinations of Awards to be
granted; the number of Shares to be covered by an Award; the exercise
price of an Award; the time or times when an Award shall be granted and
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may be exercised; the terms, performance criteria or other conditions,
vesting periods or any restrictions for an Award; any restrictions on
Shares acquired pursuant to the exercise of an Award; and any other
terms and conditions of an Award;
(iii) interpret the provisions of this Plan;
(iv) prescribe, amend and rescind rules and regulations
relating to this Plan;
(v) determine whether, to what extent and under what
circumstances to provide loans from the Company to Participants to
exercise Awards granted pursuant to this Plan, and the terms and
conditions of such loans;
(vi) rely upon employees of the Company for such clerical and
recordkeeping duties as may be necessary in connection with the
administration of this Plan;
(vii) accelerate or defer (with the consent of the
Participant) the vesting of any rights pursuant to an Award; and
(viii) make all other determinations and take all other
actions necessary or advisable for the administration of this Plan.
(b) Without limiting the Board's right to amend this Plan pursuant
to Section 17 of the Plan, the Board may take all actions authorized by Section
3.2(a) of this Plan, including, without limitation, granting such Awards
pursuant to this Plan as the Board may deem necessary or appropriate.
3.3 Procedures.
(a) Proceedings by the Board with respect to this Plan will be
conducted in accordance with the articles of incorporation and bylaws of the
Company.
(b) A majority of the Committee members shall constitute a quorum for
action by the Committee. All determinations of the Committee shall be made by
not less than a majority of its members.
(c) All questions of interpretation and application of this Plan or
pertaining to any question of fact or Award granted hereunder will be decided by
the Committee or the Board, whose decision will be final, conclusive and binding
upon the Company and each other affected party.
SECTION 4. SHARES SUBJECT TO PLAN
4.1 Limitations. The maximum number of Shares that may be issued with
respect to Awards granted pursuant to this Plan at any time shall be an amount
equal to 6.0% of the Company's issued and outstanding shares of Common Stock at
such time. The Shares issued pursuant to this Plan may be authorized but
unissued Shares, or may be issued Shares which have been reacquired by the
Company.
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4.2 Changes. To the extent that any Award granted pursuant to this
Plan shall be forfeited, shall expire or shall be cancelled, in whole or in
part, then the number of Shares covered by the Award so forfeited, expired or
cancelled may again be awarded pursuant to the provisions of this Plan. In the
event that Shares are delivered to the Company in full or partial payment of the
exercise price for the exercise of a Stock Option, the number of Shares
available for future Awards granted pursuant to this Plan shall be reduced only
by the net number of Shares issued upon the exercise of the Stock Option. Awards
that may be satisfied either by the issuance of Shares or by cash or other
consideration shall, until the form of consideration to be paid is finally
determined, be counted against the maximum number of Shares that may be issued
pursuant to this Plan.
SECTION 5. ELIGIBILITY
Eligibility for participation in this Plan shall be confined to those
individuals who are employed by the Company or a Subsidiary and such Consultants
and Non-Employee Directors as may be designated by the Committee or the Board.
In making any determination as to Persons to whom Awards shall be granted, the
type of Award and/or the number of Shares to be covered by the Award, the
Committee or the Board shall consider the position and responsibilities of the
Person, the importance of the Person to the Company, the duties of the Person,
the past, present and potential contributions of the Person to the growth and
success of the Company and such other factors as the Committee or the Board may
deem relevant in connection with accomplishing the purposes of this Plan.
SECTION 6. STOCK OPTIONS
6.1 Grants. The Committee or the Board may grant Stock Options alone
or in addition to other Awards granted pursuant to this Plan to any eligible
Person. Each Person so selected shall be offered a Stock Option to purchase the
number of Shares determined by the Committee or the Board. The Committee or the
Board shall specify whether such Stock Option is an Incentive Stock Option or a
Non-Qualified Stock Option and any other terms or conditions relating to such
Award; provided, however only employees of the Company or a Subsidiary may be
granted Incentive Stock Options. To the extent that any Stock Option designated
as an Incentive Stock Option does not qualify as an Incentive Stock Option
(whether because of its provisions, the failure of the stockholders of the
Company to authorize the issuance of Incentive Stock Options, the time or manner
of its exercise or otherwise), such Stock Option or the portion thereof which
does not qualify shall be deemed to constitute a Non-Qualified Stock Option.
Each Person to be granted a Stock Option shall enter into a written agreement
with the Company, in such form as the Committee or the Board may prescribe,
setting forth the terms and conditions (including, without limitation, the
exercise price and vesting schedule) of the Stock Option. At any time and from
time to time, the Optionee and the Committee or the Board may agree to modify an
option agreement in such respects as they may deem appropriate, including,
without limitation, the conversion of an Incentive Stock Option into a
Non-Qualified Stock Option. The Committee or the Board may require that an
Optionee meet certain conditions before the Stock Option or a portion thereof
may vest or be exercised, as, for example, that the Optionee remain in the
employ of the Company or a Subsidiary for a stated period or periods of time.
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6.2 Incentive Stock Options Limitations.
(a) In no event shall any individual be granted Incentive
Stock Options to the extent that the Shares covered by any Incentive
Stock Options (and any incentive stock options granted pursuant to any
other plans of the Company or its Subsidiaries) that may be exercised
for the first time by such individual in any calendar year have an
aggregate Fair Market Value in excess of $100,000. For this purpose,
the Fair Market Value of the Shares shall be determined as of the
date(s) on which the Incentive Stock Options are granted. It is
intended that the limitation on Incentive Stock Options provided in
this Section 6.2(a) be the maximum limitation on Stock Options which
may be considered Incentive Stock Options pursuant to the Code.
(b) The option exercise price of an Incentive Stock Option
shall not be less than one hundred percent (100%) of the Fair Market
Value of the Shares subject to such Incentive Stock Option on the date
of the grant of such Incentive Stock Option.
(c) Notwithstanding anything herein to the contrary, in no
event shall any employee owning more than ten percent (10%) of the
total combined voting power of the Company or any Subsidiary be granted
an Incentive Stock Option unless the option exercise price of such
Incentive Stock Option shall be at least one hundred ten percent (110%)
of the Fair Market Value of the Shares subject to such Incentive Stock
Option on the date of the grant of such Incentive Stock Option.
(d) In no event shall any individual be granted an Incentive
Stock Option after the expiration of ten (10) years from the date this
Plan is adopted or is approved by the stockholders of the Company (if
stockholder approval is required by Section 422 of the Code).
(e) To the extent stockholder approval of this Plan is
required by Section 422 of the Code, no individual shall be granted an
Incentive Stock Option unless this Plan is approved by the stockholders
of the Company within twelve (12) months before or after the date this
Plan is initially adopted. In the event this Plan is amended to
increase the number of Shares subject to issuance upon the exercise of
Incentive Stock Options or to change the class of employees eligible to
receive Incentive Stock Options, no individual shall be granted an
Incentive Stock Option unless such amendment is approved by the
stockholders of the Company within twelve (12) months before or after
such amendment.
(f) No Incentive Stock Option shall be granted to any employee
owning more than ten percent (10%) of the total combined voting power
of the Company or any Subsidiary unless the term of such Incentive
Stock Option is equal to or less than five (5) years measured from the
date on which such Incentive Stock Option is granted.
6.3 Option Term. The term of a Stock Option shall be for such period
of time from the date of its grant as may be determined by the Committee or the
Board; provided, however, that no Incentive Stock Option shall be exercisable
later than ten (10) years from the date of its grant.
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6.4 Time of Exercise. No Stock Option may be exercised unless it is
exercised prior to the expiration of its stated term and, in connection with
options granted to employees of the Company or its Subsidiaries, at the time of
such exercise, the Optionee is, and has been continuously since the date of
grant of such Stock Option, employed by the Company or a Subsidiary, except
that:
(a) A Stock Option may, to the extent vested as of the date
the Optionee ceases to be an employee of the Company or a Subsidiary,
be exercised during the three month period immediately following the
date the Optionee ceases (for any reason other than death, Disability
or termination for Cause) to be an employee of the Company or a
Subsidiary (or within such other period as may be specified in the
applicable option agreement), provided that, if the Stock Option has
been designated as an Incentive Stock Option and the option agreement
provides for a longer exercise period, the exercise of such Stock
Option after such three-month period shall be treated as the exercise
of a Non-Qualified Stock Option;
(b) If the Optionee dies while in the employ of the Company or
a Subsidiary, or within three months after the Optionee ceases (for any
reason other than termination for Cause) to be such an employee (or
within such other period as may be specified in the applicable option
agreement), a Stock Option may, to the extent vested as of the date of
the Optionee's death, be exercised by the Optionee's Designated
Beneficiary during the one year period immediately following the date
of the Optionee's death (or within such other period as may be
specified in the applicable option agreement); provided that, if the
Stock Option has been designated as an Incentive Stock Option and the
option agreement provides for a longer exercise period, the exercise of
such Stock Option after such one-year period shall be treated as the
exercise of a Non-Qualified Stock Option;
(c) If the Optionee ceases to be an employee of the Company or
a Subsidiary by reason of the Optionee's Disability, a Stock Option, to
the extent vested as of the date the Optionee ceases to be an employee
of the Company or a Subsidiary, may be exercised during the one year
period immediately following the date on which the Disability is
determined to exist (or within such other period as may be specified in
the applicable option agreement); provided that, if the Stock Option
has been designated as an Incentive Stock Option and the option
agreement provides for a longer exercise period, the exercise of such
Stock Option after such one-year period shall be treated as the
exercise of a Non-Qualified Stock Option; and
(d) If the Optionee's employment is terminated for Cause, all
Stock Options held by such Optionee shall simultaneously terminate and
will no longer be exercisable.
Nothing contained in this Section 6.4 will be deemed to extend the term of a
Stock Option or to revive any Stock Option which has previously lapsed or been
cancelled, terminated or surrendered. Stock Options granted under this Plan to
Consultants or Non-Employee Directors will contain such terms and conditions
with respect to the death or disability of a Consultant or Non-Employee Director
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or termination of a Consultant's or Non-Employee Director's relationship with
the Company as the Committee or the Board deems necessary or appropriate. Such
terms and conditions will be set forth in the option agreements evidencing the
grant of such Stock Options.
6.5 Vesting of Stock Options.
(a) Each Stock Option granted pursuant to this Plan may only
be exercised to the extent that the Optionee is vested in such Stock
Option. Each Stock Option shall vest separately in accordance with the
option vesting schedule determined by the Committee or the Board, which
will be incorporated in the option agreement entered into between the
Company and such Optionee. The option vesting schedule may be
accelerated if, in the sole discretion of the Committee or the Board,
the acceleration of the option vesting schedule would be in the best
interests the Company.
(b) In the event of the dissolution or liquidation of the
Company, each Stock Option granted pursuant to this Plan shall
terminate as of a date to be fixed by the Committee or Board; provided,
however, that not less than thirty (30) days' prior written notice of
the date so fixed shall be given to each Optionee. During such period
all Stock Options which have not previously been terminated, exercised
or surrendered will (subject to the provisions of Sections 6.3 and 6.4
of the Plan) fully vest and become exercisable, notwithstanding the
vesting schedule set forth in the option agreement evidencing the grant
of such Stock Option. Upon the date fixed by the Committee or the
Board, any unexercised Stock Options shall terminate and be of no
further effect.
(c) Upon the occurrence of a Change in Control, all Stock
Options and any associated Stock Appreciation Rights shall become fully
vested and immediately exercisable.
6.6 Manner of Exercise of Stock Options.
(a) Except as otherwise provided in this Plan, Stock Options
may be exercised as to Shares only in amounts and at intervals of time
specified in the written option agreement between the Company and the
Optionee. Each exercise of a Stock Option, or any part thereof, shall
be evidenced by a written notice delivered by the Optionee to the
Company. Except as set forth in Section 6.6(c) of this Plan, the
purchase price of the Shares as to which a Stock Option shall be
exercised shall be paid in full at the time of exercise, and may be
paid to the Company either:
(i) in cash (including check, bank draft or money order);
or
(ii) by other consideration deemed acceptable by the
Committee or the Board in its sole discretion.
(b) If an Optionee delivers Shares (including Shares of
Restricted Stock) already owned by the Optionee in full or partial
payment of the exercise price for any Stock Option, or if the Optionee
elects to have the Company retain that number of Shares out of the
Shares being acquired through the exercise of the Stock Option having a
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Fair Market Value equal to the exercise price of the Stock Option being
exercised, the Committee or the Board may, in its sole discretion,
authorize the grant of a new Stock Option (a "Reload Option") for that
number of Shares equal to the number of already owned Shares
surrendered (including Shares of Restricted Stock) or newly acquired
Shares being retained by the Company in payment of the option exercise
price of the underlying Stock Option being exercised. The grant of a
Reload Option will become effective upon the exercise of the underlying
Stock Option. The option exercise price of the Reload Option shall be
the Fair Market Value of a Share on the effective date of the grant of
the Reload Option. Each Reload Option shall be exercisable no later
than the time when the underlying stock option being exercised could be
last exercised. The Committee or the Board may also specify additional
terms, conditions and restrictions for the Reload Option and the Shares
to be acquired upon the exercise thereof.
(c) Either the (i) purchase price of the Shares as to which a
Stock Option shall be exercised or (ii) amount, as determined by the
Committee or the Board, of any federal, state or local tax required to
be withheld by the Company due to the exercise of a Stock Option may,
subject to the authorization of the Committee or the Board, be
satisfied, at the election of the Optionee, either (A) by payment by
the Optionee to the Company of the amount of such withholding
obligation in cash or other consideration acceptable to the Committee
or the Board in its sole discretion (the "Non-Share Method") or (B)
through either the retention by the Company of a number of Shares out
of the Shares being acquired through the exercise of the Stock Option
or the delivery of already owned Shares having a Fair Market Value
equal to the amount of the withholding obligation (the "Share Retention
Method"). If an Optionee elects to use the Share Retention Method in
full or partial satisfaction of any tax liability resulting from the
exercise of a Stock Option, the Committee or the Board may authorize
the grant of a Reload Option for that number of Shares as shall equal
the number of Shares used to satisfy the tax liabilities of the
Optionee arising out of the exercise of such Stock Option. Such Reload
Option will be granted at the price and on the terms set forth in
Section 6.6(b) of this Plan. The cash payment or an amount equal to the
Fair Market Value of the Shares so withheld, as the case may be, shall
be remitted by the Company to the appropriate taxing authorities.
(d) An Optionee shall not have any of the rights of a
stockholder of the Company with respect to the Shares subject to a
Stock Option except to the extent that such Stock Option is exercised
and one or more certificates representing such Shares shall have been
delivered to the Optionee.
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SECTION 7. RESTRICTED STOCK
7.1 Grants. The Committee or the Board may grant Awards of Restricted
Stock to any Consultant, Non-Employee Director or employee of the Company or a
Subsidiary for such minimum consideration, if any, as may be required by
applicable law or such greater consideration as may be determined by the
Committee or the Board, in its sole discretion. The terms and conditions of the
Restricted Stock shall be specified by the grant agreement. The Committee or the
Board, in its sole discretion, may specify any particular rights which the
Participant to whom a grant of Restricted Stock is made shall have in the
Restricted Stock during the restriction period and the restrictions applicable
to the particular Award, the vesting schedule (which may be based on service,
performance or other factors) and rights to acceleration of vesting (including,
without limitation, whether non-vested Shares are forfeited or vested upon
termination of employment). Further, the Committee or the Board may grant
performance-based Awards consisting of Restricted Stock by conditioning the
grant, or vesting or such other factors, such as the release, expiration or
lapse of restrictions upon any such Award (including the acceleration of any
such conditions or terms) of such Restricted Stock upon the attainment of
specified performance goals or such other factors as the Committee or the Board
may determine. The Committee or the Board shall also determine when the
restrictions shall lapse or expire and the conditions, if any, pursuant to which
the Restricted Stock will be forfeited or sold back to the Company. Each Award
of Restricted Stock may have different restrictions and conditions. Unless
otherwise set forth in the grant agreement, Restricted Stock may not be sold,
pledged, encumbered or otherwise disposed of by the recipient until the
restrictions specified in the Award expire. Awards of Restricted Stock are
subject to acceleration of vesting, termination of restrictions and termination
in the same manner as Stock Options pursuant to Sections 6.4 and 6.5 of this
Plan.
7.2 Awards and Certificates. Any Restricted Stock issued hereunder
may be evidenced in such manner as the Committee or the Board, in its sole
discretion, shall deem appropriate including, without limitation, book-entry
registration or issuance of a stock certificate or certificates. In the event
any stock certificate is issued in respect of Shares of Restricted Stock, such
certificate shall bear an appropriate legend with respect to the restrictions
applicable to such Award. The Company may retain, at its option, the physical
custody of any stock certificate representing any awards of Restricted Stock
during the restriction period or require that the certificates evidencing
Restricted Stock be placed in escrow or trust, along with a stock power endorsed
in blank, until all restrictions are removed or expire.
SECTION 8. STOCK APPRECIATION RIGHTS
8.1 Grants. The Committee or the Board may grant SARS to any
employee, Non-Employee Director, consultant or advisor of the Company in
its sole discretion.
8.2 Maximum SAR Period. The maximum period in which an SAR may be
exercised shall be determined by the Committee or the Board on the date of
grant, except that no corresponding SAR that is related to an Incentive Stock
Option shall be exercisable after the expiration of ten years from the date
such related stock Option was granted. In the case of a corresponding SAR that
is related to an Incentive Stock Option granted to a Participant who is or is
deemed to be a ten percent (10%) stockholder, such corresponding SAR shall not
be exercisable after the expiration of five years from the date such related
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Stock Option was granted. The terms of any corresponding SAR that is related
to an Incentive Stock Option may provide that it is exercisable for a period
less than such maximum period.
8.3 Exercise. Subject to the provisions of this Plan and the
applicable granting agreement, an SAR may be exercised in whole at any time or
in part from time to time at such times and in compliance with such requirements
as the Committee or the Board shall determine; provided however, that a
corresponding SAR that is related to an Incentive Stock Option may be exercised
only to the extent that the related Stock Option is exercisable and only when
the Fair Market Value exceeds the option price of the related Stock Option. An
SAR granted under this Plan may be exercised with respect to any number of whole
shares less than the full number for which the SAR could be exercised. A
partial exercise of an SAR shall not affect the right to exercise the SAR from
time to time in accordance with this Plan and the applicable granting
agreement with respect to the remaining Shares subject to the SAR. The
exercise of a corresponding SAR shall result in the termination of the
related Stock Option to the extent of the number of Shares with respect to
which the SAR is exercised.
8.4 Settlement. At the Committee's or the Board's discretion, the
amount payable as a result of the exercise of an SAR may be settled in cash,
Common Stock, or a combination of cash and Common Stock. No fractional shares
will be deliverable upon the exercise of an SAR but a cash payment will be made
in lieu thereof.
SECTION 9. PHANTOM STOCK AWARDS
9.1 Grants. The Committee or the Board shall designate each
individual to whom Phantom Stock Awards are to be granted and shall specify the
number of Shares included in such awards.
9.2 Vesting. The Committee or the Board, on the date of the Award,
may prescribe that a Participant's rights in the Phantom Stock Award shall be
forfeitable or otherwise restricted for a period of time or subject to such
conditions as may be set forth in the granting agreement.
9.3 Performance Objectives. The Committee or the Board may
prescribe that Phantom Stock Awards will become nonforfeitable based on
objectives such as, but not limited to, the Company's, a Subsidiary's or an
operating unit's return on equity, earnings per share, total earnings, earnings
growth, return on capital, return on assets, or Fair Market Value.
9.4 Settlement. A Phantom Stock Award shall be settled, to the extent
that it is nonforfeitable, at the time set forth in the applicable granting
agreement. At the Committee's or the Board's discretion, the Phantom Stock
Award may be settled in cash, Common Stock, or a combination of cash and Common
Stock. Any payment to be made in cash shall be made in a lump sum or in
installments as prescribed by the Committee or the Board in its discretion. Any
payment to be made in Common Stock shall be based on the Fair Market Value of
the Common Stock on the payment date. Cash Dividend Equivalents may be paid
during or after the vesting period with respect to a Phantom Stock Award, as
determined by the Committee or the Board. If a payment of cash is to be made on
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a deferred basis, the Committee or the Board shall establish whether interest
shall be credited, the rate thereof and any other terms and conditions
applicable thereto.
SECTION 10. DIVIDEND EQUIVALENTS
10.1 Grant of Dividend Equivalents. The Committee is authorized
to grant Dividend Equivalents to Participants, which will entitle such
Participant to receive, on a current or deferred basis and subject to such
conditions as may be imposed by the Committee, cash payments from the Company in
the same amounts (or such lesser fraction of such amounts as may be specifically
set forth in the Dividend Equivalent agreement evidencing such award) that the
holder of record of such number of Shares would be entitled to receive as cash
dividends on such Shares (unless otherwise limited in such agreement). Dividend
Equivalent agreements will specify the expiration date of such Dividend
Equivalents, the number of Shares to which they relate, and such other
conditions as the Committee may impose.
10.2 Payments. The right to a cash payment in respect of a Dividend
Equivalent will apply to all dividends the record date for which occurs at any
time during the period commencing on the date the Dividend Equivalent is granted
and ending on the date such Dividend Equivalent expires or is terminated,
whichever occurs first.
10.3 Related Dividend Equivalents. If a Dividend Equivalent is
granted in conjunction with the grant of a Stock Option, the applicable Dividend
Equivalent agreement will provide that the grantee is entitled to receive from
the Company cash payments, on a current or deferred basis, in the same amounts
(or such lesser fraction of such amounts as may be specifically set forth in the
Dividend Equivalent agreement) that the holder of record of a number of Shares
equal to the number of Shares covered by such Stock Option would be entitled to
receive as dividends on such Shares unless otherwise limited in the Dividend
Equivalent agreement. Such right to a cash payment will apply to, and such
Dividend Equivalent will remain outstanding in respect of, all cash dividends
the record date for which occurs at any time during the period commencing on the
date the related Stock Option is granted and ending on the date that such Stock
Option is exercised, expires or terminates, whichever occurs first.
SECTION 11. PERFORMANCE AWARDS
11.1 Grants. A Performance Award may consist of either or both, as the
Committee or the Board may determine, of (a) the right to receive Shares or
Restricted Stock, or any combination thereof as the Committee or the Board may
determine ("Performance Shares"), or (b) the right to receive a fixed dollar
amount payable in Shares, Restricted Stock, cash or any combination thereof,
as the Committee or the Board may determine ("Performance Units"). The Committee
or the Board may grant Performance Awards to any eligible Consultant,
Non-Employee Director or employee of the Company or a Subsidiary, for
such minimum consideration, if any, as may be required by applicable law or
such greater consideration as may be determined by the Committee or the Board,
in its sole discretion. The terms and conditions of Performance Awards shall be
specified at the time of the grant and may include provisions establishing the
performance period, the performance criteria to be achieved during a performance
period, the criteria used to determine vesting (including the acceleration
thereof), whether Performance Awards are forfeited or vest upon termination of
employment during a performance period and the maximum or minimum
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settlement values. Each Performance Award shall have its own terms and
conditions, which shall be determined in the sole discretion of the
Committee or the Board. If the Committee or the Board determines, in its sole
discretion, that the established performance measures or objectives are no
longer suitable because of a change in the Company's business, operations,
corporate structure or for other reasons that the Committee or the Board deems
satisfactory, the Committee or the Board may modify the performance measures or
objectives and/or the performance period. Awards of Performance Shares
and/or Performance Units are subject to acceleration of vesting, termination of
restrictions and termination in the same manner as Stock Options pursuant to
Sections 6.4 and 6.5 of this Plan.
11.2 Terms and Conditions. Performance Awards may be valued by
reference to the Fair Market Value of a Share or according to any other
formula or method deemed appropriate by the Committee or the Board, in its sole
discretion, including, but not limited to, achievement of specific financial,
production, sales, cost or earnings performance objectives that the Committee
or the Board believes to be relevant or the Company's performance or the
performance of the Common Stock measured against the performance of the market,
the Company's industry segment or its direct competitors. Performance Awards
may also be conditioned upon the applicable Participant remaining in the
employ of the Company or one of its Subsidiaries for a specified period.
Performance Awards may be paid in cash, Shares (including Restricted Stock) or
other consideration, or any combination thereof. Performance Awards may be
payable in a single payment or in installments and may be payable at a
specified date or dates or upon attaining the performance objective or
objectives, all at the sole discretion of the Committee or the Board. The
extent to which any applicable performance objective has been achieved shall be
conclusively determined by the Committee or the Board in its sole discretion.
SECTION 12. STOCK PURCHASE PLAN
12.1 Grant of Stock Purchase Rights. The term "Stock Purchase Right"
means the right to purchase shares of Common Stock and to pay for all or a
portion of the purchase price for such shares through a loan made by the
Company to a Participant (a "Purchase Loan") as set forth in this Section 12.
12.2 Terms of Purchase Loans
(a) Each Purchase Loan shall be evidenced by a promissory
note. The term of the Purchase Loan shall be a period not to exceed ten
years, as determined by the Committee, and the proceeds of the Purchase
Loan shall be used exclusively by the Participant for purchase of
shares of Common Stock at a purchase price equal to the Fair Market
Value on the date of the Stock Purchase Right.
(b) A Purchase Loan shall bear interest at whatever rate the
Committee shall determine (not less than the then existing prime rate
as announced by the Company's lender under the Company's credit
facility but not in excess of the maximum rate permissible under
applicable law), payable in a manner and at such times as the Committee
shall determine. Those terms and provisions as the Committee shall
determine shall be incorporated into the promissory note evidencing the
Purchase Loan.
12.3 Security for Loans.
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(a) Purchase Loans granted to Participants shall be secured by
a pledge of the shares of Common Stock acquired pursuant to the Stock
Purchase Right. Such pledge shall be evidenced by a pledge agreement
(the "Pledge Agreement") containing such terms and conditions as the
Committee shall determine. The certificates for the shares of Common
Stock purchased by a Participant pursuant to a Stock Purchase Right
shall be issued in the Participant's name, but shall be held by the
Company as security for repayment of the Participant's Purchase Loan
together with a stock power executed in blank by the Participant (the
execution and delivery of which by the Participant shall be a condition
to the issuance of the Stock Purchase Right). The Participant shall be
entitled to exercise all rights applicable to such shares of Common
Stock, including, but not limited to, the right to vote such shares of
Common Stock and the right to receive dividends and other distributions
made with respect to such shares of Common Stock.
(b) The Company shall release and deliver to each Participant
certificates for the shares of Common Stock purchased by the
Participant under the Stock Purchase Right and then held by the
Company, provided the Participant has paid or otherwise satisfied in
full the balance of the Purchase Loan and any accrued but unpaid
interest thereon. In the event the balance of the Purchase Loan is not
repaid, forgiven or otherwise satisfied within ninety (90) days after
(i) the date repayment of the Purchase Loan is due (whether in
accordance with its term, by reason of acceleration or otherwise), or
(ii) such longer time as the Committee, in its discretion, shall
provide for repayment or satisfaction, the Company shall retain those
shares of Common Stock then held by the Company in accordance with the
Pledge Agreement.
12.4 Restrictions on Transfer. No Stock Purchase Right or shares of
Common Stock purchased through a Stock Purchase Right and pledged to the
Company as collateral security for the Participant's Purchase Loan and accrued
but unpaid interest thereon may be otherwise pledged, sold, assigned or
transferred (other than by will or by the laws of descent and distribution).
SECTION 13. OTHER AWARDS
The Committee or the Board may grant to any eligible Consultant,
Non-Employee Director or employee of the Company or a Subsidiary other forms of
Awards based upon, payable in or otherwise related to, in whole or in part,
Shares, if the Committee or the Board, in its sole discretion, determines that
such other form of Award is consistent with the purposes of this Plan. The terms
and conditions of such other form of Award shall be specified in a written
agreement which sets forth the terms and conditions of such Award, including,
but not limited to, the price, if any, and the vesting schedule, if any, of such
Award. Such Awards may be granted for such minimum consideration, if any, as may
be required by applicable law or for such other greater consideration as may be
determined by the Committee or the Board, in its sole discretion.
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SECTION 14. COMPLIANCE WITH SECURITIES AND OTHER LAWS
As a condition to the issuance or transfer of any Award or any security
issuable in connection with such Award, the Company may require an opinion of
counsel, satisfactory to the Company, to the effect that (a) such issuance
and/or transfer will not be in violation of the Securities Act or any other
applicable securities laws and (b) such issuance and/or transfer will not be in
violation of the rules and regulations of any securities exchange or automated
quotation system on which the Common Stock is listed or admitted to trading.
Further, the Company may refrain from issuing, delivering or transferring any
Award or any security issuable in connection with such Award until the Committee
or the Board has determined that such issuance, delivery or transfer will not
violate such securities laws or rules and regulations and that the recipient has
tendered to the Company any federal, state or local tax owed as a result of such
issuance, delivery or transfer, when the Company has a legal liability to
satisfy such tax. The Company shall not be liable for damages due to delay in
the issuance, delivery or transfer of any Award or any security issuable in
connection with such Award or any agreement, instrument or certificate
evidencing such Award or security for any reason whatsoever, including, but not
limited to, a delay caused by the listing requirements of any securities
exchange or automated quotation system or any registration requirements under
the Securities Act, the Exchange Act, or under any other state or federal law,
rule or regulation. The Company is under no obligation to take any action or
incur any expense to register or qualify the issuance, delivery or transfer of
any Award or any security issuable in connection with such Award under
applicable securities laws or to perfect any exemption from such registration or
qualification or to list any security on any securities exchange or automated
quotation system. Furthermore, the Company will have no liability to any person
for refusing to issue, deliver or transfer any Award or any security issuable in
connection with such Award if such refusal is based upon the foregoing
provisions of this Section 14. As a condition to any issuance, delivery or
transfer of any Award or any security issuable in connection with such Award,
the Company may place legends on any agreement, instrument or certificate
evidencing such Award or security, issue stop transfer orders with respect
thereto and require such agreements or undertakings as the Company may deem
necessary or advisable to assure compliance with applicable laws or regulations,
including, if the Company or its counsel deems it appropriate, representations
from the recipient of such Award or security to the effect that such recipient
is acquiring such Award or security solely for investment and not with a view to
distribution and that no distribution of the Award or the security will be made
unless registered pursuant to applicable federal and state securities laws, or
in the opinion of counsel to the Company, such registration is unnecessary.
SECTION 15. ADJUSTMENTS UPON THE OCCURRENCE OF A REORGANIZATION OR
CORPORATE TRANSACTION
15.1 Reorganization. In the event of a Reorganization, the number of
Shares subject to this Plan and to each outstanding Award, and the exercise
price of each Award which is based upon Shares, shall (to the extent deemed
appropriate by the Committee or the Board) be proportionately adjusted (as
determined by the Committee or the Board in its sole discretion) to account for
any increase or decrease in the number of issued and outstanding Shares of the
Company resulting from such Reorganization.
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15.2 Corporate Transaction with the Company as Survivor. If a
Corporate Transaction is consummated and immediately following the consummation
of such Corporate Transaction the Persons who were holders of shares of Common
Stock immediately prior to the consummation of such Corporate Transaction
do not receive any securities or other property (hereinafter collectively
referred to as "Transactional Consideration") as a result of such Corporate
Transaction and substantially all of such Persons continue to hold the shares
of Common Stock held by them immediately prior to the consummation of such
Corporate Transaction (in substantially the same proportions relative to each
other), the Awards will remain outstanding and will (subject to the provisions
of Sections 6.1, 6.5(c), 7.1 and 9.1 of this Plan) continue in full force and
effect in accordance with its terms (without any modification) following the
consummation of the Corporate Transaction.
15.3 Corporate Transaction with Company Being Acquired. If a Corporate
Transaction is consummated and immediately following the consummation of such
Corporate Transaction the Persons who were holders of shares of Common Stock
immediately prior to the consummation of such Corporate Transaction do receive
Transactional Consideration as a result of such Corporate Transaction or
substantially all of such Persons do not continue to hold the shares of Common
Stock held by them immediately prior to the consummation of such Corporate
Transaction (in substantially the same proportions relative to each other), the
terms and conditions of the Awards will be modified as follows:
(a) If the documentation pursuant to which a Corporate
Transaction will be consummated provides for the assumption (by the
entity issuing Transactional Consideration to the Persons who were the
holders of shares of Common Stock immediately prior to the consummation
of such Corporate Transaction) of the Awards granted pursuant to this
Plan without any modification or amendment (other than Permitted
Modifications and the modifications contemplated by Sections 6.1,
6.5(c), 7.1 and 11.1 of this Plan), such Awards will remain outstanding
and will continue in full force and effect in accordance with its terms
following the consummation of such Corporate Transaction (subject to
such Permitted Modifications and the provisions of Sections 6.1,
6.5(c), 7.1 and 11.1 of the Plan).
(b) If the documentation pursuant to which a Corporate
Transaction will be consummated does not provide for the assumption (by
the entity issuing Transactional Consideration to the Persons who were
the holders of shares of Common Stock immediately prior to the
consummation of such Corporate Transaction) of the Awards granted
pursuant to this Plan without any modification or amendment (other than
Permitted Modifications), all vesting restrictions (performance based
or otherwise) applicable to Awards which will not be so assumed will
accelerate and the holders of such Awards may (subject to the
expiration of the term of such Awards) exercise/receive the benefits of
such Awards without regard to such vesting restrictions during the ten
(10) day period immediately preceding the consummation of such
Corporate Transaction. For purposes of the immediately preceding
sentence, all performance based goals will be deemed to have been
satisfied in full. The Company will provide each Participant holding
Awards which will not be so assumed with reasonable notice of the
termination of such vesting restrictions and the impending termination
of such Awards. Upon the consummation of such a Corporate Transaction,
all unexercised Awards which are not to be so assumed will
automatically terminate and cease to be outstanding.
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Nothing contained in this Section 15 will be deemed to extend the term of an
Award or to revive any Award which has previously lapsed or been cancelled,
terminated or surrendered.
SECTION 16. AMENDMENT OR TERMINATION OF THIS PLAN
16.1 Amendment of This Plan. Notwithstanding anything contained in
this Plan to the contrary, all provisions of this Plan (including, without
limitation, the maximum number of Shares that may be issued with respect to
Awards to be granted pursuant to this Plan) may at any time or from time to time
be modified or amended by the Board; provided, however, that no Award at any
time outstanding pursuant to this Plan may be modified, impaired or cancelled
adversely to the holder of the Award without the consent of such holder.
16.2 Termination of This Plan. The Board may suspend or terminate this
Plan at any time, and such suspension or termination may be retroactive or
prospective. Termination of this Plan shall not impair or affect any Award
previously granted hereunder and the rights of the holder of the Award shall
remain in effect until the Award has been exercised in its entirety or has
expired or otherwise has been terminated by the terms of such Award.
SECTION 17. AMENDMENTS AND ADJUSTMENTS TO AWARDS
The Committee or the Board may amend, modify or terminate any
outstanding Award with the Participant's consent at any time prior to payment or
exercise in any manner not inconsistent with the terms of this Plan, including,
without limitation, (a) to change the date or dates as of which and/or the terms
and conditions pursuant to which (i) a Stock Option becomes exercisable or (ii)
a Performance Award is deemed earned, (b) to amend the terms of any outstanding
Award to provide an exercise price per share which is higher or lower than the
then current exercise price per share of such outstanding Award or (c) to cancel
an Award and grant a new Award in substitution therefor under such different
terms and conditions as the Committee or the Board determines in its sole
discretion to be appropriate, including, but not limited to, having an exercise
price per share which may be higher or lower than the exercise price per share
of the cancelled Award. The Committee or the Board may also make adjustments in
the terms and conditions of, and the criteria included in agreements evidencing
Awards in recognition of unusual or nonrecurring events (including, without
limitation, the events described in Section 15 of this Plan) affecting the
Company, or the financial statements of the Company or any Subsidiary, or of
changes in applicable laws, regulations or accounting principles, whenever the
Committee or the Board determines that such adjustments are appropriate to
prevent reduction or enlargement of the benefits or potential benefits intended
to be made available pursuant to this Plan. Any provision of this Plan or any
agreement regarding an Award to the contrary notwithstanding, the Committee or
the Board may cause any Award granted to be cancelled in consideration of a cash
payment or alternative Award made to the holder of such cancelled Award equal in
value to the Fair Market Value of such cancelled Award. The determinations of
value pursuant to this Section 17 shall be made by the Committee or the Board in
its sole discretion.
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SECTION 18. GENERAL PROVISIONS
18.1 No Limit on Other Compensation Arrangements. Nothing contained in
this Plan shall prevent the Company from adopting or continuing in effect other
compensation arrangements, and such arrangements may be either generally
applicable or applicable only in specific cases.
18.2 No Right to Employment or Continuation of Relationship. Nothing
in this Plan or in any Award, nor the grant of any Award, shall confer upon or
be construed as giving any Participant any right to remain in the employ of the
Company or a Subsidiary or to continue as a Consultant or Non-Employee Director.
Further, the Company or a Subsidiary may at any time dismiss a Participant from
employment or terminate the relationship of any Consultant or Non-Employee
Director with the Company or any Subsidiary, free from any liability or any
claim pursuant to this Plan, unless otherwise expressly provided in this Plan or
in any agreement evidencing an Award made under this Plan. No Consultant,
Non-Employee Director or employee of the Company or any Subsidiary shall have
any claim to be granted any Award, and there is no obligation for uniformity of
treatment of any Consultant, Non-Employee Director or employee of the Company or
any Subsidiary or of any Participants.
18.3 GOVERNING LAW. THE VALIDITY, CONSTRUCTION AND EFFECT OF THIS PLAN
AND ANY RULES AND REGULATIONS RELATING TO THIS PLAN SHALL BE DETERMINED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT GIVING EFFECT TO THE
CONFLICT OF LAWS PRINCIPLES THEREOF.
18.4 Severability. If any provision of this Plan or any Award is or
becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction
or as to any individual or Award, or would disqualify this Plan or any Award
under any law deemed applicable by the Committee or the Board, such provision
shall be construed or deemed amended to conform to applicable law, or if it
cannot be construed or deemed amended without, in the sole determination of the
Committee or the Board, materially altering the intent of this Plan or the
Award, such provision shall be stricken as to such jurisdiction, individual or
Award and the remainder of this Plan and any such Award shall remain in full
force and effect.
18.5 No Fractional Shares. No fractional Shares shall be issued or
delivered pursuant to this Plan or any Award, and the Committee or the Board
shall determine, in its sole discretion, whether cash, other securities or other
property shall be paid or transferred in lieu of any fractional Shares or
whether such fractional Shares or any rights thereto shall be cancelled,
terminated or otherwise eliminated.
18.6 Headings. Headings are given to the Sections and Subsections of
this Plan solely as a convenience to facilitate reference. Such headings shall
not be deemed in any way material or relevant to the construction or
interpretation of this Plan or any provision thereof.
18.7 Effective Date. The provisions of this Plan that relate to the
grant of Incentive Stock Options shall be effective as of the date of the
approval of this Plan by the stockholders of the Company.
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18.8 Transferability of Awards. Awards shall not be transferable
otherwise than by will or the laws of descent and distribution without the
written consent of the Committee or the Board (which may be granted or withheld
at the sole discretion of the Committee or the Board). Awards may be exercised,
during the lifetime of the holder, only by the holder. Any attempted assignment,
transfer, pledge, hypothecation or other disposition of an Award contrary to the
provisions hereof, or the levy of any execution, attachment or similar process
upon an Award shall be null and void and without effect. Phantom Stock Awards
may be transferred to a Participant's children, grandchildren, spouse, one or
more trusts for the benefit of family members or a partnership in which such
family members are the only partners; provided; however, that the participant
may not receive any consideration for the transfer.
18.9 Rights of Participants. Except as expressly provided in this
Plan, any Person to whom an Award is granted shall have no rights by reason of
any subdivision or consolidation of stock of any class or the payment of any
stock dividend or any other increase or decrease in the number of shares of
stock of any class or by reason of any dissolution, liquidation, reorganization,
merger or consolidation or spinoff of assets or stock of another corporation,
and any issue by the Company of shares of stock of any class or securities
convertible into shares of stock of any class shall not affect, and no
adjustment by reason thereof shall be made with respect to, the number or
exercise price of Shares subject to an Award.
18.10 No Limitation Upon the Rights of the Company. The grant of an
Award pursuant to this Plan shall not affect in any way the right or power of
the Company to make adjustments, reclassifications, or changes of its capital or
business structure; to merge, convert or consolidate; to dissolve or liquidate;
or sell or transfer all or any part of its business or assets.
18.11 Date of Grant of an Award. Except as noted in this Section 18.11,
the granting of an Award shall take place only upon the execution and delivery
by the Company and the Participant of a written agreement and neither any other
action taken by the Committee or the Board nor anything contained in this Plan
or in any resolution adopted or to be adopted by the Committee, the Board or the
stockholders of the Company shall constitute the granting of an Award pursuant
to this Plan. Solely, for purposes of determining the Fair Market Value of the
Shares subject to an Award, such Award will be deemed to have been granted as of
the date specified by the Committee or the Board notwithstanding any delay which
may elapse in executing and delivering the applicable agreement.
18.12 Tax Withholding. Whenever the Company proposes or is required to
distribute Common stock under the Plan, the Company may require the recipient to
remit to the Company an amount sufficient to satisfy any federal, state and
local tax withholding requirements prior to the delivery of any certificate for
such shares or, in the discretion of the Committee, the Company may withhold
from the Common Stock to be delivered shares sufficient to satisfy all or a
portion of such tax withholding requirements. Whenever under the Plan payments
are to be made in cash, such payments may be net of an amount sufficient to
satisfy any federal, state and local tax withholding requirements.
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AmREIT, Inc.
Annual Meeting of Stockholders
June 23, 1999
This Proxy is Solicited on Behalf of the Board of Directors
The stockholder of AmREIT, Inc., a Maryland corporation, whose name and
signature appear on the reverse side of this card, having received the notice of
the annual meeting of stockholders and the related proxy statement for AmREIT's
annual meeting of stockholders to be held at 8 Greenway Plaza, Suite 824,
Houston, Texas, on Wednesday, June 23, 1999, at 10:00 a.m., Houston time, hereby
appoints H. Kerr Taylor and Larry Mangum, or each of them, the proxies of the
stockholder, each with full power of substitution, to vote at the annual
meeting, and at any adjournments of the annual meeting, all common stock, par
value $0.01 per share, of stock that the stockholder is entitled to vote, in the
manner shown on the reverse side of this card.
This proxy is solicited by the Board of Directors and the shares of common stock
represented hereby will be voted in accordance with the stockholder's directions
on the reverse side of this card. If no direction is given, then the shares
represented by this proxy will be voted FOR proposals 1, 2 and 3 and in the
proxies' discretion on any other matters that may properly come before the
annual meeting or any adjournments thereof, subject to limitations set forth in
applicable regulations under the Securities Exchange Act of 1934.
Please mark, sign, date, and return this proxy card promptly using the enclosed
envelope
See reverse side
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AMREIT, Inc.
Please mark your vote in the following manner using dark ink only: [X]. This
proxy, when properly executed and delivered, will be voted as specified below.
If no specification is made, this proxy will be voted for proposals 1, 2 and 3.
The proxies cannot vote your shares unless you sign and return this card.
The Board of Directors recommends a vote FOR proposals 1, 2 and 3.
1. Election of Directors.
FOR all nominees listed below Withhold Authority to vote for all
except as marked to the contrary). [ ] nominees listed below. [ ]
H. Kerr Taylor, Robert S. Cartwright, Jr. and George A. McCanse, Jr.
INSTRUCTION: To withhold authority to vote for any individual nominee, list the
individual's name below.
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2. Approval of the AmREIT, Inc. 1999 Flexible Incentive Plan.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. Ratification of Deloitte & Touche LLP as our independent auditors.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
4. In their discretion, the proxies are authorized to vote upon all other
matters which may properly come before the annual meeting or any
adjournments of the annual meeting.
The undersigned hereby revokes any proxy previously given with respect to our
common stock and hereby ratifies and confirms all that the proxies, their
substitutes or any of them may lawfully do by virtue hereof.
Signature ____________________________ Date ________________
Signature ____________________________ Date ________________
Note: Please sign exactly as name(s) appear(s) on this card. When shares are
held jointly, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. When
executed by a corporation or partnership, please sign in full corporate or
partnership name by a duly authorized officer or partner, giving title. Please
sign, date and mail this proxy promptly whether or not you expect to attend the
meeting. You may nevertheless vote in person if you do attend.
See reverse side
