<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 29, 1999
Registration No. 333-__________
================================================================================
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
THE MILLS CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 52-1802283
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
</TABLE>
1300 WILSON BOULEVARD
SUITE 400
ARLINGTON, VIRGINIA 22209
(Address of Principal Executive Offices, including zip code)
------------------------
THE MILLS CORPORATION
1999 STOCK OPTION PLAN
(Full title of the Plan)
------------------------
LAURENCE C. SIEGEL
CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER
1300 WILSON BOULEVARD
SUITE 400
ARLINGTON, VIRGINIA 22209
(703) 526-5000
(Name, address and telephone number, including area code, of agent for service)
With a copy to:
J. WARREN GORRELL, JR., ESQ.
ALAN L. DYE, ESQ.
HOGAN & HARTSON L.L.P.
555 THIRTEENTH STREET, N.W.
WASHINGTON, D.C. 20004-1109
(202) 637-5600
------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==================================================================================================================
AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF SECURITIES TO BE OFFERING PRICE AGGREGATE OFFERING REGISTRATION
TO BE REGISTERED REGISTERED PER SHARE (1) PRICE (1) FEE (1)
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common stock, par value $.01 per share 2,500,000 $21.6875 $54,218,750 $15,072.82
- ------------------------------------------------------------------------------------------------------------------
==================================================================================================================
</TABLE>
(1) Estimated pursuant to Rule 457(c) and (h) under the Securities Act of 1933
solely for the purposes of calculating the amount of the registration fee,
based on the average of the high and low prices per share of common stock
of The Mills Corporation, par value $.01 per share, as reported on the New
York Stock Exchange on June 23, 1999.
================================================================================
- --------------------------------------------------------------------------------
<PAGE> 2
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The documents containing the information required to be provided in this
Part I will be separately sent or given to employees participating in The Mills
Corporation 1999 Stock Option Plan (the "Plan"), as specified by Rule 428(b)(1)
under the Securities Act of 1933, as amended (the "Securities Act"). In
accordance with the instructions to Part I of Form S-8, such documents will not
be filed with the Securities and Exchange Commission (the "Commission") either
as part of this Registration Statement or as prospectuses or prospectus
supplements pursuant to Rule 424 under the Securities Act. These documents and
the documents incorporated by reference pursuant to Item 3 of Part II of this
Registration Statement, taken together, constitute the prospectus as required by
Section 10(a) of the Securities Act.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The Mills Corporation (the "Registrant") hereby incorporates by
reference into this Registration Statement the following documents:
(a) The Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1998;
(b) The Registrant's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1999;
(c) The Registrant's Current Report on Form 8-K dated
March 31, 1999 (filed on June 18, 1999); and
(d) The description of the Registrant's common stock contained
in the Registrant's Registration Statement on Form 8-A
filed with the Commission and which became effective on
June 14, 1994 (No. 1-12994).
In addition, all documents filed by the Registrant subsequent to
the date hereof pursuant to Sections 13(a), 13(c), 14 and 15(d) of the
Securities Exchange Act of 1934 (the "Exchange Act"), and prior to the filing of
a post-effective amendment which indicates that all securities offered have been
sold or which deregisters all securities remaining unsold, shall be deemed to be
incorporated by reference in this Registration Statement and to be part hereof
from the date of filing of such documents or reports. Any statement contained in
a document incorporated or deemed to be incorporated by reference herein shall
be deemed to be modified or superseded for purposes of this Registration
Statement to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
A description of the Registrant's common stock, par value $ .01
per share, is incorporated by reference under Item 3.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
<PAGE> 3
(a) Article VII of the Registrant's Amended and Restated
Certificate of Incorporation, as amended, entitled
"Indemnification," and Section VI of the Registrant's
Amended and Restated Bylaws, entitled "Indemnification,"
are set forth in Exhibits 3.1 and 3.3, respectively, to
this Registration Statement and incorporated herein by
reference.
(b) Section 145 of the General Corporation Law of the State of
Delaware, as amended, entitled "Indemnification of
Officers, Directors, Employees and Agents; Insurance," is
set forth as Exhibit 99.1 to this Registration Statement
and incorporated herein by reference.
(c) The Registrant has in effect a policy of liability
insurance covering its directors and officers.
(d) The Registrant has entered into indemnification agreements
with certain of its directors and officers, the form of
which is set forth as Exhibit 99.2 to this Registration
Statement and incorporated herein by reference.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
<TABLE>
<CAPTION>
Exhibit
Number Description
------ -----------
<S> <C>
3.1* Amended and Restated Certificate of Incorporation of the
Registrant
3.2* First Amendment to the Amended and Restated Certificate of
Incorporation of the Registrant
3.3** Amended and Restated Bylaws of the Registrant
5.1 Opinion of Hogan & Hartson L.L.P. regarding the legality of the
shares being registered
23.1 Consent of Hogan & Hartson L.L.P. (included as part of Exhibit
5.1)
23.2 Consent of Ernst & Young LLP
24.1 Power of Attorney (included as part of the signature page of
this Registration Statement)
99.1* Section 145 of the General Corporation Law of the State of
Delaware, as amended
99.2** Form of Indemnification Agreement between the Registrant and
its directors and officers
99.3 Form of The Mills Corporation 1999 Stock Option Plan
</TABLE>
- -------
* Incorporated by reference to the Registrant's Registration Statement on
Form S-8 (No. 333-35853).
<PAGE> 4
** Incorporated by reference to the Registrant's Registration Statement on
Form S-11 (No. 33-71524), which was declared effective by the Securities and
Exchange Commission on April 14, 1994.
ITEM 9. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this
Registration Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of
this Registration Statement (or the most
recent post-effective amendment thereof)
which, individually or in the aggregate,
represent a fundamental change in the
information set forth in this Registration
Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities
offered (if the total dollar value of
securities offered would not exceed that
which was registered) and any deviation from
the low or high end of the estimated maximum
offering range may be reflected in the form
of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no
more than a 20 percent change in the maximum
aggregate offering price set forth in the
"Calculation of Registration Fee" table in
the effective registration statement; and
(iii) To include any material information with
respect to the plan of distribution not
previously disclosed in the Registration
Statement or any material change to such
information in the Registration Statement;
provided, however, that paragraphs (a)(1)(i) and
(a)(1)(ii) do not apply if the registration
statement is on Form S-3, Form S-8 or Form F-3, and
the information required to be included in a
post-effective amendment by those paragraphs is
contained in the periodic reports filed by the
Registrant pursuant to Section 13 or Section 15(d)
of the Exchange Act that are incorporated by
reference in the Registration Statement.
(2) That, for the purpose of determining any liability
under the Securities Act, each such post-effective
amendment shall be deemed to be a new registration
statement relating to the securities offered
therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide
offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being
registered which remain unsold at the termination of
the offering.
<PAGE> 5
(b) The undersigned Registrant hereby further undertakes that,
for the purposes of determining any liability under the
Securities Act, each filing of the Registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section
15(d) of the Exchange Act) that is incorporated by
reference in the Registration Statement shall be deemed to
be a new registration statement relating to the securities
offered herein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering
thereof.
(c) Insofar as indemnification for liabilities arising under
the Securities Act may be permitted to directors, officers
and controlling persons of the Registrant pursuant to
existing provisions or arrangements whereby the Registrant
may indemnify a director, officer or controlling person of
the Registrant against liabilities arising under the
Securities Act, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for
indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a
director, officer or controlling person of the Registrant
in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or
controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of
its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against
public policy as expressed in the Securities Act and will
be governed by the final adjudication of such issue.
<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Arlington, Virginia, on this 25th day of June, 1999.
THE MILLS CORPORATION
By: /s/ Laurence C. Siegel
----------------------------
Laurence C. Siegel
Chairman of the Board
and Chief Executive Officer
POWER OF ATTORNEY
We, the undersigned directors and officers of The Mills Corporation, do
hereby constitute and appoint Laurence C. Siegel and Peter B. McMillan, and each
and either of them, our true and lawful attorneys-in-fact and agents, to do any
and all acts and things in our names and our behalf in our capacities as
directors and officers and to execute any and all instruments for us and in our
name in the capacities indicated below, which said attorneys and agents, or
either of them, may deem necessary or advisable to enable said Registrant to
comply with the Securities Act and any rules, regulations and requirements of
the Securities and Exchange Commission, in connection with this Registration
Statement, or any registration statement for this offering that is to be
effective upon filing pursuant to Rule 462(b) under the Securities Act,
including specifically, but without limitation, any and all amendments
(including post-effective amendments) hereto; and we hereby ratify and confirm
all that said attorneys and agents, or either of them, shall do or cause to be
done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated as of the 25th day of June, 1999.
<TABLE>
<CAPTION>
NAME TITLE
---- -----
<S> <C>
/s/ Laurence C. Siegel Chairman of the Board, Chief Executive
- ---------------------------- Officer and Director (principal executive
Laurence C. Siegel officer)
/s/ Peter B. McMillan President, Chief Operating Officer and
- ---------------------------- Director
Peter B. McMillan
/s/ James F. Dausch Executive Vice-President - Development
- ---------------------------- and Director
James F. Dausch
</TABLE>
<PAGE> 7
<TABLE>
<S> <C>
/s/ Kenneth R. Parent Executive Vice President - Finance and
- ---------------------------- Chief Financial Officer (principal
Kenneth R. Parent financial officer and principal accounting
officer)
/s/ Dietrich von Boetticher Vice Chairman and Director
- ----------------------------
Dietrich von Boetticher
/s/ John M. Ingram Vice Chairman and Director
- ----------------------------
John M. Ingram
/s/ Charles R. Black, Jr. Director
- ----------------------------
Charles R. Black, Jr.
/s/ James C. Braithwaite Director
- ----------------------------
James C. Braithwaite
/s/ Joseph B. Gildenhorn Director
- ----------------------------
Joseph B. Gildenhorn
/s/ Harry H. Nick Director
- ----------------------------
Harry H. Nick
/s/ Franz von Perfall Director
- ----------------------------
Franz von Perfall
/s/ Robert P. Pincus Director
- ----------------------------
Robert P. Pincus
/s/ Cristina L. Rose Director
- ----------------------------
Cristina L. Rose
</TABLE>
<PAGE> 8
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
------ -----------
<S> <C>
3.1* Amended and Restated Certificate of Incorporation of the Registrant
3.2* First Amendment to the Amended and Restated Certificate of
Incorporation of the Registrant
3.3** Amended and Restated Bylaws of the Registrant
5.1 Opinion of Hogan & Hartson L.L.P. regarding the legality of the
shares being registered
23.1 Consent of Hogan & Hartson L.L.P. (included as part of Exhibit 5.1)
23.2 Consent of Ernst & Young LLP
24.1 Power of Attorney (included as part of the signature page of this
Registration Statement)
99.1* Section 145 of the General Corporation Law of the State of Delaware,
as amended
99.2** Form of Indemnification Agreement between the Registrant and its
directors and officers
99.3 Form of The Mills Corporation 1999 Stock Option Plan
</TABLE>
- -------
* Incorporated by reference to the Registrant's Registration Statement on
Form S-8 (No. 333-35853).
** Incorporated by reference to the Registrant's Registration Statement on
Form S-11 (No. 33-71524), which was declared effective by the Securities and
Exchange Commission on April 14, 1994.
<PAGE> 1
HOGAN & HARTSON, L.L.P
COLUMBIA SQUARE
555 THIRTEENTH STREET, N.W.
WASHINGTON, D.C. 20004-1109
(202) 637-5600
(202) 637-5910
June 29, 1999
Board of Directors
The Mills Corporation
1300 Wilson Boulevard
Suite 400
Arlington, Virginia 22209
Ladies and Gentlemen:
We are acting as counsel to The Mills Corporation, a Delaware
corporation (the "Company"), in connection with its registration statement on
Form S-8 (the "Registration Statement"), filed with the Securities and Exchange
Commission, relating to up to 2,500,000 shares of common stock, par value $.01
per share (the "Shares") issuable under the Company's 1999 Stock Option Plan
(the "Plan"). This opinion letter is furnished to at your request to enable you
to fulfill the requirements of Item 601(b)(5) of Regulation S-K, 17 C.F.R.
Section 229.601(b)(5), in connection with the Registration Statement.
For purposes of this opinion, we have examined copies of the
following documents:
1. An executed copy of the Registration Statement.
2. The Amended and Restated Certificate of Incorporation of
the Company, as amended (the "Charter"), as certified by
the Secretary of State of the State of Delaware on June
24, 1999, and as certified by the Secretary of the Company
on the date hereof as being complete, accurate and in
effect.
3. The Amended and Restated Bylaws of the Company, as
certified by the Assistant Secretary of the Company on the
date hereof as being complete, accurate and in effect.
<PAGE> 2
4. Resolutions of the Board of Directors of the Company
adopted on February 23, 1999, as certified by the
Secretary of the Company on the date hereof as being
complete, accurate and in effect, approving and adopting
the Plan.
5. A copy of the Plan, as certified on the date hereof by the
Secretary of the Company as being complete, accurate and
in effect.
In our examination of the aforesaid documents, we have assumed the
genuineness of all signatures, the legal capacity of natural persons, the
accuracy and completeness of all documents submitted to us, the authenticity of
all original documents and the conformity to authentic original documents of all
documents submitted to us as copies (including telecopies). We have also assumed
that the Shares will not be issued in violation of the ownership limit contained
in the Charter. This opinion letter is given, and all statements herein are
made, in the context of the foregoing.
This opinion letter is based as to matters of law solely on the
General Corporation Law of the State of Delaware, as amended. We express no
opinion herein as to any other laws, statutes, ordinances, rules or regulations.
Based upon, subject to, and limited by the foregoing, we are of the
opinion that the Shares, when issued and delivered in the manner and on the
terms described in the Plan, will be validly issued, fully paid and
nonassessable.
This opinion letter has been prepared for your use in connection with
the Registration Statement and speaks as of the date hereof. We assume no
obligation to advise you of any changes in the foregoing subsequent to the
delivery of this opinion letter.
We hereby consent to the filing of this opinion letter as Exhibit 5.1
to the Registration Statement. In giving this consent, we do not thereby admit
that we are an "expert" within the meaning of the Securities Act of 1933, as
amended.
Very truly yours,
/s/ Hogan & Hartson L.L.P.
HOGAN & HARTSON L.L.P.
<PAGE> 1
EXHIBIT 23.2
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement (Form
S-8 No. 333-_____) pertaining to The Mills Corporation 1999 Stock Option Plan of
our report dated February 18, 1999, with respect to the consolidated financial
statements of The Mills Corporation incorporated by reference in its Annual
Report (Form 10-K) for the year ended December 31, 1998 and of our report dated
March 25, 1999, with respect to the related financial statement schedule
included therein, filed with the Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
Washington, D.C.
June 21, 1999
<PAGE> 1
EXHIBIT 99.3
THE MILLS CORPORATION
1999 STOCK OPTION PLAN
EFFECTIVE FEBRUARY 23, 1999
<PAGE> 2
THE MILLS CORPORATION
1999 STOCK OPTION PLAN
1. DEFINITIONS.
In this Plan, except where the context otherwise indicates, the following
definitions apply:
1.1. "EFFECTIVE DATE" means February 23, 1999.
1.2. "AGREEMENT" means a written agreement implementing a grant of an
Option or an award of Restricted Stock.
1.3. "BOARD" means the Board of Directors of the Company.
1.4. "CODE" means the Internal Revenue Code of 1986, as amended.
1.5. "COMMITTEE" means a committee of, and designated from time to time
by resolution of, the Board, which shall consist of no fewer than two members of
the Board, none of whom shall be an officer or other salaried employee of the
Company or any affiliate of the Company. Unless otherwise determined by the
Board, the Executive Compensation Committee of the Board shall be the Committee.
1.6. "COMMON STOCK" means the common stock, par value $.01 per share, of
the Company.
1.7. "COMPANY" means The Mills Corporation.
1.8. "CONVERSION MULTIPLE" shall have the meaning set forth in Article II
of the Limited Partnership Agreement.
1.9. "DATE OF EXERCISE" means the date on which the Company receives
notice of the exercise of an Option in accordance with the terms of SECTION 9
hereof.
1.10. "DATE OF GRANT" means the date on which an Option is granted or
Restricted Stock is awarded by the Committee or such other date as determined by
the Committee.
1.11. "ELIGIBLE EMPLOYEE" means an Employee who holds a position no more
senior than that of vice president and who is not a Reporting Person.
1.12. "EMPLOYEE" means any REIT Employee or a Limited Partnership
Employee.
1.13. "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
1.14. "FAIR MARKET VALUE" of a Share means:
If on the applicable date the Common Stock is listed for trading
on a national or regional securities exchange or authorized for quotation on the
National Association of Securities Dealers, Inc.'s Nasdaq National Market System
("NASDAQ/NMS"), the closing price of the Common Stock on such exchange or
NASDAQ/NMS, as the case may be, on the applicable date, or if no sales of Common
Stock shall have occurred on such exchange or NASDAQ/NMS, as the case may be, on
the applicable date, the closing price of the Common Stock on the next preceding
date on which there were such sales;
-1-
<PAGE> 3
If on the applicable date the Common Stock is not listed for
trading on a national or regional securities exchange or authorized for
quotation on NASDAQ/NMS, the mean between the closing bid price and the closing
ask price of the Common Stock as reported by the National Association of
Securities Dealers Automated Quotation System ("NASDAQ") with respect to the
applicable date or, if closing bid and ask prices for the Common Stock shall not
have been so reported with respect to the applicable date, on the next preceding
date with respect to which such bid and ask prices were so reported; or
If on the applicable date the Common Stock is not listed for
trading on a national or regional securities exchange or is not authorized for
quotation on NASDAQ/NMS or NASDAQ, the Fair Market Value of a Share as
determined by the Committee pursuant to a reasonable method adopted in good
faith for such purpose.
Such Fair Market Value shall be subject to adjustment as provided
in SECTION 23 hereof.
1.15. "GRANTEE" means an Employee or Service Provider to whom Restricted
Stock has been awarded pursuant to SUBSECTION 7.4 hereof.
1.16. "LIMITED PARTNERSHIP" means The Mills Limited Partnership, a
Delaware limited partnership.
1.17. "LIMITED PARTNERSHIP AGREEMENT" means the Limited Partnership's
Amended and Restated Limited Partnership Agreement dated April 21, 1994.
1.18. "LIMITED PARTNERSHIP EMPLOYEE" means any person determined by the
Committee to be an employee of the Limited Partnership or any Limited
Partnership Subsidiary.
1.19. "LIMITED PARTNERSHIP SUBSIDIARY" means an entity at least (fifty)
50% of the total equity interests of which is owned by the Limited Partnership
either directly or through one or more Limited Partnership Subsidiaries.
1.20. "NONSTATUTORY STOCK OPTION" means an Option granted under the Plan
that is not intended to qualify as an incentive stock option under Section 422
of the Code.
1.21. "OPTION" means an option to purchase Shares granted under the Plan
in accordance with the terms of SECTION 7 hereof.
1.22. "OPTIONEE" means an Employee or Service Provider to whom an Option
has been granted.
1.23. "OPTION PERIOD" means the period during which an Option may be
exercised.
1.24. "OPTION PRICE" mean the price per Share at which an Option may be
exercised. The Option Price shall be determined by the Committee.
1.25. "PERMANENT DISABILITY" means a mental or physical condition which,
in the opinion of the Committee, renders an Optionee or Grantee unable or
incompetent to carry out the job responsibilities which such Optionee or Grantee
held or tasks to which such Optionee or Grantee was assigned at the time the
disability was incurred and which is expected to be permanent or for an
indefinite period.
1.26. "PLAN" means The Mills Corporation 1999 Stock Option Plan, as the
same may be amended, modified or supplemented from time to time.
1.27. "RELOAD OPTION" means a new Option granted to an Optionee pursuant
to and in accordance with SUBSECTIONS 4.2(d)(v) and 9.2 hereof, upon the
surrender of Shares to pay the Option Price of a previously granted Option.
1.28. "REIT EMPLOYEE" means any person determined by the Committee to be
an employee of the Company or any REIT Subsidiary.
-2-
<PAGE> 4
1.29. "REIT SUBSIDIARY" means a corporation at least fifty (50%) of the
total combined voting power of all classes of stock which is owned by the
Company either directly or through one or more REIT Subsidiaries.
1.30. "REPORTING PERSON" means a person who is required to file reports
under Section 16(a) of the Exchange Act.]
1.31. "RESTRICTED STOCK" means Shares awarded pursuant to the provisions
of SUBSECTION 7.4 hereof.
1.32. "SERVICE PROVIDER" means a consultant or adviser to the Company, a
manager of the Company's properties or affairs, or other similar service
provider or affiliate of the Company, and employees of any of the foregoing, as
such persons may be designated from time to time by the Committee.
1.33. "SHARE" means a share of Common Stock.
1.34. "UNIT" means a "Partnership Unit," as that term is defined in the
Limited Partnership Agreement.
2. PURPOSE.
The purpose of the Plan is to advance the interests of the Company, the
Limited Partnership and their affiliates by encouraging and facilitating the
acquisition of a larger personal financial interest in the Company by those
Eligible Employees and Service Providers upon whose judgment and interest the
Company, the Limited Partnership and their affiliates are largely dependent for
the successful conduct of their operations, and making positions in the Company,
the Limited Partnership and their affiliates more attractive. It is anticipated
that the acquisition of such financial interest will stimulate the efforts of
such Eligible Employees and Service Providers on behalf of the Company, the
Limited Partnership and their affiliates and strengthen their desire to continue
in the service of the Company, the Limited Partnership or their affiliates. It
is also anticipated that the opportunity to obtain such a financial interest
will prove attractive to promising workers and will assist the Company, the
Limited Partnership and their affiliates in attracting such persons.
3. SCOPE OF THE PLAN.
3.1. SHARES AVAILABLE. Subject to adjustment as provided in SECTION 23
hereof, the number of Shares available for issuance under the Plan shall be
2,500,000 Shares, provided that no more than 500,000 Shares may be issued
pursuant to awards of Restricted Stock. Shares issued or to be issued under the
Plan shall be authorized but unissued Shares or treasury Shares.
3.2. SHARES SUBJECT TO TERMINATED OPTIONS OR FORFEITED RESTRICTED STOCK
AWARDS. If and to the extent an Option shall expire or terminate for any reason
without having been exercised in full, the Shares subject thereto which have not
become outstanding shall (unless the Plan shall have terminated) become
available under the Plan for other awards. Any Shares of Restricted Stock
forfeited by the Grantee will (unless the Plan shall have terminated) become
available under the Plan for other grants or awards.
3.3. AUTHORITY TO PURCHASE SHARES. The Board, such committee of the
Board that the Board shall specifically authorize or direct on its behalf, or
the Committee shall have the authority to cause the Company to purchase from
time to time, in such amounts and at such prices as the Board, in its
discretion, shall deem advisable or appropriate, Shares to be held as treasury
Shares and reserved and used solely for or in connection with grants or awards
under the Plan, at the discretion of the Committee.
-3-
<PAGE> 5
4. ADMINISTRATION.
4.1. THE COMMITTEE. The Plan shall be administered by the Committee.
Members of the Committee shall not participate in the Plan.
4.2. AUTHORITY OF THE COMMITTEE. The Committee shall have full and
final authority, in its discretion, but subject to the express provisions of the
Plan, as follows:
(a) to grant Options and awards of Restricted Stock;
(b) subject to SECTION 7, to determine (i) the Option Price of
the Shares subject to each Option, (ii) the Eligible Employees and
Service Providers to whom, and the time or times at which, Options
shall be granted or Restricted Stock shall be awarded, and (iii)
the number of Shares subject to an Option and the number of Shares
of Restricted Stock to be granted to each Optionee and Grantee
thereof, respectively;
(c) to determine all other terms and provisions of each
Agreement (which may, but need not be, identical), and with the
consent of the Optionee or Grantee, as the case may be, to modify
any Agreement (including, without limitation, the vesting of
Restricted Stock or Options subject to such Agreement);
(d) without limiting the foregoing, to provide, in its
discretion, in any Agreement:
(i) for an agreement by the Optionee or Grantee, as the
case may be, to render services to the Company, a REIT
Subsidiary, the Limited Partnership or a Limited
Partnership Subsidiary upon such terms and conditions as
may be specified in the Agreement, provided that the
Committee shall not have the power to commit the Company, a
REIT Subsidiary, the Limited Partnership or a Limited
Partnership Subsidiary to employ or otherwise retain any
Optionee or Grantee;
(ii) for restrictions on the transfer, sale or other
disposition of Shares issued to the Optionee upon the
exercise of an Option, and for other restrictions permitted
by SUBSECTION 7.4 hereof with respect to Restricted Stock
awarded to a Grantee;
(iii) for an agreement by the Optionee or Grantee, as the
case may be, to resell to the Company, under specified
conditions, Shares issued upon the exercise of an Option or
awarded as Restricted Stock;
(iv) for the payment of the Option Price upon the
exercise of an Option otherwise than in cash, including
without limitation by delivery of Shares (other than
Restricted Stock) valued at Fair Market Value on the Date
of Exercise of the Option in accordance with the terms of
SUBSECTION 9.1 hereof, or a combination of cash and Shares,
or for the payment in part of the Option Price with a
promissory note in accordance with the terms of SUBSECTION
9.3 hereof;
(v) for the automatic issuance of a Reload Option
covering a number of Shares equal to the number of any
Shares used to pay the Option Price in accordance with the
terms of SUBSECTION 9.2 hereof;
(vi) for the right of the Optionee to surrender to the
Company an Option (or a portion thereof) that has become
exercisable and to receive upon such surrender, without any
payment to the Company, the Limited Partnership, a REIT
Subsidiary or a Limited Partnership Subsidiary (other than
required tax withholding amounts) that number of Shares
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(equal to the highest whole number of Shares) having an
aggregate Fair Market Value as of the date of surrender
equal to that number of Shares subject to the Option (or
portion thereof) being surrendered multiplied by an amount
equal to the excess of (I) the Fair Market Value of a Share
on the date of surrender, over (II) the Option Price, plus
an amount of cash equal to the Fair Market Value of any
fractional Share to which the Optionee might be entitled.
Other than for purposes of SUBSECTION 6.2(b) hereof, any
such surrender shall be treated as the exercise of the
Option (or portion thereof).
(e) to construe and interpret the Plan and Agreements;
(f) to prescribe, amend and rescind rules and regulations
relating to the Plan, including, without limitation and subject to
SECTION 14 hereof, the rules with respect to the exercisability of
Options and the vesting of Restricted Stock;
(g) to require, whether or not provided for in the pertinent
Agreement, of any person exercising an Option or acquiring
Restricted Stock, at the time of such exercise or acquisition, the
making of any representations or agreements which the Committee
may deem necessary or advisable in order to comply with the
securities laws of the United States or of any state;
(h) to prescribe the method by which grants of Options and
awards of Restricted Stock shall be evidenced;
(i) to cancel, with the consent of the Optionee thereof,
outstanding Options and to grant new Options in substitution
therefor;
(j) to require withholding from or payment by an Optionee or
Grantee, as the case may be, of any federal, state, or other
governmental taxes;
(k) to prohibit the election described in SECTION 11 hereof;
(l) to make all other determinations deemed necessary or
advisable for the administration of the Plan; and
(m) to impose such additional conditions, restrictions and
limitations upon the exercise, vesting or retention of Options or
Restricted Stock as the Committee may, prior to or concurrently
with the grant or award thereof, deem appropriate, including, but
not limited to, limiting the percentage of Options which may from
time to time be exercised by an Optionee.
4.3. FINALITY OF COMMITTEE DETERMINATIONS: LIABILITY OF MEMBERS. The
determination of the Committee on all matters relating to the Plan or any
Agreement shall be conclusive and final. No member of the Committee shall be
liable for any action or determination made in good faith with respect to the
Plan, any Agreement or any grant thereunder.
4.4. PERIODIC COMMITTEE REVIEW AND MEETINGS WITH MANAGEMENT. The
Committee shall from time to time review the implementation and results of the
Plan to determine the extent to which the Plan's purpose is being accomplished.
In addition, the Committee shall periodically meet with senior management of the
Company and the Limited Partnership to review their suggestions regarding grants
and awards under the Plan, including the individuals who are proposed to receive
grants or awards and the amount and terms of such grants or awards; provided,
that all such grants and awards shall be determined solely by the Committee in
its discretion.
4.5. INDEMNIFICATION OF THE COMMITTEE. In addition to such other rights
of indemnification as they may have as directors of the Company or as members of
the Committee, the members of the Committee shall be
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indemnified by the Limited Partnership or, if related to a grant or award to a
REIT Employee, by the Company, against the reasonable expenses, including
attorneys' fees, actually and reasonably incurred in connection with the defense
of any action, suit or proceeding, or in connection with any appeal therein, to
which they or any of them may be a party by reason of any action taken or
failure to act under or in connection with the Plan or any Option or Restricted
Stock granted or awarded hereunder, and against all amounts reasonably paid by
them in a settlement thereof or paid by them in satisfaction of a judgment in
any such action, suit or proceeding, if such members acted in good faith and in
a manner which they believed to be in, and not opposed to, the best interests of
the Limited Partnership or, with respect to a REIT Employee, the Company.
5. ELIGIBILITY.
Options and Restricted Stock may be granted or awarded, as the case may
be granted to Eligible Employees and Service Providers; provided, however, that
Reporting Persons are not eligible to participate in the Plan. Subject to the
provisions of SECTION 3 and 27 hereof, an Eligible Employee or Service Provider
who has been granted an Option or awarded Restricted Stock may be granted
additional Options or awarded additional Restricted Stock. In selecting the
individuals to whom Options or Restricted Stock shall be granted or awarded, as
the case may be, as well as in determining the number of Shares subject to each
Option or Restricted Stock to be granted or awarded, the Committee shall take
into consideration such factors as it deems relevant in connection with
promoting the purposes of the Plan.
6. GENERAL OBLIGATIONS OF THE COMPANY AND THE LIMITED PARTNERSHIP.
6.1. ISSUANCE OF SHARES AND FRACTIONAL SHARE PAYMENTS. All Shares
issued under the Plan pursuant to the exercise of an Option or an award of
Restricted Stock shall be issued by the Company. All cash paid under the Plan
with respect to a fractional Share upon the surrender of an Option in accordance
with SUBSECTIONS 4.2(d)(iv) and 9.2 hereof shall be paid by the Company.
6.2. OPTIONS EXERCISED.
(a) ISSUANCE OF UNITS AND CAPITAL ACCOUNT ADJUSTMENTS. Upon the
exercise of an Option, the Limited Partnership shall issue to the
Company a number of Units equal to (i) the number of Shares issued
to the Optionee, divided by (ii) the Conversion Multiple. The
Company's Limited Partnership capital account in the Limited
Partnership shall be credited with an amount equal to the Fair
Market Value of the number of Shares issued upon the exercise of
an Option.
(b) CASH CONTRIBUTIONS BY THE COMPANY. Upon the exercise of an
Option (not including any deemed exercise upon the surrender of an
Option in accordance with SUBSECTION 4.2(d)(VI) hereof), the
Company shall contribute to the Limited Partnership an amount of
cash equal to the aggregate Option Price paid by the Optionee for
the Shares issued upon exercise, regardless of whether the
Optionee pays the Option Price in cash, Shares or a combination
thereof; provided, that to the extent the Option Price is paid
with a promissory note of the Optionee in accordance with the
provisions of SUBSECTION 9.3 hereof, the amount of cash
contributed to the Limited Partnership pursuant to this SUBSECTION
6.2(b) shall be contributed to the Limited Partnership only upon
receipt by the Company of any installment and interest due under
such promissory note and shall be limited to the amount of such
installment and interest and provided that, if the Optionee pays
with Shares, the Company shall have the right to cancel the Shares
received in which event Units held by the Company in an amount
equal to the Shares canceled multiplied by the Conversion Multiple
shall be canceled by the Limited Partnership. The Company's
contribution of cash to the Limited Partnership pursuant to the
preceding sentence shall not be treated as a contribution to
capital and the Company's capital account in the Limited
Partnership shall not be credited with the amount of cash so
contributed.
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<PAGE> 8
(c) FRACTIONAL SHARE CASH REIMBURSEMENTS BY THE LIMITED
PARTNERSHIP AND TREATMENT THEREOF. The Limited Partnership shall
reimburse the Company for any cash paid with respect to a
fractional Share upon the surrender of an Option in accordance
with SUBSECTION 4.2(d)(vi) hereof. Such reimbursement shall be
treated as the reimbursement of an expense incurred by the Company
on behalf of the Limited Partnership, shall not be treated as a
distribution by the Limited Partnership to the Company and shall
not reduce the Company's Limited Partnership capital account.
6.3. RESTRICTED STOCK AWARDS. Upon the award of shares of Restricted
Stock, the Limited Partnership shall issue to the Company a number of restricted
Units, equal to (i) the number of shares of Restricted Stock awarded to the
Grantee, divided by (ii) the Conversion Multiple, that are subject to the same
restrictions as those applicable to the shares of Restricted Stock. Upon the
lapse of restrictions applicable to the shares of Restricted Stock, the
restrictions applicable to the corresponding restricted Units referred to in
this SUBSECTION 6.3 also shall lapse. The Company's capital account in the
Limited Partnership shall be adjusted, as appropriate, to reflect the issuance
of shares of Restricted Stock, and such capital account also shall be adjusted,
as appropriate, in the event that the shares of Restricted Stock are forfeited
or the restrictions thereon lapse.
7. CONDITIONS TO GRANTS AND AWARDS.
7.1. GENERAL. Subject to the provisions of SECTION 5 hereof, the
Committee is hereby authorized to grant Nonstatutory Stock Options to Eligible
Employees and Service Providers. Subject to the provisions of SECTIONS 3 and 27
hereof, an individual who has been granted an Option or Restricted Stock may, if
such individual is otherwise eligible, be granted additional Options or awarded
additional Restricted Stock if the Committee shall so determine. Subject to the
other provisions of this Plan, the Committee may grant Options or award
Restricted Stock with terms and conditions which differ among the Optionees or
Grantees thereof, respectively.
7.2. OPTION PERIOD AND EXERCISABILITY. Subject to the terms of the
Plan, the Option Period shall be determined by the Committee and specifically
set forth in the Agreement; provided, however, that the Option Period shall not
be for a period of more than ten years from the Date of Grant, and shall be
subject to earlier termination as herein provided. The terms and conditions with
respect to exercisability shall be determined by the Committee. To the extent
not set forth in the Plan, the terms and conditions of each grant shall be set
forth in an Agreement.
7.3. GRANTS OF OPTIONS AND OPTION PRICE. Before the grant of any
Option, the Committee shall determine the Option Price of the Shares subject to
such Option; provided that, the Option Price shall not be less that 100% of the
Fair Market Value of the Common Stock on the Date of Grant.
7.4. AWARDS OF RESTRICTED STOCK. The Committee is hereby authorized to
award shares of Restricted Stock to Eligible Employees and Service Providers in
accordance with the following provisions:
(a) GENERAL NATURE OF RESTRICTIONS. Restricted Stock awards
under the Plan shall consist of Shares that are restricted against
transfer, subject to forfeiture and subject to such other terms
and conditions intended to further the purposes of the Plan as may
be determined by the Committee in accordance with the terms of the
Plan.
(b) TERMS OF AWARD AGREEMENTS. Restricted Stock awards shall be
evidenced by Agreements containing provisions setting forth the
terms and conditions governing such awards. Each such Agreement
shall contain the following:
(i) prohibitions against the sale, assignment, transfer,
exchange, pledge, hypothecation or other encumbrance of (A)
the Shares awarded as Restricted Stock under the Plan, (B)
the right to vote the Shares, or (C) the right to receive
dividends thereon in
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<PAGE> 9
each such case during the restriction period applicable to
the Shares; provided, however, that the Grantee shall,
unless otherwise provided in the applicable Agreement, have
all the other rights of a stockholder including, but not
limited to, the right to receive dividends and the right to
vote the Shares;
(ii) at least one term, condition or restriction
constituting a "substantial risk of forfeiture" as defined
in Section 83(c) of the Code;
(iii) such other terms, conditions and restrictions as the
Committee in its discretion may specify (including, without
limitation, provisions creating additional substantial
risks of forfeiture);
(iv) a requirement that each certificate representing
shares of Restricted Stock shall be deposited with the
Company, or its designee, and shall bear the following
legend:
"This certificate and the shares of stock
represented hereby are subject to the terms and
conditions (including the risks of forfeiture and
restrictions against transfer) contained in The
Mills Corporation 1999 Stock Option Plan, as the
same may be amended from time to time (the "Plan")
and a written agreement (the "Agreement") entered
into between the registered owner and The Mills
Corporation. Release from such terms and conditions
shall be made only in accordance with the provisions
of the Plan and the Agreement, a copy of each of
which is on file in the office of the Secretary of
The Mills Corporation."
(v) the applicable period or periods of any terms,
conditions or restrictions applicable to the Restricted
Stock; provided, however, that the Committee in its
discretion may accelerate the expiration of the applicable
restriction period with respect to any part or all of the
Shares awarded to a Grantee; and
(vi) the terms and conditions upon which any restrictions
upon Shares of Restricted Stock awarded under the Plan
shall lapse and new certificates free of the foregoing
legend shall be issued to the Grantee or his or her legal
representative.
(c) FORFEITURE UPON TERMINATION OF EMPLOYMENT OR OTHER
RELATIONSHIP. Notwithstanding the provisions of SUBSECTION 14.1
hereof, the Committee may include in an Agreement relating to an
award of Restricted Stock a requirement that in the event of a
Grantee's termination of employment or other service relationship
for any reason prior to the lapse of restrictions, all Shares of
Restricted Stock shall be forfeited by the Grantee to the Company
without payment of any consideration by the Company, and neither
the Grantee nor any successors, heirs, assigns or personal
representatives of the Grantee shall thereafter have any further
rights or interest in the Shares or certificates.
(d) RESTRICTED STOCK - DIVIDEND EQUIVALENTS. The Committee may
establish terms and conditions under which the Grantee of a
Restricted Stock award shall be entitled to receive a credit
equivalent to any dividend payable with respect to the number of
Shares which, as of the record date for such dividend, had been
stated in the award but not satisfied by delivery to him of
Shares. Any such dividend equivalents shall be paid to the Grantee
at such time or times during the period when the Shares are being
held by the Company pursuant to the terms of the Restricted Stock
award, or at the time the Shares to which the dividend equivalents
apply are delivered to the Grantee, as the Committee shall
determine. Any arrangement for payment of dividend equivalents
shall be terminated if, under the terms and conditions established
by the Committee, the right to receive Shares of Restricted Stock
being held pursuant to the terms of the Restricted Stock award
shall lapse.
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<PAGE> 10
8. NON-TRANSFERABILITY.
Unless otherwise provided in the applicable Agreement, each Option
granted and Restricted Stock awarded hereunder shall not be assignable or
transferable other than by will or the laws of descent and distribution and
Options may be exercised, during the Optionee's lifetime, only by the Optionee.
9. EXERCISE OF OPTIONS.
9.1. MANNER OF EXERCISE AND PAYMENT. Subject to the provisions hereof
and the provisions of the Agreement under which it was granted, each Option
shall be exercised by delivery to the Company's treasurer of written notice of
intent to purchase a specific number of Shares subject to the Option. The Option
Price of any Shares as to which an Option is exercised shall be paid in full at
the time of the exercise, unless and to the extent that the Committee agreed in
the Agreement in which the Option was granted to accept a promissory note as
provided in SUBSECTION 9.2 below. Payment may, at the election of the Optionee,
be made in (i) cash, (ii) to the extent provided in the Agreement, Shares valued
at its Fair Market Value on the date of exercise, (iii) to the extent provided
in the Agreement, surrender of an exercisable Option covering Shares with an
aggregate Fair Market Value as the date of exercise in excess of the Option
Price of such Option equal to the Option Price of the Options sought to be
exercised, (iv) through the delivery of irrevocable instructions to a broker to
deliver promptly to the Company an amount in cash equal to the Option Price, or
(v) any combination of the foregoing. In certain circumstances, payment may also
be made in accordance with SUBSECTION 9.3 below.
9.2. RELOAD OPTION. Pursuant to SUBSECTION 4.2(d)(v) hereof, the
Committee may, in its sole discretion, award Reload Options in an amount equal
to the number of Shares delivered in payment of the Option Price in connection
with the exercise of an Option. To the extent required by applicable law, the
number of Reload Options available to each Optionee shall be set forth in each
award. The Option Price for any Reload Option shall be the Fair Market Value of
a Share on the date that Shares are surrendered in payment of the Option Price.
Other terms of the Reload Option shall be the same as the terms contained in the
Agreement relating to the Option being exercised.
9.3. DEFERRED PAYMENT OF OPTION PRICE. To the extent permitted by
applicable law, the Committee may agree in the Agreement in which an Option is
granted to accept as partial payment for the Shares a promissory note of the
Optionee evidencing his or her obligation to make further cash payment therefor;
provided, however, that in no event may the Committee accept a promissory note
for an amount in excess of the difference between the aggregate Option Price and
the par value of the Shares. Promissory notes made pursuant to this SUBSECTION
9.3 shall be payable as determined by the Committee, shall be secured by a
pledge of the Shares in respect of the purchase of which the promissory note is
being delivered and shall bear interest at a rate fixed by the Committee (which
rate shall not be lower than a reasonable commercial rate).
10. ACCELERATED EXERCISE.
Notwithstanding any other provisions of the Plan, all unexercised Options
and non-vested Restricted Stock awards may be exercised or disposed of
commencing on the date of a Change of Control, as defined in SECTION 15 hereof;
provided, however, that the Company may cancel all such Options and Restricted
Stock under the Plan as of the date of a Change of Control by giving notice to
each Optionee or Grantee thereof, as the case may be, of its intention to do so
and by permitting the purchase during the thirty-day period next preceding such
effective date of all of the Shares subject to such outstanding Options or by
payment for outstanding Restricted Stock during such thirty-day period.
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<PAGE> 11
11. NOTIFICATION UNDER SECTION 83(B).
Provided that the Committee has not prohibited such Optionee or Grantee,
as the case may be, from making the following election, if an Optionee or
Grantee shall, in connection with the exercise of any Option or the award of
Restricted Stock, respectively, make the election permitted under Section 83(b)
of the Code (i.e., an election to include in such Optionee's or Grantee's gross
income in the year of transfer the amounts specified in Section 83(b) of the
Code), such Optionee or Grantee shall notify the Committee of such election
within ten days of filing notice of the election with the Internal Revenue
Service, in addition to any filing and notification required pursuant to
regulations issued under the authority of Section 83(b) of the Code.
12. WITHHOLDING TAXES.
The Company shall be entitled to require as a condition of delivery of
Shares hereunder that the Optionee or Grantee, as the case may be, remit an
amount sufficient to satisfy all federal, state, and other governmental
withholding tax requirements related thereto.
13. ELECTIVE SHARE WITHHOLDING.
13.1. SHARE WITHHOLDING. An Optionee or Grantee may, subject to
Committee approval, elect the withholding ("Share Withholding") by the Company
of a portion of the Shares otherwise deliverable to such Optionee or Grantee
upon his or her exercise of an Option or vesting of a Restricted Stock award
having a Fair Market Value equal to either (a) the amount necessary to satisfy
such Optionee's or Grantee's required federal, state, or other governmental
withholding tax liability with respect thereto, or (b) a greater amount, not to
exceed the estimated total amount of such Optionee's or Grantee's tax liability
with respect thereto.
13.2. SHARE WITHHOLDING IS SUBJECT TO COMMITTEE APPROVAL. Share
Withholding is subject to Committee approval and each Share Withholding election
by an Optionee or Grantee shall also be subject to the following restrictions:
(a) the election must be made prior to the date on which the
amount of tax to be withheld is determined; and
(b) the election shall be irrevocable.
14. TERMINATION OF EMPLOYMENT OR OTHER SERVICE RELATIONSHIP.
14.1. FORFEITURE. Subject to the provisions of SUBSECTION 7.4(c) hereof
with respect to Restricted Stock, and unless otherwise provided in an applicable
Agreement, an unexercised Option or non-vested Restricted Stock award shall
terminate and/or be forfeited upon the date on which the Optionee or Grantee
thereof, as the case may be, is no longer an Employee or Service Provider
("Termination of Employment or Other Service Relationship"), except that:
(a) DEATH. Unless otherwise provided in the Agreement, if the
Optionee's or Grantee's Termination of Employment or Other Service
Relationship is by reason of his or her death, unexercised Options
to the extent exercisable on the date of the Optionee's death, may
be exercised, in whole or in part, at any time within one (1) year
after the date of the death by the Optionee's personal
representative or by the person whom the Options are transferred
by will or the applicable laws of descent and distribution and
non-vested Restricted Stock awards shall become vested on the date
of the Grantee's death.
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(b) RETIREMENT. Unless otherwise provided in the Agreement, if
the Optionee's or Grantee's employment is terminated as a result
of retirement under the provisions of a retirement plan of the
Company or any of its affiliates applicable to the Optionee or
Grantee (or on or after age 60 if no retirement plan of the
Company or any of its affiliates are applicable to the Optionee or
Grantee), any unexercised Option to the extent exercisable at the
date of such Termination of Employment, may be exercised, in whole
or in part, at any time within 90 days after the date of such
Termination of Employment, and non-vested Restricted Stock awards
shall become vested; provided that, if the Optionee dies after
such Termination of Employment and before the expiration of such
90-day period, unexercised Options held by such deceased Optionee
may be exercised by his or her personal representative or by the
person to whom the Option is transferred by will or the applicable
laws of descent and distribution within one year after the
Optionee's Termination of Employment.
(c) PERMANENT DISABILITY. Unless otherwise provided in the
Agreement, if the Optionee's or Grantee' employment or other
service relationship is terminated as a result of his or her
Permanent Disability, any unexercised Option, to the extent
exercisable at the date of such Termination of Employment or Other
Service Relationship, may be exercised, in whole or in part, at
any time within one year after the date of such Termination of
Employment or Other Service Relationship, and non-vested
Restricted Stock awards shall become vested; provided that, if an
Optionee dies after such Termination of Employment or Other
Service Relationship and before the expiration of such one year
period, the unexercised Options may be exercised by the deceased
Optionee's personal representative or by the person to whom the
unexercised Options are transferred by will or the applicable laws
of descent and distribution within one year after the Optionee's
Termination of Employment or Other Service Relationship, or, if
later, within 180 days after the Optionee's death.
(d) OTHER REASONS FOR TERMINATION. Unless otherwise provided in
the Agreement, if the Optionee or Grantee has a Termination of
Employment or Other Service Relationship for any reason other than
by death, retirement or Permanent Disability, any unexercised
Option to the extent exercisable on the date of such Termination
of Employment or Other Service Relationship, may be exercised, in
whole or in part, at any time within 90 days from the date of such
Termination of Employment or Other Service Relationship.
14.2. OPTION TERM. Any of the provisions herein to the contrary
notwithstanding, no Option shall be exercisable beyond the term specified in the
related Agreement thereof.
15. CHANGE OF CONTROL.
15.1. DEFINITION OF "CHANGE OF CONTROL." The term "Change of Control"
means any of the following events and, if more than one of the following events
shall occur, each such event shall constitute a separate Change of Control.
(a) ACQUISITION OF STOCK. The acquisition, by a person or group
of persons acting in concert, of a beneficial ownership interest in the
Company, resulting in the total beneficial ownership of such persons or
group of persons equaling or exceeding twenty (20%) of the outstanding
common stock of the Company. The Change of Control shall be deemed to
occur on the date the beneficial ownership of the acquiring person or
group of persons first equals or exceeds twenty (20%) of the outstanding
common stock of the Company.
(b) CHANGE IN BOARD COMPOSITION. A change, within any period of
twenty-four months or less, in the composition of the Board such that at
the end of such period a majority of the directors who are then serving
were not serving at the beginning of such period, unless at the end of
such period a majority of the directors in office were nominated upon the
recommendation of a majority of the Board at the beginning of such
period. The Change of Control shall be deemed to occur on the date of the
last director necessary to result in a Change of Control takes office or
resigns from office, as applicable.
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(c) MERGER, CONSOLIDATION OR OTHER REORGANIZATION. The merger,
consolidation or other reorganization having substantially the same
effect, or the sale of all or substantially all the consolidated assets
of the Company. Such Change of Control shall be deemed to occur on the
date which the transaction is approved by the Company's stockholders.
15.2. EFFECT OF OPTIONEE'S OR GRANTEE'S PARTICIPATION IN CHANGE OF
CONTROL. Notwithstanding the foregoing provisions of this SECTION 15, a Change
of Control shall be deemed not to have occurred with respect to any Optionee or
Grantee, if such Optionee or Grantee is, by written agreement, a participant on
his or her own behalf in a transaction in which the persons (or their
affiliates) with whom such Optionee or Grantee has the written agreement acquire
the Company and, pursuant to the written agreement the Optionee or Grantee has
an equity interest in the resulting entity.
15.3. NOTICE OF CHANGE OF CONTROL. The Company shall notify all
Optionees and Grantees of the occurrence of a Change of Control promptly after
its occurrence, but any failure of the Company to notify shall not deprive the
Optionees or Grantees of any rights accruing hereunder by virtue of a Change of
Control.
16. SUBSTITUTED OPTIONS.
If the Committee cancels, with the consent of an Optionee, any Option
granted under the Plan, and a new Option is substituted therefor, then the
Committee may, in its discretion, provide that the Date of Grant of the canceled
Option shall be the date used to determine the earliest date or dates for
exercising the new substituted Option under SUBSECTION 7.2 hereof so that the
Optionee may exercise or dispose of the substituted Option at the same time as
if the Optionee had held the substituted Option since the Date of Grant of the
canceled Option.
17. SECURITIES LAW MATTERS.
17.1. INVESTMENT INTENT REPRESENTATION; RESTRICTIVE LEGEND. Where an
investment intent representation or restrictive legend is deemed necessary to
comply with the Securities Act of 1933, as amended, the Committee may require a
written representation to that effect by the Optionee or Grantee, or may require
that such legend be affixed to certificates for Shares at the time the Option is
exercised.
17.2. COMPANY'S RIGHT TO POSTPONE EXERCISE. If based upon the opinion of
the counsel to the Company, the Committee determines that the exercise of any
Options would violate any applicable provisions of (i) state or federal
securities law, or (ii) the listing requirements of any securities exchange
registered under the Exchange Act on which are listed any of the Company's
equity securities, then the Committee may postpone any such exercise; provided,
however, that the Company shall use its best efforts to cause such exercise to
comply with all such provisions at the earliest practicable date; and provided
further, that the Committee's authority under this SUBSECTION 17.2 shall expire
from and after the date of any Change of Control.
18. FUNDING.
Benefits payable under the Plan to any person shall be paid directly by
the Company. The Company shall not be required to fund, or otherwise segregate
assets are to be used for payment of, benefits under the Plan.
19. NO EMPLOYMENT RIGHTS.
Neither the establishment of the Plan, nor the granting of any rights
under the Plan shall be construed to (a) give any Optionee or Grantee the right
to remain employed by the Company, the Limited Partnership or any of their
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<PAGE> 14
affiliates or to any benefits not specifically provided by the Plan, or (b) in
any manner modify the right of the Company, the Limited Partnership or any of
their affiliates to modify, amend, or terminate any of its employee benefit
plans.
20. STOCKHOLDER RIGHTS.
An Optionee or Grantee shall not, by reason of any right granted
hereunder, have any right as a stockholder of the Company with respect to the
Shares which may be deliverable upon exercise of such Option or vesting of
Restricted Stock until such Shares have been delivered to him or her.
21. NATURE OF PAYMENTS.
Any and all grants or deliveries of Shares hereunder shall constitute
special incentive payments to the Optionee or Grantee and shall not be taken
into account in computing the amount of salary or compensation of the Optionee
or Grantee for the purposes of determining any pension, retirement, death or
other benefits under (a) any pension, retirement, profit-sharing, bonus, life
insurance or other employee benefit plan of the Company, the Limited Partnership
or any of their affiliates, or (b) any agreement between the Company, the
Limited Partnership or any of their affiliates, on the one hand, and the
Optionee or Grantee, on the other hand, except as such plan or agreement shall
otherwise expressly provide.
22. NON-UNIFORM DETERMINATIONS.
Neither the Committee's nor the Board's determinations under the Plan
need be uniform and may be made by the Committee or the Board selectively among
persons who receive, or are eligible to receive grants and awards under the Plan
(whether or not such persons are similarly situated). Without limiting the
generality of the foregoing, the Committee shall entitled, among other things,
to make non-uniform and selective determinations, to enter into non-uniform and
selective Option agreements and Restricted Stock agreements as to (a) the
persons to receive awards under the Plan, (b) the terms and provisions of awards
under the Plan, and (c) the treatment, under SECTION 14 hereof, of leaves of
absence.
23. ADJUSTMENTS.
Any Option or Restricted Stock Agreement entered into hereunder may
contain such provisions as the Committee shall determine for equitable
adjustment of (a) the number of Shares covered thereby, (b) the Option Price, or
(c) otherwise, to reflect a stock dividend, stock split, reverse stock split,
Share combination, recapitalization, merger, consolidation, asset spin-off,
reorganization, or similar event, of or by the Company. In any such event,
regardless of whether specified in an Agreement, the aggregate number of Shares
available under the Plan shall be appropriately adjusted to equitably reflect
such event.
24. AMENDMENT OF THE PLAN.
The Board may make such modifications of the Plan as it shall deem
advisable; provided, however, no modifications shall be made which would impair
the rights of any Optionee or Grantee theretofore granted or awarded without his
or her consent.
25. TERMINATION OF THE PLAN.
The Plan shall terminate on the tenth anniversary of the Effective Date
or at such earlier time as the Board may determine. Any termination, whether in
whole or in part, shall not affect any rights then outstanding under the Plan.
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26. CONTROLLING LAW
The Plan shall be governed, construed and administered in accordance with
the laws of the State of Delaware, except its laws with respect to choice of
law.
27. MAINTAINING REIT STATUS.
Subject to SECTION 3 hereof, there is no limit on the number of Shares
that may be subject to awards or grants to any one Eligible Employee or Service
Provider under the Plan, except that the Committee shall not take any action or
make any grants or awards hereunder that could cause the Company to fail to
qualify as a real estate investment trust for federal income tax purposes.
28. ACTION BY THE COMPANY.
Any action required by the Company under the Plan shall be by resolution
of the Board.
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