<PAGE> 1
As filed with the Securities and Exchange Commission on June 3, 1999
REGISTRATION STATEMENT NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------------------
SUMMIT PROPERTIES INC.
(Exact Name of Registrant as Specified in Its Charter)
MARYLAND 56-1857807
(State of Incorporation) (I.R.S. Employer Identification No.)
212 SOUTH TRYON STREET, SUITE 500
CHARLOTTE, NORTH CAROLINA 28281
(704) 334-9905
(Address of Principal Executive Offices)
SUMMIT PROPERTIES INC.
1994 STOCK OPTION AND INCENTIVE PLAN,
AS AMENDED AND RESTATED
(Full Title of the Plan)
------------------------------------
WILLIAM F. PAULSEN
CHIEF EXECUTIVE OFFICER
SUMMIT PROPERTIES INC.
212 SOUTH TRYON STREET, SUITE 500
CHARLOTTE, NORTH CAROLINA 28281
(704) 334-9905
(Name, Address and Telephone Number, Including Area Code, of Agent For Service)
With a copy to:
DAVID W. WATSON, P.C.
GOODWIN, PROCTER & HOAR LLP
EXCHANGE PLACE
BOSTON, MASSACHUSETTS 02109-2881
(617) 570-1000
------------------------------------
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
=======================================================================================================================
Title of Securities Being Amount to Be Proposed Maximum Proposed Maximum Amount of
Registered Registered(2) Offering Price Per Share(3) Aggregate Offering Price(3) Registration Fee
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value 2,000,000 $19.1875 $38,375,000 $10,669
$.01 per share(1)
=======================================================================================================================
</TABLE>
(1) This Registration Statement also relates to Rights to purchase shares
of Series A Junior Participating Cumulative Preferred Stock of the
Registrant which are attached to all shares of Common Stock issued,
pursuant to the terms of the Registrant's Shareholder Rights Agreement
dated December 14, 1998. Until the occurrence of certain prescribed
events, the Rights are not exercisable, are evidenced by the
certificates for the Common Stock and will be transferred with and only
with such stock. Because no separate consideration is paid for the
Rights, the registration fee therefor is included in the fee for the
Common Stock.
(2) Additional shares available for issuance under the Summit Properties
Inc. 1994 Stock Option and Incentive Plan, as Amended and Restated (the
"Plan"); plus such indeterminate number of additional shares as may be
required pursuant to the Plan in the event of a stock dividend, stock
split, recapitalization or other similar event.
(3) Estimated solely for purposes of determining the registration fee
pursuant to Rule 457(c) and (h) under the Securities Act of 1933, as
amended, based on the average of the high and low sales prices on the
New York Stock Exchange on May 27, 1999.
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<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
Pursuant to General Instruction E of Form S-8, Summit Properties Inc.
(the "Registrant") hereby incorporates by reference the contents of the
Registrant's Registration Statement on Form S-8 (No. 33-88202) as previously
filed with the Securities and Exchange Commission on December 30, 1994. This
Registration Statement is being filed to register an additional 2,000,000 shares
of the Registrant's Common Stock subject to issuance under the Registrant's 1994
Stock Option and Incentive Plan, as Amended and Restated.
Item 8. Exhibits.
(a) The following is a complete list of exhibits filed or
incorporated by reference as part of this Registration Statement.
<TABLE>
<S> <C>
4.1 Amended and Restated Articles of Incorporation of the
Registrant (incorporated herein by reference to Exhibit 3.1 to
the Registrant's Registration Statement on Form S-11,
Registration No. 33-90706).
4.2 Bylaws of the Registrant (incorporated herein by reference to
Exhibit 3.2 to the Registrant's Registration Statement on Form
S-11, Registration No. 33-90706).
4.3 Shareholder Rights Agreement, dated as of December 14, 1998,
between the Registrant and First Union National Bank, as
Rights Agent (incorporated herein by reference to Exhibit 4.1
to the Registrant's Registration Statement on Form 8-A, filed
on December 16, 1998).
4.4 Articles Supplementary to Amended and Restated Articles of
Incorporation of the Registrant designating 8.95% Series B
Cumulative Redeemable Perpetual Preferred Stock (incorporated
herein by reference to Exhibit 3.1 to the Registrant's
Quarterly Report on Form 10-Q for the quarterly period ended
March 31, 1999, File No. 001-12792).
*4.5 Summit Properties Inc. 1994 Stock Option and Incentive Plan,
as Amended and Restated.
*5.1 Opinion of Goodwin, Procter & Hoar LLP as to the legality of
the securities being registered.
*23.1 Consent of Deloitte & Touche LLP, Independent Public
Accountants.
23.2 Consent of Goodwin, Procter & Hoar LLP (included in Exhibit
5.1).
24.1 Powers of Attorney (included on signature pages of
Registration Statement).
</TABLE>
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* Filed herewith
II-1
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Charlotte, State of North Carolina, on this 3rd day
of June, 1999.
SUMMIT PROPERTIES INC.
By: /s/ William F. Paulsen
------------------------------
William F. Paulsen
Chief Executive Officer
KNOW ALL BY THESE PRESENTS that each individual whose signature appears
below constitutes and appoints each of William B. McGuire, Jr. and William F.
Paulsen as such person's true and lawful attorney-in-fact and agent with full
power of substitution and resubstitution, for such person in such person's name,
place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this Registration Statement, and to
file the same, with all exhibits thereto, and all documents in connection
therewith, with the Securities and Exchange Commission, granting unto each said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as such person might or could do
in person, hereby ratifying and confirming all that any said attorney-in-fact
and agent, or any substitute or substitutes of any of them, may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ William B. McGuire, Jr. Chairman of the Board of Directors June 3, 1999
- -------------------------------------
William B. McGuire, Jr.
/s/ William F. Paulsen Chief Executive Officer and June 3, 1999
- ------------------------------------- Director (Principal Executive Officer)
William F. Paulsen
/s/ Steven R. LeBlanc President, Chief Operating Officer June 3, 1999
- ------------------------------------- and Director
Steven R. LeBlanc
/s/ Michael L. Schwarz Executive Vice President and June 3, 1999
- ------------------------------------- Chief Financial Officer (Principal
Michael L. Schwarz Financial Officer)
</TABLE>
II-2
<PAGE> 4
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Henry H. Fishkind Director June 3, 1999
- -------------------------------------
Henry H. Fishkind
/s/ James H. Hance, Jr. Director June 3, 1999
- -------------------------------------
James H. Hance, Jr.
/s/ Nelson Schwab III Director June 3, 1999
- -------------------------------------
Nelson Schwab III
- ------------------------------------- Director
James M. Allwin
</TABLE>
II-3
<PAGE> 5
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<S> <C>
4.1 Amended and Restated Articles of Incorporation of the Registrant
(incorporated herein by reference to Exhibit 3.1 to the
Registrant's Registration Statement on Form S-11, Registration
No. 33-90706).
4.2 Bylaws of the Registrant (incorporated herein by reference to
Exhibit 3.2 to the Registrant's Registration Statement on Form
S-11, Registration No. 33-90706).
4.3 Shareholder Rights Agreement, dated as of December 14, 1998,
between the Registrant and First Union National Bank, as Rights
Agent (incorporated herein by reference to Exhibit 4.1 to the
Registrant's Registration Statement on Form 8-A, filed on
December 16, 1998).
4.4 Articles Supplementary to Amended and Restated Articles of
Incorporation of the Registrant designating 8.95% Series B
Cumulative Redeemable Perpetual Preferred Stock (incorporated
herein by reference to Exhibit 3.1 to the Registrant's Quarterly
Report on Form 10-Q for the quarterly period ended March 31,
1999, File No. 001-12792).
*4.5 Summit Properties Inc. 1994 Stock Option and Incentive Plan, as
Amended and Restated.
*5.1 Opinion of Goodwin, Procter & Hoar LLP as to the legality of the
securities being registered.
*23.1 Consent of Deloitte & Touche LLP, Independent Public
Accountants.
23.2 Consent of Goodwin, Procter & Hoar LLP (included in Exhibit
5.1).
24.1 Powers of Attorney (included on signature pages of Registration
Statement).
</TABLE>
- --------------
* Filed herewith
<PAGE> 1
EXHIBIT 4.5
SUMMIT PROPERTIES INC.
1994 STOCK OPTION AND INCENTIVE PLAN,
AS AMENDED AND RESTATED
As of December 14, 1998
SECTION 1. GENERAL PURPOSE OF THE PLAN; DEFINITIONS
The name of the plan is the Summit Properties Inc. 1994 Stock Option
and Incentive Plan, as Amended and Restated (the "Plan"). The Plan was
originally adopted on January 13, 1994, and has been amended and restated in its
entirety as set forth herein as of December 14, 1998. The purpose of the Plan is
to encourage and enable the officers, employees and Directors of Summit
Properties Inc. (the "Company") and its Subsidiaries upon whose judgment,
initiative and efforts the Company largely depends for the successful conduct of
its business to acquire a proprietary interest in the Company. It is anticipated
that providing such persons with a direct stake in the Company's welfare will
assure a closer identification of their interests with those of the Company,
thereby stimulating their efforts on the Company's behalf and strengthening
their desire to remain with the Company.
The following terms shall be defined as set forth below:
"Act" means the Securities Exchange Act of 1934, as amended.
"Award" or "Awards," except where referring to a particular category of
grant under the Plan, shall include Incentive Stock Options, Non-Qualified Stock
Options, Stock Appreciation Rights, Restricted Stock Awards, Unrestricted Stock
Awards, Stock Loan Rights, Dividend Equivalent Rights, Deferred Stock Awards and
Performance Share Awards.
"Board" means the Board of Directors of the Company.
"Cause" means the occurrence of one or more of the following: (i)
employee or Independent Director is convicted of, pleads guilty to, or confesses
to any felony or any act of fraud, misappropriation or embezzlement which has an
immediate and materially adverse effect on the Company or any Subsidiary, as
determined by the Board in good faith in its sole discretion, (ii) employee or
Independent Director engages in a fraudulent act to the material damage or
prejudice of the Company or any Subsidiary or in conduct or activities
materially damaging to the property, business or reputation of the Company or
any Subsidiary, all as determined by the Board in good faith in its sole
discretion, (iii) any material act or omission by employee or Independent
Director involving malfeasance or negligence in the performance of employee's or
Independent Director's duties to the Company or any Subsidiary to the material
detriment of the Company or any Subsidiary, as determined by the Board in good
faith in its sole discretion, which has not been corrected by employee or
Independent Director within 30 days after
<PAGE> 2
written notice from the Company of any such act or omission, (iv) failure by
employee to comply in any material respect with the terms of his employment
agreement, if any, or any written policies or directives of the Board as
determined by the Board in good faith in its sole discretion, which has not been
corrected by employee within 30 days after written notice from the Company of
such failure, or (v) material breach by employee of his noncompetition agreement
with the Company, if any, as determined by the Board in good faith in its sole
discretion.
"Change of Control" is defined in Section 18.
"Code" means the Internal Revenue Code of 1986, as amended, and any
successor Code, and related rules, regulations and interpretations.
"Committee" means the Committee of the Board referred to in Section 2.
"Covered Employee" means an employee who is a "Covered Employee" within
the meaning of Section 162(m) of the Code.
"Disability" means an employee's inability to perform his normal
required services for the Company and its Subsidiaries for a period of six
consecutive months by reason of the employee's mental or physical disability, as
determined by the Committee in good faith in its sole discretion.
"Dividend Equivalent Right" means Awards granted pursuant to Section
10.
"Effective Date" means the date on which Plan is approved by
stockholders as set forth in Section 20.
"Fair Market Value" on any given date means the last reported sale
price at which Stock is traded on such date or, if no Stock is traded on such
date, the most recent date on which Stock was traded, as reflected on the New
York Stock Exchange or, if applicable, any other national stock exchange on
which the Stock is traded. Notwithstanding the foregoing, the Fair Market Value
on the first day of the Company's initial public offering shall mean the initial
public price.
"Incentive Stock Option" means any Stock Option designated and
qualified as an "incentive stock option" as defined in Section 422 of the Code.
"Independent Director" means a member of the Board who is not also an
employee of the Company or any Subsidiary.
"Non-Qualified Stock Option" means any Stock Option that is not an
Incentive Stock Option.
2
<PAGE> 3
"Option" or "Stock Option" means any option to purchase shares of Stock
granted pursuant to Section 5.
"Performance Cycle" means one or more periods of time, which may be of
varying and overlapping durations, as the Committee may select, over which the
attainment of one or more performance criteria will be measured for the purpose
of determining a participant's right to and the payment of a Performance Share
Award, Restricted Stock Award or Deferred Stock Award.
"Performance Share Award" means Awards granted pursuant to Section 12.
"Restricted Stock Award" means Awards granted pursuant to Section 7.
"Retirement" means the employee's termination of employment with the
Company and its Subsidiaries after attainment of age 60 and completion of ten
(10) years of employment with the Company and/or any Subsidiary (and any
predecessor thereof).
"Stock" means the Common Stock, par value $.01 per share, of the
Company, subject to adjustments pursuant to Section 3.
"Stock Appreciation Right" means Awards granted pursuant to Section 6.
"Stock Loan Right" means a loan made by the Company to an employee
pursuant to Section 9 to be used towards the purchase of shares of Stock.
"Subsidiary" means Summit Properties Partnership, L.P., Summit
Management Company, Summit Building Company and any corporation or other entity
(other than the Company) in any unbroken chain of corporations or other
entities, beginning with the Company if each of the corporations or entities
(other than the last corporation or entity in the unbroken chain) owns stock or
other interests possessing 50% or more of the economic interest or the total
combined voting power of all classes of stock or other interests in one of the
other corporations or entities in the chain.
"Unrestricted Stock Award" means Awards granted pursuant to Section 8.
SECTION 2. ADMINISTRATION OF PLAN; COMMITTEE AUTHORITY TO SELECT
PARTICIPANTS AND DETERMINE AWARDS
(a) Committee. The Plan shall be administered by a committee of
not less than two Independent Directors (the "Committee").
(b) Powers of Committee. The Committee shall have the power and
authority to grant Awards consistent with the terms of the Plan, including the
power and authority:
3
<PAGE> 4
(i) to select the officers, other employees and Directors
of the Company and its Subsidiaries to whom Awards may from time to
time be granted;
(ii) to determine the time or times of grant, and the
extent, if any, of Incentive Stock Options, Non-Qualified Stock
Options, Stock Appreciation Rights, Restricted Stock Awards,
Unrestricted Stock Awards, Stock Loan Rights, Dividend Equivalent
Rights, Deferred Stock Awards, Performance Share Awards, or any
combination of the foregoing, granted to any one or more participants;
(iii) to determine the number of shares of Stock to be
covered by any Award;
(iv) to determine the terms and conditions, including
restrictions, not inconsistent with the terms of the Plan, of any
Award, which terms and conditions may differ among individual Awards
and participants, to modify such terms and conditions to the extent
permitted under Section 16, and to approve the form of written
instruments evidencing the Awards;
(v) to accelerate the exercisability or vesting of all or
any portion of any Award;
(vi) subject to the provisions of Section 5(a)(iii), to
extend the period in which Stock Options may be exercised;
(vii) to determine whether, to what extent, and under what
circumstances Stock and other amounts payable with respect to an Award
shall be deferred either automatically or at the election of the
participant and whether and to what extent the Company shall pay or
credit amounts constituting interest (at rates determined by the
Committee) or dividends or deemed dividends on such deferrals; and
(viii) to adopt, alter and repeal such rules, guidelines and
practices for administration of the Plan and for its own acts and
proceedings as it shall deem advisable; to interpret the terms and
provisions of the Plan and any Award (including related written
instruments); to make all determinations it deems advisable for the
administration of the Plan; to decide all disputes arising in
connection with the Plan; and to otherwise supervise the administration
of the Plan.
(c) Delegation of Authority to Grant Awards. The Committee, in its
discretion, may delegate to the Chief Executive Officer of the Company all or
part of the Committee's authority and duties with respect to the granting of
Awards at Fair Market Value, to individuals who are not subject to the reporting
and other provisions of
4
<PAGE> 5
Section 16 of the Act or Covered Employees. Any such delegation by the Committee
shall include a limitation as to the amount of Awards that may be granted during
the period of the delegation and shall contain guidelines as to the
determination of the exercise price of any Stock Option or Stock Appreciation
Right, the conversion ratio or price of other Awards and the vesting criteria.
The Committee may revoke or amend the terms of a delegation at any time but such
action shall not invalidate any prior actions of the Committee's delegate or
delegates that were consistent with the terms of the Plan.
All decisions and interpretations of the Committee shall be binding on
all persons, including the Company and Plan participants.
SECTION 3. STOCK ISSUABLE UNDER THE PLAN; MERGERS; SUBSTITUTION
(a) Stock Issuable. The maximum number of shares of Stock reserved
and available for issuance under the Plan shall be 3,000,000 shares. For
purposes of this limitation, the shares of Stock underlying any Awards which are
forfeited, canceled, reacquired by the Company, satisfied without the issuance
of Stock or otherwise terminated (other than by exercise) shall be added back to
the shares of Stock available for issuance under the Plan. Subject to such
overall limitation, shares of Stock may be issued up to such maximum number
pursuant to any type or types of Award, including Incentive Stock Options;
provided, however, that Stock Options or Stock Appreciation Rights with respect
to no more than 250,000 shares of Stock may be granted to any one individual
participant during any one-calendar-year period. In addition, of the additional
2,000,000 shares of Stock reserved for issuance under the Plan, no more than
500,000 of such shares of Stock shall be available for grants in the form of
Restricted Stock Awards, Unrestricted Stock Awards, Deferred Stock Awards and/or
Performance Share Awards. The shares available for issuance under the Plan may
be authorized but unissued shares of Stock or shares of Stock reacquired by the
Company and held in its treasury. Upon the exercise of a Stock Appreciation
Right settled in shares of Stock, the right to purchase an equal number of
shares of Stock covered by a related Stock Option, if any, shall be deemed to
have been surrendered and will no longer be exercisable, and said number of
shares of Stock shall no longer be available under the Plan.
(b) Changes in Stock. If, as a result of any reorganization,
recapitalization, reclassification, stock dividend, stock split, reverse stock
split or other similar change in the Company's capital stock, the outstanding
shares of Stock are increased or decreased or are exchanged for a different
number or kind of shares or other securities of the Company, or additional
shares or new or different shares or other securities of the Company or other
non-cash assets are distributed with respect to such shares of Stock or other
securities, the Committee shall make an appropriate or proportionate adjustment
in (i) the maximum number of shares reserved for issuance under the Plan, (ii)
the number of Stock Options or Stock Appreciation Rights that can be granted to
any one individual participant, (iii) the maximum number of shares that can be
granted
5
<PAGE> 6
as Restricted Stock Awards, Unrestricted Stock Awards, Deferred Stock Awards
and/or Performance Share Awards, (iv) the number and kind of shares or other
securities subject to any then outstanding Awards under the Plan, and (v) the
price for each share subject to any then outstanding Stock Options and Stock
Appreciation Rights under the Plan, without changing the aggregate exercise
price (i.e., the exercise price multiplied by the number of Stock Options and
Stock Appreciation Rights) as to which such Stock Options and Stock Appreciation
Rights remain exercisable. The adjustment by the Committee shall be final,
binding and conclusive. No fractional shares of Stock shall be issued under the
Plan resulting from any such adjustment, but the Committee in its discretion may
make a cash payment in lieu of fractional shares.
The Committee may also adjust the number of shares subject to
outstanding Awards and the exercise price and the terms of outstanding Awards to
take into consideration material changes in accounting practices or principles,
extraordinary dividends, acquisitions or dispositions of stock or property or
any other event if it is determined by the Committee that such adjustment is
appropriate to avoid distortion in the operation of the Plan, provided that no
such adjustment shall be made in the case of an Incentive Stock Option, without
the consent of the participant, if it would constitute a modification, extension
or renewal of the Option within the meaning of Section 424(h) of the Code.
(c) Mergers and Other Transactions. In the case of and subject to
the consummation of (i) the dissolution or liquidation of the Company, (ii) the
sale of all or substantially all of the assets of the Company on a consolidated
basis to an unrelated person or entity, (iii) a merger, reorganization or
consolidation in which the holders of the Company's outstanding voting power
immediately prior to such transaction do not own 50% of the outstanding voting
power of the surviving or resulting entity immediately upon completion of such
transaction, (iv) the sale of all of the Stock of the Company to an unrelated
person or entity or (v) any other transaction in which the owners of the
Company's outstanding voting power prior to such transaction do not own at least
a majority of the outstanding voting power of the relevant entity after the
transaction (in each case, a "Covered Transaction"), all Options, Stock
Appreciation Rights and Dividend Equivalent Rights that are not exercisable
shall become fully exercisable and restrictions and conditions on all other
Awards shall automatically be deemed waived, except as the Committee may
otherwise specify with respect to particular Awards. Upon the consummation of
the Covered Transaction, the Plan and all outstanding Awards granted hereunder
shall terminate, unless provision is made in connection with the Covered
Transaction for the assumption of Awards heretofore granted, or the substitution
of such Awards with new Awards of the successor entity or parent thereof, with
appropriate adjustment as to the number and kind of shares and, if appropriate,
the per share exercise prices, as provided in Section 3(b) above. In the event
of such termination, each participant holding an outstanding Stock Option or
Stock Appreciation Right shall receive payment from the Company in cash in an
amount equal to the excess of the Fair Market Value per share over the
applicable exercise price multiplied
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<PAGE> 7
by the number of shares of Stock covered by the Stock Option or Stock
Appreciation Right.
(d) Substitute Awards. The Committee may grant Awards under the
Plan in substitution for stock and stock based awards held by employees of
another corporation who concurrently become employees of the Company or a
Subsidiary as the result of a merger or consolidation of the employing
corporation with the Company or a Subsidiary or the acquisition by the Company
or a Subsidiary of property or stock of the employing corporation. The Committee
may direct that the substitute awards be granted on such terms and conditions as
the Committee considers appropriate in the circumstances. Any substitute Awards
granted under the Plan shall not count against the share limitation set forth in
Section 3(a).
SECTION 4. ELIGIBILITY
Participants in the Plan will be such full or part-time officers and
other employees of the Company and its Subsidiaries who are responsible for or
contribute to the management, growth or profitability of the Company and its
Subsidiaries and who are selected from time to time by the Committee, in its
sole discretion. Independent Directors are also eligible to participate in the
Plan but only to the extent provided in Section 5(c) below.
SECTION 5. STOCK OPTIONS
Any Stock Option granted under the Plan shall be in such form as the
Committee may from time to time approve.
Stock Options granted under the Plan may be either Incentive Stock
Options or Non-Qualified Stock Options. Incentive Stock Options may be granted
only to employees of the Company or any Subsidiary that is a "subsidiary
corporation" within the meaning of Section 424(f) of the Code. To the extent
that any Option does not qualify as an Incentive Stock Option, it shall
constitute a Non-Qualified Stock Option.
No Incentive Stock Option shall be granted under the Plan after
December 14, 2008.
(a) Stock Options Granted to Employees. The Committee in its
discretion may grant Stock Options to eligible employees of the Company or any
Subsidiary. Stock Options granted to employees pursuant to this Section 5(a)
shall be subject to the following terms and conditions and shall contain such
additional terms and conditions, not inconsistent with the terms of the Plan, as
the Committee shall deem desirable:
(i) Exercise Price. The exercise price per share for the
Stock covered by a Stock Option granted pursuant to this Section 5(a)
shall be determined by
7
<PAGE> 8
the Committee at the time of grant but shall not be less than 100% of
the Fair Market Value on the date of grant. Notwithstanding the
foregoing, with respect to Non-Qualified Stock Options which are
granted in lieu of cash bonus, the exercise price per share shall not
be less than 50% of the Fair Market Value on the date of grant. If an
employee owns or is deemed to own (by reason of the attribution rules
applicable under Section 424(d) of the Code) more than 10% of the
combined voting power of all classes of stock of the Company or any
Subsidiary or parent corporation and an Incentive Stock Option is
granted to such employee, the option price of such Incentive Stock
Option shall be not less than 110% of the Fair Market Value on the
grant date.
(ii) Grant of Discount Options in Lieu of Cash Bonus. Upon
the request of an eligible employee and with the consent of the
Committee, such employee may elect each calendar year to receive a
Non-Qualified Stock Option in lieu of cash bonus to which he may become
entitled during the following calendar year pursuant to any other plan
of the Company, but only if such employee makes an irrevocable election
to waive receipt of all or a portion of such cash bonus. Such election
shall be made on or before the date set by the Committee which date
shall be no later than 15 days preceding January 1 of the calendar year
in which the cash bonus would otherwise be paid. A NonQualified Stock
Option shall be granted to each employee who made such an irrevocable
election on the date the waived cash bonus would otherwise be paid. The
exercise price per share shall be determined by the Committee but shall
not be less than 50% of the Fair Market Value of the Stock on the date
the Stock Option is granted. The number of shares of Stock subject to
the Stock Option shall be determined by dividing the amount of the
waived cash bonus by the difference between the Fair Market Value of
the Stock on the date the Stock Option is granted and the exercise
price per Stock Option. The Stock Option shall be granted for whole
number of shares so determined; the value of any fractional share shall
be paid in cash. An employee may revoke his election under this Section
5(a)(ii) on a prospective basis at any time.
(iii) Option Term. The term of each Stock Option shall be
fixed by the Committee, but no Stock Option shall be exercisable more
than ten years after the date the option is granted. If an employee
owns or is deemed to own (by reason of the attribution rules of Section
424(d) of the Code) more than 10% of the combined voting power of all
classes of stock of the Company or any Subsidiary or parent corporation
and an Incentive Stock Option is granted to such employee, the term of
such option shall be no more than five years from the date of grant.
(iv) Exercisability; Rights of a Stockholder. Stock
Options shall become vested and exercisable at such time or times,
whether or not in installments, as shall be determined by the Committee
at or after the grant date; provided, however, that Stock Options
granted in lieu of cash bonus shall be
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<PAGE> 9
exercisable immediately. The Committee may at any time accelerate the
exercisability of all or any portion of any Stock Option. An optionee
shall have the rights of a stockholder only as to shares acquired upon
the exercise of a Stock Option and not as to unexercised Stock Options.
(v) Method of Exercise. Stock Options may be exercised in
whole or in part, by giving written notice of exercise to the Company,
specifying the number of shares to be purchased. Payment of the
purchase price may be made by one or more of the following methods to
the extent provided in the Option Award agreement:
(A) In cash, by certified or bank check or other
instrument acceptable to the Committee;
(B) Through the delivery (or attestation to the
ownership) of shares of Stock that are not then subject to
restrictions under any Company plan and that have been
purchased by the optionee on the open market or have been
beneficially owned by the optionee for at least six months, if
permitted by the Committee in its discretion. Such surrendered
shares shall be valued at Fair Market Value on the exercise
date; or
(C) By the optionee delivering to the Company a
properly executed exercise notice together with irrevocable
instructions to a broker to promptly deliver to the Company
cash or a check payable and acceptable to the Company to pay
the purchase price; provided that in the event the optionee
chooses to pay the purchase price as so provided, the optionee
and the broker shall comply with such procedures and enter
into such agreements of indemnity and other agreements as the
Committee shall prescribe as a condition of such payment
procedure. Payment instruments will be received subject to
collection.
The delivery of certificates representing the shares of Stock to be
purchased pursuant to the exercise of a Stock Option will be contingent
upon receipt from the optionee (or a purchaser acting in his stead in
accordance with the provisions of the Stock Option) by the Company of
the full purchase price for such shares and the fulfillment of any
other requirements contained in the Stock Option or applicable
provisions of laws. In the event an optionee chooses to pay the
purchase price by delivery of previously-owned shares of Stock through
the attestation method, the number of shares of Stock transferred to
the optionee upon the exercise of the Stock Option shall be net of the
number of shares attested to.
(vi) Non-transferability of Options. No Stock Option shall
be transferable by the optionee otherwise than by will or by the laws
of descent and
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distribution and all Stock Options shall be exercisable, during the
optionee's lifetime, only by the optionee or by the optionee's legal
representative or guardian in the event of the optionee's incapacity.
Notwithstanding the foregoing, the Committee may provide in an option
agreement that the optionee may transfer, without consideration for the
transfer, his Non-Qualified Stock Options to members of his immediate
family (i.e., children, grandchildren, or spouse), to trusts for the
benefit of such immediate family members and to partnerships in which
such family members are the only partners, provided that the transferee
agrees in writing with the Company to be bound by all of the terms and
conditions of this Plan and the applicable Option.
(vii) Termination by Reason of Death. If any optionee's
employment by the Company and its Subsidiaries terminates by reason of
death, the Stock Option shall become fully exercisable and may
thereafter be exercised by the legal representative or legatee of the
optionee, for a period of six months (or such longer period as the
Committee shall specify at any time) from the date of death, or until
the expiration of the stated term of the Option, if earlier.
(viii) Termination by Reason of Disability.
(A) Any Stock Option held by an optionee whose
employment by the Company and its Subsidiaries has terminated
by reason of Disability shall become fully exercisable and may
thereafter be exercised, for a period of twelve months (or
such longer period as the Committee shall specify at any time)
from the date of such termination of employment, or until the
expiration of the stated term of the Option, if earlier.
(B) The Committee shall have sole authority and
discretion to determine whether a participant's employment has
been terminated by reason of Disability.
(C) Except as otherwise provided by the
Committee at the time of grant, the death of an optionee
during a period provided in this Section 5(a)(viii) for the
exercise of a Stock Option shall extend such period for six
months from the date of death, subject to termination on the
expiration of the stated term of the Option, if earlier.
(ix) Termination by Reason of Retirement.
(A) Any Stock Option held by an optionee whose
employment by the Company and its Subsidiaries has terminated
by reason of Retirement may thereafter be exercised, to the
extent it was exercisable at the time of such termination, for
a period of twelve months (or such longer period as the
Committee shall specify at any time) from the date of
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such termination of employment, or until the expiration of the
stated term of the Option, if earlier.
(B) Except as otherwise provided by the
Committee at the time of grant, the death of an optionee
during a period provided in this Section 5(a)(ix) for the
exercise of a Stock Option shall extend such period for six
months from the date of death, subject to termination on the
expiration of the stated term of the Option, if earlier.
(x) Termination for Cause. If any optionee's employment
by the Company and its Subsidiaries has been terminated for Cause, any
Stock Option held by such optionee, including any Stock Option that is
immediately exercisable at the time of such termination, shall
immediately terminate and be of no further force and effect; provided,
however, that the Committee may, in its sole discretion, provide that
such Stock Option can be exercised for a period of up to 30 days from
the date of termination of employment or until the expiration of the
stated term of the Option, if earlier.
(xi) Other Termination. Unless otherwise determined by the
Committee, if an optionee's employment by the Company and its
Subsidiaries terminates for any reason other than death, Disability,
Retirement, or for Cause, any Stock Option held by such optionee may
thereafter be exercised, to the extent it was exercisable on the date
of termination of employment, for three months (or such longer period
as the Committee shall specify at any time) from the date of
termination of employment or until the expiration of the stated term of
the Option, if earlier.
(xii) Annual Limit on Incentive Stock Options. To the
extent required for "incentive stock option" treatment under Section
422 of the Code, the aggregate Fair Market Value (determined as of the
time of grant) of the shares of Stock with respect to which Incentive
Stock Options granted under this Plan and any other plan of the Company
or its Subsidiaries become exercisable for the first time by an
optionee during any calendar year shall not exceed $100,000. To the
extent that any Stock Option exceeds this limit, it shall constitute a
Non-Qualified Stock Option.
(xiii) Form of Settlement. Shares of Stock issued upon
exercise of a Stock Option shall be free of all restrictions under the
Plan, except as otherwise provided in this Plan.
(b) Reload Options. At the discretion of the Committee, Options
granted under Section 5(a) may include a "reload" feature pursuant to which an
optionee exercising an option by the delivery of a number of shares of Stock in
accordance with Section 5(a)(v)(B) hereof would automatically be granted an
additional Option (with an exercise price equal to the Fair Market Value of the
Stock on the date the additional
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Option is granted and with the same expiration date as the original Option being
exercised, and with such other terms as the Committee may provide) to purchase
that number of shares of Stock equal to the sum of (i) the number delivered to
exercise the original Option and (ii) the number withheld to satisfy tax
liabilities, with an Option term equal to the remainder of the original Option
term unless the Committee otherwise determines in the Award agreement for the
original Option grant.
(c) Stock Options Granted to Independent Directors.
(i) Automatic Grant of Options. Promptly after the
closing of the Company's initial public offering and the appointment of
Independent Directors, each Independent Director shall automatically be
granted a Non-Qualified Stock Option to purchase 3,000 shares of Stock.
Each Independent Director who is serving as Director of the Company on
the fifth business day after each annual meeting of shareholders,
beginning with the 1995 annual meeting, shall automatically be granted
on such day a Non-Qualified Stock Option to acquire 2,000 shares of
Stock.
(ii) Discretionary Grant of Options. The Committee, in its
discretion, may grant additional Non-Qualified Stock Options to
Independent Directors. Any such grant may vary among individual
Independent Directors.
(iii) Exercise Price. The exercise price per share for the
Stock covered by a Stock Option granted pursuant to the first sentence
of Section 5(c)(i) shall be equal to the greater of the initial public
offering price or the Fair Market Value of the Stock on the date the
Stock Option is granted. The exercise price per share for the Stock
covered by a Stock Option granted under this Section 5(c), other than
pursuant to the first sentence of Section 5(c)(i), shall be equal to
the Fair Market Value of the Stock on the date the Stock Option is
granted.
(iv) Exercise; Termination; Non-transferability.
(A) All Options granted under this Section 5(c)
shall be immediately exercisable. No Option issued under this
Section 5(c) shall be exercisable after the expiration of ten
years from the date upon which such Option is granted.
(B) The rights of an Independent Director in an
Option granted under this Section 5(c) shall terminate six
months after such Director ceases to be a Director of the
Company or the specified expiration date, if earlier;
provided, however, that if the Independent Director ceases to
be a Director for Cause, the rights shall terminate
immediately on the date on which he ceases to be a Director.
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(C) No Stock Option granted under this Section
5(c) shall be transferable by the optionee otherwise than by
will or by the laws of descent and distribution, and such
Options shall be exercisable during the optionee's lifetime
only by the optionee, or by the optionee's legal
representative or guardian in the event of the optionee's
incapacity. Any Option granted to an Independent Director and
outstanding on the date of his death may be exercised by the
legal representative or legatee of the optionee for a period
of six months from the date of death or until the expiration
of the stated term of the option, if earlier.
(D) Options granted under this Section 5(c) may
be exercised only by written notice to the Company specifying
the number of shares to be purchased. Payment of the full
purchase price of the shares to be purchased may be made by
one or more of the methods specified in Section 5(a)(v). An
optionee shall have the rights of a stockholder only as to
shares acquired upon the exercise of a Stock Option and not as
to unexercised Stock Options.
(v) Limited to Independent Directors. The provisions of
this Section 5(c) shall apply only to Options granted or to be granted
to Independent Directors, and shall not be deemed to modify, limit or
otherwise apply to any other provision of this Plan or to any Option
issued under this Plan to a participant who is not an Independent
Director of the Company. To the extent inconsistent with the provisions
of any other Section of this Plan, the provisions of this Section 5(c)
shall govern the rights and obligations of the Company and Independent
Directors respecting Options granted or to be granted to Independent
Directors.
SECTION 6. STOCK APPRECIATION RIGHTS
(a) Nature of Stock Appreciation Right. A Stock Appreciation Right
is an Award entitling the recipient to receive an amount in cash or shares of
Stock or a combination thereof having a value equal to the excess of the Fair
Market Value of the Stock on the date of exercise over the exercise price per
Stock Appreciation Right set by the Committee at the time of grant, which price
shall not be less than Fair Market Value of the Stock on the date of grant (or
over the option exercise price per share, if the Stock Appreciation Right was
granted in tandem with a Stock Option) multiplied by the number of shares of
Stock with respect to which the Stock Appreciation Right shall have been
exercised, with the Committee having the right to determine the form of payment.
(b) Grant and Exercise of Stock Appreciation Rights. Stock
Appreciation Rights may be granted to any eligible employee of the Company or
any Subsidiary by the Committee in tandem with, or independently of, any Stock
Option granted pursuant to Section 5 of the Plan. In the case of a Stock
Appreciation Right granted in tandem
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with a Non-Qualified Stock Option, such Stock Appreciation Right may be granted
either at or after the time of the grant of such Option. In the case of a Stock
Appreciation Right granted in tandem with an Incentive Stock Option, such Stock
Appreciation Right may be granted only at the time of the grant of the Option.
A Stock Appreciation Right or applicable portion thereof
granted in tandem with a Stock Option shall terminate and no longer be
exercisable upon the termination or exercise of the related Option.
(c) Terms and Conditions of Stock Appreciation Rights. Stock
Appreciation Rights shall be subject to such terms and conditions as shall be
determined from time to time by the Committee, subject to the following:
(i) Stock Appreciation Rights granted in tandem with
Options shall be exercisable at such time or times and to the extent
that the related Stock Options shall be exercisable.
(ii) Upon exercise of a Stock Appreciation Right, the
applicable portion of any related Option shall be surrendered.
(iii) Stock Appreciation Rights granted in tandem with an
Option shall be transferable only when and to the extent that the
underlying Option would be transferable. Stock Appreciation Rights not
granted in tandem with a Option shall not be transferable otherwise
than by will or the laws of descent or distribution. All Stock
Appreciation Rights shall be exercisable during the participant's
lifetime only by the participant or the participant's legal
representative. Notwithstanding the foregoing, the Committee may
provide in the Stock Appreciation Right agreement that the participant
may transfer, without consideration for the transfer, his Stock
Appreciation Rights to members of his immediate family (i.e., children,
grandchildren, or spouse), to trusts for the benefit of such immediate
family members and to partnerships in which such family members are the
only partners, provided that the transferee agrees in writing the
Company to be bound by all of the terms and conditions of this Plan and
the applicable Stock Appreciation Right.
SECTION 7. RESTRICTED STOCK AWARDS
(a) Nature of Restricted Stock Award. The Committee may grant
Restricted Stock Awards to any employee of the Company or any Subsidiary. A
Restricted Stock Award is an Award entitling the recipient to acquire, at par
value or such other higher purchase price determined by the Committee, shares of
Stock subject to such restrictions and conditions as the Committee may determine
at the time of grant ("Restricted Stock"). Conditions may be based on continuing
employment and/or achievement of pre-established performance goals and
objectives.
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(b) Acceptance of Award. A participant who is granted a Restricted
Stock Award shall have no rights with respect to such Award unless the
participant shall have accepted the Award within 60 days (or such shorter date
as the Committee may specify) following the award date by making payment to the
Company, if required, by certified or bank check or other instrument or form of
payment acceptable to the Committee in an amount equal to the specified purchase
price, if any, of the shares covered by the Award and by executing and
delivering to the Company a written instrument that sets forth the terms and
conditions of the Restricted Stock Award in such form as the Committee shall
determine.
(c) Rights as a Stockholder. Upon complying with Section 7(b)
above, a participant shall have all the rights of a stockholder with respect to
the Restricted Stock, including voting and dividend rights, subject to
non-transferability restrictions and Company repurchase or forfeiture rights
described in this Section 7 and subject to such other conditions contained in
the written instrument evidencing the Restricted Stock Award. Unless the
Committee shall otherwise determine, certificates evidencing the Restricted
Stock shall remain in the possession of the Company until such Stock is vested
as provided in Section 7(e) below.
(d) Restrictions. Restricted Stock may not be sold, assigned,
transferred, pledged or otherwise encumbered or disposed of except as
specifically provided herein or in the written instrument evidencing the
Restricted Stock Award. In the event of termination of employment by the Company
and its Subsidiaries for any reason other than death or Disability, the Company
shall have the right, at the discretion of the Committee, to repurchase
Restricted Stock with respect to which conditions have not lapsed at their
purchase price, or to require forfeiture of such shares to the Company if
acquired at no cost, from the participant or the participant's legal
representative.
(e) Vesting of Restricted Stock. The Committee at the time of
grant shall specify the date or dates and/or the attainment of pre-established
performance goals, objectives and other conditions on which the
non-transferability of the Restricted Stock and the Company's right of
repurchase or forfeiture shall lapse. Subsequent to such date or dates and/or
the attainment of such pre-established performance goals, objectives and other
conditions, the shares on which all restrictions have lapsed shall no longer be
Restricted Stock and shall be deemed "vested." A participant shall also become
vested in his Restricted Stock upon his termination of employment for reason of
death or Disability. Except as may otherwise be provided by the Committee either
in the written instrument evidencing the Restricted Stock Award or, subject to
Section 16 below, in writing after such written instrument is issued, a
participant's rights in any shares of Restricted Stock that have not vested
shall automatically terminate upon the participant's termination of employment
with the Company and its Subsidiaries and such shares shall be subject to the
Company's right of repurchase as provided in Section 7(d) above.
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(f) Waiver, Deferral and Reinvestment of Dividends. The written
instrument evidencing the Restricted Stock Award may require or permit the
immediate payment, waiver, deferral or investment of dividends paid on the
Restricted Stock.
SECTION 8. UNRESTRICTED STOCK AWARDS
The Committee may, in its sole discretion, grant (or sell at par value
or such other higher purchase price determined by the Committee) an Unrestricted
Stock Award to any employee of the Company or any Subsidiary pursuant to which
such employee may receive shares of Stock free of any restrictions under the
Plan in lieu of any cash compensation to such employee or in respect of past
services or other valid consideration.
SECTION 9. STOCK LOAN RIGHTS
The Committee may, in its sole discretion, authorize the grant of Stock
Loan Rights to selected key employees. Each such Stock Loan Right shall entitle
the employee to receive a loan from the Company which shall be used solely for
the purchase of shares of Stock. The terms of such loans shall be determined at
the sole discretion of the Committee. Such loans shall be secured by the shares
of Stock purchased by the employee, and may be made with or without recourse
against the employee.
SECTION 10. DIVIDEND EQUIVALENT RIGHTS
(a) Dividend Equivalent Rights. A Dividend Equivalent Right is an
Award entitling the recipient to receive credits based on cash dividends that
would have been paid on the shares of Stock specified in the Dividend Equivalent
Right (or other award to which it relates) if such shares had been issued to and
held by the recipient. A Dividend Equivalent Right may be granted hereunder to
any participant as a component of another Award or as a freestanding award. The
terms and conditions of Dividend Equivalent Rights shall be specified in the
grant. Dividend equivalents credited to the holder of a Dividend Equivalent
Right may be paid currently or may be deemed to be reinvested in additional
shares of Stock, which may thereafter accrue additional equivalents. Any such
reinvestment shall be at Fair Market Value on the date of reinvestment or such
other price as may then apply under a dividend reinvestment plan sponsored by
the Company, if any. Dividend Equivalent Rights may be settled in cash or shares
of Stock or a combination thereof, in a single installment or installments. A
Dividend Equivalent Right granted as a component of another Award may provide
that such Dividend Equivalent Right shall be settled upon exercise, settlement,
or payment of, or lapse of restrictions on, such other award, and that such
Dividend Equivalent Right shall expire or be forfeited or annulled under the
same conditions as such other award. A Dividend Equivalent Right granted as a
component of another Award may also contain terms and conditions different from
such other award.
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(b) Interest Equivalents. Any Award under this Plan that is
settled in whole or in part in cash on a deferred basis may provide in the grant
for interest equivalents to be credited with respect to such cash payment.
Interest equivalents may be compounded and shall be paid upon such terms and
conditions as may be specified by the grant.
(c) Termination. Except as may otherwise be provided by the
Committee either in the Award agreement or, subject to Section 16 below, in
writing after the Award agreement is issued, a participant's rights in all
Dividend Equivalent Rights or interest equivalents shall automatically terminate
upon the participant's termination of employment (or cessation of business
relationship) with the Company and its Subsidiaries for any reason.
SECTION 11. DEFERRED STOCK AWARDS
(a) Nature of Deferred Stock Awards. A Deferred Stock Award is an
Award of phantom stock units to a participant, subject to restrictions and
conditions as the Committee may determine at the time of grant. Conditions may
be based on continuing employment (or other business relationship) and/or
achievement of pre-established performance goals and objectives. The grant of a
Deferred Stock Award is contingent on the participant executing the Deferred
Stock Award agreement. The terms and conditions of each such agreement shall be
determined by the Committee, and such terms and conditions may differ among
individual Awards and participants. At the end of the deferral period, the
Deferred Stock Award, to the extent vested, shall be paid to the participant in
the form of shares of Stock.
(b) Election to Receive Deferred Stock Awards in Lieu of
Compensation. The Committee may, in its sole discretion, permit a participant to
elect to receive a portion of the cash compensation or Restricted Stock Award
otherwise due to such participant in the form of a Deferred Stock Award. Any
such election shall be made in writing and shall be delivered to the Company no
later than the date specified by the Committee and in accordance with rules and
procedures established by the Committee. The Committee shall have the sole right
to determine whether and under what circumstances to permit such elections and
to impose such limitations and other terms and conditions thereon as the
Committee deems appropriate.
(c) Rights as a Stockholder. During the deferral period, a
participant shall have no rights as a stockholder; provided, however, that the
participant may be credited with Dividend Equivalent Rights with respect to the
phantom stock units underlying his Deferred Stock Award, subject to such terms
and conditions as the Committee may determine.
(d) Restrictions. A Deferred Stock Award may not be sold,
assigned, transferred, pledged or otherwise encumbered or disposed of during the
deferral period.
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(e) Termination. Except as may otherwise be provided by the
Committee either in the Award agreement or, subject to Section 16 below, in
writing after the Award agreement is issued, a participant's right in all
Deferred Stock Awards that have not vested shall automatically terminate upon
the participant's termination of employment (or cessation of business
relationship) with the Company and its Subsidiaries for any reason.
SECTION 12. PERFORMANCE SHARE AWARDS
(a) Nature of Performance Share Awards. A Performance Share Award
is an Award entitling the recipient to acquire shares of Stock upon the
attainment of specified performance goals. The Committee may make Performance
Share Awards independent of or in connection with the granting of any other
Award under the Plan. The Committee in its sole discretion shall determine
whether and to whom Performance Share Awards shall be made, the performance
goals, the periods during which performance is to be measured, and all other
limitations and conditions.
(b) Rights as a Stockholder. A participant receiving a Performance
Share Award shall have the rights of a stockholder only as to shares actually
received by the participant under the Plan and not with respect to shares
subject to the Award but not actually received by the participant. A participant
shall be entitled to receive a stock certificate evidencing the acquisition of
shares of Stock under a Performance Share Award only upon satisfaction of all
conditions specified in the Performance Share Award agreement (or in a
performance plan adopted by the Committee).
(c) Termination. Except as may otherwise be provided by the
Committee either in the Award agreement or, subject to Section 16 below, in
writing after the Award agreement is issued, a participant's rights in all
Performance Share Awards shall automatically terminate upon the participant's
termination of employment with the Company and its Subsidiaries for any reason.
(d) Acceleration, Waiver, Etc. At any time prior to the
participant's termination of employment by the Company and its Subsidiaries, the
Committee may in its sole discretion accelerate, waive or, subject to Section
16, amend any or all of the goals, restrictions or conditions applicable to a
Performance Share Award.
SECTION 13. PERFORMANCE-BASED AWARDS TO COVERED EMPLOYEES
Notwithstanding anything to the contrary contained herein, if any
Restricted Stock Award, Deferred Stock Award or Performance Share Award granted
to a Covered Employee is intended to qualify as "Performance-based Compensation"
under Section 162(m) of the Code and the regulations promulgated thereunder (a
"Performance-based Award"), such Award shall comply with the provisions set
forth below:
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(a) Performance Criteria. The performance criteria used in
performance goals governing Performance-based Awards granted to Covered
Employees may include any or all of the following: (i) the Company's return on
equity, assets, capital or investment; (ii) pre-tax or after-tax profit levels
of the Company or any Subsidiary, a division, an operating unit or a business
segment of the Company, or any combination of the foregoing; (iii) cash flow,
funds from operations or similar measure; (iv) total shareholder return; (v)
changes in the market price of the Stock; (vi) sales or market share; or (vii)
earnings per share.
(b) Grant of Performance-based Awards. With respect to each
Performance-based Award granted to a Covered Employee, the Committee shall
select, within the first 90 days of a Performance Cycle (or, if shorter, within
the maximum period allowed under Section 162(m) of the Code) the performance
criteria for such grant, and the achievement targets with respect to each
performance criterion (including a threshold level of performance below which no
amount will become payable with respect to such Award). Each Performance-based
Award will specify the amount payable, or the formula for determining the amount
payable, upon achievement of the various applicable performance targets. The
performance criteria established by the Committee may be (but need not be)
different for each Performance Cycle and different goals may be applicable to
Performance-based Awards to different Covered Employees.
(c) Payment of Performance-based Awards. Following the completion
of a Performance Cycle, the Committee shall meet to review and certify in
writing whether, and to what extent, the performance criteria for the
Performance Cycle have been achieved and, if so, to also calculate and certify
in writing the amount of the Performance-based Awards earned for the Performance
Cycle. The Committee shall then determine the actual size of each Covered
Employee's Performance-based Award, and, in doing so, may reduce or eliminate
the amount of the Performance-based Award for a Covered Employee if, in its sole
judgment, such reduction or elimination is appropriate.
(d) Maximum Award Payable. The maximum Performance-based Award payable
to any one Covered Employee under the Plan for a Performance Cycle is 250,000
Shares (subject to adjustment as provided in Section 3(b) hereof).
SECTION 14. TAX WITHHOLDING
(a) Payment by Participant. Each participant shall, no later than
the date as of which the value of an Award or of any Stock or other amounts
received thereunder first becomes includable in the gross income of the
participant for Federal income tax purposes, pay to the Company, or make
arrangements satisfactory to the Committee regarding payment of any Federal,
state, or local taxes of any kind required by law to be withheld with respect to
such income. The Company and its Subsidiaries shall, to the extent permitted by
law, have the right to deduct any such taxes from any payment
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of any kind otherwise due to the participant. The Company's obligation to
deliver stock certificates to any participant is subject to and conditioned on
tax obligations being satisfied by the participant.
(b) Payment in Stock. With the approval of the Committee, a
participant may elect to have such tax withholding obligation satisfied, in
whole or in part, by (i) authorizing the Company to withhold from shares of
Stock to be issued pursuant to any Award a number of shares with an aggregate
Fair Market Value (as of the date the withholding is effected) that would
satisfy the withholding amount due, or (ii) transferring to the Company shares
of Stock owned by the participant with an aggregate Fair Market Value (as of the
date the withholding is effected) that would satisfy the withholding amount due.
SECTION 15. TRANSFER, LEAVE OF ABSENCE, ETC.
For purposes of the Plan, the following events shall not be deemed a
termination of employment:
(a) a transfer to the employment of the Company from a Subsidiary
or from the Company to a Subsidiary, or from one Subsidiary to another; or
(b) an approved leave of absence for military service or sickness,
or for any other purpose approved by the Company, if the employee's right to
re-employment is guaranteed either by a statute or by contract or under the
policy pursuant to which the leave of absence was granted or if the Committee
otherwise so provides in writing.
SECTION 16. AMENDMENTS AND TERMINATION
The Board may, at any time, amend or discontinue the Plan and the
Committee may, at any time, amend or cancel any outstanding Award for the
purpose of satisfying changes in law or for any other lawful purpose, but no
such action shall adversely affect rights under any outstanding Award without
the holder's consent or reduce the exercise price of any outstanding Stock
Option or Stock Appreciation Right except as provided in Section 3(b) or 3(c).
If and to the extent determined by the Committee to be required by the Code to
ensure that Options granted hereunder qualify as Incentive Stock Options under
Section 422 of the Code or to ensure that compensation earned under Awards
qualifies as performance-based compensation under Section 162(m) of the Code, if
and to the extent intended to so qualify, Plan amendments shall be subject to
approval by the Company's stockholders entitled to vote at a meeting of
stockholders at which a quorum is present. Nothing in this Section 16 shall
limit the Committee's authority to take any action permitted pursuant to Section
3(c).
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SECTION 17. STATUS OF PLAN
With respect to the portion of any Award which has not been exercised
and any payments in cash, Stock or other consideration not received by a
participant, a participant shall have no rights greater than those of a general
creditor of the Company unless the Committee shall otherwise expressly determine
in connection with any Award or Awards. In its sole discretion, the Committee
may authorize the creation of trusts or other arrangements to meet the Company's
obligations to deliver Stock or make payments with respect to Awards hereunder,
provided that the existence of such trusts or other arrangements is consistent
with the provision of the foregoing sentence.
SECTION 18. CHANGE OF CONTROL PROVISIONS
Upon the occurrence of a Change of Control as defined in this Section
18:
(a) Each outstanding Stock Option, Stock Appreciation Right and
Dividend Equivalent Right shall automatically become fully exercisable
notwithstanding any provision to the contrary herein.
(b) Restrictions and conditions on all other Awards shall
automatically be deemed waived, and the recipients of such Awards shall become
entitled to receipt of the shares of Stock subject to such Awards, except as the
Committee may otherwise specify with respect to particular Awards.
(c) "Change of Control" shall mean the occurrence of any one of
the following events:
(i) any "Person," as such term is used in Sections 13(d)
and 14(d) of the Act (other than the Company, any of its Subsidiaries,
any trustee, fiduciary or other person or entity holding securities
under any employee benefit plan of the Company or any of its
Subsidiaries), together with all "affiliates" and "associates" (as such
terms are defined in Rule 12b-2 under the Act) of such person, shall
become the "beneficial owner" (as such term is defined in Rule 13d-3
under the Act), directly or indirectly, of securities of the Company
representing 40% or more of either (A) the combined voting power of the
Company's then outstanding securities having the right to vote in an
election of the Company's Board of Directors ("Voting Securities") or
(B) the then outstanding shares of Stock of the Company (in either such
case other than as a result of acquisition of securities directly from
the Company); or
(ii) persons who, as of the date of the closing of the
Company's initial public offering, constitute the Company's Board of
Directors (the "Incumbent Directors") cease for any reason, including,
without limitation, as a result of a tender offer, proxy contest,
merger or similar transaction, to constitute at least a majority of the
Board, provided that any person becoming a director of the
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Company subsequent to the closing of the Company's initial public
offering whose election or nomination for election was approved by a
vote of at least a majority of the Incumbent Directors shall, for
purposes of this Plan, be considered an Incumbent Director; or
(iii) the stockholders of the Company shall approve (A) any
consolidation or merger of the Company or any Subsidiary where the
shareholders of the Company, immediately prior to the consolidation or
merger, would not, immediately after the consolidation or merger,
beneficially own (as such term is defined in Rule 13d-3 under the Act),
directly or indirectly, shares representing in the aggregate 50% of the
voting shares of the corporation issuing cash or securities in the
consolidation or merger (or of its ultimate parent corporation, if
any), (B) any sale, lease, exchange or other transfer (in one
transaction or a series of transactions contemplated or arranged by any
party as a single plan) of all or substantially all of the assets of
the Company or (C) any plan or proposal for the liquidation or
dissolution of the Company;
Notwithstanding the foregoing, a "Change of Control" shall not be
deemed to have occurred for purposes of the foregoing clause (i) solely as the
result of an acquisition of securities by the Company which, by reducing the
number of shares of Stock or other Voting Securities outstanding, increases (x)
the proportionate number of shares of Stock beneficially owned by any person to
40% or more of the shares of Stock then outstanding or (y) the proportionate
voting power represented by the Voting Securities beneficially owned by any
person to 40% or more of the combined voting power of all then outstanding
Voting Securities; provided, however, that if any person referred to in clause
(x) or (y) of this sentence shall thereafter become the beneficial owner of any
additional Stocks or other Voting Securities (other than pursuant to a share
split, stock dividend, or similar transaction), then a "Change of Control" shall
be deemed to have occurred for purposes of the foregoing clause (i).
SECTION 19. GENERAL PROVISIONS
(a) No Distribution; Compliance with Legal Requirements. The
Committee may require each person acquiring Stock pursuant to an Award to
represent to and agree with the Company in writing that such person is acquiring
the shares without a view to distribution thereof.
No shares of Stock shall be issued pursuant to an Award until all
applicable securities law and other legal and stock exchange or similar
requirements have been satisfied. The Committee may require the placing of such
stop-orders and restrictive legends on certificates for Stock and Awards as it
deems appropriate.
(b) Delivery of Stock Certificates. Delivery of stock certificates
to participants under this Plan shall be deemed effected for all purposes when
the Company or a stock transfer agent of the Company shall have mailed such
certificates in the United States
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mail, addressed to the participant, at the participant's last known address on
file with the Company.
(c) Other Compensation Arrangements; No Employment Rights. Nothing
contained in this amended and restated Plan shall prevent the Board from
adopting other or additional compensation arrangements, including trusts; and
such arrangements may be either generally applicable or applicable only in
specific cases. The adoption of this amended and restated Plan and the grant of
Awards do not confer upon any employee any right to continued employment with
the Company or any Subsidiary.
(d) Trading Policy Restrictions. Option exercises and other Awards
under the Plan shall be subject to the Company's insider trading policy, as in
effect from time to time.
SECTION 20. EFFECTIVE DATE OF PLAN
This Plan, as amended and restated in its entirety as set forth herein,
shall become effective upon approval by the holders of a majority of the votes
cast at a meeting of stockholders at which a quorum is present. Subject to such
approval by the stockholders, and to the requirement that no Stock may be issued
hereunder prior to such approval, Stock Options and other Awards may be granted
hereunder on and after adoption of this amended and restated Plan by the Board.
SECTION 21. GOVERNING LAW
This Plan and all Awards and actions taken thereunder shall be governed
by, and construed in accordance with, Maryland law, applied without regard to
conflict of law principles.
DATE ORIGINAL PLAN APPROVED BY
BOARD OF DIRECTORS AND STOCKHOLDERS: January 13, 1994
DATE RESTATEMENT APPROVED BY BOARD OF DIRECTORS: December 14, 1998
DATE RESTATEMENT APPROVED BY STOCKHOLDERS: May 11, 1999
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EXHIBIT 5.1
GOODWIN, PROCTER & HOAR LLP
COUNSELLORS AT LAW
EXCHANGE PLACE
BOSTON, MASSACHUSETTS 02109-2881
June 3, 1999
Summit Properties Inc.
212 South Tryon Street, Suite 500
Charlotte, North Carolina 28281
Re: Legality of Securities to be Registered Under
Registration Statement on Form S-8
Ladies and Gentlemen:
This opinion is delivered in our capacity as counsel to Summit
Properties Inc., a Maryland corporation (the "Company"), in connection with the
preparation and filing with the Securities and Exchange Commission under the
Securities Act of 1933, as amended (the "Securities Act"), of a Registration
Statement on Form S-8 (the "Registration Statement") relating to an additional
2,000,000 shares (the "Shares") of the Company's common stock, par value $.01
per share, which the Company may issue pursuant to the Company's 1994 Stock
Option and Incentive Plan, as Amended and Restated (the "Plan").
As counsel for the Company, we have examined copies of the Plan, the
Company's Amended and Restated Articles of Incorporation and Bylaws, each as
presently in effect, and such records, certificates and other documents of the
Company as we have deemed necessary or appropriate for the purposes of this
opinion.
We are attorneys admitted to practice in The Commonwealth of
Massachusetts. We express no opinion concerning the laws of any jurisdictions
other than the laws of the United States of America and The Commonwealth of
Massachusetts and the Maryland General Corporation Law, and also express no
opinion with respect to the blue sky or securities laws of any state, including
Massachusetts and Maryland.
Based upon the foregoing, we are of the opinion that upon the issuance
and delivery of the Shares against payment therefor in accordance with the terms
of the Plan, the Shares will be validly issued, fully paid and non-assessable.
The foregoing assumes all requisite steps will be taken to comply with
the requirements of the Securities Act and applicable requirements of state laws
regulating the offer and sale of securities.
We hereby consent to the inclusion of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ Goodwin, Procter & Hoar LLP
GOODWIN, PROCTER & HOAR LLP
<PAGE> 1
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Summit Properties Inc. on Form S-8 of our report dated January 21, 1999,
appearing in the Annual Report on Form 10-K of Summit Properties Inc. for the
year ended December 31, 1998.
/s/ DELOITTE & TOUCHE LLP
DELOITTE & TOUCHE LLP
Charlotte, North Carolina
June 2, 1999
