Exhibit Index begins on sequential page number: 4
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------
HIGHWOODS PROPERTIES, INC.
(Exact name of registrant as specified in its charter)
Maryland 56-1869557
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification No.)
3100 Smoketree Court 27604
Suite 600 (Zip Code)
Raleigh, North Carolina
(Address of principal
executive offices)
----------------------
HIGHWOODS PROPERTIES, INC.
AMENDED AND RESTATED 1994 STOCK OPTION PLAN
(Full title of the plan)
----------------------
Ronald P. Gibson Copy to:
President Brad S. Markoff
Highwoods Properties, Inc. Smith Helms Mulliss & Moore, L.L.P.
3100 Smoketree Court, Suite 600 2800 Two Hannover Square
Raleigh, North Carolina 27604 Raleigh, North Carolina 27601
(919) 872-4924 (919) 755-8700
(Name, address and telephone number of agent for service)
----------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of Securities to be Amount to be Proposed Maximum Proposed Maximum Amount of
registered Registered Offering Price Per Unit(1)(2) Aggregate Offering Price(2) Registration Fee
<S> <C> <C> <C> <C>
Common Stock, par value
$0.01 per share............. 1,100,000 shares $32.375 $35,612,500 $10,791.67
</TABLE>
- ---------------------------
(1) Offering prices vary with the market price of the Registrant's Common Stock.
(2) Computed pursuant to Rule 457(h) under the Securities Act of 1933 (as
amended) solely for the purpose of calculating the registration fee on
the basis of the average of the high and low prices of the Registrant's
Common Stock reported on the New York Stock Exchange on June 19, 1997.
EXPLANATORY NOTE
This Registration Statement is hereby filed with respect to the registration of
additional securities, to be issued pursuant to the Company's 1994 Amended and
Restated Stock Option Plan (the "plan"), of the same class as other securities
for which a Registration Statement has been filed on Form S-8 (File No.
333-12117) and has been effective as of September 16, 1996 (the "Original
Registration Statement").
Pursuant to general instruction e of Form S-8 with respect to the registration
of additional securities, the registrant hereby incorporates by reference herein
the contents of the Original Registration Statement.
1
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Registrant with the Securities and
Exchange Commission (the "Commission") (File No. 1-13100) pursuant to the
Securities and Exchange Act of 1934, as amended (the "Exchange Act"), are
incorporated by reference herein and in the Prospectus constituting a part of
this Registration Statement:
a. the Company's annual report on Form 10-K for the year ended
December 31, 1996;
b. the Company's quarterly report on Form 10-Q for the quarter
ended March 31, 1997;
c. the description of the Common Stock of the Company included
in the Company's Registration Statement on Form 8-A, dated
May 16, 1994; and
d. the Company's Current Reports on Form 8-K, dated January 9,
1997 (as amended by Form 8-K/A on February 7, 1997 and by
Form 8-K/A on March 10, 1997) and February 12, 1997.
All documents subsequently filed by the Registrant pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment that indicates that all securities offered hereunder
have been sold or which deregisters all securities then remaining unsold, shall
be deemed to be incorporated by reference herein and to be a part hereof from
the date of filing such reports and documents.
For purposes of this registration statement, any statement contained in
a report, document or appendix incorporated, or deemed to be incorporated, by
reference in this registration statement shall be deemed to be modified or
superseded to the extent that a statement contained in this registration
statement or in any subsequently filed report, document or appendix, which also
is or is deemed incorporated by reference, modifies or supersedes such statement
in such report, document or appendix. Any statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of this registration statement.
The Registrant will provide without charge to each person to whom the
Prospectus constituting a part of this Registration Statement is delivered, on
the written or oral request of any such person, a copy of any or all of the
documents incorporated herein and in the Prospectus by reference (other than
exhibits to such documents which are not specifically incorporated by reference
in such documents). Written requests for such copies should be directed to
Investor Relations, Highwoods Properties, Inc., 3100 Smoketree Court, Suite 600,
Raleigh, North Carolina 27604. Telephone requests may be directed
to (919) 872-4924.
ITEM 8. EXHIBITS
The following exhibits are filed herewith:
Exhibit No. Description
5.1 Opinion of Smith Helms Mulliss & Moore L.L.P. regarding the legality
of the shares of Common Stock being registered
23.1 Consent of Smith Helms Mulliss & Moore L.L.P. (included in Exhibit
5.1)
23.2 Consent of Ernst & Young, LLP
99.1 Highwoods Properties, Inc. Amended and Restated 1994 Stock Option
Plan
2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Raleigh, State of North Carolina, on June 20, 1997.
Highwoods Properties, Inc.
(Registrant)
By: /s/ Ronald P. Gibson
Ronald P. Gibson
President
--------------------------
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>
Name Title Date
<S> <C> <C>
/s/ O. Temple Sloan, Jr. Chairman of the Board of Directors June 20, 1997
- --------------------------------------------
O. Temple Sloan, Jr.
/s/ Ronald P. Gibson President, Chief Executive Officer and June 20, 1997
- -------------------------------------------- Director
Ronald P. Gibson
/s/ William T. Wilson III Executive Vice President and Director June 20, 1997
- --------------------------------------------
William T. Wilson III
/s/ John L. Turner Vice Chairman of the Board of Directors June 20, 1997
- -------------------------------------------- and Chief Investment Officer
John L. Turner
/s/ Gene H. Anderson Senior Vice President and Director June 20, 1997
- --------------------------------------------
Gene H. Anderson
/s/ John W. Eakin Senior Vice President and Director June 20, 1997
- --------------------------------------------
John W. Eakin
/s/ Thomas W. Adler Director June 20, 1997
- --------------------------------------------
Thomas W. Adler
/s/ William E. Graham, Jr. Director June 20, 1997
- --------------------------------------------
William E. Graham, Jr.
3
<PAGE>
/s/ L. Glenn Orr, Jr. Director June 20, 1997
- --------------------------------------------
L. Glenn Orr, Jr.
/s/ Willard H. Smith Jr. Director June 20, 1997
- --------------------------------------------
Willard H. Smith Jr.
/s/ Stephen Timko Director June 20, 1997
- --------------------------------------------
Stephen Timko
/s/ Carman J. Liuzzo Vice President, Chief Financial Officer June 20, 1997
- -------------------------------------------- and Treasurer (Principal Accounting
Carman J. Liuzzo Officer)
</TABLE>
4
<PAGE>
Exhibit Index
<TABLE>
<CAPTION>
Page
Exhibit No.
<S> <C> <C>
5.1 Opinion of Smith Helms Mulliss & Moore L.L.P. regarding the legality of the shares of
Common Stock being registered
23.1 Consent of Smith Helms Mulliss & Moore L.L.P. (included in Exhibit 5.1)
23.2 Consent of Ernst & Young, LLP
99.1 Highwoods Properties, Inc. Amended and Restated 1994 Stock Option Plan
</TABLE>
EXHIBIT 5.1
June 20, 1997
Highwoods Properties, Inc.
3100 Smoketree Court, Suite 600
Raleigh, North Carolina 27604
RE: REGISTRATION STATEMENT ON FORM S-8
1,100,000 SHARES OF COMMON STOCK, $0.01 PAR VALUE
AMENDED AND RESTATED 1994 STOCK OPTION PLAN
Ladies and Gentlemen:
In connection with the possible offering and sale from time to time of
up to 1,100,000 shares of the common stock, $0.01 par value per share (the
"Shares"), of Highwoods Properties, Inc. (the "Corporation"), upon the terms and
conditions set forth in the Registration Statement on Form S-8 (the
"Registration Statement"), filed on June 20, 1997 by the Corporation with the
Securities and Exchange Commission under the Securities Act of 1933, as amended,
and the prospectus constituting a part thereof (the "Prospectus"), we are of the
opinion that when (a) the Registration Statement shall become effective and (b)
the Shares have been sold upon the terms and conditions set forth in the
Registration Statement and the Prospectus, the Shares will be validly authorized
and legally issued, fully paid and nonassessable.
We hereby consent (1) to be named in the Registration Statement and in
the Prospectus as attorneys who will pass upon the legality of the Shares and
(2) to the filing of a copy of this opinion as Exhibit 5.1 to the Registration
Statement.
Very truly yours,
SMITH HELMS MULLISS & MOORE, L.L.P.
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in the Registration Statement
(Form S-8 No. 333-_______) pertaining to the Amended and Restated 1994 Stock
Option Plan of Highwoods Properties, Inc. of our report dated February 14, 1997
with respect to the consolidated financial statements and schedule of
Highwoods Properties, Inc. included in its Annual Report on Form 10-K
for the year ended December 31, 1996, and our reports dated January 24, 1997
and January 25, 1997 with respect to the Combined Statements of Revenues
and Certain Expenses of Century Center and Anderson Properties, respectively
included in the Company's Current Report on Form 8-K dated January 9,
1997 (as amended on Form 8-K/A dated February 7, 1997 and March 10, 1997).
/s/ ERNST & YOUNG LLP
Raleigh, North Carolina
June 19, 1997
EXHIBIT 99.1
HIGHWOODS PROPERTIES, INC.
AMENDED AND RESTATED 1994 STOCK OPTION PLAN
SECTION 1. GENERAL PURPOSE OF THE PLAN: DEFINITIONS
The name of the plan is the Highwoods Properties, Inc. Amended and Restated
1994 Stock Option Plan (the "Plan"). The purpose of the Plan is to encourage and
enable the officers, employees and directors of Highwoods 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, Phantom Stock and Restricted Stock Awards.
"BOARD" means the Board of Directors of the Company.
"CAUSE" means and shall be limited to a vote of the Board resolving that
the participant should be dismissed as a result of (i) any material breach by
the participant of any agreement to which the participant and the Company are
parties, (ii) any act (other than retirement) or omission to act by the
participant which may have a material and adverse effect on the business of the
Company or any Subsidiary or on the participant's ability to perform services
for the Company or any Subsidiary, including, without limitation, the commission
of any crime (other than ordinary traffic violations), or (iii) any material
misconduct or neglect of duties by the participant in connection with the
business or affairs of the Company or any Subsidiary.
"CHANGE OF CONTROL" is defined in Section 13.
"CODE" means the Internal Revenue Code of 1986, as amended, and any
successor Code, and related rules, regulations and interpretations.
"COMMITTEE" means the Board or any Committee of the Board referred to in
Section 2.
"DISABILITY" means disability as set forth in Section 22(e)(3) of the Code.
"EFFECTIVE DATE" means the date on which the Plan is approved by the
stockholders as set forth in Section 15.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the related rules, regulations and interpretations.
"FAIR MARKET VALUE" on any given date means the last reported sale price at
which the Shares are traded on such date or, if no Shares are traded on such
date, the most recent date on which the Shares were traded, as reflected on the
New York Stock Exchange or, if applicable, any other national stock exchange on
which the Shares are traded.
"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. A director emeritus shall not be
considered as an active Board member for purposes of this definition.
"MEETING FEES" means the fees paid by the Company to each Independent
Director as compensation for attending meetings of the Board or any committee of
the Board.
"NON-EMPLOYEE DIRECTOR" means a director who qualifies as such under Rule
16b-3(b)(3) promulgated under the Act or any successor definition under the Act.
"NON-QUALIFIED STOCK OPTION" means any Stock Option that is not an
Incentive Stock Option.
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"OPTION" or "STOCK OPTION" means any option to purchase Shares granted
pursuant to Section 5.
"PHANTOM STOCK" means Awards granted pursuant to Section 8.
"RESTRICTED STOCK AWARD" means Awards granted pursuant to Section 7.
"RESTRICTED SHARES" means Shares subject to restrictions as provided in
Section 7 and the subject of a Restricted Stock Award.
"RETAINER FEE" means any annual fees paid by the Company to each
Independent Director, including fees paid for service on a committee of the
Board.
"SHARE" means one or more, respectively, of the Company's shares of common
stock, par value $.01 per share, subject to adjustments pursuant to Section 3.
"STOCK APPRECIATION RIGHTS" ("SARS") means Awards granted pursuant to
Section 6.
"SUBSIDIARY" means Highwoods Services, Inc. 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.
SECTION 2. ADMINISTRATION OF PLAN: COMMITTEE AUTHORITY TO SELECT PARTICIPANTS
AND DETERMINE AWARDS
(a) COMMITTEE. Except as set forth in Section 2(c), the Plan shall be
administered by the executive compensation committee of the Board, or any other
committee of not less than two Non-Employee Directors performing similar
functions, as appointed by the Board from time to time. Only Non-Employee
Directors may vote with respect to transactions involving an award or other
acquisition from the Company.
(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:
(i) to select participants to whom Awards may be granted from time to
time;
(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, Phantom Stock, and Restricted Stock Awards, or any combination of
the foregoing, granted to any one or more participants;
(iii) to determine the number of Shares to be covered by any Award;
(iv) to determine and modify 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, 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 Shares 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 Awards (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.
All decisions and interpretations of the Committee shall be binding on all
persons, including the Company and Plan participants.
2
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SECTION 3. SHARES AVAILABLE UNDER THE PLAN; MERGERS; SUBSTITUTIONS
(a) SHARES ISSUABLE. The maximum number of Shares reserved and available
for issuance under the Plan shall be 2,500,000 Shares of which not more than
200,000 Shares may be Restricted Stock granted as provided in Section 7 hereof.
For purposes of this limitation, the Shares underlying any Awards which are
forfeited, canceled, reacquired by the Company, satisfied without the issuance
of Shares or otherwise terminated (other than by exercise) shall be added back
to the Shares available for issuance under the Plan so long as the participants
to whom such Awards had been previously granted received no benefits of
ownership of the underlying Shares to which the Award related. Subject to such
overall limitation, Shares may be issued up to such maximum number pursuant to
any type or types of Award, including Incentive Stock Options. Shares issued
under the Plan may be authorized but unissued Shares or Shares reacquired by the
Company.
(b) STOCK DIVIDENDS, MERGERS, ETC. In the event of a stock dividend, stock
split or similar change in capitalization affecting the Shares, the Committee
shall make appropriate adjustments in (i) the number and kind of stock or
securities on which Awards may thereafter be granted, (ii) the number and kind
of stock or securities remaining subject to outstanding Awards, and (iii) the
option or purchase price in respect of such stock or securities. In the event of
any merger, consolidation, dissolution or liquidation of the Company, the
Committee in its sole discretion may, as to any outstanding Awards, make such
substitution or adjustment in the aggregate number of Shares reserved for
issuance under the Plan and the number and purchase price (if any) of Shares
subject to such Awards as it may determine and as may be permitted by the terms
of such transaction, or amend or terminate such Awards upon such terms and
conditions as it shall provide (which, in the case of the termination of the
vested portion of any Award, shall require payment or other consideration which
the Committee deems equitable in the circumstances).
(c) 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.
SECTION 4. ELIGIBILITY
Participants in the Plan will be such directors, 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.
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. 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 June 16,
2004.
(a) STOCK OPTIONS GRANTED TO EMPLOYEES. The Committee in its discretion may
grant Stock Options to 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 Shares
covered by a Stock Option granted pursuant to this Section 5(a) shall be
determined by the Committee at the time of grant but shall not be less than
100% of 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 not be less than 110% of Fair Market
Value on the grant date.
(ii) OPTION TERM. The term of each Stock Option shall be fixed by the
Committee, but no Incentive 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
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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.
(iii) 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. 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.
(iv) 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 or by such other method as the
Committee may allow:
(A) In cash, by certified or bank check or other instrument
acceptable to the Committee;
(B) In the form of Shares that are not then subject to restrictions
under any Company plan and that have been held 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 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 or laws.
(v) NON-TRANSFERABILITY OF OPTIONS. No Stock Option shall be
transferable by the optionee otherwise than by will or by the laws of
descent and distribution and all Stock Options shall be exercisable, during
the optionee's lifetime, only by the optionee.
(vi) TERMINATION BY REASON OF DEATH. If any optionee's employment by
the Company and its Subsidiaries terminates by reason of death, the Stock
Option may thereafter be exercised, to the extent exercisable at the date
of death, by the legal representative or legatee of the optionee, for a
period of six months (or such longer periods 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.
(vii) 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 may
thereafter be exercised, to the extent it was exercisable at the time of
such termination, for a period of six 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)(vii) for the exercise of a Non-Qualified Stock Option, shall extend
such period of six months from the date of death, subject to termination
on the expiration of the stated term of the Option, if earlier.
(viii) 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 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.
(ix) OTHER TERMINATION. Unless otherwise determined by the Committee,
if an optionee's employment by the Company and its Subsidiaries terminate
for any reason other than death, Disability, or for Cause, any Stock Option
held
4
<PAGE>
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.
(x) 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 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.
(xi) FORM OF SETTLEMENT. Shares 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 so-called "reload" feature pursuant to which an
optionee exercising an option by the delivery of a number of Shares in
accordance with Section 5(a)(iv)(B) hereof would automatically be granted
additional Options (with an exercise price equal to the Fair Market Value of the
Stock on the date the additional 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 equal to the number
delivered to exercise the original Option.
(c) STOCK OPTIONS GRANTED TO INDEPENDENT DIRECTORS.
(i) AUTOMATIC GRANT OF OPTIONS. Each Independent Director shall
automatically be granted a Non-Qualified Stock Option to purchase 10,000
Shares upon assuming his or her position on the Board. The exercise price
per Share for the Shares covered by a Stock Option granted pursuant to this
Section 5(c)(i) shall be equal to, (x) as to each Independent Director
serving on the Board on the date of the initial public offering, the
initial public offering price and, (y) as to each Independent Director
elected to serve on the Board subsequent to the initial public offering,
the Fair Market Value of a single Share on the date the Stock Option is
granted.
(ii) DISCRETIONARY GRANT OF OPTIONS. Commencing January 1, 1996, the
Committee in its discretion may grant Non-Qualified Stock Options in
addition to those automatically awarded pursuant to Section 5(c)(i). The
exercise price per Share for the Shares covered by a Stock Option granted
pursuant to this Section 5(c)(ii) shall not be less than the Fair Market
Value of a single Share on the date the Stock Option is granted.
(iii) GRANT OF OPTIONS IN LIEU OF CASH FOR RETAINER FEE AND MEETING
FEES.
(A) Each Independent Director may elect to defer 0%, 50% or 100% of
his Retainer Fee and/or Meeting Fees for each calendar year (commencing
calendar year 1997) for the application of that amount towards the grant
of Stock Options as set forth in Section 5(c)(iii)(B). On or before
December 31 of the year preceding the calendar year for which the fees
apply, each Independent Director shall make an irrevocable election in
writing on a Notice of Election attached hereto as "Exhibit A", or such
other form as may be approved by the Committee, to receive Stock Options
in lieu of all or a designated percentage of his Retainer Fee and/or
Meeting Fees.
(B) The number of Stock Options issuable in accordance with this
Section 5(c)(iii) with respect to the elected portion of an Independent
Director's Retainer Fee and the elected portion of an Independent
Director's Meeting Fees will be equal to the amount of the deferred fees
divided by 25% of the Fair Market Value of a Share on the date of the
grant.
(C) Fractional Options shall not be granted under this Section
5(c)(iii) and any remaining amount of elected Retainer Fees and Meeting
Fees will be paid to each Independent Director in cash, on the date or
dates Option grants are made in accordance with this Section 5(c)(iii).
(D) The price at which a Share may be purchased under an Option
granted pursuant to this Section 5(c) (iii) shall be equal to 75% of the
Fair Market Value of a Share on the date of the grant.
(iv) EXERCISE; TERMINATION; NON-TRANSFERABILITY.
(A) Except as provided in Section 13, no Option granted under
Section 5(c)(i) may be exercised before the first anniversary of the
date upon which it was granted. The Shares subject to such Options
granted under Section 5(c)(i) shall become exercisable in 25% increments
on each anniversary of the date of grant beginning with the first such
anniversary such that 100% of the Shares subject to an Option shall be
exercisable on or after the fourth anniversary of the date of grant;
provided, however, that the Independent Director who has received a
grant under
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Section 5(c)(i) must be a member of the Board on any such anniversary
date. The term and exercisability of each Option granted under Section
5(c)(ii) shall be fixed by the Committee. Options granted pursuant to
Section 5(c)(iii) become exercisable six months from the date of grant;
provided, however, that the Independent Director who has received a
grant under Section 5(c)(iii) must be a member of the Board on such
date. No Option issued under Section 5(c) shall be exercisable after the
expiration of 10 years from the date such Option is granted.
(B) The rights of an Independent Director in an Option granted
under Section 5(c)(i) and 5(c)(ii) 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. The rights
of an Independent Director in an Option granted under Section 5(c)(iii)
shall terminate three years after such director ceases to be a director
of the Company or the specified expiration date, if earlier; provided,
however, that if and when an Independent Director becomes inactive or
becomes a director emeritus, Options previously granted pursuant to
Section 5(c)(iii) shall remain exercisable the same as if the inactive
director or director emeritus was at all times an active Independent
Director.
(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. Any Option granted to an
Independent Director pursuant to Section 5(c)(i) and 5(c)(ii) 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. Any Option granted to an Independent Director
pursuant to Section 5(c)(iii) and outstanding on the date of his death
may be exercised by the legal representative or legatee of the optionee
for a period of three years 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)(iv). 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. The provisions of this Section 5(c)
which affect the price, date of exercisability, option period or amount of
Shares under an Option shall not be amended more than once in any six-month
period, other than to comport with changes in the Code or ERISA.
SECTION 6. STOCK APPRECIATION RIGHTS
The Committee may from time to time grant SARs unrelated to Options or
related to Options or portions of Options granted to participants under the
Plan. Each SAR shall be evidenced by a written instrument and shall be subject
to such terms and conditions as the Committee may determine. Subject to such
terms and conditions established by the Committee the participant may exercise
an SAR or portion thereof, and thereupon shall be entitled to receive payment of
an amount equal to the aggregate appreciation in value of the Shares as to which
the SAR is awarded, as measured by the difference between the purchase price of
such Shares and their Fair Market Value at the date of exercise. Such payments
may be made in cash, in Shares valued at Fair Market Value as of the date of
exercise, or in any combination thereof, as the Committee in its discretion
shall determine.
SECTION 7. RESTRICTED STOCK AWARDS
(a) NATURE OF RESTRICTED STOCK AWARD. The Committee may grant Restricted
Stock Awards to any participant under the Plan. A Restricted Stock Award is an
Award entitling the recipient to acquire, at no cost or for a purchase price
determined by the Committee, Shares subject to such restrictions and conditions
as the Committee may determine at the time of grant. 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 Shares 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 Shares 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 conditions contained in the
written instrument evidencing the Restricted Stock Award. Unless the Committee
shall otherwise determine, certificates evidencing the Restricted Shares shall
remain in the possession of the Company until such Shares are vested as provided
in Section 7(e) below.
(d) RESTRICTIONS. Restricted Shares may not be sold, assigned, transferred,
pledged or otherwise encumbered or disposed of except as specifically provided
herein. In the event of termination of employment by the Company and its
Subsidiaries, or in the case of Independent Directors, an Independent Director
ceases to be a director, for any reason (including death, retirement,
Disability, or for Cause), the Company shall have the right, at the discretion
of the Committee, to repurchase at their original purchase price as established
at Section 7(a) above Restricted Shares with respect to which conditions have
not lapsed, or to require forfeiture of such Shares to the Company if acquired
at no cost, from the participant or the participant's legal representative. The
Company must exercise such right of repurchase or forfeiture not later than the
90th day following such termination of employment (unless otherwise specified in
the written instrument evidencing the Restricted Stock Award).
(e) VESTING OF RESTRICTED SHARES. 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 Shares 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 Shares and
shall be deemed "vested."
(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
Shares.
SECTION 8. PHANTOM STOCK
The Committee may from time to time grant Phantom Stock Awards to any
participant under the Plan. Each Phantom Stock Award shall be evidenced by a
written instrument and shall be subject to such terms and conditions as the
Committee may determine. Subject to such terms and conditions as may be
established by the Committee, the participant may exercise a Phantom Stock Award
or portion thereof, and thereupon shall be entitled to receive payment of an
amount equal to the Fair Market Value at the date of exercise of the Shares as
to which the Phantom Stock is awarded. Such payments may be made in cash, in
Shares valued at Fair Market Value as of the date of exercise, or in any
combination thereof, as the Committee in its discretion shall determine.
SECTION 9. TAX WITHHOLDING
(a) PAYMENT BY PARTICIPANT. Each participant shall, no later than the date
as of which the value of an Award of any Shares 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 of any kind otherwise due to the
participant.
(b) PAYMENT IN SHARES. A participant may elect to have such tax withholding
obligation satisfied, in whole or in part, by (i) authorizing the Company to
withhold from the Shares 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 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. With respect to any participant who is subject to Section 17 of the
Act, the following additional restrictions shall apply:
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(A) the election to satisfy tax withholding obligations relating to an
Award in the manner permitted by this Section 9(b) shall be made either (1)
during the period beginning on the third business day following the date of
release of quarterly or annual summary statements of revenues of the
Company and ending on the twelfth business day following such date, or (2)
at least six months prior to the date as of which the receipt of such Award
first becomes a taxable event for federal income tax purposes;
(B) such election shall be irrevocable;
(C) such election shall be subject to the consent or disapproval of
the Committee, and
(D) the Shares withheld to satisfy tax withholding must pertain to an
Award which has been outstanding for at least six months.
SECTION 10. 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 purposes 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 11. 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 (or provide substitute
Awards at the same or reduced exercise or purchase price or with no exercise or
purchase price, but such price, if any, must satisfy the requirements which
would apply to the substitute or amended Award as if it were then initially
granted under this Plan) for the purpose of satisfying changes in law without
the holder's consent. To the extent required by the Code to ensure that Options
granted hereunder qualify as Incentive Stock Options and to the extent required
by the Act to ensure that Awards and Options granted under the Plan are exempt
under Rule 16b-3 promulgated under the Act, Plan amendments shall be subject to
approval by the Company's stockholders.
SECTION 12. STATUS OF PLAN
With respect to the portion of any Award which has not been exercised and
any payments in cash, Shares 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 Shares or make payments with respect to Awards hereunder,
provided that the existence of such trusts or other arrangements is consistent
with the provisions of the foregoing sentence.
SECTION 13. CHANGE OF CONTROL PROVISIONS
Upon the occurrence of a Change of Control as defined in this Section 13:
(a) Each outstanding Stock Option shall automatically become fully
exercisable notwithstanding any provision to the contrary herein.
(b) Restrictions and conditions on Restricted Stock Awards shall
automatically be deemed waived, and the recipients of such Awards shall become
entitled to receipt of the Shares subject to such Awards unless the Committee
shall otherwise expressly provide at the time of grant.
(c) "CHANGE OF CONTROL" shall mean the occurrence of any one of the
following events:
(i) any "PERSON," as such term is used in Section 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
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Board of Directors ("Voting Securities") or (B) the then outstanding Shares
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 May 1, 1994, 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 Company subsequent to
May 1, 1994 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
stockholders 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 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 an 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 or other Voting Securities outstanding, increases (x) the proportionate
number of Shares beneficially owned by any person to 40% or more of the Shares
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 Shares or other Voting Securities
(other than pursuant to a stock 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 14. GENERAL PROVISIONS
(a) NO DISTRIBUTION: COMPLIANCE WITH LEGAL REQUIREMENTS. The Committee may
require each person acquiring Shares 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 shall be issued pursuant to an Award until all applicable
securities laws and other legal and stock exchange requirements have been
satisfied. The Committee may require the placing of such stop-orders and
restrictive legends on certificates for Shares 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 delivered such
certificates in the United States 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 Plan shall prevent the Board from adopting other or additional
compensation arrangements, including trusts, subject to stockholder approval if
such approval is required; and such arrangements may be either generally
applicable or applicable only in specific cases. The adoption of the Plan and
the grant of Awards do not confer upon any employee any right to continued
employment with the Company or any Subsidiary.
SECTION 15. EFFECTIVE DATE OF PLAN
This Plan shall become effective upon approval by the holders of a majority
of the Shares of the Company present or represented and entitled to vote at a
meeting of stockholders.
SECTION 16. GOVERNING LAW
This Plan shall be governed by North Carolina law except to the extent such
law is preempted by federal law.
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