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As filed with the Securities and Exchange Commission on June __, 1998. 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
----------------------
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, Suite 600
Raleigh, North Carolina 27604
(Address of principal executive offices)(Zip Code)
---------------------
HIGHWOODS PROPERTIES, INC.
AMENDED AND RESTATED 1994 STOCK OPTION PLAN
(Full title of the plan)
----------------------
Ronald P. Gibson, President
Highwoods Properties, Inc.
3100 Smoketree Court, Suite 600
Raleigh, North Carolina 27604
(919) 872-4924
(Name, address and telephone number of agent for service)
Copy to:
Brad S. Markoff
Alston & Bird LLP
3605 Glenwood Avenue, Suite 310
Raleigh, North Carolina 27612
(919) 420-2210
----------------------
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CALCULATION OF REGISTRATION FEE
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
Common Stock, par value
$0.01 per share......... 3,500,000 shares $32.07 $112,245,000 $34,014
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(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 May 27, 1998.
<PAGE>
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.
<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") 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:
1. The Company's annual report on Form 10-K for the year ended December
31, 1997 (as amended on April 29, 1998 and May 19, 1998);
2. The Company's quarterly report filed on Form 10-Q for the quarter
ended March 31, 1998;
3. The Company's current reports on Form 8-K, dated January 9, 1997 (as
amended on February 7, 1997, March 10, 1997 and April 28, 1998),
August 27, 1997 (as amended on September 23, 1997), October 1, 1997,
November 17, 1997, January 22, 1998, February 2, 1998, and April 20,
1998, April 29, 1998; and
4. The description of the Common Stock of the Company included in the
Company's registration statement on Form 8-A, dated May 16, 1994.
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.
3
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ITEM 8. EXHIBITS
The following exhibits are filed herewith:
Exhibit No. Description
5.1 Opinion of Alston & Bird LLP regarding the legality of the shares
of Common Stock being registered
23.1 Consent of Alston & Bird LLP (included in Exhibit 5.1)
23.2 Consent of Ernst & Young, LLP
23.3 Consent of Coopers & Lybrand, L.L.P.
99.1 Highwoods Properties, Inc. Amended and Restated 1994 Stock Option
Plan
4
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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 May 27, 1998.
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.
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Name Title Date
/s/ O. Temple Sloan, Jr. Chairman of the Board of Directors May 29, 1998
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O. Temple Sloan, Jr.
President, Chief Executive Officer and May 29, 1998
/s/ Ronald P. Gibson Director
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Ronald P. Gibson
Vice Chairman of the Board of Directors May 29, 1998
/s/ John L. Turner and Chief Investment Officer
- --------------------------
John L. Turner
/s/ Gene H. Anderson Senior Vice President and Director May 29, 1998
- --------------------------
Gene H. Anderson
/s/ John W. Eakin Senior Vice President and Director May 29, 1998
- --------------------------
John W. Eakin
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/s/ James R. Heistand Director May 29, 1998
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James R. Heistand
/s/ Thomas W. Adler Director May 29, 1998
- -----------------------
Thomas W. Adler
/s/ William E. Graham, Jr. Director May 29, 1998
- --------------------------
William E. Graham, Jr.
/s/ L. Glenn Orr, Jr. Director May 29, 1998
- ----------------------
L. Glenn Orr, Jr.
/s/ Willard H. Smith Jr. Director May 29, 1998
- --------------------------
Willard H. Smith Jr.
/s/ Stephen Timko Director May 29, 1998
- --------------------------
Stephen Timko
/s/ William T. Wilson, III Executive Vice President and Director May 29, 1998
- ----------------------------
William T. Wilson III
Vice president, Chief Financial Officer May 29, 1998
/s/ Carman J. Liuzzo and Treasurer (Principal Accounting
- ----------------------------- Officer)
Carman J. Liuzzo
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6
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Exhibit Index
Exhibit No.
5.1 Opinion of Alston & Bird LLP regarding the legality of the
shares of Common Stock being registered
23.1 Consent of Alston & Bird LLP (included in Exhibit 5.1)
23.2 Consent of Ernst & Young, LLP
23.3 Consent of Coopers & Lybrand, L.L.P.
99.1 Highwoods Properties, Inc. Amended and Restated 1994 Stock
Option Plan
7
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EXHIBIT 5.1
May 29, 1998
Highwoods Properties, Inc.
3100 Smoketree Court, Suite 600
Raleigh, North Carolina 27604
RE: REGISTRATION STATEMENT ON FORM S-8
3,500,000 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 3,500,000 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 ___, 1998 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,
ALSTON & BIRD LLP
8
Exhibit 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement (Form
S-8 No. 333-_______) pertaining to the Amended and Restated 1994 Stock Option
Plan of Highwoods Properties, Inc. of our reports (a) dated February 20, 1998,
with respect to the consolidated financial statements and schedule of Highwoods
Properties, Inc. included in its Annual Report (Form 10-K) for the year ended
December 31, 1997 (as amended on Form 10-K/A on April 29, 1998 and May 19,
1998); (b) 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 Highwoods Properties, Inc.'s
Current Report on Forms 8-K dated January 9, 1997 (as amended on Form 8-K/A on
February 7, 1997, March 10,1997 and April 28, 1998), and (c) dated January 16,
1998 with respect to the Combined Statements of Revenues and Certain Expenses of
Riparius Properties and Shelton Properties and the Statement of Revenues and
Certain Expenses of Winners Circle for the year ended December 31, 1996 included
in the Current Report on form 8-K of Highwoods Properties, Inc. dated November
17, 1997, all filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
---------------------
Raleigh, North Carolina
May 28, 1998
9
Exhibit 23.3
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration Statement on
Form S-8 (File No. 333-___) of our reports dated September 12, 1997, on our
audits of the combined statement of revenues and certain operating expenses of
the Associated Capital Properties Portfolio for the year ended December 31,
1996, and the combined statement of revenues and certain operating expenses of
the 1997 Pending Acquisitions for the year ended December 31, 1996, which
reports are included in the Forms 8-K of Highwoods Properties, Inc. dated August
27, 1997 (as amended on September 23, 1997) and October 1, 1997.
/s/ Coopers & Lybrand L.L.P.
-----------------------------
Memphis, Tennessee
May 27, 1998
10
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, shallinclude 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.
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"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.
"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:
2
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(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.
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 6,000,000 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).
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(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 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.
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(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.
5
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(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 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.
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(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 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.
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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. 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.
(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
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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
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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:
(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. Notwithstanding
anything herein to the contrary, neither the Board nor the Committee may reduce
the exercise or purchase price of any outstanding Award without stockholder
approval.
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.
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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 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).
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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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