<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
AMENDMENT NO. 1
(Mark One)
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
--------------------------------------------------
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period to
------------------------------------------------------
Commission File Number 1-13232
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Maryland 84-1259577
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1873 S. Bellaire Street, Suite 1700, Denver, Colorado 80222-4348
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(303) 757-8101
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Not applicable
- --------------------------------------------------------------------------------
(Former name, former address, and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
----- -----
The number of shares of Class A Common Stock outstanding as of November 1, 1996:
12,842,843
The number of shares of Class B Common Stock outstanding as of November 1, 1996:
455,000
<PAGE>
Item 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) The following exhibits are filed with this report:
Exhibit
Number Description
- ------- -----------
3.1 Restated Articles of Incorporation of the Company (incorporated by
reference from the Company's Annual Report on Form 10-K for fiscal
year 1995).
3.2 Bylaws of the Company (incorporated by reference from the Company's
Annual Report on Form 10-K for fiscal year 1995).
10.1 Credit Agreement, dated as of August 12, 1996, by and among AIMCO
Properties, L.P., the banks from time to time party to this Agreement,
Bank of America National Trust and Savings Association, as one of the
Banks, and Bank of America National Trust and Savings Association, as
Agent.*
10.2 Promissory Note, dated as of August 12, 1996, by AIMCO Properties,
L.P., in favor of Bank of America National Trust and Savings
Association.*
10.3 Payment Guaranty, dated as of August 12, 1996, by the Company,
AIMCO-GP, Inc., AIMCO-LP, Inc., AIMCO Holdings, L.P., AIMCO Holdings
QRS, Inc., AIMCO Somerset, Inc. and AIMCO/OTC QRS, Inc. in favor of
Bank of America National Trust and Savings Association, as the agent.*
10.4 Credit Agreement (BRIDGE LOAN) entered into as of August 12, 1996,
among AIMCO Properties, L.P., the National Trust and Savings
Association and Bank of America National Trust and Savings
Association, as agent.*
10.5 Promissory Note by AIMCO Properties, L.P. in favor of Bank of America
National Trust and Savings Association.*
<PAGE>
Exhibit
Number Description
- ------ -----------
10.6 Payment Guaranty dated as of August 12, 1996, by the Company,
AIMCO-GP, Inc., AIMCO-LP, Inc., AIMCO Holdings, L.P., AIMCO Holdings
QRS, Inc., AIMCO Somerset Inc. and AIMCO/OTC QRS, Inc., in favor of
Bank of America National Trust and Savings Association.*
10.7 Acquisition Agreement, dated as of July 26, 1995, among the Company,
AIMCO Properties, L.P., AIMCO/PAM Properties, L.P., John W. English,
J.W. English Real Estate, Inc., J.W. English Development Co., J.W.
English Investments Co., J.W. English Management Co., Easton Falls
Partners, Ltd. and English Income Fund I, a Texas Limited
Partnership.*
10.8 Apartment Investment and Management Company Non-Qualified Employee
Stock Option Plan, adopted August 29, 1996.
27.1 Financial Data Schedule*
(b) Reports on Form 8-K for the quarter ended September 30, 1996:
None
- -----------------------
* Previously filed.
2
<PAGE>
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
REGISTRANT:
APARTMENT INVESTMENT AND
MANAGEMENT COMPANY
Date: November 21, 1996 /s/ Leeann Morein
----------------------------
Leeann Morein
Senior Vice President and
Chief Financial Officer
(duly authorized officer and
principal financial officer)
/s/ Patricia K. Heath
----------------------------
Patricia K. Heath
Vice President and
Chief Accounting Officer
(principal accounting officer)
30
<PAGE>
APARTMENT INVESTMENT AND
MANAGEMENT COMPANY
NON-QUALIFIED EMPLOYEE STOCK OPTION PLAN
ADOPTED AUGUST 29, 1996
<PAGE>
TABLE OF CONTENTS
PAGE
SECTION 1 PURPOSE OF PLAN; DEFINITIONS.................................. 1
SECTION 2 ADMINISTRATION................................................. 4
SECTION 3 STOCK SUBJECT TO PLAN.......................................... 7
SECTION 4 ELIGIBILITY.................................................... 8
SECTION 5 STOCK OPTIONS.................................................. 8
SECTION 6 STOCK APPRECIATION RIGHTS AND
LIMITED STOCK APPRECIATION RIGHTS............................. 11
SECTION 7 DIVIDEND EQUIVALENTS.......................................... 14
SECTION 8 RESTRICTED STOCK, DEFERRED STOCK AND
PERFORMANCE SHARES............................................ 15
SECTION 9 AMENDMENT AND TERMINATION..................................... 17
SECTION 10 UNFUNDED STATUS OF PLAN....................................... 17
SECTION 11 GENERAL PROVISIONS............................................ 18
SECTION 12 EFFECTIVE DATE OF PLAN........................................ 19
SECTION 13 TERM OF PLAN.................................................. 19
i
<PAGE>
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
NON-QUALIFIED EMPLOYEE STOCK OPTION PLAN
SECTION 1
PURPOSE OF PLAN; DEFINITIONS
1.1 PURPOSE. The purpose of the Plan is to reinforce the long-term
commitment to the Company's success of those officers (including officers who
are directors of the Company), other employees, independent directors,
consultants and advisors of the Company who are or will be responsible for such
success; to facilitate the ownership of the Company's stock by such individuals,
thereby reinforcing the identity of their interests with those of the Company's
stockholders; and to assist the Company in attracting and retaining officers and
other employees, directors and consultants and advisors with experience and
ability.
1.2 DEFINITIONS. Wherever the masculine gender is used it shall
include the feminine, and where a singular pronoun is used, it shall include the
plural, unless the context clearly indicates otherwise. For purposes of the
Plan, the following terms shall be defined as set forth below:
(a) "ADMINISTRATOR" means the Board, or if the Board does not
administer the Plan, the Committee in accordance with Section 2.
(b) "BOARD" means the Board of Directors of the Company.
(c) "CODE" means the Internal Revenue Code of 1986, as amended
from time to time, or any successor thereto.
(d) "COMMITTEE" means the Compensation Committee of the Board
other than directors who are not Non-Employee Directors, including such
additional individuals as the Board shall designate in order to fulfill the
Non-Employee Director requirement of Rule 16b-3 as promulgated by the Securities
and Exchange Commission (the "Commission") under the Securities Exchange Act of
1934 (the "Act"), and as such Rule may be amended from time to time, or any
successor definition adopted by the Commission, or any other Committee the Board
may subsequently appoint to administer the Plan. The Committee shall be
composed entirely of individuals who are Non-Employee Directors. If at any time
the Board
1
<PAGE>
shall not administer the Plan, then the functions of the Board specified in the
Plan shall be exercised by the Committee.
(e) "COMPANY" means Apartment Investment and Management Company,
a Maryland corporation (or any successor corporation).
(f) "COMPANY EMPLOYEE" means any officer or other employee (as
defined in accordance with Section 3401(c) of the Code) of the Company.
(g) "DEFERRED STOCK" means an award made pursuant to Section 8
below of the right to receive Stock at the end of a specified deferral period.
(h) "DISABILITY" means the inability of a Participant to perform
substantially his duties and responsibilities to the Company by reason of a
physical or mental disability or infirmity (i) for a continuous period of six
months, or (ii) at such earlier time as the Participant submits medical evidence
satisfactory to the Company that he has a physical or mental disability or
infirmity which will likely prevent him from returning to the performance of his
work duties for six months or longer. The date of such Disability shall be on
the last day of such six-month period or the day on which the Participant
submits such satisfactory medical evidence, as the case may be.
(i) "DIVIDEND EQUIVALENT" means an award granted pursuant to
Section 7 of a right to receive certain payments with respect to shares of Stock
of the Company.
(j) "EFFECTIVE DATE" shall mean the date provided pursuant to
Section 12.
(k) "ELIGIBLE EMPLOYEE" means any Company Employee or Partnership
Employee eligible to participate in the Plan pursuant to Section 4.
(l) "FAIR MARKET VALUE" means, as of any given date, with respect
to any awards granted hereunder (A) the closing price of a share of the
Company's Common Stock on the principal exchange on which shares of the
Company's Common Stock are then trading, if any, on the trading day previous to
such date, or, if shares were not traded on the trading day previous to such
date, then on the next preceding trading day during which a sale occurred; or
(B) if such Common Stock is not traded on an exchange but is quoted on Nasdaq or
a successor
2
<PAGE>
quotation system, (1) the last sales price (if the Company's Common Stock is
then listed as a National Market Issue under the Nasdaq National Market System)
or (2) the mean between the closing representative bid and asked prices (in all
other cases) for the Company's Common Stock on the trading day previous to such
date as reported by Nasdaq or such successor quotation system; or (C) if such
Common Stock is not publicly traded on an exchange and not quoted on Nasdaq or a
successor quotation system, the mean between the closing bid and asked prices
for the Company's Common Stock, on the day previous to such date, as determined
in good faith by the Committee; or (D) if the Company's Common Stock is not
publicly traded, the fair market value established by the Committee acting in
good faith.
(m) "LIMITED STOCK APPRECIATION RIGHT" means a Stock Appreciation
Right that can be exercised only in the event of a "Change of Control" (as
defined in the award evidencing such Limited Stock Appreciation Right).
(n) "NON-EMPLOYEE DIRECTOR" shall have the meaning set forth in
Rule 16b-3 of the Act, and as such Rule may be amended from time to time, or any
successor definition adopted by the Commission.
(o) "NON-QUALIFIED STOCK OPTION" means any Stock Option that is
not an incentive stock option within the meaning of Section 422 of the Code.
(p) "PARTICIPANT" means any Eligible Employee, or any consultant
or advisor to the Company selected by the Administrator, pursuant to the
Administrator's authority in Section 2 below, to receive grants of Stock
Options, Stock Appreciation Rights, Limited Stock Appreciation Rights, Dividend
Equivalents, Restricted Stock awards, Deferred Stock awards, Performance Shares
or any combination of the foregoing.
(q) "PERFORMANCE SHARE" means an award of shares of Stock
pursuant to Section 8 that is subject to restrictions based upon the attainment
of specified performance objectives.
(r) "RESTRICTED STOCK" means an award granted pursuant to Section
8 of shares of Stock subject to certain restrictions.
1.3 "STOCK" means the Class A Common Stock of the Company, par value
$.01 per share, and any equity security of the Company issued or authorized to
be issued in the future, but excluding any warrants, options or other rights to
3
<PAGE>
purchase Class A Common Stock. Debt securities of the Company convertible into
Class A Common Stock shall be deemed equity securities of the Company.
1.4 "STOCK OWNERSHIP LIMIT" means the restrictions on ownership and
transfer of Common Stock provided in Section 3.4 of the Company's Charter.
1.5 "STOCK APPRECIATION RIGHT" means the right pursuant to an award
granted under Section 6 to receive an amount equal to the difference between (A)
the Fair Market Value, as of the date such Stock Appreciation Right or portion
thereof is surrendered, of the shares of Stock covered by such right or such
portion thereof, and (B) the aggregate exercise price of such right or such
portion thereof.
1.6 "STOCK OPTION" means any option to purchase shares of Stock
granted pursuant to Section 5.
SECTION 2
ADMINISTRATION
2.1 ADMINISTRATOR. The Plan shall be administered by the Board or by
the Committee which shall be appointed by the Board and which shall serve at the
pleasure of the Board, in accordance with the requirements of Rule 16b-3 of the
Act.
2.2 DUTIES AND POWERS OF ADMINISTRATOR. The Administrator shall have
the power and authority to grant to Eligible Employees, consultants and advisors
to the Company, pursuant to the terms of the Plan: (a) Stock Options, (b) Stock
Appreciation Rights or Limited Stock Appreciation Rights, (c) Dividend
Equivalents, (d) Restricted Stock, (e) Performance Shares, (f) Deferred Stock or
(g) any combination of the foregoing.
In particular, the Administrator shall have the authority:
(a) to select those employees of the Company who shall be
Eligible Employees;
(b) to determine whether and to what extent Stock Options, Stock
Appreciation Rights, Limited Stock Appreciation Rights, Dividend Equivalents,
Restricted Stock, Deferred Stock, Performance Shares or a combination of the
4
<PAGE>
foregoing, are to be granted hereunder to Eligible Employees, consultants and
advisors to the Company;
(c) to determine the number of shares to be covered by each such
award granted hereunder;
(d) to determine the terms and conditions, not inconsistent with
the terms of the Plan, of any award granted hereunder (including, but not
limited to, (x) the restrictions applicable to Restricted or Deferred Stock
awards and the conditions under which restrictions applicable to such Restricted
or Deferred Stock shall lapse, and (y) the performance goals and periods
applicable to the award of Performance Shares);
(e) to determine the terms and conditions, not inconsistent with
the terms of the Plan, which shall govern all written instruments evidencing the
Stock Options, Stock Appreciation Rights, Limited Stock Appreciation Rights,
Dividend Equivalents, Restricted Stock, Deferred Stock, Performance Shares or
any combination of the foregoing; and
(f) in its discretion, to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it shall
from time to time deem advisable; to interpret the terms and provisions of the
Plan and any award issued under the Plan (and any agreements relating thereto);
and to otherwise supervise the administration of the Plan.
2.3 MAJORITY RULE. The Committee shall act by a majority of its
members in attendance at a meeting at which a quorum is present or by a
memorandum or other written instrument signed by all members of the Committee.
2.4 COMPENSATION; PROFESSIONAL ASSISTANCE; GOOD FAITH ACTIONS.
Members of the Committee shall receive such compensation for their services as
members as may be determined by the Board. All expenses and liabilities that
members of the Committee or Board may incur in connection with the
administration of this Plan shall be borne by the Company. The Committee may,
with the approval of the Board, employ attorneys, consultants, accountants,
appraisers, brokers or other persons. The Committee, the Board, the Company and
the Company's officers and directors shall be entitled to rely upon the advice,
opinions or valuations of any such persons. All actions taken and all
interpretations and determinations made by the Committee or Board in good faith
shall be final and binding upon all Participants, the Company and all other
interested persons. No member of the Committee
5
<PAGE>
or Board shall be personally liable for any action, determination or
interpretation made in good faith with respect to this Plan or any award, and
all members of the Committee and Board shall be fully protected by the Company
in respect of any such action, determination or interpretation.
2.5 DELEGATION OF AUTHORITY. The Administrator may in his sole and
absolute discretion delegate to the Chief Financial Officer of the Company or
the Secretary of the Company, or both, any or all of the administrative duties
and authority of the Administrator under this Plan, other than the authority to
make grants under this Plan, to determine the price, timing or amount of such
grants or to determine any other matter required by Rule 16b-3 or other
applicable law to be determined in the sole and absolute discretion of the
Administrator.
2.6 NO LIABILITY. No member of the Board or the Committee, or
director, officer or employee of the Company shall be liable, responsible or
accountable in damages or otherwise for any determination made or other action
taken or any failure to act by such person so long as such person is not
determined to be guilty by a final adjudication of willful misconduct with
respect to such determination, action or failure to act.
2.7 INDEMNIFICATION. To the fullest extent permitted by law, each of
the members of the Board and the Committee and each of the directors, officers
and employees of the Company, shall be held harmless and be indemnified by the
Company for any liability, loss (including amounts paid in settlement), damages
or expenses (including reasonable attorneys' fees) suffered by virtue of any
determinations, acts or failures to act, or alleged acts or failures to act, in
connection with the administration of this Plan so long as such person is not
determined by a final adjudication to be guilty of willful misconduct with
respect to such determination, action or failure to act.
SECTION 3
STOCK SUBJECT TO PLAN
3.1 NUMBER OF AND SOURCE OF SHARES. The total number of shares of
Stock reserved and available for issuance under the Plan shall be 500,000. Such
shares shall consist solely of shares of Stock reacquired by the Company.
6
<PAGE>
3.2 UNREALIZED AWARDS. To the extent that (i) a Stock Option expires
or is otherwise terminated without being exercised, or (ii) any shares of Stock
subject to any Restricted Stock, Deferred Stock or Performance Share award
granted hereunder are forfeited, such shares shall again be available for
issuance in connection with future awards under the Plan. If any shares of
Stock otherwise issuable under the Plan have been pledged as collateral for
indebtedness incurred by a Participant in connection with the realization of any
award hereunder, and such shares are returned to the Company in satisfaction of
such indebtedness, such shares shall again be available for issuance in
connection with future awards under the Plan.
3.3 ADJUSTMENT OF AWARDS. In the event of any merger,
reorganization, consolidation, recapitalization, stock dividend or other change
in corporate structure affecting the Stock, a substitution or adjustment shall
be made in (i) the kind and aggregate number of shares reserved for issuance
under the Plan, (ii) the kind, number and option price of shares subject to
outstanding Stock Options granted under the Plan, and (iii) the kind, number and
purchase price of shares issuable pursuant to awards of Restricted Stock,
Deferred Stock and Performance Shares, as may be determined by the
Administrator, in its sole discretion. Such other substitutions or adjustments
shall be made respecting awards hereunder as may be determined by the
Administrator, in its sole discretion. An adjusted option price shall also be
used to determine the amount payable by the Company in connection with Stock
Appreciation Rights, Limited Stock Appreciation Rights and Dividend Equivalents
awarded under the Plan. In connection with any event described in this
paragraph, the Administrator may provide, in its discretion, for the
cancellation of any outstanding awards and payment in cash or other property in
exchange therefor.
SECTION 4
ELIGIBILITY
GENERAL PROVISIONS. Subject to Section 3.1 and the Stock Exchange
Ownership Limit, officers (including officers who are directors of the Company),
other key employees of, and consultants and advisors to the Company, who are
responsible for or contribute to the management, growth and/or profitability of
the business of the Company, shall be eligible to be granted Stock Options,
Stock Appreciation Rights, Dividend Equivalents, Limited Stock Appreciation
Rights, awards, Deferred Stock awards or Performance Shares hereunder. The
Participants under the Plan shall be selected from time to time by the
Administrator, in its sole discretion, from among the Eligible Employees,
consultants and advisors to the Company recommended by the senior management of
the Company, and the
7
<PAGE>
Administrator shall determine, in its sole discretion, the number of shares
covered by each award.
SECTION 5
STOCK OPTIONS
5.1 OPTION AWARDS. Stock Options may be granted alone or in addition
to other awards granted under the Plan. Any Stock Option granted under the Plan
shall be in such form as the Administrator may from time to time approve, and
the provisions of Stock Option awards need not be the same with respect to each
optionee. Recipients of Stock Options shall enter into a subscription and/or
award agreement with the Company, in such form as the Administrator shall
determine, which agreement shall set forth, among other things, the exercise
price of the option, the term of the option and provisions regarding
exercisability of the option granted thereunder.
The Stock Options granted under the Plan shall be Non-Qualified Stock
Options. More than one option may be granted to the same optionee and be
outstanding concurrently hereunder.
Stock Options granted under the Plan 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 Administrator shall deem
desirable:
5.2 OPTION PRICE. The option price per share of Stock purchasable
under a Stock Option shall be determined by the Administrator in its sole
discretion at the time of grant but shall not be less than the par value of the
Stock.
5.3 OPTION TERM. The term of each Stock Option shall be fixed by the
Administrator, but no Stock Option shall be exercisable more than ten years
after the date such Stock Option is granted.
5.4 EXERCISABILITY. Stock Options shall be exercisable at such time
or times and subject to such terms and conditions as shall be determined by the
Administrator at or after grant. The Administrator may provide, in its
discretion, that any Stock Option shall be exercisable only in installments, and
the Administrator may waive such installment exercise provisions at any time in
whole or in part based on such factors as the Administrator may determine, in
its sole discretion.
8
<PAGE>
5.5 METHOD OF EXERCISE. Subject to Section 5.4 above, Stock Options
may be exercised in whole or in part at any time during the option period, by
giving written notice of exercise to the Company specifying the number of shares
to be purchased, accompanied by payment in full of the purchase price in cash or
its equivalent as determined by the Administrator. As determined by the
Administrator, in its sole discretion, payment in whole or in part may also be
made in the form of unrestricted Stock already owned by the optionee, or, in the
case of the exercise of a Non-Qualified Stock Option, Dividend Equivalents,
Restricted Stock or Performance Shares subject to an award hereunder (based, in
each case, on the Fair Market Value of the Stock on the date the option is
exercised). If payment of the option exercise price of a Non-Qualified Stock
Option is made in whole or in part in the form of Dividend Equivalents,
Restricted Stock or Performance Shares, the shares received upon the exercise of
such Stock Option (to the extent of the number of shares of Dividend
Equivalents, Restricted Stock or Performance Shares surrendered upon exercise of
such Stock Option) shall be restricted in accordance with the original terms of
the Dividend Equivalents, Restricted Stock or Performance Share award in
question, except that the Administrator may direct that such restrictions shall
apply only to that number of shares equal to the number of shares surrendered
upon the exercise of such option. An optionee shall generally have the rights
to dividends and any other rights of a stockholder with respect to the Stock
subject to the option only after the optionee has given written notice of
exercise, has paid in full for such shares, and, if requested, has given the
representation described in Section 11.1.
5.6 The Administrator may require the voluntary surrender of all or a
portion of any Stock Option granted under the Plan as a condition precedent to a
grant of a new Stock Option. Subject to the provisions of the Plan, such new
Stock Option shall be exercisable at the price, during such period and on such
other terms and conditions as are specified by the Administrator at the time the
new Stock Option is granted; PROVIDED, HOWEVER, should the Administrator so
require, the number of shares subject to such new Stock Option shall not be
greater than the number of shares subject to the surrendered Stock Option. Upon
their surrender, Stock Options shall be canceled and the shares previously
subject to such canceled Stock Options shall again be available for grants of
Stock Options and other awards hereunder.
5.7 LOANS. The Company may make loans available to Stock Option
holders in connection with the exercise of outstanding options granted under the
Plan, as the Administrator, in its discretion, may determine. Such loans shall
(i) be evidenced by promissory notes entered into by the Stock Option holders in
favor of
9
<PAGE>
the Company, (ii) be subject to the terms and conditions set forth in this
Section 5.7 and such other terms and conditions, not inconsistent with the Plan,
as the Administrator shall determine, (iii) bear interest, if any, at such rate
as the Administrator shall determine, and (iv) be subject to Board approval (or
to approval by the Administrator to the extent the Board may delegate such
authority). In no event may the principal amount of any such loan exceed the
sum of (x) the exercise price less the par value of the shares of Stock covered
by the option, or portion thereof, exercised by the holder, and (y) any federal,
state, and local income tax attributable to such exercise. The initial term of
the loan, the schedule of payments of principal and interest under the loan, the
extent to which the loan is to be with or without recourse against the holder
with respect to principal or interest and the conditions upon which the loan
will become payable in the event of the holder's termination of employment shall
be determined by the Administrator. Unless the Administrator determines
otherwise, when a loan is made, shares of Stock having a Fair Market Value at
least equal to the principal amount of the loan shall be pledged by the holder
to the Company as security for payment of the unpaid balance of the loan, and
such pledge shall be evidenced by a pledge agreement, the terms of which shall
be determined by the Administrator, in its discretion; PROVIDED, HOWEVER, that
each loan shall comply with all applicable laws, regulations and rules of the
Board of Governors of the Federal Reserve System and any other governmental
agency having jurisdiction.
5.8 NON-TRANSFERABILITY OF OPTIONS. Unless otherwise determined by
the Administrator, no Stock Option shall be transferable by the optionee, and
all Stock Options shall be exercisable, during the optionee's lifetime, only by
the optionee.
5.9 TERMINATION OF EMPLOYMENT OR SERVICE. If an optionee's
employment with or service as a director of or consultant or advisor to the
Company terminates by reason of death, Disability or for any other reason, the
Stock Option may thereafter be exercised to the extent provided in the
applicable subscription or award agreement, or as otherwise determined by the
Administrator.
SECTION 6
STOCK APPRECIATION RIGHTS AND
LIMITED STOCK APPRECIATION RIGHTS
6.1 GRANT AND EXERCISE. Stock Appreciation Rights and Limited Stock
Appreciation Rights may be granted either alone ("Free Standing Rights") or
10
<PAGE>
in conjunction with all or part of any Stock Option granted under the Plan
("Related Rights"). Related Rights may be granted either at or after the time
of the grant of such Stock Option.
A Related Right or applicable portion thereof granted in conjunction
with a given Stock Option shall terminate and no longer be exercisable upon the
termination or exercise of the related Stock Option, except that, unless
otherwise provided by the Administrator at the time of grant, a Related Right
granted with respect to less than the full number of shares covered by a related
Stock Option shall only be reduced if and to the extent that the number of
shares covered by the exercise or termination of the related Stock Option
exceeds the number of shares not covered by the Related Right.
A Related Right may be exercised by an optionee, in accordance with
Section 6.2, by surrendering the applicable portion of the related Stock Option.
Upon such exercise and surrender, the optionee shall be entitled to receive an
amount determined in the manner prescribed in Section 6.2. Stock Options which
have been so surrendered, in whole or in part, shall no longer be exercisable to
the extent the Related Rights have been so exercised.
6.2 TERMS AND CONDITIONS. Stock Appreciation Rights shall be subject
to such terms and conditions, not inconsistent with the provisions of the Plan,
as shall be determined from time to time by the Administrator, including the
following:
(a) Stock Appreciation Rights that are Related Rights ("Related
Stock Appreciation Rights") shall be exercisable only at such time or times and
to the extent that the Stock Options to which they relate shall be exercisable
in accordance with the provisions of Section 5 and this Section 6 of the Plan.
(b) Upon the exercise of a Related Stock Appreciation Right, an
optionee shall be entitled to receive up to, but not more than, an amount in
cash or that number of shares of Stock (or in some combination of cash and
shares of Stock) equal in value to the excess of the Fair Market Value of one
share of Stock as of the date of exercise over the option price per share
specified in the related Stock Option multiplied by the number of shares of
Stock in respect of which the Related Stock Appreciation Right is being
exercised, with the Administrator having the right to determine the form of
payment.
11
<PAGE>
(c) Related Stock Appreciation Rights shall be transferable or
exercisable only when and to the extent that the underlying Stock Option would
be transferable or exercisable under Section 5 of the Plan.
(d) Upon the exercise of a Related Stock Appreciation Right, the
Stock Option or part thereof to which such Related Stock Appreciation Right is
related shall be deemed to have been exercised for the purpose of the limitation
set forth in Section 3 of the Plan on the number of shares of Stock to be issued
under the Plan, but only to the extent of the number of shares issued under the
Related Stock Appreciation Right.
(e) Stock Appreciation Rights that are Free Standing Rights
("Free Standing Stock Appreciation Rights") shall be exercisable at such time or
times and subject to such terms and conditions as shall be determined by the
Administrator at or after grant.
(f) The term of each Free Standing Stock Appreciation Right
shall be fixed by the Administrator, but no Free Standing Stock Appreciation
Right shall be exercisable more than ten years after the date such right is
granted.
(g) Upon the exercise of a Free Standing Stock Appreciation
Right, a recipient shall be entitled to receive up to, but not more than, an
amount in cash or that number of shares of Stock (or any combination of cash or
shares of Stock) equal in value to the excess of the Fair Market Value of one
share of Stock as of the date of exercise over the price per share specified in
the Free Standing Stock Appreciation Right (which price shall be no less than
100% of the Fair Market Value of the Stock on the date of grant) multiplied by
the number of shares of Stock in respect of which the right is being exercised,
with the Administrator having the right to determine the form of payment.
(h) Free Standing Stock Appreciation Rights shall be
transferable or exercisable only when and to the extent that a Stock Option
would be transferable or exercisable under Section 5 of the Plan.
(i) In the event of the termination of employment or service of
a Participant who has been granted one or more Free Standing Stock Appreciation
Rights, such rights shall be exercisable at such time or times and subject to
such terms and conditions as shall be determined by the Administrator at or
after grant.
12
<PAGE>
(j) Limited Stock Appreciation Rights may only be exercised
within the 30-day period following a "Change of Control" (as defined by the
Administrator in the agreement evidencing such Limited Stock Appreciation Right)
and, with respect to Limited Stock Appreciation Rights that are Related Rights
("Related Limited Stock Appreciation Rights"), only to the extent that the Stock
Options to which they relate shall be exercisable in accordance with the
provisions of Section 5 and this Section 6 of the Plan.
(k) Upon the exercise of a Limited Stock Appreciation Right, the
recipient shall be entitled to receive an amount in cash equal in value to the
excess of the "Change of Control Price" (as defined in the agreement evidencing
such Limited Stock Appreciation Right) of one share of Stock as of the date of
exercise over (A) the option price per share specified in the related Stock
Option, or (B) in the case of a Limited Stock Appreciation Right which is a Free
Standing Stock Appreciation Right, the price per share specified in the Free
Standing Stock Appreciation Right, such excess to be multiplied by the number of
shares in respect of which the Limited Stock Appreciation Right shall have been
exercised.
SECTION 7
DIVIDEND EQUIVALENTS
7.1 GRANT OF DIVIDEND EQUIVALENTS. The Committee is authorized to
grant Dividend Equivalents to Participants, which will entitle such a
Participant to receive, on a current or deferred basis and subject to such
conditions as may be imposed by the Committee, cash payments from the Company in
the same amounts (or such lesser fraction of such amounts as may be specifically
set forth in the Dividend Equivalent agreement evidencing such award) that the
holder of record of such number of shares of stock would be entitled to receive
as cash dividends on such stock (unless otherwise limited in such agreement).
Dividend Equivalent agreements will specify the expiration date of such
Dividend Equivalents, the number of shares of stock to which it relates, and
such other conditions as the Committee may impose. The Committee may provide,
at the date of grant or thereafter, that Dividend Equivalents shall be paid or
distributed when accrued or shall be deemed to have been reinvested in
additional Stock, or other investment vehicles as the Committee may specify,
provided that Dividend Equivalents (other than freestanding Dividend
Equivalents) shall be subject to all conditions and restrictions of the
underlying awards to which they relate.
13
<PAGE>
7.2 PAYMENTS. The right to a cash payment in respect of a Dividend
Equivalent will apply to all dividends the record date for which occurs at any
time during the period commencing on the date the Dividend Equivalent is granted
and ending on the date such Dividend Equivalent expires or is terminated,
whichever occurs first.
7.3 RELATED DIVIDEND EQUIVALENTS. If a Dividend Equivalent is
granted in conjunction with the grant of a Stock Option or a Stock Appreciation
Right, the applicable Dividend Equivalent agreement will provide that the
grantee thereof is entitled to receive from the Company cash payments either
current or deferred in the same amounts (or such lesser fraction of such amounts
as may be specifically set forth in the Dividend Equivalent agreement) that the
holder of record of a number of shares of Stock equal to the number of shares
covered by such Stock Option or Stock Appreciation Right would be entitled to
receive as dividends on such Stock unless otherwise limited in the Dividend
Equivalent agreement. Such right to cash payment will apply to, and such
Dividend Equivalent will remain outstanding in respect of, all cash dividends
the record date for which occurs at any time during the period commencing on the
date the related Stock Option or Stock Appreciation Right is granted and ending
on the date that such Stock Option or Stock Appreciation Right is exercised,
expires or terminates, whichever occurs first.
SECTION 8
RESTRICTED STOCK, DEFERRED STOCK AND
PERFORMANCE SHARES
8.1 GENERAL. Restricted Stock, Deferred Stock or Performance Share
awards may be issued either alone or in addition to other awards granted under
the Plan. The Administrator shall determine the Eligible Employees, consultants
and advisors to whom, and the time or times at which, grants of Restricted
Stock, Deferred Stock or Performance Share awards shall be made; the number of
shares to be awarded; the price, if any, to be paid by the recipient of
Restricted Stock, Deferred Stock or Performance Share awards; the Restricted
Period (as defined in Section 8.3 hereof) applicable to Restricted Stock or
Deferred Stock awards; the performance objectives applicable to Performance
Share or Deferred Stock awards; the date or dates on which restrictions
applicable to such Restricted Stock or Deferred Stock awards shall lapse during
such Restricted Period; and all other conditions of the Restricted Stock,
Deferred Stock and Performance Share awards. The Administrator may also
condition the grant of Restricted Stock, Deferred Stock
14
<PAGE>
awards or Performance Shares upon the exercise of Stock Options, or upon such
other criteria as the Administrator may determine, in its sole discretion. The
provisions of Restricted Stock, Deferred Stock or Performance Share awards need
not be the same with respect to each recipient. In the discretion of the
Administrator, loans may be made to Participants in connection with the purchase
of Restricted Stock under substantially the same terms and conditions as
provided in Section 5 with respect to the exercise of stock options.
8.2 AWARDS AND CERTIFICATES. The prospective recipient of a
Restricted Stock, Deferred Stock or Performance Share award shall not have any
rights with respect to such award, unless and until such recipient has executed
an agreement evidencing the award (a "Restricted Stock Award Agreement,"
"Subscription Agreement," "Deferred Stock Award Agreement," "Performance Share
Award Agreement," or other award agreement, as appropriate) and delivered a
fully executed copy thereof to the Company, within a period of sixty days (or
such other period as the Administrator may specify after the award date).
Except as otherwise provided below in this Section 8.2, (i) each Participant who
is awarded Restricted Stock or Performance Shares shall be issued a stock
certificate in respect of such shares of Restricted Stock or Performance Shares;
and (ii) such certificate shall be registered in the name of the Participant,
and shall bear an appropriate legend referring to the terms, conditions, and
restrictions applicable to such award.
The Company may require that the stock certificates evidencing
Restricted Stock or Performance Share awards hereunder be held in the custody of
the Company until the restrictions thereon shall have lapsed, and that, as a
condition of any Restricted Stock award or Performance Share award, the
Participant shall have delivered a stock power, endorsed in blank, relating to
the Stock covered by such award.
With respect to Deferred Stock awards, at the expiration of the
Restricted Period, stock certificates in respect of such shares of Deferred
Stock shall be delivered to the participant, or his legal representative, in a
number equal to the number of shares of Stock covered by the Deferred Stock
award.
8.3 RESTRICTIONS AND CONDITIONS. The Restricted Stock, Deferred
Stock and Performance Share awards granted pursuant to this Section 8 shall be
subject to the following restrictions and conditions:
(a) Subject to the provisions of the Plan and the Restricted
Stock Award Agreement, Subscription Agreement, Deferred Stock Award Agree-
15
<PAGE>
ment, Performance Share Award Agreement or other award agreement, as
appropriate, governing such award, during such period as may be set by the
Administrator commencing on the grant date (the "Restricted Period"), the
Participant shall not be permitted to sell, transfer, pledge or assign shares of
Restricted Stock, Performance Shares or Deferred Stock awarded under the Plan;
PROVIDED, HOWEVER, that the Administrator may, in its sole discretion, provide
for the lapse of such restrictions in installments and may accelerate or waive
such restrictions in whole or in part based on such factors and such
circumstances as the Administrator may determine, in its sole discretion,
including, but not limited to, the attainment of certain performance related
goals, the Participant's termination of employment or service, death or
Disability or the occurrence of a "Change of Control" as defined in the
agreement evidencing such award.
(b) Except as provided in Section 8.3(a), the Participant shall
generally have, with respect to the shares of Restricted Stock or Performance
Shares, all of the rights of a stockholder with respect to such stock during the
Restricted Period. The Participant shall generally not have the rights of a
stockholder with respect to stock subject to Deferred Stock awards during the
Restricted Period; PROVIDED, HOWEVER, that dividends declared during the
Restricted Period with respect to the number of shares covered by a Deferred
Stock award shall be paid to the Participant. Certificates for shares of
unrestricted Stock shall be delivered to the Participant promptly after, and
only after, the Restricted Period shall expire without forfeiture in respect of
such shares of Restricted Stock, Performance Shares or Deferred Stock, except as
the Administrator, in its sole discretion, shall otherwise determine.
(c) The rights of holders of Restricted Stock, Deferred Stock
and Performance Share awards upon termination of employment or service for any
reason during the Restricted Period shall be set forth in the Restricted Stock
Award Agreement, Subscription Agreement, Deferred Stock Award Agreement,
Performance Share Award Agreement or other award agreement, as appropriate,
governing such awards.
SECTION 9
AMENDMENT AND TERMINATION
The Board may amend, alter or discontinue the Plan, but no amendment,
alteration, or discontinuation shall be made that would impair the rights
16
<PAGE>
of a Participant under any award theretofore granted without such Participant's
consent.
The Administrator may amend the terms of any award theretofore
granted, prospectively or retroactively, but, subject to Section 3.3 above, no
such amendment shall impair the rights of any holder without his or her consent.
SECTION 10
UNFUNDED STATUS OF PLAN
The Plan is intended to constitute an "unfunded" plan for incentive
compensation. With respect to any payments not yet made to a Participant by the
Company, nothing contained herein shall give any such Participant any rights
that are greater than those of a general creditor of the Company.
SECTION 11
GENERAL PROVISIONS
11.1 The Administrator may require each person purchasing shares
pursuant to a Stock Option to represent to and agree with the Company in writing
that such person is acquiring the shares without a view to distribution thereof.
The certificates for such shares may include any legend which the Administrator
deems appropriate to reflect any restrictions on transfer.
All certificates for shares of Stock delivered under the Plan shall be
subject to such stock-transfer orders and other restrictions as the
Administrator may deem advisable under the rules, regulations, and other
requirements of the Commission, any stock exchange upon which the Stock is then
listed, and any applicable federal or state securities law, and the
Administrator may cause a legend or legends to be placed on any such
certificates to make appropriate reference to such restrictions.
11.2 Nothing contained in the Plan shall prevent the Board from
adopting other or additional compensation arrangements, 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 shall not confer upon any employee, consultant or advisor of the Company
any right to continued employment with the Company, as the case may be, nor
shall it interfere
17
<PAGE>
in any way with the right of the Company to terminate the employment or service
of any of its employees, consultants or advisors at any time.
11.3 Each Participant shall, no later than the date as of which the
value of an award first becomes includible in the gross income of the
Participant for federal income tax purposes, pay to the Company, or make
arrangements satisfactory to the Administrator regarding payment of, any
federal, state, or local taxes of any kind required by law to be withheld with
respect to the award. The obligations of the Company under the Plan shall be
conditional on the making of such payments or arrangements, and the Company
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.
11.4 No member of the Board or the Administrator, nor any officer or
employee of the Company acting on behalf of the Board or the Administrator,
shall be personally liable for any action, determination, or interpretation
taken or made in good faith with respect to the Plan, and all members of the
Board or the Administrator and each and any officer or employee of the Company
acting on their behalf shall, to the extent permitted by law, be fully
indemnified and protected by the Company in respect of any such action,
determination or interpretation.
SECTION 12
EFFECTIVE DATE OF PLAN
The Plan became effective (the "Effective Date") on August 29, 1996,
the date the Company's Board of Directors formally approved the Plan.
SECTION 13
TERM OF PLAN
No Stock Option, Stock Appreciation Right, Limited Stock Appreciation
Right, Dividend Equivalent, Restricted Stock, Deferred Stock or Performance
Share award shall be granted pursuant to the Plan on or after the tenth
anniversary of the Effective Date, but awards theretofore granted may extend
beyond that date.
18
