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SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the
Commission Only (as
permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
(Name of Registrant as Specified in Its Charter)
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
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APARTMENT INVESTMENT AND MANAGEMENT COMPANY
1873 SOUTH BELLAIRE STREET, SUITE 1700
DENVER, COLORADO 80222-4348
___________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 24, 1997
You are cordially invited to attend the 1997 Annual Meeting of Stockholders
(the "Meeting") of APARTMENT INVESTMENT AND MANAGEMENT COMPANY (the "Company")
to be held on Thursday, April 24, 1997, at 9:00 a.m. at the principal executive
offices of the Company at 1873 South Bellaire Street, Suite 1700, Denver,
Colorado 80222-4348, for the following purposes:
1. To elect six directors, for a term of one year each, until the next
Annual Meeting of Stockholders and until their successors are elected and
qualify;
2. To ratify the selection of Ernst & Young LLP, to serve as independent
auditors for the Company for the fiscal year ending December 31, 1997;
3. To consider and act upon a proposal to approve the Apartment
Investment and Management Company 1997 Stock Award and Incentive Plan;
4. To consider and act upon a proposal to approve and ratify (i) the
Amended and Restated Apartment Investment and Management Company Non-Qualified
Employee Stock Option Plan, and (ii) the issuance and sale of 515,500 shares of
the Company's Class A Common Stock to certain of the Company's executive
officers; and
5. To transact such other business as may properly come before the
Meeting or any adjournment(s) thereof.
Only stockholders of record at the close of business on March 19, 1997,
will be entitled to notice of, and to vote at, the Meeting or any adjournment(s)
thereof.
WHETHER OR NOT YOU EXPECT TO BE AT THE MEETING, PLEASE SIGN AND DATE THE
ENCLOSED PROXY WHICH IS BEING SOLICITED BY THE BOARD OF DIRECTORS, AND RETURN IT
PROMPTLY IN THE ENCLOSED ENVELOPE. The proxy is revocable at any time prior to
the exercise thereof by written notice to the Company, and stockholders who
attend the Meeting may withdraw their proxies and vote their shares personally
if they so desire.
BY ORDER OF THE BOARD OF DIRECTORS
Leeann Morein
SECRETARY
March 31, 1997
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APARTMENT INVESTMENT AND MANAGEMENT COMPANY
1873 SOUTH BELLAIRE STREET, SUITE 1700
DENVER, COLORADO 80222-4348
___________
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 24, 1997
This Proxy Statement is furnished to stockholders of Apartment Investment
and Management Company, (the "Company"), a self-administered and self-managed
real estate investment trust ("REIT"), in connection with the solicitation of
proxies in the form enclosed herewith for use at the Annual Meeting of
Stockholders of the Company to be held on Thursday, April 24, 1997, at 9:00 a.m.
at the principal executive offices of the Company at 1873 South Bellaire Street,
Suite 1700, Denver, Colorado 80222-4348, and at any and all adjournments or
postponements thereof (the "Meeting"), for the purposes set forth in the Notice
of Meeting. This Proxy Statement and the enclosed form of proxy are being first
mailed to stockholders on or about April 2, 1997.
This solicitation is made by mail on behalf of the Board of Directors of
the Company. Costs of the solicitation will be borne by the Company. Further
solicitation of proxies may be made by telephone, telegraph, fax or personal
interview by the directors, officers and employees of the Company and its
affiliates, who will not receive additional compensation for the solicitation.
The Company has retained the services of Corporate Investor Communications, for
an estimated fee of $4,500, plus out-of-pocket expenses, to assist in the
solicitation of proxies from brokerage houses, banks, and other custodians or
nominees holding stock in their names for others. The Company will reimburse
banks, brokerage firms and other custodians, nominees and fiduciaries for
reasonable expenses incurred by them in sending proxy material to stockholders.
Holders of record of the Class A Common Stock of the Company ("Common
Stock") as of the close of business on the record date, March 19, 1997, are
entitled to receive notice of, and to vote at, the Meeting. Each share of Common
Stock entitles the holder to one vote. At the close of business on March 19,
1997, there were 17,569,970 shares of Common Stock issued and outstanding.
Shares represented by proxies in the form enclosed, if the proxies are
properly executed and returned and not revoked, will be voted as specified.
Where no specification is made on a properly executed and returned proxy, the
shares will be voted FOR the election of all nominees for director, FOR the
ratification of the selection of Ernst & Young LLP as independent auditors for
the calendar year ending December 31, 1997, FOR the approval of the Amended and
Restated Apartment Investment and Management Company 1997 Stock Award and
Incentive Plan (the "1997 Stock Plan"), FOR the approval and ratification of (i)
the Amended and Restated Apartment Investment and Management Company
Non-Qualified Stock Option Plan (the "Non-Qualified Option Plan"), and (ii) the
issuance and sale of 515,500 shares of Common Stock to certain of the Company's
executive officers. To be voted, proxies must be filed with the Secretary of
the Company prior to voting. Proxies may be revoked at any time before voting by
filing a notice of revocation with the Secretary of the Company, by filing a
later dated proxy with the Secretary of the Company or by voting in person at
the Meeting. Shares represented by proxies that reflect abstentions or "broker
non-votes" (i.e., shares held by a broker or nominee which are represented at
the Meeting, but with respect to which such broker or nominee is not empowered
to vote on a particular proposal) will be counted as shares that are present and
entitled to vote for purposes of determining the presence of a quorum.
The Company's 1996 Annual Report to Shareholders is being mailed with this
Proxy Statement. The principal executive offices of the Company are located at
1873 South Bellaire Street, Suite 1700, Denver, Colorado 80222-4348.
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PROPOSAL 1: ELECTION OF DIRECTORS
Pursuant to the Company's Articles of Incorporation, directors are elected
at each Annual Meeting of Stockholders and hold office for one year, until their
successors are duly elected and qualify at the next Annual Meeting of
Stockholders. The Company's Bylaws currently authorize a Board of Directors
consisting of not less than three nor more than nine persons.
The nominees for election to the six positions on the Board of Directors to
be voted upon at the Meeting are Terry Considine, Richard S. Ellwood, Peter K.
Kompaniez, J. Landis Martin, Thomas L. Rhodes and John D. Smith. All nominees
were elected to the Board of Directors at the last Annual Meeting of
Stockholders. Messrs. Ellwood, Martin, Rhodes and Smith (the "Independent
Directors") are not employed by, or affiliated with, the Company, other than by
virtue of serving as directors of the Company. Unless authority to vote for the
election of directors has been specifically withheld, the persons named in the
accompanying proxy intend to vote for the election of Messrs. Considine,
Ellwood, Kompaniez, Martin, Rhodes and Smith to hold office as directors for a
term of one year until their successors are elected and qualify at the next
Annual Meeting of Stockholders. All nominees have advised the Board of Directors
that they are able and willing to serve as directors.
If any nominee becomes unavailable for any reason (which is not
anticipated), the shares represented by the proxies may be voted for such other
person or persons as may be determined by the holders of the proxies (unless a
proxy contains instructions to the contrary). In no event will the proxy be
voted for more than six nominees.
VOTE
Directors will be elected by a favorable vote of a plurality of the shares
of voting stock present and entitled to vote, in person or by proxy, at the
Meeting. Accordingly, abstentions or broker non-votes as to the election of
directors will not affect the election of the candidates receiving the plurality
of votes. Unless instructed to the contrary in the proxy, the shares represented
by the proxies will be voted FOR the election of the six nominees named above as
directors.
PROPOSAL 2: RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The firm of Ernst & Young LLP, the Company's independent auditors for the
year ended December 31, 1996, was selected by the Board of Directors, upon the
recommendation of the Audit Committee, to act in the same capacity for the
fiscal year ending December 31, 1997, subject to ratification by the
stockholders. There are no affiliations between the Company and Ernst & Young
LLP, its partners, associates or employees, other than as pertain to the
engagement of Ernst & Young LLP as independent auditors for the Company in the
previous year. Representatives of Ernst & Young LLP are expected to be present
at the Meeting and will be given the opportunity to make a statement if they so
desire and to respond to appropriate questions.
VOTE
The affirmative vote of a majority of the votes cast regarding the proposal
is required to ratify the selection of Ernst & Young LLP. Accordingly,
abstentions or broker non-votes will not affect the outcome of the vote on the
proposal. Unless instructed to the contrary in the proxy, the shares represented
by the proxies will be voted FOR the proposal to ratify the selection of Ernst &
Young LLP to serve as independent auditors for the Company for the fiscal year
ending December 31, 1997.
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PROPOSAL 3: APPROVAL OF THE 1997 STOCK PLAN
The Board of Directors has adopted, subject to stockholder approval, the
1997 Stock Plan, which provides for the grant of various types of stock-based
compensation to directors, officers, employees, consultants and advisors of the
Company and its subsidiaries. No awards have been made under the 1997 Stock
Plan. The 1997 Stock Plan is designed to comply with the requirements for
"performance-based compensation" under Section 162(m) ("Section 162(m)") of the
Internal Revenue Code of 1986, as amended (the "Code"), and the conditions for
exemption from the short-swing profit recovery rules under Rule 16b-3 ("Rule
16b-3") of the Securities Exchange Act of 1934, as amended (the "Exchange Act").
The summary that follows is subject to the actual terms of the 1997 Stock Plan,
a copy of which is attached hereto as Annex A. Capitalized terms used but not
otherwise defined in the summary that follows shall have the respective meanings
ascribed to them in the 1997 Stock Plan.
VOTE
The affirmative vote of a majority of the votes cast regarding the proposal
is required for approval of the 1997 Stock Plan. Accordingly, abstentions or
broker non-votes will not affect the outcome of the vote on the proposal.
Unless instructed to the contrary in the proxy, the shares represented by the
proxies will be voted FOR the proposal to approve the 1997 Stock Plan.
THE 1997 STOCK PLAN
The purpose of the 1997 Stock Plan is to reinforce the long-term commitment
to the Company's success of those directors, officers, employees, consultants
and advisors of the Company and its subsidiaries 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 with experience and ability.
The 1997 Stock Plan provides for the granting of incentive stock options
("ISOs"), non-qualified stock options ("NSOs") or both (collectively,
"Options"). Options granted under the 1997 Stock Plan may be accompanied by
stock appreciation rights ("SARs"), limited stock appreciation rights ("LSARs")
or both (collectively, "Rights"). NSOs and Rights may also be accompanied by
dividend equivalents ("Dividend Equivalents"). The 1997 Stock Plan also
provides for the granting of restricted stock, deferred stock and performance
shares (collectively, "Restricted Awards"). The 1997 Stock Plan also permits
the plan administrator to authorize loans to participants in connection with the
grant of awards, on terms and conditions determined solely by the plan
administrator. All awards will be evidenced by an agreement setting forth the
terms and conditions applicable thereto.
ELIGIBILITY
Options, Rights, Dividend Equivalents and Restricted Awards may be granted
to any director, officer, other employee, consultant or advisor of the Company
or its direct and indirect subsidiaries who the committee that administers the
1997 Stock Plan determines may contribute to the long-term success of the
Company; provided that ISOs may only be granted to employees of the Company.
PLAN ADMINISTRATION
The 1997 Stock Plan is administered by the Board of Directors or a
committee of the Board of Directors the composition of which will at all times
comply with the requirements of Rule 16b-3 under the Exchange Act.
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SECURITIES SUBJECT TO THE 1997 STOCK PLAN
The 1997 Stock Plan covers 10% of the shares of the Company's Common Stock
outstanding as of the first day of the fiscal year during which any award is
made but in no event more than 20,000,000 shares of Common Stock. Such shares
may be treasury, authorized but unissued shares or shares reacquired by the
Company. The 1997 Stock Plan provides for adjustments to the aggregate number
of shares subject to the 1997 Stock Plan and any award thereunder, and to the
purchase price to be paid and/or the number of shares issuable upon the exercise
of any option or pursuant to restricted awards. The plan administrator has the
authority, in the event of any such adjustment, to provide for the cancellation
of any outstanding award in exchange for payment in cash or other property.
TERMS AND CONDITIONS OF OPTIONS
The plan administrator will determine the option exercise price per share
of Common Stock purchasable pursuant to an Option, provided, however, that ISOs
cannot be granted for less than one hundred percent (100%) of the Fair Market
Value on the date of grant. Additionally, if a Company Employee owns or is
deemed to own (by reason of the attribution rules applicable under Section
424(d) of the Code) more than ten percent (10%) of the combined voting power of
all classes of stock of the Company or any Company Subsidiary or any Partnership
Subsidiary that is a corporation and an ISO is granted to such employee, the
Option exercise price of such ISO (to the extent required by the Code at the
time of grant) will not be less than one hundred and ten percent (110%) of the
Fair Market Value of the Common Stock on the date of grant. The term of each
Option shall be fixed by the plan administrator, provided that if a Company
employee owns or is deemed to own (by reason of the attribution rule of Section
424(d) of the Code) more than ten percent (10%) of the combined voting power of
all classes of stock of the Company, any Company Subsidiary, the Partnership or
any Partnership Subsidiary that is a corporation and an ISO is granted to such
employee, the term of such ISO (to the extent required by the Code at the time
of grant) shall be no more than five (5) years from the date of grant. The
Company may make loans available to Option holders in connection with the
exercise of outstanding Options granted under the 1997 Stock Plan.
STOCK APPRECIATION RIGHTS AND LIMITED STOCK APPRECIATION RIGHTS
SARs and LSARs may be granted either alone ("Free Standing Rights") or in
conjunction with all or part of an Option ("Related Rights"). SARs and LSARs
shall be subject to terms and conditions, not inconsistent with the terms of the
1997 Stock Plan, as determined by the plan administrator from time-to-time.
RESTRICTED AWARDS
A restricted stock award is an award of Common Stock that may not be sold,
assigned, transferred, pledged, hypothecated or otherwise disposed of for a
period of ten years, or such shorter period as the plan administrator shall
determine, from the date on which the award is granted (the "Restricted
Period"). The plan administrator may also impose such other restrictions and
conditions on an award as it deems appropriate. The plan administrator may
provide that the foregoing restrictions will lapse with respect to specified
percentages of the awarded shares on successive anniversaries of the date of the
award. In addition, the plan administrator has the authority to cancel all or
any portion of any restrictions prior to the expiration of the Restricted
Period. A grant of deferred stock creates a right to receive Common Stock at
the end of a specified deferral period. Performance shares are shares of Common
Stock subject to restrictions based upon the attainment of performance
objectives. Such performance objectives may be based on various financial
measures of the Company's performance. In addition, performance goals may be
based upon a participant's attainment of specific objectives set for that
participant's performance by the Company.
Upon the award of any restricted stock or performance shares, the
participant will have the rights of a stockholder with respect to the shares,
including dividend rights, subject to the conditions and restrictions generally
applicable to restricted stock or specifically set forth in the participant's
award agreement. Upon an award of
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deferred stock, the participant will not have stockholder rights, other than the
right to receive dividends, during the specified deferral period.
DIVIDEND EQUIVALENTS
Dividend Equivalents may be granted in conjunction with NSOs and in
conjunction with Rights that do not relate to ISOs. The value of a Dividend
Equivalent is equal to the product of (i) the number of shares of Common Stock
subject to the NSO or right in connection with which the Dividend Equivalent is
granted and (ii) the cash dividend payable per share of Common Stock. Dividend
Equivalents may be payable either in cash or in shares of Common Stock, and
payment may occur either as the Dividend Equivalents accrue or at such later
time as the related NSO or right is exercised. Dividend Equivalents expire at
the time the related NSO or right expires, and no dividends are payable or
credited with respect to the Dividend Equivalents themselves.
DEATH--TERMINATION OF EMPLOYMENT--RESTRICTIONS ON TRANSFER
The plan administrator will provide in the award agreements whether and to
what extent awards will be exercisable upon termination of employment or service
for any reason, including death or disability, of any participant in the 1997
Stock Plan. In no event may any Option be exercisable more than ten years from
the date it is granted. Except as otherwise determined by the plan
administrator in accordance with Rule 16b-3, Options and Rights are not
transferable and are exercisable during the recipient's lifetime only by the
recipient.
AMENDMENT; TERMINATION
The Board of Directors of the Company may terminate or amend the 1997 Stock
Plan at any time, except that stockholder approval is required for any amendment
to the 1997 Stock Plan which would be required to fulfill the conditions of Rule
16b-3, Section 162(m) and such other applicable statutory rules and regulations
and only if the Company intends to fulfill such conditions. Termination or
amendment of the 1997 Stock Plan will not affect previously granted Options,
Rights or Restricted Awards, which will continue in effect in accordance with
their terms.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
Under current Federal income tax laws, awards under the 1997 Stock Plan
will generally have the following tax consequences:
NON-QUALIFIED STOCK OPTIONS. A participant will generally not be taxed
upon the grant of an NSO. Rather, at the time of exercise of such NSO (and in
the case of an untimely exercise of an ISO), the participant will recognize
ordinary income for Federal income tax purposes in an amount equal to the
excess, if any, of the fair market value of the shares purchased over the Option
exercise price and will have a tax basis in such shares equal to the amount paid
upon exercise plus the amount taxable as ordinary income to the participant.
The Company will generally be entitled to a tax deduction at such time and in
the same amount that the participant recognizes ordinary income.
If shares acquired upon exercise of an NSO (or upon untimely exercise of an
ISO) are later sold or exchanged, then the difference between the sales price
and the fair market value of such stock on the date that ordinary income was
recognized with respect thereto will generally be taxable as long-term or
short-term capital gain or loss (if the stock is a capital asset of the
participant) depending upon whether the stock has been held for more than one
year after such date.
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INCENTIVE STOCK OPTIONS. A participant will not be in receipt of taxable
income upon the grant of an ISO or upon its timely exercise. Exercise of an ISO
will be timely if made during its term and if the participant remains an
employee of the Company or a subsidiary at all times during the period beginning
on the date of grant of the ISO and ending on the date three months before the
date of exercise (or one year before the date of exercise in the case of a
disabled employee). Exercise of an ISO will also be timely if made by the legal
representative of a participant who dies (i) while in the employ of the Company
or a subsidiary of the Company or (ii) within three months after termination of
employment. The tax consequences of an untimely exercise of an ISO will be
determined in accordance with the rules applicable to NSOs, above.
If stock acquired pursuant to a timely exercised ISO is later disposed of,
the participant will, except as noted below with respect to a "disqualifying
disposition," recognize long-term capital gain or loss at the time of the
disposition (if the stock is a capital asset of the employee) equal to the
difference between the amount realized upon such sale and the Option exercise
price. The Company, under these circumstances, will not be entitled to any
Federal income tax deduction in connection with either the exercise of the ISO
or the sale of such stock by the participant.
If, however, a participant disposes of stock acquired pursuant to the
exercise of an ISO prior to the expiration of two years from the date of grant
of the ISO or within one year from the date such stock is transferred to him
upon exercise (a "disqualifying disposition"), generally (i) the participant
will realize ordinary income at the time of the disposition in an amount equal
to the excess, if any, of the fair market value of the stock at the time of
exercise (or, if less, the amount realized on such disqualifying disposition)
over the Option exercise price, and (ii) if the stock is a capital asset of the
participant, any additional gain recognized by the participant will be taxed as
short-term or long-term capital gain. At the time of such disqualifying
disposition the Company may claim a Federal income tax deduction only for the
amount taxable to the participant as ordinary income. Any capital gain
recognized by the participant will be long-term capital gain if the
participant's holding period for the stock at the time of disposition is more
than one year; otherwise, it will be short-term.
The amount by which the fair market value of the stock on the exercise date
of an ISO exceeds the Option exercise price will be an item of adjustment for
purposes of the "alternative minimum tax" imposed by Section 55 of the Code.
EXERCISE WITH SHARES. According to a published ruling of the Internal
Revenue Service, a participant who pays the Option exercise price of an NSO, in
whole or in part, by delivering shares of the Company's stock already owned by
him will recognize no gain or loss for Federal income tax purposes on the shares
surrendered, but otherwise will be taxed according to the rules described above
for NSOs. With respect to shares acquired upon exercise which are equal in
number to the shares surrendered, the basis of such shares will be equal to the
basis of the shares surrendered, and the holding period of the shares acquired
will include the holding period of the shares surrendered. The basis of
additional shares received upon exercise will be equal to the fair market value
of such shares on the date which governs the determination of the participant's
ordinary income, and the holding period for such additional shares will commence
on such date.
The Treasury Department has issued proposed regulations that, if adopted in
their current form, would appear to provide for the following rules with respect
to the exercise of an ISO by surrender of previously owned shares of the
Company's stock. If the shares surrendered in payment of the exercise price of
an ISO are "statutory option stock" (including stock acquired pursuant to the
exercise of an ISO) and if the surrender constitutes a "disqualifying
disposition" (as would be the case, for example, if, in satisfaction of the
Option exercise price, the Company withholds shares which would otherwise be
delivered to the participant), any gain realized on such transfer will be
taxable to the optionee, as discussed above. Otherwise, when shares of the
Company's stock are surrendered upon exercise of an ISO, in general, (i) no gain
or loss will be recognized as a result of the exchange, (ii) the number of
shares received that is equal in number to the shares surrendered will have a
basis equal to the shares surrendered and (except for purposes of determining
whether a disposition will be a disqualifying disposition) will
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have a holding period that includes the holding period of the shares exchanged,
and (iii) any additional shares received will have a zero basis and will have a
holding period that begins on the date of the exchange. If any of the shares
received are disposed of within two years of the date of grant of the ISO or
within one year after exercise, the shares with the lowest basis will be deemed
to be disposed of first, and such disposition will be a disqualifying
disposition giving rise to ordinary income as discussed above.
RIGHTS. A grant of SARs or LSARs has no Federal income tax consequences at
the time of such grant. Upon the exercise of SARs or LSARs (other than a Free
Standing Right that is an LSAR), the amount of any cash and the fair market
value as of the date of exercise of any shares of the Company's stock received
is taxable to the participant as ordinary income. With respect to a Free
Standing Right that is an LSAR, however, a recipient should be required to
include as taxable income on the date of a Change in Control (as defined in the
award agreement evidencing such LSAR) an amount equal to the amount of cash that
could be received upon the exercise of the LSAR, even if the LSAR is not
exercised until a date subsequent to the Change in Control date. The Company
will generally be entitled to a deduction at the same time and in an amount
equal to the amount included in the participant's income. Upon the sale of
shares acquired upon the exercise of SARs or LSARs, a participant will recognize
capital gain or loss (assuming such stock was held as a capital asset) in an
amount equal to the difference between the amount realized upon such sale and
the fair market value of the stock on the date that governs the determination of
his ordinary income. The capital gain or loss will be long-term or short-term
depending upon whether the stock has been held for more than one year after the
date on which the income was realized by the participant.
DIVIDEND EQUIVALENTS. A participant will not be taxed upon the grant of a
Dividend Equivalent, but will instead recognize ordinary income in an amount
equal to the value of the Dividend Equivalent at the time the Dividend
Equivalent becomes payable to the participant. The Company will be entitled to
a deduction at such time and in such amount as the participant recognizes
ordinary income with respect to the Dividend Equivalent.
RESTRICTED AWARDS. In the case of a restricted award, a participant
generally will not be taxed upon the grant of such an award. The participant
will recognize ordinary income in an amount equal to (i) the fair market value
of the Company's Common Stock at the time the shares become transferable or are
otherwise no longer subject to a substantial risk of forfeiture (as defined in
the Code), minus (ii) the price, if any, paid by the participant to purchase
such stock. The Company will be entitled to a deduction at the time when, and
in the amount that, the participant recognizes ordinary income. However, a
participant may elect (not later than 30 days after acquiring such shares) to
recognize ordinary income at the time the restricted shares are awarded in an
amount equal to their fair market value at that time, notwithstanding the fact
that such shares are subject to restrictions on transfer and a substantial risk
of forfeiture. If such an election is made, no additional taxable income will
be recognized by the participant at the time the restrictions lapse. The
Company will be entitled to a tax deduction at the time when, and to the extent
that, income is recognized by the participant. However, if shares in respect of
which such election was made are later forfeited, no tax deduction is allowable
to the participant for the forfeited shares, and the Company will be deemed to
recognize ordinary income equal to the amount of the deduction allowed to the
Company at the time of the election in respect of such forfeited shares.
THE BOARD OF DIRECTORS BELIEVES THAT THE 1997 STOCK PLAN REFLECTS THE BEST
INTERESTS OF THE COMPANY AND RECOMMENDS ITS APPROVAL BY STOCKHOLDERS.
PROPOSAL 4: APPROVAL AND RATIFICATION OF THE NON-QUALIFIED
OPTION PLAN AND THE SALE OF STOCK TO CERTAIN EXECUTIVE OFFICERS
In furtherance of the Company's objective of facilitating the ownership of
the Company's stock by its officers and employees, on August 29, 1996, the Board
of Directors adopted the Apartment Investment and Management Company
Non-Qualified Employee Stock Option Plan, and, on January 22, 1997, approved an
amendment and restatement of such plan to permit the Company to issue authorized
and unissued shares, as well
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as reacquired shares, thereunder. The Non-Qualified Option Plan provides for
the grant of various types of stock-based compensation to officers, directors,
employees, consultants and advisors of the Company. The Non-Qualified Option
Plan is designed to comply with the conditions for exemption from the
short-swing profit recovery rules under Rule 16b-3. The summary that follows is
subject to the actual terms of the Non-Qualified Option Plan, a copy of which is
attached hereto as Annex B. Capitalized terms used but not otherwise defined in
the summary that follows shall have the respective meanings ascribed to them in
the Non-Qualified Option Plan.
In addition, on August 29, 1996, the Board of Directors approved the direct
sale of up to 601,500 shares of Common Stock to officers of the Company at a
price equal to the closing price of the Common Stock on the New York Stock
Exchange on that date ($20.75), with the amounts to be determined by the
Compensation Committee of the Board of Directors. On the same date, the
Compensation Committee approved the sale of, and the Company agreed to sell
382,500 of such shares to a partnership controlled by Terry Considine (the
"Considine Partnership"), 83,000 of such shares to Peter Kompaniez and 50,000 of
such shares to Thomas Toomey prior to January 31, 1997 (collectively, the "Stock
Sales"). These shares were issued and delivered as of December 31, 1996. In
payment for such shares, the Considine Partnership, Mr. Kompaniez and Mr. Toomey
executed notes payable to the Company bearing interest at 7.25% per annum,
payable quarterly, and due in 2006. These stock purchase notes were not secured
by the shares purchased, but were recourse as to 100% of the principal amount.
The Considine Partnership, Mr. Kompaniez and Mr. Toomey have subsequently repaid
the entire principal balance of the stock purchase notes.
VOTE
The affirmative vote of a majority of the votes cast regarding the proposal
is required for approval and ratification of the Non-Qualified Option Plan and
the Stock Sales. Accordingly, abstentions or broker non-votes will not affect
the outcome of the vote on the proposal. Unless instructed to the contrary in
the proxy, the shares represented by the proxies will be voted FOR the proposal
to approve and ratify the Non-Qualified Option Plan and the Stock Sales.
THE NON-QUALIFIED OPTION PLAN
The purpose of the Non-Qualified Option Plan is to reinforce the long-term
commitment to the Company's success of those directors, officers, employees,
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. The Non-Qualified Option Plan is intended to constitute an "unfunded"
plan for incentive compensation. With respect to any payments not made to a
participant, the participant will have rights no greater than those of a general
creditor of the Company. The Non-Qualified Option Plan provides for the
granting of NSO's which may be accompanied by SARs, LSARs or both. NSO's may be
also be accompanied by Dividend Equivalents. The Non-Qualified Option Plan also
provides for the granting of Restricted Awards. All awards will be evidenced by
an agreement setting forth the terms and conditions specifically applicable to
each grantee.
ELIGIBILITY
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 Company
are eligible to receive the NSO's, Rights, Dividend Equivalents and Restricted
Awards offered under the Non-Qualified Option Plan. Grantees will be selected
from time-to-time by the plan administrator, in its sole discretion, from among
those eligible to participate.
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<PAGE>
PLAN ADMINISTRATION
The Non-Qualified Option Plan is administered by the Board of Directors or
a committee appointed by the Board of Directors, the composition of which will
at all times comply with the requirements of Rule 16b-3 under the Exchange Act.
SECURITIES SUBJECT TO THE NON-QUALIFIED OPTION PLAN
A total of 500,000 shares of Common Stock is reserved and available for
issuance under the Non-Qualified Option Plan. These shares consist of
authorized and unissued shares of Common Stock and shares of Common Stock
reacquired by the Company. Additionally, these shares can consist of shares
resulting from the expiration or the otherwise termination of an unexercised
NSO, or from the forfeiture of any Restricted Award. The Non-Qualified
Option Plan also provides that in the event of any merger, reorganization,
consolidation, recapitalization, stock dividend or other change in corporate
structure affecting the stock, the plan administrator may make, as determined
in its sole discretion, a substitution or adjustment in the kind and
aggregate number of shares reserved for issuance, the kind, number and option
price of the share subject to outstanding NSOs, and the kind, number and
purchase price of shares issuable pursuant to awards of Restricted Awards.
The plan administrator also has the authority to provide for the cancellation
of any outstanding awards and for payment in cash or other property.
EXERCISE OF NSOS
Generally, NSOs become exercisable according to a schedule established by
the plan administrator. The plan administrator may also provide that NSOs may
be exercisable only in installments; otherwise, NSOs may be exercised in whole
or in part at any time during the option period by giving written notice of
exercise to the Company. Such notice must be accompanied by payment in full of
the purchase price in cash (which could be monies made available to NSO holder
by way of a loan from the Company) or its equivalent as determined by the plan
administrator.
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 an NSO,
Dividend Equivalents or Restricted Awards. If payment is made in the form of
Dividend Equivalents or Restricted Awards, certain of the shares acquired upon
exercise may also be subject to restrictions. The plan administrator may also
require the voluntary surrender of all or a portion of any NSO granted under the
Non-Qualified Option Plan as a condition precedent to a grant of a new NSO.
No NSO granted under the Non-Qualified Option Plan may be exercised more
than ten years after the date of grant of the NSO. The NSOs are
non-transferable by the optionee and can be exercised, during the optionee's
lifetime, only by the optionee.
STOCK APPRECIATION RIGHTS AND LIMITED STOCK APPRECIATION RIGHTS
SARs and LSARs may be granted as Free Standing Rights or as Related Rights.
Generally, Related Rights that are SARs are exercisable and transferable only at
such times and to the extent that the NSO to which it relates is exercisable.
Upon the exercise of a Related Right that is an SAR, a holder is entitled to
receive cash, common stock, or any combination thereof, equal in value to the
excess of the fair market value of one share of Common Stock as of the date of
exercise over the price per share multiplied by the number of shares of Common
Stock in respect of which the Right is being exercised. The plan administrator
will provide, in the applicable subscription or award agreement, whether and to
what extent NSOs will be exercisable upon termination of employment.
Generally, Free Standing Rights that are SARs are exercisable upon the
terms and conditions determined by the plan administrator. Upon the exercise
of a Free Standing Right that is an SAR, a holder is entitled to receive cash,
common stock, or any combination thereof, equal in value to the excess of the
fair market value of one share of Common Stock as of the date of exercise over
the price per share multiplied by the number of shares
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<PAGE>
of Common Stock in respect of which the Right is being exercised. No Free
Standing Right that is an SAR is exercisable more than ten years after the date
of grant, and it is transferable only to the extent that an NSO is transferable.
The plan administrator will provide, in the applicable subscription or award
agreement, whether and to what extent NSOs will be exercisable upon termination
of employment.
LSARs may only be exercised within 30 days following a Change of Control,
and Related Rights that are LSARs may only be exercised to the extent that the
NSO to which it relates is exercisable. Upon the exercise of a LSAR, a holder
is entitled to receive cash equal in value to the excess of the Change of
Control Price of one share of Common Stock as of the date of exercise over (a)
the Option price per share specified in the related NSO, or (b) in the case of a
Free Standing Right that is an LSAR, the price per share specified in the Free
Standing Right that is an SAR, such excess to be multiplied by the number of
shares in respect of which the LSAR will have been exercised.
DIVIDEND EQUIVALENTS
The plan administrator is authorized to grant Dividend Equivalents to
participants which entitle participants to receive, subject to other conditions
that may be imposed by the plan administrator, on a current or deferred basis,
cash payments in the same amounts or lesser amount as may be determined in the
award agreement, that the holder of record of such shares would be entitled to
receive as dividends or cash dividends on that stock. Dividend Equivalents can
be Free Standing Rights or Related Rights. The plan administrator may provide
that Dividend Equivalents shall be paid or distributed when accrued or shall be
deemed to have been reinvested in additional Common Stock, or other investment
vehicles as the plan administrator may specify, provided that a Dividend
Equivalent that is a Related Right shall be subject to the conditions and
restrictions of the underlying award to which it relates.
RESTRICTED AWARDS
The plan administrator shall determine the terms and conditions of the
award of Restricted Awards including, but not limited to, the time of grant, the
number of shares to be awarded, the price (which can be paid with monies made
available by way of a loan from the Company), the performance objectives and the
Restricted Period. Generally, during the Restricted Period, the participant is
not permitted to sell, transfer, pledge or assign the shares of the Restricted
Awards. The plan administrator, in its sole discretion, may provide for the
lapse, acceleration, or waiver of such restrictions based upon such factors and
circumstances as the plan administrator may determine, in its sole discretion,
including, but not limited to, the termination of employment or service due to
death, Disability or the occurrence of a Change of Control.
AMENDMENT; TERMINATION
The Board of Directors may amend, alter or discontinue the Non-Qualified
Option Plan at any time, except that no amendment, alteration or discontinuation
of the Non-Qualified Option Plan can be made that would impair the rights of a
participant without the participant's consent. The plan administrator may amend
the terms of the award, prospectively or retrospectively, provided that no such
amendment impairs the rights of any holder without the holder's consent. No
NSOs, Rights, Dividend Equivalents or Restricted Awards will be granted under
the Non-Qualified Option Plan on or after the tenth anniversary of Effective
Date of the Plan, but awards granted under the Non-Qualified Option Plan may
extend beyond that date.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
Under current Federal income tax laws, awards under the Non-Qualified
Option Plan will generally have the following tax consequences:
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<PAGE>
NON-QUALIFIED STOCK OPTIONS. A participant will generally not be taxed
upon the grant of an NSO. Rather, at the time of exercise of such NSO, the
participant will recognize ordinary income for Federal income tax purposes in an
amount equal to the excess, if any, of the fair market value of the shares
purchased over the NSO exercise price and will have a tax basis in such shares
equal to the amount paid upon exercise plus the amount taxable as ordinary
income to the participant. The Company will generally be entitled to a tax
deduction at such time and in the same amount that the participant recognizes
ordinary income.
If shares acquired upon exercise of an NSO are later sold or exchanged,
then the difference between the sales price and the fair market value of such
stock on the date that ordinary income was recognized with respect thereto will
generally be taxable as long-term or short-term capital gain or loss (if the
stock is a capital asset of the participant) depending upon whether the stock
has been held for more than one year after such date.
EXERCISE WITH SHARES. According to a published ruling of the Internal
Revenue Service, a participant who pays the NSO price upon exercise of an NSO,
in whole or in part, by delivering shares of the Company's stock already owned
by him will recognize no gain or loss for Federal income tax purposes on the
shares surrendered, but otherwise will be taxed according to the rules described
above for NSOs. With respect to shares acquired upon exercise which are equal
in number to the shares surrendered, the basis of such shares will be equal to
the basis of the shares surrendered, and the holding period of the shares
acquired will include the holding period of the shares surrendered. The basis
of additional shares received upon exercise will be equal to the fair market
value of such shares on the date which governs the determination of the
participant's ordinary income, and the holding period for such additional shares
will commence on such date.
RIGHTS. A grant of SARs or LSARs has no Federal income tax consequences at
the time of such grant. Upon the exercise of SARs or LSARs (other than a Free
Standing Right that is an LSAR), the amount of any cash and the fair market
value as of the date of exercise of any shares of the Company's stock received
is taxable to the participant as ordinary income. With respect to a Free
Standing Right that is an LSAR, however, a recipient should be required to
include as taxable income on the date of a Change in Control (as defined in the
award agreement evidencing such LSAR) an amount equal to the amount of cash that
could be received upon the exercise of the LSAR, even if the LSAR is not
exercised until a date subsequent to the Change in Control date. The Company
will generally be entitled to a deduction at the same time and in an amount
equal to the amount included in the participant's income. Upon the sale of
shares acquired upon the exercise of SARs or LSARs, a participant will recognize
capital gain or loss (assuming such stock was held as a capital asset) in an
amount equal to the difference between the amount realized upon such sale and
the fair market value of the stock on the date that governs the determination of
his ordinary income. The capital gain or loss will be long-term or short-term
depending upon whether the stock has been held for more than one year after the
date on which the income was realized by the participant.
DIVIDEND EQUIVALENTS. A participant will not be taxed upon the grant of a
Dividend Equivalent, but will instead recognize ordinary income in an amount
equal to the value of the Dividend Equivalent at the time the Dividend
Equivalent becomes payable to the participant. The Company will be entitled to
a deduction at such time and in such amount as the participant recognizes
ordinary income with respect to the Dividend Equivalent.
RESTRICTED AWARDS. In the case of a restricted award, a participant
generally will not be taxed upon the grant of such an award. The participant
will recognize ordinary income in an amount equal to (i) the fair market value
of the Company's Common Stock at the time the shares become transferable or are
otherwise no longer subject to a substantial risk of forfeiture (as defined in
the Code), minus (ii) the price, if any, paid by the participant to purchase
such stock. The Company will be entitled to a deduction at the time when, and
in the amount that, the participant recognizes ordinary income. However, a
participant may elect (not later than 30 days after acquiring such shares) to
recognize ordinary income at the time the restricted shares are awarded in an
amount equal to their fair market value at that time, notwithstanding the fact
that such shares are subject to restrictions on transfer and a substantial risk
of forfeiture. If such an election is made, no additional taxable income will
be recognized by the
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<PAGE>
participant at the time the restrictions lapse. The Company will be entitled to
a tax deduction at the time when, and to the extent that, income is recognized
by the participant. However, if shares in respect of which such election was
made are later forfeited, no tax deduction is allowable to the participant for
the forfeited shares, and the Company will be deemed to recognize ordinary
income equal to the amount of the deduction allowed to the Company at the time
of the election in respect of such forfeited shares.
OPTION GRANTS
The table below shows, as to each of the Company's executive officers named
in the Summary Compensation Table and the various indicated individuals and
groups, the number of shares of Common Stock subject to Options granted under
the Non-Qualified Option Plan. All of such Options were granted on August 29,
1996, have a ten year term and an exercise price of $20.75 per share of Common
Stock. On March 25, 1997, the closing price of the Common Stock on the New York
Stock Exchange was $29 1/4.
<TABLE>
<CAPTION>
OPTION TRANSACTIONS
- --------------------------------------------------------------------------------------------------
Options Granted
(Number
Name And Position Of Shares)
- --------------------------------------------------------------------------------------------------
<S> <C>
Terry Considine, Chairman of the Board of Directors, President and Chief
Executive Officer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153,000
Peter K. Kompaniez, Vice Chairman and Director . . . . . . . . . . . . . . . . 83,000
Steven D. Ira, Executive Vice President. . . . . . . . . . . . . . . . . . . . 73,000
Robert P. Lacy, Executive Vice President . . . . . . . . . . . . . . . . . . . 0
Thomas W. Toomey, Executive Vice President-Finance and Administration. . . . . 63,000
All executive officers as a group (6 persons). . . . . . . . . . . . . . . . . 373,500
All non-employee directors as a group (4 persons). . . . . . . . . . . . . . . 0
All employees, including current officers who are not executive officers,
as a group (8 persons) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 379,750
- --------------------------------------------------------------------------------------------------
</TABLE>
THE BOARD OF DIRECTORS BELIEVES THAT THE NON-QUALIFIED OPTION PLAN AND
THE STOCK SALES REFLECT THE BEST INTERESTS OF THE COMPANY AND RECOMMENDS
APPROVAL AND RATIFICATION THEREOF BY STOCKHOLDERS.
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BOARD OF DIRECTORS AND OFFICERS
The executive officers of the Company and the nominees for election as
directors of the Company, their ages, dates they were first elected and their
positions with the Company or on the Board of Directors are set forth below.
NAME AGE FIRST ELECTED POSITION
- ---- --- ------------- --------
Terry Considine 49 July 1994 Chairman of the Board of Directors,
President and Chief Executive
Officer
Peter K. Kompaniez 52 July 1994 Vice Chairman and Director
Steven D. Ira 47 July 1994 Executive Vice President - START
Robert P. Lacy 46 July 1994 Executive Vice President
David L. Williams 51 January 1997 Executive Vice President - Property
Operations
Thomas W. Toomey 36 January 1966 Executive Vice President - Finance
and Administration
Leeann Morein 42 July 1994 Senior Vice President, Chief
Financial Officer and Secretary
Patricia K. Heath 42 July 1994 Vice President and Chief Accounting
Officer
Harry G. Alcock 33 July 1996 Vice President - Acquisitions
Richard S. Ellwood 65 July 1994 Independent Director; Chairman,
Audit Committee
J. Landis Martin 51 July 1994 Independent Director
Thomas L. Rhodes 57 July 1994 Independent Director; Chairman,
Compensation Committee
John D. Smith 69 November 1994 Independent Director
The following is a biographical summary of the experience of the current
directors and executive officers of the Company for the past five years or more.
TERRY CONSIDINE. Mr. Considine has been Chairman of the Board of
Directors, President and Chief Executive Officer of the Company since July 1994.
He is the sole owner of Considine Investment Co. and prior to July 1994 was
owner of approximately 75% of Property Asset Management, L.L.C., Limited
Liability Company, a Colorado limited liability company, and its related
entities (collectively, "PAM"), one of the AIMCO predecessors. On October 1,
1996, Mr. Considine was appointed Co-Chairman and director of Asset Investors
Corp. and Commercial Asset Investors, Inc., two other public real estate
investment trusts, and appointed as a director of Financial Assets
Management, LLC, a real estate investment trust manager. Mr. Considine has
been involved as a principal in a variety of real estate activities, including
the acquisition, renovation, development and disposition of properties.
Mr. Considine has also controlled entities engaged in other businesses such as
television broadcasting, gasoline distribution and environmental laboratories.
Mr. Considine received a B.A. from Harvard College, a J.D. from Harvard Law
School and is admitted as a member of the Massachusetts Bar. He served as a
Colorado State Senator from 1987-1992 and in 1992 was the Republican nominee for
election to the United States Senate from Colorado.
PETER K. KOMPANIEZ. Mr. Kompaniez has been Vice Chairman and a director of
the Company since July 1994. Since September 1993, Mr. Kompaniez has owned 75%
of PDI Realty Enterprises, Inc., a Delaware corporation ("PDI"), one of the
Company's predecessors, and serves as its President and Chief Executive Officer.
From 1986 to 1993, he served as President and Chief Executive Officer of Heron
Financial Corporation ("HFC"), a United States holding company for Heron
International, N.V.'s real estate and related assets. While at HFC,
Mr. Kompaniez administered the acquisition, development and disposition of
approximately 8,150 apartment units (including 6,217 units that have been
acquired by the Company) and 3.1 million square feet of commercial real estate.
Prior to joining HFC, Mr. Kompaniez was a senior partner with the law firm of
Loeb and Loeb where he had extensive real estate and REIT experience.
Mr. Kompaniez received a B.A. from Yale College and a J.D. from the University
of California (Boalt Hall).
13
<PAGE>
STEVEN D. IRA. Mr. Ira has served as Executive Vice President of the
Company since July 1994. From 1987 until July 1994, he served as President of
PAM. Prior to merging his firm with PAM in 1987, Mr. Ira acquired extensive
experience in property management. Between 1977 and 1981 he supervised the
property management of over 3,000 apartment and mobile home units in Colorado,
Michigan, Pennsylvania and Florida, and in 1981 he joined with others to form
the property management firm of McDermott, Stein and Ira. Mr. Ira served for
several years on the National Apartment Manager Accreditation Board and is a
former president of both the National Apartment Association and the Colorado
Apartment Association. Mr. Ira is the sixth individual elected to the Hall of
Fame of the National Apartment Association in its 54-year history. He holds a
Certified Apartment Property Supervisor (CAPS) and a Certified Apartment Manager
designation from the National Apartment Association, a Certified Property
Manager (CPM) designation from the National Institute of Real Estate Management
(IREM) and he is a member of the Boards of Directors of the National
Multi-Housing Council, the National Apartment Association and the Apartment
Association of Metro Denver. Mr. Ira received a B.S. from Metropolitan State
College in 1975.
ROBERT P. LACY. Mr. Lacy has served as Executive Vice President of the
Company since July 1994. Since September 1993, Mr. Lacy has been a 25% owner
and Executive Vice President and Chief Operating Officer of PDI. From 1990 to
1993, Mr. Lacy served as Executive Vice President of Income Producing Properties
for HFC. In that capacity he was responsible for all improved real estate in
HFC's portfolio, including 8,150 apartment units (including 6,217 units that
have been acquired by the Company) and over 3.1 million square feet of
commercial real estate. From 1985 to 1990, Mr. Lacy served in various capacities
with the Birtcher Group of Companies, initially as Executive Vice President and
Chief Operating Officer of Birtcher Properties, where he managed Birtcher's
public and private partnership properties nationwide. Subsequently, Mr. Lacy
participated in the formation of Birtcher Financial Services and eventually
became Managing General Partner of that entity, where he provided portfolio
work-out services to the banking and thrift industries and successfully resolved
over $500 million in real estate loans and properties. Mr. Lacy received a B.A.
in Business Administration from California State University at Fullerton in
1973, holds a CPM designation from IREM and is a California real estate broker.
DAVID L. WILLIAMS. Mr. Williams has been Executive Vice
President-Operations of the Company since January 1997. Prior to joining the
Company, Mr. Williams was Senior Vice President of Operations at Evans
Withycombe Residential, Inc. from January 1996 to January 1997. Previously, he
was Executive Vice President at Equity Residential Properties Trust from
October 1989 to December 1995. He has served on National Multi-Housing Council
Boards and NAREIT committees. M. Williams also served as Senior Vice President
of Operations and Acquisitions of US Shelter Corporation from 1983 to 1989.
Mr. Williams has been involved in the property management, development and
acquisition of real estate properties since 1973. Mr. Williams received his
B.A. in education and administration from the University of Washington in 1967.
THOMAS W. TOOMEY. Mr. Toomey has served as Senior Vice President --
Finance and Administration of the Company since January 1996 and was promoted to
Executive Vice President - Finance and Administration in March 1997. From 1990
until 1995, Mr. Toomey served in a similar capacity with Lincoln Property
Company ("LPC") as Vice President/Senior Controller and Director of
Administrative Services of Lincoln Property Services where he was responsible
for LPC's computer systems, accounting, tax, treasury services and benefits
administration. From 1984 to 1990, he was an audit manager with Arthur Andersen
& Co. where he served real estate and banking clients. From 1981 to 1983, Mr.
Toomey was on the audit staff of Kenneth Leventhal & Company. Mr. Toomey
received a B.S. in Business Administration/Finance from Oregon State University
and is a Certified Public Accountant.
LEEANN MOREIN. Ms. Morein has served as Senior Vice President, Chief
Financial Officer and Secretary of the Company since July 1994. From
September 1990 to March 1994, Ms. Morein served as Chief Financial Officer of
the real estate subsidiaries of California Federal Bank, including the general
partner of CF Income Partners, L.P., a publicly-traded master limited
partnership. Ms. Morein joined California Federal in September 1988 as Director
of Real Estate Syndications Accounting and became Vice President -- Financial
14
<PAGE>
Administration in January 1990. From 1983 to 1988, Ms. Morein was Controller of
Storage Equities, Inc., a real estate investment trust, and from 1981 to 1983,
she was Director of Corporate Accounting for Angeles Corporation, a real estate
syndication firm. Ms. Morein worked on the audit staff of Price Waterhouse from
1979 to 1981. Ms. Morein received a B.A. from Pomona College and is a Certified
Public Accountant.
PATRICIA K. HEATH. Ms. Heath has served as Vice President and Chief
Accounting Officer of the Company since July 1994. From 1992 until July 1994,
Ms. Heath served as Manager of Accounting, then Chief Financial Officer of HFC
and, effective September 1993, as Chief Financial Officer of PDI. She had
responsibility for all internal and external financial reporting, cash
management and budgeting for HFC, its subsidiaries, related joint ventures and
partnerships and for PDI. Ms. Heath brings 15 years of real estate accounting
experience to the Company, having served as Controller for the real estate
investment, development and syndication firms of Guilford Glazer & Associates
from 1990 to 1992, Ginarra Holdings, Inc. from 1984 to 1990, and Fox & Carskadon
Financial Corporation from 1980 to 1983. Ms. Heath worked from 1978 to 1980 as
an auditor with Deloitte, Haskins and Sells. She received her B.S. in Business
from California State University at Chico and is a Certified Public Accountant.
HARRY G. ALCOCK. Mr. Alcock has served as Vice President since July 1996,
with responsibility for acquisition and financing activities since July 1994.
From June 1992 until July 1994, Mr. Alcock served as Senior Financial Analyst
for PDI and HFC. From 1988 to 1992, Mr. Alcock worked for Larwin Development
Corp., a Los Angeles based real estate developer, with responsibility for
raising debt and joint venture equity to fund land acquisitions and development.
From 1987 to 1988, Mr. Alcock worked for Ford Aerospace Corp. He received his
B.S. from San Jose State University.
RICHARD S. ELLWOOD. Mr. Ellwood was appointed a director of the Company in
July 1994 and is currently Chairman of the Audit Committee. Mr. Ellwood is the
founder and President of R.S. Ellwood & Co., Incorporated, a real estate
investment banking firm. Prior to forming R.S. Ellwood & Co., Incorporated in
1987, Mr. Ellwood had 31 years experience as an investment banker, serving as:
Managing Director and senior banker at Merrill Lynch Capital Markets from 1984
to 1987; Managing Director at Warburg Paribas Becker from 1978 to 1984; general
partner and then Senior Vice President and a director at White, Weld & Co. from
1968 to 1978; and in various capacities at J.P. Morgan & Co. from 1955 to 1968.
Mr. Ellwood currently serves as a director of Corporate Realty Income Trust and
FelCor Suite Hotels, Inc. He is a registered investment advisor.
J. LANDIS MARTIN. Mr. Martin was appointed a director of the Company in
July 1994. Mr. Martin has served as President, Chief Executive Officer and a
director of NL Industries, Inc., a manufacturer of specialty chemicals, since
1987. Since 1988, he has served as the President and Chief Executive Officer of
Tremont Corporation, an integrated producer of titanium metals. Mr. Martin has
also served as a director and the Chairman of the Board of Directors of Tremont
Corporation since August 1990. From December 1988 until January 1994, he served
as Chairman of the Board of Directors of Baroid Corporation, an oilfield
services company. In January 1994, Baroid Corporation became a wholly owned
subsidiary of Dresser Industries, Inc. and Mr. Martin currently serves as a
director of Dresser Industries, Inc. Mr. Martin also serves as Chairman of the
Board and Chief Executive Officer of Titanium Metals Corporation, an integrated
producer of titanium.
THOMAS L. RHODES. Mr. Rhodes was appointed a director of the Company in
July 1994 and is currently Chairman of the Compensation Committee. Mr. Rhodes
has served as the President and a director of NATIONAL REVIEW since 1992. From
1976 to 1992, he held various positions at Goldman, Sachs & Co. and was elected
a General Partner in 1986. He also served as a director of Underwriters
Reinsurance Company from 1987 to 1993 and was a member of the Advisory Board of
TransTerra Co. during 1993. He currently serves as Co-Chairman and director of
Financial Assets Management, LLC and its subsidiaries, and as a director of
Delphi Financial Group, Inc. and its subsidiaries, The Lynde and Harry Bradley
Foundation, and the Reserve Special Portfolio Trusts. Mr. Rhodes is Chairman of
the Empire Foundation for Policy Research, a Trustee of The Heritage
15
<PAGE>
Foundation, a Trustee of The Manhattan Institute, a Board Member of the National
Center for Neighborhood Enterprise and a Member of the Council on Foreign
Relations.
JOHN D. SMITH. Mr. Smith was appointed a director of the Company in
November, 1994. Mr. Smith is Principal and President of John D. Smith
Developments. Mr. Smith has been a shopping center developer, owner and
consultant for over 8.6 million square feet of shopping center projects
including Lenox Square in Atlanta, Georgia. Mr. Smith is a Trustee and former
President of the International Council of Shopping Centers and was selected to
be a member of the American Society of Real Estate Counselors. Mr. Smith served
as a director for Pan-American Properties, Inc. (National Coal Board of Great
Britain) formerly known as Continental Illinois Properties. He also serves as a
director of American Fidelity Assurance Companies and is retained as an advisor
by Shop System Study Society, Tokyo, Japan.
BOARD OF DIRECTORS MEETINGS AND COMMITTEES
The Board of Directors held eight meetings during the year ended
December 31, 1996. During 1996, no director attended fewer than 75% of the
total number of meetings of the Board of Directors and any committees of the
Board of Directors upon which he served. The Board of Directors has established
standing audit and compensation committees. There is no standing nominating
committee.
AUDIT COMMITTEE. The Audit Committee currently consists of the four
Independent Directors: Messrs. Ellwood (Chairman), Martin, Rhodes and Smith. The
Audit Committee makes recommendations to the Board of Directors concerning the
engagement of independent auditors, reviews with the independent auditors the
plans and results of the audit engagement, approves professional services
provided by the independent auditors, reviews the independence of the
independent public accountants, considers the range of audit and non-audit fees
and reviews the adequacy of the Company's internal accounting controls. The
Audit Committee met once in 1996.
COMPENSATION COMMITTEE. The Compensation Committee currently consists of
the four Independent Directors: Messrs. Rhodes (Chairman), Ellwood, Martin and
Smith. The Compensation Committee determines and reports to the Board of
Directors regarding compensation for the Company's executive officers and
administers the Company's stock option plans. The Compensation Committee met
three times in 1996.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee is comprised of Messrs. Rhodes, Ellwood, Martin
and Smith, none of whom are, or have ever been, employees of the Company.
COMPENSATION OF DIRECTORS
The Company paid the Independent Directors an annual fee of 600 shares of
the Company's Common Stock, a fee of $1,000 for attendance at each in-person
meeting of the Board of Directors, $500 for each in-person meeting of any
committee thereof and $350 for each telephonic meeting of the Board of Directors
or any committee thereof. Directors who are not Independent Directors do not
receive directors' fees.
Pursuant to The 1994 Stock Option Plan of Apartment Investment and
Management Company and Affiliates (the "1994 Stock Option Plan"), and the
Apartment Investment and Management Company 1996 Stock Award and Incentive Plan
(the "1996 Stock Option Plan"), each Independent Director, upon joining the
Board of Directors, received an initial grant of an option to purchase up to
3,000 shares of Common Stock at the market price of the shares on the date of
grant. Following each annual meeting of stockholders, each Independent Director
receives an additional option to purchase up to 3,000 shares of Common Stock at
the market price of the shares on the date of grant. Such options vest one year
after the date of grant. All directors will be eligible for awards under the
1997 Stock Plan. After April 24, 1997, any award of options to purchase shares
of Common Stock made to Independent Directors will be made under the 1997 Stock
Plan if it is approved by stockholders. Stockholders will vote on the 1997
Stock Plan at the Meeting. See "Proposal 3": Approval of the 1997 Stock Plan."
16
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information available to the
Company, as of February 18, 1997, with respect to shares of its Common Stock and
units ("OP Units") of limited partnership interest in AIMCO Properties, L.P., a
Delaware limited partnership through which the Company holds investments and
conducts substantially all of its operations (the "Operating Partnership"),
(i) held by those persons known to the Company to be the beneficial owners (as
determined under the rules of the Securities and Exchange Commission) of more
than 5% of such shares and (ii) held individually and as a group by the
directors and executive officers of the Company.
<TABLE>
<CAPTION>
PERCENTAGE OF PERCENTAGE OF
NAME AND ADDRESS OF SHARES OF COMMON STOCK OWNERSHIP OF
BENEFICIAL OWNER (1) COMMON STOCK OUTSTANDING OP UNITS (2) THE COMPANY (3)
- -------------------- --------------- -------------- ------------ ---------------
<S> <C> <C> <C> <C>
DIRECTORS & EXECUTIVE OFFICERS:
Terry Considine. . . . . . . . . . 990,038 (4)(5) 5.5% 783,803 (6) 8.5%
Peter K. Kompaniez . . . . . . . . 345,037 (4)(7) 1.9% 23,625 1.8%
Steven D. Ira. . . . . . . . . . . 173,643 (4)(8) 1.0% 96,373 1.3%
Robert P. Lacy . . . . . . . . . . 28,165 (4) * 7,875 *
Thomas W. Toomey . . . . . . . . . 187,000 (9) 1.0% -- *
Leeann Morein. . . . . . . . . . . 24,716 (10) * -- *
Patricia K. Heath. . . . . . . . . 13,014 (11) * -- *
Richard S. Ellwood . . . . . . . . 9,200 (12) * -- *
J. Landis Martin . . . . . . . . . 17,700 (13) * -- *
Thomas L. Rhodes . . . . . . . . . 31,700 (14) * -- *
Harry Alcock . . . . . . . . . . . 9,429 (15) * *
John D. Smith. . . . . . . . . . . 9,700 (12) * -- *
DIRECTORS AND EXECUTIVE OFFICERS
AS A GROUP (12 PERSONS). . . . . . 1,839,342 10.2% 911,676 13.1%
5% OR GREATER HOLDERS:
None
</TABLE>
___________
* Less than 1%
(1) Unless otherwise indicated, the address of the beneficial owner is 1873
South Bellaire Street, Suite 1700, Denver, Colorado 80222.
(2) Through wholly owned subsidiaries, the Company acts as general partner
and, as of December 31, 1996, holds 81.5% of the interests in the
Operating Partnership. After a one-year holding period, OP Units may be
tendered for redemption and, upon tender, may be acquired by the Company
for shares of Common Stock at an exchange ratio of one OP Unit for each
share of Common Stock (subject to adjustment). If all OP Units were
acquired by the Company for Common Stock (without regard to the ownership
limit set forth in the Company's Articles of Incorporation) these shares
of Common Stock would constitute approximately 18.5% of the then
outstanding shares of Common Stock. OP Units are subject to certain
restrictions on transfer.
(3) On a fully-diluted basis, assuming all 2,860,072 OP Units outstanding as
of February 18, 1997 are acquired by the Company for shares of Common
Stock at the exchange ratio of one OP Unit for each share of Common Stock
without regard to the ownership limit set forth in the Company's Articles
of Incorporation.
(4) Excludes 186,857, 82,875, 27,643 and 27,625 shares of Class B Common
Stock held by Messrs. Considine, Kompaniez and Ira, respectively,
representing 57.5%, 25.5%, 8.5% and 8.5%, respectively of the total
number of shares of Class B Common Stock outstanding. Class B Common
Stock is convertible into an equal number of shares of Class A Common
Stock over a four-year period ending December 31, 1998 if certain
performance standards are achieved.
(5) Includes 153,000 shares subject to options that are exercisable within 60
days. Also includes 650,181 shares held by entities in which Mr.
Considine holds sole voting and investment power, and 4,807 shares held
by a non-profit corporation in which Mr. Considine has shared voting and
investment power with his spouse. Mr. Considine disclaims beneficial
ownership of 90% of 535,500 shares held by Considine Partnership in which
Mr. Considine holds a 10% general partnership interest with the remaining
90% held by trusts for members of Mr. Considine's family.
(6) Includes 152,316 OP Units held by entities in which Mr. Considine has
sole voting and investment power, 2,300 OP Units held by the Considine
Partnership for 90% of which Mr. Considine disclaims beneficial
ownership, and 157,698 OP Units held by Mr. Considine's spouse, Elizabeth
Considine, for which Mr. Considine disclaims beneficial ownership.
(7) Includes 83,000 shares subject to options exercisable within 60 days.
(8) Includes 73,000 shares subject to options exercisable within 60 days.
(9) Includes 73,000 shares subject to options that are exercisable within 60
days.
(10) Includes 13,358 shares subject to options that are exercisable within 60
days.
(11) Includes 7,238 shares subject to options that are exercisable within 60
days.
(12) Includes 6,000 shares subject to options that are exercisable within 60
days.
(13) Includes 1,000 shares held in the director's individual retirement
account and 6,000 shares subject to options that are exercisable within
60 days.
(14) Includes 4,000 shares of common stock held by the Thomas L. Rhodes and
Gleaves Rhodes Foundation and 6,000 shares subject to options that are
exercisable within 60 days.
(15) Includes 4,828 shares subject to options that are exercisable within 60
days.
17
<PAGE>
SUMMARY COMPENSATION TABLE
The Company was formed in January 1994 and did not commence paying
salaries until July 29, 1994, immediately following the Company's initial public
offering. The following table sets forth the compensation paid for each of the
three fiscal years ended December 31, 1996 to the Company's President and Chief
Executive Officer and each of the four other most highly compensated executive
officers of the Company (the "Named Executive Officers").
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION (2)
----------------------------------------- ---------------
AWARDS
---------------
SECURITIES
OTHER ANNUAL UNDERLYING
COMPENSATION STOCK OPTIONS/ ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) ($) SARS (#) COMPENSATION($)
- -------------------------------- ---- ------------ ---------- ------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
TERRY CONSIDINE 1996 $267,500 $20,000 -- 318,000 --
Chairman of the Board of 1995 257,500 6,000 -- -- --
Directors, President and Chief 1994(1) 85,480 7,000 -- -- --
Executive Officer
PETER K. KOMPANIEZ 196 $227,500 $20,000 -- 170,000 --
Vice Chairman 1995 227,500 6,000 -- -- --
1994(1) 85,480 7,000 -- -- --
STEVEN D. IRA 1996 $194,000 $20,000 -- 150,000 --
Executive Vice President - 1995 158,500 6,000 -- -- --
START 1994(1) 64,110 7,000 -- -- --
ROBERT P. LACY 1996 $158,500 -- -- -- --
Executive Vice President 1995 158,500 -- -- -- --
1994(1) 64,110 -- -- -- --
THOMAS W. TOOMEY 1996 $130,000 $50,000 -- 136,000 --
Executive Vice President - 1995 (3) -- -- -- --
Finance and Administration 1994 (3) -- -- -- --
</TABLE>
___________
(1) Represents compensation paid by the Company for the period from July 29,
1994 through December 31, 1994. The annual base salaries of Messrs. Considine,
Kompaniez, Ira and Mr. Lacy in effect during 1994 were $200,000, $200,000,
$150,000 and $150,000, respectively. See "Employment Arrangements"
(2) Does not include Common Stock, Class B Common Stock or OP Units held by the
Named Executive Officers. See "Security Ownership of Certain Beneficial Owners
and Management."
(3) Mr. Toomey was not an employee of the Company prior to January 1996.
18
<PAGE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
Information on options granted in 1996 to the Named Executive Officers is
set forth in the following table.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE AT
ASSUMED ANNUAL RATES OF
STOCK PRICE APPRECIATION FOR
INDIVIDUAL GRANTS (1) OPTION TERM (2)
--------------------------------------------------------- ----------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS/SARS
UNDERLYING GRANTED TO EXERCISE OR
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION
NAME GRANTED (#) FISCAL YEAR ($/Sh) DATE 5% ($) 10% ($)
- ------------------ ------------ ------------ ------------ ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Terry Considine 306,000 38.3% $20.75 10/1/2006 $3,993,166 $10,119,468
12,000 1.5% 20.625 4/25/2006 155,651 394,451
Peter K. Kompaniez 166,000 20.8% 20.75 10/1/2006 2,166,228 5,489,646
4,000 0.5% 20.625 4/25/2006 51,884 131,484
Steven D. Ira 146,000 18.3% 20.75 10/1/2006 1,905,236 4,828,243
4,000 0.5% 20.625 1/25/2006 51,884 131,484
Thomas W. Toomey 126,000 15.8% 20.75 10/1/2006 1,644,245 4,166,840
10,000 1.3% 20.25 1/25/2006 127,351 322,733
Robert P. Lacy N/A N/A N/A N/A N/A N/A
</TABLE>
___________
(1) Options vest ratably over five years. Under the terms of the 1996 Stock
Option Plan, the 1994 Stock Option Plan and the Non-Qualified Option Plan, the
plan administrator retains discretion, subject to certain restrictions, to
modify the terms of outstanding options. Options are granted for terms set at
the discretion of the plan administrator and are subject to earlier termination
in certain events related to termination of employment. The exercise price of
incentive and non-qualified options granted under the 1996 Stock Option Plan,
the 1994 Stock Option Plan and the Non-Qualified Option Plan will generally
equal the fair market value of a share of Common Stock on the date of grant
unless the option holder owns more than 10% of the total combined voting power
of all classes of stock of the Company, in which case the exercise price of
incentive stock options granted to the option holder will equal 110% of the fair
market value of a share of Common Stock on the date of grant.
(2) Assumed annual rates of stock price appreciation are set forth for
illustrative purposes only. The amounts shown are for the assumed rates of
appreciation only, do not constitute projections of future stock price
performance, and may not necessarily be realized.
19
<PAGE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION/SAR VALUES
Information on option exercises during 1996 by the Named Executive
Officers, and the value of unexercised options held by Named Executive Officers
at December 31, 1996 is set forth in the following table.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS/
OPTIONS/SARS AT FY-END(#) SARS AT FY-END ($)(1)
-------------------------- --------------------------
SHARES
ACQUIRED ON VALUE
NAME EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------- ------------ ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Terry Considine 153,000 0 153,000 12,000 1,147,500 91,500
Peter K. Kompaniez 83,000 0 83,000 4,000 622,500 30,500
Steven D. Ira 73,000 0 73,000 4,000 547,500 30,500
Thomas W. Toomey 63,000 0 73,000 0 472,500 0
Robert P. Lacy 0 0 0 0 0 0
</TABLE>
(1) Market value of underlying securities at fiscal year-end, less the exercise
price. Market value is determined based on the closing price of the Common
Stock on the New York Stock Exchange on December 31, 1996 of $28.25 per share.
20
<PAGE>
COMPENSATION COMMITTEE REPORT TO STOCKHOLDERS
Compensation and benefit practices of the Company are established and
governed by the Compensation Committee comprised exclusively of independent
members of the Board of Directors. The Compensation Committee establishes the
general compensation policy of the Company, reviews and approves compensation of
the senior executive officers of the Company and administers the 1994 Stock
Option Plan, the 1996 Stock Option Plan, the Non-Qualified Option Plan
(collectively, the "Existing Stock Option Plans") and any other employee benefit
plans established by the Company. The Compensation Committee reviews the overall
compensation program of the Company to assure that it (i) is reasonable in
consideration of all the facts, including practices of comparably sized real
estate investment trusts, (ii) adequately recognizes performance tied to
creating shareholder values, and (iii) meets overall Company compensation and
business objectives.
The Compensation Committee will attempt to promote financial and
operational success by attracting, motivating and assisting in the retention of
key employees who demonstrate the highest levels of ability and talent. In
addition, the Compensation Committee will attempt to promote teamwork,
initiative and resourcefulness on the part of key employees whose performance
and responsibilities directly affect Company profits. To this end, the
compensation program is designed to balance short and long-term incentive
compensation to achieve desired results and pay for performance. The
Compensation Committee has determined that the Company's compensation program
should reward performance as measured by the creation of value for stockholders.
The Compensation Committee contemplates utilizing base salary, annual cash
incentive awards, and long-term incentive compensation as part of its program.
The Compensation Committee does not plan to allocate a fixed percentage of
compensation to each of these three elements but intends to work with management
to design compensation structures which will best serve its goals.
BASE SALARY. Salaries for executives will be reviewed annually by the
Compensation Committee based upon a variety of factors, including individual
performance, general levels of market salary increases and the Company's overall
financial results.
Base salaries for the Company's executives through December 31, 1996 were
determined by the Compensation Committee. The Compensation Committee has
reviewed the base salary for each of the five highest paid officers for 1997 and
believes that the compensation is reasonable in view of competitive practices,
the Company's performance and the contribution of those officers to that
performance.
ANNUAL CASH INCENTIVE AWARDS. Annual cash incentive bonus awards generally
are designed to protect shareholder interests by establishing a Cash Earned For
Shareholders ("CEFS") target (the "Performance Target"). Unless the Performance
Target is met it is the intention of the Compensation Committee that no cash
bonuses will be paid to Senior Management; and if the Performance Target is met,
cash bonuses may be paid to Senior Management at the discretion of the
Compensation Committee. CEFS is defined as the Company's net income or (loss)
excluding gains (or losses) from debt restructuring and sales of property, plus
certain non-cash charges, primarily real estate depreciation and amortization,
and after adjustment for unconsolidated partnerships and joint ventures, less
the dividend payment on Preferred Stock and less capital replacements of a
minimum annual provision of $300 per apartment unit. CEFS is comparable to what
others in the industry sometimes describe as Cash Available for Distribution
("CAD") or Funds Available for Distribution ("FAD"). CEFS is available to fund
new investments, pay dividends, reduce debt or repurchase stock. The Performance
Target is established by the Compensation Committee at the beginning of each
year at a level considered to provide shareholders with an acceptable rate of
return. Bonus awards also are based on personal performance measured by the
extent to which personal goals are achieved. Personal performance goals
necessarily vary between officers based upon their specific roles within the
Company and specific objectives established each year for each officer.
LONG-TERM INCENTIVE COMPENSATION. The Compensation Committee administers
the Existing Stock Option Plans. Stock options are awarded under the Existing
Stock Option Plans in order to attract and retain employees and motivate them to
improve the long-term performance of the Company's stock in the market. In
addition, the Compensation Committee may provide employees with opportunities to
purchase Common Stock directly. See
21
<PAGE>
"Proposal 4 -- Approval and Ratification of the Non-Qualified Option Plan and
the Sale of Stock to Certain Executive Officers." The Compensation Committee
believes that by providing key employees with responsibility for the management
and growth of the Company with an opportunity to increase their ownership of
Company stock, the best interests of shareholders and executives will be closely
aligned. Stock options generally are granted at no less than 100% of the current
fair market value of the Company's stock and will only be of value if the stock
price increases over time. Generally, stock options will vest in installments
over a five-year period, and the employee must be employed by the Company in
order to exercise vested options. In determining whether and in what amount to
grant stock options, the Compensation Committee will take into account, among
other things, the scope of responsibility, the anticipated performance, and the
contribution to the Company of the proposed award recipient.
CHIEF EXECUTIVE COMPENSATION. In 1996, Terry Considine, the Company's
President and Chief Executive Officer, received base compensation of $267,500,
which compensation was determined by the Compensation Committee. The
Compensation Committee also awarded Mr. Considine a cash bonus incentive award
of $20,000 for his performance during 1996 as the appropriate amount in light of
earnings in excess of the Performance Target. Mr. Considine will receive base
compensation of $275,000 per year for 1997, an increase of 2.8% from the 1996
base compensation.
Based upon the foregoing, the Compensation Committee has reviewed and
approved the total compensation for 1996 of the five most highly compensated
executive officers of the Company.
Date: March 31, 1997 THOMAS L. RHODES (Chairman)
RICHARD S. ELLWOOD
J. LANDIS MARTIN
JOHN D. SMITH
THE ABOVE REPORT WILL NOT BE DEEMED TO BE INCORPORATED BY REFERENCE INTO
ANY FILING BY THE COMPANY UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES
EXCHANGE ACT OF 1934, EXCEPT TO THE EXTENT THAT THE COMPANY SPECIFICALLY
INCORPORATES THE SAME BY REFERENCE.
EMPLOYMENT ARRANGEMENTS
Each of Messrs. Considine, Kompaniez, Ira and Lacy receive annual cash
compensation and a bonus pursuant to two-year employment contracts with the
Company. The initial two-year term of each of the contracts expired in July 1996
and, in the case of Messrs. Considine, Kompaniez and Ira each contract has been
renewed for a one year term. The base salary payable under the employment
contracts to Messrs. Considine, Kompaniez, Ira and Lacy is $257,500, $227,500,
$158,500 and $158,500, respectively, subject to annual review and adjustment by
the Compensation Committee. See "Summary Compensation Table." Each of
Messrs. Considine, Kompaniez, Ira and Lacy are also eligible for a bonus set by
the Compensation Committee. Key factors in the determination of senior
management bonuses will be his or her performance and contribution to an
increase in the Company's CEFS per share, and the amount of any bonus will be
limited to 100% of base salary.
The employment contracts provide that upon a change in control of the
Company or a termination of employment under certain circumstances, the employee
will be entitled to a payment equal to three times the average annual salary for
the previous three years. The contracts provide that during the term of the
contract and for one year thereafter, except with respect to certain existing
investments held by the employee (which the employees have committed to
liquidate in an orderly manner), in no event will the employees engage in the
acquisition, development, operation or management of other multifamily rental
apartment properties outside of the Company. In addition, the contracts provide
that the employees will not engage in any active or passive investment in
property relating to multifamily rental apartment properties, with the exception
of the ownership of up to 1% of the securities of any publicly-traded company
involved in those activities.
22
<PAGE>
STOCK PRICE PERFORMANCE GRAPH
The following graph compares cumulative total returns for the Company's
Common Stock, the Standard & Poor's 500 Total Return Index, the SNL Self-Managed
REIT Index, and the SNL Multi-Family REIT Index from July 29, 1994 (the date on
which the initial public offering of the Company's Common Stock was consummated)
to December 31, 1996. The SNL Self-Managed REIT and the SNL Multi-Family REIT
Indices were prepared by SNL Securities, an independent research and publishing
firm specializing in the collection and dissemination of data on the banking,
thrift and financial services industries. The indices are weighted for all
companies that fit the definitional criteria of the particular index and are
calculated to exclude companies as they are acquired and add them to the index
calculation as they become publicly traded companies. All companies of the
definitional criteria in existence at the point in time presented are included
in the index calculations. The graph assumes the investment of $100 in the
Company's Common Stock and in each index on July 29, 1994, and that all
dividends paid have been reinvested.
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
STOCK PRICE PERFORMANCE
[GRAPH]
<TABLE>
<CAPTION>
Period Ending
7/29/94 12/31/94 12/31/95 3/31/96 6/30/96 9/30/96 12/31/96
------- -------- -------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
AIMCO $100.00 $ 94.78 $116.08 $127.67 $117.07 $133.94 $183.47
S&P 500 $100.00 $102.85 $141.49 $149.09 $155.76 $160.59 $173.84
Equity REITs $100.00 $ 98.29 $113.11 $116.30 $121.41 $129.51 $153.77
Residential REITs $100.00 $ 99.73 $113.22 $118.79 $121.79 $127.74 $148.20
</TABLE>
THE STOCK PRICE PERFORMANCE GRAPH WILL NOT BE DEEMED TO BE INCORPORATED BY
REFERENCE INTO ANY FILING BY THE COMPANY UNDER THE SECURITIES ACT OF 1933 OR THE
SECURITIES EXCHANGE ACT OF 1934, EXCEPT TO THE EXTENT THAT THE COMPANY
SPECIFICALLY INCORPORATES THE SAME BY REFERENCE.
23
<PAGE>
CERTAIN RELATIONSHIPS AND TRANSACTIONS
Until February 1996, four of the Company's executive officers,
Messrs. Considine, Kompaniez, Ira and Lacy, collectively, had a 5% beneficial
interest in each of four regional business trusts (the "Service Trusts") in
order to accommodate the qualification of the Company as a REIT. Through the
Operating Partnership, the Company had a 95% beneficial interest in each of the
four Service Trusts. The Service Trusts owned 99% interests in the four
regional limited liability companies (the "Service LLCs") through which the
Company conducted its property management and asset management business. The
Operating Partnership owned the remaining 1% beneficial interests in the four
Service LLCs. In February 1996, the Company formed a new subsidiary, Property
Asset Management Services, Inc., a Delaware corporation ("PAMS"), to hold the
beneficial interests in each of the four Service Trusts. The Operating
Partnership's interests in each of the four Service Trusts were contributed to
PAMS in exchange for 950,000 shares of non-voting preferred stock of PAMS. The
remaining 5% beneficial interests in each of the Service Trusts held by Messrs.
Considine, Kompaniez, Ira and Lacy were contributed to PAMS in exchange for a
total of 50,000 shares of common stock of PAMS (34,166 shares, 6,750 shares,
6,834 shares and 2,250 shares, respectively). The PAMS preferred stock and
common stock are entitled to equal dividends, on a per share basis. The PAMS
preferred stock has a liquidation preference of $1.70 per share and is entitled
to 95% of any amounts in excess of such preference that may be distributed to
stockholders in the event of a liquidation, dissolution or winding up of PAMS.
The formation of PAMS is expected to facilitate operating and organizational
efficiencies for the Company, and possibly tax savings. For the year ended
December 31, 1996, Messrs. Considine, Kompaniez, Ira and Lacy received dividends
of approximately $28,000, $6,000, $6,000, and $2,000, respectively, on their
shares of PAMS common stock, and the Company received dividends of $788,000 on
its shares of PAMS preferred stock.
As of January 1, 1996, the Operating Partnership acquired the Peachtree
Park Apartments from Peachtree Park 94, L.P., a Georgia limited partnership, for
a total consideration comprised of 86,977 OP Units, the repayment of $270,268 of
indebtedness relating to the Peachtree Park Apartments, and the assumption of
$12,980,255 of indebtedness encumbering the Peachtree Park Apartments. In
addition, AIMCO purchased the cable equipment located at the Peachtree Park
Apartments from Mr. Considine for 8,243 shares of Common Stock valued at $21.25
a share. The Peachtree Park Apartments is a multifamily apartment property
comprised of 295 units located in Atlanta, Georgia. Terry Considine, Chairman
of the Board of Directors, President and Chief Executive Officer of the Company,
holds, directly and indirectly, a 100% interest in Peachtree Park 94, L.P. The
purchase price was determined based on Mr. Considine's investment in, and
expenses relating to, the property. The Company also incurred an aggregate of
$16,822 in closing costs relating to the Peachtree Park Apartments.
As of December 31, 1996, the Company served as property manager for
18 multifamily apartment properties owned by entities in which Messrs. Considine
and Ira and other officers of the Company have an ownership interest.
Compensation for these services is in an amount equal to between 3% and 6% of
gross receipts from the properties ($619,000 for the year ended December 31,
1996). All contracts for the management of these properties have been approved
by a majority of the Independent Directors, and are on terms prevailing in the
market for arms' length transactions at the time the contracts were executed.
On May 20, 1996, the Company acquired Somerset Utah, L.P., a Utah limited
partnership of which the managing general partner was a partnership between Mr.
Ira and Property Asset Management, LLC, Limited Liability Company, a Colorado
limited liability company ("PAM LLC"), which is controlled by Messrs. Considine
and Ira. Through their ownership interest in PAM LLC, Messrs. Considine and Ira
had beneficial interests in Somerset Utah, L.P. of approximately 6.4% and 1.3%,
respectively. Somerset Utah, L.P. acquired Somerset Village, an apartment
property in Salt Lake City, Utah, in August 1993 for approximately $16.7
million. AIMCO Somerset, Inc. (a wholly owned subsidiary of AIMCO) purchased
100% of the partnership interest (with two-thirds of such interest transferred
to the Operating Partnership) in Somerset Utah, L.P. for a purchase price of
approximately $21.9 million (including the assumption of indebtedness), which
was determined through negotiations between representatives of the Company and
Somerset Utah, L.P., including Mr. Considine. The Company has obtained an
independent appraisal of the Somerset Village apartment property and the
transaction was subject to the
24
<PAGE>
approval of the Company's Board of Directors (excluding Mr. Considine). Mr.
Considine received 14,305 OP Units and $83,800 and Mr. Ira received 1,431 OP
Units and $16,764 in connection with this transaction.
On October 1, 1996, the Company issued 379,750 shares of Common Stock to
certain executive officers (or entities controlled by them) at $20.75 per share
(the closing price on the New York Stock Exchange on August 29, 1996, the option
award date) pursuant to the exercise of stock options issued under the 1996
Stock Option Plan. In payment for such shares, the executive officers executed
notes payable to the Company bearing interest at 7.25% per annum, payable
quarterly, and due in 2006. These stock purchase notes are secured by the
shares purchased and are recourse as to 25% of the principal owed. As of
December 31, 1996, Messrs. Considine, Kompaniez, Ira and Toomey and Ms. Morein
had balances of $3,174,759, $1,722,250, $1,514,750 and $1,307,250, respectively,
under these notes.
In addition, on August 29, 1996, the Company agreed to sell to the
Considine Partnership, Mr. Kompaniez and Mr. Toomey, 382,500 shares, 83,000
shares and 50,000 shares, respectively, of Common Stock, at a purchase price of
$20.75 per share (the closing price on the New York Stock Exchange on such date)
prior to January 31, 1997. These shares were issued and delivered as of
December 31, 1996. In payment for such shares, the Considine Partnership, Mr.
Kompaniez and Mr. Toomey executed notes payable to the Company bearing interest
at 7.25% per annum, payable quarterly, and due in 2006. These stock purchase
notes were not secured by the shares purchased, but were recourse as to 100% of
the principal amount. As of December 31, 1996, the Considine Partnership, Mr.
Kompaniez and Mr. Toomey had balances of $7,936,875, $1,722,250 and $1,037,500,
respectively, under such notes, all of which have since been repaid in full.
OTHER MATTERS
SECTION 16(a) COMPLIANCE. Section 16(a) of the Exchange Act requires the
Company's executive officers and directors, and persons who own more than ten
percent of a registered class of the Company's equity securities, to file
reports (Forms 3, 4 and 5) of stock ownership and changes in ownership with the
Securities and Exchange Commission and the New York Stock Exchange. Officers,
directors and beneficial owners of more than ten percent of the Company's stock
are required by Securities and Exchange Commission regulation to furnish the
Company with copies of all such forms that they file.
Based solely on the Company's review of the copies of Forms 3, 4 and 5 and
the amendments thereto received by it for the year ended December 31, 1996, or
written representations from certain reporting persons that no Forms 5 were
required to be filed by those persons, the Company believes that during the
period ended December 31, 1996, all filing requirements were complied with by
its executive officers, directors and beneficial owners of more than ten percent
of the Company's stock, with the exception of the following: Messrs. Considine,
Kompaniez, Ira, Toomey and Lacy each filed a Form 5 on February 7, 1997,
disclosing, in the case of Messrs. Considine, Kompaniez, Ira and Lacy, Common
Stock acquired upon conversion of shares of Class B Common Stock of the Company
and, in the case of Messrs. Considine, Kompaniez and Toomey, Common Stock
acquired from the Company.
STOCKHOLDERS' PROPOSALS. Proposals of stockholders intended to be
presented at the Company's Annual Meeting of Stockholders to be held in 1997
must be received by the Company, marked to the attention of the Secretary, no
later than November 27, 1997. Proposals must comply with the requirements as to
form and substance established by the Securities and Exchange Commission for
proposals in order to be included in the proxy statement.
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OTHER BUSINESS. The Company knows of no other business that will come
before the Meeting for action. As to any other business that comes before the
Meeting, the persons designated as proxies will have discretionary authority to
act in their best judgment.
THE BOARD OF DIRECTORS
March 31, 1997
Denver, Colorado
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ANNEX A
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
1997 STOCK AWARD AND INCENTIVE PLAN
Apartment Investment and Management Company, a Maryland corporation, AIMCO
Properties, L.P., a Delaware limited partnership, Property Asset Management
Services, L.P., a Delaware limited partnership have adopted the Apartment
Investment and Management Company 1997 Stock Award and Incentive Plan (the
"PLAN"), adopted March 31, 1997, for the benefit of eligible employees and
directors of the Company, the Partnership, the Company Subsidiaries and the
Partnership Subsidiaries.
ARTICLE 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, the Partnership, the Company
Subsidiaries and the Partnership Subsidiaries 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, the Partnership, the
Company Subsidiaries and the Partnership Subsidiaries in attracting and
retaining officers and other employees, directors and consultants and advisors
with experience and ability.
1.2 DEFINITIONS. 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
including such additional individuals as the Board shall designate in order to
fulfill the Disinterested Persons 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 an "outside
director" within the meaning of Section 162(m)(4)(c)(ii) of the Code. If at any
time the Board 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, or of
any corporation that is then a Company Subsidiary.
(g) "COMPANY SUBSIDIARIES" means any corporation in an unbroken
chain of corporations beginning with the Company if each of the corporations
other than the last corporation in the unbroken chain then owns stock possessing
fifty percent (50%) or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain. Except with respect to
Incentive Stock Options, "COMPANY SUBSIDIARY"
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shall also mean any partnership in which the Company and/or any Company
Subsidiary owns more than fifty percent (50%) of the capital or profits
interests; PROVIDED, HOWEVER, that "COMPANY SUBSIDIARY" shall not include the
Partnership or any Partnership Subsidiary.
(h) "DEFERRED STOCK" means an award made pursuant to Section 7
below of the right to receive Stock at the end of a specified deferral period.
(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 10.
(k) "ELIGIBLE PERSONS" means any person eligible to participate
in the Plan pursuant to Section 4.1 including Independent Directors.
(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 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) "GENERAL PARTNER INTEREST" means an ownership interest in
the Partnership that is a general partner interest and includes any and all
benefits to which the holder of such an interest may be entitled as provided in
the Agreement of Limited Partnership of AIMCO Properties, L.P., as amended,
together with all obligations of such holder to comply with the terms and
provisions of such agreement.
(n) "INCENTIVE STOCK OPTION" means any Stock Option intended to
be designated as an "incentive stock option" within the meaning of Section 422
of the Code.
(o) "INDEPENDENT DIRECTOR" means a member of the Board who is
not a Company Employee or a Partnership Employee.
(p) "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).
(q) "NON-QUALIFIED STOCK OPTION" means any Stock Option that is
not an Incentive Stock Option, including any Stock Option that provides (as of
the time such option is granted) that it will not be treated as an Incentive
Stock Option.
(r) "PARTICIPANT" means any Eligible Person, or any Independent
Director, consultant or advisor to the Company, any Company Subsidiary, the
Partnership or any Partnership Subsidiary 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.
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(s) "PARTNERSHIP" means AIMCO Properties, L.P., a Delaware
limited partnership.
(t) "PARTNERSHIP EMPLOYEE" means any officer or other employee
(as defined in accordance with Section 3401(c) of the Code) of the Partnership,
or any entity that is then a Partnership Subsidiary.
(u) "PARTNERSHIP SUBSIDIARY" means any partnership or limited
liability company in any unbroken chain of partnerships or limited liability
companies beginning with the Partnership if each of the partnerships or limited
liability companies other than the last partnership or limited liability company
in the unbroken chain then owns more than fifty percent (50%) of the capital or
profits interests in one of the other partnerships or limited liability
companies. "PARTNERSHIP SUBSIDIARY" shall also mean any corporation in which the
Partnership and/or any Partnership Subsidiary owns stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of
stock. "PARTNERSHIP SUBSIDIARY" includes the Regional Service Companies.
(v) "PERFORMANCE SHARE" means an award of shares of Stock
pursuant to Section 7 that is subject to restrictions based upon the attainment
of specified performance objectives.
(w) "REGIONAL SERVICE COMPANY" shall mean Property Asset
Management Services, L.P.
(x) "RESTRICTED STOCK" means an award granted pursuant to
Section 7 of shares of Stock subject to certain restrictions.
(y) "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 purchase Class A Common Stock. Debt securities of the Company
convertible into Class A Common Stock shall be deemed equity securities of the
Company.
(z) "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.
(aa) "STOCK OPTION" means any option to purchase shares of Stock
granted pursuant to Section 5.
(ab) "STOCK OWNERSHIP LIMIT" means the restrictions on ownership
and transfer of Common Stock provided in Section 3.4 of the Company's Charter.
ARTICLE 2
ADMINISTRATION
2.1 ADMINISTRATOR. The Plan shall be administered by the Board or by
a Committee which shall be appointed by the Board and which shall serve at the
pleasure of the Board and 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 Persons, pursuant to the terms of
the Plan: Stock Options, Stock Appreciation Rights or Limited Stock
Appreciation Rights, Dividend Equivalents, Restricted Stock, Performance Shares,
Deferred Stock, or any combination of the foregoing. In particular, the
Administrator shall have the authority to determine the terms and conditions,
not inconsistent with the terms of the Plan, of any award granted hereunder and
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.
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2.3 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
(a) make grants under this Plan to employees who are "officers" of the Company
within the meaning of Rule 16(a)-1(b) of the Exchange Act or whose total
compensation is required to be reported to the Company's stockholders under the
Exchange Act, (b) determine the price, timing or amount of such grants or (c)
determine any other matter required by Rule 16b-3 or Section 162(m) of the Code
to be determined in the sole and absolute discretion of the Administrator.
ARTICLE 3
STOCK SUBJECT TO PLAN
3.1 NUMBER AND SOURCE OF SHARES. The total number of shares of Stock
reserved and available for issuance under the Plan shall be 10% of the shares of
Stock outstanding as of the first day of the fiscal year during which any award
is made but in no event more than 20,000,000 shares. Such shares may consist,
in whole or in part, of treasury shares, authorized and unissued shares or
shares of Stock reacquired by the Company. To the extent that (a) a Stock
Option expires or is otherwise terminated without being exercised, or (b) 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.
3.2 LIMITATION ON INDIVIDUAL GRANTS The aggregate number of shares
of Stock as to which Stock Options, Stock Appreciation Rights, Dividend
Equivalents, Restricted Stock, Deferred Stock and Performance Shares may be
granted to any individual during any calendar year may not, subject to
adjustment as provided in this Section 3, exceed 100% of the shares available
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 (a) the kind and aggregate number of shares reserved for issuance
under the Plan, (b) the kind, number and option price of shares subject to
outstanding Stock Options granted under the Plan, and (c) 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.
ARTTICLE 4
ELIGIBILITY
4.1 GENERAL PROVISIONS. Subject to Section 3.1 and the Stock
Ownership Limit, officers (including officers who are directors of the Company),
other key employees and Independent Directors of, and consultants and advisors
to the Company, any Company Subsidiary, the Partnership and any Partnership
Subsidiary who are responsible for or contribute to the management, growth
and/or profitability of the business of the Company, any Company Subsidiary and
any Partnership Subsidiary, shall be eligible to be granted awards under the
Plan. The Participants under the Plan shall be selected from time to time by
the Administrator, in its sole discretion, from among the
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Eligible Persons, consultants and advisors to the Company recommended by the
senior management of the Company, and the Administrator shall determine, in its
sole discretion, the number of shares covered by each award.
ARTICLE 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 an 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.
5.2 TYPES OF OPTIONS. The Stock Options granted under the Plan may
be of two types: (a) Incentive Stock Options and (b) Non-Qualified Stock
Options. The Administrator shall have the authority to grant (x) Incentive
Stock Options, Non-Qualified Stock Options, or both types of Stock Options (in
each case with or without Stock Appreciation Rights or Limited Stock
Appreciation Rights) to Company Employees and (y) Non-Qualified Stock Options
(with or without Stock Appreciation Rights or Limited Stock Appreciation Rights)
to Partnership Employees, and persons who are Independent Directors, consultants
or advisors to the Company, any Company Subsidiary, the Partnership or any
Partnership Subsidiary. To the extent that any Stock Option does not qualify as
an Incentive Stock Option, it shall constitute a separate Non-Qualified Stock
Option. More than one option may be granted to the same optionee and be
outstanding concurrently hereunder.
5.3 TERMS AND CONDITIONS OF OPTIONS. Stock Options granted under the
Plan shall contain such terms and conditions, not inconsistent with the terms of
the Plan, as the Administrator shall deem desirable:
(a) 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, in the case of Incentive
Stock Options, be less than one hundred percent (100%) of the Fair Market Value
of the Stock on such date, and shall not, in any event, be less than the par
value of the Stock. If a Company Employee owns or is deemed to own (by reason
of the attribution rules applicable under Section 424(d) of the Code) more than
ten percent (10%) of the combined voting power of all classes of stock of the
Company or any Company Subsidiary or any Partnership Subsidiary that is a
corporation and an Incentive Stock Option is granted to such employee, the
option price of such Incentive Stock Option (to the extent required by the Code
at the time of grant) shall be no less than one hundred and ten percent (110%)
of the Fair Market Value of the Stock on the date such Incentive Stock Option is
granted.
(b) OPTION TERM. The term of each Stock Option shall be fixed
by the Administrator, PROVIDED THAT if a Company Employee owns or is deemed to
own (by reason of the attribution rules of Section 424(d) of the Code) more than
ten percent (10%) of the combined voting power of all classes of stock of the
Company, any Company Subsidiary, the Partnership or any Partnership Subsidiary
that is a corporation and an Incentive Stock Option is granted to such employee,
the term of such Incentive Stock Option (to the extent required by the Code at
the time of grant) shall be no more than five (5) years from the date of grant.
(c) 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.
5.4 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
(a) be evidenced by promissory notes entered into by the Stock Option holders in
favor of the Company, (b) be subject to the terms and conditions set forth in
this Section 5.4 and such other terms and conditions, not inconsistent with the
Plan, as the Administrator shall determine; PROVIDED THAT each loan shall comply
with
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all applicable laws, regulations and rules of the Board of Governors of the
Federal Reserve System and any other governmental agency having jurisdiction.
5.5 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.
5.6 TERMINATION OF EMPLOYMENT OR SERVICE. If an optionee's
employment with or service as a director of or consultant or advisor to the
Company, any Company Subsidiary or any Partnership Subsidiary 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 award
agreement, or as otherwise determined by the Administrator.
5.7 ANNUAL LIMIT ON INCENTIVE STOCK OPTIONS. To the extent that the
aggregate Fair Market Value (determined as of the date the Incentive Stock
Option is granted) of shares of Stock with respect to which Incentive Stock
Options granted to an Optionee under this Plan and all other option plans of the
Company or its Company Subsidiaries become exercisable for the first time by the
Optionee during any calendar year exceeds $100,000, such Stock Options shall be
treated as Non-Qualified Stock Options.
ARTICLE 6
STOCK APPRECIATION RIGHTS AND
LIMITED STOCK APPRECIATION RIGHTS
6.1 GRANT OF RIGHTS. Stock Appreciation Rights and Limited Stock
Appreciation Rights may be granted either alone ("Free Standing Rights") or in
conjunction with all or part of any Stock Option granted under the Plan
("Related Rights"). In the case of a Non-Qualified Stock Option, Related Rights
may be granted either at or after the time of the grant of such Stock Option.
In the case of an Incentive Stock Option, Related Rights may be granted only at
the time of the grant of the Incentive Stock Option.
6.2 TERMINATION OF RIGHTS. A Related Right or applicable portion
thereof granted in conjunction with a 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.
6.3 EXERCISE OF RIGHTS. A Related Right may be exercised by an
optionee, in accordance with paragraph 6.4, 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 paragraph 6.4. 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.
6.4 TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS. 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:
(a) TERMINATION OF EMPLOYMENT OR SERVICE. 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.
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6.5 LIMITED STOCK APPRECIATION RIGHTS. Limited 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.
ARTICLE 7
DIVIDEND EQUIVALENTS
7.1 GRANT OF DIVIDEND EQUIVALENTS. The Committee is authorized to
grant Dividend Equivalents to Participants, which will entitle such 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.
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 is entitled to receive from the Company cash payments, on a current or
deferred basis, 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 a 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.
ARTICLE 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. 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 5.4 with
respect to the exercise of stock options.
8.2 AWARD AGREEMENTS. 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 and delivered a fully executed copy thereof to the Company,
within a period of sixty (60) days (or such other period as the Administrator
may specify after the award date).
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8.3 AWARD CERTIFICATES. Except as otherwise provided below in this
Section 8.3, (a) 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 (b) 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.
8.4 DEFERRED STOCK CERTIFICATES. 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.
8.5 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 as determined by the
Committee:
(a) RESTRICTIONS ON TRANSFER. Subject to the provisions of the
Plan and the Restricted Stock Award Agreement, Deferred Stock Award Agreement,
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 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) TERMINATION OF EMPLOYMENT OR SERVICE. 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 award agreement, as appropriate, governing such
awards.
ARTICLE 9
AMENDMENT AND TERMINATION
9.1 AMENDMENT OF THE PLAN. The Board may amend, alter or discontinue
the Plan, but no amendment, alteration, or discontinuation shall be made that
would impair the rights of a Participant under any award theretofore granted
without such Participant's consent. Notwithstanding the foregoing, stockholder
approval under this Section 9 shall only be required at such time and under such
circumstances as stockholder approval would be required under Section 162(m) or
422 of the Code with respect to any material amendment to any employee benefit
plan of the Company or as otherwise determined by the Administrator.
9.2 AMENDMENT OF AWARDS. The Administrator may amend the terms of
any award theretofore granted, prospectively or retroactively, but, no such
amendment shall impair the rights of any holder without his or her consent.
ARTICLE 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.
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ARTICLE 11
GENERAL PROVISIONS
11.1 REPRESENTATIONS. 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.
11.2 LEGENDS. 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.
11.3 OTHER PLANS; NO GUARANTEE OF ENGAGEMENT. 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 director,
employee, consultant or advisor of the Company, any Company Subsidiary or any
Partnership or Partnership Subsidiary any right to continued employment with or
service as a director to the Company, any Company Subsidiary or any Partnership
or Partnership Subsidiary, as the case may be, nor shall it interfere in any way
with the right of the Company, any Company Subsidiary, the Partnership or any
Partnership Subsidiary to terminate the employment or service of any of its
directors, employees, consultants or advisors at any time.
11.4 WITHHOLDING REQUIREMENTS. 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,
any Company Subsidiary, the Partnership or any Partnership Subsidiary (as the
case may be), 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, any Company Subsidiary, the Partnership or any Partnership
Subsidiary 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.
11.5 NO LIABILITY. No member of the Board or the Committee, or any
director, officer or employee of the Company, and Company Subsidiary, the
partnership or any partnership Subsidiary 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.
11.6 INDEMNIFICATION. 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.
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ARTICLE 12
MISCELLANEOUS
12.1 COMPLIANCE WITH LAWS.
(a) The obligation of the Company to sell or deliver Stock with
respect to any award granted under the Plan shall be subject to all applicable
laws, rules and regulations, including all applicable Federal and state
securities laws, and the obtaining of all such approvals by governmental
agencies as may be deemed necessary or appropriate by the Committee.
(b) Each award is subject to the requirement that, if at any
time the Committee determines, in its absolute discretion, that the listing,
registration or qualification of Stock issuable pursuant to the Plan is required
by any securities exchange or under any state or Federal law, or the consent or
approval of any governmental regulatory body is necessary or desirable as a
condition of, or in connection with, the grant of an award or the issuance of
Stock, no such award shall be granted, payment made or Stock issued, in whole or
in part, unless listing, registration, qualification, consent or approval has
been effected or obtained free of any conditions not acceptable to the
Committee.
(c) In the event that the disposition of Stock acquired pursuant
to the Plan is not covered by a then current registration statement under the
Securities Act of 1933, as amended (the "Securities Act") and is not otherwise
exempt from such registration, such Stock shall be restricted against transfer
to the extent required by the Securities Act or regulations thereunder, and the
Committee may require a grantee receiving Stock pursuant to the Plan, as a
condition precedent to receipt of such Stock, to represent to the Company in
writing that the Stock acquired by such grantee is acquired for investment only
and not with a view to distribution.
12.2 NO RIGHTS TO AWARDS; NO STOCKHOLDER RIGHTS. No Eligible Person
shall have any claim to be granted any award or loan under the Plan, and there
is no obligation for uniformity of treatment of grantees. Except as provided
specifically herein, a grantee or a transferee of an award shall have no rights
as a stockholder with respect to any shares covered by the award until the date
of the issuance of a stock certificate to him for such shares.
12.3 OWNERSHIP AND TRANSFER RESTRICTIONS. Shares acquired through the
realization of awards granted under the Plan shall be subject to the
restrictions on ownership and transfer set forth in the Company's Charter. The
Committee (or the Board, in the case of Non-Qualified Stock Options granted to
Independent Directors), in its sole and absolute discretion, may impose such
additional restrictions on the ownership and transferability of the shares
issuable pursuant to Plan awards as it deems appropriate. Any such restriction
shall be set forth in the respective award agreement and may be referred to on
the certificates evidencing such shares. The Committee may require a
Participant to give the Company prompt notice of any disposition of shares of
Stock acquired by exercise of an Incentive Stock Option within (i) two (2) years
from the date of granting such option to such Participant or (ii) one (1) year
after the transfer of such shares to such Participant. The Committee may direct
that the certificates evidencing shares acquired by exercise of a Stock Option
refer to such requirement to give prompt notice of disposition.
12.4 RESTRICTIONS ON OWNERSHIP. A Stock Option is not exercisable
(and an award may not otherwise be realized) if, in the sole and absolute
discretion of the Committee, the exercise of such Option or realization of such
award would likely result in any of the following:
(a) the Participant's ownership of Stock being in violation of
the Stock Ownership Limit set forth in the Company's Charter;
(b) income to the Company that could impair the Company's status
as a "real estate investment trust," within the meaning of Sections 856 through
860 of the Code;
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(c) a transfer, at any one time, of more than one-tenth of one
percent (0.1%) (measured in value or in number of shares, whichever is more
restrictive) of the Company's total Stock from the Company to the Partnership
pursuant to Section 5.4(d); or
(d) Notwithstanding any other provision of this Plan, a
Participant shall have no rights under this Plan to acquire Stock that would
otherwise be prohibited under the Company's Charter.
12.5 APPROVAL OF PLAN BY STOCKHOLDERS. The Plan shall take effect
upon its adoption by the Board but the Plan (and any grants of awards made prior
to the shareholder approval mentioned herein) shall be subject to ratification
by the holder(s) of a majority of the issued and outstanding shares of voting
securities of the Company entitled to vote, which ratification must occur within
twelve (12) months of the date that the Plan is adopted by the Board. In the
event that the shareholders of the Company do not ratify the Plan at a meeting
of the shareholders at which such issue is considered and voted upon, then upon
such event the Plan and all rights hereunder shall immediately terminate and no
grantee (or any permitted transferee thereof) shall have any remaining rights
under the Plan or any award agreement entered into in connection herewith.
12.6 NONTRANSFERABILITY. Awards shall not be transferable by a
Participant except by will or the laws of descent and distribution or, if then
permitted under Rule 16b-3, pursuant to a qualified domestic relations order as
defined under the Code or Title I of the Employee Retirement Income Security Act
of 1974, as amended, or the rules thereunder, and shall be exercisable during
the lifetime of a Participant only by such Participant or his guardian or legal
representative.
12.7 GOVERNING LAW. The Plan and all determinations made and actions
taken pursuant hereto shall be governed by the laws of the State of Maryland
without giving effect to the conflict of laws principles thereof.
ARTICLE 13
EFFECTIVE DATE OF PLAN
The Plan became effective (the "Effective Date") on April 24, 1997,
the date the Company's stockholders formally approved the Plan.
ARTICLE 14
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.
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ANNEX B
AMENDED AND RESTATED
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
NON-QUALIFIED EMPLOYEE STOCK OPTION PLAN
ARTICLE 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 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
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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 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
purchase Class A Common Stock. Debt securities of the Company convertible into
Class A Common Stock shall be deemed equity securities of the Company.
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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.
ARTICLE 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
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.
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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 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.
ARTICLE 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 may consist, in whole or in part, of treasury shares, authorized and
unissued shares or shares of Stock reacquired by the Company.
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
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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.
ARTICLE 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 Administrator shall determine, in its sole discretion, the
number of shares covered by each award.
ARTICLE 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,
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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.
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 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.
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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.
ARTICLE 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 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.
(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.
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(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.
(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.
ARTICLE 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
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(other than freestanding Dividend Equivalents) shall be subject to all
conditions and restrictions of the underlying awards to which they relate.
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.
ARTICLE 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 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.
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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 Agreement,
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.
ARTICLE 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 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.
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ARTICLE 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.
ARTICLE 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 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.
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ARTICLE 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.
ARTICLE 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.
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THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
The undersigned, a stockholder of Apartment Investment and Management
Company, a Maryland corporation (the "Company"), hereby appoints Terry
Considine and Peter K. Kompaniez or either of them (with full power to act
without the other), the attorneys and proxies of the undersigned, with power
of substitution, to attend the Annual Meeting of Stockholders of the Company
to be held at the principal executive offices of the Company at 1873 South
Bellaire Street, Suite 1700, Denver, Colorado 80222-4348, on April 24, 1997
at 9:00 a.m., and at any adjournment or adjournments thereof, and to vote the
number of shares the undersigned would be entitled to vote if personally
present, as follows:
(PLEASE DATE AND SIGN ON REVERSE SIDE AND RETURN THIS
PROXY IN THE ENCLOSED ENVELOPE.)
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FOR ALL NOMINEES WITHHOLD
(except as indicated) AUTHORITY
1. The election as directors of
Terry Considine, Richard S. / / / /
Ellwood, Peter K. Kompaniez,
J. Landis Martin, Thomas L.
Rhodes and John O. Smith,
each for a one year term ending on the date of
the next Annual Meeting of Stockholders and
until their successors are elected and qualify.
(INSTRUCTION: To withhold authority to vote for any individual
nominee, write that nominee's name in the space below.)
______________________________________________________________
Please indicate your votes by
marking the appropriate box.
FOR AGAINST ABSTAIN
2. The ratification of Ernst & Young LLP as
independent auditors for the Company. / / / / / /
3. The proposal to approve the Apartment
Investment and Management Company 1997 / / / / / /
Stock Award and Incentive Plan.
4. The proposal to approve and ratify (i)
the Amended and Restated Apartment
Investment and Management Company
Non-Qualified Employee Stock Option Plan / / / / / /
and (ii) the issuance and sale of 515,500
shares of Common Stock to certain of the
Company's Executive Officers.
5. Such other matters as may come before the
meeting, as to which discretionary authority
is granted to said proxies.
THIS PROXY WILL BE VOTED AS YOU SPECIFY ABOVE. UNLESS OTHERWISE MARKED, THIS
PROXY WILL BE VOTED FOR THE ELECTION OF THE PERSONS NAMED ABOVE, AND FOR
PROPOSALS 2, 3 AND 4. IN THE ELECTION OF DIRECTORS, AND EXCEPT AS OTHERWISE
INDICATED ABOVE, SAID PROXIES SHALL HAVE DISCRETION AND AUTHORITY TO DISTRIBUTE
THE VOTES REPRESENTED BY THIS PROXY IN SUCH PROPORTIONS AS THEY SHALL SEE FIT
AMONG THE NOMINEES NAMED IN THE PROXY STATEMENT. IF ANY SUCH NOMINEE IS UNABLE
OR UNWILLING TO SERVE OR IS OTHERWISE UNAVAILABLE SAID PROXIES SHALL HAVE
DISCRETION AND AUTHORITY TO VOTE IN ACCORDANCE WITH THEIR JUDGMENT FOR OTHER
NOMINEES OR TO DISTRIBUTE SUCH VOTES IN SUCH PROPORTIONS AS THEY SHALL SEE FIT
AMONG OTHER NOMINEES. THE UNDERSIGNED ACKNOWLEDGES RECEIPT OF THE NOTICE OF
MEETING AND PROXY STATEMENT DATED MARCH 31, 1997.
Signature(s)____________________________________ Dated _________________, 1997
(Please sign exactly as your name or names appear, if more than one name
appears, all persons so designated should sign. For joint accounts, each
joint owner should sign. Executors, administrators, trustees, guardians,
and attorneys-in-fact should so indicate when signing.
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