FORM OF NON-QUALIFIED STOCK OPTION AGREEMENT (2007 Stock Award and Incentive Plan)
Exhibit 10.3
(2007 Stock Award and Incentive Plan)
NON-QUALIFIED STOCK OPTION AGREEMENT, dated as of
(the “Agreement”),
by and between Apartment Investment and Management Company, a Maryland corporation (the “Company”),
and (the “Optionee”). Capitalized terms used but not otherwise defined in
this Agreement shall have the respective meanings set forth in the Apartment Investment and
Management Company 2007 Stock Award and Incentive Plan, as amended (the “Plan”).
WHEREAS, on
(the “Grant Date”) the Compensation Committee (the
“Committee”) of the Board of Directors (the “Board”) of the Company awarded the Optionee a
non-qualified stock option, exercisable to purchase shares of the Company’s Class A Common Stock,
par value $.01 per share (“Common Stock”), pursuant to, and subject to the terms and provisions of,
the Plan.
NOW, THEREFORE, in consideration of the Optionee’s services to the Company and for other good
and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. Number of Shares and Purchase Price. The Company hereby grants the Optionee a
non-qualified stock option (the “Option”) to purchase
shares of Common Stock
(the “Option Shares”) at a purchase price per share equal
to $ the “Exercise
Price”), pursuant to the terms of this Agreement and the provisions of the Plan.
2. Period of Option and Conditions of Exercise.
(a) Unless the Option is previously terminated pursuant to this Agreement or the Plan, the
Option shall terminate on the tenth anniversary of the Date of Grant (the “Expiration Date”). Upon
the termination of the Option, all rights of the Optionee hereunder shall cease.
(b) Subject to the provisions of the Plan and this Agreement, the Option shall become
exercisable: (i) as to % of the Option Shares on
;
(ii) as to % of the Option
Shares on
;
(iii) as to % of the Option Shares on
; and (iv) as to %
of the Option Shares on .
3. Change of Control.
All unexercised and unvested stock options issued hereunder shall, in addition to any
provisions relating to exercisability contained in this Agreement, become immediately fully vested
and exercisable by the Optionee upon the occurrence of a Change of Control (as defined below).
For purposes of this Agreement, a “Change in Control” shall mean the occurrence of any
of the following events:
(a) an acquisition (other than directly from the Company) of any voting securities of the
Company (the “Voting Securities”) by any “person” (as the term “person” is used for purposes of
Section 13(d) or Section 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)) immediately after which such person has “beneficial ownership” (within the meaning of Rule
13d-3 promulgated under the Exchange Act) (“Beneficial Ownership”) of 50% or more of the combined
voting power of the Company’s then outstanding Voting Securities; provided, however, in determining
whether a Change in Control has occurred, Voting Securities that are acquired in a Non-Control
Acquisition (as hereinafter defined) shall not constitute an acquisition that would cause a Change
in Control. “Non-Control Acquisition” shall mean an acquisition (A) by or under an employee
benefit plan (or a trust forming a part thereof) maintained by (1) the Company or (2) any
corporation, partnership or other person of which a majority of its voting power or its equity
securities or equity interest is owned directly or indirectly by the Company or in which the
Company serves as a general partner or manager (a “Subsidiary”), (B) by the Company or any
Subsidiary, or (C) by any person in connection with a Non-Control Transaction (as hereinafter
defined);
(b) the individuals who constitute the Board of Directors of the Company as of the date hereof
(the “Incumbent Board”) cease for any reason to constitute at least 50% of the Board of Directors;
provided, however, that if the election, or nomination for election by the Company’s stockholders,
of any new director was approved by a vote of at least two-thirds of the Incumbent Board, such new
director shall be considered as a member of the Incumbent Board; provided, further, that no
individual shall be considered a member of the Incumbent Board if such individual initially assumed
office as a result of either an actual or threatened “election contest” (as described in Rule
14a-11 promulgated under the Exchange Act) (an “Election Contest”) or other actual or threatened
solicitation of proxies or consents by or on behalf of a person other than the Board of Directors
(a “Proxy Contest”) including by reason of any agreement intended to avoid or settle any Election
Contest or Proxy Contest; or
(c) the consummation of any of the following: (A) a merger, consolidation, share exchange or
reorganization involving the Company, unless (1) the stockholders of the Company,
immediately before such merger, consolidation, share exchange or reorganization, own, directly or
indirectly immediately following such merger, consolidation, share exchange or reorganization, at
least 50% of the combined voting power of the outstanding voting securities of the corporation that
is the successor in such merger, consolidation, share
exchange or reorganization (the “Surviving Company”) in substantially the same proportion as
their ownership of the Voting Securities immediately before such merger, consolidation, share
exchange or reorganization, and (2) the individuals who were members of the Incumbent Board
immediately prior to the execution of the agreement providing for such merger, consolidation, share
exchange or reorganization constitute at least 50% of the members of the board of directors of the
Surviving Company; (B) a complete liquidation or dissolution of the Company; or (C) an agreement
for the sale or other disposition of all or substantially all of the assets of the Company to any
person (other than a transfer to a Subsidiary).
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Notwithstanding the foregoing, a Change in Control shall not be deemed to occur solely because
any person (a “Subject Person”) acquired Beneficial Ownership of more than the permitted amount of
the outstanding Voting Securities as a result of the acquisition of Voting Securities by the
Company that, by reducing the number of Voting Securities outstanding, increases the proportional
number of shares Beneficially Owned by such Subject Person, provided that if a Change in Control
would occur (but for the operation of this sentence) as a result of the acquisition of Voting
Securities by the Company, and after such share acquisition by the Company, such Subject Person
becomes the Beneficial Owner of any additional Voting Securities that increases the percentage of
the then outstanding Voting Securities Beneficially Owned by such Subject Person, then a Change in
Control shall occur.”
4. Termination of Employment.
(a) Except as provided in this Section 4, the Option may not be exercised after the Optionee
has ceased to be employed by the Company or one of its affiliates. In the event that the Optionee
ceases to be employed by the Company or one of its affiliates, the Option may be exercised
following such termination, as follows:
(i) if the Optionee’s termination of employment is due to his or her death or Disability (as
defined below), all unexercised and unvested stock options issued hereunder shall become
immediately fully vested and exercisable by the Optionee and the Option shall remain exercisable
until the Expiration Date for all Option Shares;
(ii) if the Optionee ceases to be employed by the Company or an affiliate other than due to
death, Disability or termination for Cause, the Option shall remain exercisable for a period of
ninety (90) days following such termination (but in no event later than the Expiration Date) with
respect to all Option Shares for which the Option was otherwise exercisable as of the date of such
termination, and shall thereafter terminate; and
(iii) if the Optionee’s termination is by the Company or one of its affiliates for Cause (as
defined below), the Option shall terminate immediately on the date of the such termination.
5. Exercise of Option.
(a) The Option may be exercised only by the Optionee or, in the event of the death or
incapacity of the Optionee, the Optionee’s successor, heir or legal representative. The Option
shall be exercised by delivery to the Company of (i) a written notice, substantially in the form
attached hereto as Exhibit A, specify the number of Option Shares for which the Option is
being exercised to purchase, and (ii) full payment of the Exercise Price for such number of Option
Shares being purchased (in respect of such Option Shares, the “Total Exercise Price”), in the
manner provided below, and any transfer or withholding taxes applicable thereto.
(b) Payment of the Exercise Price for any Option Shares being purchased shall be made as
follows:
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(i) The Optionee may satisfy all or any portion of the Total Exercise Price by delivery to the
Company of cash, by certified or cashier’s check, or
(ii) The Optionee may satisfy all of any portion of the Total Exercise Price by (A)
assignment, transfer and delivery to the Company, free of any liens, claims or encumbrances, of
shares of Common Stock that the Optionee owns, or (B) assignment and transfer to the Company, free
of any liens, claims or encumbrances, of common partnership units of AIMCO Properties, L.P. (“OP
Units”) that the Optionee owns. If the Optionee pays by assignment, transfer and delivery of
shares of Common Stock, the Optionee must include with the notice of exercise the certificates for
such shares of Common Stock, either duly endorsed for transfer or accompanied by an appropriately
executed stock power in favor of the Company. If the Optionee pays by assignment and transfer of
OP Units, the Optionee must include with the notice of exercise a duly executed assignment of all
of the Optionee’s interest in such OP Units. For purposes of this Agreement, the value of all such
shares of Common Stock delivered by the Optionee will be their Fair Market Value, and the value of
all OP Units assigned by the Optionee will be the Fair Market Value of the number of shares of
Common Stock for which such OP Units are then subject to exchange upon a redemption of such OP
Units. If the value of the shares of Common Stock delivered, or OP Units assigned, by the Optionee
exceeds the amount required to be paid pursuant to this Section 4, the Company will provide to the
Optionee, as soon as practicable, cash or a check in an amount equal to the value of any fractional
portion of a share of Common Stock or OP Unit, and will issue a certificate to the Optionee for any
whole share(s) of Common Stock or OP Units exceeding the number of shares of Common Stock or OP
Units required to pay the Exercise Price for all Option Shares being purchased; or
(iii) At the discretion of the Administrator, the Optionee may satisfy all of any portion of
the Total Exercise Price by means of a cashless exercise procedure.
(c) Not less than 100 shares of Common Stock may be purchased at any time upon the exercise of
the Option, unless the number of shares of Common Stock so purchased constitutes the total number
of Option Shares for which the Option is then exercisable. The Option may be exercised only to
purchase whole shares of Common Stock, and in no case may a fractional share of Common Stock be
purchased. The right of the Optionee to purchase Option Shares for which the Option is then
exercisable may be exercised, in whole or in part, at any time or from time to time, prior to the
Expiration Date.
(d) The Company may require the Optionee to pay, prior to the delivery of any Option Shares to
which the Optionee shall be entitled upon exercise of the Option, an amount equal to the Federal,
state and local income taxes and other amounts required by law to be withheld by the Company with
respect thereto. Alternatively, the Optionee may authorize the Company to withhold from the number
of Option Shares he or she would otherwise receive upon exercise of the Option, that number of
Option Shares having a Fair Market Value equal to the minimum statutory withholding taxes with
respect thereto.
(e) This Option may not be exercised unless such exercise is in compliance with the Securities
Act of 1933, as amended (the “Securities Act”) and all applicable state securities laws as they are
in effect on the date of exercise and the requirements of any stock
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exchange or national market
system on which the Common Stock may be listed at the time of exercise. The Optionee understands
that the Company is under no obligation to register, qualify or list the Option Shares with the
Securities Exchange Commission, any state securities commission or any stock exchange or national
market system to effect such compliance.
6. Definitions. For purposes of this Agreement:
(a) “Cause” shall mean the termination of employment of the Optionee with the Company or a
Subsidiary as a result of (i) the performance by the Optionee of any activity involving fraud or
dishonesty, (ii) the conviction of the Optionee of a felony or crime involving moral turpitude,
(iii) the failure or refusal of the Optionee to reasonably or satisfactorily perform any material
duties or responsibilities reasonably required of him or her by the Company, (iv) the gross
negligence or willful neglect or malfeasance by the Optionee in the performance or non-performance
of his or her duties or responsibilities to the Company, or (v) any unauthorized act or omission by
the Optionee that is injurious in any material respect to the financial condition or business
reputation of the Company.
(b) The Optionee’s employment will have terminated by reason of “Disability” if, in the
reasonable and good faith judgment of the Company, the Optionee is totally and permanently disabled
and is unable to return to or perform his or her duties on a full-time basis.
7. Tax Withholding. The Company shall have the power and the right to deduct or
withhold, or require the Optionee to remit to the Company, an amount sufficient to satisfy any
Federal, state, and local taxes (including the Optionee’s FICA obligation) required by law to be
withheld as a result of any taxable event arising in connection with the Option, in accordance with
the terms of the Plan and applicable law.
8. No Right to Employment. Nothing in the Plan or this Agreement shall confer on the
Optionee any right to continue in the employ of, or other relationship with, the Company, any
Company Subsidiary, the Partnership or any Partnership Subsidiary or limit in any way the right of
the Company, any Company Subsidiary, the Partnership or any Partnership Subsidiary to terminate the
Optionee’s employment or other relationship at any time, with or without cause.
9. No Rights as a Stockholder. Neither the Optionee nor any of the Optionee’s
successors in interest shall have any rights as a stockholder of the Company with respect to any
shares of Stock subject to the Stock Option until the date such shares are credited in electronic
form in an account by the Company’s transfer agent or other designee or the date of issuance of a
stock certificate for such shares.
10. Miscellaneous.
(a) Entire Agreement. This Agreement and the Plan contain the entire understanding
and agreement of the Company and the Optionee concerning the subject matter
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hereof, and supersede
all earlier negotiations and understandings, written or oral, between the parties with respect
thereto.
(b) Captions. The captions and section numbers appearing in this Agreement are
inserted only as a matter of convenience. They do not define, limit, construe or describe the
scope or intent of the provisions of this Agreement.
(c) Counterparts. This Agreement may be executed in counterparts, each of which when
signed by the Company or the Optionee will be deemed an original and all of which together will be
deemed the same agreement.
(d) Notices. Any notice or communication having to do with this Agreement must be
given by personal delivery or by certified mail, return receipt requested, addressed, if to the
Company or the Committee, to the attention of the Legal Department of the Company at the principal
office of the Company and, if to the Optionee, to the Optionee’s last known address contained in
the personnel records of the Company.
(e) Succession and Transfer. Each and all of the provisions of this Agreement are
binding upon and inure to the benefit of the Company and the Optionee and their successors, assigns
and legal representatives; provided, however, that the Option granted hereunder shall not be
transferable by the Optionee (or the Optionee’s successor or legal representative) other than by
will or by the laws of descent and distribution and may be exercised during the lifetime of the
Optionee, only by the Optionee or by his or her guardian or legal representative.
(f) Amendments. Subject to the provisions of the Plan, this Agreement may be amended
or modified at any time by an instrument in writing signed by the parties hereto.
(g) Governing Law. This Agreement and the rights of all persons claiming hereunder
will be construed and determined in accordance with the laws of the State of Maryland without
giving effect to the choice of law principles thereof.
(h) Plan Controls. This Agreement is made under and subject to the provisions of the
Plan, and all of the provisions of the Plan are hereby incorporated by reference into this
Agreement. In the event of any conflict between the provisions of this Agreement and the
provisions of the Plan, the provisions of the Plan shall govern. By signing this Agreement, the
Optionee confirms that he or she has received a copy of the Plan and has had an opportunity to
review the contents thereof.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above
written.
| APARTMENT INVESTMENT AND MANAGEMENT COMPANY |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| OPTIONEE: | ||||
| By: | ||||
| Name: | ||||
Exhibit A
NOTICE OF EXERCISE OF STOCK OPTION
, 20__
Apartment Investment and Management Company
0000 Xxxxx Xxxxxx Xxxxxx Xxxxxxx
Xxxxx 0000
Xxxxxx, XX 00000
Attn: General Counsel
0000 Xxxxx Xxxxxx Xxxxxx Xxxxxxx
Xxxxx 0000
Xxxxxx, XX 00000
Attn: General Counsel
Ladies and Gentlemen:
Reference is made to that certain Non-Qualified Stock Option Agreement, dated as of
(the “Agreement”), by and between Apartment Investment and Management Company
(the “Company”) and .
I am hereby exercising the Option to purchase option shares at the exercise price
of $ per share, for a total exercise price of $ .
I am paying 100% of the total exercise price with respect to the option shares as follows:
| — | By enclosing cash and/or a check payable to the Company in the amount of $_ . | ||
| — | By enclosing a stock certificate duly endorsed for transfer or accompanied by an appropriately executed stock power in favor of the Company, representing shares of Common Stock. | ||
| — | By enclosing a duly executed assignment of units of limited partnership interest in AIMCO Properties, L.P. (“OP Units”) in favor of the Company and a certificate representing such OP Units. | ||
| — | By cashless same-day sale. I authorize my broker to pay out of my account to AIMCO, the total exercise amount listed above and, if applicable, all taxes due for a Non-Qualified stock option. |
I am paying 100% of the local, state and Federal withholding taxes and/or all other taxes that
the Company has advised me are due as follows:
| — | By enclosing cash and/or a certified or cashier’s check payable to the Company in the amount of $ . | ||
| — | By hereby authorizing and directing the Company to withhold all amounts that the Company has advised me are due ($ ). |
I acknowledge that the Company has no obligation to issue a certificate evidencing any option
shares purchasable by me until the total exercise price of such option shares being exercised
hereby and all applicable taxes are fully paid.
| Very truly yours, | ||||||
| (Signature) | ||||||
| Name: | ||||||
| Address: | ||||||
| Phone: | ||||||
| SSN: | ||||||
