Exhibit 10.2
INCENTIVE STOCK OPTION AGREEMENT
THIS AGREEMENT, dated _______________, 2001 ("Effective Date"), is made
by and between Price Legacy Corporation, a Maryland corporation hereinafter
referred to as "Company," and _______________________, hereinafter referred to
as "Optionee":
WHEREAS, the Company wishes to afford the Optionee the opportunity to
purchase shares of its $0.0001 par value Common Stock;
WHEREAS, the Company wishes to carry out the Plan (the terms of which
are hereby incorporated by reference and made a part of this Agreement); and
WHEREAS, the Committee, appointed to administer the Plan, has
determined that it would be to the advantage and best interest of the Company
and its stockholders to grant the Incentive Stock Option provided for herein to
the Optionee as an inducement to enter into or remain in the service of the
Company or its Subsidiaries and as an incentive for increased efforts during
such service, and has advised the Company thereof and instructed the undersigned
officers to issue said Option.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto do hereby agree as follows:
ARTICLE 1.
DEFINITIONS
Whenever the following terms are used in this Agreement, they shall
have the meaning specified below unless the context clearly indicates to the
contrary. The masculine pronoun shall include the feminine and neuter, and the
singular the plural, where the context so indicates. All capitalized terms used
herein without definition shall have the meanings ascribed to such terms in the
Plan.
ARTICLE 1.1 CHANGE IN CONTROL.
(a) any Person (as defined below) is or becomes the Beneficial
Owner (as defined below), directly or indirectly, of securities of the Company
representing fifty percent (50%) or more of the combined voting power of the
Company's then outstanding securities. For purposes of this Agreement, (A) the
term "Person" is used as such term is used in Sections 13(d) and 14(d) of the
Exchange Act; provided, however, that the term shall not include the Company,
any trustee or other fiduciary holding securities under an employee benefit plan
of the Company, and any corporation owned, directly or indirectly, by the
stockholders of the Company, in substantially the same proportions as their
ownership of stock of the Company, and (B) the term
"Beneficial Owner" shall have the meaning given to such term in Rule 13d-3 under
the Exchange Act;
(b) during any period of two (2) consecutive years (not
including any period prior to the execution of this Agreement), individuals who
at the beginning of such period constitute the Board, and any new director
(other than a director designated by a person who has entered into an agreement
with the Company to effect a transaction described in Sections 2(a), (c) or (d))
whose election by the Board or nomination for election by the Company's
stockholders was approved by a vote of at least a majority of the directors then
still in office who either were directors at the beginning of the period or
whose election or nomination for election was previously so approved
(hereinafter referred to as "Continuing Directors"), cease for any reason to
constitute at least a majority thereof;
(c) the Company consummates a merger or consolidation of the
Company with any other corporation (or other entity), other than a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than 50% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation; or
(d) complete liquidation of the Company or a sale or disposition
by the Company of all or substantially all of the Company's assets.
ARTICLE 1.2 INCENTIVE STOCK OPTION. "Incentive Stock Option" shall mean
an option which conforms to the applicable provisions of Section 422 of the Code
and which is designated as an Incentive Stock Option by the Administrator.
ARTICLE 1.3 OPTION. "Option" shall mean the incentive stock option to
purchase Common Stock of the Company granted under this Agreement.
ARTICLE 1.4 PLAN. "Plan" shall mean the Amended and Restated Price
Legacy Corporation 2001 Stock Option and Incentive Plan.
ARTICLE 1.5 SECRETARY. "Secretary" shall mean the Secretary of the
Company.
ARTICLE 2.
GRANT OF OPTION
ARTICLE 2.1 GRANT OF OPTION. In consideration of the Optionee's
agreement to provide services to the Company or its Subsidiaries, and for other
good and valuable consideration, on the date hereof the Company irrevocably
grants to the Optionee the option to purchase any part or all of an aggregate of
____________ shares of its $0.0001 par value Common Stock upon the terms and
conditions set forth in this Agreement.
ARTICLE 2.2 PURCHASE PRICE. The purchase price of the shares of stock
covered by the Option shall be $ per share without commission or other charge;
PROVIDED, HOWEVER, that the price per share of the shares subject to the Option
shall not be less than the greater of (i) 100% of the Fair Market Value of a
share of Common Stock on the Effective Date, or (ii) 110% of the Fair Market
Value of a share of Common Stock on the Effective Date in the case of an
Optionee then owning (within the meaning of Section 424(d) of the Code) more
than 10% of the total combined voting power of all classes of stock of the
Company or any Subsidiary or parent corporation thereof (within the meaning of
Section 422 of the Code).
ARTICLE 2.3 CONSIDERATION TO COMPANY. In consideration of the granting
of this Option by the Company, the Optionee agrees to render faithful and
efficient services to the Company or a Subsidiary, with such duties and
responsibilities as the Company shall from time to time prescribe, for a period
of at least one (1) year from the date this Option is granted. Nothing in this
Agreement or in the Plan shall confer upon the Optionee any right to continue in
the employ of the Company or any Subsidiary, or shall interfere with or restrict
in any way the rights of the Company and its Subsidiaries, which are hereby
expressly reserved, to discharge the Optionee at any time for any reason
whatsoever, with or without cause.
ARTICLE 2.4 ADJUSTMENTS IN OPTION. The Committee shall make adjustments
with respect to the Option in accordance with the provisions of Section 11.3 of
the Plan.
ARTICLE 3.
PERIOD OF EXERCISABILITY
ARTICLE 3.1 COMMENCEMENT OF EXERCISABILITY.
(a) Subject to subsection (b) and Section 3.4, the Option shall
become exercisable in installments as follows:
(i) *The first installment consisting of fifty percent (50%)
of the shares covered by the Option shall become exercisable and vested on the
grant date.
(ii) The balance shall become exercisable and vested ratably
through December 31, 2003.
(b) No portion of the Option which is unexercisable at
Termination of Employment shall thereafter become exercisable.
ARTICLE 3.2 DURATION OF EXERCISABILITY.
The installments provided for in Section 3.1 are cumulative. Each such
installment which becomes exercisable pursuant to Section 3.1 shall remain
exercisable until it becomes unexercisable under Section 3.3.
ARTICLE 3.3 EXPIRATION OF OPTION.
The Option may not be exercised to any extent by anyone after the first
to occur of the following events:
(a) The expiration of ten (10) years and one day from the date
the Option was granted; or
(b) The expiration of three (3) months from the date of the
Optionee's Termination of Employment unless such Termination of Employment
results from his death or his disability (within the meaning of Section 22(e)(3)
of the Code) provided that if the Optionee dies within said three (3) month
period, the period shall be extended to end twelve (12) months from the date of
Optionee's death; or
(c) The expiration of twelve (12) months from the date of the
Optionee's Termination of Employment by reason of his disability (within the
meaning of Section 22(e)(3) of the Code) or death provided that if the Optionee
dies within said twelve (12) month period, the period shall be extended to end
twelve (12) months from the date of Optionee's death.
ARTICLE 3.4 ACCELERATION OF EXERCISABILITY.
(a) Notwithstanding Section 3.1(a), in the event of a Change in
Control, the Option shall, immediately prior to the effective date of the Change
in Control, automatically become fully exercisable for all of the shares of
Common Stock at the time subject to the Option, and may be exercised for any or
all of those shares as fully-vested shares of Common Stock.
(b) The Committee may make such determinations and adopt such
rules and conditions as it, in its absolute discretion, deems appropriate in
connection with such acceleration of exercisability, including, but not by way
of limitation, provisions to ensure that any such acceleration and resulting
exercise shall be conditioned upon the consummation of the contemplated Change
in Control.
ARTICLE 3.5 SPECIAL TAX CONSEQUENCES. The Optionee acknowledges that,
to the extent that the aggregate Fair Market Value of stock with respect to
which "incentive stock options" (within the meaning of Section 422 of the Code,
but without regard to Section 422(d) of the Code), including the Option, are
exercisable for the first time by the Optionee during any calendar year (under
the Plan and all other incentive stock option plans of the Company, any
Subsidiary and any parent corporation thereof (within the meaning of Section 422
of the Code)) exceeds $100,000, the Option and such other options shall be
treated as not qualifying under Section 422 of the Code but rather shall be
taxed as non-qualified stock options. The Optionee further acknowledges that the
rule set forth in the preceding sentence shall be applied by taking options into
account in the order in which they were granted. For purposes of these rules,
the Fair
Market Value of stock shall be determined as of the time the option with respect
to such stock is granted.
ARTICLE 4.
EXERCISE OF OPTION
ARTICLE 4.1 PERSON ELIGIBLE TO EXERCISE. Except as provided in Section
5.2, during the lifetime of the Optionee, only he may exercise the Option or any
portion thereof. After the death of the Optionee, any exercisable portion of the
Option may, prior to the time when the Option becomes unexercisable under
Section 3.3, be exercised by his personal representative or by any person
empowered to do so under the deceased Optionee's will or under the then
applicable laws of descent and distribution.
ARTICLE 4.2 PARTIAL EXERCISE. Any exercisable portion of the Option or
the entire Option, if then wholly exercisable, may be exercised in whole or in
part at any time prior to the time when the Option or portion thereof becomes
unexercisable under Section 3.3; provided, however, that each partial exercise
shall be for whole shares only.
ARTICLE 4.3 MANNER OF EXERCISE. The Option, or any exercisable portion
thereof, may be exercised solely by delivery to the Secretary or his office of
all of the following prior to the time when the Option or such portion becomes
unexercisable under Section 3.3:
(a) A written notice complying with the applicable rules
established by the Committee stating that the Option, or a portion thereof, is
exercised. The notice shall be signed by the Optionee or other person then
entitled to exercise the Option or such portion; and
(b) Full cash payment to the Secretary of the Company for the
shares with respect to which such Option or portion is exercised; or
(i) With the consent of the Committee, (A) shares of the
Company's Common Stock owned by the Optionee for at least six months, duly
endorsed for transfer to the Company, with a Fair Market Value on the date of
delivery equal to the aggregate exercise price of the Option or exercised
portion thereof, or (B) shares of the Company's Common Stock issuable to the
Optionee upon exercise of the Option, with a Fair Market Value on the date of
exercise of the Option or any portion thereof equal to the aggregate exercise
price of the Option or exercised portion thereof; or
(ii) With the consent of the Committee, a full recourse
promissory note bearing interest (at no less than such rate as shall then
preclude the imputation of interest under the Code or successor provision) and
payable upon such terms as may be prescribed by the Committee. The Committee may
also prescribe the form of such note and the security to be given for such note.
The Option may not be exercised, however, by delivery of a promissory note or by
a loan from the Company when or where such loan or other extension of credit is
prohibited by law; or
(iii) With the consent of the Committee, property of any
kind which constitutes good and valuable consideration; or
(iv) With the consent of the Committee, a notice that the
Optionee has placed a market sell order with a broker with respect to shares of
the Company's Common Stock then issuable upon exercise of the Option, and that
the broker has been directed to pay a sufficient portion of the net proceeds of
the sale to the Company in satisfaction of the Option exercise price; or
(v) With the consent of the Committee, any combination of
the consideration provided in the foregoing subparagraphs (i), (ii), (iii), and
(iv); and
(c) A bona fide written representation and agreement, in a form
satisfactory to the Committee, signed by the Optionee or other person then
entitled to exercise such Option or portion, stating that the shares of stock
are being acquired for his own account, for investment and without any present
intention of distributing or reselling said shares or any of them except as may
be permitted under the Securities Act and then applicable rules and regulations
thereunder, and that the Optionee or other person then entitled to exercise such
Option or portion will indemnify the Company against and hold it free and
harmless from any loss, damage, expense or liability resulting to the Company if
any sale or distribution of the shares by such person is contrary to the
representation and agreement referred to above. The Committee may, in its sole
discretion, take whatever additional actions it deems appropriate to insure the
observance and performance of such representation and agreement and to effect
compliance with the Securities Act and any other federal or state securities
laws or regulations. Without limiting the generality of the foregoing, the
Committee may require an opinion of counsel acceptable to it to the effect that
any subsequent transfer of shares acquired on an Option exercise does not
violate the Securities Act, and may issue stop-transfer orders covering such
shares. Share certificates evidencing stock issued on exercise of this Option
shall bear an appropriate legend referring to the provisions of this subsection
(c) and the agreements herein. The written representation and agreement referred
to in the first sentence of this subsection (c) shall, however, not be required
if the shares to be issued pursuant to such exercise have been registered under
the Securities Act, and such registration is then effective in respect of such
shares; and
(d) Full payment to the Company (or other employer corporation)
of all amounts which, under federal, state or local tax law, it is required to
withhold upon exercise of the Option; with the consent of the Committee, (i)
shares of the Company's Common Stock owned by the Optionee, duly endorsed for
transfer, with a Fair Market Value on the date of delivery equal to the sums
required to be withheld, or (ii) shares of the Company's Common Stock issuable
to the Optionee upon exercise of the Option with a Fair Market Value on the date
of exercise of the Option or any portion thereof equal to the sums required to
be withheld, may be used to make all or part of such payment; PROVIDED, that the
number of shares of Common Stock which may be withheld with respect to the
issuance, vesting, exercise or payment of any Option (or which may be
repurchased from the Optionee of such Option within six months after
such shares of Common Stock were acquired by the Optionee from the Company) in
order to satisfy the Optionee's federal and state income and payroll tax
liabilities with respect to the issuance, vesting, exercise or payment of the
Option shall be limited to the number of shares which have a Fair Market Value
on the date of withholding or repurchase equal to the aggregate amount of such
liabilities based on the minimum statutory withholding rates for federal and
state tax income and payroll tax purposes that are applicable to such
supplemental taxable income; and
(e) In the event the Option or portion shall be exercised
pursuant to Section 4.1 by any person or persons other than the Optionee,
appropriate proof of the right of such person or persons to exercise the Option.
ARTICLE 4.4 CONDITIONS TO ISSUANCE OF STOCK CERTIFICATES. The shares of
stock deliverable upon the exercise of the Option, or any portion thereof, may
be either previously authorized but unissued shares or issued shares which have
then been reacquired by the Company. Such shares shall be fully paid and
nonassessable. The Company shall not be required to issue or deliver any
certificate or certificates for shares of stock purchased upon the exercise of
the Option or portion thereof prior to fulfillment of all of the following
conditions:
(a) The admission of such shares to listing on all stock
exchanges on which such class of stock is then listed; and
(b) The completion of any registration or other qualification of
such shares under any state or federal law or under rulings or regulations of
the Securities and Exchange Commission or of any other governmental regulatory
body, which the Committee shall, in its sole discretion, deem necessary or
advisable; and
(c) The obtaining of any approval or other clearance from any
state or federal governmental agency which the Committee shall, in its sole
discretion, determine to be necessary or advisable; and
(d) The receipt by the Company of full payment for such shares,
including payment of all amounts which, under federal, state or local tax law,
the Company (or other employer corporation) is required to withhold upon
exercise of the Option; and
(e) The lapse of such reasonable period of time following the
exercise of the Option as the Committee may from time to time establish for
reasons of administrative convenience.
ARTICLE 4.5 RIGHTS AS STOCKHOLDER. The holder of the Option shall not
be, nor have any of the rights or privileges of, a stockholder of the Company in
respect of any shares purchasable upon the exercise of any part of the Option
unless and until certificates representing such shares shall have been issued by
the Company to such holder.
ARTICLE 5.
OTHER PROVISIONS
ARTICLE 5.1 ADMINISTRATION. The Committee shall have the power to
interpret the Plan and this Agreement and to adopt such rules for the
administration, interpretation and application of the Plan as are consistent
therewith and to interpret, amend or revoke any such rules. All actions taken
and all interpretations and determinations made by the Committee in good faith
shall be final and binding upon the Optionee, the Company and all other
interested persons. No member of the Committee shall be personally liable for
any action, determination or interpretation made in good faith with respect to
the Plan or the Option. In its sole discretion, the Board may at any time and
from time to time exercise any and all rights and duties of the Committee under
the Plan and this Agreement except with respect to matters which under Rule
16b-3 or Section 162(m) of the Code, or any regulations or rules issued
thereunder, are required to be determined in the sole discretion of the
Committee.
ARTICLE 5.2 OPTION NOT TRANSFERABLE. Neither the Option nor any
interest or right therein or part thereof shall be sold, pledged, assigned, or
transferred in any manner other than by will or the laws of descent and
distribution, unless and until such Option has been exercised, or the shares
underlying such Option have been issued, and all restrictions applicable to such
shares have lapsed. Notwithstanding the foregoing the Option may be transferred
by the Optionee, in writing and with prior written notice to the Committee, by
gift, without the receipt of any consideration, to a member of the Optionee's
immediate family, as defined in Rule 16a-1 under the Exchange Act, or to a trust
for the exclusive benefit of, or any other entity owned solely by, such members,
provided, that the Option shall continue to be subject to all of the terms and
conditions as applicable to the original Optionee, and the transferee shall
execute any and all such documents requested by the Committee in connection with
the transfer, including without limitation to evidence the transfer and to
satisfy any requirements for an exemption for the transfer under applicable
federal and state securities laws. Neither the Option nor any interest or right
therein or part thereof shall be liable for the debts, contracts or engagements
of the Optionee or his successors in interest or shall be subject to disposition
by transfer, alienation, anticipation, pledge, encumbrance, assignment or any
other means whether such disposition be voluntary or involuntary or by operation
of law by judgment, levy, attachment, garnishment or any other legal or
equitable proceedings (including bankruptcy), and any attempted disposition
thereof shall be null and void and of no effect, except to the extent that such
disposition is permitted by the preceding sentence.
ARTICLE 5.3 SHARES TO BE RESERVED. The Company shall at all times
during the term of the Option reserve and keep available such number of shares
of stock as will be sufficient to satisfy the requirements of this Agreement.
ARTICLE 5.4 NOTICES. Any notice to be given under the terms of this
Agreement to the Company shall be addressed to the Company in care of its
Secretary, and any notice to be given to the Optionee shall be addressed to him
at the address given beneath his signature hereto. By a notice given pursuant to
this Section 5.4, either party may hereafter designate a different address
for notices to be given to him. Any notice which is required to be given to the
Optionee shall, if the Optionee is then deceased, be given to the Optionee's
personal representative if such representative has previously informed the
Company of his status and address by written notice under this Section 5.4. Any
notice shall be deemed duly given when enclosed in a properly sealed envelope or
wrapper addressed as aforesaid, deposited (with postage prepaid) in a post
office or branch post office regularly maintained by the United States Postal
Service; provided, however, that any notice to be given by the Optionee relating
to the exercise of the Option or any portion thereof shall be deemed duly given
upon receipt by the Secretary or his office.
ARTICLE 5.5 TITLES. Titles are provided herein for convenience only and
are not to serve as a basis for interpretation or construction of this
Agreement.
ARTICLE 5.6 CONSTRUCTION. This Agreement shall be administered,
interpreted and enforced under the internal laws of the State of Maryland
without regard to conflicts of laws thereof.
ARTICLE 5.7 CONFORMITY TO SECURITIES LAWS. The Optionee acknowledges
that the Plan is intended to conform to the extent necessary with all provisions
of the Securities Act and the Exchange Act and any and all regulations and rules
promulgated by the Securities and Exchange Commission thereunder, including,
without limitation, the applicable exemptive conditions of Rule 16b-3.
Notwithstanding anything herein to the contrary, the Plan shall be administered,
and the Option is granted and may be exercised, only in such a manner as to
conform to such laws, rules and regulations. To the extent permitted by
applicable law, the Plan and this Agreement shall be deemed amended to the
extent necessary to conform to such laws, rules and regulations.
ARTICLE 5.8 AMENDMENTS. This Agreement and the Plan may be amended
without the consent of the Optionee provided that such amendment would not
impair any rights of the Optionee under this Agreement. No amendment of this
Agreement shall, without the consent of the Optionee, impair any rights of the
Optionee under this Agreement.
ARTICLE 5.9 INVALID PROVISION. The invalidity or unenforceability of
any particular provision hereof shall not affect the other provisions hereof,
and this Agreement shall be construed in all respects as if such invalid or
unenforceable provision was omitted.
ARTICLE 5.10 EFFECT OF OPTIONS UPON OTHER COMPENSATION PLANS. The
Option and any payments with respect thereto shall not constitute "compensation"
for purposes of any pension, welfare or other benefit plan or policy of the
Company unless provided for therein.
ARTICLE 5.11 COUNTERPARTS. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
ARTICLE 5.12 ASSIGNMENT. Except as otherwise provided herein, the
Company's rights and obligations hereunder may be assigned to any Company
Subsidiary or to any successor
pursuant to a merger, consolidation or similar event. Subject to the foregoing,
this Agreement and the respective rights and obligations of the parties hereto
shall inure to the benefit of and be binding upon, the successors and assigns of
the parties.
ARTICLE 5.13 NOTIFICATION OF DISPOSITION. The Optionee shall give
prompt notice to the Company of any disposition or other transfer of any shares
of stock acquired under this Agreement if such disposition or transfer is made
(a) within two (2) years from the Date of Grant with respect to such shares or
(b) within one (1) year after the transfer of such shares to him. Such notice
shall specify the date of such disposition or other transfer and the amount
realized, in cash, other property, assumption of indebtedness or other
consideration, by the Optionee in such disposition or other transfer.
IN WITNESS WHEREOF, this Agreement has been executed and delivered by
the parties hereto.
PRICE LEGACY CORPORATION
By:
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Its:
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Optionee
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Address
Optionee's Taxpayer
Identification Number:
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