Exhibit 10.10
INCENTIVE STOCK OPTION AGREEMENT
This Incentive Stock Option Agreement ("Agreement") is entered into as of
the 12th day of September, 1997 between Great Lakes REIT, Inc. ("GLR"), a
Maryland corporation whose principal place of business is Oak Brook, Illinois,
and ___________________, of __________________ ("Employee").
W I T N E S S E T H:
WHEREAS, on February 27, 1997 the Board of Directors granted certain stock
options to Employee subject to the adoption of a final stock option plan and the
approval of that plan by GLRs stockholders, and
WHEREAS on May 29, 1997 the Board of Directors of GLR adopted a new
compensation plan for the Companys employees known as the "1997 Equity and
Performance Incentive Plan" (the "Incentive Plan"), and the stockholders of GLR
approved the adoption of the Incentive Plan on September 11, 1997; and
WHEREAS, certain stock options granted pursuant to the Incentive Plan are
intended to qualify as "Incentive Stock Options"; and
WHEREAS, GLR desires to compensate Employee by granting an option under the
Incentive Plan to purchase certain shares of GLR's common stock in order to
provide Employee with an added incentive to increase the financial well being of
GLR; and
WHEREAS, Employee is a key employee of GLR or one of its subsidiaries;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained, the parties agree as follows:
1. Grant of Option. GLR hereby grants to Employee an option ("Option") to
purchase up to ______________ shares of GLR common stock, $.01 par value (the
"Stock"), to be issued as fully paid and non-assessable upon the exercise hereof
and payment therefor, during the following periods and subject to the following
conditions:
(a) During the period commencing September 12, 1997 and terminating
February 27, 2007 (ten years from the date of the grant), Employee may exercise
the Option to purchase up to ________(one half) shares of the aggregate number
of shares of Stock covered by the Option;
(b) During the period commencing August 27, 1998 (eighteen months from the
date of the grant) and terminating February 27, 2007 (ten years from the date of
the grant), Employee may exercise the Option to purchase up to an additional
________ (one half) shares of the aggregate number of shares of Stock covered by
the Option; and
(c) Of the shares of Stock identified in paragraph 1(a) shares shall be
treated as subject to an Incentive Stock Option, and shares shall be subject to
a non-qualified option. Of the shares of Stock identified in paragraph 1(b),
shares shall be treated as subject to an Incentive Stock Option, and shares
shall be subject to a non-qualified option.
Notwithstanding anything herein to the contrary, and except as provided in
paragraph 4 hereof, the Option and all rights granted herein shall terminate and
become null and void upon the expiration of ten years from the date of the grant
(such period is hereinafter referred to as the "Term").
2. Exercise of Option. The Option may be exercised by written notice
delivered to the Secretary of GLR at the GLR principal offices, stating that
Employee desires to exercise the Option and stating further the number of shares
with respect to which the Option is being exercised. In no case may the Option
be exercised for a fraction of a share of Stock. The purchase price of the Stock
with respect to which the Option is being exercised shall be paid (i) in cash,
or (ii) at the discretion of GLR, by delivering GLR stock already owned by
Employee, or (iii) a combination of (i) and (ii), and shall be paid in full
within three (3) business days after delivery of the Notice of Exercise.
Promptly after receipt of the Notice of Exercise and payment, GLR shall deliver
to Employee a certificate representing the shares of Stock purchased. If any law
or regulation requires GLR to take any action with respect to the shares of
Stock, then the date for the delivery of such Stock shall be extended for the
period necessary to take such action.
3. Option Price. The option price of the Stock shall be $16.00 per share,
which price is not less than 100% of the fair market value of the Stock on the
date of the grant.
4. Conditions Upon Right to Exercise.
(a) Employment at Time of Exercise. Except as provided in paragraph 4(b),
below, at the time of any exercise of the Option, Employee must be an employee
of GLR or its subsidiary.
(b) Termination of Employment.
(i) General. All of the unexercised rights of Employee under the Option
shall lapse if Employee's employment with GLR or a subsidiary is terminated for
any reason, except for leaves of absence approved in writing by the President of
GLR, or if such employment is terminated by reason of Employee's permanent total
disability, retirement or death, as described below. If Employees employment is
terminated for any reason other than Employees permanent total disability,
retirement or death, the vested portion of the Option which may be exercised
pursuant to Section 1 hereof may be exercised by Employee at any time or times
in whole or in part during the three-month period after such termination to the
extent such three-month period is included in the remainder of the Term.
(ii) Disability. If the employment of Employee with GLR or a subsidiary is
terminated by reason of Employee's permanent total disability and Employee has
been in the employ of either GLR or a subsidiary continuously from the date
hereof until such termination (except for leaves of absence approved in writing
by the President of GLR), the vested portion of the Option pursuant to Section 1
hereof may be exercised by Employee at any time or times in whole or in part
during the one year period after such termination, to the extent such one year
period is included in the remainder of the Term.
(iii) Retirement. If the employment of Employee with GLR or a subsidiary is
terminated by reason of Employee's retirement and Employee has been in the
employ of either GLR or a subsidiary continuously from the date hereof until
such retirement (except for leaves of absence approved in writing by the
President of GLR),
the vested portion of the Option pursuant to Section 1 hereof may be exercised
by Employee at any time or times in whole or in part during the three-month
period after such retirement to the extent that such three-month period is
included in the remainder of the Term.ent to the extent that such three-month
period is included in the remainder of the Term.
(iv) Death. If the employment of Employee with GLR or a subsidiary is
terminated by reason of Employee's death and Employee has been in the employ of
either GLR or a subsidiary continuously from the date hereof until Employee's
death (except for leaves of absence approved in writing by the President of
GLR), the vested portion of the Option pursuant to Section 1 hereof may be
exercised by the legal representative of Employee, or by such of his heirs,
legatees or beneficiaries to whom the Option devolves, at any time or times in
whole or in part during the one year period from the date of death of Employee,
to the extent that such one year period is included in the remainder of the
Term.
(c) Change in Control. In the event of a change in control of GLR, as
defined herein, Employee shall have the right to exercise this Option to
purchase all of the shares subject to this Option Agreement immediately,
notwithstanding the provisions of paragraph 1. For purposes of this Agreement, a
change in control of GLR shall mean any of the following events:
(i) GLR is merged or consolidated or reorganized into or with another
corporation or other legal person, and as a result of such merger, consolidation
or reorganization less than a majority of the combined voting power of the then-
outstanding securities of such corporation or person immediately after such
transaction are held in the aggregate by the holders of Common Shares (as
defined in the Incentive Plan) immediately prior to such transaction;
(ii) GLR sells or otherwise transfers all or substantially all of its
assets to any other corporation or other legal person, and less than a majority
of the combined voting power of the then-outstanding securities of such
corporation or person immediately after such sale or transfer is held in the
aggregate by the holders of Common Shares immediately prior to such sale or
transfer;
(iii) There is a report filed on Schedule 13D or Schedule 14D-1 (or any
successor schedule, form or report), each as promulgated pursuant to the
Securities Exchange Act of 1934, as amended, disclosing that any person (as the
term Person is used in Section 13(d)(3) or Section 14(d)(2) of the Securities
Exchange Act of 1934, as amended) has become the beneficial owner (as the term
beneficial owner is defined under Rule 13d-3 or any successor rule or
regulation promulgated under the Securities Exchange Act of 1934, as amended) of
securities representing 20% or more of the Voting Power (as defined in the
Incentive Plan);
(iv) GLR files a report or proxy statement with the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934, as amended,
disclosing in response to Form 8-K or Schedule 14A (or any successor schedule,
form or report or item therein) that a change in control of GLR has or may have
occurred or will or may occur in the future pursuant to any then-existing
contract or transaction; or
(v) If during any period of two consecutive years, individuals who at the
beginning of any such period constitute the directors of GLR cease for any
reason to constitute at least a majority thereof, unless the election, or the
nomination for election by GLRs stockholders, of each director of GLR first
elected during such period was approved by a vote of at least two-thirds of the
directors of GLR then still in office who were directors of GLR at the beginning
of any such period.
5. Additional Limits on Right to Exercise. If at any time the Board of
Directors of GLR shall determine, in its discretion, that the listing,
registration or qualification of the Option or the Stock issuable or
transferable upon exercise of the Option upon any securities exchange or under
any state or federal law, or that the consent or approval of any governmental
regulatory body is necessary or desirable as a condition of, or in connection
with, the granting of the Option or in connection with the issuance or transfer
of Stock thereunder, the Option may not be exercised in whole or in part unless
such listing, registration, qualification, consent or approval shall have been
effected or obtained free of any conditions not acceptable to the Board of
Directors of GLR. Unless at the time of any exercise of the Option there is, in
the opinion of GLR's counsel, a valid and effective registration statement under
the Securities Act of 1933, as amended, and an appropriate qualification and
registration under applicable state securities law, relating to the Stock,
Employee hereby agrees, upon exercise of the Option, to give a representation
that he is acquiring the Stock for his own account for investment and not with a
view to, or for sale in connection with, the resale or distribution of any such
Stock and shall give such other representations and covenants to GLR as may, in
the opinion of its counsel, be required. In the event that any Stock issued is
not registered, then Employee hereby agrees that stop transfer instructions
shall be issued to GLR's transfer agents until such time as the Stock is
registered and that the certificate representing the Stock shall bear the
following restrictive legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 ("ACT") AND MAY NOT BE SOLD, PLEDGED,
HYPOTHECATED OR OTHERWISE TRANSFERRED OR OFFERED FOR SALE IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT WITH RESPECT TO THEM UNDER THE ACT OR A
WRITTEN OPINION OF COUNSEL FOR THE COMPANY THAT REGISTRATION IS NOT
REQUIRED.
6. Non-Transferability of Option. The Option shall not be transferable by
Employee other than by will or by the laws of descent and distribution, and
during the lifetime of Employee the Option may be exercised only by Employee or
his legal representative if the Employee is disabled.
7. Stockholder Rights and Adjustments to Stock. Employee shall have no
rights as a stockholder with respect to any Stock issuable or transferable upon
exercise of the Option until the date of issuance of a stock certificate to him
for such shares of Stock. Except as hereinafter provided, no adjustment shall be
made for dividends (ordinary or extraordinary, whether in cash, securities or
other property) or distributions or other rights for which the record date is
prior to the date such stock certificate is issued and all adjustments to the
Stock by reason of a stock dividend, merger, consolidation or otherwise, shall
be made in accordance with the terms of the Incentive Plan.
This Agreement shall not affect in any way the right or power of GLR to
make adjustments, reclassifications, reorganizations or changes of its capital
or business structure or to merge, consolidate, dissolve, liquidate, sell or
transfer all or any part of its business or assets. As noted in the Incentive
Plan, in the event the Company completes such a transaction to merge,
consolidate, dissolve, liquidate, sell or transfer all or any part of its
business or assets the Board of Directors of GLR may, in its sole discretion,
provide adjustments to the number or kind of shares covered by the Options
granted hereunder.
8. Tax Withholding. GLR shall have the power to withhold, or require an
Employee or other person or entity receiving Stock under this Agreement to remit
to GLR an amount sufficient to satisfy federal, state, and local withholding tax
requirements on any Stock issued under this Agreement, and GLR may defer
issuance of Stock until such requirements are satisfied. The Employee may elect
(i) to have shares of Stock otherwise issuable under this Agreement withheld by
GLR, or (ii) to deliver to GLR previously acquired shares of Stock, in each case
have a Fair Market Value sufficient to satisfy all or part of the Employees (or
other Stock recipients) estimated total federal, state and local tax obligation
associated with the transaction.
9. Premature Disposition. If Employee disposes of shares of Stock acquired
on the exercise of the Incentive Stock Options by sale or exchange either within
two (2) years after the date of the grant, or within one (1) year after the
acquisition of such shares of Stock, Employee shall notify GLR of such
disposition and of the amount realized upon such disposition.
10. Order of Exercise. This Option may be exercised in whole or in part
only if there are no stock options outstanding that have been granted to
Employee at an earlier time that qualify as "Incentive Stock Options." For
purposes of this paragraph, an option shall be considered to be "outstanding"
until it is exercised in full or expires by reason of time.
11. Successors and Assigns. The Option shall be binding in accordance with
its terms upon any successors of GLR and upon the heirs, executors,
administrators and successors of Employee.
12. Governing Law. This Agreement and the Option shall be governed by and
construed in accordance with the laws of the State of Illinois relating to
contracts made and to be performed in that State.
IN WITNESS WHEREOF, GLR and Employee have executed this Agreement as of the
day and year first above written.
GREAT LAKES REIT, INC.
By:
Its:
EMPLOYEE
