EXHIBIT 2
G & L REALTY CORP.
NONQUALIFIED STOCK OPTION AGREEMENT
Pursuant to the
1993 STOCK INCENTIVE PLAN
This Nonqualified Stock Option Agreement ("Agreement") is made and entered
into as of the Date of Grant indicated below by and between G & L Realty
Partnership, L.P. ("G&L"), a Delaware limited partnership and the person named
below as Optionee.
WHEREAS, Optionee is an employee of the Company and/or one or more of its
subsidiaries;
WHEREAS, G&L Realty Corp., a Maryland corporation (the "Company"), is the
general partner of G&L;
WHEREAS, pursuant to the Company's 1993 Stock Incentive Plan (the "1993
Plan"), the Compensation Committee of the Board of Directors of the Company
administering the 1993 Plan (the "Committee") has approved the grant to Optionee
of an option to purchase shares of the Common Stock of the Company (the "Common
Shares"), on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing recitals and the
covenants set forth herein, the parties hereto hereby agree as follows:
1. Grant of Option: Certain Terms and Conditions. The Company hereby
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grants to Optionee, and Optionee hereby accepts, as of the Date of Grant
indicated below, an option (the "Option") to purchase the number of Common
Shares indicated below (the "Option Shares") at the Exercise Price per share
indicated below. The Option shall expire at 5:00 p.m., Los Angeles time, on the
Expiration Date indicated below and shall be subject to all of the terms and
conditions set forth in the 1993 Plan and this Agreement.
Optionee: XXXXXX X. XXXXXXXX
Date of Grant: February 29, 2000
Number of shares purchasable: 50,000
Exercise Price per share: $8.875
Expiration Date: February 27, 2010
Vesting Rate: 16,666 2/3 shares on March 1, 2001
16,666 2/3 shares on March 1, 2002
16,666 2/3 shares on March 1, 2003
2. Incentive Stock Option; Internal Revenue Code Requirements. The
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Option is intended to qualify as an incentive stock option under Section 422 of
the Internal Revenue Code (the "Code").
3. Acceleration and Termination of Option.
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(a) Termination of Employment.
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(i) Retirement. In the event that Optionee shall cease to be an
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employee of the Company, the Partnership or any of their subsidiaries
(such event shall be referred to herein as the "Termination" of Optionee's
"Employment") by reason of retirement in accordance with the Company's
then-current retirement practices, then the Option shall fully vest with
respect to all Option Shares upon the date of such Termination of
Employment and shall terminate on the Expiration Date.
(ii) Death or Permanent Disability. If Optionee's Employment is
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Terminated by reason of the death or Permanent Disability (as hereinafter
defined) of Optionee, then the Option shall fully vest with respect to all
Option Shares upon the date of such Termination of Employment, shall be
exercisable by Optionee or, in the event of death, the person or persons
to whom Optionee's rights under the Option shall have passed by will or by
the applicable laws of descent or distribution, and shall terminate on the
first anniversary of the date of such Termination of Employment.
"Permanent Disability" shall mean the inability to engage in any
substantial gainful activity by reason of any medically determinable
physical or mental impairment which can be expected to result in death or
which has lasted or can be expected to last for a continuous period of not
less than twelve (12) months. The Optionee shall not be deemed to have a
Permanent Disability until proof of the existence thereof shall have been
furnished to the Committee in such form and manner, and at such times, as
the Committee may require. Any determination by the Committee that
Optionee does or does not have a Permanent Disability shall be final and
binding upon the Company and Optionee.
(iii) Termination for Cause. If Optionee's Employment is
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Terminated for cause, then (A) the portion of the Option that has not
vested on or prior to the date of such Termination of Employment shall
terminate on such date and (B) the remaining vested portion of the Option
shall terminate one (1) month from the date of such Termination of
Employment.
(iv) Other Termination. If Optionee' s Employment is Terminated for
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any reason other than those enumerated in (i) through (iii) of this
Section 3(a), then (A) the portion of the Option that has not vested on or
prior to the date of such Termination of Employment shall terminate on
such date and (B) the remaining vested portion of the Option shall
terminate three (3) months from the date of such Termination of
Employment.
(b) Death Following Termination of Employment. Notwithstanding anything
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to the contrary in this Agreement, if Optionee shall die at any time after
the Termination of his or her Employment and prior to the Expiration Date,
then, unless the Optionee was Terminated for cause, the remaining vested but
unexercised portion of the Option shall terminate on the earlier of the
Expiration Date or the first anniversary of the date of such death.
(c) Acceleration of Option. The Option shall become fully exercisable
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immediately prior to a Change in Control. A Change in Control shall mean the
following: a reorganization, merger (not including a merger to effectuate a
reincorporation of the Company) or consolidation of the Company as a result
of which the outstanding securities of the class then subject to this Plan
are exchanged for or converted into cash, property and/or securities not
issued by the Company.
(d) Termination of Option. The Option shall terminate upon the
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occurrence of a Termination Event. A Termination Event shall mean either:
(i) the dissolution or liquidation of the Company;
(ii) a reorganization, merger (not including a merger to
effectuate a reincorporation of the Company) or consolidation of the
Company as a result of which the outstanding securities of the class then
subject to this Plan are exchanged for or converted into cash, property
and/or securities not issued by the Company, which reorganization, merger
or consolidation shall have been affirmatively recommended to the
stockholders of the Company by the Board, unless the terms of such
reorganization, merger or consolidation shall provide otherwise; or
(iii) a sale of all or substantially all of the property and assets
of the Company, unless the terms of such sale shall provide otherwise.
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4. Adjustments. In the event that the Common Shares are increased,
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decreased or exchanged for or converted into cash, property or a different
number or kind of securities, or if cash, property or securities are distributed
in respect of such outstanding Common Shares, in either case as a result of a
reorganization, merger, consolidation, recapitalization, restructuring,
reclassification, dividend (other than a regular, quarterly cash dividend) or
other distribution, stock split, reverse stock split or the like, or if
substantially all of the property and assets of the Company are sold, then,
unless such event shall cause the Option to terminate pursuant to this
Agreement, or the terms of such transaction shall provide otherwise, the
Committee shall make appropriate and proportionate adjustments in the number and
type of shares or other securities or cash or other property that may be
acquired upon the exercise in full of the Option.
5. Exercise. The Option shall be exercisable during Optionee' lifetime
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only by Optionee or by his or her guardian or legal representative, and after
Optionee' s death only by the person or entity entitled to do so under
Optionee's last will and testament or applicable intestate law. The Option may
only be exercised by the delivery to the Company of a written notice of such
exercise pursuant to the notice procedures set forth in Section 7 hereof, which
notice shall specify the number of Option Shares to be purchased (the "Purchased
Shares") and the aggregate Exercise Price for such shares (the "Exercise
Price"), together with payment in full of such aggregate Exercise Price in cash.
6. Payment of Withholding Taxes. If the Company becomes obligated to
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withhold an amount on account of any federal, state or local income tax imposed
as a result of the exercise of an option granted under this Plan (such amount
shall be referred to herein as the "Withholding Liability"), the Optionee shall
pay the Withholding Liability to the Company in full in cash on the first date
upon which the Company becomes obligated to pay such amount withheld to the
appropriate taxing authority, and the Company may delay issuing the Common
Shares pursuant to such exercise until it receives the Withholding Liability
from the Optionee.
7. Notices. Any notice given to the Company shall be addressed to the
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Company at 000 Xxxxx Xxxxxxx Xxxxx, Xxxxxxx Xxxxx, Xxxxxxxxxx 00000, Attention:
Secretary, or at such other address as the Company may hereinafter designate in
writing to Optionee. Any notice given to Optionee shall be sent to the address
set forth below Optionee's signature hereto, or at such other address as
Optionee may hereafter designate in writing to the Company. Any such notice
shall be deemed duly given when sent by prepaid certified or registered mail and
deposited in a post office or branch post office regularly maintained by the
United States Government.
8. Stock Exchange Requirements: Applicable Laws. Notwithstanding
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anything to the contrary in this Agreement, no shares of stock purchased upon
exercise of the Option, and no certificate representing all or any part of such
shares, shall be issued or delivered if (a) such shares have not been admitted
to listing upon official notice of issuance on each stock exchange upon which
shares of that class are then listed or (b) in
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the opinion of counsel to the Company, such issuance or delivery would cause the
Company to be in violation of or to incur liability under any federal, state or
other securities law, or any requirement of any stock exchange listing agreement
to which the Company is a party, or any other requirement of law or of any
administrative or regulatory body having jurisdiction over the Company.
9. Nontransferability. Neither the Option nor any interest therein may
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be sold, assigned, conveyed, gifted, pledged, hypothecated or otherwise
transferred in any manner other than by will or the laws of descent and
distribution.
10. 1993 Plan. THE OPTION IS GRANTED PURSUANT TO THE 1993 PLAN, AS IN
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EFFECT ON THE DATE OF GRANT, AND IS SUBJECT TO ALL THE TERMS AND CONDITIONS OF
THE 1993 PLAN, AS THE SAME MAY BE AMENDED FROM TIME TO TIME; PROVIDED, HOWEVER,
THAT NO SUCH AMENDMENT SHALL DEPRIVE OPTIONEE, WITHOUT HIS OR HER CONSENT, OF
THE OPTION OR OF ANY OF OPTIONEE'S RIGHTS UNDER THIS AGREEMENT. THE
INTERPRETATION AND CONSTRUCTION BY THE COMMITTEE OF THE 1993 PLAN, THIS
AGREEMENT, THE OPTION AND SUCH RULES AND REGULATIONS AS MAY BE ADOPTED BY THE
COMMITTEE FOR THE PURPOSE OF ADMINISTERING THE 1993 PLAN SHALL BE FINAL AND
BINDING UPON OPTIONEE. UNTIL THE OPTION SHALL EXPIRE, TERMINATE OR BE EXERCISED
IN FULL, THE COMPANY SHALL, UPON WRITTEN REQUEST THEREFOR, SEND A COPY OF THE
1993 PLAN, IN ITS THEN- CURRENT FORM, TO OPTIONEE OR ANY OTHER PERSON OR ENTITY
THEN ENTITLED TO EXERCISE THE OPTION.
11. Fractional Shares. The Company shall not be required to issue a
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fraction of a Common Share in connection with the exercise of the Option. In any
case where the Optionee would be entitled to receive a fraction of a Common
Share upon the exercise of the Option, the Company shall instead, upon the
exercise of the Option, issue the largest whole number of Common Shares
purchasable upon exercise of the Option, and pay to the Optionee in cash the
Fair Market Value (as determined by the Committee) of such fraction of a Common
Share at the time of exercise of the Option.
12. Stockholder Rights. No person or entity shall be entitled to vote,
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receive dividends or be deemed for any purpose the holder of any Option Shares
until the Option shall have been duly exercised to purchase such Option Shares
in accordance with the provisions of this Agreement.
13. Employment Rights. No provision of this Agreement or of the Option
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granted hereunder shall (a) confer upon Optionee any right to continue in the
employ of the Company or any of its subsidiaries, (b) affect the right of the
Company and each of its subsidiaries to terminate the employment of Optionee,
with or without cause, or (c) confer upon Optionee any right to participate in
any employee welfare or benefit plan or other program of the Company or any of
its subsidiaries other than the 1993 Plan. The
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Optionee hereby acknowledges and agrees that his or her right of employment may
be terminated by the Company for any reason, with or without cause, unless the
Optionee and the Company are parties to a written agreement which expressly
provides otherwise.
14. Governing Law. This Agreement and the Option granted hereunder shall
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be governed by and construed and enforced in accordance with the laws of the
State of Maryland.
15. Entire Agreement. This Agreement constitutes the entire agreement of
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the parties with respect to the matters covered herein and supersedes all prior
written or oral agreements or understandings of the parties with respect to the
matters covered herein. Optionee acknowledges that he or she has no right to
receive any additional Options unless and until such time, if any, that the
Committee, in its sole discretion, may approve the grant thereof, and that the
Company has not made any representation to the Optionee regarding future or
additional Option grants, or any other option related matters. The grant of any
options must be in writing.
16. Representation of Optionee. Optionee represents to the Company as
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follows:
(i) The Option will be taken and received for my own account and not
with a view to or for sale in connection with any distribution thereof;
and
(ii) I have a preexisting personal or business relationship with the
Company or its officers, directors or controlling persons, or by reason of
my business or financial experience, I can protect my own interests in
connection with my receipt and exercise of the Option.
IN WITNESS WHEREOF, the Company and Optionee have duly executed this
Agreement as of the Date of Grant.
G & L REALTY CORP. OPTIONEE
By:
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Name: Xxxxxx X. Xxxxxxxx Signature
Title: Chief Executive Officer
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Xxxxxx Xxxxxxx
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Xxxx, Xxxxx and Zip Code
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Social Security Number
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