|
EXHIBIT 10.1
MONMOUTH REAL ESTATE INVESTMENT CORPORATION
2007 STOCK OPTION PLAN
SECTION 1
EFFECTIVE DATE AND PURPOSE
1.1
Effective Date . The Board of
Directors of the Company has adopted the Plan on March 26, 2007,
subject to the approval of the stockholders of the Company
within twelve (12) months of such date.
1.2
Purpose of the Plan . The Plan is
designed to provide a means to attract, motivate and retain
eligible Participants and to further the growth and financial
success of the Company by aligning the interests of Participants
through the ownership of Shares and other incentives with the
interests of the Company’s stockholders.
SECTION 2
DEFINITIONS
2.1
The following words and phrases shall have the
following meanings unless a different meaning is plainly
required by the context:
2.2
“ 1934 Act ” means the
Securities Exchange Act of 1934, as amended. Reference to
a specific section of the 1934 Act or regulation thereunder
shall include such section or regulation, any valid regulation
promulgated under such section, and any comparable provision of
any future legislation or regulation amending, supplementing or
superseding such section or regulation.
2.3
“ Award ” means, individually
or collectively, a grant under the Plan of Nonqualified Stock
Options or Incentive Stock Options.
2.4
“ Award Agreement ” means the
written agreement setting forth the terms and provisions
applicable to each Award granted under the Plan.
2.5
“ Board ” or “ Board
of Directors ” means the Board of Directors of the
Company.
2.6
“ Cause ” means (i)
Participant’s conviction of a felony or any crime
involving moral turpitude, (ii) any public disparagement by the
Participant of the Company, or (iii) the willful engaging by the
Participant in conduct materially injurious to the Company,
monetarily or otherwise.
2.7
“ Change in Control ” shall
have the meaning assigned to such term in Section 10.
2.8
“ Code ” means the Internal
Revenue Code of 1986, as amended. Reference to a specific
section of the Code or regulation thereunder shall include such
section or regulation, any valid regulation promulgated under
such section, and any comparable provision of any future
legislation or regulation amending, supplementing or superseding
such section or regulation.
2.9
“ Committee ” means the
committee appointed by the Board pursuant to Section 4.1 to
administer the Plan.
2.10
“ Company ” means Monmouth
Real Estate Investment Corporation, a Maryland corporation, or
any successor thereto.
2.11
“ Disability ” means a
permanent and total disability that qualifies a Participant for
disability benefits under the Company’s long term
disability plan; or if no such plan is maintained, a permanent
and total disability that renders the Participant unable 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.
2.12
“ Employee ” means any
employee of the Company or its Subsidiaries, whether such
employee is so employed at the time the Plan is adopted or
becomes so employed subsequent to the adoption of the Plan.
2.13
“ Exercise Price ” means the
price at which a Share may be purchased by a Participant
pursuant to the exercise of an Option.
2.14
“ Fair Market Value ” means,
as of any given date, (i) the closing sales price of the Shares
on any national securities exchange on which the Shares are
listed; or (ii) if there is no regular public trading market for
such Shares, the fair market value of the Shares as determined
by the Committee.
2.15
“ Fiscal Year ” means the
fiscal year of the Company.
2.16
“ Grant Date ” means, with
respect to an Award, the date such Award is granted to a
Participant.
2.17
“ Incentive Stock Option ”
means an Option to purchase Shares which is designated as an
Incentive Stock Option and is intended to meet the requirements
of Section 422 of the Code.
2.18
“ Nonqualified Stock Option ”
means an Option to purchase Shares which is not an Incentive
Stock Option.
2.19
“ Option ” means an Incentive
Stock Option or a Nonqualified Stock Option.
2.20
“ Participant ” means an
Employee who has an outstanding Award under the Plan.
2.21
“ Plan ” means the Monmouth
Real Estate Investment Corporation 2007 Stock Option Plan, as
set forth in this instrument and as hereafter amended from time
to time.
2.22
“ Retirement ” means a
Termination of Service by reason of individual’s
retirement on or after attaining age 65 (or any earlier normal
retirement age specified in a Company-sponsored qualified
retirement plan).
2.23
“ Shares ” means the shares
of common stock, $.01 par value, of the Company.
2.24
“ Subsidiary ” means,
consistent with Section 424(f) of the Code, any corporation
(other than the Company) in an unbroken chain of entities
beginning with the Company if, at the time of the granting of an
Award, each of the entities other than the last entity in the
unbroken chain owns fifty percent (50%) or more of the total
combined voting power in one of the other entities in such
chain.
2.25
“ Termination of Service ”
means, a cessation of the employee-employer relationship between
such person and the Company or a Subsidiary for any reason
unless there is a simultaneous reengagement of the person by the
Company or a Subsidiary.
SECTION 3
ELIGIBILITY
3.1
Participants . Awards may be
granted in the discretion of the Committee among key
employees and officers of the Company and its Subsidiaries.
-2-
3.2
Non-Uniformity . Awards granted
hereunder need not be uniform among eligible Participants and
may reflect distinctions based on title, compensation,
responsibility or any other factor the Committee deems
appropriate.
SECTION 4
ADMINISTRATION
4.1
The Committee . The Plan shall be
administered by the Compensation Committee comprised of two or
more directors of the Company, none of whom shall be officers or
employees of the Company and all of whom shall be
“non-employee directors” (within the meaning of Rule
16b-3 promulgated under the 1934 Act) and “outside
directors” (as required by Section 162(m) of the Code).
The members of the Committee shall be appointed from time
to time by, and shall serve at the pleasure of, the Board of
Directors. In the absence of such appointment, the Board
of Directors shall serve as the Committee and shall have all of
the responsibilities, duties, and authority of the Committee set
forth herein.
4.2
Authority of the Committee . The
Committee shall have the exclusive authority to administer and
construe the Plan in accordance with its provisions. The
Committee’s authority shall include, without limitation,
the power to (a) determine persons eligible for Awards, (b)
prescribe the terms and conditions of the Awards, (c) accelerate
the time at which all or any part of an Option may be exercised,
(d) amend or modify the terms and conditions of an Award with
the consent of the Participant, (e) interpret the Plan and the
Awards, (f) adopt rules for the administration, interpretation
and application of the Plan as are consistent therewith, (g)
interpret, amend or revoke any such rules, and (h) make all
other determinations necessary or advisable for the
administration of the Plan, subject to the exclusive authority
of the Board under Section 8.1 to amend or terminate the Plan.
4.3
Delegation by the Committee . The
Committee, in its sole discretion and on such terms and
conditions as it may provide, may delegate all or any part of
its authority and powers under the Plan to one or more officers
of the Company; provided, however, that the Committee may not
delegate its authority and powers in any way which would
jeopardize the Plan’s qualification under Rule 16b-3 or
the deductibility of Awards under Section 162(m) of the
Code.
4.4
Factors to Consider for Granting Awards .
In making the determination as to the persons to whom an
Award shall be granted, the Committee or any delegate may take
into account such individual’s salary and tenure, duties
and responsibilities, their present and potential contributions
to the success of the Company, the recommendation of
supervisors, and such other factors as the Committee or any
delegate may deem important in connection with accomplishing the
purposes of the Plan.
4.5
Decisions Binding . All
determinations and decisions made by the Committee and any of
its delegates pursuant to Section 4.3 shall be final,
conclusive, and binding on all persons, and shall be given the
maximum deference permitted by law.
4.6
Committee Governance . The
Committee shall select one of its members as its Chairman and
shall hold its meetings at such times and places as it may
determine. A majority of its members shall constitute a
quorum. All determinations of the Committee shall be made
by not less than a majority of its members. Any decision
or determination reduced to writing and signed by all of the
members of the Committee shall be fully effective as if it had
been made by a majority vote at a meeting duly called and held.
The grant of an Award shall be effective only if a written
agreement is duly executed and delivered by and on behalf of the
Company following such grant. The Committee may appoint a
Secretary and may make such rules and regulations for the
conduct of its business as it shall deem advisable.
-3-
SECTION 5
SHARES SUBJECT TO THE PLAN
5.1
Number of Shares . Subject to
adjustment as provided in Section 5.3, the total number of
Shares available for grant under the Plan shall not exceed one
million five hundred thousand (1,500,000) Shares. Shares
granted under the Plan may be either authorized but unissued
Shares or treasury Shares, or any combination thereof.
5.2
Lapsed Awards . Unless determined
otherwise by the Committee, Shares related to Awards that are
forfeited, terminated, expire unexercised, tendered by a
Participant to the Company in connection with the exercise of an
Award, withheld from issuance in connection with a
Participant’s payment of tax withholding liability,
settled in cash in lieu of Shares, or settled in such other
manner so that a portion or all of the Shares included in an
Award are not issued to a Participant shall be available for
grant under the Plan.
5.3
Adjustments in Awards and Authorized
Shares . In the event of a merger, reorganization,
consolidation, recapitalization, separation, liquidation, stock
dividend, stock split, combination, or other similar change in
the corporate structure of the Company affecting the Shares, the
Committee shall, consistent with Section 409A of the Code,
adjust the number and class of Shares which may be delivered
under the Plan, the number, class and price of Shares subject to
outstanding Awards, and the numerical limits of Section 5.1 in
such manner as the Committee shall determine to be advisable or
appropriate to prevent the dilution or diminution of such
Awards.
5.4
Repurchase Option . The Board may
include in the terms of any Award Agreement that the Company
shall have the option to repurchase Shares of any Participant
acquired pursuant to any Award granted under the Plan upon a
Participant’s Termination of Service. The terms of
such repurchase right shall be set forth in the Award
Agreement.
5.5
Buy-Out Provision . The Board may
at any time offer on behalf of the Company to buy-out, for a
payment in cash or Shares, an Award previously granted, based on
such terms and conditions as the Board shall establish and
communicate to the Participants at the time such offer is made;
provided, however, to the extent Sections 13(e) and/or 14(e) of
the 1934 Act and the rules and regulations thereunder are
applicable to any such offer, the Company shall comply with the
requirements of such sections.
SECTION 6
STOCK OPTIONS
6.1
Grant of Options . Subject to the
terms and provisions of the Plan, Options may be granted to
Participants at any time and from time to time as determined by
the Committee. The Committee shall determine the number of
Shares subject to each Option. The Committee may grant
Incentive Stock Options, Nonqualified Stock Options, or any
combination thereof. The maximum number of Shares that may
be granted as Options in any one Fiscal Year to a Participant
shall be Two Hundred Thousand (200,000). Each Option may be
exercised only after one (1) year of continued employment by the
Company or one of its Subsidiaries immediately following the
date the Option is granted.
6.2
Award Agreement . Each Option shall be
evidenced by an Award Agreement that shall specify the Exercise
Price, the expiration date of the Option, the number of Shares
to which the Option pertains, any conditions to exercise of the
Option and such other terms and conditions as the Committee
shall determine. The Award Agreement shall also specify whether
the Option is intended to be an Incentive Stock Option or a
Nonqualified Stock Option.
6.3
Exercise Price . Subject to the
provisions of this Section 6.3, the Exercise Price for each
Option shall be determined by the Committee and shall be
provided in each Award Agreement.
6.3.1
Nonqualified Stock Options . In the
case of a Nonqualified Stock Option, the Exercise Price shall
not be less than one hundred percent (100%) of the Fair Market
Value of a Share on the Grant Date; provided, however, in no
case shall the Exercise Price be less than the par value of such
Share.
-4-
6.3.2
Incentive Stock Options . In the
case of an Incentive Stock Option, the Exercise Price shall be
not less than one hundred percent (100%) of the Fair Market
Value of a Share on the Grant Date; or, consistent with Section
422(c)(5) of the Code, one hundred ten percent (110%) of the
Fair Market Value of a Share if the Participant (together with
persons whose stock ownership is attributed to the Participant
pursuant to Section 424(d) of the Code) owns on the Grant Date
stock possessing more than 10% of the total combined voting
power of all classes of stock of the Company or any of its
Subsidiaries; provided, however, in no case shall the Exercise
Price be less than the par value of such Share.
6.3.3
Substitute Options .
Notwithstanding the provisions of Sections 6.3.1 and
6.3.2, in the event that the Company consummates a transaction
described in Section 424(a) of the Code, persons who become
Participants on account of such transaction may be granted
Options in substitution for options granted by such former
employer. If such substitute Options are granted, the
Committee, consistent with Sections 424(a) and 409A of the Code,
may determine that such substitute Options shall have an
exercise price less than one hundred (100%) of the Fair Market
Value of the Shares on the Grant Date.
6.4
Expiration of Options .
6.4.1
Expiration Dates . Except as
provided in Section 6.7.3 regarding Incentive Stock Options,
each Option shall terminate upon the earlier of the first to
occur of the following events:
(a)
The date(s) for termination of the Option set
forth in the Award Agreement;
(b)
The date determined under Section 6.8 regarding
Termination of Service; or
(c)
The expiration of ten (10) years from the Grant
Date.
6.4.2
Committee Discretion . Subject to
the limits of Section 6.4.1, the Committee shall provide in each
Award Agreement when each Option expires and becomes
unexercisable, and may, after an Option is granted, extend the
maximum term of the Option (subject to Section 6.7 regarding
Incentive Stock Options). Notwithstanding the foregoing,
however, in no event shall an option term be extended so as to
subject such option to Section 409A of the Code.
6.5
Exercisability of Options .
6.5.1
Timing of Exercise . Options
granted under the Plan shall be exercisable at such times and be
subject to such restrictions and conditions as the Committee
shall determine. After an Option is granted, the Committee
may accelerate the exercisability of the Option. If the
Committee provides that any Option is exercisable only in
installments, the Committee may at any time waive such
installment exercise provisions, in whole or in part, based on
such factors as the Committee may determine.
6.5.2
Restrictions on Exercise . The Committee
may postpone any exercise of an Option for such period as the
Committee in its discretion may deem necessary in order to
permit the Company (i) to effect or maintain registration of the
Plan or the Shares issuable upon the exercise of an Option under
the Securities Act of 1933, as amended, or the securities laws
of any applicable jurisdiction, (ii) to permit any action to be
taken in order to comply with restrictions or regulations
incident to the maintenance of a public market for its Shares or
to list the Shares thereon; or (iii) to determine that such
Shares and the Plan are exempt from such registration or that no
action of the kind referred to in (ii) above need be taken; and
the Company shall not be obligated by virtue of any terms and
conditions of any Award or any provision of the Plan to permit
the exercise of an Option to sell or deliver Shares in violation
of any federal or state securities or other law. Any such
postponement shall not extend the term of an Option as set forth
in Section 6.4.1; and neither the Company nor its directors or
officers or any of them shall have any obligation or liability
to the Participant, to any successor of a Participant or to any
other person with respect to any Shares as to which an Option
shall lapse because of such postponement.
6.6
Payment .
-5-
6.6.1
Notice . Options shall be exercised
by a Participant’s delivery of a written notice of
exercise to the Secretary of the Company (or its designee),
setting forth the number of Shares with respect to which the
Option is to be exercised, accompanied by full payment for the
Shares.
6.6.2
Form of Payment . Upon the exercise
of an Option, the Exercise Price shall be payable to the Company
in full in cash or its equivalent. The Committee may also
permit exercise (a) by tendering previously acquired Shares
having an aggregate Fair Market Value at the time of exercise
equal to the total Exercise Price or (b) by any other means
which the Committee determines to provide legal consideration
for the Shares, and to be consistent with the purposes of the
Plan and with all applicable laws and regulations, provided that
such other means shall be set forth in the Award Agreement.
6.6.3
Delivery of Certificates . As soon
as practicable after receipt of a written notification of
exercise and full payment for the Shares purchased, the Company
shall deliver to the Participant, Share certificates (which may
be in book entry form) representing such Shares.
6.7
Certain Additional Provisions for Incentive
Stock Options .
6.7.1
Exercisability . The aggregate Fair
Market Value (determined on the Grant Date(s)) of the Shares
with respect to which Incentive Stock Options are exercisable
for the first time by any Participant during any calendar year
(under all plans of the Company and its Subsidiaries) shall not
exceed $100,000.
6.7.2
Company and Subsidiaries Only .
Incentive Stock Options may be granted only to
Participants who are employees of the Company or its
Subsidiaries on the Grant Date.
6.7.3
Expiration . No Incentive Stock
Option may be exercised after the expiration of ten (10) years
from the Grant Date; provided, however, that if the Option is
granted to an employee who, together with persons whose stock
ownership is attributed to the employee pursuant to Section
424(d) of the Code, owns stock possessing more than ten percent
(10%) of the total combined voting power of all classes of stock
of the Company or any of its Subsidiaries, consistent with
Section 422(c)(5) of the Code, the Option may not be exercised
after the expiration of five (5) years from the Grant Date.
6.8
Termination of Service .
6.8.1
Termination for Cause . Unless
otherwise specifically provided in the Award Agreement, an
Option may not be exercised after a Participant’s
Termination of Service by the Company or a Subsidiary for
Cause
6.8.2
Termination Due To Death or Disability .
Unless otherwise specifically provided in the Award
Agreement, an Option may not be exercised more than three (3)
months after a Participant’s Termination of Service due to
death or Disability.
6.8.3
Termination For Other Reasons .
Unless otherwise specifically provided in the Award
Agreement, an Option may not be exercised more than three (3)
months after a Participant’s Termination of Service for
any reason other than described in Section 6.8.1 or 6.8.2.
6.9
Restriction on Option Transfer .
Except as otherwise determined by the Committee and set
forth in the Award Agreement, no Option may be transferred,
gifted, bequeathed, pledged, assigned, or otherwise alienated or
hypothecated, voluntarily or involuntarily, except that the
Committee may permit a transfer, upon the Participant’s
death, to beneficiaries designated by the Participant as
provided in Section 7.5.
-6-
SECTION 7
MISCELLANEOUS
7.1
No Effect on Employment or Service .
Nothing in the Plan shall interfere with or limit in any
way the right of the Company or any Subsidiary to terminate any
Participant’s employment or service at any time, with or
without Cause. Employment with the Company or any
Subsidiary is on an at-will basis only, unless otherwise
provide
| 
