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Exhibit 10.31
PUBLIC STORAGE
2007 EQUITY AND PERFORMANCE-BASED INCENTIVE COMPENSATION
PLAN
FORM OF NON-QUALIFIED SHARE OPTION AGREEMENT
This Share Option Agreement (the "Option Agreement") is made as
of the ____
day of _________, 200__, (the "Grant Date"), by and between
Public Storage (the
"Trust") and __________________, (the "Optionee"). Capitalized
terms not
otherwise defined herein shall have the meanings ascribed to
them in the Trust's
2007 Equity and Performance-Based Incentive Compensation Plan
(the "Plan").
WHEREAS, the Board of Trustees of the Trust (the "Board") has
duly adopted,
and the shareholders of the Trust have duly approved, the Plan,
which provides
for the grant to employees and Trustees of the Trust and its
Subsidiaries and
Service Providers of options for the purchase of shares of the
Trust's common
shares of beneficial interest, par value $.10 per share (the
"Common Shares"),
which may be granted from time to time as the Committee so
determines;
WHEREAS, the Trust has determined that it is desirable and in
its best
interests to grant to the Optionee, pursuant to the Plan,
options to purchase a
certain number of Common Shares as compensation for services
rendered to the
Trust, and/or in order to provide the Optionee with an incentive
to advance the
interests of the Trust, all according to the terms and
conditions set forth
herein;
NOW, THEREFORE, in consideration of the mutual promises and
covenants
contained herein, the parties hereto do hereby agree as
follows:
1. GRANT OF OPTION.
Subject to the terms of the Plan (the terms of which are
incorporated by
reference herein), the Trust hereby grants to the Optionee the
right and option
(the "Option") to purchase from the Trust, on the terms and
subject to the
conditions hereinafter set forth, ________ Common Shares. This
Option shall not
constitute an incentive shares option within the meaning of
Section 422 of the
Internal Revenue Code of 1986, as amended.
2. PRICE.
The purchase price (the "Option Price") of the Common Shares
subject to the
Option evidenced by this Option Agreement is $_________ per
share (the Fair
Market Value on the Grant Date).
3. EXERCISE OF OPTION.
Except as otherwise provided herein, the Option granted pursuant
to this
Option Agreement shall be subject to exercise as follows:
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3.1 Time of Exercise of Option.
The Optionee may exercise the Option (subject to the limitations
on
exercise set forth in the Plan or in this Option Agreement), in
installments as
determined by the Committee as follows: [ ]. The foregoing
installments, to the
extent not exercised, shall accumulate and be exercisable, in
whole or in part,
at any time and from time to time, after becoming exercisable
and prior to the
termination of the Option; provided, that no single exercise of
the Option shall
be for less than 100 shares, unless the number of shares
purchased is the total
number at the time available for purchase under this Option.
3.2 Exercise by Optionee.
During the lifetime of the Optionee, only the Optionee (or, in
the
event of the Optionee's legal incapacity or incompetency, the
Optionee's
guardian or legal representative) or a person or entity to whom
the Optionee has
transferred the Option in accordance with Section 6 hereof may
exercise the
Option.
3.3 Term of Option.
The Option shall have a term of [ ]years, subject to earlier
termination in accordance with this Option Agreement or the
terms of the Plan as
determined by the Committee.
3.4 Limitations on Exercise of Option.
In no event may the Option be exercised, in whole or in part,
after ten
years following the Grant Date, or after the occurrence of an
event referred to
in Section 8 below which results in termination of the Option.
In no event may
the Option be exercised for a fractional Share.
3.5 Termination of Employment or Other Relationship.
Subject to Sections 3.6 and 3.7 hereof, upon the termination of
(i) the
employment of the Optionee by the Trust or any Subsidiary or
Service Provider or
service as a Trustee, or (ii) a Service Provider's relationship
with the Trust,
the Optionee shall have the right at any time within 30 days
after such
termination and prior to termination of the Option pursuant to
Section 3.4
above, to exercise, in whole or in part, any Option held by such
Optionee at the
date of such termination, to the extent such Option was
exercisable immediately
prior to such termination.
3.6 Rights in the Event of Death.
If the Optionee dies while employed by the Trust, a Subsidiary
or a
Service Provider, or while serving as a Trustee or Service
Provider, the
executors or administrators or legatees or distributees of the
Optionee's estate
shall have the right, at any time within one year after the date
of the
Optionee's death and prior to termination of the Option pursuant
to Section 3.4
above, to exercise the Option with respect to all shares subject
to the Option,
whether or not the Option was exercisable immediately prior to
the Optionee's
death.
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3.7 Rights in the Event of Disability.
If the Optionee terminates employment with the Trust, a
Subsidiary, or
a Service Provider, or if the Optionee ceases to be a Service
Provider or
Trustee, by reason of the permanent and total disability of the
Optionee, then
the Optionee shall have the right, for a period of one year
after such
termination and prior to termination of the Option pursuant to
Section 3.4
above, to exercise the Option to the extent such Option was
exercisable
immediately prior to such termination or becomes exercisable
within such one
year period pursuant to Section 3.1 above. Whether termination
of employment or
service is to be considered by reason of permanent and total
disability for
purposes of this Option Agreement shall be determined by the
Committee, which
determination shall be final and conclusive.
3.8 Reduction in Number of Shares Subject to Option.
The number of Common Shares which may be purchased upon exercise
of the
Option pursuant to this Section 3 shall be reduced by the number
of shares
previously purchased upon exercise of the Option pursuant to
this Section 3.
4. METHOD OF EXERCISE OF OPTION.
The Option may be exercised to the extent that it has become
exercisable
hereunder by (a) exercise through the Trust's approved broker
for such
exercises, or (b) delivery to the Trust on any business day, at
its principal
office addressed to the attention of the Committee, of written
notice of
exercise, which notice shall specify the number of shares for
which the Option
is being exercised, and shall be accompanied by payment in full
of the Option
Price of the shares for which the Option is being exercised.
Payment of the
Option Price for the Common Shares purchased pursuant to the
exercise of the
Option shall be made (a) in cash or by check payable to the
order of the Trust;
(b) through the tender to the Trust of Common Shares, which
shares shall be
valued, for purposes of determining the extent to which the
Option Price has
been paid thereby, at their Fair Market Value on the date of
exercise; or (c) by
a combination of the methods described in (a) and (b). Payment
in full of the
Option Price need not accompany the written notice of exercise
provided the
notice directs that the Common Shares certificate or
certificates for the shares
for which the Option is exercised be delivered to the Trust
approved broker for
such exercises as the agent for the Optionee and, at the time
such Common Shares
are delivered, the broker tenders to the Trust cash (or cash
equivalents
acceptable to the Trust) equal to the Option Price plus the
amount, if any, of
federal and/or other taxes which the Trust may, in its judgment,
be required to
withhold with respect to the exercise of the Option. An attempt
to exercise the
Option granted other than as set forth above shall be invalid
and of no force or
effect. Promptly after the exercise of the Option and the
payment in full of the
Option Price of the Common Shares covered thereby, the Optionee
shall be
entitled to, as applicable, (a) the issuance of a certificate
for Common Shares
or certificates evidencing the Optionee's ownership of such
shares or (b) direct
registration for such shares or (c) electronic transfer of such
shares to a
Trust-approved broker.
5. PARACHUTE LIMITATIONS.
Notwithstanding any other provision of this Option Agreement or
of any
other agreement, contract, or understanding heretofore or
hereafter entered into
by a Optionee with the Trust or any Subsidiary, except an
agreement, contract or
understanding hereafter entered into that expressly modifies or
excludes
application of this paragraph (an "Other Agreement"), and
notwithstanding any
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formal or informal plan or other arrangement for the direct or
indirect
provision of compensation to the Optionee (including groups or
classes of
participants or beneficiaries of which the Optionee is a
member), whether or not
such compensation is deferred, is in cash, or is in the form of
a benefit to or
for the Optionee (a "Benefit Arrangement"), if the Optionee is a
"disqualified
individual," as defined in Section 280G(c) of the Code, any
Option held by that
Optionee and any right to receive any payment or other benefit
under this Option
Agreement shall not become exercisable or vested (i) to the
extent that such
right to exercise, vesting, payment, or benefit, taking into
account all other
rights, payments, or benefits to or for the Optionee under this
Option
Agreement, all Other Agreements, and all Benefit Arrangements,
would cause any
payment or benefit to the Optionee under this Option Agreement
to be considered
a "parachute payment" within the meaning of Section 280G(b)(2)
of the Code as
then in effect (a "Parachute Payment") and (ii) if, as a result
of receiving a
Parachute Payment, the aggregate after-tax amounts received by
the Optionee from
the Trust under this Option Agreement, all Other Agreements, and
all Benefit
Arrangements would be less than the maximum after-tax amount
that could be
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