Upon the occurrence of any event that affects our Common Shares in such a way that an adjustment of outstanding awards is appropriate to prevent the dilution or enlargement of rights under the awards, the Committee will make appropriate equitable adjustments. The Committee may also provide for other substitutions or adjustments in its sole discretion, including, without limitation, the cancellation of any outstanding award and payment in cash or other property in exchange thereof, equal to the excess, if any, of the fair market value of the shares or other property subject to the award over the exercise price, if any.
Types of Awards and Eligible Recipients
The terms of the Plan provide for the grant of options that are not intended to qualify as incentive stock options under Section 422 of the Code, stock appreciation rights (SARs), restricted shares, performance awards, tandem awards and other shares-based and non-shares based awards, in each case to our Manager, to the employees, officers, directors, consultants, service providers or advisors of our Manager who perform services for us, to our employees, officers, directors, consultants, service providers or advisors, and to such other persons who the Committee selects to be participants in the Plan. Such awards may be granted singularly, in tandem, or in combination with each of the other awards.
Share Options
A share option represents the right to purchase a specified number of Common Shares at a specified price during such specified time as the Committee may determine.
The Committee generally has the power to determine the number of our Common Shares covered by options, the exercise price of options, at what time or times each option may be exercised and, subject to the provisions of the Plan, the period of time, if any, after retirement, death, disability or other termination of employment during which options may be exercised. Options may become vested and exercisable in installments, and the exercisability of options may be accelerated by the Committee.
We may make loans available to the optionee in connection with the exercise of share options. Such loans must be evidenced by the delivery of a promissory note and will bear interest and be subject to such other terms and conditions (including, without limitation, the execution by the optionee of a pledge agreement) as the Committee may determine. In any event, such loan amount may not exceed the sum of (x) the exercise price less the par value of our Common Shares subject to such option then being exercised plus (y) any federal, state or local income taxes attributable to such exercise.
Other Awards
The Committee may also grant SARs in tandem with all or part of, or completely independent of, a grant of options or any other award under the Plan. A SAR issued in tandem with an option may be granted at the time of grant of the related option or at any time during the term of such option. The amount payable in cash and/or our Common Shares with respect to each SAR will be equal in value to a percentage (including up to 100%) of the amount by which the fair market value per share of our Common Shares on the exercise date exceeds the fair market value per share of our Common Shares on the date of grant of the SAR. The applicable percentage will be established by the Committee. The award agreement under which the SAR is granted may state whether the amount payable is to be paid wholly in cash, wholly in our Common Shares or in any combination of the foregoing, and if the award agreement does not state the manner of payment, the Committee will determine such manner of payment at the time of payment. The amount payable in our Common Shares, if any, is determined with reference to the fair market value per share of our Common Shares on the date of exercise.
SARs issued in tandem with options shall be exercisable only to the extent that the options to which they relate are exercisable. Upon exercise of the tandem SAR, and to the extent of such exercise, the participants underlying option shall automatically terminate. Similarly, upon the exercise of the Tandem Award, and to the extent of such exercise, the participants related SAR will automatically terminate.
The Committee may also grant restricted shares, performance awards, and other shares and non-shares-based awards under the Plan. These awards will be subject to such conditions and restrictions as the Committee may determine, which may include, without limitation, the achievement of certain performance goals or continued employment with us through a specific period.