Exhibit 10.3
FORM OF NON-QUALIFIED STOCK OPTION AGREEMENT
(2007 Stock Award and Incentive Plan)
          NON-QUALIFIED STOCK OPTION AGREEMENT, dated as of
                                                              (the “Agreement”),
by and between Apartment Investment and Management Company, a Maryland
corporation (the “Company”), and
                                                     (the “Optionee”).
Capitalized terms used but not otherwise defined in this Agreement shall have
the respective meanings set forth in the Apartment Investment and Management
Company 2007 Stock Award and Incentive Plan, as amended (the “Plan”).
          WHEREAS, on
                                                             (the “Grant Date”)
the Compensation Committee (the “Committee”) of the Board of Directors (the
“Board”) of the Company awarded the Optionee a non-qualified stock option,
exercisable to purchase shares of the Company’s Class A Common Stock, par value
$.01 per share (“Common Stock”), pursuant to, and subject to the terms and
provisions of, the Plan.
          NOW, THEREFORE, in consideration of the Optionee’s services to the
Company and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
          1. Number of Shares and Purchase Price. The Company hereby grants the
Optionee a non-qualified stock option (the “Option”) to purchase
                                                              shares of Common
Stock (the “Option Shares”) at a purchase price per share equal to
$                                         the “Exercise Price”), pursuant to the
terms of this Agreement and the provisions of the Plan.
          2. Period of Option and Conditions of Exercise.
          (a) Unless the Option is previously terminated pursuant to this
Agreement or the Plan, the Option shall terminate on the tenth anniversary of
the Date of Grant (the “Expiration Date”). Upon the termination of the Option,
all rights of the Optionee hereunder shall cease.
          (b) Subject to the provisions of the Plan and this Agreement, the
Option shall become exercisable: (i) as to     % of the Option Shares on
                                        ; (ii) as to     % of the Option Shares
on                                         ; (iii) as to     % of the Option
Shares on                      ; and (iv) as to     % of the Option Shares on
                                        .
          3. Change of Control.
     All unexercised and unvested stock options issued hereunder shall, in
addition to any provisions relating to exercisability contained in this
Agreement, become immediately fully vested and exercisable by the Optionee upon
the occurrence of a Change of Control (as defined below).

 

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     For purposes of this Agreement, a “Change in Control” shall mean the
occurrence of any of the following events:
     (a) an acquisition (other than directly from the Company) of any voting
securities of the Company (the “Voting Securities”) by any “person” (as the term
“person” is used for purposes of Section 13(d) or Section 14(d) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”)) immediately
after which such person has “beneficial ownership” (within the meaning of Rule
13d-3 promulgated under the Exchange Act) (“Beneficial Ownership”) of 50% or
more of the combined voting power of the Company’s then outstanding Voting
Securities; provided, however, in determining whether a Change in Control has
occurred, Voting Securities that are acquired in a Non-Control Acquisition (as
hereinafter defined) shall not constitute an acquisition that would cause a
Change in Control. “Non-Control Acquisition” shall mean an acquisition (A) by or
under an employee benefit plan (or a trust forming a part thereof) maintained by
(1) the Company or (2) any corporation, partnership or other person of which a
majority of its voting power or its equity securities or equity interest is
owned directly or indirectly by the Company or in which the Company serves as a
general partner or manager (a “Subsidiary”), (B) by the Company or any
Subsidiary, or (C) by any person in connection with a Non-Control Transaction
(as hereinafter defined);
     (b) the individuals who constitute the Board of Directors of the Company as
of the date hereof (the “Incumbent Board”) cease for any reason to constitute at
least 50% of the Board of Directors; provided, however, that if the election, or
nomination for election by the Company’s stockholders, of any new director was
approved by a vote of at least two-thirds of the Incumbent Board, such new
director shall be considered as a member of the Incumbent Board; provided,
further, that no individual shall be considered a member of the Incumbent Board
if such individual initially assumed office as a result of either an actual or
threatened “election contest” (as described in Rule 14a-11 promulgated under the
Exchange Act) (an “Election Contest”) or other actual or threatened solicitation
of proxies or consents by or on behalf of a person other than the Board of
Directors (a “Proxy Contest”) including by reason of any agreement intended to
avoid or settle any Election Contest or Proxy Contest; or
     (c) the consummation of any of the following: (A) a merger, consolidation,
share exchange or reorganization involving the Company, unless (1) the
stockholders of the Company, immediately before such merger, consolidation,
share exchange or reorganization, own, directly or indirectly immediately
following such merger, consolidation, share exchange or reorganization, at least
50% of the combined voting power of the outstanding voting securities of the
corporation that is the successor in such merger, consolidation, share exchange
or reorganization (the “Surviving Company”) in substantially the same proportion
as their ownership of the Voting Securities immediately before such merger,
consolidation, share exchange or reorganization, and (2) the individuals who
were members of the Incumbent Board immediately prior to the execution of the
agreement providing for such merger, consolidation, share exchange or
reorganization constitute at least 50% of the members of the board of directors
of the Surviving Company; (B) a complete liquidation or dissolution of the
Company; or (C) an agreement for the sale or other disposition of all or
substantially all of the assets of the Company to any person (other than a
transfer to a Subsidiary).

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     Notwithstanding the foregoing, a Change in Control shall not be deemed to
occur solely because any person (a “Subject Person”) acquired Beneficial
Ownership of more than the permitted amount of the outstanding Voting Securities
as a result of the acquisition of Voting Securities by the Company that, by
reducing the number of Voting Securities outstanding, increases the proportional
number of shares Beneficially Owned by such Subject Person, provided that if a
Change in Control would occur (but for the operation of this sentence) as a
result of the acquisition of Voting Securities by the Company, and after such
share acquisition by the Company, such Subject Person becomes the Beneficial
Owner of any additional Voting Securities that increases the percentage of the
then outstanding Voting Securities Beneficially Owned by such Subject Person,
then a Change in Control shall occur.”
          4. Termination of Employment.
          (a) Except as provided in this Section 4, the Option may not be
exercised after the Optionee has ceased to be employed by the Company or one of
its affiliates. In the event that the Optionee ceases to be employed by the
Company or one of its affiliates, the Option may be exercised following such
termination, as follows:
          (i) if the Optionee’s termination of employment is due to his or her
death or Disability (as defined below), all unexercised and unvested stock
options issued hereunder shall become immediately fully vested and exercisable
by the Optionee and the Option shall remain exercisable until the Expiration
Date for all Option Shares;
          (ii) if the Optionee ceases to be employed by the Company or an
affiliate other than due to death, Disability or termination for Cause, the
Option shall remain exercisable for a period of ninety (90) days following such
termination (but in no event later than the Expiration Date) with respect to all
Option Shares for which the Option was otherwise exercisable as of the date of
such termination, and shall thereafter terminate; and
          (iii) if the Optionee’s termination is by the Company or one of its
affiliates for Cause (as defined below), the Option shall terminate immediately
on the date of the such termination.
          5. Exercise of Option.
          (a) The Option may be exercised only by the Optionee or, in the event
of the death or incapacity of the Optionee, the Optionee’s successor, heir or
legal representative. The Option shall be exercised by delivery to the Company
of (i) a written notice, substantially in the form attached hereto as Exhibit A,
specify the number of Option Shares for which the Option is being exercised to
purchase, and (ii) full payment of the Exercise Price for such number of Option
Shares being purchased (in respect of such Option Shares, the “Total Exercise
Price”), in the manner provided below, and any transfer or withholding taxes
applicable thereto.
          (b) Payment of the Exercise Price for any Option Shares being
purchased shall be made as follows:

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          (i) The Optionee may satisfy all or any portion of the Total Exercise
Price by delivery to the Company of cash, by certified or cashier’s check, or
          (ii) The Optionee may satisfy all of any portion of the Total Exercise
Price by (A) assignment, transfer and delivery to the Company, free of any
liens, claims or encumbrances, of shares of Common Stock that the Optionee owns,
or (B) assignment and transfer to the Company, free of any liens, claims or
encumbrances, of common partnership units of AIMCO Properties, L.P. (“OP Units”)
that the Optionee owns. If the Optionee pays by assignment, transfer and
delivery of shares of Common Stock, the Optionee must include with the notice of
exercise the certificates for such shares of Common Stock, either duly endorsed
for transfer or accompanied by an appropriately executed stock power in favor of
the Company. If the Optionee pays by assignment and transfer of OP Units, the
Optionee must include with the notice of exercise a duly executed assignment of
all of the Optionee’s interest in such OP Units. For purposes of this Agreement,
the value of all such shares of Common Stock delivered by the Optionee will be
their Fair Market Value, and the value of all OP Units assigned by the Optionee
will be the Fair Market Value of the number of shares of Common Stock for which
such OP Units are then subject to exchange upon a redemption of such OP Units.
If the value of the shares of Common Stock delivered, or OP Units assigned, by
the Optionee exceeds the amount required to be paid pursuant to this Section 4,
the Company will provide to the Optionee, as soon as practicable, cash or a
check in an amount equal to the value of any fractional portion of a share of
Common Stock or OP Unit, and will issue a certificate to the Optionee for any
whole share(s) of Common Stock or OP Units exceeding the number of shares of
Common Stock or OP Units required to pay the Exercise Price for all Option
Shares being purchased; or
          (iii) At the discretion of the Administrator, the Optionee may satisfy
all of any portion of the Total Exercise Price by means of a cashless exercise
procedure.
          (c) Not less than 100 shares of Common Stock may be purchased at any
time upon the exercise of the Option, unless the number of shares of Common
Stock so purchased constitutes the total number of Option Shares for which the
Option is then exercisable. The Option may be exercised only to purchase whole
shares of Common Stock, and in no case may a fractional share of Common Stock be
purchased. The right of the Optionee to purchase Option Shares for which the
Option is then exercisable may be exercised, in whole or in part, at any time or
from time to time, prior to the Expiration Date.
          (d) The Company may require the Optionee to pay, prior to the delivery
of any Option Shares to which the Optionee shall be entitled upon exercise of
the Option, an amount equal to the Federal, state and local income taxes and
other amounts required by law to be withheld by the Company with respect
thereto. Alternatively, the Optionee may authorize the Company to withhold from
the number of Option Shares he or she would otherwise receive upon exercise of
the Option, that number of Option Shares having a Fair Market Value equal to the
minimum statutory withholding taxes with respect thereto.
          (e) This Option may not be exercised unless such exercise is in
compliance with the Securities Act of 1933, as amended (the “Securities Act”)
and all applicable state securities laws as they are in effect on the date of
exercise and the requirements of any stock

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exchange or national market system on which the Common Stock may be listed at
the time of exercise. The Optionee understands that the Company is under no
obligation to register, qualify or list the Option Shares with the Securities
Exchange Commission, any state securities commission or any stock exchange or
national market system to effect such compliance.
          6. Definitions. For purposes of this Agreement:
          (a) “Cause” shall mean the termination of employment of the Optionee
with the Company or a Subsidiary as a result of (i) the performance by the
Optionee of any activity involving fraud or dishonesty, (ii) the conviction of
the Optionee of a felony or crime involving moral turpitude, (iii) the failure
or refusal of the Optionee to reasonably or satisfactorily perform any material
duties or responsibilities reasonably required of him or her by the Company,
(iv) the gross negligence or willful neglect or malfeasance by the Optionee in
the performance or non-performance of his or her duties or responsibilities to
the Company, or (v) any unauthorized act or omission by the Optionee that is
injurious in any material respect to the financial condition or business
reputation of the Company.
          (b) The Optionee’s employment will have terminated by reason of
“Disability” if, in the reasonable and good faith judgment of the Company, the
Optionee is totally and permanently disabled and is unable to return to or
perform his or her duties on a full-time basis.
          7. Tax Withholding. The Company shall have the power and the right to
deduct or withhold, or require the Optionee to remit to the Company, an amount
sufficient to satisfy any Federal, state, and local taxes (including the
Optionee’s FICA obligation) required by law to be withheld as a result of any
taxable event arising in connection with the Option, in accordance with the
terms of the Plan and applicable law.
          8. No Right to Employment. Nothing in the Plan or this Agreement shall
confer on the Optionee any right to continue in the employ of, or other
relationship with, the Company, any Company Subsidiary, the Partnership or any
Partnership Subsidiary or limit in any way the right of the Company, any Company
Subsidiary, the Partnership or any Partnership Subsidiary to terminate the
Optionee’s employment or other relationship at any time, with or without cause.
          9. No Rights as a Stockholder. Neither the Optionee nor any of the
Optionee’s successors in interest shall have any rights as a stockholder of the
Company with respect to any shares of Stock subject to the Stock Option until
the date such shares are credited in electronic form in an account by the
Company’s transfer agent or other designee or the date of issuance of a stock
certificate for such shares.
          10. Miscellaneous.
          (a) Entire Agreement. This Agreement and the Plan contain the entire
understanding and agreement of the Company and the Optionee concerning the
subject matter

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hereof, and supersede all earlier negotiations and understandings, written or
oral, between the parties with respect thereto.
          (b) Captions. The captions and section numbers appearing in this
Agreement are inserted only as a matter of convenience. They do not define,
limit, construe or describe the scope or intent of the provisions of this
Agreement.
          (c) Counterparts. This Agreement may be executed in counterparts, each
of which when signed by the Company or the Optionee will be deemed an original
and all of which together will be deemed the same agreement.
          (d) Notices. Any notice or communication having to do with this
Agreement must be given by personal delivery or by certified mail, return
receipt requested, addressed, if to the Company or the Committee, to the
attention of the Legal Department of the Company at the principal office of the
Company and, if to the Optionee, to the Optionee’s last known address contained
in the personnel records of the Company.
          (e) Succession and Transfer. Each and all of the provisions of this
Agreement are binding upon and inure to the benefit of the Company and the
Optionee and their successors, assigns and legal representatives; provided,
however, that the Option granted hereunder shall not be transferable by the
Optionee (or the Optionee’s successor or legal representative) other than by
will or by the laws of descent and distribution and may be exercised during the
lifetime of the Optionee, only by the Optionee or by his or her guardian or
legal representative.
          (f) Amendments. Subject to the provisions of the Plan, this Agreement
may be amended or modified at any time by an instrument in writing signed by the
parties hereto.
          (g) Governing Law. This Agreement and the rights of all persons
claiming hereunder will be construed and determined in accordance with the laws
of the State of Maryland without giving effect to the choice of law principles
thereof.
          (h) Plan Controls. This Agreement is made under and subject to the
provisions of the Plan, and all of the provisions of the Plan are hereby
incorporated by reference into this Agreement. In the event of any conflict
between the provisions of this Agreement and the provisions of the Plan, the
provisions of the Plan shall govern. By signing this Agreement, the Optionee
confirms that he or she has received a copy of the Plan and has had an
opportunity to review the contents thereof.

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          IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.

              APARTMENT INVESTMENT AND
MANAGEMENT COMPANY
 
       
 
  By:    
 
       
 
  Name:    
 
       
 
  Title:    
 
       
 
            OPTIONEE:
 
       
 
  By:    
 
       
 
  Name:    
 
       

 

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Exhibit A
NOTICE OF EXERCISE OF STOCK OPTION
                                        , 20__
Apartment Investment and Management Company
4582 South Ulster Street Parkway
Suite 1100
Denver, CO 80237
Attn: General Counsel
Ladies and Gentlemen:
     Reference is made to that certain Non-Qualified Stock Option Agreement,
dated as of                                          (the “Agreement”), by and
between Apartment Investment and Management Company (the “Company”) and
                                        .
     I am hereby exercising the Option to purchase                      option
shares at the exercise price of $                     per share, for a total
exercise price of $                    .
     I am paying 100% of the total exercise price with respect to the option
shares as follows:

  —   By enclosing cash and/or a check payable to the Company in the amount of
$_                    .     —   By enclosing a stock certificate duly endorsed
for transfer or accompanied by an appropriately executed stock power in favor of
the Company, representing                      shares of Common Stock.     —  
By enclosing a duly executed assignment of                      units of limited
partnership interest in AIMCO Properties, L.P. (“OP Units”) in favor of the
Company and a certificate representing such OP Units.     —   By cashless
same-day sale. I authorize my broker to pay out of my account to AIMCO, the
total exercise amount listed above and, if applicable, all taxes due for a
Non-Qualified stock option.

     I am paying 100% of the local, state and Federal withholding taxes and/or
all other taxes that the Company has advised me are due as follows:

  —   By enclosing cash and/or a certified or cashier’s check payable to the
Company in the amount of $                    .     —   By hereby authorizing
and directing the Company to withhold all amounts that the Company has advised
me are due ($                    ).

     I acknowledge that the Company has no obligation to issue a certificate
evidencing any option shares purchasable by me until the total exercise price of
such option shares being exercised hereby and all applicable taxes are fully
paid.

                  Very truly yours,    
 
                     
 
      (Signature)    
 
  Name:        
 
  Address:  
 
   
 
   
 
   
 
  Phone:  
 
   
 
  SSN: