Document:

exv10w4

 

	 	 	 	 	 

Exhibit 10.4

AMENDMENT NO. 2

TO THE

THIRD AMENDED AND RESTATED 1997 STOCK OPTION AND INCENTIVE PLAN

OF

AMB PROPERTY CORPORATION

AND AMB PROPERTY, L.P.

     AMB Property Corporation, a corporation organized under the laws of State
of Maryland (the “Company”), hereby adopts this Amendment No. 2 (this
“Amendment”) to the Third Amended and Restated 1997 Stock Option and Incentive
Plan of AMB Property Corporation and AMB Property, L.P. (the “Plan”).
Capitalized terms used in this Amendment without definition shall have the
meanings given to such terms in the Plan.

     WHEREAS, Section 402 of the Sarbanes-Oxley Act of 2002 generally prohibits
any issuer from, directly or indirectly, including through any subsidiary,
extending or maintaining credit, arranging for the extension of credit, or
renewing an extension of credit, in the form of a personal loan to or for any
director or executive officer (or equivalent thereof) of that issuer (“Section
402”);

     WHEREAS, Section 5.2(d) of the Plan generally provides that the Company
may allow payment of option exercises, in whole or in part, through delivery of
a full recourse promissory note bearing interest and payable upon such terms as
may be prescribed by the Committee;

     WHEREAS, Section 10.6 of the Plan generally provides that the Committee
may, in its discretion, extend one or more loans to key employees in connection
with the exercise or receipt of an option, performance award, stock
appreciation right, dividend equivalent or stock payment granted under the
Plan, or the issuance of restricted stock or deferred stock awarded under the
Plan;

     WHEREAS, (a) Section 5.2(d) of the Plan provides that the options under
the Plan may not be exercised by delivery of a promissory note or by a loan
when or where such loan or other extension of credit is prohibited by law, and
(b) Section 10.11 of the Plan provides that, to the extent permitted by
applicable law, the Plan, the options, restricted stock awards, deferred stock
awards, performance awards, stock appreciation rights, dividend equivalents, or
stock payments granted or awarded under the Plan shall be deemed amended to the
extent necessary to conform to applicable laws, rules and regulations;

     WHEREAS, Section 10.2 of the Plan provides that unless otherwise provided
in Section 10.2 of the Plan, the Plan may be wholly or partially amended or
otherwise modified, suspended or terminated at any time or from time to time by
the Board or the Committee;

     WHEREAS, the Board believes it is in the best interest of the Company and
its stockholders to amend the Plan to confirm and clarify that the Plan
conforms to Section 402.

 

 

     NOW, THEREFORE, the Plan is hereby amended as follows:

1. Section 5.2(d). Section 5.2(d) of the Plan is hereby deleted and
replaced to read in its entirety as follows:

          
                
    “(d) Full cash payment to the Secretary of the Company for the shares with
respect to which the Option, or portion thereof, is exercised. However, the
Committee (or the Board, in the case of Options granted to Independent
Directors), may in its discretion (i) allow a delay in payment up to thirty
(30) days from the date the Option, or portion thereof, is exercised; (ii)
allow payment, in whole or in part, through the delivery of shares of Common
Stock owned by the Optionee, duly endorsed for transfer to the Company with a
Fair Market Value on the date of delivery equal to the aggregate exercise price
of the Option or exercised portion thereof; (iii) allow payment, in whole or in
part, through the surrender of shares of Common Stock then issuable upon
exercise of the Option having a Fair Market Value on the date of Option
exercise equal to the aggregate exercise price of the Option or exercised
portion thereof; (iv) allow payment, in whole or in part, through the delivery
of a full recourse promissory note bearing interest (at no less than such rate
as shall then preclude the imputation of interest under the Code) and payable
upon such terms as may be prescribed by the Committee or the Board; or (v)
allow payment through any combination of the consideration provided in the
foregoing subparagraphs (ii), (iii) and (iv); provided, however, that, the
Committee may not allow payment in the manner prescribed in subsection (iv) by
executive officers or directors of the Company. In the case of a promissory
note, the Committee (or the Board, in the case of Options granted to
Independent Directors) may also prescribe the form of such note and the
security to be given for such note. The Option may not be exercised, however,
by delivery of a promissory note or by a loan from the Company when or where
such loan or other extension of credit is prohibited by law.”

2. Section 10.6. Section 10.6 of the Plan is hereby deleted and replaced
to read in its entirety as follows:

                              “10.6. Loans. The Committee may, in its discretion, extend one or more
loans to key Employees in connection with the exercise or receipt of an Option,
Performance Award, Stock Appreciation Right, Dividend Equivalent or Stock
Payment granted under this Plan, or the issuance of Restricted Stock or
Deferred Stock awarded under this Plan; provided, however, that, the Committee
may not extend any such loans to executive officers or directors of the
Company. The terms and conditions of any such loan shall be set by the
Committee.”

(Signature Page Follows)

2

 

     I hereby certify that the foregoing Amendment to the Plan was duly adopted
by the Board of Directors of AMB Property Corporation effective as of September
23, 2004.

     Executed on this 23rd day of September, 2004.

	 	 	 	 	 
	 	 	 
	 	                                    /s/ Tamra D. Browne
 	 
	 	Tamra D. Browne 	 
	 	Secretary 	 
	 

3<PAGE>

                                                                    Exhibit 10.1

                               HMN FINANCIAL, INC.
                             2001 OMNIBUS STOCK PLAN

                        INCENTIVE STOCK OPTION AGREEMENT

Full Name of Optionee:

No. of Shares Covered:                               Date of Grant:

Exercise Price Per Share:                            Expiration Date:

Exercise Schedule pursuant to Section 4:

                                         No. of Shares as to Which Option
         Date of Vesting                        Becomes Exercisable

This is an INCENTIVE STOCK OPTION AGREEMENT (this "Agreement") between HMN
Financial, Inc., a Delaware corporation (the "Company"), and the optionee
identified above (the "Optionee") effective as of the date of grant specified
above.

                                    RECITALS

      WHEREAS, the Company maintains the HMN Financial, Inc. 2001 Omnibus Stock
Plan (the "Plan");

      WHEREAS, the Board of Directors of the Company has appointed the
Compensation Committee (the "Committee") with the authority to determine the
awards to be granted under the Plan; and

      WHEREAS, the Committee or its designee has determined that the Optionee is
eligible to receive an award under the Plan in the form of a Incentive Stock
Option (the "Option") and has set the terms thereof;

      NOW, THEREFORE, the Company hereby grants this Option to the Optionee
      under the terms set by the Committee as follows:

<PAGE>

                                     TERMS*

1.    GRANT. Subject to the terms of the Plan, the Optionee is granted this
      Option to purchase the number of Shares specified at the beginning of this
      Agreement on the terms set forth herein.

2.    EXERCISE PRICE. The price to the Optionee of each Share subject to this
      Option is the exercise price specified at the beginning of this Agreement.

3.    INCENTIVE STOCK OPTION. This Option is intended to be an "incentive stock
      option" within the meaning of Section 422 of the Internal Revenue Code of
      1986, as amended (the "Code").

4.    EXERCISE SCHEDULE. Subject to the terms of the Plan and Section 8 of this
      Agreement, the Option shall become exercisable as to the number of Shares
      and on the dates specified in the exercise schedule at the beginning of
      this Agreement. The exercise schedule shall be cumulative; thus, to the
      extent the Option has not already been exercised and has not expired,
      terminated, or been canceled, the Optionee may at any time, and from time
      to time, purchase any portion of the Shares then purchasable under the
      exercise schedule.

      This Option may be exercised in full (notwithstanding the exercise
      schedule) under the circumstances described in Section 8 of this Agreement
      if it has not expired prior thereto.

5.    EXPIRATION. This Option shall expire at 4:00 p.m. Central Time on the
      earliest of:

            (a) the expiration date specified at the beginning of this Agreement
            (which date may not be later than ten years after the date of grant
            or, if the Optionee owns or is deemed to own stock possessing more
            than 10% of the combined voting power of all classes of stock of the
            Company, five years after the date of grant);

            (b) the last day of the period as of or following the termination of
            employment of the Optionee during which this Option can be exercised
            (as specified in Section 7 of this Agreement); or

            (c) the date (if any) fixed for cancellation pursuant to Section 8
            of this Agreement.

      No one may exercise this Option after it has expired, notwithstanding any
      other provision of this Agreement.

6.    PROCEDURE TO EXERCISE OPTION.

      Notice of Exercise. Subject to the terms of this Agreement, this Option
      may be exercised by delivering written notice of exercise to the Company
      at its headquarters in the form

---------------
   *  Unless the context indicates otherwise, capitalized terms that are not
      defined in this Agreement have the meanings set forth in the Plan as it
      currently exists or as it may be amended in the future.

                                       A-2
<PAGE>

      attached to this Agreement or a similar form containing substantially the
      same information and addressed or delivered to the President. The notice
      shall state the election to exercise the Option, the number of Shares to
      be purchased, and shall be signed by the person exercising this Option. If
      the person exercising this Option is not the Optionee, he or she also must
      submit appropriate proof of his or her right to exercise this Option.

      Tender of Payment. Any notice of exercise shall be accompanied by:

                        (a) payment (by check, bank draft, or money order
                  payable to the Company) of the full purchase price of the
                  Shares being purchased;

            (b)   To the extent permitted by law, a broker-assisted cashless
                  exercise in which the Optionee irrevocably instructs a broker
                  to deliver proceeds of a sale of all or a portion of the
                  Shares to be issued pursuant to the exercise (or a loan
                  secured by such Shares) to the Company in payment of the
                  purchase price of such Shares;

            (c)   By delivery to the Company of unencumbered Shares having an
                  aggregate Fair Market Value (as defined in the Plan) on the
                  date of exercise equal to the purchase price of such Shares;
                  or

                        (d) any combination of (a), (b), or (c).

      Notwithstanding the other terms of this subparagraph, the Optionee shall
      not be permitted to pay any portion of the purchase price of the Shares
      being purchased with Shares if the Committee believes that payment in such
      manner is undesirable.

      Delivery of Certificates. As soon as practicable after the Company
      receives a properly executed notice and the purchase price provided for
      above, it shall deliver to the person exercising the Option, in the name
      of such person, one or more certificates representing the Shares being
      purchased. The Company shall pay any original issue or transfer taxes with
      respect to the issue or transfer of the Shares and all fees and expenses
      incurred by it in connection therewith. All Shares so issued shall be
      fully paid and nonassessable. Notwithstanding anything to the contrary in
      this Agreement, the Company shall not be required to issue or deliver any
      Shares before the completion of such registration or other qualification
      of such Shares under any state law, rule, or regulation as the Company
      determines to be necessary or desirable.

7.    EMPLOYMENT REQUIREMENT. This Option may be exercised only while the
      Optionee remains employed with the Company or an Affiliate, and only if
      the Optionee has been continuously so employed since the date of this
      Agreement; provided that:

      (a)   This Option may be exercised for three months following the day the
            Optionee's employment by the Company ceases if such cessation of
            employment is for a reason other than death or disability, but only
            to the extent that it was exercisable immediately prior to
            termination of employment.

                                       A-3
<PAGE>

      (b)   This Option may be exercised in full within one year after the
            Optionee's employment by the Company ceases if such cessation of
            employment is because of death, and the Optionee's employment by the
            Company has been continuous between the date of this Option and a
            date not more than three months prior to death.

      (c)   This Option may be exercised in full within one year after the
            Optionee's employment by the Company ceases if such cessation of
            employment is because of disability, and Optionee's employment by
            the Company has been continuous between the date of this Option and
            the date of such disability.

      (d)   If the Optionee's employment terminates after a declaration made
            pursuant to Section 8 of this Agreement, this Option may be
            exercised at any time permitted by such declaration.

            Notwithstanding the above, this Option may not be exercised after it
            has expired.

8.    ACCELERATION OF OPTION.

      Disability. This Option may be exercised in full (notwithstanding the
      exercise schedule) if the Optionee's employment with the Company or an
      Affiliate terminates because of disability, and Optionee's employment by
      the Company or its Affiliates has been continuous between the date of this
      Option and the date of such disability.

      Death. This Option may be exercised in full (notwithstanding the exercise
      schedule) if the Optionee dies while employed by the Company or an
      Affiliate, and the Optionee's employment by the Company or its Affiliates
      has been continuous between the date of this Option and a date not more
      than three months prior to death.

      Fundamental Change. At least 10 days before a Fundamental Change, the
      Committee may, but shall not be obligated to, declare, and provide written
      notice to the Optionee of the declaration, that this Option shall be
      cancelled at the time of, or immediately before the occurrence of, the
      Fundamental Change (unless it is exercised before the Fundamental Change)
      in exchange for payment to the Optionee, within 10 days after the
      Fundamental Change, of cash equal to the amount, for each Share covered by
      the cancelled Option, by which the event proceeds per share (as defined
      below) exceeds the exercise price per Share covered by this Option. This
      Option may be exercised in full (notwithstanding the exercise schedule) at
      any time after such declaration and before the time of cancellation of
      this Option. This Option, to the extent it has not been exercised before
      the Fundamental Change, shall be cancelled at the time of, or immediately
      before, the Fundamental Change, as provided in the declaration, and this
      Agreement shall terminate at the time of such cancellation, subject to the
      payment obligations of the Company provided in this paragraph.
      Notwithstanding the foregoing, no person holding an Option shall be
      entitled to the payment or vesting provided for in this Section 8 if the
      Option has terminated, expired, or been cancelled pursuant to this
      Agreement.

                                       A-4
<PAGE>

      In the case of a Fundamental Change that consists of the merger or
      consolidation or statutory share exchange, the Committee, instead of the
      declaration above, may make appropriate provision for the protection of
      this Option by the substitution, in lieu of this Option, of an option to
      purchase appropriate voting common stock or appropriate voting common
      stock of the corporation surviving any such merger or consolidation or, if
      appropriate, the parent corporation of the Company or such surviving
      corporation.

      For purposes of the preceding paragraphs, the "event proceeds per share"
      is the cash plus the fair market value (as determined in good faith by the
      Committee) of the non-cash consideration to be received per Share by the
      shareholders of the Company upon the occurrence of the Fundamental Change.

9.    LIMITATION ON TRANSFER. While the Optionee is alive, only the Optionee (or
      his or her legal representative) may exercise this Option. This Option may
      not be assigned or transferred other than by will or the laws of descent
      and distribution or pursuant to a qualified domestic relations order as
      defined by the Code, or Title I of ERISA, or the rules thereunder, and
      shall not be subject to pledge, hypothecation, execution, attachment, or
      similar process. Any attempt to assign, transfer, pledge, hypothecate, or
      otherwise dispose of this Option contrary to the provisions hereof, and
      the levy of any attachment or similar process upon this Option, shall be
      void.

10.   NO STOCKHOLDER RIGHTS BEFORE EXERCISE. No person shall have any of the
      rights of a stockholder of the Company with respect to any Share subject
      to this Option until the Share actually is issued to him upon exercise of
      this Option.

11.   DISCRETIONARY ADJUSTMENT. The Committee may make appropriate adjustments
      in the number of Shares subject to this Option and in the purchase price
      per Share to give effect to any adjustments made in the number of
      outstanding Shares through a Fundamental Change, recapitalization,
      reclassification, stock dividend, stock split, stock combination or other
      relevant change; provided that, fractional Shares shall be rounded to the
      nearest whole Share.

12.   TAX WITHHOLDING. Delivery of Shares upon exercise of this Option shall be
      subject to any required withholding taxes. As a condition precedent to
      receiving Shares upon exercise of this Option, the Optionee may be
      required to pay to the Company, in accordance with the provisions of the
      Plan, an amount equal to the amount of any required withholdings.

13.   INTERPRETATION OF THIS AGREEMENT. All decisions and interpretations made
      by the Committee with regard to any question arising hereunder or under
      the Plan shall be binding and conclusive upon the Company and the
      Optionee. If there is any inconsistency between the provisions of this
      Agreement and the Plan, the provisions of the Plan shall govern.

14.   DISCONTINUANCE OF EMPLOYMENT. This Agreement shall not give the Optionee a
      right to continued employment with the Company or any Affiliate, and the
      Company or Affiliate employing the Optionee may terminate his or her
      employment and otherwise deal with the Optionee without regard to the
      effect it may have upon him under this Agreement.

                                       A-5
<PAGE>

15.   OBLIGATION TO RESERVE SUFFICIENT SHARES. The Company shall at all times
      during the term of this Option reserve and keep available a sufficient
      number of Shares to satisfy this Agreement.

16.   BINDING EFFECT. This Agreement shall be binding in all respects on the
      heirs, representatives, successors and assigns of the Optionee.

17.   CHOICE OF LAW. This Agreement is entered into under the laws of the State
      of Delaware and shall be construed and interpreted thereunder (without
      regard to its conflict-of-law principles).

18.   ENTIRE AGREEMENT. This Agreement and the Plan set forth the entire
      agreement and understanding of the parties hereto with respect to the
      grant and exercise of this Option and the administration of the Plan and
      supersede all prior agreements, arrangements, plans, and understandings
      relating to the grant and exercise of this Option and the administration
      of the Plan.

19.   AMENDMENT AND WAIVER. Except as provided in the Plan, this Agreement may
      be amended, waived, modified, or canceled only by a written instrument
      executed by the parties or, in the case of a waiver, by the party waiving
      compliance.

20.   ACKNOWLEDGMENT OF RECEIPT OF COPY. By execution hereof, the Optionee
      acknowledges having received a copy of the Plan.

      IN WITNESS WHEREOF, the Optionee and the Company have executed this
Agreement as of the ___ day of _______________, 2004.

HMN FINANCIAL, INC.                          OPTIONEE

By ________________________________          ___________________________________
   Its ____________________________          Optionee

                                       A-6
<PAGE>

                                                                    ATTACHMENT 1

                       _________________________, ________

HMN Financial, Inc.
1016 Civic Center Drive Northwest
Rochester, MN 55901
Attention: President

Ladies and Gentlemen:

      I hereby exercise the following option (the "Option") granted to me with
respect to the number of shares of Common Stock, par value $0.01 ("Shares"), of
HMN Financial, Inc. (the "Company"), indicated below:

            NAME:                                   ____________________________

            DATE OF GRANT OF OPTION:                ____________________________

            EXERCISE PRICE PER SHARE:               ____________________________

            NUMBER OF SHARES WITH RESPECT TO
            WHICH THE OPTION IS HEREBY EXERCISED:   ____________________________

            TOTAL EXERCISE PRICE:                   ____________________________

            [ ]    Enclosed with this letter is a check, bank draft or money
            order in the amount of the Total Exercise Price.

            [ ]    I hereby agree to pay the Total Exercise Price within five
            business days of the date hereof and, as stated in the attached
            Broker's Letter, I have delivered irrevocable instructions to
            __________________________________ to promptly deliver to the
            Company the amount of sale or loan proceeds from the Shares to be
            issued pursuant to this exercise necessary to satisfy my obligation
            hereunder to pay the Total Exercise Price.

            [ ]    Enclosed with this letter is a certificate evidencing
            unencumbered Shares (duly endorsed in blank) having an aggregate
            Fair Market Value equal to or in excess of the Total Exercise Price.

      If I am enclosing Shares with this letter, I hereby represent and warrant
that I am the owner of such Shares free and clear of all liens, security
interests and other restrictions or encumbrances. I agree that I will pay any
required withholding taxes in connection with this exercise.

                                       A-7
<PAGE>

      Please issue a certificate (the "Certificate") for the number of Shares
with respect to which the Option is being exercised in the name of the person
indicated below and deliver the Certificate to the address indicated below:

            NAME IN WHICH TO ISSUE CERTIFICATE:     ____________________________

            ADDRESS TO WHICH CERTIFICATE SHOULD
            BE DELIVERED:                           ____________________________
                                                    ____________________________
                                                    ____________________________
                                                    ____________________________

            PRINCIPAL MAILING ADDRESS FOR HOLDER
            OF THE CERTIFICATE (IF DIFFERENT
            FROM ABOVE):                            ____________________________
                                                    ____________________________
                                                    ____________________________
                                                    ____________________________

                                                 Very truly yours,

                                                 _______________________________
                                                 Signature

                                                 _______________________________
                                                 Name, please print

                                                 _______________________________
                                                 Social Security Number

                                       A-8
<PAGE>

                         _____________________, ________

HMN Financial, Inc.
1016 Civic Center Drive Northwest
Rochester, MN 55901
Attention: President

Ladies and Gentlemen:

            NAME OF OPTIONEE:                       ____________________________

            DATE OF GRANT OF OPTION:                ____________________________

            EXERCISE PRICE PER SHARE:               ____________________________

            NUMBER OF SHARES WITH RESPECT TO
            WHICH THE OPTION IS TO BE EXERCISED:    ____________________________

            TOTAL EXERCISE PRICE:                   ____________________________

      The above Optionee has requested that we finance the exercise of the above
Option to purchase Shares of common stock of HMN Financial, Inc. (the "Company")
and has given us irrevocable instructions to promptly deliver to the Company the
amount of sale or loan proceeds from the Shares to be issued pursuant to such
exercise to satisfy the Optionee's obligation to pay the Total Exercise Price.

                                            Very truly yours,

                                            ____________________________________
                                            Broker Name

                                            By _________________________________

                                       A-9

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