Document:

exv4w1

 

Exhibit 4.1

WELLCARE HEALTH PLANS, INC.

2005 EMPLOYEE STOCK PURCHASE PLAN

 

 

WELLCARE HEALTH PLANS, INC.

2005 EMPLOYEE STOCK PURCHASE PLAN

	 	 	 	 	 
	1. Purpose
	 	 	1	 
	2. Definitions
	 	 	1	 
	3. Eligibility
	 	 	3	 
	(a) First Offering Date
	 	 	3	 
	(b) Subsequent Offering Periods
	 	 	3	 
	4. Offering Periods
	 	 	3	 
	(a) In General
	 	 	3	 
	(b) Changes by Committee
	 	 	3	 
	5. Participation
	 	 	4	 
	(a) Entry Dates
	 	 	3	 
	(b) Special Rule for First Offering Date
	 	 	3	 
	6. Plan Contributions
	 	 	4	 
	(a) Contribution by Payroll Deduction
	 	 	4	 
	(b) Payroll Deduction Election on Enrollment Agreement
	 	 	4	 
	(c) Commencement of Payroll Deduction
	 	 	4	 
	(d) Automatic Continuation of Payroll Deductions
	 	 	4	 
	(e) Change of Payroll Deduction Election
	 	 	4	 
	7. Grant of Option
	 	 	5	 
	(a) Shares of Common Stock Subject to Option
	 	 	5	 
	(b) Exercise Price
	 	 	5	 
	(c) Fair Market Value
	 	 	5	 
	(d) Limitation on Option that may be Granted
	 	 	5	 
	(e) No Rights as Shareholder
	 	 	6	 
	8. Exercise of Options
	 	 	6	 
	(a) Automatic Exercise
	 	 	6	 
	(b) Carryover of Excess Contributions
	 	 	6	 
	9. Issuance of Shares
	 	 	6	 
	(a) Delivery of Shares
	 	 	6	 
	(b) Registration of Shares
	 	 	6	 
	(c) Compliance with Applicable Laws
	 	 	6	 
	(d) Withholding
	 	 	6	 
	10. Participant Accounts
	 	 	7	 
	(a) Bookkeeping Accounts Maintained
	 	 	7	 
	(b) Participant Account Statements
	 	 	7	 
	(c) Withdrawal of Account Balance Following Exercise Date
	 	 	7	 
	11. Designation of Beneficiary
	 	 	7	 
	(a) Designation
	 	 	7	 
	(b) Change of Designation
	 	 	7	 
	12. Transferability
	 	 	7	 
	13. Withdrawal; Termination of Employment
	 	 	7	 

 

 

	 	 	 	 	 
	(a) Withdrawal
	 	 	8	 
	(b) Effect of Withdrawal on Subsequent Participation
	 	 	8	 
	(c) Termination of Employment
	 	 	8	 
	14. Common Stock Available under the Plan
	 	 	8	 
	(a) Number of Shares
	 	 	8	 
	(b) Adjustments Upon Changes in Capitalization; Corporate
Transactions
	 	 	9	 
	15. Administration
	 	 	9	 
	(a) Committee
	 	 	10	 
	(b) Requirements of Exchange Act
	 	 	10	 
	16. Amendment, Suspension and Termination of the Plan
	 	 	10	 
	(a) Amendment of the Plan
	 	 	10	 
	(b) Suspension of the Plan
	 	 	10	 
	(c) Termination of the Plan
	 	 	10	 
	17. Notices
	 	 	10	 
	18. Expenses of the Plan
	 	 	11	 
	19. No Employment Rights
	 	 	11	 
	20. Applicable Law
	 	 	11	 
	21. Additional Restrictions of Rule 16b-3
	 	 	11	 
	22. Effective Date
	 	 	11	 

 

 

WELLCARE HEALTH PLANS, INC.

2005 EMPLOYEE STOCK PURCHASE PLAN

     1. Purpose. The purpose of the Plan is to provide an incentive for
present and future employees of the Company and any Designated Subsidiary to
acquire a proprietary interest (or increase an existing proprietary interest)
in the Company through the purchase of Common Stock. It is the Company’s
intention that the Plan qualify as an “employee stock purchase plan” under
Section 423 of the Code. Accordingly, the provisions of the Plan shall be
administered, interpreted and construed in a manner consistent with the
requirements of that section of the Code.

     2. Definitions.

          (a) “Applicable Percentage” means, with respect to each Offering Period,
ninety-five percent (95%), unless and until such Applicable Percentage is
increased or decreased by the Committee, in its sole discretion, provided that
any such increase or decrease in the Applicable Percentage with respect to a
given Offering Period must be established not less than fifteen (15) days prior
to the Offering Date thereof.

          (b) “Board” means the Board of Directors of the Company.

          (c) “Code” means the Internal Revenue Code of 1986, as amended, and any
successor thereto.

          (d) “Committee” means the committee appointed by the Board to administer
the Plan as described in Section 15 of the Plan or, if no such Committee is
appointed, the Board.

          (e) “Common Stock” means the Company’s common stock, par value $0.01 per
share.

          (f) “Company” means WellCare Health Plans, Inc., a Delaware corporation.

          (g) “Compensation” means, with respect to each Participant for each pay
period, the full base salary and overtime paid to such Participant by the
Company or a Designated Subsidiary. Except as otherwise determined by the
Committee, “Compensation” does not include: (i) bonuses or commissions, (ii)
any amounts contributed by the Company or a Designated Subsidiary to any
pension plan, (iii) any automobile or relocation allowances (or reimbursement
for any such expenses), (iv) any amounts paid as a starting bonus or finder’s
fee, (v) any amounts realized from the exercise of any stock options or
incentive awards, (vi) any amounts paid by the Company or a Designated
Subsidiary for other fringe benefits, such as health and welfare,
hospitalization and group life insurance benefits, or perquisites, or paid in
lieu of such benefits, or (vii) other similar forms of extraordinary
compensation.

 

 

          (h) “Continuous Status as an Employee” means the absence of any
interruption or termination of service as an Employee. Continuous Status as an
Employee shall not be considered interrupted in the case of a leave of absence
agreed to in writing by the Company or the Designated Subsidiary that employs
the Employee, provided that such leave is for a period of not more than 90 days
or reemployment upon the expiration of such leave is guaranteed by contract or
statute.

          (i) “Designated Subsidiaries” means the Subsidiaries that have been
designated by the Board from time to time in its sole discretion as eligible to
participate in the Plan.

          (j) “Employee” means any employee of the Company or a Designated
Subsidiary. However, the term Employee shall not include the Chief Executive
Officer, the President, any Senior Vice President, Medical Director, Vice
President or any regional president, vice president, chief operating officer or
similar position or any other Officers of the Company, provided such employee
is considered a “highly compensated employee” within the meaning of Code
Section 414(q), taking into account the application of Code Section
414(q)(1)(B)(ii) for the preceding year.

          (k) “Entry Date” means the First Offering Date, and thereafter, with
respect to each eligible Employee, the date on which the eligible Employee
files an enrollment agreement with the Company.

          (l) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

          (m) “Exercise Date” means the last Trading Day of each Offering Period.

          (n) “Exercise Price” means the price per share of Common Stock offered in
a given Offering Period determined as provided in Section 7(b).

          (o) “Fair Market Value” means, with respect to a share of Common Stock,
the Fair Market Value as determined under Section 7(c).

          (p) “First Offering Date” means the first Trading Day on or after January
1, 2005.

          (q) “Offering Date” means the first Trading Day of each Offering Period.

          (r) “Offering Period” means, subject to adjustment as provided in Section
4(b), the quarterly periods during which the Company’s Common Stock will be
offered under the Plan, beginning on each Trading Day on or after each January
1, April 1, July 1 and October 1 and ending on the last Trading Day on or
before the immediately following March 31, June 30, September 30 or December 31
of each year while the Plan is in effect. The initial Offering Period shall be
the period beginning on the First Offering Date and ending on the last Trading
Day on or before March 31, 2005.

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          (s) “Officer” means a person who is an officer of the Company within the
meaning of Section 16 under the Exchange Act and the rules and regulations
promulgated thereunder.

          (t) “Participant” means an Employee who has elected to participate in the
Plan by filing an enrollment agreement with the Company as provided in Section
5 hereof.

          (u) “Plan” means this WellCare Health Plans, Inc. 2005 Employee Stock
Purchase Plan.

          (v) “Plan Contributions” means, with respect to each Participant, the lump
sum cash transfers, if any, made by the Participant to the Plan pursuant to
Section 6(a) hereof, plus the after-tax payroll deductions, if any, withheld
from the Compensation of the Participant and contributed to the Plan for the
Participant as provided in Section 6 hereof, and any other amounts contributed
to the Plan for the Participant in accordance with the terms of the Plan.

          (w) “Subsidiary” means any corporation, domestic or foreign, of which the
Company owns, directly or indirectly, 50% or more of the total combined voting
power of all classes of stock, and that otherwise qualifies as a “subsidiary
corporation” within the meaning of Section 424(f) of the Code.

          (x) “Trading Day” means a day on which the national stock exchanges and
the Nasdaq system are open for trading.

     3. Eligibility.

          (a) First Offering Date. Any Employee who has completed at least one (1)
month of employment with the Company or any Subsidiary as of the First Offering
Date shall be eligible to become a Participant as of the First Offering Date.

          (b) Subsequent Offering Periods. Any Employee who has completed at least
one (1) month of employment with the Company or any Subsidiary shall be
eligible to become a Participant as of any subsequent Entry Date under the
Plan.

     4. Offering Periods.

          (a) In General. The Plan shall generally be implemented by a series of
successive Offering Periods, with purchases of Common Stock occurring on each
Exercise Date.

          (b) Changes by Committee. The Committee shall have the power to make
changes to the duration and/or the frequency of Offering Periods with respect
to future offerings, if any such change is announced at least five (5) days
prior to the scheduled beginning of the first Offering Period to be affected.
In addition, the Committee may shorten the duration of any Offering Period then
in progress, if such change is announced at least thirty (30) days prior to the
date on which the Committee proposes that the Offering Period terminate.

3

 

     5. Participation.

          (a) Entry Dates. Employees meeting the eligibility requirements of
Section 3 hereof may elect to participate in the Plan commencing on any Entry
Date by completing an enrollment agreement on the form provided by the Company
and filing the enrollment agreement with the Company.

     6. Plan Contributions.

          (a) Contribution by Payroll Deduction. Except as otherwise authorized or
required by the Committee, all contributions to the Plan shall be made only by
payroll deductions. The Committee may, but need not, permit Participants to
make after-tax contributions to the Plan at such times and subject to such
terms and conditions as the Committee may in its discretion determine. All
such additional contributions shall be made in a manner consistent with the
provisions of Section 423 of the Code or any successor thereto, and shall be
treated in the same manner as payroll deductions contributed to the Plan as
provided herein.

          (b) Payroll Deduction Election on Enrollment Agreement. At the time a
Participant files the enrollment agreement with respect to an Offering Period,
the Participant may authorize payroll deductions to be made on each payroll
date during the portion of the Offering Period that he or she is a Participant
in an amount not less than 1% and not more than 10% of the Participant’s
Compensation on each payroll date during the portion of the Offering Period
that he or she is a Participant; provided, however, that no Participant’s Plan
Contributions may total more than $3,000 in any one calendar year.

          (c) Commencement of Payroll Deductions. Except as otherwise determined by
the Committee under rules applicable to all Participants, payroll deductions
for Participants enrolling in the Plan shall commence with the earliest
administratively practicable payroll period that begins on or after the
Participant’s Entry Date.

          (d) Automatic Continuation of Payroll Deductions. Unless a Participant
elects otherwise prior to the Exercise Date of an Offering Period, such
Participant shall be deemed (i) to have elected to participate in the
immediately succeeding Offering Period and (ii) to have authorized the same
payroll deduction for the immediately succeeding Offering Period as was in
effect for the Participant immediately prior to the commencement of the
succeeding Offering Period.

          (e) Change of Payroll Deduction Election. A Participant may decrease or
increase the rate or amount of his or her payroll deductions during an Offering
Period (within the limitations of Section 6(b) above) by completing and filing
with the Company a new enrollment agreement authorizing a change in the rate or
amount of payroll deductions; provided, that a Participant may not change the
rate or amount of his or her payroll deductions more than once in any Offering
Period. Except as otherwise determined by the Committee under rules applicable
to all Participants, the change in rate or amount shall be effective as of the
earliest administratively practicable payroll period that begins on or after
the date the Company receives the new enrollment agreement. Additionally, a
Participant may discontinue his or her participation in the Plan as provided in
Section 13(a).

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     7. Grant of Option.

          (a) Shares of Common Stock Subject to Option. On each Offering Date,
subject to the limitations set forth in Section 6(b), Section 7(d), and this
Section 7(a), a Participant shall be granted an option to purchase on the
Exercise Date of the Offering Period (at the Exercise Price determined as
provided in Section 7(b) below) up to a number of shares of Common Stock
determined by dividing such Participant’s Plan Contributions accumulated prior
to such Exercise Date and retained in the Participant’s account as of such
Exercise Date by the Exercise Price; provided that the maximum number of shares
a Participant may purchase on any Exercise Date shall be 500.

          (b) Exercise Price. The Exercise Price per share of Common Stock offered
to each Participant in a given Offering Period shall be the Applicable
Percentage of the Fair Market Value of a share of Common Stock on the Exercise
Date.

          (c) Fair Market Value. The Fair Market Value of a share of Common Stock
on a given date shall be determined by the Committee in its discretion;
provided, that if there is a public market for the Common Stock, the Fair
Market Value per share shall be either (i) in the event the Common Stock is
listed on a stock exchange, the closing price of the Common Stock on such
exchange on such date (or, in the event that the Common Stock is not traded on
such date, on the immediately preceding trading date), as reported in The Wall
Street Journal, (ii) the closing price of the Common Stock on such date (or, in
the event that the Common Stock is not traded on such date, on the immediately
preceding trading date), as reported by the National Association of Securities
Dealers Automated Quotation (Nasdaq) National Market System, (iii) if such
price is not reported, the average of the bid and asked prices for the Common
Stock on such date (or, in the event that the Common Stock is not traded on
such date, on the immediately preceding trading date), as reported by Nasdaq,
or (iv) if no such quotations are available for a date within a reasonable time
prior to the valuation date, the value of the Common Stock as determined by the
Committee using any reasonable means.

          (d) Limitation on Option that may be Granted. Notwithstanding any
provision of the Plan to the contrary, no Participant shall be granted an
option under the Plan (i) to the extent that if, immediately after the grant,
such Employee (or any other person whose stock would be attributed to such
Employee pursuant to Section 424(d) of the Code) would own stock and/or hold
outstanding options to purchase stock possessing 5% or more of the total
combined voting power or value of all classes of stock of the Company or of any
Subsidiary of the Company, or (ii) to the extent that his or her rights to
purchase stock under all employee stock purchase plans of the Company and its
Subsidiaries intended to qualify under Section 423 of the Code accrue at a rate
which exceeds $25,000 of fair market value of stock (determined at the time
such option is granted) for each calendar year in which such option is
outstanding at any time.

          (e) No Rights as Shareholder. A Participant will have no interest or
voting right in shares covered by his option until such option has been
exercised.

5

 

     8. Exercise of Options.

          (a) Automatic Exercise. A Participant’s option for the purchase of shares
will be exercised automatically on each Exercise Date, and the maximum number
of full shares subject to the option shall be purchased for the Participant at
the applicable Exercise Price with the accumulated Plan Contributions then
credited to the Participant’s account under the Plan. No fractional shares
shall be purchased for any Participant’s account. During a Participant’s
lifetime, a Participant’s option to purchase shares hereunder is exercisable
only by the Participant.

          (b) Carryover of Excess Contributions. Any amount remaining to the credit
of a Participant’s account after the purchase of shares by the Participant on
an Exercise Date, or which is insufficient to purchase a full share of Common
Stock, shall remain in the Participant’s account, and be carried over to the
next Offering Period, unless the Participant withdraws from participation in
the Plan or elects to withdraw his or her account balance in accordance with
Section 10(c).

     9. Issuance of Shares.

          (a) Delivery of Shares. As promptly as practicable after each Exercise
Date, the Company shall arrange for the delivery to each Participant (or the
Participant’s beneficiary), as appropriate, or to a custodial account for the
benefit of each Participant (or the Participant’s beneficiary) as appropriate,
of a certificate representing the shares purchased upon exercise of the
Participant’s option.

          (b) Registration of Shares. Shares to be delivered to a Participant under
the Plan will be registered in the name of the Participant or in the name of
the Participant and his or her spouse, as requested by the Participant.

          (c) Compliance with Applicable Laws. The Plan, the grant and exercise of
options to purchase shares under the Plan, and the Company’s obligation to sell
and deliver shares upon the exercise of options to purchase shares shall be
subject to compliance with all applicable federal, state and foreign laws,
rules and regulations and the requirements of any stock exchange on which the
shares may then be listed.

          (d) Withholding. The Company may make such provisions as it deems
appropriate for withholding by the Company pursuant to federal or state tax
laws of such amounts as the Company determines it is required to withhold in
connection with the purchase or sale by a Participant of any Common Stock
acquired pursuant to the Plan. The Company may require a Participant to
satisfy any relevant tax requirements before authorizing any issuance of Common
Stock to such Participant.

     10. Participant Accounts.

          (a) Bookkeeping Accounts Maintained. Individual bookkeeping accounts will
be maintained for each Participant in the Plan to account for the balance of
his Plan Contributions, options issued, and shares purchased under the Plan.
However, all Plan Contributions made for a Participant shall be deposited in
the Company’s general corporate

6

 

accounts, and no interest shall accrue or be credited with respect to a
Participant’s Plan Contributions. All Plan Contributions received or held by
the Company may be used by the Company for any corporate purpose, and the
Company shall not be obligated to segregate or otherwise set apart such Plan
Contributions from any other corporate funds.

          (b) Participant Account Statements. Statements of account will be given
to Participants from time to time, which statements will set forth the amounts
of payroll deductions, the per share purchase price(s), the number of shares
purchased and the remaining cash balance, if any.

          (c) Withdrawal of Account Balance Following Exercise Date. A Participant
may elect at any time within the first thirty (30) days following any Exercise
Date, or at such other time as the Committee may from time to time prescribe,
to receive in cash any amounts carried-over in accordance with Section 8(b).
An election under this Section 10(c) shall not be treated as a withdrawal from
participation in the Plan under Section 13(a).

     11. Designation of Beneficiary.

          (a) Designation. A Participant may file a written designation of a
beneficiary who is to receive any shares and cash, if any, from the
Participant’s account under the Plan in the event of the Participant’s death
subsequent to an Exercise Date on which the Participant’s option hereunder is
exercised but prior to delivery to the Participant of such shares and cash. In
addition, a Participant may file a written designation of a beneficiary who is
to receive any cash from the Participant’s account under the Plan in the event
of the Participant’s death prior to the exercise of the option.

          (b) Change of Designation. A Participant’s beneficiary designation may be
changed by the Participant at any time by written notice. In the event of the
death of a Participant and in the absence of a beneficiary validly designated
under the Plan who is living at the time of such Participant’s death, the
Company shall deliver such shares and/or cash to the executor or administrator
of the estate of the Participant, or if no such executor or administrator has
been appointed (to the knowledge of the Company), the Company, in its
discretion, may deliver such shares and/or cash to the spouse or to any one or
more dependents or relatives of the Participant, or if no spouse, dependent or
relative is known to the Company, then to such other person as the Company may
designate.

     12. Transferability. Neither Plan Contributions credited to a
Participant’s account nor any rights to exercise any option or receive shares
of Common Stock under the Plan may be assigned, transferred, pledged or
otherwise disposed of in any way (other than by will or the laws of descent and
distribution, or as provided in Section 11). Any attempted assignment,
transfer, pledge or other distribution shall be without effect, except that the
Company may treat such act as an election to withdraw in accordance with
Section 13(a).

     13. Withdrawal; Termination of Employment.

          (a) Withdrawal. A Participant may withdraw from the Plan at any time by
giving written notice to the Company. Payroll deductions, if any have been
authorized, shall cease as soon as administratively practicable after receipt
of the Participant’s notice of

7

 

withdrawal, and, subject to administrative practicability, no further
purchases shall be made for the Participant’s account. All Plan Contributions
credited to the Participant’s account, if any, and not yet invested in Common
Stock, will be paid to the Participant as soon as administratively practicable
after receipt of the Participant’s notice of withdrawal. The Participant’s
unexercised options to purchase shares pursuant to the Plan automatically will
be terminated. Payroll deductions will not resume on behalf of a Participant
who has withdrawn from the Plan (a “Former Participant”) unless the Former
Participant enrolls in a subsequent Offering Period in accordance with Section
5(a) and subject to the restriction provided in Section 13(b), below.

          (b) Effect of Withdrawal on Subsequent Participation. A Former
Participant who has withdrawn from the Plan pursuant to this Section 13(b)
shall again be eligible to participate in the Plan as of the beginning of the
Offering Period following the Offering Period during which the Former
Participant withdrew. The Former Participant must submit a new enrollment
agreement in order to again become a Participant as of that date.

          (c) Termination of Employment. Upon termination of a Participant’s
Continuous Status as an Employee prior to any Exercise Date for any reason,
including retirement or death, the Plan Contributions credited to the
Participant’s account and not yet invested in Common Stock will be returned to
the Participant or, in the case of death, to the Participant’s beneficiary as
determined pursuant to Section 11, and the Participant’s option to purchase
shares under the Plan will automatically terminate.

     14. Common Stock Available under the Plan.

          (a) Number of Shares. Subject to adjustment as provided in Section 14(b)
below, the maximum number of shares of the Company’s Common Stock that shall be
made available for sale under the Plan shall be 387,714 shares. Shares of
Common Stock subject to the Plan may be newly issued shares or shares
reacquired in private transactions or open market purchases. If and to the
extent that any right to purchase reserved shares shall not be exercised by any
Participant for any reason or if such right to purchase shall terminate as
provided herein, shares that have not been so purchased hereunder shall again
become available for the purpose of the Plan unless the Plan shall have been
terminated, but all shares sold under the Plan, regardless of source, shall be
counted against the limitation set forth above.

          (b) Adjustments Upon Changes in Capitalization; Corporate Transactions.

               i. If the outstanding shares of Common Stock are increased or decreased,
or are changed into or are exchanged for a different number or kind of shares,
as a result of one or more reorganizations, restructurings, recapitalizations,
reclassifications, stock splits, reverse stock splits, stock dividends or the
like, upon authorization of the Committee, appropriate adjustments shall be
made in the number and/or kind of shares, and the per-share option price
thereof, which may be issued in the aggregate and to any Participant upon
exercise of options granted under the Plan.

               ii. In the event of the proposed dissolution or liquidation of the
Company, the Offering Period will terminate immediately prior to the
consummation of such proposed action, unless otherwise provided by the
Committee.

8

 

               iii. In the event of a proposed sale of all or substantially all of the
Company’s assets, or the merger of the Company with or into another corporation
(each, a “Sale Transaction”), each option under the Plan shall be assumed or an
equivalent option shall be substituted by such successor corporation or a
parent or subsidiary of such successor corporation, unless the Committee
determines, in the exercise of its sole discretion and in lieu of such
assumption or substitution, to shorten the Offering Period then in progress by
setting a new Exercise Date (the “New Exercise Date”). If the Committee
shortens the Offering Period then in progress in lieu of assumption or
substitution in the event of a Sale Transaction, the Committee shall notify
each Participant in writing, at least ten (10) days prior to the New Exercise
Date, that the exercise date for such Participant’s option has been changed to
the New Exercise Date and that such Participant’s option will be exercised
automatically on the New Exercise Date, unless prior to such date the
Participant has withdrawn from the Plan as provided in Section 13(a). For
purposes of this Section 14(b), an option granted under the Plan shall be
deemed to have been assumed if, following the Sale Transaction, the option
confers the right to purchase, for each share of option stock subject to the
option immediately prior to the Sale Transaction, the consideration (whether
stock, cash or other securities or property) received in the Sale Transaction
by holders of Common Stock for each share of Common Stock held on the effective
date of the Sale Transaction (and if such holders were offered a choice of
consideration, the type of consideration chosen by the holders of a majority of
the outstanding shares of Common Stock); provided, that if the consideration
received in the Sale Transaction was not solely common stock of the successor
corporation or its parent (as defined in Section 424(e) of the Code), the
Committee may, with the consent of the successor corporation and the
Participant, provide for the consideration to be received upon exercise of the
option to be solely common stock of the successor corporation or its parent
equal in fair market value to the per share consideration received by the
holders of Common Stock in the Sale Transaction.

               iv. In all cases, the Committee shall have sole discretion to exercise any
of the powers and authority provided under this Section 14, and the Committee’s
actions hereunder shall be final and binding on all Participants. No
fractional shares of stock shall be issued under the Plan pursuant to any
adjustment authorized under the provisions of this Section 14.

     15. Administration.

          (a) Committee. The Plan shall be administered by the Committee. The
Committee shall have the authority to interpret the Plan, to prescribe, amend
and rescind rules and regulations relating to the Plan, and to make all other
determinations necessary or advisable for the administration of the Plan. The
administration, interpretation, or application of the Plan by the Committee
shall be final, conclusive and binding upon all persons.

          (b) Requirements of Exchange Act. Notwithstanding the provisions of
Section 15(a) above, in the event that Rule 16b-3 promulgated under the
Exchange Act or any successor provision thereto (“Rule 16b-3”) provides
specific requirements for the administrators of plans of this type, the Plan
shall only be administered by such body and in such a manner as shall comply
with the applicable requirements of Rule 16b-3. Unless permitted by Rule
16b-3, no discretion concerning decisions regarding the Plan shall be afforded
to any person that is not “disinterested” as that term is used in Rule 16b-3.

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     16. Amendment, Suspension and Termination of the Plan.

          (a) Amendment of the Plan. The Board or the Committee may at any time, or
from time to time, amend the Plan in any respect; provided, that (i) no such
amendment may make any change in any option theretofore granted which adversely
affects the rights of any Participant and (ii) the Plan may not be amended in
any way that will cause rights issued under the Plan to fail to meet the
requirements for employee stock purchase plans as defined in Section 423 of the
Code or any successor thereto. To the extent necessary to comply with Rule
16b-3 under the Exchange Act, Section 423 of the Code, or any other applicable
law or regulation), the Company shall obtain shareholder approval of any such
amendment.

          (b) Suspension of the Plan. The Board or the Committee may, as of the
close of any Exercise Date, suspend the Plan; provided, that the Board or
Committee provides notice to the Participants at least five (5) business days
prior to the suspension. The Board or Committee may resume the normal
operation of the Plan as of any Exercise Date; provided further, that the Board
or Committee provides notice to the Participants at least twenty (20) business
days prior to the date of termination of the suspension period. A Participant
shall remain a Participant in the Plan during any suspension period (unless he
or she withdraws pursuant to Section 13(a)), however no options shall be
granted or exercised, and no payroll deductions shall be made in respect of any
Participant during the suspension period. Participants shall have the right to
withdraw carryover funds provided in Section 10(c) throughout any suspension
period. The Plan shall resume its normal operation upon termination of a
suspension period.

          (c) Termination of the Plan. The Plan and all rights of Employees
hereunder shall terminate on the earliest of:

               i. the Exercise Date that Participants become entitled to purchase a
number of shares greater than the number of reserved shares remaining available
for purchase under the Plan;

               ii. such date as is determined by the Board in its discretion; or

               iii. the last Exercise Date immediately preceding the tenth (10th)
anniversary of the approval of the Plan by the Company’s stockholders.

     In the event that the Plan terminates under circumstances described in
Section 16(c)(i) above, reserved shares remaining as of the termination date
shall be sold to Participants on a pro rata basis, based on the relative value
of their cash account balances in the Plan as of the termination date.

     17. Notices. All notices or other communications by a Participant to the
Company under or in connection with the Plan shall be deemed to have been duly
given when received in the form specified by the Company at the location, or by
the person, designated by the Company for the receipt thereof.

10

 

     18. Expenses of the Plan. All costs and expenses incurred in
administering the Plan shall be paid by the Company, except that any stamp
duties or transfer taxes applicable to participation in the Plan may be charged
to the account of such Participant by the Company.

     19. No Employment Rights. The Plan does not, directly or indirectly,
create any right for the benefit of any employee or class of employees to
purchase any shares under the Plan, or create in any employee or class of
employees any right with respect to continuation of employment by the Company
or any Subsidiary, and it shall not be deemed to interfere in any way with the
right of the Company or any Subsidiary to terminate, or otherwise modify, an
employee’s employment at any time.

     20. Applicable Law. The internal laws of the State of Delaware shall
govern all matters relating to this Plan except to the extent (if any)
superseded by the laws of the United States.

     21. Additional Restrictions of Rule 16b-3. The terms and conditions of
options granted hereunder to, and the purchase of shares by, persons subject to
Section 16 of the Exchange Act shall comply with the applicable provisions of
Rule 16b-3. This Plan shall be deemed to contain, and such options shall
contain, and the shares issued upon exercise thereof shall be subject to, such
additional conditions and restrictions as may be required by Rule 16b-3 to
qualify for the maximum exemption from Section 16 of the Exchange Act with
respect to Plan transactions.

     22. Effective Date. Subject to adoption of the Plan by the Board, the
Plan shall become effective on the First Offering Date. The Board shall submit
the Plan to the shareholders of the Company for approval within twelve months
after the date the Plan is adopted by the Board.

11exv4w2

 

EXHIBIT 4.2

FORM OF REGISTRATION RIGHTS AGREEMENT

by and among

CAMDEN PROPERTY TRUST, and

THE HOLDERS NAMED HEREIN

Dated: ___________, 2005

FORM OF REGISTRATION RIGHTS AGREEMENT

     This Registration Rights Agreement (this “Agreement”) is entered into as
of    , 2005 by and among Camden Property Trust, a Texas real estate
investment trust (the “Company”), and the persons named on Exhibit A hereto
(collectively the “Holders” and each individually as a “Holder”).

     WHEREAS, pursuant to the terms of that certain Agreement and Plan of
Merger (the “Merger Agreement”), dated as of October 4, 2004 by and among the
Company, Camden Summit, Inc. (formerly Camden Sparks, Inc.), a Delaware
corporation, and Summit Properties Inc., a Maryland corporation, the Company
has agreed to grant the limited partners of Camden Summit Partnership, L.P.
(the “Partnership”) certain registration rights with respect to the common
shares of beneficial interest, par value $.01 per share (the “Common Shares”),
of the Company to be received by the Holders pursuant to any conversion of the
Units into Common Shares, whether by exercise of a redemption right or
otherwise;

     NOW, THEREFORE, in consideration of the foregoing, the mutual promises and
agreements set forth herein, and other valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree
as follows:

     1. Certain Definitions.

     As used in this Agreement, in addition to the other terms defined herein,
the following capitalized defined terms shall have the following meanings:

     “Affiliate” shall mean a Person that directly, or indirectly though one or
more intermediaries, controls, is controlled by, or is under common control
with a specified Person.

 

 

     “Affiliate Holder” shall mean a Holder that is an Affiliate of the Company
(or that would be an Affiliate of the Company if all Units held by such Holder
were exchanged for Common Shares).

     “Common Shares” shall have the meaning set forth in the recitals to this
Agreement.

     “Company” shall have the meaning set forth in the preamble to this
Agreement.

     “Demand Notice” shall have the meaning set for in Section 2(c) hereof.

     “Demand Registration” shall have the meaning set forth in Section 2(c)
hereof.

     “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.

     “Fair Market Value” shall mean the closing sales price, or the closing
sales bid if no sales were reported, of the Common Shares as quoted on the NYSE
on the date immediately preceding the date of calculation or if there are no
sales or bids for such date, then for the last preceding business day for such
sales or bids, as reported in The Wall Street Journal or similar publication.

     “Holder” or “Holders” shall have the meaning set forth in the preamble to
this Agreement.

     “Indemnitee” shall have the meaning set forth in Section 6 hereof.

     “Issuance Registration Expiration Date” shall have the meaning set forth
in Section 2(a) hereof.

     “Issuance Registration Statement” shall have the meaning set forth in
Section 2(a) hereof.

     “Merger Agreement” shall have the meaning set forth in the recitals to
this Agreement.

     “NASD” shall mean the National Association of Securities Dealers, Inc.

     “NYSE” shall mean the New York Stock Exchange.

     “Partnership” shall have the meaning set forth in the recitals to this
Agreement.

     “Person” shall mean an individual, partnership, corporation, trust, or
unincorporated organization, or a government or agency or political subdivision
thereof.

     “Prospectus” shall mean the prospectus included in a Registration
Statement, including any preliminary prospectus, as amended or supplemented by
any prospectus supplement with respect to the terms of the offering of any
portion of the Registrable Shares covered by such Registration Statement, and
by all other amendments and supplements to such prospectus, including
post-effective amendments, and in each case including all material incorporated
by reference therein.

2

 

     “Registrable Shares” (a) when used with respect to a non-Affiliate Holder,
shall mean all Shares of such Holder, excluding (i) Shares for which a
Registration Statement relating to the issuance or sale thereof shall have
become effective under the Securities Act and which have been issued or
disposed of, as applicable, under such Registration Statement, (ii) Shares sold
pursuant to Rule 144 or (iii) Shares eligible for sale pursuant to Rule 144(k)
(or any successor provision); (b) when used with respect to an Affiliate
Holder, shall mean the Shares of such Affiliate Holder, excluding (i) Shares
for which a Registration Statement relating to the sale thereof by such Holder
shall have become effective under the Securities Act and which have been
disposed of under such Registration Statement, (ii) Shares sold pursuant to
Rule 144, or (iii) Shares eligible for sale pursuant to Rule 144(k) (or any
successor provision); and (c) when used without reference to a Holder, shall
mean the Registrable Shares of all Holders. For clarification, it is
understood that once Shares have been issued to a non-Affiliate Holder under an
effective Registration Statement, such Shares are no longer Registrable Shares
no matter who holds such Shares, and, accordingly, neither the non-Affiliate
Holder nor any subsequent holder (whether or not such holder is an Affiliate of
the Company) of such Shares has any further registration rights with respect to
such Shares under this Agreement.

     “Registration Expenses” shall mean any and all expenses incident to the
performance of or compliance with this Agreement, including without limitation:
(a) all registration and filing fees; (b) all fees and expenses associated with
a required listing of the Registrable Shares on any securities exchange; (c)
fees and expenses with respect to filings required to be made with the NYSE or
the NASD; (d) fees and expenses of compliance with securities or “blue sky”
laws (including reasonable fees and disbursements of counsel for the
underwriters or holders of securities in connection with blue sky
qualifications of the securities and determination of their eligibility for
investment under the laws of such jurisdictions); (e) printing expenses,
messenger, telephone and delivery expenses; (f) fees and disbursements of
counsel for the Company and customary fees and expenses for independent
certified public accountants retained by the Company (including the expenses of
any comfort letters or costs associated with the delivery by independent
certified public accountants of a comfort letter or comfort letters); (g)
securities acts liability insurance, if the Company so desires; (h) all
internal expenses of the Company (including, without limitation, all salaries
and expenses of its officers and employees performing legal or accounting
duties); (i) the expense of any annual audit; (j) reasonable legal fees and
expenses of one (1) counsel to the Holders up to a maximum of $10,000; and (k)
the fees and expenses of any person, including special experts, retained by the
Company; provided, however, that Registration Expenses shall not include, and
the Company shall not have any obligation to pay any other expenses incurred by
the Holders in connection with the conversion of their Units, including,
without limitation, any underwriting fees, discounts, or commissions
attributable to the sale of such Registrable Shares, legal fees and expenses of
more than one (1) counsel to the Holders or in an amount exceeding $10,000,
brokerage fees and sales commissions, and any transfer taxes.

     “Registration Statement” shall mean any registration statement of the
Company which covers the issuance or resale of any of the Registrable Shares
under the Securities Act on an appropriate form, and all amendments and
supplements to such registration statement, including post-effective
amendments, in each case including the Prospectus contained therein, all
exhibits thereto and all materials incorporated by reference therein.

3

 

     “Resale Shelf Registration Expiration Date” shall have the meaning set
forth in Section 2(b) hereof.

     “Resale Shelf Registration Statement” shall have the meaning set forth in
Section 2(b) hereof.

     “Rule 144” means Rule 144 under the Securities Act (or any successor
provision).

     “SEC” shall mean the Securities and Exchange Commission.

     “Securities Act” shall mean the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.

     “Shares” shall mean all Common Shares issued or issuable to all Holders
upon redemption or in exchange for Units held by such Holders and any other
Common Shares issued as a dividend with respect to, or in exchange for or in
replacement of such Common Shares.

     “Suspension Event” shall have the meaning set forth in Section 9(b)
hereof.

     “Units” shall mean the units of limited partner interests in the
Partnership held by the Holders (or any other interests issued on account of
those units as a result of a unit split, combination, distribution or other
similar recapitalization event applying to all such units).

     “Value” means an amount per share of Common Share equal to the average of
the daily market price for the ten (10) consecutive trading days immediately
preceding the date of determination. The market price for each such trading day
shall be: (a) if the Common Shares are listed or admitted to trading on any
securities exchange or the NASDAQ National Market System, the closing price on
such day, or if no such sale takes place on such day, the average of the
closing bid and asked prices on such day; (b) if the Common Shares are not
listed or admitted to trading on any securities exchange or the NASDAQ National
Market System, the last reported sale price on such day or, if no sale takes
place on such day, the average of the closing bid and asked prices on such day,
as reported by a reliable quotation source designated by the Company; or (c) if
the Common Shares are not listed or admitted to trading on any securities
exchange or the NASDAQ National Market System and no such last reported sale
price or closing bid and asked prices are available, the average of the
reported high bid and low asked prices on such day, as reported by a reliable
quotation source designated by the Company, or if there shall be no bid and
asked prices on such day, the average of the high bid and low asked prices, as
so reported, on the most recent day (not more than ten (10) days prior to the
date in question) for which prices have been so reported; provided that if
there are no bid and asked prices reported during the ten (10) days prior to
the date in question, the Value of the Common Shares shall be determined by the
Company acting in good faith on the basis of such quotations and other
information as it considers, in its reasonable judgment, appropriate.

     2. Registration.

          (a) Filing of Issuance Registration Statement. In connection with the
Merger, the Company has filed with the SEC a registration statement relating to
the issuance of Common Shares to the Holders of the Shares in exchange for the
Units and the sale of such Shares by

4

 

Affiliate Holders (the “Issuance Registration Statement”), which
registration statement was declared effective on    . If necessary
to ensure the shares are registered on a “shelf” basis under Rule 415 of the
Securities Act, the Company shall, as soon as practicable after the date hereof
(but in any event within five (5) business days), cause a post-effective
amendment to the Issuance Registration Statement to be filed on Form S-3 or a
prospectus under Rule 424 of the Securities Act to be filed. The Company
agrees to use its best efforts to keep the Issuance Registration Statement
continuously effective until the date on which all Shares (whether outstanding
or issuable upon exchange or redemption of common units of limited partnership
interest of the Partnership) are no longer Registrable Shares (the “Issuance
Registration Expiration Date”).

          (b) Registration Statement Covering Resale of Common Shares. Unless all
Registrable Shares have been included in the filing of an Issuance Registration
Statement and if the Issuance Registration Statement is not available at any
time, the Company shall use its best efforts to file with the SEC a
Registration Statement on Form S-3 (a “Resale Shelf Registration Statement”)
under Rule 415 of the Securities Act relating to the resale by the Holders of
their Registrable Shares as soon as is practicable after the date hereof or, if
applicable, after the date such Issuance Registration Statement becomes
unavailable. The Company shall use its best efforts to cause such Resale Shelf
Registration Statement to be declared effective by the SEC as soon as
practicable thereafter. The Company agrees to use its best efforts to keep the
Resale Shelf Registration Statement, after its date of effectiveness,
continuously effective until the date (the “Resale Shelf Registration
Expiration Date”) on which all Shares (whether outstanding or issuable upon
exchange or redemption of common units of limited partnership interest of the
Partnership) are no longer Registrable Shares.

          (c) Demand Registration. At any time any Units exchangeable for
Registrable Shares are outstanding and a Registration Statement covering the
resale of such Registrable Shares is not available, the Company shall, at the
written request of any Holder or Holders (a “Demand Notice”), cause to be filed
as soon as practicable (but in any event within thirty (30) days) after the
date of such request by such Holder a Registration Statement in accordance with
Rule 415 under the Securities Act (or its successor) relating to the sale by
such Holder of all or a portion of the Registrable Shares held by such Holder
in accordance with the terms hereof, and shall use its best efforts to cause
such Registration Statement to be declared effective by the SEC as soon as
practicable thereafter (a “Demand Registration”); provided, however, that the
Company shall provide reasonable notice to all other Holders and provide such
other Holders with the opportunity to elect to have all or any portion of their
Shares included on such Registration Statement.

     The Company agrees to use its best efforts to keep the Demand Registration
continuously effective, after its date of effectiveness, with respect to the
Registrable Shares of the requesting Holder or Holders until the earlier of (i)
the date on which such Holder no longer holds any Registrable Shares or (ii)
the date on which all of the Registrable Shares held by such Holder have become
eligible for sale pursuant to Rule 144(k) (or any successor provision).

     Notwithstanding the foregoing, (A) the Company shall not be obligated to
effect more than two Demand Registrations for Holders in any 12-month period,
and (B) the number of

5

 

Registered Shares proposed to be sold by the Holders making such written
request shall have estimated market value of at least $5,000,000.

     Upon receipt by the Company of a Demand Notice, the Company may, but is
not obligated to, purchase from any Holder so requesting registration all, but
not less than all, of the Registrable Shares that are the subject of the
request at a price per share equal to the Value of the Common Shares
immediately preceding the date of the registration request. In the event that
the Company elects to purchase the Registrable Shares, that are the subject of
the Demand Registration, the Company shall notify the Holder within five
business days of the date of receipt of the request by the Company, which
notice shall indicate (I) that the Company will purchase the Registrable Shares
held by such Holder that are the subject of the request, (II) the price per
Registrable Share, calculated in accordance with the previous sentence, that
the Company will pay the Holder and (III) the date upon which the Company shall
repurchase such Registrable Shares, which date shall not be later than the
tenth business day after receipt of the Demand Notice. If the Company so elects
to purchase the Registrable Shares that are the subject of a Demand Notice made
pursuant to this Section 2(c), then upon such purchase the Company shall be
relieved of its obligations under this Section 2(c) with respect to such
Registrable Shares or as a result of the Demand Notice.

          (d) Notification and Distribution of Materials. The Company shall
promptly notify the Holder in writing of the effectiveness of any Registration
Statement applicable to the Shares and shall furnish to the Holders, without
charge, such number of copies of the Registration Statement (including any
amendments, supplements and exhibits), the Prospectus contained therein
(including each preliminary prospectus and all related amendments and
supplements) and any documents incorporated by reference in the Registration
Statement or such other documents as the Holders may reasonably request in
order to facilitate the sale of the Registrable Shares in the manner described
in the Registration Statement.

          (e) Amendments and Supplements. The Company shall promptly prepare and
file with the SEC from time to time such amendments and supplements to the
Registration Statement and Prospectus used in connection therewith as may be
necessary to keep the Registration Statement effective and to comply with the
provisions of the Securities Act with respect to the disposition of all the
Registrable Shares until the earlier of (i) such time as all of the Registrable
Shares have been issued or disposed of in accordance with the intended methods
of disposition by the Holders or issuance by the Company as set forth in the
Registration Statement or (ii) the date on which the Registration Statement is
no longer required to be effective under the terms of this Agreement. Upon ten
(10) business days’ notice, the Company shall file any supplement or
post-effective amendment to the Registration Statement with respect to the plan
of distribution or a Holder’s ownership interests in his, her or its
Registrable Shares that is reasonably necessary to permit the sale of such
Holder’s Registrable Shares pursuant to the Registration Statement.
Concurrently with the effectiveness of any Registration Statement, or amendment
or supplement thereto, required to be filed by the Company hereunder, the
Company shall file any necessary listing applications or amendments to the
existing applications to cause the Shares registered under any Registration
Statement to be then listed or quoted on the NYSE or such other primary
exchange or quotation system on which the Common Shares are then listed or
quoted.

6

 

          (f) Notice of Certain Events. The Company shall promptly notify the
Holders of, and confirm in writing, any request by the SEC for any amendment or
supplement to, or additional information in connection with, any Registration
Statement required to be prepared and filed hereunder (or Prospectus relating
thereto). The Company shall promptly notify each Holder of, and confirm in
writing, the filing of the Registration Statement or any Prospectus, amendment
or supplement related thereto or any post-effective amendment to the
Registration Statement and the effectiveness of any post-effective amendment.

     At any time when a Prospectus relating to the Registration Statement is
required to be delivered under the Securities Act by a Holder to a transferee,
the Company shall immediately notify the Holders of the happening of any event
as a result of which the Prospectus included in such Registration Statement, as
then in effect, includes an untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. In such event, the Company shall promptly, and in any event
within ten (10) business days, prepare and furnish to the Holders a reasonable
number of copies of a supplement to or an amendment of such Prospectus as may
be necessary so that, as thereafter delivered to the purchasers of Registrable
Shares sold under the Prospectus, such Prospectus shall not include an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they are made, not misleading. The Company shall, if
necessary, promptly, and in any event within ten (10) business days, amend the
Registration Statement of which such Prospectus is a part to reflect such
amendment or supplement.

     3. State Securities Laws. Subject to the conditions set forth in this
Agreement, the Company shall, in connection with the filing of any Registration
Statement hereunder, file such documents as may be necessary to register or
qualify the Registrable Shares under the securities or “Blue Sky” laws of such
states as the Holders may reasonably request, and the Company shall use its
reasonable best efforts to cause such filings to become effective in a timely
manner; provided, however, that the Company shall not be obligated to qualify
as a foreign corporation to do business under the laws of any such state in
which it is not then qualified or to file any general consent to service of
process in any such state. Once effective, the Company shall use its
reasonable best efforts to keep such filings effective until the earlier of (a)
such time as all of the Registrable Shares have been disposed of in accordance
with the intended methods of disposition by the Holders as set forth in the
applicable Registration Statement, (b) in the case of a particular state, the
applicable Holders have notified the Company that they no longer require an
effective filing in such state in accordance with their original request for
filing or (c) the date on which the applicable Registration Statement ceases to
be effective.

     4. Listing. The Company will use reasonable best efforts to cause all
Registrable Shares to be listed or otherwise eligible for full trading
privileges on the principal national securities exchange (currently the New
York Stock Exchange) or automated quotation system on which the Common Shares
are then listed or traded, in each case not later than the date on which a
Registration Statement covering the Registrable Shares becomes effective or the
Registrable Shares are issued by the Company to a Holder, whichever is later.
The Company will use reasonable best efforts to continue the listing or trading
privilege for all Registrable Shares on such exchange or automated quotation
service. The Company will promptly notify the Holders

7

 

of, and confirm in writing, the delisting of the Common Shares by such
exchange or automated quotation service.

     5. Expenses. The Company shall bear all Registration Expenses incurred in
connection with the registration of the Registrable Shares pursuant to this
Agreement and the Company’s performance of its other obligations under the
terms of this Agreement.

     6. Indemnification by the Company. The Company agrees to indemnify the
Holders and, if a Holder is a person other than an individual, such Holder’s
officers, directors, employees, members, partners, fiduciaries, agents,
representatives and Affiliates, and each person or entity, if any, that
controls a Holder within the meaning of the Securities Act, and each other
person or entity, if any, subject to liability because of his, her or its
connection with a Holder (each, an “Indemnitee”), against any and all losses,
claims, damages, actions, liabilities, costs and expenses (including without
limitation fees, reasonable expenses and disbursements of attorneys and other
professionals), joint or several, arising out of or based (a) upon any
violation by the Company of any rule or regulation promulgated under the
Securities Act applicable to the Company and relating to action or inaction
required of the Company under the terms of this Agreement or in connection with
any Registration Statement or Prospectus, or (b) upon any untrue or alleged
untrue statement of material fact contained in any Registration Statement or
any Prospectus, or any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading;
provided, that the Company shall not be liable to such Indemnitee or any person
who participates as an underwriter in the offering or sale of Registrable
Shares or any other person, if any, who controls such underwriter within the
meaning of the Securities Act, in any such case to the extent that any such
loss, claim, damage, liability (or action or proceeding in respect thereof) or
expense arises directly out of or is based directly upon (i) an untrue
statement or alleged untrue statement or omission or alleged omission made in
such Registration Statement or in any such Prospectus in reliance upon and in
conformity with information regarding such Indemnitee or its plan of
distribution or ownership interests which was furnished in writing to the
Company for use in connection with such Registration Statement or the
Prospectus contained therein by such Indemnitee or (ii) any Holder’s failure to
send or give a copy of the final, amended or supplemented Prospectus furnished
to the Holders by the Company at or prior to the time such action is required
by the Securities Act to the person claiming an untrue statement or alleged
untrue statement or omission or alleged omission if such statement or omission
was corrected in such final amended or supplemented Prospectus and such final
amended or supplemented Prospectus was received by such Holder prior to the
time delivery is required by the Securities Act.

     7. Covenants of Holders. Each of the Holders hereby agrees (a) to
cooperate with the Company and to furnish to the Company all such information
concerning its plan of distribution and ownership interests with respect to its
Registrable Shares in connection with the preparation of a Registration
Statement with respect to such Holder’s Registrable Shares and any filings with
any state securities commissions as the Company may reasonably request, (b) to
deliver or cause delivery of the Prospectus contained in such Registration
Statement (other than an Issuance Registration Statement) to any purchaser of
the shares covered by such Registration Statement from such Holder and (c) to
indemnify the Company, its officers, directors, employees, agents,
representatives and Affiliates, and each person, if any, who controls the

8

 

Company within the meaning of the Securities Act, and each other person or
entity, if any, subject to liability because of his, her or its connection with
the Company, to the same extent as the indemnity contained in Section 6 against
any and all losses, claims, damages, actions, liabilities, costs and expenses
arising out of or based upon (i) any untrue statement or alleged untrue
statement of material fact contained in any Registration Statement or
Prospectus, or any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading, if
and solely to the extent that such statement or omission occurs directly from
reliance upon and in conformity with written information regarding such Holder,
his, her or its plan of distribution or his, her or its ownership interests,
which was furnished to the Company in writing by such Holder for use therein
unless such statement or omission was corrected in writing to the Company prior
to the date one day prior to the date of the final Prospectus (as supplemented
or amended, as the case may be) or (ii) the failure by such Holder to deliver
or cause to be delivered the Prospectus contained in such Registration
Statement (as amended or supplemented, if applicable) furnished by the Company
to the Holder to any purchaser of the shares covered by such Registration
Statement from the Holder through no fault of the Company.

     8. Indemnification Procedures.

     Any person entitled to indemnification under this Agreement shall notify
promptly the indemnifying party in writing of the commencement of any action or
proceeding with respect to which a claim for indemnification may be made
hereunder, but the failure of any indemnified party to provide such notice
shall not relieve the indemnifying party of its obligations hereunder, except
to the extent the indemnifying party is materially prejudiced thereby and shall
not relieve the indemnifying party from any liability which it may have to any
indemnified party otherwise than hereunder. In case any action or proceeding
is brought against an indemnified party and it shall notify the indemnifying
party of the commencement thereof, the indemnifying party shall be entitled to
participate therein and, unless in the reasonable opinion of outside counsel to
the indemnified party a conflict of interest between such indemnified and
indemnifying parties may exist in respect of such claim, to assume the defense
thereof (alone or jointly with any other indemnifying party similarly
notified), to the extent that it chooses, with counsel reasonably satisfactory
to such indemnified party, and after notice from the indemnifying party to such
indemnified party that it so chooses, the indemnifying party shall not be
liable to such indemnified party for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense thereof;
provided, however, that (a) if the indemnifying party fails to take reasonable
steps necessary to defend diligently the action or proceeding within twenty
(20) business days after receiving notice from such indemnified party that the
indemnified party believes it has failed to do so; or (b) if such indemnified
party who is a defendant in any action or proceeding which is also brought
against the indemnifying party shall have reasonably concluded, based on the
advice of counsel, that there may be one or more legal defenses available to
such indemnified party which are not available to the indemnifying party; or
(c) if representation of both parties by the same counsel is otherwise
inappropriate under applicable standards of professional conduct, then, in any
such case, the indemnified party shall have the right to assume or continue its
own defense as set forth above (but with no more than one firm of counsel for
all indemnified parties in each jurisdiction, unless representation of more
than one of the parties by the same counsel is otherwise inappropriate under
applicable standards of professional conduct) and the indemnifying party shall
be liable for any expenses therefor. No

9

 

indemnifying party shall, without the written consent of the indemnified
party (which shall not be unreasonably withheld), effect the settlement or
compromise of, or consent to the entry of any judgment with respect to, any
pending or (to the knowledge of the indemnifying party) threatened action or
claim in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified party is an actual or potential party
to such action or claim) unless such settlement, compromise or judgment (i)
includes an unconditional release of the indemnified party from all liability
arising out of such action or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act, by or on behalf of
any indemnified party.

     9. Suspension of Registration Requirement; Restriction on Sales.

          (a) The Company shall promptly notify each Holder of, and confirm in
writing, the issuance by the SEC of any stop order suspending the effectiveness
of a Registration Statement with respect to such Holder’s Registrable Shares or
the initiation of any proceedings for that purpose. The Company shall use its
best efforts to obtain the withdrawal of any order suspending the effectiveness
of such a Registration Statement at the earliest possible moment and in any
event within forty-five (45) days from the initial date of such suspension.

          (b) Notwithstanding anything to the contrary set forth in this Agreement,
the Company’s obligation under this Agreement to file, amend or supplement a
Registration Statement, or to cause a Registration Statement, or any filings
with any state securities commission, to become effective shall be suspended,
for one or more periods not to exceed the period described in Section 10 below,
in the event of pending negotiations relating to, or consummation of, a
transaction or the occurrence of an event that (i) would require additional
disclosure of material information by the Company in the Registration Statement
or such filing, as to which the Company has a bona fide business purpose for
preserving confidentiality, or (ii) render the Company unable to comply with
SEC requirements, or (iii) would otherwise make it impracticable or unadvisable
to cause the Registration Statement or such filings to be filed, amended or
supplemented or to become effective (any such circumstances being hereinafter
referred to as a “Suspension Event”). The Company shall notify the Holders of
the existence of any Suspension Event by promptly delivering to each Holder a
certificate signed by the chief executive officer of the Company stating that a
Suspension Event has occurred and is continuing.

          (c) Subject to the terms of Section 10 below, each Holder agrees that,
following the effectiveness of any Registration Statement relating to
Registrable Shares of such Holder, such Holder will not effect any sales of the
Shares pursuant to such Registration Statement or any filings with any state
Securities Commission at any time after such Holder has received notice from
the Company to suspend sales as a result of the occurrence or existence of any
Suspension Event or so that the Company may correct or update the Registration
Statement or such filing. During such period, the Company will not be
obligated to effect redemptions of Common Units under an Issuance Registration
Statement, if one is then effective. The Holders may recommence effecting
sales of the Shares pursuant to the Registration Statement or such filings, and
all other obligations which are suspended as a result of a Suspension Event
shall no longer be so suspended, following further notice to such effect from
the Company, which notice shall be given by the Company not later than one (1)
business day after the conclusion of any such Suspension Event.

10

 

     10. Limitations on Suspension/Blackout Periods. Notwithstanding anything
herein to the contrary, the Company covenants and agrees that (a) the Company’s
rights to suspend its obligation under this Agreement to file, amend or
supplement a Registration Statement and maintain the effectiveness of any
Registration Statement during the pendency of any Suspension Event, (b) the
Holders’ obligation to suspend public sales of Shares during one or more
Offering Blackout Periods and (c) the Holders’ obligations to suspend sales of
Shares pursuant to a Registration Statement during the pendency of any
Suspension Event, shall not, in the aggregate, cause the Holders to be required
to suspend public sales of Shares or relieve the Company of its obligation to
file, amend or supplement and maintain the effectiveness of a Registration
Statement for longer than sixty (60) days in the aggregate during any twelve
(12) month period.

     11. Contribution. If the indemnification provided for in Section 6 and
Section 7 is unavailable to an indemnified party with respect to any losses,
claims, damages, actions, liabilities, costs or expenses referred to therein or
is insufficient to hold the indemnified party harmless as contemplated therein,
then the indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages, actions, liabilities, costs or expenses
in such proportion as is appropriate to reflect the relative fault of the
indemnifying party, on the one hand, and the indemnified party, on the other
hand, in connection with the statements or omissions which resulted in such
losses, claims, damages, actions, liabilities, costs or expenses as well as any
other relevant equitable considerations. The relative fault of the
indemnifying party, on the one hand, and of the indemnified party, on the other
hand, shall be determined by reference to, among other factors, whether the
untrue or alleged untrue statement of a material fact or omission to state a
material fact relates to information supplied by the indemnifying party or by
the indemnified party and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission;
provided, however, that in no event shall the obligation of any indemnifying
party to contribute under this Section 11 exceed the amount that such
indemnifying party would have been obligated to pay by way of indemnification
if the indemnification provided for under Section 6 or Section 7 hereof had
been available under the circumstances.

     The Company and the Holders agree that it would not be just and equitable
if contribution pursuant to this Section 11 were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in the immediately preceding
paragraph.

     Notwithstanding the provisions of this Section 11, no Holder shall be
required to contribute any amount in excess of the amount by which the net
proceeds from the sale of Registrable Shares under the applicable Registration
Statement in the transaction resulting in such rights of contribution exceeds
the amount of any damages that such Holder has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission. No
indemnified party guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
indemnifying party who was not guilty of such fraudulent misrepresentation.

     12. Amendments and Waivers. The provisions of this Agreement may not be
amended, modified, or supplemented or waived without the prior written consent
of the

11

 

Company and Holders holding in excess of two-thirds of the aggregate of
the outstanding Registrable Shares and Units that are convertible into
Registrable Shares (which, for the purpose of this Section 12, are to be
counted as if all such Units were converted into shares of Common Stock).

     13. Notices. Except as set forth below, all notices and other
communications provided for or permitted hereunder shall be in writing and
shall be deemed to have been duly given when and if delivered personally or
sent by telex or telecopier (with respect to notice by telex or telecopier, on
a business day between the hours of 8:00 a.m. and 7:00 p.m., Central time),
five business days after being sent if mailed by registered or certified mail
(return receipt requested), postage prepaid, or upon receipt if sent by courier
or overnight delivery service to the respective parties at the following
addresses (or at such other address for any party as shall be specified by like
notice, provided that notices of a change of address shall be effective only
upon receipt thereof), and further provided that in case of directions to amend
the Registration Statement pursuant to Section 2(f) or Section 7, the Holder
must confirm such notice in writing by overnight express delivery with
confirmation of receipt:

	 	 	 	If to the Company:

Camden Property Trust

3 Greenway Plaza, Suite 1300

Houston, TX 77046

Attention: Richard J. Campo

Facsimile: (713) 572-4440
	 
	 	 	 	with a copy to:
	 
	 	 	 	Locke Liddell & Sapp LLP

2200 Ross Avenue, Suite 2200

Dallas, TX 75201

Attention: Bryan L. Goolsby

Facsimile: (214) 740-8800
	 
	 	 	 	If to the Holders:

          At their respective address set forth on Exhibit A.

     14. Successors and Assigns. This Agreement and the rights granted
hereunder may not, without the prior written consent of the Company, be
assigned by any Holder except in connection with a transfer of Units in
accordance with the provisions of the partnership agreement of the Partnership.
This Agreement shall be binding upon the parties hereto and their respective
successors and permitted assigns and shall inure to the benefit of the parties
hereto and their respective successors and permitted assigns. If any successor
or permitted assignee of any Holder shall acquire Units or Registrable Shares,
in any manner, whether by operation of law or otherwise, (a) such successor or
permitted assignee shall be entitled to all of the benefits of a “Holder” under
this Agreement and (b) such Registrable Shares shall be held subject to all of
the terms of this Agreement, and by taking and holding such Registrable Shares
such Person

12

 

shall be conclusively deemed to have agreed to be bound by all of the
terms and provisions hereof.

     15. Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

     16. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware applicable to contracts made
and to be performed wholly within said State.

     17. Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions contained herein shall not be in any way impaired
thereby, it being intended that all of the rights and privileges of the parties
hereto shall be enforceable to the fullest extent permitted by law.

     18. Entire Agreement. This Agreement is intended by the parties as a
final expression of their agreement and intended to be the complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein, with respect to such subject matter. This Agreement supersedes all
prior agreements and understandings between the parties with respect to such
subject matter.

[The Remainder of This Page Has Been Intentionally Left Blank.]

13

 

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

	 	 	 
	 

	 	CAMDEN PROPERTY TRUST
	 
	 	 
	

	 	a Texas real estate investment trust
	 
	 	 
	

	 	By:
	

	 	

	

	 	Name:
	

	 	Title:
	 
	 	 
	

	 	[HOLDERS],
	 
	 	 
	

	 	

	 
	 	 
	

	 	By:
	

	 	

	

	 	Name:
	

	 	Time:
	 
	 	 
	

	 	

	 
	 	 
	

	 	By:
	

	 	

	

	 	Name:
	

	 	Title:

 

 

Exhibit A

Holders

	 	 	 
	Name and Address
	 	Number of Units

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