INVESTORS TITLE COMPANY INCENTIVE STOCK OPTION AGREEMENT
Exhibit
10
(iii)
INVESTORS
TITLE COMPANY
2001
STOCK OPTION AND RESTRICTED STOCK PLAN
THIS
INCENTIVE STOCK OPTION AGREEMENT (the “Agreement”) is made and entered into as
of May 20, 2002, by and between Investors Title Company, a North Carolina
corporation (the “Company”) and ________, a key employee of the Company (the
“Optionee”).
W I T N E S S E T H:
WHEREAS,
the Company recognizes the value to it of the services of the Optionee and
desires to provide the Optionee with an incentive to remain in the employment
of
the Company and an opportunity to purchase common stock of the Company, so
that
the Optionee may acquire or increase a proprietary interest in the Company’s
success, and
WHEREAS,
the Company desires to grant the Optionee an incentive stock option under
Article II of the Company's 2001 Stock Option and Restricted Stock Plan (the
“Plan”), and the Optionee desires to accept such options in accordance with the
terms and conditions set forth herein;
NOW,
THEREFORE, in consideration of the premises and the mutual covenants contained
herein, and intending to be legally bound hereby, the parties agree as
follows:
1.
Grant of Option. Subject to the terms and conditions of this Agreement
and the Plan, the Company hereby grants to the Optionee an option (the “Option”)
to purchase all or any portion of _____________ (_________) shares (the
"Shares") of the Company's common stock, no par value (“Common Stock”), at an
exercise price of Twenty Dollars and Twenty Cents ($20.20) per Share (the
"Exercise Price"). This Option is intended to be an “Incentive Stock Option”
within the meaning specified in the Plan and as defined in Section 422 of the
Internal Revenue Code of 1986, as amended (the “Code”) and is hereby designated
as such pursuant to Article II, Section 1(a) of the Plan. The grant of the
Option has been duly authorized by the Committee that administers the Plan,
as
established by the Board of Directors of the Company pursuant to Article I,
Section 3 of the Plan (the “Committee”).
2.
Term
of
Option.
Subject
to the further restrictions and provisions of the Plan and this Agreement,
the
Option shall become exercisable in installments, with the Optionee having the
right to purchase from the Company the following number of Shares subject to
this Option, on and after the following dates, in cumulative
fashion:
(a)
At
any
time after DATE and prior to DATE, up to XXX of the Shares subject to this
Option;
(b)
At
any
time after DATE and prior to DATE, up to XXX of the Shares subject to this
Option;
(d)
At
any
time after DATE and prior to DATE, up to XXX of the Shares subject to this
Option;
(e)
At
any
time after DATE and prior to DATE, up to XXX of the Shares subject to this
Option;
(f)
At
any
time after DATE and prior to DATE, up to XXX of the Shares subject to this
Option;
(g)
At
any
time after DATE and prior to DATE, up to XXX of the Shares subject to this
Option;
(h)
At
any
time after DATE and prior to DATE, up to XXX of the Shares subject to this
Option;
(i)
At
any
time after DATE and prior to DATE, up to XXX of the Shares subject to this
Option;
(j)
At
any
time after DATE and prior to DATE, up to XXX of the Shares subject to this
Option;
(j)
At
any
time after DATE and prior to its expiration, this Option shall be exercisable
in
full, to the extent it has not previously been exercised.
No
fractional shares of Common Stock shall be issued upon any exercise of this
Option. Notwithstanding the provisions of paragraph 5 hereof, this Option,
or
any unexercised portion thereof, shall expire and no longer be exercisable
on
the date that is ten (10) years from the date hereof.
3.
Transfer
of Option.
The
Option may not be sold, pledged, assigned or transferred in any manner other
than by will or by the laws of descent or distribution.
4.
Adjustments.
If the
shares of Common Stock are increased, decreased, changed into or exchanged
for a
different number or kind of shares or securities through merger, consolidation,
combination, exchange of shares, other reorganization, recapitalization,
reclassification, stock dividend, stock split or reverse stock split in which
the Company is the
2
surviving
entity, the aggregate number of Shares subject to the Option and the Exercise
Price per Share subject to the Option shall be appropriately and proportionately
adjusted in the manner provided in the Plan, provided, however, that the
aggregate purchase price applicable to the unexercised portion of the Option
shall not be affected by such adjustment.
5.
Termination
of Option.
The
Option hereby granted shall terminate and be of no force or effect upon the
happening of the first to occur of the following events:
(a)
except
as
provided in subparagraphs 5(b) and 5(c) hereof, the date of termination of
the
Optionee's employment with the Company for any reason;
(b)
expiration
of three months after the date of termination of the Optionee’s employment with
the Company because Optionee becomes disabled within the meaning of Section
22(e)(3) of the Code;
(c)
expiration
of one year after the death of the Optionee while employed by the
Company;
(d)
occurrence
of any event described in paragraph 10 hereof that causes a termination of
the
Option; or
(e)
expiration
of the term of this Option as provided in paragraph 2 above.
Any
Option
that may be exercised for a period following termination of the Optionee's
employment may be exercised only to the extent it was exercisable immediately
before such termination and in no event after the Option would expire by its
terms without regard to such termination.
6.
Method
of Exercise.
The
Option shall be exercised by tender of payment of the Exercise Price and
delivery to the Company at least three business days prior to the proposed
date
of exercise at its principal office of a written notice, which notice
shall:
(a)
state
the
election to exercise the Option, the number of Shares with respect to which
the
Option is being exercised, and the name, address, and social security number
of
the person in whose name the stock certificate or certificates for such Shares
is to be registered;
(b)
contain
any such representations and agreements as to Optionee's investment intent
with
respect to such Shares as shall be reasonably required by the Committee pursuant
to paragraph 8; and
(c)
be
signed
by the person entitled to exercise the Option, and if the Option is being
exercised by any person or persons other than the Optionee, be accompanied
by
3
proof,
satisfactory to the Committee, of the right of such person or persons to
exercise the Option.
Payment
of
the Exercise Price may be made in cash or by certified or official bank check
payable to the order of the Company. Payment may also be made by surrendering
shares of Common Stock (including any Shares received upon a prior or
simultaneous exercise of the Option) at the fair market value of such Common
Stock, as determined pursuant to Section 1(b) of Article II of the Plan, as
of
the date of surrender. Payment may also be made by combining cash, check or
Common Stock.
After
receipt of such notice in a form satisfactory to the Committee and the
acceptance of payment, the Company shall deliver to the Optionee a certificate
or certificates representing the Shares purchased hereunder, provided, that
if
any law or regulation requires the Company to take any action with respect
to
the Shares specified in such notice before the issuance thereof, the date of
delivery of such Shares shall be extended for the period necessary to take
such
action.
7.
Rights
of a Shareholder.
The
Optionee shall not be deemed for any purpose to be a shareholder of the Company
with respect to any shares covered by this Option unless this Option shall
have
been exercised and the Exercise Price paid in the manner provided herein. No
adjustment will be made for dividends or other rights where the record date
is
prior to the date of exercise and payment. Upon the exercise of the Option
and
the issuance of the certificate or certificates evidencing the shares of Common
Stock received, except as otherwise provided herein, the Optionee shall have
all
the rights of a shareholder of the Company including the rights to receive
all
dividends or other distributions paid or made with respect to such shares.
8.
Compliance
with Securities Laws.
The
Optionee recognizes that any registration of the shares of Common Stock issuable
pursuant to this Option under applicable federal and state securities laws,
or
actions to qualify for applicable exemptions from such registrations, shall
be
at the option of the Company. The Optionee acknowledges that, in the event
that
no such registrations are undertaken and the Company relies on exemptions from
such registrations, the shares shall be issued only if the Optionee qualifies
to
receive such shares in accordance with the exemptions from registration on
which
the Company relies and that, in connection with any issuance of certificates
evidencing such shares, the Board of Directors may require appropriate
representations from the Optionee and take such other action as the Board of
Directors may deem necessary, including but not limited to placing restrictive
legends on such certificates and placing stop transfer instructions in the
Company’s stock transfer records, or delivering such instructions to the
Company’s transfer agent, in order to assure compliance with any such
exemptions. Notwithstanding any other provision of the Plan or this Agreement
(i) no shares will be issued upon any exercise of the Option unless and until
such shares have been registered under all applicable federal and state
securities laws or unless, in the opinion of counsel satisfactory to the
Company, all actions necessary to qualify for exemptions from such registrations
shall have been taken and (ii) the Company shall have no obligation to undertake
such
4
registrations
or such actions necessary to qualify for exemptions from registrations and
shall
have no liability whatsoever for not doing so except to refund any option price
tendered to the Company.
9.
Rule
144.
The
Optionee acknowledges that, notwithstanding the registration of the Option
and
the shares of Common Stock issuable upon its exercise under the Securities
Act
of 1933 or under the securities laws of any state, if, at the time of exercise
of the Option, he is deemed to be an “affiliate” of the Company as defined in
Rule 144 of the Securities and Exchange Commission, any shares purchased
thereunder will nevertheless be subject to sale only in compliance with Rule
144
(but without any holding period), and that the Company shall take such action
as
it deems necessary or appropriate to assure such compliance, including placing
restrictive legends on certificates evidencing such shares and delivering stop
transfer instructions to the Company's transfer agent.
10.
Reorganizations.
If the
Company shall be a party to any merger or consolidation in which it is not
the
surviving entity or pursuant to which the shareholders of the Company exchange
their Common Stock, or if the Company shall dissolve or liquidate or sell all
or
substantially all of its assets, the Option granted hereunder shall terminate
on
the effective date of such merger, consolidation, dissolution, liquidation
or
sale; provided, however, that prior to such effective date, the Committee may,
in its discretion, cause the Option to become immediately exercisable, and
may,
to the extent the Option is terminated as provided in this paragraph 10,
authorize a payment to the Optionee that approximates the economic benefit
that
he would realize if the Option were exercised immediately before such effective
date, or authorize a payment in such other amount as it deems appropriate to
compensate the Optionee for the termination of the unexercised portion of the
Option, or arrange for the granting of a substitute option to the
Optionee.
This
Agreement shall not affect in any way the right or power of the Company to
make
adjustments, reclassifications, reorganizations or changes of its capital or
business structure, or to merge or consolidate, or to dissolve, liquidate,
sell
or transfer all or any part of its business or assets.
11.
No
Right to Continued Employment.
This
Agreement does not confer upon the Optionee any right to continued employment
by
the Company, nor shall it interfere in any way with the right of the Company
to
terminate or alter the terms of that employment.
12.
Construction.
This
Agreement shall be construed so as to be consistent with the Plan and the
provisions of the Plan shall be deemed to be controlling in the event that
any
provision hereof should be inconsistent therewith. The Optionee hereby
acknowledges receipt of a copy of the Plan from the Company and agrees to be
bound by all of the terms and provisions of the Plan.
5
Whenever
the word “Optionee” is used in any provision of this Agreement under
circumstances where the provision should logically be construed to apply to
(i)
the estate, personal representative, or beneficiary to whom this Option may
be
transferred by will or by the laws of descent and distribution or (ii) the
guardian or legal representative of the Optionee acting pursuant to a valid
power of attorney or the decree of a court of competent jurisdiction, then
the
term “Optionee” shall be construed to include such estate, personal
representative, beneficiary, guardian or legal representative.
13.
Severability.
The
provisions of this Agreement shall be severable and the invalidity or
unenforceability of any provision shall not affect the validity or
enforceability of the other provisions hereto.
14.
Successor
and Assigns.
The
terms of this Agreement shall be binding upon and shall enure to the benefit
of
any successors or assigns of the Company and of the Optionee.
15.
Notices.
Notices
under this Agreement shall be in writing and shall be deemed to have been duly
given (i) when personally delivered, (ii) when forwarded by Federal Express,
Airborne, or another private carrier which maintains records showing delivery
information, (iii) when sent via facsimile but only if a written facsimile
acknowledgment of receipt is received by the sending party, or (iv) when placed
in the United States Mail and forwarded by registered or certified mail, return
receipt requested, postage prepaid, addressed to the party to whom such notice
is being given or such other address as furnished to the Company from time
to
time for this purpose.
16.
Entire
Agreement; Modification.
This
Agreement is the entire agreement and understanding of the parties hereto with
respect to the Option granted herein and supersedes any and all prior and
contemporaneous negotiations, understandings and agreements with regard to
the
Option and the matters set forth herein, whether oral or written. No
representation, inducement, agreement, promise or understanding altering,
modifying, taking from or adding to the terms and conditions hereof shall have
any force or effect unless the same is in writing and validly executed by the
parties hereto.
17.
Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of North Carolina.
IN
WITNESS
WHEREOF, the Optionee has executed this Agreement and the Company has caused
this Agreement to be executed by its duly authorized officer, effective as
of
the day and year first written above.
6
|
INVESTORS
TITLE COMPANY
|
|||
|
By:
|
|||
|
ATTEST:
|
|||
|
|
|||
|
Assistant
Secretary
|
|||
|
(Corporate
Seal)
|
|||
|
|
|||
|
Optionee
|
|||
7