As Filed With the Securities and Exchange Commission on May 15, 2019

Registration No. 333-____

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.  20549
          

FORM S-8

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

INVESTORS TITLE COMPANY
(Exact name of registrant as specified in its charter)

 
North Carolina
56-1110199
 
 
(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

 

 
121 North Columbia Street
 
 
 
Chapel Hill, North Carolina  
  27514
 
 
(Address of principal executive offices)
  (Zip Code)
 

INVESTORS TITLE COMPANY
2019 STOCK APPRECIATION RIGHTS PLAN
(Full title of the plan)

James A. Fine, Jr.
President, Chief Financial Officer and Treasurer
Investors Title Company
121 North Columbia Street
Chapel Hill, North Carolina 27514
(Name and address of agent for service)
919/968-2200
(Telephone number, including area code,
of agent for service)


Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

  Large Accelerated filer
☐
 
Accelerated filer
☒
Non-Accelerated filer
☐
 
Smaller reporting company
☐
     
Emerging growth company
☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act of 1933, as amended (the “Securities Act”).  ☐
_____________________________

CALCULATION OF REGISTRATION FEE
Title
of securities to be
registered
  Amount
to be
registered
  Proposed maximum
offering price
per share
Proposed Maximum
Aggregate Offering Price

  Amount of
registration
fee
Common Stock, no par value (1)
250,000 shares (2)
 $158.61 (3)
 $39,652,500 (3)
$4,805.88 

_________________________

 (1)

Each share of common stock, no par value (“Common Stock”), issued by the Investors Title Company includes one right to purchase a fraction of a share of Series A Junior Participating Preferred Stock. Prior to the occurrence of certain events, the preferred stock purchase rights will not be exercisable or evidenced separately from the Common Stock. Accordingly, no additional registration fee is required.
 (2)

In accordance with Rule 416(a) of the Securities Act of 1933, as amended, this Registration Statement covers any additional securities offered or issued under the Investors Title Company 2019 Stock Appreciation Rights Plan to prevent dilution from stock splits, stock dividends or similar transactions.
 (3)
Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(c) and 457(h) of the Securities Act of 1933, as amended, and based on the average of the high and low prices for the Common Stock on May 13, 2019 as reported on The Nasdaq Global Market.

PART I

INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS

This Registration Statement on Form S-8 (this “Registration Statement”) is being filed by Investors Title Company (the “Company”) to register 250,000 shares of common stock of the Company, no par value (“Common Stock”), issuable under the Investors Title Company 2019 Stock Appreciation Rights Plan (the “Plan”). As permitted by the rules of the Securities and Exchange Commission (the “Commission”), this Registration Statement omits the information specified in Part I of Form S-8. The document containing the information specified in Part I will be delivered to the participants in the Plan as required by Rule 428(b) under the Securities Act of 1933, as amended (the “Securities Act”). This document is not being filed with the Commission as part of this Registration Statement or as a prospectus or prospectus supplement pursuant to Rule 424.

PART II

INFORMATION REQUIRED IN THE REGISTRATION STATEMENT


Item 3.                              Incorporation of Documents by Reference.

The following documents have been filed by Investors Title Company (the “Company”) with the Commission (Commission file number 0-11774) and are incorporated herein by reference:


(a)
The Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018, filed with the Commission on March 13, 2019.


(b)
The Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2019, filed with the Commission on May 8, 2019.


(c)
The description of the Common Stock set forth under the heading “Description of Company’s Securities to be Registered” in the Company’s Form 10/A filed on August 18, 1997, and all amendments or reports filed for the purpose of updating such description.


(d)
The description of the rights attached to the Common Stock contained in the Company’s Registration Statement on Form 8-A filed on November 15, 2002, and any amendments or reports filed for the purpose of updating such description.

In addition, all documents subsequently filed by the Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), prior to the filing of a post-effective amendment which indicates that all securities offered have been sold or which deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference in this Registration Statement and to be a part hereof from the date of filing of such documents. However, any documents or portions thereof, whether specifically listed above or filed in the future, that are not deemed “filed” with the Commission, including without limitation any information furnished pursuant to Item 2.02 or 7.01 of Form 8-K or certain exhibits furnished pursuant to Item 9.01 of Form 8-K, shall not be deemed to be incorporated by reference in this Registration Statement.

Any statement in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for the purposes of this Registration Statement to the extent that a statement contained herein or in any other subsequently filed document which also is incorporated or deemed to be incorporated by reference herein modifies or supersedes such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Registration Statement.

Item 4.                              Description of Securities.

Not applicable.
Item 5.               Interests of Named Experts and Counsel.

Not applicable.

Item 6.                              Indemnification of Directors and Officers.

The North Carolina Business Corporation Act (the “NCBCA”) contains provisions prescribing the extent to which directors and officers shall or may be indemnified against liabilities which they may incur in their capacities as such.  Sections 55-8-50 through 55-8-58 of the NCBCA permit a corporation to indemnify its directors, officers, employees or agents under either or both a statutory or nonstatutory scheme of indemnification.  In general, the NCBCA provides directors and officers with a right to indemnification when the director or officer has been wholly successful, on the merits or otherwise, in defense of any proceeding to which he was a party because he is or was a director or officer of the corporation, unless limited by the Articles of Incorporation. The NCBCA also permits a corporation to indemnify directors and officers who met a certain standard of conduct. Directors and officers are also entitled to apply to a court for an order requiring the corporation to indemnify the director or officer in a particular case. The court may grant such an order if it determines the director or officer is fairly and reasonably entitled to indemnification in view of all of the relevant circumstances.

In addition to, and notwithstanding the conditions of and limitations on, the indemnification described above under the statutory scheme, Section 55-8-57 of the NCBCA permits a corporation to indemnify, or agree to indemnify, any of its directors, officers, employees or agents against liability and expenses (including attorneys’ fees) in any proceeding (including proceedings brought by or on behalf of the corporation) arising out of their status as such or their activities in such capacities, except for any liabilities or expenses incurred on account of activities that were, at the time taken, known or believed by the person to be clearly in conflict with the best interests of the corporation.

The Articles of Incorporation of the Company, as amended, provide that, to the fullest extent permitted by the NCBCA, no person who is serving or who has served as a director of the Company shall be personally liable to the Company or any of its shareholders for monetary damages for breach of his or her duty as a director.

The Company’s Amended and Restated Bylaws provide that each person who serves or has served as director of the Company shall have a right to be indemnified by the Company to the fullest extent permitted by law against (a) all expenses, including but not limited to attorneys’ fees, the costs of any investigation, experts and similar expenses incurred by him or her in connection with any threatened, pending, or completed civil, criminal, administrative, investigative, or arbitrative action, suit or proceeding (and any appeal therein), whether or not brought by or on behalf of the Company, seeking to hold him or her liable by reason of the fact that he or she is or was acting in such capacity, and (b) all payments made by him or her in satisfaction of any judgment, money decree, fine (including an excise tax assessed with respect to an employee benefit plan), penalty, or settlement for which he may have become liable in any such action, suit or proceeding.

The NCBCA also permits a corporation to purchase and maintain insurance on behalf of its directors and officers against liabilities which they may incur in such capacities.  The Company has purchased insurance to provide for indemnification of directors and officers.

Item 7.                              Exemption from Registration Claimed.

Not applicable.

Item 8.                              Exhibits.

Exhibit
Number
 
 
Description
 
Location
4.1(a)   Articles of Incorporation dated January 22, 1973   Incorporated by reference to Exhibit 4.1 to Form S-8 filed August 10, 2009, File No. 333-161209
   
Incorporated by reference to Exhibit 4.2 to Form S-8 filed August 10, 2009, File No. 333-161209
   
Incorporated by reference to Exhibit 4.3 to Form S-8 filed August 10, 2009, File No. 333-161209
   
Incorporated by reference to Exhibit 3.3 to Form 10-Q for the quarter ended June 30, 2002, File No. 11774
   
Incorporated by reference to Exhibit 3.4 to Form 10-Q for the quarter ended March 31, 2003, File No. 11774
   
Incorporated by reference to Exhibit 3.1 to Form 8-K filed on October 31, 2012, File No. 11774
   
Incorporated by reference to Exhibit 4.1 to Form 8-K filed on November 2, 2012, File No. 11774
   
Filed herewith
   
Filed herewith
   
Contained in Exhibit 5.1
   
Contained on signature page
   
Filed herewith


Item 9.               Undertakings.

(a)      The undersigned Company hereby undertakes:


(1)
To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement:


(i)
To include any prospectus required by section 10(a)(3) of the Securities Act;


(ii)
To reflect in the prospectus any facts or events arising after the effective date of this Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this Registration Statement.  Notwithstanding the foregoing, any increase or decrease in the volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of a prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and


(iii)
To include any material information with respect to the plan of distribution not previously disclosed in this Registration Statement or any material change to such information in this Registration Statement;

provided , however , that paragraphs (a)(1)(i) and (a)(1)(ii) shall not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the Company pursuant to section 13 or section 15(d) of the Exchange Act that are incorporated by reference in this Registration Statement.

(2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3)  To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(b)  The undersigned Company hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the Company’s annual report pursuant to section 13(a) or section 15(d) of the Exchange Act that is incorporated by reference in this Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(c)  Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Company pursuant to the foregoing provisions or otherwise, the Company has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.  In the event that a claim for indemnification against such liabilities (other than the payment by the Company of expenses incurred or paid by a director, officer or controlling person of the Company in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Company will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Company certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Chapel Hill, State of North Carolina, on this 15th day of May, 2019.

  INVESTORS TITLE COMPANY  
       
       

By:
/s/ J. Allen Fine  
    J. Allen Fine  
    Chairman of the Board and   Chief Executive Officer  
    (Principal Executive Officer)
 


KNOW ALL MEN BY THESE PRESENTS that each individual whose signature appears below constitutes and appoints J. Allen Fine and W. Morris Fine, and each of them, his true and lawful attorneys-in-fact and agents with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this Registration Statement, and to file the same, with all exhibits thereto, and all documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or their substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities and on the date indicated.

Signature  
 
Capacity
 
Date
         
   /s/ J. Allen Fine
 
Chairman of the Board and
 
May 15, 2019
J. Allen Fine
 
  Chief Executive Officer
 
 
 
 
(Principal Executive Officer)
 
 
 
 
 
 
 
  /s/ James A. Fine Jr.
 
President, Chief Financial
 
May 15, 2019
James A. Fine, Jr.  
 
Officer, Treasurer and Director
 
 
 
 
(Principal Financial Officer and
 
 
 
 
Principal Accounting Officer)
 
 
 
 
 
 
 
  /s/ W. Morris Fine 
 
Executive Vice President,
 
May 15, 2019
W. Morris Fine     Secretary and Director    
         
  /s/ David L. Francis
  Director   
    May 15, 2019
David L. Francis
       
        May 15, 2019
  /s/ Richard M. Hutson II    
  Director  
   
Richard M. Hutson II
       
         
 /s/ R. Horace Johnson
 
Director
 
May 15, 2019
R. Horace Johnson
       
         
   
  Director  
  May ____, 2019
H. Joe King, Jr.
       
         
 /s/ James R. Morton
    Director   
  May 15, 2019
James R. Morton
       
         
  /s/ James H. Speed, Jr.    
  Director
  May 15, 2019
James H. Speed, Jr.
       


Exhibit 5.1


SMITH, ANDERSON, BLOUNT, DORSETT,
MITCHELL & JERNIGAN, L.L.P.

 
OFFICES
Wells Fargo Capitol Center
150 Fayetteville Street, Suite 2300
Raleigh, North Carolina 27601
              
 
 
 
 
 
 
 
May 15, 2019
 
 
MAILING ADDRESS
P.O. Box 2611
Raleigh, North Carolina
27602-2611
              
 
TELEPHONE:  (919) 821-1220
   FACSIMILE:  (919) 821-6800


Investors Title Company
121 North Columbia Street
Chapel Hill, North Carolina 27514


Re:
Investors Title Company Registration Statement on Form S-8

Ladies and Gentlemen:

We have acted as counsel for Investors Title Company, a North Carolina corporation (the “Company”), in connection with the registration on Form S-8 (the “Registration Statement”) under the Securities Act of 1933, as amended (the “Act”), of 250,000 shares (the “Shares”) of common stock of the Company, no par value per share (the “Common Stock”), for issuance under the Company’s 2019 Stock Appreciation Rights Plan (the “Plan”), and the associated rights to purchase Series A Junior Participating Preferred Stock (the “Rights”) issuable pursuant to the Amended and Restated Rights Agreement, amended and restated as of October 31, 2012, between the Company and Broadridge Corporate Issuer Solutions, Inc. (the “Rights Agreement”).

This letter is being furnished in accordance with the requirements of Item 8 of Form S-8 and Item 601(b)(5)(i) of Regulation S-K.

We have reviewed the Articles of Incorporation of the Company, as amended, the Amended and Restated Bylaws of the Company, certified copies of resolutions of the Board of Directors of the Company (the “Board”), the Rights Agreement and such other documents and have considered such matters of law and fact, in each case, as we, in our professional judgment, have deemed appropriate to render the opinions contained herein. We call your attention to the fact that, as a matter of customary practice, certain assumptions underlying opinions are understood to be implicit. With respect to certain facts, we have considered it appropriate to rely upon certificates or other comparable documents of public officials and officers or other appropriate representatives of the Company, without investigation or analysis of any underlying data contained therein.

Based upon and subject to the foregoing and the further assumptions, limitations, and qualifications hereinafter expressed, it is our opinion that:
Investors Title Company
May 15, 2019
Page 2


(1)  The Shares have been duly authorized, and when issued and delivered against payment therefor in accordance with the Plan as described in the Registration Statement and upon either (a) the countersigning of the certificates representing the Shares by a duly authorized signatory of the registrar for the Common Stock, or (b) the book entry of the Shares by the transfer agent for the Common Stock, will be validly issued, fully paid, and nonassessable.

(2)  When issued in accordance with the Rights Agreement, the Rights will constitute valid and binding obligations of the Company, except as may be limited by (a) applicable bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium and similar laws affecting the enforcement of creditors’ rights generally and (b) general principles of equity (regardless of whether considered in a proceeding in equity or at law), which may, among other things, deny rights of specific performance.

In rendering the opinion set forth in paragraph 2 above, we (i) express no opinion as to the determination that a court may make regarding whether the Board would be required to redeem or terminate, or take other action with respect to, the Rights or the Rights Agreement in the future based on the facts and circumstances existing at the time, (ii) have assumed that the members of the Board have acted in a manner consistent with their fiduciary duties as required under applicable law in approving and adopting the Rights Agreement, and (iii) have addressed the Rights and the Rights Agreement in their entirety (we have not addressed whether the invalidity of any particular provision of the Rights Agreement or the Rights issued thereunder would result in invalidating the Rights in their entirety).

We express no opinion as to any matter other than as expressly set forth above, and no opinion, other than the opinions given herein, may be inferred or implied herefrom. The opinions set forth herein are limited to matters governed by the laws of the State of North Carolina, and no opinion is expressed herein as to the laws of any other jurisdiction. The opinions expressed herein do not extend to compliance with federal or state securities laws relating to the offer or sale of the Shares or the issuance of the Rights.

We hereby consent to the filing of this letter as an exhibit to the Registration Statement and to all references to us in the Registration Statement and any amendment thereto. Such consent shall not be deemed to be an admission that our firm is within the category of persons whose consent is required under Section 7 of the Act or the regulations promulgated pursuant to the Act.
Investors Title Company
May 15, 2019
Page 3

Our opinions expressed herein are as of the date hereof, and we undertake no obligation to advise you of any changes in applicable law or any other matters that may come to our attention after the date hereof that may affect our opinions expressed herein.


  Sincerely yours,  
     
  /s/ Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan, L.L.P.

     
  SMITH, ANDERSON, BLOUNT, DORSETT,  
 
  MITCHELL & JERNIGAN, L.L.P.
 



 
   
 
   
 
       

Exhibit 23.1

 

 
1829 Eastchester Drive
High Point, NC 27265
P 336.889.5156
P 336.889.6168
dhg.com





Board of Directors and Stockholders Investors Title Company
Chapel Hill, North Carolina



We consent to the use of our reports dated March 12, 2019, with respect to the consolidated financial statements of Investors Title Company as of December 31, 2018 and 2017, and for each of the three-year period ended December 31, 2018, and the effectiveness of internal control over financial reporting as of December 31, 2018, incorporated herein by reference.

/S/ DIXON HUGHES GOODMAN, LLP

High Point, North Carolina
May 15, 2019














 
 
Exhibit 99.1




INVESTORS TITLE COMPANY

2019 STOCK APPRECIATION RIGHTS PLAN

ARTICLE I

GENERAL PROVISIONS

Section 1.1                            Purpose .  This 2019 Stock Appreciation Rights Plan (the “Plan”) of Investors Title Company and its subsidiaries (the "Company") is intended to induce those persons who are in a position to contribute materially to the success of the Company to remain with the Company, to offer them rewards in recognition of their contributions to the Company and to offer them incentives to continue to promote the Company’s best interests.
Section 1.2                            Administration .  The Plan shall be administered by the Compensation Committee of the Board of Directors (the “Committee”).
Section 1.3                            Authority of Committee .
(a)              Subject to the other provisions of this Plan, the Committee shall have sole authority in its absolute discretion: to grant stock appreciation Rights (“SARs”) pursuant to Article II under the Plan; to determine the officers, employees and directors to whom SARs shall be granted under the Plan; to determine the number of shares subject to any SAR under the Plan; to fix the exercise price and the duration of each SAR granted under the Plan; to establish corporate or individual performance or other vesting standards for SARs granted under the Plan; to establish any other terms and conditions of SARs granted under the Plan; and to accelerate the time at which any outstanding SAR granted under the Plan may be exercised.  The Board may also grant SARs from time to time to consultants who are not employees of the Company.  No member of the Board or of the Committee shall be liable for any action or determination made in good faith with respect to the Plan or any SAR granted thereunder.  In addition, directors or former directors of the Company, including members or former members of the Committee, shall be entitled to indemnification by the Company to the extent permitted by applicable law and by the Company’s Articles of Incorporation or Bylaws with respect to any liability or expense arising out of such person’s participation in the administration of this Plan.
(b)              Subject to the other provisions of this Plan, and with a view to effecting its purpose, the Committee shall have sole authority in its absolute discretion: to construe and interpret the Plan; to prescribe, amend, and rescind rules and regulations relating to the Plan; to make any other determinations relating to the Plan; and to do everything necessary or advisable to administer the Plan.
(c)              All decisions, determinations, and interpretations made by the Committee shall be binding and conclusive on all SAR grantees and on their legal representatives, heirs and beneficiaries.
Section 1.4                            Shares Subject to the Plan: Reservation of Shares .  The maximum aggregate number of shares of common stock of the Company available pursuant to the Plan for the grant of SARs, subject to adjustments as provided in Section 1.6, shall be 250,000 shares of the Company's common stock, no par value (the "Common Stock").  The aggregate number of shares of Common Stock with respect to which SARs under the Plan may be granted to any individual (including SARs that are subsequently cancelled) shall not exceed an aggregate of 50,000 shares of Common Stock.  If any SAR granted pursuant to the Plan expires or terminates for any reason before it has been exercised in full, the unpurchased shares subject to that SAR shall again be available for the purposes of the Plan.  The Company shall at all times reserve and keep available such number of shares of its Common Stock as shall be sufficient to satisfy the requirements of the Plan.
1
Section 1.5                            Eligibility .  SARs may be granted under the Plan to such key employees (including statutory employees within the meaning of Section 3121(d) of the Code), officers, directors or consultants of the Company or a subsidiary of the Company, whether or not employees, as the Committee shall select from time to time in its discretion.
Section 1.6                            Adjustments .  If the shares of Common Stock of the Company 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 surviving entity, an appropriate and proportionate adjustment shall be made in the maximum number and kind of shares as to which SARs may be granted under this Plan.  A corresponding adjustment changing the number or kind of shares allocated to unexercised SARs that shall have been granted prior to any such change shall likewise be made.  Any such adjustment in outstanding SARs shall be made without change in the aggregate purchase price applicable to the unexercised portion of any such SAR, but with a corresponding adjustment in the price for each share covered by the SAR, and shall be made in a manner consistent with the requirements of Section 409A of the Code in order for any such SAR to remain exempt from the requirements of Section 409A of the Code.  In making any adjustment pursuant to this Section 1.6, any fractional shares shall be disregarded.
In the event of a change in the Common Stock of the Company as presently constituted, which is limited to a change of all of its authorized shares with par value into the same number of shares with a different par value or without par value, the shares resulting from any such change shall be deemed to be Common Stock within the meaning of the Plan.

The grant of a SAR under the Plan shall not affect in any way the Rights or power of the Company to make adjustments, reclassifications, reorganizations or changes in its capital or business structure.

ARTICLE II

STOCK APPRECIATION RIGHTS
Section 2.1                            Grant .  The Committee may cause the Company to grant SARs to eligible participants under the Plan in such amounts as the Committee, in its sole discretion shall determine.  The Committee shall have complete discretion in determining the terms and conditions pertaining to such SARs consistent with the provisions of the Plan.  The grant price of a SAR shall not be less than the fair market value (as hereinafter defined) per share of the Common Stock at the time the SAR is granted.  For the purpose of the Plan, the "fair market value" per share of Common Stock on any date of reference shall be the Closing Price of the Common Stock referred to in clauses (i), (ii) or (iii) below, whichever appropriate, on the business day immediately preceding such date.  For this purpose, the Closing Price of the Common Stock on any business day shall be: (i) if the Common Stock is listed or admitted for trading on any United States national securities exchange, or if actual transactions are otherwise reported on the National Market System of the National Association of Securities Dealers Automated Quotation System ("NASDAQ") or other consolidated transaction reporting system, the last reported sale price of Common Stock on such exchange or reporting system on which the Common Stock is principally traded, as reported in any newspaper of general circulation; (ii) if clause (i) is not applicable and the Common Stock is otherwise quoted on NASDAQ, or any similar system of automated dissemination of quotations of securities prices in common use, the mean between the closing high bid and low asked quotations for the Common Stock on such system for such day; or (iii) if neither clause (i) nor (ii) is applicable, the mean between the high bid and low asked quotations for the Common Stock as reported by the National Quotation Bureau, Incorporated if at least two securities dealers have inserted both bid and asked quotations for Common Stock on at least five of the preceding ten days.  If neither clause (i) nor clauses (ii) or (iii) are applicable, "fair market value" per share of Common Stock shall be such value as shall be determined by the Committee in its sole discretion, unless the Committee shall identify a different method for determining fair market value in a fair and uniform manner.
2
Section 2 .2                            Exercise of SARs .  SARs may be exercised upon whatever terms and conditions the Committee, in its sole discretion, imposes upon them.
Section 2 .3                            SAR Agreement .  Each SAR grant shall be evidenced by a SAR agreement that shall specify the grant price, the term of the SAR, and such other provisions as the Committee shall determine.
Section 2 .4                            Term of SARs .  The term of a SAR granted under the Plan shall be determined by the Committee, in its sole discretion; provided, however , that such term shall not exceed ten (10) years.
Section 2 .5                            Payment of SAR Amount .  Upon exercise of a SAR, the grantee of the SAR shall be entitled to receive payment from the Company in an amount determined by multiplying:
(a)
The difference between the fair market value (as defined in Section 2.1) of a share of Common Stock on the date of exercise over the grant price; by

(b)
The number of shares of Common Stock with respect to which the SAR is exercised.

At the discretion of the Committee or as otherwise provided in the applicable SAR agreement, the payment upon SAR exercise shall be in cash, in shares of Common Stock of equivalent value, or in some combination thereof.
Section 2 .6                            SARs Not Transferable .  Except as otherwise provided in the applicable SAR Agreement, SARs granted pursuant to this Plan may not be sold, pledged, assigned or transferred in any manner other than by will or the laws of descent or distribution and may be exercised during the lifetime of a SAR grantee only by that grantee.
Section 2 .7                            Termination of Employment, Disability or Death
(a)              If a SAR grantee ceases to be employed by the Company, or any subsidiary corporation, for any reason other than death or disability, any SAR granted to such grantee that is unexercised or still subject to any restrictions or conditions shall be terminated and forfeited, unless otherwise provided in the applicable SAR agreement.
(b)              If a SAR grantee becomes disabled within the meaning of Section 22(e)(3) of the Code while employed by the Company, or any subsidiary corporation, any SAR may be exercised at any time within three months after the date of termination of employment due to disability, unless a longer or shorter period is provided in the applicable SAR agreement.
(c)              If a SAR grantee dies while employed by the Company, or any subsidiary corporation, any SAR shall expire one year after the date of death, unless a longer or shorter period of exercise is provided in the applicable SAR agreement.  During this period, the SAR may be exercised, except as otherwise provided in the applicable SAR agreement, by the person or persons to whom the SAR grantee's Rights under the SAR shall pass by will or by the laws of descent and distribution, but in no event may the SAR be exercisable more than ten years from the date of grant.
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(d)              Unless otherwise provided in the applicable SAR agreement, any SAR that may be exercised for a period following termination of the SAR grantee's employment may be exercised only to the extent it was exercisable immediately before such termination and in no event after the SAR would expire by its terms without regard to such termination.
(e)              Unless otherwise provided in the applicable SAR agreement, if a nonemployee director ceases to serve the Company in that capacity, the SAR grantee’s Rights upon such termination shall be governed in the manner of a SAR grantee’s Rights upon termination of employment as set forth above.
Section 2 .8                            Reorganizations .  Unless otherwise provided in the applicable SAR agreement, 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 for other securities or for cash in any acquisition transaction, or if the Company shall dissolve or liquidate or sell all or substantially all of its assets, or upon consummation of a tender offer approved by the Board, all SARs outstanding under this Plan, unless otherwise provided in the applicable SAR agreement, shall terminate on the effective date of such merger, consolidation, dissolution, liquidation, sale or tender offer; provided, however , that prior to such effective date, the Committee may, in its discretion, either (i) make any or all outstanding SARs immediately exercisable, (ii) authorize a payment to any SAR grantee that approximates the economic benefit that he would realize if his SAR were exercised immediately before such effective date, (iii) authorize a payment in such other amount as it deems appropriate to compensate any SAR grantee for the termination of his SAR, or (iv) arrange for the granting of a substitute SAR to any SAR grantee.
ARTICLE III

MISCELLANEOUS PROVISIONS

Section 3.1                            Tax Withholding . No SAR grantee shall be entitled to issuance of a stock certificate representing shares purchased upon exercise of a SAR until such grantee has paid, or made arrangements for payment, to the Company of an amount equal to the income and other taxes that the Company is required to withhold from such person as a result of his exercise of a SAR.  In addition, such amounts as the Company is required to withhold by reason of any tax reimbursement payments made pursuant to Section 3.1 may be deducted from such payments.
Section 3 .2                            Employment.   Nothing in the Plan or in any SAR agreement shall confer upon any eligible employee any Rights to continued employment by the Company or any subsidiary of the Company, or limit in any way the Rights of the Company or any subsidiary of the Company at any time to terminate or alter the terms of that employment.
Section 3 .3                            Effective Date of Plan.   This Plan shall be effective March 11, 2019, the date of adoption of the Plan by the Board of Directors of the Company, subject to approval of the Plan by the shareholders of the Company by the a majority of the votes cast at a meeting at which a majority of the Company’s Common Stock is present either in person or by proxy held within 12 months of the date of adoption of the Plan by the Board.
Section 3 .4                            Termination and Amendment of Plan .  The Plan may be amended, revised or terminated at any time by the Board; provided, however , that no amendment or revision shall, without the approval of the Company’s shareholders, (a) increase the maximum aggregate number of shares subject to this Plan, except as permitted under Section 1.6; (b) change the minimum purchase price for shares subject to SARs granted under the Plan; (c) extend the maximum duration established under the Plan for any SAR; or (d) permit the granting of a SAR to anyone other than those individuals described in Section 1.5 hereof.  Unless sooner terminated, the Plan shall terminate on March 11, 2029.  No SAR shall be granted under the Plan after the Plan is terminated.
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Section 3 .5                            Prior Rights and Obligations .  No amendment, suspension, or termination of the Plan shall, without the consent of the person who has received a SAR, alter or impair any of that person's Rights or obligations under any SAR granted under the Plan prior to such amendment, suspension, or termination.
Section 3 .6                            Securities Laws .  Shares of Common Stock issuable pursuant to this Plan may, at the option of the Company, be registered under applicable federal and state securities laws, but the Company shall have no obligation to undertake such registrations and may, in lieu thereof, issue shares hereunder only pursuant to applicable exemptions from such registrations.  In the event that no such registrations are undertaken, the shares shall be issued only to persons who qualify to receive such shares in accordance with the exemption from registration on which the Company relies.  In connection with any issuance of shares or certificates under the Plan, the Committee may require appropriate representations from the recipient of such shares and take such other action as the Committee may deem necessary, including but not limited to placing restrictive legends on certificates evidencing such shares 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, no shares will be issued pursuant to the Plan unless such shares have been registered under all applicable federal and state securities laws or unless, in the opinion of counsel satisfactory to the Company, exemptions from such registrations are available.
Section 3 .7                            Compliance With Section 409A of the Code .  The Plan is intended to comply with Section 409A of the Code, to the extent applicable.  Notwithstanding any provision of the Plan to the contrary, the Plan shall be interpreted, operated and administered consistent with this intent.  In that regard, and notwithstanding any provision of the Plan to the contrary, the Company reserves the Rights to amend the Plan or any award granted under the Plan, by action of the Committee, without the consent of any affected participant, to the extent deemed necessary or appropriate for purposes of maintaining compliance with Section 409A of the Code and the regulations promulgated thereunder.
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