Exhibit
10.1
INVESTORS
TITLE COMPANY
2001
STOCK OPTION AND RESTRICTED STOCK PLAN
STOCK APPRECIATION RIGHTS
AGREEMENT
W
I
T
N
E
S
S
E
T
H
:
WHEREAS,
the Company recognizes the value to it of the services of the Grantee and
desires to provide the Grantee with an incentive to remain as an executive
officer of the Company and an opportunity to acquire common stock of the
Company, so that the Grantee may acquire or increase a proprietary interest in
the Company’s success, and
WHEREAS,
the Company desires to award the Grantee stock appreciation rights (“SARs”)
under Article III of the Company's 2001 Stock Option and Restricted Stock Plan,
as amended and restated effective May 17, 2006 (the “Plan”), and the Grantee
desires to accept such SARs 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
SARs.
Subject to the terms and conditions of this Agreement
and the Plan, the Company hereby awards to the Grantee _________ SARs at an
exercise price of $_________ per SAR (the “Exercise Price”). Each SAR
gives the Grantee the right upon exercise of the SAR in accordance with the
terms and conditions of this Agreement and the Plan, to receive an amount equal
to the difference between (i) the fair market value (as defined in Section
2.2(b) of the Plan) of one (1) share of the Company common stock as of the
exercise date, and (ii) the Exercise Price. Upon exercise, such
amount shall be payable to the Grantee in shares of the Company common stock
(the “Shares”) in a single payment as soon as administratively practicable (but
in no event later than thirty 30 days) following the exercise
date. The number of Shares to be delivered to the Grantee shall equal
(x) the amount payable to the Grantee upon exercise of the SARs divided by (y)
the fair market value (as defined in Section 2.2(b) of the Plan) of one share of
the Company common stock as of the exercise date, with cash payable for any
fractional share. The grant of these SARs has been duly authorized by
the Committee that administers the Plan, as established by the Board of
Directors of the Company pursuant to Section 1.3 of the Plan (the
“Committee”).
2.
Vesting
and Exercisability of SARs
.
The
SARs shall vest in
______________
installments if the Grantee continues to provide services as an executive
officer of the Company through each of the vesting dates as
follows:
Vesting Date
|
|
Number
of SARs
that become Exercisable
|
|
|
|
|
|
|
|
|
|
Notwithstanding the foregoing, all SARs
granted hereunder shall fully vest in the event of the Grantee’s
death.
The SARs
granted hereunder shall become exercisable upon vesting. Unless
sooner terminated as provided in the Plan or in paragraph 5 hereof, all vested
SARs shall terminate, and all rights of the Grantee hereunder shall expire, at
the close of business on the seventh anniversary of the date of this
Agreement.
3.
Transfer of
SARs
. The SARs may not be sold, pledged, assigned or
transferred in any manner other than by will or by the laws of descent or
distribution, unless otherwise agreed by the Committee.
4.
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, the aggregate number of SARs
and the Exercise Price shall be appropriately and proportionately adjusted in
the manner provided in the Plan.
5.
Termination of
SARs
. The SARs hereby granted shall terminate and be of no
force or effect upon the happening of the first to occur of the following
events:
(a) expiration
of three (3) months after the date of termination of the Grantee’s service as an
executive officer of the Company for any reason other than the death of the
Grantee;
(b) expiration
of twelve (12) months after the death of the Grantee while serving as an
executive officer of the Company;
(c) occurrence
of any event described in paragraph 10 hereof that causes a termination of the
SARs; or
(d) the
close of business on the seventh anniversary of the date of
thisAgreement.
Any SARs
that may be exercised for a period following termination of the Grantee's
service as an executive officer may be exercised only to the extent such SARs
were vested immediately before such termination and in no event after the SARs
would expire by their terms without regard to such termination.
6.
Method of
Exercise
. The SARs shall be exercised by delivery to the
Company at its principal place of business of a written notice, at least three
(3) business days prior to the proposed date of exercise, which notice
shall:
(a) state
the election to exercise the SARs, the number of SARs which are being exercised,
and the name, address, and social security number of the person in whose name
the stock certificate or certificates for the Shares to be issued in connection
with the exercise of the SARs are to be registered;
(b) contain
any such representations and agreements as to Grantee's investment intent with
respect to such Shares as shall be reasonably required by the Committee pursuant
to paragraph 8 hereof; and
(c) be
signed by the person entitled to exercise the SARs, and if the SARs are being
exercised by any person or persons other than the Grantee, be accompanied by
proof, satisfactory to the Committee, of the right of such person or persons to
exercise the SARs.
After
receipt of such notice in a form satisfactory to the Committee, the Company
shall deliver to the Grantee a certificate or certificates representing the
Shares acquired 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 Grantee shall not be deemed for any
purpose to be a shareholder of the Company with respect to any Shares covered by
the SARs unless the SARs shall have been exercised 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. Upon the
exercise of the SARs as provided herein and the issuance of the certificate or
certificates evidencing the Shares covered thereby, the Grantee shall have all
the rights of a shareholder of the Company, including the right to receive all
dividends or other distributions paid or made with respect to such
Shares.
8.
Compliance
with Securities Laws
.
The Grantee
recognizes that any registration of the Shares issuable pursuant to
the SARs
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 Grantee 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 Grantee 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 Grantee 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 SARs
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 registrations or such actions necessary to qualify for exemptions from
registrations and shall have no liability whatsoever for not doing
so.
9.
Rule
144
. The Grantee acknowledges that, notwithstanding any
registration of
the
SARs
and the Shares issuable upon exercise of
the SARs
under the
Securities Act of 1933 or under the securities laws of any state, if, at the
time of exercise of
the SARs
, he is
deemed to be an “affiliate” of the Company as defined in Rule 144 of the
Securities and Exchange Commission, any Shares acquired hereunder will
nevertheless be subject to sale only in compliance with Rule 144 (but without
any holding period) or pursuant to an effective registration statement under the
Securities Act of 1933, and that the Company shall take such action as it deems
necessary or appropriate to assure such compliance, including, to the extent it
deems appropriate, placing restrictive legends on certificates evidencing such
Shares and delivering stop transfer instructions to the Company's transfer
agent.
10.
Reorganizations
. To
the extent permitted under Section 409A of the Internal Revenue Code of 1986, as
amended, 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 SARs 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 SARs to become
immediately exercisable, and may, to the extent the SARs are terminated as
provided in this paragraph 10, authorize a payment to the Grantee that
approximates the economic benefit that the Grantee would realize if the SARs
were exercised immediately before such effective date, or authorize a payment in
such other amount as it deems appropriate to compensate the Grantee for the
termination of the unexercised portion of the SARs, or arrange for the granting
of substitute SARs to the Grantee.
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.
Tax
Matters
. The Grantee acknowledges that, upon exercise of
the SARs, the Grantee will recognize taxable income generally in an amount equal
to the excess of the fair market value of the acquired Shares (plus cash for any
fractional shares), and the Company may have certain withholding obligations for
income and other taxes. It shall be a condition to the Grantee’s
receipt of a stock certificate covering the Shares acquired upon exercise of the
SARs that the Grantee pay to the Company such amounts as it is required to
withhold or, with the consent of the Company, that the Grantee otherwise provide
for the discharge of the Company’s withholding obligation. If any
such payment is not made by the Grantee, the Company may deduct the amounts
required to be withheld from payments of any kind to which the Grantee would
otherwise be entitled from the Company.
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 Grantee 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.
Whenever
the word “Grantee” 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 the SARs may be
transferred by will or by the laws of descent and distribution or (ii) the
guardian or legal representative of the Grantee acting pursuant to a valid power
of attorney or the decree of a court of competent jurisdiction, then the term
“Grantee” 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 Grantee.
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 and the Plan constitute the
entire agreement and understanding of the parties hereto with respect to the
SARs granted herein and supersedes any and all prior and contemporaneous
negotiations, understandings and agreements with regard to the SARs 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 Grantee 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 above written.
INVESTORS
TITLE COMPANY
By: ____________________________ ________________________________
GRANTEE
Title: ____________________________