EXHIBIT 10(x)
INVESTORS TITLE COMPANY
1997 STOCK OPTION AND RESTRICTED STOCK PLAN
NONQUALIFIED STOCK OPTION AGREEMENT
THIS NONQUALIFIED STOCK OPTION AGREEMENT (the "Agreement") is made and
entered into as of ________________ 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 a nonqualified stock
option under Article II of the Company's 1997 Stock Option and Restricted Stock
Plan (the "Plan"), and the Optionee desires to accept such option 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 _____ Dollars ($_____) per Share (the "Exercise Price"). This Option is
intended to be a "Nonqualified Stock Option" within the meaning specified in the
Plan and is hereby designated as such pursuant to Article II, Section 1(a) of
the Plan. The grant of this 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:
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(a) At any time after _______________ and prior to _______________ up
to _______________ of the Shares subject to this Option;
(b) At any time after _______________ and prior to _______________ up
to _______________ of the Shares subject to this Option;
(c) At any time after ________________ 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 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,
expiration 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
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(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 its principal office of a
written notice, at least three business days prior to the proposed date of
exercise, 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 hereof; 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 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 then 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 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.
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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 as
provided herein and the issuance of the certificate or certificates evidencing
the Shares covered thereby, except as otherwise provided herein, the Optionee
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 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 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 Exercise Price
tendered to the Company.
9. Rule 144. The Optionee acknowledges that, notwithstanding the
registration of the Option and the Shares 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
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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. Tax Matters. The Optionee acknowledges that, upon exercise of the
Option, the Optionee will recognize taxable income generally in an amount equal
to the excess of the fair market value of the purchased Shares over the Exercise
Price paid therefor, and the Company will have certain withholding obligations
for income and other taxes. It shall be a condition to the Optionee's receipt of
a stock certificate covering Shares purchased pursuant to the Option that the
Optionee pay to the Company such amounts as it is required to withhold or, with
the consent of the Company, that the Optionee otherwise provide for the
discharge of the Company's withholding obligation. If any such payment is not
made by the Optionee, the Company may deduct the amounts required to be withheld
from payments of any kind to which the Optionee would otherwise be entitled from
the Company.
12. 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.
13. 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.
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.
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14. 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.
15. 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.
16. 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.
17. 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.
18. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of North Carolina.
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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 above written.
INVESTORS TITLE COMPANY
By:
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ATTEST:
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Secretary
(Corporate Seal)
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Optionee
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