EXHIBIT 10.2.5
INCORPORATED TERMS
DATED AS OF___________
TO
RESTRICTED STOCK AND RESTRICTED STOCK UNIT AGREEMENT
The following are the "Incorporated Terms" referred to in the
instrument entitled "Restricted Stock and Restricted Stock Unit Agreement" which
refers to these Incorporated Terms and which has been signed by the Company and
the Director (the "Base Instrument"). The Incorporated Terms and the Base
Instrument constitute a single agreement and that agreement consists of the Base
Instrument and the Incorporated Terms. The Incorporated Terms dovetail with the
Base Instrument; because the last paragraph of the Base Instrument is Paragraph
1, the Incorporated Terms begin with Paragraph 2.
2. Restrictions. (a) Except as otherwise provided herein, the Restricted
Stock may not be sold, transferred or otherwise alienated or hypothecated until
the Restricted Stock Release Date set forth on the signature page (such date as
used herein with respect to the Restricted Stock is referred to as the "Release
Date.") Shares of Restricted Stock may be transferred by gift pursuant to the
"Rules for Transfer of Awards Under Deposit Share Program for Directors," which
were attached to the E-Mail. Any person to whom shares of Restricted Stock are
transferred pursuant to the Rules is herein referred to as a "Permitted
Transferee."
(b) The Release Date for Deposit Share RSUs shall be the same as the
Release Date for the Restricted Stock, and the Release Date for Annual RSUs
shall be the date set forth after "Annual RSU Release Date" on the signature
page. The term "Release Date" as used in the remainder of this Agreement shall
be applied separately to the Deposit Share RSUs and the Annual RSUs as if the
term "RSUs" were the term "Deposit Share RSUs" or "Annual RSUs," as the case may
be. Except as otherwise provided herein, RSUs may not be sold, transferred or
otherwise alienated or hypothecated regardless of the occurrence of the Release
Date.
3. Escrow. (a) Certificates for shares of Restricted Stock shall be issued
as soon as practicable in the name of the Director but shall be held in escrow
by the Company, as escrow agent. Upon issuance of such certificates, (i) if
certificates are issued in non-electronic registration, the Company shall give
the Director a receipt for the Restricted Stock held in escrow which will state
that the Company holds such Stock in escrow for the account of the Director,
subject to the terms of this Agreement, and (ii) the Director shall give the
Company a stock power for such Stock duly endorsed in blank which will be held
in escrow for use in the event such Stock is forfeited in whole or in part.
Unless forfeited as provided herein, Restricted Stock shall cease to be held in
escrow and certificates for such Stock which have not been transferred to a
Permitted Transferee shall be delivered to the Director, or in the case of his
death, to his Beneficiary (as hereinafter defined) on the Release Date or upon
any other termination of the restrictions imposed by Paragraph 2 hereof.
(b) Certificates for shares of Stock, if any, that were purchased to
obtain an award of Restricted Stock ("Purchased Shares") shall also be held in
escrow by the Company, as escrow agent. Upon issuance of such certificates, if
certificates are issued in non-electronic registration, the Company shall give
the Director a receipt for the Purchased Stock held in
escrow which will state that the Company holds such Stock in escrow for the
account of the Director.
4. Transfer After Release Date; Securities Law Restrictions. Except as
otherwise provided herein, Restricted Stock shall become free of the
restrictions of Paragraph 2 and be freely transferable by the Director on the
Release Date (such freeing of such restrictions is herein referred to as
"vesting"). Notwithstanding the foregoing or anything to the contrary herein,
the Director agrees and acknowledges with respect to any Restricted Stock and
any Stock delivered in settlement of RSUs that has not been registered under the
Securities Act of 1933, as amended (the "Act"), that (i) the Director will not
sell or otherwise dispose of such Stock except pursuant to an effective
registration statement under the Act and any applicable state securities laws,
or in a transaction which, in the opinion of counsel for the Company, is exempt
from such registration, and (ii) a legend will be placed on the certificates for
the Restricted Stock to such effect.
5. Termination of Directorship Due to Death or a Permissible Event. If the
Director ceases to be a director of the Company by reason of the Director's
death or a "Permissible Event" prior to the Release Date, (i) the restrictions
of Paragraph 2 applicable to the Restricted Stock shall terminate, (ii) a
Release Date shall be deemed to have occurred for all RSUs and (iii) the vesting
requirements for the Restricted Stock and RSUs shall be deemed to be fulfilled
on the date of the Director's death or the Permissible Event. A Permissible
Event is termination of service as a director of the Company by reason of (i)
the Director being ineligible for continued service as a director of the Company
because of the Director's age under the Company's Corporate Governance
Guidelines, or (ii) the Director's taking a position with or providing services
to a governmental, charitable or educational institution whose policies prohibit
the Director's continued service on the Company's Board or under circumstances
in which such continued service would be a violation of law.
6. Termination of Directorship for Other Reasons. If, prior to the Release
Date, the Director ceases to be a director of the Company for any reason other
than the Director's death or a Permissible Event, the Restricted Stock and RSUs
awarded hereunder shall be forfeited by the Director and shall revert to the
Company, unless otherwise provided by the Committee. In addition, Restricted
Stock may be forfeited as provided in Paragraph 14(g).
7. Beneficiary. (a) The person whose name appears on the signature page
hereof after the caption "Beneficiary" or any successor designated by the
Director in accordance herewith (the person who is the Director's Beneficiary at
the time of his death herein referred to as the "Beneficiary") shall be entitled
to receive the [vested] Restricted Stock to be released to the Beneficiary under
Paragraphs 3 and 5 as a result of the death of the Director and the Stock to be
delivered in settlement of RSUs. The Director may from time to time revoke or
change the Beneficiary without the consent of any prior Beneficiary by filing a
new designation with the Committee. The last such designation received by the
Committee shall be controlling; provided, however, that no designation, or
change or revocation thereof, shall be effective unless received by the
Committee prior to the Director's death, and in no event shall any designation
be effective as of a date prior to such receipt. If no such Beneficiary
designation is in effect at the time of the Director's death, or if no
designated Beneficiary survives the Director or if such designation conflicts
with law, the Director's estate shall be entitled to receive the Restricted
Stock upon the death of the Director and the Stock to be delivered in settlement
of RSUs.
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(b) A Permitted Transferee shall be entitled to designate a
Beneficiary with respect to the shares of Restricted Stock transferred to the
Permitted Transferee by completing the appropriate portion of the election form
contemplated by Paragraph 5 of the Rules (the "Election Form"). Such Beneficiary
shall be entitled to receive the vested Restricted Stock to be released under
Paragraphs 3 and 5 as a result of the death of the Director or otherwise to be
released hereunder if, in either case, the Permitted Transferee dies, prior to
such release. The Permitted Transferee may from time to time revoke or change
such Beneficiary without the consent of any prior Beneficiary by filing a new
designation with the Committee. The last such designation received by the
Committee shall be controlling, provided, however, that no designation, or
change or revocation thereof, shall be effective unless received by the
Committee prior to the Director's death, and in no event shall any designation
be effective as of a date prior to such receipt. If no such designated
Beneficiary survives the Permitted Transferee, such Beneficiary's estate, of if
such designation conflicts with law, the Permitted Transferee's estate, shall be
entitled to receive the Restricted Stock released hereunder.
(c) If the Committee is in doubt as to the right of any person to
receive Restricted Stock or Stock delivered in settlement of RSUs, the Company
may retain such Stock, without liability for any interest thereon, until the
Committee determines the person entitled thereto, or the Company may deliver
such Restricted Stock or Stock to be delivered in settlement of RSUs to any
court of appropriate jurisdiction and such delivery shall be a complete
discharge of the liability of the Company therefor.
8. Certificate Legend. In addition to any legends placed on certificates
for Restricted Stock under Paragraph 4 hereof, each certificate for shares of
Restricted Stock shall bear the following legend:
"The sale or other transfer of the shares of stock represented by
this certificate, whether voluntary, or by operation of law, is
subject to certain restrictions set forth in the MGIC Investment
Company 2002 Stock Incentive Plan, as amended, and a Restricted
Stock Agreement between MGIC Investment Company and the registered
owner hereof. A copy of such Plan and such Agreement may be obtained
from the Secretary of MGIC Investment Company."
When the restrictions imposed by Paragraph 2 hereof terminate, the foregoing
legend shall be removed from the certificates representing such Stock upon
request of the Director or a Permitted Transferee for whom the shares have been
transferred.
9. Voting Rights; Dividends and Other Distributions; Rights of RSUs.
(a) While the Restricted Stock is subject to restrictions under
Paragraph 2 and prior to any forfeiture thereof, the Director may exercise full
voting rights for the Restricted Stock registered in his or her name and held in
escrow hereunder.
(b) While the Restricted Stock is subject to the restrictions under
Paragraph 2 and prior to any forfeiture thereof, the Director shall be entitled
to receive all dividends and other distributions paid with respect to the
Restricted Stock. If any such dividends or distributions are paid in Stock, such
shares shall be subject to the same restrictions as the shares of Restricted
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Stock with respect to which they were paid, including the requirement that
Restricted Stock be held in escrow pursuant to Paragraph 3 hereof.
(c) Subject to the provisions of this Agreement, the Director shall
have, with respect to the Restricted Stock, all other rights of holders of
Stock.
(d) RSUs represent only the right to receive as Stock, on the terms
provided herein, (i) in the case of Deposit Share RSUs, equal to the number of
shares indicated after "Shares of Restricted Stock" on the signature page, and
(ii) in the case of the Annual RSUs, equal to one share of Stock for each such
RSU. RSUs that have vested shall be settled by the delivery of one share of
Stock for each RSU as promptly as practicable after the Director ceases to be a
Director of the Company. The Director shall have no rights as a holder of Stock
on account of RSUs, including the right to vote or to receive dividends, until
certificates for such Stock are actually delivered in settlement of the RSU.
Notwithstanding the preceding sentence, on each date on which the Company pays a
dividend in cash on the Stock, the Company shall make a payment in cash on the
RSUs that are outstanding on the record date for such dividend equal to, in the
case of Deposit Share RSUs, the dividend that would have been paid on the number
of shares indicated after "Shares of Restricted Stock" on the signature page had
such shares then been outstanding, and on the Annual RSUs, equal to the number
of shares that are to be issued in settlement of the Annual RSUs had such shares
then been outstanding.
10. Adjustments in Event of Change in Stock. In the event of any change in
the outstanding shares of Stock ("capital adjustment") for any reason, including
but not limited to, any stock splits, stock dividend, recapitalization, merger,
consolidation, reorganization, combination or exchange of shares or other
similar event which, in the judgment of the Committee, could distort the
implementation of the award of Restricted Stock or the award of RSUs, the
Committee may make such adjustments in the shares of Restricted Stock subject to
this Agreement or in the property deliverable in settlement of RSUs, or in the
terms, conditions or restrictions of this Agreement as the Committee deems
equitable.
11. Change in Control. If a "Change in Control of the Company" (as defined
in the Annex attached hereto) occurs, notwithstanding anything herein, the
restrictions of Paragraph 2 applicable to the Restricted Stock not previously
forfeited shall terminate on the date of the Change in Control of the Company
and a Release Date shall be deemed to have occurred for all RSUs. The Director
agrees that such Annex may be amended by the Company on one or more occasions
without the consent or approval of the Director if in the determination of the
Committee such amendment is necessary or appropriate to conform the provisions
of such Annex to the IRS Notice (as defined in such Annex), any regulations
issued by the IRS under Section 409A of the Internal Revenue Code of 1986 (which
was added by the American Jobs Creation Act of 2004) or any position published
by the IRS with respect to such Section. The right of the Company to make such
an amendment does not depend on whether the Restricted Stock or RSUs are subject
to such Section but will enable the Company to have uniform provisions governing
a change in control among all agreements having such change of control
provisions, including those under which compensation is subject to such Section.
Any such amendment will become effective upon notice to the Director. The
Company will seek to give the Director notice of an amendment with reasonable
promptness after the Committee has approved the amendment.
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12. Powers of Company Not Affected. The existence of the Restricted Stock
or RSUs shall not affect in any way the right or power of the Company or its
stockholders to make or authorize any combination, subdivision or
reclassification of the Stock or any reorganization, merger, consolidation,
business combination, exchange of shares, or other change in the Company's
capital structure or its business, or any issue of bonds, debentures or stock
having rights or preferences equal, superior or affecting the Restricted Stock
or any Stock to be issued in settlement of RSUs or, in both cases, the rights
thereof, or dissolution or liquidation of the Company, or any sale or transfer
of all or any part of its assets or business, or any other corporate act or
proceeding, whether of a similar character or otherwise. The determination of
the Committee as to any such adjustment shall be conclusive and binding for all
purposes of this Agreement. Nothing herein shall confer upon the Director the
right to continue as a member of the Company's Board of Directors.
13. Interpretation by Committee. The Director agrees that any dispute or
disagreement which may arise in connection with this Agreement shall be resolved
by the Committee, in its sole discretion, and that any interpretation by the
Committee of the terms of this Agreement or the Plan and any determination made
by the Committee under this Agreement or the Plan may be made in the sole
discretion of the Committee and shall be final, binding, and conclusive. Any
such determination need not be uniform and may be made differently among
directors awarded Restricted Stock and RSUs.
14. Miscellaneous.
(a) This Agreement shall be governed and construed in accordance
with the laws of the State of Wisconsin applicable to contracts made and to be
performed therein between residents thereof.
(b) The waiver by the Company of any provision of this Agreement
shall not operate or be construed to be a subsequent waiver of the same
provision or waiver of any other provision hereof.
(c) The Restricted Stock and RSUs shall be deemed to have been
awarded pursuant to the Plan and are subject to the terms and conditions
thereof. In the event of any conflict between the terms hereof and the
provisions of the Plan, the terms and conditions of the Plan shall prevail. Any
and all terms used herein, unless specifically defined herein shall have the
meaning ascribed to them in the Plan.
(d) Any notice, filing or delivery hereunder or with respect to
Restricted Stock or RSUs shall be given to the Director at either his or her
address as indicated in the records of the Company to which communications are
generally sent to him or her; shall be given to a Permitted Transferee at his
address as indicated in the Election Form; and shall be given to the Committee
or the Company at 000 Xxxx Xxxxxxxx Avenue, Milwaukee 53202, Attention:
Secretary. All such notices shall be given by first class mail, postage
pre-paid, or by personal delivery.
(e) This Agreement shall be binding upon and inure to the benefit of
the Company and its successors and assigns and shall be binding upon and inure
to the benefit of the Director, any Permitted Transferee, the Beneficiary and
the personal representative(s) and heirs
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of the Director, except that the Director may not transfer any interest in any
Restricted Stock prior to the release of the restrictions imposed by Paragraph 2
other than as provided in Paragraph 2 nor may the Director transfer any interest
in any RSUs.
(f) The term "certificate" as used herein with regard to shares of
Restricted Stock, includes electronic registration in the system of the
Company's transfer agent for the Stock. The term "Committee" means any Committee
of the Company's Board of Directors which is then administering the Plan if
other than the Management Development, Nominating and Governance Committee.
(g) If Purchased Shares are pledged in accordance with the "Rules
Relating to Pledges Under Non-Employee Directors Deposit Share Program" that
accompanied the E-Mail, and are subsequently transferred (other than to a
subsequent pledgee) prior to the Release Date, one and one-half shares of
Restricted Stock shall be forfeited for each Purchased Share so transferred.
15. Permitted Transferee. In the event shares of Restricted Stock are
transferred to a Permitted Transferee, (i) the provisions of Paragraphs 3, 4, 9,
and 13 shall apply mutatis muntandis to the shares so transferred and to the
Permitted Transferee; (ii) the provisions of Paragraphs 5, 8, 10, 11, 12 and 14
shall continue to apply without any change with respect to the shares so
transferred; and (iii) the provisions of Paragraph 6 shall continue to apply
without any change with respect to the shares so transferred, except that the
shares to be forfeited shall be those shares of Restricted Stock that have not
vested and which are held by the Permitted Transferee.
The end of Paragraph 15 is the end of the Incorporated Terms. The
remainder of the Agreement is contained in the Base Instrument.
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ANNEX
DEFINITION OF "CHANGE IN CONTROL OF THE COMPANY" AND RELATED TERMS
1 Change in Control of the Company. A "Change in Control of the Company"
shall be deemed to have occurred if an event set forth in any one of the
following paragraphs shall have occurred:
(i) any Person (other than (A) the Company or any of its
subsidiaries, (B) a trustee or other fiduciary holding securities
under any employee benefit plan of the Company or any of its
subsidiaries, (C) an underwriter temporarily holding securities
pursuant to an offering of such securities or (D) a corporation
owned, directly or indirectly, by the shareholders of the Company in
substantially the same proportions as their ownership of stock in
the Company ("Excluded Persons")) is or becomes the Beneficial
Owner, directly or indirectly, of securities of the Company (not
including in the securities beneficially owned by such Person any
securities acquired directly from the Company or its Affiliates
after July 22, 1999, pursuant to express authorization by the Board
of Directors of the Company (the "Board") that refers to this
exception) representing more than 50% of the total fair market value
of the stock of the Company or representing 50% or more of the total
voting power of the stock of the Company; or
(ii) the following individuals cease for any reason to
constitute a majority of the number of directors of the Company then
serving: (A) individuals who, on July 22, 1999, constituted the
Board and (B) any new director (other than a director whose initial
assumption of office is in connection with an actual or threatened
election contest, including but not limited to a consent
solicitation, relating to the election of directors of the Company,
as such terms are used in Rule 14a-11 of Regulation 14A under the
Act) whose appointment or election by the Board or nomination for
election by the Company's shareholders was approved by a vote of at
least a majority of the directors then still in office who either
were directors on July 22, 1999, or whose initial appointment,
election or nomination for election as a director which occurred
after July 22, 1999 was approved by such vote of the directors then
still in office at the time of such initial appointment, election or
nomination who were themselves either directors on July 22, 1999 or
initially appointed, elected or nominated by such majority vote as
described above ad infinitum (collectively the "Continuing
Directors"); provided, however, that individuals who are appointed
to the Board pursuant to or in accordance with the terms of an
agreement relating to a merger, consolidation, or share exchange
involving the Company (or any direct or indirect subsidiary of the
Company) shall not be Continuing Directors for purposes of this
Agreement until after such individuals are first nominated for
election by a vote of at least a majority of the then Continuing
Directors and are thereafter elected as directors by the
shareholders of the Company at a meeting of shareholders held
following consummation of such merger, consolidation, or share
exchange; and, provided further, that in the event the failure of
any such persons appointed to the Board to
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be Continuing Directors results in a Change in Control of the
Company, the subsequent qualification of such persons as Continuing
Directors shall not alter the fact that a Change in Control of the
Company occurred; or
(iii) a merger, consolidation or share exchange of the Company
with any other corporation is consummated or voting securities of
the Company are issued in connection with a merger, consolidation or
share exchange of the Company (or any direct or indirect subsidiary
of the Company) pursuant to applicable stock exchange requirements,
other than (A) a merger, consolidation or share exchange which would
result in the voting securities of the Company entitled to vote
generally in the election of directors outstanding immediately prior
to such merger, consolidation or share exchange continuing to
represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity or any parent
thereof) at least 50% of the combined voting power of the voting
securities of the Company or such surviving entity or any parent
thereof entitled to vote generally in the election of directors of
such entity or parent outstanding immediately after such merger,
consolidation or share exchange, or (B) a merger, consolidation or
share exchange effected to implement a recapitalization of the
Company (or similar transaction) in which no Person (other than an
Excluded Person) is or becomes the Beneficial Owner, directly or
indirectly, of securities of the Company (not including in the
securities beneficially owned by such Person any securities acquired
directly from the Company or its Affiliates after July 22, 1999,
pursuant to express authorization by the Board that refers to this
exception) representing at least 50% of the combined voting power of
the Company's then outstanding voting securities entitled to vote
generally in the election of directors; or
(iv) the sale or disposition by the Company of all or
substantially all of the Company's assets (in one transaction or a
series of related transactions within any period of 24 consecutive
months), other than a sale or disposition by the Company of all or
substantially all of the Company's assets to an entity of which at
least 75% of the combined voting power of the voting securities
entitled to vote generally in the election of directors (or such
lower percentage as is determined under the IRS Notice) immediately
after such sale are owned by Persons in substantially the same
proportions as their ownership of the Company immediately prior to
such sale. It is understood that in no event shall a sale or
disposition of assets be considered to be a sale of substantially
all of the assets unless the assets sold or disposed of have a total
gross fair market value of at least 40% of the total gross fair
market value of all of the Company's assets immediately prior to
such sale or disposition.
2 Related Definitions. For purposes of this Annex, the following terms,
when capitalized, shall have the following meanings:
(i) Act. The term "Act" means the Securities Exchange Act of
1934, as amended.
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(ii) Affiliate and Associate. The terms "Affiliate" and
"Associate" shall have the respective meanings ascribed to such
terms in Rule 12b-2 of the General Rules and Regulations under the
Act.
(iii) Beneficial Owner. A Person shall be deemed to be the
"Beneficial Owner" of any securities:
(a) which such Person or any of such Person's Affiliates
or Associates has the right to acquire (whether such right is
exercisable immediately or only after the passage of time)
pursuant to any agreement, arrangement or understanding, or
upon the exercise of conversion rights, exchange rights,
rights, warrants or options, or otherwise; provided, however,
that a Person shall not be deemed the Beneficial Owner of, or
to beneficially own, (A) securities tendered pursuant to a
tender or exchange offer made by or on behalf of such Person
or any of such Person's Affiliates or Associates until such
tendered securities are accepted for purchase, or (B)
securities issuable upon exercise of Rights issued pursuant to
the terms of the Company's Rights Agreement, dated as of July
22, 1999, between the Company and Xxxxx Fargo Bank Minnesota,
National Association (as successor Rights Agent), as amended
from time to time (or any successor to such Rights Agreement),
at any time before the issuance of such securities;
(b) which such Person or any of such Person's Affiliates
or Associates, directly or indirectly, has the right to vote
or dispose of or has "beneficial ownership" of (as determined
pursuant to Rule 13d-3 of the General Rules and Regulations
under the Act), including pursuant to any agreement,
arrangement or understanding; provided, however, that a Person
shall not be deemed the Beneficial Owner of, or to
beneficially own, any security under this Subsection 1 (c) as
a result of an agreement, arrangement or understanding to vote
such security if the agreement, arrangement or understanding:
(A) arises solely from a revocable proxy or consent given to
such Person in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the
applicable rules and regulations under the Act and (B) is not
also then reportable on a Schedule 13D under the Act (or any
comparable or successor report); or
(c) which are beneficially owned, directly or
indirectly, by any other Person with which such Person or any
of such Person's Affiliates or Associates has any agreement,
arrangement or understanding for the purpose of acquiring,
holding, voting (except pursuant to a revocable proxy as
described in Subsection 1(c) (ii) above) or disposing of any
voting securities of the Company.
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(iv) IRS Notice. The term "IRS Notice" shall mean the IRS
Notice 2005-1, which was issued with respect to the American Jobs
Creation Act of 2004.
(v) Person. The term "Person" shall mean any individual, firm,
partnership, corporation or other entity, including any successor
(by merger or otherwise) of such entity, or a group of any of the
foregoing acting in concert.
(vi) Stock. The term "stock" shall have the meaning
contemplated by the IRS Notice.
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