INVESTORS TITLE COMPANY EXHIBIT 10(ix)
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 _________, 199__, by and between
Investors Title Company, a North Carolina corporation (the
"Company"), and ________________, a director 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 as a director 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
five hundred (500) shares (the "Shares") of the Company's common
stock, no par value ("Common Stock"), at an exercise price of
Fourteen Dollars ($14.00) per Share (the "Exercise Price").
The Optionee shall be entitled to exercise the Option in full from
and after the date hereof and, unless sooner terminated as provided
in the Plan or in Section 4 hereof, shall terminate, and all rights
of the Optionee hereunder shall expire, ten (10) years from the
date hereof. 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. 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.
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3. 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 pruchase price
applicable to the unexercised portion of the Option shall not be
affected by such adjustment.
4. 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) expiration of three months after the date of
termination of the Optionee's service as a director of the
Company for any reason other than the death of the Optionee;
(b) expiration of twelve months after the death of the
Optionee while serving as a director of the Company;
(c) occurrence of any event described in paragraph 9
hereof that causes a termination of the Option; or
(d) expiration of ten years from the date of this
Agreement.
Any Option that may be exercised for a period following
termination of the Optionee's service as a director 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.
5. Method of Exercise. The Option shall be exercised by
tender of payment of the Exercise Price and delivery to the Company
at its principal place of business 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 7 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
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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 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.
6. Rights of a Shareholder. The Optionee shall not be
deemed for any purpose to be a shareholder of the Company with
respect to any Shares covered by this Option unless this Option
shall have been exercised and the Exercise Price paid in the manner
provided herein. No adjustment will be made for dividends or other
rights where the record date is prior to the date of exercise and
payment. Upon the exercise of the Option as provided herein and
the issuance of the certificate or certificates evidencing the
Shares covered thereby, 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.
7. Compliance with Securities Laws. Shares issuable pursuant
to this Option are not presently registered under applicable
federal and state securities laws. The Company may in the future,
but shall have no obligation to, undertake such registrations or
may, in lieu thereof, issue Shares hereunder only pursuant to
applicable exemptions from such registrations. Before issuing
Shares to Optionee hereunder, the Committee may require appropriate
representations from Optionee 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
place 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.
8. Rule 144. The Optionee acknowledges that, notwithstanding
any future 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
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compliance, including placing restrictive legends on certificates
evidencing such shares and delivering stop transfer instructions
to the Company's transfer agent.
9. Reorganizations. If the Company shall be a party to any
merger or consolidation in which it is not the surviving entity or
pursuant to which the shareholders of the Company exchange their
Common Stock, or if the Company shall dissolve or liquidate or sell
all or substantially all of its assets, the Option granted
hereunder shall terminate on the effective date of such merger,
consolidation, dissolution, liquidation or sale; provided, however,
that prior to such effective date, the Committee may, in its
discretion, cause the Option to become immediately exercisable, and
may, to the extent the Option is terminated as provided in this
paragraph 9, 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.
10. 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.
11. 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
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jurisdiction, then the term "Optionee" shall be construed to
include such estate, personal representative, beneficiary, guardian
or legal representative.
12. 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.
13. 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.
14. 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.
15. 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.
16. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of North
Carolina.
IN WITNESS WHEREOF, the Optionee has executed this Agreement
and the Company has caused this Agreement to be executed by its
duly authorized officer, effective as of the day and year first
above written.
INVESTORS TITLE COMPANY
By:____________________
ATTEST:
_______________________
Secretary
(Corporate Seal)
______________________
[Optionee]
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