EXHIBIT 10.2.1
INCORPORATED TERMS
DATED AS OF ______________
TO
RESTRICTED STOCK AGREEMENT
The following are the "Incorporated Terms" referred to in the instrument
entitled "Restricted Stock Agreement" which refers to these Incorporated Terms
and which has been signed by the Company and the Employee (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 Base
Restricted Stock and the Matching Restricted Stock may not be sold, transferred
or otherwise alienated or hypothecated until, in the case of the Base Restricted
Stock, the date set forth after "Base Restricted Stock Release Date" on the
signature page, and in the case of the Matching Restricted Stock, the date set
forth after "Matching Restricted Stock Release Date" on the signature page. The
term "Release Date" shall be applied separately to the Base Restricted Stock and
the Matching Restricted Stock as if the term "Release Date" were the term "Base
Restricted Stock Release Date" or the term "Matching Restricted Stock Release
Date," and such application shall correspond to the application of the term
"Restricted Stock" as set forth in Paragraph 1(a) of the Base Instrument.
(b) Except as otherwise provided herein, the Performance Restricted Stock
may not be sold, transferred or otherwise alienated or hypothecated until the
Release Date determined as follows. For each date set forth after "Performance
Restricted Stock Release Date" on the signature page, multiply the number of
shares set forth after "Shares of Performance Restricted Stock" on the signature
page by the quotient of dividing the EPS for the fiscal year of the Company
ended on the December 31 immediately preceding such date by the amount set forth
after "Target" on the signature page. The resulting product is the number of
shares of Restricted Stock that shall be released on the corresponding date set
forth after "Performance Restricted Stock Release Date" and such date shall be
the Release Date for such shares (and only for such shares). "EPS" means the
Company's diluted earnings per share, determined in accordance with generally
accepted accounting principles and adjusted to exclude the after-tax effect of
(i) realized gains and losses, and (ii) extraordinary items. If by any date set
forth after "Performance Restricted Stock Release Date" the Company has not
publicly announced its diluted earnings per share, such date shall be two
business days after such earnings are publicly announced.
3. Escrow. Shares of Restricted Stock shall be issued (in certificate or
electronic form, at the discretion of the Company) as soon as practicable in the
name of the Employee but shall be held in an escrow arrangement by the transfer
agent for the Stock, as escrow agent. The Employee 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 shall be delivered to the Employee, 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.
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 Employee on the
Release Date. Notwithstanding the foregoing or anything to the contrary herein,
the Employee agrees and acknowledges with respect to any Restricted Stock that
has not been registered under the Securities Act of 1933, as amended (the "Act")
(i) he 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 or other evidence for the Restricted Stock to such effect.
5. Termination of Employment Due to Death. If the Employee's employment
with the Company or any of its subsidiaries is terminated because of death prior
to the Release Date, the restrictions of Paragraph 2 applicable to the
Restricted Stock shall terminate on the date of death and such Restricted Stock
shall be free of such restrictions and, except as otherwise provided in
Paragraph 4 hereof, freely transferable.
6. Forfeiture of Restricted Stock. (a) If the Employee's employment with
the Company and all of its subsidiaries is terminated prior to the Release Date
for any reason (including without limitation, disability or termination by the
Company and all subsidiaries thereof, with or without cause) other than death,
all Restricted Stock shall be forfeited to the Company on the date of such
termination unless otherwise provided in subparagraph (b) below, or unless the
Management Development, Nominating and Governance Committee of the Company's
Board of Directors (the "Management Development Committee") or other Committee
of such Board administering the Plan (the Management Development Committee or
such other Committee is herein referred to as the "Committee") determines, on
such terms and conditions, if any, as the Committee may impose, that all or a
portion of the Restricted Stock shall be released to the Employee and the
restrictions of Paragraph 2 applicable thereto shall terminate. Absence of the
Employee on leave approved by a duly elected officer of the Company, other than
the Employee, shall not be considered a termination of employment during the
period of such leave.
(b) If the Employee's employment with the Company and all of its
subsidiaries terminates by reason of retirement after reaching age 62 and after
having been employed by the Company or any subsidiary thereof for an aggregate
period of at least seven years, such retirement shall not result in forfeiture
of the Performance Restricted Stock (this provision does not apply to the Base
or Matching Restricted Stock) if no later than the date on which employment
terminates, the Employee enters into an agreement with the Company (which
agreement shall be drafted by and acceptable to the Company) under which the
Employee agrees not to compete with the Company and its subsidiaries during a
period ending one year after the
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latest date set forth after "Performance Restricted Stock Release Date" on the
signature page and the Employee complies with such agreement. If the Employee
enters into such a non-competition agreement and thereafter breaches the terms
thereof, the Restricted Stock shall be forfeited. If the conditions in the
second preceding sentence are satisfied and the Employee complies with the terms
of such agreement, upon the Employee's death, the provisions of Paragraph 5
shall apply as if the Employee's employment with the Company and its
subsidiaries terminated because of such death.
(c) Any shares of the Performance Restricted Stock for which a Release Date
has not occurred by the latest date set forth after "Performance Restricted
Stock Release Date" on the signature page (such date being subject to extension
as contemplated in the last sentence of paragraph 2(b)) shall be forfeited to
the Company, unless the Committee determines otherwise as contemplated in
subparagraph (a) above.
(d) If Restricted Stock is forfeited, the Employee hereby appoints the
Company, acting through any Senior Vice President or more senior officer, as the
Employee's attorney-in-fact to transfer such forfeited Restricted Stock to the
Company.
7. Beneficiary. (a) The person whose name appears on the signature page
hereof after the caption "Beneficiary" or any successor designated by the
Employee in accordance herewith (the person who is the Employee's Beneficiary at
the time of his death herein referred to as the "Beneficiary") shall be entitled
to receive the Restricted Stock to be released to the Beneficiary under
Paragraphs 3 and 5 as a result of the death of the Employee. The Employee may
from time to time revoke or change his 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 Employee's death, and in no event shall
any designation be effective as of a date prior to such receipt.
(b) If no such Beneficiary designation is in effect at the time of an
Employee's death, or if no designated Beneficiary survives the Employee or if
such designation conflicts with law, the Employee's estate shall be entitled to
receive the Restricted Stock upon the death of the Employee. If the Committee is
in doubt as to the right of any person to receive such Restricted Stock, the
Company may retain such Stock and any distributions thereon, without liability
for any interest thereon, until the Committee determines the person entitled
thereto, or the Company may deliver such Restricted Stock and any distributions
thereon to any court of appropriate jurisdiction and such delivery shall be a
complete discharge of the liability of the Company therefor.
8. Restricted Stock Legend. In addition to any legends placed on
certificates for Restricted Stock, each certificate or other evidence for shares
of Restricted Stock shall bear the following legend:
"The sale or other transfer of these shares of stock, whether voluntary, or
by operation of law, is subject to certain restrictions set forth in the
MGIC
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Investment Corporation 2002 Stock Incentive Plan and a Restricted Stock
Agreement between MGIC Investment Corporation and the registered owner
hereof. A copy of such Plan and such Agreement may be obtained from the
Secretary of MGIC Investment Corporation."
When the restrictions imposed by Paragraph 2 hereof terminate, the Employee
shall be entitled to have the foregoing legend removed from such Stock.
9. Voting Rights; Dividends and Other Distributions. (a) While the
Restricted Stock is subject to restrictions under Paragraph 2 and prior to any
forfeiture thereof, the Employee may exercise full voting rights for the
Restricted Stock.
(b) While the Restricted Stock is subject to the restrictions under
Paragraph 2 and prior to any forfeiture thereof, the Employee 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
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 Employee shall have,
with respect to the Restricted Stock, all other rights of holders of Stock.
10. Tax Withholding. (a) It shall be a condition of the obligation of the
Company or release from escrow Restricted Stock to the Employee or the
Beneficiary, and the Employee agrees, that the Employee shall pay to the Company
upon its demand, such amount as may be requested by the Company for the purpose
of satisfying its liability to withhold federal, state, or local income or other
taxes incurred by reason of the award of the Restricted Stock or as a result of
the termination of the restrictions on such Stock hereunder.
(b) If the Employee does not make an election under Section 83(b) of the
Internal Revenue Code of 1986, as amended, with respect to the Restricted Stock
awarded hereunder, the Employee may satisfy the Company's withholding tax
requirements by electing to have the Company withhold that number of shares of
Restricted Stock otherwise deliverable to the Employee from escrow hereunder or
to deliver to the Company a number of shares of Stock, in each case, having a
Fair Market Value on the day prior to the Tax Date (as defined below) equal to
the amount required to be withheld as a result of the termination of the
restrictions on such Restricted Stock. The election must be in writing and be
delivered to the Company prior to the Tax Date. If the number of shares so
calculated to be withheld shall include a fractional share, the Employee shall
deliver cash in lieu of such fractional share. All elections shall be made in a
form approved by the Company. As used herein, "Tax Date" means the date on which
the Employee must include in his gross income for federal income tax purposes
the fair market value of the Restricted Stock over the purchase price therefor.
11. Adjustments in Event of Change in Stock or Fiscal Year. In the event of
any change in the outstanding shares of Stock ("capital adjustment") for any
reason, including
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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 realization of its
objectives, the Committee may make such adjustments in the shares of Restricted
Stock subject to this Agreement, or in the terms, conditions or restrictions of
this Agreement, including the Target set forth on the signature page, as the
Committee deems equitable. In addition, if the Company changes its fiscal year
from a year ending December 31, the Committee may make such adjustments in the
Performance Restricted Stock Release Date and the Target as the Committee deems
equitable.
12. 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 shall terminate
on the date of the Change in Control of the Company.
13. Powers of Company Not Affected; No Right to Continued Employment.
(a) The existence of the Restricted Stock 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 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.
(b) Nothing herein contained shall confer upon the Employee any right to
continue in the employment of the Company or any subsidiary or interfere with or
limit in any way the right of the Company or any subsidiary to terminate the
Employee's employment at any time, subject, however, to the provisions of any
agreement of employment between the Company or any subsidiary and the Employee.
The Employee acknowledges that a termination of his or her employment could
occur at a time before which the restrictions referred to in Paragraph 2 above
have lapsed, resulting in the forfeiture of the Restricted Stock by the
Employee, unless otherwise provided herein. In such event, the Employee will not
be able to realize the value of the Restricted Stock nor will the Employee be
entitled to any compensation on account of such value.
14. Interpretation by Committee. The Employee 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
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conclusive. Any such determination need not be uniform and may be made
differently among Employees awarded Restricted Stock.
15. 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 shall be deemed to have been awarded pursuant to
the Plan and is 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.
A copy of the Plan is available on request of the Employee made in writing or by
e-mail to the Company's Secretary.
(d) Any notice, filing or delivery hereunder or with respect to Restricted
Stock shall be given to the Employee at either his usual work location or his
home address as indicated in the records of the Company, 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 Employee, the Beneficiary and the personal representative(s)
and heirs of the Employee, except that the Employee may not transfer any
interest in any Restricted Stock prior to the release of the restrictions
imposed by Paragraph 2.
(f) As a condition to the grant of the Restricted Stock, Employee must
execute an agreement not to compete in the form provided to the Employee by the
Company.
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 50% or more of either
the then outstanding shares of common stock of the Company or the combined
voting power of the Company's then outstanding voting securities entitled
to vote generally in the election of directors; 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
two-thirds (2/3) 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 two-thirds (2/3) 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
Annex - Page 1 of 4
two-thirds (2/3) 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 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 immediately after such sale are owned by Persons in substantially
the same proportions as their ownership of the Company immediately prior to
such sale.
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.
Annex - Page 2 of 4
(ii) Affiliate and Associate. The terms "Affiliate" and "Associate"
shall have the respective meanings ascribed to such terms in Rule l2b-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 Firstar Bank Milwaukee, N.A., 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
l3d-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 l3D 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.
Annex - Page 3 of 4
(iv) 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.
Annex - Page 4 of 4
