Exhibit (10)(D)
AMENDED AND RESTATED
1992
OLD REPUBLIC INTERNATIONAL CORPORATION
NON-QUALIFIED STOCK OPTION PLAN
AS OF DECEMBER 4, 1997
1. Purpose
The purpose of this Non-Qualified Stock Option Plan (the
"Plan") is to promote the interests of Old Republic International
Corporation, a Delaware corporation (the "Company"), and its
shareholders by providing key employees on whom rests the major
responsibility for the present and future success of the Company and
its subsidiaries with an opportunity to acquire a proprietary interest
in the Company and thereby develop a stronger incentive to put forth
maximum effort for the continued success and growth of the Company and
its subsidiaries. In addition, the opportunity to acquire a proprietary
interest in the Company will aid in attracting and retaining key
personnel of outstanding ability. Only designated salaried officers and
other designated salaried key employees of the Company and its
subsidiaries, who are in a position to affect materially the
profitability and growth of the Company, will be eligible to receive
options to purchase common stock under the Plan. Directors who are
designated salaried key employees within the meaning of the foregoing
are eligible to participate in the Plan. Except as otherwise provided,
for all purposes of the Plan the term "subsidiary" or "subsidiary
corporation" shall have the meaning ascribed in the Internal Revenue
Code of 1986. As used herein, the term optionee applies both to male
and female designated salaried officers or other designated salaried
key employees of the Company or of any subsidiary corporation eligible
under the Plan.
2. Administration.
The Compensation Committee of the Board of Directors of the
Company, which shall consist of three or more disinterested directors,
shall act as a committee to administer this Plan. As such a committee
the Compensation Committee shall be responsible for the interpretation
of the provisions of the Plan. Subject to the provisions of the Plan,
they may from time to time, and at its sole discretion, adopt such
rules and regulations for the administration of the Plan as they deem
appropriate. The Compensation Committee of the Board of Directors of
the Company shall have the authority to make awards subject to the
provisions of the Plan. In making such awards it shall:
(a) determine which individuals shall receive options;
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(b) determine the terms and conditions of the options including
terms of exercise, limitations on exercise, the price, and
payment terms;
(c) determine the number of options to be granted;
(d) determine the number of shares subject to each option;
(e) grant the options; and
(f) prescribe the form or forms of the instruments evidencing any
options granted under the Plan and of any other instruments
required under the Plan, and to change such forms from time to
time, as may be required or necessary.
Except with respect to awards made to executive officers or directors
of the Company, before making awards, the Compensation Committee may consult
with the Office of the Chief Executive Officer (OCEO) and may seek the OCEO's
recommendations and advice. The OCEO is comprised of the Chairman of the Board
of the Company and the President and Chief Executive Officer of the Company.
The OCEO will have the responsibility for maintaining the records
concerning options granted to optionees, including the records concerning
exercises, lapses or forfeitures of options held by optionees.
3. Shares Subject to the Plan.
The shares that may be made subject to options granted under
the Plan shall be shares of Common Stock of the Company, $1.00 par
value ("Common Stock"). The aggregate number of shares subject to
options and issued pursuant to this Plan shall not exceed at five
percent (5%) of the Common Stock of the Company issued and outstanding
(excluding Common Stock held by the Company and any of its
subsidiaries) at December 31 of the preceding year ("maximum Number").
However, in no event shall the aggregate number of shares subject to
outstanding options pursuant to this Plan and all other stock option
plans sponsored by the Company exceed the Maximum Number. If any option
lapses or terminates for any reason before being completely exercised,
the shares covered by the unexercised portion of such option shall
again be available for the granting of options and said shares may be
used to grant new options under the Plan subject to the aforementioned
maximum number of shares. Appropriate adjustments in the number of
shares and in the option price per share will be made to give effect to
adjustments made in the number of outstanding shares of Common Stock
through recapitalization, reclassification, stock dividend, stock split
or other similar relevant changes. Shares issued upon exercise of
options granted under the Plan may be shares held by the Company as
treasury shares or authorized but previously unissued shares.
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Although the shares subject to option shall be Common Stock as
described above, the optionee shall have a right of election to receive
Series G Cumulative Convertible Preferred Stock as set forth in
paragraph 4 hereof.
4. Election to Receive Series G Preferred Stock
In lieu of exercising a right to receive Common Stock under
this Plan, an optionee may elect to receive the same number of shares
of Series G Convertible Preferred Stock ("Series G Preferred Stock") at
the same price and under the same terms and conditions as if the
optionee had elected Common Stock. Notice of an election to receive
Series G Preferred Stock shall be made in writing and delivered as part
of the written notice of exercise required by Paragraph 9 of this Plan.
Any optionee electing to exercise vested options for Series G
Preferred Stock may do so only on March 1st or September 1st of each
year. Written notice of the election and exercise of options under this
paragraph must be received by these dates.
5. Eligibility.
The individuals who shall be eligible to participate in the
Plan shall be such designated salaried officers or other designated
salaried key employees described in Paragraph 1 hereof of the Company,
or of any subsidiary corporation, as the Compensation Committee shall
determine from time to time.
6. Granting of Options.
Subject to the terms and conditions of the Plan, the
Compensation Committee, may from time to time prior to May 31, 2002,
grant to such eligible employees options to purchase such number of
shares of Common Stock under such terms and conditions as the
Compensation Committee may determine. More than one option may be
granted to the same employee. The day on which the Compensation
Committee approves the granting of an option shall be considered as the
date on which such option is granted.
7. Option Price.
The purchase price per share of Common Stock subject to an
option shall be fixed by the Compensation Committee but shall not be
less than 100% of the fair market value per share of Common Stock on
the date the option is granted. For the purposes of this Plan, the fair
market value of the Common Stock shall be determined as follows:
(a) If the Common Stock is listed on a national securities
exchange or admitted to unlisted trading privileges on such an
exchange, fair market value shall be the mean of the high and
low sale price of the Common Stock on such exchange on the
date in question, or if no sales have been made on such day,
the last reported
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sale price of the Common Stock on such exchange on the last
previous trading date; or
(b) If the Common Stock is not listed or admitted to unlisted
trading privileges, fair market value shall be the mean of the
last reported bid and asked prices of the Common Stock as
reported by the National Quotation Bureau, Inc. on the date in
question; or
(c) If the Common Stock is not so listed or admitted to unlisted
trading privileges and bid and asked prices are not reported,
fair market value shall be an amount, not less than book
value, determined in such reasonable manner as may be
prescribed by the Board of Directors of the Company.
8. Term of Options.
The term of each option shall not exceed ten years from the
date of grant. Except as provided in Paragraph 12 hereof, no option may
be exercised at any time unless the holder thereof is then an employee
of the Company or of a subsidiary. An employee shall have none of the
rights of a shareholder with respect to any of the shares subject to
option until such shares shall be issued to the optionee upon the
exercise of said option.
9. Method of Exercising Options.
Any option granted hereunder may be exercised by the optionee
by delivering to the Company at its main office (attention of the OCEO)
written notice of the number of shares with respect to which the option
rights are being exercised. Payment in full of the purchase price plus
the amount required to be withheld by the then current Internal Revenue
Regulations will be required before the issuance and delivery of
certificates.
10. Amount Exercisable.
Each option may be exercised, so long as it is valid and
outstanding, from time to time in part or as a whole, subject to the
following percentage limitations and any limitations with respect to
the number of shares for which the option may be exercised at a
particular time and to such other conditions as the Compensation
Committee in its discretion may specify upon granting the option.
Options may be exercised as follows:
(a) If the price per share of Common Stock does not reach the
Vesting Acceleration Price, to the extent of 10% of the number
of shares covered thereby on and after the date of grant; and
to the extent of an additional 10% on each January 1st
thereafter until fully vested;
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(b) If the price per share of Common Stock reaches the Vesting
Acceleration Price, to the extent of 10% of the number of
shares covered by the option for each year that the optionee
has been employed by the Company or any subsidiary; and
(c) If the price per share of Common Stock does not reach the
Vesting Acceleration Price and the optionee dies while in the
employ of the Company or any subsidiary or is retired in good
standing from the employ of the Company or any subsidiary
after attaining age 60 or as a result of disability under the
then established rules of the Company or the subsidiary, to
the extent of 10% of the number of shares covered by the
option for each year that the optionee was employed by the
Company or any subsidiary.
For purposes of this Paragraph 10, items (a), (b) and (c), the price
per share of Common Stock shall be the New York Stock Exchange Composite
Transactions closing price as published in The Wall Street Journal. Vesting
Acceleration Price shall be a price established by the Compensation Committee at
the time of grant. The Vesting Acceleration Price shall be the higher of 150% of
the book value per common share as of the most recent year end, or 150% of the
market value at date of grant. Years of employment shall be measured from the
date an employee was first employed by the Company or any subsidiary and shall
include periods of employment prior to the time when the subsidiary or division
of the Company was acquired by the Company. The right to purchase shall be
cumulative and may be exercised as to any shares not previously purchased during
the remainder of the term of the option.
11. Transferability of Options.
Options shall not be transferable by the optionee otherwise
than by will or under the laws of descent and distribution, and shall
be exercisable, during the optionee's lifetime, only by the optionee.
12. Termination of Options Upon Severance of Employment.
Except as may be otherwise expressly provided herein, options
shall terminate immediately upon severance of the employment
relationship between the Company and its subsidiaries and the optionee
for any reason, for or without cause, other than death or retirement in
good standing from the employ of Company or its subsidiaries for
reasons of age or disability under the then established rules of the
Company or the subsidiary. Whether authorized leave of absence, or
absence on military or government service, shall constitute severance
of the employment relationship between the Company and the subsidiary
and the optionee shall be determined by the Compensation Committee at
the time thereof.
(a) Death. In the event of the death of the holder of an
option while in the employ of the Company or any
subsidiary and before the date of expiration of such
option, such option shall terminate on the earlier of
such date of expiration or two years following the
date of such death.
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After the death of the optionee, the optionee's
executors, administrators, or any person or persons
to whom the optionee's option may be transferred by
will or by the laws of descent and distribution shall
have the right, at any time prior to such
termination, to exercise the option, in whole or in
part.
(b) Retirement. If, before the date of expiration of
the option, the optionee shall be retired in good
standing from the employ of the Company or any sub-
sidiary for reasons of age or disability under the
then established rules of the Company or the sub-
sidiary, the option shall terminate on the earlier
of the date of expiration or two years after the date
of such retirement. In the event of such retirement,
the option shall be exercisable prior to the termin-
ation of such option to the extent to which the
optionee was entitled to exercise such option immedi-
ately prior to such retirement unless the provisions
of Paragraph 10(c) concerning accelerated vesting
apply. An employment relationship between the Company
and the optionee shall be deemed to exist during any
period in which the optionee is employed by the
Company or any subsidiary. If the optionee dies after
retirement but prior to the expiration date of the
optionee's options, the option period shall not be
extended but shall terminate on the earlier of the
date of expiration or two years after the date of
retirement.
13. Requirements of Law.
The Company shall not be required to sell or issue any shares
under any option if the issuance of such shares shall constitute a
violation by the optionee or the Company of any provisions of any law
or regulation of any governmental authority. In addition, in connection
with the Securities Act of 1933 (as now in effect or hereafter
amended), upon exercise of any option, the Company shall not be
required to issue such shares unless the Compensation Committee has
received evidence satisfactory to it to the effect that the holder of
such option will not transfer such shares except pursuant to a
registration statement in effect under said Act or unless an opinion of
counsel to the Company has been received by the Company to the effect
that such registration is not required. Any determination in this
connection by the Compensation Committee shall be final, binding and
conclusive. At the request of the Company to enable it to comply with
said Act, the person exercising the option shall also represent in
writing that the shares acquired upon exercise of the option are being
acquired for the optionee's own account for investment and not with a
view to resale. In the event the shares issuable on exercise of an
option are not registered under the Securities Act of 1933, the Company
may imprint the following legend or any other legend which counsel for
the Company considers necessary or advisable to comply with the
Securities Act of 1933:
"The shares of stock represented by this certificate have not
been registered under the Securities Act of 1933 or under the
securities laws
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of any State and may not be sold or transferred except upon
such registration or upon receipt by the Company of an opinion
of counsel satisfactory to the Company, in form and substance
satisfactory to the Company, that registration is not required
for such sale or transfer."
The Company may, but shall in no event be obligated to,
register any securities covered hereby pursuant to the Securities Act
of 1933 (as now in effect or as hereafter amended); and in the event
any shares are so registered the Company may remove any legend on
certificates representing such shares. The Company shall make
reasonable efforts to cause the exercise of an option or the issuance
of shares pursuant thereto to comply with any law or regulation of any
governmental authority.
14. No Rights as Shareholder.
No optionee shall have rights as a shareholder with respect to
shares covered by the optionee's option until the date of issuance of a
stock certificate for such shares; and, except as otherwise provided in
Paragraph 3 hereof, no adjustment for dividends, or otherwise, shall be
made if the record date thereof is prior to the date of issuance of
such certificate.
15. Employment Obligation.
The granting of any option shall not impose upon the Company
any obligation to employ or continue to employ any optionee; and the
right of the Company to terminate the employment of any officer or
other employee shall not be diminished or affected by reason of the
fact that an option has been granted to the optionee.
16. Written Agreement.
Each option granted hereunder shall be embodied in a written
option agreement which shall be subject to the terms and conditions
prescribed above and shall be signed by the optionee and by a member of
the OCEO for and in the name and on behalf of the Company. Such an
option agreement shall contain such other provisions as the
Compensation Committee in their discretion shall deem advisable.
17. Shareholder Approval and Termination.
This Plan shall be effective on the date it is approved by the
affirmative vote of the holders of a majority of the Company's
securities entitled to vote at a meeting duly held in accordance with
the applicable laws of Delaware. It shall terminate on May 31, 2002
provided, however, that the Board of Directors of the Company may at
any time amend, suspend or terminate the Plan. No termination or
amendment of the Plan may, without the consent of the individual to
whom any option shall have been theretofore granted, adversely affect
the rights of such individual under such option.
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IN WITNESS WHEREOF, the Company has caused its President to
execute this Amended and Restated Plan this 4th day of December, 1997.
OLD REPUBLIC INTERNATIONAL CORPORATION
By: /s/ A.C. Zucaro
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A. C. Zucaro, President
ATTEST:
/s/ Spencer LeRoy III
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