EXHIBIT 4.4
STEWART INFORMATION SERVICES CORPORATION
2002 STOCK OPTION PLAN FOR REGION MANAGERS
TABLE OF CONTENTS
SECTION
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ARTICLE I PLAN
Purpose 1.1
Term of Plan.......................................................1.2
ARTICLE II DEFINITIONS
Affiliate..........................................................2.1
Board..............................................................2.2
Code...............................................................2.3
Committee..........................................................2.4
Company............................................................2.5
Employee...........................................................2.6
Fair Market Value..................................................2.7
Holder.............................................................2.8
Incentive Option...................................................2.9
Mature Shares.....................................................2.10
Nonqualified Option...............................................2.11
Option............................................................2.12
Option Agreement..................................................2.13
Plan..............................................................2.14
Region Manager....................................................2.15
Stock.............................................................2.16
ARTICLE III ELIGIBILITY
ARTICLE IV GENERAL PROVISIONS RELATING TO OPTIONS
Authority to Grant Options.........................................4.1
Dedicated Shares; Maximum Options..................................4.2
Non-Transferability................................................4.3
Requirements of Law................................................4.4
Changes in the Company's Capital Structure.........................4.5
ARTICLE V OPTIONS
Type of Option.....................................................5.1
Exercise Price.....................................................5.2
Duration of Options................................................5.3
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TABLE OF CONTENTS
(continued)
SECTION
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Amount Exercisable.................................................5.4
Exercise of Options................................................5.5
Substitution Options...............................................5.6
No Rights as Stockholder...........................................5.7
ARTICLE VI ADMINISTRATION
ARTICLE VII AMENDMENT OR TERMINATION OF PLAN
ARTICLE VIII MISCELLANEOUS
No Establishment of a Trust Fund...................................8.1
No Employment Obligation...........................................8.2
Forfeiture.........................................................8.3
Tax Withholding....................................................8.4
Written Agreement..................................................8.5
Indemnification of the Committee...................................8.6
Gender.............................................................8.7
Headings...........................................................8.8
Other Compensation Plans...........................................8.9
Other Options.....................................................8.10
Governing Law.....................................................8.11
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ARTICLE I
PLAN
1.1 PURPOSE. The Plan is intended to advance the best interests of the
Company and its stockholders by providing those persons who have substantial
responsibility for the management and growth of the Company and its Affiliates
with additional incentives and an opportunity to obtain or increase their
proprietary interest in the Company, thereby encouraging them to continue in
their employment with the Company or any of its Affiliates.
1.2 TERM OF PLAN. No Option shall be granted under the Plan after March
18, 2012. The Plan shall remain in effect until all Options under the Plan have
been satisfied or expired.
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ARTICLE II
DEFINITIONS
The words and phrases defined in this Article shall have the meaning
set out in these definitions throughout the Plan, unless the context in which
any such word or phrase appears reasonably requires a broader, narrower or
different meaning.
2.1 "AFFILIATE" means any parent corporation and any subsidiary
corporation. The term "parent corporation" means any corporation (other than the
Company) in an unbroken chain of corporations ending with the Company if, at the
time of the action or transaction, each of the corporations other than the
Company owns stock possessing 50 percent or more of the total combined voting
power of all classes of stock in one of the other corporations in the chain. The
term "subsidiary corporation" means any corporation (other than the Company) in
an unbroken chain of corporations beginning with the Company if, at the time of
the action or transaction, each of the corporations other than the last
corporation in the unbroken chain owns stock possessing 50 percent or more of
the total combined voting power of all classes of stock in one of the other
corporations in the chain.
2.2 "BOARD" means the board of directors of the Company.
2.3 "CODE" means the Internal Revenue Code of 1986, as amended.
2.4 "COMMITTEE" means the Salary Committee of the Company.
2.5 "COMPANY" means Stewart Information Services Corporation, a
Delaware corporation.
2.6 "EMPLOYEE" means a person employed by the Company or any Affiliate
as a common law employee.
2.7 "FAIR MARKET VALUE" of the Stock as of any date means the closing
price of the Stock on such date, or, if the Stock was not traded on such date,
on the immediately preceding day that the Stock was so traded. However, if the
Stock is not listed on a securities exchange or quotation system, the Fair
Market Value will be an amount determined by the Committee.
2.8 "HOLDER" means a person who has been granted an Option or any
person who is entitled to receive stock under an Option.
2.9 "INCENTIVE OPTION" means an Option granted under the Plan which is
designated as an "Incentive Option" and satisfies the requirements of section
422 of the Code.
2.10 "MATURE SHARES" means shares of Stock that the Holder has held for
at least six months.
2.11 "NONQUALIFIED OPTION" means an Option granted under the Plan other
than an Incentive Option.
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2.12 "OPTION" means either an Incentive Option or a Nonqualified Option
granted under the Plan to purchase shares of Stock.
2.13 "OPTION AGREEMENT" means the written agreement which sets out the
terms of an Option.
2.14 "PLAN" means the Stewart Information Services Corporation 2002
Stock Option Plan for Region Managers, as set forth in this document and as it
may be amended from time to time.
2.15 "REGION MANAGER" means an Employee who holds the title "Region
Manager" or an Employee who the Committee, in its sole discretion, determines
has a position equivalent to the position of a Region Manager.
2.16 "STOCK" means the common stock of the Company, $1.00 par value,
or, in the event that the outstanding shares of common stock are later changed
into or exchanged for a different class of stock or securities of the Company or
another corporation, that other stock or security.
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ARTICLE III
ELIGIBILITY
The individuals who shall be eligible to receive Options shall be those
full-time key Employees, including officers and directors, who are employed on
the date an Option is granted as a Region Manager and who have substantial
responsibility for the management and growth of the Company or any of its
Affiliates as the Committee shall determine from time to time.
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ARTICLE IV
GENERAL PROVISIONS RELATING TO OPTIONS
4.1 AUTHORITY TO GRANT OPTIONS. The Committee may grant Options to
those eligible Region Managers as it shall from time to time determine, under
the terms and conditions of the Plan. Factors the Committee may consider
include, without limitation:
(a) Region rank of consolidated STG/STC pretax profit
(dollars) in the Region Manager's territory as reported on the Region
Manager's consolidated profit center statement;
(b) Region rank of profit percentage in the Region Manager's
territory as reported on the Region Manager's STG/STC profit center
statement;
(c) Region rank of percentage of policy losses to premiums
generated YTD as reported on the Region Performance Summary Report;
(d) Market share increase in the Region Manger's territory
over the prior year as reported on the quarterly ALTA statistics on
market share. Market share weight will be increased with market share
growth in key states and percentage of state responsibility of Region
Manager;
(e) Region rank of percentage increase in Cash to Houston
remittances as reported on the Region Performance Summary Report;
(f) Region rank of percentage of delinquent premium YTD;
(g) Net expansion of territory via acquisitions, branch
offices, increased number of agents;
(h) Region Manager incorporation and pursuit of SISCO
Strategies (Service, Technology, Growth, Communication) and Ten
Standards in region's goals;
(i) Other contributions towards overall company performance or
failure to comply with company requests. Items considered may include
Region Manager rollout of technology, new products or other programs
sponsored by the company, completion of agency visits, follow-up on
audits and training and benefit participation.
The Committee shall evaluate the relative importance of these factors,
and the Region Manager's standing among the recipient group, in its sole and
absolute discretion and shall have full power and authority to determine
according to the above criteria the amount of shares subject to any option,
subject only to any applicable limitations set out in the Plan.
4.2 DEDICATED SHARES; MAXIMUM OPTIONS. The aggregate number of shares
of Stock with respect to which Options may be granted under the Plan is 300,000.
Such shares of Stock may be treasury shares or authorized but unissued shares.
The number of shares stated in this Section 4.2 shall be subject to adjustment
in accordance with the provisions of Section 4.5. If
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any outstanding Option expires or terminates for any reason or any Option is
surrendered, the shares of Stock allocable to the unexercised portion of that
Option may again be subject to an Option granted under the Plan.
4.3 NON-TRANSFERABILITY. Incentive Options shall not be transferable by
the Holder other than by will or under the laws of descent and distribution, and
shall be exercisable, during the Holder's lifetime, only by him or her. Except
as specified in domestic relations court orders, Nonqualified Options shall not
be transferable by the Holder other than by will or under the laws of descent
and distribution, and shall be exercisable, during the Holder's lifetime, only
by him or her. In the discretion of the Committee, any attempt to transfer an
Option other than under the terms of the Plan and the applicable Option
agreement may terminate the Option.
4.4 REQUIREMENTS OF LAW. The Company shall not be required to sell or
issue any Stock under any Option if issuing that Stock would constitute or
result in a violation by the Holder or the Company of any provision of any law,
statute or regulation of any governmental authority. Specifically, in connection
with any applicable statute or regulation relating to the registration of
securities, upon exercise of any Option, the Company shall not be required to
issue any Stock unless the Committee has received evidence satisfactory to it to
the effect that the Holder will not transfer the Stock except in accordance with
applicable law, including receipt of an opinion of counsel satisfactory to the
Company to the effect that any proposed transfer complies with applicable law.
The determination by the Committee on this matter shall be final, binding and
conclusive. The Company may, but shall in no event be obligated to, register any
Stock covered by the Plan pursuant to applicable securities laws of any country
or any political subdivision. In the event the Stock issuable on exercise of an
Option is not registered, the Company may imprint on the certificate evidencing
the Stock any legend that counsel for the Company considers necessary or
advisable to comply with applicable law. The Company shall not be obligated to
take any other affirmative action in order 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.
4.5 CHANGES IN THE COMPANY'S CAPITAL STRUCTURE.
(a) The existence of outstanding Options shall not affect in
any way the right or power of the Company or its stockholders to make
or authorize any or all adjustments, recapitalizations, reorganizations
or other changes in the Company's capital structure or its business,
any merger or consolidation of the Company, any issue of bonds,
debentures, preferred or prior preference stock ahead of or affecting
the Stock or its rights, the dissolution or liquidation of the Company,
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.
(b) If the Company shall effect a subdivision or consolidation
of shares or other capital readjustment, the payment of a stock
dividend, or other increase or reduction of the number of shares of
Stock outstanding, without receiving compensation for money, services
or property, then (i) the number, class or series and per share price
of shares of Stock subject to outstanding Options under this Plan shall
be appropriately adjusted in such a manner as to entitle a Holder to
receive upon exercise of an Option, for
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the same aggregate cash consideration, the equivalent total number and
class or series of shares the Holder would have received had the Holder
exercised his or her Option in full immediately prior to the event
requiring the adjustment, and (ii) the number and class or series of
shares of Stock then reserved to be issued under the Plan shall be
adjusted by substituting for the total number and class or series of
shares of Stock then reserved, that number and class or series of
shares of Stock that would have been received by the owner of an equal
number of outstanding shares of each class or series of Stock as the
result of the event requiring the adjustment.
(c) If while unexercised Options remain outstanding under the
Plan (i) the Company shall not be the surviving entity in any merger,
consolidation or other reorganization (or survives only as a subsidiary
of an entity other than an entity that was wholly-owned by the Company
immediately prior to such merger, consolidation or other
reorganization), (ii) the Company sells, leases or exchanges or agrees
to sell, lease or exchange all or substantially all of its assets to
any other person or entity (other than an entity wholly-owned by the
Company), (iii) the Company is to be dissolved or (iv) the Company is a
party to any other corporate transaction (as defined under section
424(a) of the Code and applicable Department of Treasury Regulations)
that is not described in clauses (i), (ii) or (iii) of this sentence
(each such event is referred to herein as a "Corporate Change"), then,
except as otherwise provided in an Option Agreement or as a result of
the Board's effectuation of one or more of the alternatives described
below, there shall be no acceleration of the time at which any Option
then outstanding may be exercised, and no later than ten days after the
approval by the stockholders of the Company of such Corporate Change,
the Board, acting in its sole and absolute discretion without the
consent or approval of any Holder, shall act to effect one or more of
the following alternatives, which may vary among individual Holders and
which may vary among Options held by any individual Holder:
(1) accelerate the time at which some or all of the
Options then outstanding may be exercised so that such Options
may be exercised in full for a limited period of time on or
before a specified date (before or after such Corporate
Change) fixed by the Board, after which specified date all
such Options that remain unexercised and all rights of Holders
thereunder shall terminate;
(2) require the mandatory surrender to the Company by all
or selected Holders of some or all of the then outstanding
Options held by such Holders (irrespective of whether such
Options are then exercisable under the provisions of this Plan
or the Option Agreements evidencing such Options) as of a
date, before or after such Corporate Change, specified by the
Board, in which event the Board shall thereupon cancel such
Options and the Company shall pay to each such Holder an
amount of cash per share equal to the excess, if any, of the
per share price offered to stockholders of the Company in
connection with such Corporate Change over the exercise prices
under such Options for such shares;
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(3) with respect to all or selected Holders, have some or
all of their then outstanding Options (whether vested or
unvested) assumed or have a new Option substituted for some or
all of their then outstanding Options (whether vested or
unvested) by an entity which is a party to the transaction
resulting in such Corporate Change and which is then employing
such Holder or which is affiliated or associated with such
Holder in the same or a substantially similar manner as the
Company prior to the Corporate Change, or a parent or
subsidiary of such entity, provided that (A) such assumption
or substitution is on a basis where the excess of the
aggregate fair market value of the shares subject to the
Option immediately after the assumption or substitution over
the aggregate exercise price of such shares is equal to the
excess of the aggregate fair market value of all shares
subject to the Option immediately before such assumption or
substitution over the aggregate exercise price of such shares,
and (B) the assumed rights under such existing Option or the
substituted rights under such new Option as the case may be
will have the same terms and conditions as the rights under
the existing Option assumed or substituted for, as the case
may be;
(4) provide that the number and class or series of shares
of Stock covered by an Option (whether vested or unvested)
theretofore granted shall be adjusted so that such Option when
exercised shall thereafter cover the number and class or
series of shares of stock or other securities or property
(including, without limitation, cash) to which the Holder
would have been entitled pursuant to the terms of the
agreement or plan relating to such Corporate Change if,
immediately prior to such Corporate Change, the Holder had
been the holder of record of the number of shares of Stock
then covered by such Option; or
(5) make such adjustments to Options then outstanding as
the Board deems appropriate to reflect such Corporate Change
(provided, however, that the Board may determine in its sole
and absolute discretion that no such adjustment is necessary).
In effecting one or more of alternatives (3), (4) or (5)
above, and except as otherwise may be provided in an Option Agreement,
the Board, in its sole and absolute discretion and without the consent
or approval of any Holder, may accelerate the time at which some or all
Options then outstanding may be exercised.
(d) In the event of changes in the outstanding Stock by reason
of recapitalizations, reorganizations, mergers, consolidations,
combinations, exchanges or other relevant changes in capitalization
occurring after the date of the grant of any Option and not otherwise
provided for by this Section 4.5, any outstanding Options and any
agreements evidencing such Options shall be subject to adjustment by
the Board in its sole and absolute discretion as to the number and
price of shares of stock or other consideration subject to such
Options. In the event of any such change in the outstanding
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Stock, the aggregate number of shares available under this Plan may be
appropriately adjusted by the Board, whose determination shall be
conclusive.
(e) The issuance by the Company of shares of stock of any
class or series, or securities convertible into shares of stock of any
class or series, for cash or property, or for labor or services either
upon direct sale or upon the exercise of rights or warrants to
subscribe for them, or upon conversion or exchange of shares or
obligations of the Company convertible into, or exchangeable for,
shares or other securities, shall not affect, and no adjustment by
reason of such issuance shall be made with respect to, the number,
class or series, or price of shares of Stock then subject to
outstanding Options.
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ARTICLE V
OPTIONS
5.1 TYPE OF OPTION. The Committee shall specify in an Option Agreement
whether a given Option is an Incentive Option or a Nonqualified Option.
Notwithstanding such designation, however, to the extent that the aggregate Fair
Market Value (determined as of the time an Incentive Option is granted) of the
Stock with respect to which incentive stock options first become exercisable by
an Employee during any calendar year (under the Plan and any other incentive
stock option plan(s) of the Company or any Affiliate) exceeds $100,000, the
Incentive Option shall be treated as a Nonqualified Option. In making this
determination, incentive stock options shall be taken into account in the order
in which they were granted.
5.2 EXERCISE PRICE. The price for which Stock may be purchased under an
Option shall not be less than 100 percent of the Fair Market Value of the shares
of Stock on the date the Option is granted.
5.3 DURATION OF OPTIONS. Unless the Option Agreement specifies a
shorter general term, an Option shall expire on the earliest of the date that is
(a) the tenth anniversary of the date the Option is granted or (b) one day less
than three months after the date of the Holder's termination of employment with
the Company and all Affiliates (other than by reason of the Holder's death) or
(c) the date that is one year after the date of the Holder's death. Unless the
Holder's Option Agreement specifies otherwise, an Option shall not continue to
vest after the severance of the employment relationship between the Company and
all Affiliates.
After the death of the Holder, the Holder's executors, administrators
or any person or persons to whom the Holder's Option may be transferred by will
or by the laws of descent and distribution, shall have the right, at any time
prior to the expiration of the Option to exercise the Option, in respect to the
number of shares that the Holder would have been entitled to exercise if the
Holder exercised the Option prior to the Holder's death.
5.4 AMOUNT EXERCISABLE. Each Option may be exercised at the time, in
the manner and subject to the conditions the Committee specifies in the Option
Agreement in its sole discretion.
5.5 EXERCISE OF OPTIONS. Each Option shall be exercised by the delivery
of written notice to the Committee setting forth the number of shares of Stock
with respect to which the Option is to be exercised, together with: (a) cash,
certified check, bank draft or postal or express money order payable to the
order of the Company for an amount equal to the exercise price under the Option,
(b) Mature Shares with a Fair Market Value on the date of exercise equal to the
exercise price under the Option, (c) an election to make a cashless exercise
through a registered broker-dealer (if approved in advance by the Committee or
by an executive officer of the Company) or (d) except as specified below, any
other form of payment which is acceptable to the Committee, and specifying the
address to which the certificates for the shares are to be mailed. As promptly
as practicable after receipt of written notification and payment, the Company
shall deliver to the Holder certificates for the number of shares with respect
to which the Option has been exercised, issued in the Holder's name. If Mature
Shares are used for
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payment by the Holder, the aggregate Fair Market Value of the shares of Stock
tendered must be equal to or less than the aggregate exercise price of the
shares being purchased upon exercise of the Option, and any difference must be
paid by cash, certified check, bank draft or postal or express money order
payable to the order of the Company. Delivery of the shares shall be deemed
effected for all purposes when a stock transfer agent of the Company shall have
deposited the certificates in the United States mail, addressed to the Holder,
at the address specified by the Holder.
Whenever an Option is exercised by exchanging Mature Shares owned by
the Holder, the Holder shall deliver to the Company certificates registered in
the name of the Holder representing a number of shares of Stock legally and
beneficially owned by the Holder, free of all liens, claims and encumbrances of
every kind, accompanied by stock powers duly endorsed in blank by the record
holder of the shares represented by the certificates (with signature guaranteed
by a commercial bank or trust company or by a brokerage firm having a membership
on a registered national stock exchange). The delivery of certificates upon the
exercise of Options is subject to the condition that the person exercising the
Option provide the Company with the information the Company might reasonably
request pertaining to exercise, sale or other disposition.
The Committee may permit a Holder to elect to pay the exercise price
upon exercise of an Option by authorizing a third-party broker to sell all or a
portion of the shares of Stock acquired upon exercise of the Option and remit to
the Company a sufficient portion of the sale proceeds to pay the exercise price
and any applicable tax withholding resulting from such exercise.
The Committee shall not permit a Holder to pay such Holder's exercise
price upon the exercise of an Option by having the Company reduce the number of
shares of Stock that will be delivered to the Holder pursuant to the exercise of
the Option. In addition, the Committee shall not permit a Holder to pay such
Holder's exercise price upon the exercise of an Option by using shares of Stock
other than Mature Shares.
An Option may not be exercised for a fraction of a share of Stock.
5.6 SUBSTITUTION OPTIONS. Options may be granted under the Plan from
time to time in substitution for stock options held by employees of other
corporations who are about to become employees of or affiliated with the Company
or any Affiliate as the result of a merger or consolidation of the employing
corporation with the Company or any Affiliate, or the acquisition by the Company
or any Affiliate of the assets of the employing corporation, or the acquisition
by the Company or any Affiliate of stock of the employing corporation as the
result of which it becomes an Affiliate of the Company. The terms and conditions
of the substitute Options granted may vary from the terms and conditions set out
in the Plan to the extent the Committee, at the time of grant, may deem
appropriate to conform, in whole or in part, to the provisions of the stock
options in substitution for which they are granted.
5.7 NO RIGHTS AS STOCKHOLDER. No Holder shall have any rights as a
stockholder with respect to Stock covered by such Holder's Option until the date
a stock certificate is issued for the Stock.
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ARTICLE VI
ADMINISTRATION
The Plan shall be administered by the Committee. All questions of
interpretation and application of the Plan and Options shall be subject to the
determination of the Committee. A majority of the members of the Committee shall
constitute a quorum. All determinations of the Committee shall be made by a
majority of its members. Any decision or determination reduced to writing and
signed by a majority of the members shall be as effective as if it had been made
by a majority vote at a meeting properly called and held. The Plan shall be
administered in such a manner as to permit the Options which are designated to
be Incentive Options to qualify as Incentive Options. In carrying out its
authority under the Plan, the Committee shall have full and final authority and
discretion, including but not limited to the following rights, powers and
authorities, to:
(a) determine the persons to whom and the time or times at
which Options will be made;
(b) determine the number of shares and the exercise price of
Stock covered in each Option, subject to the terms of the Plan;
(c) determine the terms, provisions and conditions of each
Option, which need not be identical;
(d) accelerate the time at which any outstanding Option may be
exercised;
(e) define the effect, if any, on an Option of the death,
disability, retirement or other termination of employment relationship
between the Holder and the Company and Affiliates;
(f) prescribe, amend and rescind rules and regulations
relating to administration of the Plan; and
(g) make all other determinations and take all other actions
deemed necessary, appropriate or advisable for the proper
administration of the Plan.
The actions of the Committee in exercising all of the rights, powers,
and authorities set out in this Article and all other Articles of the Plan, when
performed in good faith and in its sole judgment, shall be final, conclusive and
binding on all parties.
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ARTICLE VII
AMENDMENT OR TERMINATION OF PLAN
The Board may amend, terminate or suspend the Plan at any time, in its
sole and absolute discretion; provided, however, that to the extent required to
maintain the status of any Incentive Option under the Code, no amendment that
would change the aggregate number of shares of Stock which may be issued under
Incentive Options, or change the class of Employees eligible to receive
Incentive Options shall be made without the approval of the Company's
stockholders. Subject to the preceding sentence, the Board shall have the power
to make any changes in the Plan and in the regulations and administrative
provisions under it or in any outstanding Incentive Option as in the opinion of
counsel for the Company may be necessary or appropriate from time to time to
enable any Incentive Option granted under the Plan to continue to qualify as an
incentive stock option or such other stock option as may be defined under the
Code so as to receive preferential federal income tax treatment.
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ARTICLE VIII
MISCELLANEOUS
8.1 NO ESTABLISHMENT OF A TRUST FUND. No property shall be set aside
nor shall a trust fund of any kind be established to secure the rights of any
Holder under the Plan. All Holders shall at all times rely solely upon the
general credit of the Company for the payment of any benefit which becomes
payable under the Plan.
8.2 NO EMPLOYMENT OBLIGATION. The granting of any Option shall not
constitute an employment contract, express or implied, nor impose upon the
Company or any Affiliate any obligation to employ or continue to employ, or
utilize the services of, any Holder. The right of the Company or any Affiliate
to terminate the employment of any person shall not be diminished or affected by
reason of the fact that an Option has been granted to him.
8.3 FORFEITURE. Notwithstanding any other provisions of the Plan, if
the Committee finds by a majority vote after full consideration of the facts
that the Holder, before or after termination of such Holder's employment
relationship with the Company or an Affiliate for any reason committed or
engaged in willful misconduct, gross negligence, a breach of fiduciary duty,
fraud, embezzlement, theft, a felony, a crime involving moral turpitude or
proven dishonesty in the course of such Holder's employment by the Company or an
Affiliate, the Holder shall forfeit all outstanding Options, and all exercised
Options if the Company has not yet delivered a stock certificate to the Holder
with respect thereto. The decision of the Committee shall be final. No decision
of the Committee, however, shall affect the finality of the discharge of the
Holder by the Company or an Affiliate in any manner.
8.4 TAX WITHHOLDING. The Company or any Affiliate shall be entitled to
deduct from other compensation payable to each Holder any sums required by
federal, state or local tax law to be withheld with respect to the grant or
exercise of an Option. In the alternative, the Company may require the Holder of
an Option to pay such sums for taxes directly to the Company or any Affiliate in
cash or by check within ten days after the date of exercise or lapse of
restrictions. In the discretion of the Committee, and with the consent of the
Holder, the Company may reduce the number of shares of Stock issued to the
Holder upon such Holder's exercise of an Option to satisfy the tax withholding
obligations of the Company or an Affiliate; provided that the Fair Market Value
of the shares held back shall not exceed the Company's or the Affiliate's
minimum statutory withholding tax obligations. The Company shall have no
obligation upon exercise of any Option until the Company or an Affiliate has
received payment sufficient to cover all tax withholding amounts due with
respect to that exercise. Neither the Company nor any Affiliate shall be
obligated to advise a Holder of the existence of the tax or the amount which it
will be required to withhold.
8.5 WRITTEN AGREEMENT. Each Option shall be embodied in a written
agreement which shall be subject to the terms and conditions of the Plan and
shall be signed by the Holder and by a member of the Committee on behalf of the
Committee and the Company or an executive officer of the Company, other than the
Holder, on behalf of the Company. The agreement may contain any other provisions
that the Committee in its discretion shall deem advisable which are not
inconsistent with the terms of the Plan.
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8.6 INDEMNIFICATION OF THE COMMITTEE. The Company shall indemnify each
present and future member of the Committee against, and each member of the
Committee shall be entitled without further action his or her part to indemnity
from the Company for, all expenses (including attorney's fees, the amount of
judgments and the amount of approved settlements made with a view to the
curtailment of costs of litigation, other than amounts paid to the Company
itself) reasonably incurred by such member in connection with or arising out of
any action, suit or proceeding in which such member may be involved by reason of
such member being or having been a member of the Committee, whether or not he or
she continues to be a member of the Committee at the time of incurring the
expenses, including, without limitation, matters as to which such member shall
be finally adjudged in any action, suit or proceeding to have been negligent in
the performance of such member's duty as a member of the Committee. However,
this indemnity shall not include any expenses incurred by any member of the
Committee in respect of matters as to which such member shall be finally
adjudged in any action, suit or proceeding to have been guilty of gross
negligence or willful misconduct in the performance of his duty as a member of
the Committee. In addition, no right of indemnification under the Plan shall be
available to or enforceable by any member of the Committee unless, within 60
days after institution of any action, suit or proceeding, such member shall have
offered the Company, in writing, the opportunity to handle and defend same at
its own expense. This right of indemnification shall inure to the benefit of the
heirs, executors or administrators of each member of the Committee and shall be
in addition to all other rights to which a member of the Committee may be
entitled as a matter of law, contract or otherwise.
8.7 GENDER. If the context requires, words of one gender when used in
the Plan shall include the other and words used in the singular or plural shall
include the other.
8.8 HEADINGS. Headings of Articles and Sections are included for
convenience of reference only and do not constitute part of the Plan and shall
not be used in construing the terms of the Plan.
8.9 OTHER COMPENSATION PLANS. The adoption of the Plan shall not affect
any other stock option, incentive or other compensation or benefit plans in
effect for the Company or any Affiliate, nor shall the Plan preclude the Company
from establishing any other forms of incentive compensation arrangements for
Employees.
8.10 OTHER OPTIONS. The grant of an Option shall not confer upon the
Holder the right to receive any future or other Options under the Plan, whether
or not Options may be granted to similarly situated Holders, or the right to
receive future Options upon the same terms or conditions as previously granted.
8.11 GOVERNING LAW. The provisions of the Plan shall be construed,
administered and governed under the laws of the State of Delaware.
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