EXHIBIT 10.2
EIGHTH AMENDED AND RESTATED
1998 CENTEX CORPORATION
EMPLOYEE NON-QUALIFIED STOCK OPTION PLAN
(LAST AMENDED ON MAY 12, 2005)
1. PURPOSE OF THE PLAN.
This 1998 Centex Corporation Employee Non-Qualified Stock Option Plan (the
"PLAN") is intended as an employment incentive to retain in the employ of Centex
Corporation (the "COMPANY"), and any Affiliate (including any entity that
becomes an Affiliate), persons of training, experience and ability, to attract
new employees whose services are considered valuable, to encourage the sense of
proprietorship of such persons, and to stimulate the active interest of such
persons in the development and financial success of the Company. For purposes of
the Plan, "AFFILIATE" shall mean any direct or indirect subsidiary or parent of
the Company and any partnership, joint venture, limited liability company or
other business venture or entity in which the Company owns at least 50% of the
ownership interest in such entity, as determined by the Committee in its sole
and absolute discretion (such determination by the Committee to be conclusively
established by the grant of options by the Committee to an officer or employee
of such an entity). It is further intended each option granted pursuant to the
Plan (herein, an "OPTION") shall constitute non-qualified stock options within
the meaning of Section 83 of the Code.
2. ADMINISTRATION OF THE PLAN.
The Board of Directors shall appoint and maintain a Compensation and Stock
Option Committee (hereinafter called the "COMMITTEE") of the Board of Directors
to administer the Plan. Subject to the terms and conditions of the Plan, the
Committee shall have full power and authority to designate persons to whom
Options will be granted, to determine the terms and provisions of respective
option agreements (which need not be identical), and to interpret the provisions
and supervise the administration of the Plan. The Committee shall have the
authority, exercisable in its sole discretion, to grant Options containing such
terms and conditions, consistent with the provisions of the Plan, as the
Committee shall determine.
3. DESIGNATION OF PARTICIPANTS.
The persons eligible for participation in the Plan as recipients of
Options shall include all employees of the Company or of any Affiliate,
including employees of any entity that becomes an Affiliate after the date that
the Plan is adopted, other than any of the following persons (herein, an
"INELIGIBLE PERSON"):
(a) any person who is an executive officer, as defined by Rule 3b-7
promulgated under the Securities Exchange Act of 1934, as amended, or director
of the Company;
(b) any "officer" of the Company as defined by Rule 16a-1(f) promulgated
under the Securities Exchange Act of 1934, as amended; or
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(c) any "covered employee" of the Company as defined by Section 162(m)(3)
of the Internal Revenue Code.
Each Option granted hereunder shall be evidenced by an agreement between
the Company and the Optionee, which shall contain such terms and conditions as
the Committee shall determine in its sole and absolute discretion. Any person
who has been granted an Option hereunder (herein, an "OPTIONEE") may be granted
an additional Option or Options, if the Committee shall so determine.
Participation in the Plan shall not preclude an Optionee from participating in
any other stock option, benefit, bonus, or other compensation plan which the
Company or any Affiliate has adopted, or may, from time to time, adopt for the
benefit of its employees.
4. STOCK RESERVED FOR THE PLAN.
Subject to any adjustment provided in Paragraph 9 hereof, a total of
5,500,000 shares of common stock, $0.25 par value, of the Company (the "STOCK")
shall be subject to the Plan. As of May 13, 2004 the number of shares available
for Option issuance is 514,088. The shares of Stock subject to the Plan shall
consist of unissued shares or previously issued shares reacquired and held by
the Company, or any Affiliate, and such amount of shares shall be and hereby is
reserved for delivery under the Plan. Any of such shares which may remain unsold
and which are not subject to outstanding Options at the termination of the Plan
shall cease to be reserved for the purpose of the Plan, but until termination of
the Plan the Company shall at all times reserve a sufficient number of shares of
Stock to meet the requirements of the Plan. Should any Option expire or be
canceled prior to its exercise or relinquishment in full, the shares theretofore
subject to such Option may again be subjected to an Option under the Plan. If
the purchase price or tax withholding is permitted to be satisfied by the tender
or withholding of shares of Stock to the Company (by either actual delivery or
attestation), the number of shares of Stock tendered or withheld shall be
eligible for reissuance under the Plan.
5. PURCHASE PRICE.
(a) The purchase price of each share placed under option pursuant to the
Plan (a "Share") shall be determined by the Committee, but in no event shall be
less than 100% of the Fair Market Value of such Share on the date the Option is
granted. If an Option is granted as part of an Optionee's compensation package
at the commencement of an Optionee's employment by the Company or an Affiliate,
the Option shall be deemed to have been granted on the date of commencement of
such Optionee's employment by the Company or any Affiliate (the "Commencement
Date") and the purchase price of a Share shall be equal to the Fair Market Value
of such Share on the Commencement Date, so long as such Option is not granted
more than ninety (90) days following the Commencement Date.
(b) "FAIR MARKET VALUE" of a share of Stock means, as of a particular
date, the closing price per share of Stock reported on the consolidated
transaction reporting system for the New York Stock Exchange, or, if there shall
have been no such sale so reported on that date, on the last preceding date on
which such a sale was so reported.
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6. OPTION PERIOD.
The Options granted under the Plan shall be for any term set by the
Committee, but not more than ten (10) years from the date of granting of each
Option. All rights to exercise an Option shall terminate within three (3) months
after the date the Optionee ceases to be an employee of the Company or any
Affiliate, except that
(a) the Committee, in its discretion, may provide in new option grants or
amend outstanding Options to provide an extended period of time during which an
Optionee can exercise an Option up to the maximum permissible period which such
Optionee's Option would have been exercisable in the absence of the Optionee
ceasing to be an employee of the Company or an Affiliate;
(b) if an Optionee ceases to be employed by the Company or an Affiliate by
reason of such Optionee's death, all rights to exercise such Option shall
terminate fifteen (15) months after such death; and
(c) if the Optionee is terminated for cause, as determined by the
Committee in its sole and absolute discretion, any Option granted to such
Optionee hereunder shall terminate on the date of such termination.
(d) Attached hereto are resolutions adopted by the Compensation and
Management Development Committee of the Board of Directors of the Company, now
the "Committee", relating to vesting and exercise.
7. EXERCISE OF OPTIONS.
(a) Any Option granted hereunder shall be exercisable from time to time
under the terms specified in the Plan, by the Committee, or in the agreement
relating to the grant of such Option.
(b) Each exercise of an Option or a portion of an Option shall be
evidenced by a notice in writing by or on behalf of the Optionee to the Company,
stating the number of shares with respect to which the Option is being
exercised.
(c) Options may be exercised solely by the Optionee or a Permitted
Transferee (hereafter defined).
(d) The purchase price of the Shares for which an Option is exercised must
be paid prior to issuance of the Shares. Such purchase price shall be payable
(i) in cash, certified or cashiers' check, or wire transfer, (ii) at the option
of the holder of such Option, in Stock theretofore owned by such holder by
either actual delivery of shares or by attestation, or through the withholding
by the Company from the Shares otherwise issuable pursuant to the Option of an
appropriate number of Shares, (iii) by a combination of cash and such delivery
or withholding of Stock; or (iv) by delivery of a properly executed exercise
notice together with irrevocable instructions to a broker satisfactory to the
Company to promptly deliver to the Company the amount of sale or loan proceeds
required to pay the exercise price and applicable withholding taxes. For
purposes of determining the amount, if any, of the purchase price satisfied by
payment in Stock, such Stock shall be valued at its Fair Market Value on the
date of exercise. Any Stock delivered in satisfaction of all or a portion of the
purchase
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price shall be appropriately endorsed for transfer and assignment to the
Company. No holder of an Option shall be, or have any of the rights or
privileges of, a shareholder of the Company in respect of any Shares unless and
until certificates representing such Shares shall have been delivered by the
Company to such holder or such holder's interest in such shares shall have been
evidenced by an entry on the Company's books and records.
(e) If any law or regulation requires the Company to take any action with
respect to the Shares specified in such notice, the time for delivery thereof,
which would otherwise be as promptly as possible, shall be postponed for the
period of time necessary to take such action.
8. ASSIGNABILITY.
Unless otherwise permitted by the Committee, no Option or interest therein
shall be transferable by the Optionee otherwise than by will or by the
applicable laws of descent and distribution. Any person to whom an Option is
transferred in accordance with this Section 8 is referred to herein as a
"PERMITTED TRANSFEREE".
9. ADJUSTMENTS.
(a) In the event of any subdivision or consolidation of outstanding Stock
of the Company, declaration of a dividend payable in shares of Stock of the
Company or other stock split, then (i) the number of Shares reserved under this
Plan, (ii) the number of Shares covered by outstanding Options, and (iii) the
purchase price per share in respect of such Options shall each be
proportionately adjusted by the Board as appropriate to reflect such
transaction. In the event of any other recapitalization or capital
reorganization of the Company, any consolidation or merger of the Company with
another corporation or entity, the adoption by the Company of any plan of
exchange affecting shares of Stock of the Company or any distribution to holders
of shares of Stock of the Company of securities or property (other than normal
cash dividends or dividends payable in shares of Stock of the Company), the
Board shall make appropriate adjustments to (i) the number of Shares reserved
under this Plan, (ii) the number of Shares covered by outstanding Options, and
(iii) the purchase price per share in respect of such Options to reflect such
transaction; provided that such adjustments under (ii) and (iii) shall only be
such as are necessary to maintain the proportionate interest of the holders of
the Options and preserve, without increasing, the value of such Options. In the
event of a corporate merger, consolidation, acquisition of property or stock,
separation, reorganization or liquidation, the Board shall be authorized (x) to
assume under the Plan previously issued compensatory options, or to substitute
new Options for previously issued compensatory Options as part of such
adjustment or (y) to cancel Options and give the Participants who are the
holders of such Options notice and opportunity to exercise for 30 days prior to
such cancellation.
(b) Except as is otherwise expressly provided herein, the issue by the
Company of shares of its capital stock of any class, or securities convertible
into shares of capital stock of any class, either in connection with a direct
sale or upon the exercise of rights or warrants to subscribe therefor, or upon
conversion of shares or obligations of the Company convertible into such shares
or other securities, shall not affect, and no adjustment by reason thereof shall
be made with respect to, the number of or purchase price of Shares. Furthermore,
the presence of outstanding Options granted under the Plan shall not affect in
any manner the right or power of the Company to make, authorize
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or consummate (i) any or all adjustments, recapitalizations, reorganizations or
other changes in the Company's capital structure or its business; (ii) any
merger or consolidation of the Company; (iii) any issue by the Company of debt
securities or preferred or preference stock (whether or not such issue is prior
to, on a party with or junior to the Stock); (iv) the dissolution or liquidation
of the Company; (v) any sale, transfer or assignment of all or any part of the
assets or business of the Company; or (vi) any other corporate act or
proceeding, whether of a similar character or otherwise.
(c) Notwithstanding anything to the contrary above, a dissolution or
liquidation of the Company, a merger (other than a merger effecting a
reincorporation of the Company in another state) or consolidation in which the
Company is not the surviving corporation (or survives only as a subsidiary of
another corporation in a transaction in which the stockholders of the parent of
the Company and their proportionate interests therein immediately after the
transaction are not substantially identical to the stockholders of the Company
and their proportionate interests therein immediately prior to the transaction),
a transaction in which another corporation becomes the owner of 50% or more of
the total combined voting power of all classes of stock of the Company, or a
change in control (as specified below), shall cause every Option then
outstanding to become exercisable in full immediately prior to such dissolution,
liquidation, merger, consolidation, transaction, or change in control, to the
extent not theretofore exercised, without regard to the determination as to the
periods and installments of exercisability contained in the Agreements if (and
only if) such Options have not at that time expired or been terminated. For
purposes of this paragraph, a change in control shall be deemed to have taken
place if: a third person, including a "group" as defined in Section 13(d)(3) of
the Act, becomes the beneficial owner of shares of the Company having fifty
percent (50%) or more of the total number of votes that may be cast for the
election of directors of the Company; or as a result of, or in connection with,
a contested election for directors, the persons who were directors of the
Company immediately before such election shall cease to constitute a majority of
the Board. Notwithstanding the foregoing provisions of this paragraph:
(i) an event, transaction, or corporate action shall not have the
effect of accelerating the exercisability of Options if: (A) persons who
were the directors of the Company and persons who were the executive
officers of the Company as of six months prior to such event immediately
after such event constitute a majority of the directors and constitute a
majority of executive officers, respectively, for, and own in the
aggregate at least ten percent of the voting securities or equity
interests of, the Company or the surviving or resulting corporation or the
parent of such surviving or resulting corporation; and (B) if the Company
is not the surviving or resulting corporation, such surviving or resulting
corporation or parent of such surviving or resulting corporation
substitutes substantially identical options for any outstanding Options;
and
(ii) in the event of any dissolution, merger, consolidation,
transaction, or change in control, the Board may completely satisfy and
extinguish all obligations of the Company and its Affiliates with respect
to any Option outstanding on the date of such event by delivering to the
Optionee cash in an amount equal to the difference between the aggregate
purchase price for Shares under the Option and the Fair Market Value of
such Shares on the date of such event, such payment to be made within a
reasonable time after such event.
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10. TAX WITHHOLDING.
The Company shall have the right to deduct applicable taxes from any
Option and withhold, at the time of delivery of Shares under the Plan, an
appropriate number of Shares for payment of taxes required by law or to take
such other action as may be necessary in the opinion of the Company to satisfy
all obligations for withholding of such taxes. The Committee may also permit
withholding to be satisfied by the transfer to the Company of Stock theretofore
owned by the holder of the Option with respect to which withholding is required.
If Shares or Stock are used to satisfy tax withholding, such Shares or Stock
shall be valued based on the Fair Market Value when the tax withholding is
required to be made.
11. EFFECTIVE DATE OF PLAN.
The effective date of the Plan shall be February 19, 1998. No Option shall
be granted pursuant to the Plan after May 13, 2005.
12. AMENDMENT, MODIFICATION, SUSPENSION OR TERMINATION.
The Board may amend, modify, suspend or terminate the Plan at any time for
the purpose of meeting or addressing any changes in legal requirements or for
any other purpose permitted by law, except that no amendment, modification,
suspension or termination shall be made (i) that would impair the rights of any
Optionee under any Option previously granted to such Optionee without such
Optionee's written consent, (ii) prior to approval by the Company's shareholders
if such approval is then required thereby, or (iii) that would reduce the
purchase price of any outstanding Option, other than as provided by Section
9(a)(ii).
13. REQUIREMENTS OF LAW.
(a) The Plan, and the granting and exercise of Options hereunder, and the
obligation of the Company to sell and deliver shares under such Options, shall
be subject to all applicable laws, rules and regulations, and to such approvals
by any governmental agencies or national securities exchanges as may be
required.
(b) Nothing herein or in any Agreement executed or Option granted
hereunder shall require the Company to deliver any Shares upon exercise of an
Option if such delivery would, in the opinion of counsel for the Company,
constitute a violation of the Securities Act of 1933, as amended, or any similar
or superseding statute or statutes, or any other applicable statute or
regulation, as then in effect. Upon the exercise of an Option or portion or part
thereof, the Optionee may be required to give to the Company satisfactory
evidence that he is acquiring such Shares for the purpose of investment only and
not with a view to their distribution; provided, however, if or to the extent
that the Shares subject to the Option shall be included in a registration
statement filed by the Company, or one of its Affiliates, such investment
representation shall be abrogated.
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14. MISCELLANEOUS.
(a) Nothing contained in the Plan shall confer upon any Optionee the right
to continue in the employ of the Company or any Affiliate, or interfere in any
way with the rights of the Company or any Affiliate to terminate his employment
at any time.
(b) Any payment of cash or any delivery of Shares to the Optionee, or to
an Optionee's Permitted Transferee, in accordance with the provisions hereof,
shall, to the extent thereof, be in full satisfaction of all claims of such
person with respect to the Option being exercised (or portion thereof). The
Committee may require any Optionee, or Permitted Transferee, as a condition
precedent to such payment or delivery, to execute a release and receipt therefor
in such form as it shall determine.
(c) Neither the Committee nor the Company guarantees the Shares from loss
or depreciation.
(d) Records of the Company and its Affiliates regarding an individual's
period of employment, termination of employment and the reason therefor, leaves
of absence, re-employment and other matters shall be conclusive for all purposes
hereunder, unless determined by the Committee to be incorrect in its sole and
absolute discretion.
(e) The Company assumes no obligation or responsibility to an Optionee or
any Permitted Transferee for any act of, or failure to act on the part of, the
Committee.
(f) If any provision of the Plan is held to be illegal or invalid for any
reason, the illegality or invalidity shall not affect the remaining provisions
of the Plan, but such provision shall be fully severable and the Plan shall be
construed and enforced as if the illegal or invalid provision had never been
included herein.
(g) The titles and headings of Sections are included for convenience of
reference only and are not to be considered in construction of the provisions
hereof.
(h) All questions arising with respect to the provisions of the Plan shall
be determined by application of the laws of the State of Nevada except to the
extent Nevada law is preempted by federal law. The obligation of the Company to
sell and deliver Shares hereunder is subject to applicable laws and to the
approval of any governmental authority required in connection with the
authorization, issuance, sale, or delivery of such Shares.
Words used in the masculine shall apply to the feminine where applicable,
and wherever the context of the Plan dictates, the plural shall be read as the
singular and the singular as the plural.
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RESOLUTION RELATED TO STOCK OPTIONS ADOPTED BY THE COMPENSATION AND MANAGEMENT
DEVELOPMENT COMMITTEE OF THE BOARD OF DIRECTORS OF CENTEX CORPORATION ON MAY 13,
2004.
RESOLVED, that all non-qualified options held by Full Time Employees to
acquire common stock of Centex Corporation awarded under any of the stock plans
listed below, whether awarded before or after May 13, 2004, shall be subject to
the following from and after May 13, 2004:
1. If an optionee shall voluntarily terminate employment and at such
time he or she is age 55 or older, has at least 10 Years of Service
and the sum of age and Years of Service equals at least 70, then all
non-qualified options held by him or her shall immediately vest upon
the termination of employment ("Vested Retirement").
2. All rights to exercise such vested options will terminate 12 months
following the date of such Vested Retirement. However, to the extent
that an option agreement provides a longer time to exercise
following voluntary termination of employment, then such agreement
will control.
3. As used herein: "Full Time Employee" means a person actively and
regularly engaged in work at least 40 hours a week; and "Years of
Service" means an optionee's years of employment with Centex
Corporation or any of its Affiliates. An optionee shall be credited
with a Year of Service on each anniversary of the date on which he
or she was first employed by Centex Corporation or its Affiliate,
provided that the optionee continues to be employed by such employer
on such anniversary date.
4. The stock plans covered are:
- Centex Corporation Amended and Restated 1987 Stock Option Plan
- Seventh Amended and Restated 1998 Centex Corporation Employee
Non-Qualified Stock Option Plan
- Amended and Restated Centex Corporation 2001 Stock Plan
- Amended and Restated Centex Corporation 2003 Equity Incentive
Plan
FURTHER RESOLVED, that the appropriate officers of the Corporation are
hereby directed to take all steps that they deem necessary or appropriate to
communicate the substance of the foregoing resolution to option holders who are
affected and, where they deem necessary, to document the substance of this
resolution by way of amendments to the stock plans and to existing option
agreements.
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