Exhibit 10.1
STEWART INFORMATION SERVICES CORPORATION
AMENDED AND RESTATED
2005 LONG-TERM INCENTIVE PLAN
(Adopted by the Board of Directors
on January 15, 2009)

 

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TABLE OF CONTENTS

              Section
ARTICLE I ESTABLISHMENT, PURPOSE AND DURATION
       
Establishment
    1.1  
Purpose of the Plan
    1.2  
Duration of Authority to Make Grants Under the Plan
    1.3  
Adoption of Amendment and Restatement of the Plan
    1.4  
ARTICLE II DEFINITIONS
       
Affiliate
    2.1  
Associate
    2.2  
Associate Stock Bonuses
    2.3  
Award
    2.4  
Award Agreement
    2.5  
Board
    2.6  
Change in Control
    2.7  
Code
    2.8  
Committee
    2.9  
Company
    2.10  
Corporate Change
    2.11  
Directors’ Shares
    2.12  
Effective Date
    2.13  
Exchange Act
    2.14  
Executive Officer
    2.15  
Executive Option
    2.16  
Executive Share
    2.17  
Fair Market Value
    2.18  
Fiscal Year
    2.19  
Holder
    2.20  
Incentive Stock Option
    2.21  
Key Employee
    2.22  
Key Employee Option
    2.23  
Key Employee Shares
    2.24  
Mature Shares
    2.25  
Minimum Statutory Tax Withholding Obligation
    2.26  
Nonqualified Stock Option
    2.27  
Option
    2.28  
Option Price
    2.29  
Optionee
    2.30  
Option Agreement
    2.31  
Plan
    2.32  
Section 409A
    2.33  
Service Award
    2.34  
STC
    2.35  
STG
    2.36  
Stock
    2.37  
Ten Percent Stockholder
    2.38  
Termination of Employment
    2.39  
ARTICLE III ELIGIBILITY AND PARTICIPATION
       
Eligibility
    3.1  
Participation
    3.2  
ARTICLE IV GENERAL PROVISIONS RELATING TO AWARDS
       
Authority to Grant Awards
    4.1  
Dedicated Shares; Maximum Awards
    4.2  
Non-Transferability
    4.3  
Requirements of Law
    4.4  
Changes in the Company’s Capital Structure
    4.5  
Election Under Section 83(b) of the Code
    4.6  

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              Section  
Forfeiture for Cause
    4.7  
Forfeiture Events
    4.8  
ARTICLE V GENERAL PROVISIONS RELATING TO OPTIONS
       
Type of Options Available
    5.1  
Stock Appreciation Rights
    5.2  
Option Price
    5.3  
Maximum Value of Stock Subject to Options that are Incentive Stock Options
    5.4  
Exercise of Options
    5.5  
Duration of Options
    5.6  
Employment Obligation
    5.7  
Option Agreement
    5.8  
Substitution Options
    5.9  
No Rights as Stockholder
    5.10  
ARTICLE VI KEY EMPLOYEE AWARD PERFORMANCE CRITERIA
       
ARTICLE VII DIRECTORS’ SHARES
       
Annual Grant to Directors
    7.1  
Amount of Award
    7.2  
ARTICLE VIII EXECUTIVE SHARES
       
Executive Share Awards
    8.1  
Executive Share Award Agreement
    8.2  
Holder’s Rights as Stockholder
    8.3  
ARTICLE IX KEY EMPLOYEE SHARES
       
Key Employee Share Awards
    9.1  
Key Employee Share Award Agreement
    9.2  
Holder’s Rights as Stockholder
    9.3  
ARTICLE X ASSOCIATES STOCK BONUSES
       
Award of Stock Bonuses
    10.1  
Valuation
    10.2  
ARTICLE XI SERVICE AWARDS
       
ARTICLE XII SUBSTITUTION AWARDS
       
ARTICLE XIII ADMINISTRATION
       
Awards
    13.1  
Authority of the Committee
    13.2  
Decisions Binding
    13.3  
No Liability
    13.4  
ARTICLE XIV AMENDMENT OR TERMINATION OF PLAN
       
Amendment, Modification, Suspension, and Termination
    14.1  
Awards Previously Granted
    14.2  
ARTICLE XV MISCELLANEOUS
       
Unfunded Plan/No Establishment of a Trust Fund
    15.1  
No Employment Obligation
    15.2  
Tax Withholding
    15.3  
Written Agreement
    15.4  
Indemnification of the Committee
    15.5  
Gender and Number
    15.6  
Severability
    15.7  
Headings
    15.8  
Other Compensation Plans
    15.9  
Other Awards
    15.10  
Successors
    15.11  
Law Limitations/Governmental Approvals
    15.12  
Delivery of Title
    15.13  
Inability to Obtain Authority
    15.14  
Investment Representations
    15.15  
Persons Residing Outside of the United States
    15.16  
No Fractional Shares
    15.17  
Arbitration of Disputes
    15.18  
Governing Law
    15.19  

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ARTICLE I
ESTABLISHMENT, PURPOSE AND DURATION
     1.1 Establishment. The Company previously established an incentive
compensation plan, known as “Stewart Information Services Corporation 2005
Long-Term Incentive Plan”. The Plan permits the grant of Executive Options,
Executive Shares, Key Employee Options, Key Employee Shares, Directors’ Shares,
Associates Stock Bonuses, and Service Awards. The Plan became effective on
April 29, 2005 (the “Effective Date”), was amended and restated by the Board on
March 12, 2007, and on January 15, 2009, and shall remain in effect as provided
in Section 1.3.
     1.2 Purpose of the Plan. The purpose of the Plan is to reward corporate
officers and other Associates of the Company and its Affiliates by enabling them
to acquire shares of common stock of the Company and to receive other
compensation based on the increase in value of the common stock of the Company.
The Plan is intended to advance the best interests of the Company, its
Affiliates and its stockholders by providing those persons who have substantial
responsibility for the management and growth of the Company and its Affiliates
with additional performance 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 and its Affiliates.
     1.3 Duration of Authority to Make Grants Under the Plan. No Awards may be
granted under the Plan on or after the tenth anniversary of the Effective Date.
The applicable provisions of the Plan will continue in effect with respect to an
Award granted under the Plan for as long as such Award remains outstanding.
     1.4 Adoption of Amendment and Restatement of the Plan. This amendment and
restatement of the Plan is contingent upon the approval by the Company’s
stockholders of the amendment of the Plan to increase the number of shares
authorized under the Plan. The amendment and restatement of the Plan shall not
become effective unless and until such stockholder approval is obtained and no
incremental shares or Awards shall be granted under the Plan prior to the date
such stockholder approval is obtained.
ARTICLE II
DEFINITIONS
     The words and phrases defined in this Article shall have the meaning set
out below 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 corporation, partnership, limited liability
company or association, trust or other entity or organization which, directly or
indirectly, controls, is controlled by, or is under common control with, the
Company. For purposes of the preceding sentence, “control” (including, with
correlative meanings, the terms “controlled by” and “under common control
with”), as used with respect to any entity or organization, shall mean the
possession, directly or indirectly, of the power (a) to vote more than
50 percent (50%) of the securities having ordinary voting power for the election
of directors of the controlled entity or organization, or (b) to direct or cause
the direction of the management and policies of the controlled entity or
organization, whether through the ownership of voting securities or by contract
or otherwise.
     2.2 “Associate” means (a) a person employed by the Company or any Affiliate
as a common law employee, (b) a person who has agreed to become a common law
employee of the Company or any Affiliate and is expected to become such within
six (6) months from the date of a determination made for purposes of the Plan or
(c) a director or advisory director of the Company who is not an employee of the
Company or any Affiliate.
     2.3 “Associate Stock Bonuses” means an Award granted pursuant to Article X
of the Plan.
     2.4 “Award” means, individually or collectively, a grant under the Plan of
Executive Options, Share Appreciation Rights, Executive Shares, Key Employee
Options, Key Employee Shares, Directors’ Shares, Associates Stock Bonuses and
Service Awards, in each case subject to the terms and provisions of the Plan.
     2.5 “Award Agreement” means an agreement that sets forth the terms and
conditions applicable to an Award granted under the Plan.
     2.6 “Board” means the board of directors of the Company.

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     2.7 Change in Control” means the occurrence of any of the following events:
(a) there shall be consummated (i) any consolidation or merger of the Company in
which the Company is not the continuing or surviving corporation or pursuant to
which shares of the Stock would be converted into cash, securities or other
property, other than by a merger of the Company where a majority of the Board of
the surviving corporation is, and for a two-year period after the merger
continues to be, persons who were directors of the Company immediately prior to
the merger or were elected as directors, or nominated for election as director,
by a vote of at least two-thirds of the directors then still in office who were
directors of the Company immediately prior to the merger, or (ii) any sale,
lease, exchange or transfer (in one transaction or a series of related
transactions) of all or substantially all of the assets of the Company; (b) the
shareholders of the Company shall approve any plan or proposal for the
liquidation or dissolution of the Company; or (c) (i) any “person” (as such term
is used in Sections 13(d) and 14(d)(2) of the Exchange Act), other than the
Company or a subsidiary thereof or any Associate benefit plan sponsored by the
Company or a subsidiary thereof, who shall become the beneficial owner (within
the meaning of Rule 13d-3 under the Exchange Act) of securities of the Company
representing 20 percent or more of the combined voting power of the Company’s
then-outstanding securities ordinarily (and apart from rights accruing in
special circumstances) having the right to vote in the election of directors, as
a result of a tender or exchange offer, open market purchases, privately
negotiated purchases or otherwise, and (ii) at any time during a period of two
years after such “person” becomes such a beneficial owner, individuals who
immediately prior to the beginning of such period constituted the Board shall
cease for any reason to constitute at least a majority thereof, unless the
election or the nomination by the Board for election by the Company’s
shareholders of each new director during such period was approved by a vote of
at least two-thirds of the directors then still in office who were directors at
the beginning of such period.
     2.8 “Code” means the United States Internal Revenue Code of 1986, as
amended from time to time.
     2.9 “Committee” means a committee of at least two persons, who are members
of the Compensation Committee of the Board and are appointed by the Compensation
Committee of the Board, or, to the extent it chooses to operate as the
Committee, the Compensation Committee of the Board. Each member of the Committee
in respect of his or her participation in any decision with respect to an Award
intended to satisfy the requirements of Section 162(m) of the Code must satisfy
the requirements of “outside director” status within the meaning of Section
162(m) of the Code; provided, however, that the failure to satisfy such
requirement shall not affect the validity of the action of any committee
otherwise duly authorized and acting in the matter. As to Awards, grants or
other transactions that are authorized by the Committee and that are intended to
be exempt under Rule 16b-3 under the Exchange Act, the requirements of
Rule 16b-3(d)(1) under the Exchange Act with respect to the committee action
must also be satisfied.
     2.10 “Company” means Stewart Information Services Corporation, a Delaware
corporation, or any successor (by reincorporation, merger or otherwise).
     2.11 “Corporate Change” shall have the meaning ascribed to that term in
Section 4.5(c).
     2.12 “Directors’ Shares” means an Award granted pursuant to Article VII.
     2.13 “Effective Date” shall have the meaning ascribed to that term In
Section 1.1.
     2.14 “Exchange Act” means the United States Securities Exchange Act of
1934, as amended from time to time.
     2.15 “Executive Officer” has the meaning given such term in the rules and
regulations of the Securities and Exchange Commission.
     2.16 “Executive Option” means an Option granted to an Executive Officer
pursuant to Article V.
     2.17 “Executive Share” means an Award granted pursuant to Article VIII.
     2.18 “Fair Market Value” of the Stock as of any particular date means
(1) if the Stock is traded on a stock exchange, the closing sale price of the
Stock on that date as reported on the principal securities exchange on which the
Stock is traded, or (2) if the Stock is traded in the over-the-counter market,
the average between the high bid and low asked price on that date as reported in
such over-the-counter market; provided that (a) if the Stock is not so traded,
(b) if no closing price or bid and asked prices for the Stock was so reported on
that date or (c) if, in the discretion of the Committee, another means of
determining the Fair Market Value of a share of Stock at such date shall be
necessary or advisable, the Committee may provide for another means for
determining such Fair Market Value.

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     2.19 “Fiscal Year” means the Company’s fiscal year.
     2.20 “Holder” means a person who has been granted an Award or any person
who is entitled to receive shares of Stock under an Award.
     2.21 “Incentive Stock Option” means an Option granted under the Plan that
is designated by the Committee as an “Incentive Option” and satisfies the
requirements of Section 422 of the Code.
     2.22 “Key Employee” means a key employee of the Company, or an Associate,
determined by the Committee to have comparable responsibilities. An Executive
Officer is not a Key Employee for purposes of this Plan.
     2.23 “Key Employee Option” means an Option granted to a Key Employee
pursuant to Article V.
     2.24 “Key Employee Shares” means an Award granted to a Key Employee
pursuant to Article IX.
     2.25 “Mature Shares” means shares of Stock that the Holder has held for at
least six months.
     2.26 “Minimum Statutory Tax Withholding Obligation” means the amount the
Company or an Affiliate is required to withhold for federal, state and local
taxes based upon the applicable minimum statutory withholding rates required by
the relevant tax authorities.
     2.27 “Nonqualified Stock Option” means an Option granted under the Plan
other than an Incentive Option.
     2.28 “Option” means an option to purchase Stock granted pursuant to
Article V. An Option may be in the form of either an Incentive Stock Option or a
Nonqualified Stock Option.
     2.29 “Option Price” shall have the meaning ascribed to that term in
Section 5.3.
     2.30 “Optionee” means a person who is granted an Option under the Plan.
     2.31 “Option Agreement” means a written contract setting forth the terms
and conditions of an Option.
     2.32 “Plan” means Stewart Information Services Corporation 2005 Long-Term
Incentive Plan, as set forth in this document and as it may be amended from time
to time.
     2.33 “Section 409A” means Section 409A of the Code and Department of
Treasury rules and regulations issued thereunder.
     2.34 “Service Award” means an Award granted pursuant to Article XI.
     2.35 “STC” means Stewart Title Company, a subsidiary of the Company.
     2.36 “STG” means Stewart Title Guaranty Company, a subsidiary of STG.
     2.37 “Stock” means the common stock of the Company, $1.00 par value per
share (or such other par value as may be designated by act of the Company’s
stockholders).
     2.38 “Ten Percent Stockholder” means an individual who owns stock
possessing more than ten percent of the combined voting power of all classes of
stock of the Company and its Affiliates. For this purpose, an individual will be
considered as owning the stock owned, directly or indirectly, by or for his or
her brothers and sisters (whether by the whole or half blood), spouse, ancestors
and lineal descendants; and stock owned, directly or indirectly, by or for a
corporation, partnership, estate or trust will be considered as being owned
proportionately by or for its shareholders, partners or beneficiaries.
     2.39 “Termination of Employment” means the termination of the Award
recipient’s employment relationship with the Company and all Affiliates.

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ARTICLE III
ELIGIBILITY AND PARTICIPATION
     3.1 Eligibility. The persons who are eligible to receive Awards under the
Plan are as follows:

      Type of Award   Eligible Associates
Executive Options
  Executive Officers of the Company
 
   
Executive Shares
  Executive Officers of the Company
 
   
Key Employee Options
  Key Employees of the Company and persons determined by the Committee to have
equivalent responsibilities.
 
   
Key Employee Shares
  Key Employees of the Company and persons determined by the Company to have
equivalent responsibilities.
 
   
Directors’ Shares
  Directors who are not full-time employees of the Company upon their election
or re-election.
 
   
Associates Stock Bonuses
  Associates selected by the Committee who are awarded cash bonuses.
 
   
Service Awards
  Associates who have completed at least five years of service with the Company
or an Affiliate, as the Committee shall determine from time to time; provided,
that no Executive Officer or director of the Company shall be eligible to
receive any Service Award.

     3.2 Participation. Subject to the terms and provisions of the Plan, the
Committee may, from time to time, select the Associates to whom Awards shall be
granted and shall determine the nature and amount of each Award.
ARTICLE IV
GENERAL PROVISIONS RELATING TO AWARDS
     4.1 Authority to Grant Awards. The Committee may grant Awards to those
Associates as the Committee shall from time to time determine, under the terms
and conditions of the Plan. Subject only to any applicable limitations set out
in the Plan, the number of shares of Stock or other value to be covered by any
Award to be granted under the Plan shall be as determined by the Committee in
its sole discretion.
     4.2 Dedicated Shares; Maximum Awards. The aggregate number of shares of
Stock with respect to which Awards may be granted under the Plan is 1,710,000.
The aggregate number of shares of Stock with respect to which the following
types of Awards may be granted under the Plan is:

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                      Maximum Number of Shares             Aggregate per
Associate             in any Type of Award   Aggregate   One Fiscal Year
Executive Options, Share Appreciation Rights and Executive Shares
    600,000       35,000  
Key Employee Options and Key Employee Shares
    300,000       2,500  
Directors’ Shares
    380,000       —  
Associates Stock Bonuses
    350,000       —  
Service Awards
    80,000       10  

     Each of the foregoing numerical limits stated in this Section 4.2 shall be
subject to adjustment in accordance with the provisions of Section 4.5. The
number of shares of Stock stated in this Section 4.2 shall also be increased by
such number of shares of Stock as become subject to substitute Awards granted
pursuant to Article XII; provided, however, that such increase shall be
conditioned upon the approval of the stockholders of the Company to the extent
stockholder approval is required by law or applicable stock exchange rules. If
shares of Stock are withheld from payment of an Award to satisfy tax obligations
with respect to the Award, such shares of Stock will count against the aggregate
number of shares of Stock with respect to which Awards may be granted under the
Plan. To the extent that any outstanding Award is forfeited or cancelled for any
reason or is settled in cash in lieu of shares of Stock, the shares of Stock
allocable to such portion of the Award may again be subject to an Award granted
under the Plan.
     4.3 Non-Transferability. Except as specified in the applicable Award
Agreements or in domestic relations court orders, Awards 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 Award
other than under the terms of the Plan and the applicable Award Agreement may
terminate the Award.
     4.4 Requirements of Law. The Company shall not be required to sell or issue
any shares of Stock under any Award if issuing those shares of 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 or pursuant to
any other Award, the Company shall not be required to issue any shares of Stock
unless the Committee has received evidence satisfactory to it to the effect that
the Holder will not transfer the shares of 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
shares of Stock covered by the Plan pursuant to applicable securities laws of
any country or any political subdivision. In the event the shares of Stock
issuable on exercise of an Option or pursuant to any other Award are not
registered, the Company may imprint on the certificate evidencing the shares of
Stock any legend that counsel for the Company considers necessary or advisable
to comply with applicable law, or, should the shares of Stock be represented by
book or electronic entry rather than a certificate, the Company may take such
steps to restrict transfer of the shares of Stock as 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 or
enable the exercise of an Option or any other Award, or the issuance of shares
of Stock 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 Awards 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 shares
ahead of or affecting the Stock or Stock 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 Stock 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 therefore in money, services or property, then (1) the number,
class or series and per share price of Stock subject to outstanding Options or
other Awards under the Plan shall be appropriately adjusted in such a manner as
to entitle a Holder to receive upon exercise of an Option or other Award, for
the same aggregate cash consideration, the equivalent total number and class or
series of Stock the Holder would have received had the Holder exercised his or
her Option or other Award in full immediately prior to the event requiring the
adjustment, and (2) the number and class or series of Stock then reserved to be
issued under the Plan shall be adjusted by substituting

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for the total number and class or series of Stock then reserved, that number and
class or series of Stock that would have been received by the owner of an equal
number of outstanding shares of Stock of each class or series of Stock as the
result of the event requiring the adjustment.
     (c) If while unexercised Options or other Awards remain outstanding under
the Plan (1) 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), (2) 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), (3) the Company is to be dissolved or
(4) 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 (1), (2) or (3) of this sentence (each such
event is referred to herein as a “Corporate Change”), then, except as otherwise
provided in an Award Agreement (provided that such exceptions shall not apply in
the case of a reincorporation merger), or as a result of the Committee’s
effectuation of one or more of the alternatives described below, there shall be
no acceleration of the time at which any Award 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 Committee, 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 Awards held by any individual Holder
(provided that, with respect to a reincorporation merger in which Holders of the
Company’s ordinary shares will receive one ordinary share of the successor
corporation for each ordinary share of the Company, none of such alternatives
shall apply and, without Committee action, each Award shall automatically
convert into a similar award of the successor corporation exercisable for the
same number of ordinary shares of the successor as the Award was exercisable for
ordinary shares of Stock of the Company):
     (1) accelerate the time at which some or all of the Awards then outstanding
may be exercised so that such Awards 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 Committee, after which specified date all such Awards 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 Awards held by such Holders
(irrespective of whether such Awards are then exercisable under the provisions
of the Plan or the applicable Award Agreement evidencing such Award) as of a
date, before or after such Corporate Change, specified by the Committee, in
which event the Committee shall thereupon cancel such Award 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 Award
for such shares;
     (3) with respect to all or selected Holders, have some or all of their then
outstanding Awards (whether vested or unvested) assumed or have a new award of a
similar nature substituted for some or all of their then outstanding Awards
under the Plan (whether vested or unvested) by an entity that is a party to the
transaction resulting in such Corporate Change and that is then employing such
Holder or that 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 Stock subject to the Award immediately after the assumption or
substitution over the aggregate exercise price of such Stock is equal to the
excess of the aggregate Fair Market Value of all Stock subject to the Award
immediately before such assumption or substitution over the aggregate exercise
price of such Stock, and (B) the assumed rights under such existing Award or the
substituted rights under such new Award, as the case may be, will have the same
terms and conditions as the rights under the existing Award assumed or
substituted for, as the case may be;
     (4) provide that the number and class or series of Stock covered by an
Award (whether vested or unvested) theretofore granted shall be adjusted so that
such Award when exercised shall thereafter cover the number and class or series
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 Award; or
     (5) make such adjustments to Awards then outstanding as the Committee deems
appropriate to reflect such Corporate Change (provided, however, that the
Committee may determine in its sole and absolute discretion that no such
adjustment is necessary).

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     In effecting one or more of alternatives in (3), (4) or (5) immediately
above, and except as otherwise may be provided in an Award Agreement, the
Committee, in its sole and absolute discretion and without the consent or
approval of any Holder, may accelerate the time at which some or all Awards 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 Award and not otherwise provided for by this Section 4.5,
any outstanding Award and any Award Agreements evidencing such Award shall be
subject to adjustment by the Committee in its sole and absolute discretion as to
the number and price of Stock or other consideration subject to such Award. In
the event of any such change in the outstanding Stock, the aggregate number of
shares of Stock available under the Plan may be appropriately adjusted by the
Committee, whose determination shall be conclusive.
     (e) The issuance by the Company of stock of any class or series, or
securities convertible into, or exchangeable for, 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 stock or obligations of the Company convertible into, or
exchangeable for, stock 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 or other
Awards.
     4.6 Election Under Section 83(b) of the Code. No Holder shall exercise the
election permitted under Section 83(b) of the Code with respect to any Award
without the written approval of the Chief Financial Officer of the Company. Any
Holder who makes an election under Section 83(b) of the Code with respect to any
Award without the written approval of the Chief Financial Officer of the Company
may, in the discretion of the Committee, forfeit any or all Awards granted to
him or her under the Plan.
     4.7 Forfeiture for Cause. Notwithstanding any other provision of the Plan
or an Award Agreement, if the Committee finds by a majority vote that a Holder,
before or after his or her Termination of Employment (a) committed a fraud,
embezzlement, theft, felony or an act of dishonesty in the course of his or her
employment by the Company or an Affiliate, which conduct damaged the Company or
an Affiliate or (b) disclosed trade secrets of the Company or an Affiliate, then
as of the date the Committee makes its finding, any Awards awarded to the Holder
that have not been exercised by the Holder (including all Awards that have not
yet vested) will be forfeited to the Company. The findings and decision of the
Committee with respect to such matter, including those regarding the acts of the
Holder and the damage done to the Company, will be final for all purposes. No
decision of the Committee, however, will affect the finality of the discharge of
the individual by the Company or an Affiliate.
     4.8 Forfeiture Events. The Committee may specify in an Award Agreement that
the Holder’s rights, payments, and benefits with respect to an Award shall be
subject to reduction, cancellation, forfeiture, or recoupment upon the
occurrence of certain specified events, in addition to any otherwise applicable
vesting or performance conditions of an Award. Such events may include, but
shall not be limited to, Termination of Employment for cause, termination of the
Holder’s provision of services to the Company or its Affiliates, violation of
material policies of the Company and its Affiliates, breach of noncompetition,
confidentiality, or other restrictive covenants that may apply to the Holder, or
other conduct by the Holder that is detrimental to the business or reputation of
the Company and its Affiliates.
ARTICLE V
GENERAL PROVISIONS RELATING TO OPTIONS
     5.1 Type of Options Available. The Committee may grant the following
Options any time during the term of the Plan to any eligible Associate that it
chooses:
     (a) Incentive Stock Options. The Committee may grant to an Associate who is
a Key Employee of the Company, or an Affiliate that is a corporation, an Option,
or Options, to buy a stated number of shares of Stock under the terms and
conditions of the Plan, which Option or Options would be an “incentive stock
option” within the meaning of Section 422 of the Code.
     (b) Nonqualified Options. The Committee may grant to any Associate an
Option, or Options, to buy a stated number of shares of Stock under the terms
and conditions of the Plan, which Option or Options would not constitute an
“incentive stock option” within the meaning of Section 422 of the Code.
     5.2 Stock Appreciation Rights. Stock Appreciation Rights may be included in
each Option granted under the Plan to allow the holder of an Option (an
“Optionee”) to surrender that Option (or a portion of the part that is then
exercisable) and receive in

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exchange, upon a written request from the Optionee describing the special
circumstances that exist that create the need to use such Stock Appreciation
Rights and subject to any other conditions and limitations set by the Committee,
an amount equal to the excess of the Fair Market Value of the Stock covered by
the Option (or the portion of it surrendered), determined as of the date of
surrender, over the aggregate Option Price of the Stock. The payment will be
made in shares of Stock valued at Fair Market Value. Stock Appreciation Rights
may be exercised only when the Fair Market Value of the Stock covered by the
Option surrendered exceeds the Option Price of the Stock.
     Upon the surrender of an Option, or a portion of it, for Stock Appreciation
Rights, the shares represented by the Option (or that part of it surrendered)
shall not be available for reissuance under the Plan.
     Each of the Stock Appreciation Rights (a) will expire not later than the
expiration of the underlying Option, (b) may be for no more than 100 percent of
the difference between the exercise price of the underlying Option and the Fair
Market Value of a share of the Stock at the time the Stock Appreciation Right is
exercised, and (c) may be exercised only when the underlying Option is eligible
to be exercised.
     5.3 Option Price. The price at which shares of Stock may be purchased
pursuant to an Option that is an Incentive Stock Option shall be not less than
the Fair Market Value of the shares of Stock on the date the Option is granted.
The Committee in its discretion may provide that the price at which shares may
be purchased shall be more than the minimum price required. If an individual is
a Ten Percent Stockholder, the option price at which shares may be purchased
under an Option that is an Incentive Stock Option shall be not less than
110 percent of the Fair Market Value of the Stock on the date the Option is
granted.
     5.4 Maximum Value of Stock Subject to Options that are Incentive Stock
Options. To the extent that the aggregate Fair Market Value (determined as of
the date the Option is granted) of the Stock with respect to which Incentive
Stock Options are exercisable for the first time by the Optionee in any calendar
year (under the Plan and any other incentive stock option plan(s) of the Company
and any parent and subsidiary corporation) exceeds $100,000, the Options shall
be treated as Nonqualified Options. In making this determination, Options shall
be taken into account in the order in which they were granted.
     5.5 Exercise of Options. Each Option shall be exercised by notification to
the Company setting forth the number of shares of Stock with respect to which
the Option is to be exercised. Except in the case of exercise by a third-party
broker, as provided below, payment of the exercise price and any applicable tax
withholding amounts must be made at the time of exercise by any combination of
the following: (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 Company or by an executive officer of the Company) or (d) except
as specified below, any other form of payment that is acceptable to the Company.
As promptly as practicable after receipt of the Holder’s notification and
payment, the Company shall deliver to the Holder the number of shares with
respect to which the Option has been exercised. If Mature Shares are used for
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.
     The Company 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 Company 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 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 (the fifth anniversary of
the date the Option is granted in the case of an Incentive Stock Option granted
to a Ten Percent Stockholder), or (b) one day less than three months after the
date of the Holder’s Termination of Employment (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 and the Optionee.
     Whether authorized leave of absence, or absence on military or government
service, shall constitute severance of the employment relationship between the
Company and the Optionee shall be determined by the Committee at the time
thereof.

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     In the event of the death of the holder of any Option while in the employ
of the Company and before the date of expiration of such Option, such Option
shall continue in effect until the date of expiration of the Option. After the
death of the Optionee, his or her executors, administrators or any person or
person to whom his or her Option may be transferred by will or by the laws of
descent and distribution, shall have the right, any time before the termination
of the Option, to exercise the Option in respect to the number of shares that
the Optionee would have been entitled to exercise if he had exercised the Option
on the date of his or her death while in employment.
     Notwithstanding the foregoing provisions of this Article V, in the case of
an Option that is a Nonqualified Option, the Committee may provide for a
different option termination date in the option agreement with respect to such
Option. For purposes of Incentive Stock Options issued under the Plan, 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, by any
parent or subsidiary corporation, by a corporation issuing or assuming an option
in a transaction to which Section 424(a) of the Code, as amended, applies, or by
a parent or subsidiary corporation of such corporation issuing or assuming an
Option. For purposes of Nonqualified Options issued under the Plan, an
employment relationship between the Company and the Optionee will exist under
the circumstances described above for Incentive Stock Options and will also
exist if the Optionee is transferred to an affiliate corporation approved by the
Committee.
     5.7 Employment Obligation. The granting of any Option shall not impose upon
the Company any obligation to employ or continue to employ any Optionee. The
right of the Company to terminate the employment of any officer or other
employee shall not be diminished or affected because an Option has been granted
to him or her.
     5.8 Option Agreement. Each Option grant under the Plan shall be evidenced
by an Option Agreement that shall specify (a) the Option Price, (b) the duration
of the Option, (c) the number of shares of Stock to which the Option pertains,
(d) the exercise restrictions, if any, applicable to the Option, (e) whether the
Option is intended to be an Incentive Option or a Nonqualified Option, and
(f) such other provisions as the Committee shall determine that are not
inconsistent with the terms and provisions of the Plan.
     5.9 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.
     5.10 No Rights as Stockholder. No Holder, as such, shall have any rights as
a stockholder with respect to an Option.
ARTICLE VI
KEY EMPLOYEE AWARD PERFORMANCE CRITERIA
     The Committee may grant Key Employee Options or Key Employee Shares to
those eligible Key Employees as it shall from time to time determine, under the
terms and conditions of the Plan. Factors the Committee may consider include,
without limitation:

  •   Rank of consolidated STG/STC pretax profit (after deducting minority
interests) (dollars) in the Key Employee’s territory as reported on the Key
Employee’s consolidated profit center statement;     •   Rank of profit
percentage in the Key Employee’s territory as reported on the Key Employee’s
STG/STC profit center statement;     •   Rank of percentage of policy losses to
premiums generated YTD as reported on the Region Performance Summary Report;    
•   Market share increase in the Key Employee’s territory over the prior year as
reported on the quarterly American Land Title Association’s statistics on market
share. Market share weight will be increased with market share growth in key
states and percentage of state responsibility of the Key Employee;     •   Rank
of percentage increase in Cash to Houston remittances as reported on the Region
Performance Summary Report;

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  •   Region rank of percentage of delinquent premiums YTD as reported in the
Region Performance Summary Report;     •   Rank of percentage increase in Files
Closed Per Associate (FCPA) as reported on the Company’s Goals and Measures
Report;     •   Rank of region’s cumulative percentage return on investment from
acquisitions as reported on the Return on Investments — Acquisitions Report;    
•   Key Employee incorporation and pursuit of SISCO Initiatives, including
Strategies, Goals, Principles, Values and Standards;     •   Completion of
annual goals as submitted by the Key Employee during the Company’s Goals and
Budgets process; and     •   Other contributions towards overall Company
performance or failure to comply with Company requests. Items considered may
include rollout and implementation of technology, adoption of new products and
services or other programs sponsored by the Company, follow-up on audits and
training and benefits participation.

     The Committee shall evaluate the relative importance of these factors, and
the Key Employee’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 number of shares subject to any option, subject only to
any applicable limitations set out in the Plan.
ARTICLE VII
DIRECTORS’ SHARES
     7.1 Annual Grant to Directors. Each person who is not a full-time employee
of the Company or any of its subsidiaries and who shall be elected or re-elected
as a director of the Company shall be awarded shares of Stock annually on the
first business day following the Company’s annual meeting of stockholders at
which such person was elected or re-elected to serve, provided that the Plan is
in effect on that day. Each person who is not a full-time employee of the
Company or any of its subsidiaries and who shall be elected or re-elected as an
Advisory Director of the Company shall be awarded shares of Stock annually on
the first business day following the Company’s annual meeting of directors at or
subsequent to which such person was elected or re-elected to serve, provided
that the Plan is in effect on that day.
     7.2 Amount of Award. The number of shares of Stock to be awarded pursuant
to this Article VII shall be the amount determined by dividing the amount
authorized by the Company’s Board of Directors by the Fair Market Value of a
share of the Company’s common stock on the date of the award.
ARTICLE VIII
EXECUTIVE SHARES
     8.1 Executive Share Awards. The Committee may make Awards of Executive
Shares to those eligible Executive Officers selected by it. The amount of, the
vesting and the transferability restrictions applicable to any Executive Share
Award shall be determined by the Committee in its sole discretion. If the
Committee imposes vesting or transferability restrictions on a Holder’s rights
with respect to Executive Shares, the Committee may issue such instructions to
the Company’s share transfer agent in connection therewith as it deems
appropriate. The Committee may also cause the certificate for shares of Stock
issued pursuant to an Executive Share Award to be imprinted with any legend that
the Company considers advisable with respect to the restrictions or, should the
shares of Stock be represented by book or electronic entry rather than a
certificate, the Company may take such steps to restrict transfer of the shares
of Stock as counsel for the Company considers necessary or advisable to comply
with applicable law.
     8.2 Executive Share Award Agreement. Each Executive Share Award shall be
evidenced by an Award Agreement that contains any vesting, transferability
restrictions and other provisions not inconsistent with the Plan as the
Committee may specify.
     8.3 Holder’s Rights as Stockholder. Subject to the terms and conditions of
the Plan, each recipient of an Executive Share Award shall have all the rights
of a stockholder with respect to the Executive Shares included in the Executive
Share Award during any period of restriction established for the Executive Share
Award. Dividends paid with respect to Executive Shares in cash or property other
than shares of Stock or rights to acquire shares of Stock shall be paid to the
recipient of the Executive Share Award currently. Dividends paid in shares of
Stock or rights to acquire shares of Stock shall be added to and become a part
of the Executive Shares.

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During the Period of Restriction, certificates representing the Executive Shares
shall be registered in the Holder’s name and bear a restrictive legend to the
effect that ownership of such Executive Shares, and the enjoyment of all rights
appurtenant thereto, are subject to the restrictions, terms, and conditions
provided in the Plan and the applicable Award Agreement. Such certificates shall
be deposited by the recipient with the Secretary of the Company or such other
officer of the Company as may be designated by the Committee, together with all
stock powers or other instruments of assignment, each endorsed in blank, that
will permit transfer to the Company of all or any portion of the Executive
Shares that shall be forfeited in accordance with the Plan and the applicable
Award Agreement.
ARTICLE IX
KEY EMPLOYEE SHARES
     9.1 Key Employee Share Awards. The Committee may make Awards of Key
Employee shares to those eligible Key Employees selected by it. The number, the
vesting and the transferability restrictions applicable to any Key Employee
Share Award shall be determined by the Committee in its sole discretion. If the
Committee imposes vesting or transferability restrictions on a Holder’s rights
with respect to Key Employee Shares, the Committee may issue such instructions
to the Company’s share transfer agent in connection therewith as it deems
appropriate. The Committee may also cause the certificate for shares of Stock
issued pursuant to a Key Employee Share Award to be imprinted with any legend
that counsel for the Company considers advisable with respect to the
restrictions or, should the shares of Stock be represented by book or electronic
entry rather than a certificate, the Company may take such steps to restrict
transfer of the shares of Stock as counsel for the Company considers necessary
or advisable to comply with applicable law.
     9.2 Key Employee Share Award Agreement. Each Key Employee Share Award shall
be evidenced by an Award Agreement that contains any vesting, transferability
restrictions and other provisions not inconsistent with the Plan as the
Committee may specify.
     9.3 Holder’s Rights as Stockholder. Subject to the terms and conditions of
the Plan, each recipient of a Key Employee Share Award shall have all the rights
of a stockholder with respect to the Key Employee Shares included in the Key
Employee Share Award during the Period of Restriction established for the Key
Employee Share Award. Dividends paid with respect to Key Employee Shares in cash
or property, other than shares of Stock or rights to acquire shares of Stock,
shall be paid to the recipient of the Key Employee Share Award currently.
Dividends paid in shares of Stock or rights to acquire shares of Stock shall be
added to and become a part of the Key Employee Shares. During the Period of
Restriction, certificates representing the Key Employee Shares shall be
registered in the Holder’s name and bear a restrictive legend to the effect that
ownership of such Key Employee Shares, and the enjoyment of all rights
appurtenant thereto, are subject to the restrictions, terms, and conditions
provided in the Plan and the applicable Award Agreement. Such certificates shall
be deposited by the recipient with the Secretary of the Company or such other
officer of the Company as may be designated by the Committee, together with all
stock powers or other instruments of assignment, each endorsed in blank, that
will permit transfer to the Company of all or any portion of the Key Employee
Shares that shall be forfeited in accordance with the Plan and the applicable
Award Agreement.
ARTICLE X
ASSOCIATES STOCK BONUSES
     10.1 Award of Stock Bonuses. The Company shall, during the first quarter of
each Fiscal Year during the term of the Plan, issue Stock to each Associate
selected by the Committee having a value (as determined below) equal to
one-ninth of the total amount of cash bonus earned by such Associate for the
previous Fiscal Year pursuant to the established bonus policy of STG or STC, as
the case may be. Any such Award shall be granted no later than March 15
following the close of the Fiscal Year with respect to which the applicable
bonus was earned. The fact that an Associate is granted an Award pursuant to
this Article X with respect to one Fiscal Year shall not entitle the Associate
to receive such a grant in a subsequent Fiscal Year.
     10.2 Valuation. The shares of Stock to be issued pursuant to the Plan shall
be valued as of their closing price on the day following the Company’s year-end
earnings release.

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ARTICLE XI
SERVICE AWARDS
     Service Awards of 10 shares of Stock will be made to each eligible
Associate selected by the Committee upon his or her completion of the
Associate’s first five years of service for the Company or its Affiliates.
ARTICLE XII
SUBSTITUTION AWARDS
     Awards may be granted under the Plan from time to time in substitution for
stock options and other awards held by employees of other entities who are about
to become Associates, or whose employer is about to become an Affiliate as the
result of a merger or consolidation of the Company with another corporation, or
the acquisition by the Company of substantially all the assets of another
corporation, or the acquisition by the Company of at least 50 percent (50%) of
the issued and outstanding stock of another corporation as the result of which
it becomes a subsidiary of the Company. The terms and conditions of the
substitute Awards so granted may vary from the terms and conditions set forth in
the Plan to such extent as the Board at the time of grant may deem appropriate
to conform, in whole or in part, to the provisions of the Award in substitution
for which they are granted, but with respect to Options that are Incentive Stock
Options, no such variation shall be such as to affect the status of any such
substitute Option as an Incentive Stock Option under Section 422 of the Code.
ARTICLE XIII
ADMINISTRATION
     13.1 Awards. The Plan shall be administered by the Committee or, in the
absence of the Committee, the Plan shall be administered by the Board. The
members of the Committee shall serve at the discretion of the Board. The
Committee shall have full and exclusive power and authority to administer the
Plan and to take all actions that the Plan expressly contemplates or are
necessary or appropriate in connection with the administration of the Plan with
respect to Awards granted under the Plan.
     13.2 Authority of the Committee. The Committee shall have full and
exclusive power to interpret and apply the terms and provisions of the Plan and
Awards made under the Plan, and to adopt such rules, regulations and guidelines
for implementing the Plan as the Committee may deem necessary or proper, all of
which powers shall be exercised in the best interests of the Company and in
keeping with the objectives of the Plan. A majority of the members of the
Committee shall constitute a quorum for the transaction of business, and the
vote of a majority of those members present at any meeting shall decide any
question brought before that meeting. 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. All
questions of interpretation and application of the Plan, or as to awards granted
under the Plan, shall be subject to the determination, which shall be final and
binding, of a majority of the whole Committee. No member of the Committee shall
be liable for any act or omission of any other member of the Committee or for
any act or omission on his or her own part, including but not limited to the
exercise of any power or discretion given to him or her under the Plan, except
those resulting from his or her own gross negligence or willful misconduct. 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 Awards
will be made;
     (b) determine the number and exercise price of shares of Stock covered in
each Award, subject to the terms and provisions of the Plan;
     (c) determine the terms, provisions and conditions of each Award, which
need not be identical and need not match the default terms set forth in the
Plan;
     (d) accelerate the time at which any outstanding Award will vest;
     (e) prescribe, amend and rescind rules and regulations relating to
administration of the Plan; and

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     (f) make all other determinations and take all other actions deemed
necessary, appropriate or advisable for the proper administration of the Plan.
     The Committee may correct any defect or supply any omission or reconcile
any inconsistency in the Plan or in any Award to a Holder in the manner and to
the extent the Committee deems necessary or desirable to further the Plan’s
objectives. Further, the Committee shall make all other determinations that may
be necessary or advisable for the administration of the Plan. As permitted by
law and the terms and provisions of the Plan, the Committee may delegate its
authority as identified in this Section 13.2.
     The actions of the Committee in exercising all of the rights, powers, and
authorities set out in this Article XIII 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 persons. The Committee may employ attorneys,
consultants, accountants, agents, and other persons, any of whom may be an
Associate, and the Committee, the Company, and its officers and Board shall be
entitled to rely upon the advice, opinions, or valuations of any such persons.
     13.3 Decisions Binding. All determinations and decisions made by the
Committee or the Board, as the case may be, pursuant to the provisions of the
Plan and all related orders and resolutions of the Committee or the Board, as
the case may be, shall be final, conclusive and binding on all persons,
including the Company, its stockholders, Associates, Holders and the estates and
beneficiaries of Associates and Holders.
     13.4 No Liability. Under no circumstances shall the Company, the Board or
the Committee incur liability for any indirect, incidental, consequential or
special damages (including lost profits) of any form incurred by any person,
whether or not foreseeable and regardless of the form of the act in which such a
claim may be brought, with respect to the Plan or the Company’s, the Committee’s
or the Board’s roles in connection with the Plan.
ARTICLE XIV
AMENDMENT OR TERMINATION OF PLAN
     14.1 Amendment, Modification, Suspension, and Termination. Subject to
Section 14.2 the Committee may, at any time and from time to time, alter, amend,
modify, suspend, or terminate the Plan and any Award Agreement in whole or in
part; provided, however, that, without the prior approval of the Company’s
stockholders and except as provided in Section 4.5, the Committee shall not
directly or indirectly lower the Option Price of a previously granted Option,
and no amendment of the Plan shall be made without stockholder approval if
stockholder approval is required by applicable law or stock exchange rules.
     14.2 Awards Previously Granted. Notwithstanding any other provision of the
Plan to the contrary, no termination, amendment, suspension, or modification of
the Plan or an Award Agreement shall adversely affect in any material way any
Award previously granted under the Plan, without the written consent of the
Holder holding such Award.
ARTICLE XV
MISCELLANEOUS
     15.1 Unfunded Plan/No Establishment of a Trust Fund. Holders shall have no
right, title, or interest whatsoever in or to any investments that the Company
or any of its Affiliates may make to aid in meeting obligations under the Plan.
Nothing contained in the Plan, and no action taken pursuant to its provisions,
shall create or be construed to create a trust of any kind, or a fiduciary
relationship between the Company and any Holder, beneficiary, legal
representative, or any other person. To the extent that any person acquires a
right to receive payments from the Company under the Plan, such right shall be
no greater than the right of an unsecured general creditor of the Company. All
payments to be made hereunder shall be paid from the general funds of the
Company and no special or separate fund shall be established and no segregation
of assets shall be made to assure payment of such amounts, except as expressly
set forth in the Plan. 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 that becomes payable under the Plan. The Plan is
not intended to be subject to the Employee Retirement Income Security Act of
1974, as amended.
     15.2 No Employment Obligation. The granting of any Award 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

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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 Award has been
granted to him or her, and nothing in the Plan or an Award Agreement shall
interfere with or limit in any way the right of the Company or its Affiliates to
terminate any Holder’s employment at any time or for any reason not prohibited
by law.
     15.3 Tax Withholding. The Company or any Affiliate shall be entitled to
deduct from compensation payable to each Holder any sums required by federal,
state or local tax law to be withheld with respect to the vesting or exercise of
an Award or lapse of restrictions on an Award. In the alternative, the Company
may require the Holder (or other person validly exercising the Award) to pay
such sums for taxes directly to the Company or any Affiliate in cash or by check
within one day after the date of vesting, 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 of Stock held
back shall not exceed the Company’s or the Affiliate’s Minimum Statutory Tax
Withholding Obligation. The Committee may, in its discretion, permit a Holder to
satisfy any Minimum Statutory Tax Withholding Obligation arising upon the grant
or vesting (as applicable) of an Award by delivering to the Holder of the Award
a reduced number of shares of Stock in the manner specified herein. If permitted
by the Committee and acceptable to the Holder, at the time of grant or vesting
(as applicable) of an Award, the Company shall (a) calculate the amount of the
Company’s or an Affiliate’s Minimum Statutory Tax Withholding Obligation on the
assumption that all such vested shares are made available for delivery,
(b) reduce the number of such shares of Stock made available for delivery so
that the Fair Market Value of the shares of Stock withheld on the vesting date
approximates the Company’s or an Affiliate’s Minimum Statutory Tax Withholding
Obligation and (c) in lieu of the withheld shares of Stock, remit cash to the
United States Treasury and other applicable governmental authorities, on behalf
of the Holder, in the amount of the Minimum Statutory Tax Withholding
Obligation. The Company shall withhold only whole shares of Stock to satisfy its
Minimum Statutory Tax Withholding Obligation. Where the Fair Market Value of the
withheld shares of Stock does not equal the amount of the Minimum Statutory Tax
Withholding Obligation, the Company shall withhold shares of Stock with a Fair
Market Value slightly less than the amount of then Minimum Statutory Tax
Withholding Obligation and the Holder must satisfy the remaining minimum
withholding obligation in some other manner permitted under this Section 15.3.
The withheld shares of Stock not made available for delivery by the Company
shall be retained as treasury shares or will be cancelled and, in either case,
the Holder’s right, title and interest in such shares of Stock shall terminate.
The Company shall have no obligation upon vesting or exercise of any Award or
lapse of restrictions on any Award until the Company or an Affiliate has
received payment sufficient to cover the Minimum Statutory Tax Withholding
Obligation with respect to that vesting, exercise or lapse of restrictions.
Neither the Company nor any Affiliate shall be obligated to advise a Holder of
the existence of the tax or the amount that it will be required to withhold.
     15.4 Written Agreement. Each Award shall be embodied in a written agreement
or statement that shall be subject to the terms and conditions of the Plan. The
Award Agreement shall be signed by a member of the Committee on behalf of the
Committee and the Company or by an Executive Officer of the Company, other than
the Holder, on behalf of the Company, and may be signed by the Holder to the
extent required by the Committee. The Award Agreement may specify the effect of
a Change in Control on the Award. The Award Agreement may contain any other
provisions that the Committee in its discretion shall deem advisable that are
not inconsistent with the terms and provisions of the Plan.
     15.5 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 on 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 or her 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.

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     15.6 Gender and Number. 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.
     15.7 Severability. In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of the Plan, and the Plan shall be construed and enforced as
if the illegal or invalid provision had not been included.
     15.8 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 and provisions of the Plan.
     15.9 Other Compensation Plans. The adoption of the Plan shall not affect
any other 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
Associates.
     15.10 Other Awards. The grant of an Award shall not confer upon the Holder
the right to receive any future or other Awards under the Plan, whether or not
Awards may be granted to similarly situated Holders, or the right to receive
future Awards upon the same terms or conditions as previously granted.
     15.11 Successors. All obligations of the Company under the Plan with
respect to Awards granted hereunder shall be binding on any successor to the
Company, whether the existence of such successor is the result of a direct or
indirect purchase, merger, consolidation, or otherwise, of all or substantially
all of the business and/or assets of the Company.
     15.12 Law Limitations/Governmental Approvals. The granting of Awards and
the issuance of Shares under the Plan 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.
     15.13 Delivery of Title. The Company shall have no obligation to issue or
deliver evidence of title for shares of Stock issued under the Plan prior to:
     (a) obtaining any approvals from governmental agencies that the Company
determines are necessary or advisable; and
     (b) completion of any registration or other qualification of the Stock
under any applicable national or foreign law or ruling of any governmental body
that the Company determines to be necessary or advisable.
     15.14 Inability to Obtain Authority. The inability of the Company to obtain
authority from any regulatory body having jurisdiction, which authority is
deemed by the Company’s counsel to be necessary to the lawful issuance and sale
of any shares of Stock hereunder, shall relieve the Company of any liability in
respect of the failure to issue or sell such shares of Stock as to which such
requisite authority shall not have been obtained.
     15.15 Investment Representations. The Committee may require any person
receiving Stock pursuant to an Award under the Plan to represent and warrant in
writing that the person is acquiring the Shares for investment and without any
present intention to sell or distribute such Stock.
     15.16 Persons Residing Outside of the United States. Notwithstanding any
provision of the Plan to the contrary, in order to comply with the laws in other
countries in which the Company or any of its Affiliates operates or has
Associates, the Committee, in its sole discretion, shall have the power and
authority to:
     (a) determine which Affiliates shall be covered by the Plan;
     (b) determine which persons employed outside the United States are eligible
to participate in the Plan;
     (c) amend or vary the terms and provisions of the Plan and the terms and
conditions of any Award granted to persons who reside outside the United States;

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     (d) establish subplans and modify exercise procedures and other terms and
procedures to the extent such actions may be necessary or advisable — any
subplans and modifications to Plan terms and procedures established under this
Section 15.16 by the Committee shall be attached to the Plan document as
Appendices; and
     (e) take any action, before or after an Award is made, that it deems
advisable to obtain or comply with any necessary local government regulatory
exemptions or approvals.
     Notwithstanding the above, the Committee may not take any actions
hereunder, and no Awards shall be granted, that would violate the Exchange Act,
the Code, any securities law or governing statute or any other applicable law.
     15.17 No Fractional Shares. No fractional shares of Stock shall be issued
or delivered pursuant to the Plan or any Award. The Committee shall determine
whether cash, additional Awards, or other property shall be issued or paid in
lieu of fractional shares of Stock or whether such fractional shares or any
rights thereto shall be forfeited or otherwise eliminated.
     15.18 Arbitration of Disputes. Any controversy arising out of or relating
to the Plan or an Option Agreement shall be resolved by arbitration conducted
pursuant to the arbitration rules of the American Arbitration Association. The
arbitration shall be final and binding on the parties.
     15.19 Governing Law. The provisions of the Plan and the rights of all
persons claiming thereunder shall be construed, administered and governed under
the laws of the State of Texas.
     15.18 Arbitration of Disputes. Any controversy arising out of or relating
to the Plan or an Option Agreement shall be resolved by arbitration conducted
pursuant to the arbitration rules of the American Arbitration Association. The
arbitration shall be final and binding on the parties.
     15.19 Governing Law. The provisions of the Plan and the rights of all
persons claiming thereunder shall be construed, administered and governed under
the laws of the State of Texas.

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