SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] Confidential, for Use of the Commission Only (as permitted by Rule 14a-
6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
INVESTORS TITLE COMPANY
(Name of Registrant as Specified In Its Charter)
Not Applicable
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
[LETTERHEAD OF INVESTORS TITLE COMPANY]
April 12, 2001
Dear Shareholders:
You are cordially invited to attend the Annual Meeting of Shareholders to be
held in the Investors Title Building, 121 North Columbia Street, Chapel Hill,
North Carolina on Wednesday, May 16, 2001, at 11:00 A.M.
The Annual Meeting will begin with a review of the activities of the Company
for the past year and a report on current operations during the first quarter of
2001, followed by discussion and voting on the matters set forth in the
accompanying Notice of Annual Meeting and Proxy Statement.
The Board of Directors unanimously recommends that you vote "FOR" all of the
proposals.
I URGE YOU TO REVIEW THE PROXY STATEMENT, SIGN AND DATE YOUR PROXY, AND
RETURN IT PROMPTLY IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
If you attend the meeting, you may, of course, choose to revoke your proxy
and personally cast your vote.
Cordially,
/s/ J. Allen Fine
J. Allen Fine
Chief Executive Officer
[LETTERHEAD OF INVESTORS TITLE COMPANY]
-------------------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 16, 2001
-------------------------------------------------
The Annual Meeting of the Shareholders of Investors Title Company will be
held at 121 North Columbia Street, Chapel Hill, North Carolina, on Wednesday,
May 16, 2001 at 11:00 A.M. E.D.T., for the following purposes:
(1) To elect three directors for three-year terms or until their
successors are elected and qualified.
(2) To consider and act upon a proposal to approve the 2001 Stock Option
and Restricted Stock Plan.
(3) To consider any other business that may properly come before the
meeting.
Shareholders of record of Common Stock of the Company at the close of
business on March 26, 2001 are entitled to vote at the meeting and any
adjournments thereof.
By Order of the Board of Directors:
/s/ L. Dawn Martin
L. Dawn Martin
Vice President and Assistant Secretary
--------------------------------------------------------------------------------
IMPORTANT - YOUR PROXY IS ENCLOSED. WHETHER OR NOT YOU EXPECT TO BE PRESENT AT
THE MEETING, PLEASE SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT IN THE
POSTAGE-PAID ENVELOPE PROVIDED FOR THAT PURPOSE. IT WILL ASSIST THE COMPANY IN
KEEPING DOWN THE EXPENSES OF THE MEETING IF ALL SHAREHOLDERS RETURN THEIR SIGNED
PROXIES PROMPTLY. YOU MAY NEVERTHELESS VOTE IN PERSON IF YOU DO ATTEND THE
MEETING.
PROXY STATEMENT
--------------------------------------------------------------------------------
Annual Meeting of Shareholders
To Be Held on May 16, 2001
--------------------------------------------------------------------------------
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Investors Title Company of proxies to be voted at the
Annual Shareholders' Meeting to be held at 121 North Columbia Street, Chapel
Hill, North Carolina, on May 16, 2001 at 11:00 A.M. E.D.T., and at all
adjournments thereof. Shareholders of record at the close of business on March
26, 2001 are entitled to notice of and to vote at the meeting and any
adjournments thereof.
Proxy Solicitation by the Board of Directors. The solicitation of proxies
will be by mail and is made on behalf of the Board of Directors. The cost of
solicitation of proxies will be borne by the Company. Copies of proxy material
and of the Annual Report for 2000 will be provided to brokers, dealers, banks
and voting trustees or their nominees for the purpose of soliciting proxies from
the beneficial owners, and the Company will reimburse these record holders for
their out-of-pocket expenses.
Revocability of Proxy. Each proxy executed and returned by a shareholder
may be revoked at any time thereafter except as to any matter or matters upon
which, prior to such revocation, a vote shall have been cast pursuant to the
authority conferred by such proxy.
Voting Securities. On March 26, 2001, the Company had a total of 2,855,744
shares of Common Stock outstanding, its only class of issued and outstanding
capital stock. Of these shares, 2,560,564 shares are entitled to one vote per
share and 295,180 shares are held by a subsidiary of the Company and, by State
law, are not entitled to vote. A majority of the shares entitled to vote at the
meeting, represented at the meeting in person or by proxy, will constitute a
quorum.
Annual Report to Shareholders. An Annual Report of the Company for the
calendar year 2000 including financial statements and auditors' opinion, along
with this Proxy Statement and proxy card, are being first mailed to the
Company's shareholders on or about April 12, 2001.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
During the year ended December 31, 2000, the Board of Directors held four
meetings. All incumbent directors and nominees, with the exception of Loren B.
Harrell, Jr., attended 75% or more of the aggregate number of meetings of the
Board of Directors and committees of the Board on which they served.
The Corporation's Board of Directors has a Compensation Committee, a
Nominating Committee and an Audit Committee.
In 2000, the Compensation Committee was composed of James R. Morton,
Lillard H. Mount and A. Scott Parker III. This Committee, which also serves as
the Option Committee administering the Company's stock option plans, reviews
salaries, bonuses and other compensation of all officers of the Corporation. The
Compensation Committee met four times in 2000.
In 2000, the Nominating Committee was composed of J. Allen Fine, David L.
Francis and A. Scott Parker III. A slate of nominees for director to present to
the shareholders is recommended by the Nominating Committee and determined by at
least a majority vote of those directors whose terms do not expire during the
year in which the election of directors will be made. The Committee will
consider nominees recommended by the shareholders. Any shareholder wishing to
make a recommendation regarding a nominee for election at the 2002 Annual
Meeting should submit such recommendation to the Assistant Secretary, Investors
Title Company, P.O. Drawer 2687, Chapel Hill, North Carolina 27515-2687, no
later than December 12, 2001. The Nominating Committee met once in 2000.
In 2000, the Audit Committee was composed of David L. Francis, Loren B.
Harrell, Jr., William J. Kennedy III and H. Joe King, Jr. The Committee
recommends to the Board of Directors the independent public accountants to be
engaged by the Company, reviews the overall scope of the annual audit proposed
by the independent public accountants, reviews internal audit procedures on
various aspects of corporate operations, and periodically consults with the
independent public accountants on matters relating to internal financial
controls and procedures. The Audit Committee met twice in 2000.
Audit Committee Report
The Audit Committee of the Board of Directors (the Committee) is comprised
of the four directors named below. Each member of the Committee is an
independent director as defined by Nasdaq's independent director and audit
committee listing standards. The Committee has adopted a written charter which
has been approved by the Board of Directors (Board) and which is set forth in
the Appendix to this Proxy Statement. In accordance with its written charter,
the Committee assists the Board in fulfilling its responsibility for oversight
of the quality and integrity of the accounting, auditing and financial reporting
practices of the Company.
In connection with the audit process for 2000, the Audit Committee obtained
from the independent auditors a formal written statement describing all
relationships between the auditors and the Company that might bear on the
auditors' independence consistent with Independence Standards Board Standard No.
1, "Independence Discussions with Audit Committees," discussed with the auditors
any
1
relationships that may impact their objectivity and independence and satisfied
itself as to the auditors' independence. The Committee also discussed with
management and the independent auditors the quality and adequacy of the
Company's internal controls. The Committee reviewed with the independent
auditors their audit plans, audit scope and identification of audit risks.
The Committee discussed and reviewed with the independent auditors all
communications required by generally accepted auditing standards, including
those described in Statement on Auditing Standards No. 61, as amended,
"Communication with Audit Committees" and, with and without management present,
discussed and reviewed the results of the independent auditors' examination of
the financial statements.
The Committee discussed and reviewed the audited financial statements of
the Company as of and for the year ended December 31, 2000, with management and
the independent auditors. Management has the responsibility for the preparation
of the Company's financial statements and the independent auditors have the
responsibility for the examination of those statements.
Based on the above-mentioned review and discussions with management and the
independent auditors, the Committee recommended to the Board that the Company's
audited financial statements be included in its Annual Report on Form 10-K for
the year ended December 31, 2000, for filing with the Securities and Exchange
Commission.
Submitted by the Audit Committee of the Board of Directors:
William J. Kennedy III, Chairman Loren B. Harrell, Jr.
David L. Francis H. Joe King, Jr.
March 27, 2001
DIRECTORS' COMPENSATION
Directors who are not employees of the Company receive an annual retainer
for Board services of $3,000 and an attendance fee of $1,000 for each meeting of
the Board of Directors attended in addition to actual travel expenses related to
the meetings. Directors do not receive fees for committee meetings attended
unless the committee meeting is held on a day other than the regularly scheduled
board meeting date. The fee for such a committee meeting is $250. Directors who
are employees of the Company are paid no fees or other remuneration for service
on the Board or on any Board committee. Each non-employee director of the
Company was granted a Nonqualified Stock Option, exercisable for 500 shares at
$10.00 per share on May 9, 2000. These options were immediately exercisable and
will expire on May 9, 2010.
EXECUTIVE COMPENSATION
The Compensation Committee Report on Executive Compensation
The fundamental philosophy of Investors Title Company's compensation
program is to provide competitive compensation opportunities for all employees
based on the individual's personal performance, experience and contribution to
the growth of the Company. In addition, it is the Company's goal to provide
compensation opportunities that are comparable to those offered by other
businesses in the area, thus allowing the Company to attract and retain
experienced corporate officers and key employees with outstanding ability and to
motivate them to perform to their fullest extent. The Company's compensation
package is competitive with the compensation benefits of other employers of
comparable size in its area of operation.
In evaluating the performance and establishing the incentive compensation
of the Chief Executive Officer and other members of senior management, the
Committee has reviewed management's success in maximizing its sales efforts by
expanding operations in other market areas.
In reviewing management performance and compensation, the Committee also
has taken into account management's consistent commitment to the long-term
success of the Company through new innovations and intra-Company restructuring.
Based upon the evaluation of these factors, the Committee believes that the
senior management of the Company continues to be dedicated to achieving long-
term growth and that the compensation approved by the Committee has contributed
to achieving this end.
Compensation for each of the named executive officers, as well as other
senior executives, consists of a base salary, a cash and/or stock bonus,
incentive stock options and a contribution under a Simplified Employee Pension
Plan. The Committee considers the total compensation of each of the named
executive officers and other senior executives in establishing each element of
compensation.
Each year, the Chief Executive Officer reviews with the Committee the
proposed annual salaries, and the Committee recommends any modifications it
deems appropriate. Salaries are recommended by the Chief Executive Officer based
on industry standards, national surveys, individual contribution and
performance. The Committee also fixes the base salary of the Chief Executive
Officer based on the same criteria and the Committee's assessment of his past
performance and expectations as to future leadership of the Company's business.
2
Stock and cash bonuses awarded to the executive officers named in the
Summary Compensation Table appearing below and other senior executives are based
on their performance throughout the year.
In determining the Chief Executive Officer's bonus award for 2000, the
Committee considered, in addition to the factors discussed above pertaining to
expanded markets and innovations, the performance of the Company's competitors,
as well as more subjective criteria.
Periodically, the Committee considers the need to issue stock options,
which are designed to link the concerns of the executives with those of the
shareholders. Stock option grants provide an incentive that focuses the
executive's attention on managing the Company from the perspective of an owner
with an equity stake in the business. The Committee believes that past grants
have successfully focused the Company's senior management on building
profitability and shareholder value. The Chief Executive Officer is eligible to
participate in the same executive compensation plans available to other senior
executives.
In establishing grants of stock options, the Chief Executive Officer
reviews with the Committee the proposed option awards. Executive officers, other
than senior executives, also participate in the Company's compensation program.
Submitted by the Compensation Committee of the Board of Directors:
James R. Morton Lillard H. Mount A. Scott Parker III
February 12, 2001
Summary Compensation Table
Shown below is information concerning the annual compensation for services
in all capacities to the Company for the fiscal years ended December 31, 2000,
1999 and 1998, of those persons who were, at December 31, 2000 (i) the Chief
Executive Officer and (ii) the senior executive officers, other than the CEO,
who earned more than $100,000 in salary and bonus during 2000.
----------------------
Long Term Compensation
----------------------
Awards
--------------------
Annual Compensation Securities
Name and ---------------------------- Underlying All Other
Principal Salary Bonus Options/ Compensation
Position Year ($ ($) SARs (#) ($)
----------------------------------------------------------------------------------------------------------------------
J. Allen Fine 2000 231,276 99,438 50,000 17,653(1)
Chief Executive 1999 224,510 124,438 -- 17,950
Officer 1998 218,192 199,425 8,000 19,219
James A. Fine, Jr 2000 179,613 25,008 50,000 21,834(2)
President 1999 172,167 30,015 -- 20,954
1998 131,625 55,000 10,000 20,577
W. Morris Fine 2000 178,813 25,008 50,000 21,854(3)
Executive Vice 1999 171,917 32,015 -- 34,368
President 1998 132,125 55,000 10,000 20,622
----------------------------------------------------------------------------------------------------------------------
(1) Total represents $17,000 Company contribution to Simplified Employee Pension
Plan, along with $653 Company-paid life insurance premiums.
(2) Total represents $17,000 Company contribution to Simplified Employee Pension
Plan, along with $878 Company-paid life insurance premiums, and $3,956
Company-paid health insurance premiums.
(3) Total represents $17,000 Company contribution to Simplified Employee Pension
Plan, along with $898 Company-paid life insurance premiums, and $3,956
Company-paid health insurance premiums.
3
Stock Options
The following table sets forth certain information with respect to options
granted to the executive officers named in the Summary Compensation Table during
the fiscal year ended December 31, 2000.
Option Grants in Last Fiscal Year
Potential Realizable (2)
Value at Assumed Annual Rates
of Stock Price Appreciation
Individual Grants (1) For Option Term
----------------------------------------------------------------------------------------------- --------------------------------
% of Total
Number of Securities Options Granted Exercise or
Underlying Options to employees Base Price Expiration
Name Granted (#) in Fiscal Year ($/Sh) Date 0%($) 5%($) 10%($)
----------------- -------------------- ---------------- ----------- ----------- ------ ------ -------
J. Allen Fine 15,000 7.4% $ 11.00 5/9/05 0 26,442 76,576
10,000 4.9% $ 13.06 8/14/05 0 20,895 60,568
25,000 12.3% $ 13.06 8/14/05 0 52,237 151,419
James A. Fine, Jr 15,000 7.4% $ 11.00 5/9/05 0 26,442 76,576
10,000 4.9% $ 13.06 8/14/05 0 20,895 60,568
25,000 12.3% $ 13.06 8/14/05 0 52,237 151,419
W. Morris Fine 15,000 7.4% $ 11.00 5/9/05 0 26,442 76,576
10,000 4.9% $ 13.06 8/14/05 0 20,895 60,568
25,000 12.3% $ 13.06 8/14/05 0 52,237 151,419
(1) Incentive Stock Options granted pursuant to a Company stock option plan.
Options are granted at 110% of fair market value on the date of grant
because the Fine family stock ownership, by virtue of their familial
relationship, on an aggregated basis in the Company, exceeds 10% of the
total combined voting power of all classes of the Company's stock.
(2) As required by the Securities and Exchange Commission, the amounts shown
assume a 5% and 10% annual rate of appreciation on the price of the
Company's Common Stock throughout a five-year option term. There can be no
assurance that the rate of appreciation assumed for purposes of this table
will be achieved. The actual value of the stock options to the named
executive officers and all optionees as a group will depend on the future
price of the Company's Common Stock.
The following table shows stock options exercised by the executive officers
named in the Summary Compensation Table during 2000, including the aggregate
value of gains on the date of exercise (the "Value Realized"). In addition, this
table includes the number of shares covered by both exercisable and
unexercisable stock options as of December 31, 2000. Also reported are the
values for "in-the-money" options which represent the positive spread between
the exercise price of any such existing stock options and the year-end price of
the Common Stock.
Aggregated Option Exercises in Last Fiscal Year and FY-End Option Values
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
Shares Value Options at FY-End (#) at FY-End ($)(1)
Acquired on Realized
Name Exercise (#) ($) Exercisable/Unexercisable Exercisable/Unexercisable
------------------ --------------- ----------- --------------------------- ----------------------------
J. Allen Fine 1,000 $ 9,320 11,200/ $ 27,700/
46,800 137,700
James A. Fine, Jr. 0 0 16,200/ 41,950/
45,400 123,450
W. Morris Fine 0 0 16,200/ 41,950/
45,400 123,450
(1) The closing price of the Common Stock on December 29, 2000, the last day of
2000 on which the Company's Common Stock traded, was $15.75.
4
PERFORMANCE GRAPH
The following graph compares the cumulative total return among the
Company's Common Stock, a broad equity market index (the NASDAQ Market Index)
and a peer group index for the last five years. The peer group index (selected
on the basis of SIC Codes for publicly-traded title insurance companies)
consists of Fidelity National Financial, First American Financial Corporation,
LandAmerica Financial Group, Inc., and Stewart Information Services Corporation.
COMPARE 5-YEAR CUMULATIVE TOTAL RETURN AMONG
INVESTORS TITLE COMPANY,
PEER GROUP INDEX AND NASDAQ MARKET INDEX
[GRAPHIC]
ASSUMES $100 INVESTED ON JAN. 1, 1996
ASSUMES DIVIDEND REINVESTED
FISCAL YEAR ENDING DEC. 31, 2000
EXECUTIVE EMPLOYMENT AGREEMENTS
On February 9, 1984, Investors Title Insurance Company, a wholly owned
subsidiary of the Company, entered into an employment agreement with J. Allen
Fine, which provides, among other things, for a salary to be fixed by the Board
of Directors, which shall not be less than $88,000 per annum. The agreement was
for an initial term of five years, renewable annually thereafter until such time
as Mr. Fine reaches age 70. The employment agreement provides that if the
Company terminates his employment, with or without cause, for any reason other
than death or disability, prior to Mr. Fine reaching age 70, he will be paid his
monthly salary for a period of 60 months commencing on the first of the month
following such termination. Investors Title Insurance Company also entered into
employment agreements with James A. Fine, Jr. and W. Morris Fine dated December
21, 1995. These employment agreements, which are substantially identical,
provide that the employee shall not compete with the Company in the State of
North Carolina for a period of two years following voluntary termination of
employment. The agreements also provide that termination following certain
events, such as a change in control of the Company, a diminution of the
employee's duties and responsibilities, an increase in travel or a requirement
that the employee render services outside the Chapel Hill area, would not be
deemed a voluntary termination.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee is comprised of James R. Morton, Lillard H.
Mount and A. Scott Parker III. None of these directors are officers or employees
of the Company or any of its subsidiaries.
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OWNERSHIP OF STOCK BY EXECUTIVE OFFICERS AND
CERTAIN BENEFICIAL OWNERS
The following table indicates the persons known to the Company to be the
owners of more than five percent (5%) of the Company?s Common Stock as of March
26, 2001.
Name and Address of Amount and Nature Percent
Beneficial Owner of Beneficial Ownership of Class
----------------------------------------------------- ----------------------- --------
Markel Corporation 240,750(1) 9.4%
4521 Highwoods Parkway, Glen Allen, Virginia 23060
J. Allen Fine 260,758(2) 10.13%
112 Carolina Forest, Chapel Hill, North Carolina 27516
(1) Ownership as of December 31, 2000 as reported to the Company on a Schedule
13G dated February 14, 2001. According to the Schedule 13G, certain
subsidiaries of Markel Corporation, as well as other investors advised by
Markel Gayner Asset Management Corporation, have the right to receive or
the power to direct the receipt of dividends from, or the proceeds from the
sale of, the Company's Common Stock. Each such holder, with the exception
of Essex Insurance Company, a subsidiary of Markel, which beneficially owns
152,600 shares of the Company's Common Stock, holds an interest in less
than 5% of the Company?s outstanding Common Stock.
(2) This includes 11,200 shares of Common Stock that Mr. Fine has the right to
purchase under stock options that are presently exercisable or are
exercisable within 60 days of March 26, 2001. Additionally, this includes
95,000 shares held by a limited partnership, of which Mr. Fine is a general
partner, and 151,099 shares held by a limited liability company, of which
Mr. Fine is a manager. Mr. Fine and his sons, James A Fine, Jr., and W.
Morris Fine, each share voting and investment power with respect to the
shares held by the limited liability company.
The table below sets forth the shares of the Company's Common Stock
beneficially owned by each director, nominee for director, the executive
officers named in the Summary Compensation Table, and by all directors and
executive officers as a group.
Name of Amount and Nature Percent
Beneficial Owner of Beneficial Ownership of Class
----------------------- ----------------------- --------
J. Allen Fine 260,758(1) 10.13%
A. Scott Parker III 77,557(2) 3.02%
W. Morris Fine 63,525(3) 2.45%
James A. Fine, Jr. 61,823(4) 2.39%
David L. Francis 55,166(5) 2.15%
James R. Morton 20,565(5) *
H. Joe King, Jr. 19,776(6) *
William J. Kennedy III 4,000(5) *
Lillard H. Mount 2,880(7) *
Loren B. Harrell, Jr. 2,000(5) *
All Executive Officers and
Directors as a Group (12 persons) 581,885(8) 22.21%
*Represents less than 1%
(1) This includes 11,200 shares of Common Stock that Mr. Fine has the right to
purchase under stock options that are presently exercisable or are
exercisable within 60 days of March 26, 2001. Additionally, this includes
95,000 shares held by a limited partnership, of which Mr. Fine is a general
partner, and 151,099 shares held by a limited liability company, of which
Mr. Fine is a manager. Mr. Fine and his sons, James A Fine, Jr., and W.
Morris Fine, each share voting and investment power with respect to the
shares held by the limited liability company.
(2) This total includes 1,500 shares of Common Stock that Mr. Parker has the
right to purchase under stock options that are presently exercisable or are
exercisable within 60 days of March 26, 2001. Additionally, this total
includes shares beneficially owned as follows: 100 shares as custodian for
A. Scott Parker IV, son; and 1,642 shares held by wife, Millicent M.
Parker.
(3) This total includes 16,200 shares of held Common Stock that Mr. Fine has
the right to purchase under stock options that are presently exercisable or
are exercisable within 60 days of March 26, 2001. Additionally, this total
includes shares beneficially owned as follows: 3,577 shares as Custodian
for Louisa M. Fine, daughter; 5 shares as Custodian for A. Lundy Fine,
daughter; and 470 shares held by wife, Nancy J. Fine.
(4) This total includes 16,200 shares of Common Stock that Mr. Fine has the
right to purchase under stock options that are presently exercisable or are
exercisable within 60 days of March 26, 2001. Additionally, this total
includes shares beneficially owned as follows: 1,415 shares as Custodian
for S. Benton Fine, son; and 546 shares held by wife, Leslie A. Fine.
(5) This total includes 2,000 shares of Common Stock available for purchase
under stock options that are presently exercisable or are exercisable
within 60 days of March 26, 2001.
6
(6) This total includes 2,000 shares of Common Stock that Mr. King has the
right to purchase under stock options that are presently exercisable or are
exercisable within 60 days of March 26, 2001. Additionally, this total
includes shares beneficially owned as follows: 700 shares held by wife,
Patsy T. King.
(7) This total includes 1,000 shares of Common Stock that Mr. Mount has the
right to purchase under stock options that are presently exercisable or are
exercisable within 60 days of March 26, 2001. Additionally, this total
includes shares beneficially owned as follows: 700 shares held by wife,
Bonnie Mount.
(8) This total includes 59,275 shares of Common Stock that all officers and
directors, as a group, have the right to purchase under stock options that
are presently exercisable or are exercisable within 60 days of March 26,
2001.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based on a review of the reports of changes in beneficial ownership of
Company Common Stock and written representations furnished to the Company, the
Company believes that its officers, directors and holders of at least 10% of its
Common Stock filed on a timely basis the reports required to be filed under
Section 16(a) of the Securities Exchange Act of 1934 during the year ended
December 31, 2000.
ITEM 1
ELECTION OF DIRECTORS
The Company's Board of Directors is composed of 10 members divided into
three classes with staggered terms of three years for each class.
J. Allen Fine, Jr., David L. Francis and A. Scott Parker III are nominated
for re-election to serve for a three-year period or until their respective
successors have been elected and qualified. The nominees will be elected if they
receive a plurality of the votes cast for their election. Broker nonvotes will
not affect the election results if a quorum is present. If any of the nominees
should withdraw or otherwise become unavailable for reasons not presently known,
shares represented by proxies may be voted for other persons in their place in
accordance with the best judgment of the persons named in the Proxy.
THE BOARD RECOMMENDS A VOTE 'FOR' THE ELECTION OF THE NOMINEES FOR
DIRECTORS.
Information regarding the three nominees for election as directors and
directors continuing in office is set forth below:
Served as Term
Director to
Name Age Since Expire
--------- --- ------- --------
Board Nominees:
J. Allen Fine 66 1973 2004
David L. Francis 68 1982 2004
A. Scott Parker III 57 1998 2004
Directors Continuing in Office:
W. Morris Fine 34 1999 2002
Loren B. Harrell, Jr. 52 1996 2002
H. Joe King, Jr. 68 1983 2002
William J. Kennedy III 78 1987 2002
James A. Fine, Jr. 39 1997 2003
James R. Morton 63 1985 2003
Lillard H. Mount 87 1977 2003
Biographical Information
Additional information regarding nominees for election as directors and
directors continuing in office is set forth below.
Board Nominees:
J. Allen Fine was the principal organizer of Investors Title Insurance Company
and has been Chairman of the Board of that Company, Investors Title Company, and
Northeast Investors Title Insurance Company since their incorporation. Mr.Fine
served as President of Investors Title Insurance Company until February 1997,
when he was named Chief Executive Officer. Additionally, Mr. Fine serves as
Chief Executive Officer of the Company and Northeast Investors Title Insurance
Company, and Chairman of the Board of Investors Title Exchange Corporation. Mr.
Fine is the father of James A. Fine, Jr., President and Treasurer of the
Company, and W. Morris Fine, Executive Vice President and Secretary of the
Company.
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David L. Francis retired in 1997 as the President of Marsh Mortgage Company, a
mortgage banking firm and Marsh Associates, Inc., a property management company
where he had been employed since 1963. He serves on the Board of Directors of
First Landmark, a Charlotte real estate and property management firm, and is
General Partner of the Francis Family Limited Partnership.
A. Scott Parker III founded Today?s Home, Inc. in 1975 and has been President of
that Company since its incorporation. Today's Home, Inc. manufactures lamps and
wall decor for the lodging, hospitality and healthcare industries. He is also
managing member of Parker-Jones-Kemp LLC, a developer of furniture showroom
properties to the trade.
Directors Continuing in Office:
W. Morris Fine is Executive Vice President and Secretary of Investors Title
Company, President and Chief Operating Officer of Investors Title Insurance
Company and Northeast Investors Title Insurance Company, President of Investors
Title Management Services and Vice President of Investors Title Exchange
Corporation. Mr. Fine is the son of J. Allen Fine, Chief Executive Officer and
Chairman of the Board of the Company, and brother of James A. Fine, Jr.,
President and Treasurer of the Company.
Loren B. Harrell, Jr. organized SoftPro Corporation in 1984 and has been
President of that Company since its inception. SoftPro specializes in the
research and development of software utilized by law firms, title companies,
title insurance agents and lending institutions.
H. Joe King, Jr. retired as President and Chairman of the Board of Home Federal
Savings & Loan Association in Charlotte, North Carolina and its parent company,
HFNC Financial Corporation in 1998, where he had been employed since 1962.
William J. Kennedy III retired as President and Chief Executive Officer of North
Carolina Mutual Life Insurance Company in 1990, where he had been employed since
1950.
James A. Fine, Jr. is President and Treasurer of Investors Title Company,
Executive Vice President, Chief Financial Officer and Treasurer of Investors
Title Insurance Company, Executive Vice President and Chief Financial Officer of
Northeast Investors Title Insurance Company, Executive Vice President of
Investors Title Management Services and President of Investors Title Exchange
Corporation and Investors Title Accommodation Corporation. Additionally, Mr.
Fine serves as Chairman of the Board of Investors Title Accommodation
Corporation. Mr. Fine is the son of J. Allen Fine, Chief Executive Officer and
Chairman of the Board of the Company, and brother of W. Morris Fine, Executive
Vice President and Secretary of the Company.
James R. Morton was President of J. R. Morton Associates from 1968 until he
retired in 1988. He is currently President of TransCarolina Corporation.
Lillard H. Mount was General Counsel to Investors Title Company and its
subsidiaries from their incorporation until his retirement in 1998.
SHAREHOLDER PROPOSALS FOR 2002 ANNUAL MEETING
Shareholder proposals to be presented at the 2002 Annual Meeting of
Shareholders must be received by the Company on or before December 12, 2001 to
be considered for inclusion in the Company's proxy materials relating to that
meeting. If a shareholder notifies the Company after February 25, 2002 of an
intent to present a proposal at the Company's 2002 Annual Meeting of
Shareholders, the Company will have the right to exercise its discretionary
voting authority with respect to such proposal without including information
regarding such proposal in its proxy materials.
ITEM 2
PROPOSAL TO APPROVE THE 2001 STOCK OPTION
AND RESTRICTED STOCK PLAN
On February 12, 2001, the Board of Directors of the Company adopted,
subject to shareholder approval, the 2001 Stock Option and Restricted Stock Plan
(the "Plan"). The following is a summary of the Plan, a copy of which was filed
electronically with the Securities and Exchange Commission with this Proxy
Statement.
The Plan is intended to induce those persons who are in a position to
contribute materially to the success of the Company to remain with the Company,
to offer them rewards in recognition of their contributions to the Company's
progress and to offer them incentives to continue to promote its best interests.
Under the Plan, the Company may grant incentive stock options, nonqualified
stock options or restricted stock awards. For purposes of the Plan, the term
'Company' includes Investors Title Company and its subsidiaries. Grants under
existing plans will continue in effect until exhausted or expired. Currently,
the 1997 Stock Option and Restricted Stock Plan, which expires March 9, 2007,
has 236,900 shares subject to outstanding grants and 28,600 shares available for
grant; and the 1993 Incentive Stock Option Plan, which expires February 1, 2003,
has 143,900 outstanding grants and 6,100 shares available for grant.
8
Description of the Plan
General. The Plan provides that up to 250,000 shares of the Company's
Common Stock will be available for the grant of incentive stock options,
nonqualified stock options and restricted stock awards. The total number of
shares that may be issued to any one participant pursuant to options granted
under the Plan may not exceed an aggregate of 50,000 shares of Common Stock. The
Plan has a 10-year term and, unless sooner terminated as provided in the Plan,
will terminate on February 11, 2001.
The number and class of shares available under the Plan and the purchase
price per share will be adjusted appropriately in the event of stock splits and
combinations, share dividends and similar changes in the capitalization of the
Company.
The Plan will be administered by a compensation committee (the "Committee")
appointed by the Board of Directors of the Company. The Committee will be
comprised of at least two members of the Board of Directors, none of whom shall
be a current employee of the Company, a former employee of the Company who
receives compensation for prior services rendered during the taxable year, an
individual receiving direct or indirect remuneration from the Company, within
the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended
(the "Code"), and any regulations promulgated thereunder, in any capacity other
than as a director, or a former or current officer of the Company.
Awards may be granted under the Plan only to key employees (including
statutory employees within the meaning of Section 3121(d)(3) of the Code),
officers or directors of the Company. The Committee will determine those persons
who will receive incentive stock options, nonqualified stock options and
restricted stock awards under the Plan.
The Plan provides that the Board of Directors may terminate, amend or
revise the terms of the Plan at any time, except that no amendment or revision
shall (i) increase the maximum aggregate number of shares subject to the Plan,
except as permitted by the Plan in order to make appropriate adjustments for
stock splits, share dividends or similar changes in the Common Stock; (ii)
change the minimum purchase price for shares subject to options granted under
the Plan; (iii) extend the maximum duration of 10 years established under the
Plan for any option or for a restricted stock award; or (iv) permit the granting
of an option or a restricted stock award to anyone other than eligible
recipients under the terms of the Plan.
The Plan provides that restricted stock awarded under the Plan may not be
transferred in any manner prior to lapse of the restrictions and conditions
imposed on such stock at the time of the award. Incentive stock options and
nonqualified stock options granted under the Plan that have not been exercised
may not be transferred except by will or the applicable laws of descent and
distribution.
With respect to nonqualified stock options or restricted stock awards, the
Committee is authorized under the terms of the Plan, in its discretion, to make
loans or payments to optionees or restricted stock award recipients for the
purpose of assisting such persons with payment of personal income taxes incurred
upon exercise of nonqualified stock options or the lapse of restrictions to
which restricted stock is subject. (See "Federal Income Tax Consequences"
below.)
If the Company becomes a party to any merger or consolidation in which it
is not the surviving entity or pursuant to which the shareholders of the Company
exchange their Common Stock, or if the Company dissolves or liquidates or sells
all or substantially all of its assets, all incentive stock options and
nonqualified stock options outstanding under the Plan will, unless otherwise
provided in the applicable option agreement, terminate on the effective date of
such merger, consolidation, dissolution, liquidation or sale. However, prior to
such effective date, the Committee may, in its discretion, make any or all
outstanding options immediately exercisable, and may, with respect to Options
that are terminated, (i) authorize a payment to any optionee that approximates
the economic benefit that he would realize if his option were exercised
immediately before such effective date, (ii) authorize a payment in such other
amount as it deems appropriate to compensate any optionee for the termination of
his Option, or (iii) arrange for the granting of a substitute Option to any
optionee. The Committee also may, in its discretion, cause any or all restricted
stock awards that are still subject to any restrictions and conditions to become
immediately vested in full on the effective date of any such transaction, unless
otherwise provided in the applicable agreement evidencing such restricted stock
award.
Any shares of Common Stock that are subject to incentive stock options or
nonqualified stock options granted under the Plan and that are not issued, and
any share of Common Stock that are issued pursuant to restricted stock awards
under the Plan and that are subsequently forfeited, may again be the subject of
grants or awards under the Plan.
Nonqualified Stock Options. The Plan permits the granting of nonqualified
stock options to such key employees (including statutory employees within the
meaning of Section 3121(d)(3) of the Code), officers or directors of the Company
as the Committee shall select from time to time in its discretion.
The price of shares subject to nonqualified stock options granted under the
Plan will be determined by the Committee at the time of grant of the option, but
may not be less than 100% of the fair market value of the Common Stock at the
time of the grant. The Committee will determine at the time of grant the dates
on which nonqualified stock options will become exercisable and may accelerate
the scheduled exercise date of an option if deemed appropriate. No nonqualified
stock option may expire later than 10 years from the date of grant.
Unexercised nonqualified stock options will terminate if an optionee ceases
to be employed by the Company, or any parent or subsidiary corporation, for any
reason other than death or disability, except that the applicable stock option
agreement may allow such option to be exercised within a period not to exceed
three months after the date of termination of employment. In the event an
optionee
9
becomes disabled, a nonqualified stock option may be exercised at any time
within three months after the date of termination of employment due to
disability unless a longer or shorter period is provided in the applicable
option agreement. If an optionee dies while employed by the Company, or any
parent or any subsidiary corporation, his nonqualified stock options shall
expire one year after the date of death, unless a longer or shorter period of
exercise has been specifically provided in the applicable stock option
agreement.
Incentive Stock Options. The Plan permits the granting of incentive stock
options ("ISOs") only to key employees of the Company who qualify for the grant
of an ISO under Section 422 of the Code.
The terms and conditions described above for nonqualified stock options
also apply to ISOs granted under the Plan. The following additional terms and
conditions will also be applicable with respect to ISOs: (i) no ISO may be
granted to a person who owns, at the time of grant, stock representing more than
10% of the total voting power of all classes of stock of the Company unless the
option price for the shares subject to such ISO is at least 110% of the fair
market value on the date of grant and such ISO award is exercisable only within
five years after its date of grant; (ii) the total fair market value of shares
subject to ISOs which are exercisable for the first time by an optionee in a
given calendar year may not exceed $100,000, valued as of the date of the ISO's
grant; and (iii) ISOs may not be granted more than 10 years after the date of
adoption of the Plan by the Board.
Restricted Stock. Restricted stock may be issued under the terms of the
Plan to eligible recipients who are selected from time to time by the Committee.
Such restricted stock will be subject to such restrictions and conditions as may
be determined by the Committee at the time of the award. These restrictions and
conditions may include (but are not required to include) restrictions on
transfer of the awarded shares of Common Stock, vesting conditions based on
continued employment with the Company for a specified period of time following
the award or satisfaction of individual or corporate performance criteria, or
satisfaction of other vesting standards. The lapse of restrictions and
conditions with respect to restricted stock may be accelerated at any time by
the Board of Directors or the Committee in its discretion.
Certificates evidencing shares of restricted stock will be held by the
Company and may not be sold or otherwise transferred by a restricted stock award
recipient until the restrictions imposed on the stock have lapsed.
Notwithstanding such restrictions, however, the award recipient will have other
rights associated with ownership of such restricted stock, including the right
to vote such shares and to receive dividends paid thereon. Restricted stock will
be forfeited if an award recipient dies or terminates his employment with the
Company, or any parent or subsidiary corporation, prior to lapse of the
restrictions on the shares, unless otherwise provided in the applicable
restricted stock agreement.
Restrictions and conditions imposed on shares of restricted stock shall
lapse, in whole or in part, as provided in the applicable agreement evidencing
the restricted stock award, but must lapse, if at all, not later than ten years
from the date of the award.
Federal Income Tax Consequences
Incentive Stock Options. ISOs granted under the Plan are intended to
qualify as "incentive stock options" under Section 422 of the Code. The grant of
an ISO generally does not result in taxable income to the optionee at the time
of grant of the option or at the time of exercise. However, for any year in
which Common Stock is purchased upon exercise of an ISO, the difference between
the fair market value of the Common Stock at the time of exercise and its cost
to the optionee will be an item of adjustment for purposes of computation of the
optionee's alternative minimum taxable income under Section 55 of the Code. If
the optionee exercises the ISO and then sells the Common Stock purchased under
the option at a gain, the excess of the sales price of the Common Stock over its
cost to the optionee will be taxable as a long-term capital gain if the sale is
made more than two years from the granting of the option and more than one year
from the transfer of the stock to the optionee. If the sale is made within two
years after the granting of the ISO or within one year after the Common Stock is
transferred to the optionee and if sales proceeds exceed the fair market value
of the Common Stock on the date of exercise, the optionee generally will
recognize ordinary income equal to the fair market value of the Common Stock on
the date of exercise less the option price, and capital gain (long-term or
short-term as the case may be), equal to the amount realized in excess of the
fair market value of the Common Stock on the date of exercise. No tax deduction
generally will be available to the Company as a result of the granting of ISOs,
the exercise of such options, or the sale by optionees of the Common Stock
purchased. However, the Company will be entitled to a deduction in an amount
equal to the ordinary income, if any, recognized by an optionee on the sale of
Common Stock purchased pursuant to the exercise of an ISO.
Nonqualified Stock Options. Nonqualified stock options granted under the
Plan are not intended to qualify as ISOs under the Code. The grant of a
nonqualified stock option will not result in taxable income to the optionee or a
deduction to the Company. On the date any such option is exercised, an optionee
generally will be deemed to recognize ordinary income equal to the amount by
which the fair market value of the Common Stock on the exercise date exceeds the
option price, and the Company will generally receive a deduction in the same
amount.
Restricted Stock. In general, there will be no federal income tax
consequences to either the Company or to the recipient of a restricted stock
award upon the grant of restricted stock until the restrictions lapse and the
restricted stock becomes nonforfeitable. At that time, the award recipient will
recognize taxable income equal to the then fair market value of the Common Stock
and the Company will generally receive a corresponding deduction. However,
restricted stock award recipients may elect, within 30 days after the date of
grant of a restricted stock award, to recognize ordinary income equal to the
fair market value of the restricted stock on the date of grant and the Company
will be entitled to a corresponding deduction at that time.
Any discussion herein pertaining to a deduction for the Company is qualified by
application of Section 162(m) of the Code and the regulations thereunder.
Section 162(m) limits to $1,000,000 per year the allowable deduction for
compensation paid to or accrued by the
10
chief executive officer and the four most highly compensated officers (other
than the chief executive officer), except that such limit does not include
"performance-based compensation," as that term is defined therein. If the Plan
is approved by shareholders in the manner prescribed by applicable regulations,
compensation realized upon the exercise of options will be "performance-based"
if the exercise price is at least equal to the fair market value of the
underlying stock on the date of grant. The Plan is intended to meet the
provisions of Section 162(m) such that any deductions realized from stock option
transactions thereunder will not be limited. Compensation derived from
restricted stock awards granted under the Plan may be deemed "performance-based"
if they are designated as such by the Committee and if the grant thereof is
subject to the attainment of certain performance goals that qualify under the
Section 162(m) regulations. Compensation derived from restricted stock awards
that are not "performance-based" will not be deductible by the Company beyond
the prescribed $1,000,000 limit.
Plan Benefits. Because the Plan is discretionary, it is not possible to
determine or estimate the benefits or amounts that may be granted in the future
to employees, officers or directors of the Company under the Plan. If the Plan
had been in effect during 2000, the stock option awards received by the
Company's executive officers would have been the same as the stock option awards
actually received by the executive officers during 2000 under the 1997 Stock
Option and Restricted Stock Plan. The Option Grants in Last Fiscal Year table in
the Executive Compensation section above lists the stock option awards during
2000 for the executive officers named in the Summary Compensation Table. The
Aggregated Option Exercises in Last Fiscal Year and FY-End Option Values table
in the same section show all of the outstanding options held by those executive
officers at December 31, 2000.
Vote Required. Section 422 of the Code provides that the Plan must be
approved by the shareholders of the Company in order for incentive stock options
granted under the Plan to receive the favorable tax treatment discussed above.
Approval of the Plan will require a majority of the votes cast at a meeting at
which a majority of the shares of the Company's Common Stock are present in
person or by proxy and entitled to vote.
THE BOARD RECOMMENDS A VOTE 'FOR' THE PROPOSAL
TO APPROVE THE 2001 STOCK OPTION AND RESTRICTED STOCK PLAN.
INDEPENDENT AUDITORS
Deloitte & Touche LLP served as the independent auditors for the Company
for 2000. The Company plans to solicit bids for the 2001 audit; therefore, the
independent auditors have not been appointed. Representatives of Deloitte &
Touche LLP are expected to attend the 2001 Annual Meeting of Shareholders. They
will have the opportunity to make a statement if they desire to do so and are
expected to be available to respond to appropriate questions.
Audit Fees: Investors Title Company paid to Deloitte & Touche LLP $83,827
during 2000 for audit services provided by them.
All Other Fees: Investors Title Company paid to Deloitte & Touche LLP
$64,008 during 2000 for services other than audit services provided by them.
These fees were principally for tax and actuarial services. The Audit Committee
does not consider these fees to be inconsistent with the independent auditors'
independence.
OTHER MATTERS TO COME BEFORE THE MEETING
Management does not know of any other matters that may come before the
meeting. However, if any other matters do properly come before the meeting, it
is the intention of the persons named as proxies to vote upon them in accordance
with their best judgment.
GENERAL INFORMATION
A copy of the Company's 2000 Annual Report and Form 10-K filed with the
Securities and Exchange Commission, excluding exhibits, can be obtained without
charge by writing to the Assistant Secretary of the Company, 121 North Columbia
Street, Chapel Hill, North Carolina 27514.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ L. Dawn Martin
L. Dawn Martin
Vice President and Assistant Secretary
April 12, 2001
11
APPENDIX
AUDIT COMMITTEE CHARTER
A-1
INVESTORS TITLE COMPANY
AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
CHARTER
Organization
There shall be a committee of the Board of Directors to be known as the
Audit Committee. The Audit Committee shall be composed of directors who are
independent of the management of the Company and any of its subsidiaries and are
free of any relationship that, in the opinion of the Board of Directors, would
interfere with their exercise of independent judgment as a Committee Member. All
members of the Audit Committee must be able to read and understand fundamental
financial statements, including a company's balance sheet, income statement and
cash flow statement. At least one director must have past employment experience
in finance or accounting, requisite professional certification in accounting, or
other comparable experience or background, including a current or past position
as a chief executive or financial officer or other senior officer with financial
oversight responsibilities.
Statement of Policy
The Audit Committee shall provide assistance to the Corporate Directors in
fulfilling their responsibility to the shareholders, potential shareholders, and
investment community relating to corporate accounting, reporting practices of
the Company, and the quality and integrity of the financial reports of the
Company. In so doing, it is the responsibility of the Audit Committee to
maintain free and open means of communication between the directors, the
independent auditors and the financial management of the Company.
Responsibilities
In carrying out its responsibilities, the Audit Committee believes its policies
and procedures should remain flexible, in order to best react to changing
conditions and to ensure to the Corporate Directors and shareholders that the
Company's corporate accounting and reporting practices are in accordance with
all requirements and are of the highest quality.
In carrying out these responsibilities, the Audit Committee will:
Review and recommend to the Board of Directors the independent auditors to
be selected to audit the financial statements of the Company and its
subsidiaries.
Meet with the independent auditors and financial management of the Company
to review the scope of the proposed audit for the current year and the audit
procedures to be utilized, and at the conclusion thereof review such audit,
including any comments or recommendations of the independent auditors.
Review the following items with the independent auditors: (1) the
proficiency and cooperation of financial and accounting personnel, (2) the
adequacy and effectiveness of the accounting and financial controls of the
Company, and (3) elicit any recommendations for the improvement of such internal
control procedures or particular areas where new or more detailed controls or
procedures are desirable. Particular emphasis should be given to the adequacy of
such internal controls to expose any payments, transactions, or procedures that
might be deemed illegal or otherwise improper.
Review the financial statements contained in the Annual Report to
Shareholders with management and the independent auditors to determine that
management and the independent auditors are satisfied with the disclosure and
content of the financial statements to be presented to the shareholders. Any
changes in accounting principles should be reviewed.
Provide sufficient opportunity for the independent auditors to meet with
the members of the Audit Committee without members of management present. Among
the items to be discussed in these meetings are the independent auditors'
evaluation of the Company's financial and accounting personnel, and the
cooperation that the independent auditors received during the course of the
audit.
Submit the minutes of all meetings of the Audit Committee to, or discuss
the matters discussed at each committee meeting with, the Board of Directors.
Investigate any matter brought to its attention within the scope of its
duties, with the power to retain outside counsel for this purpose if, in its
judgment, that is appropriate.
A-2
[LETTERHEAD OF INVESTORS TITLE COMPANY]
------------------------------------------------------------------------------------
PROXY This Proxy is Solicited on Behalf of the Board of Directors for
PLEASE SIGN the Annual Meeting of Shareholders on May 16, 2001
ON REVERSE SIDE
AND RETURN IN The undersigned hereby appoints J. Allen Fine and L. Dawn Martin, and each of them, each with power of
THE ENCLOSED substitution, as lawful proxies, to vote all shares of common stock of Investors Title Company that the
POSTAGE-PAID undersigned would be entitled to vote if personally present at the Annual Shareholders' Meeting of
ENVELOPE. Investors Title Company to be held at 121 North Columbia Street, Chapel Hill, North Carolina on Wednesday,
May 16, 2001 at 11:00 A.M. E.D.T., and at any adjournment thereof, upon such business as may properly come
before the meeting.
Please sign on reverse exactly as name appears. When shares are held by joint tenants, both should
sign. When signing as attorney, as executor, administrator, trustee or guardian, please give full title as
such. If a corporation, please sign in full corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
Please sign on reverse side and return in the enclosed postage-paid envelope.
SHAREHOLDER__________________________________________________________________________NUMBER OF SHARES__________________________
DIRECTORS RECOMMEND A VOTE FOR ELECTION OF THE DIRECTOR NOMINEES LISTED BELOW.
Mark "X" for only one box. If no direction is indicated, shares will be voted "For" the following director nominees:
1 - J. ALLEN FINE 2 - DAVID L. FRANCIS 3 - A. SCOTT PARKER III
( ) FOR all nominees ( ) WITHHOLD all nominees ( ) Withhold authority to vote for any individual nominee.
Write number(s) of nominee(s) below.
_____________________
DIRECTORS RECOMMEND A VOTE FOR THE PROPOSAL TO APPROVE THE 2001 STOCK OPTION AND RESTRICTED STOCK PLAN.
( ) FOR ( ) AGAINST ( ) ABSTAIN
IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE IN THEIR BEST JUDGMENT WITH RESPECT TO ANY OTHER BUSINESS THAT MAY PROPERLY
COME BEFORE THE MEETING.
Dated____________________________________, 2001 (Signature)__________________________________________________
(Signature if held jointly)__________________________________
INVESTORS TITLE COMPANY
2001 STOCK OPTION AND RESTRICTED STOCK PLAN
ARTICLE I
---------
GENERAL PROVISIONS
------------------
Section 1.1 Purpose. This 2001 Stock Option and Restricted Stock Plan
-------
(the "Plan") of Investor's Title Company and its subsidiaries (the "Company") is
intended to induce those persons who are in a position to contribute materially
to the success of the Company to remain with the Company, to offer them rewards
in recognition of their contributions to the Company and to offer them
incentives to continue to promote the Company's best interests.
Section 1.2 Elements of the Plan. The Plan provides for the grant of
--------------------
stock options pursuant to ARTICLE II of the Plan ("Options") and restricted
stock awards pursuant to ARTICLE III of the Plan ("Restricted Stock Awards").
Each Option granted pursuant to the Plan shall be designated as provided in
ARTICLE II as either an Incentive Stock Option or a Nonqualified Stock Option.
Incentive Stock Options granted under the Plan are intended to qualify as such
under Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"),
and shall be construed and interpreted to comply with the requirements of that
section and any regulations promulgated thereunder.
Section 1.3 Administration. The Plan shall be administered by an option
--------------
committee (the "Committee") appointed by the Board of Directors of the Company
(the "Board"). The Committee shall be comprised of not less than two members,
all of whom must be persons who are both "Non-Employee Directors" within the
meaning of Rule 16b-3 as promulgated by the Securities and Exchange Commission
under the Securities Exchange Act of 1934 and "outside directors" within the
meaning of Section 162(m) of the Code and the regulations promulgated
thereunder. The Board from time to time may appoint members of the Committee in
substitution for or in addition to members previously appointed, and may fill
vacancies in the Committee, however caused. Any action by the Committee shall
be taken by majority vote at a meeting thereof called in accordance with
procedures adopted thereby, or by unanimous written consent of the Committee.
Section 1.4 Authority of Committee.
----------------------
(a) Subject to the other provisions of this Plan, the Committee shall
have sole authority in its absolute discretion: to grant Options and
Restricted Stock Awards under the Plan; to determine the officers,
employees and directors to whom Options and/or Restricted Stock Awards
shall be granted under the Plan; to determine the number of
1
shares subject to any Option or Restricted Stock Award under the Plan; to
fix the option price and the duration of each Option; to establish
corporate or individual performance or other vesting standards for Options
or Restricted Stock Awards; to establish any other terms and conditions of
Options and Restricted Stock Awards; and to accelerate the time at which
any outstanding Option may be exercised or the time when restrictions and
conditions on Restricted Stock Awards will lapse. The Board may also grant
Options and/or Restricted Stock Awards from time to time to consultants who
are not employees of the Company. No member of the Board or of the
Committee shall be liable for any action or determination made in good
faith with respect to the Plan or any Option or Restricted Stock Award
granted thereunder. In addition, directors or former directors of the
Company, including members or former members of the Committee, shall be
entitled to indemnification by the Company to the extent permitted by
applicable law and by the Company's Articles of Incorporation or Bylaws
with respect to any liability or expense arising out of such person's
participation in the administration of this Plan.
(b) Subject to the other provisions of this Plan, and with a view to
effecting its purpose, the Committee shall have sole authority in its
absolute discretion: to construe and interpret the Plan; to prescribe,
amend, and rescind rules and regulations relating to the Plan; to make any
other determinations relating to the Plan; and to do everything necessary
or advisable to administer the Plan.
(c) All decisions, determinations, and interpretations made by the
Committee shall be binding and conclusive on all optionees and holders of
restricted stock and on their legal representatives, heirs and
beneficiaries.
Section 1.5 Shares Subject to the Plan: Reservation of Shares. The
-------------------------------------------------
maximum aggregate number of shares of common stock of the Company available
pursuant to the Plan for the grant of Options and for Restricted Stock Awards,
subject to adjustments as provided in Section 1.7, shall be 250,000 shares of
the Company's common stock, no par value (the "Common Stock"). The aggregate
number of shares of Common Stock with respect to which Options and Restricted
Stock Awards under the Plan may be granted to any individual (including Options
and Restricted Stock Awards that are subsequently cancelled) shall not exceed an
aggregate of 50,000 shares of Common Stock. If any Option granted pursuant to
the Plan expires or terminates for any reason before it has been exercised in
full, the unpurchased shares subject to that Option shall again be available for
the purposes of the Plan. If any shares issued pursuant to a Restricted Stock
Award are forfeited, they shall again be available for the purposes of the Plan.
The Company shall at all times reserve and keep available such number of shares
of its Common Stock as shall be sufficient to satisfy the requirements of the
Plan.
Section 1.6 Eligibility. Options and Restricted Stock Awards may be
-----------
granted under the Plan to such key employees (including statutory employees
within the meaning of Section 3121(d) of the Code), officers, directors or
consultants of the Company or a subsidiary of the Company, whether or not
employees, as the Committee shall select from time to time in its discretion.
Incentive Stock Options, however, may be granted under the Plan only to key
employees of the Company or a subsidiary of the Company who qualify for the
grant of an Incentive Stock Option under Section 422 of the Code.
2
Section 1.7 Adjustments. If the shares of Common Stock of the
-----------
Company are increased, decreased, changed into or exchanged for a different
number or kind of shares or securities through merger, consolidation,
combination, exchange of shares, other reorganization, recapitalization,
reclassification, stock dividend, stock split or reverse stock split in which
the Company is the surviving entity, an appropriate and proportionate adjustment
shall be made in the maximum number and kind of shares as to which Options and
Restricted Stock Awards may be granted under this Plan. A corresponding
adjustment changing the number or kind of shares allocated to unexercised
Options or unvested Restricted Stock Awards that shall have been granted prior
to any such change shall likewise be made. Any such adjustment in outstanding
Options shall be made without change in the aggregate purchase price applicable
to the unexercised portion of any such Option, but with a corresponding
adjustment in the price for each share covered by the Option, and shall be made
in a manner as not to constitute a modification, within the meaning of Section
424(h) of the Code, of outstanding Incentive Stock Options. In making any
adjustment pursuant to this Section 1.7, any fractional shares shall be
disregarded.
In the event of a change in the Common Stock of the Company as presently
constituted, which is limited to a change of all of its authorized shares with
par value into the same number of shares with a different par value or without
par value, the shares resulting from any such change shall be deemed to be
Common Stock within the meaning of the Plan.
The grant of an Option or a Restricted Stock Award under the Plan shall not
affect in any way the right or power of the Company to make adjustments,
reclassifications, reorganizations or changes in its capital or business
structure.
ARTICLE II
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STOCK OPTIONS
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Section 2.1 Grant. The Committee may cause the Company to grant
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Stock Options for the purchase of shares of Common Stock to eligible
participants under the Plan in such amounts as the Committee, in its sole
discretion shall determine. Options granted pursuant to the Plan that are
intended to qualify as "incentive stock options" under Section 422 of the Code
shall be designated as such at the time of their grant and are referred to
herein as Incentive Stock Options. Options not intended to qualify as Incentive
Stock Options are referred to herein as Nonqualified Stock Options and shall be
designated as such in the applicable option agreement.
Section 2.2 Terms and Conditions of Options. Options granted under
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the Plan shall be evidenced by written agreements ("option agreements") in such
form as the Committee may from time to time approve. The terms and conditions
of Options granted under the Plan, including the satisfaction of corporate or
individual performance or other vesting standards, may differ one from another
as the Committee shall in its discretion determine, as long as all Options
granted under the Plan satisfy the terms and conditions applicable to Options
set forth in this Plan.
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(a) Number of Shares; Designation. Each Option shall state the number
-----------------------------
of shares of Common Stock to which it pertains and that it is either an
Incentive Stock Option or a Nonqualified Stock Option.
(b) Option Price. Each Option shall state the option price, which
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shall not be less than the fair market value (as hereinafter defined) per
share of the Common Stock at the time the option is granted (except that
for Incentive Stock Options granted to any employee who owns more than 10%
of the combined voting power of all classes of stock of the Company, the
option price shall not be less than 110% of fair market value). For the
purpose of the Plan, the "fair market value" per share of Common Stock on
any date of reference shall be the Closing Price of the Common Stock
referred to in clauses (i), (ii) or (iii) below, whichever appropriate, on
the business day immediately preceding such date. For this purpose, the
Closing Price of the Common Stock on any business day shall be: (i) if the
Common Stock is listed or admitted for trading on any United States
national securities exchange, or if actual transactions are otherwise
reported on the National Market System of the National Association of
Securities Dealers Automated Quotation System ("NASDAQ") or other
consolidated transaction reporting system, the last reported sale price of
Common Stock on such exchange or reporting system on which the Common Stock
is principally traded, as reported in any newspaper of general circulation;
(ii) if clause (i) is not applicable and the Common Stock is otherwise
quoted on NASDAQ, or any similar system of automated dissemination of
quotations of securities prices in common use, the mean between the closing
high bid and low asked quotations for the Common Stock on such system for
such day; or (iii) if neither clause (i) nor (ii) is applicable, the mean
between the high bid and low asked quotations for the Common Stock as
reported by the National Quotation Bureau, Incorporated if at least two
securities dealers have inserted both bid and asked quotations for Common
Stock on at least five of the preceding ten days. If neither clause (i)
nor clauses (ii) or (iii) are applicable, "fair market value" per share of
Common Stock shall be such value as shall be determined by the Committee in
its sole discretion, unless the Committee shall identify a different method
for determining fair market value in a fair and uniform manner.
(c) Exercise of Options. Each Option shall be exercisable in one or
-------------------
more installments during its term, as provided in the applicable Option
agreement, and the right to exercise may be cumulative. No Option may be
exercised for a fraction of a share of Common Stock. Unless otherwise
provided by the applicable Option agreement, the purchase price of any
shares purchased shall be paid in full in cash or by cashier's check
payable to the order of the Company, by surrender of shares of Common Stock
held by the grantee for more than six months and having a value at the
exercise date equal to the exercise price, or through a cashless exercise
through a broker-dealer registered with the Securities and Exchange
Commission, or by a combination of any of the foregoing. If any portion of
the purchase price is paid in shares of Common Stock, those shares shall be
valued at their fair market value as of the day of delivery, as determined
in accordance with Section 2.2(b). No optionee, or optionee's executor,
administrator, legatee, or distributee, shall be deemed to be a holder of
any shares subject to an Option unless and until a stock certificate or
certificates for such are issued to such person(s) under the terms of the
Plan. No adjustment shall be made for dividends (ordinary or
extraordinary, whether in cash, securities or other property) or
distributions or other rights for which the
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record date is prior to the date such stock certificate is issued, except
as provided in Section 1.7. The exercise of Options under the Plan shall be
subject to the withholding requirements as set forth in Section 4.2.
(d) Written Notice Required. An Option granted pursuant to the terms
------------------------
of this Plan shall be exercised when written notice of that exercise,
stating the number of shares with respect to which the Option is being
exercised, has been given to the Company at its principal office, from the
person entitled to exercise the Option and full payment for the shares with
respect to which the Option is exercised has been received by the Company.
(e) Options Not Transferable. Options granted pursuant to this Plan
------------------------
may not be sold, pledged, assigned or transferred in any manner other than
by will or the laws of descent or distribution and may be exercised during
the lifetime of an optionee only by that optionee.
(f) Duration of Options. Each Option and all rights thereunder
-------------------
granted pursuant to the terms of this Plan shall expire on the date
specified in the applicable option agreement, but in no event shall any
Option expire later than ten (10) years from the date on which the Option
is granted; provided, however, that any Incentive Stock Option granted to
an employee who owns more than 10% of the combined voting power of all
classes of stock of the Company may not be exercisable after the date five
(5) years from the date the Option is granted. In addition, each Option
shall be subject to early termination as provided in this Plan or the
applicable option agreement.
(g) Termination of Employment, Disability or Death.
-----------------------------------------------
(i) If an optionee ceases to be employed by the Company, or any
subsidiary corporation, for any reason other than death or disability,
any Option granted to such optionee that is unexercised or still
subject to any restrictions or conditions shall be terminated and
forfeited, unless otherwise provided in the applicable option
agreement.
(ii) If an optionee becomes disabled within the meaning of
Section 22(e)(3) of the Code while employed by the Company, or any
subsidiary corporation, any Option may be exercised at any time within
three months after the date of termination of employment due to
disability, unless a longer or shorter period is provided in the
applicable option agreement.
(iii) If an optionee dies while employed by the Company, or any
subsidiary corporation, any Option shall expire one year after the
date of death, unless a longer or shorter period of exercise is
provided in the applicable option agreement. During this period, the
Option may be exercised, except as otherwise provided in the
applicable option agreement, by the person or persons to whom the
optionee's rights under the Option shall pass by will or by the laws
of descent and distribution, but in no event may the Option be
exercisable more than ten years from the date of grant.
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(iv) Unless otherwise provided in the applicable option
agreement, any Option that may be exercised for a period following
termination of the optionee's employment may be exercised only to the
extent it was exercisable immediately before such termination and in
no event after the Option would expire by its terms without regard to
such termination.
(v) If a nonemployee director ceases to serve the Company in
that capacity, the optionee's rights upon such termination shall be
governed in the manner of a optionee's rights upon termination of
employment as set forth above.
(h) Reorganizations. If the Company shall be a party to any merger or
----------------
consolidation in which it is not the surviving entity or pursuant to which
the shareholders of the Company exchange their Common Stock for other
securities or for cash in any acquisition transaction, or if the Company
shall dissolve or liquidate or sell all or substantially all of its assets,
or upon consummation of a tender offer approved by the Board, all Options
outstanding under this Plan, unless otherwise provided in the applicable
option agreement, shall terminate on the effective date of such merger,
consolidation, dissolution, liquidation, sale or tender offer; provided,
however, that prior to such effective date, the Committee may, in its
discretion, either (i) make any or all outstanding Options immediately
exercisable, (ii) authorize a payment to any optionee that approximates the
economic benefit that he would realize if his option were exercised
immediately before such effective date, (iii) authorize a payment in such
other amount as it deems appropriate to compensate any optionee for the
termination of his Option, or (iv) arrange for the granting of a substitute
Option to any optionee.
Section 2.3 Maximum Amount of Incentive Stock Options. The maximum
-----------------------------------------
aggregate fair market value of Common Stock, determined as of the time the
Incentive Stock Option is granted, with respect to which Incentive Stock Options
are exercisable by an optionee for the first time during any calendar year,
under this Plan and all other incentive stock option plans of the Company and
any parent, subsidiary, and predecessor corporations, shall not exceed $100,000.
Any Option in excess of the foregoing limitation shall be deemed a Nonqualified
Stock Option to the extent of such excess.
ARTICLE III
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RESTRICTED STOCK AWARDS
-----------------------
Section 3.1 Grant of Restricted Shares. The Committee may cause the
---------------------------
Company to grant Restricted Stock Awards to eligible participants under the Plan
in such amounts as the Committee, in its sole discretion, shall determine.
Restricted Stock Awards may be issued either alone or in addition to Options
granted under the Plan.
Section 3.2 Agreement. Each Restricted Stock Award shall be
---------
evidenced by a written agreement in such form and containing such provisions not
inconsistent with the Plan as the Committee may from time to time approve. Each
Restricted Stock Award shall be effective as of the date so stated in the
resolution of the Committee making the award.
6
Section 3.3 Restrictions and Conditions. Shares of Common Stock
---------------------------
awarded under this ARTICLE III shall be subject to such restrictions and
conditions, if any, as may be imposed by the Committee at the time of making the
award. Such restrictions and conditions may include, without limitation, the
satisfaction of specified performance criteria by the Company or by the grantee
of the Restricted Stock Award, or other vesting standards; provided, however,
that no award shall require any payment of cash consideration by the grantee.
Restrictions and conditions imposed on shares of Common Stock awarded under this
ARTICLE III may differ from one award to another as the Committee shall, in its
discretion, determine. Any restrictions and conditions shall lapse, in whole or
in part, as provided in the agreement evidencing the Restricted Stock Award, but
must lapse, if at all, not later than ten (10) years from the date of the award.
Shares with respect to which no restrictions or conditions are imposed and
shares with respect to which the restrictions and conditions imposed thereon
have lapsed are hereinafter referred to as "Unrestricted Shares." Shares with
respect to which the restrictions and conditions imposed thereon have not lapsed
are hereinafter referred to as "Restricted Shares."
Section 3.4 Rights as a Shareholder. A holder of Unrestricted Shares
-----------------------
shall have all of the rights of a shareholder of the Company with respect
thereto and shall be entitled to receive a stock certificate evidencing such
Unrestricted Shares. Such certificate shall be issued without legend, except to
the extent that a legend may be necessary for compliance with applicable
securities laws.
A holder of Restricted Shares shall be the record owner thereof and shall,
subject to the restrictions and conditions, have all of the rights of a
shareholder with respect thereto, including, but not limited to, the right to
receive all dividends paid on the Common Stock (ordinary or extraordinary,
whether in cash, securities or other property) and the right to vote the
Restricted Shares; provided, however, that each stock certificate evidencing
Restricted Shares shall bear a conspicuous legend stating that the shares
evidenced thereby are subject to restrictions as to transferability as provided
in Section 3.6 and to such other restrictions and conditions as have been
imposed by the Committee, and each such certificate shall be deposited by the
Holder with the Company or its designee together with a stock power endorsed in
blank.
Section 3.5 Forfeiture. Unless otherwise provided in the applicable
----------
Restricted Stock Award agreement, upon termination of the grantee's employment
with the Company or any of its subsidiaries for any reason whatsoever
(voluntarily or involuntarily, with or without cause), all Restricted Shares
then owned by him shall automatically and without any action on his part be
forfeited and transferred to the Company.
Section 3.6 Transferability. Restricted Shares held by a grantee
---------------
shall not be subject to alienation, sale, transfer, assignment, pledge,
attachment or encumbrances of any kind, and any attempt to alienate, sell,
transfer, assign, pledge or otherwise encumber any Restricted Shares shall be
void. In addition, the Company may impose such restrictions on the transfer of
Unrestricted Shares as it deems necessary or desirable to assure compliance with
all applicable federal and state securities laws.
7
Section 3.7 Adjustments. If there is a change in the Common Stock of
-----------
the Company as described in Section 1.7 of this Plan, any stock or other
securities or other property issued with respect to Restricted Shares shall be
subject to the same restrictions and conditions as are applicable to such
Restricted Shares, and the certificates or other evidence of such stock,
securities or other property, together with an appropriate stock power or power
of attorney, shall be delivered to the Company or its designee and held until
such time as the restrictions and conditions applicable thereto lapse or until
the stock, securities or other property is forfeited in accordance with the
provisions of this ARTICLE III.
If the Company shall be a party to any merger or consolidation in which it
is not the surviving company or pursuant to which the shareholders of the
Company exchange their Common Stock for other securities or for cash in any
acquisition transaction, if the Company shall dissolve or liquidate or sell all
or substantially all of its assets, or upon consummation of a tender offer
approved by the Board, the Committee may, in its discretion, cause all
Restricted Stock Awards that are still subject to any restrictions and
conditions to become immediately vested in full on the effective date of any
such transaction, unless otherwise provided in the applicable agreement
evidencing such Restricted Stock Award.
ARTICLE IV
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MISCELLANEOUS PROVISIONS
------------------------
Section 4.1 Tax Reimbursement Payments or Loans. In view of the
-----------------------------------
federal and state income tax savings expected to be realized by the Company upon
exercise of a Nonqualified Stock Option or the lapse of restrictions and
conditions imposed upon Restricted Shares, the Committee may, in its discretion,
provide that the Company will make a cash payment or a loan or a combination
thereof to the grantee of a Nonqualified Stock Option or the recipient of a
Restricted Stock Award (or his personal representatives or heirs) for the
purpose of assisting such optionee or grantee in the payment of personal income
taxes arising from such exercise or lapse of restrictions and conditions. The
basis for determining the amount and conditions of such cash payment or loan or
combination thereof and the terms and conditions of any such loan shall be
specified in the agreement pursuant to which the grant or award is made or may
be subsequently determined by the Committee. The Committee, in its discretion,
may from time to time forgive any such loan in whole or in part.
Section 4.2 Tax Withholding. No optionee shall be entitled to
---------------
issuance of a stock certificate representing shares purchased upon exercise of a
Nonqualified Stock Option, and no grantee of a Restricted Stock Award shall be
entitled to issuance of a stock certificate evidencing Unrestricted Shares,
until such optionee or grantee has paid, or made arrangements for payment, to
the Company of an amount equal to the income and other taxes that the Company is
required to withhold from such person as a result of his exercise of a
Nonqualified Stock Option or his receipt of Unrestricted Shares. In addition,
such amounts as the Company is required to withhold by reason of any tax
reimbursement payments made pursuant to Section 4.1 may be deducted from such
payments.
Section 4.3 Employment. Nothing in the Plan or in any Option or
-----------
Restricted Stock Award shall confer upon any eligible employee any right to
continued employment by the
8
Company or any subsidiary of the Company, or limit in any way the right of the
Company or any subsidiary of the Company at any time to terminate or alter the
terms of that employment.
Section 4.4 Effective Date of Plan. This Plan shall be effective
-----------------------
February 12, 2001, the date of adoption of the Plan by the Board of Directors of
the Company, subject to approval of the Plan by the shareholders of the Company
by the majority of the votes cast at a meeting at which a majority of the
Company's Common Stock is present either in person or by proxy held within 12
months of the date of adoption of the Plan by the Board.
Section 4.5 Termination and Amendment of Plan. The Plan may be
---------------------------------
amended, revised or terminated at any time by the Board; provided, however, that
no amendment or revision shall, without the approval of the Company's
Shareholders, (a) increase the maximum aggregate number of shares subject to
this Plan, except as permitted under Section 1.7; (b) change the minimum
purchase price for shares subject to Options granted under the Plan; (c) extend
the maximum duration established under the Plan for any Option or for a
Restricted Stock Award; or (d) permit the granting of an Option or Restricted
Stock Award to anyone other than those individuals described in Section 1.6
hereof . Unless sooner terminated, the Plan shall terminate on February 11,
2011. No Option or Restricted Stock Award shall be granted under the Plan after
the Plan is terminated.
Section 4.6 Prior Rights and Obligations. No amendment, suspension,
----------------------------
or termination of the Plan shall, without the consent of the person who has
received an Option or Restricted Stock Award, alter or impair any of that
person's rights or obligations under any Option or Restricted Stock Award
granted under the Plan prior to such amendment, suspension, or termination.
Section 4.7 Securities Laws. Shares of Common Stock issuable
---------------
pursuant to this Plan may, at the option of the Company, be registered under
applicable federal and state securities laws, but the Company shall have no
obligation to undertake such registrations and may, in lieu thereof, issue
shares hereunder only pursuant to applicable exemptions from such registrations.
In the event that no such registrations are undertaken, the shares shall be
issued only to persons who qualify to receive such shares in accordance with the
exemption from registration on which the Company relies. In connection with any
award of shares or the reissuance of certificates under the Plan, the Committee
may require appropriate representations from the recipient of such shares and
take such other action as the Committee may deem necessary, including but not
limited to placing restrictive legends on certificates evidencing such shares
and placing stop transfer instructions in the Company's stock transfer records,
or delivering such instructions to the Company's transfer agent, in order to
assure compliance with any such exemptions. Notwithstanding any other provision
of the Plan, no shares will be issued pursuant to the Plan unless such shares
have been registered under all applicable federal and state securities laws or
unless, in the opinion of counsel satisfactory to the Company, exemptions from
such registrations are available.
9