Exhibit 4.1
CAPITAL TITLE GROUP,
INC.
1996 STOCK OPTION
PLAN
Amended and Restated Effective May 23,
2003
1. Purpose of the Plan . The
purposes of this 1996 Stock Option Plan are to attract and retain
the best available personnel for positions of substantial
responsibility to provide successful management of the
Company’s business, to provide additional incentive to
certain key employees of the Company, and to promote the success of
the Company’s business through the grant of options to
purchase shares of the Company’s Common Stock.
Options granted hereunder may be
either “Incentive Stock Options,” as defined in Section
422 of the Code, or “Nonstatutory Stock Options,” at
the discretion of the Board and as reflected in the terms of the
written option agreement.
2. Definitions . As used
herein, the following definitions shall apply:
(a) “ Board ”
shall mean the Board of Directors of the Company or the Committee,
if one has been appointed.
(b) “ Code ”
shall mean the Internal Revenue Code of 1986, as amended, and the
rules and regulations promulgated thereunder.
(c) “ Common Stock
” shall mean the common stock of the Company described in the
Company’s Certificate of Incorporation, as
amended.
(d) “ Company ”
shall mean Capital Title Group, Inc., a Delaware corporation, and
shall include any parent or subsidiary corporation of the Company
as defined in Sections 424(e) and (f), respectively, of the
Code.
(e) “ Committee ”
shall mean the Committee appointed by the Board in accordance with
paragraph (a) of Section 4 of the Plan, if one is
appointed.
(f) “ Employee ”
shall mean any person, including officers and directors, employed
by the Company. The payment of a director’s fee by the
Company shall not be sufficient to constitute
“employment” by the Company.
(g) “ Exchange Act
” shall mean the Securities and Exchange Act of 1934, as
amended.
(h) “ Fair Market Value
” shall mean, with respect to the date a given Option is
granted or exercised, the value of the Common Stock determined by
the
Board in such manner as it may deem
equitable for Plan purposes but, in the case of an Incentive Stock
Option, no less than is required by applicable laws or regulations;
provided, however, that where there is a public market for the
Common Stock, the Fair Market Value per Share shall be the mean of
the bid and asked prices of the Common Stock on the date of grant,
as reported in the Wall Street Journal (or, if not reported,
as otherwise reported by the National Association of Securities
Dealers Automated Quotation System) or, in the event the Common
Stock is listed on the New York Stock Exchange or the American
Stock Exchange, the Fair Market Value per Share shall be the
closing price on such exchange on the date of grant of the Option,
as reported in the Wall Street Journal .
(i) “ Incentive Stock
Option ” shall mean an Option which is intended to
qualify as an incentive stock option within the meaning of Section
422 of the Code.
(j) “ Option ”
shall mean a stock option granted under the Plan.
(k) “ Optioned Stock
” shall mean the Common Stock subject to an
Option.
(l) “ Optionee ”
shall mean an Employee of the Company who has been granted one or
more Options.
(m) “ Parent ”
shall mean a “parent corporation,” whether now or
hereafter existing, as defined in Section 424(e) of the
Code.
(n) “ Plan ”
shall mean this Stock Option Plan.
(o) “ Share ”
shall mean a share of the Common Stock, as adjusted in accordance
with Section 11 of the Plan.
(p) “ Subsidiary
” shall mean a “subsidiary corporation,” whether
now or hereafter existing, as defined in Section 424(f) of the
Code.
(q) “ Tax Date ”
shall mean the date an Optionee is required to pay the Company an
amount with respect to tax withholding obligations in connection
with the exercise of an option.
3. Common Stock Subject to the
Plan . Subject to the provisions of Section 11 of the Plan, the
maximum aggregate number of shares which may be optioned and sold
under the Plan is Five Million Six Hundred Fifty Thousand
(5,650,000) Shares of Common Stock. The Shares may be authorized,
but unissued, or previously issued Shares acquired or to be
acquired by the Company and held in treasury.
If an Option should expire or become
unexercisable for any reason without having been exercised in full,
the unpurchased Shares covered by such Option shall, unless the
Plan shall have been terminated, be available for future grants of
Options.
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4. Administration of the Plan
.
(a) Procedure.
(i) The Plan shall be administered
by the Board in accordance with Securities and Exchange Commission
Rule 16b-3 (“ Rule 16b-3 ”); provided, however,
that the Board may appoint a Committee to administer the Plan at
any time or from time to time and, provided further, that if
members of the Board are not “disinterested” within the
meaning of Securities and Exchange Commission Rule 16b-3, then any
participation by directors in the Plan must be administered by a
Committee appointed by the Board.
(ii) The Committee shall consist of
at least two (2) members of the Board, each of whom is
“disinterested” within the meaning of Securities and
Exchange Commission Rule 16b-3 to administer the Plan on behalf of
the Board, subject to such terms and conditions as the Board may
prescribe. Once appointed, the Committee shall continue to serve
until otherwise directed by the Board. From time to time the Board
may increase the size of the Committee and appoint additional
members thereof, remove members (with or without cause), and
appoint new members in substitution therefor, fill vacancies
however caused, or remove all members of the Committee and
thereafter directly administer the Plan; provided, however, that at
no time may any director who is not “disinterested”
within the meaning of Securities and Exchange Commission Rule 16b-3
serve on the Committee nor shall a Committee of less than two (2)
members administer the Plan.
(b) Powers of the Board .
Subject to the provisions of the Plan, the Board shall have the
authority, in its discretion: (i) to grant Incentive Stock Options,
in accordance with Section 422 of the Code, and to grant
“nonstatutory stock options;” (ii) to determine, upon
review of relevant information and in accordance with Section 2 of
the Plan, the Fair Market Value of the Common Stock; (iii) to
determine the exercise price per Share of Options to be granted,
which exercise price shall be determined in accordance with Section
8(a) of the Plan; (iv) to determine the Employees to whom, and the
time or times at which Options shall be granted and the number of
shares to be represented by each Option; (v) to interpret the Plan;
(vi) to prescribe, amend and rescind rules and regulations relating
to the Plan; (vii) to determine the terms and provisions of each
Option granted (which need not be identical) and, with the consent
of the Optionee thereof, modify or amend each Option; (viii) to
accelerate or defer (with the consent of the Optionee) the exercise
date of any Option; (ix) to authorize any person to execute on
behalf of the Company any instrument required to effectuate the
grant of an Option previously granted by the Board; (x) to accept
or reject the election made by an Optionee pursuant to Section 17
of the Plan; and (xi) to make all other determinations deemed
necessary or advisable for the administration of the
Plan.
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(c) Effect of Board’s
Decision . All decisions, determinations and interpretations of
the Board shall be final and binding on all Optionees and any other
holders of any Options granted under the Plan.
5. Eligibility .
(a) Consistent with the Plan’s
purposes, Options may be granted only to key Employees of the
Company as determined by the Board. An Employee who has been
granted an Option may, if he is otherwise eligible, be granted an
additional Option or Options. Incentive Stock Options may be
granted only to those Employees who meet the requirements
applicable under Section 422 of the Code.
(b) With respect to Incentive Stock
Options granted under the Plan, the aggregate fair market value
(determined at the time the Incentive Stock Option is granted) of
the Common Stock with respect to which Incentive Stock Options are
exercisable for the first time by the employee during any calendar
year (under all plans of the Company and its parent and subsidiary
corporations) shall not exceed One Hundred Thousand Dollars
($100,000).
The Plan shall not confer upon any
Optionee any right with respect to continuation of employment with
the Company, nor shall it interfere in any way with his right or
the Company’s right to terminate his employment at any
time.
6. Effective Date . The Plan
shall take effect on May 23, 1996, the date on which the Board
approved the Plan. No Option may be granted after May 23, 2006 (ten
(10) years from the effective date of the Plan); provided, however,
that the Plan and all outstanding Options shall remain in effect
until such Options have expired or until such Options are canceled.
The Plan shall be submitted for shareholder approval at the next
meeting of shareholders of the Company; provided, however, that
failure to obtain such approval shall not affect the effectiveness
of the Plan.
7. Term of Option . Unless
otherwise provided in the Stock Option Agreement, the term of each
Option shall be five (5) years from the date of grant thereof.
Notwithstanding the foregoing, in the event the Board determines
that the term of an Option should be other than five (5) years from
the date of grant thereof, (i) the term of each Incentive Stock
Option shall not exceed ten (10) years from the date of grant, (ii)
the term of each Option which is not an Incentive Stock Option
shall not exceed eleven (11) years from the date of grant, and
(iii) in the case of an Incentive Stock Option granted to an
Employee who, at the time the Incentive Stock Option is granted,
owns ten percent (10%) or more of the Common Stock as such amount
is calculated under Section 422(b)(6) of the Code (“ Ten
Percent Shareholder ”), the term of the Incentive Stock
Option shall not exceed five (5) years from the date of grant
thereof.
8. Exercise Price and Payment
.
(a) Exercise Price . The per
Share exercise price for the Shares to be issued pursuant to
exercise of an Option shall be determined by the Board, but in
the
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case of an Incentive Stock Option
shall be no less than one hundred percent (100%) of the Fair Market
Value per Share on the date of grant; provided, further, that in
the case of an Incentive Stock Option granted to an Employee who,
at the time of the grant of such Incentive Stock Option, is a Ten
Percent Shareholder, the per Share exercise price shall be no less
than one hundred ten percent (110%) of the Fair Market Value per
Share on the date of grant. In no event may the exercise price in
the case of a nonstatutory stock option be less than eighty-five
(85%) of the Fair Market Value per share on the date of
grant.
(b) Payment . The price of an
exercised Option and any taxes attributable to the delivery
of
