As filed with the Securities and Exchange Commission on January 30, 1998
Registration No. 333-____
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES EXCHANGE ACT OF 1933
EMC INSURANCE GROUP INC.
(Exact name of issuer as specified in its charter)
Iowa 42-6234555
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
717 Mulberry Street, Des Moines, Iowa 50309
(Address of principal executive office and Zip Code)
1993 Employers Mutual Casualty Company
Incentive Stock Option Plan
(Full title of the plan)
Donald D. Klemme, EMC Insurance Group Inc.
717 Mulberry Street, Des Moines, Iowa 50309
(Name and address of agent for service)
(515) 280-2626
(Telephone number, including area code, of agent for service)
Copy to:
G. Thomas Sullivan, Esq.
Nyemaster, Goode, Voigts, West, Hansell & O'Brien, P.C.
700 Walnut, Suite 1600
Des Moines, Iowa 50309
(515) 283-3126
<PAGE>
Calculation of Registration Fee
Title of Amount Proposed Proposed Amount of
Securities to be Maximum Maximum Registration
to be Registered Offering Price Aggregate Fee
Registered Per Share Offering Price
(1) (2) (1) (2) (3)
Common
Stock 500,000 $13.25 $6,625,000.00 $1,954.38
$1.00 par Shares
value
(1) Amount represents the number of shares issuable pursuant to the above-
referenced Plan, which is in addition to the 500,000 shares registered on
Registration Statement No. 33-49337. In addition, this Registration
Statement also covers an indeterminate amount of additional securities
which may be issued under the above-referenced Plan pursuant to the share
adjustment provisions of such Plan.
(2) Estimated in accordance with Rules 457(c) and (h)(1), the proposed
maximum offering price per share, proposed maximum aggregate offering
price and the amount of the registration fee are based upon the last sale
price reported on the NASDAQ National Market System on January 28,
1998.
(3) On February 12, 1993, registration fees of $1,289.06 were paid with
respect to the 500,000 shares of Common Stock registered pursuant to
Registration Statement No. 33-49337. Additional fees of $1,954.38 with
respect to the additional 500,000 shares of Common Stock registered
pursuant to this Registration Statement are being paid on the date hereof
pursuant to Instruction E of Form S-8.
<PAGE>
Registration of Additional Securities
This Registration Statement relates to the amendment of the 1993 Employers
Mutual Casualty Company Incentive Stock Option Plan to increase the number of
shares of Common Stock, par value $1.00, authorized to be issued thereunder
from 500,000 to 1,000,000. The contents of the Registrant's Registration
Statement on Form S-8, except for Items 3, 6 and 8, with respect to the 1993
Employers Mutual Casualty Company Incentive Stock Option Plan, Registration
No. 33-49337, filed with the Securities and Exchange Commission on February
12, 1993, are hereby incorporated by reference pursuant to Instruction E of
Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents, filed by the Company with the Commission, are
incorporated herein by reference:
(1) The Company's Annual Report on Form 10-K for the calendar year
ended December 31, 1996, filed pursuant to Section 13 of the Exchange
Act.
(2) The Company's Quarterly Report on Form 10-Q for the three-month
period ended March 31, 1997, filed pursuant to Section 13 of the Exchange
Act.
(3) The Company's Quarterly Report on Form 10-Q for the three-month
period ended June 30, 1997, filed pursuant to Section 13 of the Exchange
Act.
(4) The Company's Quarterly Report on Form 10-Q for the three-month
period ended September 30, 1997, filed pursuant to Section 13 of the
Exchange Act.
(5) The description of the Company's Common Stock contained in its
Registration Statement on Form 8-A under Section 12 of the Exchange Act,
including any amendments or reports filed for the purpose of updating such
description.
(6) All reports and other documents subsequently filed by the Company
pursuant to Section 13(a), 13(c), 14 and 15(d) of the Exchange Act
subsequent to the date hereof, and prior to the filing of a post-effective
amendment to the Registration Statement which indicates that all securities
offered have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference herein and to be a
part hereof from the date of the filing of such reports and documents. Any
statement contained in a document incorporated or deemed to be
incorporated herein by reference shall be deemed to be modified or
superseded for the purpose of this Registration Statement to the extent
that such a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such document.
The Company undertakes to provide, without charge to each person to whom a
Prospectus is delivered, upon written or oral request of such person, a copy of
any and all of the information that has been incorporated by reference in this
Registration Statement (not including exhibits to the information that is
incorporated by reference herein unless such exhibits are specifically
incorporated by reference into the information incorporated by reference). Such
oral or written request may be made to: EMC Insurance Group Inc., 717 Mulberry
Street, Des Moines, Iowa 50309, attention: Corporate Secretary.
<PAGE>
Item 6. Indemnification of Directors and Officers.
The Iowa Business Corporation Act makes provision for the indemnification of
directors and officers in terms sufficiently broad to indemnify such persons
from liability (including reimbursements for expenses incurred) arising under
the Securities Act of 1933. Generally, indemnification is permissible if (i)
the person acted in good faith and, (ii) if acting in the person's official
capacity, in a manner reasonably believed to be in the best interests of the
Company and, in all other cases, that the person's conduct was at least not
opposed to the Company's best interests and, (iii) in the case of any criminal
proceeding, the person had no reasonable cause to believe the person's conduct
was unlawful. The By-Laws of the Company provide for indemnification of
officers, directors, employees, or agents as permitted under the Iowa Business
Corporation Act or as otherwise permitted by law.
The Plan provides for indemnification to the full extent permitted by law of
any person in connection with any proceeding, suit or action brought by reason
of any action taken or not taken under the Plan while such person was a member
of the Board of Directors of Employers Mutual or the Company.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers or persons controlling the
registrant pursuant to the foregoing provisions, the registrant has been
informed that in the opinion of the Commission such indemnification is against
public policy as expressed in the Act and is therefore unenforceable.
Item 8. Exhibits.
The exhibits accompanying this Registration Statement are listed on the
accompanying Exhibit Index.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Des Moines, State of Iowa, on January 30, 1998.
EMC INSURANCE GROUP INC.
By:/s/ Bruce G. Kelley
-------------------------------------
Bruce G. Kelley
President and Chief Executive Officer
Pursuant to the requirements of the Securities and Exchange Act of 1933,
this Registration Statement has been signed below by the following persons in
the capacities and on the date indicated.
Date
By: /s/ Bruce G. Kelley January 30, 1998
----------------------------------
Bruce G. Kelley
President, Chief Executive Officer
and Director
By: /s/ Mark E. Reese January 30, 1998
----------------------------------
Mark E. Reese
Chief Financial and Accounting Officer
By: /s/ George C. Carpenter III * January 30, 1998
----------------------------------
George C. Carpenter III, Director
By: /s/ E. H. Creese * January 30, 1998
----------------------------------
E. H. Creese, Director
By: /s/ David J. Fisher * January 30, 1998
----------------------------------
David J. Fisher, Director
By: /s/ George W. Kochheiser * January 30, 1998
----------------------------------
George W. Kochheiser, Director
By: /s/ Raymond A. Michel * January 30, 1998
----------------------------------
Raymond A. Michel, Director
By: /s/ Fredrick A. Schiek * January 30, 1998
----------------------------------
Fredrick A. Schiek, Director
* By /s/ Mark E. Reese January 30, 1998
-------------------------
Mark E. Reese
(Attorney-in-Fact)
<PAGE>
EXHIBIT INDEX
Exhibit
Number
5 Opinion of Nyemaster, Goode, Voigts, West, Hansell & O'Brien, P.C.
with respect to the legality of securities
23.1 Consent of Nyemaster, Goode, Voigts, West, Hansell & O'Brien, P.C.
(contained in Exhibit 5)
23.2 Consent of KPMG Peat Marwick LLP
24 Power of Attorney
99.1 1993 Employers Mutual Casualty Company Incentive Stock Option
Plan, as amended
<PAGE>
EXHIBITS 5 AND 23.1
January 30, 1998
EMC Insurance Group Inc.
717 Mulberry Street
Des Moines, IA 50309
Re: 1993 Employers Mutual Casualty Company Incentive Stock Option Plan (
the "Plan")
Ladies and Gentlemen:
We have acted as counsel with respect to the Registration Statement on Form S-8
(the "Registration Statement") being filed by EMC Insurance Group Inc. (the
"Company") with the Securities and Exchange Commission under the Securities
Act of 1933, as amended (the "Securities Act"), relating to the registration of
500,000 shares of Common Stock, $1.00 par value, of the Company (the "Shares")
which have been reserved for issuance upon the exercise of options issuable to
eligible employees of the Company pursuant to the Plan.
In rendering our opinion, we have examined and relied upon a copy of the Plan
and the Registration Statement relating to the Plan. We have also examined
such records, documents and questions of law as we have considered relevant and
necessary as a basis for this opinion. As to matters of fact material to our
opinion, we have with your agreement relied upon certificates of officers of
the Company. We have assumed with your agreement the authenticity of all
documents submitted to us as originals, the conformity with the original
documents of any copies submitted to us for our examination and the
authenticity of the original of any such copies.
Based on the foregoing, and subject to the foregoing qualifications and
limitations, it is our opinion that the Shares will be legally issued, fully
paid and non-assessable when: (i) the Registration Statement shall have become
effective under the Securities Act; (ii) the Shares shall have been duly issued
and sold in the manner contemplated by the Plan; and (iii) certificates
representing Shares shall have been duly executed, countersigned and registered
and duly delivered to the purchasers thereof against payment of the agreed
consideration therefor in accordance with the terms of the Plan.
We are admitted to the Bar of the State of Iowa, and express no opinion herein
as to the laws of any other jurisdiction, including the laws of the United
States of America.
Except as expressly set forth herein, we express no opinion, and no opinion is
implied or may be inferred, in connection with the Registration Statement, the
Plan or the issuance of the Shares. Without limiting the generality of the
foregoing, we express no opinion with respect to the securities or blue sky
laws of the State of Iowa or any other jurisdiction.
The undersigned law firm also hereby consents to the filing of this opinion
as an Exhibit to the Registration Statement and to the use of its name in the
Registration Statement.
Very truly yours,
Nyemaster, Goode, Voigts, West, Hansell
& O'Brien, P.C.
By: /s/ G. Thomas Sullivan
----------------------
G. Thomas Sullivan
Exhibit 23.2
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to incorporation by reference in the Registration Statement on
Form S-8 of EMC Insurance Group Inc. of our reports dated February 26, 1997,
relating to the consolidated balance sheets of EMC Insurance Group Inc. and
Subsidiaries as of December 31, 1996 and 1995, and the related consolidated
statements of income, stockholders' equity and cash flows and related financial
statement schedules for each of the years in the three-year period ended
December 31, 1996, which reports appear in the December 31, 1996 annual report
on Form 10-K of EMC Insurance Group Inc.
By /s/ KPMG Peat Marwick LLP
-------------------------
KPMG Peat Marwick LLP
Des Moines, Iowa
January 30, 1998
EXHIBIT 24
POWER OF ATTORNEY
Know all persons by these presents, that each of the undersigned hereby
constitutes and appoints, jointly and severally, Bruce G. Kelley and Mark E.
Reese, or either of them (with full power to each of them to act alone), as his
true and lawful attorneys-in-fact and agents, each with full power of substi-
tution and resubstitution, for him and on his behalf to sign, execute and file
this registration statement and any or all amendments (including, without
limitation, post-effective amendments) to this registration statement, and to
file the same, with all exhibits thereto and all documents required to be filed
with respect therewith, with the Securities and Exchange Commission or any
regulatory authority, granting unto such attorneys-in-fact and agents, and each
of them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in connection therewith and about the
premises in order to effectuate the same as fully to all intents and purposes
as he might or could do if personally present, hereby ratifying and confirming
all that such attorneys-in-fact and agents, or any of them, or his or their
substitute or substitutes, may lawfully do or cause to be done.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this
28th day of January, 1998.
By: /s/ Bruce G. Kelley
-----------------------------------
Bruce G. Kelley
President, Chief Executive Officer
and Director
By: /s/ George C. Carpenter III
-----------------------------------
George C. Carpenter III, Director
By: /s/ E. H. Creese
-----------------------------------
E. H. Creese, Director
By: /s/ David J. Fisher
-----------------------------------
David J. Fisher, Director
By: /s/ George W. Kochheiser
-----------------------------------
George W. Kochheiser, Director
By: /s/ Raymond A. Michel
-----------------------------------
Raymond A. Michel, Director
By: /s/ Fredrick A. Schiek
-----------------------------------
Fredrick A. Schiek, Director
EXHIBIT 99.1
1993 EMPLOYERS MUTUAL CASUALTY COMPANY INCENTIVE
STOCK OPTION PLAN
1. PURPOSE. The purpose of this Stock Option Plan, which shall be known as
the "1993 Employers Mutual Casualty Company Incentive Stock Option Plan" (the
"Plan"), is to promote the interests of Employers Mutual Casualty Company (the
"Company" or "EMCC") and its policyholders, and the interests of all of its
Subsidiaries and Affiliates (as each is hereinafter defined) including
specifically EMC Insurance Group Inc. ("EMC Group") and its subsidiaries and
the interests of the other shareholders of EMC Group, by strengthening the
ability of the Company to attract and retain key personnel with exceptional
abilities by furnishing them with incentives for the acquisition and long term
accumulation of the common stock of EMC Group, and also by giving them a common
interest with the other shareholders in the continued growth and success of the
Company. The Plan provides for the grant of incentive stock options in
accordance with the terms and conditions set forth below.
The term "Subsidiary" shall mean any corporation of which a majority of the
voting stock is owned or controlled, directly or indirectly, by the Company. The
term "Affiliate" shall mean any non-stock corporation which is required under
Iowa law to be shown as a member of the EMCC Insurance Holding Company
System. The term "Company" when used in the Plan with reference to
employment shall include Subsidiaries and Affiliates of the Company. Unless
otherwise required by the context, the term "option" shall refer to the
incentive stock options granted under the Plan.
2. ADMINISTRATION. The Plan has been proposed and promulgated at the
request of the Board of Directors (the "Board") of the Company, and shall be
subject to the Board's approval. Implementation of the Plan shall also be
subject to the approval of the policyholders of the Company, and the
shareholders ofEMC Group.
The Plan shall be administered by the Senior Executive Compensation and
Stock Option Committee of the Board or such disinterested other committee as
the Board may appoint to administer the Plan (the "Committee"), consisting of
three or more Directors, each of whom is not an "Eligible Employee" as defined
in Section 4 of the Plan; and the Committee shall be further constituted to the
extent, if any, required in order that the Plan complies with the applicable
rules under Section 16(b) of the Securities Exchange Act of 1934, as amended
(the "1934 Act").
The Committee shall have full power and complete authority, except as limited
by law, the 1934 Act, the Plan, and the Articles of Incorporation and Bylaws of
the Company, to take all action necessary and appropriate hereunder (i) to
establish, amend, rescind or waive appropriate rules and regulations relating
to the Plan, (ii) to construe and interpret the Plan and any agreement or
instrument entered into under the Plan, (iii) to decide all questions of fact
and resolve all disputes arising from the Plan's application, (iv) to select
the Eligible Employees (as hereinafter defined) to receive awards under the
Plan, (v) to make awards in such forms and amounts as it shall determine, (vi)
to impose such limitations, restrictions, terms and conditions upon such awards
as it shall deem appropriate and as shall be consistent with the Plan, (vii) to
correct any defect or omission, or to reconcile any inconsistency, in the Plan
or in any award granted thereunder, and (viii) to take all such steps and make
all such determinations in connection with the Plan and the options granted
thereunder as it may deem necessary or advisable. All determinations,
decisions and other actions made by the Committee pursuant to the provisions
of the Plan shall be final, conclusive and binding on all persons, including
without limitation the Company, its policyholders, Directors, officers and
employees (including Eligible Employees and Optionees) and their estates,
beneficiaries and legal representatives, subject however to the authority
of the Board to amend, modify and terminate the Plan as provided in Section 18
of the Plan.
The Committee may, in its discretion, designate an administrator for the
day to day operations of the Plan. A majority of the Committee shall
constitute a quorum, and the acts of a majority shall be sufficient for
the taking of any action under the Plan.
3. STOCK. The stock to be subject to options under the Plan shall be
shares of EMC Group common stock of the par value of $1.00 per share
(the "Stock"). The total amount of Stock on which options may be granted
under the Plan shall not exceed 1,000,000 shares. Such number of shares
is subject to adjustment in accordance with the provisions of Section 12
hereof. The shares involved in the unexercised portion of any terminated,
lapsed or expired options under the Plan may again be subjected to options
under the Plan, to the maximum extent possible under the then applicable
rules under Section 16 of the 1934 Act.
<PAGE>
4. ELIGIBILITY. To be eligible for a grant of an option by the Committee,
an individual must be an officer or key employee of the Company as of the
respective date on which the grant is made or on which eligibility is to
be determined for other purposes; such individuals are hereinafter referred
to as "Eligible Employee(s)." Those Directors who are not officers or
employees of the Company or of any Subsidiary or Affiliate will not be
eligible under this Plan. Subject to the provisions of this Plan and as
hereinafter provided, options may be granted to such Eligible Employees as
the Committee may select and for such number of shares as the Committee may
designate. The Committee shall take into account the duties of the
respective employees, their present and potential contributions to the
success of the Company and its Subsidiaries and Affiliates, and such other
factors as it shall deem relevant in connection with accomplishing the
purposes of the Plan.
5. GRANT OF OPTIONS. Each Eligible Employee to whom an option is
granted is hereinafter sometimes referred to as the "Optionee".
Where appropriate, the term "Optionee" may refer to both the individual to
whom the option is granted and to his or her beneficiary or legal
representative in the event of death.
The granting of an option pursuant to the Plan shall take place when the
Committee, by resolution, written consent or other appropriate action,
determines to grant such an option to an Optionee. The date on which the
option shall be granted (hereinafter sometimes referred to as the "Date of
Grant") shall be the date of the appropriate action by the Committee or such
later date as may then be determined. Following such grant, a notice thereof
shall be sent to the Optionee stating the number of shares under option, the
date of grant, and the option price per share. If deemed advisable by the
Committee, the notice may be accompanied by an option agreement to be signed
by the Company and the Optionee, which agreement shall contain provisions not
inconsistent with the Plan. Any individual may hold more than one option at
any one time.
The aggregate fair market value (determined as of the date of grant) of
shares of stock with respect to which incentive stock options are
exercisable for the first time by the Optionee during any calendar year
under this Plan shall not exceed $100,000.
6. OPTION PRICE. The option price per share with respect to each option
shall be determined by the Committee but shall not be less than 100% of the
fair market value of the Stock on the Date of Grant.
7. FAIR MARKET VALUE. For the purpose of determining the option price,
the fair market value of the Stock on the Date of Grant shall be the mean
between the high and low prices published in The Wall Street Journal for the
Date of Grant.
The fair market value of Stock, as of any date other than the Date of
Grant, shall be the mean between the high and low prices published in The Wall
Street Journal for such date.
In the event the high and low prices for the respective date are not
published in The Wall Street Journal, then the prices published in The Wall
Street Journal for the closest date prior thereto shall be used.
Provided further, in the event the high and low prices are not published in
The Wall Street Journal, but the bid and asked prices are then so published
in The Wall Street Journal, the bid and asked prices shall be used in lieu
of the high and low prices.
8. TERM AND VESTING OF OPTIONS. Each option shall be for a period of
two or more years, not to exceed ten, as determined by the Committee at the
time of grant of the respective option. The term shall commence on the Date
of Grant. At the end of the term, all rights to the option shall expire.
Each option shall have a vesting period of two, three, four, or five years,
as determined by the Committee at the time of granting the respective
option, with the option becoming exercisable in equal annual cumulative
increments. The vesting period shall commence one year from the Date of
Grant with the exception of an option with a two year vesting period for
which the vesting period shall commence on the Date of Grant.
<PAGE>
By way of example only, if the option had a term of ten years and a five
year vesting period, then such option could only be exercisable in
accordance with the following schedule:
a. During the first year, the Optionee could not exercise the option
as to any shares.
b. During the second year, the Optionee may exercise the option as to
not more than one/fifth (20%) of the shares under option.
c. During the third year, the Optionee may exercise the option as to
not more than two/fifths (40%) of the shares under option less that
number of shares for which the option was exercised in the second
year.
d. During the fourth year, the Optionee may exercise the option as to
not more than three/fifths (60%) of the shares under option less that
number of shares for which the option was exercised in prior years.
e. During the fifth year, the Optionee may exercise the option as to
not more than four/fifths (80%) of the shares under option less that
number of shares for which the option was exercised in the prior
years.
f. During the sixth through the tenth years, the Optionee may exercise
the option as to all of the shares under the option less that number
of shares for which the option was previously exercised.
As a further example, if the option had a term of eight years and a four
year vesting period, then the Optionee could exercise the option as to not
more than 25% during the second year, not more than 50% during the third
year, not more than 75% during the fourth year, and as to 100% during the
fifth through the eighth years.
9. EXERCISE OF OPTIONS. An option shall be exercised when written
notice of such exercise has been given to the Company at its home office in Des
Moines, Iowa (Attention: Chief Executive Officer) by the Optionee accompanied
by full payment for the shares with respect to which the option is exercised.
All, or any portion, of the option exercise price, at the discretion of the
Committee and in accordance with such rules, regulations and restrictions as
may be established from time to time by the Committee, may be paid by the
surrender to EMC Group, at the time of exercise, of shares of previously
acquired Stock owned by the Optionee, to the extent that such payment does not
require the surrender of a fractional share of such previously acquired Stock.
For this purpose, shares of previously acquired Stock shall be valued at fair
market value on the date the option is exercised. Notwithstanding the
foregoing, the minimum number of shares of previously acquired Stock which may
be so surrendered is 100, and only one such surrender shall be permitted in
any thirty (30) day period. No shares shall be issued or delivered until full
payment therefor has been made.
10. NON-TRANSFERABILITY OF OPTIONS. No option shall be transferable
by an Optionee otherwise than at death and then only by a written designation
of the beneficiary or beneficiaries as provided in this Section 10 or by will
or the laws of descent and distribution. During the lifetime of the Optionee,
the option shall be exercisable only by such Optionee or a guardian or
conservator for such Optionee if appointed by court order. An Optionee may
file with the Company a written designation of a beneficiary or beneficiaries
(subject to such limitations as to the classes and number of beneficiaries and
contingent beneficiaries and such other limitations as the Committee may from
time to time prescribe) to exercise, in the event of the death of the Optionee,
such option rights, subject to the provisions of Section 11 hereof. An
Optionee may from time to time revoke or change any such designation of
beneficiary and any designation of beneficiary under the Plan shall be
controlling over any other disposition, testamentary or otherwise; provided
however, that if the Committee shall be in doubt as to the right of any such
beneficiary to exercise any such option, or in the event that no written
designation of beneficiary is on file, the Committee may determine to recognize
only an exercise by the legal representative of the Optionee, in which case the
Company, the Committee and the members thereof shall not be under any further
liability to anyone.
<PAGE>
11. TERMINATION OF EMPLOYMENT OR DEATH. In the event of
termination of employment, for a reason other than death or misconduct or
disability, an Optionee shall have the right, for a period of three months from
the effective date of termination, to exercise an option or options which he or
she has previously been granted but only to the extent that such was or were
exercisable by such Optionee on the date of termination; provided however, in
the event the termination of employment is due to retirement, the Optionee
shall have the right during such three-month period to exercise the option(s)
previously granted to him or her as to all shares, to the extent not previously
exercised, whether or not exercisable on the date of termination, but excluding
any terminated, lapsed or expired option(s).
In the event of termination of employment due to permanent and total
disability, the Optionee shall have the right, for a period of twelve months
from the effective date of such termination, to exercise the option(s)
previously granted to him or her as to all shares, to the extent not previously
exercised, whether or not exercisable on the date of termination, but excluding
any terminated, lapsed or expired option(s).
In the event of termination of employment due to deliberate, willful or
gross misconduct as determined by the Company, all unexercised options of
such Optionee, whether or not exercisable on the date of termination, shall
immediately terminate and all rights thereunder shall cease.
In the event of the death of the Optionee, prior to his or her termination
of employment, the designated beneficiary or the legal representative of
the Optionee, as the case may be, shall have the right, for a period of
twelve months from the date of death, to exercise the option(s) previously
granted to the Optionee as to all shares, whether or not exercisable as of
the date of death, to the extent not previously exercised and excluding any
terminated, lapsed or expired options. In the event of the death of the
Optionee, after his or her termination of employment for a reason other
than deliberate, willful or gross misconduct but during the three-month
period or twelve-month period, as the case may be, for exercise of the
option, the designated beneficiary or the legal representative of the
Optionee, as the case may be, shall have the right for a period of six
months from the date of death or the original term from date of termination
of employment, whichever is longer, to exercise the option as to all
shares which were subject to the exercise of such option at date of death.
To the extent such options are not exercised within the three-month,
six-month or twelve-month applicable periods, such shall lapse at the
expiration of such period(s).
No transfer of an option right, other than by filing a written designatio
of beneficiary pursuant to Section 10 hereof, shall be effective to bind the
Company unless the Company shall have been furnished with a copy of the Will
and/or such other evidence as the Committee may deem necessary to establish
the validity of the transfer. Such transfer shall be subject to the terms
and conditions of such option.
12. STOCK ADJUSTMENT, RECLASSIFICATION, MERGER, OR CONSOLIDATION. The
total amount of Stock on which options may be granted under the Plan and the
option rights (both as to the option price and the number of shares as to which
the option may be exercised) shall be appropriately adjusted for any increase
or decrease in the number of outstanding shares of Stock resulting from (i)
payment of a stock dividend on Stock, (ii) a subdivision or combination of
shares of Stock, (iii) a stock-split of Stock, or (iv) a reclassification of
Stock, and (v), subject to the provisions contained in the next following
paragraph, in the event of a merger or consolidation in which EMC Group shall
be the surviving corporation.
After any merger of one or more corporations into EMC Group or after any
consolidation of EMC Group and one or more corporations in which EMC Group
shall be the surviving corporation, each Optionee shall have the right to
exercise, in lieu of the number of shares of Stock as to which such option
right could then be so exercised, the number and class of shares of Stock or
other securities to which such Optionee would have been entitled pursuant to
the terms of the agreement of merger or consolidation if at the time of such
merger or consolidation such Optionee had been a holder of record of a number
of shares of Stock equal to the number of shares as to which such option right
shall then be so exercised. Anything contained herein to the contrary
notwithstanding, upon the dissolution or liquidation of EMC Group, or upon any
merger or consolidation in which EMC Group is not the surviving corporation,
each option right granted under the Plan shall terminate.
The foregoing adjustments and the manner of application of the foregoing
provisions shall be determined by the Company in its sole discretion. Any such
adjustment may provide for the elimination of any fractional share which might
otherwise become subject to an option.
<PAGE>
13. RIGHTS AS A STOCKHOLDER. An Optionee shall have no rights as a
stockholder with respect to any share covered by the option right until the
Optionee shall have become the holder of record of such share of Stock, and no
adjustment shall be made for dividends (ordinary or extraordinary, whether in
cash, securities or other property) or distributions or other rights in respect
of such share for which the record date is prior to the date on which the
Optionee shall have become the holder of record thereof, except for the
adjustments required under the provisions of Section 12 hereof.
14. INVESTMENT PURPOSE. At the time of any exercise of any option
right, the Company may, if it shall deem it necessary or desirable for any
reason, require the Optionee to represent in writing to the Company and/or EMC
Group, or to present any other evidence satisfactory to the Company, in its
sole discretion, that it is such person's then-present intention to acquire the
Stock for investment purposes only and not with a view to the near-term
distribution thereof. In such event no shares shall be issued to such person
unless and until the Company, in its sole discretion, is satisfied with the
correctness of such representation, and the Company may consider the past stock
trading or distribution practices of the Optionee in making such determination.
15. REGULATORY APPROVALS AND LISTING. EMC Group shall not be
required to issue any certificate or certificates for shares of Stock upon the
exercise of an option granted under the Plan prior to the completion of any
registration or other qualification of such shares under any state or federal
law or rulings or regulations of any governmental body which EMC Group shall,
in its sole discretion, determine to be necessary or advisable.
16. INDEMNIFICATION AND EXCULPATION. The Company shall indemnify to the
full extent permitted by law any person who is made or threatened to be made a
party to any action, suit or proceeding (whether civil, criminal,
administrative or investigative) by reason of any action taken or failure to
act under the Plan while such person or his or her testator or intestate is or
was the administrator or a member of the Board or of the Committee or of the
Board of Directors of EMC Group. The foregoing right of indemnification shall
not be exclusive of any other right to which such person may be entitled as a
matter of law or otherwise (including but not limited to the Bylaws of the
Company) or any power that the Company may have to indemnify or hold such
person harmless.
The administrator and each member of the Committee or of the Boards of
Directors, and each officer and employee of the Company and EMC Group, shall
be fully justified in relying or acting in good faith upon any information
furnished in connection with the administration of the Plan by any appropriate
person or persons other than such person. In no event shall any person who is
or shall have been an administrator or a member of the Committee or of the
Boards of Directors, or an officer or employee of the Company or EMC Group, be
held liable for any determination made or other action taken or any omission to
act in reliance upon any such information, or for any failure to act, if in
good faith. The foregoing right shall not be exclusive of any other right to
which such person may be entitled as a matter of law or otherwise (including
without limitation the Bylaws of the Company or EMC Group).
17. TERM OF PLAN. No option shall be granted pursuant to this Plan after
December 31, 2002, but options theretofore granted may extend beyond that date
and the terms and conditions of this Plan shall continue to apply thereto and
to shares of Stock acquired upon exercise of such options.
18. AMENDMENT AND TERMINATION OF THE PLAN. The Board may at any time or
times amend the Plan for the purpose of satisfying the requirements of any
changes in applicable laws or regulations or for any other purpose which may
at the time be permitted by law, provided that no such amendment (except to the
extent explicitly required or permitted herein) will, without the approval of
the shareholders of EMC Group, (a) increase the maximum number of shares
available under the Plan, (b) reduce the purchase price of Stock for which
options may be exercised, (c) cause options issued under the Plan to fail to
meet the requirements of an "Incentive Stock Option Plan" as provided in
Section 422 of the Internal Revenue Code, as amended or restated from time to
time (the "Code"), (d) amend the provisions of this Section 18 of the Plan, or
(e) be adopted where shareholder approval is required by Section 16 of the 1934
Act, by any national securities exchange or system on which the Stock is listed
or reported, or by a regulatory body having jurisdiction with respect thereto;
and no such amendment will adversely affect the rights of any Optionee (without
his or her consent) under any unexercised option previously granted.
Notwithstanding the foregoing, the Board may, without shareholder approval,
increase the number of shares which may be issued under the Plan to reflect
adjustments made pursuant to Section 12 of the Plan.
<PAGE>
The Plan may be permanently or temporarily terminated at any time by the
Board, but no such termination shall adversely affect the rights and privileges
of Optionees without their consent.
19. EFFECTIVE DATE. This Plan shall, subject to approvals at the 1993
Annual Meeting of the policyholders of the Company and at the 1993 Annual
Meeting of the shareholders of EMC Group, be deemed effective on the first day
of January, 1993.
20. TITLES. Titles are provided herein for convenience only and are not
to serve as a basis for interpretation or construction of this Plan.
21. GOVERNING LAWS. This Plan and all rights and obligations under the
Plan shall be construed in accordance with and governed by the laws of the
State of Iowa.
