<PAGE> 1
As filed with the Securities and Exchange Commission on November 19, 1997
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
CMAC INVESTMENT CORPORATION
(Exact name of issuer as specified in its charter)
Delaware 23-2691170
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1601 Market Street, Philadelphia, PA 19103
(Address of principal executive offices) (Zip Code)
CMAC INVESTMENT CORPORATION
1997 EMPLOYEE STOCK PURCHASE PLAN
(Full title of the plan)
HOWARD S. YARUSS, ESQ.
Senior Vice President, Secretary and General Counsel
CMAC Investment Corporation
1601 Market Street
Philadelphia, PA 19103
(Name and address of agent for service)
(215) 564-6600
(Telephone number, including area code, of agent for service)
Copy of all communications to:
JAMES W. JENNINGS, ESQ.
Morgan, Lewis & Bockius LLP
2000 One Logan Square
Philadelphia, PA 19103
(215) 963-5276
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=================================================================================================================================
Title of securities Proposed maximum Proposed maximum
to be Amount to be offering price aggregate Amount of
registered(1)(2) registered(2) per share offering price registration fee
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par 200,000 $52.0625(1) $10,412,500(1) $3,155.30
value $.001 per
share......................
=================================================================================================================================
</TABLE>
(1) Estimated pursuant to paragraphs (c) and (h) of Rule 457 solely for the
purpose of calculating the registration fee, based upon the average of
the reported high and low sales prices of shares of Common Stock on
November 14, 1997, as reported on the New York Stock Exchange.
(2) In addition, pursuant to Rule 416(c) under the Securities Act of 1933,
this registration statement also covers an indeterminate amount of
interests to be offered or sold pursuant to the employee benefit plan
described herein.
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents, as filed by CMAC Investment
Corporation (the "Company") with the Securities and Exchange Commission, are
incorporated by reference in this Registration Statement and made a part hereof:
(a) The Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1996.
(b) The Company's Quarterly Report on Form 10-Q for
the quarters ended March 31, 1997, June 30, 1997, and
September 30, 1997.
(c) All other reports filed pursuant to Section 13(a)
or 15(d) of the Securities Exchange Act of 1934 since the end
of the fiscal year covered by the Annual Report referred to in
(a) above.
(d) The description of the Common Stock of the
Company that is contained in its Registration Statement on
Form 8-A filed with the Securities and Exchange Commission on
August 24, 1992, under the Securities Exchange Act of 1934,
including any amendment or report filed for the purpose of
updating such description.
Any statement contained in a document incorporated by
reference herein shall be deemed to be modified or superseded for purposes
hereof to the extent that a statement contained or incorporated by reference
herein modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute part hereof.
All reports and other documents subsequently filed by the
Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities
Exchange Act of 1934, prior to the filing of a post-effective amendment that
indicates that all securities offered hereby have been sold or that deregisters
all securities then remaining unsold, shall be deemed to be incorporated by
reference herein and to be part hereof from the date of filing of such
documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
James W. Jennings, a director of the Company, is a partner in
the law firm of Morgan, Lewis & Bockius LLP, Philadelphia, Pennsylvania, which
firm is providing an opinion of counsel as to the legality of the securities
being registered by this Registration Statement.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law permits
indemnification of directors, officers, agents and controlling persons of a
corporation under certain conditions and subject to certain limitations. The
Amended and Restated Certificate of Incorporation and By-laws of the Company
provide for the indemnification of the Company's directors and officers to the
fullest extent permitted by the Delaware General Corporation Law. Specific
procedures for indemnification are set forth in the Company's By-laws. The
employment agreements entered into between the Company and certain of its
executive officers also provide for indemnification of such executive officers
in certain circumstances.
2
<PAGE> 3
As permitted by the Delaware General Corporation Law, the
Company has included a provision in its Amended and Restated Certificate of
Incorporation that, subject to certain limitations, eliminates the ability of
the Company and its stockholders to recover monetary damages from a director of
the Company for breach of fiduciary duty as a director.
As also permitted by the Delaware General Corporation Law, the
Company has a directors' and officers' liability insurance policy which affords
officers and directors with insurance coverage for losses arising from claims
based upon breaches of duty, negligence, error and other wrongful acts.
In connection with the initial public offering of the
Company's Common Stock (the "Offering"), Reliance Group Holdings, Inc. has
agreed to indemnify each of the Company's directors and director nominees as
well as its officers who executed the Company's registration statement on Form
S-1 (Registration No. 33-51188) against certain liabilities under the Securities
Act of 1933. The U.S. Underwriting Agreement and the International Underwriting
Agreement entered into by the Company in connection with the Offering provide
for indemnification among the Company, the Company's principal subsidiary, the
Company's former principal stockholder and the U.S. Underwriters and
International Managers underwriting the Offering against certain liabilities
under the Securities Act of 1933.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
The exhibits filed as part of this Registration Statement are
as follows:
<TABLE>
<CAPTION>
Exhibit
Number Exhibit
- ------ -------
<S> <C>
4.1 Amended and Restated Certificate of Incorporation of the Company (Exhibit 3.1)(1)
4.2 Amended and Restated By-laws of the Company (Exhibit 3.2)(2)
4.3 Specimen certificate for Common Stock (Exhibit 4.1)(3)
4.4 Form of Standstill and Voting Agreement dated October 27, 1992 between the Company and
Reliance Group Holdings, Inc. (Exhibit 4.4)(1)
5 Opinion of Morgan, Lewis & Bockius LLP
10 CMAC Investment Corporation 1997 Employee Stock Purchase Plan
23.1 Consent of Deloitte & Touche
23.2 Consent of Morgan, Lewis & Bockius LLP (included as part of Exhibit 5)
24 Power of Attorney (included as part of the signature page)
</TABLE>
- ----------------------
(1) Incorporated by reference to the exhibit identified in parentheses,
filed as an Exhibit to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1992, filed with the Securities and
Exchange Commission on March 30, 1993.
(2) Incorporated by reference to the exhibit identified in parentheses,
riled as an Exhibit to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1994, filed with the Securities and
Exchange Commission on March 30, 1995.
3
<PAGE> 4
(3) Incorporated by reference to the exhibit identified in parentheses,
filed as an Exhibit to the Company's Registration Statement on Form S-1
filed August 24, 1992, and amendments thereto (File No. 33-51188).
ITEM 9. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change in
the information set forth in the registration statement; and
(iii) To include any material information with
respect to the plan of distribution not previously disclosed in the
registration statement or any material change to such information
in the registration statement;
Provided, however, that subparagraphs (a)(1)(i) and (a)(1)(ii)
of this section do not apply if the information required to be included in a
post-effective amendment by those subparagraphs is contained in periodic reports
filed by the Company pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered that remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for the
purpose of determining any liability under the Securities Act of 1933, each
filing of the Company's annual report pursuant to Section 13(a) or Section 15(d)
of the Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in this
registration statement shall be deemed to be a new registration statement
relating to the securities offered herein and the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof.
(c) The undersigned registrant hereby undertakes to deliver or
cause to be delivered with the prospectus, to each person to whom the prospectus
is sent or given, the latest annual report to security holders that is
incorporated by reference in the prospectus and furnished pursuant to and
meeting the requirements of Rule 14a-3 or Rule 14c-3 under the Securities
Exchange Act of 1934; and, where interim financial information required to be
presented by Article 3 of Regulation S-X are not set forth in the prospectus, to
deliver, or cause to be delivered to each person to whom the prospectus is sent
or given, the latest quarterly report that is specifically incorporated by
reference in the prospectus to provide such interim financial information.
(d) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is
4
<PAGE> 5
asserted by such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
5
<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Company 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 Philadelphia, Commonwealth of Pennsylvania, on
this 19th day of November, 1997.
CMAC INVESTMENT CORPORATION
By: /s/ Frank P. Filipps
----------------------------------------
Frank P. Filipps
President and Chief Executive Officer
(Principal Executive Officer)
Pursuant to the requirements of the Securities Act of 1933,
the Plan Administrator of the Plan has duly caused this Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Philadelphia, Commonwealth of Pennsylvania, on this 19th day of
November, 1997.
CMAC INVESTMENT CORPORATION
1997 EMPLOYEE STOCK PURCHASE PLAN
By: CMAC INVESTMENT CORPORATION,
as Plan Administrator
By: /s/ Frank P. Filipps
----------------------------------------
Frank P. Filipps
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed below by or on behalf of the
following persons in the capacities and on the dates indicated.
Each person, in so signing, also makes, constitutes and
appoints Frank P. Filipps, President and Chief Executive Officer, and Howard S.
Yaruss, Senior Vice President, Secretary and General Counsel, and each of such
officers acting singly, his true and lawful attorney-in-fact, in his name, place
and stead to execute and cause to be filed with the Securities and Exchange
Commission any or all amendments to this Registration Statement, with all
exhibits and any and all documents required to be filed with respect thereto,
and to do and perform each and every act and thing necessary to effectuate the
same.
/s/ Herbert Wender November 19th, 1997
- ---------------------------------
Herbert Wender
Chairman of the Board and Director
6
<PAGE> 7
/s/ Frank P. Filipps November 19th, 1997
- ---------------------------------
Frank P. Filipps
President and Chief Executive Officer
(Principal Executive Officer)
/s/ C. Robert Quint November 19th, 1997
- --------------------------------
C. Robert Quint
Senior Vice President,
Chief Financial Officer
(Principal Accounting Officer)
/s/ David C. Carney November 19th, 1997
- -------------------------------
David C. Carney
Director
/s/ Claire M. Fagin, Ph.D., R.N. November 19th, 1997
- --------------------------------
Claire M. Fagin
Director
/s/ James W. Jennings November 19th, 1997
- -------------------------------
James W. Jennings
Director
/s/ James C. Miller November 19th, 1997
- -------------------------------
James C. Miller
Director
/s/ Ronald W. Moore November 19th, 1997
- ------------------------------
Ronald W. Moore
Director
/s/ Robert W. Richards November 19th, 1997
- -------------------------------
Robert W. Richards
Director
/s/ Anthony W. Schweiger November 19th, 1997
- -----------------------------
Anthony W. Schweiger
Director
7
<PAGE> 8
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Sequentially
Exhibit Numbered
Number Exhibit Page
- ------ ------- ----
<S> <C> <C> <C>
4.1 - Amended and Restated Certificate of Incorporation
of the Company (Exhibit 3.1)(1)
4.2 - Amended and Restated By-laws of the Company
(Exhibit 3.2)(2)
4.3 - Specimen certificate for Common Stock
(Exhibit 4.1)(3)
4.4 - Form of Standstill and Voting Agreement dated
October 27, 1992 between the Company and
Reliance Group Holdings, Inc. (Exhibit 4.4)(1)
5 - Opinion of Morgan, Lewis & Bockius LLP
10 - CMAC Investment Corporation 1997 Employee
Stock Purchase Plan
23.1 - Consent of Deloitte & Touche
23.2 - Consent of Morgan, Lewis & Bockius LLP
(included as part of Exhibit 5)
24 - Power of attorney
(included in signature page)
</TABLE>
- --------------------
(1) Incorporated by reference to the exhibit identified in parentheses, filed
as an Exhibit to the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1992, filed with the Securities and Exchange
Commission on March 30, 1993.
(2) Incorporated by reference to the exhibit identified in parentheses, filed
as an Exhibit to the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1994, filed with the Securities and Exchange
Commission on March 30, 1995.
(3) Incorporated by reference to the exhibit identified in parentheses, filed
as an Exhibit to the Company's Registration Statement on Form S-1 filed
August 24, 1992, and amendments thereto (File No. 33-51188).
8
<PAGE> 1
November 18, 1997
CMAC Investment Corporation
1601 Market Street
Philadelphia, PA 19103
Re: REGISTRATION STATEMENT ON FORM S-8 RELATING TO THE
CMAC INVESTMENT CORPORATION 1997 EMPLOYEE STOCK PURCHASE PLAN
Ladies and Gentlemen:
We have acted as counsel to CMAC Investment Corporation, a Delaware corporation
(the "Company"), in connection with the preparation of a registration statement
on Form S-8 (the "Registration Statement") to be filed with the Securities and
Exchange Commission under the Securities Act of 1933, as amended (the "Act"),
relating to the offering of up to 200,000 shares of the Company's common stock,
par value $.001 per share (the "Common Stock"), to be issued under the Company's
1997 Employee Stock Purchase Plan (the "Plan"). We have examined such records,
documents, statutes and decisions as we have deemed relevant in rendering this
opinion. In our examination we have assumed the genuineness of documents
submitted to us as originals and the conformity with the original of all
documents submitted to us as copies thereof.
In our opinion, the shares of Common Stock issued or to be issued in accordance
with the terms of the Plan are or will be, when issued in accordance with the
terms of the Plan, validly issued, fully paid and nonassessable shares of Common
Stock.
The opinion set forth above is limited to the General Corporation Law of the
State of Delaware.
<PAGE> 2
CMAC Investment Corporation
November 18, 1997
Page 2
We hereby consent to the use of this opinion as Exhibit 5 to the Registration
Statement. In giving such opinion, we do not thereby admit that we are acting
within the category of persons whose consent is required under Section 7 of the
Act or the rules or regulations of the Securities and Exchange Commission
thereunder.
Very truly yours,
/s/ MORGAN, LEWIS & BOCKIUS LLP
<PAGE> 1
CMAC INVESTMENT CORPORATION
1997 EMPLOYEE STOCK PURCHASE PLAN
The following constitute the provisions of the 1997 Employee Stock
Purchase Plan of CMAC Investment Corporation.
1. Purpose. The purpose of the Plan is to provide Eligible Employees of
the Company and its Subsidiaries with an opportunity to purchase Common Stock of
the Company. It is the intention of the Company to have the Plan qualify as an
"Employee Stock Purchase Plan" under Section 423 of the Internal Revenue Code of
1986, as amended. The provisions of the Plan shall, accordingly, be construed so
as to extend and limit participation in a manner consistent with the
requirements of that section of the Code. The Plan is not intended and shall not
be construed as constituting an "employee benefit plan", within the meaning of
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended.
2. Definitions.
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Code" shall mean the Internal Revenue Code of 1986, as amended,
and any successor statute of similar nature. References to specific sections of
the Code shall be taken to be references to corresponding sections of any
successor statute.
(c ) "Committee" shall mean the committee appointed by the Board of
Directors to administer the Plan.
(d) "Common Stock" shall mean the Common Stock of the Company.
(e) "Company" shall mean CMAC Investment Corporation, a Delaware
corporation.
(f) "Compensation" shall mean all regular straight time gross
earnings and shall not include payments for commissions, overtime, shift
premium, incentive compensation, incentive payments, bonuses and other
compensation.
(g) "Continuous Status" shall mean the absence of any interruption
or termination of service as an Employee. Continuous Status as an Eligible
Employee shall not be considered interrupted in the case of a leave of absence
agreed to in writing by the Company or an absence by reason of uniformed
military service, provided that such leave is for a period of not more than 90
days or reemployment upon the expiration of such leave is guaranteed by contract
or statute.
(h) "Contributions" shall mean all amounts credited to the account
of a Participant pursuant to the Plan.
(i) "Designated Subsidiaries" shall mean the Subsidiaries which have
been designated by the Board from time to time in its sole discretion as
eligible to participate in the Plan.
(j) "Eligible Employee" shall mean any person, who after completion
of eighteen (18) months of service with the Company or its Subsidiary, is
customarily employed for at least twenty (20) hours per week and more than five
(5) months in a calendar year by the Company or one of its Designated
Subsidiaries and who is not deemed for purposes of Section 423(b)(3) of the Code
to own stock possessing five percent (5%) or more of the total combined voting
power or value of all classes of stock of the Company or any Subsidiary. The
term shall not include any person employed
<PAGE> 2
by the Company or any Subsidiary on a temporary basis.
(k) "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and as the same may hereinafter be amended.
(l) "Fair Market Value" shall mean the fair market value of the
Company's Common Stock on a given date as determined by the Board or the
Committee in its discretion, based on the closing price of the Common Stock for
such date as reported by the New York Stock Exchange. In the event that the
Common Stock is not traded on such date, Fair Market Value is determined on the
immediately preceding trading date.
(m) "Offering Date" shall mean the first business day of each
Offering Period of the Plan.
(n) "Offering Period" shall mean a period of time defined by the
Board or the Committee during which a Participant's Contributions are
accumulated for the purpose of purchasing shares of the Company's Common Stock.
The maximum offering period under this Plan is 27 months.
(o) "Participant" shall mean any Eligible Employee who elects to
participate in the Plan.
(p) "Plan" shall mean this CMAC Investment Corporation 1997 Employee
Stock Purchase Plan.
(q) "Purchase Date" shall mean the last day of each Purchase Period
of the Plan.
(r) "Purchase Period" shall mean the period of time within an
Offering Period in which payroll deductions are accumulated for the purpose of
buying stock on the next scheduled Purchase Date in accordance with the terms
and conditions of the Plan. Generally the Purchase Period falls between the
Offering Date and the Purchase Date or between Purchase Dates where there are
multiple Purchase Dates within one Offering Period.
(s) "Subscription Agreement" shall mean the instrument prescribed by
the Board or the Committee pursuant to which an Eligible Employee may enroll as
a Participant and subscribe for the purchase of shares of Common Stock on the
terms and conditions offered by the Company. The Subscription Agreement is also
intended to evidence the Company's offer of an option to the Eligible Employee
to purchase Common Stock on the terms and conditions set forth therein and
herein.
(t) "Subsidiary" shall mean a corporation, domestic or foreign, of
which not less than 50% of the voting shares are held by the Company or a
Subsidiary, whether or not such corporation now exists or is hereafter organized
or acquired by the Company or a Subsidiary.
3. Eligibility.
(a) Any person who is an Eligible Employee as of the Offering Date
of a given Offering Period shall be eligible to participate in such Offering
Period under the Plan, subject to the requirements of Section 5(a) of the Plan
and the limitations imposed by Section 423(b) of the Code.
(b) Any provisions of the Plan to the contrary notwithstanding, no
Eligible Employee shall be granted an option under the Plan (i) if, immediately
after grant, such Eligible Employee (or any other person whose stock would be
attributed to such Eligible Employee pursuant to Section 424(d) of the Code)
would own stock and/or hold outstanding options to purchase stock possessing
five percent (5%) or more of the total combined voting power or value of all
classes of stock of the Company or of any Subsidiary of the Company, or (ii) if
such option would permit his or her rights to purchase stock under all employee
stock purchase plans (described in Section 423 of the Code) of the Company and
its Subsidiaries to accrue at a rate which exceeds twenty-five thousand dollars
($25,000) of fair market value of such stock (determined at the time such option
is granted) for each calendar year in which such option is outstanding at any
time.
<PAGE> 3
4. Offering Periods and Purchase Periods.
(a) Offering Periods. The Plan shall be implemented by a series of
Offering Periods of such duration or durations as may be determined by the Board
or the Committee, with new Offering Periods commencing on such date or dates as
may be determined by the Board or the Committee. The first Offering Period shall
commence January 1, 1998 and continue (subject to this Plan being approved by
the shareholders of the Company at the 1998 Annual Meeting, May 13, 1998) until
June 30, 1998 . The Plan shall continue until terminated in accordance with
Sections 19 and 20 hereof. The Board or the Committee shall have the power to
change the duration and/or the frequency of Offering Periods with respect to
future offerings without shareholder approval if such change is announced at
least fifteen (15) days prior to the scheduled beginning of the first Offering
Period to be affected. Eligible Employees may not participate in more than one
Offering Period at a time.
(b) Purchase Periods. Each Offering Period shall consist of
consecutive Purchase Periods as determined by the Board or the Committee with
the duration or durations determined by the Board or the Committee. The last day
of each Purchase Period shall be the "Purchase Date" for such Purchase Period.
The first Purchase Period shall commence on January 1, 1998 and end on June 30,
1998. The Board or the Committee shall have the power to change the duration
and/or frequency of Purchase Periods with respect to future purchases without
shareholder approval if such change is announced at least fifteen (15) days
prior to the scheduled beginning of the first Purchase Period to be affected.
5. Participation
(a) An Eligible Employee may become a Participant in the Plan by
completing a Subscription Agreement on the form provided by the Company and
filing it with the Company's Corporate Secretary's office on or before the 15th
day of the month preceding the Offering Date, unless a later time for filing the
Subscription Agreement is set by the Board or the Committee for all Eligible
Employees with respect to a given offering. The Subscription Agreement shall set
forth the dollar amount of the Participant's Compensation to be paid as
Contributions pursuant to the Plan. The Board or the Committee will establish a
Contribution limitation in a manner consistent with Section 423 of the Code.
(b) Payroll deductions shall commence on the first payroll following
the Offering Date and shall end on the last payroll paid on or prior to the last
day in the Purchase Period of the Offering Period to which the Subscription
Agreement is applicable, unless sooner terminated by the Participant as provided
in Section 10 of this Plan.
6. Method of Payment of Contributions.
(a) A Participant may elect to have Compensation deducted from each
of his or her biweekly pay checks during the Offering Period. All payroll
deductions made by a Participant shall be credited to his or her account under
the Plan. A Participant may not make additional payments into such account.
(b) A Participant may discontinue his or her participation in the
Plan by filing a Notice of Withdrawal, as provided in Section 10 of this Plan,
or, on one occasion only during the Offering Period (or more frequently if the
Board or the Committee determines the necessity for such), may decrease the rate
of his or her Contributions during the Offering Period by completing and filing
with the Company's Corporate Secretary a new Subscription Agreement. The change
in rate shall be effective as of the beginning of the next calendar month
following the date of filing of the new Subscription Agreement, if the agreement
is filed on or before the 15th of the month preceding such date (or any other
amount of time as determined by the Board or the Committee) and, if not, as of
the beginning of the next succeeding calendar month.
(c) Notwithstanding the foregoing, to the extent necessary to comply
with Section 423(b)(8) of the Code and Section 3(b) herein, a Participant's
payroll deductions may be decreased to 0% at such time during any Offering
Period which is scheduled to end during the current calendar year that the
aggregate of all payroll deductions accumulated with respect to such Offering
Period and any other Offering Period ending within the same calendar year equal
$21,250. Payroll deductions shall re-commence at the rate provided in such
Participant's Subscription Agreement at the beginning of the first Offering
Period which is scheduled to end in the following calendar year, unless
terminated by the Participant as provided in Section 10 hereof.
<PAGE> 4
7. Grant of Option.
(a) On the Offering Date of each Offering Period, each Eligible
Employee participating in such Offering Period shall be granted an option to
purchase on each Purchase Date a number of shares of the Company's Common Stock
determined by dividing such Eligible Employee's Contributions accumulated prior
to such Purchase Date and retained in the Participant's account as of the
Purchase Date by the lower of (i) eighty-five percent (85%) of the Fair Market
Value of a share of the Company's Common Stock on the Offering Date, or (ii)
eighty-five percent (85%) of the Fair Market Value of a share of the Company's
Common Stock on the Purchase Date; provided however, that the purchase shall be
subject to limitations set forth in Sections 3(b) and 13. The Fair Market Value
of a share of the Company's Common Stock shall be determined as provided in
Section 2(l) of this Plan.
(b) The option price per share of the shares offered in a given
Offering Period shall be the lower of: (i) 85% of the Fair Market Value of a
share of Common Stock of the Company on the Offering Date; or (ii) 85% of the
Fair Market Value of a share of Common Stock of the Company on the Purchase
Date.
8. Exercise of Option. Unless a Participant withdraws from the Plan as
provided in Section 10 hereof, his or her option for the purchase of shares will
be exercised automatically on each Purchase Date within an Offering Period, and
the maximum number of full shares subject to the option will be purchased at the
applicable option price with the accumulated Contributions in his or her
account. The shares purchased upon exercise of an option hereunder shall be
deemed to be transferred to the Participant on the Purchase Date. During his or
her lifetime, a Participant's option to purchase shares hereunder is exercisable
only by him or her.
9. Delivery. As promptly as practicable after each Purchase Date within
each Offering Period, the Company shall arrange the delivery to each
Participant's designated brokerage account, as appropriate, of a certificate
representing the shares purchased upon exercise of his or her option. Any cash
remaining to the credit of a Participant's account under the Plan after a
purchase by him or her of shares at the termination of each Purchase Period, or
which is insufficient to purchase a full share of Common Stock of the Company,
shall be carried over to the next Purchase Period if the Eligible Employee
continues to participate in the Plan, or if the Eligible Employee does not
continue to participate, shall be returned to said Participant.
10. Voluntary Withdrawal; Termination of Employment.
(a) A Participant may withdraw all but not less than all the
Contributions credited to his or her account under the Plan at any time prior to
each Purchase Date by giving written notice to the Company via the Notice of
Withdrawal. All of the Participant's Contributions credited to his or her
account will be paid to him or her promptly after receipt of his or her Notice
of Withdrawal and his or her option for the current period will be automatically
terminated, and no further Contributions for the purchase of shares will be made
during the Offering Period.
(b) Upon termination of the Participant's Continuous Status as an
Eligible Employee prior to the Purchase Date within an Offering Period for any
reason, including retirement or death, the Contributions credited to his or her
account will be returned to him or her or, in the case of his or her death, to
the person or persons entitled thereto under Section 15 hereof, and his or her
option will be automatically terminated.
(c) In the event a Participant fails to remain in Continuous Status
as an Eligible Employee of the Company for at least twenty (20) hours per week
during the Offering Period in which the Eligible Employee is a Participant, he
or she will be deemed to have elected to withdraw from the Plan and the
Contributions credited to his or her account will be returned to him or her and
his or her option terminated.
(d) A Participant's withdrawal from an offering will not have any
effect upon his or her eligibility to participate in a succeeding offering or in
any similar plan which may hereafter be adopted by the Company.
11. Automatic Withdrawal. If the Fair Market Value of the shares on the
first Purchase Date of an Offering Period which contains more than one Purchase
Date, is less than the Fair Market Value of the shares on the Offering Date
<PAGE> 5
for such Offering Period, then every Participant shall automatically (i) be
withdrawn from such Offering Period at the close of such Purchase Date and after
the acquisition of shares for such Purchase Period, and (ii) be enrolled in the
Offering Period commencing on the first business day subsequent to such Purchase
Period.
12. Interest. No interest shall accrue on the Contributions of a
Participant in the Plan.
13. Stock.
(a) The maximum number of shares of the Company's Common Stock
which shall be made available for sale under the Plan shall be 200,000 shares,
subject to adjustment upon changes in capitalization of the Company as provided
in Section 19 hereof. If the total number of shares which would otherwise be
subject to options granted pursuant to Section 7(a) hereof on the Offering Date
of an Offering Period exceeds the number of shares then available under the Plan
(after deduction of all shares for which options have been exercised or are then
outstanding), the Company shall make a pro rata allocation of the shares
remaining available for option grant in as uniform a manner as shall be
practicable and as it shall determine to be equitable. In such event, the
Company shall give written notice of such reduction of the number of shares
subject to the option to each Eligible Employee affected thereby and shall
similarly reduce the rate of Contributions, if necessary. The Plan shall
automatically terminate immediately after the Purchase Date as of which the
supply of available shares is exhausted.
(b) The Participant will have no interest or voting right in shares
covered by his or her option until such option has been exercised.
(c) Shares to be delivered to a Participant under the Plan will be
registered in the name of the Participant or in the name of the Participant and
his or her spouse and delivered to the Participant's brokerage account.
14. Administration. The Board, or the Committee, shall supervise and
administer the Plan and shall have full power to adopt, amend and rescind any
rules deemed desirable and appropriate for the administration of the Plan and
not inconsistent with the Plan, to construe and interpret the Plan, and to make
all other determinations necessary or advisable for the administration of the
Plan. The Committee's interpretations and decisions in respect of the Plan, the
rules and regulations pursuant to which it is operated, and the rights of
Participants hereunder shall be final and conclusive.
15. Designation of Beneficiary.
(a) A Participant may file a written designation of a beneficiary
who is to receive shares and cash, if any, from the Participant's account under
the Plan in the event of such Participant's death subsequent to the end of a
Purchase Period but prior to delivery to him or her of such shares and cash. In
addition, a Participant may file a written designation of a beneficiary who is
to receive any cash from the Participant's account under the Plan in the event
of such Participant's death prior to the Purchase Date of an Offering Period.
(b) Such designation of beneficiary may be changed by the
Participant at any time by written notice. In the event of the death of a
Participant and in the absence of a beneficiary validly designated under the
Plan who is living at the time of such Participant's death, the Company shall
deliver such shares and/or cash to the executor or administrator of the estate
of the Participant.
16. Transferability. Neither Contributions credited to a Participant's
account nor any rights with regard to the exercise of an option or to receive
shares under the Plan may be assigned, transferred, pledged or otherwise
disposed of in any way (other than by will, the laws of descent and
distribution, or as provided in Section 15 hereof) by the Participant. Any such
attempt at assignment, transfer, pledge or other disposition shall be without
effect, except that the Company may treat such act as an election to withdraw
funds in accordance with Section 10 hereof.
17. Use of Funds. All Contributions received or held by the Company
under the Plan are general assets of the Company, free of any trust or other
restriction, and may be used by the Company for any corporate purpose, and the
Company shall not be obligated to segregate such Contributions.
<PAGE> 6
18. Reports. Each Participant in the Plan will be entitled to a
statement of account promptly following the Purchase Date. Such statements will
set forth the amounts of Contributions, the per share purchase price, the number
of shares purchased and the remaining cash balance.
19. Adjustments Upon Changes in Capitalization; Corporate Transactions.
(a) Adjustment. Subject to any required action by the shareholders
of the Company, the number of shares of Common Stock covered by each option
under the Plan which has not yet been exercised and the number of shares of
Common Stock which have been authorized for issuance under the Plan but have not
yet been placed under option (collectively, the "Reserves"), as well as the
price per share of Common Stock covered by each option under the Plan which has
not yet been exercised, shall be proportionately adjusted for any increase or
decrease in the number of issued shares of Common Stock resulting from a stock
split, reverse stock split, stock dividend, combination or reclassification of
the Common Stock, or any other increase or decrease in the number of shares of
Common Stock effected without receipt of consideration by the Company; provided,
however, that conversion of any convertible securities of the Company shall not
be deemed to have been "effected without receipt of consideration". Such
adjustment shall be made by the Board or the Committee, whose determination in
that respect shall be final, binding and conclusive. Except as expressly
provided herein, no issue by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or price
of shares of Common Stock subject to an option.
(b) Corporate Transactions . In the event of the proposed
dissolution or liquidation of the Company, the Offering Period will terminate
immediately prior to the consummation of such proposed action, unless otherwise
provided by the Board or the Committee. In the event of a proposed sale of all
or substantially all of the assets of the Company, or the merger of the Company
with or into another corporation, each option under the plan shall be assumed or
an equivalent option shall be substituted by such successor corporation or a
parent or subsidiary of such successor corporation, unless the Board or the
Committee determines, in the exercise of its sole discretion and in lieu of such
assumption or substitution, to shorten the Offering Period then in progress by
setting a new Purchase Date (the "New Purchase Date"). If the Board or the
Committee shortens the Offering Period then in progress in lieu of assumption or
substitution in the event of a merger or sale of assets, the Board or the
Committee shall notify each Participant in writing, at least ten (10) days prior
to the New Purchase Date, that the Purchase Date for his or her option has been
changed to the New Purchase Date and that his or her option will be exercised
automatically on the New Purchase Date, unless prior to such date he or she has
withdrawn from the Offering Period as provided in Section 10 hereof. For
purposes of this Section 19(b), an option granted under the Plan shall be deemed
to be assumed if, following the sale of assets or merger, the option confers the
right to purchase, for each share of option stock subject to the option
immediately prior to the sale of assets or merger, the consideration (whether
stock, cash or other securities or property) received in the sale of assets or
merger by holders of Common Stock for each share of Common Stock held on the
effective date of the transaction (and if such holders were offered a choice of
consideration, the type of consideration chosen by the holders of a majority of
the outstanding shares of Common Stock); provided, however, that if such
consideration received in the sale of assets or merger was not solely common
stock of the successor corporation or its parent (as defined in Section 424(e)
of the Code), the Board or the Committee may, with the consent of the successor
corporation and the Participant, provide for the consideration to be received
upon exercise of the option to be solely common stock of the successor
corporation or its parent equal in Fair Market Value to the per share
consideration received by holders of Common Stock and the sale of assets or
merger.
The Board or the Committee may, if it so determines in the exercise
of its sole discretion, also make provision for adjusting the Reserves, as well
as the price per share of Common Stock covered by each outstanding option, in
the event that the Company effects one or more reorganizations,
recapitalizations, rights offerings or other increases or reductions of shares
of its outstanding Common Stock, and in the event of the Company being
consolidated with or merged into any other corporation.
20. Amendment or Termination.
(a) The Board or the Committee may at any time terminate or amend
the Plan. Except as provided in Section 19 hereof, no such termination may
affect options previously granted, nor may an amendment make any change
<PAGE> 7
in any option theretofore granted which adversely affects the rights of any
Participant. In addition, to the extent necessary to comply with Section 423 of
the Code (or any successor rule or provision or any applicable law or
regulation), the Company shall obtain shareholder approval in such a manner and
to such a degree as so required. No amendment may increase the number of shares
reserved for purposes of the Plan and no amendment shall allow any person who is
not an Eligible Employee to become a Participant, without the approval of the
shareholders of the Company.
(b) Without shareholder consent and without regard to whether any
Participant rights may be considered to have been adversely affected, the Board
or the Committee shall be entitled to change the Offering Periods and Purchase
Periods, limit the frequency and/or number of changes in the amount withheld
during an Offering Period, establish the exchange ratio applicable to amounts
withheld in a currency other than U.S. dollars, permit payroll withholding in
excess of the amount designated by a Participant in order to adjust for delays
or mistakes in the Company's processing of properly completed withholding
elections, establish reasonable waiting and adjustment periods and/or accounting
and crediting procedures to ensure that amounts applied toward the purchase of
Common Stock for each Participant properly correspond with amounts withheld from
the Participant's Compensation, and establish such other limitations or
procedures as the Board or the Committee determines in its sole discretion as
advisable and which are consistent with the Plan.
(c) If requisite shareholder approval of this Plan is not received
at the 1998 Annual Meeting of Shareholders scheduled to be held May 13, 1998
this Plan will automatically terminate and all Contributions will be returned to
the Participants in accordance with Section 10 hereof.
21. Notices. All notices or other communications by a Participant to
the Company under or in connection with the Plan shall be deemed to have been
duly given when received in the form specified by the Company at the location,
or by the person, designated by the Company for the receipt thereof.
22. Conditions Upon Issuance of Shares. Shares shall not be issued with
respect to an option unless the exercise of such option and the issuance and
delivery of such shares pursuant thereto shall comply with all applicable
provisions of law, domestic or foreign, including, without limitation, the
Securities Act of 1933, as amended, the Exchange Act, the rules and regulations
promulgated thereunder, and the requirements of any stock exchange upon which
the shares may then be listed, and shall be further subject to the approval of
counsel for the Company with respect to such compliance.
As a condition to the exercise of an option, the Company may
require the person exercising such option to represent and warrant at the time
of any such exercise that the shares are being purchased only for investment and
without any present intention to sell or distribute such shares if, in the
opinion of counsel for the Company, such a representation is required by any of
the aforementioned applicable provisions of law.
23. Term of Plan; Effective Date. The Plan shall become effective upon
the earlier to occur of its adoption by the Board or its approval by the
shareholders of the Company. The Plan shall continue in effect for a term of ten
(10) years unless sooner terminated under Sections 13 and 20 hereof.
24. Additional Restrictions of Rule 16b-3. The terms and conditions of
options granted hereunder to, and the purchase of shares by, persons subject to
Section 16 of the Exchange Act shall comply with the applicable provisions of
Rule 16b-3. The Plan shall be deemed to contain, and such options shall contain,
and the shares issued upon exercise thereof shall be subject to, such additional
conditions and restrictions as may be required by Rule 16b-3 to qualify for the
maximum exemption from Section 16 of the Exchange Act with respect to Plan
transactions.
<PAGE> 1
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
CMAC Investment Corporation on Form S-8 of our report dated January 21, 1997,
appearing in the Annual Report on Form 10-K of CMAC Investment Corporation for
the year ended December 31, 1996.
DELOITTE & TOUCHE LLP
Philadelphia, Pennsylvania
November 19, 1997
