-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, McgObtfSxlceLAeiFtVNsoCkNIGqjUBc+sKcRqGaBZQC1jsmi00pijm/oaUjaBlt w7v+3qZ/A+TCAG+m8mY+aQ== 0000950123-99-001972.txt : 19990310 0000950123-99-001972.hdr.sgml : 19990310 ACCESSION NUMBER: 0000950123-99-001972 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 19990309 EFFECTIVENESS DATE: 19990309 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CHICAGO TITLE CORP CENTRAL INDEX KEY: 0001058575 STANDARD INDUSTRIAL CLASSIFICATION: TITLE INSURANCE [6361] IRS NUMBER: 364217886 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: SEC FILE NUMBER: 333-74133 FILM NUMBER: 99560943 BUSINESS ADDRESS: STREET 1: 171 NORTH CLARK ST CITY: CHICAGO STATE: IL ZIP: 60601-3292 BUSINESS PHONE: 3122232000 MAIL ADDRESS: STREET 1: 171 NORTH CLARK ST CITY: CHICAGO STATE: IL ZIP: 60601-3292 S-8 1 CHICAGO TITLE CORPORATION 1 As filed with the Securities and Exchange Commission on March 9, 1999 Registration Number 333-_____ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 CHICAGO TITLE CORPORATION (Exact name of registrant as specified in its charter) Delaware 36-4217886 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 171 North Clark Street 60601-3294 Chicago, Illinois (Zip Code) (Address of Principal Executive Offices) CHICAGO TITLE CORPORATION AND SUBSIDIARIES 1999 ANNUAL INCENTIVE PLAN (Full Title of the Plan) Paul T. Sands, Jr., Esq. Executive Vice President, General Counsel and Secretary Chicago Title Corporation 171 North Clark Street Chicago, Illinois 60601-3294 (312) 223-2000 (Name, address and telephone number of agent for service) Copies to: Linda E. Ransom, Esq. Dewey Ballantine LLP 1301 Avenue of the Americas New York, New York 10019-6092 (212) 259-8000 2 CALCULATION OF REGISTRATION FEE
====================================================================================================================== PROPOSED MAXIMUM PROPOSED MAXIMUM TITLE OF SECURITIES TO AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF BE REGISTERED REGISTERED UNIT (1) PRICE (1) REGISTRATION FEE ====================================================================================================================== Common Stock, par value $1.00 per share 80,000 $33.4375 $2,675,000 $743.65 ======================================================================================================================
(1) Estimated for the sole purpose of computing the registration fee. Pursuant to Rules 457(c) and 457(h) under the Securities Act, the proposed maximum offering price per unit is calculated as the average of the high and low prices, reported by the New York Stock Exchange, Inc., of the common stock of the registrant as of March 3, 1999. 3 PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE. The following documents filed with the Securities and Exchange Commission by Chicago Title Corporation ("Chicago Title") (File No. 1-13995) are incorporated herein by reference and made a part hereof: (a) Chicago Title's Registration Statement on Form 10, as amended, filed pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), including the description of the Common Stock of Chicago Title contained in such Registration Statement on Form 10; such description is qualified in its entirety by reference to the (i) Certificate of Incorporation of Chicago Title, filed as Exhibit 3.1 to Chicago Title's Registration Statement on Form 10, and (ii) By-Laws of Chicago Title, filed as Exhibit 3.2 to this Registration Statement, and any amendment or report filed for the purpose of updating that description; (b) Chicago Title's Quarterly Reports on Form 10-Q for the quarters ended June 30, 1998 and September 30, 1998; and (c) Chicago Title's Current Report on Form 8-K dated June 18, 1998. All documents filed by Chicago Title pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act subsequent to the date of this Registration Statement and prior to the filing of a post-effective amendment 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 in this Registration Statement and to be part hereof from the date of filing of such documents. The consolidated financial statements of Chicago Title and Trust Company ("CT&T") and its subsidiaries included in Chicago Title's Registration Statement on Form 10 have been incorporated herein by reference in reliance upon the report, also incorporated herein by reference, of KPMG LLP, independent auditors, given on their authority as experts in auditing and accounting. ITEM 4. DESCRIPTION OF SECURITIES. Not Applicable. ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL. Not Applicable. II-1 4 ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Chicago Title is a Delaware corporation. Reference is made to Section 145 of the Delaware General Corporation Law as to indemnification by Chicago Title of its officers and directors. The general effect of such law is to empower a corporation to indemnify any of its officers and directors against certain expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person to be indemnified in connection with certain actions, suits or proceedings (threatened, pending or completed) if the person to be indemnified acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. Article Ninth of Chicago Title's Certificate of Incorporation (which Certificate of Incorporation was filed as Exhibit 3.1 to Chicago Title's Registration Statement on Form 10), provides for the indemnification of Chicago Title's officers and directors in accordance with the Delaware General Corporation Law, and includes, as permitted by the Delaware General Corporation Law, certain limitations on the potential personal liability of members of Chicago Title's Board of Directors for monetary damages as a result of actions taken in their capacity as Board members. The directors and officers of Chicago Title are covered by insurance policies indemnifying them against certain liabilities arising under the Securities Act, which might be incurred by them in such capacities. ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED. Not applicable. ITEM 8. EXHIBITS. The documents listed hereunder are filed as exhibits hereto. Exhibit Number Description 3.2 By-Laws of Chicago Title Corporation. 5 Opinion and Consent of Dewey Ballantine LLP. 23.1 Consent of Dewey Ballantine LLP (included in Exhibit 5 hereto). 23.2 Consent of KPMG LLP. 24 Power of Attorney. 99 Chicago Title Corporation and Subsidiaries 1999 Annual Incentive Plan. II-2 5 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 paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the registrant 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 which remain unsold at the termination of the offering. (b) The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant'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) 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 II-3 6 director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is 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. II-4 7 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 Chicago, State of Illinois, on the 9th day of March, 1999. CHICAGO TITLE CORPORATION By: /s/ John Rau ------------------------------------- John Rau President and Chief Executive Officer Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
Date: March 9, 1999 By: /s/ John Rau --------------------------------------------- John Rau President, Chief Executive Officer and Director (principal executive officer) Date: March 9, 1999 By: /s/ Peter G. Leemputte ------------------------------------------- Peter G. Leemputte Executive Vice President, Chief Administrative Officer and Chief Financial Officer (principal financial officer) Date: March 9, 1999 By: /s/ Bryan R. Willis ------------------------------------------- Bryan R. Willis Vice President and Corporate Controller Date: March 9, 1999 By: * ------------------------------------------- Norman R Bobins Director Date: March 9, 1999 By: * ------------------------------------------- John J. Burns, Jr. Director
8
Date: March 9, 1999 By: * ------------------------------------------- Peter H. Dailey Director Date: March 9, 1999 By: * ------------------------------------------- Robert M. Hart Director Date: March 9, 1999 By: * ------------------------------------------- Philip G. Heasley Director Date: March 9, 1999 By: * ------------------------------------------- Allan P. Kirby, Jr. Director Date: March 9, 1999 By: * ------------------------------------------- M. Leanne Lachman Director Date: March 9, 1999 By: * ------------------------------------------- William K. Lavin Director Date: March 9, 1999 By: * ------------------------------------------- Lawrence F. Levy Director Date: March 9, 1999 By: * ------------------------------------------- Margaret P. MacKimm Director Date: March 9, 1999 By: * ------------------------------------------- Langdon D. Neal Director
9
Date: March 9, 1999 By: * ------------------------------------------- Alan N. Prince Director Date: March 9, 1999 By: * ------------------------------------------- Richard P. Toft Director *By: /s/ Paul T. Sands, Jr. ------------------------------------------- Paul T. Sands, Jr. Attorney-in-Fact
10 INDEX TO EXHIBITS Exhibit Number Description 3.2 By-Laws of Chicago Title Corporation. 5 Opinion and Consent of Dewey Ballantine LLP. 23.1 Consent of Dewey Ballantine LLP (included in Exhibit 5 hereto). 23.2 Consent of KPMG LLP. 24 Power of Attorney. 99 Chicago Title Corporation and Subsidiaries 1999 Annual Incentive Plan. EX-3.2 2 BY-LAWS 1 EXHIBIT 3.2 BY-LAWS OF CHICAGO TITLE CORPORATION DELAWARE As Amended Through January 26, 1999 2 ARTICLE I STOCKHOLDERS SECTION 1. ANNUAL MEETING The annual meeting of stockholders for the election of directors and for the transaction of any other business that may properly come before the meeting shall be held at such hour and at such place or places within or without the State of Delaware as may from time to time be determined by the Board of Directors, on the first Tuesday of May in each year or such other date as may be set by the Board of Directors not more than fifteen days before, nor fifteen days after, the first Tuesday of May. SECTION 2. SPECIAL MEETINGS At any time in the interval between regular meetings, special meetings of stockholders may be called by the Chairman, or by a majority of the Board of Directors, to be held at such times and at such places within or without the State of Delaware as may be specified in the notices of such meetings. The notice of any special meeting shall state the purpose of the meeting and specify the action to be taken at said meeting and no business shall be transacted thereat except that specifically named in the notice. SECTION 3. NOTICE OF MEETING Notice of the time and place of every meeting of stockholders shall be delivered personally or mailed at least ten days and not more than sixty days prior thereto to each stockholder of record entitled to vote at his address as it appears on the records of the Corporation. Such further notice shall be given as may be required by law. Business transacted at any special meeting shall be confined to the purpose or purposes stated in the notice of such special meeting. Meetings may be held without notice if all stockholders entitled to vote are present or if notice is waived by those not present. SECTION 4. VOTING At all meetings of stockholders any stockholder entitled to vote may vote in person or by proxy in writing or by a transmission permitted by law filed in accordance with the procedure established for the meeting. Any copy, facsimile telecommunication or other reliable reproduction of the writing or transmission created pursuant to this paragraph may be substituted or used in lieu of the original writing or transmission for any and all purposes for which the original writing or transmission could be used, provided that such copy, facsimile telecommunication or other reproduction shall be a complete reproduction of the entire original writing or transmission. SECTION 5. QUORUM Unless otherwise required by statute or the Certificate of Incorporation of the Corporation (the "Certificate of Incorporation"), at any annual or special meeting of 3 stockholders the presence in person or by proxy of stockholders entitled to cast a majority of all the votes entitled to be cast at the meeting shall constitute a quorum, but if at any meeting of the stockholders there be less than a quorum present, the stockholders present at such meeting may, without further notice, adjourn, the same from time to time until a quorum shall attend, but no business shall be transacted at any such adjournment except such as might have been lawfully transacted had the meeting not been adjourned. SECTION 6. ACTION AT MEETINGS Except as otherwise required by law, the Certificate of Incorporation or these By-Laws, a majority of the votes cast at a meeting at which a quorum is present shall be sufficient to take or authorize action upon any matter which may properly come before the meeting, and the stockholders shall not be entitled to cumulate their votes upon the election of directors or any other matter. Any action required or permitted to be taken by the stockholders must be effected at an annual or special meeting of stockholders and may not be effected by any consent in writing by such stockholders. SECTION 7. PROCEDURE AT MEETINGS The Board of Directors may appoint two or more persons to serve as inspectors of election at any meeting of stockholders. In the absence of such appointment, the Chairman of the Meeting may make such appointment. The inspectors of election shall receive, examine and tabulate all ballots and proxies, including proxies filed with the Secretary, shall determine the presence or absence of a quorum and shall report to the officer of the Corporation or other person presiding over the meeting the result of all voting taken at the meeting by ballot. The order of business and all other matters of procedure at every meeting of the stockholders may be determined by the officer of the Corporation or other person presiding over the meeting. SECTION 8. NOMINATIONS AND STOCKHOLDER BUSINESS Nominations of persons for election to the Board of Directors and the proposal of business to be transacted by the stockholders may be made at an annual meeting of stockholders (a) pursuant to the Corporation's notice with respect to such meeting, (b) by or at the direction of the Board of Directors or (c) by any stockholder of record of the Corporation who was a stockholder of record at the time of the giving of the notice provided for in this Section 8, who is entitled to vote at the meeting and who has complied with the notice procedures set forth in this Section 8. For nominations or other business to be properly brought before an annual meeting by a stockholder pursuant to this Section 8, the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation, such business must be a proper matter for stockholder action under the Delaware General Corporation Law and, if the stockholder, or the beneficial owner on whose behalf any such proposal or nomination is made, solicits or participates in the solicitation of proxies in support of such proposal or nomination, the stockholder must have timely indicated such -2- 4 stockholder's, or such beneficial owner's, intention to do so as hereinafter provided. To be timely, a stockholder's notice shall be delivered to the Secretary at the principal executive offices of the Corporation not less than 90 days prior to the first anniversary of the preceding year's annual meeting of stockholders; provided, however, that if the date of the annual meeting is advanced more than 30 days prior to or delayed more than 60 days after such anniversary date, notice by the stockholder to be timely must be so delivered not later than the close of business on the later of the 90th day prior to such annual meeting or the 10th day following the day on which public announcement of the date of such meeting is first made. Such stockholder's notice shall set forth (a) as to each person whom the stockholder proposes to nominate for election or reelection as a director all information relating to such person as would be required to be disclosed in solicitations of proxies for the election of such nominees as directors pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and such person's written consent to serve as a director is elected; (b) as to any other business that the stockholder proposes to bring before the meeting, a brief description of such business, the reasons for conducting such business at the meeting and any material interest in such business of such stockholder and the beneficial owner, if any, on whose behalf the proposal is made; (c) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made (i) the name and address of such stockholder, as they appear on the Corporation's books, and of such beneficial owner, (ii) the class and number of shares of the Corporation which are owned beneficially and of record by such stockholder and such beneficial owner, and (iii) whether either such stockholder or beneficial owner intends to solicit or participate in the solicitation of proxies in favor of such proposal or nominee or nominees. Notwithstanding anything in this Section 8 to the contrary, in the event that the number of directors to be elected to the Board of Directors is increased and there is no public announcement naming all of the nominees for director or specifying the size of the increased Board of Directors made by the Corporation at least 100 days prior to the first anniversary of the preceding year's annual meeting, a stockholder's notice required by this section shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the 10th day following the day on which such public announcement is first made by the Corporation. Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Corporation's notice of meeting. Nominations of persons for election to the Board of Directors may be made at a special meeting of stockholders at which directors are to be elected pursuant to the Corporation's notice of meeting (a) by or at the direction of the Board of Directors or (b) by any stockholder of record of the Corporation who is a stockholder of record at the time of giving of notice provided for in this Section 8, who shall be entitled to vote at the meeting and who complies with the notice procedures set forth in this Section 8. Nominations by stockholders of persons for election to the Board of Directors may be made at such a special meeting of stockholders if the stockholder's notice required by this Section 8 shall be delivered to the Secretary at the principal executive offices of the -3- 5 Corporation not later than the close of business on the later of the 90th day prior to such special meeting or the 10th day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board of Directors to be elected at such meeting. Only persons nominated in accordance with the procedures set forth in this section shall be eligible to serve as directors and only such business shall be conducted at a meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in this Section 8. The officer of the Corporation or other person presiding over the meeting shall have the power and the duty to determine whether a nomination or any business proposed to be brought before the meeting has been made in compliance with the procedures set forth in this Section 8 and, if any proposed nomination or business is not in compliance with this Section 8, to declare that such defective proposed business or nomination shall not be presented for stockholder action at the meeting and shall be disregarded. For purposes of this section, "public announcement" shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or a comparable national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act. Notwithstanding the foregoing provisions of this section, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to matters set forth in this Section 8. Nothing in this Section 8 shall be deemed to affect any rights of stockholders to request inclusion of proposals in the Corporation's proxy statement pursuant to Rule 14a-8 under the Exchange Act. SECTION 9. ADJOURNMENTS Any meeting of stockholders may be adjourned from time to time, whether or not a quorum is present, by the affirmative vote of a majority of the votes present and entitled to be cast at the meeting, or by the officer of the Corporation presiding over the meeting, or by the Board of Directors. ARTICLE II DIRECTORS SECTION 1. NUMBER AND ELECTION Directors (other than such directors, if any, as are elected by holders of preferred stock of the Corporation voting as a separate class) shall be divided into three classes, which shall be as nearly equal in number as practicable. Unless changed by the Board of Directors pursuant hereto the number of directors shall be fifteen. The number of directors and the number of which each class is to consist may be increased or -4- 6 decreased from time to time by a resolution adopted by the vote of in excess of 75 percent of the Whole Board (as defined in the Certificate of Incorporation); and provided that no decrease in the number of directors shall affect the tenure of office of any existing director. The term of office of the first class shall expire at the 1999 annual meeting of stockholders, the term of office of the second class shall expire at the 2000 annual meeting of stockholders and the term of office of the third class shall expire at the 2001 annual meeting of stockholders, with each director to hold office until his or her successor shall have been duly elected and qualified. At each annual meeting of stockholders, commencing with the 1999 annual meeting, directors elected to succeed those directors whose terms then expire shall be elected for a term of office to expire at the third succeeding annual meeting of stockholders after their election, with each director to hold office until his or her successor shall have been duly elected and qualified. SECTION 2. VACANCIES Subject to the rights of the holders of any series of Preferred Stock, and unless the Board of Directors otherwise determines, newly created directorships resulting from any increase in the authorized number of directors or any vacancies in the Board of Directors resulting from death, resignation, retirement, disqualification, removal from office or other cause may be filled only by a majority vote of the directors then in office, though less than a quorum, and any director so chosen shall hold office for a term expiring at the annual meeting of stockholders at which the term of office of the class to which such director has been elected expires and until such director's successor shall have been duly elected and qualified. SECTION 3. REGULAR MEETINGS Regular meetings of the Board of Directors shall be held at such times and places as the Board of Directors may from time to time determine. SECTION 4. SPECIAL MEETINGS Special meetings of the Board of Directors may be called at any time, at any place and for any purpose by the Chairman of the Board or by any three directors. SECTION 5. NOTICE OF MEETING Notice of regular meetings of the Board of Directors need not be given. Notice of every special meeting of the Board of Directors shall be given to each director, by (a) deposit in the mail at least seventy-two hours before the meeting, or (b) telephonic or telefacsimile communication directly with such person, the dispatch of a telegraphic communication to his address, or actual delivery to his address, at least forty-eight hours before the meeting. If given to a director by mail, telegraph or actual delivery to his address, such notice shall be sent or delivered to his business or residential address as shown on the records of the Secretary or an -5- 7 Assistant Secretary of the Corporation, or to such other address as shall have been furnished to the Secretary or an Assistant Secretary of the Corporation by him for the purpose. Such notice need not include a statement of the business to be transacted at, or the purpose of, any such meeting. SECTION 6. QUORUM; ACTION AT MEETINGS A majority of the Board of Directors shall constitute a quorum for the transaction of business, but if, at any meeting of the Board, there be less than a quorum present, the members at the meeting may, without further notice, adjourn the same from time to time until a quorum shall attend. Except as provided herein or in the Certificate of Incorporation or as required by law, a majority of such quorum shall decide any questions that may come before the meeting. SECTION 7. PARTICIPATING IN MEETING BY CONFERENCE TELEPHONE Members of the Board of Directors, or any committee thereof, may participate in a meeting of such Board or committee by means of conference telephone or similar equipment by means of which all persons participating in the meeting can hear each other at the same time and such participation shall constitute presence in person at such meeting. SECTION 8. DIVIDENDS Anything in these By-Laws to the contrary notwithstanding, the declaration of dividends or other distributions on the capital stock of the Corporation, whether in cash or property (other than the dividend preference payable on any Preferred Stock of the Corporation outstanding from time to time), may be authorized only by vote of in excess of 75 percent of the directors present at a meeting duly called at which a quorum is present. ARTICLE III COMMITTEES OF THE BOARD OF DIRECTORS SECTION 1. ELECTION The Board of Directors may appoint an Executive Committee and other committees composed of two or more of its members, and may appoint one of the members of each such committee to the office of chairman thereof. Members of the committees of the Board of Directors shall hold office for a term of one year and until their successors are appointed and qualify or until they shall cease to be directors. SECTION 2. POWERS Subject to such limitations as may from time to time be established by resolution of the Board of Directors, the Executive Committee shall have any and may exercise all of the powers of the Board of Directors when the Board of Directors is not in -6- 8 session except that it shall have no power to (a) declare dividends, (b) issue stock of the Corporation, (c) recommend to the stockholders any action which requires stockholder approval, (d) alter, amend or repeal any resolution of the Board of Directors relating to the Executive Committee, or (e) take any other action which legally may be taken only by the Board of Directors. Other committees of the Board of Directors shall have such powers as shall be properly delegated to them by the Board of Directors. SECTION 3. VACANCIES If the office of any member of any committee becomes vacant by death, resignation, or otherwise, such vacancy may be filled from the members of the Board by the Board of Directors. SECTION 4. SUBSTITUTE MEMBERS In the event that a member of any committee is absent from a meeting of the committee, the members of the committee present at the meeting whether or not they constitute a quorum may appoint another director to act in place of the absent member. SECTION 5. MEETINGS AND NOTICE OF MEETINGS The Executive Committee shall meet from time to time on call of the Chairman of the Board or the Chairman of the Executive Committee, or on call of any three or more members of the Executive Committee, for the transaction of any business. Notice of every meeting of the Executive Committee shall be given to each member, by (a) deposit in the mail at least seventy-two hours before the meeting, or (b) telephonic or telefacsimile communication directly with such person, the dispatch of a telegraphic communication to his address, or actual delivery to his address, at least forty-eight hours before the meeting. If given to a member by mail, telegraph or actual delivery to his address, such notice shall be sent or delivered to his business or residential address as shown on the records of the Secretary or an Assistant Secretary of the Corporation, or to such other address as shall have been furnished to the Secretary or an Assistant Secretary of the Corporation by him for this purpose. Such notice need not include a statement of the business to be transacted at, or the purpose of, any such meeting. All other committees of the Board of Directors shall meet at such times and upon such notice as they may determine. SECTION 6. QUORUM; ACTION AT MEETINGS At any meeting of any committee, however called, a majority of the members shall constitute a quorum for the transaction of business. A majority of such quorum shall decide any questions that may come before the meeting. -7- 9 ARTICLE IV OFFICERS SECTION 1. ELECTION AND NUMBER The Board of Directors may appoint one of its number as Chairman of the Board. The Board of Directors shall appoint a President from among the directors, and a Secretary and a Treasurer, who need not be directors. The Board of Directors may also appoint one or more Executive Vice Presidents, Senior Vice Presidents and/or Vice Presidents, who need not be directors. All officers of the Corporation shall hold office at the pleasure of the Board of Directors. Any two or more offices, except those of President and Vice President, may, at the discretion of the Board of Directors, be held by the same person. The Board of Directors may from time to time appoint such other officers and agents with such powers and duties as the Board may prescribe. SECTION 2. CHAIRMAN OF THE BOARD The Chairman of the Board shall preside at all meetings of the Board of Directors and shall perform such other duties and exercise such other powers as may be assigned to him from time to time by the Board of Directors. SECTION 3. PRESIDENT The President shall be the chief executive officer and the chief operating officer of the Corporation. The President shall preside at all meetings of stockholders and, in the absence of the Chairman of the Board, shall preside at all meetings of the Board of Directors. Subject to the control of the Board of Directors, the President shall have direct power and authority over the business and affairs of the Corporation. The President shall perform such other duties and exercise such other powers as may be assigned to him from time to time by the Board of Directors. SECTION 4. EXECUTIVE VICE PRESIDENTS The Executive Vice President or Executive Vice Presidents shall perform the duties of the President in his absence or during his disability to act. In addition, the Executive Vice President or Executive Vice Presidents shall perform the duties and exercise the powers usually incident to their respective offices and/or such other duties and powers as may be properly assigned to them from time to time by the Board of Directors, the Chairman of the Board or the President. SECTION 5. SENIOR VICE PRESIDENTS The Senior Vice President or Senior Vice Presidents shall perform the duties of the Executive Vice President or Executive Vice Presidents in his or their absence or disability to act. In addition, the Senior Vice President or Senior Vice Presidents shall perform the duties and exercise the powers usually incident to their respective offices and/or such other duties and powers as may be properly assigned to -8- 10 them from time to time by the Board of Directors, the Chairman of the Board, the President or any Executive Vice President having supervisory authority over them. SECTION 6. VICE PRESIDENTS The Vice President or Vice Presidents shall perform the duties of the Senior Vice President or Senior Vice Presidents in his or their absence or disability to act. In addition, the Vice President or Vice Presidents shall perform the duties and exercise the powers usually incident to their respective offices and such other duties and powers as may be properly assigned to them from time to time by the Board of Directors, the Chairman of the Board, the President or any Executive Vice President or Senior Vice President having supervisory authority over them. SECTION 7. SECRETARY The Secretary shall issue notices of meetings, keep the minutes of the Board of Directors and its committees, have charge of the corporate seal, and perform such other duties and exercise such other powers as are usually incident to such office or are properly assigned thereto by the Board of Directors, the Chairman of the Board, the President or any Executive Vice President or Senior Vice President or Vice President having supervisory authority over him. SECTION 8. TREASURER The Treasurer shall have charge of all monies and securities of the Corporation, other than monies and securities of any division of the Corporation which has a treasurer or financial officer appointed by the Board of Directors, and shall keep regular books of account. The funds of the Corporation shall be deposited in the name of the Corporation by the Treasurer with such banks or trust companies as the Board of Directors or the Executive Committee from time to time shall designate. He shall sign or countersign such instruments as require his signature, shall perform all such duties and have all such powers as are usually incident to such office or are properly assigned to him by the Board of Directors, the Chairman of the Board, the President or any Executive Vice President or Senior Vice President or Vice President having supervisory authority over him, and may be required to give bond for the faithful performance of his duties in such sum and with such surety as may be required by the Board of Directors. SECTION 9. CONTROLLER The Controller shall be responsible for the accounting policies and practices of the Corporation, maintain its financial records, collect and consolidate the financial results of its subsidiaries and other operating units, prepare its financial reports, determine the amount and source of the funds required to meet its financial obligations, and perform such other duties and exercise such other powers as are usually incident to such office or are properly assigned thereto by the Board of Directors, the Chairman of the Board, the President or any Executive Vice President or Senior Vice President or Vice President having supervisory authority over him. -9- 11 SECTION 10. ASSISTANT SECRETARY; ASSISTANT TREASURER The Board of Directors may appoint one or more assistant secretaries and one or more assistant treasurers, or one appointee to both such positions, which officers shall have such powers and shall perform such duties as are provided in these By-Laws to the Secretary or Treasurer, as the case may be, or as are properly assigned thereto by the Board of Directors, the Chairman of the Board, the President, the Secretary or Treasurer as the case may be, or any other officer having supervisory authority over them. ARTICLE V FISCAL YEAR The fiscal year of the Corporation shall end on the thirty-first day of December in each year, or on such other day as may be fixed from time to time by the Board of Directors. ARTICLE VI SEAL The Board of Directors shall provide a suitable seal, containing the name of the Corporation, which seal shall be in the charge of the Secretary or an Assistant Secretary. ARTICLE VII STOCK SECTION 1. STOCK OF THE CORPORATION Shares of stock of the Corporation shall be represented by certificates, provided that the Board of Directors may provide that some or all of a class or series of stock shall be uncertificated shares. Certificates representing shares of stock of the Corporation shall be issued in such form as may be approved by the Board of Directors and shall be signed, manually or by facsimile, by the Chairman of the Board, President, or an Executive Vice President or Senior Vice President or Vice President and by the Treasurer, Assistant Treasurer, Secretary or Assistant Secretary, and sealed with the seal of the Corporation or a facsimile thereof. SECTION 2. TRANSFERS The Board of Directors shall have power and authority to make all such rules and regulations as it may deem expedient concerning the issue, transfer and registration of stock of the Corporation. The Board of Directors may appoint Transfer Agents and Registrars thereof. -10- 12 SECTION 3. RECORD DATE; CLOSING OF TRANSFER BOOKS The Board of Directors may fix a record date or direct that the stock transfer books be closed for a stated period for the purpose of making any proper determination with respect to stockholders, including which stockholders are entitled to notice of or to vote at a meeting or any adjournment thereof, receive payment of any dividend or other distribution, or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock. The record date may not be more than sixty nor less than ten days before the date on which the action requiring the determination will be taken; the transfer books may not be closed for a period longer than twenty days; and, in the case of a meeting of stockholders, the closing of the transfer books shall be at least ten days before the date of the meeting. SECTION 4. LOST CERTIFICATES The Board of Directors may determine the conditions upon which a new certificate of stock will be issued to replace a certificate which is alleged to have been lost, stolen, mutilated or destroyed, and the Board of Directors may delegate to any officer of the Corporation the power to make such determinations and to cause such replacement certificates to be issued. SECTION 5. WARRANTS The foregoing provisions relative to certificates of stock shall also apply to allotment certificates or other certificates or warrants representing rights with respect to stock in the Corporation, which certificates or warrants may be issued from time to time by a vote of the Board of Directors in such form as they may approve. SECTION 6. STOCK LEDGER The Corporation shall maintain a stock ledger which contains the name and address of each stockholder and the number of shares of stock of each class which the stockholder holds. The stock ledger may be in written form or in any other form which can be converted within a reasonable time into written form for visual inspection. The original stock ledger shall be kept at the office of the Corporation's Transfer Agent. ARTICLE VIII SIGNATURES SECTION 1. NEGOTIABLE INSTRUMENTS All checks, drafts, notes, or other obligations of the Corporation shall be signed (a) by any two officers of the Corporation of the rank of Chairman of the Board, President, Executive Vice President, Senior Vice President or Vice President, (b) by the Chairman of the Board, President, any Executive Vice President or any Senior Vice President or any Vice President, and by the Treasurer or Assistant Treasurer or Secretary -11- 13 or Assistant Secretary, or (c) as otherwise authorized by the Board of Directors or the Executive Committee; provided, however, that bonds, debentures or notes issued under a mortgage indenture or trust agreement with a bank or trust company as trustee and coupons attached pertaining to any such bonds, debentures or notes may be executed manually or by facsimile. SECTION 2. STOCK TRANSFERS All endorsements, assignments, transfers, stock powers or other instruments of transfer of securities standing in the name of the Corporation shall be executed for and in the name of the Corporation (a) by any two officers of the Corporation of the rank of Chairman of the Board, President, Executive Vice President, Senior Vice President or Vice President, or (b) by the Chairman of the Board, President, any Executive Vice President or any Senior Vice President or any Vice President, and by the Secretary or any Assistant Secretary, or (c) as otherwise authorized by the Board of Directors. ARTICLE IX WAIVER OF NOTICE OF MEETINGS SECTION 1. STOCKHOLDERS Notice of the time, place and/or purpose of any meeting of stockholders shall not be required to be given to any stockholder who shall attend such meeting in person or by proxy; and if any stockholder shall, in a writing filed with the records of the meeting, either before or after the holding thereof, waive notice of any stockholders' meeting, notice thereof need not be given to him. SECTION 2. DIRECTORS Notice of any meeting of the Board of Directors or of any committee thereof need not be given to any director if he shall attend such meeting in person, or shall in a writing filed with the records of the meeting, either before or after the holding thereof, waive such notice; and any meeting of the Board of Directors or of any committee thereof shall be a legal meeting without any notice thereof having been given if all such directors shall be present at such meeting. ARTICLE X VOTING OF STOCKS Unless otherwise ordered by the Board of Directors, the Chairman of the Board, the President, any Executive Vice President or any Senior Vice President or any Vice President of this Corporation shall have full power and authority, on behalf of the Corporation, to attend, act and vote at any meeting of the stockholders of any corporation in which this Corporation may hold stock and at such meeting may exercise any or all -12- 14 rights and powers incident to the ownership of such stock and which as owner thereof the Corporation might exercise if present and to execute on behalf of the Corporation a proxy or proxies empowering others to act as aforesaid. The Board of Directors by resolution from time to time may confer like powers upon any other person or persons. ARTICLE XI CHECKS, NOTES, ETC. All checks on the Corporation's bank accounts and all drafts, bills of exchange and promissory notes, and all acceptances, obligations and other instruments for the payment of money, shall be signed by such person or persons as shall be authorized to do so from time to time by the Board of Directors or by the committee or officer or officers of the Corporation to whom the Board shall have delegated the power to authorize such signing; provided, however, that the signature of any person so authorized on checks and drafts drawn on the Corporation's dividend and special accounts may be in facsimile if the Board of Directors or such committee or officer or officers, whichever shall have authorized such person to sign such checks or drafts, shall have authorized such person to sign in facsimile, and provided further that in case notes or other instruments for the payment of money (other than notes, bonds or debentures issued under a trust instrument of the Corporation) are required to be signed by two persons, the signature thereon of only one of the persons signing any such note or other instrument may be in facsimile, and that in the case of notes, bonds or debentures issued under a trust instrument of the Corporation and required to be signed by two officers of the Corporation, the signatures of both such officers may be in facsimile if specifically authorized and directed by the Board of Directors of the Corporation and if such notes, bonds or debentures are required to be authenticated by a corporate trustee which is a party to the trust instrument and provided further that in case any person or persons who shall have signed any such note or other instrument, either manually or in facsimile, shall have ceased to be a person or persons so authorized to sign any such note or other instrument, whether because of death or by reason of any other fact or circumstance, before such note or other instrument shall have been delivered by the Corporation, such note or other instrument may, nevertheless, be adopted by the Corporation and be issued and delivered as though the person or persons who so signed such note or other instrument had not ceased to be such a person or persons. ARTICLE XII OFFICES The Corporation may have offices outside the State of Delaware at such places as shall be determined from time to time by the Board of Directors. -13- 15 ARTICLE XIII AMENDMENTS Subject to the provisions of the Certificate of Incorporation, (a) these By-Laws may be amended, altered or repealed by the stockholders at any annual or special meeting by the affirmative vote of at least 75 percent of the voting power of the outstanding shares of Voting Stock and (b) these By-Laws may be amended, altered or repealed by the Board of Directors by the affirmative vote of a majority of the Whole Board. -14- EX-5 3 OPINION AND CONSENT OF DEWEY BALLANTINE LLP 1 Exhibit 5 DEWEY BALLANTINE LLP 1301 Avenue of the Americas New York 10019-6092 Tel 212 259-8000 Fax 212 259-6333 March 9, 1999 Chicago Title Corporation 171 North Clark Street Chicago, Illinois 60601 Re: Registration Statement on Form S-8 Filed with the Securities and Exchange Commission on March 9, 1999 Gentlemen: We are acting as counsel for Chicago Title Corporation, a Delaware corporation ("Chicago Title"), in connection with the registration by Chicago Title under the Securities Act of 1933, as amended (the "Act"), of 80,000 shares of common stock, par value $1.00 per share (the "Shares"), of Chicago Title to be offered pursuant to the Chicago Title Corporation and Subsidiaries 1999 Annual Incentive Plan (the "Plan") under the Registration Statement on Form S-8 filed with the Securities and Exchange Commission on March 9, 1999 (the "Registration Statement"). We are familiar with the proceedings of Chicago Title relating to the authorization and issuance of the Shares. In addition, we have made such further examinations of law and fact as we have deemed appropriate in connection with the opinion hereinafter set forth. We express no opinion as to the law of any jurisdiction other than the laws of the State of New York and the corporate laws of the State of Delaware. Based upon the foregoing, we are of the opinion that the Shares to be offered pursuant to the Plan have been duly authorized and, when issued in accordance with the resolutions of the Board of Directors of Chicago Title authorizing such issuance, will be validly issued, fully paid and nonassessable. 2 Chicago Title Corporation March 9, 1999 Page 2 We hereby consent to the filing of this opinion as an exhibit to the Registration Statement. In giving such consent, we do not thereby admit that we come within the category of persons whose consent is required under Section 7 of the Act, or under the rules and regulations of the Securities and Exchange Commission thereunder. Very truly yours, /s/ Dewey Ballantine LLP EX-23.2 4 CONSENT OF KPMG LLP 1 Exhibit 23.2 CONSENT OF INDEPENDENT AUDITORS The Board of Directors Chicago Title Corporation: We consent to the use of our report incorporated herein by reference and to the reference to our firm as experts in the registration statement. /s/ KPMG LLP Chicago, Illinois March 9, 1999 EX-24 5 POWER OF ATTORNEY 1 Exhibit 24 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned do hereby constitute and appoint JOHN RAU and PAUL T. SANDS, JR., and each of them, with full powers of substitution, their true and lawful attorneys-in-fact and agents to do any and all acts and things and to execute any and all instruments which said attorneys-in-fact and agents may deem necessary or advisable to enable Chicago Title Corporation, a Delaware corporation, to comply with the Securities Act of 1933, as amended, and any rules, regulations and requirements of the Securities and Exchange Commission in respect thereof, in connection with the registration under said Act of the number of shares of Common Stock, par value $1.00 per share, of Chicago Title Corporation that may be offered from time to time pursuant to the Chicago Title Corporation and Subsidiaries 1999 Annual Incentive Plan, including specifically, but without limitation thereof, power and authority to sign the names of the undersigned as directors of Chicago Title Corporation to the Registration Statement to be filed with the Securities and Exchange Commission and any amendment, supplement or update thereto in respect of such shares of Common Stock of Chicago Title Corporation and to any documents filed as part of or in connection with said Registration Statement or amendments, supplements or updates; and the undersigned do hereby ratify and confirm all that said attorneys-in-fact and agents shall do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned have subscribed these presents on the 26th day of January, 1999.
/s/ Norman R Bobins /s/ John J. Burns, Jr. ----------------------------------- ----------------------------------------- Norman R Bobins John J. Burns, Jr. /s/ Peter H. Dailey /s/ Robert M. Hart ----------------------------------- ----------------------------------------- Peter H. Dailey Robert M. Hart /s/ Philip G. Heasley /s/ Allan P. Kirby, Jr. ----------------------------------- ----------------------------------------- Philip G. Heasley Allan P. Kirby, Jr. /s/ M. Leanne Lachman /s/ William K. Lavin ----------------------------------- ----------------------------------------- M. Leanne Lachman William K. Lavin /s/ Lawrence F. Levy /s/ Margaret P. MacKimm ----------------------------------- ----------------------------------------- Lawrence F. Levy Margaret P. MacKimm /s/ Langdon D. Neal /s/ Alan N. Prince ----------------------------------- ----------------------------------------- Langdon D. Neal Alan N. Prince /s/ Richard P. Toft ----------------------------------------- Richard P. Toft
EX-99 6 1999 ANNUAL INCENTIVE PLAN 1 Exhibit 99 CHICAGO TITLE CORPORATION AND SUBSIDIARIES 1999 ANNUAL INCENTIVE PLAN 1. ESTABLISHMENT OF PLAN. The CHICAGO TITLE CORPORATION AND SUBSIDIARIES 1999 ANNUAL INCENTIVE PLAN (Plan), an unfunded incentive compensation plan, is hereby established effective January 1, 1999 by CHICAGO TITLE CORPORATION (Company) for certain employees of itself and its corporate affiliates. The Plan shall continue from year to year, except as otherwise amended or terminated by the Company. 2. AFFILIATED COMPANIES. The Company may, at its option, authorize and designate any of its affiliated corporations to participate in the Plan and, in that event, any such corporation shall execute a written statement of adoption, consenting to the terms and conditions of the Plan. Each participating company (including the Company) shall be referred to as an "Employer" hereunder. 3. ELIGIBILITY - SELECTION BY PRESIDENT AND CHIEF EXECUTIVE OFFICER. The Plan is intended to provide incentive to select personnel of Employers who are able to contribute to the achievement of the Company's and its affiliates' primary business objectives and to reward superior performance and results. The President and Chief Executive Officer of the Company shall select and determine those persons who shall be eligible to participate in the Plan other than the President and Chief Executive Officer of the Company and his direct reports. The eligibility of the President and the Chief Executive Officer for the Plan participation is authorized by his employment agreement with Chicago Title Corporation. The eligibility of the direct reports of the President shall be determined by the Compensation Committee of the Board of Directors of the Company. 4. INCENTIVE OPPORTUNITIES - PAYMENT OF INCENTIVES. A. An incentive opportunity shall be established for each Plan participant expressed both as a percentage of such participant's annual salary earned during the Plan year and as a dollar amount (hereinafter "Incentive Factor"). Incentive Factors shall be determined by the President and Chief Executive Officer for participants other than the President and Chief Executive Officer and his direct reports. Subject to contractual provisions, if any, the President and Chief Executive Officer shall make recommendations to the Compensation Committee regarding incentive opportunities for his direct reports and the Committee shall review and finally approve such recommendations. The Incentive Factor for the President and Chief Executive Officer shall be as provided in his employment agreement. Participants shall be notified in writing, by the end of February of each Plan year, with respect to their Incentive Factor and the portion that is subject to financial performance and the portion that is subject to individual objectives. The precise opportunity keyed to corporate financial performance will be as described below. 2 B. Generally, a portion of each participant's Incentive Factor shall be based on the attainment or non-attainment of special objectives crafted on an individual or group basis. Such special objectives shall be in writing and shall generally constitute from one-third to one-half of the maximum incentive opportunity. For the President and Chief Executive Officer, the weighting for special objectives shall be one-third of his incentive opportunity, unless in a given year he and the Chairman of the Compensation Committee of the Board of Directors of Chicago Title Corporation mutually agree to a different relative weighting. C. A participant's incentive at the time of distribution shall be payable as follows: i. Distributions up to and including $20,000 shall be payable in cash; ii. Distributions in excess of $20,000 and up to and including $120,000 shall be paid 80% in cash and 20% in Chicago Title Corporation stock; provided that, the amount payable in Chicago Title Corporation stock shall be reduced dollar for dollar by the participant's investment in the Chicago Title Corporation Employee Stock Purchase Plan for the Plan year just completed; iii. Distributions in excess of $120,000 shall be paid 75% in cash and 25% in Chicago Title Corporation stock; provided that, if the participant's credit for investments in the Employee Stock Purchase Plan has not been exhausted as provided in subparagraph (ii)(a) above, the balance of such credit shall reduce the required payment in Chicago Title Corporation stock in this subparagraph. 5. ADMINISTRATION OF PLAN. The Plan shall be administered by, or under the direction of, the Compensation Committee of the Board of Chicago Title (the "Committee"). The Committee's interpretation of the Plan or any awards thereunder, including the determination of ROE, Net Income and Beginning Shareholders' Equity for any Plan Year and any adjustments thereto, shall be final and binding on all parties concerned. The Committee shall have authority, subject to the provisions of the Plan, to establish, adopt and revise such rules, regulations, guidelines, forms of agreement and instruments relating to the Plan as it may deem necessary or advisable for the administration of the Plan. The Committee may make such changes or adjustments to Net Income and Beginning Shareholders' Equity for any Plan Year as it may deem advisable in order to adjust for the effect upon Net Income and Shareholders' Equity of transactions of an extraordinary, unusual or non-recurring nature, including changes in reserving practices or rates, releases of reserves, or any change in accounting rules or practices, retroactive restatement of earnings or the like. All decisions as to participation, levels of responsibility and other matters made by the Committee, the President and Chief Executive Officer of the Company and administering officers, as the case may be, shall be final. The President and Chief Executive Officer is authorized to make discretionary decisions regarding eligibility, participation, and distributions regarding an individual participant as shall be equitable for that participant. The Company shall prepare and maintain a schedule of plan participants showing the mix between financial and special 2 3 objectives and shall provide a copy of such schedule to the Compensation Committee on at least an annual basis. 6. CALCULATION OF BENEFITS - DEFINITIONS. In calculating benefits payable under the Plan, the following definitions shall apply: A. "Rate of Return on Equity," or "ROE," shall mean the percentage calculated by dividing the Company's Net Income for the relevant calendar year by Beginning Stockholders' Equity for such year. "Net Income" shall mean the audited consolidated after-tax net income of the Company. "Shareholder's Equity" shall mean the total assets of the Company and its subsidiaries less total liabilities of the Company and its subsidiaries, all as shown on a consolidated balance sheet. "Beginning Shareholders' Equity" shall mean the Shareholders' Equity on the first day of each calendar year, based upon the publicly reported Shareholders' Equity as of the end of the immediately preceding year end. The calculation of ROE shall be subject to change or adjustment as provided in Paragraph 5 above. B. "Executives" shall mean the President and Chief Executive Officer and any participants approved by the President. An "Executives" eligibility will be determined, in part, on whether the officer has the potential to have a significant impact on both the level and volatility of the Company's return on equity. C. "Managers/Professionals" shall mean any participants not qualifying as Executives. D. "Incentive Factor" shall have the meaning set forth in section 4A above. 7. CALCULATION OF BENEFITS - PROCEDURE. The incentive opportunity for Plan participation based on financial performance shall be determined as follows: A. Financial incentive opportunities for Managers/Professionals and Executives are as described below in Paragraphs B and C, respectively. - More than maximum achievement will simply pay out at the maximum provided. - All calculations of benefits are subject to such additional modifications of accounting results from operations of the Company as the Company may, in its sole and absolute discretion, deem appropriate. B. The steps in calculating a manager's incentive opportunity based on financial performance are as follows: 3 4 Step 1 Determine the assigned percentage of base salary (Incentive Factor) against which a multiplier is to be applied to produce the incentive payable. Step 2 Adjust the Incentive Factor by multiplying that amount by a number determined as follows: i. for ROE of 8% or below multiply by 0; ii. for ROE of 10% multiply by .33; iii. for ROE between 8% and 10% multiply by 1/2 of the interpolated number between 0 and .33; iv. for ROE of 14% multiply by 1.0; v. for ROE between 10% and 14% multiply by the interpolated number between .33 and 1.0; vi. for ROE of 30% or more multiply by 1.5. vii. for ROE between 14% and 30% multiply by the interpolated number between 1.0 and 1.5. Step 3 SUMMARY: ROE MULTIPLIER (of Incentive Factor) Under 8% 0 INTERPOLATE BETWEEN Between 8% to 10% 0 and .33 and take one-half of the result. at 10% .33 INTERPOLATE BETWEEN Between 10% - 14% .33 and 1.0 at 14% 1.0 INTERPOLATE BETWEEN Between 14% - 30% 1.0 and 1.5 30% and over 1.5 4 5 C. The steps in calculating an Executive's incentive opportunity based on financial performance are as follows: Step 1 Determine the assigned percentage of base salary (Incentive Factor) against which a multiplier is to be applied to produce the incentive payable. Step 2 Adjust the Incentive Factor as follows: i. Multiply by O for any ROE below 11%. ii. Multiply by .5 for ROE at 11% and multiply by 1.0 for ROE at 14%. Interpolate for any ROE between those amounts. iii. Multiply by 1.0 for ROE at 14% and multiply by 2.5 for ROE at 30% or greater. Interpolate for any ROE between 14% and 30%. Step 3 SUMMARY: ROE MULTIPLIER (of incentive factor) 0% - 10.99% 0 11% - 14% .5 Interpolate 1.0 14% - 30% or more 1.0 Interpolate 2.5 Interpolated Multiplier shall be calculated to four decimal points. Step 4 Make all payouts in the combination of stock and cash specified by Section 4C up to the payout attributable to a multiplier of 1.5. Payments attributable to a multiplier in excess of 1.5 shall be paid in common stock of the Company with a three year vesting schedule (on a monthly pro rata basis) and in accordance with procedures to be promulgated by the administrators of the Plan; provided that, all rights to stock not yet vested shall be forfeited upon any termination for cause or other termination of employment prior to payment, except for bona fide retirement after age 60 from the Company, and employment in any business competitive with the Company and its Corporate affiliates and; provided further, 100% vesting shall apply in cases of death, or permanent and total disability. 5 6 8. PAYOUT OF BENEFITS. The distribution of benefits under the Plan shall be governed by the following provisions: A. The distribution of incentive pay amounts shall be made in cash and/or in stock, as appropriate, as soon as possible after audited results are available for the relevant year subject to applicable vesting restrictions. B. Select examples or payment procedures may be set forth as Exhibits from time to time at the Company's discretion. C. The Company shall have the right to deduct from all Plan distributions any taxes required by law to be withheld with respect to such payments. D. ASSIGNMENTS. Plan benefits may not be assigned or transferred by a participant without the prior written consent of the Company. 9. NOT CONTRACT OF EMPLOYMENT. Nothing in this Plan shall be constructed as providing to a participant any contractual right to continued employment or any special rights with respect to employment with an Employer. 10. NO ACCRUED BENEFIT. The Company intends that the subject Plan be subject at all times to final audited results of operation of the Company at the end of a calendar year and that payments be in the nature of a bonus made at its discretion. Consequently, there shall be no accrual of benefits or pro-rata entitlement prior to the actual date of payment except as set forth in paragraph 12 below. 11. PLAN AMENDMENT - TERMINATION. The Plan may be amended or terminated at any time by action of the Board of Directors. In the event of Plan termination, no benefits shall be paid under the Plan. 12. EARLY DISTRIBUTION - PRORATION. In the event of death, permanent total disability or retirement of a participant prior to the payment of Plan benefits, Plan benefits for the participant shall be calculated at the end of the year in which such event occurs using actual results for the year with benefits to be prorated to the date of such event. 13. SUBSEQUENT CYCLES. The Plan shall remain in effect for the calender year of 1999 and succeeding calendar years unless amended or terminated by the Company. 14. REPORTS. The Company intends but is not obligated to provide periodic reports to plan participants of the Company's financial performance relative to rates of return on equity. 6 7 15. BOARD APPROVAL. This Plan is subject to approval of the Board of Directors of the Company. Executed this 22nd day of February 1999 to evidence the adoption of the Chicago Title Corporation and Subsidiaries 1999 Annual Incentive Plan. CHICAGO TITLE CORPORATION By: /s/ John Rau ___________________________ President Each participating Employer under the Plan hereby evidences its adoption and acceptance of the Plan by signature set beside its name:
Participating Employer Date of Execution Executing Officer Chicago Title and Trust Company 2/22/99 /s/ Thomas J. Adams, VP _________________ __________________________ Chicago Title Insurance Company 2/22/99 /s/ William L. Greene, VP _________________ __________________________ Ticor Title Insurance Company 2/22/99 /s/ Kenneth C. Ferraro, VP _________________ __________________________ Chicago Title Company 2/22/99 /s/ Thomas J. Adams, VP _________________ __________________________
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