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EXHIBIT 4.3
THE MIDLAND COMPANY
AGENT STOCK ACQUISITION PROGRAM
1. PURPOSE.
The purpose of
the Agent Stock Acquisition Program (the "Program") is to
provide persons performing insurance agency
services for The Midland Company
("Midland") or any of its insurance
subsidiaries or affiliates (such
subsidiaries and affiliates and Midland are
hereinafter collectively referred to
as "Company") performance-related
incentives to achieve long-range performance
goals and to enable such persons to
participate in the long-term growth and
financial success of the Company. The
Program seeks to accomplish this purpose
by permitting eligible agencies to purchase
restricted shares of Midland's
Common Stock (the "Common Stock") at
below-market prices. On January 29, 2004,
the Board of Directors of The Midland
Company approved the Program, subject to
the shareholder approval requirements of
NASD Rule 4350(i).
2.
ELIGIBILITY.
This Program is
available to all Eligible Agencies. "Eligible Agencies" are
insurance agencies and agents (each an
"Agency") that have a direct contract
with Company to promote and sell the
Company's lines of insurance that have: (1)
earned the threshold contingent commission
established by the Committee (as
defined herein) for the Accounting Period
(as defined herein) immediately
preceding the applicable Purchase Date (as
defined herein); and (2) been
selected for participation by such
Committee, in its sole discretion.
3. EFFECTIVE
DATE.
This Program
shall become effective upon approval by the affirmative vote
of a majority of the votes cast at a
shareholders' meeting of the Company prior
to December 31, 2004. If shareholder
approval is not received by such date, the
Program shall be null and void.
4.
ADMINISTRATION OF THE PROGRAM.
The Program
shall be administered by a committee consisting of not less
than two (2) persons (the "Committee"), the
members of which shall be designated
by the Chief Executive Officer and/or Chief
Financial Officer of Midland. The
Committee may amend, suspend, discontinue
or terminate the Program or any
portion thereof at any time and for any
reason, including a reason related to
the necessity or advisability to register
or qualify shares of Common Stock
issued under the Program upon any
securities exchange or under any state or
federal law; provided, however, that no
amendment shall be made without
requisite shareholder or other approval
under applicable law or NASD regulation
or without the approval of the Board of
Directors if such amendment increases
the number of shares of Common Stock
available under the Program.
The Committee
has the sole power and authority to: (i) interpret and
administer the Program and any instrument
or agreement entered into under the
Program; (ii) establish such rules and
regulations and appoint such agents and
delegate such authority as it shall deem
appropriate for the proper
administration of the Program; (iii)
establish the threshold contingent
commission for Eligible Agencies and the
amount of contingent commission
Eligible Agencies must receive in shares of
Common Stock to participate in the
Program; and (iv) make any other
determination and take any other action that
the Committee deems necessary or desirable
for administration of the Program,
including, but not limited to, the waiver
of any Agency eligibility requirement,
in its sole discretion. Decisions of the
Committee shall be final, conclusive
and binding upon all persons, including
Company, any participant and any other
Agency. A majority of the members of the
Committee may determine its actions and
fix the time and place of its meetings.
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5.
PARTICIPATION.
Following the
close of each Accounting Period, the Company will provide an
election form along with any other
documents, agreements or instruments the
Company deems necessary or advisable (the
"Election Form") to each Eligible
Agency. The "Accounting Period" will be
monthly, quarterly or annually
consistent with the contractual arrangement
for payment of contingent
commissions between the Eligible Agent and
Company. The Election Form will allow
such Agency to decide how much of its
contingent commission it wants to receive
in Common Stock and how much it wants to
receive in cash.
The Company will
not issue fractional shares under any circumstances. Any
portion of the Eligible Agency's contingent
commission not applied to the
purchase of whole shares will be paid in
cash directly to the Eligible Agency.
To participate in the Program, the Eligible
Agency must elect to receive a
minimum dollar amount of its contingent
commission in shares of Common Stock;
such minimum dollar amount to be
established by the Committee, in its sole
discretion. The Company will pay all costs
of the Program. Participants (as
herein defined) can purchase Midland Common
Stock without the payment of any
brokerage commission or other charges.
The Eligible
Agency must complete the Election Form and return it to the
Committee by the due date determined by the
Committee and communicated to the
Eligible Agent ("Due Date") to participate
in the Program for an Accounting
Period. Eligible Agencies are under no
obligation to participate in the Program.
If an Eligible Agency chooses not to
participate or if Company does not receive
the Election Form by the Due Date, it will
receive its contingent commission in
cash.
6. PURCHASE
PRICE.
Eligible
Agencies can make purchases under the Program on the Purchase
Date. "Purchase Date" means the first day
on which sh
