Exhibit 10(g)
ALFA CORPORATION
2005 AMENDED AND RESTATED STOCK
INCENTIVE PLAN
1. Purpose of Plan.
The purpose of this Amended and
Restated Stock Incentive Plan is to promote the interests of Alfa
Corporation (the “Company”) and its shareholders by
encouraging selected officers and key employees of the Alfa Mutual
Insurance Company (“Mutual”) and the Company who
provide substantive management, administrative, sales and other
employment services to the Company or Mutual to invest in or
acquire the Company’s capital stock (the “Stock”
as herein defined), thereby giving them as shareholders an
increased personal interest in the Company’s profits and its
continuing growth, development and financial success, providing
them an additional incentive in their efforts on behalf of the
Company and Mutual, and strengthening their desire to continue to
provide management, sales and other employment services to the
Company and Mutual. So long as the Company, Mutual and other
affiliated insurance companies mutually participate in the pooled
premium revenues of such companies, employee services to either the
Company or Mutual are considered to be for the benefit of both the
Company and Mutual. This Plan amends and restates the
Company’s 1993 Stock Incentive Plan and the Company’s
Amended and Restated Stock Incentive Plan effective January 1,
2001.
2. Definitions.
When used herein, except where the
context clearly indicates otherwise, the following terms have the
meaning set forth below:
(a) “ Act ” means
the Securities Exchange Act of 1934, as in effect from time to
time.
(b) “ Award ”
means a SAR, Restricted Share, Restricted Share Unit, or
Performance Share.
(c) “ Award Agreement
” means a written or electronic agreement executed on behalf
of the Company by the Chief Executive Officer (or another officer
designated by the Committee) and delivered to the Grantee and
containing terms and provisions of Awards, consistent with the
Plan, as the Committee may approve. Such agreement may, but is not
required to be, executed by a Grantee.
(d) “ Base Price
” means the initial value of a SAR as established by the
Committee on the Date of Grant.
(e) “ Board ”
means the Board of Directors of Alfa Corporation.
(f) “ Code ”
means the Internal Revenue Code of 1986 as amended or recodified
from time to time.
(g) “ Committee ”
means the Compensation Committee of the Board or any other standing
or special committee that may be established and appointed by the
Board for the purpose of administering this Plan and performing
such other duties as are contemplated to be performed by the
Committee as herein provided. If the Board shall act as a committee
of the
whole in any matter under this Plan, either
because of its inherent discretion to do so or because no such
Committee then exists, then, in that event, references herein to
“Committee” shall be deemed to include the Board of
Directors acting in such a capacity.
(h) “ Company ”
means Alfa Corporation and includes any corporation which is or may
become a parent or subsidiary (as defined in Section 424(e) and (f)
of the Code) of Alfa Corporation.
(i) “ Date of Grant
” means the date specified by the Committee on which a grant
of a Stock Option or Award shall become effective (which date shall
not be earlier than the date on which the Committee takes action
with respect thereto).
(j) “ Dividend
Equivalents ” means the nonforfeitable right of a
Grantee, if such right is explicitly granted in connection with
each share of Stock subject to a Stock Option or an Award, to an
amount equal to the cash dividends paid on a share of Stock related
to such Stock Option or Award as specified in the Plan and in the
Stock Option Agreement or Award Agreement.
(k) “ Fair Market Value
” means, with respect to a share of Stock, whichever of the
following is applicable:
(i) if the Stock is then traded
either in the over-the-counter market or on an exchange, the last
sales price per share of Stock as reported at the close of business
on the date of grant by the NASDAQ National Market System or by the
principal exchange on which the Stock is traded, or by any other
responsible reporting service selected by the Committee, or if
there were no transactions in the Stock on such date, then the last
preceding date on which transactions took place, or
(ii) if the Stock is not then
actively traded either in the over-the-counter market or on an
exchange, in such manner as the Committee, in its sole discretion,
may determine by a good faith effort.
Notwithstanding the foregoing, the Committee may
determine the Fair Market Value in any other manner as is permitted
or required by applicable law or regulations.
(l) “ Grantee ”
means a person who is eligible to participate in this Plan and has
been granted one or more Stock Options or Awards under this
Plan.
(m) “ Incentive Stock
Option ” means an option to purchase Stock which
qualifies as an incentive stock option under Section 422 of the
Code and which is designated by the Committee to be an Incentive
Stock Option.
(n) “ Mutual ”
means Alfa Mutual Insurance Company.
(o) “ Nonqualified Stock
Option ” means an option to purchase Stock which is
designated as such or which does not qualify as an Incentive Stock
Option.
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(p) “ Option Price
” means the purchase price per share of Stock payable on
exercise of a Stock Option.
(q) “ Performance Share
” means a contractual right awarded pursuant to Section 10 of
this Plan to receive a share of Stock (or its value in cash) that
is forfeitable by the Grantee until the achievement of
pre-established objectives over an established period.
(r) “ Plan ”
means the Alfa Corporation 2005 Amended and Restated Stock
Incentive Plan as contained herein and any amendments hereto or
restatements hereof.
(s) “ Prior Plans
” means the Alfa Corporation Amended and Restated Stock
Incentive Plan, effective January 1, 2001, and the 1993 Stock
Incentive Plan.
(t) “ Restricted Share
” means an award of a share of Stock made pursuant to Section
9 of this Plan that is forfeitable by the Grantee until the
completion of a specified period of future service, the achievement
of pre-established performance objectives or until otherwise
determined by the Committee.
(u) “ Restricted Share
Unit ” means a contractual right awarded pursuant to
Section 9 of this Plan to receive a share of Stock (or its value in
cash) that is forfeitable by the Grantee until the completion of a
specified period of future service, the achievement of
pre-established performance objectives or until otherwise
determined by the Committee.
(v) “ SAR ” means
a stock appreciation right granted under Section 8 of the Plan in
respect of one or more shares of Stock that entitles a Grantee to
receive, in cash or shares of Stock, at the discretion of the
Committee, an amount equal to the excess, if any, of the Fair
Market Value of a share of Stock on the date the SAR is exercised
over the Base Price.
(w) “ Stock ”
means the Common Stock, $1.00 par value, of the Company.
(w) “ Stock Option
” (unless further qualified) means either an Incentive Stock
Option or a Nonqualified Stock Option granted under Sections 6 and
7 of the Plan.
(y) “ Stock Option
Agreement ” means the agreement entered into between the
Company and any Grantee of a Stock Option under this Plan, defining
the terms, conditions, restrictions, rights and privileges with
respect to such Stock Options.
(z) “ Ten Percent
Shareholder ” means a person who owns, directly or
indirectly through the stock attribution rules of Section 424(d) of
the Code, stock possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the
Company.
3. Eligibility and
Participation. Officers
and employees of either Mutual or the Company or other persons who
are performing or who have been employed to perform services of
significant importance to the management, operation or development
of the Company or Mutual are eligible to participate in this Plan.
Eligible employees may include employees who are also officers of
the Company and members of the Board. Nonemployee members of the
Board shall not be eligible to participate in this Plan.
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Stock Options and Awards may be
granted to those persons eligible to participate in the Plan at
such times and upon such terms and conditions as the Committee, in
its sole discretion, shall determine.
4. Shares Subject to the
Plan. (a) Total Number
of Shares. A maximum of
Three Million Eight Hundred Thousand (3,800,000) shares of Stock
may be issued under the Plan. The shares authorized by this Plan
shall not include shares previously authorized and made the subject
of grants of options under the Prior Plans which shares shall
continue to be subject to issuance and shall be governed by the
terms of the Prior Plans. Shares issuable under the Plan may
include authorized but unissued or reacquired shares of Stock.
Notwithstanding the foregoing, the following rules shall apply for
purposes of the determination of the number of Shares available for
grant under the Plan:
(i) When a SAR is granted in tandem
with a Stock Option, so that only one may be exercised with the
other terminating upon such exercise, the number of shares subject
to the tandem Stock Option and SAR shall only be taken into account
once (and not as to both awards) for purposes of this limit or any
other limit set forth in this Plan.
(ii) Any shares of Stock which are
subject to Stock Options or Awards under this Plan, but not the
Prior Plans, that are terminated, unexercised, forfeited or
surrendered or that expire for any reason (including, but not
limited to, shares of Stock tendered to exercise outstanding Stock
Options or shares tendered or withheld for taxes under any Stock
Option or Award under this Plan) shall again be available for
issuance under the Plan.
(iii) SARs, Restricted Stock Units
and Performance Shares that can only be settled in cash shall not
result in a charge against the aggregate number of shares available
for issuance. For purposes of determining the maximum number of
shares available for issuance under the Plan, SARs, Restricted
Stock Units and Performance Shares that may be settled in shares of
Stock shall cause the available reserve to be reduced by the
maximum number of shares of Stock that may be issued in connection
with the Award. Notwithstanding the foregoing, any shares not
actually issued at exercise or settlement shall again be available
for issuance under the Plan.
(iv) The shares available for
issuance under the Plan shall be subject to adjustment as provided
in Section 13 of this Plan.
(b) Individual Limits.
Notwithstanding anything in this Plan to the contrary, and subject
to adjustment as provided in Section 13 of this Plan, in any
calendar year no Grantee shall be granted under this Plan (i) Stock
Options or SARs for more than 200,000 shares of Stock or (ii) any
Restricted Shares, Restricted Share Units or Performance Shares
intended to be performance based compensation under Section 11 for
more than 40,000 shares of Stock. The purpose of the limits set
forth in this Section 4(b) is to comply with Section 162(m) of the
Code and not to create a presumption that any person is entitled to
a grant of a Stock Option or Award for the maximum amount
stated.
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5. Administration.
(a) Powers of the Committee.
The Committee shall administer the Plan and shall have all powers
necessary or appropriate to enable it to properly administer the
Plan, including but not limited to the following powers:
(i) To grant Incentive Stock
Options, Nonqualified Stock Options and Awards under the Plan,
including the power to determine those eligible to receive Stock
Options or Awards, the number of shares of Stock subject to such
Stock Options or Awards, and the terms and conditions of Stock
Option Agreements and Award Agreements (which shall include the
terms and conditions of this Plan but may also include other terms
and conditions not inconsistent with the Plan);
(ii) To accelerate the exercise or
settlement of any Stock Option or Award;
(iii) To cancel any Stock Option or
Award awarded under the Plan (1) if a Grantee (while an officer or
employee of the Company or Mutual or while otherwise employed or
engaged, contractually or otherwise, to perform services in
accordance with Section 3 of this Plan) conducts or conducted
himself in a manner which the Committee determines to be inimical
to the best interests of the Company, including, but not limited
to, a Grantee’s admission of guilt or conviction of any crime
resulting from dishonesty in connection with the affairs of the
Company, Mutual, or any affiliate thereof, a finding by the
Committee that the Grantee has engaged in any act of fraud or any
fraudulent activity (whether or not admitted to by the Grantee or
prosecuted by the Company) or a finding by the Committee that the
Grantee has conducted the affairs of the Company, Mutual, or any
affiliate thereof, in his or her own interests and contrary to the
interests of the Company, Mutual, or any affiliate thereof, or (2)
if a Grantee’s employment or engagement, contractual or
otherwise, is terminated by the Company or Mutual for
“cause,” which for this purpose shall be determined by
the Committee and shall mean, unless defined otherwise in the Stock
Option Agreement or Award Agreement, (x) the engaging by the
Grantee in willful, reckless or grossly negligent misconduct which
is determined by the Committee to be materially injurious to the
Company, Mutual, or any affiliate thereof, monetarily or otherwise,
or (y) the Grantee’s pleading guilty to or conviction of a
felony;
(iv) To construe and interpret the
Plan, to establish rules and regulations relating to the
interpretation and administration of the Plan, to delegate
administrative responsibilities as it deems proper, and to perform
all other acts it deems necessary to carry out the purpose and
intent of the Plan; and
(v) To correct any defect, supply
any omission or reconcile any inconsistency in the Plan or in any
Stock Option or Award granted pursuant to the Plan in such a manner
and to the extent it deems necessary or appropriate.
(b) Designation of Stock
Options. At the time of the grant of a Stock Option under this
Plan, the Committee shall designate whether it is an Incentive
Stock Option or a Nonqualified Stock Option, provided, however,
that if it is not otherwise designated, it shall be treated as a
Nonqualified Stock Option.
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(c) Conduct of Committee
Business. A majority of the Committee shall constitute a
quorum; the action of a majority of members of the Committee
present at any meeting held in any manner provided in the bylaws of
the Company (e.g., in person or by telephone) at which a quorum is
present or actions unanimously adopted in writing without the
holding of a meeting shall be the acts of the Committee. Any
decision made or action taken by the Committee arising out of or in
connection with the interpretation and administration of the Plan
shall be final and conclusive, subject only to review by the Board,
in which event the determination of the Board shall be final and
conclusive.
(d) Discretion of the
Committee. The Committee’s determinations under the Plan
(including, without limitation, its determinations of the persons
to receive grants; the number of shares subject to each Stock
Option or Award; and the form, terms and provisions of such grants)
need not be uniform and may be made selectively among persons who
receive or are eligible to receive grants under the Plan, whether
or not such persons are similarly situated.
6. Terms and Conditions of Stock
Options. Each Stock
Option granted under the Plan shall be evidenced by a written Stock
Option Agreement, consistent with the Plan, in a form approved by
the Committee. Such agreement shall be subject to or shall contain
the following provisions and shall contain such other provisions
not inconsistent with the terms of this Plan as the Committee may
determine:
(a) Number of Options
Granted. The agreement shall specify whether the grant is of an
Incentive Stock Option or a Nonqualified Stock Option and the
number of shares subject to the Stock Option. Unless determined
otherwise by the Committee, Stock Options will not be granted with
Dividend Equivalents.
(b) Price. The agreement
shall specify the Option Price which shall not be less than 100% of
the Fair Market Value per share of Stock on the Date of
Grant.
(c) Period. The Committee
shall determine the period during which a Stock Option may be
exercised; however, subject to Section 12, no Stock Option shall be
exercisable after ten years from the Date of Grant.
(d) Installment Exercise.
Subject to Section 12, the Stock Option Agreement may (but need
not) provide that the right to exercise a Stock Option shall vest
or accrue in such incremental installments over such a period of
time as shall be designated by the granting authority.
(e) Manner of Exercise. A
Stock Option, or any portion thereof, shall be exercised by
delivery to the Company of a written notice of exercise by the
Grantee in such form as the Committee shall reasonably require and
payment by the Grantee of the full Option Price.
(f) Payment. The price of an
exercised Stock Option, or any portion thereof, shall be paid in
any of the following methods as determined by the Committee at the
time of the grant of the Stock Option and as set forth or referred
to in the Stock Option Agreement:
(i) in cash, or by check, bank draft
or money order payable to the order of the Company (all of which
will be accepted as full payment subject to collection);
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(ii) in the sole discretion of the
Committee, by the delivery of certificates (duly endorsed for
transfer) or by a duly authorized attestation regarding the
delivery of such certificates acceptable to the Committee for
shares of Stock having an aggregate Fair Market Value equal to the
Option Price of the Shares being paid in such medium of payment
provided such shares have been held for at least six
months;
(iii) in the sole discretion of the
Committee, by any combination of (i) and (ii) above; or
(iv) to the extent permitted by law,
a broker assisted cashless exercise
7. Special Rules for Incentive
Stock Options. Notwithstanding any other provision of the Plan,
in the case of any Stock Option granted under the Plan which is
designated as an Incentive Stock Option, the provisions set forth
in this Section 7 will apply. References to Section 422 of the Code
shall mean Section 422, or any successor section, as it may from
time to time be amended.
(a) Employment by the
Company. No Incentive Stock Option may be granted to a Grantee
who is not determined to be an “employee” of the
Company (which may include “dual employment” status
with both the Company and Mutual) within the meaning of Section 422
of the Code.
(b) Options Granted at Fair
Market Value. Incentive Stock Options shall be granted at
Option Prices which are not less than fair market value as defined
in Section 422 of the Code (which includes “Fair Market
Value”).
(c) Special Rules for 10%
Shareholders. No Incentive Stock Option shall be granted to an
employee who, at the time of grant, is a Ten Percent Shareholder,
unless the Option Price is at least 110% of the Fair Market Value
of the Stock subject to the Stock Option and such Stock Option, by
its terms, is not exercisable after the expiration of 5 years from
the Date of Grant.
(d) Options for Stock Having Fair
Market Value in Excess of $100,000. No Incentive Stock Option
shall be granted to an employee which, if aggregated with all other
Incentive Stock Options (within the meaning of Code Section 422,
whether or not issued under this Plan) would result in Stock having
a Fair Market Value (determined at the Date of Grant of each Stock
Option) in excess of $100,000 (or such larger individual employee
maximum amount as may be in effect from time to time under the Code
at the time the Incentive Stock Option is granted) becoming first
exercisable during any one calendar year.
(e) Notification of Disposition
of Shares within Certain Time Periods. Any Grantee who disposes
of shares of Stock transferred to him pursuant to the exercise of
an Incentive Stock Option either (i) within two years after the
Date of Grant of the Incentive Stock Option under which the Stock
was transferred to him or (ii) within one year after the transfer
of such shares to the Grantee shall notify the Company of such
disposition and of the amount realized upon such
disposition.
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(f) Compliance with Other Code
Requirements Applicable to Incentive Stock Options. Incentive
Stock Options shall comply with the grant terms required of such
Stock Options as provided in Section 422 of the Code.
8. SARs. The Committee may from time to time authorize
grants to any Grantee of SARs upon such terms and conditions as the
Committee may determine in accordance with the provisions set forth
below.
(a) Each grant shall specify the
number of shares of Stock to which it pertains, subject to the
limitations set forth in Section 4 of this Plan. Unless determined
otherwise by the Committee, SARs will not be granted with Dividend
Equivalents.
(b) Each grant shall specify the
Base Price, which unless determined otherwise by the Committee,
shall not be less than 100% of the Fair Market Value on the Date of
Grant.
(c) SARs may be granted in tandem
with a Stock Option, or may be granted on a freestanding basis, not
related to any Stock Option.
(d) Subject to Section 12, each
grant shall specify the required period or periods (if any) of
service by the Grantee with the Company and/or any other conditions
to be satisfied before the SARs or installments thereof shall
become exercisable.
(e) Subject to Section 12 and except
as otherwise provided in an Award Agreement, no SAR shall be
exercisable more than 10 years from the Date of Grant.
(f) A Grantee may exercise a SAR in
whole or in part at any time and from time to time during the
period within which the SAR may be exercised. A Grantee shall give
written notice to the Company specifying the number of SARs to be
exercised. Upon exercise of a SAR, the Grantee shall be entitled to
receive payment, at the discretion of the Committee, in cash, in
shares of Stock, or in a combination thereof.
(g) Each grant shall be evidenced by
an Award Agreement.
9. Restric
