Exhibit 10.1
------------
THE EXECUTIVES AND DIRECTORS
OPTION IT PLAN
Adoption Agreement
THIS AGREEMENT is made the 1st day of November, 2002, by
Employers Mutual Casualty Company and its
Affiliates and Subsidiaries (the
"Employer"), having its principal office at
717 Mulberry, Des
Moines, IA
50303 and EXECUTIVE BENEFIT SERVICES, INC.
(the "Sponsor"), having its
principal office at 434 Fayetteville
Street, Suite 1160, Raleigh, North
Carolina 27601.
W I T N E S S E T H:
WHEREAS, the Sponsor has established The Executives and
Directors
Option It Plan; and
WHEREAS, the Employer desires to adopt the OPTION IT as a
nonqualified option plan, for the benefit
of the selected employees and other
individuals providing services to the
Employer or related entities;
NOW, THEREFORE, the Employer hereby adopts the OPTION IT in
accordance with the terms and conditions
set forth in this Adoption
Agreement:
ARTICLE I
Terms used in this Adoption Agreement shall have the same
meaning
as in the OPTION IT document, unless some
other meaning is expressly herein
set forth. The Employer hereby represents and
warrants that the OPTION IT
has been adopted by the Employer upon
proper authorization and the Employer
hereby elects to adopt the OPTION IT for
the benefit of its Participants as
referred to in the OPTION IT. By the execution of this Adoption
Agreement,
the Employer hereby agrees to be bound by
the terms of the OPTION IT.
This Adoption Agreement may only be used in connection with The
Executives and Directors Option It Plan.
The Sponsor will
inform the
Employer of any amendments to the OPTION IT
or of the discontinuance or
abandonment of the OPTION IT. For questions concerning the
OPTION IT, the
Employer may call the Sponsor at (919)
833-1042.
ARTICLE II
The Employer hereby makes the following designations or
elections
for the purpose of the OPTION IT [Section
references below correspond to
Section references in the OPTION IT
document]:
<PAGE>
Participating Employer(s): As of the Effective Date, the
following Participating Employer(s) are
parties to the Plan [list all
employer-parties, including the
Employer]:
Name of Employer
Address Telephone
No.
EIN
------------------------- -------------------
------------- ----------
Employers Mutual Casualty
Company and Its Affiliates P.O. Box 712
(515) 280-2511
42-0234980
and Subsidiaries
Des
Moines, IA 50303
2.0
Administration of the OPTION IT: The OPTION IT
Administrator
shall be [check desired option]:
___ (a)
Board of
Directors.
___ (b)
Committee.
___ (c)
Employer.
___ (d)
Board of
Trustees.
XX
(e) Other:
Board or person or
persons appointed by the
Board.
3.0
Effective Date: [check
desired option]:
___ (a)
This is a
newly-established OPTION IT, and the
Effective Date of the OPTION IT is _______________.
XX
(b) This
is an amendment and restatement of OPTION IT
with an effective date of January 1, 2001, and the
Effective Date of this amended and restated OPTION IT
is November 1, 2002.
This is amendment number 3.
<PAGE>
6.1
Option Grant: The
following types of Option grants may be
made under the
OPTION IT [check desired option(s)]:
XX
(a)
Employer Incentive Grants. The Administrator in its
sole and absolute discretion may make Employer
Incentive Grants pursuant to the terms of the
Participation Agreement with the Participant. The
price per share at which the Option may be exercised
by the Participant (the "Option Price") shall be as
follows [check desired option]:
___ (i)
Fair
Market Value on Grant Date - the fair
market value per share of the Option Property
subject to the Option on the Grant Date.
___ (ii)
Discounted Value
on Grant Date - 25% of the
fair market value per share of the Option
Property subject to the Option on the Grant
Date. (Strike price remains fixed.)
___ (iii)
Discounted Value on
Exercise Date - 25% of the
fair market value per share of the Option
Property subject to the Option on the date the
Option is exercised.
(Variable strike price.)
XX
(iv) Discounted
Value on Grant Date or Exercise Date
- the greater of (A) 25% of the fair market
value per share of the Option Property subject
to the Option on the Grant Date, or (B) 25% of
the fair market value per share of the Option
Property subject to the Option on the date the
Option is exercised.
<PAGE>
XX
(b) Employee
Exchange Grants. The
Administrator in its
sole and absolute discretion may make Employee
Exchange Grants pursuant to the terms of the
Participation Agreement with the Participant. The
price per share at which the Option may be exercised
by the Participant (the "Option Price") shall be as
follows [check desired option]:
___ (i)
Discounted Value on Grant Date - 25% of the
fair market value per share of the Option
Property subject to the Option on the Grant
Date. (Strike price remains fixed.)
___ (ii)
Discounted
Value on Exercise Date - 25% of the
fair market value per share of the Option
Property subject to the Option on the date the
Option is exercised. (Variable strike price.)
XX (iii)
Discounted Value
on Grant Date or Exercise Date
- the greater of (A) 25% of the fair market
value per share of the Option Property subject
to the Option on the Grant Date, or (B) 25% of
the fair market value per share of the Option
Property subject to the Option on the date the
Option is exercised.
Complete the following blanks only if minimum or maximum
limits on the amount of Employee Exchange Grants is
desired:
XX Minimum
Compensation Exchanged: $5,000
___ Maximum
Compensation Exchanged: $_________ or ________%
Compensation: The "Compensation" of a
Participant shall mean all of
each Participant's:
___ (a)
Compensation received as an Employee reportable in
box 1, Wages, Tips and other Compensation, on Form W-2.
___ (b)
Annual
base salary.
XX (c)
Annual
bonus.
___ (d)
Long term
incentive plan compensation.
XX (e)
Compensation or retainer and meeting fees received as
non employee Directors reportable on Form 1099.
___ (f)
Other
[specify]: ____________________________________
<PAGE>
Notwithstanding
the foregoing, Compensation shall include any
compensation
exchanged under the OPTION IT, any compensation deferred
by the
Participant under other nonqualified plans maintained by the
Employer, and
amounts contributed by the Participant pursuant to salary
deferrals under
employee benefit plans of the Employer that are not
includible in
the gross income of the Participant under Sections 125,
401(k), 403(b)
or similar provisions of the Code.
6.2
Option Period: The
Grant Date and Option Period for
Options granted under the OPTION IT are as
follows:
Grant Date:
The Grant Date for
Options under the OPTION IT shall be
[check desired Grant Date]:
___ (a)
The last
business day of each calendar month.
___ (b)
The last
business day of each calendar quarter.
___ (c)
The last
business day of each calendar year.
___ (d)
Each
business day on which Compensation exchanged by
the Participant is delivered to Executive Benefit
Services, Inc.
XX (e)
Other :
Each business day as determined by the
Company/employers and when delivery to sponsor (EBS).
Option Period: Except as otherwise provided in
the OPTION IT, each
Option granted under the OPTION IT shall
expire if not exercised in
full before [check desired option]:
___ (a)
The fifth anniversary of the
Grant Date.
___ (b)
The tenth
anniversary of the Grant Date.
___ (c)
The
fifteenth anniversary of the Grant Date.
___ (d)
The
twentieth anniversary of the Grant Date.
XX (e)
Other :
Ten years after retirement date of
participant.
<PAGE>
6.3
Option Vesting: An
Employee Exchange Grant shall be 100%
vested and exercisable by the Participant
as of the Grant Date.
An Employer
Incentive Grant shall be vested and
exercisable by the Participant as follows
[check (a), (b) or (c) and complete as
required]:
XX (a)
100%
vested and exercisable as of the Grant Date.
___ (b)
100%
vested and exercisable after ___ Years of Service.
___ (c)
Number of
Years
Percentage Vested
of Service
and Exercisable
Less than 1
___%
1
___%
2
___%
3
___%
4
___%
5
___%
6
___%
7
___%
8
___%
9
___%
10 or more
___%
Years of Service: For vesting purposes,
Years of Service of a Participant
shall be calculated from the date
designated below [check desired option]:
___ (a)
First Day
of Service.
___ (b)
Effective
Date of the Plan.
XX (c)
Each Grant
Date. Under this
option (c), each
Employer Incentive Option Grant shall vest
in accordance with the
applicable schedule selected in Section 6.3
of this Adoption Agreement.
Vesting Upon Death, Disability or
Retirement:
Notwithstanding the vesting
schedule selected above, an Employer
Incentive Grant will become 100% vested
and exercisable upon the following events
[check if desired]:
___
(a) Death of the
Participant.
___ (b)
Disability
of the Participant.
XX (c)
Retirement
of the Participant.
<PAGE>
Other Vesting
Conditions: Each
Option granted under the OPTION IT
shall be subject
to the following conditions to vesting and exercise
[specify, if
any]:
_____________________________________________________________________
6.4
Option Exercise: A
Participant may exercise Options that
are vested and exercisable in accordance
with the terms of the OPTION IT, the
related Participation Agreement and this
Adoption Agreement, as follows:
Limits on
Exercise Frequency: A
participant may exercise an Option no
more frequently
than [check desired option]:
___ (a)
Once each
calendar quarter.
___ (b)
Once every
six months.
___ (c)
Once each
calendar year.
XX (d)
No limit
for Employees and Non Employee Directors.
___ (e)
Other
[specify]: __________________________________.
Payment of
Option Price: The
Option Price may be paid in the form of
[check desired
option(s)]:
XX (a)
Personal
check.
___ (b)
Certified
funds.
XX (c)
An agreed
upon procedure between the Participant and
the Employer that allows the Participant to borrow
the funds to pay the Option Price or to use a method
that provides for a cashless exercise.
6.5
Limitations on the Right to Exercise Option: If the
employment or service of the Participant is
terminated prior to the end of
the Option Period, any Option which has not
then been exercised by the
Participant shall lapse except as provided
below [check if desired and
complete as required]:
XX (a)
Termination. If the
employment or service of a
Participant is terminated for any reason other than
for "cause," or due to the retirement, disability or
death of the Participant, the Option may be exercised
to the extent then vested:
___ (i)
During the
remaining Option Period; or
<PAGE>
XX
(ii) During the period
beginning on the termination
date and ending after 365 days; or
___ (iii)
During the period beginning on the termination
date and ending after _____ years; or
___ (iv)
Other [specify]:
___________________________.
XX (b)
Disability
or Death. If the
employment or service of
a Participant is terminated due to disability or
death of the Participant, the Option may be exercised
to the extent then vested (including any accelerated
vesting elected in Section 6.3 of this Adoption
Agreement):
___ (i)
During the
remaining period of the Option; or
___ (ii)
During the period
beginning on the termination
date and ending after ____days; or
XX
(iii) During the period beginning on the termination
date and ending after ten (10) years; or
___ (iv)
Other [specify]:
__________________________.
XX (c)
Retirement, Separation and/or Resignation from the
Company's Board. If
the employment or service of a
Participant is terminated due to the retirement of
the Participant, the Option may be exercised to the
extent then vested (including any accelerated vesting
elected in Section 6.3 of this Adoption Agreement):
___ (i)
During the
remaining period of the Option; or
___ (ii)
During the period
beginning on the termination
date and ending after _____ days; or
XX
(iii During the period
beginning on the termination
date and ending after ten (10) years; or
___ (iv)
Other [specify]:
________________________.
<PAGE>
10.0
Amendment and Termination of the OPTION IT: [check or
complete all that apply]:
___ (a)
Notwithstanding any
provision in this Adoption
Agreement or the OPTION IT to the contrary, Section
_____ of the Plan shall be amended to read as follows:
See attached Exhibit ____.
XX (b)
The OPTION IT shall be
terminated upon the occurrence
of one or more of the following events [check if desired]:
___ (i) The amount of net worth
shown on the financial
statements of the Employer for each of the two most
recent fiscal years is less than $____________.
___ (ii) The aggregate net loss as
reported on the
financial statements of the Employer for the two
most recent fiscal years is greater than
$____________.
___ (iii) The Administrator determines there
has been a
change of control of the Employer.
XX (iv)
Other
[specify]:
The Board, in its
sole
discretion, may amend, suspend or discontinue the
Plan or Option Agreement. No amendment, suspension,
or discontinuance shall impair the rights of any
Participant except to the extent necessary to comply
with any provision of federal or applicable state
laws or except to the extent necessary to prevent
detriment to the Company as so determined by the
Board.
12.0
Adjustment to Option Property: If a dividend is declared
on the Option Property, then the Options
granted under the OPTION IT shall be
adjusted as follows:
XX (a)
The Participant's
original Options shall include
adjustments under such terms and conditions
determined by the Administrator that reflect the
dividends declared on the Option Property.
___ (b) Other [specify]:
_________________________________
__________________________________
__________________________________
.
<PAGE>
13.0
Applicable Law: The
provisions of the OPTION IT, Trust (if
any) and the Agreements shall be construed
and enforced according to the laws
of the State of Iowa, without regard to the
conflict of laws or provisions of
any state.
15.0
Death Benefit: If the
Participant dies while in Service,
the Employer shall pay a death benefit (in
addition to the right a
beneficiary may have to exercise the
Participant's Option) to the
Participant's designated beneficiary in an
amount equal to [check desired
option]:
___
(a)
An amount to be
determined by the Administrator.
___
(b) A lump sum of $
____________.
___
(c) _____ times the
annual base salary of the Participant
at his date of death.
___
(d) Other [specify]:
__________________________________.
XX (e)
No death benefits.
16.0
Trust: [check desired
option]:
___
(a) The Employer does
desire to establish a "rabbi" trust
for the purpose of
setting aside assets of the
Employer contributed thereto for the payment of
benefits under the OPTION IT. In accordance with
Section 4.5 of The Executive Performance Option Plan
Trust Agreement, the percentage that shall be used to
measure whether the
value of the assets of the trust
fund is great enough to allow "excess assets" to be
returned to the Employer shall be ______%.
XX (b)
The Employer does not
desire to establish a "rabbi"
trust for the purpose of setting aside assets of the
Employer contributed thereto for the payment of
benefits under the OPTION IT.
<PAGE>
IN WITNESS WHEREOF, this Agreement has been executed as of the
day and year first above stated.
__________________________________________________________
Employers Mutual Casualty Company and its Affiliates and
Subsidiaries
By: /s/ Douglas J. Zmolek
Authorized Person
NOTE: Execution of this Adoption
Agreement creates a legal liability of the
Employer with significant tax consequences
to the Employer and Participants.
The Employer should obtain legal and tax
advice from its professional
advisors before adopting the OPTION IT.
The Sponsor disclaims
all liability
for the legal and tax consequences which
result from the elections made by
the Employer in this
