Exhibit 10.6
HOMEOWNERS CHOICE,
INC.
2007 Stock Option and Incentive
Plan
|
|
1.
|
Purpose and
Eligibility
|
The purpose of this 2007 Stock
Option and Incentive Plan (the “ Plan ”) of
Homeowners Choice, Inc. (the “ Company ”) is to
provide stock options and other equity interests in the Company
(each an “ Award ”) to employees, officers,
directors, consultants and advisors of the Company and its
Subsidiaries, all of whom are eligible to receive Awards under the
Plan. Any person to whom an Award has been granted under the Plan
is called a “ Participant ”. Additional
definitions are contained in Section 8.
a. Administration by Board of
Directors . The Plan will be administered by the Board of
Directors of the Company (the “ Board ”). The
Board, in its sole discretion, shall have the authority to grant
and amend Awards, to adopt, amend and repeal rules relating to the
Plan and to interpret and correct the provisions of the Plan and
any Award. All decisions by the Board shall be final and binding on
all interested persons. Neither the Company nor any member of the
Board shall be liable for any action or determination relating to
the Plan.
b. Appointment of Committees
. To the extent permitted by applicable law, the Board may
delegate any or all of its powers under the Plan to one or more
committees or subcommittees of the Board (a “
Committee ”). All references in the Plan to the
“ Board ” shall mean such Committee or the
Board.
c. Delegation to Executive
Officers . To the extent permitted by applicable law, the
Board may delegate to one or more executive officers of the Company
the power to grant Awards and exercise such other powers under the
Plan as the Board may determine , provided that the Board
shall fix the maximum number of Awards to be granted and the
maximum number of shares issuable to any one Participant pursuant
to Awards granted by such executive officers.
|
|
3.
|
Stock Available
for Awards
|
a. Number of Shares
. Subject to adjustment under Section 3(b), the aggregate
number of shares of Common Stock of the Company (the “
Common Stock ”) that may be issued pursuant to the
Plan is six million (6,000,000) shares. If any Award expires,
or is terminated, surrendered or forfeited, in whole or in part,
the unissued Common Stock covered by such Award shall again be
available for the grant of Awards under the Plan. If shares of
Common Stock issued pursuant to the Plan are repurchased by, or are
surrendered or forfeited to, the Company at no more than cost, such
shares of Common Stock shall again be available for the grant of
Awards under the Plan; provided, however , that the
cumulative number of such shares that may be so reissued under the
Plan will not exceed six million (6,000,000) shares. Shares
issued under the Plan may consist in whole or in part of authorized
but unissued shares or treasury shares.
b. Adjustment to Common Stock
. In the event of any stock split, stock dividend,
extraordinary cash dividend, recapitalization, reorganization,
merger, consolidation, combination, exchange of shares,
liquidation, spin-off, split-up, or other similar change in
capitalization or event, (i) the number and class of
securities available for Awards under the Plan and the
per-Participant share limit, (ii) the number and class of
securities, vesting schedule and exercise price per share subject
to each outstanding Option, (iii) the repurchase price per
security subject to repurchase, and (iv) the terms of each
other outstanding stock-based Award shall be adjusted by the
Company (or substituted Awards may be made) to the extent the Board
shall determine, in good faith, that such an adjustment (or
substitution) is appropriate.
a. General . The Board
may grant options to purchase Common Stock (each, an “
Option ”) and determine the number of shares of Common
Stock to be covered by each Option, the exercise price of each
Option and the conditions and limitations applicable to the
exercise of each Option and the Common Stock issued upon the
exercise of each Option, including vesting provisions, repurchase
provisions and restrictions relating to applicable federal or state
securities laws, as it considers advisable.
b. Incentive Stock Options
. An Option that the Board intends to be an “incentive
stock option” as defined in Section 422 of the Code (an
“ Incentive Stock Option ”) shall be granted
only to employees of the Company and shall be subject to and shall
be construed consistently with the requirements of Section 422
of the Code. The maximum aggregate number of shares of Common Stock
which may be issued under this Plan as Incentive Stock Options is
six million (6,000,000), subject to adjustment under
Section 3(c). The Board and the Company shall have no
liability if an Option or any part thereof that is intended to be
an Incentive Stock Option does not qualify as such. An Option or
any part thereof that does not qualify as an Incentive Stock Option
is referred to herein as a “ Nonstatutory Stock Option
.”
c. Exercise Price . The
Board shall establish the exercise price (or determine the method
by which the exercise price shall be determined) at the time each
Option is granted and specify it in the applicable option
agreement.
d. Duration of Options . Each
Option shall be exercisable at such times and subject to such terms
and conditions as the Board may specify in the applicable option
agreement.
e. Exercise of Option
. Options may be exercised only by delivery to the Company of
a written notice of exercise signed by the proper person together
with payment in full as specified in Section 4(f) for the
number of shares for which the Option is exercised.
f. Payment Upon Exercise
. Common Stock purchased upon the exercise of an Option shall
be paid for by one or any combination of the following forms of
payment:
i. by check payable to the order of
the Company;
2
ii. except as otherwise explicitly
provided in the applicable option agreement, and only if the Common
Stock is then publicly traded, delivery of an irrevocable and
unconditional undertaking by a creditworthy broker to deliver
promptly to the Company sufficient funds to pay the exercise price,
or delivery by the Participant to the Company of a copy of
irrevocable and unconditional instructions to a creditworthy broker
to deliver promptly to the Company cash or a check sufficient to
pay the exercise price; or
iii. to the extent explicitly
provided in the applicable option agreement, by (a) delivery
of shares of Common Stock owned by the Participant valued at fair
market value (as determined by the Board or as determined pursuant
to the applicable option agreement), (b) delivery of a
promissory note of the Participant to the Company (and delivery to
the Company by the Participant of a check in an amount equal to the
par value of the shares purchased), or (c)
