|
Exhibit 4.1
UNITED FIRE &
CASUALTY COMPANY
2005 NONQUALIFIED
NON-EMPLOYEE
DIRECTOR STOCK OPTION AND
RESTRICTED STOCK PLAN
United Fire &
Casualty Company established the 2005 Nonqualified Non-Employee
Director Stock Option Plan upon the terms and conditions set forth
in this document. The Plan will permit the Company to grant
Nonqualified Stock Options to purchase shares of its Common Stock.
The purpose of the Plan is to advance the interests of United
Fire & Casualty Company through the attraction, motivation
and retention of qualified non-employee directors. The Plan will
provide a means for non-employee directors to increase their equity
ownership of the Company. By increasing their equity ownership of
the Company, the economic interests of the non-employee directors
will more closely align with those of all other stockholders of the
Company, and the non-employee directors will have an additional
incentive to contribute to the success of the Company and the
Affiliated Companies.
The following terms wherever
used herein shall have the meanings set forth below.
| |
A. |
Affiliated Company or Affiliated Companies. The
term “Affiliated Company” or “Affiliated
Companies” means component member or members of a controlled
group of corporations, as defined under Section 1563 of the
Internal Revenue Code of 1986, as amended, in which the Company is
also a component member. |
| |
B. |
Award. The term “Award” means a grant
of an Option or Restricted Stock under the Plan. |
| |
C. |
Beneficial Owner. The term “beneficial
owner” means a Person as defined in Rule 13d-3 under the
Exchange Act. |
| |
D. |
Board of Directors. The term “Board of
Directors” shall mean the Board of Directors of the
Company. |
| |
E. |
Change in Control of the Company. The term
“Change in Control of the Company” shall mean a change
in control of a nature that would be required to be reported in
response to Item 6(e) of Schedule 14A of the Regulation 14A
promulgated under the Exchange Act, whether or not the Company is
in fact required to comply with that Regulation. |
A Change in Control of the
Company shall be deemed to have occurred if:
| |
1. |
Any Person becomes the Beneficial Owner, directly or
indirectly, of securities of the Company representing 20% or more
of the combined voting power of the Company’s then
outstanding securities; |
| |
2. |
during any
period of two consecutive years (not including any period prior to
the adoption of the Plan), individuals who at the beginning of such
period constitute the Board of Directors and any new director whose
election by the Board of Directors or nomination for election by
the Company’s stockholders was approved by a vote of at least
two-thirds of the directors then still in office who either were
directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any
reason to constitute a majority of the Board of Directors (This
clause 2 shall not apply to a director designated by a person who
has
|
1
| |
entered into an agreement
with the Company to effect a transaction described in clauses
(1) or (4) of this definition.);
|
| |
3. |
the Company enters into an agreement, the consummation of which
would result in a Change in Control of the Company; or |
| |
4. |
the stockholders of the Company approve a merger, share
exchange or consolidation of the Company with any other company,
other than a merger, share exchange or consolidation that would
result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities
of the surviving entity) at least 50% of the combined voting power
of such surviving entity outstanding immediately after such merger,
share exchange or consolidation, or the stockholders of the Company
approve a plan of complete liquidation of the Company or an
agreement for the sale or disposition by the Company of all or
substantially all the Company’s assets. |
| |
F. |
Committee. The term “Committee” shall
mean the Compensation Committee of the Board of
Directors. |
| |
G. |
Common Stock. The term “Common Stock”
shall mean the shares of common stock, par value $3.33 1/3 per
share, of the Company. |
| |
H. |
Company. The term “Company” shall
mean United Fire & Casualty Company, an Iowa
corporation. |
| |
I. |
Date of Grant. The “Date of Grant” is
the date the Board of Directors grants an Award to an Eligible
Director. The Date of Grant will be a date determined by the Board
of Directors. |
| |
J. |
Eligible Director. The term “Eligible
Director” means any person who on the Date of Grant is a
member of the Board of Directors of the Company or the Affiliated
Companies and who is not an employee of the Company or the
Affiliated Companies. |
| |
K. |
Exchange Act. The term “Exchange Act”
shall mean the Securities Exchange Act of 1934, as
amended. |
| |
L. |
Fair Market Value. The term “Fair Market
Value” of the Common Stock shall be: |
| |
1. |
the average on the applicable date of the high and low prices
of a share of Common Stock on the principal national securities
exchange on which shares of Common Stock are then trading, or, if
shares were not traded on such date, then on the next preceding
date on which a trade occurred; or |
| |
2. |
if Common Stock is not traded on a national securities exchange
but is quoted on the National Association of Securities Dealers,
Inc. Authorized Quotation System (“NASDAQ”) or a
successor quotation system, the last reported sale price on such
date as reported by NASDAQ or such successor quotation system;
or |
| |
3. |
if Common Stock is not traded on a national securities exchange
and is not reported in NASDAQ or a successor quotation system, the
closing bid price (or average bid prices) last quoted on such date
by an established quotation service for over-the-counter
securities; or |
| |
4. |
if Common
Stock is not publicly traded on such date, the value of a share of
Common Stock as established by the Board of Directors acting in
good faith and taking into consideration all factors which it deems
appropriate, including, without limitation, recent sale or offer
prices for the Common Stock in private
arm’s-length
|
2
| |
transactions. During periods
when the Fair Market Value of a share of Common Stock cannot be
determined under any of the methods specified in clauses (1),
(2) and (3), above, the Board of Directors shall have the
authority to establish the Fair Market Value of the Common Stock as
of the beginning of (or periodically during) each fiscal year of
the Company and to use such value for all transactions occurring
thereafter within such fiscal year.
|
| |
M. |
Grantee. A “Grantee” is an Eligible
Director to whom the Board of Directors has granted an
Award. |
| |
N. |
Option. The term “Option” shall mean
any right granted pursuant to the Plan to purchase shares of Common
Stock at an Option Price established by the Board of
Directors. |
| |
O. |
Option Agreement. The term “Option
Agreement” shall mean the written agreement representing
Options granted pursuant to the Plan. |
| |
P. |
Option Expiration Date. The “Option
Expiration Date” is the date an Option expires. |
| |
Q. |
Option Price. The “Option Price” is
the price at which Common Stock may be purchased upon the exercise
of an Option. |
| |
R. |
Person. The term “Person” means a
person as used in Section 13(d) and 14(d) of the Exchange Act,
other than a trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any of its Affiliated
Companies or a Company owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions
as the ownership of Common Stock of the Company. |
| |
S. |
Plan. The term “Plan” shall mean the
United Fire & Casualty Company 2005 Nonqualified
Non-Employee Director Stock Option and Restricted Stock Plan as
originally approved by the Board of Directors on February 11,
2005, as the same may be amended from time to time. |
| |
T. |
Restricted Stock. The term “Restricted
Stock” means a share of Common Stock awarded under the Plan
that is subject to restrictions determined by the Board of
Directors. |
| |
U. |
Restricted Stock Agreement. The term
“Restricted Stock Agreement” means the agreement
between the Company and the recipient of Restricted Stock that
contains the terms, conditions and restrictions pertaining to such
Restricted Stock. |
| III. |
Effective Date of the Plan |
The Plan shall become
effective upon approval of the stockholders owning a majority of
the outstanding shares of the Company eligible to vote.
| IV. |
Operation and Administration |
| |
A. |
The Board of Directors shall administer the Plan, provided
however, the Board of Directors may delegate its responsibilities
and duties under the Plan to the Committee. If the Board of
Directors delegates responsibilities and duties to the Committee,
the Committee is empowered to do all acts with respect to the Plan
that the Plan authorizes the Board of Directors to do. |
| |
B. |
The Board of Directors may establish, from time to time and at
any time, subject to the limitations of the Plan as set forth
herein, such rules and regulations and amendments and supplements
thereto, as it deems necessary to comply with applicable law and
regulation and for the proper administration of the
Plan. |
3
| |
C. |
The Board of Directors shall have the authority and discretion,
subject to the express provisions and restrictions of the Plan, to
determine, without limitation: |
| |
1. |
which Eligible Directors receive Awards; |
| |
2. |
when Options and Restricted Stock shall be granted; |
| |
4. |
the Option Expiration Date; |
| |
6. |
the vesting schedule of Options or whether Options shall be
immediately vested; |
| |
7. |
the terms and conditions of Options and Restricted Stock, other
than those terms and conditions set forth in the Plan;
and |
| |
8. |
the number of shares of Common Stock to be issued pursuant to
an Option Agreement and Restricted Stock Agreement. |
| |
D. |
The Company shall grant Awards and Awards shall become
effective only after prior approval of the Board of Directors and
upon the execution of an Option Agreement or a Restricted Stock
Agreement, as applicable, between the Company and the recipient of
the Award. |
| |
E. |
All distributions under the Plan are subject to withholding of
all applicable taxes, and the Board of Directors may condition the
delivery of any shares or other benefits under the Plan on
satisfaction of the applicable withholding obligations. The Board
of Directors, in its discretion, and subject to such requirements
as the Board of Directors may impose prior to the occurrence of
such withholding, may permit such withholding obligation to be
satisfied through cash payments, through the surrender of shares of
Common Stock which the participant already owns, or through the
surrender of shares of Common Stock to which the participant is
otherwise entitled under the Plan. |
| |
F. |
The Board of Directors’ interpretation and construction
of the provisions of the Plan and the rules and regulations adopted
by the Board of Directors shall be final. No member of the Board of
Directors (of the Committee) shall be liable for any action taken
or determination made in respect of the Plan in good
faith. |
| |
G. |
The Board of Directors may impose such other terms and
conditions not inconsistent with the terms of the Plan as it deems
advisable, including, without limitation, restrictions and
requirements r |
|
