EXHIBIT
10(j)
2003 EMPLOYERS MUTUAL CASUALTY
COMPANY
NON-EMPLOYEE DIRECTOR STOCK
OPTION PLAN
The purpose of the 2003 Non-Employee
Director Stock Option Plan (the “Plan”) is to enable
Employers Mutual Casualty Company (“EMCC”) and such of
its Subsidiaries and Affiliates (as hereinafter defined) which (i)
have one or more non-employee directors and (ii) adopt this Plan
(collectively, with EMCC, the “Company”) to attract and
retain non-employee persons of exceptional ability to serve as
directors and to more closely identify the directors with the
interests of the shareholders of EMC Insurance Group Inc.
(“EMC Group”), a Subsidiary, through the granting of
options to purchase shares of the common stock
(“Stock”) of EMC Group.
“Affiliate” shall mean
any non-stock corporation which is required under Iowa law to be
shown as a member of the EMCC Insurance Holding Company
System.
“Annual Retainer” for
any given year shall mean the cash retainer to be paid to such
Eligible Director in respect of services as a director but shall
not include (i) any meeting fees, (ii) any fees related to service
as chair of a committee, or (iii) per diem amounts paid with
respect to board or committee meeting attendance.
“Disinterested Director”
shall mean, for 2003, a director of EMCC who is not an Eligible
Director or who elects, on or before January 1, 2003, not to
receive, and does not receive, an Option in 2003; and shall mean,
for 2004 and subsequent years, a director of EMCC (i) who did not
receive, during the one year prior to service on the Disinterested
Director Committee, an Option and (ii) who does not receive, during
his or her period of service on the Disinterested Director
Committee, an Option. Provided, however, that the qualifications
for a Disinterested Director as provided herein shall, for all
years, be subject to such modifications and amendments as Section
16(b) of the Securities and Exchange Act of 1934, as amended (the
“1934 Act”), may, from time to time,
provide.
“Eligible Directors”
shall mean all non-employee directors of the Company, each of whom
shall be eligible to participate in the Plan and each of whom shall
have not elected to be a Disinterested Director. Directors who are
officers or employees of the Company shall not be eligible to
participate in the Plan.
“Exercise Date” shall
mean the date on which notice of exercise of an Option is received
at the office of the Chief Executive Officer (“CEO”) or
the corporate Secretary of EMCC. There shall be only one Exercise
Date during each Option Period for each Option granted to an
Eligible Director.
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“Option” shall mean a Stock option
granted under this Plan.
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“Option Payment” shall mean the
amount paid by the Eligible Director in the exercise of his or her
Option.
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“Option Period” shall,
for a director of EMCC or an insurance company Affiliate, mean the
period of time from, and commencing on, the date of the Annual
Meeting of Policyholders of such entity to the day immediately
prior to the next and subsequent Annual Meeting of such entity;
and, for a director of EMC Group or another Subsidiary, shall mean
the period from, and commencing on, the date of the Annual Meeting
of the Board of Directors of such entity to the day immediately
prior to such board's next and subsequent Annual Meeting. The first
Option Period for EMCC shall commence with its 2003 Annual Meeting.
The first Option Period for each of the participating Subsidiaries
and Affiliates shall commence with either its first Annual Meeting
following the adoption of the Plan by such Subsidiary or Affiliate,
or the Annual Meeting at which the Plan was adopted, whichever is
earlier.
1
“Option
Price” shall be equal to seventy-five percent (75%) of the
fair market value of the Stock at the Exercise Date. Fair market
value shall be deemed to be the average between the high and low
prices for the Exercise Date as reported (as of the close of
regular trading) on Nasdaq-online.com. In the event the high and
low prices for the Exercise Date are not reported on
Nasdaq-online.com (e.g., if no trades in the Stock occurred on the
Exercise Date), then the prices reported (as of the close of
regular trading) on Nasdaq-online.com for the closest date prior
thereto shall be used to determine the fair market value of the
Stock.
“Subsidiary” shall mean
any corporation of which a majority of the voting stock or voting
power is owned or controlled, directly or indirectly, by
EMCC.
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Section 3.
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Administration
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All decisions concerning (a) the
eligibility of directors of the Company to participate in the Plan
and (b) the timing, price and amount of Stock that can be purchased
by an Eligible Director under this Plan shall be determined in
accordance with the provisions of the Plan. All other decisions
relating to the administration of the Plan shall be made by a
committee of two or more Disinterested Directors of EMCC (the
“Disinterested Director Committee”).
The Disinterested Director Committee
shall have the authority, not inconsistent with the express
provisions of the Plan, to take all action necessary or appropriate
hereunder, to establish appropriate rules and regulations relating
to the Plan, to interpret its provisions, and to decide all
questions and resolve all disputes which may arise in connection
therewith. Such determination shall be conclusive and shall bind
all parties, including Eligible Directors and any and all persons
claiming under or through any Eligible Director.
The Disinterested Director Committee
may, in its discretion, designate an administrator for the day to
day operations of the Plan.
The maximum number of shares of
Stock available under the Plan for purchase pursuant to the
exercise of Options granted under the Plan is an aggregate of
200,000 shares which EMCC shall provide for Eligible Directors,
other than those of EMC Group
