Exhibit 10.1
SEABRIGHT INSURANCE HOLDINGS INC.
SECOND AMENDED AND RESTATED 2003
STOCK OPTION PLAN
ARTICLE I
Purpose of Plan
This
Second Amended and Restated 2003 Stock Option Plan (the “
Plan ”) of SeaBright Insurance Holdings, Inc., a
Delaware corporation, adopted by the Board of Directors of the
Company on April 3, 2007, for executives, directors, consultants,
advisors and key employees of the Company, is intended to advance
the best interests of the Company by providing those persons who
have a substantial responsibility for its management and growth
with additional incentives by allowing them to acquire an ownership
interest in the Company and thereby encouraging them to contribute
to the success of the Company and to remain in its employ. The
availability and offering of stock options under the Plan also
increases the Company’s ability to attract and retain
individuals of exceptional managerial talent upon whom, in large
measure, the sustained progress, growth and profitability of the
Company depends.
ARTICLE II
Definitions
For
purposes of the Plan, except where the context clearly indicates
otherwise, the following terms shall have the meanings set forth
below:
“
Board ” shall mean the Board of Directors of the
Company.
“
Cause ” shall mean (A) if a Participant (i) acts in
bad faith and to the detriment of the Company; (ii) refuses or
fails to act in accordance with any specific direction or order of
the Company or the Board; (iii) exhibits in regard to his
employment unfitness or unavailability for service, unsatisfactory
performance, misconduct, dishonesty, habitual neglect, or
incompetence; (iv) is convicted of a crime involving dishonesty,
breach of trust, or physical or emotional harm to any person (or
enter a plea of guilty or nolo contendere with respect
thereto); or (v) breaches any material term of this Plan or
breaches any other agreement (including, without limitation, any
employment agreement) between or among such Participant and the
Company or (B) such other definition may be set forth in a
Participant’s Option Agreement (as defined in Section
6.3).
“
Code ” shall mean the Internal Revenue Code of 1986,
as amended, and any successor statute.
“
Committee ” shall mean the committee of the Board
which may be designated by the Board to administer the Plan. The
Committee shall be composed of two or more directors as appointed
from time to time to serve by the Board.
“
Common Stock ” shall mean the Company’s Common
Stock, par value $.01 per share, or if the outstanding Common Stock
is hereafter changed into or exchanged for different stock or
securities of the Company, such other stock or
securities.
“
Company ” shall mean SeaBright Insurance Holdings,
Inc., a Delaware corporation, and (except to the extent the context
clearly requires otherwise) any subsidiary corporation of SeaBright
Insurance Holdings, Inc. as such term is defined in Section 424(f)
of the Code.
“
Disability ” shall mean the inability, due to illness,
accident, injury, physical or mental incapacity or other
disability, of any Participant to carry out effectively his or her
duties and obligations to the Company or to participate effectively
and actively in the management of the Company for a period of at
least 90 consecutive days or for shorter periods aggregating at
least 120 days (whether or not consecutive) during any twelve-month
period, as determined in the reasonable judgment of the
Board.
“
Fair Market Value ” of the Common Stock shall be
determined by the Committee or, in the absence of the Committee, by
the Board.
“
Options ” shall have the meaning set forth in Article
IV.
“
Participant ” shall mean any executive or other key
employee of the Company who has been selected to participate in the
Plan by the Committee or the Board.
“
Person ” means an individual, a partnership, a
corporation, a limited liability company, an association, a joint
stock company, a trust, a joint venture, an unincorporated
organization and a governmental entity or any department, agency or
political subdivision thereof.
“
Sale of the Company ” means the sale of the Company
pursuant to which any party or parties (other than Summit Partners,
L.P. and/or any of its affiliated investment funds) acquire (i)
capital stock of the Company possessing the voting power under
normal circumstances to elect a majority of the Company’s
board of directors (whether by merger, consolidation or sale or
transfer of the Company’s capital stock) or (ii) all or
substantially all of the Company’s assets determined on a
consolidated basis.
ARTICLE III
Administration
The
Plan shall be administered by the Committee; provided
that if for any reason the Committee shall not have been
appointed by the Board, all authority and duties of the Committee
under the Plan shall be vested in and exercised by the Board.
Subject to the limitations of the Plan, the Committee shall have
the sole and complete authority to: (i) select Participants, (ii)
grant Options to Participants in such forms and amounts as it shall
determine, (iii) impose such limitations, restrictions and
conditions upon such Options as it shall deem appropriate, (iv)
interpret the Plan and adopt, amend and rescind administrative
guidelines and other rules and regulations relating to the Plan,
(v) correct any defect or omission or reconcile any inconsistency
in the Plan or in any Option granted hereunder and (vi) make all
other determinations and take all other actions necessary or
advisable for the implementation and administration of the Plan.
The Committee’s determinations on matters within its
authority shall be conclusive and binding upon the Participants,
the Company and all other Persons. All expenses associated with the
administration of the Plan shall be borne by the Company. The
Committee may, as approved by the Board and to the extent
permissible by law, delegate any of its authority hereunder to such
persons as it deems appropriate.
ARTICLE IV
Limitation on Aggregate
Shares
The
number of shares of Common Stock with respect to which options may
be granted under the Plan (the “ Options ”) and
which may be issued upon the exercise thereof shall not exceed, in
the aggregate, 101,500 shares; provided that the type
and the aggregate number of shares which may be subject to Options
shall be subject to adjustment in accordance with the provisions of
paragraph 6.8 below, and further provided that to the extent any
Options expire unexercised or are canceled, terminated or forfeited
in any manner without the issuance of Common Stock thereunder, or
if any Options are exercised and the shares of Common Stock issued
thereunder are repurchased by the Company, such shares shall again
be available under the Plan. The 101,500 shares of Common Stock
available under the Plan may be either authorized and unissued
shares, treasury shares or a combination thereof, as the Committee
shall determine.
ARTICLE V
Awards
5.1
Options . The Committee may grant Options
to Participants in accordance with this Article V.
5.2
Form of Option . Options granted under
this Plan may be, in the Committee’s discretion, either
incentive stock options (which are intended to be “incentive
stock options” within the meaning of Section 422(b) of the
Code or any successor provision) or nonqualified stock
options.
5.3
Exercise Price . The option exercise
price per share of Common Stock shall be fixed by the Committee at
not less than 100% of the Fair Market Value of a share of Common
Stock on the date of grant.
5.4
Exercisability . Options shall be
exercisable at such time or times as the Committee shall determine
at or subsequent to grant.
5.5
Payment of Exercise Price . Options shall
be exercised in whole or in part by written notice to the Company
(to the attention of the Company’s Secretary) accompanied by
payment in full of the option exercise price. Payment of the option
exercise price shall be made (i) in cash (including check, bank
draft or money order) , (ii) by delivery of outstanding
shares of Common Stock that he or she has owned for at least six
months prior to the date of exercise with a Fair Market Value on
the date of exercise equal to the aggregate exercise price payable
with respect to the options’ exercise, (iii) by simultaneous
sale through a broker of shares acquired on exercise, as permitted
under Regulation T of the Federal Reserve Board or (iv) by any
combination of the foregoing.
5.6
Terms of Options . The Committee shall
determine the term of each Option, which term shall in no event
exceed ten years from the date of grant.
ARTICLE VI
General Provisions
6.1
Conditions and Limitations on Exercise .
Options may be made exercisable in one or more installments, upon
the happening of certain events, upon the passage of a specified
period of time, upon the fulfillment of certain conditions or upon
the achievement by the Company of certain performance goals, as the
Committee shall decide in each case when the Options are
granted.
6.2
Sale of the Company . In the event of a
Sale of the Company and a Participant is terminated from being a
director, officer or employee of, or from performing other services
for the Company or a Subsidiary through an “Involuntary
Termination” (defined below) effected within forty-eight (48)
months following the effect
