AMERICAN WHOLESALE INSURANCE
GROUP, INC.
2002 STOCK OPTION
PLAN
1.1 Purpose
of the Plan . This Plan is intended to promote the
interests of the Company by giving eligible persons who provide
services to the Company the opportunity to acquire a proprietary
interest, or otherwise increase their proprietary interest, in the
Company as an incentive to continue their employment or service.
Capitalized terms used in the Plan shall have the meanings given to
them in Appendix A attached hereto.
1.2
Administration of the Plan .
(a) The Plan
shall be administered by the Board; provided ,
however , that any or all administrative functions otherwise
exercisable by the Board may be delegated to the Committee. Members
of the Committee shall serve for such period of time as the Board
may determine and shall be subject to removal by the Board at any
time. The Board also may, at any time, terminate the functions of
the Committee and reassume all powers and authority previously
delegated to the Committee. The Board or the Committee, as the Plan
Administrator, shall have full power and authority (subject to the
provisions of the Plan) to establish such rules and regulations as
it may deem appropriate for the proper administration of the Plan
and to make such determinations under, and issue such
interpretations of, the Plan and any outstanding Options thereunder
as it may deem necessary or advisable. Decisions of the Plan
Administrator shall be final and binding on all parties who have an
interest in the Plan or any Option issued hereunder.
(b) Subject
to the terms of the Plan, the Plan Administrator shall have full
power and authority to determine which eligible persons will
receive Option grants, the time or times when such grants will be
made, the number of shares to be covered by each grant, the status
of each Option as either an Incentive Stock Option or a
Non-Qualified Stock Option, the time or times when each Option is
exercisable, the vesting schedule (if any) applicable to granted
Options, the maximum term for which an Option shall remain
outstanding, and all other terms and conditions of an Option
granted under the Plan.
1.3
Eligibility . Only Employees are eligible to receive
grants of Incentive Stock Options. The persons eligible to receive
grants of Non-Qualified Stock Options are (a) Employees,
(b) non-employee members of the Board or the board of
directors of any Parent or Subsidiary, and (c) consultants and
other independent advisors who provide services to the Company (or
any Parent or Subsidiary).
1.4 Stock
Subject to the Plan . The stock issuable under the Plan
shall be shares of authorized but unissued Common Stock. The
maximum number of shares of Common Stock that may be issued under
the Plan shall not exceed 206,833 shares. Shares of Common Stock
subject to outstanding Options shall be available for subsequent
issuance under the Plan to the extent (a) any Options expire
or terminate for any reason prior to their exercise in full or
(b) any Options are canceled in accordance with
Section 2.10 .
1.5
Adjustments in Common Stock . Should any change be made
to the Common Stock by reason of any stock split, stock dividend,
recapitalization, combination of shares, exchange of shares or
other similar change, the Plan Administrator shall cause
appropriate adjustments to be made to (a) the maximum number
and/or class of securities issuable under the Plan and (b) the
number and/or class of
securities and
the exercise price per share in effect under each outstanding
Option, in order to prevent the dilution or enlargement of benefits
thereunder. The adjustments determined by the Plan Administrator
shall be final, binding and conclusive.
2.1 Grant
of Options . Each Option granted under this Plan shall have
such terms and conditions as approved by the Plan Administrator.
Subject to the provisions of this Plan, each Option shall be
evidenced by one or more documents in the form approved by the Plan
Administrator, and no grant shall be effective unless and until
both the Company and the person to whom the Option is being granted
shall have executed such documents as required by the Plan
Administrator.
2.2
Exercise Price . The exercise price per share of each
Option shall be fixed by the Plan Administrator and, subject to the
terms and conditions set forth herein, may be less than, equal to
or greater than the Fair Market Value per share of Common Stock on
the Option grant date.
2.3
Vesting, Exercise and Term of Options . Each Option
shall vest and be exercisable at such time or times and for such
number of shares as shall be determined by the Plan Administrator
and set forth in the documents evidencing the Option grant. No
Option, however, shall have a term in excess of ten (10) years
from the Option grant date.
2.4
Exercise Procedures .
(a) Subject
to Section 2.7 , an Option may be exercised only by the
Optionee to whom such Option was granted under the Plan. An Option
shall be exercisable at such time or times as set forth herein and
in the documents evidencing the grant of the Option.
Notwithstanding anything in the Plan to the contrary, the Plan
Administrator, in its sole discretion, may at any time and from
time to time accelerate the date for exercising all or any part of
an Option. In no event, however, may an Option be exercised after
the expiration of its fixed term.
(b) Each
Option granted under the Plan shall be deemed exercised when the
holder thereof (i) shall indicate the decision to do so in writing
delivered to the Company, (ii) shall at the same time tender
to the Company payment in full of the exercise price for the shares
for which the Option is exercised in accordance with
Section 2.4(c) , (iii) shall likewise tender to
the Company payment in full of all federal and state withholding or
other employment taxes applicable to the taxable income, if any, of
the holder resulting from such exercise, (iv) shall execute a
purchase agreement in form and substance satisfactory to the Plan
Administrator, and (v) shall comply with such other
requirements as the Plan Administrator may establish.
(c) In
connection with the exercise of any Option, the Optionee shall pay
the exercise price to the Company in cash, by certified, bank or
cashier’s check, or in such other manner as permitted by the
Plan Administrator, which may include the surrender of shares of
Common Stock or other unexercised Options held by the Optionee.
Notwithstanding the foregoing, should the Common Stock be
registered under Section 12 of the Exchange Act at the time an
Option is exercised, then the exercise price may also be paid as
follows:
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(i) in shares of
Common Stock held for the requisite period necessary to avoid a
charge to the Company’s earnings for financial reporting
purposes and valued at Fair Market Value on the exercise date,
or
(ii) through a
special sale and remittance procedure pursuant to which the
Optionee shall concurrently provide irrevocable instructions
(A) to a Company-designated brokerage firm to effect the
immediate sale of the purchased shares and remit to the Company,
out of the sale proceeds available on the settlement date,
sufficient funds to cover the aggregate exercise price payable for
the purchased shares plus all applicable federal, state and local
income and employment taxes required to be withheld by the Company
by reason of such exercise and (B) to the Company to deliver
the certificates for the purchased shares directly to such
brokerage firm in order to complete the sale.
(d) An Option
granted under the Plan may be exercised for any lesser number of
shares than the full amount for which it could be exercised. Such a
partial exercise shall not affect the right to exercise the Option
for the remaining shares from time to time in accordance with the
Plan and the documents evidencing the grant of the
Option.
2.5 Effect
of Termination of Service .
(a) The
following provisions shall govern the exercise of Options held by
an Optionee at the time of such Optionee’s cessation of
Service or death:
(i) Should the
Optionee cease to remain in Service for any reason other than
death, Permanent Disability or Misconduct, then the Optionee shall
have a period of three (3) months following the date of cessation
of Service to exercise each outstanding Option held by such
Optionee.
(ii) Should the
Optionee’s Service terminate by reason of Permanent
Disability, then the Optionee shall have a period of twelve
(12) months following the date of cessation of Service to
exercise each outstanding Option held by such Optionee.
(iii) If the
Optionee dies while holding an outstanding Option, then the
personal representative of his or her estate or the Person or
Persons to whom the Option is transferred pursuant to the
Optionee’s will or the laws of inheritance shall have twelve
(12) months following the date of cessation of Service to
exercise each outstanding Option held by the Optionee.
(iv) Should the
Optionee’s Service be terminated for Misconduct, then all
outstanding Options held by the Optionee shall terminate
immediately and cease to remain outstanding, regardless of whether
any Options have vested.
(v) During the
applicable post-Service exercise period, an Option may be exercised
only if it has vested and for no more than the aggregate number of
shares for which the vested Option is exercisable on the date of
the Optionee’s cessation of Service. The Option shall,
immediately upon the Optionee’s cessation of Service,
terminate and cease to be outstanding with respect to any and all
Option shares for which the Option is not otherwise exercisable at
that time. Upon the expiration of the applicable exercise period or
(if earlier) upon the expiration of the Option term, the Option
shall terminate and cease to be outstanding.
(b) The Plan
Administrator shall have the discretion to do any of the following
at any time:
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(i) extend the
period of time for which an Option remains exercisable following
the Optionee’s cessation of Service or death to such greater
period of time as the Plan Administrator deems appropriate in its
sole discretion, but in no event beyond the expiration of the
Option term; and/or
(ii) before or
after the Optionee’s cessation of Service, permit the Option
to be exercised in accordance with this Plan with respect to one or
more additional installments of shares that could have been
purchased if the Option continued to vest while the Optionee
remained in Service.
2.6
Stockholder Rights . The holder of an Option shall have
no stockholder rights with respect to the shares subject to the
Option until such Person shall have exercised the Option in
accordance with Section 2.4 and become the record
holder of the purchased shares. Each Person who validly exercises
an Option and is issued shares of Common Stock by the Company shall
be subject to all of the terms and conditions set forth in the
applicable purchase agreement to be executed by such person upon
exercise.
2.7
Transferability of Options .
(a) Except as
set forth in Section 2.7(b) , Options may be
transferred only by will or the laws of inheritance upon the death
of an Optionee. Otherwise, no Option may be assigned, pledged,
hypothecated or transferred in any manner. Upon any attempt to
assign, pledge, hypothecate or transfer an Option, such Option
shall immediately be cancelled and terminated.
(b) The Plan
Administrator, may, in its sole discretion, permit a Non-Qualified
Stock Option to be assigned in whole or in part during the
Optionee’s lifetime as a gift to (i) one or more members
of the Optionee’s immediate family, (ii) a trust in
which Optionee and/or one or more of such family members hold more
than fifty percent (50%) of the beneficial interest, or
(iii) an entity in which more than fifty percent (50%) of the
voting interests are owned by the Optionee and/or one or more of
such family members. The terms applicable to the assigned
Non-Qualified Stock Option shall be the same as those in effect for
such Option immediately prior to the assignment, as more fully set
forth herein and in the documents evidencing the grant of the
Option.
2.8
Incentive Stock Options . All Incentive Stock Options
shall be subject to the terms set forth in this
Section 2.8 . Options that are not specifically
designated as Incentive Stock Options in the documentation
evidencing the grant of such Options, or that are specifically
designated as Non-Qualified Stock Options, shall not be
subject to the terms of this Section 2.8 .
(a)
Eligibility . Incentive Stock Options may be granted only to
Employees.
(b)
Exercise Price . An Incentive Stock Option’s exercise
price per share of Common Stock shall not be less than one hundred
percent (100%) of the Fair Market Value per share of Common Stock
on the date such Option is granted.
(c)
Dollar Limitation . The aggregate Fair Market Value of the
shares of Common Stock (determined as of the respective date or
dates of grant) for which one or more Incentive Stock Options
granted to any Employee under the Plan (or any other option plan of
the Company or any Parent or Subsidiary) may for the first time
become exercisable during any one calendar year shall not exceed
One Hundred Thousand Dollars ($100,000). To the extent an Employee
holds two or more Incentive Stock Options which become exercisable
for the first time in the same calendar year, the foregoing
limitation on
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the
exercisability of such Incentive Stock Options shall be applied on
the basis of the order in which such Options are
granted.
(d) Ten
Percent (10%) Stockholder . If an Employee to whom an Incentive
Stock Option is granted is a Ten Percent (10%) Stockholder, then
the Incentive Stock Option’s exercise price per share of
Common Stock shall not be less than one hundred ten percent (110%)
of the Fair Market Value per share of Common Stock on the Option
grant date, and the Incentive Stock Option’s term shall not
exceed five years from the date of grant.
2.9 Change
of Control Transactions .
(a) The Plan
Administrator may, in its sole and absolute discretion, determine
that any outstanding Option shall become fully exercisable on an
accelerated basis immediately prior to a Change of Control,
notwithstanding the fact that any portion of such Option shall not
have vested.
(b) Unless
otherwise determined by the Plan Administrator, (i) upon
consummation of a Change of Control in which the Company is not the
surviving entity, all outstanding Options, to the extent not
exercised, shall terminate and cease to be outstanding, except to
the extent assumed by the successor corporation (or parent
thereof), and (ii) upon consummation of a Change of Control in
which the Company is the surviving entity, all outstanding Options,
to the extent not exercised, shall remaining outstanding in full
force and effect on the same terms and conditions.
(c) The Plan
Administrator shall have the discretion at any time to provide for
the immediate termination of any consent, repurchase or first
refusal rights of the Company with respect to the shares subject to
those Options upon the occurrence of a Change of Control, whether
or not the Options are to be assumed by any successor corporation
(or parent thereof).
(d) In the
event that any Option shall survive and remain outstanding after a
Change of Control, the Plan Administrator shall have full power and
authority at any time to structure or amend an Option so that it
will automatically vest on an accelerated basis should the
Optionee’s Service terminate by reason of an Involuntary
Termination within a designated period following the effective date
of the Change of Control.
(e) The
portion of any Incentive Stock Option accelerated in connection
with a Change of Control sha
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