Exhibit 10.7
Unitrin, Inc. 1995 Non-Employee
Director Stock Option Plan
NON-QUALIFIED STOCK OPTION
AGREEMENT
This NON-QUALIFIED STOCK OPTION
AGREEMENT (the “Agreement”) is made as of this
day of
, between UNITRIN, INC., a Delaware corporation (the
“Company”), and
(the “Option Holder”).
RECITALS
A. The Board of Directors and
Shareholders of the Company have adopted the 1995 Non-Employee
Director Stock Option Plan.
B. The Plan provides, among other
things, for the automatic grant of stock options to non-employee
directors of the Company in the amounts and at the times set forth
in the Plan.
C. The option granted hereby is
not intended to qualify as an “incentive stock
option” under §422A of the Internal Revenue Code of
1986, as amended.
D. Terms used herein and not
otherwise defined shall have the meanings given to such terms in
the Plan.
NOW, THEREFORE, the parties hereto
agree as follows:
1. Grant of
Option . The Company
grants to the Option Holder the right and option to purchase on the
terms and conditions hereinafter set forth, all or any part of an
aggregate of four thousand (4,000) shares of the Common Stock
of the Company (the “Option”) at the purchase price of
$
per share, exercisable from time to time in accordance with the
provisions of this Agreement during a period expiring on the tenth
anniversary of the date of this Agreement or such later date as may
result from the application of §6 (the “Expiration
Date”). This Option is also subject to early termination in
accordance with §5.
2. Vesting
. The Option Holder may not purchase
any shares by exercise of this Option between the date of this
Agreement and the first anniversary date hereof. The shares subject
to this Option shall become exercisable in full by the Option
Holder commencing on the first anniversary date of this Agreement.
Subject to earlier termination under §5 or the terms of the
Plan and no later than the Expiration Date, the Option Holder may
purchase all or any part of the shares subject to this Option which
are currently exercisable in the manner and under the terms
specified in §3 hereof. The
number of shares subject to the Option which the
Option Holder may purchase shall be reduced by the number of shares
previously purchased by the Option Holder pursuant to the
Agreement.
3. Manner of
Exercise . Each
exercise of this Option shall be by means of a written notice of
exercise delivered to the Company. Such notice shall identify the
Options being exercised. When applicable, the notice shall also
specify the number of Mature Shares (as defined in the Plan) that
the Option Holder plans to deliver in payment of all or part of the
exercise price. Before shares will be issued, the full purchase
price of the shares subject to the Options being exercised shall be
paid to the Company using the following methods, individually or in
combination: (i) in cash or by certified, cashier’s or
(as funds clear) personal check payable to the order of the
Company; (ii) by Constructive or Actual Delivery (as defined
in the Plan) of Mature Shares with a fair market value as of the
close of business on the date of exercise equal to or greater than
the purchase price; (iii) by wire transfer to an account
specified by the Company, or (iv) by delivery of a properly
executed exercise notice together with irrevocable instructions to
a broker to deliver promptly to the Company the amount of sale or
loan proceeds to pay such full purchase price (in which case the
exercise will be effective upon the earlier of the trade date or
receipt of such proceeds by the Company for the related sale of
shares). The Company reserves the right to accept shares of stock
of the Company in payment of the purchase price of an option only
if such shares have been held by the Option Holder for a specified
minimum period of time during which such shares were not exchanged
to effectuate another option exercise. This Option may not be
exercised for a fraction of a share and no partial exercise of this
Option may be for less than: (i) one hundred
(100) shares; or (ii) the total number of shares then
eligible for exercise, if less than one hundred
(100) shares.
This Option may be exercised:
(i) during the lifetime of the Option Holder only by the
Option Holder or in the event a guardian or legal representative is
appointed during the Option Holder’s lifetime to handle the
affairs of the Option Holder, such guardian or legal
representative; and (ii) after the Option Holder’s death
by his or her transferees by will or the laws of descent or
distribution, and not otherwise, regardless of any community
property interest therein of the spouse of the Option Holder, or
such spouse’s successors in interest. If the spouse of the
Option Holder shall have acquired a community property interest in
this Option, the Option Holder, or the Option Holder’s
permitted successors in interest, may exercise the Option on behalf
of the spouse of the Option Holder or such spouse’s
successors in interest.
4. Fair Market Value of Common
Stock . The fair
market value of a share of Common Stock shall be determined for
purposes of this Agreement by reference to the closing price of a
share of Common Stock, as reported by the New York Stock Exchange
(or such other exchange on which the shares of Common Stock are
primarily traded) for the Grant Date or date of exercise, as
applicable, or if such date is not a business day, for the business
day immediately preceding such date (or, if for any reason no such
price is available, in such other manner as the Committee may deem
appropriate to reflect the then fair market value
thereof).
5. Cessation of Services,
Death or Permanent Disability . All rights of the Option Holder in this Option
shall terminate three (3)&
