Exhibit 10.2
UNITRIN,
INC.
1995 NON-EMPLOYEE DIRECTOR STOCK
OPTION PLAN
Amended and
Restated
1. Purpose
.
The purpose of this 1995
Non-Employee Director Stock Option Plan (“Plan”) of
Unitrin, Inc. (“Company”) is to encourage ownership in
the Company by non-employee directors of the Company and to attract
and retain qualified non-employee personnel to serve as directors
of the Company.
2. Administration
.
The Plan will be administered by a
committee or committees (which term includes subcommittees)
consisting of two or more persons appointed by the Board of
Directors of the Company. The composition of any committee
responsible for administration of the Plan shall comply with the
applicable requirements of the Securities Exchange Act of 1934, as
amended (“Exchange Act”). Members of a committee will
serve for such term as the Board of Directors may determine,
subject to removal by the Board of Directors at any time. With
respect to any matter, the term “Committee” refers to
the committee that has been delegated authority with respect to
such matter.
Subject to the provisions of the
Plan, the Committee shall have authority: (i) to construe and
interpret the Plan; (ii) to define the terms used herein;
(iii) to prescribe, amend and rescind rules and regulations
relating to the Plan; (iv) to make such changes to the Plan as
may become necessary or advisable to comply with the Exchange Act
or other legal requirements; and (v) to make all other
determinations necessary or advisable for the administration of the
Plan. All determinations and interpretations made by the Committee
shall be binding and conclusive on all participants in the Plan and
their legal representatives and beneficiaries.
3. Shares Subject to the
Plan .
The shares to be offered under the
Plan shall consist of authorized but unissued shares or treasury
shares of the Company’s common stock (“Common
Stock”) and, subject to adjustment as provided in paragraph
13 hereof, the aggregate amount of Common Stock which may be
subject to options granted pursuant to paragraphs 5a, 5b and 5c
hereunder (“Options”) shall not exceed 400,000 shares.
If any Option granted under the Plan shall expire or terminate for
any reason, without having been exercised or vested in full, as the
case may be, the unpurchased shares subject thereto shall again be
available for Options to be granted under the Plan. Options granted
under the Plan will not be qualified as “incentive stock
options” under Section 422 of the Internal Revenue Code
of 1986, as amended (“Code”). All Options granted under
the Plan shall be granted on or before
August 2, 2015, except for Restorative
Options (as defined in Section 5f below) which may continue to
be granted after August 2, 2015 until the expiration dates of
the original options to which such Restorative Options relate,
subject to the limitation in the last sentence of paragraph
5f.
4. Eligibility
.
Each director of the Company who
first becomes a director after November 1, 1993 and is not an
employee of the Company or any subsidiary of the Company and each
director who has retired as an employee of the Company or a
subsidiary of the Company shall be eligible to participate in the
Plan (“Eligible Directors”). Each Option granted under
the Plan shall be governed by an agreement in such form as the
Committee shall from time to time approve.
5. Stock Option Grants
.
a. Initial Option
Grants .
An Option covering 4,000 shares of
Common Stock shall be granted to such director on the date that he
or she first becomes an Eligible Director.
b. Annual Option Grants
.
An Option covering 4,000 shares of
Common Stock will be granted to each Eligible Director
automatically at the conclusion of each Company Annual
Meeting.
c. Duration of Options
.
Subject to paragraph 9, below, each
Option granted pursuant to this paragraph 5 and all rights
associated therewith shall expire ten years from the date of
grant.
d. Purchase Price
.
The purchase price of the stock
covered by each Option shall be the fair market value (as defined
in paragraph 6) of a share of Common Stock as of the date of the
grant of such Option.
e. Exercise of
Options.
Options granted hereunder shall be
exercisable during an Option holder’s lifetime only by the
Option holder or by his or her guardian or legal representative.
Each Option granted under this Plan shall be exercisable in full
one year after the date of the grant. No Option may be exercised
for a fraction of a share and no partial exercise of any 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.
Each Option holder or his or her
guardian or legal representative who desires to exercise an Option
shall give advance written notice of such exercise to the Company
in
such form as may be prescribed from time to time
by the Committee. Before shares will be issued in connection with
an Option exercise, the purchase price for the shares shall be paid
in full by: (i) cash or check payable to the order of the
Company; (ii) Constructive or Actual Delivery of Mature
Shares; (iii) wire transfer to an account specified by the
Company or (iv) any combination of the foregoing. Shares of
Common Stock used to satisfy the exercise price of an Option shall
be valued at their fair market value determined in accordance with
paragraph 6 hereof.
For purposes hereof:
(i) the term “Constructive or
Actual Delivery” means either: (a) presentation to the
Company of a recent brokerage account statement or other written
evidence satisfactory to the Committee evidencing beneficial
ownership by an Eligible Director of shares of Common Stock other
than shares held in 401(k), pension, IRA or similar accounts; or
(b) physical delivery of certificates evidencing shares of
Common Stock, properly indorsed for transfer to the Company or with
an appropriately executed stock power; and
(ii) the term “Mature
Shares” means shares of Common Stock that satisfy the
following requirements: (a) have been owned by a Participant
free of any encumbrances, vesting requirements or similar
restrictions for at least six (6) months; and (b) have
not been exchanged or surrendered by Constructive or Actual
Delivery in full or partial payment of the Exercise Price and/or
the related tax withholding obligations arising out of an Option
exercise within the previous six months.
f. Restorative
Options.
No Restorative Options (as defined
in the next paragraph below) will be granted in connection with
Options under original grants made on or after February 3,
2009.
With regard to Options under
original grants made before February 3, 2009, and for
Restorative Options relating to such original grants, and subject
to the remaining provisions of this paragraph 5f, if (i) an
Eligible Director elects to pay some or all of the exercise price
of an Option granted on or after May 3, 2000 (the
“Underlying Option”) by Constructive or Actual Delivery
of Mature Shares, and (ii) for Options under original grants
made on or after February 1, 2006, and for Restorative Options
relating to such original grants, the fair market value
o
