EXHIBIT 10.1
DELPHI FINANCIAL GROUP, INC.
AMENDED AND RESTATED DIRECTORS STOCK OPTION PLAN
INTRODUCTION
Delphi Financial Group, Inc. (the "Company") adopted the Delphi Financial Group,
Inc. 1994 Directors Stock Option Plan effective April 12, 1994. Effective as of
March 20, 1997, the Company amended and restated such plan (subject to the
approval of the stockholders of the Company) to incorporate provisions whereby
the eligible members of its Board of Directors may receive stock options in lieu
of their annual cash retainers, to increase the number of shares subject to
nonqualified stock options available for issuance under such plan, and to effect
certain further amendments. Such plan, as so amended and restated, and as
further amended effective May 14, 1997, April 1, 1998, February 7, 2001 (subject
to the approval of the stockholders of the Company), and July 2, 2001 (subject
to the approval of the stockholders of the Company) is as follows:
1. PURPOSE
This Amended and Restated Directors Stock Option Plan (the "Plan") is intended
to increase the proprietary interest in Delphi Financial Group, Inc. (the
"Company") of outside directors of the Company, i.e., directors who are not
officers or employees of the Company or its subsidiaries, whose continued
services are important to the continued success of the Company, thereby
providing them with additional incentive to continue to serve as directors. The
Plan provides for the issuance of nonqualified stock options ("Options"). The
Plan shall be effective upon its approval
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by the stockholders of the Company (as provided in Section 10 below).
2. ADMINISTRATION
Except as to discretionary grants of Options pursuant to Section 5(B), the Plan
shall be substantially self-executing. Such discretionary grants, and any
administrative determinations regarding the Plan that may be required to be
made, shall be made pursuant to the affirmative vote of a majority of the
members of a committee consisting of the members of the Company's Board of
Directors (the "Committee"). All ministerial matters relating to the Plan shall
be performed by or at the direction of the Committee.
3. ELIGIBILITY
The persons who shall receive Options (the "Optionees") shall be members of the
Company's Board of Directors who are not officers or employees of the Company or
any of its subsidiaries ("Subsidiaries"), as that term is defined by Section
424(f) of the Internal Revenue Code of 1986, as amended from time to time (the
"Code"). Persons eligible to be Optionees are sometimes referred to herein as
"Outside Directors."
4. STOCK
The stock subject to the Options shall be shares (the "Shares") of the Company's
authorized but unissued or reacquired Class A common stock, par value $.01 per
share. The aggregate number of Shares as to which Options may be granted shall
not exceed 350,000. The limitation established by the preceding sentence shall
be subject to adjustment as provided in Section 5(C)(ix) of the Plan. In the
event that any outstanding Option under the Plan for any reason expires,
terminates or is cancelled, the Shares
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allocable to the unexercised portion of such Option will again be subject to
Options thereafter awarded under the Plan.
5. TERMS AND CONDITIONS OF OPTIONS
A. Options shall automatically be granted under the Plan as follows:
(i) On the day immediately following the date on which the Plan is
approved by the stockholders of the Company (as provided in Section 10
below), and thereafter on the first business day immediately following each
date on which the Company holds its annual meeting of stockholders
(commencing with the 1997 meeting), each Outside Director then in office
will automatically be awarded as of such date Options exercisable for a
number of Shares determined pursuant to the following formula: Number of
Option Shares = 2,000 (with such amount to be automatically proportionately
adjusted to reflect the cumulative effect of all events of the type
referred to in Section 5(C)(ix) hereof having occurred prior to such date)
multiplied by [1 + (.125 multiplied by the number of years of continuous
years of service of such Outside Director to that point, including any
portion of a year of service, which shall be treated as a full year)].
(ii) Each Outside Director shall, on the first business day following
each date on which such director is elected, reelected or appointed, as
applicable, to the Company's Board of Directors (the "Election Date"),
commencing with the elections to occur at the 1997 annual meeting of
stockholders, be awarded Options in lieu of the cash amount (the "Retainer
Amount") that such director would be entitled to receive for serving as
such in the period from the Election Date up to the date of the Company's
next following annual meeting of stockholders, exclusive of meeting fees,
fees for serving
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on any committee of the Board, or fees associated with any other services
provided to the Company or its Subsidiaries. Such Options will be
exercisable for the nearest number of whole Shares determined pursuant to
the following formula: Number of Option Shares = (Retainer Amount
multiplied by 3), divided by (Fair Market Value, as that term is defined in
Section 5(C)(ii) hereof, as of the award date). Notwithstanding the
foregoing, Options will not be awarded pursuant to this Section 5(A)(ii) if
the Outside Director files with the Secretary of the Company, on or prior
to the commencement of the calendar year in which the applicable Election
Date is to occur, a written election not to receive Options in lieu of the
Retainer Amount (other than the Election Date on which such director is
first elected or appointed, in which case such election may be made at any
time prior to such Election Date).
(iii) Each Outside Director shall, on the date on which an increase in
the Retainer Amount for the year of service commencing with the 2001 annual
meeting of stockholders (the "2001 Service Year") becomes effective, be
awarded Options in lieu of the additional cash amount that would otherwise
be paid for such year of service as result of such increase. The number of
Shares subject to such Option shall be determined as provided in Section
5(A)(ii) hereof, as if such additional cash amount were the Retainer Amount
referred to therein.
B. Without limiting the operation of Section 5(A) hereof, the Committee may
also make discretionary Option grants to Outside Directors hereunder. The
Committee may determine in its discretion the Outside Directors to whom any such
Options are to be granted under this Plan, the number of Shares to be subject to
each such Option and the other terms and conditions of such Options, consistent
with the terms of the Plan.
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C. Promptly after each award pursuant to Section 5(A) or Section 5(B)
hereof, a Notice of Award of Stock Option (an "Option Notice") shall be given to
each Optionee, which notice shall comply with and be subject to the following
terms and conditions:
(i) NUMBER OF SHARES. Each Option Notice shall state the number of
Shares to which it pertains.
(ii) OPTION PRICE. Each Option Notice shall state the Option price per
Share, which shall be 100% of the Fair Market Value of a Share on the date
of the grant of the Option (the "Option Price"). For purposes hereof, "Fair
Market Value" shall be the closing price on the applicable date of a Share,
as reported on the New York Stock Exchange (the "NYSE"), or, if the Shares
are not then listed for trading on the NYSE, the closing price of the
Shares as reported on another recognized securities exchange or on the
NASDAQ National Market System if the Shares shall then be listed on such
exchange or system. If the Shares did not trade on the award date on the
NYSE or such other applicable exchange or system, the Fair Market Value for
purposes hereof shall be the reported closing price on the last business
day on which the Shares were traded preceding the award date.
(iii) OPTION PRICE. The Option Notice may provide that the Optionee may
make payment of the Option Price in cash, Shares or such other
consideration as may be specified therein or as may be acceptable to the
Committee, or any combination thereof, in an amount or having an aggregate
value, as the case may be, equal to the total Option Price. Such payment
shall be made upon exercise of the Option.
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(iv) TERM, TRANSFERABILITY AND EXERCISABILITY OF OPTIONS.
(a) Each Option Notice shall state the date on which the Option
shall expire (the "Expiration Date"), which shall be ten years from the
date on which the Option is awarded. Options are not assignable or
transferable by an Optionee other than by will or the laws of descent
and distribution, or pursuant to a qualified domestic relations order
as defined by the Code or by Title I of the Employee Retirement Income
Security Act, or the rules thereunder. Notwithstanding the foregoing,
if provided in the applicable Option Notice (at the time of grant or at
any time thereafter), an Option granted hereunder may be transferred
for no consideration by the Optionee to members of his or her immediate
family, to a trust or trusts established for the exclusive benefit only
of one or more members of his or her immediate family or to a
partnership in which his or her immediate family members are the only
partners. Any Option held by the transferee will continue to be subject
to the same terms and conditions that were applicable to the Option
immediately prior to the transfer, except that the Option will be
transferable by the transferee only by will or the laws of descent and
distribution. For purposes hereof, "immediate family" means the
Optionee's children, stepchildren, grandchildren, parents, stepparents,
grandparents, spouse, siblings (including half brothers and sisters),
in-laws, and relationships arising because of legal adoption.
(b) Options granted pursuant to Section 5(A)(i) hereof shall
become exercisable in five equal annual installments of twenty percent
(20%) per year. Options granted pursuant to Section 5(A)(ii) hereof
shall become exercisable in four substantially equal
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installments (without taking into account any fractional share) on the
dates which follow the date of the grant by 90, 180, 270 and 360 days,
respectively. Options granted pursuant to Section 5(A)(iii) hereof
shall become exercisable in four substantially equal installments on
the same dates on which the Options granted pursuant to Section
5(A)(ii) hereof in relation to the 2001 Service Year become
exercisable. Options granted pursuant to Section 5(B) hereof shall
become exercisable on such terms and conditions as are established by
the Committee and set forth in the Option Notice. Once Options with
respect to Shares become exercisable as aforesaid, they may be
exercised in whole or in part from time to time through the applicable
Expiration Date, subject to the terms and conditions hereof. Upon or in
connection with a Change of Ownership, each Optionee shall have the
right, immediately prior to such Change of Ownership, to exercise his
or her Options without regard to the foregoing installment provisions
as to exercisability. For purposes of this Plan, a "Change of
Ownership" shall be deemed to have occurred (1) if individuals who, as
of the effective date of this Plan, constitute the Board of Directors
of the Company (the "Board of Directors" generally and as of the date
hereof the "Incumbent Board") cease for any reason to constitute at
least a majority of the directors constituting the Board of Directors,
provided that any person becoming a director subsequent to the
effective date of this Plan whose election, or nomination for election
by the Company's shareholders, was approved by a vote of at least
three-quarters (3/4) of the then directors who are members of the
Incumbent Board (other than an election or nomination of an individual
whose initial assumption of office is (A) in connection with the
acquisition by a third person, including a "group" as such term is used
in Section 13(d)(3) of the Securities and Exchange Act of 1934, as
amended (the "1934 Act"),
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of beneficial ownership, directly or indirectly, of 20% or more of the
combined voting securities ordinarily having the right to vote for the
election of directors of the Company (unless such acquisition of
beneficial ownership was approved by a majority of the Board of
Directors who are members of the Incumbent Board), or (B) in connection
with an actual or threatened election contest relating to the election
of the directors of the Company, as such terms are used in Rule 14a-11
of Regulation 14A promulgated under the 1934 Act) shall be, for
purposes of this Plan, considered as though such person were a member
of the Incumbent Board; or (2) if the stockholders of the Company
approve a merger, consolidation, recapitalization or reorganization of
the Company, reverse split of any class of voting securities of the
Company, or an acquisition of securities or assets by the Company, or
the sale or disposition by the Company of all or substantially all of
the Company's assets, or if any such transaction is consummated without
stockholder approval, other than any such transaction in which the
holders of outstanding Company voting securities immediately prior to
the transaction receive, with respect to such Company voting
securities, voting securities of the surviving or transferee entity
representing more than 60 percent of the total voting power outstanding
immediately after such transaction, with the voting power of each such
continuing holder relative to other such continuing holders not
substantially altered in the transaction; or (3) if the stockholders of
the Company approve a plan of complete liquidation of the Company.
(c) At any time and from time to time when any Option or portion
thereof is exercisable, such Option or portion thereof may be exercised
in whole or in part, as applicable; provided, however, that the
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Company shall not be required to issue fractional Shares.
(v) TERMINATION OF SERVICE EXCEPT BY DEATH, DISABILITY, RETIREMENT OR
REMOVAL FOR CAUSE. In the event that the Optionee shall cease to be an
Outside Director for any reason other than death, disability, retirement or
removal for cause as further provided herein, Options granted pursuant to
Section 5(A)(i) and Section 5(B) hereof may be exercised only within three
(3) months after such termination of service or such longer period as may
be established by the Committee at the time of grant or thereafter.
Sections 5(C)(vi) and 5(C)(viii) hereof shall not be construed to limit the
right of an Optionee (or, in the case of the death of an Optionee, the
persons referenced in the second sentence of Section 5(C)(vi)) to exercise
Options granted pursuant to Section 5(A)(ii) or Section 5(A)(iii) hereof
prior to their Expiration Date. Notwithstanding anything contained in this
Plan to the contrary, any Option that is not exercisable on the last day on
which an Optionee is an Outside Director shall expire immediately, and in
no event shall any Option be exercised after its Expiration Date.
(vi) DEATH OR DISABILITY OF OPTIONEE. In the event an Optionee shall
die or become disabled while a director of the Company, Options may be
exercised at any time within one (1) year after the Optionee's death or
disability or such longer period as may be established by the Committee at
the time of grant or thereafter, but only to the extent that such Option
was exercisable by the Optionee on the last day on which the Optionee was
an Outside Director, and in no event may an Option be exercised after its
Expiration Date. During such one-year period, the Option may be exercised
by the Optionee or a representative, or in the case of death, by the
executors or administrators of the Optionee or by any person or
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persons who shall have acquired the Option directly from the Optionee by
bequest or inheritance. Whether an Optionee shall have become disabled for
the purposes of the Plan shall be determined by the Committee, which
determination shall be final and conclusive.
(vii) REMOVAL FOR CAUSE. If an Optionee is removed as a director of the
Company on account of any act of (a) fraud or intentional misrepresentation
or (b) embezzlement, misappropriation or conversion of assets or
opportunities of the Company, or any unauthorized disclosure of
confidential information or trade secrets of the Company, all unexercised
Options shall terminate as of the date of such Optionee's removal.
(viii) RETIREMENT. To the extent an Option was exercisable on the last
date of service as a director of the Company, such Option may be exercised
up to one (1) year following the Optionee's retirement at or after age 75
or such longer period as may be established by the Committee at the time of
grant or thereafter, but in no event may an Option be exercised after its
Expiration Date.
(ix) RECAPITALIZATION, REORGANIZATION, ETC., OF COMPANY.
(a) Subject to any required action by the stockholders, the number
of Shares covered by each outstanding Option, and the price per Share
so covered, shall automatically be proportionately adjusted for any
increase or decrease in the number of issued shares of Class A Common
Stock of the Company resulting from a subdivision or consolidation of
Shares or the payment of a stock dividend or any other increase or
decrease in the number of such shares effected without receipt of
consideration by the Company.
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b) If, pursuant to any reorganization, recapitalization, sale or
exchange of assets, consolidation or merger, outstanding Class A Common
Stock of the Company is or would be exchanged for other securities of
the Company or of another corporation which is a party to such
transaction, or for property, whether or not any such transaction gives
rise to a Change of Ownership, any Options under the Plan theretofore
granted shall apply to the securities or property into which the Class
A Common Stock covered thereby shall be so changed or for which such
Class A Common Stock shall be exchanged. In any of such events, the
total number and class of Shares then remaining available for issuance
under the Plan (including Shares reserved for outstanding Options and
Shares available for future grant of Options under the Plan) shall
likewise be adjusted so that the Plan shall thereafter cover the number
and class of shares equivalent to the Shares covered by the Plan
immediately prior to such event.
(c) In the event of a change in the Class A Common Stock of the
Company as presently constituted, which is limited to a change of all
of its authorized shares with par value into the same number of shares
with a different par value or without par value, the shares resulting
from any such change shall be deemed to be the Class A Common Stock
within the meaning of the Plan.
(d) Adjustments pursuant to Section 5(C)(ix)(b) hereof shall be
made by the Committee, whose determination as to which shall be final,
binding and conclusive.
(e) Except as hereinbefore expressly provided in this Section
5(C)(ix), an Optionee shall have no rights by reason of any subdivision
or consolidation of shares
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of stock of any class or the payment of any stock dividend or any other
increase or decrease in the number of shares of stock of any class or
by reason of any dissolution, liquidation, merger or consolidation or
spin-off of assets or stock of another corporation, and any class, or
securities convertible into shares of stock of any class, shall not
affect, and no adjustment by reason thereof shall be made with respect
to, the number or price of shares of Class A Common Stock subject to
the Option.
(f) The grant of an Option pursuant to the Plan shall not affect
in any way the right or power of the Company to make adjustments,
reclassifications, mergers, reorganizations or changes of its capital
or business structure, to merge or to consolidate, to dissolve or
liquidate or to sell or transfer all or any part of its business or
assets.
(x) RIGHTS AS A STOCKHOLDER. No person shall have any rights as a
stockholder with respect to any Shares covered by an Option until the date
of the issuance of the Shares to such person. No adjustments shall be made
to outstanding Options for dividends (ordinary or extraordinary, whether in
cash, securities or other property) or distributions or other rights,
except as provided in Section 5(C)(ix) hereof.
(xi) MODIFICATION, EXTENSION AND RENEWAL OF OPTIONS. Subject to the
terms and conditions and within the limitations of the Plan, the Committee
may modify, extend or renew outstanding Options granted under the Plan, or
accept the surrender of outstanding Options (to the extent not theretofore
exercised). Notwithstanding the foregoing, however, no modification of an
Option shall, without the consent of the Optionee, alter or impair any
rights or obligations under any Option theretofore granted under the Plan.
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(xii) INVESTMENT PURPOSE. Each Option under the Plan shall be granted
on the condition that the purchases of Shares hereunder shall be for
investment purposes and not with a view to resale or distribution, except
that in the event the Shares subject to such Option are registered under
the Securities Act of 1933, as amended (the "Act"), or in the event a
resale of such Shares without such registration would otherwise be
permissible, such condition shall be inoperative if, in the opinion of
counsel for the Company, such condition is not required under the Act, or
any other applicable law, regulation or rule of any governmental agency.
(xiii) OTHER PROVISIONS. The Option Notice shall comply with and be
subject to the terms and conditions of the Plan, and shall contain such
other terms, conditions and provisions as the Committee shall deem
advisable.
6. TERM OF PLAN
Options shall be granted pursuant to the Plan from time to time within the
period of ten years from the earlier of the date of adoption of the Plan and the
date on which the Plan is approved by the stockholders of the Company.
7. AMENDMENT OF THE PLAN
The Board of Directors may, insofar as permitted by law, from time to time, with
respect to any Shares not then subject to Options, suspend or discontinue the
Plan or revise or amend it in any respect whatsoever, subject to the approval of
the stockholders of the Company where such approval is required by law or
regulation or pursuant to the rules of the NYSE or, if the Shares are not listed
on the NYSE, the rules of any other exchange or market on which the Shares may
be traded.
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8. APPLICATION OF FUNDS
The proceeds received by the Company from the sale of shares pursuant to Options
will be used for general corporate purposes.
9. NO OBLIGATION TO EXERCISE OPTION
The granting of an Option shall impose no obligation upon the Optionee to
exercise such Option.
10. APPROVAL OF STOCKHOLDERS
This Plan shall be effective upon its approval by the stockholders of the
Company.
11. NO RIGHT TO NOMINATION
Neither the Plan nor any action taken hereunder shall be construed as giving any
director any right to be nominated for reelection to the Company's Board of
Directors.
12. EFFECT OF PLAN UPON OTHER OPTIONS AND COMPENSATION PLANS
The adoption of this Plan shall not affect any other compensation or incentive
plans in effect for the Company or any Subsidiary. Nothing in this Plan shall be
construed to limit the right of the Company or any Subsidiary to (a) establish
any other forms of incentives or compensation for employees or directors of or
persons associated with the Company or any Subsidiary, or (b) grant or assume
options otherwise than under this Plan in connection with any proper corporate
purpose, including, but not by way of limitation, the grant or assumption of
options in connection with the acquisition by purchase, lease, merger,
consolidation or otherwise, of the business, stock or assets of any corporation,
firm or association.
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