EXHIBIT 10.2
E. W. BLANCH HOLDINGS, INC.
DIRECTORS' STOCK OPTION PLAN
1. Purpose of the Plan. The purpose of this E. W. Blanch Holdings, Inc.
Directors' Stock Option Plan is to attract and retain the best available
individuals for service as Directors of the Company and provide additional
incentive to the Outside Directors of the Company to serve as Directors.
None of the Options granted hereunder shall be "incentive stock options" within
the meaning of Section 422 of the Code (as hereinafter defined).
2. Definitions. As used herein, the following definitions shall apply:
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(c) "Common Stock" shall mean the Common Stock of the Company.
(d) "Company" shall mean E. W. Blanch Holdings, Inc., a Delaware corporation.
(e) "Continuous Status as a Director" shall mean the absence of any interruption
or termination of service as a Director.
(f) "Director" shall mean a member of the Board.
(g) "Employee" shall mean any person, including officers and Directors, employed
by the Company or any parent or Subsidiary of the Company. The payment
of a Director's fee by the Company shall not be sufficient in and of
itself to constitute "employment" by the Company.
(h) "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
(i) "Fair Market Value" of a Share shall mean the closing price of the Common
Stock on the date of determination.
(j) "Option" shall mean a stock option granted pursuant to the Plan.
(k) "Optioned Stock" shall mean the Common Stock subject to an Option.
(l) "Optionee" shall mean an Outside Director who receives an Option.
(m) "Outside Director" shall mean a Director who is not an Employee.
(n) "Parent" shall mean a "parent corporation," whether now or hereafter
existing, as defined in Section 425(e) of the Code.
(o) "Plan" shall mean this Directors' Stock Option Plan.
(p) "Shares" shall mean shares of the Common Stock, as adjusted in accordance
with Section 10 of the Plan.
(q) "Subsidiary" shall mean a "subsidiary corporation," whether now or hereafter
existing, as defined in Section 425(f) of the Code.
3. Stock Subject to the Plan. Subject to the provisions of Section 10 of the
Plan, the maximum aggregate number of Shares which may be optioned and sold
under the Plan is 300,000 Shares of Common Stock. The Shares shall be issued
from the Company's treasury stock. If an Option should expire or become
unexercisable for any reason without having been exercised in full, the
unpurchased Shares which were subject thereto shall, unless the Plan shall
have been terminated, become available for future grant under the Plan. If
Shares which were acquired upon exercise of an Option are subsequently
repurchased by the Company, such Shares shall not in any event be returned
to the Plan and shall not become available for future grant under the Plan.
4. Administration of and Grants of Options under the Plan.
(a) Administrator. Except as otherwise required herein, the Plan shall be
administered by the Board.
(b) Procedurefor Grants. The provisions set forth in this Section 4(b) shall not
be amended more than once every six months, other than to comport with
changes in the Code, the Employee Retirement Income Security Act of
1974, as amended, or the rules thereunder. All grants of Options
hereunder shall be automatic and nondiscretionary and shall be made
strictly in accordance with the following provisions:
(i) No person shall have any discretion to select which Outside Directors shall
be granted Options or to determine the number of Shares to be covered by
Options granted to Outside Directors.
(ii) Each Outside Director shall be automatically granted an Option (an "Initial
Grant") to purchase 5,000 Shares upon the date on which such person
first becomes a Director, whether through election by the shareholders
of the Company or appointment by the Board of Directors to
fill a vacancy. All Outside Directors as of the date this Plan is
approved by the Board shall be automatically granted an Initial Grant
Option to purchase 5,000 Shares upon the date when this Plan is approved
by the Board. Options granted under this Section 4(b)(ii) shall become
vested and thereby exercisable with respect to 33 1/3% of the Optioned
Stock on the date of such Initial Grant, with respect to 33 1/3% of the
Optioned Stock on the twelve month anniversary date of such Initial
Grant and with respect to 33 1/3% of the Optioned Stock on the date of
the second twelve month anniversary date; provided, however, an unvested
portion of an Initial Grant shall only vest so long as the Outside
Director remains a Director on the date such portion vests.
(iii) Each Outside Director shall automatically receive, on the date of each
Annual Meeting of Shareholders of the Company, an Option to purchase
2,000 Shares, such Option to become exercisable six months subsequent to
the date of grant; provided, however, that such Option shall only be
granted to Outside Directors who have served since the date of the last
Annual Meeting of Shareholders and who will continue to serve as Outside
Directors after the date of grant of such Option.
(iv) The terms of an Option granted hereunder shall be as follows:
(A)The term of the Option shall be ten (10) years.
(B) The Option shall be exercisable only while the Outside Director remains a
Director of the Company, except as set forth in Section 8 hereinof.
(C) The exercise price per Share shall be 100% of the Fair Market Value per
Share on the date of grant of the Option.
(D) A Director shall be entitled to receive Options to purchase a total of no
more than 100,000 Shares pursuant to the terms of this Plan.
(c) Powers of the Board. Subject to the provisions and restrictions of the Plan,
the Board shall have the authority, in its discretion: (i) to determine,
upon review of relevant information, the Fair Market Value of the Common
Stock; (ii) to determine the exercise price per share of Options to be
granted, which exercise price shall be determined in accordance with
Section 4(b)(iv)(C) of the Plan; (iii) to interpret the Plan; (iv) to
prescribe, amend and rescind rules and regulations relating to the Plan;
(v) to authorize any person to execute on behalf of the Company any
instrument required to effectuate the grant of an Option previously
granted hereunder and (vi) to make all other determinations deemed
necessary or advisable for the administration of the Plan.
(d) Effect of Board's Decision. All decisions, determinations and
interpretations of the Board shall be final and binding on all Optionees
and any other holders of any Options granted under the Plan.
5. Eligibility. Options may be granted only to Outside Directors. All Options
shall be automatically granted in accordance with the terms set forth in
Section 4(b) hereof.
The Plan shall not confer upon any Optionee any right with respect to
continuation of service as a Director or nomination to serve as a Director,
nor shall it interfere in any way with any rights which the Director or the
Company may have to terminate his directorship at any time.
6. Term of Plan. The Plan shall become effective upon its adoption by the
Board. and shall continue in effect for a term of ten (10) years unless
sooner terminated under Section 12 of the Plan.
7. Consideration. Subject to compliance with provisions of
applicable law the consideration to be paid for the Shares to be issued
upon exercise of an Option, including the method of payment, shall be
determined by the Board and may consist entirely of (i) cash, (ii)
check, (iii) other Shares which have a Fair Market Value on the date of
exercise equal to the aggregate exercise price of the Shares as to which
said Option shall be exercised, (iv) authorization for the Company to
retain from the total number of Shares as to which the Option is
exercised that number of Shares having a Fair Market Value on the date
of exercise equal to the exercise price for the total number of Shares
as to which the Option is exercised, (v) delivery of a properly executed
exercise notice together with irrevocable instructions to a broker to
promptly deliver to the Company the amount of sale or loan proceeds
required to pay the exercise price, (vi) delivery of an irrevocable
subscription agreement for the Shares which irrevocably obligates the
Option holder to take and pay for the Shares not more than twelve months
after the date of delivery of the subscription agreement, (vii) any
combination
of the foregoing methods of payment or (vii) such other consideration
and method of payment for the issuance of Shares as may be permitted
under applicable laws. In making its determination as to the type of
consideration to accept, the Board shall consider whether acceptance of
such consideration may be reasonably expected to benefit the Company.
8. Exercise of Option.
(a) Procedure for Exercise: Rights as a Shareholder. Any Option granted
hereunder shall be exercisable at such times as are set forth in Section
4(b) hereof.
An Option may not be exercised for a fraction of a Share.
An Option shall be deemed to be exercised when written notice of such exercise
has been given to the Company in accordance with the terms of the Option
by the person entitled to exercise the Option and full payment for the
Shares with respect to which the Option is exercised has been received
by the Company. Full payment may consist of any consideration and method
of payment allowable under Section 7 of the Plan. Until the issuance (as
evidenced by the appropriate entry on the books of the Company or of a
duly authorized transfer agent of the Company) of the stock certificate
evidencing such Shares, no right to vote or receive dividends or any
other rights as a shareholder shall exist with respect to the Optioned
Stock, notwithstanding the exercise of the Option. A share certificate
for the number of Shares so acquired shall be issued to the Optionee as
soon as practicable after exercise of the Option. No adjustment will be
made for a dividend or other right for which the record date is prior to
the date the stock certificate is issued, except as provided in Section
10 of the Plan.
Exercise of an Option in any manner shall result in a decrease in the number of
Shares which thereafter may be available, both for purposes of the Plan
and for sale under the Option, by the number of Shares as to which the
Option is exercised.
(b) Termination of Status as a Director. If an Outside Director ceases to serve
as a Director, he may, but only within three (3) years after the date he
ceases to be a Director of the Company, or by the date of termination of
the Option, whichever is earlier, exercise his Option to the extent that
he was entitled to exercise it at the date he ceases to be a Director.
To the extent that he was not entitled to exercise an Option at the date
of such termination, or if he does not exercise such Option (which he
was entitled to exercise) within the time specified herein, the Option
shall terminate.
(c) Disability of Optionee. Notwithstanding the provisions of Section 8(b)
above, in the event an Optionee is unable to continue his service as a
Director with the Company as a result of total and permanent disability
(as defined in Section 22(e)(3) of the Code) he may, but only within
three (3) years from the date he ceases to be a Director, or by the date
of termination of the Option, whichever is earlier, exercise his Option
to the extent he was entitled to exercise it at the date he ceases to be
a Director. To the extent that he was not entitled to exercise the
Option at the date of termination, or if he does not exercise such
Option (which he was entitled to exercise) within the time specified
herein, the Option shall terminate.
(d) Death of Optionee. Notwithstanding the provisions of Section 8(b) above, in
the event of the death of an Optionee:
(i) during the term of the Option who is at the time of his death a Director of
the Company and who has been in Continuous Status as a Director since
the date of grant of the Option, the Option may be exercised, at any
time within twelve (12) months following the date of death, by the
Optionee's estate or by a person who acquired the right to exercise the
Option by bequest or inheritance, but only to the extent of the right to
exercise that would have accrued had the Optionee continued living and
remained in Continuous Status as a Director for twelve (12) months after
the date of death; or
(ii) within thirty (30) days after the termination of Continuous Status as a
Director, the Option may be exercised, at any time within twelve (12)
months following the date of death, by the Optionee's estate or by a
person who acquired the right to exercise the Option by bequest or
inheritance, but only to the extent of the right to exercise that had
accrued at the date of termination of Continuous Status as a Director.
9. Non-Transferability of Options. An Option may not be sold, pledged,
assigned, hypothecated, transferred or disposed of in any manner other than
by will or by the laws of descent or distribution and may be exercised,
during the lifetime of the Optionee, only by the Optionee.
10. Adjustments Upon Changes in Capitalization, Dissolution or Merger.
(a) In the event that the number of outstanding shares of Common Stock of the
Company is changed by a stock dividend, stock split, reverse stock
split, combination, reclassification or similar change in the capital
structure of the Company without consideration, the number of Shares
available under this Plan and the number of Shares, subject to
outstanding Options and the exercise price per share of such Options,
shall be proportionately adjusted, subject to any required action by the
Board or shareholders of the Company and compliance with applicable
securities laws; provided, however, that no certificate or scrip
representing fractional shares shall be issued upon exercise of any
Option and any resulting fractions of a Share shall be ignored. Such
adjustment shall be made by the Board, whose determination in that
respect shall be final, binding and conclusive.
(b) In the event of a dissolution or liquidation of the Company, a merger in
which Company is not the surviving corporation, a transaction or series
of related transactions in which 20% or more of the then outstanding
voting stock is sold or otherwise transferred, or the sale of
substantially all of the assets of the Company, any or all outstanding
Options shall, notwithstanding any contrary terms of the written
agreement governing such Option, accelerate and become exercisable in
full at least ten days prior to (and shall expire on) the consummation
of such dissolution, liquidation, merger or sale of stock or sale of
assets on such conditions as the Board shall determine unless the
successor corporation assumes the outstanding Options or substitutes
substantially equivalent options.
11. Time of Granting Options. The date of grant of an Option shall, for all
purposes, be the date determined in accordance with Section 4(b) hereof.
Notice of the determination shall be given to each Outside Director to whom
an Option is so granted within a reasonable time after the date of such
grant.
12. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may at any time amend, alter, suspend,
or discontinue the Plan, but no amendment, alteration, suspension, or
discontinuance shall be made which would impair the rights of any
Optionee under any grant theretofore made, without his or her consent.
In addition, to the extent necessary and desirable to comply with any
applicable law or regulation or the requirements of any stock exchange
upon which the Shares may then be listed, the Company shall obtain
shareholder approval of any Plan amendment in such a manner and to such
a degree as required.
(b) Effect of Amendment or Termination. Any such amendment or termination of the
Plan shall not affect Options already granted and such Options shall
remain in full force and effect as if this Plan had not been amended or
terminated, unless mutually agreed otherwise between the Optionee and
the Board, which agreement must be in writing and signed by the Optionee
and the Company.
13. Conditions Upon Issuance of Shares. Shares shall not be issued pursuant to
the exercise of an Option unless the exercise of such Option and the
issuance and delivery of such Shares pursuant thereto shall comply with all
relevant provisions of law, including, without limitation, the Securities
Act of 1933, as amended, the Exchange Act, the rules and regulations
promulgated thereunder, state securities laws and the requirements of any
stock exchange upon which the Shares may then be listed, and shall be
further subject to the approval of counsel for the Company with respect to
such compliance.
As a condition to the exercise of an Option, the Company may require the
person exercising such Option to represent and warrant at the time of any
such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares, if, in the
opinion of counsel for the Company, such a representation is required by any
of the aforementioned relevant provisions of law.
Inability of the Company to obtain authority from any regulatory body having
jurisdiction which authority is deemed by the Company's counsel to be
necessary to the lawful issuance and sale of any Shares hereunder, shall
relieve the Company of any liability in respect of the failure to issue or
sell such Shares as to which such requisite authority shall not have been
obtained.
14. Reservation of Shares. The Company, during the term of this Plan, will at
all times reserve and keep available from its treasury stock such number of
Shares for issuance pursuant to this Plan as shall be sufficient to satisfy
the requirements of the Plan.
15. Option Agreement. Options shall be evidenced by written option agreements in
such form as the Board shall approve.
16. Information to Optionees. The Company shall provide to each Optionee, during
the period for which such Optionee has one or more Options outstanding,
copies of all annual reports to shareholders, proxy statements and other
information provided to all shareholders of the Company.