Exhibit 10.7
AMERISAFE, INC.
2005 EQUITY INCENTIVE PLAN
INCENTIVE STOCK OPTION AWARD AGREEMENT
THIS OPTION AWARD AGREEMENT (this "Agreement"), dated as of __________, is
entered into between AMERISAFE, INC. a Texas corporation (the "Company"), and
____________________ ("Optionee"). Capitalized terms used herein but not defined
shall have the meanings assigned to those terms in the AMERISAFE, Inc. 2005
Equity Incentive Plan (the "Plan").
1. Grant of Option Right. Pursuant to the Plan, the Company hereby grants
to Optionee, as a Participant in the Plan and effective as of the Date of Grant
(as defined in Section 3), an option right ("Option Right") to purchase ___
shares ("Option Shares") of the Company's common stock, par value $0.01 per
share ("Common Shares"), at the price of $_________ per share (the "Option
Price").
2. Type of Option Right. The Option Right is intended to qualify as an
"incentive stock option" within the meaning of Section 422 of the Code.
3. Date of Grant. The effective date of the grant of this Option Right is
_______ ("Date of Grant").
4. Date of Expiration. This Option Right shall expire on the tenth
anniversary of the Date of Grant (the "Date of Expiration"), unless earlier
terminated under Section 7(a).
5. Vesting of Option Right.
(a) Except as otherwise provided in this Agreement, the Option Right
shall become vested and exercisable to the extent of 20% of the Option
Shares on each of the first five anniversaries of the Date of Grant;
provided, however, that if the Board determines that Optionee has
satisfied the management objectives established by the Board and attached
as Appendix A hereto as of the ____ anniversary of the Date of Grant, the
Option Right shall become fully vested and exercisable on the ____
anniversary of the Date of Grant.
(b) Notwithstanding the provisions of Section 5(a) above, the Option
Right shall become immediately vested and exercisable in full upon the
occurrence of a Change in Control, as defined in the Plan.
(c) Notwithstanding Section 5(a) above, the Board, in its sole
discretion, may determine within 60 days following one of the events
described in clauses (i) through (iii) below that the Option Right shall
become immediately exercisable in full (i) if Optionee becomes permanently
disabled (as determined by the Board), (ii) if Optionee dies while an
employee of the Company or a Subsidiary, (iii) if Optionee retires at or
after the earliest voluntary retirement age permitted by his or her
employer or with the consent of the Board, or (iv) under other special
circumstances.
6. Manner of Exercise.
(a) To the extent that the Option Right is exercisable in accordance
with Section 5, the Option Right may be exercised by Optionee at any time,
or from time to time, in whole or in part on or prior to the Termination
Date; provided, however, that Optionee must exercise the Option Right in
multiples of 100 Option Shares unless fewer than 100 Option Shares are
available for purchase by Optionee under this Agreement at the time of
exercise.
(b) Optionee shall exercise the Option Right by delivering a signed
written notice to the Company, which notice shall specify the number of
Option Shares to be purchased and be accompanied by payment in full of the
Option Price and any required taxes (as provided in the Plan) for the
number of Option Shares specified for purchase; provided, however, that
payment of the Option Price may be deferred and paid from the proceeds of
sale through a bank or broker on a date satisfactory to the Company of
some or all of the shares to which such exercise relates.
(c) The Option Price shall be payable (i) in cash or by check
acceptable to the Company or by wire transfer of immediately available
funds, (ii) by the actual or constructive transfer to the Company of
Common Shares owned by Optionee for at least six months having a Market
Value per Share at the time of exercise equal to the total Option Price,
or (iii) by a combination of such methods of payment.
(d) The Company's obligation to deliver Option Shares to Optionee is
subject to and conditioned upon Optionee satisfying all tax obligations
associated with Optionee's exercise of the Option Right. The Company and
its Subsidiaries, as applicable, shall be entitled to deduct from any
payment otherwise due to Optionee the amount necessary to satisfy all such
taxes.
(e) Upon full payment of the Option Price and satisfaction of all
applicable tax obligations, and subject to the applicable terms and
conditions of the Plan and the terms and conditions of this Agreement, the
Company will cause certificates for the Option Shares purchased hereunder
to be delivered to Optionee.
7. Termination.
(a) The Option Right shall terminate on the earliest of the
following dates (such date, the "Termination Date"):
(i) 90 days after Optionee's employment with the Company or a
Subsidiary is terminated for any reason other than permanent
disability (as determined by the Board) or death; provided, however,
that Optionee's Option Right shall terminate immediately if Optionee
is terminated for cause. For purposes of the foregoing, termination
for cause shall [mean the involuntary termination of Optionee's
employment initiated by Optionee's employer for any of the
disciplinary reasons set forth in the employee handbook of
Optionee's employer] [be as defined in Optionee's employment
agreement] as in effect at the time of termination.
(ii) One year after Optionee becomes permanently disabled (as
determined by the Board) or dies, if Optionee dies or becomes
permanently disabled while an employee of the Company or Subsidiary;
or
(iii) The Date of Expiration.
(b) Subject to Section 5(c), during the 90-day period referred to in
Section 7(a)(i) above and the one-year period referred to in Section
7(a)(ii) above, the Option Right may be exercised only to the extent that,
at the time that Optionee ceases to be an employee of the Company or a
Subsidiary, it is exercisable pursuant to Section 5 hereof.
(c) For the purposes of this Agreement, the continuous employment of
Optionee with the Company or a Subsidiary shall not be deemed to have been
interrupted, and Optionee shall not be deemed to have ceased to be an
employee of the Company or Subsidiary by reason of (i) the transfer of
Optionee's employment among the Company and its Subsidiaries, (ii) an
approved leave of absence of not more than 90 days, or (iii) the period of
any leave of absence required to be granted by the Company under any law,
rule, regulation or contract applicable to Optionee's employment with the
Company or any Subsidiary.
8. Share Certificates. All certificates evidencing Option Shares purchased
pursuant hereto, and any certificates for Common Shares issued as dividends on,
in exchange of, or as replacements for, certificates evidencing Option Shares
which, in the opinion of counsel for the Company, are subject to similar legal
requirements, shall have endorsed thereon before issuance such restrictive or
other legends as the Company (upon advice of counsel) may deem necessary or
advisable. The Company and any transfer agent shall not be required to register
or record the transfer of any such shares unless and until the Company or its
transfer agent shall have received from Optionee's counsel an opinion, in a form
satisfactory to the Company, that any such transfer will not be in violation of
any applicable law, rule or regulation. Optionee agrees not to sell, assign,
pledge or otherwise dispose of any Option Shares or any Common Shares that are
subject to restrictions on transfer described in this Section 8 without the
Company first receiving such an opinion.
9. Transfer. The Option Right may not be transferred by Optionee except by
will or the laws of descent and distribution and may not be exercised during the
lifetime of Optionee except by Optionee or Optionee's guardian or legal
representative acting on behalf of Optionee in a fiduciary capacity under state
law and court supervision.
10. Disqualifying Dispositions. If within one year of exercising the
Option Right, Optionee sells, assigns or transfers such Common Shares, Optionee
agrees to provide immediate written notice to the Company of such disposition
including the date, number of shares and consideration received for such
disposition.
11. Compliance with Law. The Company shall make reasonable efforts to
comply with all applicable federal or state securities laws; provided, however,
that notwithstanding any
other provision of this Agreement, the Option Right shall not be exercisable if
the exercise and issuance of the Option Shares would result in a violation of
any such laws.
12. Employment Rights. This Agreement shall not confer on Optionee any
right with respect to the continuance of employment or other service with the
Company or any Subsidiary. No provision of this Agreement shall limit in any way
whatsoever any right that the Company or a Subsidiary may otherwise have to
terminate the employment of Optionee at any time.
13. Communications. All notices, demands and other communications required
or permitted hereunder or designated to be given with respect to the rights or
interests covered by this Agreement shall be deemed to have been properly given
or delivered when delivered personally or sent by certified or registered mail,
return receipt requested, U.S. mail or reputable overnight carrier, with full
postage prepaid and addressed to the parties as follows:
If to the Company, at: the Company's principal executive attention of
the Secretary office, addressed to the
If to Optionee, at: Optionee's address provided by Optionee on the
last page hereof
Either the Company or Optionee may change the above designated address by
written notice to the other specifying such new address.
14. Interpretation. The interpretation and construction of this Agreement
by the Board shall be final and conclusive. No member of the Board shall be
liable for any such action or determination made in good faith.
15. Amendments. The Plan may be amended, suspended or terminated and this
Agreement may be amended by the Board for purposes of satisfying changes in the
law or for any other lawful purposes, provided that (i) no such action shall
adversely affect Optionee's rights under this Agreement without Optionee's
consent, and (ii) all such amendments shall be in writing.
16. Integration. The Option Right is granted pursuant to the Plan.
Notwithstanding anything in this Agreement to the contrary, this Agreement is
subject to all of the terms and conditions of the Plan, a copy of which has been
made available to the Optionee and is available upon request to the Secretary at
the address specified in Section 13 and which is incorporated herein by
reference. As such, this Agreement and the Plan embody the entire agreement and
understanding of the Company and Optionee and supersede any prior understandings
or agreements, whether written or oral, with respect to the Option Right.
17. Severance. In the event that one or more of the provisions of this
Agreement shall be invalidated for any reason by a court of competent
jurisdiction, any provision so invalidated shall be deemed to be separable from
the other provisions hereof and the remaining provisions hereof shall continue
to be valid and fully enforceable.
18. Governing Law. This Agreement is made under, and shall be construed in
accordance with, the laws of the State of Texas, without regard to the conflict
of laws principles thereof.
19. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, this Agreement is executed by a duly authorized
representative of the Company on the day and year first above written.
AMERISAFE, INC.
By: ________________________________________
Name: _______________________________________
Title: ______________________________________
The undersigned Optionee hereby acknowledges receipt of an executed original of
this Agreement and accepts the Option Right subject to the applicable terms and
conditions of the Plan and the terms and conditions hereinabove set forth.
Date: _________________________ _____________________________
Optionee
OPTIONEE: Please complete/update the following information, as applicable.
Name: ________________________________________
________________________________________
Home Address: ________________________________________
________________________________________
Social Security Number: ________________________________________