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EXHIBIT 10.2
AMERISAFE, INC.
1996 STOCK INCENTIVE PLAN
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AMERISAFE, INC.
1996 STOCK INCENTIVE PLAN
TABLE OF CONTENTS
PAGE
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1. Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
3. Shares Available under the Plan . . . . . . . . . . . . . . . . . . . . . . . 2
4. Option Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
5. Appreciation Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
6. Restricted Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
7. Transferability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
8. Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
9. Fractional Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
10. Withholding Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
11. Certain Terminations of Employment, Hardship and Approved Leaves of
Absence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
12. Administration of the Plan . . . . . . . . . . . . . . . . . . . . . . . . . 6
13. Amendments and Other Matters . . . . . . . . . . . . . . . . . . . . . . . . 7
14. Termination of the Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
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AMERISAFE, INC.
1996 STOCK INCENTIVE PLAN
1. Purpose. The purpose of this AMERISAFE, Inc. 1996 Stock
Incentive Plan is to attract and retain directors, officers and other salaried
employees of AMERISAFE, Inc., and its Subsidiaries (as defined) and to provide
such persons with incentives and rewards for superior performance.
2. Definitions. As used in this Plan:
"Appreciation Rights" means a right granted pursuant to Section 5 of
this Plan, including a Free-Standing Appreciation Right and a Tandem
Appreciation Right.
"Base Price" means the price to be used as the basis for determining
the Spread upon the exercise of a Free-Standing Appreciation Right.
"Board" means the Board of Directors of the Corporation.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time.
"Common Shares" means (i) shares of the Class A Common Stock, $.01 par
value per share, of the Corporation and (ii) any security into which Common
Shares may be converted by reason of any transaction or event of the type
referred to in Section 8 of this Plan.
"Corporation" means AMERISAFE, Inc., a Texas corporation.
"Date of Grant" means the date specified by the Board on which a grant
of Option Rights, Appreciation Rights or a grant or sale of Restricted Shares
shall become effective, which shall not be earlier than the date on which the
Board takes action with respect thereto.
"Free-Standing Appreciation Right" means an Appreciation Right granted
pursuant to Section 5 of this Plan that is not granted in tandem with an Option
Right or similar right.
"Incentive Stock Option" means an Option Right that is intended to
qualify as an "incentive stock option" under Section 422 of the Code or any
successor provision thereto.
"Management Objectives" means the achievement of performance
objectives established pursuant to this Plan.
"Market Value per Share" means the fair market value of the Common
Shares as determined by the Board from time to time.
"Nonqualified Option" means an Option Right that is not intended to
qualify as a Tax-Qualified Option.
"Optionee" means the person so designated in an agreement evidencing
an outstanding Option Right.
"Option Price" means the purchase price payable upon the exercise of
an Option Right.
"Option Right" means the right to purchase Common Shares from the
Corporation upon the exercise of a Nonqualified Option or a Tax-Qualified
Option granted pursuant to Section 4 of this Plan.
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"Participant" means a person who is selected by the Board to receive
benefits under this Plan and (i) is at that time a director, officer or other
salaried employee of the Corporation or any Subsidiary, or (ii) has agreed to
commence serving in any such capacity.
"Plan" means this AMERISAFE, Inc. 1996 Stock Incentive Plan.
"Restricted Shares" means Common Shares as to which neither the
substantial risk of forfeiture nor the restrictions on transfer referred to in
Section 6 hereof has expired.
"Rule 16b-3" means Rule 16b-3, as promulgated and amended from time to
time by the Securities and Exchange Commission under the Securities Exchange
Act of 1934, as amended, or any successor rule.
"Spread" means, in the case of a Free-Standing Appreciation Right, the
amount by which the Market Value per Share on the date when the Appreciation
Right is exercised exceeds the Base Price specified therein or, in the case of
a Tandem Appreciation Right, the amount by which the Market Value per Share on
the date when the Appreciation Right is exercised exceeds the Option Price
specified in the related Option Right.
"Subsidiary" means a corporation, partnership, joint venture,
unincorporated association or other entity in which the Corporation has a
direct or indirect ownership or other equity interest; provided, however, for
purposes of determining whether any person may be a Participant for purposes of
any grant of Incentive Stock Options, "Subsidiary" means any corporation in
which the Corporation owns or controls directly or indirectly at least 50
percent of the total combined voting power represented by all classes of stock
issued by such corporation at the time of the grant.
"Tandem Appreciation Right" means an Appreciation Right granted
pursuant to Section 5 of this Plan that is granted in tandem with an Option
Right or any similar right granted under any other plan of the Corporation.
"Tax-Qualified Option" means an Option Right that is intended to
qualify under particular provisions of the Code, including without limitation
an Incentive Stock Option.
3. Shares Available under the Plan. (a) Subject to adjustment as
provided in Section 8 of this Plan, the number of Common Shares issued or
transferred and covered by outstanding awards granted under this Plan shall not
in the aggregate exceed 3,000,000 Common Shares, which may be Common Shares of
original issuance or Common Shares held in treasury or a combination thereof.
For the purposes of this Section 3(a):
(i) Upon payment in cash of the benefit provided by any
award granted under this Plan, any Common Shares that were covered by
that award shall again be available for issuance or transfer
hereunder.
(ii) Common Shares covered by any award granted under this
Plan shall be deemed to have been issued or transferred, and shall
cease to be available for future issuance or transfer in respect of
any other award granted hereunder, at the earlier of the time when
they are actually issued or transferred or the time when dividends or
dividend equivalents are paid thereon; provided, however, that
Restricted Shares shall be deemed to have been issued or transferred
at the earlier of the time when they cease to be subject to a
substantial risk of forfeiture or the time when dividends are paid
thereon.
(b) Notwithstanding anything to the contrary contained in this
Plan, including without limitation Section 3(a) hereof, the aggregate number of
Common Shares actually issued or transferred by the Corporation upon the
exercise of the Incentive Stock Options shall not exceed 3,000,000 Common
Shares.
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(c) Notwithstanding anything to the contrary contained in this
Plan, no Participant shall be granted, in the aggregate, Option Rights and
Appreciation Rights for more than 1,500,000 Common Shares during any period of
five consecutive calendar years, subject to adjustment as provided in Section 8
of this Plan.
4. Option Rights. The Board may from time to time authorize
grants to Participants of options to purchase Common Shares upon such terms and
conditions as the Board may determine in accordance with the following
provisions:
(a) each grant shall specify the number of Common Shares
to which it pertains; and
(b) each grant shall specify the form of consideration to
be paid in satisfaction of the Option Price and the manner of payment
of such consideration, which may include (i) cash in the form of
currency or check or other cash equivalent acceptable to the
Corporation, (ii) nonforfeitable, unrestricted Common Shares, which
are already owned by the Optionee and have a value at the time of
exercise that is equal to the Option Price, (iii) any other legal
consideration that the Board may deem appropriate and (iv) any
combination of the foregoing.
(c) Any grant may provide for deferred payment of the
Option Price from the proceeds of sale through a broker of some or all
of the Common Shares to which the exercise relates.
(d) Successive grants may be made to the same Participant
regardless of whether any Option Rights previously granted to the
Participant remain unexercised.
(e) Each grant shall specify the period or periods of
continuous employment of the Optionee by the Corporation or any
Subsidiary, or the achievement of Management Objectives, or both, that
are necessary before the Option Rights or installments thereof shall
become exercisable, and any grant may provide for the earlier exercise
of the Option Rights in the event of a change in control of the
Corporation or other similar transaction or event.
(f) Option Rights granted pursuant to this Section 4 may
be Nonqualified Options or Tax-Qualified Options or combinations
thereof.
(g) On or after the Date of Grant of any Nonqualified
Option, the Board may provide for the payment to the Optionee of
dividend equivalents thereon in cash or Common Shares on a current,
deferred or contingent basis, or the Board may provide that any
dividend equivalents shall be credited against the Option Price.
(h) No Option Right granted pursuant to this Section 4
may be exercised more than 10 years from the Date of Grant.
(i) Each grant shall be evidenced by an agreement, which
shall be executed on behalf of the Corporation by any officer thereof
and delivered to and accepted by the Optionee and shall contain such
terms and provisions as the Board may determine consistent with this
Plan.
5. Appreciation Rights. The Board may also authorize
grants to Participants of Appreciation Rights. An Appreciation Right shall be
a right of the Participant to receive from the Corporation an amount, which
shall be determined by the Board and shall be expressed as a percentage (not
exceeding 100 percent) of the Spread at the time of the exercise of an
Appreciation Right. Any grant of Appreciation Rights under this Plan shall be
upon such terms and conditions as the Board may determine in accordance with
the following provisions:
(a) Any grant may specify that the amount payable upon
the exercise of an Appreciation Right may be paid by the Corporation
in cash, Common Shares or any combination
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thereof and may (i) either grant to the Participant or reserve to the
Board the right to elect among those alternatives or (ii) preclude the
right of the Participant to receive and the Corporation to issue
Common Shares or other equity securities in lieu of cash; provided,
however, that no form of consideration or manner of payment that would
cause Rule 16b-3 to cease to apply to this Plan shall be permitted.
(b) Any grant may specify that the amount payable upon
the exercise of an Appreciation Right shall not exceed a maximum
specified by the Board on the Date of Grant.
(c) Any grant may specify (i) a waiting period or periods
before Appreciation Rights shall become exercisable and (ii)
permissible dates or periods on or during which Appreciation Rights
shall be exercisable.
(d) Any grant may specify that an Appreciation Right may
be exercised only in the event of a change in control of the
Corporation or other similar transaction or event.
(e) Any grant may provide for the payment to the
Participant of dividend equivalents thereon in cash or Common Shares
on a current, deferred or contingent basis.
(f) Regarding Tandem Appreciation Rights only: Each
grant shall provide that a Tandem Appreciation Right may be exercised
only (i) at a time when the related Option Right (or any similar right
granted under any other plan of the Corporation) is also exercisable
and the Spread is positive and (ii) by surrender of the related Option
Right (or such other right) for cancellation.
(g) Regarding Free-Standing Appreciation Rights only:
(i) Each grant shall specify in respect of each
Free-Standing Appreciation Right a Base Price per Common
Share;
(ii) Successive grants may be made to the same
Participant regardless of whether any Free-Standing
Appreciation Rights previously granted to the Participant
remain unexercised;
(iii) Each grant shall specify the period or
periods of continuous employment of the Participant by the
Corporation or any Subsidiary, or the achievement of
Management Objectives or both, that are necessary before the
Free-Standing Appreciation Rights or installments thereof
shall become exercisable, and any grant may provide for the
earlier exercise of the Free-Standing Appreciation Rights in
the event of a change in control of the Corporation or other
similar transaction or event; and
(iv) No Free-Standing Appreciation Right granted
under this Plan may be exercised more than 10 years from the
Date of Grant.
(h) Each grant shall be evidenced by an agreement, which
shall be executed on behalf of the Corporation by any officer thereof
and delivered to and accepted by the Participant and shall describe
the subject Appreciation Rights, identify any related Option Rights,
state that the Appreciation Rights are subject to all of the terms and
conditions of this Plan and contain such other terms and provisions as
the Board may determine consistent with this Plan.
6. Restricted Shares. The Board may also authorize grants or
sales to Participants of Restricted Shares upon such terms and conditions as
the Board may determine in accordance with the following provisions:
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(a) Each grant or sale shall constitute an immediate
transfer of the ownership of Common Shares to the Participant in
consideration of the performance of services, entitling such
Participant to dividend, voting and other ownership rights, subject to
the substantial risk of forfeiture and restrictions on transfer
hereinafter referred to.
(b) Each grant or sale may be made without additional
consideration from the Participant or in consideration of a payment by
the Participant.
(c) Each grant or sale may provide that the Restricted
Shares covered thereby shall be subject to a "substantial risk of
forfeiture" within the meaning of Section 83 of the Code for a period
to be determined by the Board on the Date of Grant, and any grant or
sale may provide for the earlier termination of such period in the
event of a change in control of the Corporation or other similar
transaction or event.
(d) Each grant or sale shall provide that, during the
period for which such substantial risk of forfeiture is to continue,
the transferability of the Restricted Shares shall be prohibited or
restricted in the manner and to the extent prescribed by the Board on
the Date of Grant. Such restrictions may include without limitation
rights of repurchase or first refusal in the Corporation or provisions
subjecting the Restricted Shares to a continuing substantial risk of
forfeiture in the hands of any transferee.
(e) Any grant or sale may require that any or all
dividends or other distributions paid on the Restricted Shares during
the period of such restrictions be automatically sequestered and
reinvested on an immediate or deferred basis in additional Common
Shares, which may be subject to the same restrictions as the
underlying award or such other restrictions as the Board may
determine.
(f) Each grant or sale shall be evidenced by an
agreement, which shall be executed on behalf of the Corporation by any
officer thereof and delivered to and accepted by the Participant and
shall contain such terms and provisions as the Board may determine
consistent with this Plan. Unless otherwise directed by the Board,
all certificates representing Restricted Shares, together with a stock
power that shall be endorsed in blank by the Participant with respect
to the Restricted Shares, shall be held in custody by the Corporation
until all restrictions thereon lapse.
7. Transferability. (a) Except as otherwise expressly provided
in the agreement evidencing such grant, no Option Right or other derivative
security (as that term is used in Rule 16b-3) granted under this Plan may be
transferred by a Participant except by will or the laws of descent and
distribution.
(b) Any grant made under this Plan may provide that all
or any part of the Common Shares that are to be issued or transferred by the
Corporation upon the exercise of Option Rights or upon the termination of the
period during which Restricted Shares are subject to the substantial risk of
forfeiture and restrictions on transfer referred to in Section 6 of this Plan,
shall be subject to further restrictions upon transfer.
8. Adjustments. The Board may make or provide for such
adjustments in the number of Common Shares covered by outstanding Option
Rights, Appreciation Rights and Restricted Shares granted hereunder, the Option
Prices per Common Share or Base Price per Common Share applicable to any such
Option Rights and the kind of shares (including shares of another issuer)
covered thereby, as the Board may in good faith determine to be equitably
required in order to prevent dilution or expansion of the rights of
Participants that otherwise would result from (i) any stock dividend, stock
split, combination of shares, recapitalization or other change in the capital
structure of the Corporation, or (ii) any merger, consolidation, spin-off,
spin-out, split-off, split-up, reorganization, partial or complete liquidation
or other distribution of assets, issuance of warrants or other rights to
purchase securities or any other corporate transaction or event having an
effect similar to any of the foregoing. In the event of any such transaction
or event, the Board may provide in substitution for any or all outstanding
awards under this Plan such alternative consideration
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as it may in good faith determine to be equitable under the circumstances and
may require in connection therewith the surrender of all awards so replaced.
Moreover, the Board may on or after the Date of Grant provide in the agreement
evidencing any award under this Plan that the holder of the award may elect to
receive an equivalent award in respect of securities of the surviving entity of
any merger, consolidation or other transaction or event having a similar
effect, or the Board may provide that the holder will automatically be entitled
to receive such an equivalent award. The Board may also make or provide for
such adjustments in the maximum number of Common Shares specified in Section
3(a) of this Plan as the Board may in good faith determine to be appropriate in
order to reflect any transaction or event described in this Section 8.
9. Fractional Shares. The Corporation shall not be required to
issue any fractional Common Shares pursuant to this Plan. The Board may
provide for the elimination of fractions or for the settlement thereof in cash.
10. Withholding Taxes. To the extent that the Corporation is
required to withhold federal, state, local or foreign taxes in connection with
any payment made or benefit realized by a Participant or other person under
this Plan, and the amounts available to the Corporation for the withholding are
insufficient, it shall be a condition to the receipt of any such payment or the
realization of any such benefit that the Participant or such other person make
arrangements satisfactory to the Corporation for payment of the balance of any
taxes required to be withheld. At the discretion of the Board, any such
arrangements may include relinquishment of a portion of any such payment or
benefit. The Corporation and any Participant or such other person may also
make similar arrangements with respect to the payment of any taxes with respect
to which withholding is not required.
11. Certain Terminations of Employment, Hardship and Approved
Leaves of Absence. Notwithstanding any other provision of this Plan to the
contrary, in the event of termination of employment by reason of death,
disability, normal retirement, early retirement with the consent of the
Corporation, termination of employment to enter public service with the consent
of the Corporation or leave of absence approved by the Corporation, or in the
event of hardship or other special circumstances, of a Participant who holds an
Option Right or Appreciation Right that is not immediately and fully
exercisable, or any Restricted Shares as to which the substantial risk of
forfeiture or the prohibition or restriction on transfer has not lapsed, the
Board may take any action that it deems to be equitable under the circumstances
or in the best interests of the Corporation, including without limitation
waiving or modifying any limitation or requirement with respect to any award
under this Plan.
12. Administration of the Plan. (a) This Plan shall be
administered by the Board, which may from time to time delegate all or any part
of its authority under this Plan to a committee of not less than two directors
appointed by the Board. The members of the committee shall be "non-employee
directors" within the meaning of that term in Rule 16b-3 of the Securities and
Exchange Commission (or any successor rule to the same effect). To the extent
of such delegation, references in this Plan to the Board shall also refer to
the committee. The majority of the committee shall constitute a quorum, and
the action of a majority of the members of the committee present at any meeting
at which a quorum is present, or acts unanimously approved in writing, shall be
the acts of the committee. In the event that the Board authorizes a committee
thereof to administer the Plan, grants of Option Rights, Appreciation Rights or
Restricted Shares pursuant to this Plan to any member of such committee shall
be approved by the Board of Directors of the Corporation.
(b) The interpretation and construction by the Board of
any provision of this Plan or any agreement, notification or document
evidencing the grant of Option Rights, Appreciation Rights or Restricted
Shares, and any determination by the Board pursuant to any provision of this
Plan or any such agreement, notification or document, shall be final and
conclusive. No member of the Board shall be liable for any such action taken
or determination made in good faith.
13. Amendments and Other Matters. (a) This Plan may be amended
from time to time by the Board; provided, however, except as expressly
authorized by this Plan, no such amendment shall cause this
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Plan to cease to satisfy any applicable condition of Rule 16b-3, without the
further approval of the shareholders of the Corporation.
(b) The Board may condition the grant of any award or
combination of awards authorized under this Plan on the surrender or deferral
by the Participant of his or her right to receive a cash bonus or other
compensation otherwise payable by the Corporation or a Subsidiary to the
Participant.
(c) This Plan shall not confer upon any Participant any
right with respect to continuance of employment or other service with the
Corporation or any Subsidiary and shall not interfere in any way with any right
that the Corporation or any Subsidiary would otherwise have to terminate any
Participant's employment or other service at any time.
(d) To the extent that any provision of this Plan would
prevent any Option Right that was intended to qualify as a Tax-Qualified Option
from so qualifying, any such provision shall be null and void with respect to
any such Option Right; provided, however, that any such provision shall remain
in effect with respect to other Option Rights, and there shall be no further
effect on any provision of this Plan.
14. Termination of the Plan. No further awards shall be granted
under this Plan after the passage of 10 years from the date on which this Plan
is first approved by the shareholders of the Corporation.
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