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Exhibit 10.65
INSURANCE MANAGEMENT SOLUTIONS GROUP, INC.
NON-QUALIFIED STOCK OPTION PLAN
ARTICLE 1:
1. ESTABLISHMENT; PURPOSE:
1.1. ESTABLISHMENT. Insurance Management Solutions Group, Inc., a Florida
corporation, (the "Company") hereby establishes an incentive
compensation plan to be known as the "Insurance Management Solutions
Group, Inc. Non-Qualified Stock Option Plan" (the "Plan").
1.2. PURPOSE. The purpose of the Plan is to retain, motivate, and reward
participating advisors and consultants of the Company and its
subsidiaries through an award of shares of the Common Stock of the
Company (the "Shares").
1.3. MAXIMUM NUMBER OF SHARES. The number of Shares to be issued under the
Plan is 125,000, subject to adjustment as provided in Section 6.1.
Such Shares may be issued through the purchase of either authorized and
unissued Shares, or issued Shares acquired by the Company. If an
Option is surrendered or for any other reason ceases to be exercisable
in whole or in part, the Shares that are subject to such Option, but as
to which the Option has not been exercised, shall again become
available for offering under the Plan.
1.4. STATUS. No Award under the Plan is intended to qualify for special
treatment or status under the Code.
ARTICLE 2:
2. DEFINITIONS:
2.1. DEFINITIONS. The following words and terms as used herein shall have
that meaning set forth therefor in this Article 2 unless a different
meaning is clearly required by the context.
2.1.1. "Award" shall mean any Option granted or awarded under the
Plan.
2.1.2. "Award Agreement(s)" shall mean any document, agreement or
certificate deemed by the Committee as necessary or advisable
to be entered into with or delivered to a Participant in
connection with the grant of an Award under the Plan.
2.1.3. "Board" or "Board of Directors" shall mean the Board of
Directors of the Company.
2.1.4. "Committee" is defined in Article 3.1.
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2.1.3. "Code" shall mean the Internal Revenue Code of 1986, as
amended. Reference to a specific section of the Code shall
include a reference to any successor provision.
2.1.6. "Company" shall mean Insurance Management Solutions Group,
Inc., a Florida corporation, and its successors.
2.1.7. "Effective Date" is defined in Section 6.6.3
2.1.8. "Eligible Individual" shall mean any individual who is
employed as a consultant or advisor by the Company that
provides bona fide services not in connection with a capital
raising transaction.
2.1.9. "Fair Market Value" of the Shares shall mean the closing price
on the date in question (or, if no Shares are traded on such
day, on the next preceding day on which Shares were traded) of
the Shares on the principal securities exchange in the United
States on which such stock is listed, or if such Shares are
not listed on a securities exchange in the United States, the
closing price on such day in the over-the-counter market as
reported by the National Association of Security Dealers
Automated Quotation System (NASDAQ), or NASDAQ's successor, or
if not reported on NASDAQ, the fair market value of such
Shares as determined by the Committee in good faith and based
on all relevant factors.
2.1.10. "NSO" shall mean a nonqualified stock option granted in
accordance with the provisions of Article 5 of the Plan.
2.1.11. "Option" shall mean an NSO.
2.1.12. "Optionee" shall mean an Eligible Individual to whom an Option
is granted under the Plan.
2.1.13. "Participant" shall mean an Eligible Individual, who in
accordance with the terms of the Plan, is approved by the
Committee for participation in the Plan as a recipient of an
Award and who receives an Award.
2.1.14. "Plan" shall mean the Insurance Management Solutions Group,
Inc. Non-Qualified Stock Option Plan, as set forth herein and
as amended from time to time.
2.1.15. "Shares" shall mean shares of the common stock of the Company.
2.1.16. "Subsidiary" shall mean any corporation that at the time
qualifies as a subsidiary of the Company under the definition
of "subsidiary corporation" contained in Section 424(f) of the
Code.
2.2. USAGE. Whenever appropriate, words used in the singular shall
be deemed to include the plural and vice versa, and the masculine
gender shall be deemed to include the feminine gender.
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ARTICLE 3
3. ADMINISTRATION
3.1. COMMITTEE. This Plan shall be administered by a committee appointed by
the Board of Directors (the "Committee"). The Committee shall consist
of not less than two (2) nor more than five (5) persons, each of whom
shall be a member of the Board and none of whom shall be eligible to
participate under the Plan. The Board of Directors may from time to
time remove members from, or add members to, the Committee. Vacancies
on the Committee, howsoever caused, shall be filled by the Board of
Directors.
3.2. ORGANIZATION. The Committee shall select one of its members as
chairman, and shall hold meetings at such time and places as it may
determine. The acts of a majority of the Committee at which a quorum
is present, or acts reduced to or approved in writing by a majority of
the members of the Committee, shall be valid acts of the Committee.
3.3. POWER AND AUTHORITY. Subject to the provisions of the Plan, the
Committee shall have full authority, in its discretion: (a) to
determine from among Eligible Individuals those persons who shall become
Participants; (b) to determine the nature, amount and terms and
conditions of all Awards under the Plan, in accordance with and subject
to the specific limitations and requirements set forth in the Plan; and
(c) to interpret the Plan, the terms of all Awards and Award Agreements
and any other agreement or instrument awarded, issued or entered into
under the Plan, and to prescribe, amend and rescind rules and
regulations with respect to the administration of the Plan. The
interpretation and construction by the Committee of any provision of the
Plan, any Award or any other agreement or instrument awarded, issued or
entered into under the Plan, and all other determinations and decisions
of the Committee pursuant to the provisions of the Plan, shall be final,
conclusive and binding on all Participants and other affected persons.
Notwithstanding the foregoing, the Committee shall only have authority
within this Plan to issue Awards to a maximum of five Participants and
up to a maximum 25,000 Shares per Participant.
3.4. DISCRETIONARY AUTHORITY. The Committee's decision to authorize the
grant of an Award to an Eligible Individual at any time shall not
require the Committee to authorize the grant of an Award to that
employee at any other time or to any other employee at any time; nor
shall its determination with respect to the size, type or terms and
conditions of the Award to be granted to an Eligible Individual at any
time require it to authorize the grant of an Award of the same type or
size or with the same terms and conditions to that employee at any other
time or to any other employee at any time. The Committee shall not be
precluded from authorizing the grant of an Award to any Eligible
Individual solely because the employee previously may have been granted
an Award of any kind under the Plan. Furthermore, without limiting its
authority, the Committee may condition the grant of an Award on a
Participant providing appropriate investment representations and / or
otherwise complying with state and federal rules and regulations that
would enable the Company to meet applicable exceptions under state and
federal securities laws.
3.5. NO LIABILITY. No member of the Committee shall be liable for any action
or determination made in good faith with respect to the Plan.
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ARTICLE 4
4. INDIVIDUALS ELIGIBLE TO PARTICIPATE
4.1. GENERALLY. Any person, that provides bona fide services to the Company
not in connection with a capital raising transaction, who is acting in
the capacity of an advisor or consultant to the Company or to any
Subsidiary of the Company on the date of a grant of an Award shall be
an Eligible Individual, able to participate in the Plan in accordance
with the terms of the Plan. The Committee shall have the sole power to
determine if the eligibility requirements have been satisfied.
4.2. PARTICIPANT STATUS. In accordance with the provisions of Section 3.3,
the Committee, in its sole discretion, from time to time may select
from among Eligible Individuals persons to become Participants in the
Plan. Any Eligible Individual so selected and who remains an Eligible
Individual shall become a Participant upon the approval of such status
by the Committee, which approval shall be conclusively evidenced by the
award or grant of an Award to a Participant.
ARTICLE 5
5. TERMS AND CONDITIONS OF NONQUALIFIED STOCK OPTIONS
5.1. GRANT. Any NSO granted pursuant to the Plan shall be authorized by the
Committee and shall be evidenced by certificates or agreements in such
form as the Committee from time to time shall approve, which
certificates or agreements shall comply with and be subject to the
terms and conditions hereinafter specified. Upon the granting of any
NSO, the Committee shall promptly cause the Optionee to be notified of
the fact that such Option has been granted. The date on which the
Committee approves the grant of a NSO shall be considered to be the
date on which such Option is granted.
5.2. NUMBER OF SHARES. Each NSO shall state the number of Shares to which
it pertains.
5.3. OPTION PRICE. Each NSO shall state the option price, which option
price shall be determined by the Committee in its discretion and may be
equal to, less than or greater than 100% of the Fair Market Value of
the Shares on the date of grant.
5.4. METHOD OF EXERCISE. An Optionee may exercise a NSO during such time as
may be permitted by the Option and the Plan by providing written notice
to the Committee, tendering the purchase price in accordance with the
provisions of Section 5.5, and complying with any other exercise
requirements contained in the Option or promulgated from time to time
by the Committee.
5.5. METHOD OF PAYMENT. Payment of the option price upon the exercise of
the NSO shall be: (a) in United States dollars in cash or by check,
bank draft or money order payable to the order of the Company; (b) in
the discretion of and in the manner determined by the Committee, by the
delivery of Shares already owned by the Optionee; (c) by any other
legally permissible means acceptable to the Committee at the time of
grant of the Option (including cashless exercise as
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permitted under the Federal Reserve Board's Regulation T, subject to
applicable legal restrictions); or in the discretion of the Committee,
through a combination of (a), (b) and (c) of this Section. If the
option price is paid in whole or in part through the delivery of
Shares, the decision of the Committee with respect to the Fair Market
Value of such Shares shall be final and conclusive.
5.6. TERM AND EXERCISE OF OPTIONS.
5.6.1. Unless otherwise specified in writing by the Committee at the
time of grant or in the Award Agreement, each NSO shall be
exercisable, in whole or in part, only in accordance with the
attached Vesting Schedule. To the extent not exercised,
exercisable installments of NSOs shall be exercisable, in
whole or in part, in any subsequent period, but not later than
the expiration date of the Option. The Committee shall
determine the expiration date of the Option at the time of the
grant of the Option; provided, however, that no NSO shall be
exercisable after the expiration of ten (10) years from the
date it is granted. Not less than one hundred (100) Shares may
be exercised at any one time unless the number exercised is
the total number at the time exercisable under the Option.
5.6.2. Within the limits described above, the Committee may impose
additional requirements on the exercise of NSOs. When it
deems special circumstances to exist, the Committee in its
discretion may accelerate the time at which a NSO may be
exercised if, under previously established exercise terms,
such Option was not immediately exercisable in full, even if
the acceleration would permit the Option to be exercised more
rapidly than the vesting set forth in the attached Vesting
Schedule, or as otherwise specified by the Committee, would
permit.
5.7. DEATH OR OTHER TERMINATION OF EMPLOYMENT.
5.7.1. In the event that an Optionee shall cease to be employed by
the Company or a Subsidiary for any reason other than his or
her death, subject to the conditions that no NSO shall be
exercisable after its expiration date, such Optionee shall
have the right to exercise the NSO at any time within ninety
(90) days after such termination of employment to the extent
his or her right to exercise such Option had accrued pursuant
to this Article 5 at the date of such termination and had not
previously been exercised; such ninety (90) day period shall
be increased to one (1) year for any Optionee who ceases to be
employed by the Company or a Subsidiary because he is disabled
(within the meaning of Section 22(e)( 3) of the Code) or who
dies during the ninety (90) day period, and the Option may be
exercised within such extended time limit by the Optionee or
in the case of death, the personal representative of the
Optionee or by any person or persons who shall have acquired
the Option directly from the Optionee by bequest or
inheritance. Whether an authorized leave of absence or
absence for military or governmental service shall constitute
termination of employment for purposes of the Plan shall be
determined by the Committee, whose determination shall be
final and conclusive.
5.7.2. In the event that an Optionee shall die while in the employ
of the Company or a Subsidiary and shall not have fully
exercised any NSO, the NSO may be exercised,
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subject to the conditions that no NSO shall be exercisable
after its expiration date, to the extent that the Optionee's
right to exercise such Option had accrued pursuant to this
Article 5 at the time of his or her death and had not
previously been exercised, at any time within one (1) year
after the Optionee's death, by the personal representative of
the Optionee or by any person or persons who shall have
acquired the Option directly from the Optionee by bequest or
inheritance.
5.7.3. No NSO shall be transferable by the Optionee otherwise than
by will or the laws of descent and distribution.
5.7.4. During the lifetime of the Optionee, an NSO shall be
exercisable only by him or her and shall not be assignable or
transferable, and no other person shall acquire any rights
therein.
5.8. DELIVERY OF CERTIFICATES REPRESENTING SHARES.
5.8.1. As soon as practicable after the exercise of a NSO, the
Company shall deliver or cause to be delivered to the Optionee
exercising the NSO a certificate or certificates representing
the Shares purchased upon the exercise.
5.8.2. Certificates representing Shares to be delivered to an
Optionee under the Plan will be registered in the name of the
Optionee, or if the Optionee so directs, by written notice to
the Company, and to the extent permitted by applicable law, in
the names of the Optionee and one such other person as may be
designated by the Optionee, as joint tenants with rights of
survivorship.
5.9. RIGHTS AS A STOCKHOLDER. An Optionee shall have no rights as a
stockholder with respect to any Shares covered by his or her NSO until
the date on which he or she becomes a record owner of the Shares
purchased upon the exercise of the Option (the "record ownership
date"). No adjustment shall be made for dividends (ordinary or
extraordinary, whether in cash, securities or other property),
distributions, or other rights for which the record date is prior to
the record ownership date, except as provided in Article 6.
5.10. MODIFICATION, EXTENSION AND RENEWAL OF OPTIONS. Subject to the terms
and conditions and within the limitations of the Plan, the Committee
may modify outstanding NSOs granted under the Plan, or accept the
surrender of outstanding NSOs (to the extent not theretofore exercised)
and authorize the granting of new Options in substitution therefor (to
the extent not theretofore exercised). The Committee shall not,
however, modify any outstanding NSO so as to specify a lower option
price or accept the surrender of outstanding NSOs and authorize the
granting of new Options in substitution therefor specifying a lower
option price. Notwithstanding the foregoing, however, no modification
of an NSO shall, without the consent of the Optionee, alter or impair
any of the rights or obligations under any NSO theretofore granted
under the Plan.
5.11 LISTING AND REGISTRATION OF SHARES. Each NSO shall be subject to the
requirement that if at any time the Committee shall determine, in its
discretion, that the listing, registration or qualification of the
Shares covered thereby upon any securities exchange or under any state
or federal laws, or
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the consent or approval of any governmental regulatory body, is
necessary or desirable as a condition of, or in connection with, the
granting of such NSO or the issuance or purchase of shares thereunder,
such NSO may not be exercised unless and until such listing,
registration, qualification, consent or approval shall have been
effected or obtained free of any conditions not acceptable to the
Committee. Notwithstanding anything in the Plan to the contrary, if the
provisions of this Section become operative, and if, as a result
thereof, the exercise of a NSO is delayed, then and in that event, the
term of the NSO shall not be affected.
5.12. OTHER PROVISIONS. The NSO certificates or agreements authorized under
the Plan shall contain such other provisions, including, without
limitation, restrictions upon the exercise of the Option, as the
Committee shall deem advisable.
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ARTICLE 6
6. MISCELLANEOUS
6.1. STOCK ADJUSTMENTS.
6.1.1. In the event of any increase or decrease in the number of
issued Shares resulting from a stock split or other division
or consolidation of shares or the payment of a stock dividend
(but only on Shares) or any other increase or decrease in the
number of Shares effected without any receipt of consideration
by the Company, then, in any such event, the number of Shares
that remain available under the Plan, the number of Shares
covered by each outstanding Option, and the exercise price per
Share covered by each outstanding Option, shall be
proportionately and appropriately adjusted for any such
increase or decrease.
6.1.2. Subject to any required action by the stockholders, if any
change occurs in the Shares by reason of any recapitalization,
reorganization, merger, consolidation, split-up, combination
or exchange of shares, or of any similar change affecting
Shares, then, in any such event, the number and type of Shares
then covered by each outstanding Option, and the purchase
price per Share covered by each outstanding Option, shall be
proportionately and appropriately adjusted for any such
change.
6.1.3. In the event of a change in the Shares as presently
constituted that 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 change shall be deemed to be Shares
within the meaning of the Plan.
6.1.4. To the extent that the foregoing adjustments relate to stock
or securities of the Company, such adjustments shall be made
by, and in the discretion of, the Committee, whose
determination in that respect shall be final, binding and
conclusive.
6.1.5. Except as hereinabove expressly provided in this Section, an
Eligible Individual or a Participant shall have no rights by
reason of any division or consolidation of shares of stock of
any class or the payment of any stock dividend or any other
increase or decrease 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 issuance by the Company of shares of
stock of any class, securities convertible into shares of
stock of any class, or warrants or options for 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 or any Option granted but not yet issued.
6.1.6. The existence of the Plan, or the grant of an Option under the
Plan, shall not affect in any way the right or power of the
Company to make adjustments, reclassifications,
reorganizations or changes of its capital or business
structure or to merge or to consolidate, or to dissolve, to
liquidate, to sell, or to transfer all or any part of its
business or assets.
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6.2. TAX ABSORPTION PAYMENTS. The Company may, but is not required to,
make a cash payment, either directly to any Participant or on a
Participant's behalf, in an amount that the Committee estimates to be
equal (after taking into account any federal and state taxes that the
Committee estimates to be applicable to such cash payment) to any
additional federal and state income taxes that are imposed upon a
Participant as a result of the granting of any Award under the Plan (a
"Tax Absorption Payment"). In determining the amount of any Tax
Absorption Payment, the Committee may adopt such methods and
assumptions as it considers appropriate, and it shall not be required
to examine the individual tax liability of any Participant. The
decision to make any Tax Absorption Payment shall be made by the
Committee at the same time as the grant of the Award to which it
relates.
6.3. AMENDMENT OF THE PLAN; TERMINATION. The Board shall have the right to
revise, amend or terminate the Plan at any time without notice;
provided, however, that without shareholder approval the Board may not
(a) increase the aggregate number of Shares that may be issued pursuant
to this Plan, (b) extend the period during which any Award may be
granted, (c) extend the term of the Plan, or (d) modify the
requirements as to eligibility for participation hereunder; provided,
further, that no such action may be taken, without the consent of the
Participant to whom any Award shall have been granted, that adversely
affects the rights of such Participant concerning such Award, except as
such termination or amendment of this Plan is required by statute, or
rules or regulations promulgated thereunder, or as otherwise permitted
hereunder. The foregoing prohibitions in this Section shall not be
affected by adjustments in shares and purchase price made in accordance
with the provisions of Section 6.1.
6.4. APPLICATION OF FUNDS. The proceeds received by the Company from the
sale of Shares or the exercise of Awards pursuant to the Plan will be
used for general corporate purposes.
6.5. NO IMPLIED RIGHTS TO PARTICIPANTS. The existence of the Plan and the
granting of Awards under the Plan shall in no way give any employee the
right to continued employment or the right to receive any additional
Awards or any additional compensation under the Plan, or otherwise
provide any employee any rights not specifically set forth in the Plan
or in any Option or Award Agreement.
6.6. WITHHOLDING.
6.6.1. The Company shall have the power to withhold, or require a
Participant to remit to the Company, an amount sufficient to
satisfy any federal, state or local withholding or other tax
due from the Company with respect to any amount payable and/or
shares issuable under the Plan, and the Company may defer such
payment or issuance unless indemnified to its satisfaction.
Whenever under the Plan payments are to be made in cash, such
payments shall be made net of an amount sufficient to satisfy
any federal, state or local withholding tax liability.
6.6.2. Subject to the consent of the Committee, with respect to the
exercise of an NSO, a Participant may make an irrevocable
election (an "Election") to (A) have shares of Common Stock
otherwise issuable withheld, or (B) tender back to the Company
shares of Common Stock or (C) deliver back to the Company
previously acquired shares of
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Common Stock having a Fair Market Value sufficient to satisfy
all or part of the Participant's estimated tax obligations
associated with the transaction. Such Election must be made
by a Participant prior to the date on which the relevant tax
obligation arises. The Committee may disapprove of any
Election, may suspend or terminate the right to make
Elections, or may provide with respect to any Award under this
Plan that the right to make Elections shall not apply to such
Awards.
6.6.3. CONDITIONS PRECEDENT TO EFFECTIVENESS. The Plan shall become
effective upon the satisfaction of all the following
conditions, with the Effective Date of the Plan being the date
that the last of the following conditions is satisfied:
6.6.3.1. the adoption of the Plan by the Board of Directors;
and
6.6.3.2. the effectiveness of the Company's Registration
Statement on Form S-1 relating to the Company's
initial public offering, as filed with the
SEC (File No. 333-57747).
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VESTING SCHEDULE:
Number of Years from Percentage of Shares
Date Option is Granted Exercisable
- ---------------------- ---------------------
Less than 1 year 0%
1 year but less than 2 years 20%
2 years but less than 3 years 40%
3 years but less than 4 years 60%
4 years but less than 5 years 80%
5 years or more 100%