EXHIBIT 10.4
FORM OF
AMERICAN MEDICAL SECURITY GROUP, INC.
EQUITY INCENTIVE PLAN
RESTRICTED STOCK AWARD AGREEMENT
You have been selected to be a Participant in the American Medical
Security Group, Inc. Equity Incentive Plan, as amended and restated November 29,
2001, (the "Plan"), as specified below:
PARTICIPANT:
DATE OF GRANT:
NUMBER OF SHARES OF RESTRICTED STOCK GRANTED:
VESTING DATE:
THIS AGREEMENT, effective as of the Date of Grant set forth above, is
between American Medical Security Group, Inc., a Wisconsin corporation (the
"Company") and the Participant named above pursuant to the provisions of the
Plan. Unless otherwise indicated, capitalized terms used herein shall have the
meanings assigned to such terms under the Plan. In consideration of the
foregoing, the parties hereto agree as follows:
1. GRANT OF RESTRICTED STOCK. As of the Date of Grant specified above,
the Company grants to the Participant the number of Shares of Restricted Stock
specified above (the "Restricted Stock"), subject to the terms and conditions of
the Plan and this Agreement.
2. VESTING OF RESTRICTED STOCK. The Shares of Restricted Stock granted
to the Participant under this Agreement shall be subject to certain restrictions
and risks of forfeiture as set forth in Section 3 below until vested in
accordance with the terms of this Agreement. Unless the Shares are forfeited
pursuant to Section 8 below or vesting is accelerated pursuant to Sections 5, 6
or 7 below, the Shares of Restricted Stock shall become vested and the
restrictions shall lapse if the Participant's tenure as a Director continues
uninterrupted through the third anniversary of the Date of Grant (which is the
"Vesting Date" set forth above).
3. RIGHTS DURING PERIOD OF RESTRICTION. Prior to the time that the
Shares of Restricted Stock become vested in accordance with this Agreement (the
"Period of Restriction"), the Shares of Restricted Stock may not be sold,
transferred, pledged, encumbered or otherwise alienated or disposed of prior to
vesting, except by will or the laws of descent and distribution. Unless
otherwise determined by the Board of Directors of the Company, the Restricted
Stock will not count toward the Director's stock ownership target until Shares
become vested and the transferability restrictions have lapsed. However, during
the Period of Restriction, the Director shall have the right to vote the Shares
of Restricted Stock and to receive any dividends and other distributions with
respect to the Restricted Stock unless and until the Restricted Stock is
forfeited pursuant to this Agreement. (Any dividend or other distribution which
is paid in Shares shall be subject to the same restrictions on transferability
and the same vesting requirements as the Shares of Restricted Stock granted
under this Agreement.)
4. CUSTODY. The Restricted Stock issued to the Director hereunder
shall be held, along with any stock dividends and other non-cash distributions
relating thereto, in custody by
the Company or an agent for the Company until the restrictions lapse. If any
certificates are issued for Shares of Restricted Stock, such certificates
representing shares of Restricted Stock and any such stock dividends or
distributions shall bear an appropriate legend as determined by the Company
referring to the applicable terms, conditions and restrictions, consistent with
the Plan, and the Director shall deliver a signed, blank stock power to the
Company relating thereto.
5. TERMINATION OF DIRECTORSHIP BY DEATH. In the event the
Participant's tenure as a Director is terminated by reason of death prior to the
Vesting Date set forth above, all restrictions on the Restricted Stock granted
pursuant to this Agreement shall immediately lapse and the Participant shall
vest one hundred percent (100%) in such Restricted Stock.
6. TERMINATION OF DIRECTORSHIP BY DISABILITY. In the event the
Participant's tenure as a Director is terminated by reason of Disability prior
to the Vesting Date set forth above, all restrictions on the Restricted Stock
granted pursuant to this Agreement shall immediately lapse and the Participant
shall vest one hundred percent (100%) in such Restricted Stock as of the date
the Compensation Committee (the "Committee") determines the definition of
Disability has been satisfied.
7. CHANGE IN CONTROL. In the event of both a Change in Control and a
Qualifying Separation prior to the Vesting Date set forth above, all
restrictions on the Restricted Stock shall lapse as of the first date that both
events have occurred, and the Participant shall vest one hundred percent (100%)
in such Restricted Stock in accordance with the terms of this Agreement and the
Plan, without regard to the six month wait under the Plan.
8. TERMINATION OF DIRECTORSHIP FOR OTHER REASONS. If the Participant's
tenure as a Director shall terminate for any reason other than death,
Disability, or Change in Control and a Qualifying Separation prior to the
Vesting Date set forth above, all Restricted Stock granted pursuant to this
Agreement shall be forfeited to the Company as of the date of such termination.
The Company shall have no further obligation to the Participant under this
Agreement, and all rights of the Participant with respect to such Restricted
Stock shall terminate as of such date.
9. RECAPITALIZATION. This Restricted Stock Agreement shall not affect
the right of the Company to reclassify, recapitalize or otherwise change its
capital or debt structure or to merge, consolidate, convey any or all of its
assets, dissolve, liquidate, windup, or otherwise reorganize. In the event there
is any change in the Shares of the Company through the declaration of stock
dividends or through recapitalization resulting in stock split-ups or through
merger, consolidation, exchange of shares, or otherwise, the number and class of
Shares of Restricted Stock shall be adjusted as may be determined to be
appropriate and equitable by the Committee, in its sole discretion in accordance
with the Plan, to prevent dilution or enlargement of rights.
10. ACCOUNTING TREATMENT. The parties intend that the issuance of
Restricted Stock under this Agreement result in fixed, rather than variable,
accounting treatment to the Company and shall implement this Agreement in a
manner consistent with such intent.
11. TENURE AS A DIRECTOR. This Agreement shall not confer upon
Participant any right to continuance of tenure as a Director of the Company, nor
shall this Agreement interfere in any way with the Company's right to terminate
his or her tenure at any time.
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12. TAX CONSEQUENCES. The Participant has been encouraged to review
with the Participant's own tax advisors, the federal, state and other tax
consequences of the transactions contemplated by this Agreement. The Participant
is relying solely on such advisors and not on any statements or representations
of the Company or any of its agents. The Participant understands that the
Participant (and not the Company) shall be responsible for the Participant's own
tax liability that may arise as a result of the grant of Restricted Stock under
this Agreement. The Participant understands that Section 83 of the Internal
Revenue Code of 1986, as amended (the "Code"), taxes as ordinary income the
difference between the purchase price for the Restricted Stock (which is $0) and
the fair market value of the Restricted Stock as of the date the restrictions on
the Restricted Stock lapse. The Participant understands that the Participant may
elect to be taxed at the time the Restricted Stock is granted rather than when
the restrictions lapse by filing an election under Section 83(b) of the Code
with the Internal Revenue Service within thirty (30) days from the Date of
Grant. The Participant acknowledges that it is the Participant's sole
responsibility, and not the Company's, to timely file the election under Section
83(b).
13. MISCELLANEOUS.
(a) This Agreement and the rights of the Participant hereunder
are subject to all the terms and conditions of the Plan, as
the same may be amended from time to time, as well as to
such rules and regulations as the Committee may adopt for
administration of the Plan. The Committee shall have the
right to impose such restrictions on any Shares, as it may
deem advisable, including, without limitation, restrictions
under applicable federal securities laws, under the
requirements of any stock exchange or market upon which such
Shares are then listed and/or traded, and under any blue sky
or state securities laws applicable to such Shares.
It is expressly understood that the Committee is authorized
to administer, construe, and make all determinations
necessary or appropriate to the administration of the Plan
and this Agreement, all of which shall be binding upon
Participant. Any inconsistency between this Agreement and
the Plan shall be resolved in favor of the Plan.
(b) With the approval of the Board of Directors of the Company,
the Committee may terminate, amend, or modify the Plan;
provided, however, that no such termination, amendment, or
modification of the Plan may in any material way adversely
affect Participant's vested rights with respect to
Restricted Stock granted under this Agreement.
(c) This Agreement may be amended by written agreement of the
Participant and the Company at any time and shall be binding
upon the parties hereto, their heirs, executors,
administrators, successor and assigns, including any
successor to the Company whether the existence of such
successor is the result of a direct or indirect purchase,
merger, consolidation, or otherwise, of all or substantially
all of the business and/or assets of the Company.
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(d) Participant agrees to take all steps necessary to comply
with all applicable provisions of federal and state
securities law in exercising Participant's rights under this
Agreement.
(e) The Plan and this Agreement are not intended to qualify for
treatment under the provisions of the Employee Retirement
Income Security Act of 1974, as amended, ("ERISA").
(f) This Agreement shall be subject to all applicable laws,
rules and regulations, and to such approvals by any
governmental agencies or national securities exchanges as
may be required.
(g) To the extent not preempted by federal law, this Agreement
shall be governed by, and construed in accordance with the
laws of the State of Wisconsin without regard to principles
of conflicts of law.
IN WITNESS WHEREOF, the parties have caused this Restricted Stock Award
Agreement to be executed as of the Date of Grant.
AMERICAN MEDICAL SECURITY GROUP, INC.
By:
Xxxx X. Xxxxx
Vice President, Human Resources
PARTICIPANT
By:
Participant
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