EXHIBIT 10(iii)(A)(6)
STOCK APPRECIATION RIGHTS AGREEMENT
STOCK APPRECIATION RIGHTS AGREEMENT dated as of ___________
between Independence Holding Company, a Delaware corporation (the
"Company"), and ___________, an employee of the Company (the
"Employee").
W I T N E S S E T H:
WHEREAS, the Company has adopted and maintains the Company's
1988 Stock Incentive Plan, as amended (the "Plan") to secure for
the Company and its stockholders the benefit of the incentives
inherent in common stock ownership and the receipt of incentive
awards by selected key employees of the Company and its
subsidiaries who contribute to and will be responsible for its
continued growth and to provide a mechanism for attracting,
motivating and retaining such key employees by providing an
opportunity for capital appreciation and giving suitable
recognition for services which contribute materially to the
success of the Company; and
WHEREAS, Section 2 of the Plan provides that the Committee
(as that term is defined in the Plan) shall have the power and
authority to grant Awards under the Plan, including, consistent
with the terms of the Plan, the power and authority to select
officers and other key employees of the Company to whom awards
may be granted from time to time, to determine the times of
grant, the number of shares of Stock to be covered by any Award
and to determine the other terms and conditions, not inconsistent
with the terms of the Plan, of any Award; and
WHEREAS, the Committee has determined that the Employee is a
key employee of the Company and is in a position to make an
important contribution to the Company's long-term performance and
has determined to grant to the Employee an award of a Stock
Appreciation Right pursuant to Section 7 of the Plan.
NOW, THEREFORE, in consideration of the foregoing and of the
mutual covenants hereinafter set forth, and for other good and
valuable consideration, the parties hereto agree as follows:
1. Award of Stock Appreciation Right. Subject to the terms and
conditions hereafter set forth, the Company hereby grants to the
Employee an Award of a stand-alone Stock Appreciation Right with
respect to ______ shares of Stock (the "SAR").
2. Base Price. The base price-per-share of Stock subject to
the SAR (the "Base Price") shall be $____, which is the Fair
Market Value of a share of Stock as of the Grant Date.
3. Date of Grant. For all purposes of the Plan, the date of
grant of the SAR granted hereby shall be __________ (the "Grant
Date").
4. Incorporation of Plan. All terms, conditions and
restrictions of the Plan are incorporated herein and made part
hereof as if stated herein. If there is any conflict between the
terms and conditions of the Plan and this Agreement, the terms
and conditions of the Plan,
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as interpreted by the Committee,
shall govern. Except as otherwise provided herein, all
capitalized terms used herein shall have the meaning given to
such terms in the Plan.
5. Exercise Terms.
(a) Subject to the provisions of the Plan and this
Agreement, the SAR granted hereby shall expire and terminate on
________ (the "Expiration Date").
(b) The SAR shall become exercisable in ____ equal
installments, the first of which shall become exercisable on
___________, and the second of which shall become exercisable on
___________. Once an installment becomes exercisable, subject to
the terms hereof and of the Plan, it shall remain exercisable
until the Expiration Date. The SAR may be exercised from time to
time (each an "Exercise Date") as to all or part to the extent
then exercisable.
6. Payment Upon Exercise of Stock Appreciation Right.
(a) Except as set forth in Section 7 hereof, upon the
exercise of the SAR, the Employee shall become entitled to
receive an amount equal to the product of (i) the excess of (A)
the Fair Market Value of a share of Stock on the Exercise Date
over (B) the Base Price, multiplied by (ii) the number of shares
with respect to which the SAR is exercised. Such amount shall be
paid in cash within 120 days after the Exercise Date.
(b) As used herein, the "Fair Market Value" of a share of
Stock on any given date means the average of the closing bid and
asked prices of the Stock on a national exchange, or in the
absence of closing bid and asked prices on such day, such average
on the first preceding day. So long as the Stock is listed on the
National Association of Securities Dealers' Automated Quotation
System ("NASDAQ"), Fair Market Value shall be determined in the
same manner, except the closing bid and asked prices used shall
be as reported by NASDAQ.
7. Termination of Employment. In the event of the
termination of the Employee's employment as an employee of the
Company other than for Cause, the SAR, to the extent then
outstanding and exercisable, shall be deemed to have been
exercised as of the date of Disability, death or termination of
employment, and the SAR, to the extent not then exercisable,
immediately shall terminate and be of no further force or effect.
In the event of termination of the Employee's employment as an
employee of the Company for Cause, the SAR shall terminate and
shall cease to be exercisable immediately and shall be of no
further force or effect. The SAR shall not be affected by any
change of employment so long as the Employee continues to be an
employee of the Company.
8. Changes in Stock. In the event of any stock dividend, stock
split, reverse stock split, recapitalization, exchange of shares
or similar change in capitalization affecting the Stock, the
Committee shall make appropriate adjustments in the (b) number
and kind of shares subject to the SAR and/or (ii) Base Price. In
the event of any merger, consolidation, dissolution or
liquidation of the Company, the Committee, in its sole
discretion, may make such substitution or adjustment in the
number of shares subject to the SAR and in the Base Price as it
may determine, or accelerate, amend or terminate the SAR upon
such terms and conditions as it shall provide. Notwithstanding
the foregoing, in the event that all or any portion of the SAR is
terminated and not replaced with a similar award, the Committee
shall deliver to the Employee such payment or other consideration
as the Committee deems equitable under the circumstances.
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9. Withholding Taxes. All payments under this Agreement shall
be net of an amount sufficient to satisfy any federal, state and
local withholding tax requirements.
10. Nature of Payments.
(a) Any and all payments hereunder shall be paid in
consideration of services performed for the Company or its
Subsidiaries or for their benefit by the Employee.
(b) All such payments shall constitute a special incentive
payment to the Employee and shall not, unless otherwise
determined by the Committee or unless otherwise expressly
provided in any applicable plan document or agreement, be taken
into account in computing the amount of salary or regular
compensation of the Employee for the purposes of determining any
pension, retirement, death or other benefits under (i) any
pension, retirement, life insurance or other benefit plan of the
Company or any Subsidiary thereof or (ii) any agreement between
the Company or any Subsidiary thereof, on the one hand, and the
Employee, on the other hand.
11. Other Payments or Awards. Nothing contained in this
Agreement shall be deemed in any way to limit or restrict the
Company, any Subsidiary thereof or the Committee from making any
award or payment to the Employee under any other plan, agreement,
arrangement or understanding, whether now existing or thereafter
in effect, nor shall anything contained in this Agreement create
a right of the Employee to receive any Award under the Plan or
any other type of award or compensation.
12. Right to Terminate Employment. Nothing in this Agreement
shall confer upon the Employee the right to continue in the
employment of the Company or any of its Subsidiaries or affect
any right which the Company or any of its Subsidiaries may have
to terminate the employment of the Employee.
13. Non-Transferability. No rights granted to the Employee
under this Agreement shall be assignable or transferable by the
Employee, except by will or by the laws of descent and
distribution. During the life of the Employee, all rights
granted to the Employee under this Agreement shall be exercisable
only by the Employee or by the Employee's guardian or legal
representative.
14. Administration.
(a) The Committee shall have and exercise all of the power
and authority, among other things, (i) to construe, interpret and
implement this Agreement, and (ii) to make all determinations
necessary or advisable in administering this Agreement.
(b) No member of the Committee shall be liable for any
action or determination made in good faith with respect to this
Agreement or any Award hereunder.
15. No Rights as a Stockholder. The grant of the SAR hereunder
shall not confer on the Employee any of the rights of a
stockholder of the Company.
16. Notices. Any notice to be given to the Company hereunder
shall be in writing and shall be addressed to the Secretary of
the Company, at 00 Xxxxxxxx Xxxxx Xxxx, Xxxxxxxx, Xxxxxxxxxxx
00000, or at such other address as the Company may hereafter
designate to the Employee by notice as provided herein. Any
notice to be given to the Employee hereunder shall
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be addressed
to the Employee at the address set forth beneath his signature
hereto, or at such other address as the Employee may hereafter
designate to the Company by notice as provided herein. Notices
hereunder shall be deemed to have been duly given when mailed by
registered or certified mail to the party entitled to receive the
same.
17. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and the
successors and assigns of the Company and, to the extent set
forth in Section 7 hereof, to the heirs and personal
representatives of the Employee.
18. Exercise. The SAR shall be exercisable in whole or in part.
The partial exercise of the SAR shall not cause the expiration,
termination or cancellation of the remaining portion thereof.
The SAR shall be exercised by delivering a notice of such
exercise to the Company, no less than one business day in advance
of the effective date of the proposed exercise. Such notice
shall be accompanied by this Agreement, shall specify the number
of shares of Stock with respect to which the SAR is being
exercised and the effective date of the proposed exercise. The
Employee may withdraw such notice at any time prior to the close
of business on the business day immediately preceding the
effective date of the proposed exercise, in which case this
Agreement shall be returned to the Employee.
19. Employee Acknowledgment. The Employee hereby acknowledges
receipt of a copy of the Plan. The Employee hereby acknowledges
that all decisions, determinations and interpretations of the
Committee in respect of the Plan, this Agreement and the SAR
shall be final and conclusive.
20. Integration. This Agreement (together with the Plan, which
is incorporated herein by reference) contains the entire
understanding of the parties with respect to its subject matter.
There are no restrictions, agreements, promises, representations,
warranties, covenants or undertakings with respect to the subject
matter hereof other than those expressly set forth herein. This
Agreement supersedes all prior agreements and understandings
between the parties with respect to its subject matter.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date and year first above written.
INDEPENDENCE HOLDING COMPANY
By: ______________________________
__________________________________
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