FORM OF STOCK OPTION AWARD AGREEMENT
VERISK ANALYTICS, INC.
2009 EQUITY INCENTIVE PLAN
2009 EQUITY INCENTIVE PLAN
STOCK OPTION AWARD AGREEMENT FOR EMPLOYEES
This Award Agreement, made effective as of (the “Grant Date”) between Verisk Analytics,
Inc. (the “Company”) and (the “Optionee”).
Section 1. Definitions.
Unless otherwise defined in this Award Agreement, the terms in the Verisk Analytics, Inc. 2009
Equity Plan (the “Plan”) shall have the same defined meaning in this Award Agreement. If the
Optionee is employed by or otherwise provides services to a Subsidiary, the definition of “Company”
in this Award Agreement shall include the Subsidiary as appropriate to the context in which such
term is used; provided, however, that references to “Company” in the definition of “Change in
Control” below mean solely Verisk Analytics, Inc.
(a) “Cause” means the occurrence of any one or more of the following:
(i) the Optionee is convicted of (or pleads nolo contendere to) a felony, a crime
involving moral turpitude or common law fraud;
(ii) the Optionee’s willful and continued failure to substantially perform the
Optionees’s material duties for the Company after written notice from the Company;
(iii) the Optionee engages in willful misconduct or gross neglect, in either case
resulting in demonstrable harm to the Company; or
(iv) the Optionee willfully violates the written policies of the Company applicable
to the Optionee, resulting in demonstrable harm to the Company.
(b) “Change in Control” shall mean the occurrence of any of the following events:
(i) any “person”, as such term is used in Section 13(d) of the Securities Exchange
Act of 1934, or group of persons (excluding persons that are Company benefit plans)
becomes (directly or indirectly) a “beneficial owner”, as such term is used in Rule 13d-3
promulgated under that Act, of 30% or more of any class of voting securities entitled to
vote for the election of directors of the boards (“Voting Securities”) of either the
Company or Insurance Services Offices, Inc. (“ISO”), a Delaware corporation (measured either by number of Voting Securities or by voting power);
(ii) a majority of the Board consists of individuals other than “Incumbent
Directors,” which term means the members of such Board on the Grant Date; provided that
any individual becoming a director subsequent to such date whose election or nomination
for election was supported (other than in connection with any actual or threatened proxy
contest) by two-thirds of the directors who then comprised the Incumbent Directors shall
be considered to be an Incumbent Director;
(iii) the Board of the Company or the board of directors of ISO approves a plan of
liquidation for its respective company; or
(iv) (x) either of the Company or ISO combines with another entity and is the
surviving entity, or (y) all or substantially all of the assets or business of either of
the Company or ISO is disposed of pursuant to a sale, merger, consolidation, liquidation,
dissolution or other transaction or series of transactions (collectively, a “Triggering
Event”) unless the holders of Voting Securities of such entity immediately prior to such
Triggering Event own, directly or indirectly, by reason of their ownership of Voting
Securities of such entity immediately prior to such Triggering Event, more than 50% of the
Voting Securities (measured both by number of Voting Securities and by voting power) of
(1) in the case of a combination in which such entity is the surviving entity, the
surviving entity and (2) in any other case, the entity (if any) that succeeds to
substantially all of such entity’s business and assets.
(c) “Disability” means the Optionee ceases his or her employment with the Company because he
or she is unable, as a result of mental or physical illness, to perform the essential duties of his
or her position with the Company with reasonable accommodation.
(d) “Good Reason” means, without the Optionee’s express prior written consent, the occurrence
of any one or more of the following:
(i) a material adverse change in either the Optionee’s duties and responsibilities
(including removal from any position the Optionee holds) or reporting relationship from
those in effect immediately prior to the Change in Control, provided that the Company no
longer being a public company will not itself constitute a Good Reason event under this
clause (i) as long as the Company has an independent board of directors;
(ii) a material reduction by the Company of the Optionee’s base salary in effect
immediately prior to the Change in Control or as the same shall be increased from time to
time, unless such reduction is part of an across-the-board reduction of not more than 10%
(in the aggregate including all reductions) applicable to all similarly situated employees of the
Company;
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(iii) if applicable, a material reduction by the Company of the Optionee’s Target
Bonus (as defined below) in effect immediately prior to the Change in Control or as the
same shall be increased from time to time, unless such reduction is part of an
across-the-board reduction of not more than 10% (in the aggregate including all
reductions) applicable to all senior executives of the Company;
(iv) the relocation of the Optionee’s office more than 40 miles from the Optionee’s
principal place of employment immediately prior to the Change in Control if such
relocation materially increases the Optionee’s commute;
(v) a reduction by at least 5% of the aggregate benefits under employee benefit plans
provided to the Optionee by the Company following a Change in Control as compared with the
aggregate benefits made available to the Optionee immediately prior to such Change in
Control; or
(vi) any failure by a successor to the Company as a result of the Change in Control
to obtain the assumption in writing or by operation of law of its obligations under this
Award Agreement by any subsequent successor to all or substantially all of the Company’s
business or assets upon or prior to the consummation of any such transaction.
Notwithstanding the foregoing, the Optionee shall not be entitled to terminate employment for
Good Reason unless the Optionee provides the Company with written notice of the events giving rise
to Good Reason no later than 120 days after the date the Optionee learns of the occurrence of the
event and the Company fails to cure such event(s) within 10 days following receipt of such notice
(provided that in the case of any notice pursuant to clause (vi), the Company’s cure right shall
end on the date of the consummation of the transaction).
(e) “Retirement” means the termination by the Optionee of his or her employment with the
Company after he or she (i) has reached age 62 and (ii) has been employed by the Company for at
least five consecutive years immediately prior to such termination of employment.
(f) “Target Bonus” means the target cash award opportunity as a percentage of the Optionee’s
annual base salary under the Company’s annual short term incentive compensation plan in effect for
the Optionee immediately prior to the Change in Control.
Section 2. Grant and Acceptance of Option.
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(a) The Company hereby grants to the Optionee, effective as of the Grant Date, the right and
option (this “Option”) to purchase all or any part of an aggregate number of whole Shares specified
in Schedule I attached hereto, as amended or supplemented from time to time, subject to, and in
accordance with, the terms and conditions set forth in the Plan and this Award Agreement.
(b) This Award Agreement shall be construed in accordance with, and shall be subject to, the
provisions of the Plan (the provisions of which are incorporated herein by reference).
(c) The Optionee’s signature and delivery of a copy of this Award Agreement will not commit
the Optionee to purchase any Shares that are subject to the Option but will evidence the Optionee’s
acceptance of the Option upon the terms and conditions herein stated.
(d) This Option is not intended to qualify as an Incentive Stock Option within the meaning of
Section 422 of the Code.
Section 3. Purchase Price. The price per Share at which the Optionee shall be entitled to
purchase Shares upon the exercise of the Option (the “Option Price”) is set forth on Schedule I
hereto.
Section 4. Duration of Option. Upon becoming exercisable, the Option shall remain
exercisable to the extent and in the manner provided herein for a period of 10 years from the Grant
Date (the “Exercise Term”), unless the Option earlier ceases to be exercisable pursuant to Section
5 of this Award Agreement.
Section 5. Exercisability of Option; Termination Period. (a) Unless otherwise provided by
the Board or Committee, the Plan or this Award Agreement, the Option shall entitle the Optionee to
purchase, in whole at any time or in part from time to time, the total number of Shares covered by
the Option after the expiration of the period(s) of time set forth in the vesting schedule in
Schedule I, provided, however, that if the Optionee ceases to be an employee of the Company by
reason of the Optionee’s:
(i) death;
(ii) Disability;
(iii) Retirement; or
(iv) within two years following a Change in Control, termination of employment for
Good Reason; or
(v) within two years following a Change in Control, termination of employment by the
Company without Cause;
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the Option shall immediately be exercisable with respect to the total number of unexercised Shares
covered by the Option (whether or not the period(s) of time set forth in the vesting schedule in
Schedule I shall have expired), and shall remain exercisable for a period of 12 months following
the date the Optionee ceased to be an employee of the Company.
(b) If the Optionee’s employment is terminated by the Company for Cause, the Option shall
immediately terminate with respect to all Shares covered by the Option whether or not previously
exercisable.
(c) For purposes of this Award Agreement, any transfer of the Optionee’s employment from the
Company to a Subsidiary (or any transfer of the Optionee’s employment from one Subsidiary to
another Subsidiary), related entity, or affiliate of the Company, with or without the Optionee’s
consent, shall not constitute termination of the Optionee’s employment with the Company. Upon any
such transfer of the Optionee’s employment, the definition of “Company” shall thereafter include
any Subsidiary, related entity or affiliate as appropriate to the context in which such term is
used; provided, however, that references to “Company” in the definition of “Change in Control”
under this Award Agreement shall continue to refer solely to Verisk Analytics, Inc.
(d) If the Optionee’s employment with the Company terminates for any reason other than those
set forth in Sections 5(a) or 5(b) of this Award Agreement, the Option (i) shall immediately
terminate with respect to any Shares that have not yet become exercisable and (ii) shall terminate
and cease to be exercisable with respect to any previously exercisable shares at 5:00 p.m. Eastern
time on the 90th day following the date of such termination of employment or, if such
day is not a Business Day, on the first day thereafter that is a Business Day. “Business Day”
means a day on which the banks in New York City are generally open for business.
Section 6. Manner of Exercise and Payment.
(a) Subject to the terms and conditions of this Award Agreement and the Plan, the Optionee (or
the Optionee’s, representative, devisee or heir, as applicable), may exercise any portion of the
Option that has become exercisable in accordance with the terms of this Award Agreement by
delivering to the Secretary of the Company or his or her designee, at its principal executive
office written notice in form acceptable to the Committee specifying the number of whole Shares to
be purchased. The notice shall be signed by the person or persons exercising the Option and shall
be an irrevocable election to exercise such Option. If requested by the Committee, such person or
persons shall provide satisfactory proof as to the right of such person or persons to exercise the
Option.
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(b) The notice of exercise described above shall be accompanied by the aggregate Option Price
for the Shares in respect of which the Option is being exercised. Payment shall be (i) in cash, by
certified or bank cashier’s check payable to the order of the Company, free from all collection charges, (ii) in unencumbered
Shares (including, unless the Committee determines in its sole discretion that it would result in
adverse accounting treatment (including under Statement of Financial Accounting Standards Board No.
123R), Shares otherwise to be delivered upon exercise of the Option) having a Fair Market Value
equal to the full amount of the Option Price therefor or (iii) such other form as may be permitted
by the Committee.
(c) Any applicable withholding taxes shall be payable (i) in cash, (ii) by delivery of Shares
previously purchased by the Optionee, (iii) by the Company withholding that number of Shares
sufficient to satisfy the minimum required statutory withholding obligation (iv) or by a
combination of such forms of payment.
(d) Any exercise shall be effective as of the date specified in the notice of exercise (or
otherwise in accordance with rules that may be established by the Committee from time to time),
provided that such date is not earlier than the date that the Company actually receives the full
purchase price for the Shares (or adequate provision therefor) in respect of which the Option is
being exercised and the amount of any applicable withholding taxes to be paid, subject to the
exercise method elected by the Optionee and permitted by Section 6(b) above.
(e) The Optionee shall not be deemed to be the holder of, or to have any of the rights of a
holder with respect to, any Shares subject to the Option until such Shares have been paid for in
full and issued to the Optionee.
Section 7. Rescission of Grant or Exercise by the Company.
(a) If, within one year following the date of the Optionee’s Retirement, Optionee Competes
with the Company, the Company may elect to rescind any grant of Options that vested solely by
reason of Optionee’s Retirement. Such rescission shall become effective when written notice of the
Company’s election to rescind is sent to the Optionee. Any grant of Options as to which the
Company has sent a notice of rescission shall be null and void. For purposes of this Award
Agreement, “Competes” shall mean that the Optionee, for him or herself or for any third party,
directly or indirectly: (i) diverts or attempts to divert from the Company any business of any kind
in which the Company is engaged, including without limitation, the solicitation or interference
with any of the Company’s suppliers or customers that have used or provided, as the case may be,
products or services of the Company within the 24-month period prior to the date the Optionee
solicits or interferes with such supplier or customer; (ii) employs or solicits for employment, any
person employed by the Company during the period of such person’s employment and for a period of
one year thereafter; (iii) engages in any business activity that is competitive with the activities
of the Company prior to the Optionee’s Retirement; or (iv) directly or indirectly invests in any
entity whose business activity is competitive with the activities engaged in by the Company; except
that in each case the foregoing provisions will not be deemed
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breached merely because the Optionee owns not more than 1% of the outstanding common stock of
any competitor, if, at the time of its acquisition by the Optionee, such stock is listed on a
national securities exchange, is reported on NASDAQ, or is regularly traded in the over-the-counter
market by a member of a national securities exchange. For purposes of this Award Agreement,
"Competes” shall include, by way of example and not by way of limitation, the disclosure by the
Optionee to any third party, whether or not a competitor of the Company, of any trade secret or
other confidential or proprietary information of the Company.
(b) If, following his or her Retirement, the Optionee exercises any Options as to which the
Company would have had, but for such exercise, a right of rescission pursuant to Section 7(a), the
Company may elect to rescind any such exercise by (i) providing written notice of such rescission
to the Optionee, (ii) returning to the Optionee the purchase price received by the Company from the
Optionee in respect of such exercise, and (iii) canceling on the Company’s share register the
shares issued in respect of such rescinded exercise. If the Optionee has sold the Shares issued in
respect of such rescinded exercise, the Optionee shall pay to the Company within five days of
receiving such written notice an amount equal to the proceeds of sale received by the Optionee for
such Shares.
Section 8. Nontransferability. The Optionee shall not be permitted to sell, assign,
transfer, pledge or otherwise encumber all or any portion of an unexercised Option. During the
life of the Optionee, the Option shall be exercisable only by the Optionee, the Optionee’s guardian
or legal representative.
Section 9. No Right to Continued Employment. Nothing in this Award Agreement or the Plan
shall be interpreted or construed to confer upon the Optionee any right with respect to
continuation of employment by the Company, nor shall this Award Agreement or the Plan interfere in
any way with the right of the Company to remove the Optionee as an officer or employee of the
Company.
Section 10. Withholding of Taxes. The Company shall have the right to deduct from payments
(including cash, Shares or other securities) to the Optionee hereunder any federal, state and local
income taxes and other amounts as may be required by law to be withheld with respect to such
payments.
Section 11. Optionee Bound by the Plan. The Optionee hereby acknowledges receipt of a copy
of the Plan, as amended, and agrees to be bound by all terms and provisions thereof.
Section 12. Modification of Award Agreement. This Award Agreement may be modified, amended,
suspended, or terminated, and any terms or conditions may be waived, but only by a written
instrument executed by each of the parties hereto.
Section 13. Severability. Should any provision of this Award Agreement be held by a court
of competent jurisdiction to be unenforceable or invalid for any reason, the remaining provisions of this Award Agreement shall not be affected by such holding
and shall continue in full force in accordance with their terms.
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Section 14. Successors in Interest. This Award Agreement shall inure to the benefit of and
be binding upon each successor to the Company. This Award Agreement shall inure to the benefit of
the Optionee’s legal representatives. All obligations imposed upon the Optionee and all rights
granted to the Company under this Award Agreement shall be final, binding and conclusive upon the
Optionee’s heirs, executors, administrators and successors.
Section 15. Resolution of Disputes. Any dispute or disagreement which may arise under, or
as a result of, or in any way relate to, the interpretation, construction or application of this
Award Agreement shall be determined by the Committee. Any determination made by the Committee
hereunder shall be final, binding and conclusive on the Optionee and the Company for all purposes.
Section 16. Notices. Any notice, request, consent, waiver or other communication required
or permitted to be delivered hereunder shall be effectively delivered only if it is in writing and
personally delivered or sent by Express Mail, Federal Express or similar overnight delivery
service, addressed as set forth below, or sent by facsimile to the number set forth below with
confirmation received and followed by a writing personally delivered or sent by Express Mail,
Federal Express or similar overnight delivery service.
If to Optionee:
The address specified from time to time in the employment records of the Company.
If to the Company:
VERISK ANALYTICS, INC.
000 Xxxxxxxxxx Xxxxxxxxx
Xxxxxx Xxxx, Xxx Xxxxxx 00000-0000
Attention: Secretary Facsimile: (000) 000-0000
VERISK ANALYTICS, INC.
000 Xxxxxxxxxx Xxxxxxxxx
Xxxxxx Xxxx, Xxx Xxxxxx 00000-0000
Attention: Secretary Facsimile: (000) 000-0000
or such other person or address or to such other facsimile number as the addressee may have
specified in a notice duly given to the sender as provided herein. Such notice or communication
shall be deemed to have been delivered as of the date of acknowledged receipt.
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