LIFE OF THE SOUTH CORPORATION 2005 EQUITY INCENTIVE PLAN STOCK OPTION AGREEMENT
Exhibit 10.43
LIFE OF THE SOUTH CORPORATION
2005 EQUITY INCENTIVE PLAN
2005 EQUITY INCENTIVE PLAN
This Stock Option Agreement (the “Agreement”), is made and entered into as of this
18th day of November, 2005, by and between LIFE OF THE SOUTH CORPORATION, a corporation organized
under the laws of the State of Georgia (the “Corporation”), and XXXXXX X. XXXXXXXXXX (the
“Employee”).
WITNESSETH:
WHEREAS, the Corporation adopted the Life of the South Corporation 2005 Equity Incentive Plan
(the “Plan”) for the benefit of certain key employees of the Corporation, which Plan became
effective on November 18, 2005 and was approved by the shareholders of the Corporation on April
27, 2006; and
WHEREAS, the Corporation has adopted the Plan in a form that qualifies in pertinent part as
an Incentive Stock Option Plan, as provided in Section 422 of the Internal Revenue Code of 1986,
as amended (the “Code”), and so that certain options granted under the Plan will constitute
“Incentive Stock Options” and will be afforded the favorable tax treatment allowed such options
under the Code; and
WHEREAS, pursuant to the Plan, the Employee has been selected as an Optionee under the Plan,
and the Corporation desires to grant to the Employee an option to purchase shares of the
Corporation’s Common Stock (“Common Stock”), on the terms and conditions hereinafter set forth;
NOW, THEREFORE, for and in consideration of the premises and the mutual agreements and
covenants hereinafter set forth and other good and valuable consideration, the parties agree as
follows:
1. GRANT OF OPTION. Subject to the terms and conditions of this Agreement and the
terms and conditions of the Plan, which are incorporated herein by reference, the Corporation
irrevocably grants on November 18, 2005 (“Grant Date”) to the Employee the right and option to
purchase 50,000 shares of Common Stock (this “Option”), exercisable in accordance with the
provisions of paragraph 3. Unless otherwise indicated, capitalized terms used in this Agreement
shall have the same meaning as provided in the Plan.
2. TERM OF OPTION. Subject to earlier termination as provided in paragraph 3 hereof,
the term of this Option is ten (10) years from the date hereof. In no event may this Option be
exercised as to any shares covered hereby after 5:00 P.M.,
Eastern Time, on the date which immediately precedes the tenth anniversary of the date of this
Agreement.
3. OPTION PRICE. VESTING AND EXERCISE.
(a) Option Price. The purchase price of each share of Common Stock subject
to this Option shall be $15.92. This price represents a value no less than the Fair
Market Value of each such share as of the date of grant of this Option.
(b) Vesting of Option. Subject to the other provisions of this Agreement,
the Employee may exercise this Option, or any portion thereof, only to the extent
provided in the following vesting schedule:
| Vested Interest As Percentage of | ||||
| Vesting Date | Total Shares Subject To This Option | |||
April 30, 2006 |
20 | % | ||
April 30, 2007 |
40 | % | ||
April 30, 2008 |
60 | % | ||
April 30, 2009 |
80 | % | ||
April 30, 2010 |
100 | % | ||
The right to exercise this Option as to any portion of the shares covered hereby on
or after the respective dates provided above is cumulative, and a failure to exercise
any portion of this Option in any year shall not constitute a lapse of such right during
the term of this Option. If the aggregate Fair Market Value of Common Stock with respect
to which Options under the Plan and options under all stock option plans of the
Corporation and its subsidiaries are exercisable for the first time by the Employee (or
person then entitled to exercise this Option) during any calendar year exceeds $100,000,
this Option shall be an Incentive Stock Option (up to the $100,000 limit) and a
Nonqualified Stock Option for the remaining shares. Any exercise of this Option shall be
deemed first to be the exercise of Incentive Stock Options, with the excess treated as
the exercise of Nonqualified Stock Options. For purposes of determining the $100,000
limit, the Fair Market Value of the Common Stock shall be determined at the time the
Options are granted. Further, no partial exercise of this Option may be made for less
than 100 shares or, if less than 100 shares are still available for exercise under this
Option, the number of such remaining shares. For purposes of vesting and other rights
under this Agreement, the Employee’s employment by any Employer shall be considered
employment hereunder.
(c) Manner of Exercise. The person then entitled to exercise this Option
may do so by delivering written notice of exercise to the Secretary of the Corporation,
in person, or by mail, postage prepaid, addressed to the attention of
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the Secretary of the Corporation at the location at which the Corporation then maintains its
principal office, and if so mailed, the date of mailing will be considered the date of exercise.
Such notice shall be in substantially the form attached and shall be accompanied by payment in
full of the total purchase price for the shares being purchased. Such payment may be made in cash
or, in whole or in part, by transfer and delivery to the Corporation of shares of Common Stock
already owned by the Employee, free and clear of any liens, encumbrances or charges of any kind,
valued at their Fair Market Value (as defined in the Plan) on the date of such exercise. The
Corporation, in the event of exercise by an authorized person other than the Employee, may require
proof of the right of such person to exercise this Option. As promptly as practicable after
receipt by the Corporation of the notice to purchase and the full payment of the purchase price of
the shares of Stock, the Corporation shall cause to be issued to the person entitled to purchase
the shares for which this Option is exercised, stock certificate(s) for the number of shares of
Common Stock being purchased, which shall evidence fully paid and nonassessable shares.
(d) Person Who May Exercise Option. Except as the Corporation may otherwise permit in
its discretion pursuant to Section 4 below, during the lifetime of the Employee, this Option shall
be exercisable only by the Employee, or if the Employee is disabled, by his duly appointed
guardian or legal representative. Upon his death, to the extent that such Option is otherwise
exercisable hereunder, this Option may be exercised by the Employee’s legal representative or by a
person who receives the right to exercise this Option under the Employee’s will or by the
applicable laws of descent and distribution.
(e) Earlier Termination of Option. Not withstanding the provisions of subparagraph
3(b), the right to exercise the vested portion of this Option shall, except as provided in (f)
below, terminate upon the earliest to occur of: (i) the expiration of the term of this Option as
set forth in paragraph 2 hereof, (ii) the expiration of one (1) year after the date the Employee’s
employment is terminated because of death or Total and Permanent Disability, (iii) the expiration
of one (1) year after the date the Employee’s employment is terminated by the Corporation without
Cause or the Employee terminates for Good Reason, or (iv) the date the Employee’s employment is
terminated by the Corporation for Cause or the Employee voluntarily terminates his employment. For
purposes of this Agreement, “Cause” and “Good Reason” shall have the meaning set forth in the
Employment Agreement, dated as of May 1, 2005 (“Employment Agreement”), between the Corporation
and the Employee, as it may be amended.
(f) Earlier Exercise of Option. The following special rule shall apply to the
exercise of this Option: upon the occurrence of a Change in Control (as defined
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in the Employment Agreement) or upon the Employee becoming entitled to receive termination
benefits under Sections 4.1 or 4.2 of the Employment Agreement, this Option shall become
fully vested and immediately exercisable. The period during which this Option may be
exercised after any such events shall extend to the expiration of one year after the
Employee’s date of termination.
4. TRANSFERABILITY. Except as the Corporation may otherwise permit in its discretion,
this Agreement and any rights hereunder shall be nontransferable and nonassignable by the Employee
or by any other person entitled hereunder to exercise any such rights; provided, however, that
upon the death of the employee any rights granted hereunder shall be transferable, subject to the
provisions of subparagraph 3(d), by the Employee’s will or by the applicable laws of descent and
distribution.
5. ADJUSTMENT OF SHARES. In the event of (i) any dividend payable in shares of Common
Stock, (ii) any recapitalization, reclassification, split-up, consolidation of, or other change
in, the Common Stock, or (iii) an exchange of the then outstanding shares of Common Stock, in
connection with a merger, consolidation, or other reorganization of the Corporation, or a sale by
the Corporation of all or a portion of its assets, for a different number or class of shares of
stock or other securities of the Corporation or for shares of the stock or other securities of any
other corporation; then the number and class of shares or other securities that shall be subject
to this Option and/or the purchase price per share which must be paid thereafter upon exercise of
this Option shall automatically be appropriately adjusted to reflect the event described in (i),
(ii), or (iii) above.
6. INVESTMENT REPRESENTATION. The Employee hereby represents, warrants and agrees:
(a) That, unless a registration statement is effective at the time of exercise, the
shares that are purchased under this Agreement will be purchased for his own account for
investment purposes only and not with a view to resale or distribution thereof;
(b) That he understands the offer of shares under this Agreement may be made pursuant
to a claim of exemption from the registration provisions of the Securities Act of 1933, as
amended (the “Act”) and any applicable state securities laws, and that such claim may be
based in part upon the representations contained herein;
(c) That the shares subject to this Agreement may be unregistered and, if so, will be
required to be held indefinitely, unless such shares are subsequently registered or an
exemption from registration is then available;
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(d) That the Corporation is under no obligation to register such shares, to comply
with any such exemption or to supply the Employee with any information necessary to enable
him to make routine sales of such shares under Rule 144 or any other rule or regulation of
the Securities and Exchange Commission; and
(e) That the transfer agent for the Corporation may be instructed not to transfer
ownership of the stock certificate(s) representing shares acquired upon any exercise of
this Option, unless in the prior written opinion of counsel reasonably acceptable to the
Corporation, such transfer is lawful under the Act and applicable state securities laws.
In regard to the foregoing, the Employee understands and agrees that the certificate(s)
evidencing any shares that may be purchased pursuant to the exercise of this Option which have not
been registered under the Act or any applicable state securities law, may bear an appropriate
restrictive legend in a form determined in the sole discretion of the Corporation.
7. LEGAL RESTRICTIONS. If in the opinion of legal counsel for the Corporation the
issuance or sale of any shares of Common Stock pursuant to the exercise of this Option would not
be lawful for any reason, including without limitation the inability of the Corporation to obtain
from any governmental authority or regulatory body having jurisdiction the authority deemed by
such counsel to be necessary to such issuance or sale, the Corporation shall not be obligated to
issue or sell any Common Stock pursuant to the exercise of this Option to the Employee or any
other authorized person unless a registration statement that complies with the provisions of the
Act in respect of such shares is in effect at the time thereof, or other appropriate action has
been taken under and pursuant to the terms and provisions of the Act, or the Corporation receives
evidence satisfactory to such counsel that the issuance and sale of such shares, in the absence of
an effective registration statement or other appropriate action, would not constitute a violation
of the Act or any applicable state securities law.
8. NO RIGHTS AS SHAREHOLDER OR TO EMPLOYMENT. Neither the Employee nor any other
person authorized to purchase Common Stock upon exercise of this Option shall have any interest in
or shareholder rights with respect to any shares of Common Stock which are subject to this Option
until such shares have been issued and delivered to the Employee or any such person pursuant to
the exercise of this Option. Furthermore, neither this Agreement nor the Plan shall confer upon
the Employee any rights of employment with the Corporation or a Subsidiary, including without
limitation any right to continue in the employ of the Corporation or a Subsidiary, or shall affect
the right of the Corporation or a Subsidiary to terminate the employment of the Employee at any
time with or without Cause.
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9. WITHHOLDING TAXES. As a condition of exercise of this Option, the Corporation may,
in its sole discretion, withhold or require the Employee to pay or reimburse the Corporation for
any taxes which the Corporation determines are required to be withheld in connection with the
grant or any exercise of this Option (including the right to use shares acquired in connection
with the exercise of the Option to pay any required withholding taxes).
10. HEIRS AND SUCCESSORS. This Agreement and all terms and conditions hereof shall be
binding upon the parties hereto, and their successors, heirs, legatees and legal representatives.
11. AMENDMENT. The Corporation hereby reserves the right to amend this Agreement,
except that no such amendment shall adversely affect the rights of the Employee hereunder without
his written consent.
IN WITNESS WHEREOF, the Corporation has caused this Agreement to be executed by its duly
authorized officer and its corporate seal to be affixed hereto, and the Employee has executed this
Agreement under seal, all as of the date first above written.
| CORPORATION: LIFE OF THE SOUTH CORPORATION |
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| By: | /s/ Illegible | |||
| Title: President | ||||
| ATTEST: |
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| /s/ Illegible | ||||
| Title: Assist. Secretary | ||||
| EMPLOYEE : |
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| /s/ Xxxxxx X. Xxxxxxxxxx | ||||
| XXXXXX X. XXXXXXXXXX | ||||
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EXERCISE OF STOCK OPTION
The undersigned Optionee under that certain Life of the South Corporation 2005 Equity
Incentive Plan Stock Option Agreement, dated November 18, 2005 (the “Agreement”), hereby exercises
the Option granted under the Agreement for the following number of shares of Common Stock, subject
to the terms and conditions of the Agreement:
Number of shares being purchased: |
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Total purchase price submitted herewith
|
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(in cash and/or shares of Common Stock) |
| (Signature) | ||||
| (Date) |
AMENDMENT TO THE LIFE OF THE SOUTH CORPORATION
2005 EQUITY INCENTIVE PLAN STOCK OPTION
AGREEMENT FOR XXXXXX X. XXXXXXXXXX
2005 EQUITY INCENTIVE PLAN STOCK OPTION
AGREEMENT FOR XXXXXX X. XXXXXXXXXX
THIS AMENDMENT (“Amendment”), dated March 7, 2007 is made to the Stock Option
Agreement for Xxxxxx X. Xxxxxxxxxx, dated as of November 18, 2005, related to the grant of 50,000
stock options under the Life of the South Corporation 2005 Equity Incentive Plan (the “Plan”).
Recitals
WHEREAS, Life of the South Corporation (the “Corporation”) desires to amend the terms of
the 2005 Equity Incentive Plan Stock Option Agreement for Xxxxxx X. Xxxxxxxxxx (the “Agreement”);
and
WHEREAS, the Corporation may amend the Agreement pursuant to Paragraph 11 of the Agreement;
and
NOW, THEREFORE, the Agreement is hereby amended as follows:
1. AMENDMENT
1.1 Section 1. Section 4 of the Agreement shall be amended by adding the following at
the end thereof:
“If Options are exercised between the signing and closing of the transaction contemplated by
that certain Agreement and Plan of Merger, dated as of March 8, 2007 among the Corporation and the
other parties thereto, the Optionee shall not transfer such shares prior to the closing of such
transaction, at which time the shares will be transferable as permitted by the Stockholder’s
Agreement entered into in conjunction with such Agreement and Plan of Merger.”
2. MISCELLANEOUS
2.1 Definitions. Capitalized terms not defined herein shall have the meanings
set forth with respect thereto in the Agreement and/or the Plan.
2.2 Counterparts. This Amendment may be executed in any number of counterparts, each
of which shall be considered an original for all purposes, and all of which taken together shall
constitute a single instrument.
2.3 Effect of Amendment. Except as specifically amended by this Amendment, the
Agreement shall remain in full force and effect, and is hereby affirmed and ratified in all
respects.
AMENDMENT TO THE LIFE OF THE SOUTH CORPORATION
2005 EQUITY INCENTIVE PLAN STOCK OPTION
AGREEMENT FOR XXXXXX X. XXXXXXXXXX
2005 EQUITY INCENTIVE PLAN STOCK OPTION
AGREEMENT FOR XXXXXX X. XXXXXXXXXX
IN WITNESS WHEREOF, the Corporation and the Employee have caused this Amendment
to the Agreement to be executed as of the day written above.
CORPORATION:
| LIFE OF THE SOUTH CORPORATION |
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| By: | /s/ Illegible | |||
| Its: President | ||||
| EMPLOYEE: |
||||
| /s/ Xxxxxx X. Xxxxxxxxxx | ||||
| Xxxxxx X. Xxxxxxxxxx | ||||
3
AMENDMENT TO THE LIFE OF THE SOUTH CORPORATION
2005 EQUITY INCENTIVE PLAN STOCK OPTION
AGREEMENT FOR XXXXXX XXXXXXXXXX
2005 EQUITY INCENTIVE PLAN STOCK OPTION
AGREEMENT FOR XXXXXX XXXXXXXXXX
THIS AMENDMENT (“Amendment”), dated as of June 20, 2007 is made to the Stock Option
Agreement for Xxxxxx Xxxxxxxxxx (the “Employee”), dated as of November 18, 2005, related to the
grant of 50,000 stock options under the Life of the South Corporation 2005 Equity Incentive Plan
(the “Plan”).
Recitals
WHEREAS, Life of the South Corporation (the “Corporation”) has entered into an Agreement and
Plan of Merger, dated March 7, 2007 (the “Merger Agreement”), pursuant to which the Corporation
will merge (the “Merger”) with and into LOS Acquisition Co., with the Corporation being the
surviving corporation; and
WHEREAS, in connection with the Merger, the Corporation desires to amend the terms of the
2005 Equity Incentive Plan Stock Option Agreement for Xxxxxx Xxxxxxxxxx (the “Agreement”); and
WHEREAS, the Corporation may amend the Agreement pursuant to Paragraph 11 of the Agreement
and the Employee has agreed to consent to the Amendment; and
NOW, THEREFORE, the Agreement is hereby amended, effective as of the Closing Date of the
Merger, as follows:
1. Amendment
Section 3(e) of the Agreement is hereby amended by deleting the last sentence of such section
in its entirety and substituting the following in lieu thereof:
“For purposes of this Agreement, “Cause” and “Good Reason” shall have the meaning
set forth in the Executive Employment And Non-Competition Agreement, dated as of
March 8, 2007 (“Employment Agreement”), between the Corporation and the
Employee, as it may be amended.”
2.
Section 3(f) is hereby amended by deleting the present section in its entirety and
substituting the following in lieu thereof:
“(f) Earlier Exercise of Option. The following special rule
shall apply to the exercise of this Option: upon the occurrence of a Change in
Control (as it was defined in the Employment Agreement dated May 1, 2005 between
the Corporation and Employee), this Option shall become fully vested and
immediately exercisable. Subject to Section 3(g) below, the
period during which this Option may be exercised after such Change in Control
shall extend to the expiration of one year after the Employee’s date of
termination.”
3.
Section 3 of the Agreement shall be further amended by adding the following at the end
thereof as a new subsection (g):
“(g) Change in Control Transaction. Upon a contemplated transaction,
occurring after the closing of the transaction contemplated by that certain
Agreement and Plan of Merger, dated as of March 7, 2007 among the
Corporation and the other parties thereto, whereby the securities of the
Corporation representing in excess of 50% of the voting power of the Corporation
are acquired directly, or indirectly through one or more entities, by any “person”
or “group” of Persons (as such terms are used in Section 13(d) of the Exchange
Act), other than the Sponsors or their Permitted Transferees (as those terms are
defined in the Stockholders’ Agreement) or (ii) a sale of all or substantially all
of the assets of the Corporation (the “Change in Control Transaction”), the
Committee may, but is not obligated to, provide for: (i) continuation or
assumption of such outstanding Option under the Plan by the Corporation (if it is
the surviving company or corporation) or by the surviving company or corporation
or its parent; (ii) substitution by the surviving company or corporation or its
parent of awards with substantially the same terms with respect to Option Price,
Term, exercise rights, adjustment of shares and other matters for such outstanding
Options; (iii) upon written notice, provide that any outstanding Options must be
exercised, to the extent then exercisable, within fifteen days immediately prior
to the scheduled consummation of the event, or such other period as determined by
the Committee (in either case contingent upon the consummation of the event), and
at the end of such period, such Options shall terminate to the extent not so
exercised within the relevant period; or (iv) cancellation of all or any portion
of outstanding Options for fair value which shall equal the excess, if any, of the
value of the consideration to be paid in the Change of Control Transaction to
holders of the same number of Shares subject to such Options (or, if no such
consideration is paid, Fair Market Value of the Shares subject to such outstanding
Options or portion thereof being canceled) over the aggregate Option Price or
exercise price, as applicable, with respect to such Option or portion thereof
being canceled.”
2. Miscellaneous
2.1 Definitions. Capitalized terms not defined herein shall have the meanings
set forth with respect thereto in the Agreement and/or the Plan.
2.2 Counterparts. This Amendment may be executed in any number of
counterparts, each of which shall be considered an original for all purposes, and all
of which taken together shall constitute a single instrument.
2.3 Effect of Amendment. Except as specifically amended by this
Amendment, the Agreement shall remain in full force and effect, and is hereby affirmed
and ratified in all respects.
IN WITNESS WHEREOF, the Corporation and the Employee have caused this Amendment to the
Agreement to be executed as of the day first written above.
| CORPORATION: LIFE OF THE SOUTH CORPORATION |
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| By: | /s/ Illegible | |||
| Its: President | ||||
| EMPLOYEE: |
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| /s/ Xxxxxx Xxxxxxxxxx | ||||
| Xxxxxx Xxxxxxxxxx | ||||
