EXHIBIT 10.2
AMERICAN MEDICAL SECURITY GROUP, INC.
EQUITY INCENTIVE PLAN
NONQUALIFIED STOCK OPTION AWARD AGREEMENT
You have been selected to be a Participant in the American Medical Security
Group, Inc. Equity Incentive Plan (the "Plan"), as specified below:
PARTICIPANT: ____________________
DATE OF GRANT: ____________________
DATE OF EXPIRATION: _____________________
NUMBER OF SHARES COVERED BY THIS OPTION: __________________ Shares
OPTION PRICE: $__________ per Share
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. The parties hereto agree as
follows:
1. GRANT OF STOCK OPTION. The Company hereby grants to Participant the
option (the "Option(s)") to purchase the number of shares of common stock of the
Company ("Common Stock") set forth above at the stated Option Price, which is
one hundred percent (100%) of the Fair Market Value on the Date of Grant,
subject to the terms and conditions of the Plan and this Agreement. This award
is intended to be Nonqualified Stock Option, and therefore is not subject to
Section 422 of the Code.
2. VESTING OF STOCK OPTION. Except as hereinafter provided, with respect to
the Options granted hereunder, vesting shall occur at a rate of twenty-five
percent (25%) per year beginning on the first anniversary of the Date of Xxxxx
and each subsequent anniversary date thereafter.
3. EXERCISABILITY OF OPTION. The Options are exercisable at any time after
the Date of Grant, in whole or in part, but only if all of the following
conditions are met at the time of exercise:
(a) The Options to be exercised are vested as described in Section 2
above;
(b) The date of exercise is on or before the Date of Expiration set
forth above;
(c) The Options to be exercised are exercised only in compliance with
the Company's then current Xxxxxxx Xxxxxxx Policy; and
(d) Participant is employed by the Company or any present or future
parent, subsidiary or Affiliate of the Company; or, if he or she is no
longer so employed, the date of exercise is in accordance with the
provisions of this Agreement and the Plan.
4. TERMINATION OF EMPLOYMENT BY DEATH. In the event the employment of the
Participant is terminated by reason of death, all outstanding Options granted
pursuant to this Agreement shall immediately vest one hundred percent (100%),
and shall remain exercisable for a period ending on the earlier of (i) the Date
of Expiration identified above, or (ii) one (1) year after the date of the
Participant's death.
5. TERMINATION OF EMPLOYMENT BY DISABILITY. In the event the employment of
the Participant is terminated by reason of Disability, all outstanding Options
granted pursuant to this Agreement shall immediately vest one hundred percent
(100%) as of the date the Compensation Committee (the "Committee") determines
the definition of Disability to have been satisfied, and shall remain
exercisable for a period ending on the earlier of (i) the Date of Expiration
identified above, or (ii) one (1) year after the date the Committee determines
the definition of Disability to have been satisfied.
6. TERMINATION OF EMPLOYMENT BY RETIREMENT. In the event the employment of
Participant is terminated by reason of Retirement (as defined under the
then-established rules of the Company's tax-qualified retirement plan), the
Committee shall retain discretion over the treatment of any unvested Options.
However, at the date of termination of employment by reason of Retirement, any
vested Options shall remain exercisable for a period ending on the earlier of
(i) the Date of Expiration identified above, or (ii) the end of the third (3rd)
year following the date of termination of the Participant's employment by reason
of Retirement.
7. EMPLOYMENT TERMINATION FOLLOWED BY DEATH. In the event Participant's
employment terminates by reason of Disability or Retirement, and within the
exercise period allowed by the Committee following such termination the
Participant dies, then the remaining exercise period under outstanding Options
shall equal the longer of: (i) one (1) year following death; or (ii) the
remaining portion of the exercise period which was triggered by the employment
termination.
8. TERMINATION OF EMPLOYMENT FOR OTHER REASONS. If the employment of
Participant shall terminate for any reason other than his or her death,
Disability, or Retirement (and other than for Cause), all Options held by the
Participant which are not vested as of the effective date of employment
termination immediately shall be forfeited to the Company. However, the
Committee, in its sole discretion, shall have the right to immediately vest all
or any portion of such Options subject to such terms as the Committee, in its
sole discretion, deems appropriate.
Options which are vested as of the effective date of employment termination
may be exercised by the Participant within the period beginning on the effective
date of employment termination, and ending on the earlier of (i) the Date of
Expiration identified above, or (ii) six (6) months after the date of employment
termination.
If the employment of Participant shall be terminated by the Company for
Cause, all outstanding Options held by the Participant immediately shall be
forfeited to the Company and no additional exercise period shall be allowed,
regardless of the vested status of the Options.
9. CHANGE IN CONTROL. In the event of a Change in Control (as defined in
the Plan) which occurs prior to the Participant's termination, Participant's
right to exercise the Options shall vest fully as of the first date that the
definition of Change in Control has been fulfilled, and shall become immediately
exercisable in accordance with the terms of this Agreement and the Plan.
10. RESTRICTIONS ON TRANSFER. The Options may not be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated, other than by will or
by the laws of descent and distribution and shall be exercisable during
Participant's lifetime only by Participant or Participant's legal
representative, except that the Options may be transferred by the Participant to
the Participant's spouse, children or grandchildren or a trust for the benefit
of such spouse, children or grandchildren. In the event the Options are
transferred, they shall remain subject to this Agreement and the Plan.
11. RECAPITALIZATION. In the event there is any change in the Common Stock
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 Common Stock
subject to the Options, as well as the Option Price, shall be equitably adjusted
by the Committee, in its sole discretion, to prevent dilution or enlargement of
rights.
12. PROCEDURE FOR EXERCISE OF OPTIONS. The Options may be exercised by
giving written notice to the Company at its executive offices, addressed to the
attention of its Secretary. Such notice is to be received by the Secretary on or
before the date on which the Options are to be exercised. Such notice (a) shall
be signed by the Participant or his or her legal representative; (b) shall
specify the number of full shares then elected to be purchased with respect to
the Option; and (c) unless a Registration Statement under the Securities Act of
1933 is in effect with respect to the Shares to be purchased, shall contain a
representation of Participant that the Shares are being acquired by him or her
for investment purposes only, and that he or she will not sell or otherwise
transfer the Shares except in compliance with all applicable securities laws and
requirements of any stock exchange upon which the shares of Common Stock may
then be listed and/or traded, and under any blue sky or state securities laws
applicable to such Shares; and (d) shall be accompanied by payment in full of
the Option Price of the Shares to be purchased.
The Option Price upon exercise of the Options shall be payable to the
Company in full either (a) in cash or its equivalent (acceptable cash
equivalents shall be determined at the sole discretion of the Committee); (b) by
tendering previously acquired Shares (held at least six months) having an
aggregate Fair Market Value at the time of exercise equal to the total price of
the Shares for which the Option is being exercised; (c) through a "cashless
exercise" procedure pursuant to the terms and conditions specified in the Plan;
or (d) by a combination of (a), (b) and (c).
As promptly as practicable after receipt of such notice and payment, the
Company shall cause to be issued and delivered to the Participant or his or her
legal representative, as the case may be, certificates for the Shares so
purchased, which may, if appropriate, be endorsed with appropriate restrictive
legends. The Company shall maintain a record of all information pertaining to
Participant's rights under this Agreement, including the number of Shares for
which the Option is exercisable. If the Option shall have been exercised in
full, this Agreement shall be returned to the Company and canceled.
13. RIGHTS AS A STOCKHOLDER. Participant shall have no rights as a
stockholder of the Company with respect to the shares of Common Stock subject to
this Option Agreement until such time as the purchase price has been paid and
the Shares have been issued and delivered to him or her.
14. CONTINUATION OF EMPLOYMENT. This Agreement shall not confer upon
Participant any right to continuation of employment by the Company, nor shall
this Agreement interfere in any way with the Company's right to terminate his or
her employment at any time.
15. MISCELLANEOUS.
(a) This Agreement and the rights of 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
Compensation Committee may adopt for administration of the Plan. The
Committee shall have the right to impose such restrictions on any Share
acquired pursuant to the exercise of the Options, 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
Options granted under this Agreement.
(c) The Company shall have the authority to deduct or withhold, or
require Participant to remit to the Company, an amount sufficient to
satisfy federal, state, and local taxes (including Participant's FICA
obligation) required by law to be withheld with respect to any exercise of
Participant's rights under this Agreement.
Participant may elect, unless otherwise determined by the Committee in
its sole discretion, to satisfy the withholding requirement, in whole or in
part, by having the Company withhold shares of Common Stock having an
aggregate Fair Market Value, on the date the tax is to be determined, equal
to the minimum amount required to be withheld. All elections shall be
irrevocable and in writing, and shall be signed by Participant, and shall
be made in accordance with rules set forth in Section 15.2 of the Plan.
(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 Option Agreement to
be executed as of the Date of Xxxxx.
AMERICAN MEDICAL SECURITY GROUP, INC.
By:__________________________________
Xxxx X. Xxxxx
Vice President, Human Resources
_______________________________
Participant
