Exhibit 10.63
THE 2001 AMENDED AND RESTATED EQUITY PARTICIPATION PLAN OF
SCPIE HOLDINGS INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
FOR INDEPENDENT DIRECTORS
THIS NON-QUALIFIED STOCK OPTION AGREEMENT (this "Agreement"), dated
____________________, is made by and between SCPIE Holdings Inc., a Delaware
corporation (the "Company"), and ____________, an independent director of the
Company or a Subsidiary of the Company (the "Optionee"):
A. WHEREAS, the Company wishes to afford the Optionee the
opportunity to purchase shares of its $.0001 par value Common Stock; and
B. WHEREAS, the Company wishes to carry out the 2001 Amended and
Restated Equity Participation Plan of SCPIE Holdings Inc. (the "Plan"), the
terms of which are hereby incorporated by reference and made a part of this
Agreement; and
C. WHEREAS, the Board, in carrying out the obligations of the
Company under the Plan, has instructed the undersigned officers to issue the
Non-Qualified Option provided for herein (the "Option");
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto do hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 - Definitions
All capitalized terms used herein without definition shall have the
meanings ascribed to such terms in the Plan. All capitalized terms when used in
this Agreement shall have the meaning specified in the Plan or in the Agreement,
as applicable, unless the context clearly indicates to the contrary. The
masculine pronoun shall include the feminine and neuter, and the singular the
plural, where the context so indicates.
ARTICLE II
GRANT OF OPTION
Section 2.1 - Grant of Option
In consideration of the Optionee's agreement to serve as an
Independent Director of the Company or one of its Subsidiaries for one year
after the date of grant of the Option and for other good and valuable
consideration, on the date hereof the Company irrevocably grants to the Optionee
the option to purchase any part or all of an aggregate of Five Thousand (5,000)
shares of its $.0001 par value Common Stock upon the terms and conditions set
forth in this Agreement.
Section 2.2 - Purchase Price
The purchase price of the shares of stock covered by the Option
shall be ____________ per share (which is the Fair Market Value of a share of
Common Stock on the date of the granting of this Option) without commission or
other charge.
Section 2.3 - Consideration to Company
In consideration of the granting of this Option by the Company, the
Optionee agrees to render faithful and efficient services to the Company or a
Subsidiary, with such duties and responsibilities as the Company shall from time
to time prescribe, for a period of at least one year from the date this Option
is granted. Nothing in this Agreement or in the Plan shall confer upon the
Optionee any right to continue as a Director of the Company or its Subsidiaries.
Section 2.4 - Adjustments in Option
The Board shall make adjustments with respect to the Option in
accordance with the provisions of Section 10.3 of the Plan.
ARTICLE III
PERIOD OF EXERCISABILITY
Section 3.1 - Commencement of Exercisability
(a) The Option shall become exercisable in three (3) cumulative
installments as follows:
(i) The first installment shall consist of one-third (1/3) of
the shares covered by the Option and shall become exercisable on the first
anniversary of the date the Option is granted.
(ii) The second installment shall consist of one-third (1/3)
of the shares covered by the Option and shall become exercisable on the
second anniversary of the date the Option is granted.
(iii) The third installment shall consist of one-third (1/3)
of the shares covered by the Option and shall become exercisable on the
third anniversary of the date the Option is granted.
(b) No portion of the Option which is unexercisable at Termination
of Directorship shall thereafter become exercisable, except as set forth in
Section 3.4.
Section 3.2 - Duration of Exercisability
The installments provided for in Section 3.1 are cumulative. Each
such installment which becomes exercisable pursuant to Section 3.1 shall remain
exercisable until it becomes unexercisable under Section 3.3.
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Section 3.3 - Expiration of Option
The Option may not be exercised to any extent by anyone after the
first to occur of the following events:
(a) The expiration of ten years from the date the Option was
granted; or
(b) The expiration of three months from the date of the Optionee's
Termination of Directorship for any reason other than such Optionee's death,
permanent and total disability or retirement, unless the Optionee dies within
said three-month period; or
(c) The expiration of 12 months from the date of the Optionee's
retirement; or
(d) The expiration of 12 months from the date of the Optionee's
Termination of Directorship by reason of his permanent and total disability
(within the meaning of Section 22(e)(3) of the Code); or
(e) The expiration of 12 months from the date of the Optionee's
death.
Section 3.4 - Acceleration of Exercisability
(a) In the event of a Change in Control, provided the Option has
not become unexercisable prior to such Change in Control, the Option shall
become fully vested and exercisable as to all shares covered thereby upon such
Change in Control, notwithstanding anything to the contrary in Section 3.1.
(b) In the event of a Corporate Transaction, provided the Option
has not become unexercisable prior to such Corporate Transaction, the Option
shall become fully vested and exercisable as to all shares covered thereby
immediately prior to the effective date of such Corporate Transaction,
notwithstanding anything to the contrary in Section 3.1; provided, however, that
this acceleration of exercisability shall not take place if, in connection with
such Corporate Transaction, provision is made for an assumption of this Option
or a substitution therefor of a new option by a successor or survivor
corporation, or a parent or subsidiary of such corporation.
(c) To the extent consistent with the requirements of Rule 16b-3,
this Option shall become fully vested and exercisable as to all the shares
covered hereby, notwithstanding that this Option may not yet have become fully
exercisable under Section 3.1(a), upon the Optionee's Termination of
Directorship by reason of his death, permanent and total disability (within the
meaning of Section 22(e)(3) of the Code) or retirement required by age limits
established by the Board on directorships of the Company or a Subsidiary.
(d) The Board may make such determinations and adopt such rules and
conditions as it, in its absolute discretion, deems appropriate in connection
with such acceleration of exercisability, including, but not by way of
limitation, provisions to ensure that any such acceleration and resulting
exercise shall be conditioned upon the consummation of the contemplated Change
in Control or Corporate Transaction, and determinations regarding whether
provisions for assumption or substitution have been made as defined in
subsection (b) above.
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ARTICLE IV
EXERCISE OF OPTION
Section 4.1 - Person Eligible to Exercise
During the lifetime of the Optionee, only the Optionee may exercise
the Option or any portion thereof, unless it has been disposed of pursuant to a
QDRO. After the death of the Optionee, any exercisable portion of the Option
may, prior to the time when such portion becomes unexercisable under Section
3.3, be exercised by his personal representative or by any person empowered to
do so under the deceased Optionee's will or under the then applicable laws of
descent and distribution.
Section 4.2 - Partial Exercise
Any exercisable portion of the Option or the entire Option, if then
wholly exercisable, may be exercised in whole or in part at any time prior to
the time when the Option or portion thereof becomes unexercisable under Section
3.3; provided, however, that each partial exercise shall be for whole shares
only.
Section 4.3 - Manner of Exercise
The Option, or any exercisable portion thereof, may be exercised
solely by delivery to the Secretary of the Company (the "Secretary") or his
office of all of the following prior to the time when the Option or such portion
becomes unexercisable under Section 3.3:
(a) A written notice complying with the applicable rules
established by the Board stating that the Option, or a portion thereof, is
exercised. The notice shall be signed by the Optionee or other person then
entitled to exercise the Option or such portion; and
(b) Full cash payment to the Secretary for the shares with respect
to which the Option, or portion thereof, is exercised. However, the Board, may
in its discretion (i) allow a delay in payment up to 30 days from the date the
Option, or portion thereof, is exercised; (ii) allow payment, in whole or in
part, through the delivery of shares of Common Stock owned by the Optionee, duly
endorsed for transfer to the Company with a Fair Market Value on the date of
delivery equal to the aggregate exercise price of the Option or exercised
portion thereof; (iii) allow payment, in whole or in part, through the surrender
of shares of Common Stock then issuable upon exercise of the Option having a
Fair Market Value on the date of Option exercise equal to the aggregate exercise
price of the Option or exercised portion thereof; (iv) allow payment, in whole
or in part, through the delivery of property of any kind which constitutes good
and valuable consideration; (v) allow payment, in whole or in part, through the
delivery of a full recourse promissory note bearing interest (at no less than
such rate as shall then preclude the imputation of interest under the Code) and
payable upon such terms as may be prescribed by the Board; (vi) allow payment,
in whole or in part, through the delivery of a notice that the Optionee has
placed a market sell order with a broker with respect to shares of Common Stock
then issuable upon exercise of the Option, and that the broker has been directed
to pay a sufficient portion of the net proceeds of the sale to the Company in
satisfaction of the Option exercise price; or (vii) allow payment through any
combination of the consideration provided in the foregoing subparagraphs (ii),
(iii), (iv), (v) and (vi). In the case of a promissory note, the Board may also
prescribe the form of such note and the security to be given for such note. The
Option may not be exercised, however, by delivery of a promissory note or by a
loan from the Company when or where such loan or other extension of credit is
prohibited by law; and
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(c) Such representations and documents as the Board, in its
absolute discretion, deems necessary or advisable to effect compliance with all
applicable provisions of the Securities Act of 1933, as amended, and any other
federal or state securities laws or regulations. The Board may, in its absolute
discretion, also take whatever additional actions it deems appropriate to effect
such compliance, including, without limitation, placing legends on share
certificates and issuing stop-transfer notices to agents and registrars; and
(d) Full payment to the Company of all amounts which, under
federal, state or local tax law, it is required to withhold upon exercise of the
Option; provided that, with the consent of the Board, all or part of such
payment may be made with (i) shares of the Company's Common Stock owned by the
Optionee, duly endorsed for transfer, with a Fair Market Value equal to the sums
required to be withheld, or (ii) shares of the Company's Common Stock issuable
to the Optionee upon exercise of the Option with a Fair Market Value equal to
the sums required to be withheld; provided, further, that the number of shares
of Common Stock which may be withheld with respect to the issuance, vesting,
exercise or payment of the Option (or which may be repurchased from the Optionee
within six months after such shares of Common Stock were acquired from the
Company by the Optionee) in order to satisfy the Optionee's federal and state
income and payroll tax liabilities with respect to the issuance, vesting,
exercise or payment of the Option shall be limited to the number of shares which
have a Fair Market Value on the date of withholding or repurchase equal to the
aggregate amount of such liabilities based on the minimum statutory withholding
rates for federal and state tax income and payroll tax purposes that are
applicable to such supplemental taxable income; and
(e) In the event the Option or portion shall be exercised pursuant
to Section 4.1 by any person or persons other than the Optionee, appropriate
proof of the right of such person or persons to exercise the Option.
Section 4.4 - Conditions to Issuance of Stock Certificates
The shares of stock deliverable upon the exercise of the Option, or
any portion thereof, may be either previously authorized but unissued shares or
issued shares which have then been reacquired by the Company. Such shares shall
be fully paid and nonassessable. The Company shall not be required to issue or
deliver any certificate or certificates for shares of stock purchased upon the
exercise of the Option or portion thereof prior to fulfillment of all of the
following conditions:
(a) The admission of such shares to listing on all stock exchanges
on which such class of stock is then listed; and
(b) The completion of any registration or other qualification of
such shares under any state or federal law or under rulings or regulations of
the Securities and Exchange Commission or of any other governmental regulatory
body, which the Board shall, in its absolute discretion, deem necessary or
advisable; and
(c) The obtaining of any approval or other clearance from any state
or federal governmental agency which the Board shall, in its absolute
discretion, determine to be necessary or advisable; and
(d) The receipt by the Company of full payment for such shares,
including payment of any applicable withholding tax; and
(e) The lapse of such reasonable period of time following the
exercise of the Option as the Board may from time to time establish for reasons
of administrative convenience.
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Section 4.5 - Rights as Stockholder
The holder of the Option shall not be, nor have any of the rights
or privileges of, a stockholder of the Company in respect of any shares
purchasable upon the exercise of any part of the Option unless and until
certificates representing such shares shall have been issued by the Company to
such holder.
ARTICLE V
OTHER PROVISIONS
Section 5.1 - Administration
The full Board, acting by a majority of its members in office,
shall conduct the general administration of the Plan with respect to options
(including this Option) granted to Independent Directors under the Plan, and
with respect thereto shall have the power to interpret the Plan and this
Agreement and to adopt such rules for the administration, interpretation and
application of the Plan as are consistent therewith and to interpret, amend or
revoke any such rules. All actions taken and all interpretations and
determinations made by the Board in good faith shall be final and binding upon
the Optionee, the Company and all other interested persons. No member of the
Board shall be personally liable for any action, determination or interpretation
made in good faith with respect to the Plan or the Option.
Section 5.2 - Option Not Transferable
Neither the Option nor any interest or right therein or part
thereof shall be sold, pledged, assigned, or transferred in any manner other
than by will or the laws of descent and distribution or pursuant to a QDRO,
unless and until such Option has been exercised, or the shares underlying such
Option have been issued, and all restrictions applicable to such shares have
lapsed. Neither the Option nor any interest or right therein or part thereof
shall be liable for the debts, contracts or engagements of the Optionee or his
successors in interest or shall be subject to disposition by transfer,
alienation, anticipation, pledge, encumbrance, assignment or any other means
whether such disposition be voluntary or involuntary or by operation of law by
judgment, levy, attachment, garnishment or any other legal or equitable
proceedings (including bankruptcy), and any attempted disposition thereof shall
be null and void and of no effect, except to the extent that such disposition is
permitted by the preceding sentence.
Section 5.3 - Shares to Be Reserved
The Company shall at all times during the term of the Option
reserve and keep available such number of shares of stock as will be sufficient
to satisfy the requirements of this Agreement.
Section 5.4 - Notices
Any notice to be given under the terms of this Agreement to the
Company shall be addressed to the Company in care of its Secretary at 0000
Xxxxxxx Xxxx Xxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000, and any notice to be given to
the Optionee shall be addressed to him at the address given beneath his
signature hereto. By a notice given pursuant to this Section 5.4, either party
may hereafter designate a different address for notices to be given to him. Any
notice which is required to be given to the Optionee shall, if the Optionee is
then deceased, be given to the Optionee's personal representative if such
representative has previously informed the Company of his status and address by
written notice under this Section 5.4. Any notice shall be deemed duly given
when enclosed in a properly sealed envelope or
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wrapper addressed as aforesaid, deposited (with postage prepaid) in a post
office or branch post office regularly maintained by the United States Postal
Service.
Section 5.5 - Titles
Titles are provided herein for convenience only and are not to
serve as a basis for interpretation or construction of this Agreement.
Section 5.6 - Construction
This Agreement shall be administered, interpreted and enforced
under the internal laws of the State of Delaware without regard to conflicts of
laws thereof.
Section 5.7 - Conformity to Securities Laws
The Optionee acknowledges that the Plan is intended to conform to
the extent necessary with all provisions of the Securities Act and the Exchange
Act and any and all regulations and rules promulgated by the Securities and
Exchange Commission thereunder, including without limitation Rule 16b-3.
Notwithstanding anything herein to the contrary, the Plan shall be administered,
and the Option is granted and may be exercised, only in such a manner as to
conform to such laws, rules and regulations. To the extent permitted by
applicable law, the Plan and this Agreement shall be deemed amended to the
extent necessary to conform to such laws, rules and regulations.
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IN WITNESS WHEREOF, this Agreement has been executed and delivered
by the parties hereto.
SCPIE HOLDINGS INC.
By
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President
By
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Secretary
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Optionee Signature
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Optionee's Address
Optionee's Social Security Number:
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