EXHIBIT 10.4A
Amendment to Piedmont Management Company Inc.
1988 Employee Stock Option Plan
and
1979 Employee Stock Option Plan
WHEREAS, Piedmont Management Company Inc. (the
"Company") has entered into an Agreement and Plan of Merger
dated as of August 7, 1995 between Piedmont and Chartwell Re
Corporation (as amended, the "Merger Agreement");
WHEREAS, Section 2.1(d) of the Merger Agreement
provides for certain amendments (the "Amendment") to the
Piedmont Management Company Inc. 1988 Employee Stock Option
Plan and 1979 Employee Stock Option Plan (collectively, the
"Plans"); and
WHEREAS, the Company is seeking shareholder
approval of such amendments in order to grant the Committee
the discretion to amend the options granted under the Plans
in order to consummate the transactions described in Section
2.1(d) of the Merger Agreement.
NOW, THEREFORE, subject to approval of the
stockholders of the Company, the Plans are amended as
follows:
1. Defined Terms.
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Capitalized terms not otherwise defined herein
shall have the meanings given to them in the Plans.
2. Accelerated Vesting; Automatic Exercise.
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Subject to the consent of the recipient, the
Committee shall have the discretion to provide that, as of
the day immediately preceding the Option Date (as defined in
the Merger Agreement), no recipient may exercise an Option
and any Option (whether or not then vested or exercisable)
that, as of the Option Date, is "in-the-money" (based on the
average of the closing prices for Common Stock for the five
trading days preceding the Option Date (such average, the
"fair market value")) shall be canceled and the recipient
shall receive for any such "in-the-money" Option that number
of shares of Common Stock obtained by dividing (i) the
excess, if any, of the fair market value per share of Common
Stock multiplied by the number of such in-the-money Options
held by such recipient over the sum of (A) the aggregate
option price of such options plus (B) the aggregate amount
required to be withheld for federal, state, and local taxes
(using for this purpose
the supplemental wage payment withholding rate (currently
28% for federal taxes)) by (ii) the fair market value per
share of Common Stock. No fractional shares of Piedmont
Common Stock shall be issued or delivered in connection
therewith and each recipient shall instead receive cash
(without interest) in an amount equal to any fractional part
of a share of Common Stock derived from the above formula
multiplied by the fair market value of a share of Common
Stock, less any applicable withholding taxes. Any Option
that is not in-the-money on such Option Date shall be
canceled and shall cease to exist, and no cash or other
consideration shall be delivered or deliverable in exchange
therefor.
3. Amendment to Section 2.
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Section 2 of each Plan is hereby amended as
follows:
(a) Clause (iii) of Section 2 shall be deleted in
its entirety and replaced with the following:
"Each Option shall be exercisable at such times
and subject to such terms and conditions as the
Committee may, in its sole discretion, specify in
the applicable stock option agreement or
thereafter."
(b) The following shall be added at the end of
clause (iv) of Section 2:
"Such payment may be made in any form specified by
the Committee in the applicable stock option
agreement or thereafter."
4. Amendment to Section 6.
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Section 6 of each Plan is hereby amended (a) to
delete the phrase "such period however not to exceed
three months beginning the day following the date of
termination of employment" and replace it with "the end of
such period however not to be later than the date of the
consummation of the transactions contemplated by the Merger
Agreement", (b) to delete the phrase "and only to the extent
such Option or Stock Appreciation Right could have been
exercised on the date of termination of employment" and (c)
to add the phrase "Except as otherwise specified by the
Committee in the applicable stock option agreement or
thereafter," at the beginning of the following sentence.
5. Amendment to Section 11.
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Section 11 of each Plan is hereby amended to
insert the words "or share amounts otherwise issuable upon
the exercise of an Option" after the words "cash amounts
otherwise payable".
6. Effective Date of Amendment and Approval by
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Stockholders. Subject to the approval of the Company's
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stockholders, the effective date of this Amendment is the
date of the special meeting of the Company's stockholders at
which such Amendment is to be approved.
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ANNEX E
ction 11.
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Section 11 of each Plan is hereby amended to
insert the words "or share amounts otherwise issuable upon
the exercise of an Option" after the words "cash amounts
otherwise payable".
6. Effective Date of Amendment and Approval by
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Stockholders. Subject to the approval of the Company's
------------
stockholders, the effective date of this Amendment is the
date of the special meeting of the Company's stockholders at
which such Amendment is to be approved.
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