DARWIN PROFESSIONAL UNDERWRITERS, INC.
RESTRICTED STOCK PLAN
(AS AMENDED, EFFECTIVE NOVEMBER 11, 2005)
By action of the Board of Directors of Darwin Professional
, the Darwin Professional Underwriters, Inc.
Plan (the "Plan") has been amended and restated in its entirety to read as set
forth below, such amendment and restatement to be effective as of November 11,
2005 and to be applicable both to all awards made under the Plan.
1. Purposes. The purposes of the Darwin Professional Underwriters,
Restricted Stock Plan are to advance the interests of Darwin Professional
(the "Company") and its stockholders by providing a means to
attract, retain, and motivate newly hired employees of the Company upon whose
judgment, initiative and efforts the continued success, growth and development
of the Company is dependent.
2. Definitions. For purposes of the Plan, the following terms shall be
defined as set forth below:
"Award" means an award of Restricted Shares granted to a Participant
under the Plan.
"Award Agreement" means any written agreement, contract, or other
instrument or document evidencing an Award.
"Board" means the Board of Directors of the Company.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time. References to any provision of the Code shall be deemed to include
successor provisions thereto and regulations thereunder.
"Committee" means the Compensation Committee of the Board or, if no
such committee exists, the entire Board.
"Company" means Darwin Professional Underwriters, Inc.
"Participant" means an employee of the Company who has been granted an
Award under the Plan.
"Plan" means this Darwin Professional Underwriters, Inc.
"Restricted Shares" means an Award of Shares under Section 5(b) that
may be subject to certain transfer restrictions and to a risk of forfeiture, as
set forth herein and in any Participant's Award Agreement.
"Shares" means common stock, $0.10 par value per share, of the
(a) Authority of the Committee. The Plan shall be administered by the
Committee, and the Committee shall have full and final authority to take the
following actions, in each case in good faith and subject to and consistent with
the provisions of the Plan:
(i) to determine the number of Awards to be granted, the number
of Shares to which an Award may relate, the terms and conditions of any
Award granted under the Plan (including, but not limited to, any purchase
price, and any bases for adjusting such purchase price, any restriction or
condition, any schedule for lapse of restrictions or conditions relating to
transferability or forfeiture of an Award, and waiver or accelerations
thereof, and waivers of performance conditions relating to an Award, based
in each case on such considerations as the Committee shall determine), and
all other matters to be determined in connection with an Award;
(ii) to determine whether, to what extent, and under what
circumstances an Award may be cancelled, forfeited, exchanged, or
(iii) to prescribe the form of each Award Agreement, which need
not be identical for each Participant;
(iv) to adopt, amend, suspend, waive, and rescind such rules and
regulations and appoint such agents as the Committee may deem necessary or
advisable to administer the Plan;
(v) to correct any defect or supply any omission or reconcile any
inconsistency in the Plan and to construe and interpret the Plan and any
Award, rules and regulations, Award Agreement, or other instrument
(vi) to accelerate the vesting of all or any portion of any
(vii) to make all other decisions and determinations as may be
required under the terms of the Plan or as the Committee may deem necessary
or advisable for the administration of the Plan.
(b) Manner of Exercise of Committee Authority. The Committee shall
have sole discretion in exercising its authority under the Plan. Any action of
the Committee with respect to the Plan shall be final, conclusive, and binding
on all persons,
including the Company, Participants, any person claiming any rights under the
Plan from or through any Participants, and shareholders. The express grant of
any specific power to the Committee, and the taking of any action by the
Committee, shall not be construed as limiting any power or authority of the
Committee. The Committee may delegate to officers or managers of the Company the
authority, subject to such terms as the Committee shall determine, to perform
administrative functions and such other functions as the Committee may
determine, to the extent permitted under applicable law. Notwithstanding any
provision of this Plan to the contrary, the Committee may grant Awards which are
subject to the approval of the Board; provided that an Award shall be subject to
Board approval only if the Committee expressly so states.
(c) Limitation of Liability. Each member of the Committee shall be
entitled to rely or act upon any report or other information furnished to him or
her by any officer or other employee of the Company, the Company's independent
certified public accountants, or other professional retained by the Company to
assist in the administration of the Plan. No member of the Committee, nor any
officer or employee of the Company acting on behalf of the Committee, shall be
personally liable for any action, determination, or interpretation taken or made
in good faith with respect to the Plan, and all members of the Committee and any
officer or employee of the Company acting on their behalf shall, to the extent
permitted by law, be fully indemnified and protected by the Company with respect
to any such action, determination, or interpretation.
4. Shares Subject to the Plan.
(a) Subject to adjustment as provided in Section 4(c) hereof, the
total number of Shares reserved for issuance under the Plan shall be 100,000. No
Award may be granted if the number of Shares to which such Award relates, when
added to the number of Shares previously issued under the Plan, exceeds the
number of Shares reserved under the preceding sentence. If any Awards are
forfeited, cancelled, terminated, exchanged or surrendered, including in
connection with satisfying tax withholding requirements, or such Award
terminates without a distribution of Shares to the Participant, any Shares
counted against the number of Shares reserved and available under the Plan with
respect to such Award shall, to the extent of any such forfeiture, termination,
cancellation, exchange or surrender, again be available for Awards under the
(b) Any Shares distributed pursuant to an Award may consist, in whole
or in part, of authorized and unissued Shares or treasury Shares including
Shares acquired by purchase.
(c) In the event that the Committee shall determine that any dividend
in Shares, recapitalization, Share split, reverse split, reorganization, merger,
consolidation, spin-off, combination, repurchase, or share exchange, or other
similar corporate transaction or event, affects the Shares such that an
adjustment is appropriate in order to prevent dilution or enlargement of the
rights of Participants under the Plan, then the Committee shall make such
equitable changes or adjustments as it deems appropriate and, in such manner as
it may deem equitable, adjust any or all of (i) the number and kind
of shares which may thereafter be issued under the Plan, (ii) the number and
kind of shares, other securities, or other consideration (including cash) issued
or issuable in respect of outstanding Awards, and (iii) the purchase price
relating to any Award. In addition, the Committee is authorized to make
adjustments in the terms and conditions of, and the criteria and performance
objectives included in, Awards in recognition of unusual or non-recurring events
(including, without limitation, events described in the preceding sentence)
affecting the Company or the financial statements of the Company, or in response
to changes in applicable laws, regulations, or accounting principles.
5. Specific Terms of Awards.
(a) General. Awards may be granted on the terms and conditions set
forth in this Section 5. In addition, the Committee may impose on any Award, at
the date of grant or thereafter (subject to Section 7(d)), such additional terms
and conditions, not inconsistent with the provisions of the Plan, as the
Committee shall determine, including terms regarding forfeiture in the event of
termination of employment by the Participant.
(b) Restricted Shares. The Committee is authorized to grant Restricted
Shares to Participants on the following terms and conditions:
(i) Issuance and Restrictions. Restricted Shares shall be subject
to such restrictions on transferability and other restrictions, if any, as
the Committee may impose at the date of grant or thereafter, which
restrictions, if any, may lapse separately or in combination at such times,
under such circumstances (including, without limitation, upon achievement
of performance criteria if deemed appropriate by the Committee), in such
installments, or otherwise, as the Committee may determine. Except to the
extent restricted under the Award Agreement relating to the Restricted
Shares, a Participant granted Restricted Shares shall have all of the
rights of a shareholder including, without limitation, the right to vote
Restricted Shares and the right to receive dividends thereon. The Committee
must certify in writing prior to the lapse of restrictions conditioned on
the achievement of performance criteria that such performance criteria were
in fact satisfied.
(ii) Forfeiture. Except as otherwise determined by the Committee,
at the date of grant or thereafter, upon termination of employment prior to
specific vesting dates, Restricted Shares and any accrued but unpaid
dividends that are at that time subject to restrictions shall be forfeited;
provided, however, that the Committee may provide, by rule or regulation or
in any Award Agreement, that restrictions or forfeiture conditions relating
to Restricted Shares will be waived in whole or in part in the event of
terminations resulting from specified causes.
(iii) Certificates for Shares. Restricted Shares granted under
the Plan may be evidenced in such manner as the Committee shall determine.
If certificates representing Restricted Shares are registered in the name
of the Participant, such certificates shall bear an appropriate legend
referring to the
terms, conditions, and restrictions applicable to such Restricted Shares,
and, if the Committee so determines, the Company shall retain physical
possession of the certificate representing such Restricted Shares (whether
or not vested).
(iv) Dividends. Cash dividends paid on Restricted Shares shall be
either paid at the dividend payment date, or deferred for payment to the
date no later than 2 1/2 months after the date the restrictions and risk of
forfeiture of the Restricted Shares with respect to which such cash
dividends has been distributed shall lapse, in cash or in unrestricted
Shares having a fair market value (as determined by the Committee) equal to
the amount of such dividends, all as determined by the Committee. Shares
distributed in connection with a Share split or dividend in Shares, and
other property distributed as a dividend, shall be subject to restrictions
and a risk of forfeiture to the same extent as the Restricted Shares with
respect to which such Shares or other property has been distributed.
6. Certain Provisions Applicable to Awards.
(a) Terms of Awards. The term of each Award granted to a Participant
shall be for such period as may be determined by the Committee.
(b) Nontransferability. Except as set forth below, Awards shall not be
transferable by a Participant except to the Company and by will or the laws of
descent and distribution. Notwithstanding the foregoing, if the Committee
expressly so provides in the applicable Award agreement (at the time of grant or
at any time thereafter), an Award granted hereunder may be transferred by a
Participant to members of his or her "immediate family" or to a trust or other
entity established for the exclusive benefit of solely one or more members of
the Participant's "immediate family," and any such transfer by a Participant
must be for no consideration. Any Award held by the transferee will continue to
be subject to the same terms and conditions that were applicable to the Award
immediately prior to the transfer, except that the Award will be transferable by
the transferee only by will or the laws of descent and distribution. For
purposes hereof, "immediate family" means the Participant's children,
stepchildren, grandchildren, parents, stepparents, grandparents, spouse,
siblings (including half brothers and sisters), in-laws, and relationships
arising because of legal adoption. A Participant's rights under the Plan may not
be pledged, mortgaged, hypothecated, or otherwise encumbered, and shall not be
subject to claims of the Participant's creditors.
7. General Provisions.
(a) Compliance with Legal and Trading Requirements. The Plan, the
granting of Awards thereunder, and the other obligations of the Company under
the Plan and any Award Agreement, shall be subject to all applicable federal and
state laws, rules and regulations, and to such approvals by any regulatory or
governmental agency as may be required. The Company, in its discretion, may
postpone the issuance or delivery of Shares under any Award until completion of
any stock exchange or market system listing or registration or qualification of
such Shares or other required action under any state or federal law, rule or
regulation as the Company may consider appropriate, and may
require any Participant to make such representations and furnish such
information as it may consider appropriate in connection with the issuance or
delivery of Shares in compliance with applicable laws, rules and regulations. No
provisions of the Plan shall be interpreted or construed to obligate the Company
to register any Shares under federal or state law.
(b) No Right to Continued Employment. Neither the Plan nor any action
taken thereunder shall be construed as giving any employee the right to be
retained in the employ or service of the Company, nor shall it interfere in any
way with the right of the Company to terminate any employee's employment at any
(c) Taxes. The Company is authorized to withhold, from any Award
granted, any payment relating to an Award under the Plan, including from a
distribution of Shares, or any payroll or other payment to a Participant,
amounts of withholding and other taxes due in connection with any transaction
involving an Award, and to take such other action as the Committee may deem
advisable to enable the Company and Participants to satisfy obligations for the
payment of withholding taxes and other tax obligations relating to any Award.
This authority shall include authority to withhold or receive Shares or other
property and to make cash payments in respect thereof in satisfaction of a
Participant's tax obligations.
(d) Changes to the Plan and Awards. The Board may amend, alter,
suspend, discontinue, or terminate the Plan or the Committee's authority to
grant Awards under the Plan without the consent of either shareholders of the
Company or Participants; provided, however, that, without the consent of an
affected Participant, no amendment, alteration, suspension, discontinuation, or
termination of the Plan may impair the rights or, in any other manner, adversely
affect the rights of such Participant under any Award theretofore granted to him
(e) No Rights to Awards; No Shareholder Rights. No Participant or
employee shall have any claim to be granted any Award under the Plan, and there
is no obligation for uniformity of treatment of Participants. No Award shall
confer on any Participant any of the rights of a shareholder of the Company
unless and until Shares are duly issued or transferred to the Participant in
accordance with the terms of the Award.
(f) Unfunded Status of Awards. The Plan is intended to constitute an
"unfunded" plan for incentive compensation. With respect to any payments not yet
made to a Participant pursuant to an Award, nothing contained in the Plan or any
Award shall give any such Participant any rights that are greater than those of
a general creditor of the Company; provided, however, that the Committee may
authorize the creation of trusts or make other arrangements to meet the
Company's obligations under the Plan to deliver Shares, Awards, or other
property pursuant to any Award, which trusts or other arrangements shall be
consistent with the "unfunded" status of the Plan unless the Committee otherwise
determines with the consent of each affected Participant.
(g) Not Compensation for Benefit Plans. No Award payable under this
Plan shall be deemed salary or compensation for the purpose of computing
under any benefit plan or other arrangement of the Company for the benefit of
its employees unless the Company shall determine otherwise.
(h) No Fractional Shares. No fractional Shares shall be issued or
delivered pursuant to the Plan or any Award. In the case of Awards to
Participants, the Committee shall determine whether cash or other property shall
be issued or paid in lieu of such fractional Shares, or whether such fractional
Shares or any rights thereto shall be forfeited or otherwise eliminated.
(i) Governing Law. The validity, construction, and effect of the Plan,
any rules and regulations relating to the Plan, and any Award Agreement shall be
determined in accordance with the laws of State of Delaware
effect to principles of conflict of laws.
(j) Effective Date; Plan Termination. The Plan became effective on
July 14, 2003. The Plan shall terminate as to future awards on July 14, 2013.
(k) Titles and Headings. The titles and headings of the sections in
the Plan are for convenience of reference only. In the event of any conflict,
the text of the Plan, rather than such titles or headings, shall control.