Exhibit 10.2(c)
Form of Director Option Agreement
- Performance Accelerated NQSO
-- Under 2002 Incentive Compensation Plan
XXXXXX XXXX EDUCATORS CORPORATION
2002 Incentive Compensation Plan
Stock Option Agreement -- Non-Employee Director
This Stock Option Agreement (the "Agreement") confirms the grant on
_________ __, ____ (the "Grant Date") by XXXXXX XXXX EDUCATORS CORPORATION, a
Delaware corporation (the "Company"), to _______________ ("Optionee") of a
non-qualified stock option (the "Option") to purchase shares of Common Stock,
par value $.001 per share (the "Shares"), as follows:
Shares purchasable: ________________ Shares
Exercise Price: $_______________ per Share
Option vests and becomes exercisable: As to all of the Shares on
__________,_____; provided that portions of the Option will vest and
become cumulatively exercisable ("Accelerated Vesting") if and to the
extent that the performance goals set forth under the Company's
Long-Term Incentive Plan have been achieved for the specified
performance year. As specified on Attachment A hereto, for each year in
the period _____ - _____, a level of achievement of performance
targets, based __% on _____________ and __% on ________________, will
be determined by the Committee. This level of achievement (the
"Achievement Level") will be expressed as a percentage of target level
performance (blending _____and ______performance), ranging from __% if
the "threshold" level of performance is achieved to ___% if the
"target" level of performance is achieved to ___% if the "maximum"
level is achieved or exceeded. If the calculated Achievement Level for
any year would be less than __%, the Achievement Level will be deemed
to be _%, and no Accelerated Vesting will result for that year.
Straight-line interpolation will apply if the level of achievement of
_______ or ________is less than "target," based on the "threshold" and
"target" datapoints, or between "target" and "maximum" based on those
datapoints. The Committee will determine the Achievement Level
following the completion of the audit of the Company's financial
statements for the performance year, with any resulting Accelerated
Vesting effective at the date of such determination. Committee
determinations of the Achievement Level under the Long-Term Incentive
Plan and all other matters hereunder will be final. The portion of the
Option, expressed as a percentage of the total number of Shares
purchasable under the Option, subject to Accelerated Vesting in each
year will be as follows:
Portion of Option Subject
Performance Year to Accelerated Vesting
---------------- ----------------------
____ __% times the Achievement Level
____ __% times the Achievement Level
____ __% times the Achievement Level
provided, however, that the portion of the Option subject to
Accelerated Vesting in ____ in no event will exceed the then remaining
unvested portion of the Option. In addition to possible Accelerated
Vesting, the Option will become immediately vested and exercisable upon
the occurrence of certain events relating to termination of service as
a director, in accordance with Section 4 hereof.
Expiration Date: _______ __, ____ (the "Stated Expiration Date").
The Option is subject to the terms and conditions of the 2002 Incentive
Compensation Plan (the "Plan") and this Agreement, including the Terms and
Conditions of Option Grant attached hereto and deemed a part hereof. The number
and kind of shares purchasable, the Exercise Price, and other terms and
conditions are subject to adjustment in accordance with Section 11(c) of the
Plan.
Optionee acknowledges and agrees that (i) the Option is
nontransferable, except as provided in Section 6 hereof and Section 11(b) of the
Plan, and (ii) sales of Shares will be subject to any Company policy regulating
trading by employees and directors.
IN WITNESS WHEREOF, XXXXXX XXXX EDUCATORS CORPORATION has caused this
Agreement to be executed by its officer thereunto duly authorized.
XXXXXX XXXX EDUCATORS CORPORATION
By:______________________________
[Name]
[Title]
TERMS AND CONDITIONS OF OPTION GRANT
The following Terms and Conditions apply to the Option granted to
Optionee by XXXXXX XXXX EDUCATORS CORPORATION (the "Company"), as specified on
the preceding page. Certain specific terms of the Option, including the number
of shares purchasable, vesting and Expiration Date, and Exercise Price, are set
forth on the preceding page.
1. General. The Option is granted to Optionee under the Company's 2002
Incentive Compensation Plan (the "Plan"), which has been previously delivered to
Optionee and/or is available upon request to the Corporate Benefits Department.
All of the applicable terms, conditions and other provisions of the Plan are
incorporated by reference herein. Capitalized terms used in this Agreement but
not defined herein shall have the same meanings as in the Plan. If there is any
conflict between the provisions of this document and mandatory provisions of the
Plan, the provisions of the Plan govern. By accepting the grant of the Option,
Optionee agrees to be bound by all of the terms and provisions of the Plan (as
presently in effect or later amended), the rules and regulations under the Plan
adopted from time to time, and the decisions and determinations of the
Compensation Committee of the Company's Board of Directors (the "Committee")
made from time to time. The Option is a non-qualified stock option and not an
incentive stock option under Section 422 of the Internal Revenue Code of 1986,
as amended.
2. Right to Exercise Option. Subject to all applicable laws, rules,
regulations and the terms of the Plan and this Agreement, Optionee may exercise
the Option only after the time and to the extent the Option has become vested
and exercisable and prior to the Expiration Date of the Option.
3. Method of Exercise. To exercise the Option, Optionee must (a) give
written notice to the Vice President, Corporate Benefits of the Company, which
notice shall specifically refer to this Agreement, state the number of Shares as
to which the Option is being exercised, the name in which he or she wishes the
Shares to be issued, and be signed by Optionee, and (b) pay in full to the
Company the Exercise Price of the Option for the number of Shares being
purchased either (i) in cash (including by check), payable in United States
dollars, (ii), by delivery of Shares already owned by Optionee (which Shares
must have been held for at least six months if they were acquired under a
Company plan and are not considered to be "mature" shares for accounting
purposes) having a fair market value, determined as of the date the Option is
exercised, equal to all or the part of the aggregate Exercise Price being paid
in this way, or (iii) in any other manner then permitted by the Committee. Once
Optionee gives notice of exercise, such notice may not be revoked. When Optionee
exercises the Option, or part thereof, the Company will transfer Shares (or make
a non-certificated credit) to Optionee's brokerage account at a designated
securities brokerage firm or otherwise deliver Shares to Optionee. No Optionee
or Beneficiary shall have at any time any rights with respect to Shares covered
by this Agreement prior to the valid exercise and full payment for the Shares as
specified herein, and no adjustment shall be made for dividends or other rights
for which the record date is prior to such valid exercise and payment.
4. Termination Provisions. In the event of Optionee's termination of
service as a director of the Company for any reason (including due to death),
the Option, to the extent then outstanding, will vest and become immediately
exercisable in full, and will remain exercisable until the Stated Expiration
Date.
5. Optionee Representations and Warranties Upon Exercise. As a
condition to the exercise of the Option, the Company may require Optionee to
make any representation or warranty to the Company as may be required under any
applicable law or regulation.
6. Nontransferability. The Option is not transferable except to: (a)
the Optionee's spouse, sibling, parent, child or grandchild (including adoptive
relationships), (b) a trust primarily for the benefit of Optionee or the persons
described in (a), and (c) a corporation or other entity exclusively owned by
Optionee or by persons described in (a). In addition, the Option may be
transferred to a Beneficiary in the event of death or as otherwise permitted and
subject to the conditions under Section 11(b) of the Plan.
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7. Miscellaneous.
(a) Binding Agreement; Written Amendments. This Agreement shall be
binding upon the heirs, executors, administrators and successors of the
parties. This Agreement constitutes the entire agreement between the
parties with respect to the Option, and supersedes any prior agreements
or documents with respect to the Option. No amendment or alteration of
this Agreement which may impose any additional obligation upon the
Company shall be valid unless expressed in a written instrument duly
executed in the name of the Company, and no amendment, alteration,
suspension or termination of this Agreement which may materially impair
the rights of Optionee with respect to the Option shall be valid unless
expressed in a written instrument executed by Optionee.
(b) No Promise of Service. The Option and the granting thereof
shall not constitute or be evidence of any agreement or understanding,
express or implied, that Optionee has a right to continue as a director
of the Company for any period of time, or at any particular rate of
compensation.
(c) Governing Law. The validity, construction, and effect of this
agreement shall be determined in accordance with the laws (including
those governing contracts) of the state of Delaware, without giving
effect to principles of conflicts of laws, and applicable federal law.
(d) Notices. Any notice to be given the Company under this
Agreement shall be addressed to the Company at its principal executive
offices, in care of the Vice President, Corporate Benefits, and any
notice to the Optionee shall be addressed to the Optionee at Optionee's
address as then appearing in the records of the Company.
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Attachment A
CORPORATE PERFORMANCE MEASURES
FOR THE LONG TERM INCENTIVE PLAN
____-____
Measure Weight ____ ( % Vesting) ____ ( % Vesting) ____ ( % Vesting)
------------------------------------------------------------------------------------------------------------------------------------
Thres. Target Max. Thres. Target Max. Thres. Target Max.
----------------------------------------------------------------------------------------
----------------- --% --- ---- ---- ---- ---- ---- ---- ---- ----
----------------- --% --- ---- ---- ---- ---- ---- ---- ---- ----
Note: Threshold payout is at __%. Target payout is at ___%. Maximum is at ___%.
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