Kemper Corporation 2011 Omnibus Equity Plan
NON-QUALIFIED STOCK OPTION AND SAR AGREEMENT
(Cliff-Vesting Form)
This NON-QUALIFIED STOCK OPTION AND SAR AGREEMENT (“Agreement”) is made as of
this ______ day of __________________, 20__ (“Grant Date”) between KEMPER
CORPORATION, a Delaware corporation (“Company”), and «name» (“Participant”), for
an award consisting of the right and option (“Option”) to purchase, on the terms
and conditions hereinafter set forth, shares of the Company’s common stock
(“Common Stock”), along with a tandem stock appreciation right (“SAR”).
SIGNATURES
As of the date set forth above, the parties have accepted the terms of this
Agreement by signing this Agreement by an electronic signature, and each party
agrees that such signature shall not be denied legal effect, validity or
enforceability solely because it was submitted or executed electronically.
KEMPER CORPORATION                PARTICIPANT
By: __________________________________    ____________________________________
«CEO Signature and Title»    «name»
RECITALS
A.The Board of Directors of the Company (“Board”) has adopted the Kemper
Corporation 2011 Omnibus Equity Plan (“Plan”), including all amendments to date,
to be administered by the Compensation Committee of the Board or any
subcommittee thereof, or any other committee designated by the Board to
administer the Plan (“Committee”). Capitalized terms that are not defined herein
shall be defined in accordance with the Plan.
B.    The Plan authorizes the Committee to grant to selected Employees,
Directors and Third Party Service Providers awards of various types, including
options to purchase shares of Common Stock and tandem stock appreciation rights.
C.    Pursuant to the Plan, the Committee has determined that it is in the best
interest of the Company and its shareholders to grant a non-qualified stock
option (and tandem stock appreciation right) to the Participant under the terms
and conditions specified in this Agreement as an inducement to remain in the
service of the Company and as an incentive for increased effort during such
service.
D.    Neither the Option nor the SAR granted hereby is intended to qualify as an
“incentive stock option” under Section 422 of the Internal Revenue Code of 1986,
as amended.
NOW, THEREFORE, the parties hereto agree as follows:
1.    Grant.
(a)    The Company grants the Option to purchase all or any part (subject to the
limitations of Section 8) of an aggregate of «shares» («number») shares of
Common Stock at the Exercise Price (as defined below) to the Participant, which
will be exercisable in accordance with the provisions of this Agreement.
(b)    The Option is coupled with a SAR that is exercisable to the extent, and
only to the extent, that the Option is vested as described in Section 6. The SAR
shall entitle the Participant to surrender the Option (or any portion thereof,
subject to Section 8(a)) to the Company unexercised and receive in exchange
therefor that number of shares of Common Stock having an aggregate value equal
to: (A) the excess of the Fair Market Value (as defined below) of one share of
Common Stock over the Exercise Price, multiplied by (B) the number of such
shares of Common Stock subject to the Option (or portion thereof) which is so
surrendered.
2.    Exercise Price. The per share price of Common Stock issuable upon exercise
of the Option shall be $ ____ (“Exercise Price”), which shall not be less than
100% of the Fair Market Value of a share of Common Stock on the Grant Date. The
Exercise Price may be adjusted in accordance with Section 13.
3.    Governing Plan. The Option is granted pursuant to the Plan, which is
incorporated herein for all purposes. The Participant agrees to be bound by the
terms and conditions of the Plan, which controls in case of any conflict with
this Agreement, except as otherwise provided for in the Plan. No amendment of
the Plan shall adversely affect this Option in any material way without the
written consent of the Participant.
4.    Restrictions on Transfer. The Option and the SAR and all rights and
privileges granted hereby (including the right of exercise) shall not be
transferred, assigned, pledged or hypothecated in any way, whether by operation
of the law or otherwise, except by will or the laws of descent and distribution.
Without limiting the generality of the preceding sentence, no rights or
privileges granted hereby may be assigned or otherwise transferred to the spouse
or former spouse of the Participant pursuant to any divorce proceedings,
settlement or judgment. Upon any attempt to transfer, assign, pledge,
hypothecate or otherwise dispose of the Option or the SAR or any other rights or
privileges granted hereby contrary to the provisions hereof, the Option and the
SAR and all other rights and privileges contained herein shall immediately
become null and void and of no further force or effect.
5.    Term. Except as provided in Section 11, neither the Option nor the SAR
shall be exercisable after the Company’s close of business on the last business
day that occurs coincident with or prior to the earliest of (“Expiration Date”):
(a)    the 10th anniversary of the Grant Date;
(b)    the first anniversary of the Participant’s death;
(c)    the first anniversary of the Participant’s termination of Service due to
the Participant’s Disability;
(d)    the first anniversary of the Participant’s termination of Service (other
than for Substantial Cause) following Retirement;
(e)    the date that is three months following the Participant’s termination of
Service for any reason other than Substantial Cause or any reason described in
(b) – (d) above; or
(f)    any date of the Participant’s termination of Service for Substantial
Cause.
6.    Vesting and Exercise.
(a)    Vesting. The Option and/or the SAR may only be exercised to the extent
they are vested. To the extent not previously forfeited in accordance with
Section 7, the Option and the SAR shall fully vest on the earliest to occur of
the following (“Vesting Date”):
(i)    the _____ anniversary of the Grant Date;
(ii)    the Participant’s death, if the Participant dies while in Service;
(iii)    the date of the Participant’s Disability, if the Participant becomes
Disabled while in Service; or
(iv)    the date upon which vesting is accelerated by the Committee in its
discretion in accordance with the terms of the Plan.
(b)    Certain Definitions.
(i)    “Service” means the period during which the Participant is an Employee,
Director or Third Party Service Provider; provided, however, that the
Participant will not be deemed to be in Service after the Company divests its
control in the Affiliate for whom the Participant is exclusively in Service, or
if the Company’s control of such Affiliate otherwise ceases.
(ii)    “Retirement” means that the Participant has either attained age 60 and
completed 10 years of Service as an Employee or attained age 65 and completed
five years of Service as an Employee.
(iii)    “Disabled” or “Disability” means that the Participant either:
(A)    is unable to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment that can be expected to
result in death or can be expected to last for a continuous period of not less
than 12 months and, with respect to a Participant who is an Employee, is
receiving income replacement benefits for a period of not less than three months
under an accident and health plan (e.g., a long term disability plan) covering
Employees of the Company or Affiliate that employs the Participant; or
(B)    is determined to be totally disabled by the Social Security
Administration or Railroad Retirement Board.
7.    Forfeiture. If the Option and the SAR have not vested as of the
Participant’s termination of Service for any reason (after accounting for any
acceleration of vesting as set forth in Section 6), the Option and the SAR shall
be forfeited. Any portions of the Option and the SAR that have not been
exercised prior to the Expiration Date shall be forfeited as of the Expiration
Date.
8.    Manner of Exercise.
(a)    During the period beginning on the Vesting Date and ending on the
Expiration Date, the Participant may purchase all or any part of the shares of
Common Stock subject to the Option or may receive such lesser number of shares
as may be available through the exercise of the SAR. In the event the Option (or
any portion thereof) is exercised, then the SAR (or the corresponding portion)
shall terminate. In the event that the SAR (or any portion thereof) is
exercised, then the Option (or the corresponding portion) shall likewise
terminate. Consequently, the total number of shares subject to the Option shall
be reduced by the number of shares for which the Option or the SAR has
previously been exercised. Likewise, the total number of shares subject to the
SAR shall be reduced by the number of shares for which the SAR or the Option has
previously been exercised.
(b)    Each exercise of the Option shall be initiated by the Participant or his
or her Representative by means of a notice of exercise delivered to the Company
through the internet portal (“Portal”) provided by or on behalf of the Company
or, if such Portal is not available for such exercise, in the form of a written
document or electronic mail (“Notice”). The Notice shall identify the number of
shares for which the Option is being exercised. Before shares of Common Stock
will be issued and subject to the requirements of Section 9 below, the aggregate
Exercise Price for the shares for which the Option is being exercised shall be
paid to the Company in a manner permitted under the Plan. The Option may not be
exercised for a fraction of a share and no partial exercise of the Option may be
for less than 50 shares unless the total number of shares covered by the Option
is less than 50 on the date of exercise or unless the Option is scheduled to
expire within six months of the date of exercise.
(c)    Each exercise of the SAR shall be initiated by the Participant or his or
her Representative by delivery of a Notice as described above in Section 8(b).
The Notice shall identify the number of shares for which the SAR is being
exercised. Upon satisfaction of the Participant’s obligation to pay the Company
the amount of all taxes that the Company is required to withhold in connection
with such exercise as specified in Section 9 below, the Company shall issue to
the Participant a number of shares of the Company’s common stock determined in
accordance with Section 1(b). The SAR may only be settled by delivery of shares
of Common Stock and not by payment of cash to the Participant. Any fractional
share that would otherwise result from an exercise of the SAR shall be rounded
down to the nearest whole share.
(d)    The date of exercise shall be: (i) in the case of an Option exercise, the
date that the Company receives the Notice if received within regular market
hours on a day that the New York Stock Exchange is open for business (“Trading
Day”), and otherwise on the next Trading Day; provided, however, that if the
Notice is provided by means of a “Good Till Cancelled Order” involving a “Same
Day Sale” or “Sell to Cover” transaction (“Order”), then the date of exercise
shall instead be the date that the Order is executed; (ii) in the case of a SAR
exercise not conducted through the Portal, the date specified in the Notice or,
if not specified, the date that the Company receives the Notice; or (iii) in the
case of a SAR exercise conducted through the Portal, the date that the Company
receives the Notice if received within regular market hours on a Trading Day,
and otherwise on the next Trading Day.
(e)    The Option and the SAR may be exercised only by the Participant or his or
her Representative, and not otherwise, regardless of any community property
interest therein of the spouse of the Participant, or such spouse’s successors
in interest. If the spouse of the Participant shall have acquired a community
property interest in the Option or the SAR, the Participant, or the
Participant’s Representative, may exercise the Option and/or the SAR on behalf
of the spouse of the Participant or such spouse’s successors in interest.
9.    Withholding of Taxes. Upon the exercise of the Option or the SAR, the
Participant or the Participant’s Representative shall pay to the Company the
amount of any taxes which the Company is required to withhold with respect to
such exercise. Subject to the limitations set forth in the next two sentences,
the Company shall withhold shares of Common Stock that would otherwise have been
issued pursuant to the exercise of the Option or the SAR to satisfy the tax
withholding obligations, unless and except to the extent that the Participant or
his or her Representative elects to satisfy all or any portion of such tax
withholding obligations by cash payment to the Company. Neither the Participant
nor his or her Representative shall have the right to have shares withheld, in
either case, to the extent that the Fair Market Value of such shares delivered
or withheld on the date of exercise exceeds the amount required to be delivered
or withheld to meet tax withholding requirements, based on the maximum statutory
withholding rates for the Participant for federal, state and local tax purposes
(including the Participant’s share of payroll or similar taxes) in the
applicable jurisdiction. In the case of an exercise of the SAR, the Committee
retains the right to require the Participant or his or her Representative to pay
any and all withholding taxes arising out of such exercise solely in cash.
10.    Fair Market Value of Common Stock. The fair market value (“Fair Market
Value”) of a share of Common Stock shall be determined for purposes of this
Agreement by reference to the closing price of a share of Common Stock, as
reported by the New York Stock Exchange (or such other exchange on which the
Shares of Common Stock are primarily traded) for the Grant Date or date of
exercise, as applicable, or if such date is not a business day, for the business
day immediately preceding such date (or, if for any reason no such price is
available, in such other manner as the Committee in its sole discretion may deem
appropriate to reflect the then fair market value thereof).
11.    Extension of Expiration Date in Certain Cases. From time to time, the
Company may declare “blackout” periods during which the Participant may be
prohibited from engaging in certain transactions in Company securities. In the
event that the scheduled Expiration Date of the Option and the SAR shall fall
within a blackout period that has been declared by the Company and that applies
to the Participant, then the Expiration Date shall automatically, and without
further notice to the Participant, be extended until such time as fifteen (15)
consecutive business days have elapsed after the scheduled Expiration Date
without interruption by any blackout period that applied to the Participant.
12.    Shares to be Issued in Compliance with Federal Securities Laws and
Exchange Rules. No shares issuable upon the exercise of the Option or the SAR
shall be issued and delivered unless and until there shall have been full
compliance with all applicable requirements of the Securities Act of 1933, as
amended (whether by registration or satisfaction of exemption conditions), all
applicable listing requirements of the New York Stock Exchange (or such other
exchange(s) or market(s) on which shares of the same class are then listed) and
any other requirements of law or of any regulatory bodies having jurisdiction
over such issuance and delivery. The Company shall use its best efforts and take
all necessary or appropriate actions to ensure that such full compliance on the
part of the Company is made.
13.    Certain Adjustments; Change in Control. If, during the term of this
Agreement, there shall be any stock splits, reorganizations, equity
restructurings and similar matters, the Committee shall make or cause to be made
an appropriate and equitable substitution, adjustment or treatment with respect
to the Option in a manner consistent with Sections 4.4 and 19.2 of the Plan. The
Committee’s determination as to what adjustments shall be made, and the extent
thereof, shall be final, binding and conclusive. No fractional shares of Common
Stock shall be issued under the Plan on any such adjustment. This award may be
subject to early vesting or termination in connection with a Change in Control
in accordance with the provisions of Section 18.3 of the Plan.
14.    Participation by Participant in Other Company Plans. Nothing herein
contained shall affect the right of the Participant to participate in and
receive benefits under and in accordance with the then current provisions of any
retirement plan or employee welfare benefit plan or program of the Company or of
any Affiliate of the Company, subject in each case, to the terms and conditions
of any such plan or program.
15.    No Rights as a Shareholder Until Issuance of Shares. Neither the
Participant nor his or her Representative shall be entitled to any of the rights
or privileges of a shareholder of the Company in respect of any shares of Common
Stock issuable upon any exercise of the Option or the SAR unless and until such
shares shall have been issued and delivered to: (i) the Participant in the form
of certificates, (ii) a brokerage or other account for the benefit of the
Participant either in certificate form or via “DWAC” or similar electronic
means, or (iii) a book entry or direct registration account in the name of the
Participant.
16.    Not an Employment or Service Contract. Nothing herein contained shall be
construed as an agreement by the Company or any of its Affiliates, expressed or
implied, to employ or contract for the services of the Participant, to restrict
the right of the Company or any of its Affiliates to discharge the Participant
or cease contracting for the Participant’s services or to modify, extend or
otherwise affect in any manner whatsoever, the terms of any employment agreement
or contract for services which may exist between the Participant and the Company
or any of its Affiliates.
17.    Death of Participant. In the event of the death of the Participant while
any portion of the Option and/or the SAR are outstanding, the Option and/or the
SAR may be exercised prior to the Expiration Date by the duly appointed and
qualified executor or other personal representative of the Participant, and the
shares of Common Stock received upon such exercise shall be made to such
executor or representative to be distributed in accordance with the
Participant’s will or applicable intestacy law.
18.    Confidentiality, Non-Solicitation and Non-Disparagement. Participant
agrees that the Award to Participant under the terms and conditions specified in
this Agreement is conditioned upon Participant’s compliance with the following
confidentiality, non-solicitation and non-disparagement terms and conditions.
(a)    Definitions. As used in this Section, the following terms have the
meanings set forth below:
(i)    “Confidential Information” means any and all confidential information,
including without limitation any negotiations or agreements between the Company
or its Affiliates and third parties, business and marketing plans and related
materials, training materials, financial information, plans, executive
summaries, capitalization tables, budgets, unpublished financial statements,
costs, prices, licenses, employee, customer, supplier, shareholder, partner or
investor lists and/or data, products, technology, know-how, business processes,
business data, inventions, designs, patents, trademarks, copyrights, trade
secrets, business models, notes, sketches, flow charts, formulas, blueprints and
elements thereof, databases, compilations, and other intellectual property,
whether written or otherwise. Some or all of the Confidential Information may
also be entitled to protection as a “trade secret” under applicable state or
federal law. Confidential Information does not include information that
Participant can prove was properly known to Participant from sources permitted
to disseminate the information prior to Participant’s employment by, or
provision of services to, Employer, or that has become publicly known and made
generally available through no wrongful act of Participant.
(ii)    “Customer” means any customer of the Company or an Affiliate with
which/whom Participant communicated, performed any services, to which/whom
Participant sold any products, or about which Participant learned or had access
to any Confidential Information during the twelve (12)-month period immediately
preceding Participant’s termination of employment from, or provision of services
to, the Employer (for any reason).
(iii)    “Employer” means the Company or Affiliate by whom Participant is
employed, or to whom Participant provides services.
(iv)    “Enhanced Restricted Period” means the twenty-four (24)-month period
commencing on the day following the last day of Participant’s employment with
the Employer (regardless of the reason(s) for the termination of employment).
(v)    “Restricted Employee” means any person who was employed by the Company or
an Affiliate and had Material Contact pursuant to Participant’s duties during
the period of twelve (12) months immediately preceding the Participant’s last
day of employment with the Employer. For purposes of this Agreement, “Material
Contact” means interaction between Participant and another employee of the
Employer or its affiliates: (i) with whom Participant actually dealt; or (ii)
whose employment or dealings with Employer or services for the Employer were
handled, coordinated, managed, or supervised by Participant.
(vi)    “Restricted Period” means the twelve (12)-month period commencing on the
day following the last day of Participant’s employment with the Employer
(regardless of the reason(s) for the termination of employment).
(b)    Confidential Information.
(i)    Protection of Confidential Information. At all times during Participant’s
employment with, or provision of services to, the Employer and at all times
thereafter, Participant agrees to: (A) hold the Confidential Information in
strictest confidence, and not to directly or indirectly copy, distribute,
disclose, divert, or disseminate, in whole or in part, any of such Confidential
Information to any person, firm, corporation, association or other entity except
(x) to authorized agents of the Employer who have a need to know such
Confidential Information for the purpose for which it is disclosed, or (y) to
other persons for the benefit of the Employer, in the course and scope of
Participant’s employment with or service to the Employer; and (B) refrain from
directly or indirectly using the Confidential Information other than as
necessary and as authorized in the course and scope of Participant’s employment
with, or provision of services to, the Employer. In the event Participant
receives a subpoena or other validly issued administrative or judicial order
demanding Confidential Information, Participant shall promptly notify the
Employer and provide a copy of such subpoena or order and tender to the Employer
the defense of any such demand. Participant may, if necessary, disclose
Confidential Information in judicial proceedings relating to the enforcement of
Participant’s rights or obligations under this Agreement; provided, however,
that Participant must first enter into an agreed protective order with the
Employer protecting the confidentiality of the Confidential Information.
(ii)    Notwithstanding Participant’s confidentiality and non-disclosure
obligations under this Agreement or otherwise, as provided in the Federal Defend
Trade Secret Act, Participant shall not be held criminally or civilly liable
under any federal or state trade secret law for the disclosure of a trade secret
that is made: (A) in confidence to a federal, state, or local government
official, either directly or indirectly, or to an attorney, and solely for the
purpose of reporting or investigating a suspected violation of law, or to
Participant’s attorney in connection with a lawsuit for retaliation for
reporting a suspected violation of law; or (B) in a complaint or other document
filed in a lawsuit or other proceeding, if such filing is made under seal so
that it is not made public. Participant acknowledges and understands that
nothing in this Agreement prohibits Participant from reporting possible
violations of federal law or regulation to any governmental agency or entity,
including but not limited to the Department of Justice or the Securities and
Exchange Commission, or making other disclosures that are protected under the
whistleblower provisions of federal or state law or regulation. Participant
understands that Participant does not need prior authorization of the Employer
to make any such reports or disclosures, and that Participant is not required to
notify the Employer that Participant has made such reports or disclosures.
(c)    Non-Solicitation.
(i)    Non-Solicitation of Employees. Participant acknowledges that the Company
and its Affiliates sustain their operations and the goodwill of the Customers
and other business relations through its employees. The Company and its
Affiliates have made significant investment in its employees and their ability
to establish and maintain relationships with one another and with their
Customers, agents, brokers, vendors, suppliers, consultants, partners and/or
other business relations in order to further the Company’s and its Affiliates’
legitimate business interests and operations and to cultivate goodwill.
Participant acknowledges that the loss of the employees could adversely affect
the Company’s and its Affiliates’ operations and jeopardize the goodwill that
has been established through these employees, and that the Company and its
Affiliates therefore have a legitimate interest in preventing the solicitation
of its employees. During the Participant’s employment with the Employer and the
Restricted Period, Participant shall not, directly or indirectly, seek to
recruit or solicit, attempt to influence or assist, participate in, or promote
the solicitation of, or otherwise attempt to adversely affect the employment of
any Restricted Employees. Without limiting the foregoing restriction, during the
Restricted Period Participant shall not, on behalf of Participant or any other
person or entity, hire, employ or engage any Restricted Employee and shall not
engage in the aforesaid conduct through a third party for the purpose of
colluding to avoid the restrictions of this subsection(c)(i).
(ii)    Non-Solicitation of Business. Participant acknowledges that by virtue of
Participant’s employment with, or service to, the Employer, Participant has
developed or will develop relationships with and/or had or will have access to
Confidential Information about Customers and agents, brokers and similar key
business partners (“Key Business Partners”) and is, therefore, capable of
significantly and adversely impacting existing relationships that the Company or
an Affiliate has with them. Participant acknowledges that the Company and/or its
Affiliates have invested in its and Participant’s relationship with Customers
and Key Business Partners and the goodwill that has been developed with them;
therefore, the Company and/or its Affiliates has a legitimate business interest
in protecting these relationships against solicitation and/or interference by
Participant for a reasonable period of time after Participant’s employment with,
or provision of services to, the Employer ends. Accordingly, during the
Participant’s employment with the Employer and the Restricted Period Participant
shall not, directly or indirectly initiate, contact or engage in any contact or
communication, of any kind whatsoever, that has the purpose or effect of: (A)
inviting, assisting, encouraging or requesting any Customer or Key Business
Partner to (1) transfer Participant’s business from the Company or an Affiliate
to Participant, Participant’s subsequent employer or any other third party, or
(2) otherwise diminish, divert, discontinue or terminate Customer’s patronage
and/or business relationship with the Company or an Affiliate; or (B) inviting,
assisting, encouraging or requesting any Customer to purchase any products or
services from Participant, Participant’s subsequent employer or any other third
party that are or may be competitive with the products or services of the
Company or an Affiliate, or use any products or services of Participant,
Participant’s subsequent employer or of any other third party that are or may be
competitive with the products or services of the Company or an Affiliate. In
addition to the foregoing restrictions, Participant agrees not to be personally
involved in the negotiation, competition for, solicitation or execution of any
individual book roll over(s) or other book of business transfer arrangements
involving the transfer of business away from the Company or an Affiliate, at any
time during the Enhanced Restricted Period. Notwithstanding the foregoing, if
Participant resides in the State of California, the restrictions set forth in
this subsection (c)(ii) shall not apply to the extent such restrictions are
inconsistent with Appendix I of this Agreement.
(d)    Notification of New Employers. During the Restricted Period, Participant
shall notify any subsequent employer of Participant’s obligations under this
Section prior to commencing employment. In addition, during the Restricted
Period, Participant shall provide the Employer and his/her prior manager at the
Employer fourteen (14) days’ advance written notice prior to becoming employed
by, or retained to represent or provide services to, any person or entity or
engaging in any business of any type or form, with such notice including the
identity of the prospective employer or business, the specific division (if
applicable) for which Participant will be performing services and the title or
position to be assumed by Participant.
(e)    Non-Disparagement. Participant shall not make or intentionally cause or
direct others to make any written or oral statement that disparages, defames or
reflects adversely on the Company or its Affiliates, or their respective
business relations. Without in any way limiting the scope or effect of the
preceding sentence, Participant specifically agrees, represents and warrants
that Participant shall not directly or indirectly disparage the Company’s and/or
its Affiliates’: (i) officers, management, business practices, policies,
procedures and/or operations, (ii) employees or other personnel, employment or
other personnel-related decisions, staffing, and/or hiring or termination
decisions, practices or other personnel-related activities or occurrences,
and/or any other employment-related decisions, actions or practices by or
relating to the Company or the Affiliates, or (iii) any other policies,
procedures or matters concerning or relating to the Company, including but not
limited to the Company’s business, operations, employees, management, Customers,
suppliers, activities, products, services or any other matter relating to the
Company or its Affiliates; provided that this non-disparagement provision shall
not prohibit any statement, reporting or other action this is permitted by
subsection (b)(ii) of this Section. Moreover, Participant shall not encourage or
aid any person or entity in the pursuit of any cause of action, lawsuit or any
other claim or dispute of any kind against the Company and/or its Affiliates.
(f)    Consideration/Reasonableness of Restrictions.
(i)    Consideration. Participant acknowledges and agrees that Participant has
received valuable and adequate consideration in exchange for the restrictions in
this Section, including but not limited to the Award to Participant under the
terms and conditions specified in this Agreement, offer of employment or
continuing employment with the Employer, access to the Confidential Information
and access to the Customers and Key Business Partners.
(ii)    Reasonableness of Restrictions. Participant acknowledges and understands
the importance of the relationships which the Company and its Affiliates have
with their Employees, Customers and Key Business Partners, as well as how
significant the maintenance of the Confidential Information is to the business
and success of the Company and its Affiliates, and acknowledges the steps the
Company and its Affiliates have taken, are taking and will continue to take to
develop, preserve and protect these relationships and the Confidential
Information. Accordingly, Participant agrees that the scope and duration of the
restrictions and limitations described in this Section are reasonable and
necessary to protect the legitimate business interests of the Company and its
Affiliates, and Participant acknowledges and agrees that all restrictions and
limitations relating to the period following the end of Participant’s employment
or service with the Employer will apply regardless of the reason Participant’s
employment or service ends. Participant acknowledges and agrees that the
enforcement of this Section will not in any way preclude Participant from
becoming gainfully employed or engaged as a contractor in such manner and to
such extent as to provide Participant with an adequate standard of living.
(iii)    Tolling. Notwithstanding anything herein to the contrary, if
Participant breaches any of the Non-Solicitation Conditions of this Section,
then the Restricted Period (or the Enhanced Restricted Period, if applicable)
shall be tolled (retroactive to the date such breach commenced) until such
breach or violation has been duly cured.
(iv)    Modification. If any provision or term in this Section is declared
invalid or unenforceable by a court of competent jurisdiction, the invalid and
unenforceable portion shall be reformed to the maximum time, activity-related
restrictions and/or limitations permitted by applicable law, so as to be valid
and enforceable.
(v)    Breach/Remedies. Notwithstanding anything to the contrary in this
Agreement, Participant acknowledges that the breach of this Section would cause
substantial loss to the goodwill of the Company and/or its Affiliates, and cause
irreparable harm for which there is no adequate remedy at law. Further, because
Participant’s employment with the Employer is personal and unique, because
damages alone would not be an adequate remedy and because of Participant’s
access to the Confidential Information, the Company and/or its Affiliates shall
have the right to enforce this Section, including any of its provisions, by
injunction, specific performance, or other equitable relief, without having to
post bond or prove actual damages, and without prejudice to any other rights and
remedies that the Company and/or its Affiliates may have for a breach of this
Agreement, including, without limitation, money damages. Participant
acknowledges and agrees that notwithstanding the arbitration provisions in this
Agreement, the Company may elect to file and pursue claims which arise from or
relate to Participant’s actual or threatened breaches of this Section in state
or federal court of competent jurisdiction. Participant shall be liable to pay
all costs, including reasonable attorneys’ and experts’ fees and expenses, that
the Company may incur in enforcing or defending this Section, whether or not
litigation is actually commenced and including litigation of any appeal taken or
defended by the Company where the Company succeeds in enforcing any provision of
this Agreement.
(vi)    Forfeiture and Repayment Provisions. Notwithstanding the terms regarding
vesting and forfeiture or any other provision set forth in this Agreement,
Participant agrees that during the Restricted Period (or the Enhanced Restricted
Period, if/as applicable), if Participant breaches any of the terms or
conditions in this Section, then in addition to all rights and remedies
available to the Company at law and in equity Participant shall immediately
forfeit any portion of the Award that has not otherwise been previously
forfeited under the applicable terms of this Agreement and that has not yet been
paid, exercised, settled or vested. The Company may also require repayment from
Participant of any and all of the compensatory value of the Award that
Participant received during the Restricted Period (or the Enhanced Restricted
Period, as applicable), including without limitation the gross amount of any
Common Stock distribution or cash payment made to the Participant upon the
vesting, distribution, exercise, or settlement of the Award and/or any
consideration in excess of such gross amounts received by Participant upon the
sale or transfer of the Common Stock acquired through vesting, distribution,
exercise or settlement of the Award. Participant shall promptly pay the full
amount due upon demand by the Company, in the form of cash or shares of Common
Stock at current Fair Market Value.
(vii)    Interpretation. Any reference to Section or subsection in this Section
18 shall refer to this Section 18 or respective subsection.
19.    Arbitration. In lieu of litigation by way of court or jury trial, any
dispute or controversy arising hereunder shall be settled by arbitration, in
accordance with the arbitration agreement currently in effect by separate
agreement between the Participant and the Company or any of its Affiliates and
which is incorporated herein by reference. In the event that such arbitration
agreement is determined to be inapplicable or unenforceable or if no such
arbitration agreement is then in effect, the parties mutually agree to arbitrate
any dispute arising out of or related to this Agreement pursuant to the terms of
this paragraph.  The parties agree that this Agreement provides sufficient
consideration for that obligation and the mutual promises to arbitrate also
constitutes consideration for this agreement to arbitrate.  The following terms
and conditions shall apply to such arbitration hereunder. The arbitration shall
be conducted before a single arbitrator in accordance with the Employment
Arbitration Rules of the American Arbitration Association (“AAA”) then in
effect, and shall be governed by the Federal Arbitration Act. Judgment may be
entered on the award of the arbitrator in any court having jurisdiction. Unless
provided otherwise in the arbitrator’s award, each party will pay its own
attorneys’ fees and costs. To the extent required by law or the AAA Rules, all
administrative costs of arbitration (including filing fees) and the fees of the
arbitrator will be paid by the Company. The Participant and the Company waive
the right for any dispute to be brought, heard, decided, or arbitrated as a
class and/or collective action (or joinder or consolidation with claims of any
other person), and the parties agree that, regardless of anything else in this
arbitration provision or the AAA Rules, the interpretation, applicability,
enforceability or formation of the class action waiver in this provision may
only be determined by a court and not an arbitrator.  Regardless of anything
else in this Agreement, this arbitration provision may not be modified or
terminated absent a writing signed by the Participant and the Company stating an
intent to modify or terminate the arbitration provision.
20.    Governing Law. Except as otherwise provided in the foregoing Section,
this Agreement and any disputes hereunder shall be governed by and interpreted
in accordance with the laws of the State of Delaware, without application of its
conflicts of laws principles.
21.    Miscellaneous. This Agreement, together with the Plan, is the entire
agreement of the parties with respect to the Option and the SAR granted hereby
and may not be amended except in a writing signed by both the Company and the
Participant or his or her Representative. If any provision of this Agreement is
deemed invalid, it shall be modified to the extent possible and minimally
necessary to be enforceable, and, in any event, the remainder of this Agreement
will be in full force and effect.
22.    Forfeiture and Clawback of Option. Notwithstanding the terms regarding
vesting and forfeiture or any other provision set forth in this Agreement and as
a condition to the receipt of this Option, the rights, payments and benefits
with respect to this Option are subject to reduction, cancellation, forfeiture,
or recoupment by the Company if and to the extent required in accordance with
Company policy as in effect from time to time (“Forfeiture and Clawback
Policy”), and/or as otherwise required by applicable law, rule or regulation of
the Securities and Exchange Commission, or rule or listing requirement of the
New York Stock Exchange (or such other exchange(s) or market(s) on which shares
of the same class are then listed) as in effect from time to time (collectively
with the Forfeiture and Clawback Policy, “Applicable Requirements”) in
connection with an accounting restatement or under such other circumstances as
specified in the Applicable Requirements. Any determination made and action
taken under the Forfeiture and Clawback Policy shall be final, binding and
conclusive.
ADDITIONAL PROVISIONS APPLICABLE ONLY TO EXECUTIVE OFFICERS OF THE COMPANY:
23.    Stock Holding Period. The Participant agrees to hold all shares of Common
Stock acquired upon the exercise of the Option and/or the SAR granted hereunder
for a minimum of 12 months following the date of such exercise. This holding
period shall not apply to shares sold or tendered by the Participant and/or
withheld by the Company to pay the aggregate Exercise Price and/or to settle tax
liabilities related to the exercise, and as otherwise may be provided under the
Company’s Stock Ownership Policy.

Appendix I (California Employees)
If Participant resides in the State of California, Section 18(c)(ii) of the
foregoing Non-Qualified Stock Option and SAR Agreement shall be restated as
follows:
18(c)(ii)    Non-Solicitation of Business. Participant acknowledges that by
virtue of Participant’s employment with, or service to, the Employer,
Participant has developed or will develop relationships with and/or had or will
have access to Confidential Information about Customers and agents, brokers and
similar key business partners (“Key Business Partners”) and is, therefore,
capable of significantly and adversely impacting existing relationships that the
Company or an Affiliate has with them. Participant acknowledges that the Company
and/or its Affiliates have invested in its and Participant’s relationship with
Customers and Key Business Partners and the goodwill that has been developed
with them; therefore, the Company and/or its Affiliates has a legitimate
business interest in protecting these relationships against solicitation and/or
interference by Participant for a reasonable period of time after Participant’s
employment with, or provision of services to, the Employer ends. Accordingly,
during the Participant’s employment with the Employer and the Restricted Period
Participant shall not use or rely in any manner on any Confidential Information
(as the term is defined in this Section) to, directly or indirectly initiate,
contact or engage in any contact or communication, of any kind whatsoever, that
has the purpose or effect of: (A) inviting, assisting, encouraging or requesting
any Customer or Key Business Partner to (1) transfer Participant’s business from
the Company or an Affiliate to Participant, Participant’s subsequent employer or
any other third party, or (2) otherwise diminish, divert, discontinue or
terminate Customer’s patronage and/or business relationship with the Company or
an Affiliate; or (B) inviting, assisting, encouraging or requesting any Customer
to purchase any products or services from Participant, Participant’s subsequent
employer or any other third party that are or may be competitive with the
products or services of the Company or an Affiliate, or use any products or
services of Participant, Participant’s subsequent employer or of any other third
party that are or may be competitive with the products or services of the
Company or an Affiliate. In addition to the foregoing restrictions, Participant
agrees not to be personally involved in the negotiation, competition for,
solicitation or execution of any individual book roll over(s) or other book of
business transfer arrangements involving the transfer of business away from the
Company or an Affiliate, at any time during the Enhanced Restricted Period.

As of 2-6-18