Document:

Exhibit 10.3

 

Exhibit 10.3

 No Stock or other security shall be delivered, and no option or other right to
acquire any stock or other security shall be exercisable, pursuant to this Award except upon
effective registration under the Securities Act of 1933 as amended and the securities laws of each
applicable state or other jurisdiction or upon acceptance by the Company of an opinion of counsel
in such form and by such counsel as satisfactory to counsel for the Company that such registration
is not required.

ProCentury Corporation

Stock Option Award Agreement

for

Non-Qualified Stock Options

under the

2004 Stock Option and Award Plan

To _____________:1

     Congratulations! ProCentury Corporation is awarding you this Option to purchase shares of
Stock pursuant to its 2004 Stock Option and Award Plan (the “Plan”). All capitalized terms used in
this Award Agreement shall have the same meaning as defined in the Plan. Your Option is subject to
acceptance by your signing a copy of this Award Agreement under the heading “Acceptance” and
returning the signed copy before the close of business on _____, 200___.

     The purpose of this Award Agreement is to summarize some of the terms and conditions of your
Option as well as the shares of Stock purchased upon exercise of the Option. This Award Agreement
makes numerous references to the Plan and is governed by the Plan document. You as the Participant
may obtain a copy of the current Plan document at any time by contacting the Company Secretary at

465 Cleveland Avenue

Westerville, OH 43082

(614)-895-2000.

	1	 The Company entered into this agreement with
the individuals listed on Annex A attached hereto.

 

 

Your Option

     Your
Option entitles you to purchase up to _________ (___) shares of Stock, all of
which are designated as Service Vesting Shares.

     The Exercise Price at which you may purchase each such share is $___, which is the fair
market value of the Stock on the Date of Grant of ____________, 200_. Both the number of shares and
the Exercise Price are subject to adjustment for events such as stock splits, etc. as provided in
the Plan.

Vesting of Your Option

     Your Service Vesting Shares are subject to a Service Vesting Schedule that requires you to
complete a period of Service before you can exercise the Option to purchase those Shares. Pursuant
to your Service Vesting Schedule, 1/36th of the total number of your Service Vesting Shares will
become Vested Shares as of the last day of the calendar month for each full calendar month of your
Service as a Director after the Date of Grant, such that the entire number of your Service Vesting
Shares will become vested on
_________, 200___ (the last day of the 36th calendar month of
Service after the Date of Grant).

     In addition and notwithstanding any provision in the Plan to the contrary, your Unvested
Shares will become Vested Shares upon severance of your Service as a result of your death,
Disability or Retirement within the meaning of the Plan.

     As soon as your Unvested Shares become Vested Shares, you may exercise this Option to purchase
your Vested Shares in any one or more transactions at any time and from time to time during the
remaining term of your Option.

Taxation

     Your Option is designated as a Non-Qualified Stock Option under the Plan. The spread between
the market value and the Exercise Price of the Stock purchased will not be taxable to you until you
exercise the Option, at which time the spread will be taxable to you as compensation at ordinary
income rates. Any additional appreciation in value of the Stock realized upon sale of the stock
after your exercise is taxable as a sale of property at capital gains rates. Although the Company
can give no assurance as to the taxability to you, you may contact the Company Secretary for
further information generally describing the tax aspects of a Non-Qualified Stock Option.

Exercising Your Option

     You may exercise your Option, in the manner described below, from time to time at any time
during the period from the Date of Grant until 5:00 p.m. local time at the Company’s office on the
calendar day immediately preceding the 10th anniversary of the Date of Grant, which is
the

2

 

Date of Expiration of your Option. You may exercise your Option any number of times during this
Exercise Period until you have purchased all of your Vested Shares subject to the Option.
Notwithstanding anything to the contrary in this Award Agreement, this Option shall automatically
expire upon, and no longer be exercisable after, the first to occur of the following:

	 	•  	Date of Expiration;
	 
	 	•  	If you are terminated for Cause, on your last day of Service;
	 
	 	•  	If you resign or are otherwise terminated for any reason other than Cause, or
Retirement, on the first day of the fourth calendar month beginning after your last day of
Service;
	 
	 	•  	If your Service is terminated for Retirement or Disability or death, on the first
anniversary of your last day of Service.

     You may exercise your Option by giving notice in writing (as provided in the Plan) to the
Company to the attention of the Company Secretary (or his or her designee) at the above address.
Your notice must state the number of shares being purchased and must be accompanied with payment of
the Exercise Price for those shares. Unless otherwise agreed with the Company, payment shall be by
check in immediately available funds payable in United States dollars to the order of the Company.
Other methods of payment are allowed under the Plan, and you may discuss the availability of these
to you by contacting the Company Secretary.

Other Terms and Conditions

     Your Option is not transferable except at your death by will or the applicable laws of descent
and distribution. During your lifetime, this Option shall be exercisable only by you or, in the
case of your incapacity, your guardian, or legal representative.

     This Award Agreement and your Option are subject to other terms and conditions set forth in
the Plan, including: (i) withholding requirements for taxes, (ii) immediate termination of this
Option if your Service is terminated for Cause, (iii) certain restrictions in the case of a public
offering, and (iv) certain securities law restrictions.

     One of the restrictions to facilitate any future public offering by the Company is that by
accepting this Option you agree on behalf of yourself and your heirs, legal representatives,
successors, and assigns that in the event of any underwritten public offering of any Company
securities made by the Company pursuant to an effective registration statement filed under the
Securities Act, neither you nor any such heirs, legal representatives, successors, and assigns will
directly or indirectly sell, offer to sell, solicit an offer to buy, grant any option to purchase,
contract to sell (including, without limitation, any short sale), or otherwise dispose or offer to
dispose of any interest, equitable or beneficial, in any of such shares for such period of time
from and after the effective date of such registration statement except as provided in the Plan or
pursuant to such public offering.

3

 

     Finally, in the case of any conflict with the terms of this Award Agreement, the terms of the
Plan shall prevail and govern.

	 	 	 	 	 
	 	 	ProCentury Corporation
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	 
	

	 	Name:
	 	Edward F. Feighan
	

	 	Title:
	 	Chairman, President and Chief Executive Officer

Acceptance

     The Participant is familiar with the terms of this Award Agreement and the terms and
conditions of the Plan. The Participant understands that this Option and any Stock issued upon
exercise of this Option are intended to be held for purposes of investment only and not for further
distribution by the Participant. By signing below, the Participant accepts this Option subject to
all of such terms and conditions and agrees to hold and exercise this Option as well as any Stock
purchased upon exercise of this Option for purposes of investment only and not for further
distribution unless and until the Company advises the Participant such Stock may be distributed
without registration under the Securities Act or such Stock is to be distributed pursuant to such a
registration.

	 	 	 	 
	Dated:
                    , 200  

	 	 
	

	 	Participant Name

4

 

Annex A

	 	 	 	 	 	 	 
	Participant	 	Grant Date	 	Number of
Shares    	 
	 
	Michael J. Endres
	 	March 22, 2005	 	 	1,000                  	 
	 
	Robert F. Fix
	 	March 22, 2005	 	 	1,000                  	 
	 
	Jeffrey A. Maffett
	 	March 22, 2005	 	 	1,000                  	 
	 
	Press C. Southworth III
	 	March 22, 2005	 	 	1,000                  	 
	 
	Alan R. Weiler
	 	March 22, 2005	 	 	1,000                  	 
	 
	Robert J. Woodward, Jr.
	 	March 22, 2005	 	 	1,000                  	 

5<PAGE>

                                                                     EXHIBIT 4.4

                           CREDIT AGREEMENT AMENDMENT
                     (AVAILABILITY AND COVENANT AMENDMENTS)
                             (Dated: June 29, 2004)

                                    BETWEEN:

                     --------------------------------------

                               TELVENT CANADA LTD.

                                     - AND -

    LASALLE BUSINESS CREDIT, A DIVISION OF ABN AMRO BANK N.V., CANADA BRANCH

                     --------------------------------------

                                BAKER & MCKENZIE
                                   SUITE 2600
                              255 - 5TH AVENUE S.W.
                                CALGARY, ALBERTA
                                     T2P 3G6

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<S>                                                                                  <C>
                                   ARTICLE 1.

INTERPRETATION.................................................................      Page 1
   SECTION 1.1   DEFINITIONS...................................................      Page 1

                                   ARTICLE 2.

AMENDMENT TO SECURITY..........................................................      Page 2
   SECTION 2.1   AMENDMENT TO DEFINITIONS......................................      Page 2
   SECTION 2.2   AMENDMENT TO DEFINITION OF OBLIGATIONS........................      Page 2

                                   ARTICLE 3.

AMENDMENT TO FINANCIAL RATIOS..................................................      Page 2
   SECTION 3.1   AMENDMENT TO FINANCIAL RATIOS AND COVENANTS...................      Page 2

                                   ARTICLE 4.

WAIVER OF BREACH OF COVENANT...................................................      Page 3
   SECTION 4.1   FIXED CHARGE COVERAGE RATIO BREACH............................      Page 3
   SECTION 4.2   WAVER FEE.....................................................      Page 3

                                   ARTICLE 5.

CREDIT AGREEMENT IF FULL FORCE.................................................      Page 3
   SECTION 5.1   CREDIT AGREEMENT OTHERWISE UNAMENDED..........................      Page 3
   SECTION 5.2   AMENDMENT PURSUANT TO CREDIT AGREEMENT........................      Page 3

                                   ARTICLE 6.

MISCELLANEOUS..................................................................      Page 3
   SECTION 6.1   GOVERNING LAW.................................................      Page 3
   SECTION 6.2   CONSENT TO JURISDICTION.......................................      Page 4
   SECTION 6.3   BENEFIT OF THE AGREEMENT......................................      Page 4
   SECTION 6.4   SEVERABILITY..................................................      Page 4
   SECTION 6.5   AMENDMENTS AND WAIVERS........................................      Page 4
   SECTION 6.6   BINDING EFFECT................................................      Page 5
   SECTION 6.7   TIME OF THE ESSENCE...........................................      Page 5
   SECTION 6.8   COUNTERPARTS..................................................      Page 5
</TABLE>

<PAGE>

                       CREDIT FACILITY AMENDING AGREEMENT

      THIS AGREEMENT MADE as of June 29, 2004.

BETWEEN:

            TELVENT CANADA LTD., a Corporation, incorporated under the Laws of
            Canada, and having an office in the City of Calgary in the Province
            of Alberta (herein referred to as the "Borrower")

                                                               OF THE FIRST PART

                                     - and -

            LASALLE BUSINESS CREDIT, A DIVISION OF ABN AMRO BANK N.V., CANADA
            BRANCH, a Canadian Branch of a Foreign Bank, under the Bank Act
            (Canada), and having an office in the City of Toronto in the
            Province of Ontario (herein referred to as the "Bank")

                                                              OF THE SECOND PART

      WHEREAS the Borrower and the Bank entered into the Credit Agreement;

      AND WHEREAS the Borrower and the Bank wish to amend the Credit Agreement
to provide for certain amendments to the obligations secured by the Credit
Agreement and certain financial ratio covenants of the Borrower.

      NOW THEREFORE, in consideration of the terms, covenants, conditions and
provisions hereof, given or made by each party hereto, to or in favor of all or
any of the other parties hereto, and other good and valuable consideration
(receipt and sufficiency whereof is hereby acknowledged by each party receiving
the same) the parties hereto mutually covenant and agree as follows.

                                   ARTICLE 1.
                                 INTERPRETATION

      SECTION 1.1 DEFINITIONS

      In this Agreement, capitalized expressions used herein shall have the
meanings given them in the Credit Agreement, and in this Agreement, unless
something in the subject matter or context is inconsistent therewith:

"CREDIT AGREEMENT" means the credit agreement dated May 2, 2003 between the
Borrower and the Bank, as amended on May 12, 2003, and as the same may be
amended from time to time.

<PAGE>

                                   ARTICLE 2.
                              AMENDMENT TO SECURITY

      SECTION 2.1 AMENDMENT TO DEFINITIONS

      Effective as of June 29, 2004, there shall be added to the Definitions the
following defined terms:

"HEDGING AGREEMENTS" means any interest rate, currency or commodity swap
agreement, cap agreement or collar agreement, and any other agreement or
arrangement designed to protect the Borrower or any Subsidiary of the Borrower
against fluctuations in interest rates, currency exchange rates or commodity
prices.

"HEDGING OBLIGATIONS" means any liability of the Borrower or any Subsidiary to
the Bank or an affiliate of the Bank under any Hedging Agreement.

      SECTION 2.2 AMENDMENT TO DEFINITION OF OBLIGATIONS

      Effective as of June 29, 2004, the definition of "Obligations" under the
Credit Agreement is hereby amended by replacing that Section with the following:

"OBLIGATIONS" means the obligations of the Borrower to repay the principal of,
and to pay interest on, the Loans, all issued Bankers' Acceptances, all L/C
Obligations, all Hedging Obligations and to pay all fees and other amounts from
time to time due from the Borrower to the Bank hereunder.

                                   ARTICLE 3.
                          AMENDMENT TO FINANCIAL RATIOS

      SECTION 3.1 AMENDMENT TO FINANCIAL RATIOS AND COVENANTS

      Effective as of June 29, 2004, Section 14.2 of the Credit Agreement is
hereby amended by replacing that Section with the following:

"SECTION 14.2 FINANCIAL RATIOS AND COVENANTS

      The Borrower covenants and agrees with the Bank that the Borrower,
together with its consolidated Subsidiaries, as at the end of each successive
Computation Period shall have:

      14.2.1   a ratio of Total Net Debt to EBITDA:

             14.2.1.1  for the Computation Period for April 1, 2004 to June 30,
                       2004, of not more than 4.00:1.00, and

             14.2.1.2  for all Computation Periods commencing on and after
                       July 1, 2004, of not more than 3.00:1.00; and

                                     - 2 -

<PAGE>

      14.2.2   a Fixed Charge Coverage Ratio:

             14.2.2.1  for the Computation Period for April 1, 2004 to June
                       30, 2004, of not less than 0.50:1.00; and

             14.2.2.2  for all Computation Periods commencing on and after
                       July 1, 2004, of not less than 1.20:1.00; and

      14.2.3   a minimum Net Income of not less than U.S. $1.00 per year."

                                   ARTICLE 4.
                          WAIVER OF BREACH OF COVENANT

      SECTION 4.1 FIXED CHARGE COVERAGE RATIO BREACH

      The Bank hereby waives the breach by the Borrower of Section 14.2.2 of the
Credit Agreement with respect to the Computation Period ending on March 31, 2004
with respect to the obligation to maintain a Fixed Charge Coverage Ratio of
1.20:1.00.

      SECTION 4.2 WAVER FEE

      In consideration of the Bank waiving the breach of the fixed charge
coverage ratio covenant pursuant to Section 4.1 hereof, the Borrower hereby
agrees to pay to the Bank on June 30, 2004 a waiver fee of U.S.$10,000.00.

                                   ARTICLE 5.
                         CREDIT AGREEMENT IF FULL FORCE

      SECTION 5.1 CREDIT AGREEMENT OTHERWISE UNAMENDED

      Except as specifically herein provided, the Credit Agreement remains
unamended and in full force and effect as at the date hereof.

      SECTION 5.2 AMENDMENT PURSUANT TO CREDIT AGREEMENT

      This Agreement constitutes an amendment within the meaning of Section
18.10 of the Credit Agreement.

                                   ARTICLE 6.
                                  MISCELLANEOUS

      SECTION 6.1 GOVERNING LAW

      This Agreement shall be conclusively deemed to be a contract made under,
and shall for all purposes be governed by and construed in accordance with the
laws of the Province of

                                     - 3 -

<PAGE>

Alberta and the federal laws of Canada therein applicable to contracts made in
and to be wholly performed in such Province, without prejudice to or limitation
of any other rights or remedies available under the laws of any jurisdiction
where property or assets of the Borrower may be found.

      SECTION 6.2 CONSENT TO JURISDICTION

      6.2.1 The Borrower hereby irrevocably submits to the jurisdiction of any
            Alberta court sitting in Calgary in any action or proceeding arising
            out of or relating to this Agreement and the Security Documents and
            hereby irrevocably agrees that all claims in respect of any such
            action or proceeding may be heard and determined in such Alberta
            court. The Borrower hereby consents to service upon it at its
            address set out in Section 18.2 of the Credit Agreement of copies of
            the statement of claim and any process issued in respect of any such
            action or proceeding. The Borrower agrees that a final judgment in
            any such action or proceeding shall be conclusive and may be
            enforced in other jurisdictions by suit on the judgment or in any
            other manner provided by law.

      6.2.2 Nothing in this Section shall affect the right of the Bank to serve
            legal process in any other manner permitted by law or affect the
            right of the Bank to bring any action or proceeding against the
            Borrower or its property in the courts of other jurisdictions.

      SECTION 6.3 BENEFIT OF THE AGREEMENT

      This Agreement shall enure to the benefit of and be binding upon the
Borrower and the Bank, and their respective successors and permitted assigns.

      SECTION 6.4 SEVERABILITY

      Any provision of this Agreement which is prohibited or unenforceable in
any jurisdiction shall not invalidate the remaining provisions hereof and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

      SECTION 6.5 AMENDMENTS AND WAIVERS

      Except as otherwise specifically provided herein, any provision of this
Agreement may be amended only by the Borrower and the Bank in writing and may be
waived only if the Bank so agrees in writing. Any such waiver and any consent by
the Bank under any provision of this Agreement may be given subject to any
conditions thought fit by the Bank. Any waiver or consent shall be effective
only in the instance and for the purpose for which it is given.

                                     - 4 -

<PAGE>

      SECTION 6.6 BINDING EFFECT

      This Agreement shall become effective when it shall have been executed by
the Borrower and the Bank and thereafter shall be binding upon and enure to the
benefit of the Borrower and the Bank and their respective successors and
assigns. The Borrower shall not assign its rights and obligations hereunder or
any interest herein without the prior consent of all the Bank.

      SECTION 6.7 TIME OF THE ESSENCE

      Time shall be of the essence of this Agreement.

      SECTION 6.8 COUNTERPARTS

      This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original and all of which taken together shall be
deemed to constitute one and the same instrument and it shall not be necessary
in making proof of this Agreement to produce or account for more than one such
counterpart.

      IN WITNESS WHEREOF the Parties hereto have duly executed this Agreement as
of the date first above written.

TELVENT CANADA LTD.                  LASALLE BUSINESS CREDIT, A DIVISION OF ABN
                                     AMRO BANK N.V., CANADA BRANCH

/s/ Steve                            /s/ D. Mack
------------------------             ------------------------
                                     Darcy Mack
/s/ C. Demcoe                        First Vice President
------------------------

                                     /s/ A. Turner
                                     ------------------------
                                     Aaron Turner
                                     First Vice President

                                     - 5 -

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