Document:

stockplan2009.htm

EXHIBIT 10.1

EVEREST RE GROUP, LTD.

2009 STOCK OPTION AND RESTRICTED STOCK PLAN

FOR NON-EMPLOYEE DIRECTORS

	
1.  

	
Purpose of the Plan.  The purpose of the Everest Re Group, Ltd. 2009 Stock Option and Restricted Stock Plan for Non-Employee Directors (the “Plan”) is to aid Everest Re Group, Ltd.,  a Bermuda company (the “Company”) and its shareholders by enhancing the Company’s ability to have experienced and knowledgeable persons who are not employees of the Company or any of its Subsidiaries or affiliates become and remain members of the Board of Directors (the “Board”) of the Company and to provide to such persons the benefits of the incentive inherent in common stock ownership.

	
2.  

	
Stock Subject to Plan.  The stock which may be issued and sold under the Plan shall be the common shares (par value $.01 per share) of the Company, or any security of the Company issued in substitution, exchange or in lieu thereof (“hereinafter “Common Stock”), of a total number not exceeding 37,439 shares, which were available for issuance but not issued under the 1995 Stock Option Plan for Non-Employee Directors, subject to adjustment as provided in Section 10.  The Common Stock to be issued may be either authorized and unissued shares or issued shares acquired by the Company or its Subsidiaries, including shares purchased in the open market or in private transactions. Each stock option granted pursuant to the Plan is referred to herein as an “Option.” Each share of Common Stock granted pursuant to the Plan which is subject to a substantial risk of forfeiture or other restrictions is referred to herein as ”Restricted Stock” (such Options and Restricted Stock collectively referred to herein as “Award” or “Awards”). In the event that Options granted under the Plan terminate or expire without being exercised, or that any shares of Common Stock covered by an Award are not delivered to a Participant or beneficiary because the Award is forfeited or canceled, or that the shares of Common Stock are not delivered because the Award is settled in cash or used to satisfy the applicable tax withholding obligation, then such shares shall be deemed to have not been delivered for purposes of determining the maximum number of shares of Common Stock available for the grant of Awards under the Plan, and such shares shall be available for the grant of Awards under the Plan.

	
3.  

	
Eligibility. Each member of the Board who first becomes a director of the Company after the Effective Date of the Plan shall be eligible to receive an Award in accordance with the terms of the Plan, provided he or she, as of the date of a granting of an Award, (i) is not an Employee of the Company or any of its Subsidiaries, and (ii) is otherwise not eligible for selection to participate in any plan of the Company or any of its Subsidiaries that entitles the Participant therein to acquire securities or derivatives securities of the Company (an “Eligible Director”). “Employee” means officers and employees of the Company or a Subsidiary, and excludes directors who are not also officers or employees of the Company or a Subsidiary.  Each member of the Board who receives an Award hereunder is referred to herein as a “Participant”.  “Subsidiary” means any corporation in which the Company, directly or indirectly, controls 50% or more of the total combined voting power of all classes of such corporation’s common equity.

	
4.  

	
Option or Restricted Share Grants.

	
  

	
(a)

	
Each person who first becomes an Eligible Director of the Company shall, on the date on which he or she is first elected to the Board, by reason of an election and without further action by the Board, be granted as of the close of business on said date, an Award consisting of Restricted Stock, an Option, or some combination thereof, in the manner and subject to the terms and conditions herein provided. To the extent such number of shares remain available for such purpose hereunder, the total number of shares of the Common Stock of the Company subject to such Award shall be equal to $50,000 divided by the Market Price of the Common Stock on said date (provided that, if the number of shares so calculated includes a fractional share, such number shall be rounded down to the next lower whole number).  In the event that the number of shares available for grants under 

 

  

  

  

 

	
  

	
 

	
the Plan is insufficient to make all grants hereby specified on the applicable date, then all those who become entitled to a grant on such date shall share ratably in the number of shares then available for grant under the Plan. The Compensation Committee, as described in Section 11, shall determine the allocation of Awards as between Restricted Stock and Option components.

 

	
  

	
(b)

	
It is understood that the Committee  may, at any time and from time to time after the granting of an Award  hereunder, specify such additional terms, conditions and restrictions with respect to such Award as may be deemed necessary or appropriate to ensure compliance with any and all applicable laws, including, but not limited to, terms, restrictions and conditions for compliance with federal and state securities laws and methods of withholding or providing for the payment of required taxes.

	
5.  

	
Terms and Conditions of Awards.     Each Award  granted under the Plan shall be evidenced by an agreement in such form as the Committee shall prescribe from time to time in accordance with the Plan (“Award Agreement”) and shall comply with the following terms and conditions:

 

	
  

	
(a)

	

All Awards

 

	
1)  

	
An Award Agreement shall be prepared by the Company and delivered to the director as soon as practicable following the date on which the Award is granted.  The Award Agreement shall not be a precondition to the granting of an Award; however, no person shall have any rights under any Award granted under the Plan unless and until the Participant to whom such Award shall have been granted shall have executed and delivered to the Company an Award Agreement.  A fully executed original of the Award Agreement shall be provided to both the Company and the Participant.  By executing an Award Agreement, a Participant shall be deemed to have accepted and consented to any action taken under the Plan by the Board, the Committee or its delegates.

	
2)  

	
Consistent with the terms of the Plan set forth herein, the Award Agreement shall contain a provision describing the treatment of an Award in the event of the death, disability or other termination of a director’s service with the Company, including but not limited to terms relating to the vesting, time for exercise, forfeiture or cancellation of an Award in such circumstances.  Participants who terminate service prior to the satisfaction of applicable conditions and restrictions associated with their Award may be entitled to such Award, as and to the extent determined by the Committee.

	
3)  

	
The Award Agreement shall contain a provision that a Participant shall have no rights as a shareholder with respect to any Common Stock covered by an Award until the date the Participant becomes the holder of record.  Except as provided in Section 10 hereof, no adjustment shall be made for dividends or other rights, unless the Award Agreement specifically requires such adjustment.

	
4)  

	
Options while vested or unvested, and Restricted Stock, while unvested, shall not be assignable or transferable by the director otherwise than by will or the laws of descent and distribution, and shall be exercisable during the director’s lifetime only by the director or his or her guardian or legal representative.

	
5)  

	
An Award Agreement may include such other terms as the Committee may determine as necessary and appropriate to effectuate an Award to the director.

 

	
  

	
(b)

	

Option Awards

 

	
1)  

	
All Options shall be nonstatutory stock options not intended to qualify as stock options entitled to special tax treatment under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”).

  

  

  

	
2)  

	
The Option exercise price shall be the fair market value of the Common Stock on the date the Option is granted (the “Market Price”),  which shall be the average of the highest and lowest sale prices of the Common Stock on the date of grant as reported on the New York Stock Exchange Composite Transactions Tape (or such other exchange, if any, on which the Common Stock is traded) or, if no sale of the Common Stock is reported for such date, on the next day for which there is a reported sale.  In no event shall the fair market value be less than the prevailing par value of a Common Stock to be issued under the Plan.

 

	
3)  

	
Each Option shall be subject to the following restrictions on exercise:

	
(i)  

	
The Option is not immediately exercisable.  Except in the event of the Participant’s death, an Option shall not be exercisable, in whole or in part, prior to the expiration of one (1) year from the date of grant.  In no event shall an Option be exercisable after the expiration of ten years from the date the Option was granted.  To the extent that an Option is not exercised within the ten-year period of exercisability, it shall expire as to the then unexercised part.

	
(ii)  

	
Subject to Sections 5(b)(3(i)) and 7 and 8, Options shall vest in accordance with the following schedule:

	
(A)  

	
in the event the date of grant of the Option is the annual general meeting of shareholders of the Company, one-half of the total number of shares of Common Stock covered by the Option (as such number may be adjusted pursuant to the provisions of Section 10) shall become exercisable on the next succeeding annual general meeting of shareholders, and the additional one-half of said initial total number of shares shall become exercisable on the second succeeding annual general meeting of shareholders; or

	
(B)  

	
in the event the date of grant is a date other than the annual general meeting of shareholders, one-half of the total number of shares of Common Stock covered by the Option (as such number may be adjusted pursuant to the provisions of Section 10) shall become exercisable on the first anniversary date of the grant of the Option, and the additional one-half of said initial total number of shares shall become exercisable on the second succeeding anniversary date of the date of grant.

	
(iii)  

	
 An Option shall not be exercisable with respect to a fractional share or with respect to the lesser of fifty (50) shares or the full number of shares then subject to the Option.  If a fractional share shall become subject to an Option by reason of a stock dividend or otherwise, the Participant shall not be entitled to exercise the Option with respect to such fractional share.

	
(iv)  

	
Except as provided in Section 7, an Option shall not be exercisable in whole or in part unless the Participant, at the time the Participant exercises the Option, is, and has been at all times since the date of grant of the Option, an Eligible Director.

	
(v)  

	
Unless the Option Agreement shall otherwise provide, an Option may only be exercised by delivery of written notice of the exercise to the Company specifying the number of shares to be purchased and by making payment in full for the shares of Common Stock being acquired thereunder at the time of exercise (including applicable withholding taxes, if any); such payment shall be made

 

	
(A)  

	
in the United States dollars by check or bank draft, or

 

	
(B)  

	
by tendering to the Company Common Stock shares already owned for at least six (6) months by the person exercising the Option, which may include shares received as the result of a prior exercise of an Option, and having a fair market value equal to the cash exercise price applicable to such Option, such fair market value to be the average of the

 

  

  

  

 

	
 

	
high and low sales prices of a Common Stock share on the date of exercise as reported on the New York Stock Exchange Composite Transactions Tape (or such other exchange, if any, on which the Common Stock is traded), or, if no sale of the Common Stock is reported for such date, on the next preceding day for which there is a reported sale, or

 

	
(C)  

	
by a combination of United States dollars and Common Stock shares as aforesaid, or

 

	
(D)  

	
in accordance with a cashless exercise program under which, if so instructed by the Participant, shares of Common Stock may be issued directly to the Participant’s broker or dealer upon receipt of the purchase price in cash from the broker or dealer.

	
(vi)  

	
If at any time the Committee shall determine, in its discretion, that the listing, registration or qualification of shares upon any national securities exchange or under any state or federal law, or the consent or approval of any governmental regulatory body, is necessary or desirable as a condition of, or in connection with, the sale or purchase of shares hereunder, such Option may not be exercised in whole or in part unless and until such listing, registration, qualification, consent or approval shall have been effected or obtained, or otherwise provided for, free of any conditions not acceptable to the Committee in the exercise of its reasonable judgment.

	
6.  

	
Restricted Stock.     Restricted Stock is Common Stock that is issued to a director and is subject to a substantial risk of forfeiture, other restriction on transfer, or such other restrictions on incidents of ownership as the Committee may determine, where such restrictions will lapse upon the achievement of one or more goals relating to completion of services by the director or other objectives as may be determined by the Committee.  A certificate for the shares of Restricted Stock, which certificate shall be registered in the name of the director, shall bear an appropriate restrictive legend and shall be subject to appropriate stop transfer orders; provided, however, that the certificates representing shares of restricted Stock shall be held in the custody of the Company until the restrictions relating thereto otherwise lapse, and; provided further, that the director shall deliver to the Company a stock power endorsed in blank relating to the shares of Restricted Stock as soon as practicable following the date of the grant.  The period during which Restricted Stock is subject to restrictions may commence prior to the actual transfer of Restricted Stock to the director.

	
7.  

	
Termination of Service.     An Option shall expire upon the termination, for any reason, of the Participant’s directorship with the Company, and shall not be exercisable following the Participant’s date of termination except as follows:

	
(a)  

	
If a director’s service as a member of the Board shall be discontinued for any reason after the completion of such director’s initial elected term of office, each unexpired Option held by the Participant shall, to the extent exercisable on such date, remain exercisable, in whole or in part, for a period of three (3) years following such director’s termination of service as a director of the Company.

	
(b)  

	
Upon termination of service as a director of the Company by reason of death or disability each unexpired Option held by the Participant, or in the case of death, the Participant’s executors, administrators, heirs or distributees, as the case may be, shall become immediately exercisable and shall remain exercisable, in whole or in part, for a period of three (3) years after such termination.  Disability shall mean an inability as determined by the Committee to perform duties and services as a director of the Company by reason of a medically determinable physical or mental impairment, supported by medical evidence, which can be expected to last for a continuous period.

 

	
  

	
In the event any Option is exercised by the executors, administrators, heirs or distributees of the estate of a deceased Participant, the Company shall be under no obligation to issue Common Stock thereunder unless and until the Company is satisfied that the person or persons exercising the

 

  

  

  

 

	
  

	
Option are the duly appointed legal representative of the deceased Participant’s estate or the proper legatees or distributees thereof.

	
  

	
Notwithstanding the foregoing, in no event shall an Option to be exercised after ten (10) years from the date it was granted.

 

	
8.  

	
Change in Control.

	
  

	
(a)

	
Notwithstanding other provisions of the Plan, but subject to Section 7, in the event of a change in control of the Company, in addition to any action authorized by the terms of an Award Agreement, the Board may (i) offer to purchase any outstanding Restricted Stock Award from the director for its fair market value as of the date of the change in control; or (ii) make adjustments or modifications to the outstanding Restricted Stock Awards as the Board deems appropriate to maintain and protect the rights and interests of directors following such change in control, which adjustment or modification may include acceleration of time periods for purposes of vesting, or realizing gain, for any outstanding Restricted Stock Award made pursuant to the Plan. If an Option Award is outstanding on the date of a change in control of the Company, all of the Participant’s then outstanding Options shall immediately become exercisable and each Participant shall have the right within one (1) year after such event to exercise the Option in full notwithstanding any limitation or restriction in any Award Agreement or in the Plan.

 

	
  

	
(b)

	
For purposes of this Section 8, a “change in control” shall be deemed to have occurred if:

	
  

	
(i)

	
A tender offer or exchange offer is made whereby the effect of such offer is to take over and control the affairs of the Company, and such offer is consummated for the ownership of securities of the Company representing twenty-five percent (25%) or more of the combined voting power of the Company’s then outstanding securities.

	
  

	
(ii)

	
The Company is merged or consolidated with another corporation and, as a result of such merger or consolidation, less than seventy-five percent (75%) of the outstanding voting securities of the surviving or resulting corporation shall then be owned in the aggregate by the former shareholders of the Company, other than affiliates within the meaning of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or any party to such merger or consolidation).

	
  

	
(iii)

	
The Company transfers substantially all of its assets to another corporation or entity that is not a wholly owned subsidiary of the Company.

	
  

	
(iv)

	
Any person (as such term is used in Sections 3(a) (9) and 13 (d)(3) of the Exchange Act) is or becomes the beneficial owner, directly or indirectly, of securities of the Company representing twenty-five percent (25%) or more of the combined voting power of the Company’s then outstanding securities, and the effect of such ownership is to take over and control the affairs of the Company.

	
  

	
(v)

	
As the result of a tender offer, merger, consolidation, sale of assets, or contested election, or any combination of such transactions, the persons who were members of the Board immediately before the transaction, cease to constitute at least a majority thereof.

	
9.  

	
Purchase for Investment.

 

	
  

	
(a)

	
Except as hereafter provided, the holder of an Option shall, upon any exercise thereof, execute and deliver to the Company a written statement, in form satisfactory to the Company, in which such holder represents and warrants that such holder is purchasing or acquiring the shares acquired thereunder for such holder’s own account, for investment only and not with a view to the resale or distribution thereof, and represents and agrees that any subsequent offer for sale for distribution of any of such shares shall be made only pursuant to either (i) a registration statement on an appropriate form under

 

  

  

  

 

	
  

	
 

	
the Securities Act of 1933, as amended (the “Act”) which registration statement has become effective and is current with regard to the shares being offered or sold, or (ii) a specific exemption from the registration requirements of the Act, but in claiming such exemption the holder shall, prior to any offer for sale or sale of such shares, obtain a prior favorable written opinion, in form and substance satisfactory to the Company, from counsel for or approved by the Company, as to the applicability of such exemption thereto.  The foregoing restriction shall not apply to (a) issuances by the Company so long as the shares being issued are registered under the Act and a prospectus in respect thereof is current or (b) reofferings of shares by affiliates of the Company (as defined in Rule 405 or any successor rule or regulation promulgated under the Act) if the shares being reoffered are registered under the Act and a prospectus in respect thereof is current.

 

	
  

	

(b)

	
The Company may endorse such legend or legends upon the certificates for shares issued upon exercise of an Option or issued or delivered upon the lapse of restrictions on Restricted Stock granted hereunder and may issue such “stop transfer” instructions to its transfer agent in respect of such shares as, in its discretion, it determines to be necessary or appropriate to prevent a violation of, or to perfect an exemption from, the registration requirements of the Act.

  

	
10.  

	
Adjustment in the Event of Change in Common Stock. In the event of changes in the outstanding Common Stock of the Company by reason of stock dividend, reverse split, subdivision, recapitalization, merger (whether or not the Company is the surviving corporation), consolidation, split-up, combination or exchange of shares, reorganization or liquidation, extraordinary dividend payable in cash or property, and the like, the aggregate number and class of shares available under the Plan, and the number, class and the price of shares of Common Stock subject to outstanding Awards shall be appropriately adjusted by the Board, whose determination shall be conclusive.

 

	
 

	
The existence of the Plan and Awards granted hereunder shall not affect or restrict in any way the right or power of the Board or the shareholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other capital structure of its business, any merger or consolidation of the Company, any issue or bonds, debentures, preferred or prior preference stock ahead of or affecting the Common Stock or the rights thereof, the dissolution or liquidation of the Company or any sale or any part of its assets or business, or any other corporate act or proceeding.

	
11.  

	
Administration. The Plan shall be administered by the Board or a committee thereof (the “Committee”), which shall initially be the full Board.  The full Board shall remain as the Committee until such time, and times, as the Board, designates a lesser number of Board members to serve as the Committee, which Committee shall have three or more persons that are “non-employee directors” within the meaning of Rule 16B-3 promulgated under the Exchange Act.  The Committee shall have all the powers vested in it by the terms of the Plan, such powers to include authority (within the limitations described herein) to prescribe the form of all Award  Agreements.  The Committee shall, subject to the provisions of the Plan, have the power to construe the Plan, to determine all questions arising thereunder and to adopt and amend such rules and regulations for the administration of the Plan as it may deem desirable.  Any decision of the Committee in the administration of the Plan, as described herein, shall be final and conclusive.  In the event of a conflict between the Award Agreement and this Plan, the terms of this Plan shall govern. The Committee may act only by a majority of its members in office, except that the members thereof may authorize any one or more of their number or the secretary or any other officer of the Company to execute and deliver documents on behalf of the Committee.  No member of the Committee shall be liable for anything done or omitted to be done by such member or by any other member of the Committee in connection with the Plan, except as may expressly provided by statute.  Notwithstanding the foregoing, the Compensation Committee of the Board (or, if the Compensation Committee does not consist of three or more persons who constitute “non-employee directors” within the meaning of Rule 16b-3 promulgated under the Exchange Act, then the Committee described above) shall have the authority to determine the allocation of Awards as between Restricted Stock and Option components as contemplated by Section 4(a). Each of the Committee and the Compensation Committee shall have such additional authority delegated to it by the terms of the Plan or by the Board.  The determination of the Committee and the Compensation Committee on matters within such committee’s authority, whether by the terms of the Plan or by delegation of the Board, shall 

 

  

  

  

 

	
  

	
be conclusive and binding on the Company and all other persons.  If the Committee or the Compensation Committee does not exist, or for any other reason determined by the Board, the Board may take any action under the Plan that would otherwise be the responsibility of the Committee or the Compensation Committee.

 

	
  

	
Except to the extent prohibited by applicable law or the applicable rules of the stock exchange, the Committee may delegate to the officers or employees of the Company and its Subsidiaries the authority to execute and deliver such instruments and documents, to do all such acts and things, and to take all such other steps deemed necessary, advisable or convenient for the effective administration of the plan in accordance with its terms and purpose, except that the Committee may not delegate any discretionary authority with respect to substantive decisions or functions regarding the Plan or Awards thereunder, including but not limited to, decisions regarding the timing, eligibility, pricing, amount or other material terms of such Awards.  Any such delegation may be revoked by the Committee at any time.

 

	
12.  

	
Miscellaneous Provisions.

	
  

	
(a)

	
Except as expressly provided for in the Plan, no director or other person shall have any claim or right to be granted an Award under the Plan.  Neither the Plan nor any action taken hereunder shall be construed as a contract or give any Eligible Director any right to be retained in the service of the Company as a director or otherwise.

	
  

	
(b)

	
A director’s rights and interest under the Plan may not be assigned or transferred in whole or in part either directly or by operation of law or otherwise (except in the event of an director’s death, by will or the laws of descent and distribution), including, but not by way of limitation, execution, levy, garnishment, attachment, pledge, bankruptcy or in any other manner, and no such right or interest of any Participant in the Plan shall be subject to any obligation or liability of such Participant.

 

	
  

	
(c)

	
The expenses of the Plan shall be borne by the Company.

 

	
(d)   

	
The Plan shall be unfunded.  Neither the Company, the Board, the Committee, nor the Compensation Committee shall be required to establish any special or separate fund or to make any other segregation of assets to assure the issuance of shares upon exercise of any Award under the Plan and issuance of shares upon exercise of Awards shall be subordinate to the claims of the Company’s general creditors.  Proceeds from the sale of shares pursuant to Options however shall constitute general funds of the Company.  Neither the Company, a Subsidiary, the Board, the Committee, nor the Compensation Committee shall be deemed to be a trustee of any amounts to be paid under the Plan.

	
  

	
(e)

	
By accepting any Award or other benefit under the Plan, each Participant and each person claiming under or through such person shall be conclusively deemed to have indicated his acceptance and ratification, and consent to, any action taken under the Plan by the Company, the Board, the Committee or the Compensation Committee.

	
  

	
(f)

	
A Participant shall have no voting rights or other rights of shareholders with respect to shares which are subject to an Option, nor shall cash dividends accrue or be payable with respect to any such shares.  A Participant shall have only those voting rights or other rights of shareholders with respect to shares of Restricted Stock as determined by the Committee and as set forth in the Award Agreement evidencing the grant of Restricted Stock.

	
  

	
(g)

	
Notwithstanding any other provision of the Plan, the Company shall have no obligation to grant an Award or make any other distribution or take any other action under the Plan unless such grant or action would comply with all applicable laws (including, without limitation, the requirements of the Exchange Act) and the applicable requirements of any securities exchange or similar entity.

  

  

  

	
13.  

	
Amendment or Discontinuance.  The Board may at any time and from time to time in any respect, amend, modify or terminate the Plan; provided, however, that, solely to  the extent necessary to comply with Rule 16b-3 or other applicable law (i) the Board may not act more than once every six months to amend the provisions of the Plan relating to the determination of the amount, price or timing of any grant under the Plan; and (ii) the approval of the Company’s shareholders will be required for any amendment that (a) changes the class of persons eligible for the grants, (b) increases (other than as permitted in Section 10 hereof) the maximum number of shares of Common Stock subject to grant under the Plan, as specified in Section 2 hereof, (c) materially increases the benefits accruing to Participants under the Plan, within the meaning of Rule 16b-3. Any such approval shall be by the affirmative vote of the shareholders of the Company present, or represented, and entitled to vote at a meeting duly held in accordance with applicable Bermuda law and the Memorandum of Association and By-Laws of the Company.  Notwithstanding the foregoing, no amendment or modification of the Plan shall in any manner affect any grant theretofore granted without the consent of the Participant or the permitted transferee of the grant.

	
14.  

	
Limits of Liability.

	
  

	
(a)

	
Any liability of the Company to any Participant with respect to an Award shall be based solely upon contractual obligations, if any, created by the Plan and the Participant’s Award Agreement.

	
  

	
(b)

	
Neither the Company nor any member of the Board, or the Committee or Compensation Committee, nor any other person participating in any determination of any question under the Plan, or in the interpretation, administration or application of the Plan, shall have any liability to any party for any action taken or not taken in connection with the Plan, except as may expressly be provided by statute.

	
15.  

	
Effective Date and Duration of the Plan. The Board adopted the Plan subject to the approval of shareholders of the Company at the 2009 Annual General Meeting of its Shareholders on May 13, 2009.  The date of such shareholder approval shall be the “Effective Date” of the Plan. This Plan shall terminate upon the earlier of the following dates or events to occur:

 

	
  

	
(a)

	
upon the adoption of a resolution of the Board terminating the Plan; or

 

	
  

	
(b)

	
the date all shares of Common Stock subject to the Plan shall have been purchased (in the case of Options) or all restrictions have lapsed (in the case of Restricted Stock) according to the Plan’s provisions; or

 

	
  

	
(c)

	
ten years from the Effective Date of the Plan.

 

No such termination of this Plan shall affect the rights of any Participant hereunder and all Awards previously granted hereunder shall continue in force and in operation after termination of the Plan, except as they may be otherwise terminated in accordance with the terms of the Plan.stockincentiveplan2010.htm

 

EXHIBIT 10.2

 

EVEREST RE GROUP, LTD.

2010 STOCK INCENTIVE PLAN

Section 1.   Establishment and Purpose

The purpose of the Everest Re Group, Ltd. 2010 Stock Incentive Plan (the “Plan”) is to benefit the Corporation, its Subsidiaries, and its shareholders by encouraging high levels of performance by individuals who are key to the success of the Corporation and its Subsidiaries and to enable the Corporation and its Subsidiaries to attract, motivate and retain talented and experienced individuals essential to their success. This is to be accomplished by providing such eligible individuals an opportunity to obtain or increase their proprietary interest in the Corporation’s performance and by providing such individuals with additional incentives to remain with the Corporation and its Subsidiaries.

Section 2.   Definitions

The following terms, used herein, shall have the meaning specified:

	
(a)  

	
“Award” means any award or benefit granted under the terms of the Plan.

	
(b)  

	
“Award Agreement” means an agreement described in Section 6 hereof entered into between the Corporation and a Participant, setting forth the terms and conditions applicable to the Award granted to the Participant.

	
(c)  

	
“Board of Directors” means the Board of Directors of the Corporation as it may be comprised from time to time.

	
(d)  

	
“Code” means the Internal Revenue Code of 1986, and any successor statute, and the regulations promulgated thereunder, as it or they may be amended from time to time.

	
(e)  

	
“Committee” means the Committee as defined in Section 8.

	
(f)  

	
“Corporation” means Everest Re Group, Ltd., and any successor corporation.

	
(g)  

	
“Effective Date” means the Effective Date as defined in Section 15.

	
(h)  

	
“Employee” means officers and other key employees of the Corporation or a Subsidiary, and excludes directors who are not also employees of the Corporation or a Subsidiary. “Employee” includes consultants and advisors that provide bona fide services to the Corporation or a Subsidiary, provided that such services are not in connection with the offer or sale of securities of the Corporation or a Subsidiary in a capital-raising transaction.

	
  (i)  

	
“Exchange Act” means the Securities Exchange Act of 1934, and any successor statute, as it may be amended from time to time.

	
(j)  

	
“Exercise Price” means a purchase or exercise price established by the Committee at the time an Option or an SAR is granted.

 

  

 

  

 

	
(k)  

	
“Fair Market Value” means, unless otherwise provided in the Award Agreement, the average of the highest and lowest sale price of the Stock as reported on the Composite Transaction Tape of the New York Stock Exchange (or on such other exchange, if any, on which the Stock is traded) on the relevant date, or if no sale of the Stock is reported for such date, the next preceding day for which there is a reported sale. If the Stock is not traded on any such exchange, Fair Market Value shall be as determined in the Award Agreement, or as may be determined in good faith by the Committee.

	
(l)   

	
“Incentive Stock Option” means an option that is intended to satisfy the requirements applicable to an “incentive stock option” described in Section 422(b) of the Code.

	
(m)   

	
“Insider” means any person who is subject to “Section 16.”

	
(n)   

	
“Option” means an Award granted under the Plan that entitles the Participant, for a certain period of time, to purchase shares of Stock at an Exercise Price established by the Committee.

	
(o)   

	
“Participant” means any Employee who has been granted an Award pursuant to this Plan.

	
(p)   

	
“Section 16” means Section 16 of the Exchange Act, and any successor statutory provision, and the rules promulgated thereunder, as it or they may be amended from time to time.

	
(q)   

	
“Stock” means shares of common stock  (class of common shares) of the Corporation, par value $.01 per share, or any security of the Corporation issued in substitution, exchange or lieu thereof.

	
(r)   

	
“Subsidiary” means any corporation in which the Corporation, directly or indirectly, controls 50% or more of the total combined voting power of all classes of such corporation’s stock.

	
(s)   

	
“Ten-percent Shareholder” means any person who owns, directly or indirectly, on the relevant date securities representing more than ten percent (10%) of the total combined voting power of all classes of stock of the Corporation or of its parent or Subsidiary. For purposes of applying the foregoing ten percent (10%) limitation, the rules of Code Section 424(d) shall apply.

Section 3.   Eligibility

Persons eligible for Awards shall consist of Employees who hold positions of significant responsibilities with the Corporation and/or a Subsidiary or whose performance or potential contribution, in the judgment of the Committee, will benefit the future success of the Corporation and/or a Subsidiary.

  

 

 

Section 4.   Awards

The Committee may grant any of the types of Awards enumerated in paragraphs (a) through (d) of this Section 4, either singly, in tandem or in combination with other types of Awards, as the Committee may in its sole discretion determine:

	
                     (a)    

	
Non-qualified Stock Options. The grant of an Option entitles the Participant to purchase a specific number of shares of Stock at an Exercise Price established by the Committee. Any Option granted under this Section 4 may either be an incentive stock option or a non-qualified stock option. A Non-qualified Stock Option is an Option that is not intended to be an “incentive stock option” as described in section 422(b) of the Code. All Non-qualified Stock Options granted under the Plan shall expire not later than ten (10) years after grant, and shall have an Exercise Price equal to 100% of the Fair Market Value of the Stock on the date the option is granted.

	
  

	
(b)

	
Incentive Stock Options. An Incentive Stock Option is an Option that is intended to satisfy the requirements applicable to an “incentive stock option” as described in section 422(b) of the Code. All Incentive Stock Options granted under the Plan shall be subject to the following:

	
  

	
(i)

	
The aggregate fair market value (determined at the time of the grant of the Award) of the shares of Stock subject to Incentive Stock Options which are exercisable by one person for the first time during a particular calendar year shall not exceed $100,000.

	
  

	
(ii)

	
No Incentive Stock Option may be granted under this Plan on or after the tenth anniversary of the date this Plan is adopted, or the date this Plan is approved by shareholders, whichever is earlier.

	
  

	
(iii)

	
No Incentive Stock Option may be exercisable more than:

	
A.  

	
in the case of an Employee who is not a Ten-Percent Shareholder on the date that the option is granted, ten (10) years after the date the option is granted, and

	
B.  

	
in the case of an Employee who is a Ten-Percent Shareholder on the date the option is granted, five (5) years after the date the option is granted.

	
  

	
(iv)

	
The exercise price of any Incentive Stock Option shall be no less than:

	
A.  

	
in the case of an Employee who is not a Ten-Percent Shareholder on the date that the option is granted, the Fair Market Value of the Stock subject to the option on such date; and

	
B.  

	
in the case of an Employee who is a Ten-Percent Shareholder on the date that the option is granted, 110% of the Fair Market Value of the Stock subject to the option on such date.

	
  

	
(v)

	
No Incentive Stock Option shall be granted to an individual who is an Employee by virtue of being a consultant or advisor.

 

  

 

 

	
(c)  

	
Stock Appreciation Rights. A stock appreciation right (“SAR”) is a right to receive, upon surrender of the right, an amount payable in cash or in shares of Stock, which may be Restricted Stock.

	
  

	
(i)

	
The amount payable with respect to each SAR shall be equal in value to the excess, if any, of the Fair Market Value of a specified number of shares of Stock on the exercise date (or on such other date or dates set forth in the Award Agreement) over the Exercise Price relative to such shares, as may be established by the Committee.

	
  

	
(ii)

	
In the case of an SAR granted with respect to an Incentive Stock Option to an Employee who is a Ten-Percent Shareholder on the date of such Award, the Exercise Price shall not be less than 110% of the Fair Market Value of a share of Stock on the date the Award is made.

	
  

	
(d)

	
Restricted Stock and Stock Awards.

	
  

	
(i)

	
Restricted Stock is Stock that is issued to a Participant and is subject to a substantial risk of forfeiture or other restrictions on transfer and/or such other restrictions on incidents of ownership as the Committee may determine, where such restrictions will lapse upon achievement of one or more goals relating to the completion of services by the Participant or achievement of other objectives as may be determined by the Committee. A certificate for the shares of Restricted Stock, which certificate shall be registered in the name of the Participant, shall bear an appropriate restrictive legend and shall be subject to appropriate stop-transfer orders; provided, that the certificates representing shares of Restricted Stock shall be held in custody by the Corporation until the restrictions relating thereto otherwise lapse, and; provided further, that the Participant shall deliver to the Corporation a stock power endorsed in blank relating to the Restricted Stock as soon as practicable following the date of grant.

	
  

	
(ii)

	
Stock Awards shall be any compensation grant to a Participant that provides for payment to a Participant in shares of Stock.

	
  

	
(iii)

	
Restricted Stock and Stock Awards may be issued at the time of grant, upon the exercise of an SAR, Option or other right, as payment of a bonus, as payment of any other compensation obligations, upon the occurrence of a future event, at a specified time in the future or as otherwise determined by the Committee. The period during which Restricted Stock is subject to restrictions may commence prior to the actual transfer of Restricted Stock to a Participant if so specified in the Award Agreement.

	
  

	
(e)

	
Payment of Option Exercise Price. The payment of the Exercise Price of an Option granted under this Section 4 shall be subject to the following:

	
  

	
(i)

	
Subject to the following provisions of this subsection 4(e), the full Exercise Price for shares of stock purchased on the exercise of an Option shall be paid at the time of such exercise.

 

  

 

 

 

	
  

	
(ii)

	
The Exercise Price of the Stock subject to the Option may be paid in cash. At the discretion of the Committee, the purchase price may also be paid by the tender, by actual delivery of shares or by attestation, of Stock owned for at least six months by the holder of the option (the value of such Stock shall be its Fair Market Value on the date of exercise), through a combination of Stock and cash, or through such other means as the Committee determines are consistent with the Plan’s purpose and applicable law. No fractional shares of Stock will be issued or accepted.

	
  

	
(iii)

	
In accordance with a cashless exercise program under which, if so instructed by the Participant, shares of Common Stock may be issued directly to the Participant’s broker or dealer upon receipt of the purchase price in cash from the broker or dealer.

Section 5.   Shares of Stock and Other Stock-Based Awards Available Under Plan

 

	
  

	
(a)

	

The Stock which may be issued pursuant to an Award under the Plan may be shares currently authorized but unissued or currently held or subsequently acquired by the Corporation as treasury shares, including shares purchased in the open market or in private transactions.

 

	
  

	
(b)

	

Subject to the adjustment provisions of Section 9 hereof, the maximum number of shares that may be delivered to Participants and their beneficiaries under the Plan shall be equal to 4,000,000 shares of Stock.

	 	
(c)

	

Subject to the adjustment provisions of Section 9 hereof, the following additional maximums are imposed on the Plan:

 

	
  

	
(i)

	
The maximum number of shares of Stock that may be issued pursuant to Options intended to be Incentive Stock Options shall be 1,000,000 shares.

	
  

	
(ii)

	
The aggregate maximum number of shares of Stock that may be covered by Awards granted to any one individual pursuant to Section 4 relating to Options and SARs, shall be 350,000 shares during any one calendar-year period. Notwithstanding the preceding sentence, or any other provision of the Plan, the Committee, in its sole discretion, may make Awards under the Plan which are not intended to satisfy the “performance-based” compensation exception of Section 162(m) of the Code and regulations thereunder, which Awards shall not be subject to the individual limits set forth in the preceding sentence.

 

	 	
(d)

	

To the extent that any shares of Stock covered by an Award are not delivered to a Participant or beneficiary because the Award is forfeited or canceled, or the shares of Stock are not delivered because the Award is settled in cash or used to satisfy the applicable tax withholding obligation, such shares shall be deemed to not have been delivered for purposes of determining the maximum number of shares of Stock available for delivery under the Plan.

 

	 	
(e)

	

If the Exercise Price of any Option granted under the Plan is satisfied by tendering shares of Stock to the Corporation (by either actual delivery or by attestation), only the number of shares of Stock issued net of the shares of Stock tender shall be deemed delivered for purposes of determining the maximum number of shares of Stock available for delivery under the Plan.

  

 

 

 

 

	 	
(f)

	

For the purposes of computing the total number of shares of Stock granted under the Plan, the following rules shall apply to Awards payable in Stock:

 

	
  

	
(i)

	
each Option shall be deemed to be the equivalent of the maximum number of shares of Stock that may be issued upon exercise of the particular Option;

	
  

	
(ii)

	
where one or more types of Awards (both of which are payable in Stock) are granted in tandem with each other, the number of shares of Stock shall be deemed to be the greater of the number of shares that would be counted if one or the other Award alone was outstanding.

Additional rules for determining the number of shares of Stock granted under the Plan may be adopted by the Committee, as it deems necessary and appropriate.

Section 6.   Award Agreements

Each Award under the Plan shall be evidenced by an Award Agreement setting forth the number of shares of Stock and/or SARs subject to the Award and such other terms and conditions applicable to the Award, as determined by the Committee, not inconsistent with the terms of the Plan. The Committee may, but need not require that the Participant sign a copy of such document. Such document is referred to as the Award Agreement regardless of whether any Participant signature is required. In the event that the Committee requires that the Participant execute and return the Award Agreement, no person shall have any rights under the Award unless and until the Participant to whom such Award shall have been granted shall have executed and delivered to the Company the Award Agreement; provided, however, the execution and delivery of such an Award Agreement shall not be a precondition to the granting of such Award. By executing the Award Agreement, or submitting an option exercise form (whether or not the Award Agreement required execution) a Participant shall be deemed to have accepted and consented to any action taken under the Plan by the Committee, the Board of Directors or their delegates.

 

	 	
(a)

	

Award Agreements shall include the following terms:

	
  

	
(i)

	
Non-assignability. Unless otherwise specifically provided for by the Committee, a provision that no Award shall be assignable or transferable except by will or by the laws of descent and distribution and that, during the lifetime of a Participant, the Award shall be exercised, if exercisable, only by such Participant or by his or her guardian or legal representative.

	
  

	
(ii)

	
Termination of Employment. A provision describing the treatment of an Award in the event of the retirement, disability, death or other termination of a Participant’s employment with the Corporation or a Subsidiary, including but not limited to terms relating to the vesting, time for exercise, forfeiture or cancellation of an Award in such circumstances. Participants who terminate employment prior to the satisfaction of applicable conditions and restrictions associated with their Award(s) may be entitled to such Award(s) as and to the extent determined by the Committee. A provision that for purposes of the Plan (A) a transfer of an Employee from the Corporation to a Subsidiary or affiliate of the Corporation, whether or not incorporated, or vice versa, or from one Subsidiary or affiliate of the Corporation to another, and (B) a leave of absence, duly authorized in writing by the Corporation, shall not be deemed a termination of employment, except as otherwise required by applicable law, as determined by the Committee, in order to preserve the status of an option as an Incentive Stock Option.

 

  

 

 

 

	
  

	
(iii)

	
Rights as a Shareholder. A provision that a Participant shall have no rights as a shareholder with respect to any Stock covered by an Award until the date the Participant becomes the holder of record. Except as provided in Section 9 hereof, no adjustment shall be made for dividends or other rights, unless the Award Agreement specifically requires such adjustment.

 

	 	
(iv)

	

Withholding. A provision requiring the withholding of applicable taxes required by law from all amounts paid to the holder of an Award in satisfaction of such Award. In the case of an Award paid in cash, the withholding obligation shall be satisfied by withholding the applicable amount and paying the net amount in cash to the Participant. In the case of Awards paid in shares of Stock, a Participant may satisfy the withholding obligation by paying the amount of any taxes in cash or, with the approval of the Committee, shares of Stock may be deducted from the payment to satisfy the obligation in full or in part. The amount of the withholding and the number of shares of Stock to be deducted shall be determined by the Committee with reference to the Fair Market Value of the Stock when the withholding is required to be made; provided, however, the amount of Stock so deducted shall not exceed the minimum required withholding obligation. 

 

	
  

	
(v)

	
Treatment of Option. Each Award of an option shall state whether or not it is intended to constitute an Incentive Stock Option.

 

	
  

	
(vi)

	
Minimum Exercise. No option may be exercised for less than the lesser of 50 shares of Stock or the full number of shares of Stock for which the option is then exercisable.

 

	 	
(b)

	

Other Terms.  Award Agreements may include such other terms as the Committee may determine are necessary, and appropriate to effect an Award to the Participant, including, but not limited to, the term of the Award, vesting provisions, any requirements for continued employment with the Corporation or a Subsidiary, any other restrictions or conditions (including performance requirements) on the Award and the method by which restrictions or conditions lapse, the effect on the Award of  a change in control of the Corporation or an employing Subsidiary, the price, amount or value of Awards, and the terms, if any, pursuant to which a Participant may elect to defer the receipt of cash or Stock under an Award.

 

Section 7.   Amendment and Termination

The Board of Directors may at any time amend, suspend or discontinue the Plan, in whole or in part; provided that no amendment by the Board of Directors shall increase any limitations set forth in Section 5 nor shall it permit any options to be awarded at exercise prices below Fair Market Value. The Committee may at any time alter or amend any or all Award Agreements under the Plan to the extent permitted by law, but no such alteration or amendment shall impair the rights of any holder of an Award without the holder’s consent. Adjustments pursuant to Section 9 shall not be subject to the foregoing limitations of this Section 7.

Section 8.   Administration

	
  

	
(a)

	
The Plan and all Awards granted pursuant thereto shall be administered by a committee of the Board of Directors (the “Committee”), which Committee shall consist of not less than two (2) members of such Board of Directors who are not employees of the Corporation or any Subsidiary. The members of the Committee shall be designated by the Board of Directors. If the Committee does not exist, or for any other reason determined by the Board, the Board may take any action under the Plan that would otherwise be the responsibility of the Committee.

  

 

 

	
  

	
(b)

	
The Committee shall have the authority and discretion to interpret and administer the Plan, to establish, amend and rescind any rules and regulations relating to the Plan and to determine the terms and provisions of any Award Agreement made pursuant to the Plan. All questions of interpretation with respect to the Plan, the number of shares of Stock or other security, SARs, or rights granted and the terms of any Award Agreements, including the timing, pricing, and amounts of Awards, shall be determined by the Committee, and its determination shall be final and conclusive upon all parties in interest. In the event of any conflict between an Award Agreement and this Plan, the terms of this Plan shall govern.

	
  

	
(c)

	
Except to the extent prohibited by applicable law or the applicable rules of a stock exchange, the Committee may delegate to the officers or employees of the Corporation and its Subsidiaries the authority to execute and deliver such instruments and documents, to do all such acts and things, and to take all such other steps deemed necessary, advisable or convenient for the effective administration of the Plan in accordance with its terms and purpose, except that the Committee may not delegate any discretionary authority with respect to substantive decisions or functions regarding the Plan or Awards thereunder as these relate to Insiders, including, but not limited to, decisions regarding the timing, eligibility, pricing, amount or other material terms of such Awards. Any such delegation may be revoked by the Committee at any time.

	
  

	
(d)

	
To the extent that the Committee determines that the restrictions imposed by the Plan preclude the achievement of the material purposes of the Awards in jurisdictions outside the United States, the Committee will have the authority and discretion to modify those restrictions as the Committee determines to be necessary or appropriate to conform to applicable requirements or practices of jurisdictions outside of the United States.

Section 9.   Adjustment Provisions

	
  

	
(a)

	
In the event of any change in the outstanding shares of Stock by reason of a stock dividend or split, recapitalization, merger or consolidation (whether or not the Corporation is a surviving corporation), reorganization, combination or exchange of shares or other similar corporate changes or an extraordinary dividend paid in cash or property, the number of shares of Stock (or other securities) then remaining subject to this Plan, and the maximum number of shares that may be issued to anyone pursuant to this Plan, including those that are then covered by outstanding Awards, shall (i) in the event of an increase in the number of outstanding shares, be proportionately increased and the price for each share then covered by an outstanding Award shall be proportionately reduced, and (ii) in the event of a reduction in the number of outstanding shares, be proportionately reduced and the price for each share then covered by an outstanding Award shall be proportionately increased.

	
  

	
(b)

	
In the event the adjustments described in clauses (i) and (ii) of paragraph (a) of this Section 9 are inadequate to ensure equitable treatment of any Award holder, then, to the extent permissible under applicable law, the Committee shall make any further adjustments as it deems necessary to ensure equitable treatment of any holder of an Award as the result of any transaction affecting the securities subject to the Plan or as is required or authorized under the terms of any applicable Award Agreement.

  

 

 

	
  

	
(c)

	
The existence of the Plan and the Awards granted hereunder shall not affect or restrict in any way the right or power of the Board of Directors or the shareholders of the Corporation to make or authorize any adjustment, recapitalization, reorganization or other capital structure of its business, any merger or consolidation of the Corporation, any issue of bonds, debentures, preferred or prior preference stock ahead of or affecting the Stock or the rights thereof, the dissolution or liquidation of the Corporation or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding.

Section 10.   Change of Control

 

	 	
(a)

	

In the event of a “Change in Control” of the Corporation (defined below), in addition to any action required or authorized by the terms of an Award Agreement, the Committee may, in its sole discretion, recommend that the Board of Directors take any of the following actions as a result, or in anticipation, of any such event to assure fair and equitable treatment of Participants:

 

	 	
(i)

	

accelerate time periods for purposes of vesting in, or realizing gain from, any outstanding Award made pursuant to this Plan;

 

	
  

	
(ii)

	
offer to purchase any outstanding Award made pursuant to this Plan from the holder for its equivalent cash value, as determined by the Committee, as of the date of the change of control; or

	
  

	
(iii)

	
make adjustments or modifications to outstanding Awards as the Committee deems appropriate to maintain and protect the rights and interests of Participants following such change of control.

Any such action approved by the Board of Directors shall be conclusive and binding on the Corporation and all Participants.

 

	 	
(b)

	

For purposes of this Section, a Change of Control shall mean the occurrence of any of the following:

 

	 	
(i)

	

A tender offer or exchange offer whereby the effect of such offer is to take over and control the affairs of the Corporation, and such offer is consummated for the ownership of securities of the Corporation representing twenty-five percent (25%) or more of the combined voting power of the Corporation’s then outstanding voting securities.

 

	
  

	
(ii)

	
The Corporation is merged or consolidated with another corporation and, as a result of such merger or consolidation, less than seventy-five percent (75%) of the outstanding voting securities of the surviving or resulting corporation shall then be owned in the aggregate by the former shareholders of the Corporation, other than affiliates within the meaning of the Exchange Act or any party to such merger or consolidation.

 

  

 

 

	
  

	
(iii)

	
The Corporation transfers substantially all of its assets to another corporation or entity that is not a wholly-owned subsidiary of the Corporation.

	
  

	
(iv)

	
Any person (as such term is used in Sections 3(a)(9) and 13(d)(3) of the Exchange Act) is or becomes the beneficial owner, directly or indirectly, of securities of the Corporation representing twenty-five percent (25%) or more of the combined voting power of the Corporation’s then outstanding securities, and the effect of such ownership is to take over and control the affairs of the Corporation.

	
  

	
(v)

	
As the result of a tender offer, merger, consolidation, sale of assets, or contested election, or any combination of such transactions, the persons who were members of the Board of Directors of the Corporation immediately before the transaction, cease to constitute at least a majority thereof.

Section 11.   General Restrictions

Delivery of shares of Stock or other amounts under the Plan shall be subject to the following:

	
  

	
(a)

	
Notwithstanding any other provision of the Plan, the Corporation shall have no liability to deliver any shares of Stock under the Plan or make any other distribution of benefits under the Plan unless such delivery or distribution would comply with all applicable laws (including, without limitation, the requirements of the Securities Act of 1933), and the applicable requirements of any securities exchange or similar entity.

	
  

	
(b)

	
To the extent that the Plan provides for issuance of stock certificates to reflect the issuance of shares of Stock, the issuance may be effected on a non-certificated basis, to the extent not prohibited by applicable law or the applicable rules of any stock exchange.

Section 12.   Unfunded Plan

The Plan shall be unfunded. Neither the Corporation, a Subsidiary, nor the Board of Directors shall be required to segregate any assets that may at any time be represented by Awards made pursuant to the Plan. Neither the Corporation, a Subsidiary, the Committee, nor the Board of Directors shall be deemed to be a trustee of any amounts to be paid under the Plan.

Section 13.   Limits of Liability

	
  

	
(a)

	
Any liability of the Corporation or a Subsidiary to any Participant with respect to an Award shall be based solely upon contractual obligations created by the Plan and the Award Agreement.

	
  

	
(b)

	
Neither the Corporation nor a Subsidiary, nor any member of the Board of Directors or of the Committee, nor any other person participating in any determination of any question under the Plan, or in the interpretation, administration or application of the Plan, shall have any liability to any party for any action taken or not taken in good faith under the Plan except as may be expressly provided by statute.

  

 

 

Section 14.   Rights of Employees

	
  

	
(a)

	
Status as an eligible Employee shall not be construed as a commitment that any Award will be made under this Plan to such eligible Employee or to eligible Employees generally.

	
  

	
(b)

	
Nothing contained in this Plan or in any Award Agreement (or in any other documents related to this Plan or to any Award or Award Agreement) shall confer upon any Employee or Participant any right to continue in the employ or other service of the Corporation or a Subsidiary or constitute any contract or limit in any way the right of the Corporation or a Subsidiary to change such person’s compensation or other benefits or to terminate the employment or other service of such person with or without cause.

Section 15.   Duration

The Board of Directors adopted the Plan subject to the approval of the shareholders of the Corporation at the Corporation’s 2010 annual meeting of its shareholders on May 19, 2010. The date of such shareholder approval shall be the “Effective Date” of the Plan. The Plan shall remain in effect until all Awards under the Plan have been exercised or terminated under the terms of the Plan and applicable Award Agreements, provided that Awards under the Plan may only be granted within ten years from the Effective Date of the Plan.

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