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FBL FINANCIAL GROUP, INC.
 
2006 CLASS A COMMON STOCK 
 
COMPENSATION PLAN
 
 
 
Effective Date: May 17, 2006
As Amended through August 19, 2010
 
 
 
 

 

 

FBL FINANCIAL GROUP, INC.
2006 CLASS A COMMON STOCK 
COMPENSATION PLAN
 
 
1.    Purpose.  The purpose of the Plan is to provide additional incentive to those officers, employees, advisors and consultants of the Company and its Subsidiaries whose substantial contributions are essential to the continued growth and success of the Company's business in order to strengthen their commitment to the Company and its Subsidiaries, to motivate them to faithfully and diligently perform their assigned responsibilities and to attract and retain competent and dedicated individuals whose efforts will result in the long-term growth and profitability of the Company.  An additional purpose of the Plan is to build a proprietary interest among the Non-Employee Directors of the Company and its First Tier Subsidiaries and thereby secure for the Company's stockholders the benefits associated with common stock ownership by those who will oversee the Company's future growth and success.  To accomplish such purposes, the Plan provides that the Company may grant Incentive Stock Options, Nonqualified Stock Options, Restricted Stock, Restricted Stock Units, Stock Bonuses  or Stock Appreciation Rights.  The provisions of the Plan are intended to satisfy the requirements of Section 16(b) of the Exchange Act and Internal Revenue Code Section 162(m).
 
2.    Definitions.  For purposes of this Plan:
 
(a)    "Advisor" or "Consultant" means an advisor or consultant who is an independent contractor with respect to the Company or a Subsidiary, and who provides bona fide services (other than in connection with the offer or sale of securities in a capital raising transaction) to the executive officers or Board of Directors with regard to major functions, portions or operations of the Company's business; who is not an employee, officer, director or holder of more than 10% of the outstanding voting securities of the Company, and whose services the Committee determines is of vital importance to the overall success of the Company.
 
(b)    “Agreement” means the written agreement evidencing the grant of an Award  and setting forth the terms and conditions thereof.
 
(c)    “Award” means, individually or collectively, a grant under this Plan of Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units or Stock Bonuses.
 
(d)    “Board” means the Board of Directors of the Company.
 
(e)    “Change in Capitalization” means any increase, reduction, or change or exchange of Shares for a different number or kind of shares or other securities of the Company by reason of a reclassification, recapitalization, merger, consolidation, reorganization, issuance of warrants or rights, stock dividend, stock split or reverse stock split, combination or exchange of Shares, repurchase of Shares, change in corporate structure or otherwise.
 
(f)    “Change in Control” means one of the following events:
 
(i)     any “person” (as defined in Sections 13(d) and 14(d) of the Exchange Act), other than the Company, any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any Subsidiary, or any corporation owned, directly or indirectly, by the stockholders of the Company, in substantially the same proportions as their ownership of stock of the Company, acquires “beneficial ownership” (as defined in rule 13d-3 under the Exchange Act) of securities representing 35% of the combined voting power of the Company; or 
 
(ii)    during any period of not more than two consecutive years, individuals who at the beginning of such period constitute the Board and any new directors (other than any director designated by a person who has entered into an agreement with the company to effect a transaction described in subsections 2(f)(i), 2(f)(iii), or 2(f)(iv) of this Plan) whose election by the Board or nomination for election by the Company's stockholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof; or
 
(iii)    a merger approved by the stockholders of the Company is consummated, other than (A) a merger that would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the 

 

 

surviving entity), in combination with the ownership of any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any Subsidiary, at least 50% of the combined voting power of all classes of stock of the Company or such surviving entity outstanding immediately after such merger or (B) a merger effected to implement a recapitalization of the Company (or similar transaction) in which no person acquires more than 50% of the combined voting power of the Company's then outstanding securities; or
 
(iv)    the stockholders of the Company approve a plan of complete liquidation of the Company or a sale of all or substantially all of the assets of the Company.
 
(g)    “Code” means the Internal Revenue Code of 1986, as amended.
 
(h)    “Committee” means the Management Development and Compensation Committee of the Board or any other committee which may be appointed by the Board to administer the Plan to perform the functions set forth herein.   Any such committee must be comprised entirely of independent directors, as the term “independent” is defined in the rules of the New York Stock Exchange.
 
(i)    “Company” means FBL Financial Group, Inc., an Iowa corporation, or any successor thereto.
 
(j)    “Disability” means the inability, due to illness or injury, to engage in any gainful occupation for which the individual is suited by education, training or experience, which condition continues for at least six (6) months.
 
(k)    “Effective Date of this Plan” shall be the later of May 17, 2006 or the date the Plan is approved by the Stockholders. 
 
(l)    “Eligible Employee” means any officer, employee, advisor or consultant of the Company or a Subsidiary of the Company designated by the Committee as eligible to receive Awards subject to the conditions set forth herein.
 
(m)    “Exchange Act” means the Securities Exchange Act of 1934, as amended.
 
(n)    "Executive Officer" shall mean an officer of the Company who is required to file reports under Section 16 of the Exchange Act.
 
(o)    “Fair Market Value” means the fair market value of the Shares as determined by the Committee in its sole discretion; provided, however, that (A) if the Shares are then admitted to trading on a national securities exchange, the Fair Market Value on any date shall be the last sale price reported for the Shares on such exchange on such date or on the last date preceding such date on which a sale was reported, (B) if the Shares are admitted to quotation on the National Association of Securities Dealers Automated Quotation System (“NASDAQ”) or other comparable quotation system and have been designated as a National Market System (“NMS”) security, the Fair Market Value on any date shall be the last sale price reported for the Shares on such system on such date or on the last day preceding such date on which a sale was reported or (C) if the Shares are admitted to quotation on NASDAQ and have not been designated an NMS security, the Fair Market Value on any date shall be the average of the highest bid and lowest asked prices of the shares on such system on such date.
 
(p)    “First Tier Subsidiary” means a corporation 50% or more of whose stock possessing voting power is owned directly by the Company.
 
(q)    “Incentive Stock Option” means an Option within the meaning of Section 422 of the Code.
 
(r)    “Non-Employee Director” means a member of the Board or a member of the board of directors of a First Tier Subsidiary, who is not an employee of the Company or a Subsidiary.
 
(s)    “Nonqualified Stock Option” means an Option which is not an Incentive Stock Option.
 
(t)    “Option” means an Incentive Stock Option, a Nonqualified Stock Option, or either or both of them, as the context requires.
 
(u)    “Participant” means a person to whom an Award has been granted under the Plan.

 

 

 
(v)    "Period of Restriction" means the period during which the transfer of Shares of Restricted Stock or Restricted Stock Units is restricted in some way (based on the passage of time, the achievement of performance goals, or upon the occurrence of other events as determined by the Committee, at its discretion), and is subject to a substantial risk of forfeiture, as provided in Sections 9 and 10 below.
 
(w)    “Plan” means the FBL Financial Group, Inc. 2006 Class A Common Stock Compensation Plan, as amended from time to time.
 
(x)    "Restricted Stock" means a Stock Award granted to a Participant pursuant to Section 9 below which the Committee has determined should be subject to one or more restrictions on transfer for a specified Period of Restriction.
 
(y)    “Restricted Stock Unit” means a contractual right granted to a Participant under this Plan to receive a Share (or cash equivalent) which the Committee has determined has subject to one or more restrictions or transfer for a specified Period of Restriction.
 
(z)    “Retirement” means termination of employment of a Participant by the Company (other than as a result of death or Disability) if the Participant is (i) at least 55 years of age and has at least ten years of 'credited employment' as defined in the FBL Financial Group, Inc. Retirement Plan, or (ii) is at least 65 years of age.
 
(aa)     “Securities Act” means the Securities Act of 1933, as amended.
 
(bb)    “Shares” means shares of the Class A Common Stock,  without par value  of the Company (including any new, additional or different stock or securities resulting from a Change in Capitalization), as the case may be.
 
(cc)    “Stock Appreciation Right” means a right to receive all or some portion of the increase in the value of Shares as provided in Section 7 hereof.
 
(dd)    "Stock Bonus" shall mean a grant of Shares to an Employee, Advisor or Consultant pursuant to Section 9 below.
 
(ee)    “Subsidiary” means any corporation in a descending, unbroken chain of corporations, beginning with the Company, if each of the corporations other than the last corporation in the unbroken chain owns stock possessing 50% or more of the total combined voting power of all  classes of stock in one of the other corporations in such chain.
 
(ff)    “Ten-Percent Stockholder” means an Eligible Employee, who, at the time an Incentive Stock Option is to be granted to such Eligible Employee, owns (within the meaning of Section 422(b)(6) of the Code) stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company, a parent or a Subsidiary within the meaning of Sections 424(e) and 424(f), respectively, of the Code.
 
3.    Administration.
 
(a)    The Plan shall be administered by the Committee, which Committee shall at all times satisfy the provisions of Rule 16b-3 under the Exchange Act.  The Committee shall hold meetings at such times as may be necessary for the proper administration of the Plan.  The Committee shall keep minutes of its meetings. A majority of the Committee shall constitute a quorum and a majority of a quorum may authorize any action.  Any decision reduced to writing and signed by all of the members of the Committee shall be fully effective as if it had been made at a meeting duly held.  No member of the Committee shall be personally liable for any action, determination or interpretation made in good faith with respect to the Plan, Options, Restricted Stock, Restricted Stock Units or Stock Appreciation Rights, and all members of the Committee shall be fully indemnified by the Company with respect to any such action, determination or interpretation.  The Company shall pay all expenses incurred in the administration of the Plan.  Notwithstanding any provision of this Plan to the contrary, the Board may assume the powers and responsibilities granted to the Committee or other delegate at any time, in whole or part.
 
(b)    Subject to the express terms and conditions set forth herein, the Committee shall have the power from time to time:

 

 

 
(i)    to determine those Eligible Employees to whom Awards shall be granted under the Plan and the number of Shares subject to such Awards to be granted to each Eligible Employee and to prescribe the terms and conditions (which need not be identical) of each Award, including the purchase price per share of each Award, and the forfeiture provisions, if any, if the employee leaves the employment of the Company or a Subsidiary within a prescribed time or acts against the interests of the Company within a prescribed time;
 
(ii)    to construe and interpret the Plan, the Awards granted hereunder and to establish, amend and revoke rules and regulations for the administration of the Plan, including, but not limited to, correcting any defect or supplying any omission, or reconciling any inconsistency in the Plan or in any Agreement, and (subject to the provisions of Section 13 below) to amend the terms and conditions of any outstanding Award to the extent such terms and conditions are within the discretion of the Committee as provided in the Plan, in the manner and to the extent it shall deem necessary or advisable to make the Plan fully effective, and all decisions and determinations by the Committee in the exercise of this power shall be final and binding upon the Company or a Subsidiary, and the Participants, as the case may be;
 
(iii)    to determine the duration and purposes for leaves of absence which may be granted to a Participant without constituting a termination of employment or service for purposes of the Plan; and
 
(iv)    generally, to exercise such powers and to perform such acts as are deemed necessary or advisable to promote the best interests of the Company with respect to the Plan.
 
(c)    Unless otherwise authorized by the shareholders of the Company, the Committee shall not authorize the amendment of any outstanding stock option or stock appreciation right to reduce the exercise price.
 
(d)    No stock option or stock appreciation right shall be cancelled and replaced with    awards having a lower exercise price without the prior approval of the shareholders of the Company.  This provision is intended to prohibit the repricing of “underwater” stock options and stock appreciation rights.
 
(e)     With respect to any performance award that is intended to qualify as performance-based compensation under Section 162(m) of the Internal Revenue Code, the Committee may adjust downwards, but not upwards, the Award granted.
 
 
4.    Stock Subject to Plan.
 
(a)    The maximum number of shares that may be issued or transferred pursuant to Awards granted under this Plan is five million (5,000,000) (or the number and kind of shares of stock or other securities that are substituted for those Shares or to which those Shares are adjusted upon a Change in Capitalization), and the Company shall reserve for the purposes of the Plan, out of its authorized but unissued Shares, such number of Shares as shall be determined by the Board. Notwithstanding any other provision to the contrary, no Participant may be awarded a grant in any one year, which, when added to any other grant of Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units or Stock Bonuses in the same year, shall exceed 300,000 Shares. If an Option is canceled, the canceled Option continues to count against the maximum number of Shares for which Options may be granted to a Participant in any year.
 
(b)    Whenever any outstanding Award or portion thereof expires, is canceled or is otherwise terminated (other than by exercise of the Award), the Shares allocable to the unexercised portion of such Award may again be the subject of Awards hereunder, to the extent permitted by Rule 16b-3 under the Exchange Act.
 
5.    Eligibility.  Subject to the provisions of the Plan, the Committee shall have full and final authority to select those Eligible Employees who will receive Awards.
 
6.    Options.  The Committee may grant Options in accordance with the Plan, the terms and conditions of which shall be set forth in an Agreement.  Each Option and Agreement shall be subject to the following conditions:
 
(a)    Purchase Price.  The purchase price or the manner in which the purchase price is to be determined for Shares under each Option shall be set forth in the Agreement; provided, however, that the purchase price per Share 

 

 

under each Nonqualified Stock Option shall not be less than 85% of the Fair Market Value of a Share at the time the Option is granted, 100% in the case of an Incentive Stock Option generally and 110% in the case of an Incentive Stock Option granted to a Ten-Percent Stockholder.  If the Participant is a “covered employee” as defined in Internal Revenue Code Section 162(m), the purchase price per Share under each Nonqualified Stock Option shall not be less than 100% of the Fair Market Value of a Share at the time the Option is granted.
  
(b)    Duration.  Options granted hereunder shall be for such term as the Committee shall determine; provided, however, that no Option shall be exercisable after the expiration of ten (10) years from the date it is granted (five (5) years in the case of an Incentive Stock Option granted to a Ten-Percent Stockholder).  The Committee may, subsequent to the granting of any Option, extend the term thereof but in no event shall the term as so extended exceed the maximum term provided for in the preceding sentence.
 
(c)    Non-transferability.  No Option granted hereunder shall be transferable by the Participant to whom such Option is granted otherwise than (i) except for an Incentive Stock Option, by gift, to an immediate family member or members, or to a partnership or limited liability company consisting only of immediate family members, or to a trust solely for the benefit of the Participant and/or immediate family members, (a “donee” or “assignee”), (ii) by will or the laws of descent and distribution, or (iii) pursuant to a qualified domestic relations order as defined in the Code, and an Option may be exercised during the lifetime of such Participant only by the Participant, the Participant's donee, or such Participant's guardian or legal representative.  The terms of such Option shall be binding upon the beneficiaries, executors, administrators, heirs, donees and successors of the Participant.
 
(d)    Vesting.  Subject to subsection 6(e) below, unless otherwise set forth in the Agreement, each Option shall become exercisable upon the earlier of (i) as to all of the Shares covered by the Option on the death, Retirement (unless the Participant is a “covered employee” as defined in Internal Revenue Code Section 162(m)) or Disability of the Participant; or  (ii) as to 20 percent of the Shares covered by the Option on the first anniversary of the date the Option was granted and as to an additional 20 percent of the Shares covered by the Option on each of the following four (4) anniversaries of such date of grant.  To the extent not exercised, installments shall accumulate and be exercisable, in whole or in part, at any time after becoming exercisable, but not later than the date the Option expires.  The Committee may accelerate the exercisability of any Option or portion thereof at any time (unless the Participant is a “covered employee” as defined in Internal Revenue Code Section 162(m)).
 
(e)    Accelerated Vesting upon Change in Control.  Notwithstanding the provisions of subsection 6(d) above, each Option granted to a Participant may become immediately exercisable in full upon the occurrence of a Change in Control if so provided in the Agreement, and only under the terms so provided in the Agreement. 
 
(f)    Termination of Employment.  In the event that a Participant ceases to be employed by the Company or any Subsidiary, any outstanding Options held by such Participant shall, unless this Plan or the Agreement evidencing such Option provides otherwise, terminate as follows:
 
(i)    If the Participant's termination of employment is due to his death, Disability, or Retirement, the Option shall be exercisable for a period of three (3) years following such termination of employment, but in no event shall the three (3) year period extend beyond the term of the Option as provided for in Section 6(b) hereinabove and shall thereafter terminate; and
 
(ii)    If the Participant's termination of employment is for any other reason (including a Participant's ceasing to be employed by a Subsidiary as a result of the sale of such Subsidiary or an interest in such Subsidiary), the Option (to the extent exercisable at the time of the Participant's termination of employment) shall be exercisable for a period of thirty (30) days following such termination of employment,,  but in no event shall the three (3) year period extend beyond the term of the Option as provided for in Section 6(b) hereinabove, and shall thereafter terminate.
 
Notwithstanding the foregoing, the Committee may provide, either at the time an Option is granted or thereafter, that the Option may be exercised after the periods provided for in this Section 6(f), but in no event beyond the term of the Option as provided for in Section 6(b) hereinabove.
 
(g)    Method of Exercise.  The exercise of an Option shall be made only by a written notice delivered to the Secretary of the Company at the Company's principal executive office, specifying the number of shares to be purchased and accompanied by payment therefor and otherwise in accordance with the Agreement pursuant to which the Option was granted.  The purchase price for any Shares purchased pursuant to the exercise of an Option shall be 

 

 

paid in full upon such exercise in cash, by check, or, at the discretion of the Committee and upon such terms and conditions as the Committee shall approve, by transferring Shares to the Company or by such other method as the Committee may determine.  Any Shares transferred to the Company as payment of the purchase price under an Option shall be valued at their Fair Market Value on the day preceding the date of exercise of such Option.  If requested by the Committee, the Participant shall deliver the Agreement evidencing the Option or the Agreement evidencing any Stock Appreciation Right to the Secretary of the Company who shall endorse thereon a notation of such exercise and return such Agreement to the Participant.  Not less than 100 Shares may be purchased at any time upon the exercise of an Option unless the number of Shares so purchased constitutes the total number of Shares then purchasable under the Option.
 
(h)    Rights of Participants.  No Participant shall be deemed for any purpose to be the owner of any Shares subject to any Option unless and until (i) the Option shall have been exercised pursuant to the terms thereof, (ii) the Company shall have issued and delivered the Shares to the Participant, and (iii) the Participant's name shall have been entered as a stockholder of record on the books of the Company.  Thereupon, the Participant shall have full voting, dividend and other ownership rights with respect to such Shares.
 
7.    Stock Appreciation Rights.  The Committee may, in its discretion, grant a Stock Appreciation Right alone (a “Free Standing Stock Appreciation Right”) or in conjunction with the grant of an Option (a “Related Stock Appreciation Right”), in either case, in accordance with the Plan, and the terms and conditions of such Stock Appreciation Right shall be set forth in an Agreement.  A Related Stock Appreciation Right shall cover the same Shares covered by the related Option (or such lesser number of Shares as the Committee may determine) and shall, except as provided in this Section 7 be subject to the same terms and conditions as the related Option.
 
(a)     Grant of Stock Appreciation Rights.
 
(i)    Time of Grant of Related Stock Appreciation Right.  A Related Stock Appreciation Right may be granted either at the time of grant, or at any time thereafter during the term of the Option; provided, however, that Related Stock Appreciation Rights related to Incentive Stock Options may only be granted at the time of grant of the Option.
 
(ii)    Purchase Price.  The purchase price or the manner in which the purchase price is to be determined for Shares covered by each Free Standing Stock Appreciation Right shall be set forth in the Agreement; provided, however, that the purchase price per Share under each Free Standing Stock Appreciation Right shall not be less than 85% of the Fair Market Value of a Share at the time the Free Standing Stock Appreciation Right is granted. If the Participant is a “covered employee” as defined in Internal Revenue Code Section 162(m), the purchase price per Share covered by each Free Standing Stock Appreciation Right shall not be less than 100% of the Fair Market Value of a Share at the time the Free Standing Stock Appreciation Right is granted.   The purchase price or the manner in which the purchase price is to be determined for Shares covered by each Related Stock Appreciation Right shall be set forth in the Agreement for the related Option.
 
(iii)    Payment.  A Stock Appreciation Right shall entitle the holder thereof, upon exercise of the Stock Appreciation Right or any portion thereof, to receive payment of the amount computed pursuant to Section 7 (a) (vi) below.
 
(iv)    Exercise.  Free Standing Stock Appreciation Rights generally will be exercisable at such time or times, and may be subject to such other terms and conditions, as shall be determined by the Committee, in its discretion, and such terms and conditions shall be set forth in the Agreement; provided, however, that no Free Standing Stock Appreciation Right shall be exercisable after the expiration of ten (10) years from the date it is granted.  No Free Standing Stock Appreciation Right granted hereunder shall be transferable by the Participant to whom such right is granted otherwise than by will or the laws of descent and distribution, and a Free Standing Stock Appreciation Right may be exercised during the lifetime of such Participant only by the Participant or such Participant's guardian or legal representative.  The terms of such Free Standing Stock Appreciation Right shall be binding upon the  beneficiaries, executors, administrators, heirs and successors of the Participant.
 
Subject to subsection 7(a)(v) below, a Related Stock Appreciation Right shall be exercisable at such time or times and only to the extent that the related Option is exercisable, and will not be transferable except to the extent the related Option may be transferable.  A Related Stock Appreciation Right granted in conjunction 

 

 

with an Incentive Stock Option shall be exercisable only if the Fair Market Value of a Share on the date of exercise exceeds the purchase price specified in the related Incentive Stock Option.
 
(v)    Accelerated Vesting.  Notwithstanding the provisions of subsection 7(a)(iv) above, each Stock Appreciation Right granted to a Participant shall become immediately exercisable in full upon the occurrence of both a Change in Control and any additional requirement the Committee determines to add to any Stock Appreciation Right in the nature of a materially adverse change in the Participant's employment status.
 
(vi)     Amount Payable.  Upon the exercise of a Stock Appreciation Right, the Participant shall be entitled to receive an amount determined by multiplying (A) the excess of the Fair Market Value of a Share on the date of exercise of such Stock Appreciation Right over (i) with respect to a Related Stock Appreciation Right, the per Share purchase price under the related Option, and (ii) with respect to a Free Standing Stock Appreciation Right, the per Share purchase price set forth in the Agreement by (B) the number of Shares as to which such Stock Appreciation Right is being exercised. Notwithstanding the foregoing, the Committee may limit in any manner the amount payable with respect to any Stock Appreciation Right by including such a limit at the time it is granted.
 
(vii)     Treatment of Related Options and Related Stock Appreciation Rights Upon Exercise.  Upon the exercise of a Related Stock Appreciation Right, the related Option shall be canceled to the extent of the number of Shares as to which the Related Stock Appreciation Right is exercised and upon the exercise of an Option granted in conjunction with a Related Stock Appreciation Right, the Related Stock Appreciation Right shall be canceled to the extent of the number of Shares as to which the related Option is exercised or surrendered.
 
(b)    Method of Exercise.  Stock Appreciation Rights shall be exercised by a Participant only by a written notice delivered in person or by mail to the Secretary of the Company at the Company's principal executive office, specifying the number of Shares with respect to which the Stock Appreciation Right is being exercised.  If requested by the Committee, the Participant shall deliver the Agreement evidencing the Stock Appreciation Right being exercised and with respect to a Related Stock Appreciation Right, the Agreement evidencing any related Option to the Secretary of the Company who shall endorse thereon a notation of such exercise and return such Agreement or Agreements to the Participant.
 
(c)    Form of Payment.  Payment of the amount determined under Sections 7(a)(vi) above may be made solely in whole Shares in a number determined based upon their Fair Market Value on the date of exercise of the Stock Appreciation Right or, alternatively, at the sole discretion of the Committee, solely in cash, or in a combination of cash and Shares as the Committee deems advisable.  In the event that a Stock Appreciation Right is exercised within the sixty-day period following a Change in Control, any amount payable shall be solely in cash.  If the Committee decides to make full payment in Shares, and the amount payable results in a fractional Share, payment for the fractional Share will be made in cash.
 
 
8.    Adjustment Upon Changes in Capitalization.
 
(a)    In the event of a Change of Capitalization, the Committee shall conclusively determine the appropriate adjustments, if any, to the maximum number and class of shares of stock with respect to which Awards may be granted under the Plan, and to the number and class of shares of stock as to which Awards have been granted under the Plan, and the purchase price therefor, if applicable.
 
(b)    Any such adjustment in the Shares or other securities subject to outstanding Incentive Stock Options (including any adjustments in the purchase price) shall be made in such manner as not to constitute a modification as defined by Section 424(h)(3) of the Code and only to the extent otherwise permitted by Sections 422 and 424 of the Code.
 
9.    Stock Bonuses and Restricted Stock.
 
(a)    Grant of Stock Bonuses.  Subject to the terms and provisions of the Plan, the Committee, at any time and from time to time, may grant Shares to Employees, Advisors and Consultants either outright or subject to such restrictions as the Committee shall determine pursuant to this Section 9, and in such amounts as the Committee 

 

 

shall determine.
 
(b)    Restricted Stock Agreement.  If the Committee grants Shares subject to restrictions, each such grant shall be evidenced by a Restricted Stock Agreement that shall specify the Period of Restriction, or Periods, the number of Shares of Restricted Stock granted, and such other provisions as the Committee shall determine.
 
(c)    Transferability.  Except as provided in this Section 9, the Shares of Restricted Stock granted herein may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated until the end of the applicable Period of Restriction established by the Committee and specified in the Restricted Stock Agreement, or upon earlier satisfaction of any other conditions, as specified by the Committee in its sole discretion and set forth in the Restricted Stock Agreement.  However, in no event may any Restricted Stock granted under this Plan to an Executive Officer or Director become vested in a Participant prior to twelve (12) months following the date of its grant.  All rights with respect to the Restricted Stock granted to a Participant under the Plan shall be available during his or her lifetime only to such Participant.
 
(d)    Other Restrictions.  The Committee shall impose such other restrictions on any Shares of Restricted Stock granted pursuant to the Plan as it may deem advisable including, without limitation, restrictions based upon the achievement of specific (Company-wide, divisional, and/or individual) performance goals, and/or restrictions under applicable Federal or state securities laws; and may legend the certificates representing Restricted Stock to give appropriate notice of such restrictions.
 
(e)    Certificate Legend.  In addition to any legends placed on certificates pursuant to subsection 9(d), each certificate representing Shares of Restricted Stock granted pursuant to the Plan shall bear the following legend:
 
"The sale or other transfer of the Shares of Stock represented by this certificate, whether voluntary, involuntary, or by operation of law, is subject to certain restrictions on transfer as set forth in the FBL Financial Group, Inc. 2006 Class A Common Stock Compensation Plan and in a Restricted Stock Agreement dated ____________.  A copy of the Plan and such Restricted Stock Agreement may be obtained from the Secretary of FBL Financial Group, Inc."
 
(f)    Removal of Restrictions.  Except as otherwise provided in this Section, Shares of Restricted Stock covered by each Restricted Stock grant made under the Plan shall become freely transferable by the Participant after the last day of the Period of Restriction.  Once the Shares are released from the restrictions, the Participant shall be entitled to have the legend required by subsection 9(e) removed from his Stock certificate.
 
(g)    Voting Rights.  During the Period of Restriction, Participants holding Shares of Restricted Stock granted hereunder may exercise voting rights, if any, with respect to those Shares.
 
(h)    Dividends and Other Distributions.  During the Period of Restriction, Participants holding Shares of Restricted Stock granted hereunder shall be entitled to receive all dividends and other distributions paid with respect to those Shares while they are so held only as provided for, if at all, in the Agreement.  If any such dividends or distributions are paid in Shares of Stock, the Shares shall be subject to the same restrictions on transferability and forfeitability as the Shares of Restricted Stock with respect to which they were paid.
 
(i)    Termination of Employment.  In the event that a Participant experiences a termination of employment with the Company for any reason, including death, Disability, or Retirement, (as defined herein or under the then-established rules of the Company), any and all of the Participant's Shares of Restricted Stock still subject to restrictions as of the date of termination shall automatically be forfeited and returned to the Company; provided, however, that the Committee, in its sole discretion, may waive the restrictions remaining on any or all Shares of Restricted Stock, pursuant to this Section 9, and add such new restrictions to those Shares of Restricted Stock as it deems appropriate, unless the Participant is a “covered employee” as defined in Internal Revenue Code Section 162(m).
 
10.    Restricted Stock Units. 
 
(a)    Grants of Restricted Stock Units.  A Restricted Stock Unit shall entitle the Participant to receive one Share at such future time and upon such terms as specified by the Committee in the Stock Incentive Agreement evidencing such award.  Restricted Stock Units issued under the Plan may have restrictions which lapse based upon the service of a Participant, or based upon other criteria that the Committee may determine appropriate.  The 

 

 

Committee may require a cash payment from the Participant in exchange for the grant of Restricted Stock Units or may grant Restricted Stock Units that vest on the attainment of performance goals determined by the Committee, and must have the attainment of such performance goals certified in writing by the Committee as a condition to vesting.
 
(b)    Vesting of Restricted Stock Units.  The Committee shall establish the vesting schedule applicable to Restricted Stock Units and shall specify the times, vesting and performance goal requirements.  Until the end of the period(s) of time specified in the vesting schedule and/or the satisfaction of any performance criteria, the Restricted Stock Units subject to such grant shall remain subject to forfeiture.
 
(c)    Termination of Employment.  If the Participant's employment with the Company and/or a Subsidiary ends before the Restricted Stock Units vest, the Participant shall forfeit all unvested Restricted Stock Units, unless the termination is a result of the occurrence of a death, Disability or, unless the Participant is a “covered employee” as defined in Internal Revenue Code Section 162(m), Retirement, or the Committee determines that the Participant's unvested Restricted Stock Units shall vest as of the date of such event (unless the Participant is a “covered employee” as defined in Internal Revenue Code Section 162(m)); provided, however, the Committee may grant Restricted Stock Units precluding such accelerated vesting.
 
(d)    Death, Disability and Retirement.  In the event the death, Disability or, unless the Participant is a “covered employee” as defined in Internal Revenue Code Section 162(m), Retirement of a Participant occurs before the date or dates on which Restricted Stock Units vest, the expiration of the applicable restrictions (other than restrictions based on performance criteria) shall be accelerated and the Participant shall be entitled to receive the Shares free of all such restrictions.  In the case of Restricted Stock Units which are based on performance criteria, then as of the date of death, Disability or, unless the Participant is a “covered employee” as defined in Internal Revenue Code Section 162(m), Retirement, the Participant shall be entitled to receive a number of Shares that is determined by measuring the selected performance criteria from the Company's most recent publicly available quarterly results that are available as of the date of death, Disability or Retirement; provided, however, the Committee may grant Restricted Stock Units precluding such partial awards.  All other Shares subject to such Restricted Stock Units shall be forfeited and returned to the Company as of the date of death, Disability or Retirement.
 
(e)    Acceleration of Award.  Notwithstanding anything to the contrary in this Plan, unless the Participant is a “covered employee” as defined in Internal Revenue Code Section 162(m), the Committee shall have the power to permit, in its sole discretion, an acceleration of the applicable restrictions or the applicable period of such restrictions with respect to any part or all of the Restricted Stock Units awarded to a Participant; provided, however, the Committee may grant Restricted Stock Units precluding such accelerated vesting.
 
(f)    Necessity of Agreement.  Each grant of Restricted Stock Unit(s) shall be evidenced by an Agreement that shall specify the terms, conditions and restrictions regarding the Participant's right to receive Share(s) in the future, and shall incorporate such other terms and conditions as the Committee, acting in its sole discretion, deems consistent with the terms of this Plan.
 
(g)    Transferability of Restricted Stock Units.  Except as otherwise provided in a Participant's Agreement, no Restricted Stock Unit granted under the Plan may be sold, transferred, pledged, assigned or otherwise alienated or hypothecated by the holder Participant, except upon the death of the holder Participant by will or by the laws of descent and distribution.
 
(h)    Voting, Dividend & Other Rights.  Unless the applicable Agreement provides otherwise, holders of Restricted Stock Units shall not be entitled to vote or to receive dividends until they become owners of the Shares pursuant to their Restricted Stock Units, and, unless the applicable Stock Incentive Agreement provides otherwise, the holder of a Restricted Stock Unit shall not be entitled to any dividend or dividend equivalents.  
 
11.    Non-Employee Director Equity Grants.
   
     (a)      General. From and after the 2008 annual meeting of shareholders through the cessation of this Plan, a total of 500,000 shares under this Plan shall be made available for grants of equity interests to the Non-Employee Directors of the Company and of its First Tier Subsidiaries.  Grants shall be made and administered by the Committee. Grants shall be made in writing in a form approved by the Committee.
 

 

 

(b)      Interpretation.  Except as set forth in this Section 11, the other provisions of the Plan shall apply to grants of equity instruments to Non-Employee Directors to the extent not inconsistent with this Section and not inconsistent with the legal requirements applicable to the Non-Employee Directors.  For purposes of interpreting requirements of the Plan, a Non-Employee Director's service as a member of the Board of Directors of the Company or of a First Tier Subsidiary shall be deemed to be employment with the Company or its Subsidiaries.
 
(c)      Equity Instruments Defined.  As used in this Section 11, equity instruments include any nonqualified stock option (but not incentive stock options), stock, stock appreciation right, restricted stock, restricted stock unit, or any other form of grant measured by shares of Class A Common Stock that may be available under the Plan from time to time. 
 
     (d)      Declining Awards.  Notwithstanding any grants of equity interests to a Non-Employee Director under this Section 11, a Non-Employee Director may elect, at any time before the award would otherwise be made, to decline an award under this Plan or to revoke a previous election to decline grants hereunder.  A Non-Employee Director who elects to decline the grants made available under this Plan shall receive nothing in lieu of such awards (either at the time of such election or at any time thereafter).
 
12.    Release of Financial Information.  A copy of the Company's annual report to stockholders shall be delivered or made available to each Participant if and at the time and in the same manner any such report is distributed or made available to the Company's stockholders. Upon request by any Participant, the Company shall furnish to such Participant a copy of its most recent annual report and each quarterly report and current report filed under the Exchange Act since the end of the Company's prior fiscal year.
 
13.    Termination and Amendment of the Plan.  The Plan shall terminate on the day preceding the tenth anniversary of its Effective Date, except with respect to Awards outstanding on such date, and no Awards may be granted thereafter.  The Board may sooner terminate or amend the Plan at any time, and from time to time; provided, however, that, except as provided in Section 8 hereof, no amendment shall be effective unless approved by the stockholders of the Company where stockholder approval of such amendment is required (a) to comply with Rule 16b-3 under the Exchange Act subsequent to the Registration Date or (b) to comply with any other law, regulation or stock exchange rule.  Notwithstanding anything in this Section 13 to the contrary, Section 11 relating to Options for Non Employee Directors shall not be amended more than once in any six-month period, other than to comport with changes in the Code, the Employee Retirement Income Security Act of 1974, as amended, or the rules or regulations thereunder.
 
Except as provided in Section 8 hereof, rights and obligations under any Award granted before any amendment of the Plan shall not be adversely altered or impaired by such amendment, except with the consent of the Participant.
 
14.    Non-Exclusivity of the Plan.  The adoption of the Plan by the Board shall not be construed as amending, modifying or rescinding any previously approved incentive arrangement or as creating any limitations on the power of the Board to adopt such other incentive arrangements as it may deem desirable, including, without limitation, the granting of stock options otherwise than under the Plan, and such arrangements may be either applicable generally or only in specific cases.
 
15.    Limitation of Liability.  As illustrative of the limitations of liability of the Company, but not intended to be exhaustive thereof, nothing in the Plan shall be construed to:
 
(a)    give any employee any right to be granted an Award other than at the sole discretion of the Committee;
 
(b)    give any person any rights whatsoever with respect to Shares except as specifically provided in the Plan;
 
(c)    limit in any way the right of the Company or its Subsidiaries to terminate the employment of any person at any time; or
 
(d)    be evidence of any agreement or understanding, expressed or implied, that the Company, or its Subsidiaries, will employ any person in any particular position, at any particular rate of compensation or for any particular period of time.
 

 

 

16.    Regulations and Other Approvals; Governing Law.
 
(a)    This Plan and the rights of all persons claiming hereunder shall be construed and determined in accordance with the laws of the State of Iowa.
 
(b)    The obligation of the Company to sell or deliver Shares with respect to Options granted under the Plan shall be subject to all applicable laws, rules and regulations, including all applicable federal and state securities laws, and the obtaining of all such approvals by governmental agencies as may be deemed necessary or appropriate by the Committee.
 
(c)    Any provisions of the Plan inconsistent with Rule l6b-3 under Exchange Act shall be inoperative and shall not affect the validity of the Plan.
 
(d)    Except as otherwise provided in Section 13, the Board may make such changes as may be necessary or appropriate to comply with the rules and regulations of any government authority or to obtain for Participants granted Incentive Stock Options, the tax benefits under the applicable provisions of the Code and regulations promulgated thereunder.
 
(e)    Each Award is subject to the requirement that, if at any time the Committee determines, in its absolute discretion, that the listing, registration or qualification of Shares issuable pursuant to the Plan is required by any 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 grant of an Award or the issuance of Shares, no Awards shall be granted or payment made or Shares issued, in whole or in part, unless listing, registration, qualification, consent or approval has been effected or obtained free of any conditions as acceptable to the Committee.
 
(f)    In the event that the disposition of Shares acquired pursuant to the Plan is not covered by a then current registration statement under the Securities Act and is not otherwise exempt from such registration, such Shares shall be restricted against transfer to the extent required by the Securities Act or regulations thereunder, and the Committee may require a Participant receiving Shares pursuant to the Plan, as a condition precedent to receipt of such Shares, to represent to the Company in writing that the Shares acquired by such Participant are acquired for investment only and not with a view to distribution.
 
17.    Miscellaneous.
 
(a)    Multiple Agreements.  The terms of each Award may differ from other Awards granted under the Plan at the same time, or at any other time. Subject to Section 3(c) and (d), the Committee may also grant more than one Award to a given Participant during the term of the Plan, either in addition to, or in substitution for, one or more Awards previously granted to that Participant. The grant of multiple Awards may be evidenced by a single Agreement or multiple Agreements, as determined by the Committee.
 
(b)    Withholding of Taxes.  The Company shall have the right to deduct from any payment of cash to any Participant an amount equal to the federal, state and local income taxes and other amounts required by law to be withheld with respect to any Award. Notwithstanding anything to the contrary contained herein, if a Participant is entitled to receive Shares upon exercise of an Option or Stock Appreciation Right, the Company shall have the right to require such Participant, prior to the delivery of such Shares, to pay to the Company the amount of any federal, state or local income taxes and other amounts that the Company is required by law to withhold. Participants may elect, subject to the approval of the Committee, to satisfy the withholding requirement, in whole or in part, by having the Company withhold Shares having a Fair Market Value, on the date the tax is to be determined, equal to the amount required to be withheld. All elections shall be irrevocable, and be made in writing, signed by the Participant in advance of the day that the transaction becomes taxable. The Agreement evidencing any Incentive Stock Options granted under this Plan shall provide that if the Participant makes a disposition, within the meaning of Section 424(c) of the Code and regulations promulgated thereunder, of any Share or Shares issued to such Participant pursuant to such Participant's exercise of the Incentive Stock Option, and such disposition occurs within the two-year period commencing on the day after the date of grant of such Option or within the one-year period commencing on the day after the date of transfer of the Share or Shares to the Participant pursuant to the exercise of such Option, such Participant shall, within ten (10) days of such disposition, notify the Company thereof and thereafter immediately deliver to the Company any amount of federal, state or local income taxes and other amounts that the Company informs the Participant the Company is required to withhold.

 

 

 
(c)    Designation of Beneficiary.  Each Participant may, with the consent of the Committee, designate a person or persons to receive in the event of such Participant's death, any Award or any amount of Shares payable pursuant thereto, to which such Participant would then be entitled. Such designation shall be made upon forms supplied by and delivered to the Company and may be revoked or changed in writing. In the event of the death of a Participant and in the absence of a beneficiary validly designated under the Plan who is living at the time of such Participant's death, the Company shall deliver such Options, Stock Appreciation Rights, Restricted Stock and/or amounts payable to the executor or administrator of the estate of the Participant, or if no such executor or administrator has been appointed (to the knowledge of the Company), the Company, in its discretion, may deliver such Options, Stock Appreciation Rights, Restricted Stock and/or amounts payable to the spouse or to any one or more dependents or relatives of the Participant, or if no spouse, dependent or relative is known to the Company, then to such other person as the Company may designate.
 
(d)    Gender and Number.  Except where otherwise indicated by the context, any masculine term used herein also shall include the feminine; the plural shall include the singular and the singular shall include the plural. 
 
(e)    Severability.  In the event any provision of the Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not been included. 
 
(f)    Successors.  All obligations of the Company under the Plan, with respect to Awards granted hereunder, shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company.
 
18.     Effective Date. This Plan shall become effective on the Effective Date of this Plan.WebFilings | EDGAR view

 

 
 
 
 
 
 
FBL FINANCIAL GROUP, INC.
 
INCENTIVE STOCK OPTION AGREEMENT
 
 
OPTIONEE:            
DATE OF GRANT:            
DATE FIRST EXERCISABLE: One Year from Date of Grant
DATE OF EXPIRATION: Ten Years from Date of Grant
NUMBER OF SHARES COVERED BY THIS OPTION:  
OPTION PRICE:                    
 
 
THIS OPTION AGREEMENT  (the "Agreement"), effective as of Date of Grant set forth above, is between FBL Financial Group, Inc., an Iowa corporation (the "Company") and the Optionee set forth above, who is an employee of the Company or one of its Subsidiaries, pursuant to the FBL Financial Group, Inc. 2006 Class A Common Stock Compensation Plan adopted by the Board of Directors of the Company on November 16, 2005 and approved by the shareholders of the Company on May 17, 2006, as subsequently amended (the "Plan").  The Plan provides for the granting of Incentive Stock Options within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the "Code") by the Board of Directors of the Company (the "Board") or by a committee appointed by the Board (the "Committee") to certain Eligible Employees, as defined in the Plan.  Capitalized terms used in this Agreement shall have the same meaning as defined in the Plan unless otherwise defined herein.  References to the Company used in this Agreement may mean, as the context requires, the Board of Directors or any Committee appointed by the Board of Directors of the Company to administer the Plan and to perform the functions set forth therein.  The parties hereto agree as follows:
 
1. Grant of Stock Option at Option price.  The Company hereby grants to Optionee the Option to purchase the number of shares of Class A Common Stock without par value of the Company ("Common Stock") set forth above at the Option Price per share set forth above; provided, however, that the Option Price per share shall not be less than 100% (110% in the case of  Optionee being a Ten-Percent Stockholder as defined in the Plan as of the Date of Grant) of the Fair Market Value (as defined in the Plan) of a share of the common Stock as of the Date of Grant, subject to the terms and conditions of this Agreement.  This Option is intended by the parties to be, and shall be treated as, an Incentive Stock Option within the meaning of Section 422 of the Code.  However, in no event shall the option be considered an Incentive Stock Option if more than $100,000 in aggregate fair market value of stock (determined as of the date of grant) becomes exercisable for the first time in any calendar year.  
 
2. Duration of the Stock Option.  The Option shall be exercisable in accordance with this Agreement and the Plan until the Date of Expiration set forth above; provided, however that this Option shall not be exercisable under any circumstances after the expiration of ten (10) years (five (5) years in the case of Optionee being a Ten-Percent Stockholder as of the Date of Grant) from the Date of Grant.  The Company may extend the Date of Expiration in accordance with the Plan by written notice to Optionee, but in no event shall the term of this Option as so extended exceed the maximum term provided for in the preceding sentence.
 

 

 

3.  Vesting of Stock Option.  
 
(a) Five Year Vesting.  This Option shall become exercisable as to 20% of the number of shares covered by this Option set forth above at any time on or after the first anniversary date of the Date of Grant (the “Date First Exercisable”).  An additional 20% of the number of shares covered by this Option shall become purchasable at any time on or after each of the second through fifth anniversaries of the Date of Grant.  To the extent not exercised, installments shall accumulate and be exercisable, in whole or in part, at any time after becoming exercisable, but not later than the Date of Expiration.  
 
(b) Acceleration.  The Company may accelerate the exercisability of this Option, or any portion thereof, at any time, by written notice to Optionee.  Notwithstanding the above provisions of Section 3(a), this Option shall become immediately exercisable in full upon (i) the death, Disability or Retirement of the Optionee as described in Section 4, or (ii) the occurrence of a Change in Control as defined in the Plan followed by the first of the following to occur within the subsequent 24 months:  (A) the Company terminates the Optionee's employment for other than Cause, (B) the Optionee terminates employment for Good Reason.
 
(c)  Cause.  “Cause” means:
 
(i)  the Optionee's willful and continued failure to substantially perform the Optionee's duties with the Company or its Affiliates (other than any such failure resulting from the Optionee's incapacity due to physical or mental illness), after a written demand for substantial performance is delivered to the Optionee by the Company which specifically identifies the manner in which the Company believes that the Optionee has not substantially performed his or her duties;
 
(ii)  the final conviction of the Optionee of, or an entering of a guilty plea or a plea of no contest by the Optionee to, a felony; or
 
(iii)  the willful engaging by the Optionee in illegal conduct or gross misconduct which is materially and demonstrably injurious to the Company.
 
For purposes of this definition, no act or failure to act on the part of the Optionee shall be considered “willful” unless it is done, or omitted to be done, by the Optionee in bad faith or without a reasonable belief that the action or omission was in the best interests of the Company or its Affiliates.  Any act, or failure to act, based on authority given pursuant to a resolution duly adopted by the Board, the instructions of a more senior officer of the Company or the advice of counsel to the Company or its Affiliates will be conclusively presumed to be done, or omitted to be done, by the Optionee in good faith and in the best interests of the Company and its Affiliates.
 
(d)  Good Reason.  “Good Reason” means one or more of the following conditions, arising without the consent of the Optionee:
 
(i)  A material diminution in the Optionee's authority, duties, or responsibilities;
 
(ii)  A material diminution in the Optionee's base compensation;
 
(iii)  A material diminution in the authority, duties, or responsibilities of the corporate officer or employee to whom the Optionee is required to report, including a requirement that the Optionee report to a corporate officer or employee instead of reporting directly to the Board.
 
(iv)  A material diminution in the budget over which the Optionee retains authority;
 

 

 

(v)  A material change in the geographic location at which the Optionee must perform the services Optionee provides to the Company; or
 
(vi)  Any other action or inaction that constitutes a material breach by the Company of any agreement under which the Optionee provides services.
 
4.  Termination of Employment by Retirement, Death or Disability.  If, without having fully exercised this Option, Optionee shall die or Optionee's employment with the Company or any Subsidiary (as defined in the Plan) of the Company is terminated by reason of Retirement or Disability (each as defined in the Plan), and if at such time this Option is not yet exercisable, then Optionee's rights to purchase all of the Common Stock subject to this Option shall immediately vest, and Optionee or Optionee's legal representative or beneficiary (or such persons who have acquired Optionee's rights under the Option by will or by the laws of descent and distribution), as applicable, shall have the right to exercise this Option for a period ending on the earlier of (a) the Date of Expiration, or (b) the third anniversary date of such termination of employment, and the Option shall thereafter terminate. Notwithstanding the above provisions of this Section 4, the Company may extend the period for the exercise of this Option in accordance with the Plan by written notice to Optionee, but in no event shall the term of this Option as so extended exceed the maximum term provided for in Section 2.  Optionee acknowledges and understands that  (a) if Optionee exercises this Option more than one year after termination of employment with the Company or any Subsidiary by reason of Disability (three months if the Disability is not a disability within the meaning of Section 22(e)(3) of the Code), or (b) this option is exercised more than three months after termination of Optionee's employment for any other reason except death, the provisions of Section 421(a) of the Code, including the provision thereof that no income shall result at the time of the exercise of the Option, shall not apply.
 
5.  Termination of Employment for Other Reasons.  If, without having fully exercised this Option, Optionee's employment with the Company or any Subsidiary is terminated for reasons other than Optionee's death, Disability or Retirement (including Optionee's ceasing to be employed by the Company or a Subsidiary as a result of the sale of such Subsidiary or an interest in such Subsidiary), and if at such time this Option is not yet exercisable, then Optionee's rights under this Option shall immediately terminate.  However, if at the date of such termination of Optionee's employment, this Option or a portion of this Option is exercisable, then Optionee shall have the right to exercise this Option, to the extent exercisable at the time of Optionee's termination of employment, for a period ending on the earlier of (a) the Date of Expiration, or (b) thirty (30) days following such termination of employment, and the Option shall thereafter terminate.  Notwithstanding the above provisions of this Section 5, the Company may extend the period for the exercise of this Option in accordance with the Plan by written notice to Optionee, but in no event shall the term of this Option as so extended exceed the maximum term provided for in Section 2.
 
6. Procedure for Exercise of Option.  
 
(a)  Minimum Shares. This Option may be exercised in whole or in part, but not for less than one hundred (100) shares of Common Stock at any one time, unless fewer than one hundred (100) shares are then purchasable under the Option and the Option is then being exercised as to all such shares.  
 
(b)  Written Notice. This Option may be exercised by giving written notice in the form attached to the Company's designated representative at the Company's principal executive office.  This Option may be exercised during Optionee's lifetime only by Optionee or Optionee's legal representative or after Optionee's death only by Optionee's legal representative, beneficiary.  Such notice shall (i) be signed by the Optionee or Optionee's legal representative or beneficiary entitled to exercise the Option and, if being exercised by any person other than Optionee, be accompanied by proof, satisfactory to counsel for the Company, of the right of such person to exercise the Option; (ii) state the person(s) in whose name the shares of Common 

 

 

Stock are to be registered, and the street address and the tax identification or social security number of such person(s); (iii) specify the number of full shares of Common Stock then elected to be purchased with respect to the Option and the date of exercise thereof; (iv) contain such representations and agreements as may be satisfactory to counsel for the Company and, unless a Registration Statement under the Securities Act of 1933, as amended (the “Securities Act”) is in effect with respect to the shares to be purchased, contain a representation of Optionee or Optionee's legal representative or beneficiary, as applicable, that the shares of Common Stock are being acquired for investment, and that the shares will not be sold or otherwise transferred except in compliance with all applicable securities laws and regulations and all requirements of any stock exchange or market upon which such shares of Common Stock are then listed and/or traded; and (v) be accompanied by payment in full of the Option Price of the shares to be purchased. With concurrence of the Company, Optionee or holder may vary from the foregoing procedures and do a cashless exercise of the Option involving a same day sale of the shares by a Company designated broker, with payment to the Company being made by the broker.
 
Alternatively, the Optionee may exercise an Option on-line through Etrade, but the method of exercise is limited to same-day sales.
 
(c)  Payment of Option Price. The Option Price upon exercise of this Option shall be payable to the Company in full either (i) in cash or its equivalent (acceptable cash equivalents shall be determined at the sole discretion of the Company) or by check; (ii) at the sole discretion of the Company and upon such terms and conditions as the Company shall approve, by (a) transferring previously-acquired shares of Common Stock having an aggregate Fair Market Value (as defined in the Plan) on the day preceding the date of exercise equal to the total price of the shares for which the Option is being exercised; (iii) by a combination of (i) and (ii), or (iv), upon such terms and conditions as the Company shall require, by cashless exercise and same day sale, with the exercise price paid to the Company by the selling broker.
 
(d) Confirmation.  As promptly as practicable after receipt of such written notice, required representations, and payment, the Company shall cause to be delivered to the Optionee or Optionee's legal representative or beneficiary, as applicable, confirmation of the number of shares allocated to the recipient on the books of the Company maintained by its stock transfer agent.  
 
(e)  Records.  The Company shall maintain records of all information pertaining to Optionee's rights under this Agreement, including the number of shares for which this Option is exercisable, and the Company's books and records shall be conclusive and binding upon Optionee.
 
7. Restrictions on Transfer.  This Option may not be sold, transferred, pledged, assigned or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution, or by a qualified domestic relations order.   Optionee, with the consent of the Board, may designate a person or persons to receive in the event of Optionee's death, this Option or any shares pursuant thereto, to which Optionee would then be entitled.  Such designation shall be made upon forms supplied by and delivered to the Company and may be revoked or changed in writing by Optionee.  In the event of the death of Optionee and in the absence of a beneficiary validly designated under the Plan who is living at the time of Optionee's death, the Company shall deliver this Option and/or amounts payable to the executor or administrator of Optionee's estate or, if no executor or administrator has been appointed to the knowledge of the Company, the Company, in its sole discretion, may deliver this Option and/or amounts payable to the spouse or to any one or more dependents or relatives of Optionee, or if no spouse, dependent or relative is known to the Company, then to such other person or persons as the Company may designate.  This Option shall not be subject to any levy, attachment, execution or similar process.  In the event of any transfer or levy of process upon the rights or interests hereby conferred, the Company may terminate this Option by written notice to Optionee and it shall thereupon become null and void.  This Agreement shall be binding upon the beneficiaries and legal representatives of 

 

 

Optionee.
 
8. Change in Capitalization.  In the event of a Change in Capitalization as defined in the Plan, the number and class of shares of Common Stock subject to this Option, as well as the Option Price, may be adjusted by the Company, in its sole discretion, to prevent dilution or enlargement of rights.  The Company's determination of the adjustment, if any, shall be conclusive and binding upon Optionee.  Any such adjustments shall be made in such manner as not to constitute a modification as defined by Section 424(h)(3) of the Code, and only to the extent otherwise permitted by Sections 422 and 424 of the Code.
 
9. Rights as a Stockholder.  Neither Optionee nor Optionee's legal representative or beneficiary, as applicable, shall have any rights or privileges as a stockholder of the Company with respect to the shares of Common Stock subject to this Agreement unless and until (a) the Option shall have been exercised pursuant to the terms of the Plan and this Agreement; (b) the Company shall have delivered a confirmation pursuant to Section 6(d), above; and (c) the name of Optionee, Optionee's legal representative or beneficiary, as applicable, shall have been entered as a stockholder of record on the books of the Company.  Thereupon, Optionee, Optionee's legal representative or beneficiary, as applicable, shall have full voting, dividend and other ownership rights with respect to such shares.
 
10. Continuation of Employment.  This Agreement shall not confer upon Optionee any right to continuation of employment by the Company or any Subsidiary of the Company, nor shall this Agreement interfere in any way with the Company's right to terminate Optionee's employment at any time.
 
11. Additional Restrictions on Exercise.  This Option may not be exercised if the issuance of shares upon such exercise would constitute a violation of any applicable federal or state securities or other law or regulation, including, without limitation, the Code or regulations promulgated thereunder, or Section 16(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).  As a condition to the exercise of this Option, the Company may require the person exercising this Option to make any representation or warranty to the Company as may be required by applicable law or regulation or other restriction or agreement binding upon or otherwise affecting the shares of the Company.  To the extent that the aggregate Fair Market Value of Common Stock determined as of the Date of Grant with respect to which this Option is exercisable for the first time by Optionee during any calendar year exceeds $100,000, the shares issued in excess of $100,000 shall not be qualified as Incentive Stock Options and the Company shall identify such shares as non-qualifying in the Company's stock transfer records.
 
12. Miscellaneous.
 
(a)  This Agreement and the rights of Optionee hereunder are subject to the terms of the Plan and all rules and regulations as the Board, the Committee, or the Company may adopt for administration of the Plan, the terms of which are incorporated herein by this reference.  The Company shall have the right to impose such restrictions on any shares acquired pursuant to the exercise of this Option as the Company may deem advisable, including, without limitation, restrictions under applicable federal or state securities laws or regulations, the requirements of any stock exchange or market upon which such shares are listed and/or traded, and applicable provisions of the Code or regulations promulgated thereunder.  It is expressly understood that the Board, the Committee, or the Company is authorized to administer, construe and make all determinations necessary or appropriate to the administration of the Plan or this Agreement, all of which shall be conclusive and binding upon Optionee and any other person claiming an interest thereunder.
 
(b)  The Company may issue additional options, or terminate, amend, or modify its rules and regulations for administering the options; provided, however, that no such action may in any way adversely alter or impair Optionee's rights under this Agreement, except as provided in Sections 8 and 11 hereof.

 

 

 
(c)  The Company shall have the authority to deduct or withhold, or require Optionee to remit to the Company, an amount sufficient to satisfy federal, state and local taxes (including Optionee's FICA obligations) and other amounts required by law to be withheld with respect to any exercise of Optionee's rights under this Agreement.  Optionee may elect, subject to the approval of the Company, to satisfy withholding requirements, in whole or in part, by having the Company withhold shares of Common Stock having an aggregate Fair Market Value, on the date the tax is to be determined, equal to the amount required to be withheld.  All elections shall be irrevocable and in writing, and shall be signed by Optionee in advance of the day that the transaction becomes taxable.  If the Optionee makes a disposition, within the meaning of Section 424(c) of the Code and regulations promulgated thereunder, of any shares issued to the Optionee pursuant to Optionee's exercise of this Option, and such disposition occurs within the two-year period commencing on the date after the Date of Grant or within the one-year period commencing on the day after the date of transfer of such shares to Optionee pursuant to the exercise of this Option, such Optionee shall, within ten (10) days of such disposition, give written notice to the Company thereof and immediately thereafter deliver to the Company any amount of federal, state or local income taxes and other amounts that the Company informs Optionee the Company is required to withhold.
 
(d)  Optionee agrees to take all steps necessary to comply with all applicable provisions of federal and state securities law in exercising Optionee's rights under this Agreement.
 
(e)  This Agreement is not intended to qualify for treatment under the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA").
 
(f)  This Agreement shall be subject to all applicable laws, rules and regulations, and to such approvals by any governmental entities or stock exchanges as may be required.
 
(g)  To the extent not preempted by federal law, this Agreement shall be governed by, and construed in accordance with, the laws of the State of Iowa.
 
(h)  Any written notice required or permitted under this Agreement shall be given by hand delivery or by United States mail, postage prepaid, to the address set forth herein for each party (or to such other address as may be given by such party by written notice and shall be effective upon delivery or upon mailing, as applicable.
 
13. Cancellation and Rescission of Options.
 
(a) The Committee may cancel, rescind, suspend, withhold or otherwise limit or restrict any unexpired, unpaid, or deferred options at any time if the Optionee is not in compliance with all applicable provisions of the option Agreement and the Plan, or if the Optionee engages in any "Detrimental Activity." For purposes of this Section 13, "Detrimental Activity" shall include: (i) the rendering of services for any organization or engaging directly or indirectly in any business which is or becomes competitive with the Company, or which organization or business, or the rendering of services to such organization or business, is or becomes otherwise prejudicial to or in conflict with the interests of the Company; (ii) the disclosure to anyone outside the Company, or the use in other than the Company's business, without prior written authorization from the Company, of any confidential information or material, as defined in the Company's Code of Conduct, relating to the business of the Company, acquired by the Optionee either during or after employment with the Company; (iii) activity that results in termination of the Optionee's employment for cause; (iv) a violation of any rules, policies, procedures or guidelines of the Company, including but not limited to the Company's Corporate Compliance Manual or Code of Ethics for Senior Financial Officers, if applicable; (v) any attempt directly or indirectly to induce any employee of the Company to be 

 

 

employed or perform services elsewhere or any attempt directly or indirectly to solicit the trade or business of any current or prospective customer, supplier or partner of the Company; (vi) the Optionee being convicted of, or entering a guilty plea with respect to, a crime, whether or not connected with the Company; or (viii) any other conduct or act determined to be injurious, detrimental or prejudicial to any interest of the Company.
 
(b) Exercise of an Option shall be deemed to constitute certification by the Optionee that he or she is in compliance with the terms and conditions of the Plan. In the event an Optionee fails to comply with the provisions of paragraphs (a)(i)-(viii) of this Section 13 prior to, or during the six months after, any exercise, payment or delivery pursuant to an Option, such exercise, payment or delivery may be rescinded within two years thereafter. In the event of any such rescission, the Optionee shall pay to the Company the amount of any gain realized or payment received as a result of the rescinded exercise, payment or delivery, in such manner and on such terms and conditions as may be required, and the Company shall be entitled to set-off against the amount of any such gain any amount owed to the Optionee by the Company.
 
14.    Clawback Policy.  This Agreement and the options awarded hereunder are subject to the Policy:  Impact of Restatement of Financial Statements Upon Awards adopted by Management Development and Compensation Committee December 2006 as it may be amended from time to time, which is attached hereto and incorporated herein by reference.
 

 

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the date set forth below.
 
 
ATTEST:                        FBL FINANCIAL GROUP, INC. 
 
 
                                                           
David A. McNeill
Vice President, General Counsel
and Secretary
 
 
Dated: ______________________ 
 
_________________________________
By: Douglas V. Shelton
Vice President - Corporate Planning
 
Optionee hereby acknowledges receipt of copies of this Agreement and the Plan attached hereto; represents that Optionee is familiar with the terms and provisions of the Plan; and hereby accepts this Option subject to all the terms and provisions of the Plan and this Agreement.  Optionee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Committee or the Company with respect to all matters or issues arising under the Plan or this Agreement.
 
 
Dated:                                                    _________________________________
Optionee (please sign)
 
 
_________________________________
                           Name (please type or print)
 
 
_________________________________  
Street Address
 
_________________________________                                                                                                             City                    State                  Zip Code
 
                                                                                                                                        __________________________________
Social Security / Tax Identification Number
 
 __________________________________                                                                                      Date of Birth
 
 

 

 

[Insert Exercise Notice form per 6(b)]

 

 

Policy:  Impact of Restatement of Financial Statements Upon Awards.  (Adopted by Management Development and Compensation Committee December 2006.)

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