Document:

Exhibit 10.14

 

Exhibit 10.14

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

ProCentury Corporation

Stock Option Award Agreement

for

Incentive Stock Options

under the

2004 Stock Option and Award Plan

To ____________:

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

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

465 Cleveland Avenue

Westerville, OH 43082

(614)-895-2000.

 

 

Your Option

     Your Option entitles you to purchase up to _________(______) shares of Stock all of
which are designated as Service Vesting Shares subject to vesting as described under “Vesting of
Your Option.”

     The Exercise Price at which you may purchase each such share is $______which is the Fair
Market Value of a share determined as of _________, 200_, which is the Date of Grant of your Option.
Both the number of shares and the Exercise Price are subject to adjustment for events such as
stock splits, etc. as provided in the Plan.

Vesting of Your Option

     Your Shares are subject a Service Vesting Schedule that requires you to complete a period of
Service before you can exercise the Option to purchase those Shares. Pursuant to your Service
Vesting Schedule, 1/48th of the total number of your Service Vesting Shares will become Vested
Shares for each calendar month of your Service after the Date of Grant such that the entire number
of your Service Vesting Shares will become vested after 48 calendar months of Service after the
Date of Grant.

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

Taxation

     Your Option is intended to be an Incentive Stock Option under the Plan subject to some special
limitations set forth in the Plan. Unless there is a disqualifying disposition or an exercise in
excess of the $100,000 Per Year Limitation, Incentive Stock Options are not taxable until sale or
other disposition of the Stock acquired upon exercise of the Option. In other words, there is no
tax incident upon granting or, unlike non-qualified stock options, exercise of the Option. If
properly exercised, the spread between the market value and the Exercise Price of the Stock
purchased is taxable to the Participant as a sale of property at capital gains rates rather than as
compensation at ordinary income rates. Although the Company can give no assurance as to the
taxability to you, you may contact the Company Secretary for further information generally
describing the tax aspects of an Incentive Stock Option.

Exercising Your Option

     You may exercise your Option from time to time at any time during the period from the Date of
Grant until 5:00 p.m. local time at the Company’s office on the calendar day immediately preceding
the 10th anniversary of the Date of Grant, which is the Date of Expiration of your
Option. You may exercise your Option any number of times during this Exercise Period until you
have purchased all of your Vested Shares subject to the Option. Notwithstanding anything to

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the contrary in this Award Agreement, this Option shall automatically expire upon, and no longer be
exercisable after, the first to occur of the following:

	•  	Date of Expiration;

	•  	If you are terminated for Cause, your last day of Service;

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

	•  	If your Service is terminated for Retirement or Disability or
death, the first anniversary of your last day of Service.

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

Other Terms and Conditions

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

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

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

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

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	 	 	ProCentury Corporation
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 
	 
	

	 	By:
	 	Edward F. Feighan	 	 
	

	 	 	 	 	 
	 
	

	 	Its:
	 	Chairman, President and CEO	 	 
	

	 	 	 	 

Acceptance

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

							
	Dated:	 	 	 	 	 	 
	
	 	 
	 	 
	 	
	 	 	Name:	 	 

4Exhibit 10.15

 

Exhibit 10.15

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

ProCentury Corporation

Restricted Stock Option Award Agreement

for

Restricted Stock 

under the

2004 Stock Option and Award Plan

To _______________:1

     Congratulations! ProCentury Corporation is awarding you this Stock Grant of Restricted Stock
pursuant to its 2004 Stock option and Award Plan (the “Plan) and your Executive Employment
Agreement (“Employment Agreement”). Except to the extent that reference is made to your Employment
Agreement, all capitalized terms used in this Award Agreement shall have the same meaning as
defined in the Plan. Your Stock Grant is subject to acceptance by your signing of a copy of this
Award Agreement under the heading “Acceptance” and returning the signed copy before the close of
business on ____________, 200__.

     The purpose of this Award Agreement is to summarize some of the terms and conditions of your
Stock Grant as well as the shares of Restricted Stock to be issued. This Award Agreement makes
numerous references to the Plan and is governed by the Plan document except to the extent that
reference is made to your Employment Agreement. You as the Participant may obtain a copy of the
current Plan document at any time by contacting the Company Secretary at

465 Cleveland Avenue

Westerville, OH 43082

(614)-895-2000.

	1	 	See Appendix A attached hereto for
a list of executive officers with whom the Company has entered into such
agreements.

 

 

Your Stock Grant

     Your Stock Grant entitles you to receive                   
(                    ) shares of
Restricted Stock all of which are designated as Service Vesting Shares. As soon as you sign and
return a signed copy of the Acceptance, certificates evidencing these shares of Restricted Stock
will be issued in your name as record holder. Unless and until these shares are forfeited as
discussed below, you will be entitled to all rights and incidents of ownership of these Restricted
Shares, including all dividend and voting rights, from the Date of Grant. However, until the
shares become Vested Shares, you will not be entitled to offer for sale, sell, pledge, assign,
encumber, or otherwise transfer or dispose of such Unvested Shares or any interest in such shares
until satisfaction of all such restrictions imposed by the Plan or this Award Agreement.

Vesting of Your Restricted Stock

     Your Service Vesting Shares are subject to a Service Vesting Schedule that requires you to
complete a period of Service before those shares will become Vested Shares. Pursuant to your
Service Vesting Schedule, 1/48th of the total number of your Service Vesting Shares will
become Vested Shares for each calendar month of your Service after the Date of Grant such that the
entire number of your Service Vesting Shares will become vested after 48 calendar months of Service
after the Date of Grant.

     In addition and notwithstanding any provision in the Plan to the contrary, your Unvested
Shares will become Vested Shares upon severance of your Service for any of the following reasons –

	•  	Death;
	 
	•  	Disability or Retirement within the meaning of the Plan;
	 
	•  	Discharge by the Company other than for Cause within the meaning of your Employment
Agreement;
	 
	•  	Resignation by you for Good Reason within the meaning of your Employment Agreement; or
	 
	•  	Resignation or discharge for any reason other than Cause upon or after a Change in
Control within the meaning of your Employment Agreement –

whichever is first to occur (constituting a “Date of Vesting” within the meaning of the Plan).

     At death, your Vested Shares (including any Unvested Shares that become Vested Shares will be
transferred pursuant to your will or applicable laws of descent and distribution.

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     Until your shares of Restricted Stock become Vested Shares, the certificates evidencing your
shares will contain a notation that these shares may not be transferred other than by reversion to the Company upon forfeiture as discussed below, and these certificates will be held by
an appropriate officer of the Company with stock transfer powers signed by you in transferable form
as provided in Section 5.3 of the Plan. If your shares become Vested Shares and all requirements
for withholding of federal, state, local, and foreign taxes are satisfied, a new certificate
without any notation of the foregoing restrictions will be delivered to you, and each share
represented by this new certificate will no longer constitute a share of Restricted Stock.

Forfeiture of Your Restricted Stock is Not Vested

     If your Service is terminated for any reason other than one constituting a Date of Vesting
described above, you will forfeit all rights and incidents of ownership in and to all Unvested
Shares. In the event of such forfeiture, the certificates representing those Unvested Shares will
be cancelled, and all such Unvested Shares will revert to the Company.

Taxation

     Unless you make an election under section 83(b) of the Code to be taxed at the Date of Grant,
your Unvested Shares of Restricted Stock will not be taxable to you until they become Vested
Shares, at which time the market value of the Shares then vesting is subject to the Participant as
compensation at ordinary income rates for the year of the vesting. Any additional appreciation in
value of the Stock realized upon the sale of the stock after you vest is taxable as a sale of
property at capital gains rates. You may elect under section 83(b) of the Code to be taxed earlier
at ordinary income rates so that appreciation realized thereafter will be taxable at capital gains
rates. You are required to notify the Company if you make such an election under section 83(b).
Although the Company can give you no assurance as to the taxability to you, you may contact the
Company Secretary for further information generally describing the tax aspects of Restricted Stock.

Miscellaneous

     Your Unvested Shares are not transferable except to the extent they become vested at your
death.

     This Award Agreement and your Restricted Stock are subject to other terms and conditions set
forth in the Plan, including withholding requirements for taxes, immediate forfeiture of all
Unvested Shares if your Service is terminated for Cause, certain restrictions in the case of a
public offering and certain securities law restrictions.

     One of the restrictions to facilitate any future public offering by the Company is that by
accepting this Award you agree on behalf of yourself and your heirs, legal representatives,
successors, and assigns that in the event of any underwritten public offering of any Company

3

 

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

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

	 	 	 	 	 	 	 
	 

	 	ProCentury Corporation
	 
	 	 
	 
	 	 
	

	 	 
	 
	 	 
	

	 	By:
	

	 	 	 
	 
	 	 
	

	 	Its:
	

	 	 	 

Acceptance

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

							
	Dated:	 	 	 	 
	
	 	 
	 	 
	
	 	 	 	Participant’s Signature	 

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Appendix A

	 	 	 	 	 	 	 	 	 
	Name of Executive	 	Number of Shares	 	 	Grant Date	 
	Edward F. Feighan
	 	 	25,300	 	 	 	4/20/2004	 
	Charles D. Hamm, Jr.
	 	 	25,300	 	 	 	4/20/2004	 
	Christopher J. Timm
	 	 	25,300	 	 	 	4/20/2004	 
	John A. Marazza
	 	 	25,300	 	 	 	4/20/2004

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