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Exhibit 4.07    
    

THE
SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN
EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT COVERING SUCH SECURITIES, THE SALE IS MADE IN ACCORDANCE WITH RULE 144 OR RULE 701 UNDER THE ACT, OR THE COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE
COMPANY STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT. 

THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE HELD BY AN AFFILIATE OF THE COMPANY. NO SALE OR DISPOSITION OF THESE SHARES MAY BE EFFECTED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION RELATED
THERETO OR IN COMPLIANCE WITH RULE 144 OR ITS SUCCESSOR OR PURSUANT TO AN OPINION OF COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. 

	Warrant No.	 	 	 	Number of Shares:	 	 
	 	 	
	 	 	 	
 (subject to adjustment)

Date
of Issuance: January 5, 2004 

 
 

INSIGNIA SOLUTIONS PLC
  
    Warrant to Purchase American Depositary Shares    
    

        Insignia Solutions, plc (the "Company"), for value received equal to $0.001 per share of Warrant Stock, hereby
certifies that                        or its registered assigns (the "Registered Holder"), is entitled, subject to the terms set forth below, to have issued to
it by the Company, at any time after the date hereof and on or before the Expiration Date (as defined in Section 6 below), up
to                        (            ) American depositary shares
("ADSs") (as adjusted from time to time pursuant to the provisions of this Warrant), with each ADS representing one ordinary share, 20 pence per share
nominal value of the Company, at a per share Exercise Price equal to $0.92, which is 115% of $0.80 (subject to adjustment as hereinafter provided), provided however  that the Exercise Price shall be at
least the U.S. Dollar equivalent of 20.5 pence per ADS calculated by reference to the average currency conversion rate quoted by the Bank of
America in London as the price for Pounds Sterling purchased with U.S. Dollars prevailing at the date the Warrant is exercised. Notwithstanding any provision hereof to the contrary (and in particular
any provision relating to the adjustment of the Exercise Price), the Company shall not be required or permitted to issue any ordinary shares under this Warrant (or have its transfer agent or
Depositary issue any ADSs), if such issuance would breach the Company's obligations under the United Kingdom Companies Act 1985. The shares to be issued upon exercise of this Warrant and the exercise
price per share, as adjusted from time to time pursuant to the provisions of this Warrant, are hereinafter referred to as the "Warrant Stock" and the
"Exercise Price," respectively. 

        This
Warrant is issued pursuant to that certain Engagement Letter dated October 9, 2003 by and between the Company and Nash Fitzwilliams, Ltd. Any capitalized terms used
herein, but not defined herein, shall carry those definitions ascribed to them in that certain American Depositary Shares Purchase Agreement dated approximately concurrently herewith by and among the
Company and certain investors (the "Purchase Agreement"). 

        1.    Fully Vested Shares.    The shares of Warrant Stock are fully vested and exercisable as
of the date of this Warrant. 

 

        2.    Exercise.    

        (a)    Method of Exercise.    This Warrant may be exercised by the Registered Holder, in whole
or in part, by surrendering this Warrant, with the purchase/exercise form appended hereto as Exhibit A duly executed by such Registered Holder or
by such Registered Holder's duly authorized attorney, at the principal office of the Company, or at such other office or agency as the Company may designate in writing prior to the date of such
exercise, accompanied by payment in full of the Exercise Price payable in respect of the number of shares of Warrant Stock issued upon such exercise. The Exercise Price may be paid by cash, check,
wire transfer or by the surrender of promissory notes or other instruments representing indebtedness of the Company to the Registered Holder. 

        (b)    Effective Time of Exercise.    Each exercise of this Warrant shall be deemed to have
been effected immediately prior to the close of business on the day on which this Warrant shall have been surrendered to the Company as provided in Section 2(a) above. At such time, the person
or persons in whose name or names any certificates for Warrant Stock shall be issuable upon such exercise as provided in Section 2(c) below shall be deemed to have become the holder or holders
of record of the Warrant Stock represented by such certificates. 

        (c)    Delivery to Holder.    As soon as practicable after the exercise of this Warrant in
whole or in part, and in any event within 10 days thereafter, the Company at its expense will cause to be issued in the name of, and delivered to, the Registered Holder, or as such Registered
Holder (upon payment by such Registered Holder of any applicable transfer taxes) may direct: 

          (i)  an
American Depositary Receipt representing such number of shares of Warrant Stock to which such Registered Holder shall be entitled, and 

         (ii)  in
case such exercise is in part only, a new warrant or warrants (dated the date hereof) of like tenor, calling in the aggregate on the face or faces thereof for the
number of shares of Warrant Stock equal (giving effect to any adjustment therein) to the number of such shares called for on the face of this Warrant minus the number of such shares purchased by the
Registered Holder upon such exercise as provided in Section 2(a) above. 

        3.    Adjustments.    The following provisions in relation to adjustments shall be subject to
the provisions in the opening clause of this Warrant relating to the minimum Exercise Price and to breaches of the United Kingdom Companies Act 1985: 

        (a)    Share subdivision and Dividends.    If the Company's outstanding shares shall be
subdivided into a greater number of shares or a dividend in ordinary shares shall be paid in respect of the ADSs, the Exercise Price in effect immediately prior to such subdivision or at the record
date of such dividend shall simultaneously with the effectiveness of such subdivision or immediately after the record date of such dividend be proportionately reduced subject to the proviso that the
Exercise Price shall never be less than the US Dollar equivalent to 20.5 pence on the date of exercise. If outstanding shares shall be combined into a smaller number of shares, the Exercise Price in
effect immediately prior to such combination shall, simultaneously with the effectiveness of such combination, be proportionately
increased. When any adjustment is required to be made in the Exercise Price, the number of shares of Warrant Stock to be issued upon the exercise of this Warrant shall be changed to the number
determined by dividing (i) an amount equal to the number of shares issuable upon the exercise of this Warrant immediately prior to such adjustment, multiplied by the Exercise Price in effect
immediately prior to such adjustment, by (ii) the Exercise Price in effect immediately after such adjustment. 

        (b)    Sale, Reclassification, Etc.    In case of any (i) sale or other disposition of
all or substantially all of the Company's assets or distribution of property to shareholders (other than distributions payable out of distributable profits available for that purpose), or
(ii) reclassification, 

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change
or conversion of the share capital of the Company or of any reorganization of the Company (or any other company the shares or securities of which are at the time receivable upon the exercise of
this Warrant) or (iii) any similar corporate reorganization on or after the date hereof, then and in each such case the holder of this Warrant, upon the exercise hereof at any time thereafter
shall be entitled to receive, in lieu of the shares or other securities and property receivable upon the exercise hereof prior to such sale or other disposal, reclassification, change, conversion or
reorganization, the shares or other securities or property to which such holder would have been entitled upon such consummation if such holder had exercised this Warrant immediately prior thereto, all
subject to further adjustment as provided in Section 3(a) or 3(b); and in each such case, the terms of this Section 3 shall be applicable to the shares or other securities properly
receivable upon the exercise of this Warrant after such sale or other disposal, reclassification, change, conversion or reorganization. 

        (c)    Adjustment Certificate.    When any adjustment is required to be made in the Warrant
Stock or the Exercise Price pursuant to this Section 3, the Company shall promptly mail to the Registered Holder a certificate setting forth (i) a brief statement of the facts requiring
such adjustment, (ii) the Exercise Price after such adjustment and (iii) the kind and amount of stock or other securities or property into which this Warrant shall be exercisable after
such adjustment. 

        4.    Transfers.    

        (a)    Unregistered Security.    Each holder of this Warrant acknowledges that this Warrant
and the Warrant Stock have not been registered under the Securities Act of 1933, as amended (the "Securities Act"), and agrees not to sell, pledge,
distribute, offer for sale, transfer or otherwise dispose of this Warrant or any Warrant Stock issued upon its exercise in the absence of (i) an effective registration statement under the
Securities Act as to this Warrant or such Warrant Stock and registration or qualification of this Warrant or such Warrant Stock under any applicable U.S. federal or state securities law then in effect
or (ii) an opinion of counsel, reasonably satisfactory to the Company, that such registration and qualification are not required. Each certificate or other instrument for Warrant Stock issued
upon the exercise of this Warrant shall bear a legend substantially to the foregoing effect. 

        (b)    Transferability.    Subject to the provisions of Section 4(a) hereof, this
Warrant and all rights hereunder are transferable, in whole or in part, to (i) any entity controlling, controlled by or under common
control of the Registered Holder that is not in the good faith determination of the Company's Board of Directors involved in a business that is competitive with the Company's business, or
(ii) to any other proposed transferee of at least fifty percent (50%) of the Warrant Shares by surrendering the Warrant with a properly executed assignment (in the form of  Exhibit B hereto) at
the principal office of the Company. 

        (c)    Warrant Register.    The Company will maintain a register containing the names and
addresses of the Registered Holders of this Warrant. Until any transfer of this Warrant is made in the warrant register, the Company may treat the Registered Holder of this Warrant as the absolute
owner hereof for all purposes; provided, however, that if this Warrant is properly assigned in blank,
the Company may (but shall not be required to) treat the bearer hereof as the absolute owner hereof for all purposes, notwithstanding any notice to the contrary. Any Registered Holder may change such
Registered Holder's address as shown on the warrant register by written notice to the Company requesting such change. 

        5.    No Impairment.    The Company will not, by amendment of its memorandum and articles of
association or through reorganization, dissolution, sale of assets or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will
(subject to Section 14 below) at all times in good faith assist in the carrying out of all such terms and in the taking 

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of
all such action as may be necessary or appropriate in order to protect the rights of the holder of this Warrant against impairment. 

        6.    Termination.    This Warrant (and the right to purchase securities upon exercise hereof)
shall terminate on the earlier of: (i) January 5, 2009 or (ii) the closing of any sale of all or substantially all of the assets of the Company, or any transaction or series of
related transactions in which the Company's shareholders (which shall include, for the avoidance of doubt, indirect shareholders who hold ADSs through the depositary) immediately prior thereto own
less than a majority of the voting stock of the Company (or its successor or parent) immediately thereafter (an "Acquisition") (the
"Expiration Date"). 

        7.    Notices of Certain Transactions.    In case: 

        (a)   the
Company shall take a record of the holders of its Ordinary Shares (including ADSs) (or other stock or securities at the time deliverable upon the exercise of this
Warrant) for the purpose of entitling or enabling them to receive any dividend or other distribution, or to receive any right to subscribe for or purchase any shares of stock of any class or any other
securities, or to receive any other right, to subscribe for or purchase any shares of stock of any class or any other securities, or to receive any other right, or 

        (b)   of
any capital reorganization of the Company, any reclassification of the share capital of the Company, or 

        (c)   of
the voluntary or involuntary dissolution, liquidation or winding-up of the Company, 

then,
and in each such case, the Company will mail or cause to be mailed to the Registered Holder of this Warrant a notice specifying, as the case may be, (i) the date on which a record is to
be taken for the purpose of such dividend, distribution or right, and stating the amount and character of such dividend, distribution or right, or (ii) the effective date on which such
reorganization, reclassification, transfer, dissolution, liquidation or winding-up is to take place, and the time, if any is to be fixed, as of which the holders of record of Ordinary
Shares (including ADSs) (or such other securities at the time deliverable upon such reorganization, reclassification, transfer, dissolution, liquidation or winding-up) are to be
determined. 

        8.    Reservation of Stock.    The Company shall ensure that it will have sufficient
authorized but unissued share capital out of which it can allot and issue such shares of Warrant Stock as may need to be issued to the Registered Holder upon the exercise of this Warrant. 

        9.    Exchange of Warrants.    Upon the surrender by the Registered Holder of any Warrant or
Warrants, properly endorsed, to the Company at the principal office of the Company, the Company will, subject to the provisions of Section 4 hereof, issue and deliver to or upon the order of
such Holder, at the Company's expense, a new Warrant or Warrants of like tenor, in the name of such Registered Holder or as such Registered Holder (upon payment by such Registered Holder of any
applicable transfer taxes) may direct, calling in the aggregate on the face or faces thereof for the number of shares of ADSs called for on the face or faces of the Warrant or Warrants so surrendered. 

        10.    Replacement of Warrants.    Upon receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction or mutilation of this Warrant and (in the case of loss, theft or destruction) upon delivery of an indemnity agreement (with surety if reasonably required) in an
amount reasonably satisfactory to the Company, or (in the case of mutilation) upon surrender and cancellation of this Warrant, the Company will issue, in lieu thereof, a new Warrant of like tenor. 

        11.    Notices.    Any notice required or permitted by this Warrant shall be in writing and
shall be deemed duly given upon receipt, when delivered personally or by courier, overnight delivery service or confirmed facsimile, or 48 hours after being deposited in the regular mail as
certified or registered mail (airmail if sent internationally) with postage prepaid, addressed (a) if to the Registered Holder, to the 

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address
of the Registered Holder most recently furnished in writing to the Company and (b) if to the Company, to the address set forth on the signature page of this Warrant or as subsequently
modified by written notice to the Registered Holder. 

        12.    No Rights as Stockholder.    Until the exercise of this Warrant, the Registered Holder
of this Warrant shall not have or exercise any rights by virtue hereof as a stockholder of the Company. 

        13.    No Fractional Shares.    No fractional shares of ADSs will be issued in connection with
any exercise hereunder. 

        14.    Amendment or Waiver.    Any term of this Warrant may be amended or waived upon written
consent of the Company and the registered holders of at least 50% of the ADSs issuable upon exercise of the outstanding warrants purchased pursuant to the Purchase Agreement. By acceptance hereof, the
Registered Holder acknowledges that in the event the required consent is obtained, any term of this Warrant may be amended or waived with or without the consent of the Registered Holder;  provided,
however, that any amendment hereof that would materially adversely affect the Registered
Holder in a manner different from the holders of the remaining warrants issued pursuant to the Purchase Agreement shall also require the consent of Registered Holder. 

        15.    Headings.    The headings in this Warrant are for purposes of reference only and shall
not limit or otherwise affect the meaning of any provision of this Warrant. 

        16.    Governing Law.    This Warrant and all acts and transactions pursuant hereto and the
rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of California, without giving effect to principles of conflicts of
law. 

        17.    Registration Rights.    The Warrant Shares are subject to the re-sale
registration rights described in the Registration Rights Agreement by and between the Company and the Registered Holder and dated concurrently herewith. 

        18.    Representations and Covenants of the Holder.    This Warrant has been entered into by
the Company in reliance upon the following representations and covenants of the Registered Holder: 

        (a)    Investment Purpose.    The Registered Holder is acquiring the Warrant and the ADSs
issuable upon exercise of the Warrant for its own account, not as a nominee or agent and with no present intention of selling or otherwise distributing any part thereof. 

        (b)    Private Issue.    The Registered Holder understands, except as provided in the
Registration Rights Agreement, (i) that neither the Warrant nor the ADSs issuable upon exercise of this Warrant is, nor will be, registered under the Securities Act or qualified under
applicable state securities laws on the ground that the issuance contemplated by this Warrant will be exempt from the registration and qualifications requirements thereof pursuant to
Section 4(2) of the Securities Act and any applicable state securities laws, and (ii) that the Company's reliance on such exemption is predicated on the representations set forth in this
Section 18. 

        (c)    Disposition of Holder's Rights.    In no event will the Registered Holder make a
disposition of the Warrant or the ADSs issuable upon exercise of the Warrant in the absence of (i) an effective registration statement under the Securities Act as to this Warrant or such
Warrant Stock and registration or qualification of this Warrant or such Warrant Stock under any applicable U.S. federal or state securities law then in effect or (ii) an opinion of counsel,
reasonably satisfactory to the Company, that such registration and qualification are not required. Notwithstanding the foregoing, the restrictions imposed upon the transferability of any of its rights
to acquire ADSs do not apply to transfers from the beneficial owner of any of the aforementioned securities to its nominee or from such nominee to its beneficial owner, and shall terminate as to any
particular ADS when (1) such security shall have been effectively registered under the Securities Act and sold by the holder thereof in accordance with such registration or (2) such
security shall have been 

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sold
without registration in compliance with Rule 144 under the Securities Act, or (3) a letter shall have been issued to the Registered Holder at its request by the staff of the
Securities and Exchange Commission (the "SEC") or a ruling shall have been issued to the Registered Holder at its request by the SEC stating that no
action shall be recommended by such staff or taken by SEC, as the case may be, if such security is transferred without registration under the Securities Act in accordance with the conditions set forth
in such letter or ruling and such letter or ruling specifies that no subsequent restrictions on transfer are required. Whenever the restrictions imposed hereunder shall terminate, as hereinabove
provided, the Registered Holder or holder of an ADS then outstanding as to which such restrictions have terminated shall be entitled to receive from the Company, without expense to such holder, one or
more new certificates for the Warrant or for such ADSs not bearing any restrictive legend. 

        (d)    Financial Risk.    The Registered Holder has such business and financial experience as
is required to give it the capacity to protect its own interests in connection with its investment. 

        (e)    Accredited Investor.    The Registered Holder is an "accredited investor" as defined by
Rule 501 of Regulation D under the Securities Act, as presently in effect. 

        (f)    4.99% Maximum Share Holding.    Notwithstanding anything to the contrary contained
herein, the Holder shall not exercise this Warrant to the extent (but only to the extent) that such Holder would be the beneficial owner of more then 4.99% of the shares of the Company's common stock
outstanding thereafter. For purposes of this paragraph, beneficial ownership and all determinations and calculations shall be determined and calculated in accordance with Secion 13(d) of the
Securities Exchange Act of 1934, as amended, and all applicable rules and regulations thereunder. It is expressly a term of this Warrant that the limitations set forth herein shall apply to each
successive holder of any of this Warrant. The foregoing restriction may not be altered, amended, deleted or changed in any manner whatsoever unless the holders of a majority of the Company's
outstanding shares of common stock and the Holder (or any successive holder) approve such alteration, amendment, deletion or change. 

        (g)    Financial Services and Markets Act 2000 (Financial Promotion) Order 2001 (S12001/1335), as amended,
("FPO").    To the extent that the Purchaser is a resident of the United Kingdom or would otherwise be subject to the Financial Services and Markets Act 2000, the
Purchaser is either a person of a kind described in Article 19 (Investment Professionals), Article 49 (High Net Worth Companies, Unincorporated Association etc.) and/or Article 50
(Sophisticated Investors) of FPO, as presently in effect. 

        19.    Representations and Warranties of the Company.    This Warrant has been entered into by
the Registered Holder in reliance upon the following representations and covenants of the Company: 

        (a)    Authorization.    The Warrant has been duly executed and delivered by the Company and
constitutes a legal, valid and binding obligation of the Company enforceable in accordance with its terms, subject to laws of general application relating to bankruptcy, insolvency and the relief of
debtors and rules of law governing specific performance, injunctive relief or other equitable remedies. 

        (b)    Valid Issuance.    The Warrant Stock is duly authorized and reserved for issuance, and
when issued, sold and delivered in accordance with the terms of this Warrant will be duly and validly issued and fully paid. 

        (c)    No Conflict.    The execution and delivery of this Warrant do not, and the consummation
of the transactions contemplated hereby will not, conflict with, or result in any violation of, breach or default (with or without notice or lapse of time, or both), or give rise to a right of
termination, cancellation or acceleration of any obligation or to a loss of a material benefit, under, any provision of the memorandum and articles of association of the Company or any material 

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agreement
attached as an exhibit to the Company's SEC Documents (as defined in the Purchase Agreement), or any judgment, order, decree, statute, law, ordinance, rule, listing requirement or regulation
applicable to the Company, its properties or assets, which conflict, violation, default or right would have a material adverse effect on the business, properties, prospects, financial condition or
operations of the Company. 

        20.    Counterparts.    This Warrant may be executed in counterparts, and each such
counterpart shall be deemed an original for all purposes. 

[Signature Pages Follow] 

7

        IN
WITNESS WHEREOF, the parties have executed this Warrant to Purchase American Depositary Shares as of the date first above written. 

	 	 	 	 	INSIGNIA SOLUTIONS, PLC
	

 	
 	

 	
 	

By	
 	

 
	 	 	 	 	 	 	

	

 	
 	

 	
 	

Name:	
 	

 
	 	 	 	 	 	 	
 (print)
	

 	
 	

 	
 	

Title:	
 	

 
	 	 	 	 	 	 	

	

 	
 	

 	
 	

Address:	
 	

41300 Christy Street

Fremont, CA 94538-3115

Attention: Chief Financial Officer
	

 	
 	

 	
 	

Fax Number: (510) 360-3701
	
AGREED TO AND ACCEPTED BY:
	

	
 	

 	
 	

 
	

By	
 	

	
 	

 	
 	

 
	

Name:	
 	

 (print)	
 	

 	
 	

 
	

Title:	
 	

	
 	

 	
 	

 
	

Address:	
 	

 	
 	

 	
 	

 
	

Fax Number:

 
 

EXHIBIT A
  
    PURCHASE/EXERCISE FORM    
    

To:
Insignia Solutions,
plc                                         
                 Dated:
 

        The
undersigned, pursuant to the provisions set forth in the attached Warrant No.                        , hereby irrevocably elects
to purchase            American depositary shares covered
by such Warrant and herewith makes payment of
$                                         
 , representing the full purchase price for such shares at the price per share provided for in such Warrant. 

        The
undersigned acknowledges that it has reviewed the representations and warranties contained in Section 18 of the Warrant and by its signature below hereby makes such
representations and warranties to the Company. Defined terms contained in such representations and warranties shall have the meanings assigned to them in the Warrant. 

	 	 	Signature:	 	 
	 	 	 	 	

	

 	
 	

Name (print):	
 	

 
	 	 	 	 	

	

 	
 	

Title (if applic.):	
 	

 
	 	 	 	 	

	

 	
 	

Company (if applic.):	
 	

 
	 	 	 	 	

 
 

EXHIBIT B
  
    ASSIGNMENT FORM    
    

        FOR VALUE RECEIVED,                        hereby sells, assigns
and transfers all of the rights of the undersigned under the attached Warrant with respect to the number
of American depositary shares covered thereby set forth below, unto: 

	Name of Assignee
	 	Address/Fax Number
	 	No. of Shares

	

    	
 	

 	
 	

 
	

    	
 	

 	
 	

 

	Dated:	 	 	 	Signature:	 	 
	 	 	
	 	 	 	

	

 	
 	

 	
 	

 	
 	

	

 	
 	

 	
 	

Witness:	
 	

 
	 	 	 	 	 	 	

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Exhibit 4.07

INSIGNIA SOLUTIONS PLC Warrant to Purchase American Depositary Shares

EXHIBIT A PURCHASE/EXERCISE FORM

EXHIBIT B ASSIGNMENT FORMQuickLinks
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Exhibit 10.18  

 
 

2004 STOCK INCENTIVE PLAN
  FOR
  BRISTOL WEST HOLDINGS, INC. AND SUBSIDIARIES    
    

1.     Purpose of the Plan

        The
purpose of the Plan is to aid the Company and its Affiliates in recruiting and retaining employees, directors, advisors and consultants and to motivate such employees, directors,
advisors and consultants to exert their best efforts on behalf of the Company and its Affiliates by providing incentives through the granting of Awards. The Company expects that it will benefit from
the added interest which such key employees, directors, advisors and consultants will have in the welfare of the Company as a result of their proprietary interest in the Company's success. 

2.     Definitions

        The
following capitalized terms used in the Plan have the respective meanings set forth in this Section: 

	(a)
	Act: The Securities Exchange Act of 1934, as amended, or any successor thereto.

	(b)
	Affiliate: Any entity directly or indirectly controlling, controlled by, or under common control with, the Company or any other entity
designated by the Board in which the Company or a shareholder of the Company has an interest.

	(c)
	Award: An Option, Stock Appreciation Right or Other Share-Based Award granted pursuant to the Plan.

	(d)
	Beneficial Owner: A "beneficial owner," as such term is defined in Rule 13d-3 and 13d-5 under the Act
(or any successor rule thereto), which shall in any event include having the power to vote (or cause to be voted) pursuant to contract, irrevocable proxy or otherwise, and which, for purposes of the
calculation under clause (y) of the definition of Change in Control, shall be deemed to include shares that any such Person or Group has a right to acquire, whether such right is exercisable
immediately or only after the passage of time.

	(e)
	Board: The Board of Directors Of the Company.

	(f)
	Change in Control: means the occurrence of any of the following events:

	(i)
	sale
of all or substantially all of the assets of the Company to a Person or Group that is not Kohlberg Kravis Roberts & Co. or an Affiliate thereof
(collectively, the "KKR Partnerships");

	(ii)
	a
sale by any member of the KKR Partnerships resulting in more than 50% of the voting stock of the Company being held by a Person or Group that is not a member of the
KKR Partnerships; or

	(iii)
	a
merger, consolidation, recapitalization or reorganization of the Company with or into another Person which is not a member of the KKR Partnerships; 

and following any of the foregoing events in clause (ii)-(iii), (x) the KKR Partnerships no longer have the ability, without the approval
of a Person or Group or an Affiliate of the Company that is not a member of the KKR Partnerships, to elect a majority of the Board (or the resulting entity in the transaction)  and (y) any Person or
Group who is not a member of the KKR Partnerships is or becomes the Beneficial Owner, directly or indirectly, in the
aggregate, of a greater percentage of the total voting power of the Company than that held, directly or indirectly, in the aggregate, by the KKR Partnerships. 

 

	(g)
	Code: The Internal Revenue Code of 1986, as amended, or any successor thereto.

	(h)
	Committee: The Compensation Committee of the Board, or such other committee as may be appointed by the Board in accordance with
Section 4 of the Plan.

	(i)
	Company: Bristol West Holdings, Inc., a Delaware corporation.

	(j)
	Effective Date: The date the Board approves the Plan, or such later date as is designated by the Board.

	(k)
	Fair Market Value: If the Shares are traded on NASDAQ, the Fair Market Value of the Shares as of any date of determination shall be the
closing sale price on that date of a Share as reported in the NASDAQ National Market Issues quotations of the New York City Edition of the Wall Street Journal. If the Shares are traded on the New York
Stock Exchange, the Fair Market Value of the Shares as of any date of determination shall be the closing sale price on that date of a Share as reported on the New York Stock Exchange Composite Tape
(or, if the Shares are not traded on NASDAQ or the New York Stock Exchange, as applicable, on such date, on the next preceding date on which it was so traded); and if there should not be a public
market for the Shares on such date, the Fair Market Value shall be the value established by the Committee in good faith.

	(l)
	Group: Group" means a "group" as such term is used in Sections 13(d) and 14(d) of the Act, acting in concert.

	(m)
	ISO: An Option that is also an incentive stock option, as described in Section 422 of the Code, granted pursuant to
Section 6(c) of the Plan.

	(n)
	LSAR: A limited stock appreciation right granted pursuant to Section 7(d) of the Plan.

	(o)
	Option: An option to purchase Shares granted pursuant to Section 6 of the Plan.

	(p)
	Option Price: The purchase price per Share under the terms of an Option, as determined pursuant to Section 6(a) of the Plan.

	(q)
	Other Share-Based Awards: Awards granted pursuant to Section 8 of the Plan.

	(r)
	Participant: An employee, director or consultant of the Company or an Affiliate who is selected by the Committee to participate in the
Plan.

	(s)
	Person: A "person," as such term is used for purposes of Section 13(d) or 14(d) of the Act (or any successor section thereto).

	(t)
	Plan: The 2004 Stock Incentive Plan for Bristol West Holdings, Inc. and Subsidiaries.

	(u)
	RSU: A restricted stock unit, granted pursuant to Section 8 of the Plan, which represents the right to receive a Share.

	(v)
	Shares: Shares of common stock of the Company, subject to coordination with Section 9 of the Plan.

	(w)
	Stock Appreciation Right: A stock appreciation right granted in connection with or independent of the grant of an Option, pursuant to
Section 7 of the Plan. 

3.     Shares Subject to the Plan

        The
total number of Shares of common stock that may be used to satisfy Awards under the Plan initially is 3,000,000. The Shares may consist, in whole or in part, of unissued Shares or
previously-issued Shares. Of this number, a maximum of 500,000 of Shares may be granted during any given calendar year to any Participant and the maximum number of Shares that may be awarded in the
form 

2

 

of
RSUs, restricted Shares or Other Share-Based Awards payable in Shares during any calendar year to any Participant shall be 500,000. The issuance of Shares upon the exercise or payment of an Award
shall reduce the total number of Shares available under the Plan, as applicable. Shares which are subject to Awards that terminate, lapse or are cancelled may again be used to satisfy Awards under the
Plan. If the Option Price of any Option granted under the Plan is satisfied by delivering Shares to the Company in accordance with the terms of Section 6(b) of the Plan, only the number of
Shares issued net of the Shares delivered shall be deemed delivered for purposes of determining the maximum numbers of Shares available under the Plan. To the extent any Shares subject to an Award are
not delivered to a Participant because such Shares are used to satisfy an applicable minimum income tax withholding obligation, such Shares shall not be deemed to have been delivered for purposes of
determining the maximum number of Shares available under the Plan. 

4.     Administration

        The
Plan shall be administered by the Committee, which may delegate its duties and powers in whole or in part as it determines, including to a subcommittee consisting of at least two
individuals who are intended to qualify as "non-employee directors" within the meaning of Rule 16b-3 under the Act (or any successor rule thereto) and "outside
directors" within the meaning of Section 162(m) of the Code. The Committee may grant Awards under this Plan only to Participants; provided that
Awards may also, in the discretion of the Committee, be made under the Plan in assumption of, or in substitution for, outstanding awards previously granted by the Company or its Affiliates or a
company that becomes an Affiliate. The number of Shares underlying such substitute Awards shall be counted against the aggregate number of Shares available for Awards under the Plan. The Committee is
authorized to interpret the Plan, to establish, amend and rescind any rules and regulations relating to the Plan, and to make any other determinations that it deems necessary or desirable for the
administration of the Plan. The Committee may correct any defect or supply any omission or reconcile any inconsistency in the Plan in the manner and to the extent the Committee deems necessary or
desirable. Any decision of the Committee in the interpretation and administration of the Plan, as described herein, shall lie within its sole and absolute discretion and shall be final, conclusive and
binding on all parties concerned (including, but not limited to, Participants and their
beneficiaries or successors). The Committee shall have the full power and authority to establish the terms and conditions of any Award consistent with the provisions of the Plan and to waive any such
terms and conditions at any time, in its sole discretion (including, without limitation, accelerating or waiving any vesting conditions and/or accelerating any payment). The Committee shall require
payment of any amount it may determine to be necessary to withhold for federal, state, local or other taxes of any relevant jurisdiction as a result of the granting, vesting or exercise of an Award,
or upon the sale of Shares acquired by the granting, vesting or exercise of an Award. For avoidance of doubt, if at any time the Committee determines that it has not received or required sufficient
payment in respect of such withholding, the Committee is authorized to require such additional payments as it determines are necessary, and may withhold from such sources as it determines are
necessary, including by payroll deductions. 

5.     Limitations

        No
Award may be granted under the Plan after the tenth anniversary of the Effective Date, but Awards theretofore granted may extend beyond that date. 

6.     Terms and Conditions of Options

        Options
granted under the Plan shall be, as determined by the Committee, non-qualified stock options or ISOs for United States federal income tax purposes (or other types of
Options in jurisdictions outside the United States), as evidenced by the related Award, and shall be subject to the 

3

 

foregoing,
the following terms and conditions, and to such other terms and conditions, not inconsistent therewith, as the Committee shall determine: 

	(a)
	Option Price; Exercisability. Any Option granted under the Plan shall have an Option Price of not less than the Fair Market Value of
one Share on the date the Option is granted, and shall be exercisable at such time and upon such terms and conditions, as may be determined by the Committee.

	(b)
	Exercise of Options. Except as otherwise provided in the Plan or in an Award, an Option may be exercised for all, or from time to time
any part, of the Shares for which it is then exercisable. For purposes of this Section 6 of the Plan, the exercise date of an Option shall be the later of the date a notice of exercise is
received by the Company and, if applicable, the date payment is received by the Company pursuant to clauses (i), (ii), (iii) or (iv) in the following sentence. Except as otherwise
provided in an Award, the purchase price for the Shares as to which an Option is exercised shall be paid in full at the time of exercise at the election of the Participant: (i) in cash or its
equivalent (e.g., by check); (ii) to the extent permitted by the Committee, in Shares having a Fair Market Value equal to the aggregate Option Price for the Shares being purchased and
satisfying such other requirements as may be imposed by the Committee, provided, that such Shares have been held by the Participant for no less than six
months (or such other period as established from time to time by the Committee or United States generally accepted accounting principles); (iii) partly in cash and, to the extent permitted by
the Committee, partly in such Shares, provided, that such Shares have been held by the Participant for no less than six months (or such other period as
established from time to time by the Committee or generally accepted accounting principles); or (iv) to the extent permitted by applicable law through the delivery of irrevocable instructions
to a broker to sell Shares obtained upon the exercise of the Option and deliver promptly to the Company an amount out of the proceeds of such sale equal to the aggregate Option Price for the Shares
being purchased. The Committee may also only authorize the Company to make or facilitate loans to Participants to enable them to exercise Options to the extent not prohibited by applicable law. The
Committee may permit Participants to exercise Options in joint-tenancy with the Participant's spouse. No Participant shall have any rights to dividends or other rights of a shareholder with respect to
Shares subject to an Option until the Participant has given written notice of exercise of the Option, the Participant has paid in full for such Shares, the Shares in question have been recorded in the
Company's register of shareholders, and, if applicable, the Participant has satisfied any other conditions imposed by the Committee pursuant to the Plan.

	(c)
	ISOs. The Committee may grant Options under the Plan that are intended to be ISOs. No ISO shall have an Option Price of less than the
Fair Market Value of one Share on the date granted or have a term in excess of ten years; provided, however, that no ISO may be granted to any
Participant who at the time of such grant, owns more than ten percent of the total combined voting power of all classes of shares of the Company or of any Subsidiary, unless (i) the Option
Price for such ISO is at least 110% of the Fair Market Value of a Share on the date the ISO is granted and (ii) the date on which such ISO terminates is a date not later than the day preceding
the fifth anniversary of the date on which the ISO is granted. Any Participant who disposes of Shares acquired upon the exercise of an ISO either (A) within two years after the date of grant of
such ISO or (B) within one year after the transfer of such Shares to the Participant, shall notify the Company of such disposition and of the amount realized upon such disposition.

	(d)
	Attestation. Wherever in this Plan or any agreement evidencing an Award a Participant is permitted to pay the Option Price by
delivering Shares, the Participant may, subject to procedures satisfactory to the Committee (and to the extent permitted by applicable law), 

4

 

satisfy
such delivery requirement by presenting proof of record ownership of such Shares, or, to the extent permitted by the Committee, beneficial ownership of such Shares, in which case the Company
shall treat the Option as exercised without further payment and shall withhold such number of Shares from the Shares acquired by the exercise of the Option. 

7.     Terms and Conditions of Stock Appreciation Rights

	(a)
	Grants. The Committee also may grant (i) a Stock Appreciation Right independent of an Option or (ii) a Stock Appreciation
Right in connection with an Option, or a portion thereof. A Stock Appreciation Right granted pursuant to clause (ii) of the preceding sentence (A) may be granted at the time the related
Option is granted or at any time prior to the exercise or cancellation of the related Option, (B) shall cover the same Shares covered by an Option (or such lesser number of Shares as the
Committee may determine) and (C) shall be subject to the same terms and conditions as such Option except for such additional limitations as are contemplated by this Section 7 (or such
additional limitations as may be included in a Stock Appreciation Right Award).

	(b)
	Terms. The exercise price per Share of a Stock Appreciation Right shall be an amount determined by the Committee. Each Stock
Appreciation Right granted independent of an Option shall entitle a Participant upon exercise to a payment from the Company of an amount equal to (i) the excess of (A) the Fair Market
Value on the exercise date of one Share over (B) the exercise price per Share, times (ii) the number of Shares covered by the Stock Appreciation Right. Each Stock Appreciation Right
granted in conjunction with an Option, or a portion thereof, shall entitle a Participant to surrender to the Company the unexercised Option, or any portion thereof, and to receive from the Company in
exchange therefor an amount equal to (I) the excess of (x) the Fair Market Value on the exercise date of one Share over (y) the Option Price, times (II) the number of
Shares covered by the Option, or portion thereof, which is surrendered. The date a notice of exercise is received by the Company shall be the exercise date. Payment shall be made in Shares or in cash,
or partly in Shares and partly in cash (any such Shares valued at such Fair Market Value), all as shall be determined by the Committee. Stock Appreciation Rights may be exercised from time to time
upon actual receipt by the Company of written notice of exercise stating the number of Shares with respect to which the Stock Appreciation Right is being exercised. No fractional Shares will be issued
in payment for Stock Appreciation Rights, but instead cash will be paid for a fraction or, if the Committee should so determine, the number of Shares will be rounded downward to the next whole Share.

	(c)
	Limitations. The Committee may impose, in its discretion, such conditions upon the exercisability or transferability of Stock
Appreciation Rights as it may deem fit.

	(d)
	Limited Stock Appreciation Rights. The Committee may grant LSARs that are exercisable upon the occurrence of specified contingent
events. Such LSARs may provide for a different method of determining appreciation, specify that payment will be made only in cash and provide that any related Awards are not exercisable while such
LSARs are exercisable. Unless the context otherwise requires, whenever the term "Stock Appreciation Right" is used in the Plan, such term shall include LSARs. 

8.     Other Share-Based Awards

	(a)
	Generally. The Committee, in its sole discretion, may grant Awards of Shares, Awards of restricted Shares, Awards of RSUs and other
Awards that are valued in whole or in part by reference to, or are otherwise based on the Fair Market Value, of Shares ("Other Share-Based Awards"). Such Other Share-Based Awards shall be in such
form, and dependent on such 

5

 

conditions,
as the Committee shall determine, including, without limitation, the right to receive one or more Shares (or the equivalent cash value of such Shares) upon the completion of a specified
period of service, the occurrence of an event and/or the attainment of performance objectives. Other Share-Based Awards may be granted alone or in addition to any other Awards granted under the Plan.
Subject to the provisions of the Plan, the Committee shall determine: (i) to whom and when Other Share-Based Awards will be made; (ii) the number of Shares to be awarded under (or
otherwise related to) such Other Share-Based Awards; (iii) whether such Other Share-Based Awards shall be settled in cash, Shares or a combination of cash and Shares; and (iv) all other
terms and conditions of such Other Share-Based Awards (including, without limitation, the vesting provisions thereof and provisions ensuring that all Shares so awarded and issued shall be fully paid
and non-assessable). 

	(b)
	Performance-Based Awards. Notwithstanding anything to the contrary herein, certain Other Share-Based Awards granted under this
Section 9 may be granted in a manner which is intended to be deductible by the Company under Section 162(m) of the Code (or any successor section thereto) ("Performance-Based Awards"). A
Participant's Performance-Based Award shall be determined based on the attainment of written performance goals approved by the Board for a performance period established by the Board (i) while
the outcome for that performance period is substantially uncertain and (ii) no more than 90 days after the commencement of the performance period to which the performance goal relates
or, if less, the number of days which is equal to 25 percent of the relevant performance period. The performance goals, which must be objective, shall be based upon one or more of the following
criteria: (i) consolidated earnings before or after taxes (including earnings before interest, taxes, depreciation and amortization); (ii) net income; (iii) operating income;
(iv) earnings per Share; (v) book value per Share; (vi) return on shareholders' equity; (vii) expense management; (viii) return on investment;
(ix) improvements in capital structure; (x) profitability of an identifiable business unit or product; (xi) maintenance or improvement of profit margins; (xii) stock price;
(xiii) market share; (xiv) revenues or sales; (xv) costs; (xvi) cash flow; (xvii) working capital and (xviii) return on assets. The foregoing criteria may
relate to the Company, one or more of its Affiliates or one or more of its or their divisions or units, or any combination of the foregoing, and may be applied on an absolute basis and/or be relative
to one or more peer group companies or indices, or any combination thereof, all as the Board shall determine. In addition, to the degree consistent with Section 162(m) of the Code (or any
successor section thereto), the performance goals may be calculated without regard to extraordinary items. The Board shall determine whether, with respect to a performance period, the applicable
performance goals have been met with respect to a given Participant and, if they have, shall so certify and ascertain the amount of the applicable Performance-Based Award. No Performance-Based Awards
will be paid for such performance period until such certification is made by the Board. The amount of the Performance-Based Award actually paid to a given Participant may be less than the amount
determined by the applicable performance goal formula, at the discretion of the Board. The amount of the Performance-Based Award determined by the Board for a performance period shall be paid to the
Participant at such time as determined by the Board in its sole discretion after the end of such performance period; provided, however, that a
Participant may, if and to the extent permitted by the Board and consistent with the provisions of Section 162(m) of the Code, elect to defer payment of a Performance-Based Award. 

6

 

9.     Adjustments Upon Certain Events

        Notwithstanding
any other provisions in the Plan to the contrary, the following provisions shall apply to all Awards granted under the Plan: 

	(a)
	Generally. In the event of any change in the outstanding Shares after the Effective Date by reason of any Share dividend or split,
reorganization, recapitalization, merger, consolidation, spin-off or combination transaction or exchange of Shares or other corporate exchange, or any distribution to shareholders of
Shares other than regular cash dividends or any transaction similar to the foregoing, the Committee in its sole discretion and without liability to any person may make such substitution or adjustment,
if any, as it deems to be equitable, as to (i) the number or kind of Shares or other securities available for issuance issued or reserved for issuance pursuant to the Plan and pursuant to
outstanding Awards, (ii) the Option Price or exercise price of any Stock Appreciation Right, and/or (iii) any other affected terms of any Award.

	(b)
	Change in Control. In the event of a Change in Control after the Effective Date, the Committee may, in its sole discretion, provide
for: (i) the accelerated vesting or exercisability of any outstanding Awards then held by Participants that are otherwise unexercisable or unvested, as the case may be, to the extent determined
by the Committee and as of a date selected by the Committee; (ii) the termination of an Award upon the consummation of the Change in Control, and the payment of a cash amount in exchange for
the cancellation of an Award which, in the case of Options and Stock Appreciation Rights, may equal the excess, if any, of the Fair Market Value of the Shares in the Change in Control subject to such
Options or Stock Appreciation Rights over the aggregate exercise price of such Options or Stock Appreciation Rights; and/or (iii) the issuance of substitute Awards that will substantially
preserve the otherwise applicable terms of any affected Awards previously granted hereunder. 

10.   No Right to Employment or Awards

        The
granting of an Award under the Plan shall impose no obligation on the Company or any Affiliate to continue the employment or service or consulting relationship of a Participant and
shall not lessen or affect the Company's or Affiliate's right to terminate the employment or service or consulting relationship of such Participant. No Participant or other person shall have any claim
to be granted any Award, and there is no obligation for uniformity of treatment of Participants, or holders or beneficiaries of Awards. The terms and conditions of Awards and the Committee's
determinations and interpretations with respect thereto need not be the same with respect to each Participant (whether or not such Participants are similarly situated). 

11.   Successors and Assigns

        The
Plan shall be binding on all successors and assigns of the Company and a Participant, including without limitation, the estate of such Participant and the executor, administrator or
trustee of such estate, or any receiver or trustee in bankruptcy or representative of the Participant's creditors. 

12.   Nontransferability of Awards

        Unless
otherwise determined by the Committee, an Award shall not be transferable or assignable by the Participant other than by will or by the laws of descent and distribution. An Award
exercisable after the death of a Participant may be exercised by the legatees, personal representatives or distributees of the Participant. 

7

 

13.   Amendments or Termination

        Subject
to Section 9 of the Plan, the Board may amend, alter or discontinue the Plan, but no amendment, alteration or discontinuation shall be made which would:
(i) increase the maximum number of Shares available for Awards under the Plan, increase the maximum number of Shares available for issuance in the form of RSUs, as restricted Shares or Other
Share-Based Awards, or increase the maximum number of Shares that may be granted to a Participant in any given calendar year (other than amendments having such purpose that may be approved by at least
a majority of the Shareholders of the Company); (ii) without the consent of a Participant, diminish any of the rights of the Participant under any Award theretofore granted to such Participant
under the Plan; or (iii) be prohibited by applicable law or otherwise require Shareholder approval (whether in order to maintain the full tax deductibility of all Awards under
Section 162(m) of the Code or otherwise); provided, however, that the Committee may amend the Plan in such manner as it deems necessary to permit
Awards to meet the requirements of the Code or other applicable laws. In no event may the Board amend the Plan to provide for the repricing of any Option Price or exercise price of any Stock
Appreciation Rights without the approval by the Shareholders of the Company. 

14.   International Participants

        With
respect to Participants, if any, who reside or work outside the United States of America, the Committee may, in its sole discretion, amend the terms of the Plan or Awards with
respect to such Participants in order to conform such terms with the provisions of local law, and the Committee may, where appropriate, establish one or more sub-plans to reflect such
amended or varied provisions. 

15.   Choice of Law

        The
Plan shall be governed by and construed in accordance with the laws of the State of Delaware without regard to conflicts of laws. 

16.   Effectiveness of the Plan

        The
Plan shall be effective as of the Effective Date, subject to the approval of the Shareholders of the Company. 

8

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2004 STOCK INCENTIVE PLAN FOR BRISTOL WEST HOLDINGS, INC. AND SUBSIDIARIES

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