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Prepared by MERRILL CORPORATION

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Exhibit 10.2    
  

THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR EXEMPTION FROM REGISTRATION UNDER THE FOREGOING LAWS. ACCORDINGLY, THIS WARRANT MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF WITHOUT
(i) AN OPINION OF COUNSEL SATISFACTORY TO ZAMBA CORPORATION THAT SUCH SALE, TRANSFER OR OTHER DISPOSITION MAY LAWFULLY BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933 AND
APPLICABLE STATE SECURITIES LAWS OR (ii) SUCH REGISTRATION.

 
 

ZAMBA CORPORATION
  
    WARRANT
  TO PURCHASE
  SHARES OF COMMON STOCK    
  

    For value received, Joseph B. Costello, or his successors or assigns ("Holder"), is entitled to purchase from Zamba Corporation, a Delaware corporation (the
"Company"), up to 1,176,471 fully paid and nonassessable shares of the Company's common stock, $.01 par value per share, or such greater or lesser number of such shares as may be determined by
application of the anti-dilution provisions of this warrant, at the price of $1.0625 per share, subject to adjustments as noted below (the "warrant exercise price"). This warrant is being
issued pursuant to the terms of a Stock Purchase Agreement, dated the date hereof, between Holder and the Company. 

    This
warrant may be exercised by Holder at any time or from time to time prior to the close of business on June 29, 2005. 

    This
warrant is subject to the following terms and conditions: 

    1.  Exercise.  The rights represented by this warrant may be exercised by the Holder, in whole or in
part, by written election, in the form set forth below, by the surrender of this warrant (properly endorsed if required) at the principal office of the Company, by payment to it by cash, certified
check or bank draft of the warrant exercise price for the shares to be purchased and by delivery of a subscription agreement, an investment letter and/or similar documents acceptable to the Company
demonstrating that the sale of the shares to be purchased is exempt from registration under the Securities Act of 1933, as amended, and any state securities law. The shares so purchased shall be
deemed to be issued as of the close of business on the date on which this warrant has been exercised by payment to the Company of the warrant exercise price. Certificates for the shares of stock so
purchased, bearing an appropriate restrictive legend, shall be delivered to the Holder within 15 days after the rights represented by this warrant shall have been so exercised, and, unless this
warrant has expired, a new warrant representing the number of shares, if any, with respect to which this warrant has not been exercised shall also be delivered to the Holder hereof within such time.
No fractional shares shall be issued upon the exercise of this warrant. 

    2.  Shares.  All shares that may be issued upon the exercise of the rights represented by this warrant
shall, upon issuance, be duly authorized and issued, fully paid and nonassessable shares. During the period within which the rights represented by this warrant may be exercised, the Company shall at
all times have authorized and reserved for the purpose of issue or transfer upon exercise of the subscription rights evidenced by this warrant a sufficient number of shares of its common stock to
provide for the exercise of the rights represented by this warrant. 

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    3.  Adjustment.  The warrant exercise price shall be subject to adjustment from time to time as
hereinafter provided in this Section 3: 

    (a) If
the Company at any time divides the outstanding shares of its common stock into a greater number of shares (whether pursuant to a stock split, stock dividend or
otherwise), and conversely, if the outstanding shares of its common stock are combined into a smaller number of shares, the warrant exercise price in effect immediately prior to such division or
combination shall be proportionately adjusted to reflect the reduction or increase in the value of each such common share. 

    (b) If
any capital reorganization or reclassification of the capital stock of the Company, or consolidation or merger of the Company with another corporation, or the
sale of all or substantially all of its assets to another corporation shall be effected in such a way that holders of the Company's common stock shall be entitled to receive stock, securities or
assets with respect to or in exchange for such common stock, then, as a condition of such reorganization, reclassification, consolidation, merger or sale, the Holder shall have the right to purchase
and receive upon the basis and upon the terms and conditions specified in this warrant and in lieu of the shares of the common stock of the Company immediately theretofore purchasable and receivable
upon the exercise of the rights represented hereby, such shares of stock, other securities or assets as would have been issued or delivered to the Holder if Holder had exercised this warrant and had
received such shares of common stock immediately prior to such
reorganization, reclassification, consolidation, merger or sale. The Company shall not effect any such consolidation, merger or sale unless prior to the consummation thereof the successor corporation
(if other than the Company) resulting from such consolidation or merger or the corporation purchasing such assets shall assume by written instrument executed and mailed to the Holder at the last
address of the Holder appearing on the books of the Company the obligation to deliver to the Holder such shares of stock, securities or assets as, in accordance with the foregoing provisions, the
Holder may be entitled to purchase. 

    (c) If
the Company takes any other action, or if any other event occurs, which does not come within the scope of the provisions of Section 3(a) or 3(b), but
which should result in an adjustment in the warrant exercise price and/or the number of shares subject to this warrant in order to fairly protect the purchase rights of the Holder, an appropriate
adjustment in such purchase rights shall be made by the Company. 

    (d) Upon
each adjustment of the warrant exercise price, the Holder shall thereafter be entitled to purchase, at the warrant exercise price resulting from such
adjustment, the number of shares obtained by multiplying the warrant exercise price in effect immediately prior to such adjustment by the number of shares purchasable pursuant hereto immediately prior
to such adjustment and dividing the product thereof by the warrant exercise price resulting from such adjustment. 

    (e) Upon
any adjustment of the warrant exercise price, the Company shall give written notice thereof to the Holder stating the warrant exercise price resulting from
such adjustment and the increase or decrease, if any, in the number of shares purchasable at such price upon the exercise of this warrant, setting forth in reasonable detail the method of calculation
and the facts upon which such calculation is based. 

    4.  No Rights as Shareholder.  This warrant shall not entitle the Holder to any voting rights or other
rights as a shareholder of the Company. 

    5.  Registration Rights.  Holder shall be entitled to participate in any registered offering of shares of
Company's common stock that the Company initiates prior to June 29, 2005. Holder's participation 

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in any such offering shall be in accordance with the procedures, and subject to the limitations, attached hereto. 

    6.  Transfer.  This warrant and all rights hereunder shall not be transferable, in whole or in part, by
the holder hereof without the prior written consent of the Company, which consent shall not be
unreasonably withheld; provided, however, that any such proposed transfer must be in compliance with applicable securities laws and in compliance with
the legend set forth above. The bearer of this warrant, when endorsed, may be treated by the Company and all other persons dealing with this warrant as the absolute owner hereof for any purpose and as
the person entitled to exercise the rights represented by this warrant. 

    7.  Notices.  All demands and notices to be given hereunder shall be delivered or sent by first class
mail, postage prepaid; in the case of the Company, addressed to its corporate headquarters, 3033 Excelsior Boulevard, Suite 200, Minneapolis, Minnesota 55416, Attention: Chief Financial Officer, until
a new address shall have been substituted by like notice; and in the case of Holder, addressed to Holder at the address written below, until a new address shall have been substituted by like notice. 

    8.  Loss or Mutilation.  Upon receipt by the Company of evidence satisfactory to it of the ownership of,
and the loss, theft, destruction or mutilation of, this warrant and (in the case of loss, theft or destruction) of indemnity satisfactory to it, and (in the case of mutilation) upon surrender and
cancellation thereof, the Company will execute and deliver in lieu thereof a new warrant. 

    9.  Governing Law.  This warrant shall in all respects by governed by, and enforced and interpreted in
accordance with, the laws of the State of Minnesota, except with respect to its rules relating to conflicts of laws. 

    10.  Severability and Enforceability.  If any provision of this warrant, or the application thereof,
shall for any reason and to any extent, be invalid or unenforceable, the remainder of this warrant and application of such provisions to other persons or circumstances shall be interpreted as if it
were written so as to be enforceable to the maximum extent permitted by law so as to effectuate the parties' intent to the maximum extent. The parties further agree to replace such void or
unenforceable provisions of this warrant with valid or enforceable provisions which will achieve, to the extent possible, the economic, business and other purposes of the void or unenforceable
provisions; provided, however, that if any government or regulatory authority shall declare this warrant (and any shares issuable hereunder) to be
invalid and unenforceable, then this warrant (and any shares issuable hereunder) shall be null and void and shall be of no further force or effect. 

    11.  Amendment and Waiver.  Any provision of this warrant may be amended or waived if, and only if, such
amendment or waiver is in writing and signed, in the case of an amendment, by the Holder and the Company or, in the case of a waiver, by the party against whom such waiver is to be effective. 

[The remainder of this page has been left blank intentionally.]

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    IN WITNESS WHEREOF, the Company has caused this warrant to be executed and delivered by a duly authorized officer. 

Dated:
June 29, 2001 

	 	 	ZAMBA CORPORATION
	

 	
 	

By	
 	

/s/ Ian Nemerov
	 	 	 	 	Name: Ian Nemerov
	 	 	 	 	Title: Secretary
	
JOSEPH B. COSTELLO	
 	

 	
 	

 
	

/s/ Joseph B. Costello

Joseph B. Costello

2880 Lakeside Drive, Suite 250

Santa Clara, California 95054	
 	

 	
 	

 

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WARRANT EXERCISE    
  

(To be signed only upon exercise of this warrant) 

    The
undersigned, the Holder of the foregoing warrant, hereby irrevocably elects to exercise the purchase right represented by such warrant for, and to purchase thereunder,
            shares of common stock of Zamba Corporation, to which such warrant relates and herewith makes payment of
$            therefor in cash, certified check or bank draft and
requests that the certificates for such shares be issued in the name of, and be delivered to                        , whose
address is set forth below the signature of the undersigned. 

Dated:
________________________ 

	

 	
 	

 Signature
	

If shares are to be issued other than to Holder:	
 	

Social Security or other Tax Identification No.
	

  
  
  
 Please print present name and address	
 	

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WARRANT ASSIGNMENT    
  

(To be signed only upon transfer of this warrant in accordance with Section 6) 

    FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto                        the right represented by the foregoing
warrant to purchase the shares of common stock of Zamba Corporation and appoints                        attorney to transfer such
right on the books of Zamba Corporation, with full power of substitution
in the premises. 

Dated:
________________________ 

	

 	
 	

 Signature
	

 	
 	

Social Security or other Tax Identification No.
	

  
  
  
 Please print present name and complete address	
 	

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Exhibit 10.2

ZAMBA CORPORATION WARRANT TO PURCHASE SHARES OF COMMON STOCK

WARRANT EXERCISE

WARRANT ASSIGNMENTPrepared by MERRILL CORPORATION

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Exhibit 4.3  

 
  SECOND AMENDMENT
  TO
  20TH CENTURY INDUSTRIES
  1995 STOCK OPTION PLAN    
  

The
20th Century Industries 1995 Stock Option Plan (the "Plan") of 21st Century Industries, a California corporation (the "Company") is hereby amended in the following respects: 

	1.
	The
name of the Plan is amended and restated to read as follows: 

21st
Century Insurance Group 1995 Stock Option Plan 

	2.
	Paragraph (e)
of Section 3 of the Plan is amended and restated to read as follows:

	(e)
	Notwithstanding
any other provision of this Plan, no Employee shall be granted Awards in excess of 800,000 shares of Common Stock, subject to adjustment pursuant to Section 8
hereof, during any one calendar year. 

	3.
	Paragraphs
(a) and (b) of Section 5 of the Plan are amended and restated to read as follows:

	(a)
	The
aggregate number of Common Shares that may be issued pursuant to all Incentive Stock Options granted under this Plan shall not exceed 9,600,000 subject to adjustment as provided
in Section 8 hereof.

	(b)
	At
any time, the aggregate number of Common Shares issued and issuable pursuant to all Awards (including Incentive Stock Options) and Nonemployee Director Options granted under this
Plan shall not exceed 10,000,000 subject to adjustment as provided in Section 8 hereof. 

	4.
	In
all other respects the 1995 Stock Option Plan, as amended, is hereby ratified, confirmed and approved.

	5.
	This
Second Amendment shall be effective upon approval, directly or indirectly, by the affirmative votes of the holders of a majority of the Common Shares of the Company present, or
represented, and entitled to vote at a meeting duly held in accordance with the laws of the State of California, or by written consent of a majority of the outstanding Common Shares. 

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SECOND AMENDMENT TO 20TH CENTURY INDUSTRIES 1995 STOCK OPTION PLAN

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