Document:

Conformed copy of the 1988 Nonqualified Stock Option Plan

 Exhibit 10.27 
 ARTHUR J. GALLAGHER & CO. 
 1988
NONQUALIFIED STOCK OPTION PLAN 
 (Restated as of January 22, 1998) 
 – CONFORMED THROUGH AMENDMENT NO. 6 – 
  

	1.	Purpose 

 The purpose of
this 1988 Nonqualified Stock Option Plan (the “Plan”) is to promote the interests of Arthur J. Gallagher & Co., a Delaware corporation (the “Company”), and its shareholders by providing key employees on whom rests the
major responsibility for the present and future success of the Company and its subsidiaries with an opportunity to acquire a proprietary interest in the Company and thereby develop a stronger incentive to put forth maximum effort for the continued
success and growth of the Company and its subsidiaries. In addition, the opportunity to so acquire a proprietary interest in the Company will aid in attracting and retaining key personnel of outstanding ability. 
  

	2.	Administration 

  

	 	A.	All administrative duties hereunder shall rest with the Option Committee of the Board of Directors (hereinafter the “Committee”). The Committee shall have the
duty and authority, subject to the provisions of the Plan, to: 

  

	 	(i)	determine which individuals shall receive options and how many options each individual shall receive; 

  

	 	(ii)	grant the options; 

  

	 	(iii)	determine the terms and conditions of the options including exercise dates, limitations on exercise and time periods for exercise (“Vesting Schedules”), and
the price and payment terms; 

  

	 	(iv)	determine the limitation, if any, on the number of shares acquired under an option which may be sold by the employee in any year; 

  

	 	(v)	prescribe the form or forms of the instruments evidencing any options granted under the Plan (“Option Agreements”) and of any other instruments required under
the Plan, and to change such forms from time to time; and 

  

	 	(vi)	adopt such rules and regulations for the administration of the Plan as it deems appropriate. 

  

	 	B.	The Committee is further authorized, at the discretion of the Committee, to amend, at any time, all Option Agreements entered into pursuant to the Plan and in effect as
of May 11, 1993: 

  

	 	(i)	to provide that the Option Agreements, and all rights thereunder, shall continue and be unaffected by any termination of the employment relationship of the type
described in Paragraph 2(C) below; and/or 

	 	(ii)	to accelerate or shorten Vesting Schedules in the event of any termination of the employment relationship of the type described in Paragraph 2(C) below.

  

	 	C.	The types of termination of the employment relationship between an optionee and the Company to which the Committee’s amendatory power shall apply are as follows:

  

	 	(i)	termination due to the death of the optionee; and 

  

	 	(ii)	termination of the employment relationship at a time when the optionee’s medical condition, upon such termination, would qualify the optionee to receive long term
disability benefits under the Company’s employee benefits plan; and 

  

	 	(iii)	termination of the employment relationship at a time when the optionee, upon such termination, would be immediately eligible to commence to receive retirement benefits
under the Company’s pension plan. 

  

	 	D.	The Committee is further authorized, at its discretion, to amend at any time all previous grants of options pursuant to the Plan and in effect as of January 22,
1998, to provide that in the event of a change in control of the Company, as defined in Paragraph 18 below, all such options shall become immediately vested and exercisable. 

  

	 	E.	In exercising the authority set forth in Section 2A, the Committee may take into account the nature of the services rendered by the respective individuals, their
present and potential contributions to the Company’s success, and such other factors as the Committee, in its discretion, shall deem relevant.” 

  

	3.	Shares Subject to the Plan 

 The shares that may be made subject to options under the Plan shall be shares of Common Stock of the Company, one dollar ($1.00) par value (“Common Stock”), and the total shares subject to option and issued pursuant to this Plan
shall not exceed, in the aggregate, 39,600,000 shares of the Common Stock of the Company. If any such option lapses or terminates for any reason without having been exercised in full, the shares covered by the unexercised portion of such option may
again be made subject to options granted under the Plan. Shares issued upon exercise of options granted under the Plan may be shares held by the Company either as treasury shares or as authorized but previously unissued shares. Upon authorization
from the Board of Directors, the Company may from time to time acquire shares of Common Stock on the open market upon such terms as the Board shall deem appropriate for reserve in its treasury for reissuance in connection with exercises hereunder.

  

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	4.	Eligibility 

 Employees
eligible to participate in the Plan shall be those salaried officers and other salaried key employees of the Company and its subsidiaries who, in the opinion of the Committee, are in a position to affect materially the profitability and growth of
the Company and its subsidiaries. Directors who are salaried key employees within the meaning of the foregoing are eligible to participate in the Plan, provided however that members of the Committee shall not be eligible to receive options.

  

	5.	Granting of Options 

 Subject to the terms and conditions of the Plan, the Committee may from time to time prior to the termination of the Plan grant to eligible employees options to purchase the number of shares of Common Stock authorized by the Committee,
subject to such terms and conditions as the Committee may determine. More than one option may be granted to the same employee. The day on which the Committee approves the granting of an option shall be considered as the date on which such option is
granted. 
  

	6.	Option Price 

 The
purchase price per share of Common Stock subject to an option shall be fixed by the Committee. In no event shall options for more than 500,000 shares of Common Stock be granted under the Plan at less than fair market value over the life of the Plan.

  

	7.	Term of Options 

 The term
of each option shall be not more than 10 years commencing with the date of the grant. Each option shall also terminate as provided in Section 12. 
  

	8.	Method of Exercising Options 

 Any option granted hereunder may be exercised by the optionee by delivering to the Company at its main office (attention of the Secretary) written notice of the number of shares with respect to which the option rights are being exercised
and by paying in cash the purchase price of the shares purchased in full, in exchange for the issuance and delivery of certificates therefor. The Committee in its discretion may permit an employee to use shares of stock of the Company as payment for
additional stock purchased pursuant to an option. The value of the shares to be used as payment shall be determined by the Committee. The Company may delay the processing of any exercise hereunder so long as may be necessary, in the opinion of
counsel to the Company, to comply with securities laws and regulations relating to disclosure of material non-public information concerning the Company. 
  

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	9.	Amount Exercisable 

 Each
option may be exercised, so long as it is valid and outstanding, from time to time in part or as a whole, subject to any limitations with respect to the number of shares for which the option may be exercised at a particular time and to such other
conditions as the Committee in its discretion may specify upon granting the option. The Committee may, in its sole discretion and for any reason at any time, take action such that (i) any or all outstanding options shall become exercisable in
part or in full, (ii) any or all outstanding options shall continue to become exercisable in part or in full following termination of an optionee’s employment with the Company or a subsidiary for any reason specified by the Committee and
(iii) any or all outstanding options shall remain exercisable in part or in full following termination of an optionee’s employment with the Company or a subsidiary for any reason specified by the Committee. 
  

	10.	Capital Adjustments Affecting Common Stock 

 In the event of a capital adjustment resulting from a stock dividend, stock split, reorganization, merger, consolidation, or a combination or exchange of shares, the number of shares of Common Stock
subject to the Plan and the number of shares under the option shall be adjusted in a manner consistent with such capital adjustment. The price of any shares under option shall be adjusted so that there will be no change in the aggregate purchase
price payable upon exercise of any such option. 
  

	11.	Transferability of Options 

 Options shall not be transferable by the optionee otherwise than by will or under the laws of descent and distribution, and shall be exercisable, during his lifetime, only by him. 
  

	12.	Termination of Employment or Death of Optionee 

 Any termination of the employment relationship between the Company or a subsidiary and the optionee due to death, disability or retirement, as those events are provided for in Section 2(C)(i),
(ii) and (iii), shall not act to terminate an option grant. Except as may otherwise be provided by the Committee in its sole discretion on or after the date on which an option is granted hereunder, a termination of the employment relationship
for any reason other than those so provided in Section 2(C)(i), (ii) and (iii) shall act to terminate an option grant as of the effective date of such termination of the employment relationship, as reflected in the records of the
Company. The Committee shall have the authority to determine whether an authorized leave of absence or absence due to military or government service shall constitute a termination of the employment relationship for purposes hereof. 
  

	13.	Requirements of Law 

 In
the event the shares issuable on exercise of an option are not registered under the Securities Act of 1933, the Company shall imprint the following legend or any other legend which counsel for the Company considers necessary or advisable to comply
with the Securities Act of 1933: 
 “The shares of stock represented by this certificate have not been registered under the
Securities Act of 1933 or under the securities laws of any State and may not be sold or transferred except upon such registration or upon receipt by the Corporation of an opinion of counsel in form and substance satisfactory to the Corporation that
registration is not required for such sale or transfer.” 
  

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 The Company may, but shall in no event be obligated to, register any securities covered
hereby pursuant to the Securities Act of 1933 (as now in effect or as hereafter amended); and in the event any shares are so registered the Company may remove any legend on certificates representing such shares. The Company shall make reasonable
efforts to cause the exercise of an option or the issuance of shares pursuant thereto to comply with any law or regulation of any governmental authority. 
  

	14.	No Rights as Stockholder 

 No optionee shall have rights as a stockholder with respect to shares covered by an option until the date of issuance of a stock certificate for such shares; and, except as otherwise provided in Paragraph 10 hereof, no adjustment for
dividends, or otherwise, shall be made if the record date therefor is prior to the date of issuance of such certificate. 
  

	15.	Employment Obligation 

 The granting of any option shall not impose upon the Company or subsidiary any obligation to employ or continue to employ any optionee; and the right of the Company or subsidiary to terminate the employment of any officer or other employee
shall not be diminished or affected by reason of the fact that an option has been granted to such officer or employee. 
  

	16.	Form of Agreement 

 Each
option granted hereunder shall be embodied in a writing, the form and content of which shall be as the Committee in its discretion shall deem advisable. 
  

	17.	Amendment, Termination and Effective Date 

 This Plan shall be effective as of June 1, 1988, and shall terminate on May 31, 2008. The Board shall have the right to amend, suspend or terminate the Plan, provided that no termination or
amendment of the Plan may, without the consent of the individual to whom any option shall have been theretofor granted, adversely affect the rights of such individual under such option. 
  

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	18.	Change in Control 

 In the
event of a change in control of the Company, as defined below, each option outstanding shall immediately become exercisable in full. For all purposes of the Plan, a “change in control of the Company” occurs if: (a) any person or
group, as defined in Sections 13(d) and 14(d)(2) of the Exchange Act, as amended, is or becomes the beneficial owner, directly or indirectly of securities of the Company representing 50 percent or more of the combined voting power of the
Company’s outstanding securities then entitled to vote for the election of directors; or (b) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board of Directors and any new
directors whose election by the Board or nomination for election by the Company’s Stockholders was approved by at least two-thirds of the directors then still in office who either were directors at the beginning of the period or whose election
was previously so approved cease for any reason to constitute at least a majority thereof; or the Stockholders of the Company shall approve the sale of all or substantially all of the assets of the Company or any merger, consolidation, issuance of
securities or purchase of assets, the result of which would be the occurrence of any event described in clause (a) or (b) above.” 
  

 6Conformed copy of the 1989 Non-Employee Directors' Stock Option Plan

 Exhibit 10.28 
 ARTHUR J. GALLAGHER & CO. 
 1989
NON-EMPLOYEE DIRECTORS’ STOCK OPTION PLAN 
 (RESTATED AS OF JANUARY 22, 1998) 
 – CONFORMED THROUGH AMENDMENT NO. 6 – 
  

	1.	PURPOSE 

 The purpose of this 1989
Non-Employee Directors’ Stock Option Plan (the “Plan”) is to promote the interests of Arthur J. Gallagher & Co., a Delaware corporation (the “Company”), and its shareholders by providing an incentive to non-employee
directors to serve and continue to serve on the Company’s Board of Directors and to devote the large amounts of time required to participate actively in the work of the Board of Directors. In that the continued services of qualified
non-employee directors are essential to the sustained growth and progress of the Company, it is thought that the Plan will make service on the Board of Directors more attractive to present and future non-employee directors. 
  

	2.	GENERAL 

 The Plan encompasses options
granted to a non-employee director in the discretion of the Option Committee of the Board of Directors (“Discretionary Options”) and options granted to a non-employee director pursuant to an election made by the non-employee director to
receive options in lieu of his annual retainer, as defined in Paragraph 11 hereof, (“Retainer Options”), (together, hereinafter referred to as “Options”). All Options under the Plan will be nonqualified options not eligible for
treatment as “incentive stock options” as that term is used in Section 422A of the Internal Revenue Code, as amended. 
  

	3.	ADMINISTRATION 

  

	 	A.	All administrative duties hereunder shall rest with the Option Committee of the Board of Directors (hereinafter the “Committee”). Except as otherwise provided
in Paragraph 11 hereof as to Retainer Options, the Committee shall have the duty and authority, subject to the provisions of the Plan, to: 

  

	 	(i)	determine which non-employee directors of the Company shall receive Options and how many Options each non-employee director shall receive; 

  

	 	(ii)	grant the Options; 

  

	 	(iii)	determine the terms and conditions of the Options including exercise dates, limitations on exercise and time periods for exercise (“Vesting Schedules”), and
the price and payment terms; 

  

	 	(iv)	prescribe the form or forms of the instruments evidencing any Options granted under the Plan (“Option Agreements”) and of any other instruments required under
the Plan, and to change such forms from time to time; and 

	 	(v)	adopt such rules and regulations for the administration of the Plan as it deems appropriate. 

  

	 	B.	The Committee is further authorized, at the discretion of the Committee, to amend, at any time, all Option Agreements entered into pursuant to the Plan and in effect as
of May 11, 1993: 

  

	 	(i)	to provide that the Option Agreements, and all rights thereunder, shall continue and be unaffected by any termination of optionee’s association with the Company
for any reason; and/or 

  

	 	(ii)	to accelerate or shorten Vesting Schedules in the event of a termination of an optionee’s association with the Company for any reason. 

  

	 	C.	The Committee is further authorized, at its discretion, to amend at any time all previous grants of options pursuant to the Plan and in effect as of January 22,
1998, to provide that in the event of a change in control of the Company, as defined in Paragraph 22 below, all such options shall become immediately vested and exercisable. 

  

	4.	SHARES SUBJECT TO THE PLAN 

 The shares
that may be made subject to Options under the Plan shall be shares of common stock, one dollar ($1.00) par value (“Common Stock”), of the Company, and the total number of shares subject to the Options and issued pursuant to this Plan shall
not exceed, in the aggregate, 1,925,000 shares of the Common Stock of the Company. If any such Option lapses or terminates for any reason without having been exercised in full, the shares covered by the unexercised portion of such Option may again
be made subject to the Options granted under the Plan. Shares issued upon exercise of Options granted under the Plan may be shares held by the Company either as treasury shares or as authorized but previously unissued shares. Upon authorization from
the Board of Directors, the Company may from time to time acquire shares of Common Stock in the open market upon such terms as the Board shall deem appropriate for reserve in its treasury for reissuance in connection with exercises hereunder.

  

	5.	ELIGIBILITY 

 Non-employee directors of
the Company shall be eligible to receive Discretionary Options under the Plan and on an annual basis may make an election to receive Retainer Options as set forth in Paragraph 11 hereof. 
  

	6.	GRANTING OF OPTIONS 

 Subject to the terms
and conditions of the Plan, the Committee may from time to time prior to the termination of the Plan grant to non-employee directors Discretionary Options to purchase the number of shares of Common Stock authorized by the Committee, subject to such
terms and conditions as the Committee may determine. Retainer Options shall be granted by the Committee subject to the terms and conditions of Paragraph 11 hereof and such other terms and conditions as the Committee may prescribe. The day on which
the Committee approves the granting of a Discretionary Option shall be considered as the date on which such Discretionary Option is granted. Retainer Options shall be deemed granted on the applicable Annual Meeting Date referred to in Paragraph 11.

  

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	7.	OPTION PRICE 

 The purchase price per
share of Common Stock subject to a Discretionary Option shall be fixed by the Committee. The purchase price per share of Common Stock subject to a Retainer Option shall be determined as set forth in Section 11 hereof. 
  

	8.	TERM OF OPTIONS 

 The term of each
Discretionary Option shall be determined by the Committee but shall be not more than 10 years commencing with the date of grant. The term of each Retainer Option shall be unlimited subject to the provisions of Paragraph 14 hereof. 
  

	9.	METHOD OF EXERCISING OPTIONS 

 Any Option
granted hereunder may be exercised by the Optionee by delivering to the Company at its main office (attention of the Secretary) written notice of the number of shares of Common Stock with respect to which the option rights are being exercised and by
paying in cash the purchase price of the shares purchased in full, in exchange for the issuance and delivery of certificates therefor. The Committee in its discretion may permit a director to use shares of Common Stock as payment for additional
stock purchased pursuant to an Option. The value of the shares to be used as payment shall be determined by the Committee. The Company may delay the processing of any exercise hereunder so long as may be necessary, in the opinion of counsel to the
Company, to comply with securities laws and regulations relating to the disclosure of material non-public information concerning the Company. 
  

	10.	AMOUNT EXERCISABLE 

 Each Option may be
exercised, so long as it is valid and outstanding, from time to time in part or as a whole, subject to any limitations with respect to the number of shares for which the Option may be exercised at a particular time and to such other conditions as
the Committee in its discretion may specify upon granting the Option. 
  

	11.	RETAINER OPTIONS 

 Prior to
December 31 of each year that the Plan is in effect, a non-employee director may elect to receive an option to purchase Common Stock in lieu of receipt of his annual retainer for the twelve-month period following the date of the next annual
meeting of stockholders (“Annual Meeting Date”). The election made by the non-employee director shall remain in full force and effect until a revocation of this election is made prior to any December 31. Such revocation shall become
effective at the next Annual Meeting Date. The term “annual retainer” will mean the total amount which a non-employee director will be entitled to receive for serving as a director and for serving as a member of any committee of the Board
of Directors in the twelve-month period following the Annual Meeting Date, but will not include fees for attendance at either meetings of the Board of Directors or any committee of the Board of Directors, or of any other services which a director
may provide to the Company. 
  

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 Each year on, or as soon as administratively practicable after, such Annual Meeting Date, a Retainer Option
shall be granted to each non-employee director who has elected to receive a Retainer Option for such year. The exercise price per share shall be equal to 100% of the fair market value per share of Common Stock on the date of grant. The number of
shares of Common Stock subject to each Retainer Option shall have an aggregate fair market value as of the date of the grant equal to a multiple of the foregone amount of the cash retainer otherwise payable to the non-employee director, which
multiple shall be determined by the Board from time to time. 
 The term “fair market value” will mean the closing price of the
Company’s Common Stock as reported on the New York Stock Exchange Composite Transaction Reporting System for the day on which the Retainer Option is granted. The option price per share shall be not less than the par value of the Common Stock.

  

	12.	CAPITAL ADJUSTMENTS AFFECTING COMMON STOCK 

 In the event of a capital adjustment resulting from a stock dividend, stock split, reorganization, merger, consolidation, or a combination or exchange of shares, the number of shares of Common Stock subject to the Plan and the number of
shares under any Option shall be adjusted in a manner consistent with such capital adjustment. The price of any shares under an Option shall be adjusted so that there will be no change in the aggregate purchase price payable upon exercise of any
such Option. 
  

	13.	TRANSFERABILITY OF OPTIONS 

 Options shall
not be transferable by the optionee otherwise than by will or under the laws of descent and distribution, and shall be exercisable, during his lifetime, only by him. 
  

	14.	TERMINATION OF ASSOCIATION WITH COMPANY 

 The term and effectiveness of each Discretionary Option shall not be limited or affected by the termination of optionee’s association with the Company for any reason. 
  

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 In the event of a termination of an optionee’s association with the Company for any reason, the term of
each Retainer Option of such optionee shall terminate on the tenth anniversary of the date of grant of such Retainer Option. 
  

	15.	REQUIREMENTS OF LAW 

 In the event the
shares issuable on exercise of an Option are not registered under the Securities Act of 1933, the Company shall (or cause its transfer agent to) imprint the following legend or any other legend which counsel for the Company considers necessary or
advisable to comply with the Securities Act of 1933: 
 “The shares of stock represented by this certificate have not been
registered under the Securities Act of 1933 or under the securities laws of any State and may not be sold or transferred except upon such registration or upon receipt by the Corporation of an opinion of counsel in form and substance satisfactory to
the Corporation that registration is not required for such sale or transfer.” 
 The Company may, but shall in no event be obligated to,
register any securities covered hereby pursuant to the Securities Act of 1933 (as now in effect or as hereafter amended); and in the event any shares are so registered the Company may remove any legend on certificates representing such shares. The
Company shall make reasonable efforts to cause the exercise of an Option or the issuance of shares pursuant thereto to comply with any law or regulation of any governmental authority. 
  

	16.	NO RIGHTS AS STOCKHOLDER 

 Optionees shall
have no rights as a stockholder with respect to shares covered by an Option until the date of issuance of a stock certificate for such shares; and, except as otherwise provided in Paragraph 12 hereof, no adjustment for dividends, or otherwise, shall
be made if the record date therefor is prior to the date of issuance of such certificate. 
  

	17.	NO RIGHT TO CONTINUE AS DIRECTOR 

 Neither
the granting of any Option nor any other action taken pursuant to the Plan will constitute or be evidence of any agreement or understanding, express or implied, that the Company will retain a director for any period of time. 
  

	18.	FORM OF AGREEMENT 

 Each Option granted
hereunder shall be embodied in a writing, the form and content of which shall be as the Committee in its discretion shall deem advisable. 
  

	19.	WITHHOLDING REQUIRED BY LAW 

 Upon the
exercise of an Option, the grantee or other person receiving such Common Stock will be required, as a condition of such distribution, either to pay to the Company at the time of distribution thereof the amount of any federal, state, local or foreign
taxes due or required to be withheld with respect to such Common Stock, or to have the number of shares of Common Stock, valued at fair market value on the date of distribution, reduced by an amount equal to the value of taxes due or required to be
withheld. 
  

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	20.	AMENDMENT, TERMINATION AND EFFECTIVE DATE 

 This Plan shall be effective as of May 9, 1989, and shall terminate on May 9, 2009. The Board shall have the right to amend, suspend or terminate the Plan, provided that no termination or amendment of the Plan may, without the consent
of the individual to whom any Option shall have been theretofore granted, adversely affect the rights of such individual under such Option. 
  

	21.	GOVERNING LAW 

 The Plan and all
determinations made and actions taken pursuant hereto will be governed by the law of the State of Delaware and construed accordingly. 
  

	22.	CHANGE IN CONTROL 

 In the event of a
change in control of the Company, as defined below, each option outstanding shall immediately become exercisable in full. For all purposes of the Plan, a “change in control of the Company” occurs if: (a) any person or group, as
defined in Sections 13(d) and 14(d)(2) of the Exchange Act, as amended, is or becomes the beneficial owner, directly or indirectly of securities of the Company representing 50 percent or more of the combined voting power of the Company’s
outstanding securities then entitled to vote for the election of directors; (b) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board of Directors and any new directors whose election
by the Board or nomination for election by the Company’s Stockholders was approved by at least two-thirds of the directors then still in office who either were directors at the beginning of the period or whose election was previously so
approved cease for any reason to constitute at least a majority thereof; or (c) the Stockholders of the Company shall approve the sale of all or substantially all of the assets of the Company or any merger, consolidation, issuance of securities
or purchase of assets, the result of which would be the occurrence of any event described in clause (a) or (b) above. 
  

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