Exhibit 10.18
2001 STOCK OPTION PLAN
NONQUALIFIED STOCK OPTION AGREEMENT
This AGREEMENT (the "OPTION AGREEMENT") is made by and between SCOTTISH
ANNUITY & LIFE HOLDINGS, LTD., a Cayman Islands company (the "COMPANY") and the
Optionee stated in the attached Notice of Grant of Stock Options and Option
Agreement ("Notice of Grant").
1. GRANT OF SHARE OPTION. Subject to and upon the terms, conditions, and
restrictions set forth in this Option Agreement, the Company hereby
grants to the Optionee a stock option (the "Option") to purchase the
Company's Ordinary Shares (the "Optioned Shares"). The Option may be
exercised from time to time in accordance with the terms of this Option
Agreement. The price at which the Optioned Shares may be purchased
pursuant to this Option is as stated in the attached Notice of Grant
and is subject to adjustment as hereinafter provided (the "Option
Price"). The Option is intended to be a nonqualified stock option and
shall not be treated as an "incentive stock option" within the meaning
of that term under Section 422 of the Code, or any successor provision
thereto.
2. TERM OF OPTION. The term of the Option shall commence on the date set
forth on the attached Notice of Grant (the "Date of Grant") and, unless
earlier terminated in accordance with Section 6 hereof, shall expire
TEN (10) YEARS from the Date of Grant.
3. RIGHT TO EXERCISE. Subject to expiration or earlier termination, on
each anniversary of the Date of Grant the number of Optioned Shares
equal to Twenty percent (20 %) multiplied by the initial number of
Optioned Shares specified in this Agreement shall become exercisable on
a cumulative basis until the Option is fully exercisable. To the extent
the Option is exercisable, it may be exercised in whole or in part. In
no event shall the Optionee be entitled to acquire a fraction of one
Optioned Share pursuant to this Option. The Optionee shall be entitled
to the privileges of ownership with respect to Optioned Shares
purchased and delivered to him upon the exercise of all or part of this
Option.
4. TRANSFERABILITY. The Option granted hereby is NOT transferable by the
Optionee.
5. NOTICE OF EXERCISE; PAYMENT.
(a) To the extent then exercisable, the Option may be exercised by
written notice to the Company stating the number of Optioned
Shares for which the Option is being exercised and the
intended manner of payment. The date of such notice shall be
the exercise date. Payment equal to the aggregate Option Price
of the Optioned Shares being exercised shall be tendered in
full with the notice of exercise to the Company in cash in the
form of currency or check or other cash equivalent acceptable
to the Company. The requirement of payment in cash shall be
deemed satisfied if, with the consent of the Board, the
Optionee makes arrangements that are satisfactory to the
Company with a broker that is a member of the National
Association of Securities Dealers, Inc. to sell a sufficient
number
of Optioned Shares which are being purchased pursuant to the
exercise, so that the net proceeds of the sale transaction
will at least equal the amount of the aggregate Option Price,
and pursuant to which the broker undertakes to deliver to the
Company the amount of the aggregate Option Price not later
than the date on which the sale transaction will settle in the
ordinary course of business. The Optionee may also, with the
consent of the Board, tender the Option Price by a combination
of the foregoing methods of payment.
(b) Within ten (10) days after notice, the Company shall direct
the due issuance of the Optioned Shares so purchased.
(c) As a further condition precedent to the exercise of this
Option, the optionee shall comply with all regulations and the
requirements of any regulatory authority having control of, or
supervision over, the issuance of Ordinary Shares and in
connection therewith shall execute any documents which the
Board shall in its sole discretion deem necessary or
advisable.
6. TERMINATION OF AGREEMENT. The Option Agreement and the Option granted
hereby shall terminate automatically and without further notice on the
earliest of the following dates:
(a) Two (2) years after the Optionee's death if the Optionee dies
while in the employ of the Company or its Subsidiaries;
(b) Two (2) years after the date of the Optionee's permanent and
total disability if the Optionee becomes permanently and
totally disabled while an employee of the Company or its
Subsidiaries;
(c) Except as provided on a case-by-case basis, 60 days after the
date the Optionee ceases to be an employee of the Company, or
a Subsidiary, for any reason other than as described in this
Section 6; or
(d) TEN (10) YEARS from the Date of Grant.
In the event that the Optionee's employment is terminated for cause, the Option
Agreement shall terminate at the time of such termination notwithstanding any
other provision of this Option Agreement. For purposes of this provision,
"cause" shall mean the Optionee shall have committed prior to termination of
employment any of the following acts:
(i) an intentional act of fraud, embezzlement, theft, or
any other material violation of law in connection
with the Optionee's duties or in the course of the
Optionee's employment;
(ii) intentional wrongful damage to material assets of the
Company or its Subsidiaries;
(iii) intentional wrongful disclosure of material
confidential information of the Company or its
Subsidiaries;
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(iv) intentional wrongful engagement in any competitive
activity that would constitute a material breach of
the duty of loyalty; or
(v) intentional breach of any stated material employment
policy of the Company or its Subsidiaries.
Any determination of whether an Optionee's employment was terminated for cause
shall be made by the Board, whose determination shall be binding and conclusive.
This Option Agreement shall not be exercisable for any number of Optioned Shares
in excess of the number of Optioned Shares for which this Option Agreement is
then exercisable, pursuant to Sections 3 and 7 hereof, on the date of
termination of employment. For the purposes of this Option Agreement, the
continuous employment of the Optionee with the Company shall not be deemed to
have been interrupted, and the Optionee shall not be deemed to have ceased to be
an employee of the Company, by reason of the transfer of his employment among
the Company and its Subsidiaries or a leave of absence approved by the Board.
7. ACCELERATION OF OPTION. Notwithstanding Section 3, but subject to
earlier termination, the Option granted hereby shall become immediately
exercisable in full in the event of a Change of Control, as defined in
the Plan.
8. NO EMPLOYMENT CONTRACT. Nothing contained in this Option Agreement
shall confer upon the Optionee any right with respect to continuance of
employment by the Company, nor limit or affect in any manner the right
of the Company or a Subsidiary to terminate the employment or adjust
the compensation of the Optionee.
9. TAXES AND WITHHOLDING. If the Company and/or one of its Subsidiaries
shall be required to withhold any federal, state, local or foreign tax
in connection with the exercise of the Option, and the amounts
available to the Company and/or one of its Subsidiaries for such
withholding are insufficient, the Optionee shall pay the tax or make
provisions that are satisfactory to the Company for the payment
thereof. The Company and/or one of its Subsidiaries will pay any and
all issue and other taxes in the nature thereof which may be payable by
the Company and/or one of its Subsidiaries in respect of any issue or
delivery upon a purchase pursuant to this Option.
10. COMPLIANCE WITH LAW. The Company shall make reasonable efforts to
comply with all applicable federal and state securities laws; provided,
however, notwithstanding any other provision of this Option Agreement,
the Option shall not be exercisable if the exercise thereof would
result in a violation of any such law.
11. ADJUSTMENTS. The Board may make or provide for such adjustments in the
number of Optioned Shares covered by this Option, in the Option Price
applicable to such Option, and in the kind of shares covered thereby,
as the Board in its sole discretion, exercised in good faith, may
determine is equitably required to prevent dilution or enlargement of
the Optionee's rights that otherwise would result from (a) any stock
dividend, stock split, combination of shares, recapitalization, or
other change in the capital structure of the Company, (b) any merger,
consolidation, spin-off, reorganization, partial or complete
liquidation, or issuance of rights or warrants to purchase securities,
or (c) any other
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corporate transaction or event having an effect similar to any of the
foregoing. In the event of any such transaction or event, the Board may
provide in substitution for this Option such alternative consideration
as it may determine to be equitable in the circumstances and may
require in connection therewith the surrender of this Option. Any
fractional shares resulting from the foregoing adjustments shall be
eliminated.
12. RELATION TO OTHER BENEFITS. Any economic or other benefit to the
Optionee under this Option Agreement shall not be taken into account in
determining any benefits to which the Optionee may be entitled under
any profit-sharing, retirement or other benefit or compensation plan
maintained by the Company and shall not affect the amount of any life
insurance coverage available to any beneficiary under any life
insurance plan covering employees of the Company.
13. AMENDMENTS. Any amendment to the Plan shall be deemed to be an
amendment to this Option Agreement to the extent that the amendment is
applicable hereto; provided, however, that no amendment shall adversely
affect the rights of the Optionee under this Agreement without the
Optionee's consent.
14. SEVERABILITY. In the event that one or more of the provisions of this
Option Agreement shall be invalidated for any reason by a court of
competent jurisdiction, any provision so invalidated shall be deemed to
be separable from the other provisions hereof, and the remaining
provisions hereof shall continue to be valid and fully enforceable.
15. RELATION TO PLAN. This Option Agreement is subject to the terms and
conditions of the Plan. In the event of any inconsistent provisions
between this Option Agreement and the Plan, the Plan shall govern.
Capitalized terms used herein without definition shall have the
meanings assigned to them in the Plan. The Board acting pursuant to the
Plan, as constituted from time to time, shall, except as expressly
provided otherwise herein, have the right to determine any questions
which arise in connection with this Option or its exercise.
16. SUCCESSORS AND ASSIGNS. The provisions of this Option Agreement shall
inure to the benefit of, and be binding upon, the successors,
administrators, heirs, legal representatives and assigns of the
Optionee, and the successors and assigns of the Company.
17. GOVERNING LAW. The interpretation, performance, and enforcement of this
Option Agreement shall be governed by the laws of the Cayman Islands,
without giving effect to the principles of conflict of laws thereof.
18. NOTICES. Any notice to the Company provided for herein shall be in
writing to the Company, marked Attention: Chief Executive Officer, and
any notice to the Optionee shall be addressed to said Optionee at his
or her address currently on file with the Company. Except as otherwise
provided herein, any written notice shall be deemed to be duly given if
and when delivered personally or deposited in the mail, postage and
fees prepaid, and addressed as aforesaid. Any party may change the
address to which notices are to be given hereunder by written notice to
the other party as herein specified (provided that for this purpose any
mailed notice shall be deemed given on the third business day following
deposit of the same in the United States mail).
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