EXHIBIT 10.31
NONQUALIFIED STOCK OPTION AGREEMENT
UNDER THE
MEADOWBROOK INSURANCE GROUP, INC., STOCK OPTION PLAN
THIS NONQUALIFIED STOCK OPTION AGREEMENT (the "Agreement") is made as
of this 21st day of February, 2003, between Meadowbrook Insurance Group, Inc., a
Michigan corporation (the "Company"), and (the "Optionee").
WHEREAS, the Company wishes to further align the interests of the
Optionee with those of shareholders;
WHEREAS, on February 21, 2003 (the "Grant Date"), the Committee for the
Meadowbrook Insurance Group, Inc. Stock Option Plan (the "Committee") granted
nonqualified stock options to certain employees or directors of the Company,
including the Optionee; and
WHEREAS, the parties desire to document the terms of stock option
grants;
NOW THEREFORE, the parties agree as follows:
1. GRANT OF OPTIONS. The Company has granted nonqualified stock
options to purchase _____ shares of Company Stock to the Optionee (the
"Options"). Once vested, the Optionee may purchase shares subject to the Stock
Option at a price of $_____per share of the Company's Stock (the "Option
Price").
2. VESTING OF OPTIONS. Options are not exercisable until they vest.
Except as otherwise provided herein, 20% of the Options shall be exercisable as
of the Grant Date and an additional 20% of the Options shall become exercisable
on the next four (4) successive anniversaries of the Grant Date. Upon the
effective date of a Hostile Change in Control of the Company, all Options shall
become fully and immediately exercisable.
3. EXPIRATION OF OPTIONS. Unless otherwise determined by the
Committee, to the extent not previously exercised, the Options will expire on
the earlier of, (a) the fifth anniversary of the Grant Date; (b) thirty days
after the date that the Optionee ceases to be an Eligible Person for any reason
other than Cause, death or Disability; (c) immediately upon the termination of
Optionee's service as an employee or director for Cause; or (d) after the date
the Optionee ceases to be an Eligible Person by reason of such person's death,
Disability or Retirement. THE OPTIONEE IS RESPONSIBLE FOR UNDERSTANDING THE
TERMINATION PROVISIONS OF THE PLAN AND THIS AGREEMENT AND TO KEEP TRACK OF THE
TERMINATION DATES FOR ANY OPTIONS GRANTED TO THE OPTIONEE UNDER THE PLAN. THE
COMPANY SHALL HAVE NO RESPONSIBILITY TO NOTIFY OPTIONEES OF THE DATE ON WHICH
OPTIONS WILL EXPIRE AND DOES NOT ANTICIPATE GIVING SUCH NOTICE TO ANY OPTIONEE
EITHER VERBALLY OR IN WRITING.
4. OPTIONEE RIGHTS. No rights or privileges of a shareholder of the
Company are conferred by reason of the granting of the Options. The Optionee
will not become a shareholder of the Company with respect to the Option Stock
unless and until the Options have been properly exercised and the Option Price
fully paid for the number of the Options exercised.
5. TRANSFERABILITY. The Options are not transferable, except by the
laws of descent and distribution, however, the Committee has the discretion to
allow for other Transfers of Options, but only to the extent provided in the
Plan and only when such Transfer would be considered a completed gift for tax
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purposes. If an Option is transferred, it will continue to be subject to the
terms and conditions of this Agreement, together with the Plan, and may not be
transferred again. If the Options are transferable during the Optionee's
lifetime, the Optionee will remain responsible for all applicable withholding
taxes upon the exercise of any transferred Options and will, prior to
transferring any Options, notify the Company of the anticipated Transfer. The
Company shall not be required to provide to the transferee any notice of
termination of any of the Options. If the Optionee Transfers an Option and dies
before a transferred Option has been exercised, the Option will automatically
terminate upon the earlier of one year from the date of the Optionee's death or
the expiration of the Option pursuant to this Agreement.
6. TERMS OF OPTIONS. This Agreement, and the Options issued to the
Optionee, are subject to all of the terms and conditions set forth herein and in
the Plan, as may be amended from time to time, a copy of which has been provided
to Optionee. To the extent that any conflict may exist between any term or
provision of this Agreement and any term or provision of the Plan, the Plan
shall govern. Capitalized terms referenced, but not defined herein, will have
the meaning attributed to them by the Plan. THE OPTIONEE ACKNOWLEDGES THAT HE OR
SHE HAS READ THE PLAN AND AGREES TO BE BOUND BY ITS TERMS. Pursuant to the Plan,
the Committee has authorized the Option Price and any applicable tax withholding
liability associated with exercise of the Options to be payable in cash, or by
netting or withholding Option Stock granted pursuant to the Options being
exercised, subject to the Optionee's attestation that the Optionee has, for at
least 6 months, owned Stock with a Fair Market Value equal to the amount of the
exercise price due to the Company.
7. MISCELLANEOUS. This Agreement, together with the Plan, sets
forth the complete agreement of the parties concerning the subject matter
hereof, superseding all prior agreements, negotiations and understandings.
Nothing contained in this Agreement will confer upon the Optionee any right with
respect to the continuation of his or her status as an employee, director or an
Eligible Person. This Agreement shall be binding upon and inure to the benefit
of the Company and the Optionee, and their respective heirs, personal legal
representatives and successors. No change or modification of this Agreement
shall be valid unless the same is in writing and signed by the parties hereto;
provided, however, that the Optionee hereby covenants and agrees to execute any
amendment to this Agreement which shall be required or desirable (in the opinion
of the Company or its counsel) in order to comply with the laws governing this
Agreement. This Agreement will be governed by the substantive law of the State
of Michigan and may be executed in counterparts.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first set forth above.
ATTEST: MEADOWBROOK INSURANCE GROUP, INC.
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By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Its: President & CEO
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Optionee:
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