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EXHIBIT 99.1
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SCOTTISH ANNUITY & LIFE HOLDINGS, LTD.
SECOND AMENDED AND RESTATED
1998 STOCK OPTION PLAN
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1. Purpose. The purpose of this Plan is to attract and retain the best
available talent and encourage the highest level of performance by executive
officers, key employees, directors, advisors and consultants, and to provide
them with incentives to put forth maximum efforts for the success of Scottish
Annuity & Life Holdings, Ltd.'s business, in order to serve the best interests
of Scottish Annuity & Life Holdings, Ltd. and its stockholders. All options
granted under the Plan are intended to be nonstatutory stock options.
2. Definitions. The following terms, when used in the Plan with initial
capital letters, shall have the following meanings:
(a) "Act" means the Securities Exchange Act of 1934, as in effect from
time to time.
(b) "Board" means the Board of Directors of the Company and, to the
extent of any delegation by the Board to a committee (or subcommittee
thereof) pursuant to Paragraph 9 of this Plan, such committee (or
subcommittee).
(c) "Change in Control" shall have the meaning provided in Paragraph
11 of this Plan.
(d) "Code" means the Internal Revenue Code of 1986, as amended from
time to time, and any successor thereto.
(e) "Company" means Scottish Annuity & Life Holdings, Ltd., a Cayman
Islands limited liability company.
(f) "Date of Grant" means the date specified by the Board on which a
grant of Stock Options shall become effective (which date shall not be
earlier than the date on which the Board takes action with respect
thereto).
(g) "Director" means a member of the Board of Directors of the
Company.
(h) "Eligible Non-Employee Director" means any person, not an employee
of the Company or any Subsidiary, who, prior to the consummation of the
Company's Initial Public Offering, is a Director or who has consented to
become a Director.
(i) "Immediate Family" has the meaning ascribed thereto in Rule 16a-
1(e) under the Act (or any successor rule to the same effect) as in effect
from time to time.
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(j) "Initial Public Offering" means the offering to the public by the
Company of Ordinary Shares registered with the Securities and Exchange
Commission of the United States.
(k) "Market Value Per Share" means, as of any given day, the closing
price of an Ordinary Share on a national securities exchange on which the
Ordinary Shares are listed or admitted to trading on the day preceding the
day such determination is being made or, if there was no closing price
reported on such day, on the most recently preceding day on which such a
closing price was reported; or if the Ordinary Shares are not listed or
admitted to trading on a national securities exchange on the day as of
which the determination is being made, the amount determined by the Board
to be the fair market value of an Ordinary Share on such day; provided,
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however, that Market Value Per Share with respect to the initial grant of
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options to officers and Non-Employee Directors prior to consummation of the
Company's Initial Public Offering means the public offering price per share
of the Ordinary Shares in the Initial Public Offering.
(l) "Option Price" means the purchase price per Ordinary Share
payable on exercise of a Stock Option.
(m) "Optionee" means the optionee named in an agreement evidencing an
outstanding Stock Option or a permitted transferee of a Stock Option.
(n) "Ordinary Shares" means the ordinary shares, par value $0.01 per
share, of the Company or any security into which such Ordinary Shares may
be changed by reason of any transaction or event of the type described in
Paragraph 7 of this Plan.
(o) "Participant" means a person who is selected by the Board to
receive Stock Options under Paragraph 5 of this Plan and who is at that
time (i) an executive officer or other key employee of the Company or any
Subsidiary, (ii) an advisor or consultant to the Company or any Subsidiary,
or (iii) a member of the Board.
(p) "Plan" means this 1998 Stock Option Plan of the Company, as
amended from time to time.
(q) "Rule 16b-3" means Rule 16b-3 under Section 16 of the Act (or any
successor rule to the same effect) as in effect from time to time.
(r) "Stock Option" means the right to purchase Ordinary Shares upon
exercise of an option granted pursuant to Paragraph 5 of this Plan.
(s) "Subsidiary" means any corporation, partnership, joint venture or
other entity in which the Company owns or controls, directly or indirectly,
not less than 50% of the total combined voting power or equity interests
represented by all classes of stock issued by such corporation,
partnership, joint venture or other entity.
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3. Shares Available Under Plan. The Ordinary Shares which may be issued
under the Plan shall not exceed in the aggregate 1,600,000 shares, subject to
adjustment as provided in this Paragraph 3. Such shares may be shares of
original issuance or treasury shares or a combination of the foregoing.
(a) Any Ordinary Shares which are subject to Stock Options that are
terminated unexercised, forfeited or surrendered or that expire for any
reason shall again be available for issuance under the Plan.
(b) The shares available for issuance under the Plan also shall be
subject to adjustment as provided in Paragraph 7 of this Plan.
4. Individual Limitation on Stock Options. Notwithstanding anything in
this Plan to the contrary, and subject to adjustment as provided in Paragraph 7
of this Plan, no individual Participant shall be granted Stock Options under
this Plan, during the term of this Plan, for more than 1,000,000 Ordinary
Shares.
5. Grants of Stock Options to Participants. The Board may from time to
time authorize grants to any Participant of Stock Options upon such terms and
conditions as the Board may determine in accordance with the provisions set
forth below.
(a) Each grant shall specify the number of Ordinary Shares to which
it pertains, subject to the limitations set forth in Paragraphs 3 and 4 of
this Plan.
(b) Each grant shall specify the Option Price, which shall not be
less than 100% of the Market Value Per Share on the Date of Grant.
(c) Each grant shall specify whether the Option Price shall be
payable (i) in cash or by check acceptable to the Company or (ii deferred
payment of the Option Price from the proceeds of sale through a bank or
broker of some or all of the shares to which such exercise relates or (ii
by a combination of methods (i) or (ii).
(d) Successive grants may be made to the same Participant whether or
not any Stock Options previously granted to such Participant remain
unexercised.
(e) Each grant shall specify the required period or periods (if any)
of continuous service by the Participant with the Company or any Subsidiary
and/or any other conditions to be satisfied before the Stock Options or
installments thereof shall become exercisable, and any grant may provide
for the earlier exercise of the Stock Options in the event of a Change in
Control of the Company or in the event of any other similar transaction or
event. Unless otherwise provided in the option agreement evidencing a
grant, a grant shall become exercisable in three equal annual installments,
commencing on the first anniversary of the grant.
(f) Each grant shall specify whether or not a Stock Option is
transferable, and the conditions, if any, of such transferability.
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(g) No Stock Option shall be exercisable more than 10 years from the
Date of Grant.
(h) An Optionee may exercise a Stock Option in whole or in part at
any time and from time to time during the period within which the Stock
Option may be exercised. To exercise a Stock Option, an Optionee shall give
written notice to the Company specifying the number of Ordinary Shares to
be purchased and provide payment of the Option Price and any other
documentation that may be required by the Company.
(i) An Optionee shall be treated for all purposes as the owner of
record of the number of Ordinary Shares purchased pursuant to exercise of
the Stock Option (in whole or in part) as of the date the conditions set
forth in Paragraph 5(h) of this Plan are satisfied.
(j) The Board may permit Optionees to elect to defer the issuance of
Ordinary Shares under this Plan pursuant to such rules, procedures or
programs as it may establish for purposes of this Plan. The Board may also
provide that deferred issuances and settlements include the payment or
crediting of dividend equivalents or interest on the deferred amounts.
(k) Each grant shall be evidenced by a stock option agreement
executed on behalf of the Company by the Chief Executive Officer (or
another officer designated by the Board) and delivered to the Participant
and containing such further terms and provisions, consistent with the Plan,
as the Board may approve.
6. Grants of Stock Options to Eligible Non-Employee Directors. Each
Eligible Non-Employee Director at or on the consummation of the Initial Public
Offering will be granted a Stock Option to purchase 10,000 Ordinary Shares with
an exercise price equal to the price per Ordinary Share to the public of the
Ordinary Shares offered and sold by the Company in the Initial Public Offering,
exercisable in three equal installments commencing with the first anniversary of
the grant date. In addition, each Eligible Non-Employee Director will be
granted a Stock Option to purchase 2,000 Ordinary Shares at each successive
annual general meeting after December 31, 1998, provided that such individual
continues to be an Eligible Non-Employee Director at the close of business of
each such annual general meeting. The additional Stock Options will have an
exercise price equal to the fair market value of the Ordinary Shares on the date
of grant and shall be immediately exercisable if granted after the first
anniversary of the consummation of the Initial Public Offering and, if granted
prior to the first anniversary of the consummation of the Initial Public
Offering, shall be exercisable on such anniversary. For purposes of this
Paragraph 6, the date of an annual general meeting is the date on which the
meeting is convened or, if later, the date of the last adjournment thereof.
7. Adjustments. The Board may make or provide for such adjustments in
the maximum number of shares specified in Paragraphs 3 or 4 of this Plan, in the
number of Ordinary Shares covered by outstanding Stock Options granted
hereunder, in the Option Price applicable to any such Stock Options, and/or in
the kind of shares covered thereby (including shares of another issuer), as the
Board in its sole discretion, exercised in good faith, may
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determine is equitably required to prevent dilution or enlargement of the rights
of Participants that otherwise would result from any stock dividend, stock
split, combination of shares, recapitalization or other change in the capital
structure of the Company, merger, consolidation, spin-off, reorganization,
partial or complete liquidation, issuance of rights or warrants to purchase
securities or any other corporate transaction or event having an effect similar
to any of the foregoing. Any fractional shares resulting from the foregoing
adjustments shall be eliminated.
8. Withholding of Taxes. To the extent that the Company is required to
withhold federal, state, local or foreign taxes in connection with any benefit
realized by an Optionee under the Plan, or is requested by an Optionee to
withhold additional amounts with respect to such taxes, and the amounts
available to the Company for such withholding are insufficient, it shall be a
condition to the realization of such benefit that the Optionee make arrangements
satisfactory to the Company for payment of the balance of such taxes required or
requested to be withheld. In addition, if permitted by the Board, an Optionee
may elect to have any withholding obligation of the Company satisfied with
Ordinary Shares that would otherwise be transferred to the Optionee on exercise
of the Stock Option.
9. Administration of the Plan. (a) The Plan shall be administered by the
Board, which from time to time may delegate all or any part of its authority
under this Plan to a committee (the "Stock Option Committee") of not less than
two Directors appointed by the Board. The members of the Stock Option Committee
shall be "Non-Employee Directors" within the meaning of Rule 16b-3 and "outside
directors" within the meaning of Section 162(m) of the Code. To the extent of
any such delegation, references in this Plan to the Board shall also refer to
the Stock Option Committee. A majority of the members of the Stock Option
Committee shall constitute a quorum, and any action taken by a majority of the
members of the Stock Option Committee who are present at any meeting of the
Stock Option Committee at which a quorum is present, or any actions of the Stock
Option Committee that are unanimously approved by the members of the Stock
Option Committee in writing, shall be the acts of the Stock Option Committee.
The Board shall have the authority to delegate responsibility and authority for
the operation and administration of this Plan, appoint employees and officers of
the Company and Subsidiaries to act on its behalf, and employ persons to assist
in fulfilling its responsibilities under this Plan.
(b) The Board has the full authority and discretion to interpret and
construe any provision of this Plan or of any agreement, notification or
document evidencing the grant of a Stock Option. The interpretation and
construction by the Board of any such provision and any determination by the
Board pursuant to any provision of the Plan or of any such agreement,
notification or document shall be final and conclusive. No member of the Board
shall be liable for any such action or determination made in good faith.
10. Amendments, Etc. (a) The Board may, without the consent of the
Optionee, amend any agreement evidencing a Stock Option granted under the Plan,
or otherwise take action, to accelerate the time or times at which the Stock
Option may be exercised, to extend the expiration date of the Stock Option, to
waive any other condition or restriction applicable to such Stock Option or to
the exercise of such Stock Option and to reduce the exercise price of such
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Stock Option and may amend any such agreement in any other respect with the
consent of the Optionee.
(b) The Plan may be amended from time to time by the Board or any
duly authorized committee thereof. In the event any law, or any rule or
regulation issued or promulgated by the Internal Revenue Service, the Securities
and Exchange Commission, the National Association of Securities Dealers, Inc.,
any stock exchange upon which the Ordinary Shares are listed for trading, or any
other governmental or quasi-governmental agency having jurisdiction over the
Company, the Common Stock or the Plan, requires the Plan to be amended, or in
the event Rule 16b-3 is amended or supplemented (e.g., by addition of
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alternative rules) or any of the rules under Section 16 of the Act are amended
or supplemented, in either event to permit the Company to remove or lessen any
restrictions on or with respect to Stock Options, the Board reserves the right
to amend the Plan to the extent of any such requirement, amendment or
supplement, and all Stock Options then outstanding shall be subject to such
amendment.
(c) The Plan may be terminated at any time by action of the Board.
The termination of the Plan shall not adversely affect the terms of any
outstanding Stock Option.
(d) The Plan shall not confer upon any Participant any right with
respect to continuance of employment or other service with the Company or any
Subsidiary, nor shall it interfere in any way with any right the Company or any
Subsidiary would otherwise have to terminate a Participant's employment or other
service at any time.
(e) This Plan shall be effective as of June 18, 1998.
(f) No Stock Option shall be granted pursuant to this Plan on or
after the tenth anniversary of the date of effectiveness of this Plan, but
awards granted prior to such tenth anniversary may extend beyond that date.
11. Change in Control. For purposes of this Plan, a "Change in Control"
shall mean the occurrence of any of the following events shall have occurred:
(a) The Company is merged or consolidated or reorganized into or with
another corporation or other legal person, and as a result of such merger,
consolidation or reorganization less than a majority of the combined voting
power of the then-outstanding securities of such corporation or person
immediately after such transaction are held in the aggregate by the holders of
Ordinary Shares immediately prior to such transaction;
(b) The Company sells or otherwise transfers all or substantially all
of its assets to any other corporation or other legal person, and less than a
majority of the combined voting power of the then-outstanding securities of such
corporation or person immediately after such sale or transfer is held in the
aggregate by the holders of Ordinary Shares immediately prior to such sale or
transfer;
(c) The Company files a report or proxy statement with the Securities
and Exchange Commission pursuant to the Act disclosing in response to Form 8-K
or Schedule 14A
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(or any successor schedule, form or report or item therein) that a change in
control of the Company has or may have occurred or will or may occur in the
future pursuant to any then-existing contract or transaction; or
(d) If during any period of two consecutive years after December 31,
1998, individuals who at the beginning of any such period constitute the
Directors cease for any reason to constitute at least a majority thereof, unless
the election, or the nomination for election by the Company's shareholders, of
each Director first elected during such period was approved by a vote of at
least two-thirds of the Directors then still in office who were Directors at the
beginning of any such period.
Notwithstanding the foregoing provisions of Paragraph 11(c) above, a
"Change in Control" shall not be deemed to have occurred for purposes of this
Plan (i) by reason of any action taken by the Company, including changed in
beneficial ownership of equity securities of the Company occurring in connection
with the Company's Initial Public Offering; (ii) solely because (A) the Company,
(B) a Subsidiary, or (C) any Company-sponsored employee stock ownership plan or
other employee benefit plan of the Company either files or becomes obligated to
file a report or proxy statement under or in response to Schedule 13D, Schedule
14D-1, Form 8-K or Schedule 14A (or any successor schedule, form or report or
item therein) under the Act, disclosing beneficial ownership by it of shares, or
because the Company reports that a change of control of the Company has or may
have occurred or will or may occur in the future by reason of such beneficial
ownership; or (iii) solely because of a change in control of any Subsidiary
other than Scottish Annuity & Life Insurance Company (Cayman), Ltd.
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