Exhibit 99.3
TRENWICK GROUP INC.
AMENDED
1993 STOCK OPTION PLAN
1. Purpose. This Plan is intended to strengthen the ability of the Company
and its Subsidiaries to attract and retain Qualified Employees of outstanding
competence by providing them with added incentive to render high levels of
performance and effective service in connection with their employment through
the opportunity for common stock ownership and benefits of common stock
appreciation.
2. Definitions. For the Purposes of the Plan, except where the context
otherwise indicates, the following definitions shall apply:
"Board" means the Board of Directors of the Company.
A "Change in Control" shall be deemed to have occurred at such time as:
a. Any person within the meaning of Section 16(d) of the Securities
Exchange Act of 1934, other than the Company, a subsidiary or any employee
benefit plan(s) sponsored by the Company or any subsidiary, is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Securities Exchange Act
of 1934), directly or indirectly, of fifty percent (50%) or more of the
Company's issued and outstanding shares of common stock, or shares of capital
stock at any time issued by the Company representing fifty percent (50%) or more
of the voting rights of all shares of stock issued by the Company;
b. Individuals who constitute the Board of Directors on December 15, 1993
cease for any reason to constitute a majority at least thereof, provided that
any person becoming a director subsequent to December 15, 1993, whose election,
or nomination for election by the Company's stockholders, was approved by a vote
of at least three quarters of the directors comprising the Board on December 15,
1993 (either by a specific vote or by approval of the proxy statement of the
Company in which such person is named as a nominee for director, without
objection to such nomination) shall be considered as though such person were a
member of the Board on December 15, 1993;
c. Trenwick consolidates with, or merges with and into, any other person
(other than a subsidiary of Trenwick), and Trenwick is not the continuing or
surviving corporation of such consolidation or merger;
d. Any person (other than a subsidiary of Trenwick) consolidates with, or
merges with and into, Trenwick, and Trenwick is the continuing or surviving
corporation of such consolidation or merger, and in connection with such
consolidation or merger, all or part of the outstanding shares of common stock
are changed into or exchanged for stock or other securities of any other person
or cash or any other property;
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e. Trenwick sells or otherwise transfers (or one or more of its
subsidiaries sells or otherwise transfers), in one transaction or in a series of
related transactions, assets or earning power aggregating more than fifty
percent (50%) of the assets or earning power of Trenwick and its subsidiaries
(taken as a whole) to any person or persons (other than Trenwick or subsidiaries
of Trenwick);
f. Any person commences a tender offer (as defined in Rule 14d-2 as
promulgated by the Securities and Exchange Commission) for fifty percent (50%)
or more of Trenwick's outstanding shares of common stock.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Committee" means the Compensation Committee or any other committee
designated by the Board to have administrative responsibility with respect to
the Plan.
"Common stock" means the Company's common stock, par value $0.10.
"Company" means Trenwick Group Inc.
"Date of Exercise" of an Option or a Stock Appreciation Right ("SAR") means
the date upon which written notice thereof is received by the Company's
Corporate Secretary.
"Date of Grant" means the date Restricted Shares, an Option or any related
SARs become effective under the terms of the governing Restricted Stock
Agreement or Option Agreement.
"Exercise Notice" means a written notice from an Optionee to the Company,
made on a form and in a manner as the Committee may from time to time determine,
pursuant to which the Optionee irrevocably elects to exercise all or any portion
of an Option and irrevocably directs the Company to deliver the common stock
certificate to be issued to such Optionee upon such Option exercise directly to
a "broker" or "dealer" (within the meaning of Section 3 (a) of the Securities
Exchange Act of 1934, as amended from time to time). An Exercise Notice must be
accompanied by or contain irrevocable instructions to the broker or dealer (i)
to promptly sell a sufficient number of shares of such common stock, or to loan
the Optionee a sufficient amount of money, to pay the exercise price for the
Options, and (ii) to promptly remit such sum to the Company upon the broker's or
dealer's receipt of the certificate.
"Fair Market Value" means the fair market value of common stock determined
by the Committee.
"Incentive Stock Option" means an Option granted as an incentive stock
option as defined in Section 422A of the Code.
"Non-Employee Director" means "non-employee director" as defined in Rule
16b-3 of the Securities and Exchange Commission, as amended from time to time.
"Non-Qualified Stock Option" means an Option that does not qualify as an
Incentive Stock Option or is so stated to be a Non-Qualified Stock Option upon
issuance. The terms of the Option Agreement for a Non-Qualified Stock Option
shall expressly state that the Option is a Non-Qualified Stock Option.
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"Option" means the rights granted to a Qualified Employee to purchase
common stock pursuant to the terms and conditions of an Option Agreement,
including both Incentive Stock Options and Non-Qualified Stock Options.
"Option Agreement" means a written agreement (and any amendment or
supplement thereto) between the Company and a Qualified Employee designating the
terms and conditions of an Option, including any related SAR.
"Optionee" means a Qualified Employee to whom an Option and any related SAR
are granted.
"Plan" means Trenwick Group Inc. 1993 Stock Option Plan.
"Qualified Employee" means any person employed on a full-time basis by the
Company or a Subsidiary whose performance, in the judgement of the Committee,
could have or did have a significant effect on either (or both) the current or
long-term success of the Company or a Subsidiary (or both).
"Restricted Shares" means common stock which shall be non-transferable and
subject to forfeiture to the Company until vested.
"Restricted Stock Agreement" means a written agreement (and any amendment
or supplement thereto) between the Company and a Qualified Employee evidencing
the number of shares of common stock granted.
"Stock Appreciation Right" or "SAR" means a right (which shall not exist
separately from a related unexercised Option) granted to the terms and
conditions of an Option Agreement to surrender an unexercised Option, or some
portion of an unexercised Option, and to receive from the Company either shares
of common stock (valued at Fair Market Value on the Date of Exercise of the
SAR), cash, or a combination thereof, equal in amount to the excess of the
aggregate Fair Market Value (on the Date of Exercise of the SAR) of the shares
as to which the Option is surrendered, over the aggregate Option price of such
shares, subject to any limitations in Section 7. Notwithstanding any other
provision of this Plan or of an Option Agreement to the contrary, in no event
shall the amount payable to the Optionee upon exercise of a SAR related to an
Incentive Stock Option exceed one hundred (100%) percent of the difference
between the exercise price of the related Incentive Stock Option and the Fair
Market Value of the common stock at the Date of Exercise of the SAR.
"Subsidiary" means any entity of which, at the time such Subsidiary status
is to be determined, at least fifty (50%) percent of the combined voting power
of such entity is directly or indirectly owned or controlled by the Company.
3. Administration of the Plan The Plan shall be administered by the
Committee (whose members shall be appointed by the Board) consisting solely of
three or more members of the Board who are Non-Employee Directors. A majority of
the Committee shall constitute a quorum, and all acts of the Committee must be
approved by a majority (at least two) of its members.
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Subject to the provisions of the Plan, the Committee shall have authority in its
sole discretion:
(a) To interpret the provisions of the Plan and decide all
questions of fact arising in its application;
(b) To prescribe, amend and rescind rules and regulations relating
to the Plan;
(c) To determine the Qualified Employees to whom, the time or
times at which, the price at which, and the extent to which Restricted
Shares, Options and any SARs shall be granted based upon the nature
of the services rendered or to be rendered by the persons it deems
eligible, their past, present and potential contributions to the
success of the Company and/or any of its Subsidiaries their other
compensation from the Company or any Subsidiary, and such other factors
as the Committee in its discretion shall deem relevant;
(d) To determine, upon their issuance but not thereafter, the time
when Restricted Shares are vested;
(e) To determine, upon their issuance but not thereafter, the time
or times when Options and any SARs become exercisable and the duration
of the exercise period;
(f) To determine whether any shares of common stock under any
Option must be purchased before any related SAR becomes exercisable;
(g) To prescribe and amend the form or forms of the Restricted
Stock Agreement and Option Agreement;
(h) To determine the form or forms of consideration which will be
accepted by the Company from an Optionee in payment of the purchase
price upon the exercise of an Option; and
(i) To determine which Options shall be Incentive Stock Options and
which Options shall be Non-Qualified Stock Options.
The Committee's determinations of the foregoing shall be final and
conclusive.
4. Eligibility Restricted Shares, Options and any SARs may be granted under
the Plan only to Qualified Employees. Any Qualified Employee may be granted and
may hold more than one award of Restricted Shares, more than one Option and more
than one SAR. In no event shall an Incentive Stock Option be granted to a
Qualified Employee if the grant of such Incentive Stock Option would cause the
aggregate Fair Market Value (on the Date of Grant) of the common stock with
respect to which Incentive Stock Options are exercisable for the first time by
such Qualified Employee during any calendar year (under all plans of the Company
and any parent or subsidiary corporations of the Company within the meaning of
Code Section 425) to exceed $100,000.
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5. Shares Available Subject to adjustment as provided in Section 10
hereof:
(a) An aggregate of 1,800,000 shares of common stock will be available
and reserved for issue or transfer with respect to Restricted Shares, Options or
SARs granted under the Plan.
(b) When the right to purchase shares pursuant to an Option is
surrendered on exercise of a SAR, whether such right is settled in cash, common
stock or a combination thereof, the aggregate number of shares covered by the
related Option shall be reduced by the number of shares with respect to which
the SAR was exercised, and such shares shall not be available for granting
further Options and SARS.
(c) No Qualified Employee including the Chief Executive Officer of the
Company may receive more than 450,000 Restricted Shares, Options or SARs granted
under the Plan.
(d) If an Option shall terminate for any reason without having been
exercised in full or surrendered on exercise of a SAR, the unpurchased and
non-surrendered shares subject thereto shall become available for further
Restricted Shares, Options and SARs.
(e) In applying the limitation on the number of Restricted Shares,
Options or SARs that can be received by a Qualified Employee as set forth in
paragraphs (c) and (d) of this Section 5, the principles of Section 162(m) of
the Internal Revenue Code of 1986, as amended, and the regulations issued
thereunder, shall govern.
(f) In the case of Options or SARs, the maximum amount of compensation
payable to a Qualified Employee attributable to the exercise of Options or SARs
under the Plan shall be equal to the maximum number of shares of common stock
for which Options or SARs can be granted to a Qualified Employee under Section 5
hereof multiplied by the excess of the Fair Market Value of the common stock on
the date of the exercise over the aggregate Option price of such shares as
determined under Section 7 hereof.
6. Restricted Shares Restricted Shares shall be granted subject to the
following conditions:
(a) The number of Restricted Shares granted to a Qualified Employee in
any one calendar year shall be determined by the Committee and shall be based on
a percentage of such qualified employees' salary as a group, such percentage not
to exceed twenty five (25%) percent of the gross annual aggregate salaries of
such employees, divided by the Fair Market Value of the Company's stock on the
day prior to the Date of Grant.
(b) Restricted Shares shall vest ratably over a five (5) year period
from the Date of Grant or pursuant to such other vesting schedule as the
Committee shall approve at the time of grant. The Restricted Stockholder may
make provision for the payment of all or any part of any taxes which the Company
is obligated to collect or withhold with respect to the vesting of Restricted
Shares by (i) the delivery to the Company of full shares of common stock, valued
at Fair Market Value, that have been held for at least six (6) months or (ii) by
electing to have the Company withhold whole shares of common stock, valued at
Fair Market Value, from the vested Restricted Shares to be delivered to the
Restricted Stockholder.
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(c) Upon the occurrence of a Change in Control, subject to any
limitation set forth in the Restricted Stock Agreement, all restrictions shall
lapse and all Restricted Shares shall be deemed to have vested.
(d) Forfeiture of Restricted Shares:
(i) Restricted Shares which have not vested in the hands of the
Restricted Stockholder shall be forfeited to the Company upon voluntary
or involuntary termination of the Restricted Stockholder's employment
with the Company for any reason;
(ii) Notwithstanding the foregoing, upon death or disability, a
Restricted Stockholder shall be considered to be vested for those
Restricted Shares which would have otherwise vested in the year such
death or disability occurred.
(e) Each certificate representing shares issued to a Restricted
Stockholder which have not vested shall be retained by the Company and shall
bear a legend that complies with applicable law with respect to the restrictions
on transferability:
"The shares represented by this certificate are subject to restrictions on
transferability imposed by that certain instrument entitled the 1993 Stock
Option Plan adopted December 15, 1993 as from time to time amended which limits
transferability and subjects these shares to forfeiture to Trenwick Group Inc.
in certain instances."
Nothing in the Plan or in any Restricted Stock Agreement shall in any way
diminish the right of the Company or any Subsidiary to reduce the compensation
or to terminate the employment of any Restricted Stockholder or Qualified
Employee.
7. Options Each Option granted shall be subject to the following
conditions:
(a) The Option price per share of common stock shall be set by the
Option Agreement but shall in no instance be less than one hundred (100%)
percent of the Fair Market Value on the Date of Grant with respect to any
Option.
(b) Each Option will become exercisable in part or in full on the date
or dates specified in the Option Agreement.
(c) Upon the occurrence of a Change in Control of the Company, subject
to any limitation set forth in the Option Agreement, all outstanding Options
shall become immediately exercisable in full.
(d) Each Option and any related SARs shall terminate:
(1) If the Optionee is then living, at the earliest of the
following times:
(i) ten years after the Date of Grant of the Option;
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(ii) five years after termination of employment because
of retirement;
(iii) one month after termination of employment other
than termination because of retirement or through discharge
for cause provided, however, that if any Option is not fully
exercisable at the time of such termination of employment,
such Option shall expire on the date of such termination of
employment to the extent not then exercisable;
(iv) immediately upon termination of employment through
discharge for cause; or
(v) any earlier time set forth in the Option Agreement.
(2) If the Optionee dies while employed by the Company or any
Subsidiary, or if no longer so employed, prior to termination of the
entire Option under Section 7(d)(1)(ii) or (iii) hereof, one hundred
and eighty (180) days after the date of death. To the extent an Option
is exercisable after the death of the Optionee, it may be exercised by
the person or persons to whom the Optionee's rights under the Option
Agreement have passed by will or by the applicable laws of descent and
distribution.
(e) If the Optionee exercises any Option or SAR with respect to some,
but not all, of the shares of common stock subject to such Option or SAR, the
right to exercise such Option or SAR with respect to the remaining shares shall
continue until it lapses or terminates. No Option shall be exercisable except in
respect of whole shares. The exercise of an Option or SAR may be made with
respect to no fewer than ten shares at one time unless fewer than ten shares
remain subject to the Option or SAR.
(f) Any exercise of an Option shall be effective on the Date of
Exercise, provided the full purchase price of such shares or an effective
Exercise Notice has been tendered with the notice of exercise. Payment of the
purchase price upon the exercise of any Option shall be made in cash (including
check, bank draft or money order), by the delivery of full shares of common
stock valued at Fair Market Value (but only if such shares have been held by the
Optionee for at least six (6) months), by promissory note (containing such terms
and conditions as the Committee may in its discretion determine) or by any
combination thereof. The Optionee may make provision for the payment of all or
any part of any taxes which the Company is obligated to collect or withhold with
respect to the issue or transfer of any common stock underlying an Option by (i)
the delivery to the Company of full shares of common stock, valued at Fair
Market Value, that have been held for at least six (6) months or (ii) electing
to have the Company withhold whole shares of common stock, valued at Fair Market
Value, from the shares to be delivered to the Optionee upon the exercise.
Nothing in the Plan or in any Option Agreement shall in any way diminish
the right of the Company or any Subsidiary to reduce the compensation or to
terminate the employment of any Optionee or Qualified Employee.
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8. Stock Appreciation Rights. The Committee may in its discretion grant
SARs either concurrently with or subsequent to the Date of Grant of the related
Option. A SAR shall be evidenced by provisions in the Option Agreement or an
amendment or supplement thereto. SARs shall be subject to the following terms
and conditions:
(a) Grant. The number of shares of common stock covered by a SAR shall
not exceed the number of shares of common stock covered by the related Option.
(b) Exercise. A SAR shall be exercisable, in whole or in part, at such
time or times, on the conditions and to the extent set forth in the
Option Agreement but in no event will such SAR be exercisable;
(i) At any time that the related Option is not exercisable; or
(ii) At any time that the Fair Market Value of a share of
common stock does not exceed the Option price of the related Option
share.
(c) A SAR will terminate on the same date as the related Option.
An Optionee shall be entitled upon exercise of a SAR to receive payment in
the amount described in the definition of "Stock Appreciation Right". In
connection with tile exercise of a SAR, the Optionee thereof may, subject to the
provisions of the following paragraph, request by application to the Committee
to receive payment in the form of cash, shares of common stock, or a combination
thereof. However, the Committee, in its sole discretion, shall determine the
form of payment.
9. Limitations on Common Stock. Any shares of common stock issued or
transferred pursuant to the Plan shall not be sold, transferred or otherwise
disposed of by Restricted Stockholders or Optionees except in compliance with
applicable registration requirements of state and federal securities laws unless
in the opinion of counsel for the Company, such sale, transfer or disposition is
exempt from registration.
10. Adjustment of Shares. If any change is made in the common stock subject
to the Plan, or subject to Restricted Shares, any Option or SAR, through merger,
consolidation, reorganization, recapitalization, stock dividend, stock split,
combination of shares, rights offerings, change in corporate structure of the
Company, or otherwise, the Board in its discretion may make appropriate
adjustments as to the number and type of securities subject to and reserved for
issue or transfer under the Plan and, in order to prevent dilution or
enlargement of the rights of Restricted Stockholders, Optionees, the number of
Restricted Shares or number of Options, type and Option price of securities
subject to outstanding Options and SARs.
11. Non-transferability. Each share of Restricted Shares shall be
nontransferable and subject to forfeiture to the Company until vested.
No Option or SAR is transferable by the Optionee other than by will or the
laws of descent and distribution, and no Option or SAR is exercisable during the
Optionee's lifetime by anyone other than the Optionee.
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12. Stockholder's Rights. The Restricted Stockholder shall have all rights
relative to the Restricted Shares, including the right to vote and to collect
dividends.
Neither the Optionee nor the Optionee's legal representative, legatees or
distributees, as the case may be, shall have any of the rights or privileges of
a stockholder of the Company by virtue of the grant of an Option or SAR except
with respect to any shares of common stock actually issued or transferred of
record and delivered to one of the aforementioned persons.
13. Termination, Suspension or Modification of Plan. The Board may at any
time terminate, suspend or modify the Plan. No termination, suspension or
modification of the Plan shall adversely affect any right acquired by any
Restricted Stockholder or Optionee under the terms of Restricted Shares, Options
or SARs granted before the date of such termination, suspension or modification,
unless such Restricted Stockholder or Optionee shall consent thereto.
14. Governing Laws. The Plan and all rights and obligations thereunder
shall be construed in accordance with and governed by the laws of the State of
Delaware.
15. Term. Unless previously terminated by the Board, the Plan shall
terminate at the close of business on December 14, 2003. No Restricted Shares,
Options or SARs shall be granted at2er Plan termination, but such termination
shall not affect any Restricted Shares, Options or SARs previously granted.
16. Approval. The Plan shall become effective on December 15, 1993 but
shall be subject to approval by vote of the stockholders of the Company at the
1994 Annual Meeting.
17. Cancellation and Substitution of Options Upon Business Combination.
Notwithstanding anything to the contrary contained in the Plan, at the
"Effective Time" (as defined in the Amended and Restated Agreement, Schemes of
Arrangement and Plan of Reorganization among LaSalle Re Holdings Limited,
LaSalle Re Limited, the Company and Trenwick Group Ltd., formerly Gowin Holdings
International Limited ("Trenwick Bermuda") dated as of March 20, 2000 (the
"Business Combination Agreement")), each outstanding Option under the Plan,
whether or not then vested or exercisable, shall be assumed by Trenwick and
converted into an option to acquire, on the same terms and conditions as were
applicable under such Option prior to the Effective Time, an equivalent number
of "New Holdings Shares" (as defined in the Business Combination Agreement).
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