Exhibit 99.7
CHARTWELL RE CORPORATION
AMENDED
1997 OMNIBUS STOCK INCENTIVE PLAN
1. Establishment and Purpose.
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There is hereby adopted the Chartwell Re Corporation 1997 Omnibus Stock
Incentive Plan (the "Plan"). The Plan shall be the successor to the Amended and
Restated Chartwell Re 1993 Stock Option Plan (the "Predecessor Plan"). Upon
adoption of the Plan by the Board of Directors and approval of the Plan by
stockholders of Chartwell Re Corporation (the "Company"), no further awards
shall be made under the Predecessor Plan. If the Plan is not approved by the
stockholders of The Company, the Predecessor Plan shall remain in full force and
effect. The Plan is intended to promote the interests of the Company and the
stockholders of The Company by providing officers and other employees of the
Company (including directors who are also employees of the Company) with
appropriate incentives and rewards to encourage them to enter into and continue
in the employ of the Company and to acquire a proprietary interest in the
long-term success of the Company, thereby aligning their interest more closely
to the interest of stock-holders.
2. Definitions.
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As used in the Plan, the following definitions apply to the terms
indicated below:
(a) "Award Agreement" shall mean the written agreement between
the Company and a Participant evidencing an Incentive Award.
(b) "Board of Directors" shall mean the Board of Directors of the
Company.
(c) "Cause," when used in connection with the termination of
a Participant's employment by the Company, shall mean (i)
the willful and continued failure by the Participant
substantially to perform his duties and obligations to the
Company (other than any such failure resulting from his
incapacity due to physical or mental illness) or (ii) the
willful engaging by the Participant in misconduct which is
materially injurious to the Company. For purposes of this
Section 2(c), no act, or failure to act, on a Participant's
part shall be considered "willful" unless done, or omitted
to be done, by the Participant in bad faith and without
reasonable belief that his action or omission was in the best
interest of the Company. The Committee shall determine whether
a termination of employment is for Cause.
(d) "Change in Control" shall mean any of the following
occurrences:
(i) any "person," as such term is used in Sections 13(d) and
14(d) of the Exchange Act (other than the Company, any trustee
or other fiduciary holding securities under an employee
benefit plan of the Company or any corporation owned, directly
or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of stock
of the Company), is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of The Company representing 50% or
more of the combined voting power of The Company's then
outstanding securities;
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(ii) during any period of not more than two consecutive years
(not including any period prior to the adoption of the Plan),
individuals who at the beginning of such period constitute the
Board of Directors and any new director (other than a director
designated by a person who has entered into an agreement with
the Company to effect a transaction described in clause (i),
(iii) or (iv) of this Section) whose election by the Board of
Directors or nomination for election was approved by a vote of
at least two-thirds (2/3) of the directors then still in
office who either were directors at the beginning of the
period or whose election or nomination for election was
previously so approved, cease for any reason to constitute at
least a majority thereof;
(iii) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation, other
than (A) a merger or consolidation which would result in the
voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of
the surviving entity) more than 50% of the combined voting
power of the voting securities of the Company or such
surviving entity outstanding immediately after such merger or
consolidation or (B) a merger or consolidation effected to
implement a recapitalization of The Company (or similar
transaction) in which no "person" (as hereinabove defined)
acquires more than 50% of the combined voting power of the
Company's then outstanding securities; or
(iv) the stockholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the
sale or disposition by the Company of all or substantially all
of the Company's assets.
(e) "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
(f) "Committee" shall mean the Compensation Committee of the Board
of Directors. The Committee shall consist of two or more
persons each of whom is an "outside director" within the
meaning of Section 162(m) of the Code and a "Non-Employee
Director" within the meaning of Rule 16b-3 under the Exchange
Act (or who satisfies any other criteria for administering
employee benefit plans as may be specified by the Securities
and Exchange Commission in order for transactions under such
plan to be exempt from the provisions of Section 16(b) of the
Exchange Act).
(g) "Company" shall mean, Chartwell Re Corporation, a Delaware
corporation.
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(h) "Common Stock" shall mean the common stock of the Company, par
value $0.01 per share.
(i) "Disability" shall mean: (1) any physical or mental condition
that would qualify a Participant for a disability benefit
under the long-term disability plan maintained by the Company
or a Subsidiary of the Company and applicable to such
Participant; or (2) when used in connection with the exercise
of an Incentive Stock Option following termination of
employment, disability within the meaning of Section 22(e)(3)
of the Code.
(j) "Effective Date" shall mean the date upon which this Plan is
adopted by the Board of Directors.
(k) "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended from time to time.
(l) "Executive Officer" shall have the meaning set forth in
Rule 3b-7 promulgated under the Exchange Act.
(m) "Exercise Date" shall mean the date on which a Participant may
exercise an Incentive Award.
(n) "Fair Market Value" of a share of Common Stock, as of a date
of determination, shall mean (i) the closing sales price per
share of Common Stock on the national securities exchange on
which such stock is principally traded for the last preceding
date on which there was a sale of such stock on such exchange,
or (ii) if the shares of Common Stock are not listed or
admitted to trading on any such exchange, the closing price
as reported by the Nasdaq Stock Market for the last preceding
date on which there was a sale of such stock on such exchange,
or (iii) if the shares of Common Stock are not then listed
on the Nasdaq Stock Market, the average of the highest
reported bid and lowest reported asked prices for the shares
of Common Stock as reported by the National Association of
Securities Dealers, Inc. Automated Quotations System for the
last preceding date on which there was a sale of such stock in
such market, or (iv) if the shares of Common Stock are not
then listed on a national securities exchange or traded in
an over-the-counter market, such value as determined by the
Committee in good faith.
(o) "Incentive Award" shall mean an Option, Tandem SAR,
Stand-Alone SAR, Restricted Stock grant, Phantom Stock grant
or Stock Bonus granted pursuant to the terms of the Plan.
(p) "Incentive Stock Option" shall mean an Option that is an
"incentive stock option" within the meaning of Section 422 of
the Code.
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(q) "Issue Date" shall mean the date established by the Company on
which certificates representing shares of Restricted Stock
shall be issued by the Company pursuant to the terms of
Section 10(e) of the Plan.
(r) "Non-Qualified Stock Option" shall mean an Option that is not
an Incentive Stock Option.
(s) "Option" shall mean an option to purchase shares of Common
Stock granted pursuant to Section 7 of the Plan.
(t) "Participant" shall mean an employee of the Company or a
subsidiary of the Company to whom an Incentive Award is
granted pursuant to the Plan, and, upon his death, his
successors, heirs, executors and administrators, as the case
may be.
(u) "Phantom Stock" shall mean the right, granted pursuant to
Section 11 of the Plan, to receive in cash the Fair Market
Value of a share of Common Stock.
(v) "Plan" shall mean this 1997 Omnibus Stock Incentive Plan,
as amended from time to time.
(x) "Reference Value" shall mean, with respect to Stand-Alone
SARs, the greater of the Fair Market Value or the value given
by the Compensation Committee.
(y) "Restricted Stock" shall mean a share of Common Stock which is
granted pursuant to the terms of Section 10 hereof and which
is subject to the restrictions set forth in Section 10 of the
Plan.
(z) "Rule 16b-3" shall mean the Rule 16b-3 promulgated under the
Exchange Act.
(aa) "Section 162(m)" shall mean Section 162(m) of the Code and the
regulations promulgated thereunder.
(ab) "Securities Act" shall mean the Securities Act of 1933, as
amended from time to time.
(ac) "Stand-Alone SAR" shall mean a stock appreciation right
granted pursuant to Section 9 of the Plan which is not related
to any Option.
(ad) "Stock Bonus" shall mean a bonus payable in shares of Common
Stock granted pursuant to Section 12 of the Plan.
(ae) "Subsidiary" shall mean a "subsidiary corporation" within the
meaning of Section 424(f) of the Code.
(af) "Tandem SAR" shall mean a stock appreciation right granted
pursuant to Section 8 of the Plan which is related to an
Option.
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(ag) "Vesting Date" shall mean the date established by the
Committee on which a share of Restricted Stock or Phantom
Stock may vest.
3. Stock subject to the Plan
(a) Shares Available for Awards
The maximum number of shares of Common Stock reserved for
issuance under the Plan shall be 907,000 shares (subject to
adjustment as provided herein), which shall include 107,000
shares authorized but unissued under the Predecessor Plan. The
total number of shares reserved for issuance hereunder may be
authorized but unissued Common Stock or authorized and issued
Common Stock held in the Company's treasury or acquired by the
Company for the purposes of the Plan. The Committee may direct
that any stock certificate evidencing shares issued pursuant
to the Plan shall bear a legend setting forth such
restrictions on transferability as may apply to such shares
pursuant to the Plan.
The grant of a Tandem SAR shall not reduce the number of
shares of Common Stock with respect to which Incentive Awards
may be granted pursuant to the Plan. Upon the exercise of any
Tandem SAR, the related Option shall be canceled to the extent
of the number of shares of Common Stock as to which the Tandem
SAR is exercised and, notwithstanding the foregoing, such
number of shares shall no longer be available for Incentive
Awards under the Plan.
(b) Individual Limitation
The total number of shares of Common Stock subject to
Incentive Awards (including Incentive Awards payable in cash
but denominated as shares of Common Stock, i.e., Stand-Alone
SARs and Phantom Stock), awarded to any employee during any
tax year of the Company, shall not exceed 300,000 shares.
Determinations under the preceding sentence shall be made in a
manner that is consistent with Section 162(m) of the Code.
(c) Adjustment for Change in Capitalization.
In the event that the Committee shall determine that any
dividend or other distribution (whether in the form of cash,
Common Stock, or other property), recapitalization, stock
split, reverse stock split, reorganization, merger,
consolidation, spin-off, combination, repurchase, or share
exchange, or other similar corporate transaction or event,
affects the Common Stock such that an adjustment is
appropriate in order to prevent dilution or enlargement of the
rights of Participants under the Plan, then the Committee
shall make such equitable changes or adjustments as it deems
necessary or appropriate to any or all of (i) the number and
kind of shares of stock which may thereafter be issued in
connection with Incentive Awards, (ii) the number and kind of
shares of stock issued or issuable in respect of outstanding
Incentive Awards, and (iii) the exercise price, grant price,
or purchase price relating to any Incentive Award; provided
that, with respect to Incentive Stock Options, such adjustment
shall be made in accordance with Section 424 of the Code.
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(d) Re-use of Shares.
The following shares of Common Stock shall again become
available for Incentive Awards: any shares subject to an
Incentive Award that remain unissued upon the cancellation,
surrender, exchange or termination of such award for any
reason whatsoever; any shares of Restricted Stock forfeited;
and any shares in respect of which a stock appreciation right
is settled for cash.
4. Administration of the Plan.
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The Plan shall be administered by the Committee. The Committee shall
have the authority in its sole discretion, subject to and not inconsistent with
the express provisions of the Plan, to administer the Plan and to exercise all
the powers and authorities either specifically granted to it under the Plan or
necessary or advisable in the administration of the Plan, including, without
limitation, the authority to grant Incentive Awards; to determine the persons to
whom and the time or times at which Incentive Awards shall be granted; to
determine the type and number of Incentive Awards to be granted, the number of
shares of Stock to which an Award may relate and the terms, conditions,
restrictions and performance criteria relating to any Incentive Award; to
determine whether, to what extent, and under what circumstances an Incentive
Award may be settled, canceled, forfeited, exchanged, or surrendered (provided
that in no event shall the foregoing be construed to permit the repricing of an
Option (whether by amendment, cancellation and regrant or otherwise) to a lower
exercise price); to make adjustments in the performance goals in recognition of
unusual or non-recurring events affecting the Company or the financial
statements of the Company (to the extent in accordance with Section 162(m)of the
Code, if applicable), or in response to changes in applicable laws, regulations,
or accounting principles; to construe and interpret the Plan and any Incentive
Award; to prescribe, amend and rescind rules and regulations relating to the
Plan; to determine the terms and provisions of Award Agreements; and to make all
other determinations deemed necessary or advisable for the administration of the
Plan.
The Committee may, in its absolute discretion, without amendment to the
Plan, (i) accelerate the date on which any Tandem SAR or Stand-Alone SAR or
Incentive Award relating to Phantom Stock granted under the Plan becomes
exercisable, waive or amend the operation of Plan provisions respecting exercise
after termination of employment or otherwise adjust any of the terms of such
Option or Stand-Alone SAR, and (ii) accelerate the Exercise Date or Issue Date,
or waive any condition imposed hereunder, with respect to any share of
Restricted Stock or Phantom Stock or otherwise adjust any of the terms
applicable to such share.
No member of the Committee shall be liable for any action, omission or
determination relating to the Plan, and the Company shall indemnify and hold
harmless each member of the Committee and each other director or employee of the
Company to whom any duty or power relating to the administration or
interpretation of the Plan has been delegated against any cost or expense
(including counsel fees) or liability (including any sum paid in settlement of a
claim with the approval of the Committee) arising out of any action, omission or
determination relating to the Plan, if, in either case, such action, omission or
determination was taken or made by such member, director or employee in good
faith and in a manner such member, director or employee reasonably believed to
be in or not opposed to the best interests of the Company.
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5. Eligibility.
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The persons who shall be eligible to receive Incentive Awards pursuant
to the Plan shall be such employees of the Company or its Subsidiaries(including
officers of the Company or its Subsidiaries, whether or not they are directors
of the Company or its Subsidiaries) as the Committee shall select from time to
time. Directors who are not employees or officers of the Company shall not be
eligible to receive Incentive Awards under the Plan.
6. Awards Under the Plan; Award Agreement.
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The Committee may grant Options, Tandem SARs, Stand-Alone SARs, shares
of Restricted Stock, shares of Phantom Stock and Stock Bonuses, in such amounts
and with such terms and conditions as the Committee shall determine, subject to
the provisions of the Plan.
Each Incentive Award granted under the Plan (except an unconditional
Stock Bonus) shall be evidenced by an Award Agreement which shall contain such
provisions as the Committee may in its sole discretion deem necessary or
desirable. By accepting an Incentive Award, a Participant thereby agrees that
the award shall be subject to all of the terms and provisions of the Plan and
the applicable Award Agreement.
7. Options.
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(a) Identification of Options.
Each Option shall be clearly identified in the applicable
Award Agreement as either an Incentive Stock Option or a
Non-Qualified Stock Option.
(b) Exercise Price.
Each Award Agreement with respect to an Option shall set forth
the amount (the "option exercise price") payable by the
grantee to the Company upon exercise of the Option. The option
exercise price per share shall be determined by the Committee
but shall in no event be less than the Fair Market Value of a
share of Common Stock on the date the Option is granted.
(c) Term and Exercise of Options.
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(1) Unless the applicable Award Agreement provides
otherwise, an Option shall become cumulatively
exercisable as to 25 percent of the shares covered
thereby on each of the first, second, third and
fourth anniversaries of the date of grant. The
Committee shall determine the expiration date of each
Option; provided, however, that no Incentive Stock
Option shall be exercisable more than 10 years after
the date of grant. Unless the applicable Award
Agreement provides otherwise, no Option shall be
exercisable prior to the first anniversary of the
date of grant.
(2) An Option may be exercised for all or any portion of
the shares as to which it is exercisable, provided,
that no partial exercise of an Option shall be for an
aggregate exercise price of less than $1,000. The
partial exercise of an Option shall not cause the
expiration, termination or cancellation of the
remaining portion thereof.
(3) An Option shall be exercised by delivering notice to
the Company's principal office, to the attention of
its Secretary, no less than one business day in
advance of the effective date of the proposed
exercise. Such notice shall specify the number of
shares of Common Stock with respect to which the
Option is being exercised and the effective date of
the proposed exercise and shall be signed by the
Participant or other person then having the right to
exercise the Option. Such notice may be withdrawn at
any time prior to the close of business on the
business day immediately preceding the effective date
of the proposed exercise. Payment for shares of
Common Stock purchased upon the exercise of an Option
shall be made on the effective date of such exercise
by one or a combination of the following means: (i)
in cash, by certified check, bank cashier's check or
wire transfer; (ii) by delivering a properly executed
exercise notice to the Company together with a copy
of irrevocable instructions to a broker to deliver
promptly to the Company the amount of sale or loan
proceeds to pay the full amount of the Purchase
Price, (iii) by delivering shares of Common Stock
owned by the Participant with appropriate stock
powers, (iv) by electing to have the Company retain
shares of Common Stock which would otherwise be
issued on the exercise of the Option, or (v) any
combination of the foregoing forms. In determining
the number of shares of Common Stock necessary to be
delivered to or retained by the Company, such shares
shall be valued at their Fair Market Value as of the
exercise date.
(4) Certificates for shares of Common Stock purchased
upon the exercise of an Option shall be issued in the
name of the Participant or other person entitled to
receive such shares, and delivered to the Participant
or such other person as soon as practicable following
the effective date on which the Option is exercised.
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(d) Limitations on Incentive Stock Options.
(1) To the extent that the aggregate Fair Market Value of
shares of Common Stock with respect to which
Incentive Stock Options are exercisable for the first
time by a Participant during any calendar year under
the Plan and any other stock option plan of the
Company (or any Subsidiary of the Company) shall
exceed $100,000, or such higher value as may be
permitted under Section 422 of the Code, such Options
shall be treated as Non-Qualified Stock Options. Such
Fair Market Value shall be determined as of the date
on which each such Incentive Stock Option is granted.
(2) No Incentive Stock Option may be granted to an
individual if, at the time of the grant, such
individual owns stock possessing more than ten
percent of the total combined voting power of all
classes of stock of the Company unless (i) the
exercise price per share of such Incentive Stock
Option is at least 110 percent of the Fair Market
Value of a share of Common Stock at the time such
Incentive Stock Option is granted and (ii) such
Incentive Stock Option is not exercisable after the
expiration of five years from the date such Incentive
Stock Option is granted.
(e) Effect of Termination of Employment.
(1) Unless the applicable Award Agreement provides
otherwise, in the event that the employment of a
Participant with the Company or a Subsidiary of the
Company shall terminate for any reason other than
death, Disability or Cause, (i) Options granted to
such Participant, to the extent that they are
exercisable at the time of such termination, shall
remain exercisable until the date that is ninety
(90)days after such termination, on which date they
shall expire, and (ii) Options granted to such
Participant, to the extent that they were not
exercisable at the time of such termination, shall
expire at the close of business on the date of such
termination. Notwithstanding the foregoing, no Option
shall be exercisable after the expiration of its
term.
(2) Unless the applicable Award Agreement provides
otherwise, in the event that the employment of a
Participant with the Company or a Subsidiary of the
Company shall terminate on account of the Disability
or death of the Participant (i) Options granted to
such Participant, to the extent that they were
exercisable at the time of such termination, shall
remain exercisable until the first anniversary of
such termination, on which date they shall expire,
and (ii) Options granted to such Participant, to the
extent that they were not exercisable at the time of
such termination, shall expire at the close of
business on the date of such termination.
Notwithstanding the foregoing, no Option shall be
exercisable after the expiration of its term.
(3) If a Participant's employment with the Company or a
Subsidiary of the Company is terminated for Cause,
all outstanding options granted to such Participant
shall expire at the commencement of business on the
date of such termination.
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(f) Acceleration of Exercise Date Upon Change in Control.
Upon the occurrence of a Change in Control, each Option
granted under the Plan and outstanding at such time shall
become fully and immediately exercisable and shall remain
exercisable until its expiration, pursuant to the terms of the
Plan notwithstanding the provisions of Section 7(e)(1) and (2)
of the Plan.
8. Tandem SARs.
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The Committee may grant in connection with any Option granted hereunder
one or more Tandem SARs relating to a number of shares of Common Stock less than
or equal to the number of shares of Common Stock subject to the related Option.
A Tandem SAR may be granted at the same time as, or, in the case of a
Non-Qualified Stock Option, subsequent to the time that, its related Option is
granted.
(a) Benefit Upon Exercise.
The exercise of a Tandem SAR with respect to any number of
shares of Common Stock shall entitle the Participant to a cash
payment, for each such share, equal to the excess of (i) the
Fair Market Value of a share of Common Stock on the exercise
date over (ii) the option exercise price per share of the
related Option. Such payment shall be made as soon as
practicable after the effective date of such exercise.
(b) Term and Exercise of Tandem SAR.
(1) A Tandem SAR shall be exercisable only if and to the
extent that its related Option is exercisable.
(2) The exercise of a Tandem SAR with respect to a number
of shares of Common Stock shall cause the immediate
and automatic cancellation of its related Option with
respect to an equal number of shares. The exercise of
an Option, or the cancellation, termination or
expiration of an Option (other than pursuant to this
Section 8(b)(2)), with respect to a number of shares
of Common Stock shall cause the automatic and
immediate cancellation of any related Tandem SARs to
the extent that the number of shares of Common Stock
remaining subject to such Option is less than the
number of shares then subject to such Tandem SAR.
Such Tandem SARs shall be canceled in the order in
which they become exercisable.
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(3) A Tandem SAR may be exercised for all or any portion
of the shares as to which the related Option is
exercisable; provided, that no partial exercise of a
Tandem SAR shall be for less than a number of shares
having an aggregate option exercise price of less
than $1,000. The partial exercise of a Tandem SAR
shall not cause the expiration, termination or
cancellation of the remaining portion thereof.
(4) No Tandem SAR shall be assignable or transferable
otherwise than together with its related Option, and
any such transfer or assignment will be subject to
the provisions of Section 20 of the Plan.
(5) A Tandem SAR shall be exercised by delivering notice
to the Company's principal office, to the attention
of its Secretary, no less than one business day in
advance of the effective date of the proposed
exercise. Such notice shall specify the number of
shares of Common Stock with respect to which the
Tandem SAR is being exercised and the effective date
of the proposed exercise and shall be signed by the
Participant or other person then having the right to
exercise the Option to which the Tandem SAR is
related. Such notice may be withdrawn at any time
prior to the close of business on the business day
immediately preceding the effective date of the
proposed exercise.
9. Stand-Alone SARs.
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(a) Benefit Upon Exercise.
The exercise of a Stand-Alone SAR with respect to any number
of shares of Common Stock shall entitle the Participant to a
cash payment, for each such share, equal to the excess of (i)
the Fair Market Value of a share of Common Stock on the
exercise date over (ii) the Reference Value of the Stand-Alone
SAR. Such payments shall be made as soon as practicable after
the effective date of such exercise.
(b) Term and Exercise of Stand-Alone SARs.
(1) Unless the applicable Award Agreement provides
otherwise, a Stand-Alone SAR shall become
cumulatively exercisable as to 25 percent of the
shares covered thereby on each of the first, second,
third and fourth anniversaries of the date of grant.
The Committee shall determine the expiration date of
each Stand-Alone SAR. Unless the applicable Award
Agreement provides otherwise, no Stand-Alone SAR
shall be exercisable prior to the first anniversary
of the date of grant.
(2) A Stand-Alone SAR may be exercised for all or any
portion of the shares as to which it is exercisable;
provided, that no partial exercise of a Stand-Alone
SAR shall be for an aggregate Reference Value of less
than $1,000. The partial exercise of a Stand-Alone
SAR shall not cause the expiration, termination or
cancellation of the remaining portion thereof.
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(3) A Stand-Alone SAR shall be exercised by delivering
notice to the Company's principal office, to the
attention of its Secretary, no less than one business
day in advance of the effective date of the proposed
exercise. Such notice shall specify the number of
shares of Common Stock with respect to which the
Stand-Alone SAR is being exercised, and the effective
date of the proposed exercise, and shall be signed by
the Participant. The Participant may withdraw such
notice at anytime prior to the close of business on
the business day immediately preceding the effective
date of the proposed exercise.
(c) Effect of Termination of Employment.
The provisions set forth in Section 7(e) with respect to the
exercise of Options following termination of employment shall
apply as well to the exercise of Stand-Alone SARs.
(d) Acceleration of Exercise Date Upon Change in Control.
Upon the occurrence of a Change in Control, any Stand-Alone
SAR granted under the Plan and outstanding at such time shall
become fully and immediately exercisable and shall remain
exercisable until its expiration pursuant to the terms of the
Plan notwithstanding the provisions of Section 7(e) of the
Plan which are incorporated into this Section 9.
10. Restricted Stock.
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(a) Issue Date and Vesting Date.
At the time of the grant of shares of Restricted Stock, the
Committee shall establish an Issue Date or Issue Dates and a
Vesting Date or Vesting Dates with respect to such shares. The
Committee may divide such shares into classes and assign a
different Issue Date and/or Vesting Date for each class. If
the grantee is employed by the Company or a Subsidiary of the
Company on an Issue Date (which may be the date of grant), the
specified number of shares of Restricted Stock shall be issued
in accordance with the provisions of Section 10(e) of the
Plan. Provided that all conditions to the vesting of a share
of Restricted Stock imposed pursuant to Section 10(b) of the
plan are satisfied, and except as provided in Section 10(g) of
the Plan, upon the occurrence of the Vesting Date with respect
to a share of Restricted Stock, such share shall vest and the
restrictions of Section 10(c)of the Plan shall lapse.
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(b) Conditions to Vesting.
At the time of the grant of shares of Restricted Stock, the
Committee may impose such restrictions or conditions to the
vesting of such shares as it, in its absolute discretion,
deems appropriate.
(c) Restrictions on Transfer Prior to Vesting.
Prior to the vesting of a share of Restricted Stock, no
transfer of a Participant's rights with respect to such share,
whether voluntary or involuntary, by operation of law or
otherwise, shall be permitted. Immediately upon any attempt to
transfer such rights, such share, and all of the rights
related thereto, shall be forfeited by the Participant.
(d) Dividends on Restricted Stock.
The Committee in its discretion may require that any dividends
paid on shares of Restricted Stock shall be held in escrow
until all restrictions on such shares have lapsed.
(e) Issuance of Certificates.
(1) Reasonably promptly after the Issue Date with respect
to shares of Restricted Stock, the Company shall
cause to be issued a stock certificate, registered in
the name of the Participant to whom such shares were
granted, evidencing such shares; provided, that the
Company shall not cause such a stock certificate to
be issued unless it has received a stock power duly
endorsed in blank with respect to such shares. Each
such stock certificate shall bear the following
legend:
The transferability of this certificate and the
shares of stock represented hereby are subject to the
restrictions, terms and conditions (including
forfeiture provisions and restrictions against
transfer) contained in the 1997 Omnibus Stock
Incentive Plan of Chartwell Re Corporation and an
Award Agreement entered into between the registered
owner of such shares and Chartwell Re Corporation. A
copy of such Plan and Award Agreement is on file in
the office of the Secretary of Chartwell Re
Corporation, 4 Stamford Plaza, Stamford, Connecticut
06912.
Such legend shall not be removed until such shares vest
pursuant to the terms of the applicable Award Agreement.
(2) Each certificate issued pursuant to this Section
10(e), together with the stock powers relating to the
shares of Restricted Stock evidenced by such
certificate, shall be held by the Company unless the
Committee determines otherwise.
13
<PAGE>
(f) Consequences of Vesting.
Upon the vesting of a share of Restricted Stock pursuant to
the terms of the applicable Award Agreement, the restrictions
of Section 10(c) of the Plan shall lapse. Reasonably promptly
after a share of Restricted Stock vests, the Company shall
cause to be delivered to the Participant to whom such shares
were granted, a certificate evidencing such share, free of the
legend set forth in Section 10(e) of the Plan.
(g) Effect of Termination of Employment.
(1) Subject to such other provision as the Committee may
set forth in the applicable Award Agreement, and to
the Committee's amendment authority pursuant to
Section 4 of the Plan, upon the termination of a
Participant's employment by the Company or any
Subsidiary of the Company for any reason other than
Cause, any and all shares to which restrictions on
transferability apply shall be immediately forfeited
by the Participant and transferred to the Company,
provided that if the Committee, in its sole
discretion and within thirty (30) days after such
termination of employment notifies the Participant in
writing of its decision not to terminate the
Participant's rights in such shares, then the
Participant shall continue to be the owner of such
shares subject to such continuing restrictions as the
Committee may prescribe in such notice. If shares of
Restricted Stock are forfeited in accordance with the
provision of this Section 10, the Company shall also
have the right to require the return of all dividends
paid on such shares, whether by termination of any
escrow arrangement under which such dividends are
held or otherwise.
(2) In the event of the termination of a Participant's
employment for Cause, all shares of Restricted Stock
granted to such Participant which have not vested as
of the date of such termination shall immediately be
returned to the Company, together with any dividends
paid on such shares.
(h) Effect of Change in Control.
Upon the occurrence of a Change in Control, all outstanding
shares of Restricted Stock which have not theretofore vested
shall immediately vest and all restrictions on such shares
shall immediately lapse.
14
<PAGE>
(i) Special Provisions Regarding Restricted Stock Awards.
Notwithstanding anything to the contrary contained herein,
Restricted Stock granted pursuant to this Section 10 shall be
based on the attainment by the Company (or a Subsidiary or
division of the Company if applicable) of performance goals
pre-established by the Committee, based on one or more of the
following criteria: (i) the attainment of a specified
percentage return on total stockholder equity of the Company;
(ii) the attainment of a specified percentage increase in
earnings per share of Common Stock; (iii) the attainment of a
specified percentage increase in net income of the Company;
and (iv) the attainment of a specified percentage increase in
profit before taxation of the Company (or a Subsidiary or
division of the Company if applicable). Attainment of any such
performance criteria shall be determined in accordance with
generally accepted accounting principles as in effect from
time to time. Such shares of Restricted Stock shall be
released from restrictions only after the attainment of such
performance measures have been certified by the Committee.
11. Phantom Stock.
-------------
(a) Vesting Date.
At the time of the grant of shares of Phantom Stock, the
Committee shall establish a Vesting Date or Vesting Dates with
respect to such shares. The Committee may divide such shares
into classes and assign a different Vesting Date for each
class. Provided that all conditions to the vesting of a share
of Phantom Stock imposed pursuant to Section 11(c) of the Plan
are satisfied, and except as provided in Section 11(d) of the
Plan, upon the occurrence of the Vesting Date with respect to
a share of Phantom Stock, such share shall vest.
(b) Benefit Upon Vesting.
Upon the vesting of a share of Phantom Stock, the Participant
shall be entitled to receive in cash, within 30 days of the
date on which such share vests, an amount equal to the sum of
(i) the Fair Market Value of a share of Common Stock on the
date on which such share of Phantom Stock vests and (ii) the
aggregate amount of cash dividends paid with respect to a
share of Common Stock during the period commencing on the date
on which the share of Phantom Stock was granted and
terminating on the date on which such share vests.
(c) Conditions to Vesting.
At the time of the grant of shares of Phantom Stock, the
Committee may impose such restrictions or conditions to the
vesting of such shares as it, in its absolute discretion,
deems appropriate.
(d) Effect of Termination of Employment.
(1) Subject to such other provisions as the Committee may
set forth in the applicable Award Agreement, and to
the Committee's amendment authority pursuant to
Section 4 of the Plan, shares of Phantom Stock that
have not vested, together with any dividends credited
on such shares, shall be forfeited upon the
Participant's termination of employment for any
reason other than Cause.
15
<PAGE>
(2) In the event of the termination of a Participant's
employment for Cause, all shares of Phantom Stock
granted to such Participant which have not vested as
of the date of such termination shall immediately be
forfeited, together with any dividends credited on
such shares.
(e) Effect of Change in Control.
Upon the occurrence of a Change in Control, all outstanding
shares of Phantom Stock which have not theretofore vested
shall immediately vest.
(f) Special Provisions Regarding Phantom Stock Awards.
Notwithstanding anything to the contrary contained herein,
Phantom Stock granted pursuant to this Section 11 to Executive
Officers shall be based on the attainment by the Company (or a
Subsidiary or division of the Company if applicable) of
performance goals pre-established by the Committee, based on
one or more of the following criteria: (i) the attainment of a
specified percentage return on total stockholder equity of the
Company; (ii) the attainment of a specified percentage
increase in earnings per share of Common Stock from continuing
operations; (iii) the attainment of a specified percentage
increase in net income of the Company; and (iv) the attainment
of a specified percentage increase in profit before taxation
of the Company (or a Subsidiary or division of the Company if
applicable). Attainment of any such performance criteria shall
be determined in accordance with generally accepted accounting
principles as in effect from time to time. No cash payment in
respect of any Phantom Stock award will be paid to an
Executive Officer until the attainment of the respective
performance measures have been certified by the Committee.
12. Stock Bonuses.
-------------
In the event that the Committee grants a Stock Bonus, a certificate for
the shares of Common Stock comprising such Stock Bonus shall be issued in the
name of the Participant to whom such grant was made and delivered to such
Participant as soon as practicable after the date on which such Stock Bonus is
payable.
13. Rights as a Stockholder.
-----------------------
No person shall have any rights as a stockholder with respect to any
shares of Common Stock covered by or relating to any Incentive Award until the
date of issuance of a stock certificate with respect to such shares. Except as
otherwise expressly provided in Section 3(c) of the Plan, no adjustment to any
Incentive Award shall be made for dividends or other rights for which the record
date occurs prior to the date such stock certificate is issued.
16
<PAGE>
14. No Special Employment Rights; No Right to Incentive Award.
---------------------------------------------------------
Nothing contained in the Plan or any Award Agreement shall confer upon
any Participant any right with respect to the continuation of employment by the
Company or any Subsidiary of the Company or interfere in any way with the right
of the Company or any Subsidiary of the Company, subject to the terms of any
separate employment agreement to the contrary, at any time to terminate such
employment or to increase or decrease the compensation of the Participant.
No person shall have any claim or right to receive an Incentive Award
hereunder. The Committee's granting of an Incentive Award to a Participant at
any time shall neither require the Committee to grant any other Incentive Award
to such Participant or other person at any time or preclude the Committee from
making subsequent grants to such Participant or any other person.
15. Securities Matters.
------------------
(a) The Company shall be under no obligation to effect the
registration pursuant to the Securities Act of any interests
in the Plan or any shares of Common Stock to be issued hereunder
or to effect similar compliance under any state laws.
Notwithstanding anything herein to the contrary, The Company
shall not be obligated to cause to be issued or delivered any
certificates evidencing shares of Common Stock pursuant to the
Plan unless and until the Company is advised by its counsel that
the issuance and delivery of such certificates is in compliance
with all applicable laws, regulations of governmental authority
and the requirements of any securities exchange on which shares
of Common Stock are traded. The Committee may require, as a
condition of the issuance and delivery of certificates evidencing
shares of Common Stock pursuant to the terms hereof and of the
applicable Award Agreement, that the recipient of such shares
make such covenants, agreements and representations, and that
such certificates bear such legends, as the Committee, in its
sole discretion, deems necessary or desirable.
(b) The transfer of any shares of Common Stock hereunder shall be
effective only at such time as counsel to the Company shall
have determined that the issuance and delivery of such shares is
in compliance with all applicable laws, regulations of
governmental authority and the requirements of any securities
exchange on which shares of Common Stock are traded. The
Committee may, in its sole discretion, defer the effectiveness of
any transfer of shares of Common Stock hereunder in order to
allow the issuance of such shares to be made pursuant to
registration or an exemption from registration or other methods
for compliance available under federal or state securities laws.
The Committee shall inform the Participant in writing of its
decision to defer the effectiveness of a transfer. During the
period of such deferral in connection with the exercise of an
Option, the Participant may, by written notice, withdraw such
exercise and obtain the refund of any amount paid with respect
thereto.
17
<PAGE>
16. Withholding Taxes.
-----------------
Whenever cash is to be paid pursuant to an Incentive Award, the Company
shall have the right to deduct therefrom an amount sufficient to satisfy any
federal, state and local withholding tax requirements related thereto.
Whenever shares of Common Stock are to be delivered pursuant to an
Incentive Award, the Company shall have the right to require the Participant to
remit to the Company in cash an amount sufficient to satisfy any federal, state
and local withholding tax requirements related thereto. With the approval of the
Committee, a Participant may satisfy the foregoing requirement by electing to
have the Company withhold from delivery shares of Common Stock having a fair
market value equal to the amount of tax to be withheld. Such shares shall be
valued at their Fair Market Value on the date on which the amount of tax to be
withheld is determined (the "Tax Date"). Fractional share amounts shall be
settled in cash. Such a withholding election may be made with respect to all or
any portion of the shares to be delivered pursuant to an Incentive Award.
17. Notification of Election Under Section 83(b) of the Code.
--------------------------------------------------------
If any Participant shall, in connection with the acquisition of shares
of Common Stock under the Plan, make the election permitted under Section 83(b)
of the Code (i.e., an election to include in gross income in the year of
transfer the amounts specified in Section 83(b)), such Participant shall notify
the Company of such election within 10 days of filing notice of the election
with the Internal Revenue Service, in addition to any filing and a notification
required pursuant to regulation issued under the authority of Code Section
83(b).
18. Notification Upon Disqualifying Disposition Under Section 421(b) of the
Code.
------------------------------------------------------------------------
Each Award Agreement with respect to an Incentive Stock Option shall
require the Participant to notify the Company of any disposition of shares of
Common Stock issued pursuant to the exercise of such Option under the
circumstances described in Section 421(b) of the Code (relating to certain
disqualifying dispositions), within 10 days of such disposition.
19. Amendment or Termination of the Plan.
------------------------------------
The Board of Directors may, at any time, suspend or terminate the Plan
or revise or amend it in any respect whatsoever; provided, however, that
stockholder approval shall be required if and to the extent the Board of
Directors determines that such approval is appropriate for purposes of
satisfying Section 162(m) or 422 of the Code or to the extent such approval is
required by the rules of any stock exchange on which the Common Stock is listed.
Nothing herein shall restrict the Committee's ability to exercise its
discretionary authority pursuant to Section 4 of the Plan, which discretion may
be exercised without amendment to the Plan. No action hereunder may, without the
consent of a Participant, reduce the Participant's rights under any outstanding
Incentive Award.
18
<PAGE>
20. Transfers Upon Death; Nonassignability.
--------------------------------------
Upon the death of a Participant, outstanding Incentive Awards granted
to such Participant may be exercised only by the executor or administrator of
the Participant's estate or by a person who shall have acquired the right to
such exercise by will or by the laws of descent and distribution. No transfer of
an Incentive Award by will or the laws of descent and distribution shall be
effective to bind the Company unless the Committee shall have been furnished
with (a) written notice thereof and with a copy of the will and/or such evidence
as the Committee may deem necessary to establish the validity of the transfer
and (b) an agreement by the transferee to comply with all the terms and
conditions of the Incentive Award that are or would have been applicable to the
Participant and to be bound by the acknowledgments made by the Participant in
connection with the grant of the Incentive Award.
During a Participant's lifetime, the Committee may permit the transfer,
assignment or other encumbrance of an outstanding Option or outstanding shares
of Restricted Stock unless such Option is an Incentive Stock Option and the
Committee and the Participant intend that it shall retain such status.
Notwithstanding the foregoing, subject to any conditions as the Committee may
prescribe, a Participant may, upon providing written notice to the Secretary of
the Company, elect to transfer any or all Options granted to such Participant
pursuant to the Plan to members of his or her immediate family, including, but
not limited to, children, grandchildren and spouse or to trusts for the benefit
of such immediate family members or to partnerships in which such family members
are the only partners; provided, however, that no such transfer by any
Participant may be made in exchange for consideration.
21. Expenses and Receipts.
---------------------
The expenses of the Plan shall be paid by the Company. Any proceeds
received by the Company in connection with any Incentive Award will be used for
general corporate purposes.
22. Failure to Comply.
-----------------
In addition to the remedies of the Company elsewhere provided for
herein, failure by a Participant (or beneficiary or transferee) to comply with
any of the terms and conditions of the Plan or the applicable Award Agreement,
unless such failure is remedied by such Participant (or beneficiary or
transferee) within ten days after notice of such failure by the Committee, shall
be grounds for the cancellation and forfeiture of such Incentive Award, in whole
or in part, as the Committee, in its absolute discretion, may determine.
23. Effective Date and Term of Plan.
-------------------------------
The Plan became effective on the Effective Date, but the Plan (and any
grants of Incentive Awards made prior to stockholder approval of the Plan) shall
be subject to the requisite approval of the stockholders of the Company. In the
absence of such approval, such Incentive Awards shall be null and void. Unless
earlier terminated by the Board of Directors, the right to grant Incentive
Awards under the Plan will terminate on the tenth anniversary of the Effective
Date. Incentive Awards outstanding at Plan termination will remain in effect
according to their terms and the provisions of the Plan.
19
<PAGE>
24. Applicable Law.
--------------
Except to the extent preempted by any applicable federal law, the Plan
will be construed and administered in accordance with the laws of the State of
Delaware, without reference to the principles of conflicts of law.
25. Participant Rights.
------------------
No Participant shall have any claim to be granted any Incentive Award
under the Plan, and there is no obligation for uniformity of treatment for
Participants. Except as provided specifically herein, a Participant or a
transferee of an Incentive Award shall have no rights as a stockholder with
respect to any shares covered by any award until the date of the issuance of a
Common Stock certificate to him for such shares.
26. Unfunded Status of Awards.
-------------------------
The Plan is intended to constitute an "unfunded" plan for incentive and
deferred compensation. With respect to any payments not yet made to a
Participant pursuant to an Incentive Award, nothing contained in the Plan or any
Award Agreement shall give any such Participant any rights that are greater than
those of a general creditor of the Company.
27. No Fractional Shares.
--------------------
No fractional shares of Common Stock shall be issued or delivered
pursuant to the Plan. The Committee shall determine whether cash, other
Incentive Awards, or other property shall be issued or paid in lieu of such
fractional shares or whether such fractional shares or any rights thereto shall
be forfeited or otherwise eliminated.
28. Beneficiary.
-----------
A Participant may file with the Committee a written designation of a
beneficiary on such form as may be prescribed by the Committee and may, from
time to time, amend or revoke such designation. If no designated beneficiary
survives the Participant, the executor or administrator of the Participant's
estate shall be deemed to be the Participant's beneficiary.
29. Interpretation.
--------------
The Plan is designed and intended to comply with Rule 16b-3 promulgated
under the Exchange Act and, with Section 162(m) of the Code, and all provisions
hereof shall be construed in a manner to so comply.
20
<PAGE>
30. Cancellation and Substitution of Options Upon Merger.
-----------------------------------------------------
Notwithstanding anything to the contrary contained in the
Plan, at the time of the merger (the "Effective Time") of the Company with and
into Trenwick Group Inc. ("Trenwick") pursuant to the terms of the Agreement and
Plan of Merger between Trenwick and the Company, dated as of June 21, 1999 (the
"Merger 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, the number (rounded down to the nearest
whole number) of shares of Trenwick's common stock, par value $.10 per share
(the "Trenwick Common Stock") determined by multiplying (x) the number of shares
of Common Stock subject to such Option immediately prior to the Effective Time
by (y) 0.825, at a price per share of Trenwick Common Stock (rounded up to the
nearest whole cent) equal to (A) the "option exercise price" (as defined in
Section 7(b) hereof) for such Option divided by (B) 0.825.
31. 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).
21
