Exhibit 99.5
CHARTWELL RE CORPORATION
AMENDED
CHARTWELL RE 1993 STOCK OPTION PLAN
1. Purpose; Types of Awards.
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The purpose of the Chartwell Re 1993 Stock Option Plan is to
afford an incentive to directors, officers and other key employees of the
Company or any subsidiary of the Company which now exists or hereafter is
organized or acquired by the Company, to acquire a proprietary interest in the
Company, to increase their efforts on behalf of the Company and to promote the
success of the Company's business. The Committee may grant Options which shall
constitute either Nonqualified Stock Options or Incentive Stock Options.
2. Definitions.
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As used in this Plan, the following words and phrases shall
have the meanings indicated:
(a) "Board" shall mean the Board of Directors of the
Company.
(b) "Change in Capitalization" shall mean any
increase, reduction, or change or exchange of shares of Common
Stock for a different number or kind of shares or other
securities of the Company by reason of a reclassification,
recapitalization, merger, consolidation, reorganization, stock
dividend, stock split or reverse stock split, combination or
exchange of shares, repurchase of shares, change in corporate
structure or otherwise.
(c) "Change in Control of the Company" shall mean
the occurrence of one of the following events:
(i) any "person" (as defined in Section 3(a)
(9) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") and as such term is
modified in Sections 13(d) and 14(d) of the Exchange
Act, excluding the Company or any of its subsidiaries
or Wand Partners Inc. (or any of its affiliates), a
trustee or any fiduciary holding securities under an
employee benefit plan of the Company or any of its
subsidiaries, an underwriter temporarily holding
securities pursuant to an offering of such securities
or a corporation owned, directly or indirectly, by
stockholders of the Company in substantially the same
proportions as their ownership 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 (not
including in the securities beneficially owned by
such person any securities acquired directly from the
Company or its affiliates) representing 50% or more
of the combined voting power of the Company's then
outstanding securities; or
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(ii) during any period of not more than two
consecutive years (not including any period prior to
the execution of this Agreement), individuals who at
the beginning of such period constitute the Board 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 paragraph) whose election
by the Board or nomination for election by the
Company's stockholders 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 a majority thereof; or
(iii) the shareholders 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), in
combination with the ownership of any trustee or
other fiduciary holding securities under an employee
benefit plan of the Company, at least 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 acquires more than
50% of the combined voting power of the Company's
then outstanding securities; or
(iv) the shareholders 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 the Company's assets.
(d) "Code" shall mean the Internal Revenue Code of
1986, as amended.
(e) "Committee" shall have the meaning set forth in
Section 3 hereof.
(f) "Common Stock" shall mean shares of common
stock, par value $.01 per share, of the Company.
(g) "Company" shall mean Chartwell Re Corporation, a
Delaware corporation.
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(h) "Disability" shall mean the Optionee's incapacity
due to physical or mental illness, as a result of which the
Optionee shall have been absent from his duties of employment
with the Company or a Subsidiary Corporation of the Company on
a full-time basis for the entire period of six (6) consecutive
months, and within thirty (30) days after written notice of
termination is given by the Company or a Subsidiary
Corporation of the Company (which notice may be given within
thirty (30) days before or at any time after the end of such
three month period) shall not have returned to the performance
of such duties on a full-time basis.
(i) "Fair Market Value" per share as of a particular
date shall mean (i) the closing sales price per share of
Common Stock on the national securities exchange on which the
Common Stock is principally traded, for the last preceding
date on which there was a sale of such Common Stock on such
exchange, or (ii) 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 the Committee, in its
sole discretion, shall determine.
(j) "Incentive Stock Option" shall mean an Option
within the meaning of Section 422 of the Code.
(k) "Initial Option" shall mean an Option granted
prior to the Initial Public Offering that is designated as an
Initial Option in the Option Agreement.
(l) "Initial Public Offering" shall mean the initial
public offering of Common Stock pursuant to a registration
statement under the Securities Act of 1933 filed with the
Securities Exchange Commission.
(m) "Option" or "Options" shall mean a grant to an
Optionee of an option or options to purchase shares of Common
Stock. Options granted by the Committee pursuant to the Plan
shall constitute either Nonqualified Stock Options or
Incentive Stock Options, as determined by the Committee.
(n) "Optionee" shall have the meaning set forth in
Section 3 hereof.
(o) "Option Price" shall have the meaning set forth
in Section 3 hereof.
(p) "Nonqualified Stock Option" shall mean an Option
that is not an Incentive Stock Option.
(q) "Parent Corporation" shall mean any corporation
(other than the Company) in an unbroken chain of corporations
ending with the employer corporation if, at the time of
granting an Option, each of the corporations other than the
employer corporation owns stock possessing fifty percent (50%)
or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain.
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(r) "Plan" shall mean the Chartwell Re 1993 Stock
Option Plan.
(s) "Plan Year" shall mean each calendar year that
the Plan is in effect.
(t) "Subsidiary Corporation" shall mean any
corporation (other than the Company) in an unbroken chain of
corporations beginning with the employer corporation if, at
the time of granting an Option, each of the corporations other
than the last corporation in the unbroken chain owns stock
possessing fifty percent (50%) or more of the total combined
voting power of all classes of stock in one of the other
corporations in such chain.
(u) "Ten Percent Shareholder" shall mean an Optionee
who, at the time an Incentive Stock Option is granted, owns
stock possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company
or of its Parent or Subsidiary Corporations.
3. Administration.
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The Plan shall be administered by a committee of directors
(the "Committee") established by the Board. 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 Options; to determine the purchase price of
the shares of Common Stock covered by each Option (the "Option Price"); to
determine the persons to whom, and the time or times at which Options shall be
granted, (each such person is referred to herein as an "Optionee"); to determine
the number of shares to be covered by each Option; to interpret the Plan; to
prescribe, amend and rescind rules and regulations relating to the Plan; to
determine the terms and provisions of the agreements (which need not be
identical) entered into in connection with Options granted under the Plan; to
cancel or suspend Options, as necessary; and to make all other determinations
deemed necessary or advisable for the administration of the Plan. The Committee
may delegate to one or more of its members or to one or more agents such
administrative duties as it may deem advisable, and the Committee or any person
to whom it has delegated duties as aforesaid may employ one or more persons to
render advice with respect to any responsibility the Committee or such person
may have under the Plan. All decisions, determinations and interpretations of
the Committee shall be final and binding on all Optionees. Notwithstanding the
foregoing provisions of this paragraph, the grant of Initial Options may be made
by the Board, in its discretion, with the same authority otherwise vested in the
Committee under this paragraph, it being understood that upon the appointment of
the Committee in accordance with the first paragraph of this Section 3, the
Committee shall thereafter have all such authority with respect to the Initial
Options and any Options to be granted subsequent to the Initial Options.
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The Board shall fill all vacancies, however caused, in the
Committee. The Board may at any time remove any Committee members and substitute
others. The Committee shall hold its meetings at such times and places as it
shall deem advisable. All determinations of the Committee shall be made by a
majority of its members either present in person or participating by conference
telephone at a meeting or by written consent. The Committee may appoint a
chairman and a secretary and make such rules and regulations for the conduct of
its business as it shall deem advisable, and shall keep minutes of its meetings.
No member of the Board or Committee shall be liable for any
action taken or determination made in good faith with respect to the Plan or any
Option granted hereunder.
4. Eligibility.
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Options may be granted to directors, officers and other key
employees of the Company or any Subsidiary Corporation of the Company which now
exists or hereafter is organized or acquired by the Company. In determining the
persons to whom Options shall be granted and the number of shares to be covered
by each Option, the Committee shall take into account the duties of the
respective persons, their present and potential contributions to the success of
the Company and such other factors as the Committee shall deem relevant in
connection with accomplishing the purposes of the Plan.
5. Common Stock Subject to the Plan.
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The maximum number of the shares of Common Stock reserved for
the grant of Options shall be 1,000,000, subject to adjustment as provided in
Section 9(a) hereof. Such shares may, in whole or in part, be authorized but
unissued shares or shares that shall have been or may be reacquired by the
Company.
If any outstanding Option under the Plan should, for any
reason expire, be canceled or be terminated, without having been exercised in
full, the shares of Common Stock allocable to the unexercised, canceled or
terminated portion of such Option shall (unless the Plan shall have been
terminated) become available for subsequent grants of Options under the Plan.
6. Incentive Stock Options.
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Options granted pursuant to this Section 6 are intended to
constitute Incentive Stock Options and shall be subject to the following special
terms and conditions, in addition to the general terms and condition specified
in Section 8 hereof.
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(a) Value of Shares. The aggregate Fair Market Value
(determined as of the date that Incentive Stock Options are
granted) of the shares of Common Stock with respect to which
Options granted under this Plan and all other option plans of
the Company and any Parent or Subsidiary Corporation become
exercisable for the first time by an Optionee during any
calendar year shall not exceed $100,000. To the extent this
Section 6(a) is not complied with, any Option which no longer
qualified as an Incentive Stock Option will be converted into
a Nonqualified Stock Option.
(b) Ten Percent Shareholders. In the case of an
Incentive Stock Option granted to a Ten Percent Shareholder,
(i) the Option Price shall not be less than one hundred ten
percent (110%) of the Fair Market Value of the shares of
Common Stock on the date of grant of such Incentive Stock
Option, and (ii) the exercise period shall not exceed five (5)
years from the date of grant of such Incentive Stock Option.
7. Nonqualified Stock Options.
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Options granted pursuant to this Section 7 are intended to
constitute Nonqualified Stock Options and shall be subject only to the general
terms and conditions specified in Section 8 hereof.
8. Terms and Conditions of Options.
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Each Option granted pursuant to the Plan shall be evidenced by
a written agreement between the Company and the Optionee in such form as the
Committee shall from time to time approve (the "Option Agreement"), which Option
Agreement shall be subject to and set forth the following terms and conditions.
(a) Number of Shares. Each Option Agreement shall
state the number of shares of Common Stock to which the Option
relates; provided, however, that subject to adjustment
pursuant to Section 9(a) hereof, no executive officer of the
Company may be granted in any calendar year Options to
purchase in excess of 200,000 shares.
(b) Type of Option. Each Option Agreement shall
specifically state whether the Option constitutes a
Nonqualified Stock Option or an Incentive Stock Option.
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(c) Option Price. Each Option Agreement shall state
the Option Price which shall not be less than the Fair Market
Value of the shares of Common Stock covered by the Option on
the date of grant; provided, however, that Initial Options may
have an Option Price per share of Common Stock equal to: (i)
$22.00, (ii) the lesser of $30 or 120% of the offering price
per share of Common Stock offered in the Initial Public
Offering or (iii) the lesser of $30 or the offering price per
share of Common Stock offered in the Initial Public Offering.
The Option Price shall be subject to adjustment as provided in
Section 9 hereof. The date on which the Committee adopts a
resolution expressly granting an Option shall be considered
the day on which such Option is granted, except to the extent
any such resolution provides otherwise.
(d) Method and Time of Payment. Each Option Agreement
shall require that the Option Price be paid in full, at the
time of exercise of an Option, in cash or by certified or
cashier's check or with shares of Common Stock either
previously owned by the Optionee or otherwise issuable upon
the Option exercise (valued at Fair Market Value as of the
exercise date), or in a combination thereof. The Committee, in
its discretion, may also permit the payment of the Option
Price by a cashless exercise procedure.
(e) Term and Exercisability of Options. Each Option
shall become vested and exercisable pursuant to the terms and
conditions of the Optionee's Option Agreement and Section 9(b)
hereof. The Committee, in its discretion, may accelerate the
exercisability of any Option. Except as specifically provided
in Sections 8(f) and 8(g) hereof, all Options shall expire ten
(10) years from the date of grant of such Option (five (5)
years in the case of incentive Stock Option granted to a
Ten-Percent Stockholder) or on such earlier date as may be
prescribed by the Committee and set forth in the Option
Agreement. An Option may be exercised, as to any or all full
shares of Common Stock as to which the Option has become
exercisable, by giving written notice of such exercise to the
Committee or its designated agent; provided, however, that an
Option may not be exercised at any one time as to fewer than
100 shares (or such number of shares as to which the Option is
then exercisable if such number of shares is less than 100).
(f) Termination of Employment. Except as provided in
Section 8(g) hereof, each Option granted hereunder shall
terminate, to the extent not theretofore exercised, three (3)
months following the date that the Optionee ceases to be
employed by the Company or any Subsidiary Corporation of the
Company due to any reason (or on such other date as may be
prescribed by the Committee and set forth in any Option
Agreement).
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(g) Death or Disability of Optionee. If an Optionee
shall die while employed by the Company or any Subsidiary
Corporation of the Company (or within any period following
termination of employment as the Committee may have provided
pursuant to Section 8(f) hereof), or if the Optionee's
employment shall terminate by reason of Disability, all
Options theretofore granted to such Optionee ( to the extent
otherwise exercisable) may, unless earlier terminated in
accordance with their terms, be exercised by the Optionee or
by the Optionee's estate or by a person who acquired the right
to exercise such Options by bequest or inheritance or
otherwise by reason of the Death or Disability of the
Optionee, at any time within one year after the date of Death
or Disability of the Optionee; provided, however, that the
Committee may, in any Option Agreement, extend such period of
exercisability. In the event that an Option granted hereunder
shall be exercised by the legal representatives of a decreased
or former Optionee, written notice of such exercise shall be
accompanied by a certified copy of letters testamentary or
equivalent proof of the right of such legal representative to
exercise such Option.
(h) Service on the Board. With respect to any
non-employee member of the Board who receives an Option
hereunder, service on the Board shall be treated as employment
with the Company for purposes of this Section 8 and Section 15
hereof.
(i) Other Provisions. The Option Agreements
evidencing Options under the Plan shall contain such other
terms and conditions, not inconsistent with the Plan, as the
Committee may determine.
9. Effect of Certain Changes.
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(a) In the event of a Change in Capitalization or the
distribution of an extraordinary dividend, the Committee shall
promptly make equitable adjustments to the number and class of
shares of Common Stock available for Options, the number of
shares which may be subject to Options pursuant to Section
5(a) hereof, the number of shares of Common Stock or other
securities covered by outstanding Options after the effective
date of such transaction and the Option Price of such
outstanding Options, as it deems appropriate; provided,
however, that any fractional shares resulting from such
adjustment shall be eliminated.
(b) In the event of a Change in Control of the
Company, each Option then outstanding shall become immediately
and fully exercisable.
10. Period During Which Options May Be Granted.
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Options may be granted pursuant to the Plan from time to time
within a period of ten (10) years from the date the Plan is adopted by the
Board, or the date the Plan is approved by the stockholders of the Company,
whichever is earlier.
11. Nontransferability of Options.
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Options granted under the Plan shall not be transferable
otherwise than by will or by the laws of descent and distribution, and Options
may be exercised or otherwise realized, during the lifetime of the Optionee,
only by the Optionee or by his guardian or legal representative.
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12. Beneficiary.
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An Optionee 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 Optionee, the executor or administrator of the
Optionee's estate shall be deemed to be the Optionee's beneficiary.
13. Agreement by Optionee Regarding Withholding Taxes.
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If the Committee shall so require, as a condition of exercise
of an Option granted hereunder, each Optionee shall agree that no later than the
date of exercise, the Optionee will pay to the Company or make arrangements
satisfactory to the Committee regarding payment of any federal, state or local
taxes of any kind required by law to be withheld upon the exercise of an Option.
To the extent provided in the applicable Option Agreement, such payment may be
made by the Optionee with shares of Common Stock (whether previously owned by,
or issuable upon the exercise of an Option awarded to, such Optionee) having a
Fair Market Value equal to the amount of such taxes. In the event the Optionee
does not pay to the Company any such taxes, or make arrangements satisfactory to
the Committee regarding the payment of such taxes, the Committee may provide for
the Company to deduct federal, state and local taxes of any kind required by law
to be withheld upon the exercise of an Option from any payment of any kind due
to the Optionee.
14. Rights as a Stockholder.
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An Optionee or a transferee of an Option shall have no rights
as a stockholder with respect to any shares of Common Stock covered by the
Option until the date of the issuance of a stock certificate to him for such
shares. No adjustment shall be made for dividends (ordinary or extraordinary,
whether in cash, securities or other property) or distribution of other rights
for which the record date is prior to the date such stock certificate is issued,
except as provided in Section 9 hereof.
15. No Rights to Employment.
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Nothing in the Plan or in any Option granted hereunder or
Option Agreement entered into pursuant hereto shall confer upon any Optionee the
right to continue in the employ of the Company or any Subsidiary Corporation of
the Company or to be entitled to any remuneration or benefits not set forth in
the Plan or such Option Agreement or to interfere with or limit in any way the
right of the Company or any Subsidiary Corporation of the Company to terminate
such Optionee's employment.
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16. Approval of Stockholders.
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The Plan shall be subject to approval by the holder(s) of a
majority of the issued and outstanding shares of the Company's capital stock
which are entitled to vote, which approval must occur within one year after the
date that the Plan is adopted by the Board. In the event that the stockholders
of the Company do not so approve the Plan then, upon such event, this Plan and
all rights hereunder or under any Option Agreement entered into in connection
herewith shall immediately terminate and no Optionee (or any permitted
transferee thereof) shall have any remaining rights under the Plan.
17. Amendment and Termination of the Plan.
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The Board at any time and from time to time may suspend,
terminate, modify or amend the Plan; provided, however, that any amendment shall
be subject to the approval of the holder(s) of a majority of the issued and
outstanding shares of the Company's capital stock which are entitled to vote if
the Board deems such approval advisable to meet the requirements of Rule 16b-3
of the Securities Exchange Act of 1934 or any other law or regulation or to
maintain the status of Incentive Stock Options under the Code. Except as
provided in Section 9 hereof, no suspension, termination, modification or
amendment of the Plan may adversely affect any Option previously granted,
without the express written consent of the Optionee.
18. Governing Law.
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The Plan and all determinations made and actions taken
pursuant hereto shall be governed by the laws of the State of Delaware without
giving effect to the conflict of laws principles thereof.
19. Effective Date and Duration of the Plan.
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This Plan shall, subject to Section 16 hereof, be effective as
of July 29, 1993, the date of its adoption by the Board of Directors, and shall
terminate on July 29, 2003, but such Plan termination shall not affect any
Options outstanding at such time.
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20. Cancellation and substitution of Options Upon Merger.
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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 Price for such Option divided by (B)
0.825."
21. Cancellation and Substitution of Options Upon Business Combination.
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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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