EXHIBIT 10.2
PLATINUM UNDERWRITERS HOLDINGS, LTD.
2002 SHARE INCENTIVE PLAN
1. PURPOSE OF THE PLAN
The purpose of the Platinum 2002 Share Incentive Plan (the "Plan") is
to advance the interests of the Company and its shareholders by attracting,
retaining and motivating key personnel upon whose judgment, initiative and
effort the successful conduct of the Company's operations is largely dependent.
The Plan is also intended to further align the interests of employees, officers
and directors with those of the shareholders by promoting the ownership of
Common Shares by these individuals.
2. DEFINITIONS
Wherever the following capitalized terms are used in this Plan, they
shall have the meanings specified below:
(a) "Award" means an award of an Option, Restricted Shares Award, Share
Appreciation Right or Share Unit Award granted under the Plan.
(b) "Award Agreement" means an agreement entered into between the
Company and a Participant setting forth the terms and conditions of an Award
granted to a Participant.
(c) "Board" means the Board of Directors of the Company.
(d) "Change in Control" shall have the meaning specified in Section 10
hereof.
(e) "Code" means the Internal Revenue Code of 1986, as amended.
(f) "Committee" means the Compensation Committee of the Board or any
other committee of the Board appointed by the Board to administer the Plan from
time to time.
(g) "Common Shares" means the common shares of the Company, par value
$0.01 per share.
(h) "Company" means Platinum Underwriters Holdings, Ltd., a Bermuda
corporation.
(i) "Date of Grant" means the date on which an Award under the Plan is
made by the Committee, or such later date as the Committee may specify to be the
effective date of the Award.
(j) "Dividend Equivalent Right" means the right of a Participant to
receive cash payments or Common Shares, as determined by the Committee, with
respect to dividends declared on a specified number of Common Shares during the
term of a Share Appreciation Right or a Share Unit Award.
(k) "Effective Date" means the Effective Date of this Plan, as
described to Section 13.1 hereof,
(l) "Eligible Person" means any person who is an employee, officer,
director, agent, consultant or advisor of flue Company or any Subsidiary, as
determined by the Committee, or any person who is determined by the Committee to
be a prospective employee, officer, director, insurance agent, consultant or
advisor of the Company or any subsidiary.
(m) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(n) "Fair Market Value" of Common Shares as of a given date means the
closing sales price of Common Shares on the New York Stock Exchange or other
exchange or securities market as reflected on the composite index on the trading
day immediately preceding the date as of which FAIR Market Value is to be
determined, or in the absence of any reported sales of Common Shares on such
date on the first preceding date on which any such sale shall have been
reported. IF pie Common Shares are not listed on the New York Stock Exchange or
other exchange or securities market on me date as of which Fair Market Value is
to be determined, the Board shell determine in good faith the Fair Market Value
in whatever manner it considers appropriate With respect to Options granted upon
completion of the initial public offering of the Common Shares, Fair Market
Value shall mean die public offering price per share.
(o) 'Incentive Option" means an option to purchase Common Shares that
is intended to qualify as an "incentive stock option" under Section 422 of the
Code and the Treasury Regulations thereunder.
(p) "Nonqualified Option" means an option to purchase Common Shares
that is not an Incentive Option.
(q) "Option" means an Incentive Option or a Nonqualified Option granted
under Section 6 hereof.
(r) "Participant" means any Eligible Person who holds an outstanding
Award under the Plan.
(s)"Plan" means the Platinum 2002 Share Incentive Plan as set forth
herein, as it may be amended from time to time.
(t) "Restricted Share Award" means an Award under Section 8 hereof
entitling a Participant to Common Shares that are nontransferable and subject to
forfeiture until specific conditions established by the Committee are satisfied.
(u) "Share Appreciation Right" or "SAR" means an Award under Section 7
hereof entitling a Participant to receive an amount, representing the difference
between the base price per share of the right and the Fair Market Value of a
Common Share on the date of exercise.
(v) "Share Unit Award" means an Award under Section 9 hereof entitling
a Participant to a payment & the end of a vesting period of a unit value based
on the Fair Market Value of a Common Share.
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(w) "Subsidiary" means an entity (whether or not a corporation) that is
wholly or majority owned or controlled, directly or indirectly, by the Company,
or any other affiliate of the Company that is so designated, from time to time,
by the Committee; provided, however, that with respect to Incentive Options, the
term "Subsidiary" shall include only an entity that qualifies under Section
424(f) of the Code as a "subsidiary corporation" with respect to the Company.
3. COMMON SHARES SUBJECT TO THE PLAN
3.1. Number of Shares. Subject to the following provisions of this
Section 3, the aggregate number of Common Shares that may be issued pursuant to
all Awards under the Plan is 6,000,000 Common Shares. The Common Shares to be
delivered under the Plan will be made available from authorized but unissued
Common Shares or from reacquired shares. To the extent that any Award payable in
Common Shares is forfeited, cancelled, returned to the Company for failure to
satisfy vesting requirements or upon the occurrence of other forfeiture events,
or otherwise terminates without payment being made thereunder, the Common Shares
covered thereby will no longer be charged against the foregoing maximum share
limitations and may again be made subject to Awards under the Plan pursuant to
such limitations. In addition, any Common Shares exchanged by an Optionee as
full or partial payment to the Company of the exercise price or tax withholding
upon exercise of an Option shall be added to the number of Common Shares
available for issuance under the Plan from time to time. The number of Common
Shares that may be issued and sold under Incentive Options shall be limited to
6,000,000 shares, without giving effect to the immediately preceding sentence.
3.2. Adjustments. If there shall occur any recapitalization,
reclassification, share dividend, share split, reverse share split, or other
distribution with respect to the Common Shares, or other change in corporate
structure affecting the Common Shares, the Committee may, in the manner and to
the extent that it deems appropriate and equitable to the Participants and
consistent with the terms of this Plan, cause an adjustment to be made in (i)
the maximum number and kind of shares provided in Section 3.1 hereof, (ii) the
maximum number and kind of shares set forth in Sections 6.1, 7.1 and 8.1 hereof,
(iii) the number and kind of shares of Common Shares, share units, or other
rights subject to then outstanding Awards, (iv) the price for each share or unit
or other right subject to then outstanding Awards, or (v) any other terms of an
Award that are affected by the event. Notwithstanding the foregoing, in the case
of Incentive Options, any such adjustments shall be made in a manner consistent
with the requirements of Section 424(a) of the Code. In the event of any merger,
consolidation, reorganization, amalgamation or similar corporate event in which
Common Shares are to be exchanged for payment of cash (the "Cash
Consideration"), the Committee may, in its discretion, (i) make equitable
adjustments as provided above, or (ii) cancel any outstanding Award in exchange
for payment in cash, if any, equal to the excess of the Cash Consideration for
the shares underlying such Award over the exercise, base or purchase price for
such shares.
4. ADMINISTRATION OF THE PLAN
4.1. Committee Members. The Plan shall be administered by a
Committee comprised of no fewer than two members of the Board. Solely to the
extent deemed necessary or advisable by the Board, each Committee member shall
meet the definition of a "nonemployee director" for purposes of such Rule 16b-3
under the Exchange Act and of an "outside director" under Section
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162(m) of the Code. The Board shall also have the authority to exercise the
powers and duties of the Committee under the Plan. The Committee shall have such
powers and authority as may be necessary or appropriate for the Committee to
carry out its functions as described in the Plan. No member of the Committee
shall be liable for any action or determination made in good faith by the
Committee with respect to the Plan or any Award thereunder.
4.2. Discretionary Authority. Subject to the express limitations of
the Plan, the Committee shall have authority in its discretion to determine the
Eligible Persons to whom, and the time or times at which, Awards may be granted,
the number of shares, units or other rights subject to each Award, the exercise,
base or purchase price of an Award (if any), the time or times at which an Award
will become vested, exercisable or payable, the performance criteria,
performance goals and other conditions of an Award, the duration of the Award,
and all other terms of the Award. The Committee shall also have discretionary
authority to interpret the Plan, to make all factual determinations under the
Plan, and to make all other determinations necessary or advisable for Plan
administration. The Committee may prescribe, amend, and rescind rules and
regulations relating to the Plan. All interpretations, determinations, and
actions by the Committee shall be final, conclusive, and binding upon all
parties.
4.3. Delegation of Authority. The Committee shall have the right,
from time to time, to delegate to one or more officers of the Company the
authority of the Committee to grant and determine the terms and conditions of
Awards awarded under the Plan, subject to such limitations as the Committee
shall determine; provided, however, that no such authority may be delegated with
respect to Awards awarded to any member of the Board or any Participant who the
Committee determines may be covered by Rule 16b under the Exchange Act or
Section 162(m)of the Code.
4.4. Grants to Nonemployee Directors. Awards to nonemployee
directors under the Plan shall be approved by the Board. With respect to awards
to such directors, all rights, powers and authorities vested in the Committee
under the Plan shall instead be exercised by the Board, and all provisions of
the Plan relating to the Committee shall be interpreted in a manner consistent
with the foregoing by treating any such reference as a reference to the Board
for such purpose.
5. ELIGIBILITY AND AWARDS
All Eligible Persons are eligible to be designated by the Committee to
receive an Award under the Plan. The Committee has authority, in its sole
discretion, to determine and designate from time to time those Eligible Persons
who are to be granted Awards, the types of Awards to be granted and the number
of shares or units subject to the Awards that are granted under the Plan. Each
Award will be evidenced by an Award Agreement as described in Section 11.1
hereof.
6. SHARE OPTIONS
6.1. Grant of Option. An Option may be granted to any Eligible
Person selected by the Committee. Subject to the applicable provisions of
Section 422 of the Code, each Option shall be designated, in the discretion of
the Committee, as an Incentive Option or a Nonqualified Option. The maximum
number of Common Shares that may be granted under Options to any
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Participant during any calendar year shall be limited to 1,000,000 shares
(subject to adjustment as provided in Section 3.2 hereof).
6.2. Exercise Price. The exercise price under any Option shall be
determined by the Committee; provided, however, that the exercise price per
share under an Option shall not be less than 100 percent of the Fair Market
Value per share of the Common Shares on the Date of Grant.
6.3. Vesting; Term of Option. The Committee, in its sole
discretion, shall prescribe the time or times at which, or the conditions upon
which, an Option or portion thereof shall become vested and exercisable, and may
accelerate the exercisability of any Option at any time. The period during which
a vested Option may be exercised shall be ten years from the Date of Grant,
unless a shorter exercise period is specified by the Committee in an Award,
subject to such limitations as may apply under an Award relating to the
termination of a Participant's employment or other service with the Company or
any Subsidiary or any other cancellation of an Option in accordance with this
Plan or an Award Agreement.
6.4. Option Exercise; Withholding. Subject to such terms and
conditions as shall be specified in an Award, an Option may be exercised in
whole or in part at any time during the term thereof by written notice to the
Company, together with payment of the aggregate exercise price therefor. Payment
of the exercise price shall be made, at the discretion of the Committee as
specified in the Award Agreement, by (i) payment in cash or cash equivalent
acceptable to the Committee, (ii) payment in Common Shares that have been held
by the Participant for at least six months (or such other period as the
Committee may deem appropriate for purposes of applicable accounting rules),
valued at the Fair Market Value of such shares on the date of exercise, (iii) a
broker-assisted "cashless exercise," (iv) a combination of the methods described
above, or (v) such other method as may be approved by the Committee and set
forth in the Award Agreement. In addition to and at the time of payment of the
exercise price, the Participant shall pay to the Company the full amount of any
and all applicable income tax and employment tax amounts required to be withheld
in connection with such exercise, payable under such of the methods described
above for the payment of the exercise price of the Options as may be approved by
the Committee.
6.5. Authorization of Reload Options. The Committee may provide in
an Award Agreement for any Option for the grant of a reload option upon the
Participant's tendering of Common Shares upon exercise (and payment of
withholding tax) of the underlying Option pursuant to Section 6.4 hereof (the
"Reload Option"). The Reload Option shall be for a number of Common Shares equal
to the number of Common Shares tendered by the Participant pursuant to Section
6.4 hereof with respect to the underlying Option and shall have such other terms
and conditions as determined by the Committee and set forth in the Award
Agreement.
6.6. Limited Transferability of Nonqualified Options. All Options
shall be nontransferable except (i) upon the Participant's death, by the
Participant's will or the laws of descent and distribution or (ii) in the case
Nonqualified Options only, on a case-by-case basis as may be approved by the
Committee in its discretion, in accordance with the terms provided below. An
award for a Nonqualified Option may provide that the Participant shall be
permitted to, during his or her lifetime and subject to the prior approval of
the Committee at the time of proposed transfer, transfer all or part of the
Option to the Participant's family member (as defined
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in the Award Agreement in a manner consistent with the requirements for the Form
S-8 registration statement, if applicable). The transfer of a Nonqualified
Option may be subject to such other terms and conditions as the Committee may in
its discretion impose from time to time. Subsequent transfers of an Option shall
be prohibited other than by will or the laws of descent and distribution upon
the death of the transferee.
6.7. Additional Rules for Incentive Options.
(a) Eligibility. An Incentive Option may only be granted to an Eligible
Person who is considered an employee of the Company or any Subsidiary for
purposes of Treasury Regulations Section 1.421-7(h).
(b) Annual Limits. No Incentive Option shall be granted to a
Participant as a result of which the aggregate Fair Market Value (determined as
of the Date of Grant) of the share with respect to which Incentive Options are
exercisable for the first time in any calendar year under the Plan and any
other share option plans of the Company, any Subsidiary, or any parent Company,
would exceed $100,000, determined in accordance with Section 422(d) of the
Code. This limitation shall be applied by taking Options into account in the
order in which granted.
(c) Termination of Employment. An Award of an Incentive Option may
provide that such Option may be exercised not later than 3 months following
termination of employment of the Participant with the Company and all
Subsidiaries, or not later than one year following death and disability, as and
to the extent determined by the Committee to be consistent with the
requirements of Section 422 of the Code and Treasury Regulations thereunder.
(d) Other Terms and Conditions; Nontransferability. Any Incentive
Option granted hereunder shall contain such additional terms and conditions,
not inconsistent with the terms of this Plan, as are deemed necessary or
desirable by the Committee, which terms, together with the terms of this Plan,
shall be intended and interpreted to cause such Incentive Option to qualify as
an incentive stock option under Section 422 of the Code. Such terms shall
include, if applicable, limitations on Incentive Options granted to ten-percent
owners of the Company. An Award Agreement for an Incentive Option may provide
that such Option shall be treated as a Nonqualified Option to the extent that
certain requirements applicable to incentive options under the Code shall not
be satisfied. An Incentive Option shall by its terms be nontransferable
otherwise than by will or by the laws of descent and distribution, and shall be
exercisable during the lifetime of a Participant only by such Participant.
(e) Disqualifying Dispositions. If Common Shares acquired by exercise
of an Incentive Option are disposed of within two years following the Date of
Grant or one year following the issuance of such shares to the Participant upon
exercise, the Participant shall, promptly following such disposition, notify
the Company in writing of the date and terms of such disposition and provide
such other information regarding the disposition as the Committee may
reasonably require.
7. SHARE APPRECIATION RIGHTS
7.1. Grant of SARs. A Share Appreciation Right granted to a
Participant is an Award in the form of a right to receive, upon surrender of the
right but without other payment, an
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amount based on appreciation in the Fair Market Value of Common Shares over a
base price established for the Award, exercisable at such time or times and upon
conditions as may be approved by the Committee. The maximum number of shares of
Common Shares that may be subject to SARs granted to any Participant during any
calendar year shall be limited to 1,000,000 shares (subject to adjustment as
provided in Section 3.2 hereof). An SAR may be granted, at the discretion of the
Committee, together with a Dividend Equivalent Right with respect to the same
number of Common Shares.
7.2. Freestanding SARs. A Share Appreciation Right may be granted
without any related Option, and in such case, will be exercisable as determined
by the Committee, but in no event after 10 years from the Date of Grant. The
base price of an SAR granted without any related Option shall be determined by
the Committee in its sole discretion; provided, however, that the base price per
share of any such freestanding SAR shall not be less than 100 percent of the
Fair Market Value of the Common Shares on the Date of Grant.
7.3. Tandem SARs. A Share Appreciation Right may be granted in
connection with an Option, either at the time of grant or at any time thereafter
during the term of the Option. An SAR granted in connection with an Option will
entitle the holder, upon exercise, to surrender such Option or any portion
thereof to the extent unexercised, with respect to the number of shares as to
which such SAR is exercised, and to receive payment of an amount computed as
described in Section 7.4 hereof. Such Option will, to the extent and when
surrendered, cease to be exercisable. An SAR granted in connection with an
Option hereunder will have a base price per share equal to the per share
exercise price of the Option, will be exercisable at such time or times, and
only to the extent, that a related Option is exercisable, and will expire no
later than the related Option expires.
7.4. Payment of SARs. An SAR will entitle the holder, upon exercise
of the SAR, to receive payment of an amount determined by multiplying: (i) the
excess of the Fair Market Value of a the Common Shares on the date of exercise
of the SAR over the base price of such SAR, by (ii) the number of shares as to
which such SAR is exercised. Payment of the amount determined under the
foregoing may be made, in the discretion of the Committee, in cash, in Common
Shares valued at their Fair Market Value on the date of exercise, or in a
combination of cash and Common Shares.
8. RESTRICTED SHARE AWARD
8.1. Grant of Restricted Share Awards. A Restricted Share Award to
a Participant represents Common Shares that are issued subject to such
restrictions on transfer and other incidents of ownership and such forfeiture
conditions as the Committee may determine. The Committee may, in connection with
any Restricted Share Award, require the payment of a specified purchase price.
The maximum number of Common Shares that may be subject to Restricted Share
Awards granted to all Participants during the term of the Plan shall be limited
to 1,000,000 shares (subject to adjustment as provided in Section 3.2 hereof).
8.2. Vesting Requirements. The restrictions imposed on shares
granted under a Restricted Share Award shall lapse in accordance with the
vesting requirements specified by the Committee in the Award Agreement. Such
vesting requirements may be based on the continued
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employment of the Participant with the Company or its Subsidiaries for a
specified time period or periods, and may also be based on the attainment of
specified business goals or measures established by the Committee in its sole
discretion.
8.3. Restrictions. Shares granted under any Restricted Share Award
may not be transferred, assigned or subject to any encumbrance, pledge, or
charge until all applicable restrictions are removed or have expired, unless
otherwise allowed by the Committee. The Committee may require the Participant to
enter into an escrow agreement providing that the certificates representing the
shares granted or sold under a Restricted Share Award will remain in the
physical custody of an escrow holder until all restrictions are removed or have
expired. Failure to satisfy any applicable restrictions shall result in the
subject shares of the Restricted Share Award being forfeited and returned to the
Company, with any purchase price paid by the Participant to be refunded, unless
otherwise provided by the Committee. The Committee may require that certificates
representing the shares granted under a Restricted Share Award bear a legend
making appropriate reference to the restrictions imposed.
8.4. Rights as Shareholder. Subject to the foregoing provisions of
this Section 8 and the applicable Award Agreement, the Participant will have all
rights of a shareholder with respect to the shares granted to him under a
Restricted Share Award, including the right to vote the shares and receive all
dividends and other distributions paid or made with respect thereto, unless the
Committee determines otherwise at the time the Restricted Share Award is
granted.
8.5. Section 83(b) Election. The Committee may provide in an Award
Agreement that the Restricted Share Award is conditioned upon the Participant's
refraining from making an election with respect to the Award under Section 83(b)
of the Code. Irrespective of whether an Award is so conditioned, if a
Participant makes an election pursuant to Section 83(b) of the Code with respect
to a Restricted Share Award, the Participant shall be required to promptly file
a copy of such election with the Company.
9. SHARE UNIT AWARD
9.1. Grant of Share Unit Awards. A Share Unit Award is an Award to
a Participant of a number of hypothetical share units with respect to Common
Shares, with an initial value based on the Fair Market Value of the Common
Shares on the Date of Grant. Such vesting requirements may be based on the
continued employment of the Participant with the Company or its Subsidiaries for
a specified time period or periods, and may also be based on the attainment of
specified business goals or measures established by the Committee in its sole
discretion. On the Date of Grant, the Committee shall determine, in its sole
discretion, the installment or other vesting period of the Share Unit Award and
the maximum value of the Share Unit Award, if any. No vesting period shall
exceed 10 years from the Date of Grant. A Share Unit Award may be granted, at
the discretion of the Committee, together with a Dividend Equivalent Right with
respect to the same number of Common Shares.
9.2. Payment of Share Unit Awards. Upon the vesting date or dates
applicable to the Share Unit Award granted to a Participant, an amount equal to
the Fair Market Value of one Common Share upon such vesting dates (subject to
any applicable maximum value) shall be paid with respect to each Share Unit
Award unit granted to the Participant. Payment may be made, at
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the discretion of the Committee, in cash or in Common Shares valued at their
Fair Market Value on the applicable vesting dates, or in a combination thereof.
10. CHANGE IN CONTROL
10.1. Effect of Change in Control. The Committee may, in an Award
Agreement, provide for the effect of a "Change in Control" of the Company (as
defined below) on an Award. Such provisions may include any one or more of the
following: (i) the acceleration or extension of time periods for purposes of
exercising, vesting in, or realizing gain from any Award, (ii) the elimination
or modification of performance or other conditions related to the payment or
other rights under an Award, (iii) provision for the cash settlement of an Award
for an equivalent cash value, as determined by the Committee, or (iv) such other
modification or adjustment to an Award as the Committee deems appropriate to
maintain and protect the rights and interests of Participants upon or following
a Change in Control. Unless otherwise provided by the Committee and set forth in
the Award Agreement, upon a Change in Control (i) each outstanding Option, to
the extent that it shall not otherwise have become vested and exercisable, shall
automatically become fully and immediately vested and exercisable, without
regard to any otherwise applicable vesting requirement and (ii) any restricted
period in effect shall automatically terminate as to all Common Shares awarded
pursuant to a Restricted Share Award.
10.2. Definition of Change in Control. For purposes hereof, a
"Change in Control" of the Company shall mean:
(i) an acquisition subsequent to the Effective Date
hereof by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act (a "Person") of
beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of fifty percent (50%) or more of either (A)
the then outstanding Common Shares or (B) the combined voting power of
the then outstanding voting securities of the Company entitled to vote
generally in the election of directors; excluding, however, the
following: (1) any acquisition directly from the Company, other than an
acquisition by virtue of the exercise of a conversion privilege unless
the security being so converted was itself acquired directly from the
Company, (2) any acquisition by the Company and (3) any acquisition by
an employee benefit plan (or related trust) sponsored or maintained by
the Company or any Subsidiary;
(ii) during any period of two (2) consecutive years (not
including any period prior to the Effective Date), individuals who at
the beginning of such period constitute the Board (and any new
directors whose election by the Board or nomination for election by the
Company's shareholders 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 so approved) cease for any reason (except for death,
disability or voluntary retirement) to constitute a majority thereof;
(iii) the consummation of a merger, consolidation,
reorganization, amalgamation or similar corporate transaction which
has been approved by the shareholders of the Company, whether or not
the Company is the surviving Company in such transaction, other than a
merger, consolidation, reorganization or amalgamation that
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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) at least fifty percent (50%) of the combined voting
power of the voting securities of the Company (or such surviving
entity) outstanding immediately after such merger, consolidation,
reorganization, amalgamation or similar corporate transaction;
(iv) the approval by the shareholders of the Company of
(A) the sale or other disposition of all or substantially all of the
assets of the Company or (B) a complete liquidation or dissolution of
the Company; or
(v) adoption by the Board of a resolution to the effect
that any person has acquired effective control of the business and
affairs of the Company.
11. AWARD AGREEMENTS
11.1. Form of Agreement. Each Award under this Plan shall be
evidenced by an Award Agreement in a form approved by the Committee setting
forth the number of Common Shares, units or other rights (as applicable) subject
to the Award, the exercise, base, or purchase price (if any) of the Award, the
time or times at which an Award will become vested, exercisable or payable and
the duration of the Award. The Award Agreement shall also set forth other
material terms and conditions applicable to the Award as determined by the
Committee consistent with the limitations of this Plan. Award Agreements
evidencing Incentive Options shall contain such terms and conditions as may be
necessary to meet the applicable provisions of Section 422 of the Code.
11.2. Forfeiture Events. The Committee may specify in an Award that
the Participant's rights, payments and benefits with respect to an Award shall
be subject to reduction, cancellation, forfeiture or recoupment upon the
occurrence of certain specified events, in addition to any otherwise applicable
vesting or performance conditions of an Award. Such events shall include, but
shall not be limited to, termination of employment for cause, violation of
material Company policies, breach of noncompetition, confidentiality or other
restrictive covenants that may apply to the Participant, or other conduct by the
Participant that is detrimental to the business or reputation of the Company.
12. GENERAL PROVISIONS
12.1. No Assignment or Transfer; Beneficiaries. Except as provided
in Section 6.5 hereof, Awards under the Plan shall not be assignable or
transferable, except by will or by the laws of descent and distribution, and
during the lifetime of a Participant, the Award shall be exercised only by such
Participant or by his guardian or legal representative. Notwithstanding the
foregoing, the Committee may provide in the terms of an Award Agreement that the
Participant shall have the right to designate a beneficiary or beneficiaries who
shall be entitled to any rights, payments or other specified under an Award
following the Participant's death.
12.2. Deferrals of Payment. Notwithstanding any other provisions
of the Plan, the Committee may permit a Participant to defer the receipt of
payment of cash or delivery of
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Common Shares that would otherwise be due to the Participant by virtue of the
exercise of a right or the satisfaction of vesting or other conditions with
respect to an Award. If any such deferral is to be permitted by the Committee,
the Committee shall establish the rules and procedures relating to such
deferral, including, without limitation, the period of time in advance of
payment when an election to defer may be made, the time period of the deferral
and the events that would result in payment of the deferred amount, the interest
or other earnings attributable to the deferral and the method of funding, if
any, attributable to the deferred amount.
12.3. Rights as Shareholder. A Participant shall have no rights as a
holder of Common Shares with respect to any unissued securities covered by an
Award until the date the Participant becomes the holder of record of such
securities. Except as provided in Section 3.2 hereof, no adjustment or other
provision shall be made for dividends or other shareholder rights, except to the
extent that the Award Agreement provides for a Dividend Equivalent Right, or
otherwise provides for dividend payments or similar economic benefits.
12.4. Employment or Service. Nothing in the Plan, in the grant of
any Award or in any Award Agreement shall confer upon any Eligible Person the
right to continue in the capacity in which he is employed by, or otherwise
serves, the Company or any Subsidiary.
12.5. Securities Laws. No Common Shares will be issued or
transferred pursuant to an Award unless and until all then applicable
requirements imposed by federal and state securities and other laws, rules and
regulations and by any regulatory agencies having jurisdiction, and by any
exchanges upon which the Common Shares may be listed, have been fully met. As a
condition precedent to the issuance of shares pursuant to the grant or exercise
of an Award, the Company may require the Participant to take any reasonable
action to meet such requirements. The Committee may impose such conditions on
any Common Shares issuable under the Plan as it may deem advisable, including,
without limitation, restrictions under the Securities Act of 1933, as amended,
under the requirements of any exchange upon which such shares of the same class
are then listed, and under any blue sky or other securities laws applicable to
such shares.
12.6. Tax Withholding. The Participant shall be responsible for
payment of any taxes or similar charges required by law to be withheld from an
Award or an amount paid in satisfaction of an Award, which shall be paid by the
Participant on or prior to the payment or other event that results in taxable
income in respect of an Award. The Award Agreement shall specify the manner in
which the withholding obligation shall be satisfied with respect to the
particular type of Award.
12.7. Unfunded Plan. The adoption of this Plan and any setting aside
of cash amounts or Common Shares by the Company with which to discharge its
obligations hereunder shall not be deemed to create a trust or other funded
arrangement. The benefits provided under this Plan shall be a general, unsecured
obligation of the Company payable solely from the general assets of the Company,
and neither a Participant nor the Participant's permitted transferees or estate
shall have any interest in any assets of the Company by virtue of this Plan,
except as a general unsecured creditor of the Company. Notwithstanding the
foregoing, the Company shall have the right to implement or set aside funds in a
grantor trust, subject to the claims of the Company's creditors, to discharge
its obligations under the Plan.
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12.8. Other Compensation and Benefit Plans. The adoption of the Plan
shall not affect any other share incentive or other compensation plans in effect
for the Company or any Subsidiary, nor shall the Plan preclude the Company from
establishing any other forms of share incentive or other compensation for
employees of the Company or any Subsidiary. The amount of any compensation
deemed to be received by a Participant pursuant to an Award shall not constitute
compensation with respect to which any other employee benefits of such
Participant are determined, including, without limitation, benefits under any
bonus, pension, profit sharing, life insurance or salary continuation plan,
except as otherwise specifically provided by the terms of such plan.
12.9. Plan Binding on Transferees. The Plan shall be binding upon
the Company, its transferees and assigns, and the Participant, his executor,
administrator and permitted transferees and beneficiaries.
12.10. Construction and Interpretation. Whenever used herein,
nouns in the singular shall include the plural, and the masculine pronoun shall
include the feminine gender. Headings of Sections hereof are inserted for
convenience and reference and constitute no part of the Plan.
12.11. Severability. If any provision of the Plan or any Award
Agreement shall be determined to be illegal or unenforceable by any court of law
in any jurisdiction, the remaining provisions hereof and thereof shall be
severable and enforceable in accordance with their terms, and all provisions
shall remain enforceable in any other jurisdiction.
12.12. Fractional Shares. No fractional shares shall be issued or
delivered pursuant to this Pan or any Award. The Committee shall determine
whether cash, Common Shares, Share Options or other property shall be issued or
paid in lieu of fractional shares or whether such fractional shares or any
rights thereto shall be forfeited or otherwise eliminated.
12.13. Foreign Jurisdictions. The Committee may adopt, amend and
terminate such arrangements and grant such Awards, not inconsistent with the
intent of the Plan, as it may deem necessary or desirable to comply with or take
advantage of tax, securities, regulatory or other laws of foreign jurisdictions
with respect to Participants who are subject to such laws. The terms and
conditions of such Awards may vary from the terms and conditions that would
otherwise be required by the Plan.
12.14. Governing Law. The Plan and all rights hereunder shall be
subject to and interpreted in accordance with the laws of the State of New York,
without reference to the principles of conflicts of laws, and to applicable
federal securities laws.
13. EFFECTIVE DATE, TERMINATION AND AMENDMENT
13.1. Effective Date; Shareholder Approval. The Plan shall become
effective on the date of its adoption by the Board and approval by the Company's
shareholders. At the sole discretion of the Committee, in order to comply with
the requirements of Section 162(m) of the Code for certain types of Awards under
the Plan, the Plan shall be submitted again for approval by the shareholders of
the Company at the first meeting of the shareholders that occurs more than 12
months after the Company's initial public offering.
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13.2. Amendment. The Board may at any time and from time to time and
in any respect, amend or modify the Plan; provided, however, that no amendment
or modification of the Plan shall be effective without the consent of the
Company's shareholders that would (i) change the class of Eligible Persons under
the Plan, (ii) increase the number of Common Shares reserved for issuance under
the Plan in accordance with Section 3.1 hereof or the maximum numbers of Common
Shares that may be subject to certain types of Awards under the Plan, or (iii)
allow the grant of Options at an exercise price below Fair Market Value. In
addition, the Board may seek the approval of any amendment or modification by
the Company's shareholders to the extent it deems necessary or advisable in its
sole discretion for purposes of compliance with Section 162(m) or Section 422 of
the Code, the listing requirements of the New York Stock Exchange or other
exchange or securities market or for any other purpose. No amendment or
modification of the Plan shall adversely affect any Award theretofore granted
without the consent of the Participant or the permitted transferee of the Award.
13.3. Termination. The Plan shall terminate on the date immediately
preceding the tenth anniversary of the date the Plan is adopted by the Board.
The Board may, in its sole discretion and at any earlier date, terminate the
Plan. Notwithstanding the foregoing, no termination of the Plan shall adversely
affect any Award theretofore granted without the consent of the Participant or
the permitted transferee of the Award.
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