EXHIBIT 4.4
ABB EMPLOYEE SHARE ACQUISITION PLAN
US SCHEDULE
(1) INTERACTION WITH THE PLAN
The ESAP Board has determined that it is advisable to establish a sub-Plan
for the purpose of permitting Awards granted to certain employees of US
Participating Companies (as defined herein), each of which is a
Participating Company, to qualify for certain favorable Federal income tax
treatment in the United States. The ESAP Board, therefore, has established
a sub-Plan as set forth in this Schedule for the purpose of granting Awards
that qualify as Incentive Stock Options (as defined herein). The terms of
the Plan shall, subject to the modifications in this Schedule, constitute
the US Share Acquisition Sub-Plan to the ABB Employee Share Acquisition
Plan (the "US Sub-Plan").
Awards granted under the US Sub-Plan shall be Incentive Stock Options;
however, to the extent that any such Award does not qualify as an Incentive
Stock Option (whether because of its provisions or the time or manner of
its exercise or otherwise), such Award, or the portion thereof which does
not so qualify, shall constitute a separate stock option other than an
Incentive Stock Option.
Awards granted to employees resident in the United States who are eligible
to participate in the US Sub-Plan, pursuant to Section (5) hereof, will be
subject to the US Sub-Plan.
(2) DEFINITIONS
Capitalized terms used in the US Sub-Plan shall have the same meanings as
set forth in the ABB Employee Share Acquisition Plan unless a specific
definition is set forth herein as follows:
"Administrator" means ABB Inc.
"Award" means a right to purchase Shares granted under the terms of the US
Sub-Plan.
"Code" means the United States Internal Revenue Code of 1986, as it may be
amended from time to time, including regulations and rules thereunder and
successor provisions and regulations and rules thereto.
"Direct Hire Temporary Employee" means an individual who is hired by a US
Participating Company as an interim replacement to supplement the work
force or to assist in the completion of a specific project for a limited
duration, including an individual who receives retention pay during periods
between specific projects, and an individual hired on a per diem or
"casual" basis such as an intern or a summer employee.
"Employee" means, except as set forth in the immediately following
sentence, any person who (a)(i) is a United States citizen or (ii) has been
granted a working visa in the United States by the United States
Immigration and Naturalization Service, and (b) is employed by a US
Participating Company. An Independent Contractor is not an Employee. An
"Independent Contractor" means an individual retained by a US Participating
Company to provide specific and self-directed services, who has the right
to direct the means and methods of accomplishing the results without
direction by management, and who meets the requisite conditions under the
Code for recognition as an independent contractor with respect to the US
Sub-Plan.
"External Agency Resource" means an individual who is hired by a US
Participating Company through a contractual arrangement with an external
agency to supplement the regular workforce and who is employed by such
agency and not by the US Participating Company.
"Incentive Stock Option" means an Award granted to a Participant under the
US Sub-Plan which conforms to the applicable provisions of Section 422 of
the Code.
"Non-Regular Status Worker" means a Direct Hire Temporary Employee or an
External Agency Resource. The classification of an individual as a
Non-Regular Status Worker with respect to the US Sub-Plan shall be
determined by the US Participating Company, and that determination shall be
final and binding, notwithstanding a contrary adjudication or any contrary
determination by the United States Internal Revenue Service, the United
States Department of Labor, or other governmental authority.
"Parent" of any corporation means any present or future corporation,
domestic or foreign, which is or would be a "parent corporation," as
defined under section 424(e) of the Code, of such corporation.
"Participant" means a person who holds an Award granted under the US
Sub-Plan.
"Regular Full-Time Employee" means an individual who is hired to work the
normal complement of a full work week, however that period is defined by
the individual's employer, who is paid from the payroll of the employer and
whose duration of employment has no pre-determined end date.
"Regular Part-Time Employee" means an individual who is hired to work less
than the normal complement of a full work week, however that period is
defined by the individual's employer, who is paid from the payroll of the
employer and whose duration of employment has no pre-determined end date.
"Regular Status Employee" means a Regular Full-Time Employee or a Regular
Part-Time Employee. Regular Status Employees shall be designated as such on
the payroll records of a US Participating Company, and such designation
shall be wholly within the US Participating Company's sole discretion.
"Subsidiary" of any corporation means any present or future corporation,
domestic or foreign, which is or would be a "subsidiary corporation," as
defined under section 424(f) of the Code, of such corporation.
"US Participating Company" means (i) any Subsidiary of ABB Holdings Inc.,
or (ii) any United States Subsidiary of ABB Ltd as the Administrator may
designate for participation in the US Sub-Plan.
(3) SHARES SUBJECT TO US SUB-PLAN AND OFFER PRICE
(a) For purposes of the US Sub-Plan, "Share" means an ADS representing one
fully paid registered share of ABB, subject to adjustments by the ESAP
Board to appropriately reflect the events described in Rule 10 of the
Plan or any change or termination of ABB's ADR program.
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(b) The maximum number of Shares (after taking into account any adjustment
in accordance with Rule 10 of the Plan relating to variations in the
share capital of ABB) that may be issued under the US Sub-Plan shall
be 10,000,000 Shares.
(c) For purposes of the US Sub-Plan, the Offer Price of an Award shall be
the closing price of a Share on the New York Stock Exchange on the
Grant Date of such Award, as determined by the ESAP Board in
accordance with the Plan. The Offer Price of an Award shall be stated
in US Dollars.
(4) ADMINISTRATION
(a) The Administrator shall administer, manage and operate the US Sub-Plan
in accordance with its terms and conditions; provided, however, that
the Administrator shall have no authority to take any action pursuant
to Rule 10 or Rule 11 of the Plan, subject to the Administrator's
authority to amend the US Sub-Plan in accordance with Section (11)
hereof.
(b) The Administrator shall have all authority that may be necessary or
helpful to enable it to discharge its responsibilities with respect to
the US Sub-Plan. Without limiting the generality of the foregoing
sentence or Section (4)(a), and in addition to the powers otherwise
expressly designated to the Administrator herein, the Administrator
shall have the exclusive right and discretionary authority to
interpret the US Sub-Plan and ancillary agreements and documents
relating to the US Sub-Plan; construe any ambiguous provision of the
US Sub-Plan and/or any such agreements and documents and decide all
questions concerning eligibility to participate in the US Sub-Plan.
The Administrator may establish, amend, waive and/or rescind rules and
regulations and administrative guidelines for carrying out the US
Sub-Plan and may correct any errors, supply any omissions or reconcile
any inconsistencies in the Plan (as it relates to the US Sub-Plan),
the US Sub-Plan and/or any ancillary agreements and documents of the
US Sub-Plan. The Administrator shall have full discretionary authority
in all matters related to the discharge of its responsibilities and
the exercise of its authority under the US Sub-Plan. Decisions and
actions by the Administrator with respect to the US Sub-Plan and any
ancillary agreement or document of the US Sub-Plan shall be final,
conclusive and binding on all persons having or claiming to have any
right or interest in or under the US Sub-Plan and/or any such
agreement or document.
(c) Except to the extent prohibited by applicable law or the applicable
rules of any stock exchange, the Administrator may, in its discretion,
allocate all or any portion of its responsibilities and powers under
this Section (4) to any one or more of its employees and/or delegate
all or any part of its responsibilities and powers under this Section
(4) to any person or persons selected by it; provided, however, that
the Administrator may not delegate its authority to correct errors,
omissions or inconsistencies in the Plan or the US Sub-Plan. Any such
authority delegated or allocated by the Administrator under this
Section (4) shall be exercised in accordance with the terms and
conditions of the US Sub-Plan and any rules, regulations or
administrative guidelines that may from time to time be established by
the Administrator, and any such allocation or delegation may be
revoked by the Administrator at any time.
(5) ELIGIBILITY
(a) An individual is eligible to participate in the US Sub-Plan if (and
only if):
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(i) he is on the Grant Date an Employee; and
(ii) he either:
(1) is paid on a salaried basis, is classified as a Regular Status
Employee and not a Non-Regular Status Worker, and is not
represented by a collective bargaining agent, or if represented,
the collective bargaining agreement provides for participation in
the US Sub-Plan, or
(2) is a domestic non-union hourly paid Employee, except for any such
Employee as may be designated by the Administrator as ineligible
for participation in the US Sub-Plan, or a member of those
certain domestic union hourly paid groups whose collective
bargaining agreement provides for participation in the US
Sub-Plan.
(b) Notwithstanding anything in paragraph (a) of this Section (5) to the
contrary, an Employee who is on a leave of absence on the Grant Date
shall not be eligible to participate in the US Sub-Plan.
(c) If an individual employed by the US Participating Company is not
eligible to participate in the US Sub-Plan, he shall not be eligible
to participate in the Plan.
(d) A leave of absence of a Participant shall not be deemed a termination
of employment of the Participant for purposes of the US Sub-Plan to
the extent permitted by the Code with respect to Incentive Stock
Options, so long as such leave of absence is duly authorized in
writing by the Administrator and such authorization expressly permits
continued participation in the US Sub-Plan during such leave of
absence.
(e) This Section (5) of the US Sub-Plan is subject to the provisions of
Rule 7 of the Plan.
(6) CERTAIN LIMITATIONS ON AWARDS
(a) Notwithstanding any intent to grant an Incentive Stock Option, an
Award granted under the US Sub-Plan will not be considered an
Incentive Stock Option to the extent that it, together with any other
"incentive stock options" (within the meaning of Section 422 of the
Code, but without regard to subsection (d) of such Section) granted
under the US Sub-Plan, and under any other "incentive stock option"
plans of the employer US Participating Company, any Subsidiary of such
US Participating Company and any Parent of such US Participating
Company, are exercisable for the first time by any Participant during
any calendar year for Shares having an aggregate fair market value
(determined as of the Grant Date of such Award) in excess of
US$100,000 (or such other limit as may be required by the Code). The
rule set forth in the preceding sentence shall be applied by taking
Awards into account in the order in which they were granted and in
compliance with Code Section 422(d).
(b) No Incentive Stock Option shall be granted to an individual otherwise
eligible to participate in the US Sub-Plan who owns (within the
meaning of Section 424(d) of the Code), at the time the Award is
granted, more than ten percent (10%) of the total combined voting
power of all classes of stock of the US Participating Company
employing the individual or a Subsidiary or Parent of such US
Participating Company. This restriction does not apply if at the time
such Incentive Stock Option is granted the
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Offer Price per Share subject to the Incentive Stock Option is at
least 110% of the fair market value of a Share on the date such
Incentive Stock Option is granted, and the Incentive Stock Option by
its terms is not exercisable after the expiration of five years from
such date of grant.
(7) NO TRANSFER OF AWARDS
An Award by its terms shall be personal and may not be sold, transferred,
pledged, assigned, encumbered or otherwise alienated or hypothecated by the
Participant to whom such Award was granted, and such Award shall be
exercisable only by such Participant.
(8) CONDITIONS UPON ISSUANCE OF SHARES
Shares shall not be issued with respect to an Award unless the exercise of
such Award and the issuance and delivery of such Shares pursuant thereto
shall comply with all applicable provisions of law of the United States,
including, without limitation, the Securities Act of 1933, as amended; the
Securities Exchange Act of 1934, as amended; the rules and regulations
respectively promulgated thereunder; and the requirements of any stock
exchange or quotation system upon which the Shares may then be listed or
quoted; and shall be further subject to the approval of counsel for ABB
Holdings or a US Participating Company with respect to such compliance.
As a condition to the exercise of an Award, ABB Holdings or a US
Participating Company may require the Participant exercising such Award to
represent and warrant at the time of any such exercise that the Shares are
being purchased only for investment and without any present intention to
sell or distribute such Shares and may require any other representation or
warranty if, in the opinion of counsel for ABB Holdings or a US
Participating Company, such a representation is required by any of the
aforementioned applicable provisions of law.
(9) EMPLOYEE SHARE ACCOUNT
Any Shares transferred to a Participant upon exercise of such Participant's
Award under the US Sub-Plan shall be held in such Participant's Employee
Share Account in accordance with Rule 5 of the Plan, and shall not be
transferred out of such Employee Share Account before the earliest to occur
of (a) one year after the transfer of such Shares to such Participant and
(b) such Participant's disposition of such Shares, subject to the last
sentence of Rule 5(1) of the Plan.
(10) APPLICABLE LAW
The US Sub-Plan and all rights hereunder shall be governed by and construed
in accordance with English law. Should any provision of the US Sub-Plan be
determined by a court of competent jurisdiction to be unlawful or
unenforceable, such determination shall in no way affect the application of
any of the remaining provisions of the US Sub-Plan.
(11) AMENDMENT OF US SUB-PLAN
The Administrator may at any time, and from time to time, with or without
prior notice, amend, alter, suspend or terminate the US Sub-Plan,
retroactively or otherwise; provided, however, that no such amendment,
alteration, suspension or termination shall violate the terms and
conditions of the Plan; provided further, however, that, except as provided
in Rule 10 of the Plan relating to variation in the share capital of ABB,
no such amendment shall be effective unless approved by
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the shareholders of ABB and/or the shareholder of ABB Holdings, to the
extent shareholder approval is necessary to satisfy any requirements of the
Code relating to Incentive Stock Options.
The Administrator may amend the terms of any Award theretofore granted,
including any document or agreement relating thereto, retroactively or
otherwise; provided, however, that no such amendment shall violate the
terms and conditions of the Plan.
(12) SHAREHOLDER APPROVAL
The US Sub-Plan shall be effective as of the date upon which it shall be
adopted by the ESAP Board and the Board of Directors of ABB Holdings. The
maximum number of Shares that may be issued under the US Sub-Plan and the
employees eligible to participate in the US Sub-Plan shall be submitted to
the shareholders of ABB and the shareholder of ABB Holdings for approval
within twelve (12) months before or after the date of adoption of the US
Sub-Plan by the ESAP Board and the Board of Directors of ABB Holdings.
Notwithstanding any other provisions of the US Sub-Plan to the contrary, if
the shareholders of ABB or the shareholder of ABB Holdings fail to approve
such provisions of the US Sub-Plan within twelve months of such adoption of
the US Sub-Plan, any Awards previously granted under the US Sub-Plan shall
not qualify as Incentive Stock Options, but, rather, shall constitute stock
options other than Incentive Stock Options.
(13) DURATION
The US Sub-Plan shall terminate upon the earliest to occur of:
(a) the effective date of a resolution adopted by the Administrator
terminating the US Sub-Plan;
(b) the effective date of termination of the Plan by the ESAP Board;
(c) the date all Shares subject to the US Sub-Plan are delivered pursuant
to the US Sub-Plan's provisions; or
(d) ten (10) years from the date the US Sub-Plan becomes effective in
accordance with Section (12) of the US Sub-Plan.
No Award may be granted under the US Sub-Plan after the earliest to occur
of the events or dates described in the foregoing paragraphs (a) through
(d) of this Section (13); however, Awards theretofore granted may extend
beyond such date.
All Awards previously granted under the US Sub-Plan shall continue in force
and in operation after the termination of the US Sub-Plan, except as they
may be otherwise terminated in accordance with the terms of the US
Sub-Plan.
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Plan Rules
ABB ESAP LTD
ABB EMPLOYEE SHARE ACQUISITION PLAN
ABB
(OBJECT OMITTED)
CONTENTS
PREAMBLE.................................................................1
1. ELIGIBILITY..............................................................1
2. GRANT OF AWARDS..........................................................2
3. LIMITS...................................................................3
4. BUYING OF SHARES.........................................................3
5. EMPLOYEE SHARE ACCOUNT...................................................5
6. CESSATION OF EMPLOYMENT..................................................6
7. TRANSFER OF EMPLOYMENT...................................................6
8. EXITING THE PLAN.........................................................7
9. CHANGE OF CONTROL........................................................7
10. VARIATION OF CAPITAL.....................................................8
11. ALTERATIONS..............................................................8
12. MISCELLANEOUS............................................................9
13. DEFINITIONS AND INTERPRETATION..........................................10
PREAMBLE
The Plan is a discretionary benefit offered by the ABB Group for the
benefit of its employees, the purpose of which is to increase the interest
of the employees in ABB's business goals and results through share
ownership. The Plan is intended to encourage the employees' commitment to
the goals of the ABB Group; shares purchased under the Plan, or any gain
achieved by such acquisition, are not part of salary. The Plan is being
offered for the first time in 2004 in selected countries and the ESAP Board
shall have the right to decide, in its sole discretion, whether or not
another Plan will be offered in the future and to which Participating
Companies it shall extend.
The Plan is a share purchase program where employees can choose to enroll
and commit to save, into a Savings Account, a sum of money regularly for a
period of twelve months at the end of which they have the choice to buy ABB
shares at a price fixed at the beginning of the period, or to have their
savings returned with interest. A plan cycle begins with the Invitation
Date when invitations to participate are issued, followed by a 12-month
"Savings Period" and ends at the execution of participants' purchase
decision. Shares purchased under the Plan will be held in an Employee Share
Account for and on behalf of the Participants. The employees interact
directly with the Bank for further transactions of these shares.
Participating in the Plan is an investment opportunity distinct from the
employment contract. Each Participant therefore has to take his/her own
investment advice and be responsible for the consequences of his/her
participation in the Plan. By choosing to participate in the Plan the
employee is treated as being aware of any risks associated with the
investment and accepts them on his/her own free will.
The detailed rules for the Plan are set out below. These rules together
with the Savings Terms and the terms and conditions applicable to the
Employee Share Account held with the Bank contain the legal terms and
conditions regulating the Plan.
All the definitions of the capitalised terms used in this document can be
found in Rule 13 below.
1. ELIGIBILITY
An individual is eligible to be granted an Award under the Plan if :
(a) he is on the Grant Date an employee of a Participating Company; and
(b) he either:
(i) on the Grant Date, has an employment contract with a
Participating Company with an indefinite term; or
(ii) on the Grant Date, has an employment contract with a
Participating Company with a fixed term that will not expire
until the end of the Savings Period; or
(iii) on the Grant Date, has an employment contract with a
Participating Company with a fixed term and has been an employee
of a Group Company for a period of 12 months immediately
preceding the Invitation Date; or
(iv) has been declared eligible to participate by the ESAP Board.
Eligibility is to be reviewed by Participating Companies in accordance with
the above principles.
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2. GRANT OF AWARDS
(1) Subject to Rule 3, the ESAP Board may grant an Award conferring the right
to acquire Shares upon the terms set out in the Plan, to any individual
who:
(a) is eligible to be granted an Award under Rule 1, and
(b) has enrolled in the Plan and agreed to the Savings Terms under which
he/she commits to make regular savings for a period of twelve months
towards the purchase of the Shares. Pursuant to the Savings Terms, the
savings shall be held by the Trustee on behalf of the Participants in
a bank account operated by the Bank.
To participate in the Plan, an eligible employee has to agree to make
regular savings that can be used to buy the shares at the end of the
Savings Period.
(2) Subject to Rule 3(2), the amount of the monthly contribution under the
Savings Terms, and expressed in the Savings Currency, shall be the amount
that the individual shall have specified in his/her application form that
he is willing to save under the Savings Terms, provided that such amount
shall not exceed:
(a) such amount as is equal to 10% of his/her monthly gross salary (such
amount to be determined in the absolute discretion of the
Participating Company for which the individual works having regard to
recurring cash items over the six months immediately preceding the
Invitation Date) before any deductions; or
(b) the Local Currency Equivalent of Swiss Francs 750 or such other
maximum permitted amount and in such other currency, which may vary
from country to country, as may from time to time be determined by the
ESAP Board,
whichever is lower.
The ESAP Board may, in exceptional circumstances, allow such amount to be
decreased during the term of the Savings Period.
At the outset, employees can choose how much to save each pay day. This
amount is fixed for the entire Savings Period, unless the ESAP Board
approves, under exceptional circumstances, a decrease in the amount. There
is a maximum savings amount, being the lower of 10% of monthly gross salary
or Swiss Francs 750 a month. Savings are made in local currency.
(3) Subject to Rule 3, the maximum number of Shares (to be known as the Maximum
Participation) in respect of which an Award may be granted to any
individual shall be the number calculated in the following way:
(a) the monthly amount determined by Rule 2(2) (ignoring any later
reduction in this amount as may be permitted by the ESAP Board) shall
be multiplied by 12;
(b) the Swiss Franc Equivalent of this figure shall be calculated, if
applicable;
(c) this will be divided by the Offer Price for that Award;
(d) this will be multiplied by 110%; and
(e) this will then be rounded up to the next multiple of 10 Shares.
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The Offer Price and the maximum number of shares that you can buy at the
end of the Savings Period, called the Maximum Participation, are set at the
beginning of a plan cycle. The calculation of the Maximum Participation
deals with exchange rate movements between your local currency and the
Swiss Franc and accounts for the interest to be earned on your savings by
integrating a 10% allowance. If your local currency strengthens against the
Swiss Franc, you may receive a refund of monies in excess of the amount
necessary to purchase the Maximum Participation. On the contrary, if your
local currency weakens against the Swiss Franc, your total savings and
interest may not be sufficient to buy the Maximum Participation and you
will have the choice (but not the obligation) to make a "top-up" payment if
you wish to purchase the Maximum Participation.
(4) The price in Swiss Francs at which Shares may be acquired under an Award
granted on any day shall be determined by the ESAP Board and stated on that
day, and the price shall be the closing price paid for Shares on the Stock
Exchange on the Grant Date of the Award or as otherwise provided in the
relevant country schedule, if any.
The price at which shares may be bought at the end of the Savings Period is
set at the beginning of the Savings Period. The price is expressed in Swiss
Francs.
(5) Awards shall normally be granted within one month from the Invitation Date
and, as soon as reasonably practicable after the Grant Date, the Plan
Administrator shall notify the Participants of the Offer Price, the Maximum
Participation of the Award and the interest applicable to the contributions
under the Savings Terms.
Participants will be sent a confirmation letter showing the key details of
their participation.
(6) An Award granted under the Plan to any individual shall not be capable of
being pledged or transferred by him.
Securities laws require ABB to limit participation in the Plan to ABB
employees only.
3. LIMITS
(1) No Awards shall be granted under the Plan to the extent that they exceed
the number of Shares specified by the ESAP Board before the Grant Date as
being available for the Plan.
(2) If the grant of Awards under the Plan on any day would but for this
sub-rule cause any limit referred to in Rule 3(1) to be breached, the ESAP
Board shall determine in a fair and reasonable manner how the grant of
Awards should be scaled down.
ABB may specify a maximum number of shares that will be available any given
year under the Plan. If there is over subscription in any year, awards will
have to be scaled back in a fair way.
4. BUYING OF SHARES
(1) The buying of Shares subject to an Award shall be effected in the form and
manner prescribed by the ESAP Board and communicated before the end of the
Savings Period.
Before the end of the Savings Period, you will be told the process to
follow to buy shares or to ask for your savings and interest to be repaid.
(2) Subject to Rule 9, the buying of Shares subject to an Award shall take
place on the date when the purchase decision is communicated and shall be
completed on the Settlement Date and not before.
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(3) The maximum number of Shares subject to an Award that may be purchased
shall not exceed the Maximum Participation of that Award. Should the
balance of the savings and accrued interest not be sufficient for that
purpose, the Participant may contribute via his/her Participating Company
an appropriate amount of money to allow the purchase of the Maximum
Participation by such date as specified by the ESAP Board. Alternatively,
if the balance of the account exceeds the amount required to purchase the
Maximum Participation, the excess shall be refunded to the Participant.
When setting the Maximum Participation, an allowance is made for foreign
exchange fluctuations. In some cases the savings and interest at the end of
the plan cycle will be insufficient to buy this maximum number of shares.
You will have the choice (but not an obligation) to make a "top up" payment
via payroll at the end of the plan cycle so that, if you wish, you can buy
your Maximum Participation.
(4) If the Participant goes on maternity or paternity leave, military service,
long term sickness or disability, or retires, and as a result thereof there
is no payroll or insufficient payroll to deduct the Participant's monthly
contributions in accordance with the Savings Terms, the contributions shall
be interrupted and the Participant may remain enrolled in the Plan without
adding more savings. At the end of the Savings Period, the Participant
shall have the right to contribute an appropriate amount of money if he/she
wishes to purchase the Maximum Participation in accordance with Rule 4(3).
(5) On the date and by such time as specified by the ESAP Board pursuant to
Rule 4(1), the Participant must have notified the Company in such manner as
the ESAP Board may determine that he/she either:
(a) wishes to buy the Maximum Participation at the Offer Price and has
given the appropriate authority for the accumulated contributions and
interest paid pursuant to the Savings Terms and the payment envisaged
by Rule 4(3), if any, to be transferred to the Company (or such other
person as the ESAP Board may select) in order to pay for the Shares;
or
(b) wishes to buy the maximum number of Shares possible at the Offer Price
using the Swiss Francs Equivalent of the accumulated contributions and
interest and has given the appropriate authority for such sum to be
transferred to the Company (or such other person as the ESAP Board may
select) in order to pay for the Shares; or
(c) does not wish to buy the Shares subject to that Award and has given
the appropriate instruction for the accumulated contributions and
interest paid pursuant to the Savings Terms to be repaid.
At the end of the Savings Period, you have three choices: (1) buy the
Maximum Participation (using the possibility to make a top-up payment), (2)
use all your savings and interest (but no top up payment) to buy shares, or
(3) ask for the savings and interest to be returned to you. You will have
limited time to communicate this important choice.
(6) If the notification has not been made by the time specified in Rule 4(5) or
if the notification is incomplete or otherwise defective, then this Rule
4(6) shall be the authority for the ESAP Board (or any other person
nominated by the ESAP Board) to repay the accumulated contributions and
interest paid pursuant to the Savings Terms to the Participant in full and
final settlement and the Award shall forthwith lapse.
If you do not make a choice or do not comply with the purchase process,
your savings and interest will be returned to you.
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(7) If the Participant has elected to purchase the Maximum Participation and if
the appropriate amount of money referred to in Rule 4(3) necessary thereto
has not been made available by the Participant by the date specified by the
ESAP Board, then this Rule 4(7) shall be the authority for the ESAP Board
(or any other person nominated by the ESAP Board) to repay the accumulated
contributions and interest paid pursuant to the Savings Terms to the
Participant in full and final settlement and the Award shall forthwith
lapse.
If you do not make available the money necessary to top-up, your savings
and interest will be returned to you.
(8) In a case where any Group Company would be obliged to (or would suffer a
disadvantage if it were not to) account, or has already been obliged to
account, for any tax and/or for any social security contributions (in any
jurisdiction) for which the Participant would be liable by virtue of
his/her ownership or vesting of the Award or the purchase of Shares subject
to the Award (together, the "Tax Liability") or any dealing costs
associated with the sale of the Shares, this Rule 4(8) shall be the
authority for the ESAP Board (or any other person nominated by the ESAP
Board) to secure that payment of the Tax Liability and any such dealing
costs is made (whether by authorising the sale of some or all of the Shares
on his/her behalf and the payment to the Group Company of the relevant
amount out of the proceeds of sale or otherwise).
If your employer has to account for any tax on any profit made by you under
the Plan, this clause authorises a sufficient number of your shares to be
sold and for the sale proceeds to be used to pay the tax.
(9) Where Shares subject to an Award are bought, the ESAP Board, shall procure
the issue or transfer of those Shares on the Settlement Date to the
Employee Share Account opened with the Bank.
5. EMPLOYEE SHARE ACCOUNT
(1) After the Settlement Date, the Participant may elect to:
(a) keep the Shares in the Employee Share Account;
(b) transfer some or all of the Shares to his/her own brokerage
account at his/her own cost . Should the Participant request the
Bank to transfer the Shares to him/her, the Bank shall only be
required to transfer such number of Shares rounded down to the
nearest whole number and any fraction of a Share shall be
forfeited by the Participant; or
(c) sell some or all of the Shares at any time and receive the sales
proceeds (less handling charges, taxes and duties).
However, if the Participant is no longer employed by any Group
Company, the Participant needs to transfer his/her Shares out of the
Employee Share Account in accordance with Rule 6 below.
(2) The terms and conditions applicable to the Employee Share Account are set
out in a separate document issued to the Participant during the Savings
Period.
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The Employee Share Account is an arrangement where the Bank looks after
your Shares for you. The cost of this service is met by ABB. Financial
benefits derived from the ownership of Shares, such as dividend
distributions, will automatically be reinvested in additional Shares, or
fractions thereof, bought at the market price for you. You can ask for some
or all of the Shares to be sold or taken out of the Employee Share Account
at any time. You should note that it will not be possible for you to vote
the shares while they are held in the Employee Share Account; this is
because of administrative difficulties in arranging this.
6. CESSATION OF EMPLOYMENT
(1) Subject to Rule 6(2) below, if for any reason, any Participant ceases to be
an employee of a Group Company then:
(a) any subsisting Award held by that Participant and for which the
associated Savings Period has not been completed shall lapse on the
date of cessation of employment and the Shares subject to that Award
may not be bought;
(b) the accumulated contributions (but no interest thereon) made under the
Savings Terms associated with any Award as referred to in paragraph
(a) above will be returned to the Participant; and
(c) any Shares held by the Bank must be transferred out of the Employee
Share Account within 60 (sixty) days of the last day of employment.
For the avoidance of doubt, if a Participant ceases to be an employee of a
Group Company after he/she has completed the Savings Period, paragraphs (a)
and (b) above shall not apply.
(2) Rule 6(1) shall not apply in case of retirement of a Participant. In case
of retirement, a Participant shall transfer out of the Employee Share
Account any Shares held with the Bank within 60 (sixty) days of the later
of: (i) the last day of employment, or, to the extent the Participant is
enrolled in any given Plan cycle, (ii) the Settlement Date.
(3) If a Participant fails to give the appropriate instructions as may be
reasonably required by the Bank in order to transfer the Shares out of the
Employee Share Account as envisaged by Rules 6(1)(c) and 6(2) above, the
terms and conditions applicable to the Employee Share Account will provide
that the Shares shall be sold and the sale proceeds (less any dealing
costs) shall be sent to the Participant.
(4) A Participant shall not be treated for the purposes of this Plan as having
ceased to be an employee of a Group Company until such time as he/she is no
longer employed by any Group Company.
The Plan is a Plan for employees. Should you leave ABB before the end of a
plan cycle, for whatever reason, you will lose the right to buy the shares
but you will not lose your savings.
7. TRANSFER OF EMPLOYMENT
(1) If a Participant's employment is transferred to another Group Company whose
registered office is in the same country as that of the original
Participating Company, the Participant shall continue to participate in the
Plan on exactly the same terms.
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(2) If a Participant's employment is transferred to another Group Company whose
registered office is in a different country to that of the original
Participating Company, then:
(a) the Participant shall have the right to remain in the Plan but shall
be prevented from making further contributions under the Savings
Terms;
(b) the Award shall not lapse and the Participant is, subject to
applicable laws, entitled to purchase Shares in accordance with Rule 4
as if the Savings Period had continued as contemplated, and, for the
avoidance of doubt, a Participant will be entitled to purchase his/her
Maximum Participation in accordance with Rule 4(3); and
(c) for the avoidance of doubt, any Shares held by the Bank in the
Employee Share Account on behalf of the Participant do not have to be
transferred out of the account.
8. EXITING THE PLAN
Where, before the expiration of the Savings Period, the Participant
requests repayment of the contributions made under the Savings Terms or
otherwise withdraws his/her savings made under the Savings Terms, then:
(a) the Award shall immediately lapse and the Shares subject to that Award
may not be bought;
(b) the accumulated contributions (but no interest thereon) shall be
repaid as soon as reasonably practicable; and
(c) for the avoidance of doubt, any Shares held by the Bank in the
Employee Share Account on behalf of the Participant do not have to be
transferred out of this account.
Participation is voluntary and participants are free to withdraw from the
Plan at any time. Savings made by an employee will always be returned;
interest will not be earned because interest is only payable at the end of
the Savings Period. The right to buy the shares is lost.
9. CHANGE OF CONTROL
(1) Unless otherwise decided by the ESAP Board, if there is a Change of Control
of ABB, the following shall occur:
(a) ESAP Board shall notify every Participant thereof as soon as
practicable;
(b) the Savings Period shall end on the date the Change of Control is
notified as set out in paragraph (a) above;
(c) every Participant shall be entitled to buy the Shares subject to an
Award up to the Maximum Participation on such date as the ESAP Board
may specify provided that this is not more than 45 days after the
notification referred to in paragraph (a) and this date shall be the
new Settlement Date of all Awards ; and
(d) if the Shares are not purchased at that time, the Award shall lapse.
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Notwithstanding the foregoing, in the event of a Change of Control, the
ESAP Board will, depending on prevailing circumstances, consider the
possibility to procure the alternative for Participants to purchase shares
of the acquiring company rather than the Shares. In such a case, the ESAP
Board shall take advice from a financial institution of good international
standing with respect to the number of shares and the price per share which
should apply with respect to the Awards.
For the avoidance of doubt, the provisions of Rule 4 as modified by this
Rule 9(1) shall apply in the case of Change of Control.
(2) For the purposes of Rule 9(1), a "Change of Control" means the acquisition
in one or more transactions by any person or group, directly or indirectly,
of beneficial ownership of shares representing more than fifty percent
(50%) of the voting rights pertaining to the outstanding shares of common
stock of ABB; provided, however, that any acquisition by ABB or any of its
subsidiaries, or any employee benefit plan (or related trust) sponsored or
maintained by ABB or any of its subsidiaries shall not constitute a Change
of Control.
In case of a takeover of ABB, you will be notified and you will maintain
your right to buy Shares to the same extent as envisaged. However, you will
most likely be offered to make your decision in the weeks following the
change of control rather than at the end of the plan cycle. You will be
given further detailed information should these circumstances ever arise.
10. VARIATION OF CAPITAL
(1) In the event of any variation of the share capital of ABB, the payment of a
special dividend or other comparable event as determined by the ESAP Board,
the ESAP Board will take advice from a financial institution of good
international standing with respect to appropriate adjustments (if any) to:
(a) the number of Shares subject to an Award; and/or
(b) the price at which Shares may be bought.
(2) As soon as reasonably practicable after making any adjustment under this
Rule 10, the ESAP Board shall give notice in writing thereof to any
Participant affected thereby.
If there is any future change to the Shares, which could adversely affect
your right to buy Shares, you will be informed of any change made to your
right to buy the Shares.
11. ALTERATIONS
The ESAP Board acting fairly and reasonably may at any time alter the rules
of the Plan and the terms of any Awards granted under it. This shall
include, and shall not be limited to, the ESAP Board deciding to make some
adjustments to the Rules due to local requirements, to bring forward the
Settlement Date and permitting the early purchase of Shares or the return
of the monies saved as a result of unforeseen circumstances.
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12. MISCELLANEOUS
(1) For the sole purpose of the administration, operation and fulfilment of the
Plan and Participant's participation, personal data about the Participant
(including (i) Participant's name, (ii) Participant's birth date, (iii)
Participant's mailing address, (iv) Participant's monthly contribution, (v)
payroll/bank account number/Brokerage account number, (vi) the company and
the country codes and (vii) ABB internal personnel number (the "Personal
Data")) may be transferred to and processed by his/her employing company
and third parties (including the Plan Administrator, the Trustee, the Bank)
in and outside of the Participant's country without further notification.
Such Personal Data may be stored and used for further reference after the
Participant's participation in the Plan has terminated for whatever reason.
The Participant expressly consents to such processing and transfer of
his/her Personal Data.
(2) The Plan (including the Savings Terms) is an investment opportunity
distinct from the employment contract. Each Participant therefore has to
take his/her own investment advice and be responsible for the consequences
of his/her participation in the Plan. The Participant understands that
he/she is investing in securities of a listed company, the value of which
is subject to fluctuation. The Participant understands, inter alia, that
the value of the Shares may fluctuate between the notification of the
decision pursuant to Rule 4(5) and the Settlement Date.
(3) Participants may be subject to regulations on insider dealings in the
respective jurisdictions. Therefore, Participants are advised to consult
with legal advisors in their jurisdiction as to any restrictions with
regard to participating in the Plan or dealing with the Shares conveyed
under the Plan. For the avoidance of doubt, Participants are also reminded
that they shall comply with ABB policies with respect to insider trading.
(4) The rights and obligations of any individual under the terms of his/her
office or employment with a Group Company shall not be affected by his/her
participation in this Plan or any right which he may have to participate in
it and, for the avoidance of doubt, it is hereby expressly confirmed that
participation in the Plan on one or more occasion shall not confer on an
individual any additional rights under his/her contract of employment and
shall not constitute part of any individual's remuneration. An individual
who participates in the Plan hereby waives any and all rights to claim for
compensation or damages as a result of the application of these Rules in
case of termination of the Participant's office or employment for any
reason whatsoever.
(5) In the event of any dispute or disagreement as to the interpretation of
this Plan, or as to any question or right arising from or related to this
Plan, the decision of the ESAP Board shall be final and binding upon all
persons. In case of discrepancy between the English version of the Rules
and a translation thereof in any other language, the English version of the
Rules shall take precedence.
(6) No Group Company makes any representation as to the tax consequences
(including any social security contributions) for any Participant in
respect of his/her participation in the Plan. The tax treatment is
difficult to predict and varies from country to country and from time to
time. Each Participant therefore has to inform himself/herself of and be
responsible for the tax consequences (including any social security
contributions) of his/her participation in the Plan.
(7) Any notice or other communication under or in connection with this Plan may
be given by personal delivery or by sending it by post, in the case of a
company to its registered office, and in the case of an individual either
to his/her last known address or to the address of the place of
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business at which he performs the whole or substantially the whole of the
duties of his/her office or employment or to his/her allocated corporate
e-mail address.
(8) The Rules of this Plan and the rights and obligations of any person
thereunder shall be governed by and construed in accordance with the laws
of England and Wales, and all parties shall respect the exclusive
jurisdiction of the Courts of the district of Zurich.
13. DEFINITIONS AND INTERPRETATION
(1) In this Plan, unless the context otherwise requires:
"ABB" means ABB Ltd. (registered in Switzerland under number
CH-020.3.021.615-2);
"Award" means a right to purchase Shares granted under the terms of the
Plan;
"Bank" means Citibank N.A. Jersey Branch or Citigroup Global Markets Inc.
as the case may be, or such other persons as selected by the ESAP Board
from time to time to operate respectively the Savings Account and the
Employee Share Account.
"Change of Control" has the meaning as set forth in Rule 9(2);
"Company" means ABB ESAP Limited (registered in Guernsey under number
38462);
"Control" means the power of a person A to secure:
(a) by means of the holding of shares or the possession of voting power in
relation to a person B; or
(b) by virtue of any powers conferred by the articles of association or
other document regulating the affairs of person B; or
(c) by being entitled to a right to a share of more than one-half of the
assets or income of person B (in the case of person B being a
partnership)
that the affairs of person B are conducted in accordance with the wishes of
person A;
"Dealing Day" means a day on which the Stock Exchange is open for business;
"Employee Share Account" means the account opened with and operated by the
Bank where Shares purchased by a Participant will be held on his/her
behalf.
"ESAP Board" means the board of directors of the Company or a committee
appointed by them;
"Grant Date" means the date on which an Award is granted;
"Group Company" means ABB or any company or limited liability partnership
which is under the Control (directly or indirectly) of ABB;
"Invitation Date" means the date selected by the ESAP Board when
invitations to participate in the Plan will be issued;
"Local Currency Equivalent" in relation to an amount of Swiss francs means
the number of local currency units which are equivalent to that amount of
Swiss francs by applying a rate of exchange as published in a national
newspaper, as chosen by the ESAP Board, on the day that
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the calculation is being performed or, if monies are actually being
converted, the rate of exchange at which the transaction was carried out;
"Maximum Participation" in relation to any Award means the number of Shares
determined by Rule 2(3);
"Offer Price" means the price as determined by the ESAP Board under Rule
2(4) at which the Shares subject to an Award may be bought;
"Participant" means a person who holds an Award granted under this Plan;
"Participating Company" means ABB or any Group Company to which the ESAP
Board has resolved that this Plan shall for the time being extend;
"Plan" means the ABB Employee Share Acquisition Plan as herein set out but
subject to any alterations or additions made under Rule 11;
"Plan Administrator" means Abacus Corporate Services International Ltd. or
such other person as selected by the ESAP Board from time to time to
provide administrative services in relation to the Plan;
"Trustee" means Abacus Corporate Nominees Ltd. or such other person as
selected by the ESAP Board from time to time for the purpose set out in
Rule 2(1)(b);
"Savings Account" means the account opened with the Bank where the
contributions of the Participants will be held in accordance with the
Savings Terms;
"Savings Terms" means an arrangement approved by the ESAP Board under which
regular payments are made to the account opened in the name of the Trustee
with the Bank;
"Savings Period" means the period specified in the Savings Terms during
which the regular payments are made to the account opened in the name of
the Trustee with the Bank;
"Savings Currency" means Swiss francs or such other currency selected by
the ESAP Board, from time to time, for each country where the Plan is
operated;
"Settlement Date" subject to Rule 9, for any Award means the day 30 days
after the end of the Savings Period , but if that day is not a Dealing Day,
it shall be the first Dealing Day following that day;
"Shares" means newly issued fully paid ordinary shares of ABB;
"Stock Exchange" means the SWX Swiss Exchange or any other public market as
selected by the ESAP Board on which the Shares are listed (and for the
avoidance of doubt, the ESAP Board may select different stock exchanges for
the different countries where the Plan is operated); and
"Swiss Franc Equivalent" in relation to an amount denominated in a currency
other than Swiss francs means the number of Swiss francs which are
equivalent to that amount by applying a rate of exchange as published in a
national newspaper, as chosen by the ESAP Board, on the day that the
calculation is being performed or, if monies are actually being converted,
the rate of exchange at which the transaction was carried out.
(2) Where a Participant is paid more frequently than monthly, references to
monthly contributions shall mean:
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(a) in the event that a Participant is weekly paid, the sum of four weekly
contributions;
(b) in the event that a Participant is fortnightly paid, the sum of two
fortnightly contributions; and
(c) in the event that a Participant is four-weekly paid, the amount of
that four-weekly contribution
and contributions shall be deducted from the Participant's pay on each pay
date rather than a single monthly deduction, provided that in the case of a
Participant who is four-weekly paid, fortnightly paid or weekly paid
deductions shall only be made in the first 48 (forty eight) weeks of the
Savings Period.
(3) Any reference in this Plan to any enactment includes a reference to that
enactment as from time to time modified, extended or re-enacted.
(4) Expressions in italic and headings are for guidance only and do not form
part of the rules of the Plan.
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