ACE LIMITED 1998
LONG-TERM INCENTIVE PLAN
TABLE OF CONTENTS
GENERAL..................................................................... 1
Purpose................................................................... 1
Participation............................................................. 1
Operation, Administration, and Definitions................................ 1
OPTIONS AND SARS............................................................ 1
Definitions............................................................... 1
Exercise Price............................................................ 1
Exercise.................................................................. 2
Payment of Option Exercise Price.......................................... 2
Settlement of Award....................................................... 2
OTHER STOCK AWARDS.......................................................... 2
Definitions............................................................... 2
Restrictions on Awards.................................................... 2
OPERATION AND ADMINISTRATION................................................ 3
Effective Date............................................................ 3
Shares Subject to Plan.................................................... 3
General Restrictions...................................................... 4
Use of Shares............................................................. 5
Dividends and Dividend Equivalents........................................ 5
Payments.................................................................. 5
Transferability........................................................... 5
Form and Time of Elections................................................ 5
Agreement With Company.................................................... 5
Action by Company or Subsidiary........................................... 5
Gender and Number......................................................... 5
Limitation of Implied Rights.............................................. 6
Benefits Under Qualified Retirement Plans................................. 6
Evidence.................................................................. 6
CHANGE IN CONTROL........................................................... 6
COMMITTEE................................................................... 6
Administration............................................................ 6
Powers of Committee....................................................... 7
Delegation by Committee................................................... 7
Information to be Furnished to Committee.................................. 7
AMENDMENT AND TERMINATION................................................... 7
DEFINED TERMS............................................................... 7
i
ACE LIMITED 1998
LONG-TERM INCENTIVE PLAN
SECTION 1
GENERAL
1.1. Purpose. The ACE Limited Long-Term Incentive Plan (the "Plan") has been
established by ACE Limited (the "Company") to (i) attract and retain persons
eligible to participate in the Plan; (ii) motivate Participants, by means of
appropriate incentives, to achieve long-range goals; (iii) provide incentive
compensation opportunities that are competitive with those of other similar
companies; and (iv) further identify Participants' interests with those of the
Company's other shareholders through compensation that is based on the
Company's ordinary shares of stock; and thereby promote the long-term
financial interest of the Company and the Subsidiaries, including the growth
in value of the Company's equity and enhancement of long-term shareholder
return.
1.2. Participation. Subject to the terms and conditions of the Plan, the
Committee shall determine and designate, from time to time, from among the
Eligible Individuals (including transferees of Eligible Individuals to the
extent the transfer is permitted by the Plan and the applicable Award
Agreement), those persons who will be granted one or more Awards under the
Plan, and thereby become "Participants" in the Plan. In the discretion of the
Committee, a Participant may be granted any Award permitted under the
provisions of the Plan, and more than one Award may be granted to a
Participant. Awards may be granted as alternatives to or replacement of awards
granted or outstanding under the Plan, or any other plan or arrangement of the
Company or a Subsidiary (including a plan or arrangement of a business or
entity, all or a portion of which is acquired by the Company or a Subsidiary).
1.3. Operation, Administration, and Definitions. The operation and
administration of the Plan, including the Awards made under the Plan, shall be
subject to the provisions of Section 4 (relating to operation and
administration). Capitalized terms in the Plan shall be defined as set forth
in the Plan (including the definition provisions of Section 8 of the Plan).
SECTION 2
OPTIONS AND SARS
2.1. Definitions.
(a) The grant of an "Option" entitles the Participant to purchase shares of
Stock at an Exercise Price established by the Committee. Any Option granted
under this Section 2 may be either an incentive stock option (an "ISO") or a
non-qualified option (an "NQO"), as determined in the discretion of the
Committee. An "ISO" is an Option that is intended to satisfy the requirements
applicable to an "incentive stock option" described in section 422(b) of the
Code. An "NQO" is an Option that is not intended to be an "incentive stock
option" as that term is described in section 422(b) of the Code.
(b) A stock appreciation right (an "SAR") entitles the Participant to
receive, in cash or Stock (as determined in accordance with subsection 2.5),
value equal to (or otherwise based on) the excess of: (a) the Fair Market
Value of a specified number of shares of Stock at the time of exercise; over
(b) an Exercise Price established by the Committee.
2.2. Exercise Price. The "Exercise Price" of each Option and SAR granted
under this Section 2 shall be established by the Committee or shall be
determined by a method established by the Committee at the time the Option or
SAR is granted; except that the Exercise Price shall not be less than 100% of
the Fair Market Value of a share of Stock on the date of grant (or, if
greater, the par value of a share of Stock).
2.3. Exercise. An Option and an SAR shall be exercisable in accordance with
such terms and conditions and during such periods as may be established by the
Committee.
2.4. Payment of Option Exercise Price. The payment of the Exercise Price of
an Option granted under this Section 2 shall be subject to the following:
(a) Subject to the following provisions of this subsection 2.4, the full
Exercise Price for shares of Stock purchased upon the exercise of any
Option shall be paid at the time of such exercise (except that, in the case
of an exercise arrangement approved by the Committee and described in
paragraph 2.4(c), payment may be made as soon as practicable after the
exercise).
(b) The Exercise Price shall be payable in cash or by tendering, by
either actual delivery of shares or by attestation, shares of Stock
acceptable to the Committee, and valued at Fair Market Value as of the day
of exercise, or in any combination thereof, as determined by the Committee.
(c) The Committee may permit a Participant to elect to pay the Exercise
Price upon the exercise of an Option by irrevocably authorizing a third
party to sell shares of Stock (or a sufficient portion of the shares)
acquired upon exercise of the Option and remit to the Company a sufficient
portion of the sale proceeds to pay the entire Exercise Price and any tax
withholding resulting from such exercise.
2.5. Settlement of Award. Shares of Stock delivered pursuant to the exercise
of an Option or SAR shall be subject to such conditions, restrictions and
contingencies as the Committee may establish in the applicable Award
Agreement. Settlement of SARs may be made in shares of Stock (valued at their
Fair Market Value at the time of exercise), in cash, or in a combination
thereof, as determined in the discretion of the Committee. The Committee, in
its discretion, may impose such conditions, restrictions and contingencies
with respect to shares of Stock acquired pursuant to the exercise of an Option
or an SAR as the Committee determines to be desirable.
SECTION 3
OTHER STOCK AWARDS
3.1. Definitions.
(a) A "Stock Unit" Award is the grant of a right to receive shares of Stock
in the future.
(b) A "Performance Share" Award is a grant of a right to receive shares of
Stock or Stock Units which is contingent on the achievement of performance or
other objectives during a specified period.
(c) A "Performance Unit" Award is a grant of a right to receive a designated
dollar value amount of Stock which is contingent on the achievement of
performance or other objectives during a specified period.
(d) A "Restricted Stock" Award is a grant of shares of Stock, and a
"Restricted Stock Unit" Award is the grant of a right to receive shares of
Stock in the future, with such shares of Stock or right to future delivery of
such shares of Stock subject to a risk of forfeiture or other restrictions
that will lapse upon the achievement of one or more goals relating to
completion of service by the Participant, or achievement of performance or
other objectives, as determined by the Committee.
3.2. Restrictions on Awards. Each Stock Unit Award, Restricted Stock Award,
Restricted Stock Unit Award, Performance Share Award and Performance Unit
Award shall be subject to the following:
(a) Any such Award shall be subject to such conditions, restrictions and
contingencies as the Committee shall determine.
(b) The Committee may designate whether any such Award being granted to
any Participant is intended to be "performance-based compensation" as that
term is used in section 162(m) of the Code. Any such Awards designated as
intended to be "performance-based compensation" shall be conditioned on the
achievement of one or more Performance Measures, to the extent required by
Code section 162(m). The
2
Performance Measures that may be used by the Committee for such Awards
shall be based on any one or more of the following Company, Subsidiary,
operating unit or division performance measures, as selected by the
Committee: gross premiums written; net premiums written; net premiums
earned; net investment income; losses and loss expenses; underwriting and
administrative expenses; operating expenses; cash flow(s); operating
income; earnings before interest and taxes; net income; stock price;
dividends; strategic business objectives, consisting of one or more
objectives based on meeting specified cost targets, business expansion
goals, and goals relating to acquisitions or divestitures; or any
combination thereof. Each goal may be expressed on an absolute and/or
relative basis, may be based on or otherwise employ comparisons based on
internal targets, the past performance of the Company and/or the past or
current performance of other companies, and in the case of earnings-based
measures, may use or employ comparisons relating to capital, shareholders'
equity and/or shares outstanding, investments or to assets or net assets.
For Awards under this Section 3 intended to be "performance-based
compensation," the grant of the Awards and the establishment of the
Performance Measures shall be made during the period required under Code
section 162(m).
(c) If the right to become vested in a Restricted Stock Award or
Restricted Stock Unit Award granted under this Section 3 is conditioned on
the completion of a specified period of service with the Company or the
Subsidiaries, without achievement of Performance Measures or other
performance objectives being required as a condition of vesting, and
without it being granted in lieu of other compensation, then the required
period of service for vesting shall be not less than three years (subject
to acceleration of vesting, to the extent permitted by the Committee, in
the event of the Participant's death, disability, retirement, change in
control or involuntary termination).
SECTION 4
OPERATION AND ADMINISTRATION
4.1. Effective Date. Subject to the approval of the shareholders of the
Company at the Company's 1999 annual meeting of its shareholders, the Plan
shall be effective as of November 13, 1998 (the "Effective Date"); provided,
however, that to the extent that Awards are granted under the Plan prior to
its approval by shareholders, the Awards shall be contingent on approval of
the Plan by the shareholders of the Company at such annual meeting. The Plan
shall be unlimited in duration and, in the event of Plan termination, shall
remain in effect as long as any Awards under it are outstanding; provided,
however, that no Awards may be granted under the Plan after the ten-year
anniversary of the Effective Date.
4.2. Shares Subject to Plan. The shares of Stock for which Awards may be
granted under the Plan shall be subject to the following:
(a) The shares of Stock with respect to which Awards may be made under
the Plan shall be currently authorized but unissued shares, or shares
purchased in the open market by a direct or indirect wholly-owned
subsidiary of the Company (as determined by the Chairman or any Executive
Vice President of the Company). The Company may contribute to the
subsidiary an amount sufficient to accomplish the purchase in the open
market of the shares of Stock to be so acquired (as determined by the
Chairman or any Executive Vice President of the Company).
(b) The number of shares of Stock available for Awards under the Plan
during any fiscal year of the Company shall equal (i) five percent of the
adjusted average of the outstanding Stock, as that number is determined by
the Company to calculate fully diluted earnings per share for the preceding
fiscal year; reduced by (ii) any shares of Stock granted pursuant to Awards
under the Plan, and any shares of Stock subject to any outstanding award
under the Plan.
(c) To the extent provided by the Committee, any Award may be settled in
cash rather than Stock. To the extent any shares of Stock covered by an
Award are not delivered to a Participant or beneficiary because the Award
is forfeited or canceled, or the shares of Stock are not delivered because
the Award is settled in
3
cash or used to satisfy the applicable tax withholding obligation, such
shares shall not be deemed to have been delivered for purposes of
determining the maximum number of shares of Stock available for delivery
under the Plan.
(d) If the exercise price of any Option granted under the Plan is
satisfied by tendering shares of Stock to the Company (by either actual
delivery or by attestation), only the number of shares of Stock issued net
of the shares of Stock tendered shall be deemed delivered for purposes of
determining the maximum number of shares of Stock available for delivery
under the Plan.
(e) Subject to paragraph 4.2(f), the following additional maximums are
imposed under the Plan:
(i) The maximum number of shares of Stock that may be issued by
Options intended to be ISOs shall be 8,000,000 shares.
(ii) The maximum number of shares that may be covered by Awards
granted to any one individual pursuant to Section 2 (relating to
Options and SARs) shall be 6,000,000 shares during any one-calendar-
year period.
(iii) The maximum number of shares of Stock that may be issued in
conjunction with Awards granted pursuant to Section 3 (relating to
Other Stock Awards) shall be 2,000,000 shares.
(iv) For Stock Unit Awards, Restricted Stock Awards, Restricted Stock
Unit Awards and Performance Share Awards that are intended to be
"performance-based compensation" (as that term is used for purposes of
Code section 162(m)), no more than 2,000,000 shares of Stock may be
subject to such Awards granted to any one individual during any one-
calendar-year period (regardless of when such shares are deliverable).
(v) For Performance Unit Awards that are intended to be "performance-
based compensation" (as that term is used for purposes of Code section
162(m)), no more than $5,000,000 may be subject to such Awards granted
to any one individual during any one-calendar-year period (regardless
of when such amounts are deliverable).
(f) In the event of a corporate transaction involving the Company
(including, without limitation, any stock dividend, stock split,
extraordinary cash dividend, recapitalization, reorganization, merger,
consolidation, split-up, spin-off, combination or exchange of shares), the
Committee may adjust Awards to preserve the benefits or potential benefits
of the Awards. Action by the Committee may include: (i) adjustment of the
number and kind of shares which may be delivered under the Plan; (ii)
adjustment of the number and kind of shares subject to outstanding Awards;
(iii) adjustment of the Exercise Price of outstanding Options and SARs; and
(iv) any other adjustments that the Committee determines to be equitable.
4.3. General Restrictions. Delivery of shares of Stock or other amounts
under the Plan shall be subject to the following:
(a) Notwithstanding any other provision of the Plan, the Company shall
have no liability to deliver any shares of Stock under the Plan or make any
other distribution of benefits under the Plan unless such delivery or
distribution would comply with all applicable laws (including, without
limitation, the requirements of the United States Securities Act of 1933),
and the applicable requirements of any securities exchange or similar
entity.
(b) To the extent that the Plan provides for issuance of stock
certificates to reflect the issuance of shares of Stock, the issuance may
be effected on a non-certificated basis, to the extent not prohibited by
applicable law or the applicable rules of any stock exchange.
4.4. Tax Withholding. All distributions under the Plan are subject to
withholding of all applicable taxes, and the Committee may condition the
delivery of any shares or other benefits under the Plan on satisfaction of the
applicable withholding obligations. The Committee, in its discretion, and
subject to such requirements as the Committee may impose prior to the
occurrence of such withholding, may permit such withholding obligations to
4
be satisfied through cash payment by the Participant, through the surrender of
shares of Stock which the Participant already owns, or through the surrender
of shares of Stock to which the Participant is otherwise entitled under the
Plan.
4.5. Use of Shares. Subject to the overall limitation on the number of
shares of Stock that may be delivered under the Plan, the Committee may use
available shares of Stock as the form of payment for compensation, grants or
rights earned or due under any other compensation plans or arrangements of the
Company or a Subsidiary, including the plans and arrangements of the Company
or a Subsidiary assumed in business combinations.
4.6. Dividends and Dividend Equivalents. An Award (including without
limitation an Option or SAR Award) may provide the Participant with the right
to receive dividend payments or dividend equivalent payments with respect to
Stock subject to the Award (both before and after the Stock subject to the
Award is earned, vested, or acquired), which payments may be either made
currently or credited to an account for the Participant, and may be settled in
cash or Stock as determined by the Committee. Any such settlements, and any
such crediting of dividends or dividend equivalents or reinvestment in shares
of Stock, may be subject to such conditions, restrictions and contingencies as
the Committee shall establish, including the reinvestment of such credited
amounts in Stock equivalents.
4.7. Payments. Awards may be settled through cash payments, the delivery of
shares of Stock, the granting of replacement Awards, or combination thereof as
the Committee shall determine. Any Award settlement, including payment
deferrals, may be subject to such conditions, restrictions and contingencies
as the Committee shall determine. The Committee may permit or require the
deferral of any Award payment, subject to such rules and procedures as it may
establish, which may include provisions for the payment or crediting of
interest, or dividend equivalents, including converting such credits into
deferred Stock equivalents. Each Subsidiary shall be liable for payment of
cash due under the Plan with respect to any Participant to the extent that
such benefits are attributable to the services rendered for that Subsidiary by
the Participant. Any disputes relating to liability of a Subsidiary for cash
payments shall be resolved by the Committee.
4.8. Transferability. Except as otherwise provided by the Committee, Awards
under the Plan are not transferable except as designated by the Participant by
will or by the laws of descent and distribution.
4.9. Form and Time of Elections. Unless otherwise specified herein, each
election required or permitted to be made by any Participant or other person
entitled to benefits under the Plan, and any permitted modification, or
revocation thereof, shall be in writing filed with the Committee at such
times, in such form, and subject to such restrictions and limitations, not
inconsistent with the terms of the Plan, as the Committee shall require.
4.10. Agreement With Company. An Award under the Plan shall be subject to
such terms and conditions, not inconsistent with the Plan, as the Committee
shall, in its sole discretion, prescribe. The terms and conditions of any
Award to any Participant shall be reflected in such form of written document
as is determined by the Committee. A copy of such document shall be provided
to the Participant, and the Committee may, but need not require that the
Participant sign a copy of such document. Such document is referred to in the
Plan as an "Award Agreement" regardless of whether any Participant signature
is required.
4.11. Action by Company or Subsidiary. Any action required or permitted to
be taken by the Company or any Subsidiary shall be by resolution of its board
of directors, or by action of one or more members of the board (including a
committee of the board) who are duly authorized to act for the board, or
(except to the extent prohibited by applicable law or applicable rules of any
stock exchange) by a duly authorized officer of such company.
4.12. Gender and Number. Where the context admits, words in any gender shall
include any other gender, words in the singular shall include the plural and
the plural shall include the singular.
5
4.13. Limitation of Implied Rights.
(a) Neither a Participant nor any other person shall, by reason of
participation in the Plan, acquire any right in or title to any assets, funds
or property of the Company or any Subsidiary whatsoever, including, without
limitation, any specific funds, assets, or other property which the Company or
any Subsidiary, in their sole discretion, may set aside in anticipation of a
liability under the Plan. A Participant shall have only a contractual right to
the Stock or amounts, if any, payable under the Plan, unsecured by any assets
of the Company or any Subsidiary, and nothing contained in the Plan shall
constitute a guarantee that the assets of the Company or any Subsidiary shall
be sufficient to pay any benefits to any person.
(b) The Plan does not constitute a contract of employment, and selection as
a Participant will not give any participating employee or other individual the
right to be retained in the employ of the Company or any Subsidiary or the
right to continue to provide services to the Company or any Subsidiary, nor
any right or claim to any benefit under the Plan, unless such right or claim
has specifically accrued under the terms of the Plan. Except as otherwise
provided in the Plan, no Award under the Plan shall confer upon the holder
thereof any rights as a shareholder of the Company prior to the date on which
the individual fulfills all conditions for receipt of such rights.
4.14. Benefits Under Qualified Retirement Plans. Except as otherwise
provided by the Committee, Awards to a Participant (including the grant and
the receipt of benefits) under the Plan shall be disregarded for purposes of
determining the Participant's benefits under any Qualified Retirement Plan and
other plans maintained by the Participant's employer. The term "Qualified
Retirement Plan" means any plan of the Company or a Subsidiary that is
intended to be qualified under section 401(a) of the Code.
4.15. Evidence. Evidence required of anyone under the Plan may be by
certificate, affidavit, document or other information which the person acting
on it considers pertinent and reliable, and signed, made or presented by the
proper party or parties.
SECTION 5
CHANGE IN CONTROL
Subject to the provisions of paragraph 4.2(f) (relating to the adjustment of
shares), and except as otherwise provided in the Plan or the Award Agreement
reflecting the applicable Award, upon the occurrence of a Change in Control:
(a) All outstanding Options (regardless of whether in tandem with SARs)
shall become fully exercisable.
(b) All outstanding SARs (regardless of whether in tandem with Options)
shall become fully exercisable.
(c) All Stock Units, Restricted Stock, Restricted Stock Units,
Performance Shares, and Performance Units shall become fully vested.
SECTION 6
COMMITTEE
6.1. Administration. The authority to control and manage the operation and
administration of the Plan shall be vested in a committee (the "Committee") in
accordance with this Section 6. The Compensation Committee of the Board shall
serve as the "Committee" under the Plan, except as otherwise determined by the
Board. If the Committee does not exist, or for any other reason determined by
the Board, the Board may take any action under the Plan that would otherwise
be the responsibility of the Committee.
6
6.2. Powers of Committee. The Committee's administration of the Plan shall
be subject to the following:
(a) Subject to the provisions of the Plan, the Committee will have the
authority and discretion to select from among the Eligible Individuals
those persons who shall receive Awards, to determine the time or times of
receipt, to determine the types of Awards and the number of shares covered
by the Awards, to establish the terms, conditions, performance criteria,
restrictions, and other provisions of such Awards, and (subject to the
restrictions imposed by Section 7) to cancel or suspend Awards.
(b) To the extent that the Committee determines that the restrictions
imposed by the Plan preclude the achievement of the material purposes of
the Awards in jurisdictions outside the United States, the Cayman Islands,
and Bermuda, the Committee will have the authority and discretion to modify
those restrictions as the Committee determines to be necessary or
appropriate to conform to applicable requirements or practices of
jurisdictions outside of the United States, the Cayman Islands, and
Bermuda.
(c) The Committee will have the authority and discretion to interpret the
Plan, to establish, amend, and rescind any rules and regulations relating
to the Plan, to determine the terms and provisions of any Award Agreement
made pursuant to the Plan, and to make all other determinations that may be
necessary or advisable for the administration of the Plan.
(d) Any interpretation of the Plan by the Committee and any decision made
by it under the Plan is final and binding on all persons.
(e) In controlling and managing the operation and administration of the
Plan, the Committee shall take action in a manner that conforms to the
Memorandum and Articles of Association of the Company, and applicable
corporate law.
6.3. Delegation by Committee. Except to the extent prohibited by applicable
law or the applicable rules of a stock exchange, the Committee may allocate
all or any portion of its responsibilities and powers to any one or more of
its members and may delegate all or any part of its responsibilities and
powers to any person or persons selected by it. Any such allocation or
delegation may be revoked by the Committee at any time.
6.4. Information to be Furnished to Committee. The Company and Subsidiaries
shall furnish the Committee with such data and information as it determines
may be required for it to discharge its duties. The records of the Company and
Subsidiaries as to an employee's or Participant's employment (or other
provision of services), termination of employment (or cessation of the
provision of services), leave of absence, reemployment and compensation shall
be conclusive on all persons unless determined to be incorrect. Participants
and other persons entitled to benefits under the Plan must furnish the
Committee such evidence, data or information as the Committee considers
desirable to carry out the terms of the Plan.
SECTION 7
AMENDMENT AND TERMINATION
The Board may, at any time, amend or terminate the Plan, provided that no
amendment or termination may, in the absence of written consent to the change
by the affected Participant (or, if the Participant is not then living, the
affected beneficiary), adversely affect the rights of any Participant or
beneficiary under any Award granted under the Plan prior to the date such
amendment is adopted by the Board; provided that adjustments pursuant to
subject to paragraph 4.2(f) shall not be subject to the foregoing limitations
of this Section 7.
SECTION 8
DEFINED TERMS
In addition to the other definitions contained herein, the following
definitions shall apply:
(a) Award. The term "Award" shall mean any award or benefit granted under
the Plan, including, without limitation, the grant of Options, SARs, Stock
Unit Awards, Restricted Stock Awards, Restricted Stock Unit Awards,
Performance Share Awards, and Performance Unit Awards.
7
(b) Board. The term "Board" shall mean the Board of Directors of the
Company.
(c) Change in Control. The term "Change in Control" shall mean the
occurrence of any one of the following events:
(i) any "person," as such term is used in Sections 3(a)(9) and 13(d)
of the United States Securities Exchange Act of 1934, becomes a
"beneficial owner," as such term is used in Rule 13d-3 promulgated
under that act, of 50% or more of the Voting Stock (as defined below)
of the Company;
(ii) the majority of the Board consists of individuals other than
Incumbent Directors, which term means the members of the Board on the
Effective Date; provided that any person becoming a director subsequent
to such date whose election or nomination for election was supported by
three-quarters of the directors who then comprised the Incumbent
Directors shall be considered to be an Incumbent Director;
(iii) the Company adopts any plan of liquidation providing for the
distribution of all or substantially all of its assets;
(iv) all or substantially all of the assets or business of the
Company is disposed of pursuant to a merger, consolidation or other
transaction (unless the shareholders of the Company immediately prior
to such merger, consolidation or other transaction beneficially own,
directly or indirectly, in substantially the same proportion as they
owned the Voting Stock of the Company, all of the Voting Stock or other
ownership interests of the entity or entities, if any, that succeed to
the business of the Company); or
(v) the Company combines with another company and is the surviving
corporation but, immediately after the combination, the shareholders of
the Company immediately prior to the combination hold, directly or
indirectly, 50% or less of the Voting Stock of the combined company
(there being excluded from the number of shares held by such
shareholders, but not from the Voting Stock of the combined company,
any shares received by Affiliates (as defined below) of such other
company in exchange for stock of such other company).
For the purpose of this definition of "Change in Control," (I) an
"Affiliate" of a person or other entity shall mean a person or other
entity that directly or indirectly controls, is controlled by, or is
under common control with the person or other entity specified and (II)
"Voting Stock" shall mean capital stock of any class or classes having
general voting power under ordinary circumstances, in the absence of
contingencies, to elect the directors of a corporation.
(d) Code. The term "Code" means the United States Internal Revenue Code
of 1986, as amended. A reference to any provision of the Code shall include
reference to any successor provision of the Code.
(e) Dollars. As used in the Plan, the term "dollars" or numbers preceded
by the symbol "$" shall mean amounts in United States dollars.
(f) Eligible Individual. For purposes of the Plan, the term "Eligible
Individual" shall mean any employee of the Company or a Subsidiary, and any
consultant, director, or other person providing services to the Company or
a Subsidiary. An Award may be granted to an employee or other individual
providing services, in connection with hiring, retention or otherwise,
prior to the date the employee or service provider first performs services
for the Company or the Subsidiaries, provided that such Awards shall not
become vested prior to the date the employee or service provider first
performs such services.
(g) Fair Market Value. Except as otherwise provided by the Committee, the
"Fair Market Value" of a share of Stock as of any date shall be the closing
market composite price for such Stock as reported for the New York Stock
Exchange--Composite Transactions on that date or, if Stock is not traded on
that date, on the next preceding date on which Stock was traded.
(h) Subsidiaries. For purposes of the Plan, the term "Subsidiary" means
any corporation, partnership, joint venture or other entity during any
period in which at least a fifty percent voting or profits interest is
8
owned, directly or indirectly, by the Company (or by any entity that is a
successor to the Company), and any other business venture designated by the
Committee in which the Company (or any entity that is a successor to the
Company) has a significant interest, as determined in the discretion of the
Committee.
(i) Stock. The term "Stock" shall mean ordinary shares of stock of the
Company.
9