Exhibit 10.7
ASPEN INSURANCE HOLDINGS LIMITED
2003 SHARE INCENTIVE PLAN
1. PURPOSE OF THE PLAN
The purpose of the Plan is to aid the Company and its
Affiliates in recruiting and retaining key employees or directors and to
motivate such employees or directors to exert their best efforts on behalf of
the Company and its Affiliates by providing incentives through the granting of
Awards. The Company expects that it will benefit from the added interest which
such key employees or directors will have in the welfare of the Company as a
result of their proprietary interest in the Company's success.
2. DEFINITIONS
The following capitalized terms used in the Plan have the
respective meanings set forth in this Section:
(a) "Act" means The Securities Exchange Act of 1934, as
amended, or any successor thereto.
(b) "Affiliate" means any entity directly or indirectly
controlling, controlled by, or under common control with,
the Company or any other entity designated by the Board in
which the Company or an Affiliate has an interest.
(c) "Award" means an Option, Share Appreciation Right,
Restricted Share or Other Share-Based Award granted
pursuant to the Plan.
(d) "Beneficial Owner" means a "beneficial owner", as such
term is defined in Rule 13d-3 under the Act (or any
successor rule thereto) (except that a Person shall be
deemed to have "beneficial ownership" of all Shares that
such Person has the right to acquire, whether such right
is exercisable immediately or only after the passage of
time).
(e) "Board" means the Board of Directors of the Company.
(f) "Change in Control" means,
(i) at any time that the Investors (as defined below)
are the Beneficial Owners of 33.33% or more of the
combined voting power of the voting shares of the Company,
the occurrence of any of the following events:
(A) the sale or disposition, in one or a series of
related transactions, of all or substantially all, of the
assets of the Company to any Person or Group (other than
(x) any subsidiary (as defined below) of the Company or
(y) any entity which is a holding company of the Company
(other than any holding company which became a holding
company in a transaction
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that resulted in a Change in Control) or any subsidiary of
such holding company);
(B) any Person or Group is or becomes the Beneficial
Owner, directly or indirectly, of more than 50% of the
combined voting power of the voting shares of the Company
(or any entity which is the Beneficial Owner of more than
50% of the combined voting power of the voting shares of
the Company), including by way of merger, consolidation,
tender or exchange offer or otherwise; excluding, however,
the following: (I) any acquisition directly from the
Company, (II) any acquisition by the Company, or (III) any
acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any
corporation controlled by the Company; or
(C) the consummation of any transaction or series of
transactions resulting in a merger, consolidation or
amalgamation, in which the Company is involved, other than
a merger, consolidation or amalgamation which would result
in the shareholders of the Company immediately prior
thereto continuing to own (either by remaining outstanding
or by being converted into voting securities of the
surviving entity), in the same proportion as immediately
prior to the transaction(s), more than 50% of the combined
voting power of the voting shares of the Company or such
surviving entity outstanding immediately after such
merger, consolidation or amalgamation; and
(ii) at any time that the Investors (as defined below)
are the Beneficial Owners of less than 33.33% of the
combined voting power of the voting shares of the Company,
the occurrence of any of the following events:
(A) the sale or disposition, in one or a series of
related transactions, of all or substantially all, of the
assets of the Company to any Person or Group (other than
(x) any subsidiary of the Company or (y) any entity that
is a holding company of the Company (other than any
holding company which became a holding company in a
transaction that resulted in a Change in Control) or any
subsidiary of such holding company);
(B) any Person or Group is or becomes the Beneficial
Owner, directly or indirectly, of more than 30% of the
combined voting power of the voting shares of the Company
(or any entity which is the Beneficial Owner of more than
50% of the combined voting power of the voting shares of
the Company), including by way of merger, consolidation,
tender or exchange offer or otherwise; excluding, however,
the following: (I) any acquisition directly from the
Company, (II) any acquisition by the Company, (III) any
acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any
corporation controlled by the Company, or (IV) any
acquisition by a Person or Group
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if immediately after such acquisition a Person or Group
who is a shareholder of the Company on the Effective Date
continues to own voting power of the voting shares of the
Company that is greater than the voting power owned by
such acquiring Person or Group;
(C) the consummation of any transaction or series of
transactions resulting in a merger, consolidation or
amalgamation, in which the Company is involved, other than
a merger, consolidation or amalgamation which would result
in the shareholders of the Company immediately prior
thereto continuing to own (either by remaining outstanding
or by being converted into voting securities of the
surviving entity), in the same proportion as immediately
prior to the transaction(s), more than 50% of the combined
voting power of the voting shares of the Company or such
surviving entity outstanding immediately after such
merger, consolidation or amalgamation; or
(D) a change in the composition of the Board such that
the individuals who, as of the Effective Date, constitute
the Board (such Board shall be referred to for purposes of
this subsection (ii)(D) as the "Incumbent Board") cease
for any reason to constitute at least a majority of the
Board; provided, however, that for purposes of this
definition, any individual who becomes a member of the
Board subsequent to the Effective Date, whose election, or
nomination for election, by a majority of those
individuals who are members of the Board and who were also
members of the Incumbent Board (or deemed to be such
pursuant to this proviso) shall be considered as though
such individual were a member of the Incumbent Board; and,
provided further, however, that any such individual whose
initial assumption of office occurs as the result of or in
connection with either an actual or threatened election
contest (as such terms are used in Rule 14a-11 or
Regulation 14A of the Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of an
entity other than the Board shall not be so considered as
a member of the Incumbent Board.
For purposes of this definition of Change in Control, (i)
"Investors" shall mean The Blackstone Group, Wellington
Underwriting plc, Candover Partners Limited, Credit Suisse
First Boston Private Equity, Montpelier Re Holdings Ltd.,
3i Group plc, Olympus Partners and Phoenix Equity Partners
or their respective Affiliates; (ii) "subsidiary" shall
mean, in respect of any entity, any other entity that is,
directly or indirectly, wholly owned by the first entity;
and (iii) "holding company" shall mean, in respect of any
entity, any other entity that, directly or indirectly,
wholly owns such first entity.
(g) "Code" means the Internal Revenue Code of 1986, as
amended, or any successor thereto.
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(h) "Committee" means the Compensation Committee of the Board
or the full Board, as determined by the Board.
(i) "Company" means Aspen Insurance Holdings Limited, a
Bermuda corporation.
(j) "Effective Date" means the date the Board approves the
Plan.
(k) "Employment" means (i) a Participant's employment if the
Participant is an employee of the Company or any of its
Affiliates and (ii) a Participant's services as an
non-employee director, if the Participant is a
non-employee member of the Board or the board of directors
of an Affiliate; provided, however, that unless otherwise
determined by the Committee, a change in a Participant's
status from employee to non-employee (other than a
director of the Company or an Affiliate) shall constitute
a termination of employment hereunder.
(l) "Fair Market Value" means, on a given date, (i) if there
is a public market for the Shares on such date, the
arithmetic mean of the high and low prices of the Shares
as reported on such date on the Composite Tape of the
principal national securities exchange on which such
Shares are listed or admitted to trading, or, if the
Shares are not listed or admitted on any national
securities exchange, the arithmetic mean of the per Share
closing bid price and per Share closing asked price on
such date as quoted on the National Association of
Securities Dealers Automated Quotation System (or such
market in which such prices are regularly quoted)(the
"NASDAQ"), or, if no sale of Shares shall have been
reported on the Composite Tape of any national securities
exchange or quoted on the NASDAQ on such date, then the
immediately preceding date on which sales of the Shares
have been so reported or quoted shall be used; provided
that, in connection with the grant of an Award on the date
of completion of an Initial Public Offering of the Shares,
the Fair Market Value on such date shall be the public
offering price, and (ii) if there is not a public market
for the Shares on such date, the Fair Market Value shall
be the value established by the Committee in good faith.
(m) "Group" means a "group", as such term is used for purposes
of Section 13(d)(3) or 14(d)(2) of the Act (or any
successor section thereto).
(n) "ISO" means an Option that is also an incentive stock
option granted pursuant to Section 6(d).
(o) "Initial Grant" has the meaning set forth in Section 3.
(p) "Initial Public Offering" means the initial public
offering by the Company of Shares pursuant to a
registration statement (other than a registration
statement on Form S-4 or Form S-8, or any other similar or
successor form) filed under the United States Securities
Act of 1933, as amended,
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and any successor thereto and declared effective by the
United States Securities and Exchange Commission.
(q) "Option" means a share option granted pursuant to Section
6.
(r) "Option Price" means the purchase price per Share of an
Option, as determined pursuant to Section 6(a).
(s) "Other Share-Based Awards" means awards granted pursuant
to Section 9.
(t) "Participant" means an employee or non-employee director
who is selected by the Committee to participate in the
Plan.
(u) "Person" means a "person", as such term is used for
purposes of Section 13(d) or 14(d) of the Act (or any
successor section thereto).
(v) "Plan" means the Aspen Insurance Holdings 2003 Share
Incentive Plan.
(w) "Restricted Shares" means any Share granted pursuant to
Section 8.
(x) "Shares" means ordinary shares, par value(pound)0.01 per
share, in the capital of the Company.
(y) "Share Appreciation Right" means a share appreciation
right granted pursuant to Section 7.
(z) "Subsidiary" means a subsidiary corporation, as defined in
Section 424(f) of the Code (or any successor section
thereto), of the Company.
3. SHARES SUBJECT TO THE PLAN
The total number of Shares that may be issued under the Plan
is 572,457. Awards to acquire 388,402 Shares will be granted promptly following
adoption of this Plan (the "Initial Grant"). The remaining 184,055 Shares may be
granted to new hires or as additional Awards, as and when determined in the sole
discretion of the Committee. The Shares may consist, in whole or in part, of
unissued Shares or previously issued Shares. The issuance of Shares or the
payment of cash upon the exercise of an Award or in consideration of the
cancellation or termination of an Award shall reduce the total number of Shares
available under the Plan, as applicable. Shares that are subject to Awards (or
portions thereof) that are forfeited, are cancelled, expire, terminate or lapse
without the payment of consideration may be granted again under the Plan.
4. ADMINISTRATION
(a) The Plan shall be administered by the Committee, which may
delegate its duties and powers in whole or in part to any
subcommittee thereof consisting solely of at least two
individuals who, during any period the Company is subject
to Section 16 of the Act, are intended to qualify as
"Non-Employee Directors" within the meaning of Rule 16b-3
under the
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Act (or any successor rule thereto) and, to the extent
required by Section 162(m) of the Code (or any successor
section thereto), "outside directors" within the meaning
thereof.
(b) The Committee shall have the full power and authority to
make, and establish the terms and conditions of, any Award
to any person eligible to be a Participant, consistent
with the provisions of the Plan and to waive any such
terms and conditions at any time (including, without
limitation, accelerating or waiving any vesting
conditions). Subject to Section 5(b), Awards may, in the
discretion of the Committee, be made under the Plan in
assumption of, or in substitution for, outstanding awards
previously granted by the Company or its Affiliates or a
company acquired by the Company or with which the Company
combines. The number of Shares underlying such substitute
awards shall be counted against the aggregate number of
Shares available for Awards under the Plan.
(c) The Committee is authorized to interpret the Plan, to
establish, amend and rescind any rules and regulations
relating to the Plan, and to make any other determinations
that it deems necessary or desirable for the
administration of the Plan, and may delegate such
authority, as it deems appropriate. The Committee may
correct any defect or supply any omission or reconcile any
inconsistency in the Plan in the manner and to the extent
the Committee deems necessary or desirable. Any decision
of the Committee in the interpretation and administration
of the Plan, as described herein, shall lie within its
sole and absolute discretion and shall be final,
conclusive and binding on all parties concerned
(including, but not limited to, Participants and their
beneficiaries or successors).
(d) The Committee shall require payment of any amount it may
determine to be necessary to withhold for federal, state,
local or other taxes as a result of the exercise, grant or
vesting of an Award. Unless the Committee specifies
otherwise, the Participant may elect to pay a portion or
all of such withholding taxes by (a) delivery in Shares or
(b) having Shares withheld by the Company with a Fair
Market Value equal to the minimum statutory withholding
rate from any Shares that would have otherwise been
received by the Participant.
5. LIMITATIONS
(a) No Award may be granted under the Plan after the tenth
anniversary of the Effective Date, but Awards theretofore
granted may extend beyond that date.
(b) Without the approval of the shareholders of the Company,
the Company shall not adjust an Option or Share
Appreciation Right or exchange an Option or Share
Appreciation Right with another Option or Share
Appreciation Right that would result in an Award with a
lower Option
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Price or exercise price (except for adjustments pursuant
to Section 10 of the Plan).
(c) Notwithstanding any provision of the Plan other than
Section 10, the number of Shares under the Plan that may
be issued in connection with grants of ISOs shall not
exceed 150,000 Shares.
6. TERMS AND CONDITIONS OF OPTIONS
Options granted under the Plan shall be, as determined by the
Committee, nonqualified or incentive stock options for federal income tax
purposes, as evidenced by the related Award agreements, and shall be subject to
the foregoing and the following terms and conditions and to such other terms and
conditions, not inconsistent therewith, as the Committee shall determine:
(a) Option Price. (i) Prior to the date of the Initial Public
Offering, the Option Price per Share shall be determined
by the Committee, and, in the case of ISOs, shall comply
with the requirements set forth in Section 6(d) of the
Plan, and (ii) after the date of the Initial Public
Offering, the Option Price per Share shall be determined
by the Committee, but shall not be less than 100% of the
Fair Market Value of the Shares on the date an Option is
granted.
(b) Exercisability. Options granted under the Plan shall be
exercisable at such time and upon such terms and
conditions as may be determined by the Committee, but in
no event shall an Option be exercisable more than ten
years after the date it is granted, except as may be
provided pursuant to Section 15.
(c) Exercise of Options. Except as otherwise provided in the
Plan or in an Award agreement, an Option may be exercised
for all, or from time to time any part, of the Shares for
which it is then exercisable. For purposes of this Section
6, the exercise date of an Option shall be the date a
notice of exercise is received by the Company, together
with payment (or to the extent permitted by applicable
law, provision for payment) of the full purchase price in
accordance with Section 6(c). The purchase price for the
Shares as to which an Option is exercised shall be paid to
the Company, as designated by the Committee, pursuant to
one or more of the following methods: (i) in cash or its
equivalent (e.g., by check); (ii) in Shares having a Fair
Market Value equal to the aggregate Option Price for the
Shares being purchased and satisfying such other
requirements as may be imposed by the Committee; provided,
that such Shares have been held by the Participant for no
less than six months, which period may be waived by the
Committee (or such other period as established from time
to time by the Committee in order to avoid adverse
accounting treatment applying generally accepted
accounting principles); (iii) partly in cash and partly in
such Shares; or (iv) if there is a public market for the
Shares at such time, through the delivery of irrevocable
instructions to a broker to sell Shares
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obtained upon the exercise of the Option and to deliver
promptly to the Company an amount out of the proceeds of
such Sale equal to the aggregate Option Price for the
Shares being purchased. No Participant shall have any
rights to dividends or other rights of a shareholder with
respect to Shares subject to an Option until the
Participant has given written notice of exercise of the
Option, paid in full for such Shares and, if applicable,
has satisfied any other conditions imposed by the
Committee pursuant to the Plan.
(d) ISOs. The Committee may grant Options under the Plan to
Participants who are employees of the Company that are
intended to be ISOs. Such ISOs shall comply with the
requirements of Section 422 of the Code (or any successor
section thereto), including without limitation that the
Option Price shall not be less than 100% of the Fair
Market Value of the Shares on the date the ISO is granted.
No ISO may be granted to any Participant who at the time
of such grant, owns more than ten percent of the total
combined voting power of all classes of shares of the
Company or of any Subsidiary, unless (i) the Option Price
for such ISO is at least 110% of the Fair Market Value of
a Share on the date the ISO is granted and (ii) the date
on which such ISO terminates is a date not later than the
day preceding the fifth anniversary of the date on which
the ISO is granted. Any Participant who disposes of Shares
acquired upon the exercise of an ISO either (i) within two
years after the date of grant of such ISO or (ii) within
one year after the transfer of such Shares to the
Participant, shall notify the Company of such disposition
and of the amount realized upon such disposition. All
Options granted under the Plan are intended to be
nonqualified share options, unless the applicable Award
agreement expressly states that the Option is intended to
be an ISO. If an Option is intended to be an ISO, and if
for any reason such Option (or portion thereof) shall not
qualify as an ISO, then, to the extent of such
nonqualification, such Option (or portion thereof) shall
be regarded as a nonqualified share option granted under
the Plan; provided that such Option (or portion thereof)
otherwise complies with the Plan's requirements relating
to nonqualified share options. In no event shall any
member of the Committee, the Company or any of its
Affiliates (or their respective employees, officers or
directors) have any liability to any Participant (or any
other Person) due to the failure of an Option to qualify
for any reason as an ISO.
(e) Attestation. Wherever in this Plan or any agreement
evidencing an Award a Participant is permitted to pay the
exercise price of an Option or taxes relating to the
exercise of an Option by delivering Shares, the
Participant may, subject to procedures satisfactory to the
Committee, satisfy such delivery requirement by presenting
proof of beneficial ownership of such Shares, in which
case the Company shall treat the Option as exercised
without further payment and/or shall withhold such number
of Shares from the Shares acquired by the exercise of the
Option, as appropriate.
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7. TERMS AND CONDITIONS OF SHARE APPRECIATION RIGHTS
(a) Grants. The Committee may grant (i) a Share Appreciation
Right independent of an Option or (ii) a Share
Appreciation Right in connection with an Option, or a
portion thereof. A Share Appreciation Right granted
pursuant to clause (ii) of the preceding sentence (A) may
be granted at the time the related Option is granted or at
any time prior to the exercise or cancellation of the
related Option, (B) shall cover the same number of Shares
covered by an Option (or such lesser number of Shares as
the Committee may determine) and (C) shall be subject to
the same terms and conditions as such Option except for
such additional limitations as are contemplated by this
Section 7 (or such additional limitations as may be
included in an Award agreement).
(b) Terms. The exercise price per Share of a Share
Appreciation Right shall be an amount determined by the
Committee but in no event shall such amount be less than
the Fair Market Value of a Share on the date the Share
Appreciation Right is granted, except that,
notwithstanding the foregoing, in the case of a Share
Appreciation Right granted in conjunction with an Option,
or a portion thereof, the exercise price may not be less
than the Option Price of the related Option. Each Share
Appreciation Right granted independent of an Option shall
entitle a Participant upon exercise to an amount equal to
(i) the excess of (A) the Fair Market Value on the
exercise date of one Share over (B) the exercise price per
Share, times (ii) the number of Shares covered by the
Share Appreciation Right. Each Share Appreciation Right
granted in conjunction with an Option, or a portion
thereof, shall entitle a Participant to surrender to the
Company the unexercised Option, or any portion thereof,
and to receive from the Company in exchange therefor an
amount equal to (i) the excess of (A) the Fair Market
Value on the exercise date of one Share over (B) the
Option Price per Share, times (ii) the number of Shares
covered by the Option, or portion thereof, which is
surrendered. Payment shall be made in Shares or in cash,
or partly in Shares and partly in cash (any such Shares
valued at such Fair Market Value), all as shall be
determined by the Committee. Share Appreciation Rights may
be exercised from time to time upon actual receipt by the
Company of written notice of exercise stating the number
of Shares with respect to which the Share Appreciation
Right is being exercised. The date a notice of exercised
is received by the Company shall be the exercise date. No
fractional Shares will be issued in payment for Share
Appreciation Rights, but instead cash will be paid for a
fraction or, if the Committee should so determine, the
number of Shares will be rounded downward to the next
whole Share.
(c) Limitations. The Committee may impose, in its discretion,
such conditions upon the exercisability or transferability
of Share Appreciation Rights as it may deem fit.
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8. RESTRICTED SHARES
(a) Grant. Subject to the provisions of the Plan, the
Committee shall determine the number of Restricted Shares
to be granted to each Participant, the duration of the
period during which, and the conditions, if any, under
which, the Restricted Shares may be forfeited to the
Company, and the other terms and conditions of such
Awards.
(b) Transfer Restrictions. Restricted Shares may not be sold,
assigned, transferred, pledged or otherwise encumbered,
except as provided in the Plan or the applicable Award
agreement. Certificates issued in respect of Restricted
Shares shall be registered in the name of the Participant
and deposited by such Participant, together with a stock
power endorsed in blank, with the Company. After the lapse
of the restrictions applicable to such Restricted Shares,
the Company shall deliver such certificates to the
Participant or the Participant's legal representative.
(c) Dividends. Dividends paid on any Restricted Shares may be
paid directly to the Participant, withheld by the Company
subject to vesting of the Restricted Shares pursuant to
the terms of the applicable Award agreement, or may be
reinvested in additional Restricted Shares, as determined
by the Committee in its sole discretion.
9. OTHER SHARE-BASED AWARDS
(a) Generally. The Committee, in its sole discretion, may
grant or sell Awards of Shares and Awards that are valued
in whole or in part by reference to, or are otherwise
based on the Fair Market Value of, Shares ("Other
Share-Based Awards"). Such Other Share-Based Awards shall
be in such form, and dependent on such conditions, as the
Committee shall determine, including, without limitation,
the right to receive, or vest with respect to, one or more
Shares (or the equivalent cash value of such Shares) upon
the completion of a specified period of service, the
occurrence of an event and/or the attainment of
performance objectives. Other Share-Based Awards may be
granted alone or in addition to any other Awards granted
under the Plan. Subject to the provisions of the Plan, the
Committee shall determine the number of Shares to be
awarded under (or otherwise related to) such Other
Share-Based Awards; whether such Other Share-Based Awards
shall be settled in cash, Shares or a combination of cash
and Shares; and all other terms and conditions of such
Awards (including, without limitation, the vesting
provisions thereof and provisions ensuring that all Shares
so awarded and issued shall be fully paid and
non-assessable).
10. ADJUSTMENTS UPON CERTAIN EVENTS
Notwithstanding any other provisions in the Plan to the
contrary, the following provisions shall apply to all Awards granted under the
Plan:
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(a) Generally. In the event of any change in the outstanding
Shares after the Effective Date by reason of any Share
dividend or split, reorganization, recapitalization,
merger, consolidation, spin-off, combination, combination
or transaction or exchange of Shares or other corporate
exchange, or any distribution to shareholders of Shares
other than regular cash dividends or any transaction
similar to the foregoing, the Committee in its sole
discretion and without liability to any person shall make
such substitutions or adjustments as it deems to be
equitable, in its sole discretion, and necessary to
preserve the benefits or potential benefits intended to be
made available under this Plan as to (i) the number or
kind of Shares or other securities issued or reserved for
issuance pursuant to the Plan or pursuant to outstanding
Awards, (ii) the maximum number of Shares for which Awards
(including limits established for Restricted Shares or
Performance-Based Awards) may be granted during a calendar
year to any Participant, (iii) the Option Price or
exercise price of any Share Appreciation Right, and/or
(iv) any other affected terms of such Awards.
(b) Change in Control.
(i) In the event of a Change in Control after the
Effective Date, solely with respect to the Initial Grant,
without any action required, with respect to Awards
outstanding as of the date of such Change in Control (x)
all Options and Share Appreciation Rights shall become
fully and immediately exercisable and vested to the full
extent of the original grant, (y) the restrictions
applicable to any Restricted Shares shall lapse, and such
Restricted Shares shall become fully and immediately
vested, and (z) the restrictions and other conditions
applicable to any Other Share-Based Award shall lapse, and
such Other Share-Based Award shall become free of all
restrictions, limitations and conditions or, if
applicable, shall be considered earned and payable in full
and immediately settled or distributed.
(ii) In the event of a Change in Control after the
Effective Date, the Committee may, but shall not be
obligated to, (A) with respect to any Award other than the
Initial Grant, accelerate, vest or cause the restrictions
to lapse with respect to, all or any portion of an Award
or (B) cancel Awards for fair value (as reasonably
determined in the discretion of the Committee) which, in
the case of Options and Share Appreciation Rights, may
equal, but in any event shall not be less than, the
excess, if any, of value of the consideration to be paid
in the Change in Control transaction to holders of the
same number of Shares subject to such Options or Share
Appreciation Rights (or, if no consideration is paid in
any such transaction, the Fair Market Value of the Shares
subject to such Options or Share Appreciation Rights) over
the aggregate exercise price of such Options or Share
Appreciation Rights or (C) provide for the issuance of
substitute Awards that will substantially preserve the
otherwise applicable terms of any affected Awards
previously granted hereunder as determined
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by the Committee in its sole discretion or (D) provide
that for a period of at least 15 days prior to the Change
in Control, such Options shall be exercisable as to all
Shares subject thereto and that upon the occurrence of the
Change in Control, such Options shall terminate and be of
no further force and effect.
11. NO RIGHT TO EMPLOYMENT OR AWARDS
The granting of an Award under the Plan shall impose no
obligation on the Company or any Affiliate to continue the Employment of a
Participant and shall not lessen or affect the Company's or Affiliate's right to
terminate the Employment of such Participant. No Participant or other Person
shall have any claim to be granted any Award, and there is no obligation for
uniformity of treatment of Participants, or holders or beneficiaries of Awards.
The terms and conditions of Awards and the Committee's determinations and
interpretations with respect thereto need not be the same with respect to each
Participant (whether or not such Participants are similarly situated).
12. SUCCESSORS AND ASSIGNS
The Plan shall be binding on all successors and assigns of the
Company and a Participant, including without limitation, the estate of such
Participant and the executor, administrator or trustee of such estate, or any
receiver or trustee in bankruptcy or representative of the Participant's
creditors.
13. NONTRANSFERABILITY OF AWARDS
Unless otherwise determined by the Committee, an Award shall
not be transferable or assignable by the Participant otherwise than by will or
by the laws of descent and distribution. An Award exercisable after the death of
a Participant may be exercised by the legatees, personal representatives or
distributees of the Participant.
14. AMENDMENTS OR TERMINATION
The Board or the Committee may amend, alter or discontinue the
Plan, but no amendment, alteration or discontinuation shall be made, (a) without
the approval of the shareholders of the Company, if such action would (except as
is provided in Section 10 of the Plan), increase the total number of Shares
reserved for the purposes of the Plan, (b) without the consent of a Participant,
if such action would diminish any of the rights of the Participant under any
Award theretofore granted to such Participant under the Plan or (c) without the
approval of the shareholders of the Company, to Section 5(b), relating to
repricing of Options or Share Appreciation Rights, to permit such repricing;
provided, however, that the Committee may amend the Plan in such manner as it
deems necessary to permit the granting of Awards meeting the requirements of the
Code or other applicable laws.
15. CONFLICTS OF LAW; INTERNATIONAL PARTICIPANTS
The Committee may, in its sole discretion, amend the terms of
the Plan or Awards in order (i) to comply with United States Federal law or the
rules of any securities exchange in
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the United States or (ii) with respect to Participants who reside or work
outside the United States of America, to conform such terms with the
requirements of local law or to obtain more favorable tax or other treatment for
a Participant, the Company or an Affiliate, and the Committee may, where
appropriate, establish one or more sub-plans to reflect such amended or varied
provisions.
16. OTHER BENEFIT PLANS
All Awards shall constitute a special incentive payment to the
Participant and shall not be taken into account in computing the amount of
salary or compensation of the Participant for the purpose of determining any
benefits under any pension, retirement, profit-sharing, bonus, life insurance or
other benefit plan of the Company or under any agreement between the Company and
the Participant, unless such plan or agreement specifically provides otherwise.
17. CHOICE OF LAW
The Plan shall be governed by and construed in accordance with
the laws of Bermuda, without regard to conflicts of laws principles.
18. ARBITRATION
In the event of any controversy between a Participant and the
Company arising out of, or relating to, this Plan or an Award granted hereunder
which cannot be settled amicably by the parties, such controversy shall be
finally, exclusively and conclusively settled by mandatory arbitration conducted
expeditiously in accordance with the American Arbitration Association rules, by
a single independent arbitrator. If the parties are unable to agree on the
selection of an arbitrator, then either the Participant or the Company may
petition the American Arbitration Association for the appointment of the
arbitrator, which appointment shall be made within ten (10) days of the petition
therefor. Either party to the dispute may institute such arbitration proceeding
by giving written notice to the other party. A hearing shall be held by the
arbitrator in New York, London or Bermuda as agreed by the parties (or, failing
such agreement, in Bermuda) within thirty (30) days of his or her appointment.
The decision of the arbitrator shall be final and binding upon the parties and
shall be rendered pursuant to a written decision that contains a detailed
recital of the arbitrator's reasoning. Judgment upon the award rendered may be
entered in any court having jurisdiction thereof.
19. EFFECTIVENESS OF THE PLAN
The Plan shall be effective as of the Effective Date, subject
to the approval of the shareholders of the Company.