Exhibit 10.1
ADT LIMITED 1993
LONG TERM INCENTIVE PLAN
(AS AMENDED ____________, 1997)
(TO BE KNOWN HEREAFTER AS THE
TYCO INTERNATIONAL LTD.
LONG TERM INCENTIVE PLAN)*
*In the event the merger described in the agreement dated March 17, 1997
among Tyco International Ltd., ADT Limited and Limited Apache, Inc., is not
consummated, the name of the plan will continue to be the ADT Limited 1993
Long Term Incentive Plan, and references in the Plan to Tyco International
Ltd. shall be disregarded or treated as references to ADT Limited, as
appropriate.
Section 1. Purpose.
The purposes of this Tyco International Ltd. Long Term Incentive Plan (the
"Plan") are to promote the interest of Tyco International Ltd. (together with
any successor thereto, the "Company") and its stockholders by (i) attracting
and retaining officers, key employees or directors of the Company and its
Subsidiaries (ii) motivating such employees or directors by means of
performance-related incentives to achieve longer-range performance goals, and
(iii) enabling such employees or directors to participate in the long-term
growth and financial success of the Company.
Section 2. Definitions.
As used in the Plan, the following terms shall have the meanings set forth
below:
"ADT Merger" means the merger described in the agreement dated March 17, 1997
among Tyco International Ltd., ADT Limited and Limited Apache, Inc.
"Award" shall mean any Option, Stock Appreciation Right, Performance Award,
Dividend Equivalent, or other Stock Based Award, including any Prior ADT
Option or Prior Tyco Option.
"Award Agreement" shall mean any written agreement, contract or other
instrument or document evidencing any Award, which may, but need not, be
executed or acknowledged by a Participant.
"Board" shall mean the Board of Directors of the Company.
"Code" shall mean the U.S. Internal Revenue Code of 1986, as amended from time
to time.
"Committee" shall mean the Board or a committee of the Board designated by the
Board to administer the Plan and composed of not less than the minimum number
of persons from time to time required by Rule 16b-3 or any applicable law,
each of whom, to the extent necessary to comply with Rule 16b-3 only, is a
"non-employee director" within the meaning of Rule 16b-3.
"Director" shall mean any member of the Board.
"Dividend Equivalent" shall mean any right granted under Section 6(a) of the
Plan.
"Employee" shall mean any officer or key employee of the Company or of any
Subsidiary, as determined by the Committee.
"Exchange Act" shall mean the U.S. Securities Exchange Act of 1934, as amended.
"Fair Market Value" shall mean, (A) with respect to any property other than
the Shares, the fair market value of such property determined by such methods
or procedures as shall be established from time to time by the Committee and
(B) with respect to the Shares, as of any date, (i) the last reported sales
price regular way on the New York Stock Exchange or, if not reported for the
New York Stock Exchange, on the Composite Tape, or, in case no such reported
sale takes place on such day, the average of the reported closing bid and asked
quotations on the New York Stock Exchange, (ii) if the Shares are not listed
on the New York Stock Exchange or no such quotations are available, the
closing price of the Shares as reported by the National Market System, or
similar organization, or if no such quotations are available, the average of
the high bid and low asked quotations in the over-the-counter market as
reported by the National Quotation Bureau Incorporated or similar
organization; or (iii) in the event that there shall be no public market for
the Shares, the fair market value of the Shares as determined (which
determination shall be conclusive) in good faith by the Committee, based upon
the value of the Company as a going concern, as if such Shares were publicly
owned stock, but without any discount with respect to minority ownership.
"Incentive Stock Option" shall mean an option granted under Section 6(a) of
the Plan that is intended to meet the requirements of Section 422 of the Code
or any successor provision thereto.
"Option" shall mean an option granted under Section 6(a) of the Plan.
"Other Stock-Based Award" shall mean any right granted under Section 6(e)
of the Plan.
"Participant" shall mean any Employee or Director granted an Award under the
Plan.
"Performance Award" shall mean any right granted under Section 6(d) of the
Plan.
"Person" shall mean any individual, corporation, partnership, association,
joint-stock company, trust, unincorporated organization, government or
political subdivision thereof or other entity.
"Prior ADT Option" shall mean any option granted under the ADT Senior
Executive Share Option Plan, the ADT US Stock Option Plan 1990, the ADT
International Executive Share Option Plan, or this Plan by ADT Limited or its
affiliate with respect to Prior ADT Shares.
"Prior ADT Shares" shall mean the common shares of ADT Limited prior to the
ADT Merger.
"Prior Tyco Option" shall mean any option granted with respect to Prior
Tyco Shares by Tyco International Ltd. to its employee, or assumed by
Tyco International Ltd., prior to the ADT Merger.
"Prior Tyco Shares" shall mean the common shares of Tyco International Ltd.
prior to the ADT Merger.
"Rule 16b-3" shall mean Rule 16b-3 promulgated by the SEC under the Exchange
Act or any successor rule or regulation thereto as in effect from time to time.
"SEC" shall mean the U.S. Securities and Exchange Commission, or any successor
thereto.
"Shares" shall mean the common shares of the Company, U.S. $0.20 par value,
and such other securities or property as may become subject to Awards pursuant
to an adjustment made under Section 4(b) of the Plan.*
"Stock Appreciation Right" shall mean any right granted under Section 6(b) of
the Plan.
"Subsidiary" shall mean a subsidiary company as defined by Section 86 of the
Companies Act 1981 of Bermuda (as amended).
*If the ADT Merger is not consummated, then "Shares" will mean common
shares of ADT, U.S.$0.10 par value.
Section 3. Administration.
The Plan shall be administered by the Committee. Subject to the terms of the
Plan and applicable law, and in addition to other express powers and
authorizations conferred on the Committee by the plan, the Committee shall
have full power and authority to (i) designate Participants; (ii) determine
the type or types of Awards to be granted to an eligible Employee or Director;
(iii) determine the number of Shares to be covered by, or with respect to
which payments, rights, or other matters are to be calculated in connection
with, Awards; (iv) determine the terms and conditions of any Award; (v)
determine whether, to what extent, and under what circumstances Awards may be
settled or exercised in cash, Shares, other securities, other Awards or other
property, or canceled, forfeited, or suspended and the method or methods by
which Awards may be settled, exercised, canceled, forfeited, or suspended,
(vi) determine whether, to what extent, and under what circumstances cash,
Shares, other securities, other Awards, other property and other amounts
payable with respect to an Award shall be deferred either automatically or at
the election of the holder thereof or of the Committee; (vii) interpret and
administer the Plan and any instrument or agreement relating to, or Award made
under, the Plan; (viii) establish, amend, suspend, or waive such rules and
regulations and appoint such agents as it shall deem appropriate for the
proper administration of the Plan. Unless otherwise expressly provided in the
Plan, all designations, determinations, interpretations, and other decisions
under or with respect to the Plan or any Award shall be within the sole
discretion of the Committee, may be made at any time and shall be final,
conclusive, and binding upon all Persons, including the Company, any
Subsidiary, any Participant, any holder or beneficiary of any Award, any
shareholder and any Employee.
Section 4. Shares Available for Awards.
(a) Shares Available
Subject to adjustment as provided in Section 4(b);
(i) Calculation of Number Shares Available.
The number of Shares with respect to which Awards may be granted
under the Plan shall be 22,000,000.(**) If, after the effective date
of the Plan, any Award is forfeited, or any Award otherwise
terminates or is canceled without the delivery of Shares or of other
consideration, then the Shares covered by such Award or to which such
Award relates, or the number of Shares otherwise counted against the
aggregate number of Shares with respect to which Awards may be
granted, to the extent of any such forfeiture, termination or
cancellation, shall again be, or shall become, Shares with respect to
which Awards may be granted.
(**)22,000,000 reflects the reverse stock split contemplated by the
ADT Merger. If the ADT Merger is not consummated, the number of
ADT common shares with respect to which Awards may be granted
under the Plan shall remain 17,000,000 (not adjusted for the
reverse stock split).
(ii) Accounting for Awards
For purposes of this Section 4:
(A) if an Award (other than a Dividend Equivalent) is related to or
payable in Shares, the number of Shares covered by such Award, or
to which such Award related, shall be counted on the date of
grant of such Award against the aggregate number of Shares with
respect to which Awards may be granted under the Plan; and
(B) Dividend Equivalents and Awards not related to or payable in
Shares shall be counted against the aggregate number of Shares
with respect to which Awards may be granted under the Plan in
such amount and at such time as the Committee shall determine
under procedures adopted by the Committee consistent with the
purposes of the Plan.
provided, that Awards that operate in tandem with (whether granted,
simultaneously with or at a different time from), or that are substituted
for, other Awards may be counted or not counted under procedures adopted by
the Committee in order to avoid double counting. Subject to the
requirements of applicable law, any Shares delivered by the Company, or any
Shares with respect to which Awards are made by the Company, or any Shares
with respect to which the Company becomes obligated to make Awards, through
the assumption of, or in substitution for, outstanding awards previously
granted by an acquired company, shall not be counted against the Shares
available for Awards under the Plan.
(iii) Sources of Shares Deliverable Under Awards
Any Shares delivered pursuant to an Award may consist, in whole or in
part, of authorized and unissued Shares or, to the extent permissible
under applicable law, of Shares acquired by any Subsidiary or any
Other Person designated by the Company.
(b) Adjustments
In the event that the Committee determines that any dividend or other
distribution (whether in the form of cash, Shares, other securities, or
other property), recapitalization, stock split, reverse stock split,
reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, or exchange of Shares or other rights to purchase Shares or
other securities of the Company, or other similar corporate transaction
or event affects the Shares such that any adjustment is determined by the
Committee to be appropriate in order to prevent dilution or enlargement
of the benefits or potential benefits intended to be made available
under the Plan, then the Committee shall, in such manner as it may deem
equitable, adjust any or all of (i) the number and type of Shares (or
other securities or property) with respect to which Awards may be
granted, (ii) the number and type of Shares (or other securities or
property subject to outstanding Awards), and (iii) the grant or exercise
price with respect to any Award or, if deemed appropriate, make
provision for a cash payment to the holder of an outstanding Award;
provided, in each case that with respect to Awards of Incentive Stock
Options no such adjustment shall be authorized to the extent that such
authority would cause the Plan to violate Section 422(b)(1) of the Code
or any successor provision thereto; and provided further, that the
number of Shares subject to any Award denominated in Shares shall always
be a whole number.
(c) Limitation
No Participant shall be granted Awards for more than 3,000,000 Shares in
1997 or any subsequent calendar year. For purposes of this limitation,
neither the modification of a Prior ADT Option pursuant to Section 7(a)
nor the replacement of a Prior Tyco Option pursuant to Section 7(b)
shall be treated as the grant of an Award.
Section 5. Eligibility.
Any Employee or Director shall be eligible to be designated a Participant.
Section 6. Awards.
(a) Options
The Committee is hereby authorized to grant to eligible Employees and
Directors an option to purchase Shares (an "Option") which shall (except
as otherwise provided in Section 7) contain the following terms and
conditions and such additional terms and conditions, which are not
inconsistent with the provisions of the Plan, as the Committee shall
determine.
(i) Exercise Price
The purchase price per Share under an Option shall be not less than
the Fair Market Value of a Share at the date of the grant, except
that if the Award requires the option to be paid for by the
Participant, or if any discount from such Fair Market Value is
expressly granted in lieu of a reasonable amount of salary or cash
bonus, the Committee may fix such purchase price at not less than 85%
of such Fair Market Value.
(ii) Time and Method of Exercise
The Committee shall determine the time or times at which an Option
may be exercised in whole or in part, and the method or methods by
which, and the form or forms (which may include, without limitation,
cash, Shares, outstanding Awards, other securities or other property,
or any combination thereof, having a Fair Market Value on the
exercise date equal to the relevant exercise price) in which, payment
of the exercise price with respect thereto may be deemed to have been
made.
(iii) Incentive Stock Options
The terms of any Incentive Stock Option granted under the Plan shall
comply in all respects with the provisions of Section 422 of the
Code, or any successor provisions, and any regulations promulgated
thereunder. The aggregate fair market value (determined on the date
an option is granted) of shares with respect to which Incentive Stock
Options become exercisable by any Employee in any year shall not
exceed $100,000.
(b) Stock Appreciation Rights
The Committee is hereby authorized to grant to eligible Employees and
Directors a "Stock Appreciation Right", which shall consist of a right
to receive the excess of (i) the Fair Market Value of one Share on the
date the right is exercised or, if the Committee shall so determine in
the case of any such right other than one related to any Incentive Stock
Option, at any time during a specified period before or after the date
of exercise over (ii) the xxxxx xxxxx (determined in the manner set forth
below) of the right. A Stock Appreciation Right may be granted in
tandem with an Option, in addition to an Option, or free standing and
unrelated to an Option.
(i) Xxxxx Xxxxx
The xxxxx xxxxx of a Stock Appreciation Right shall be not less than
the Fair Market Value of a Share at the date of the grant, except
that if the Award requires the SAR to be paid for by the Participant,
or if any discount from such Fair Market Value is expressly granted
in lieu of a reasonable amount of salary or cash bonus, the Committee
may fix such xxxxx xxxxx at not less than 85% of such Fair Market
Value.
(ii) Other Terms and Conditions
Subject to the terms of the Plan and any applicable Award Agreement,
the Committee shall determine, at or after the grant of a Stock
Appreciation Right, the term, methods of exercise, methods of
settlement, and any other terms and conditions of any Stock
Appreciation Right. Any such determination by the Committee may be
changed by the Committee from time to time and may govern the
exercise of Stock Appreciation Rights granted or exercised prior to
such determination as well as Stock Appreciation Rights granted or
exercised thereafter. The Committee may impose such conditions or
restrictions on the exercise of any Stock Appreciation Right as it
shall deem appropriate.
(c) Performance Awards
The Committee is hereby authorized to grant to eligible Employees and
Directors a "Performance Award"), which shall consist of a right, (i)
denominated or payable in cash, Shares, other securities or other
property (including without limitation, restricted securities), and (ii)
which shall confer on the holder thereof rights valued as determined by
the Committee and payable to, or exercisable by, such holder, in whole
or in part, upon the achievement of such performance goals during such
performance periods as the Committee shall establish. The criteria with
respect to which performance goals may be established are stock price,
market share, sales, earnings, earnings per share, earnings before
income tax, cash flow and return on equity.
(i) Terms and Conditions
Subject to the terms of the Plan and any applicable Award Agreement,
the Committee shall determine the performance goals to be achieved
during any performance period, the length of any performance period,
the amount of any Performance Award and the amount of any payment or
transfer to be made pursuant to any Performance Award.
(ii) Payment of Performance Awards
Performance Awards may be paid in a lump sum or in installments
following the close of the performance period or, in accordance with
procedures established by the Committee, on a deferred basis.
(d) Dividend Equivalents
The Committee is hereby authorized to grant to eligible Employees and
Directors a "Dividend Equivalent", which shall consist of a right
pursuant to which any such eligible Employee or Director shall be
entitled to receive payments equivalent to dividends with respect to a
number of Shares determined by the Committee, and the Committee may
provide that such amounts (if any) shall be deemed to have been
reinvested in additional Shares or otherwise reinvested. Subject to the
terms of the Plan and any applicable Award Agreement, such Awards may
have such terms and conditions as the Committee shall determine.
(e) Other Stock-Based Awards
The Committee is hereby authorized to grant to eligible Employees and
Directors an "Other Stock-Based Award", which shall consist of a right
(i) which is other than an Award or right described in Section 6(a),
(b), (c), or (d) above and (ii) which is denominated or payable in,
valued in whole or in part by reference to, or otherwise based on or
related to Shares (including, without limitation, securities convertible
into Shares), as are deemed by the Committee to be consistent with
the purposes of the Plan. Subject to the terms of the Plan and any
applicable Award Agreement, the Committee shall determine the terms
and conditions of any such Other Stock-Based Award, which conditions may
include satisfaction of performance goals relating to stock price,
market share, sales, earnings, earnings per share, earnings before
income tax, cash flow and return on equity.
(f) General
(i) Awards May be Granted Separately or Together
Awards may, in the discretion of the Committee, be granted either
alone or in addition to, in tandem with, or in substitution for any
other Award granted under the Plan or any award granted under any
other plan of the Company or any Subsidiary. Awards granted in
addition to or in tandem with other Awards or awards granted under
any other plan of the Company or any Subsidiary may be granted either
at the same time as or at a different time from the grant of such
other Awards or awards.
(ii) Forms of Payment by Company Under Awards
Subject to the terms of the Plan and of any applicable Award
Agreement and the requirements of applicable law, payments or
transfers to be made by the Company or a Subsidiary upon the grant,
exercise or payment of an Award may be made in such form or forms as
the Committee shall determine, including, without limitation, cash,
Shares, other securities, other Awards or other property, or any
combination thereof, and may be made in a single payment or transfer,
in installments, or on a deferred basis, in each case in accordance
with rules and procedures established by the Committee. Such rules
and procedures may include, without limitation, provisions for the
payment or crediting of reasonable interest on installment or deferred
payments or the grant or crediting of Dividend Equivalents in respect
of installment or deferred payments denominated in Shares.
(iii) Limits on Transfer of Awards
Subject to paragraph (ix) below:
(A) Each Award, and each right under any Award, shall be exercisable
only by the Participant during the Participant's lifetime, or, if
permissible under applicable law, by the Participant's guardian
or legal representative or by a transferee receiving such Award
pursuant to a qualified domestic relations order (a "QDRO") as
defined in the Code or Title I of the U.S. Employee Retirement
Income Security Act of 1974 ("ERISA"), or the rules thereunder.
(B) No Award (prior to the time, if applicable, Shares are issued
in respect of such Award), and no right under any such Award,
may be assigned, alienated, pledged, attached, sold or
otherwise transferred or encumbered by a Participant otherwise
than by will or by the laws of descent and distribution (or,
in the case of restricted securities, to the Company) or
pursuant to a QDRO, and any such purported assignment,
alienation, pledge, attachment, sale, transfer or encumbrance
shall be void and unenforceable against the Company or any
Subsidiary; provided, that the designation of a beneficiary
shall not constitute an assignment, alienation, pledge,
attachment, sale, transfer or encumbrance.
(iv) Terms of Awards
The term of each Award shall be for such period as may be determined
by the Committee; provided, that in no event shall the term of any
Incentive Stock Option exceed a period of ten years from the date of
its grant.
(v) Rule 16b-3 Six-Month Limitations
To the extent required in order to comply with Rule 16b-3 only, any
equity security offered pursuant to the Plan must be held for at
least six months after the date of grant, and with respect to any
derivative security issued pursuant to the Plan at least six months
must elapse from the date of acquisition of such derivative security
to the date of disposition (other than upon exercise or conversion)
of the derivative security or its underlying equity security after
the grant thereof. Terms used in the preceding sentence shall, for
the purposes of such sentence only, have the meanings, if any,
assigned to them under Rule 16b-3.
(vi) Share Certificates
All certificates for Shares or other securities of the Company or any
Subsidiary delivered under the Plan pursuant to any Award or the
exercise thereof shall be subject to such stop transfer orders and
other restrictions as the Committee may deem advisable under the Plan
or the rules, regulations, and other requirements of the U.S.
Securities and Exchange Commission, any stock exchange upon which
such Shares or other securities are then listed, and any applicable
laws, and the Committee may cause a legend or legends to be put on
any such certificates to make appropriate reference to such
restrictions. Notwithstanding the foregoing, no action shall be
taken by the Committee which would, under the laws of Bermuda, cause
a separate class of securities other than Shares to be created and
the Committee shall consult with appropriate legal counsel in this
regard.
(vii) Consideration for Grants
Awards, may be granted for no cash consideration, for such nominal
cash consideration as may be required by applicable law or for such
greater amount as may be established by the Committee.
(viii) Delivery of Shares or Other Securities and Payment by Participant
of Consideration
No Shares or other securities shall be delivered pursuant to any
Award until payment in full of any amount required to be paid
pursuant to the Plan or the applicable Award Agreement is received by
the Company. Such payment may be made by such method or methods and
in such form or forms as the Committee shall determine, including,
without limitation, cash, Shares, other securities, other Awards or
other property, or any combination thereof, provided that the
combined value, as determined by the Committee, of all cash and cash
equivalent and the Fair Market Value of any such Shares or other
property so tendered to the Company, as of the date of such tender,
is at least equal to the full amount required to be paid pursuant to
the Plan or the applicable Award Agreement to the Company.
(ix) Committee Discretion to Remove or Amend Restrictions on
Transferability
Notwithstanding the provisions of paragraph (iii) above and any other
restrictions on transferability of Awards referred to in this Plan,
the Committee may, in its discretion, either generally or
specifically, prospectively or retroactively, (a) grant Awards
without limits on transferability thereof or with such limits on
transferability as the Committee may deem appropriate in the
circumstances, and (b) waive, amend, alter, suspend, discontinue,
cancel or terminate any limits on transferability of Awards on such
terms as the Committee may deem appropriate; provided, that any of
the acts described in clause (b) of this paragraph that would impair
the rights of any Participant, or any holder or any beneficiary of
any Award theretofore granted, shall not to that extent be effective
without the consent of the affected Participant, holder or
beneficiary.
Section 7. Modification and Replacement of Outstanding Options. (*)
(*)In the event the ADT Merger is not consummated, only clause (c) of Section
7 shall be applicable.
(a) Modification of Prior ADT Options
Each Prior ADT Option outstanding as of the effective date of the ADT
Merger shall be modified, as of that date, as follows:
(i) Shares to Which Option Relates.
Each Prior ADT Option shall entitle the recipient to purchase a
number of Shares equal to the product of .48133 and the number of
Prior ADT Shares to which such Prior ADT Option originally related.
(ii) Exercise Price.
The exercise price of each Prior ADT Option shall be equal to the
original exercise price of such Prior ADT Option, divided by .48133.
Each Prior ADT Option shall continue to have the same term, and shall
otherwise continue to be subject to all of the other terms and
conditions, as applied to such option prior to the ADT Merger. In the
event of a conflict between the terms of this Plan and the terms of the
award agreement by which a Prior ADT Option was originally granted, the
terms of the award agreement shall govern.
(b) Replacement of Prior Tyco Options
In addition to any other Awards that may be granted under the Plan,
Options ("Substitute Options") shall be granted hereunder in replacement
of all outstanding Prior Tyco Options, as of the effective date of the
ADT Merger. The number of Shares subject to each Substitute Option
issued in respect of a Prior Tyco Option shall be the same as the number
of Prior Tyco Shares to which such Prior Tyco Option related, and the
exercise price of such Substitute Option shall be the same as the
exercise price of such Prior Tyco Option. Each Substitute Option shall
have the same term as the original option in respect of which it is
granted, and shall otherwise be subject to all of the other terms and
conditions as applied to such original option. Except to the extent
required to reflect the ADT Merger, in the event of a conflict
between the terms of this Plan and the terms of the award agreement
by which a Prior Tyco Option was originally granted, the terms of the
award agreement shall govern.
(c) All Prior ADT Options Subject to Plan.
From and after the date of this Amendment each outstanding Prior ADT
Option will be subject to the terms of this Plan and the award
agreement with respect to such Option.
Section 8. Amendment and Termination.
Except to the extent prohibited by applicable law and unless otherwise
expressly provided in an Award Agreement or in the Plan:
(a) Amendments to the Plan
The Board may amend, alter, suspend, discontinue, or terminate the Plan
without the consent of any shareholder, Participant, other holder or
beneficiary of an Award, or other Person; provided that any such
amendment, alteration, suspension, discontinuation, or termination that
would impair the rights of any Participant, or any other holder or
beneficiary of any Award theretofore granted, shall not to that extent
be effective without the consent of the affected Participant, holder or
beneficiary and provided further, that notwithstanding any other
provision of the Plan or any Award Agreement, without the approval of
the shareholders of the Company no such amendment, alteration,
suspension, discontinuation, or termination shall be made that would:
(i) increase the total number of Shares available for Awards under the
Plan, except as provided in Section 4 of the Plan; or
(ii) otherwise cause the Plan to cease to comply with any applicable law
or regulatory requirement with respect to which the Board determines
compliance is necessary or desirable.
(b) Amendments to Awards
The Committee may waive any conditions or rights under, amend any terms
of, or alter, suspend, discontinue, cancel or terminate, any Award
theretofore granted, prospectively or retroactively, without the consent
of any relevant Participant or holder or beneficiary of an Award;
provided that, subject to the Committee's right to adjust Awards
pursuant to Section 6(f)(ix) and Section 8(c) and (d), (i) any such
waiver, amendment, alteration, suspension, discontinuance, cancellation
or termination that would materially impair the rights of any
Participant, or any holder or beneficiary of any Award theretofore
granted shall not to that extent be effective without the consent of the
affected Participant, holder or beneficiary; and (ii) without the
approval of the shareholders of the Company, no such waiver, amendment,
alteration, suspension, discontinuance, cancellation or termination that
would materially increase the rights of any Participant or any holder or
beneficiary of any Award, shall be effective unless the Award, after
giving effect to such waiver, amendment, alteration, suspension,
discontinuance, cancellation or termination, could permissibly have been
granted under the terms of the Plan (without regard to this Section
8(b)).
(c) Adjustments of Awards Upon Certain Acquisitions
In the event the Company or any Subsidiary shall assume outstanding
employee awards or the right or obligation to make future employee
awards in connection with the acquisition of another business or another
corporation or business entity, the Committee may make such adjustments,
not inconsistent with the terms of the Plan, in the terms of Awards as
it shall deem appropriate in order to achieve reasonable comparability,
or other equitable relationship between the assumed awards and the Awards
as so adjusted.
(d) Adjustment of Awards Upon the occurrence of Certain Unusual or
Nonrecurring Events
The Committee is hereby authorized to make adjustments in the terms and
conditions of and the criteria included in, Awards in recognition of
unusual or nonrecurring events (including, without limitation, the
events described in Section 4(b) hereof) affecting the Company, any
Subsidiary, or the financial statements of the Company or any
Subsidiary, or of changes in applicable laws, regulations, or accounting
principles, whenever the Committee determines that such adjustments are
appropriate in order to prevent dilution or enlargement of the benefits
or potential benefits intended to be made available under the Plan, or
to be derived by the Company.
Section 9. Change in Control.
(a) In addition to the Committee's authority set forth in Section 8(d), in
order to maintain the Participants' rights in the event of any Change
in Control, as hereinafter defined, the Committee, as constituted
before such Change in Control, is hereby authorized, and has sole
discretion, as to any Award, either at the time such Award is made
hereunder or any time thereafter, to take any one or more of the
following actions: (i) provide for the acceleration of any time periods
relating to the exercise or realization of such Award so that such
Award may be exercised or realized in full on or before a date fixed by
the Committee; (ii) provide for the purchase of any such Award, upon the
Participant's request, for an amount of cash equal to the amount that
could have been attained upon the exercise of such Award or realization
of the Participant's rights had such Award been currently exercisable
or payable; (iii) make such adjustment to any such Award then
outstanding as the Committee deems appropriate to reflect such Change
in Control; or (iv) cause any such Award then outstanding to be
assumed, or new rights substituted therefor, by the acquiring or
surviving corporation after such Change in Control. The Committee may,
in its discretion, include such further provisions and limitations in
any Award Agreement as it may deem equitable and in the best interests
of the Company.
(b) A "Change in Control" shall mean the occurrence of any of the following
events:
(i) any "person" or "group" (as defined under Sections 13(d) and
14(d) of the Securities Exchange Act of 1934 (the "Exchange
Act")) is or becomes the direct or indirect "beneficial owner"
(as defined in Rules 13d-3 and 13d-5 under the Exchange Act), of
securities representing 50% or more of the combined voting power
of the Company's then outstanding voting securities;
(ii) individuals who either:
(A) are Directors of the Company at [DATE OF ADOPTION OF AMENDED
PLAN] or subsequently are appointed as Directors of the Company by, or on
the recommendation of, a majority of the Directors in office at [DATE OF
ADOPTION OF AMENDED PLAN]; or
(B) are subsequently appointed as Directors of the Company by, or
on the recommendation of, a majority of those Directors of the Company
referred to in paragraph (A) above,
cease for any reason, other than death or incapacity of a Director or
his retirement at a general meeting of the Company at which he is
re-elected as a Director (but including as a result of any proxy contest
involving the solicitation of revocable proxies under Section 14(a) of the
Exchange Act), to constitute a majority of the Board of Directors of the
Company;
(iii) any "person" or "group" (other than an employee benefit plan or
plans maintained by the Company or its affiliate) comes to possess, directly
or indirectly, the legal right to direct the management and policies of the
Company, whether through the ownership of securities, by contract or otherwise
(other than solely by virtue of membership on the Board of Directors of the
Company or any committee thereof);
(iv) the Company effects a merger, amalgamation, scheme of arrangement or
other combination in which the Company is not the surviving entity, or a sale
or disposition of all, or substantially all, of the assets of the Company; or
(v) a merger, amalgamation, scheme of arrangement or other combination
of the Company or any Subsidiary of the Company with or into another person or
any analogous or similar transaction or event occurs as a result of which the
voting rights exercisable at general meetings of the Company in respect of the
shares of the Company in issue immediately prior to the relevant event no
longer represent a majority of all the voting rights normally exercisable at
general meetings of the Company in respect of the shares of the Company in
issue immediately after such event.
Section 10. General Provisions.
(a) No Rights to Awards
No Employee, Director, Participant or other Person shall have any claim
to be granted any Award, and there is no obligation for uniformity of
treatment of Employees, Directors, Participants, or holders or
beneficiaries of Awards. The terms and conditions of Awards need not be
the same with respect to each recipient. No Participant shall have the
rights of a shareholder with respect to any Award unless and until
Shares have been issued in respect of such Award.
(b) Delegation
Subject to the terms of the Plan and applicable law, the Committee may
delegate to one or more officers or managers of the Company or any
Subsidiary, or to a committee of such officers or managers, the
authority, subject to the terms and limitations as the Committee shall
determine, to grant Awards to, or to cancel, modify or waive rights with
respect to, or to alter, discontinue, suspend, or terminate Awards held
by, Employees who are not officers or directors of the Company for
purposes of Section 16 of the Exchange Act, or any successor section
thereto, or who are otherwise not subject to such Section.
(c) Withholding
The Company or any Subsidiary is hereby authorized to withhold from any
Award, from any payment due or transfer made under any Award or under
the Plan or from any compensation or other amount owing to a Participant
the amount (in cash, Shares, other securities, other Awards or other
property) of any applicable withholding taxes in respect of an Award,
its exercise, or any payment or transfer under an Award or under the
Plan and to take such other action as may be necessary in the opinion of
the Company to satisfy all obligations for the payment of such taxes.
(d) No Limit on Other Compensation Arrangements
Nothing contained in the Plan shall prevent the Company or any
Subsidiary from adopting or continuing in effect other compensation
arrangements (subject to shareholder approval if such approval is
required), and such arrangements may be either generally applicable or
applicable only in specific cases.
(e) No Right to Employment
The grant of an Award shall not be construed as giving a Participant the
right to be retained in the employ of the Company or any Subsidiary.
Further, the Company or a Subsidiary may at any time dismiss a
Participant from employment, free from any liability or any claim under
the Plan, unless otherwise expressly provided in the Plan or in any
Award Agreement.
(f) Governing Law
The validity, construction, and effect of the Plan and any rules and
regulations relating to the Plan shall be determined in accordance with
the laws of Bermuda. In addition, the Committee may amend the terms of
the Plan and any Awards or Award Agreement in order to comply with the
laws of Bermuda or the laws of any other applicable jurisdiction.
(g) Severability
If any provision of the Plan or any Award is or becomes or is deemed to
be invalid, illegal, or unenforceable in any jurisdiction or as to any
Person or Award, or would disqualify the Plan or any Award under any law
deemed applicable by the Committee, such provision shall be construed or
deemed amended to conform to applicable laws, or if it cannot be
construed or deemed amended without, in the determination of the
Committee, materially altering the intent of the Plan of the Award, such
provision shall be stricken as to such jurisdiction, Person or Award and
the remainder of the Plan and any such Award shall remain in full force
and effect.
(h) Additional Powers
The Committee may refuse to issue or transfer any Shares or other
consideration under an Award if, acting in its sole discretion, it
determines that the issuance or transfer of such Shares or such other
consideration might violate any applicable law or regulation or entitle
the Company to recover the same under Section 16(b) of the Exchange Act,
and any payment tendered to the Company by a Participant, other holder
or beneficiary in connection with the exercise of such Award shall be
promptly refunded to the relevant Participant, holder or beneficiary.
(i) No Trust or Fund Created
Neither the Plan nor any Award shall create or be construed to create a
trust or separate fund of any kind or a fiduciary relationship between
the Company or any Subsidiary and a Participant or any other Person. To
the extent that any Person acquires a right to receive payments from the
Company or any Subsidiary pursuant to an Award, such right shall be no
greater than the right of any unsecured general creditor of the Company
or any Subsidiary.
(j) No Fractional Shares
No fractional Shares shall be issued or delivered pursuant to the Plan
or any Award, and the Committee shall determine whether cash, other
securities, or other property shall be paid or transferred in lieu of
any fractional Shares or whether such fractional Shares or any rights
thereto shall be canceled, terminated or otherwise eliminated.
(k) Headings
Headings are given to the Sections and subsections of the Plan solely as
a convenience to facilitate reference. Such headings shall not be
deemed in any way material or relevant to the construction or
interpretation of the Plan or any provision thereof.
Section 11. Effective Date of the Plan.
This amended Plan shall be effective as of the date of its approval, as
amended, by the shareholders of the Company.
Section 12. Term of the Plan.
No Award shall be granted under the Plan after June 30, 2007. However, unless
otherwise expressly provided in the Plan or in an applicable Award Agreement,
any Award theretofore granted may, and the authority of the Board or the
Committee to amend, alter, adjust, suspend, discontinue, or terminate any such
Award or to waive any conditions or rights under any such Award, shall extend
beyond such date.
