Exhibit 10.3

 

WILLIS GROUP HOLDINGS LIMITED

2008 SHARE PURCHASE AND OPTION PLAN

 

1.             Purpose of Plan

 

The Willis Group Holdings Limited (“Holdings”) 2008 Share Purchase and Option
Plan (the “Plan”) is designed:

 

(a)           to promote the long term financial interests and growth of
Holdings and its Subsidiaries (collectively, “Willis Group”) by attracting and
retaining personnel with the training, experience and ability to enable them to
make a substantial contribution to the success of Willis Group’s business;

 

(b)           to motivate management personnel by means of growth-related
incentives to achieve long range goals; and

 

(c)           to further the identity of interests of participants with those of
the shareholders of Willis Group through opportunities for increased stock, or
stock- based, ownership in Willis Group.

 

2.             Definitions

 

As used in the Plan, the following words shall have the following meanings:

 

(a)           “2001 Plan” means the Amended and Restated Willis Group Holdings
Limited 2001 Share Purchase and Option Plan.

 

(b)           “Board of Directors” means the Board of Directors of Holdings.

 

(c)           “Change of Control” means (a) the acquisition of ownership,
directly or indirectly, beneficially or of record, by any Person or group
(within the meaning of the Securities Exchange Act of 1934 and the rules of the
Securities and Exchange Commission thereunder as in effect on the date hereof)
of the common shares of Holdings representing more than 50% of the aggregate
voting power represented by the issued and outstanding common shares of
Holdings; (b) occupation of a majority of the seats (other than vacant seats) on
the board of directors of Holdings by Persons who were neither (i) nominated by
Holdings’ board of directors nor (ii) appointed by directors so nominated.”

 

(d)           “Code” means the Internal Revenue Code of 1986 of the United
States of America, as amended from time to time.

 

(e)           “Committee” means the Compensation Committee of the Board of
Directors (or, if no such committee is appointed, the Board of Directors
provided that a majority of the Board of Directors are “independent directors”
for the purpose of the rules and regulations of the New York Stock Exchange).

 

(f)            “Common Shares” or “Share” means common shares of Willis Group,
which may be authorized but unissued.

 

(g)           “Designated Associate Company” means any company in which Willis
Group owns twenty percent or more of the voting share interest but less than
fifty percent of the voting share interest and that has been designated by the
Board of Directors as being eligible for participation in the Plan.

 

(h)           “Director” means any member of the Board of Directors.

 

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(i)            “Dividend Equivalents” means an entitlement to receive, in such
form and on such terms as the Committee may determine, the value of a dividend
or distribution paid by Holdings on one of its Shares in accordance with its
Bye-Laws that would be payable on the number of Shares subject to a Grant.

 

(j)            “Employee” means a person, including a Director and an officer,
in the employment of Willis Group or a Designated Associate Company.

 

(k)           “Fair Market Value” means, with respect to any property other than
Shares, the market value of such property determined by such methods or
procedures as shall be established from time to time by the Committee. The Fair
Market Value of Shares as of any date shall be the per Share closing price of
the Shares as reported on the New York Stock Exchange on that date (or if there
were no reported prices on such date, on the last preceding date on which the
prices were reported) or, if Holdings is not then listed on the New York Stock
Exchange, on such other principal securities exchange on which the Shares are
traded, and if Holdings is not listed on the New York Stock Exchange or any
other securities exchange, the Fair Market Value of Shares shall be determined
by the Committee in its sole discretion using appropriate criteria which, with
respect to Grants to US Participants, shall comply with Section 15 and shall be
determined pursuant to a reasonable valuation method as set forth in
Section 409A of the Code.

 

(l)            “Grant” means an award made to a Participant pursuant to the Plan
and described in Section 6, including, without limitation, an award of a Share
Option, Restricted Stock, Restricted Stock Unit, Purchase Shares, Other
Share-Based Grant, or any combination of the foregoing.

 

(m)          “Grant Agreement” means an agreement between Holdings and a
Participant that sets forth the terms, conditions and limitations applicable to
a Grant.

 

(n)           “Participant” means an Employee or Director of any member of
Willis Group or a Designated Associate Company, to whom one or more Grants have
been made, and such Grants have not all expired or been forfeited or terminated
under the Plan.

 

(o)           “Person” means “person” as such term is used in Sections 13(d) and
14(d) of the Exchange Act.

 

(p)           “Share-Based Grants” means the collective reference to the grant
of Purchase Shares, Restricted Stock, Restricted Stock Units and Other
Share-Based Grants.

 

(q)           “Share Options” means options to purchase Common Shares, which may
or may not be incentive stock options within the meaning of Section 422 of the
Code (“Incentive Stock Options”).

 

(r)            “Subsidiary” means a “subsidiary”, as such term is defined in
Section 86 of the Bermudan Companies Act 1981.

 

(s)           “Substitute Awards” shall mean a Grant or Shares issued by the
Company in assumption of, or in substitution or exchange for, awards previously
granted, or the right or obligation to make future awards, in each case by a
company acquired by the Company or any Subsidiary or with which the Company or
any Subsidiary combines.

 

3.             Administration of Plan

 

(a)           The Plan shall be administered by the Committee. All of the
members of the Committee and any other Directors shall be eligible to be
selected for Grants under the Plan; provided, however, that to the extent the
Board of Directors determines it is necessary or desirable to satisfy any
regulation or rule, whether under Section 16 of the Securities Exchange Act of
1934 of the United States, as amended (“Exchange Act”) or otherwise related to
the Grants, the members of the Committee shall qualify

 

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under such regulation or rules. The Committee may adopt its own rules of
procedure, and the action of a majority of the Committee, taken at a meeting or
taken without a meeting by a writing signed by such majority, shall constitute
action by the Committee. The Committee shall have the power and authority to
administer, construe and interpret the Plan in its sole discretion, to make
rules for carrying it out and to make changes in such rules. The Committee shall
also have the power to establish sub-plans, which may constitute separate
schemes, for the purpose of establishing schemes which qualify for approval by
the UK Inland Revenue or meet any special tax or regulatory requirements
anywhere in the world. Any such interpretations, rules, administration and
sub-plans shall be consistent with the basic purposes of the Plan and shall be
binding on Participants.

 

(b)           The Committee may delegate to the Chief Executive Officer and to
other senior officers of Willis Group its duties under the Plan subject to such
conditions and limitations as the Committee shall prescribe except that only the
Committee may designate and make Grants, including the variation (including
substitution), cancellation or suspension of said Grant, to Participants who are
subject to Section 16 of the Exchange Act.

 

(c)           The Committee may employ attorneys, consultants, accountants,
appraisers, brokers or other persons. The Committee, Willis Group, and the
officers and Directors of Willis Group shall be entitled to rely upon the
advice, opinions or valuations of any such persons. All actions taken and all
interpretations and determinations made by the Committee in good faith shall be
final and binding upon all Participants, Willis Group and all other interested
persons. No member of the Committee shall be personally liable for any action,
determination or interpretation made in good faith with respect to the Plan or
the Grants, and all members of the Committee shall be fully protected by Willis
Group with respect to any such action, determination or interpretation.

 

(d)           Notwithstanding anything to the contrary contained in the Plan or
any Grant Agreement, (i) neither Holdings, the Willis Group, any Designated
Associate Company or any of their respective employees, directors, officers,
agents or representatives nor any member of the Committee shall have liability
to a Participant or otherwise with respect to the failure of the Plan, any Grant
or Grant Agreement to comply with Section 409A of the Code and (ii) neither
Holdings, the Willis Group, any Designated Associate Company or any of their
respective employees, directors, officers, agents or representatives nor any
member of the Committee makes any representation or warranty to any Participant
that any Grant hereunder satisfies the requirements of Section 409A of the Code.

 

4.             Eligibility

 

Subject to Section 12 of the Plan, the Committee may from time to time make
Grants under the Plan to such Employees of the Willis Group or of any Designated
Associate Company, and in such form and having such terms, conditions and
limitations as the Committee may determine. Grants may be granted singly, in
combination or in tandem. The terms, conditions and limitations of each Grant
under the plan shall be set forth in a Grant Agreement, in a form approved by
the Committee, consistent, however, with the terms of the Plan.

 

5.             Share Limitations and Conditions

 

(a)           Number of Shares—Subject to adjustment as provided in Section 9, a
total of 8,000,000 Shares shall be authorized for grant under the Plan. The
Shares available for the grant of Incentive Stock Options under the Plan shall
not exceed 5,000,000 Shares, subject to adjustment as provided in Section 9 and
subject to the provisions of Sections 422 or 424 of the Code or any successor
provisions. The Shares available for the grant of Restricted Stock, Restricted
Stock Units or other full- value share-based grants under the Plan shall not
exceed 2,000,000.

 

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If any Shares subject to a Grant are forfeited, terminate, expire or a Grant is
settled for cash (in whole or in part) or otherwise does not result in the
issuance of all or a portion of the Shares subject to such Grant, the Shares
subject to such Grant or award shall, to the extent of such forfeiture,
expiration, termination, non-issuance, cash settlement or otherwise, again be
available for Grants under the Plan. Notwithstanding anything to the contrary
contained herein, the following Shares shall not be added to the Shares
authorized for grant under paragraph (a) of this Section: (i) Shares tendered by
the Participant or withheld by the Company in payment of the purchase price of a
Share Option; (ii) Shares tendered by the Participant or withheld by the Company
to satisfy any tax withholding obligation with respect to a Grant; and
(iii) Shares repurchased by the Company using Option proceeds.

 

(b)           Substitute Awards shall not reduce the Shares authorized for grant
under the Plan or authorized for grant to a Participant in any calendar year.
Additionally, in the event that a company acquired by Holdings or any Subsidiary
or with which the Holdings or any Subsidiary combines has shares available under
a pre-existing plan approved by shareholders and not adopted in contemplation of
such acquisition or combination, the shares available for grant pursuant to the
terms of such pre-existing plan (as adjusted, to the extent appropriate, using
the exchange ratio or other adjustment or valuation ratio or formula used in
such acquisition or combination to determine the consideration payable to the
holders of common stock of the entities party to such acquisition or
combination) may be used for Grants under the Plan and shall not reduce the
Shares authorized for grant under the Plan; provided that Grants using such
available shares shall not be made after the date grants could have been made
under the terms of the pre-existing plan, absent the acquisition or combination,
and shall only be made to individuals who were not Employees or Directors prior
to such acquisition or combination.

 

(c)           Purchase Shares, as defined in Section 6 (c) below whether offered
to a participant or in connection with any other Grant under this Plan, shall
not be counted against the above limits if they are sold to a Participant at
Fair Market Value on the date of purchase.

 

(d)           The number of Shares subject to Grants under this Plan to any one
Participant shall not be more than 2,000,000 Shares in any one calendar year and
such limit shall not include Purchase Shares.

 

(e)           No Grants shall be made under the Plan beyond ten years after the
effective date of the Plan, but the terms of Grants made on or before the
expiration of the Plan may extend beyond such expiration. At the time a Grant is
made or amended or the terms or conditions of a Grant are changed, the Committee
may provide for limitations or conditions on such Grant.

 

(f)            Nothing contained herein shall affect the right of Willis Group
or, if applicable, a Designated Associate Company to terminate any Participant’s
employment at any time or for any reason. The rights and obligations of any
individual under the terms of his office or employment with any member of Willis
Group or, if applicable, a Designated Associate Company shall not be affected by
his or her participation in this Plan or any right which he or she may have to
participate in it, and an individual who participates in this Plan shall waive
any and all rights to compensation or damages in consequence of the termination
of his or her office or employment for any reason whatsoever insofar as those
rights arise or may arise from his or her ceasing to have rights under or be
entitled to exercise any Grant as a result of such termination.

 

(g)           Subject to complying with Section 409A of the Code, deferrals of
Grant payouts may be provided for, at the sole discretion of the Committee, in
the Grant Agreements.

 

(h)           Except as otherwise prescribed by the Committee, the amounts of
the Grants for any employee of a Subsidiary, along with interest, dividend, and
other expenses accrued

 

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on deferred Grants shall be charged to the Participant’s employer during the
period for which the Grant is made. If the Participant is employed by more than
one Subsidiary or by both Willis Group and a Subsidiary during the period for
which the Grant is made, the Participant’s Grant and related expenses will be
allocated between the companies employing the Participant in a manner prescribed
by the Committee.

 

(i)            No option, right or benefit under the Plan may be transferred by
a Participant other than by will or the laws of descent and distribution, and
except as set forth in paragraph (k) of this Section, all options, rights and
benefits under the Plan may be exercised during the Participant’s lifetime only
by the Participant. No such benefit shall, prior to receipt thereof by the
Participant, be in any manner liable for or subject to the debts, contracts,
liabilities, engagements, or torts of the Participant.

 

(j)            Participants shall not be, and shall not have any of the rights
or privileges of, shareholders of Willis Group in respect of any Shares
purchasable in connection with any Grant unless and until certificates
representing any such Shares have been issued by Willis Group to such
Participants, unless the Committee shall otherwise determine.

 

(k)           No election as to benefits or exercise of Share Options or other
rights may be made during a Participant’s lifetime by anyone other than the
Participant or by a legal representative appointed for or by the Participant.

 

(l)            Absent express provisions to the contrary, any Grant under this
Plan shall not be deemed compensation for purposes of computing benefits or
contributions under any retirement plan of any member of Willis Group and shall
not affect any benefits under any other benefit plan of any kind now or
subsequently in effect under which the availability or amount of benefits is
related to level of compensation. This Plan is not a “Pension Plan” or “Welfare
Plan” under the Employee Retirement Income Security Act of 1974 of the United
States, as amended.

 

(m)          Unless the Board of Directors determines otherwise, no benefit or
promise under the Plan shall be secured by any specific assets of any member of
Willis Group, nor shall any assets of any member of Willis Group be designated
as attributable or allocated to the satisfaction of Willis Group’s obligations
under the Plan.

 

6.             Grants

 

From time to time, the Committee will determine the forms and amounts of Grants
for Participants. Such Grants may take the following forms in the Committee’s
sole discretion; provided, however, that in no event shall the purchase price of
any Grant be less than the par value of the Shares. The terms of any Grant may
include a requirement that the Participant enter into an agreement or election
under which the Participant agrees to pay his or her employer’s social security
liability (or reimburse the employer for such liability) in any jurisdiction
arising on exercise of any Share Option, or at any other time with respect to
any other Share-Based Award, and if this requirement is not permitted in any
jurisdiction the Grant in such circumstances shall be null and void.

 

(a)           Share Options—These are options to purchase Common Shares, which
may or may not be Incentive Stock Options. The option price per each Share
purchasable under any Share Option granted pursuant to this Article shall not be
less than 100% of the Fair Market Value of one Share on the date of grant of
such option (or, if the person to whom the Incentive Stock Option is being
granted owns Common Shares representing more than 10 percent of the voting power
of all classes of Holdings’ equity, the exercise price shall be at least equal
to 110% of the Fair Market Value of one Common Share on the date of grant) other
than in connection with Substitute Awards. At the time of the Grant the
Committee shall determine, and shall have contained in the Grant Agreement the
option exercise period, the option price, and such other conditions or
restrictions on the grant or exercise of the option as the Committee deems
appropriate, which may include the requirement that the grant of options is
predicated on the acquisition of Purchase Shares under Section 6(c) by the

 

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Participant or as may be required pursuant to applicable law, if such options
shall be Incentive Stock Options, subject to Section 12. Payment of the option
price shall be made in cash or in Common Shares (provided, that such Shares have
been held by the Participant for not less than six months (or such other period
as established by the Committee from time to time)), or a combination thereof,
in accordance with the terms of the Plan, the Grant Agreement and any applicable
guidelines of the Committee in effect at the time. Notwithstanding anything to
the contrary in the Plan, Incentive Stock Options may be granted only to
employees of Holdings or of a “parent corporation” or “subsidiary corporation
(as such terms are defined in Section 424 of the Code at the date of grant. The
aggregate Fair Market Value (generally determined as of the time the Share
Option is granted) of the Shares with respect to which Incentive Stock Options
are exercisable for the first time by a Participant during any calendar year
(under all plans of Holdings and of any parent corporation or subsidiary
corporation) shall not exceed one hundred thousand dollars ($100,000). For
purposes of the preceding sentence, Incentive Stock Options will be taken into
account generally in the order in which they are granted. No Incentive Stock
Option may be exercised later than ten (10) years after the date it is granted
or five years, in the case of a Participant who owns Common Shares representing
more than 10 percent of the voting power of all classes of Holdings’ equity.
Each provision of the Plan and each Grant Agreement relating to an Incentive
Stock Option shall be construed so that each Incentive Stock Option shall be an
incentive stock option as defined in Section 422 of the Code, and any provisions
of the Grant Agreement thereof that cannot be so construed shall be disregarded.
Except for Substitute Awards and in certain limited situations, including,
without limitation the death, disability, termination of employment of the
Participant without good cause as determined by the Committee, or retirement of
the Participant or a Change of Control, Share Options shall have a vesting
period of not less than three (3) years from date of grant (but permitting pro
rata vesting over such time) provided that such restrictions shall not be
applicable to grants of Share Options, Restricted Stock Awards or Restricted
Stock Unit Awards not in excess of 5% of the number of shares available for
Grants under Section 5(a). Share Options subject to the achievement of
performance objectives shall have a minimum vesting period of one (1) year.

 

(b)           Restricted Stock and Restricted Stock Units—Grants of Restricted
Stock and of Restricted Stock Units may be issued to Participants either alone
or in addition to other Grants made under the Plan (a “Restricted Stock Award”
or “Restricted Stock Unit Award” respectively). Except for Substitute Awards and
in certain limited situations, including, without limitation the death,
disability, termination of employment of the Participant without good cause as
determined by the Committee, or retirement of the Participant, a Change of
Control, Restricted Stock Awards and Restricted Stock Unit Awards subject to
continued service with the Company or a Subsidiary shall have a vesting period
of not less than three (3) years from date of grant (but permitting pro rata
vesting over such time); provided that such restrictions shall not be applicable
to grants of Share Options, Restricted Stock Awards or Restricted Stock Unit
Awards not in excess of 5% of the number of shares available for Grants under
Section 5(a). Restricted Stock Awards and Restricted Stock Unit Awards subject
to the achievement of performance objectives shall have a minimum vesting period
of one (1) year.

 

Unless otherwise provided in the Grant Agreement, beginning on the date of grant
of the Restricted Stock Award and subject to execution of the Grant Agreement,
the Participant shall become a shareholder of Holdings with respect to all
Shares subject to the Grant Agreement and shall have all of the rights of a
shareholder, including the right to vote such Shares and the right to receive
distributions made with respect to such Shares. A Participant receiving a
Restricted Stock Unit Award shall not possess the rights of a shareholder with
respect to such grant. Except as otherwise provided in an Grant Agreement any
Shares or any other property (other than cash) distributed as a dividend or
otherwise with respect to any Restricted Stock Award or Restricted Stock Unit
Award as to which the restrictions have not yet lapsed shall be subject to

 

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the same restrictions as such Restricted Stock Award or Restricted Stock Unit
Award.

 

(c)           Purchase Shares—Purchase Shares refer to Common Shares held in
Holdings’ employee share ownership plan trust, The Trinity Employees’ Share
Ownership Plan Trust, offered to a Participant at not less than 100% of the Fair
Market Value of one Share on the date of purchase, the acquisition of which may
make him eligible to receive under the Plan, among other things, Share Options.

 

(d)           Other Share-Based Grants—The Committee may make other Grants under
the Plan pursuant to which Common Shares or other equity securities of Willis
Group are or may in the future be acquired, or Grants denominated in stock
units, including ones valued using measures other than Fair Market Value. Other
Share-Based Grants may be granted with or without consideration.

 

(e)           Entitlement to Dividend Equivalents—Subject to complying with
Section 409A of the Code and the provisions of the Plan, including, without
limitation Section 14, and any Grant Agreement, the recipient of a Grant other
than a Share Option may, if so determined by the Committee, be entitled to
receive, currently or on a deferred basis, cash, stock or other property
dividends, or cash payments in amounts equivalent to cash, stock or other
property dividends on Shares (“Dividend Equivalents”) with respect to the number
of Shares covered by the Grant, as determined by the Committee, in its sole
discretion. The right of US Participants to receive Dividend Equivalents or
other dividends or payments shall be treated as a separate Grant and such
Dividend Equivalents or other dividends or payments for such US Participants, if
any, shall be credited to a notional account maintained by Holdings or paid, as
of the dividend payment dates during the period between the date of the Grant
and the date the Grant is exercised, vested, expired, credited or paid, as
applicable and shall be subject to such limitations as may be determined by the
Committee. The Committee may provide that such amounts and Dividend Equivalents
(if any) shall be deemed to have been reinvested in additional Shares or
otherwise reinvested and may provide that such amounts and Dividend Equivalents
are subject to the same vesting or performance conditions as the underlying
Grant.

 

(f)            Performance Awards—If the Committee determines that a Share
Option, Restricted Stock Award, a Restricted Stock Unit Award, a Performance
Award or an Other Share-Based Award is intended to be subject to performance
goals, the lapsing of restrictions thereon and the distribution of cash, Shares
or other property pursuant thereto, as applicable, shall be subject to the
achievement of one or more objective performance goals established by the
Committee, which shall be based on the attainment of specified levels of one or
any combination of the following: net revenue; revenue growth or product revenue
growth; operating income (before or after taxes); pre- or after-tax income
(before or after allocation of corporate overhead and bonus); earnings per
share; net income (before or after taxes); return on equity; total shareholder
return; return on assets or net assets; appreciation in and/or maintenance of
the price of the Shares or any other publicly-traded securities of Holdings;
market share; gross profits; earnings (including earnings before taxes, earnings
before interest and taxes or earnings before interest, taxes, depreciation and
amortization); economic value-added models or equivalent metrics; comparisons
with various stock market indices; reductions in costs; cash flow or cash flow
per share (before or after dividends); return on capital (including return on
total capital or return on invested capital); cash flow return on investment;
improvement in or attainment of expense levels or working capital levels;
operating margins, gross margins or cash margin; year-end cash; debt reductions;
stockholder equity; market share; regulatory achievements; and implementation,
completion or attainment of measurable objectives with respect to research,
development, products or projects, production volume levels, acquisitions and
divestitures and recruiting and maintaining personnel. Such performance goals
also may be based solely by reference to Holdings’ performance or the
performance of a Subsidiary, division, business segment or business unit of
Holdings, or based upon the relative

 

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performance of other companies or upon comparisons of any of the indicators of
performance relative to other companies. The Committee may also exclude charges
related to an event or occurrence which the Committee determines should
appropriately be excluded, including (a) restructurings, discontinued
operations, extraordinary items, and other unusual or non-recurring charges,
(b) an event either not directly related to the operations of Holdings or not
within the reasonable control of Holdings’ management, or (c) the cumulative
effects of tax or accounting changes in accordance with U.S. generally accepted
accounting principles. Such performance goals shall be set by the Committee
within the time period prescribed by, and shall otherwise comply with the
requirements of, Section 162(m) of the Code, and the regulations thereunder.

 

7.             Forfeiture or Clawback of Awards

 

Notwithstanding anything to the contrary contained herein, a Grant Agreement may
provide that the Grant shall be canceled if the Participant, without the consent
of Holdings, while employed by Holdings, any Subsidiary or, if applicable, a
Designated Associate Company or after termination of such employment or service,
establishes a relationship with a competitor of Holdings, any Subsidiary or, if
applicable, a Designated Associate Company or engages in activity that is in
conflict with or adverse to the interest of Holdings, any Subsidiary or, if
applicable, a Designated Associate Company (including conduct contributing to
financial restatements or irregularities), as determined by the Board of
Directors in its sole discretion. The Committee may provide in a Grant Agreement
that if within the time period specified in the Grant Agreement the Participant
establishes a relationship with a competitor or engages in an activity referred
to in the preceding sentence, the Participant will forfeit any gain realized on
the vesting or exercise of the Grant and must repay such gain to Holdings.

 

8.             Transfers and Leaves of Absence

 

For purposes of the Plan, unless the Committee determines otherwise: (a) a
transfer of a Participant’s employment without an intervening period of
separation among Willis Group and any Subsidiary or Designated Associate Company
shall not be deemed a termination of employment, and (b) a Participant who is
granted in writing a leave of absence shall be deemed to have remained in the
employ of Willis Group or Designated Associate Company during such leave of
absence.

 

9.             Adjustments

 

In the event of any change in the outstanding Common Shares by reason of a stock
split, spin-off, stock or extraordinary cash dividend, stock combination or
reclassification, recapitalization or merger, Change of Control, or similar
event, the Committee shall substitute or adjust proportionately, in its sole
discretion, (a) the number and kind of Shares or other securities that may be
issued under the Plan or under particular forms of Grants, (b) the number and
kind of Shares or other securities subject to outstanding Grants, (c) the Share
Option exercise price, grant price or purchase price applicable to outstanding
Grants, (d) the grant of a Dividend Equivalent or other dividends or payments,
and/or (e) other value determinations applicable to the Plan or outstanding
Grants, in all events in order to allow Participants to participate to such
event in an equitable manner.

 

10.          Change of Control

 

(a)           Grant Agreements may provide that in the event of a Change of
Control of Holdings, Share Options outstanding as of the date of the Change of
Control shall be cancelled and terminated without payment therefore if 100% of
the Fair Market Value of one Share as of the date of the Change of Control is
less than the per Share Option exercise price grant price.

 

(b)           Assumption or Substitution of Certain Awards—Unless otherwise
provided in a Grant Agreement, in the event of a Change of Control of Holdings
in which the successor company assumes or substitutes for a Share Option,
Restricted Stock Award, Restricted Stock Unit Award or Other Share-Based Grant,
if a Participant’s employment with such successor company (or a subsidiary
thereof) terminates within 24 months following such Change of Control (or such
other period set forth in the

 

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Grant Agreement, including prior thereto if applicable) and under the
circumstances specified in the Grant Agreement: (i) Share Options outstanding as
of the date of such termination of employment will immediately vest, become
fully exercisable, and may thereafter be exercised for 24 months (or the period
of time set forth in the Grant Agreement), (ii) restrictions and deferral
limitations on Restricted Stock Awards and Restricted Stock Units Awards shall
lapse and the Restricted Stock and Restricted Stock Units shall become free of
all restrictions and limitations and become fully vested, and (iii) the
restrictions and deferral limitations and other conditions applicable to any
Other Share-Based Grants or any other Grants shall lapse, and such Other
Share-Based Grants or such other Grants shall become free of all restrictions,
limitations or conditions and become fully vested and transferable to the full
extent of the original Grant. For the purposes of this Section 10(b), a Share
Option, Restricted Stock Award, Restricted Stock Unit Award or Other Share-Based
Grants shall be considered assumed or substituted for if following the Change of
Control the Grant confers the right to purchase or receive, for each Share
subject to the Share Option, Restricted Stock Award, Restricted Stock Unit Award
or Other Share-Based Grants immediately prior to the Change of Control, the
consideration (whether stock, cash or other securities or property) received in
the transaction constituting a Change of Control by holders of Shares for each
Share held on the effective date of such transaction (and if holders were
offered a choice of consideration, the type of consideration chosen by the
holders of a majority of the outstanding shares); provided, however, that if
such consideration received in the transaction constituting a Change of Control
is not solely common stock of the successor company, the Committee may, with the
consent of the successor company, provide that the consideration to be received
upon the exercise or vesting of a Share Option, Restricted Stock Award,
Restricted Stock Unit Award or Other Share-Based Grant, for each Share subject
thereto, will be solely common stock of the successor company substantially
equal in Fair Market Value to the per share consideration received by holders of
Shares in the transaction constituting a Change in Control. The determination of
such substantial equality of value of consideration shall be made by the
Committee in its sole discretion and its determination shall be conclusive and
binding.

 

(c)           Unless otherwise provided in a Grant Agreement, in the event of a
Change of Control of Holdings to the extent the successor company does not
assume or substitute for a Share Option, Restricted Stock Award, Restricted
Stock Unit Award or Other Share-Based Grant: (i) those Share Options outstanding
as of the date of the Change of Control that are not assumed or substituted for
shall immediately vest and become fully exercisable, (ii) restrictions and
deferral limitations on Restricted Stock and Restricted Stock Units that are not
assumed or substituted for shall lapse and the Restricted Stock and Restricted
Stock Units shall become free of all restrictions and limitations and become
fully vested, and (iii) the restrictions and deferral limitations and other
conditions applicable to any Other Share-Based Grants or any other Grants that
are not assumed or substituted for shall lapse, and such Other Share-Based
Grants or such other Grants shall become free of all restrictions, limitations
or conditions and become fully vested and transferable to the full extent of the
original grant.

 

(d)           The Committee, in its discretion, may determine that, upon the
occurrence of a Change of Control of Holdings, each Share Option outstanding
shall terminate within a specified number of days after notice to the
Participant, and/or that each Participant shall receive, with respect to each
Share subject to such Share Option an amount equal to the excess of the Fair
Market Value of such Share immediately prior to the occurrence of such Change of
Control over the exercise price per share of such Share Option; such amount to
be payable in cash, in one or more kinds of stock or property (including the
stock or property, if any, payable in the transaction) or in a combination
thereof, as the Committee, in its discretion, shall determine.

 

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11.          Amendment and Termination

 

The Committee shall have the authority to make such amendments to any terms and
conditions applicable to outstanding Grants as are consistent with this Plan.
The Board of Directors may amend, suspend or terminate the Plan at any time.

 

Without the approval of Holdings’ stockholders, other than pursuant to
Section 9, the Committee shall not (i) increase the benefits accrued to
Participants, (ii) increase the number of shares which may be issued under the
Plan, (iii) cancel any Share Option in exchange for cash or another Grant (other
than in connection with Substitute Awards) (iv) modify the requirements for
participation in the Plan, (v) lapse or waive restrictions except in limited
cases relating to death, disability, retirement, termination of employment
without “cause” or for “good reason” as is determined by the Board, or change of
control.

 

12.          Foreign Options and Rights

 

The Committee or Board of Directors, as applicable, may establish rules or
schemes in order to make Grants to Employees who are subject to the laws of
nations other than Bermuda, which Grants may have terms and conditions that
differ from the terms thereof as provided elsewhere in the Plan for the purpose
of complying with foreign laws. In the event that the Committee or Board of
Directors establishes such rules or schemes, the substantive provisions thereof
shall be set forth on schedules attached hereto, and are hereby incorporated by
reference as part of the Plan, subject to any additional action required to be
taken pursuant to the applicable foreign law.

 

13.          Withholding Taxes

 

(a)           Willis Group shall have the right to deduct from any cash payment
made under the Plan any federal, state, local, national, provincial or other
income or other taxes required by law to be withheld with respect to such
payment. It shall be a condition to the obligation of Willis Group to deliver
shares upon the exercise of a Share Option, upon delivery of Restricted Stock or
upon exercise, settlement or payment of Restricted Stock Units or any Other
Stock-Based Grant that the Participant shall pay to Willis Group such amount as
may be requested by Willis Group for the purpose of satisfying any liability for
such withholding taxes. Any Grant Agreement may provide that the Participant may
elect, in accordance with any conditions set forth in such Grant Agreement, to
pay a portion or the entire minimum amount of such withholding taxes in Common
Shares.

 

(b)           In the event that Willis Group is required to account for tax
arising from the exercise or vesting of a Grant to the relevant tax authorities
and the Participant has not paid, or otherwise made arrangements acceptable to
Willis Group to pay the amounts due, Willis Group shall be authorized to procure
and effect the sale of a sufficient number of Shares to be allotted or
transferred to the Participant as a consequence of the vesting or exercise of
the Grant in order to pay the amounts due out of the sale proceeds.

 

(c)           Notwithstanding anything set forth in this Section 13, an option
may not be exercised unless:

 

(i)            the Board of Directors considers that the issue or transfer of
shares pursuant to such exercise would be lawful in all relevant jurisdictions;
and

 

(ii)           in a case where, if the option were exercised, Willis Group would
be obliged to (or would suffer a disadvantage if it were not to) account for any
tax (in any jurisdiction) for which the person in question would be liable by
virtue of the exercise of the option and/or for any social security
contributions that would be recoverable from the person in question (together,
the “Tax Liability”), that person has either:

 

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(x)            made a payment to Willis Group of an amount at least equal to the
Holdings estimated of the Tax Liability; or

 

(y)           entered into arrangements acceptable to Willis Group to secure
that such a payment is made (whether by authorizing the sale of some or all of
the shares on his behalf and the payment to Willis Group of the relevant amount
out of the proceeds of sale or otherwise).

 

14.          Compliance with Section 409A of the Code

 

(a)           To the extent that the Plan and/or Grants are subject to
Section 409A of the Code, the Committee may, in its sole discretion and without
a Participant’s prior consent, amend the Plan and/or Grants, adopt policies and
procedures, or take any other actions (including amendments, policies,
procedures and actions with retroactive effect) as are necessary or appropriate
to (a) exempt the Plan and/or any Grant from the application of Section 409A of
the Code, (b) preserve the intended tax treatment of any such Grant, and/or
(c) comply with the requirements of Section 409A of the Code. This Plan shall be
interpreted at all times in such a manner that the terms and provisions of the
Plan and Grants are exempt from or comply with Section 409A of the Code.
Reference to Section 409A of the Code includes reference to any proposed,
temporary or final regulations and any other guidance promulgated with respect
to such section by the U.S. Department of the Treasury of the Internal Revenue
Service.

 

(b)           All Grants that would otherwise be subject to Section 409A of the
Code shall be paid or otherwise settled on or as soon as practicable after the
applicable vesting date and not later than the 15th day of the third month from
the end of (i) the Participant’s tax year that includes the applicable vesting
date, or (ii) Holdings’ tax year that includes the applicable vesting date,
whichever is later; provided, however, that the Committee reserves the right to
delay payment or specify a compliant payment date with respect to any such Grant
under circumstances set forth in Section 409A of the Code; provided, further,
that notwithstanding any contrary provision of the Plan or a Grant Agreement,
any payment(s) that are otherwise required to be made under the Plan to a
“specified employee” (as defined under Section 409A of the Code) as a result of
his or her separation from service (other than a payment that is not subject to
Section 409A of the Code) shall be delayed for the first six (6) months
following such separation from service (or, if earlier, the date of death of the
specified employee) and shall instead be paid (in a manner set forth in the
Grant Agreement) on the date that immediately follows the end of such six-month
period or as soon as administratively practicable thereafter.

 

15.          Governing Law

 

This Plan shall be governed by the laws of Bermuda, without regard to conflicts
of laws.

 

16.          Effective Date and Termination Dates

 

The Plan shall be effective on and as of the date of its approval by a majority
of the shareholders of Holdings, and shall terminate ten years thereafter,
subject to earlier termination by the Board of Directors pursuant to Section 11.

 

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