Exhibit 10.10

THE THIRD POINT REINSURANCE LTD.
2013 OMNIBUS INCENTIVE PLAN
SECTION 1. PURPOSE
The purposes of the Third Point Reinsurance Ltd. 2013 Omnibus Incentive Plan
(the “Plan”) are to promote the interests of Third Point Reinsurance Ltd. and
its shareholders by (i) attracting and retaining executive personnel and other
key employees and directors of outstanding ability; (ii) motivating executive
personnel and other key employees and directors by means of performance-related
incentives, to achieve longer-range performance goals; and (iii) enabling such
individuals to participate in the long-term growth and financial success of
Third Point Reinsurance Ltd.
SECTION 2.     DEFINITIONS
(a)    Certain Definitions. Capitalized terms used herein without definition
shall have the respective meanings set forth below:
“Adjustment Event” has the meaning given in Section 4(d).
“Affiliate” means, (i) for purposes of Incentive Share Options, any corporation
that is a “parent corporation” (as defined in Section 424(e) of the Code) or a
“subsidiary corporation” (as defined in Section 424(e) of the Code) of the
Company, and (ii) for all other purposes, with respect to any person, any other
person that (directly or indirectly) is controlled by, controlling or under
common control with such person.
“Alternative Award” has the meaning given in Section 13(b).
“Applicable Law” means the requirements related to or implicated by the
administration of the Plan under Bermuda law, United States federal and state
laws, the Code, applicable securities laws, any stock exchange or quotation
system on which the shares of Common Stock are listed or quoted, and the
applicable laws of any other foreign country or jurisdiction where Awards are
granted under the Plan, including, in each case, the applicable rules,
regulations and guidance promulgated thereunder.
“Award” means any Performance Award, Restricted Shares, Restricted Share Unit,
Option, Share Appreciation Right, Deferred Share Unit, Dividend Equivalent or
other Share-Based Award granted to a Participant pursuant to the Plan, including
an Award combining two or more types in a single grant.
“Award Agreement” means any written agreement, contract or other instrument or
document evidencing an Award granted under the Plan.
“Board” means the Board of Directors of the Company.
“Cause” with respect to a Participant shall mean (i) the refusal or neglect of
the Participant to perform substantially his or her employment-related duties;
(ii) the Participant’s personal dishonesty, incompetence, willful misconduct, or
breach of fiduciary duty; (iii) the Participant’s conviction of or entering a
plea of guilty or nolo contendere (or any applicable equivalent thereof) to a
crime constituting a felony (or a crime or offense of equivalent magnitude in
any jurisdiction) or his or her willful violation of any other law, rule, or
regulation (other than a traffic violation or other offense or violation outside
of the course of employment that in no way adversely affects the Company or any
Subsidiary or its reputation or the ability of the Participant to perform his or
her employment related duties or to represent the Company or any Subsidiary);
(iv) the Participant’s material violation of the Company’s policies or standards
or of any statutory or common law duty of loyalty or good faith to the Company;
or (v) the material breach by the Participant of any covenant or agreement with
the Company or any Subsidiary, or any written policy of the Company or any
Subsidiary, not to disclose any information pertaining to the Company or any
Subsidiary or not to compete or interfere with the Company or any Subsidiary;
provided that with respect to any Participant who is party to an employment
agreement with the Company or any Subsidiary that contains a definition of
“Cause”, “Cause” shall have the meaning specified in such Participant’s
employment agreement.
“Change in Control” shall mean the first to occur of the following:
(i)    the acquisition (whether by purchase, merger, amalgamation,
consolidation, or other similar transaction) by any person, entity, or “group”
(as defined in Section 13(d) of the U.S. Securities Exchange Act of 1934, as
amended) of beneficial ownership of all or substantially all of the combined
voting power of the Company’s then outstanding voting securities, other than any
such acquisition by the Company, any of its Subsidiaries, any employee benefit
plan of the Company or any of its Subsidiaries, or by the Sponsors, or any
affiliates of any of the foregoing;
(ii)    (ii) the sale, transfer, or other disposition of all or substantially
all of the assets of the Company and the Subsidiaries, taken as a whole, to one
or more persons or entities that are not, immediately prior to such sale,
transfer, or other disposition, affiliates of the Company or any Sponsor; or
(iii)    within any 24-month period, the persons who were directors of the
Company at the beginning of such period (the “Incumbent Directors”) shall cease
to constitute at least a majority of the Board, provided that any director
nominated for election to the Board by a majority of the Incumbent Directors
still in office shall be deemed to be an Incumbent Director for purpose of this
clause (iii);
in each case, provided that, as to Specified Awards, such event also constitutes
a “change in control” within the meaning of Section 409A of the Code.
“Change in Control Price” means the price per Share offered in conjunction with
any transaction resulting in a Change in Control. If any part of the offered
price is payable other than in cash, or if more than one price per Share is paid
in conjunction with such transaction, the Change in Control Price shall be
determined in good faith by the Committee as constituted immediately prior to
the Change in Control.
“Code” means the U.S. Internal Revenue Code of 1986, as amended from time to
time.
“Committee” means the Compensation Committee of the Board or such other
committee of the Board as the Board shall designate from time to time. To the
extent Section 162(m) of the Code is applicable to the Company and the Plan, and
for those Awards intended to qualify as performance-based compensation under
Section 162(m) of the Code, the Committee shall mean the compensation committee
of the Board or such committee as the Board or compensation committee shall
designate, consisting of two or more members of the Board, each of whom, is an
“outside director,” within the meaning of Section 162(m) of the Code and the
Treasury Regulations promulgated thereunder.
“Company” means Third Point Reinsurance Ltd., a Bermuda exempted company, and
any successor thereto.
“Consultant” means consultants and advisors who are natural persons who provide
bona fide services to the Company and its Subsidiaries (other than services in
connection with the offer or sale of securities in a capital raising transaction
or that promote or maintain a market for the Company’s securities).
“Covered Employee” means any “covered employee” as defined in Section 162(m)(3)
of the Code.
“Deferred Annual Amount” shall have the meaning set forth in Section 9(a).
“Deferred Award” shall have the meaning set forth in Section 9(a).
“Deferred Share Unit” means a unit credited to a Participant’s account on the
books of the Company under Section 9 that represents the right to receive Shares
or cash with a value equal to the Fair Market Value of one Share on settlement
of the account.
“Designated Beneficiary” means the beneficiary designated by the Participant, in
a manner determined by the Committee, to receive amounts due the Participant in
the event of the Participant’s death. In the absence of an effective designation
by the Participant, Designated Beneficiary shall mean the Participant’s estate.
“Disability” means, unless another definition is incorporated into the
applicable Award Agreement, Disability as specified under the Company’s
long-term disability insurance policy and any other termination of a
Participant’s employment or service under such circumstances that the Committee
determines to qualify as a Disability for purposes of this Plan; provided, that
if a Participant is a party to an employment or individual severance agreement
with an Employer that defines the term “Disability” then, with respect to any
Award made to such Participant, “Disability” shall have the meaning set forth in
such agreement; provided, further, that in the case of any Award subject to
Section 409A of the Code, Disability shall have the meaning set forth in Section
409A of the Code.
“Dividend Equivalent” means the right, granted under Section 11 of the Plan, to
receive payments in cash or in Shares, based on dividends paid with respect to
Shares.
“Effective Date” means the date, following adoption of this Plan by the Board,
on which this Plan is approved by a majority of the votes cast at a duly
constituted meeting of the shareholders of the Company or by a duly effective
written consent of the shareholders in lieu thereof.
“Elective Deferred Share Unit” shall have the meaning set forth in Section 9(a).
“Eligible Director” means a member of the Board who is not an Employee.
“Employee” means any officer or employee of the Company, any Subsidiary or any
other Employer (as determined by the Committee in its sole discretion).
“Employer” means the Company and any Subsidiary, and, in the discretion of the
Committee, may also mean any business organization designated as an Employer;
provided that the Company directly or indirectly owns at least 20% of the
combined voting power of all classes of voting securities of such entity.
“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.
“Executive Officer” means any “officer” within the meaning of Rule 16(a)-1(f)
promulgated under the Act or any Covered Employee.
“Fair Market Value” means,
(i) If the Shares are listed on any established stock exchange or a national
market system, the closing sales price for a Share (or the closing bid, if no
sales were reported) as quoted on such exchange or system on the date of
determination, as reported in The Wall Street Journal or, if not so reported,
such other source as the Committee deems reliable;
(ii) If the Shares are regularly quoted by a recognized securities dealer but
selling prices are not reported, its Fair Market Value shall be the mean between
the high bid and low asked prices for the Shares on the last market trading day
prior to the day of determination;
(iii) If the Shares are not listed on an established stock exchange or national
market system, its Fair Market Value shall be determined in good faith by the
Committee pursuant to a reasonable valuation method in accordance with Section
409A of the Code, including without limitation by reliance on an independent
appraisal completed within the preceding 12 months.
“Freestanding SAR” means a Share Appreciation Right granted independently of any
Options.
“Good Reason” shall have the meaning, if any, set forth in a Participant’s Award
Agreement. If a Participant’s Award Agreement does not contain a definition of
Good Reason, then the terms of the Plan relating to Good Reason shall not be
operative with respect to such Participant.
“Incentive Share Option” means an option to purchase Shares granted under
Section 7 of the Plan that is designated as an Incentive Share Option that meets
the requirements of Section 422 of the Code.
“IPO” means the first day as of which (i) sales of Shares are made to the public
in the United States pursuant to an underwritten public offering of the Shares
pursuant to an effective registration statement under the U.S. Securities Act of
1933, as amended that covers (together with prior effective registrations) (A)
not less than 25% of the then issued and outstanding Shares, on a fully diluted
basis, or (B) Shares that, after the closing of such public offering, will be
traded on the New York Stock Exchange, the American Stock Exchange, the National
Association of Securities Dealers Automated Quotation System, or an equivalent
internationally recognized securities exchange or quotation system, or (ii) the
Committee has determined that the Shares otherwise have become publicly traded
for this purpose.
“New Employer” means, after a Change in Control, a Participant’s employer, or
any direct or indirect parent or any direct or indirect majority-owned
subsidiary of such employer.
“Non-Statutory Share Option” means an option to purchase Shares granted under
Section 7 of the Plan that is not intended to be an Incentive Share Option.
“Non-U.S. Award(s)” has the meaning given in Section 3(f).
“Option” means an Incentive Share Option or a Non-Statutory Share Option.
“Participant” means an Employee, Eligible Director or Consultant who is selected
by the Committee to receive an Award under the Plan.
“Performance Award” means an Award of Restricted Shares, Restricted Share Units,
Options, Performance Shares, Deferred Shares, Deferred Share Units, Performance
Units, SARs, other Equity-Based Awards or other Awards, the grant, exercise,
voting or settlement of which is subject (in whole or in part) to the
achievement of specified Performance Goals.
“Performance Cycle” means the period of time selected by the Committee during
which performance is measured for the purpose of determining the extent to which
a Performance Award has been earned or vested.
“Performance Goals” means the objectives established by the Committee for a
Performance Cycle pursuant to Section 5(c) for the purpose of determining the
extent to which a Performance Award has been earned or vested.
“Performance Share” means a Performance Award that is a contractual right to
receive a Share (or the cash equivalent thereof) granted pursuant to Section 5
of the Plan.
“Performance Unit” means a Performance Award that is a dollar denominated unit
(or a unit denominated in the Participant’s local currency) granted pursuant to
Section 5 of the Plan.
“Permitted Transferees” has the meaning given it in Section 15(b).
“Plan” has the meaning given it in the preamble to this Agreement.
“Preexisting Plan” means the Third Point Reinsurance Ltd. Share Incentive Plan.
“Preexisting Plan Award” means an award of share options previously granted to a
Participant pursuant to the Preexisting Plan.
“Restriction Period” means the period of time selected by the Committee during
which a grant of Restricted Shares, Restricted Share Units or Deferred Share
Units, as the case may be, is subject to forfeiture and/or restrictions on
transfer pursuant to the terms of the Plan.
“Restricted Shares” means Shares contingently granted to a Participant under
Section 6 of the Plan.
“Restricted Share Unit” means a Share denominated unit contingently awarded
under Section 6 of the Plan.
“Retirement” means a termination of a Participant’s employment, other than for
Cause, on or after the Participant’s attainment of age 65.
“Section 409A of the Code” means Section 409A of the Code and the applicable
rules, regulations and guidance promulgated thereunder.
“Service” means, with respect to Employees and Consultants, continued employment
with the Company and its Subsidiaries and Affiliates or, with respect to
Eligible Directors, service on the Board of Directors.
“Service Award” means an Award that vests solely based on the passage of time or
continued Service over a fixed period of time.
“Shares” means the common shares of the Company, par value US$0.10 per share.
“Specified Award” means an Award of non-qualified deferred compensation within
the meaning of and that is subject to Section 409A of the Code, and which may
include other Awards granted pursuant to the Plan (including, but not limited
to, Restricted Share Units and Deferred Awards) that do not otherwise qualify
for an exemption from Section 409A of the Code.
“Sponsors” means collectively, Daniel S. Loeb, KEP TP Holdings, L.P., KIA TP
Holdings, L.P. and Pine Brook LVR, L.P.
“Share Appreciation Right” or “SAR” means the right to receive a payment from
the Company in cash and/or Shares equal to the product of (i) the excess, if
any, of the Fair Market Value of one Share on the exercise date over a specified
price fixed by the Committee on the grant date, multiplied by (ii) a stated
number of Shares.
“Share-Based Awards” has the meaning given in Section 10(a).
“Subplan” has the meaning given in Section 3(f).
“Subsidiary” means any business entity in which the Company owns, directly or
indirectly, fifty percent (50%) or more of the total combined voting power of
all classes of shares entitled to vote, and any other business organization,
regardless of form, in which the Company possesses, directly or indirectly, 50%
or more of the total combined equity interests in such organization.
“Ten Percent Holder” has the meaning given in Section 7(b).
“Termination of Service” means with respect to an Eligible Director, the date
upon which such Eligible Director ceases to be a member of the Board, with
respect to an Employee, the date the Participant ceases to be an Employee and,
with respect to a Consultant, the date the Consultant ceases to provide services
to the Company or any Employer, in each case as determined by the Committee;
provided, that, with respect to any Specified Award, Termination of Service
shall mean “separation from service”, as defined in Section 409A of the Code and
the rules, regulations and guidance promulgated thereunder.
“Voting Power” when used in the definition of Change in Control shall mean such
specified number of the Voting Securities as shall enable the holders thereof to
cast such percentage of all the votes which could be cast in an annual election
of directors and “Voting Securities” shall mean all securities of a company
entitling the holders thereof to vote in an annual election of directors.
(b)    Gender and Number. Except when otherwise indicated by the context, words
in the masculine gender used in the Plan shall include the feminine gender, the
singular shall include the plural, and the plural shall include the singular.
SECTION 3.     POWERS OF THE COMMITTEE
(a)    Eligibility. Participants in the Plan shall consist of such Employees
(including any officer of the Company), Consultants and Eligible Directors as
the Committee in its sole discretion may select from time to time.
(b)    Power to Grant and Establish Terms of Awards. The Committee shall have
the discretionary authority, subject to the terms of the Plan, to determine the
Participants, if any, to whom Awards shall be granted, the type or types of
Awards to be granted, and the terms and conditions of any and all Awards
including, without limitation, the number of Shares subject to an Award, the
time or times at which Awards shall be granted, and the terms and conditions of
the Awards and the applicable Award Agreements. The Committee may establish
different terms and conditions for different types of Awards, for different
Participants receiving the same type of Award, and for the same Participant for
each type of Award such Participant may receive, whether or not granted at the
same or different times.
(c)    Administration. The Plan shall be administered by the Committee. The
Committee shall have sole and complete authority and discretion to adopt, alter
and repeal such administrative rules, guidelines and practices governing the
operation of the Plan as it shall from time to time deem advisable, and to
interpret the terms and provisions of the Plan. The Committee’s decisions
(including any failure to make decisions) shall be binding upon all persons,
including but not limited to the Company, shareholders, Employers and each
Employee, Director, Consultant, Participant, Designated Beneficiary and such
person’s heirs, successors or assigns, and shall be given deference in any
proceeding with respect thereto.
(d)    Delegation by the Committee. The Committee may delegate to the chief
executive officer of the Company the power and authority to make Awards to
Participants who are not Executive Officers or Covered Employees, pursuant to
such conditions and limitations as the Committee may establish. The Committee
may also appoint agents (who may be officers or employees of the Company) to
assist in the administration of the Plan and may grant authority to such persons
to execute agreements, including Award Agreements, or other documents on its
behalf. All expenses incurred in the administration of the Plan, including,
without limitation, for the engagement of any counsel, consultant or agent,
shall be paid by the Company.
(e)    Restrictive Covenants and Other Conditions. Without limiting the
generality of the foregoing, the Committee may condition the grant of any Award
under the Plan upon the Participant to whom such Award would be granted agreeing
in writing to certain conditions (such as restrictions on the ability to
transfer the underlying Shares) or covenants in favor of the Company and/or one
or more Affiliates thereof (including, without limitation, covenants not to
compete, not to solicit employees and customers and not to disclose confidential
information, that may have effect following the Termination of Service and after
the Shares subject to the Award have been transferred to the Participant),
including, without limitation, the requirement that the Participant disgorge any
profit, gain or other benefit received in respect of the Award prior to any
breach of any such covenant.
(f)    Participants Based Outside the United States. To conform with the
provisions of local laws and regulations, or with local compensation practices
and policies, in foreign countries in which the Company or any of its
Subsidiaries or Affiliates operate, but subject to the limitations set forth
herein regarding the maximum number of shares issuable hereunder and the maximum
award to any single Participant, the Committee may (i) modify the terms and
conditions of Awards granted to Participants employed outside the United States
(“Non-US Awards”), (ii) establish subplans with modified exercise procedures and
such other modifications as may be necessary or advisable under the
circumstances (“Subplans”), and (iii) take any action which it deems advisable
to obtain, comply with or otherwise reflect any necessary governmental
regulatory procedures, exemptions or approvals with respect to the Plan. The
Committee’s decision to grant Non-US Awards or to establish Subplans is entirely
voluntary, and at the complete discretion of the Committee. The Committee may
amend, modify or terminate any Subplans at any time, and such amendment,
modification or termination may be made without prior notice to the
Participants. The Company, Subsidiaries, Affiliates and members of the Committee
shall not incur any liability of any kind to any Participant as a result of any
change, amendment or termination of any Subplan at any time. The benefits and
rights provided under any Subplan or by any Non-US Award (i) are wholly
discretionary and, although provided by either the Company, a Subsidiary or
Affiliate, do not constitute regular or periodic payments and (ii) are not to be
considered part of the Participant’s salary or compensation under the
Participant’s employment with the Participant’s local employer for purposes of
calculating any severance, resignation, redundancy or other end of service
payments, vacation, bonuses, long-term service awards, indemnification, pension
or retirement benefits, or any other payments, benefits or rights of any kind.
If a Subplan is terminated, the Committee may direct the payment of Non-US
Awards (or direct the deferral of payments whose amount shall be determined)
prior to the dates on which payments would otherwise have been made, and, in the
Committee’s discretion, such payments may be made in a lump sum or in
installments.
SECTION 1.     MAXIMUM AMOUNT AVAILABLE FOR AWARDS
(a)    Number. Subject in all cases to the provisions of this Section 4, the
maximum number of Shares that are available for Awards (including Preexisting
Plan Awards) shall be 21,627,906 Shares. Notwithstanding the provisions of
Section 4(b), the maximum number of Shares that may be issued in respect of
Incentive Share Options shall not exceed 21,627,906 shares. Shares may be made
available from Shares held in treasury or authorized but unissued shares of the
Company not reserved for any other purpose.
(b)    Canceled, Terminated, or Forfeited Awards, etc. Any Shares subject to an
Award (or Preexisting Plan Award) which for any reason expires without having
been exercised, is canceled or terminated or otherwise is settled without the
issuance of any Shares shall again be available for grant under the Plan;
provided, however, that (i) vested Shares that are repurchased after being
issued from the Plan (or Preexisting Plan), (ii) Shares otherwise issuable or
issued in respect of, or as part of, any Award (or Preexisting Plan Award) that
are repurchased, equal to the amount necessary to cover applicable taxes and
(iii) Shares that are tendered to exercise outstanding Options or other Awards
(or Preexisting Plan Awards) or to cover applicable taxes shall not be available
for future issuance under the Plan. If a Share Appreciation Right is granted in
tandem with an Option so that only one may be exercised with the other being
surrendered in such exercise in accordance with Section 8(b), the number of
shares subject to the tandem Option and Share Appreciation Right shall only be
taken into account once (and not as to both Awards). Shares subject to Awards
that are assumed, converted or substituted pursuant to an Adjustment Event will
not further reduce the maximum limitation set forth in Section 4(a).
(c)    Individual Award Limitations. Subject to Sections 4(b) and 4(d), the
following individual Award limits shall apply to the extent Section 162(m) of
the Code is applicable to the Company and the Plan, and for those Awards
intended to qualify as performance-based compensation under Section 162(m) of
the Code:
(i)     No Participant may receive the right to more than 2,000,000
share-denominated Performance Awards under the Plan in any one calendar year.
(ii)     No Participant may receive the right to Performance Units or other cash
based Performance Award under the Plan in any one calendar year with a value of
more than $5,000,000 (or the equivalent of such amount denominated in the
Participant’s local currency).
(iii)     No Participant may receive Options, Share Appreciation Rights or any
other Award based solely on the increase in value of Shares on more than
4,000,000 Shares under the Plan in any one calendar year.
(d)    Adjustment in Capitalization. The number and kind of Shares available for
issuance under the Plan and the number, class, exercise price, Performance Goals
or other terms of any outstanding Award shall be adjusted by the Committee to
reflect any extraordinary dividend or distribution, share dividend, bonus issue,
share split or share consolidation or any reorganization, recapitalization,
business combination, merger, amalgamation, consolidation, spin-off, exchange of
shares, liquidation or dissolution of the Company or other similar transaction
or event affecting the Shares (any such transaction or event, an “Adjustment
Event”) in such manner as it determines in its sole discretion.
(e)    Prohibition Against Repricing. From and after an IPO, except to the
extent (i) approved in advance by holders of a majority of the shares of the
Company entitled to vote generally in the election of directors or (ii) as a
result of any Adjustment Event, the Committee shall not have the power or
authority to reduce, whether through amendment or otherwise, the exercise price
of any outstanding Option or base price of any outstanding Share Appreciation
Right or to grant any new Award, or make any cash payment, in substitution for
or upon the cancellation of Options or Share Appreciation Rights previously
granted.
SECTION 2.     PERFORMANCE AWARDS
(a)    Generally. The Committee shall have the authority to determine the
Participants who shall receive Performance Awards, the number and type of
Performance Awards and the number of Shares and/or value of Performance Units or
other cash-based Performance Award each Participant receives for each or any
Performance Cycle, and the Performance Goals applicable in respect of such
Performance Awards. Any adjustments to such Performance Goals shall be approved
by the Committee. The Committee shall determine the duration of each Performance
Cycle (the duration of Performance Cycles may differ from each other), and there
may be more than one Performance Cycle in existence at any one time. Performance
Awards shall be evidenced by an Award Agreement that shall specify the kind of
Award, the number of Shares and/or value of Awards awarded to the Participant,
the Performance Goals applicable thereto, and such other terms and conditions
not inconsistent with the Plan as the Committee shall determine. No Shares will
be issued at the time an Award of Performance Shares is made, and the Company
shall not be required to set aside a fund for the payment of Performance Shares,
Performance Units or other Performance Awards.
(b)    Earned Performance Awards. Performance Awards shall become earned, in
whole or in part, based upon the attainment of specified Performance Goals or
the occurrence of any event or events, including a Change in Control, as the
Committee shall determine, either before, at or after the grant date. In
addition to the achievement of the specified Performance Goals, the Committee
may, at the grant date, condition payment of Performance Awards on such
conditions as the Committee shall specify. The Committee may also require the
completion of a minimum period of service (in addition to the achievement of any
applicable Performance Goals) as a condition to the vesting of any Performance
Award.
(c)    Performance Goals. The Committee shall in its discretion establish the
Performance Goals that must be satisfied in order for a Participant to receive a
Performance Award for a Performance Period or for a Performance Award to be
earned or vested. At the discretion of the Committee, the Performance Goals for
a Performance Period may be based upon one or more of the following criteria
(alone or in combination, whether gross or net, before or after taxes, and/or
before or after other adjustments, as determined by the Committee): (a) gross,
net or operating income (before or after taxes); (b) earnings before interest
and taxes (c) earnings before taxes, interest, depreciation, and/or amortization
(“EBITDA”); (d) EBITDA excluding charges for share compensation, management
fees, restructurings, impairments and/or other specified items (“Adjusted
EBITDA”); (e) EBITDA excluding capital expenditures; (f) basic or diluted
earnings per share or improvement in basic or diluted earnings per share; (g)
revenues (including, but not limited to, total revenues, net revenues or revenue
growth); (h) net operating profit; (i) growth in basic or diluted book value;
(j) financial return measures (including, but not limited to, return on assets,
capital, invested capital, investments, investment income generated by
underwriting or other operations or on the float from such operations, equity,
or revenue) including or excluding negative returns, and with or without
compounding; (k) cash flow measures (including, but not limited to, operating
cash flow, free cash flow, cash flow return on equity, and cash flow return on
investment); (l) productivity ratios (including but not limited to measuring
liquidity, profitability or leverage); (m) enterprise value; (n) share price
(including, but not limited to, growth measures and total shareholder return,
inclusive or exclusive of dividends); (o) expense/cost management targets
(including but not limited to improvement in or attainment of expense levels,
capital expenditure levels, and/or working capital levels); (p) margins
(including, but not limited to, operating margin, underwriting margins, net
income margin, cash margin, gross, net or operating profit margins, EBITDA
margins, Adjusted EBITDA margins); (q) operating efficiency; (r) market share or
market penetration; (s) customer targets (including, but not limited to,
customer growth or customer satisfaction); (t) working capital targets or
improvements; (u) profit measures (including but not limited to gross profit,
net profit, operating profit, investment profit and/or underwriting profit),
including or excluding charges for share compensation, fee income, underwriting
losses incurred in prior periods, changes in IBNR reserves and/or other
specified items; (v) economic value added; (w) balance sheet metrics (including,
but not limited to, inventory, inventory turns, receivables turnover, net asset
turnover, debt reduction, retained earnings, year-end cash, cash conversion
cycle, ratio of debt to equity or to EBITDA); (x) workforce targets (including
but not limited to diversity goals, employee engagement or satisfaction,
employee retention, and workplace health and safety goals); (y) implementation,
completion or attainment of measurable objectives with respect to risk
management, research and development, key products or key projects, lines of
business, acquisitions and divestitures and strategic plan development and/or
implementation; (z) comparisons with various stock market indices, peer
companies or industry groups or classifications with regard to one more of these
criteria, or (aa) for any period of time in which Section 162(m) is not
applicable to the Company and the Plan, or at any time in the case of (A)
persons who are not “covered employees” under Section 162(m) of the Code or (B)
Awards (whether or not to “covered employees”) not intended to qualify as
performance-based compensation under Section 162(m) of the Code, such other
criteria as may be determined by the Committee. Performance Goals may be
established on a Company-wide basis or with respect to one or more business
units, divisions, Subsidiaries, or products and may be expressed in absolute
terms, or relative or comparative to (i) current internal targets or budgets,
(ii) the past performance of the Company (including the performance of one or
more Subsidiaries, divisions, or operating units), (iii) the performance of one
or more similarly situated companies, (iv) the performance of an index covering
multiple companies, or (v) other external measures of the selected performance
criteria. Any performance objective may measure performance on an individual
basis, as appropriate. The Committee may provide for a threshold level of
performance below which no Shares or compensation will be granted or paid in
respect of Performance Awards, and a maximum level of performance above which no
additional Shares or compensation will be granted or paid in respect of
Performance Awards, and it may provide for differing amounts of Shares or
compensation to be granted or paid in respect of Performance Awards for
different levels of performance. Unless otherwise determined by the Committee at
the time Performance Goals for a Performance Cycle are established, to the
maximum extent possible, performance criteria shall be determined excluding any
or all “unusual or infrequently occurring items” as determined under U.S.
generally accepted accounting principles and as identified in the financial
statements, notes to the financial statements or management’s discussion and
analysis in the annual report, including, without limitation, the charges or
costs associated with restructurings of the Company or any Subsidiary,
discontinued operations, unusual or infrequently occurring items, capital gains
and losses, dividends, Share repurchase, other unusual, infrequently occurring
or non-recurring items, and the cumulative effects of accounting changes. Except
in the case of Awards to “covered employees” intended to be performance-based
compensation under Section 162(m) of the Code, the Committee may also adjust the
Performance Goals for any Performance Cycle as it deems equitable in recognition
of unusual or non-recurring events affecting the Company, changes in applicable
tax laws or accounting principles, or such other factors as the Committee may
determine. Except in the case of Awards to Executive Officers intended to be
“other performance-based compensation” under Section 162(m)(4) of the Code, the
Committee may also adjust the Performance Goals for any Performance Cycle as it
deems equitable in recognition of unusual or non-recurring events affecting the
Company, changes in applicable tax laws or accounting principles, or such other
factors as the Committee may determine (including, without limitation, any
adjustments that would result in the Company paying non-deductible compensation
to a Participant).
(d)    Special Rule for Performance Goals. If, at the time of grant, the
Committee intends a Performance Award to qualify as performance based
compensation within the meaning of Section 162(m) of the Code, the Committee
must establish Performance Goals for the applicable Performance Cycle no later
than the 90th day after the Performance Cycle begins (or by such other date as
may be required under Section 162(m) of the Code) and in no event later than the
date on which 25% of the performance period has lapsed.
(e)    Negative Discretion. Notwithstanding anything in this Section 5 to the
contrary, the Committee shall have the right, in its absolute discretion, (i) to
reduce or eliminate the amount otherwise payable to any Participant under
Section 5(h) based on individual performance or any other factors that the
Committee, in its discretion, shall deem appropriate and (ii) to establish rules
or procedures that have the effect of limiting the amount payable to each
Participant to an amount that is less than the maximum amount otherwise
authorized.
(f)    Affirmative Discretion. Notwithstanding any other provision in the Plan
to the contrary, (including, without limitation, the maximum amounts payable
under Section 4(c)), but subject to the maximum number of shares available for
issuance under Section 4(a) of the Plan, (i) the Committee shall have the right,
in its discretion, to grant an Award in cash, in Shares or other Awards or in
any combination thereof, to any Participant (except for a Participant who is a
Covered Employee, to the extent Section 162(m) of the Code is applicable to the
Company and the Plan for the year in which the amount paid would ordinarily be
deductible by the Company for federal income tax purposes in an amount up to the
maximum Award payable), in a greater amount than would apply under the
applicable Performance Codes, based on individual performance or any other
criteria that the Committee deems appropriate and (ii) in connection with the
hiring of any person who is or becomes a Covered Employee, the Committee may
provide for a minimum bonus amount or Award payment in any Performance Cycle,
regardless of whether performance objectives are attained. Notwithstanding any
provision of the Plan to the contrary, in no event shall the Committee have, or
exercise, discretion with respect to a Performance Award intended to qualify as
performance-based compensation under Section 162(m) of the Code if such
discretion or the exercise thereof would cause such qualification not to be
available.
(g)    Certification of Attainment of Performance Goals. As soon as practicable
after the end of a Performance Cycle and prior to any payment or vesting in
respect of such Performance Cycle, the Committee shall certify in writing the
number of Performance Shares or other Performance Awards and the number and
value of Performance Units which have been earned or vested on the basis of
performance in relation to the established Performance Goals.
(h)    Payment of Awards. Except as provided otherwise in an Award Agreement,
payment or delivery of Shares with respect to earned Performance Awards shall be
distributed to the Participant or, if the Participant has died, to the
Participant’s Designated Beneficiary, as soon as practicable after the
expiration of the Performance Cycle and the Committee’s certification under
paragraph 5(g) above (and in any event within 2½ months after the end of the
Performance Cycle), provided that payment or delivery of Shares with respect to
earned Performance Awards shall not be distributed to a Participant until any
other conditions on payment of such Awards established by the Committee have
been satisfied. The Committee shall determine whether earned Performance Awards
are distributed in the form of cash, Shares or in a combination thereof, with
the value or number of shares payable to be determined based on the Fair Market
Value of the Shares on the date of the Committee’s certification under paragraph
5(g) above. The Committee shall have the right to impose whatever conditions it
deems appropriate with respect to the award or delivery of Shares, including
conditioning the vesting of such shares on the performance of additional
service.
(i)    Newly Eligible Participants. Notwithstanding anything in this Section 5
to the contrary, the Committee shall be entitled to make such rules,
determinations and adjustments as it deems appropriate with respect to any
Participant who becomes eligible to receive Performance Awards after the
commencement of a Performance Cycle.
SECTION 3.     RESTRICTED SHARES AND RESTRICTED SHARE UNITS
(a)    Grant. Restricted Shares and Restricted Share Units may be granted to
Participants at such time or times as shall be determined by the Committee. The
grant date of any Restricted Shares or Restricted Share Units under the Plan
will be the date on which such Restricted Shares or Restricted Share Units are
awarded by the Committee, or on such other date as the Committee shall
determine. Restricted Shares and Restricted Share Units shall be evidenced by an
Award Agreement that shall specify (i) the number of shares of Restricted Shares
and/or the number of Restricted Share Units to be granted to each Participant,
(ii) the Restriction Period(s) and (iii) such other terms and conditions,
including rights to dividends or Dividend Equivalents, not inconsistent with the
Plan as the Committee shall determine, including customary representations,
warranties and covenants with respect to securities law matters. Grants of
Restricted Shares shall be evidenced by issuance of certificates representing
the shares registered in the name of the Participant or a bookkeeping entry in
the Company’s records (or by such other reasonable method as the Company shall
determine from time to time). No Shares will be issued at the time an Award of
Restricted Share Units is made and the Company shall not be required to set
aside a fund for the payment of any such Awards.
(b)    Vesting. Restricted Shares and Restricted Share Units granted to
Participants under the Plan shall be subject to a Restriction Period. Except as
otherwise determined by the Committee at or after grant, and subject to the
Participant’s continued employment with the Company on such date, the
Restriction Period shall lapse in accordance with the schedule provided in the
Participant’s Award Agreement. In its discretion, the Committee may also
establish performance-based vesting conditions with respect to Awards of
Restricted Shares and Restricted Share Units (in lieu of, or in addition to,
time-based vesting) based on one or more of the Performance Goals listed in
Section 5(c) or other performance goal; provided that any Award of Restricted
Shares or Restricted Share Units made to any Executive Officer that is intended
to qualify as “other performance based compensation” under Section 162(m) of the
Code shall be subject to the same restrictions and limitations applicable to
Performance Awards under Sections 5(d) and 5(g), during a Performance Cycle
selected by the Committee.
(c)    Settlement of Restricted Shares and Restricted Share Units. At the
expiration of the Restriction Period for any Restricted Share Awards, the
Company shall remove the restrictions applicable to share certificates or the
entry in the Company’s register of members evidencing the Restricted Share
Awards, and shall, upon request, deliver the share certificates evidencing such
Restricted Share Awards to the Participant or the Participant’s legal
representative (or otherwise evidence the issuance of such shares free of any
restrictions imposed under the Plan). At the expiration of the Restriction
Period for any Restricted Share Units, for each such Restricted Share Unit, the
Participant shall receive, in the Committee’s discretion, (i) a cash payment
equal to the Fair Market Value of one Share as of such payment date, (ii) one
Share or (iii) any combination of cash and Shares.
(d)    Restrictions on Transfer. Except as provided herein or in an Award
Agreement, Restricted Shares and Restricted Share Units may not be sold,
assigned, transferred, pledged, charged, hedged or otherwise encumbered during
the Restriction Period. Any such attempt by the Participant to sell, assign,
transfer, pledge, charge, hedge or encumber Restricted Shares and Restricted
Share Units without complying with the provisions of the Plan shall be void and
of no effect.
SECTION 4.     SHARE OPTIONS
(a)    Grant. The Committee may, in its discretion, grant Options to purchase
Shares to such eligible persons as may be selected by the Committee. Each
Option, or portion thereof, that is not an Incentive Share Option shall be a
Non-Statutory Share Option. An Incentive Share Option may not be granted to any
person who is not an employee of the Company or any parent or subsidiary (as
defined in Section 424 of the Code). Each Incentive Share Option shall be
granted within ten years of the date this Plan is adopted by the Board. The
aggregate Fair Market Value of the Shares with respect to which Incentive Share
Options are exercisable for the first time by a Participant during any calendar
year shall not exceed $100,000 or such higher limit as may be permitted under
Section 422 of the Code. To the extent that the aggregate Fair Market Value
(determined as of the date of grant) of Shares with respect to which Options
designated as Incentive Share Options are exercisable for the first time by a
participant during any calendar year (under this Plan or any other plan of the
Company or any parent or subsidiary as defined in Section 424 of the Code)
exceeds $100,000 or such higher limit established by the Code, such Options
shall constitute Non-Statutory Share Options. Each Option shall be evidenced by
an Award Agreement that shall specify the number of Shares subject to such
Option, the exercise price associated with the Option, the time and conditions
of exercise of the Option and all other terms and conditions of the Option.
(b)    Number of Shares and Purchase Price. The number of Shares subject to an
Option and the purchase price per Share purchasable upon exercise of the Option
shall be determined by the Committee; provided, however, that the purchase price
per Share purchasable upon exercise of an Option shall not be less than 100% of
the Fair Market Value of a Share on the date of grant of such Option; provided
further, that if an Incentive Share Option shall be granted to any person who,
at the time such Option is granted, owns capital shares possessing more than ten
percent of the total combined voting power of all classes of capital shares of
the Company (or of any parent or subsidiary as defined in Section 424 of the
Code) (a “Ten Percent Holder”), the purchase price per Share shall be the price
(currently 110% of Fair Market Value) required by the Code in order to
constitute an Incentive Share Option.
(c)    Exercise Period and Exercisability. The period during which an Option may
be exercised shall be determined by the Committee; provided, however, that no
Option shall be exercised later than ten years after its date of grant; and
provided further, that if an Incentive Share Option shall be granted to a Ten
Percent Holder, such Option shall not be exercised later than five years after
its date of grant. The Committee shall determine whether a Share Option shall
become exercisable in cumulative or non-cumulative installments and in part or
in full at any time. The Committee may require that an exercisable Option, or
portion thereof, be exercised only with respect to whole Shares.
(d)    Method of Exercise. An Option may be exercised (i) by giving written
notice to the Company specifying the number of Shares to be purchased and by
accompanying such notice with a payment therefor in full (or by arranging for
such payment to the Company’s satisfaction) and (ii) by executing such documents
as the Company may reasonably request. If the Company’s Shares are not listed on
an established stock exchange or national market system at the time an Option is
exercised, then the optionholder shall pay the exercise price of such Option in
cash. If the Company’s Shares are listed on an established stock exchange or
national market system at the time an option is exercised, then the optionholder
may pay the exercise price of such Option either (A) in cash, (B) by delivery
(either actual delivery or by attestation procedures established by the Company)
of Shares having an aggregate Fair Market Value, determined as of the date of
exercise, equal to the aggregate purchase price payable by reason of such
exercise, (C) authorizing the Company to repurchase whole Shares which would
otherwise be delivered having an aggregate Fair Market Value, determined as of
the date of exercise, equal to the amount necessary to satisfy such obligation,
and withhold the proceeds thereof, provided that the Committee determines that
such repurchase of shares does not cause the Company to recognize an increased
compensation expense under applicable accounting principles, (D) in cash by a
broker-dealer acceptable to the Company to whom the optionee has submitted an
irrevocable notice of exercise or (E) a combination of (A), (B), (C) and (D), in
each case to the extent set forth in the Award Agreement relating to the Option.
The Company shall have sole discretion to disapprove of an election pursuant to
any of clauses (B) through (E). Any fraction of a Share which would be required
to pay such purchase price shall be disregarded and the remaining amount due
shall be paid in cash by the optionee. No certificate representing Shares shall
be delivered until the full purchase price therefor and any withholding taxes
(as determined, pursuant to Section 15(a)), have been paid (or arrangement made
for such payment to the Company’s satisfaction).
SECTION 5.     SHARE APPRECIATION RIGHTS
(a)    Grant. Share Appreciation Rights may be granted to Participants at such
time or times as shall be determined by the Committee. Share Appreciation Rights
may be granted in tandem with Options which, unless otherwise determined by the
Committee at or after the grant date, shall have substantially similar terms and
conditions to such Options to the extent applicable, or may be granted on a
freestanding basis, not related to any Option (“Freestanding SARs”). The grant
date of any Share Appreciation Right under the Plan will be the date on which
the Share Appreciation Right is awarded by the Committee or such other future
date as the Committee shall determine in its sole discretion. No Share
Appreciation Right shall be exercisable on or after the tenth anniversary of its
grant date. Share Appreciation Rights shall be evidenced by an Award Agreement,
whether as part of the Award Agreement governing the terms of the Options, if
any, to which such Share Appreciation Right relates or pursuant to a separate
Award Agreement with respect to Freestanding SARs, in each case containing such
provisions not inconsistent with the Plan as the Committee shall determine,
including customary representations, warranties and covenants with respect to
securities law matters.
(b)    Exercise Period and Exercisability. The period during which a Share
Appreciation Right may be exercised shall be determined by the Committee;
provided, however, that no Share Appreciation Right shall be exercised later
than ten years after its date of grant. The Committee shall determine whether a
Share Appreciation Right shall become exercisable in cumulative or
non-cumulative installments and in part or in full at any time. Share
Appreciation Rights granted in tandem with an Option shall become exercisable on
the same date or dates as the Options with which such Share Appreciation Rights
are associated become exercisable. Share Appreciation Rights that are granted in
tandem with an Option may only be exercised upon the surrender of the right to
exercise such Option for an equivalent number of Shares, and may be exercised
only with respect to the Shares for which the related Option is then
exercisable.
(c)    Settlement. Subject to Section 13, upon exercise of a Share Appreciation
Right, the Participant shall be entitled to receive payment in the form,
determined by the Committee, of cash or Shares having a Fair Market Value equal
to such cash amount, or a combination of Shares and cash having an aggregate
value equal to such amount, determined by multiplying:
(i)     any increase in the Fair Market Value of one Share on the exercise date
over the price fixed by the Committee on the grant date of such Share
Appreciation Right, which may not be less than the Fair Market Value of a Share
on the grant date of such Share Appreciation Right, by
(ii)     the number of Shares with respect to which the Share Appreciation Right
is exercised;
provided, however, that on the grant date, the Committee may establish, in its
sole discretion, a maximum amount per share which will be payable upon exercise
of a Share Appreciation Right.
SECTION 6.     DEFERRED SHARE UNITS
(a)    Grant. Freestanding Deferred Share Units may be granted to Participants
at such time or times as shall be determined by the Committee without regard to
any election by the Participant to defer receipt of any compensation or bonus
amount payable to him. The grant date of any freestanding Deferred Share Unit
under the Plan will be the date on which such freestanding Deferred Share Unit
is awarded by the Committee or on such other future date as the Committee shall
determine in its sole discretion. In addition, on fixed dates established by the
Committee and subject to such terms and conditions as the Committee shall
determine, the Committee may permit a Participant to elect to defer receipt of
all or a portion of his or her annual compensation and/or annual incentive bonus
(“Deferred Annual Amount”) payable by the Company or a Subsidiary and any other
Award (“Deferred Award”) and receive in lieu thereof an Award of elective
Deferred Share Units (“Elective Deferred Share Units”) equal to, in the case of
a Deferred Annual Amount, the greatest whole number which may be obtained by
dividing (i) the amount of the Deferred Annual Amount, by (ii) the Fair Market
Value of one Share on the date of payment of such compensation and/or annual
bonus or, in the case of a Deferred Award under the Plan, the number of Shares
subject to the Deferred Award. Each Award of Deferred Share Units shall be
evidenced by an Award Agreement that shall specify (x) the number of Shares to
which the Deferred Share Units pertain, (y) the time and form of payment of the
Deferred Share Units and (z) such terms and conditions not inconsistent with the
Plan as the Committee shall determine, including customary representations,
warranties and covenants with respect to securities law matters and such
provisions as may be required pursuant to Section 409A of the Code. Upon the
grant of Deferred Share Units pursuant to the Plan, the Company shall establish
a notional account for the Participant and will record in such account the
number of Deferred Share Units awarded to the Participant. No Shares will be
issued to the Participant at the time an award of Deferred Share Units is
granted. Deferred Share Units may become payable on a Change in Control,
Termination of Service or on a specified date or dates set forth in the Award
Agreement evidencing such Deferred Share Units.
(b)    Rights as a Shareholder. The Committee shall determine whether and to
what extent Dividend Equivalents will be credited to the account of, or paid
currently to, a Participant receiving an Award of Deferred Share Units. Unless
otherwise provided by the Committee at or after the grant date, (i) any cash
dividends or distributions credited to the Participant’s account shall be deemed
to have been invested in additional Deferred Share Units on the record date
established for the related dividend or distribution in an amount equal to the
greatest whole number which may be obtained by dividing (A) the value of such
dividend or distribution on the record date by (B) the Fair Market Value of one
Share on such date, and such additional Deferred Share Unit shall be subject to
the same terms and conditions as are applicable in respect of the Deferred Share
Unit with respect to which such dividends or distributions were payable, and
(ii) if any such dividends or distributions are paid in Shares or other
securities, such shares and other securities shall be subject to the same
vesting, performance and other restrictions as apply to the Deferred Share Unit
with respect to which they were paid. A Participant shall not have any rights as
a shareholder in respect of Deferred Share Units awarded pursuant to the Plan
(including, without limitation, the right to vote on any matter submitted to the
Company’s shareholders) until such time as the Shares attributable to such
Deferred Share Units have been issued to such Participant or his beneficiary.
(c)    Vesting. Unless the Committee provides otherwise at or after the grant
date, the portion of each Award of Deferred Share Units that consists of
freestanding Deferred Share Units, together with any Dividend Equivalents
credited with respect thereto, will be subject to a Restriction Period. Except
as otherwise determined by the Committee at the time of grant, and subject to
the Participant’s continued Service with his or her Employer on such date, the
Restriction Period with respect to Deferred Share Units shall lapse as provided
in the Participant’s Award Agreement. In its discretion, the Committee may
establish performance-based vesting conditions with respect to Awards of
Deferred Share Units (in lieu of, or in addition to, time-based vesting) based
on one more of the Performance Goals listed in Section 5(c) or other performance
goal; provided that any Award of Deferred Share Units made to any Covered
Employee that is intended to qualify as performance-based compensation under
Section 162(m) of the Code shall be subject to the same restrictions and
limitations applicable to Awards of Performance Shares and Performance Units
under Sections 5(d) and 5(g), during a Performance Cycle selected by the
Committee. The portion of each Award of Deferred Share Units that consists of
Elective Deferred Share Units, together with any Dividend Equivalents credited
with respect thereto, need not be subject to any Restriction Period and may be
non‑forfeitable.
(d)    Further Deferral Elections. A Participant may elect to further defer
receipt of Shares issuable in respect of Deferred Share Units or other Award (or
an installment of an Award) for a specified period or until a specified event,
subject in each case to the Committee’s approval and to such terms as are
determined by the Committee, all in its sole discretion. Subject to any
exceptions adopted by the Committee, such election must generally be made at
least 12 months before the prior settlement date of such Deferred Share Units
(or any such installment thereof) whether pursuant to this Section 9 or Section
13 and must defer settlement for at least five years. A further deferral
opportunity is not required to be made available to all Participants, and
different terms and conditions may apply with respect to the further deferral
opportunities made available to different Participants.
(e)    Settlement. Subject to this Section 9 and Section 13, upon the date
specified in the Award Agreement evidencing the Deferred Share Units for each
such Deferred Share Unit the Participant shall receive, in the Committee’s
discretion, (i) a cash payment equal to the Fair Market Value of one Share as of
such payment date, (ii) one Share or (iii) any combination of cash and Shares.
SECTION 7.     OTHER SHARE-BASED AWARDS
(a)    Generally. The Committee is authorized to make Awards of other types of
equity-based or equity-related awards (“Share-Based Awards”) not otherwise
described by the terms of the Plan in such amounts and subject to such terms and
conditions as the Committee shall determine. All Share -Based Awards shall be
evidenced by an Award Agreement. Such Share -Based Awards may be granted as an
inducement to enter the employ of the Company or any Subsidiary or in
satisfaction of any obligation of the Company or any Subsidiary to an officer or
other key employee, whether pursuant to this Plan or otherwise, that would
otherwise have been payable in cash or in respect of any other obligation of the
Company. Such Share -Based Awards may entail the transfer of actual Shares, or
payment in cash or otherwise of amounts based on the value of Shares and may
include, without limitation, Awards designed to comply with or take advantage of
the applicable local laws of jurisdictions other than the United States. The
terms of any other Share -Based Award need not be uniform in application to all
(or any class of) Participants, and each other Share -Based award granted to any
Participant (whether or not at the same time) may have different terms.
SECTION 8.     DIVIDEND EQUIVALENTS
(a)    Generally. Dividend Equivalents may be granted to Participants at such
time or times as shall be determined by the Committee. Dividend Equivalents may
be granted in tandem with other Awards, in addition to other Awards, or
freestanding and unrelated to other Awards. The grant date of any Dividend
Equivalents under the Plan will be the date on which the Dividend Equivalent is
awarded by the Committee, or such other date as the Committee shall determine in
its sole discretion. Dividend Equivalents may be paid in cash or in Shares or
any compensation thereof as determined by the Committee in its sole discretion.
Dividend Equivalents shall be evidenced in writing, whether as part of the Award
Agreement governing the terms of the Award, if any, to which such Dividend
Equivalent relates, or pursuant to a separate Award Agreement with respect to
freestanding Dividend Equivalents, in each case, containing such provisions not
inconsistent with the Plan as the Committee shall determine, including customary
representations, warranties and covenants with respect to securities law
matters.
SECTION 9.     TERMINATION OF EMPLOYMENT OR
SERVICE AND FORFEITURE
(a)    Termination for Cause. Unless otherwise determined by the Committee at
the grant date and set forth in the Award Agreement covering the Award (or
otherwise in writing), or determined thereafter in a manner more favorable to
the Participant, if a Participant’s employment or service terminates for Cause,
all Options and SARs, whether vested or unvested, and all other Awards that are
unvested or unexercisable or otherwise unpaid (or were unvested or unexercisable
or unpaid at the time of occurrence of Cause) shall be immediately forfeited and
canceled, effective as of the date of the Participant’s termination of service.
(b)    Termination Due to Death or Disability. Unless otherwise determined by
the Committee at the grant date and set forth in the Award Agreement covering
the Award (or otherwise in writing), or determined thereafter in a manner more
favorable to the Participant, if a Participant’s employment or service
terminates due to the death or Disability of the Participant:
(i)    All Service Awards that are unvested or unexercisable that would have
become vested at any time prior to the first anniversary of the Participant’s
Termination of Service, had the Participant continued to be employed by the
Company through such date, shall immediately become vested and exercisable as of
the date of termination;
(ii)    Performance Awards that are unvested or unexercisable shall, subject to
the achievement of the applicable Performance Goals, be deemed vested and/or
exercisable to the extent of the number of Performance Awards that would have
vested and/or become exercisable had the Participant’s Service continued until
the first anniversary of the Participant’s Termination of Service;
(iii)    All Options and SARs that are vested shall remain outstanding until (y)
the one year anniversary of the Participant’s termination of employment or
(z) the Award’s normal expiration date, whichever is earlier, after which date
any unexercised Options and SARs shall immediately terminate;
(iv)    All Awards other than Options and SARs that are vested shall be treated
as set forth in the applicable Award Agreement (or in any more favorable manner
determined by the Committee); and
(v)    All Awards that are unvested or unexercisable (and do not become vested
pursuant to Section 12(b)(ii or (ii))) shall immediately terminate as of the
date of the Participant’s Termination of Service.
(c)    Termination for Any Other Reason. Unless otherwise determined by the
Committee at the grant date and set forth in the Award Agreement covering the
Award (or otherwise in writing), or determined thereafter in a manner more
favorable to the Participant, if a Participant’s employment or service
terminates for any reason other than Cause or due to the death or Disability of
the Participant:
(i)    All Awards that are unvested or unexercisable shall be immediately be
forfeited and canceled, effective as of the date of the Participant’s
Termination of Service;
(ii)    All Options and SARs that are vested shall remain outstanding until (x)
in the case of Retirement, the one year anniversary of the date of the
Participant’s Termination of Service, (y) the three-month anniversary of the
effective date of the Participant’s Termination of Service for any reason other
than Retirement or (z) the Award’s normal expiration date, whichever is earlier,
after which any unexercised Options and SARs shall immediately terminate; and
(iii)    All Awards other than Options and SARs that are vested shall be treated
as set forth in the applicable Award Agreement (or in any more favorable manner
determined by the Committee).
(d)    Termination in Connection with a Change in Control. Notwithstanding
anything to the contrary in this Section 12, Section 13 shall determine the
treatment of Awards upon a Change in Control.
(e)    Forfeiture, Cancellation and “Clawback” of Awards. The Participant shall
forfeit and disgorge to the Company any Awards granted or vested and any gains
earned or accrued due to the exercise of Options or SARs or the sale of any
Shares or the settlement of any Award to the extent required by Applicable Law
or regulations in effect on or after the Effective Date, including Section 304
of the U.S. Sarbanes-Oxley Act of 2002 and Section 10D of the Exchange Act. For
the avoidance of doubt, the Committee shall have full authority to implement any
policies and procedures necessary to comply with Section 10D of the Exchange Act
and any rules promulgated thereunder. The implementation of policies and
procedures pursuant to this Section 12(e) and any modification of the same shall
not be subject to any restrictions on amendment or modification of Awards.
Awards granted under this Plan (and gains earned or accrued in connection with
Awards) shall also be subject to such generally applicable policies as to
forfeiture and recoupment (including, without limitation, upon the occurrence of
material financial or accounting errors, financial or other misconduct or
Competitive Activity) as may be adopted by the Administrator or the Board from
time to time and communicated to Participants. Any such policies may (in the
discretion of the Administrator or the Board) be applied to outstanding Awards
at the time of adoption of such policies, or on a prospective basis only.
SECTION 10.     CHANGE IN CONTROL
(a)    Accelerated Vesting and Payment.
(i)    In General. Except as otherwise provided in an Award Agreement, upon the
occurrence of a Change in Control, (i) all Options and Share Appreciation Rights
shall become immediately exercisable, (ii) the Restriction Period on all
Restricted Shares, Restricted Share Units and Deferred Share Units shall lapse
immediately prior to such Change in Control and (iii) Shares underlying Awards
of Restricted Share Units and Deferred Share Units shall be issued to each
Participant then holding such Award immediately prior to such Change in Control;
provided, that, at the discretion of the Committee (as constituted immediately
prior to the Change in Control), each such Option, Share Appreciation Right,
Restricted Share Unit and/or Deferred Share Unit may be canceled in exchange for
an amount equal to the product of (A)(I) in the case of Options and Share
Appreciation Rights, the excess, if any, of the product of the Change in Control
Price over the exercise price for such Award, and (II) in the case of other such
Awards, the Change in Control Price multiplied by (B) the aggregate number of
Shares covered by such Award. Notwithstanding the foregoing, the Committee may,
in its discretion, instead terminate any outstanding Options or Share
Appreciation Rights if either (x) the Company provides holders of such Options
and Share Appreciation Rights with reasonable advance notice to exercise their
outstanding and unexercised Options and Share Appreciation Rights or (y) the
Committee reasonably determines that the Change in Control Price is equal to or
less than the exercise price for such Options or Share Appreciation Rights.
(ii)    Performance Awards. Performance Awards that are outstanding in the event
of a Change in Control shall be treated as provided in the individual Award
Agreement governing such Performance Awards.
(b)    Timing of Payments. Payment of any amounts calculated in accordance with
Section (i) shall be made in cash or, if determined by the Committee (as
constituted immediately prior to the Change in Control), in common shares of the
New Employer having an aggregate fair market value equal to such amount and
shall be payable in full, as soon as reasonably practicable, but in no event
later than 30 days, following the Change in Control. For purposes hereof, the
fair market value of one common share of the New Employer shall be determined by
the Committee (as constituted immediately prior to the consummation of the
transaction constituting the Change in Control), in good faith.
(c)    Termination Without Cause Prior to a Change in Control. Unless otherwise
determined by the Committee at or after the time of grant, any Participant whose
employment or service is terminated without Cause within three (3) months prior
to the occurrence of a Change in Control shall be treated, solely for the
purposes of this Plan (including, without limitation, this Section 13) as
continuing in the Company’s employment or service until the occurrence of such
Change in Control, and to have been terminated immediately thereafter.
(d)    Waiver of Benefits. Notwithstanding anything contained in this Plan or
any Award Agreement to the contrary, to the extent that any of the payments and
benefits provided for under this Plan, any Award Agreement, or any other
agreement or arrangement between the Company or any Subsidiary and a Participant
(collectively, the “Payments”) would constitute an “excess parachute payment”
within the meaning of Section 280G of the Code, such Participant shall be
entitled to waive any or all of such Payments to the extent necessary to avoid
the application of the excise tax under Section 4999 of the Code.
SECTION 11.     EFFECTIVE DATE, AMENDMENT, MODIFICATION,
AND TERMINATION OF THE PLAN
The Plan shall be effective on the Effective Date, and shall continue in effect,
unless sooner terminated pursuant to this Section 14, until the tenth
anniversary of the Effective Date. The Board or the Committee may at any time in
its sole discretion, for any reason whatsoever, terminate or suspend the Plan,
and from time to time, subject to obtaining any regulatory approval, including
that of a stock exchange on which the Shares are then listed, if applicable, may
amend or modify the Plan; provided that without the approval by a majority of
the votes cast at a duly constituted meeting of shareholders of the Company, no
amendment or modification to the Plan may (i) materially increase the benefits
accruing to Participants under the Plan, (ii) except as otherwise expressly
provided in Section 4(d), increase the number of Shares subject to the Plan or
the individual Award limitations specified in Section 4(c), (iii)  modify the
class of persons eligible for participation in the Plan, (iv) allow Options or
Share Appreciation Rights to be issued with an exercise price or reference price
below Fair Market Value on the date of grant (v) extend the term of any Award
granted under the Plan beyond its original expiry date or (vi) materially modify
the Plan in any other way that would require shareholder approval under any
regulatory requirement that the Committee determines to be applicable,
including, without limitation, the rules of any exchange on which the Shares are
then listed. Notwithstanding any provisions of the Plan to the contrary, neither
the Board nor the Committee may, without the consent of the affected
Participant, amend, modify or terminate the Plan in any manner that would
adversely affect any Award theretofore granted under the Plan or result in the
imposition of an additional tax, interest or penalty under Section 409A of the
Code.
SECTION 12.     GENERAL PROVISIONS
(a)    Withholding. The Employer shall have the right to deduct from all amounts
paid to a Participant in cash (whether under this Plan or otherwise) any amount
of taxes required by law to be withheld in respect of Awards under this Plan as
may be necessary in the opinion of the Employer to satisfy tax withholding
required under the laws of any country, state, province, city or other
jurisdiction, including but not limited to income taxes, capital gains taxes,
transfer taxes, and social security contributions that are required by law to be
withheld. In the case of payments of Awards in the form of Shares, at the
Committee’s discretion, the Participant shall be required to either pay to the
Employer the amount of any taxes required to be withheld with respect to such
Shares or, in lieu thereof, the Employer shall have the right to retain and
repurchase from the Participant (or the Participant may be offered the
opportunity to elect to tender for repurchase by the Company) the number of
Shares whose Fair Market Value equals such amount required to be withheld and
withhold the proceeds of such sale; and provided, further, that with respect to
any Specified Award, in no event shall Shares or other amounts receivable under
a Specified Award be repurchased pursuant to this Section 15(a) (other than upon
or immediately prior to settlement in accordance with the Plan and the
applicable Award Agreement) other than to pay taxes imposed under the U.S.
Federal Insurance Contributions Act (FICA) and any associated U.S. federal
withholding tax imposed under Section 3401 of the Code and in no event shall the
value of such Shares or other amounts receivable under a Specified Award (other
than upon or immediately prior to settlement) exceed the amount of the tax
imposed under FICA and any associated U.S. federal withholding tax imposed under
Section 3401 of the Code. The Participant shall be responsible for all
withholding taxes and other tax consequences of any Award granted under this
Plan.
(b)    Nontransferability of Awards. Except as provided herein or in an Award
Agreement, no Award may be sold, assigned, transferred, pledged, charged or
otherwise encumbered except by will or the laws of descent and distribution;
provided that the Committee may permit (on such terms and conditions as it shall
establish) a Participant to transfer an Award for no consideration to the
Participant’s child, stepchild, grandchild, parent, stepparent, grandparent,
spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including
adoptive relationships, any person sharing the Participant’s household (other
than a tenant or employee), a trust in which these persons have more than fifty
percent of the beneficial interest and any other entity in which these persons
(or the Participant) own more than fifty percent of the voting interests
(“Permitted Transferees”). A Participant may not enter into any transaction
which hedges or otherwise transfers the risk of price movements with regard to
the Shares subject to any unvested or unearned Award. No amendment to the Plan
or to any Award shall permit transfers other than in accordance with the
preceding sentence. Any attempt by a Participant to sell, assign, transfer,
pledge, charge, hedge or encumber an Award without complying with the provisions
of the Plan shall be void and of no effect. Except to the extent required by
law, no right or interest of any Participant shall be subject to any lien,
obligation or liability of the Participant. All rights with respect to Awards
granted to a Participant under the Plan shall be exercisable during the
Participant’s lifetime only by such Participant or, if applicable, his or her
Permitted Transferee(s). The rights of a Permitted Transferee shall be limited
to the rights conveyed to such Permitted Transferee, who shall be subject to and
bound by the terms of the agreement or agreements between the Participant and
the Company.
(c)    No Limitation on Compensation. Nothing in the Plan shall be construed to
limit the right of the Company to establish other plans or to pay compensation
to its Employees, in cash or property, in a manner which is not expressly
authorized under the Plan.
(d)    No Right to Employment. No person shall have any claim or right to be
granted an Award, and the grant of an Award shall not be construed as giving a
Participant the right to be retained in the employ of the Employer. The grant of
an Award hereunder, and any future grant of Awards under the Plan is entirely
voluntary, and at the complete discretion of the Company. Neither the grant of
an Award nor any future grant of Awards by the Company shall be deemed to create
any obligation to grant any further Awards, whether or not such a reservation is
explicitly stated at the time of such a grant. The Plan shall not be deemed to
constitute, and shall not be construed by the Participant to constitute, part of
the terms and conditions of employment and participation in the Plan shall not
be deemed to constitute, and shall not be deemed by the Participant to
constitute, an employment or labor relationship of any kind with the Company.
The Employer expressly reserves the right at any time to dismiss a Participant
free from any liability, or any claim under the Plan, except as provided herein
and in any agreement entered into with respect to an Award. The Company
expressly reserves the right to require, as a condition of participation in the
Plan, that Award recipients agree and acknowledge the above in writing. Further,
the Company expressly reserves the right to require Award recipients, as a
condition of participation, to consent in writing to the collection, transfer
from the Employer to the Company and third parties, storage and use of personal
data for purposes of administering the Plan.
(e)    No Rights as Shareholder. Subject to the provisions of the applicable
Award contained in the Plan and in the Award Agreement, no Participant,
Permitted Transferee or Designated Beneficiary shall have any rights as a
shareholder with respect to any Shares to be distributed under the Plan until he
or she has become the holder thereof.
(f)    Construction of the Plan. The validity, construction, interpretation,
administration and effect of the Plan and of its rules and regulations, and
rights relating to the Plan, shall be determined solely in accordance with the
laws of Bermuda (without reference to the principles of conflicts of law or
choice of law that might otherwise refer the construction or interpretation of
this Plan to the substantive laws of another jurisdiction).
(g)    Rules of Construction. Whenever the context so requires, the use of the
masculine gender shall be deemed to include the feminine and vice versa, and the
use of the singular shall be deemed to include the plural and vice versa. That
this plan was drafted by the Company shall not be taken into account in
interpreting or construing any provision of this Plan.
(h)    Compliance with Legal and Exchange Requirements. The Plan, the granting
and exercising of Awards thereunder, and any obligations of the Company under
the Plan, shall be subject to all applicable federal, state, and foreign country
laws, rules, and regulations, and to such approvals by any regulatory or
governmental agency as may be required, and to any rules or regulations of any
exchange on which the Shares are listed. The Company, in its discretion, may
postpone the granting and exercising of Awards, the issuance or delivery of
Shares under any Award or any other action permitted under the Plan to permit
the Company, with reasonable diligence, to complete such stock exchange listing
or registration or qualification of such Shares or other required action under
any federal, state or foreign country law, rule, or regulation and may require
any Participant to make such representations and furnish such information as it
may consider appropriate in connection with the issuance or delivery of Shares
in compliance with applicable laws, rules, and regulations. The Company shall
not be obligated by virtue of any provision of the Plan to recognize the
exercise of any Award or to otherwise sell or issue Shares in violation of any
such laws, rules, or regulations, and any postponement of the exercise or
settlement of any Award under this provision shall not extend the term of such
Awards. Neither the Company nor its directors or officers shall have any
obligation or liability to a Participant with respect to any Award (or Shares
issuable thereunder) that shall lapse because of such postponement.
(i)    Deferrals. Subject to the requirements of Section 409A of the Code, the
Committee may postpone the exercising of Awards, the issuance or delivery of
Shares under, or the payment of cash in respect of, any Award or any action
permitted under the Plan, upon such terms and conditions as the Committee may
establish from time to time. Subject to the requirements of Section 409A of the
Code, a Participant may electively defer receipt of the Shares or cash otherwise
payable in respect of any Award (including, without limitation, any Shares
issuable upon the exercise of an Option other than an Incentive Share Option)
upon such terms and conditions as the Committee may establish from time to time.
(j)    Limitation on Liability; Indemnification. No member of the Board or
Committee, and none of the chief executive officer or any other delegate or
agent of the Committee shall be liable for any act, omission, interpretation,
construction or determination made in connection with the Plan in good faith,
and each person who is or shall have been a member of the Board or Committee,
the chief executive officer and each delegate or agent of the Committee shall be
indemnified and held harmless by the Company against and from any loss, cost,
liability, or expense (including attorneys’ fees) that may be imposed upon or
reasonably incurred by him or her in connection with or resulting from any
claim, action, suit, or proceeding to which he or she may be made a party or in
which he or she may be involved in by reason of any action taken or failure to
act under the Plan to the full extent permitted by law, except as otherwise
provided in the Company’s Memorandum of Association and Bye-laws, and under any
directors’ and officers’ liability insurance that may be in effect from time to
time. The foregoing right of indemnification shall not be exclusive and shall be
independent of any other rights of indemnification to which such persons may be
entitled under the Company’s Memorandum of Association or Bye-laws, by contract,
as a matter of law, or otherwise.
(k)    Amendment of Award. In the event that the Committee shall determine that
such action would, taking into account such factors as it deems relevant, be
beneficial to the Company, the Committee may affirmatively act to amend, modify
or terminate any outstanding Award at any time prior to payment or exercise in
any manner not inconsistent with the terms of the Plan, including without
limitation, change the date or dates as of which (A) an Option or Share
Appreciation Right becomes exercisable, (B) a Performance Share or Performance
Unit is deemed earned, or (C) Restricted Share, Restricted Share Units, Deferred
Share Units and other Share -Based Awards becomes nonforfeitable, except that no
outstanding Option may be amended or otherwise modified or exchanged (other than
in connection with a transaction described in Section 4(d)) in a manner that
would have the effect of reducing its original exercise price or otherwise
constitute repricing. Any such action by the Committee shall be subject to the
Participant’s consent if the Committee determines that such action would
adversely affect the Participant’s rights under such Award, whether in whole or
in part. The Committee may, in its sole discretion, accelerate the
exercisability or vesting or lapse of any Restriction Period with respect to all
or any portion of any outstanding Award at any time. Notwithstanding any
provisions of the Plan to the contrary, the Committee may not, without the
consent of the affected Participant, amend, modify or terminate an outstanding
Award or exercise any discretion in any manner that would result in the
imposition of an additional tax, interest or penalty under Section 409A of the
Code.
(l)    409A Compliance. The Plan is intended to be administered in a manner
consistent with the requirements, where applicable, of Section 409A of the Code.
Where reasonably possible and practicable, the Plan shall be administered in a
manner to avoid the imposition on Participants of immediate tax recognition and
additional taxes pursuant to Section 409A of the Code. In the case of any
Specified Award that may be treated as payable in the form of “a series of
installment payments,” as defined in U.S. Treasury Regulation Section
1.409A-2(b)(2)(iii), a Participant’s or Designated Beneficiary’s right to
receive such payments shall be treated as a right to receive a series of
separate payments for purposes of such Treasury Regulation. Notwithstanding the
foregoing, neither the Company nor the Committee, nor any of the Company’s
directors, officers or employees shall have any liability to any person in the
event Section 409A of the Code applies to any such Award in a manner that
results in adverse tax consequences for the Participant or any of his
beneficiaries or transferees. Notwithstanding any provision of this Plan or any
Award Agreement to the contrary, the Board or the Committee may unilaterally
amend, modify or terminate the Plan or any outstanding Award, including but not
limited to changing the form of Award or the exercise price of any Option or
SAR, if the Board or Committee determines, in its sole discretion, that such
amendment, modification or termination is necessary or advisable to comply with
applicable U.S. law, as a result of changes in law or regulation or to avoid the
imposition of an additional tax, interest or penalty under Section 409A of the
Code.
(m)    Certain Provisions Applicable to Specified Employees. Notwithstanding the
terms of this Plan or any Award Agreement to the contrary, if at the time of
Participant’s Termination of Service he or she is a “specified employee” within
the meaning of Section 409A of the Code, any payment of any “nonqualified
deferred compensation” amounts (within the meaning of Section 409A of the Code
and after taking into account all exclusions applicable to such payments under
Section 409A of the Code) required to be made to the Participant upon or as a
result of the Termination of Service (as defined in Section 409A) shall be
delayed until after the six-month anniversary of the Termination of Service to
the extent necessary to comply with and avoid the imposition of taxes, interest
and penalties under Section 409A of the Code. Any such payments to which he or
she would otherwise be entitled during the first six months following his or her
Termination of Service will be accumulated and paid without interest on the
first payroll date after the six-month anniversary of the Termination of Service
(unless another Section 409A-compliant payment date applies) or within thirty
days thereafter. These provisions will only apply if and to the extent required
to avoid the imposition of taxes, interest and penalties under Section 409A of
the Code.
(n)    Section 162(m) Transition Period. For the avoidance of doubt, to the
extent that Section 162(m) of the Code does not apply to the Plan or an Award
that is granted or settled prior to the first meeting of shareholders at which
directors are to be elected that occurs after the close of the third calendar
year following the calendar year in which the Shares become publicly held
pursuant to an IPO, the Committee shall have discretion to grant Awards in
excess of the maximum amounts set forth in Section 4(c), to establish
performance objectives without reference to the criteria set forth in the U.S.
Treasury regulations under Section 162(m), including but not limited to U.S.
Treasury Regulation §1.162-27(e), to set performance goals outside of the period
set forth in Section 5(d), to exercise affirmative discretion under Section 5(f)
with respect to Covered Employees, to waive certification requirements under
Section 5(g) and to take action by a Committee that is not comprised solely of
“outside directors” as defined in Section 162(m).
(o)    No Impact on Benefits. Except as may otherwise be specifically stated
under any employee benefit plan, policy or program, no amount payable in respect
of any Award shall be treated as compensation for purposes of calculating a
Participant’s right under any such plan, policy or program.
(p)    No Constraint on Corporate Action. Nothing in this Plan shall be
construed (a) to limit, impair or otherwise affect the Company’s right or power
to make adjustments, reclassifications, reorganizations or changes of its
capital or business structure, or to merge, amalgamate or consolidate, or
dissolve, liquidate, sell, or transfer all or any part of its business or assets
or (b) to limit the right or power of the Company, or any Subsidiary, to take
any action which such entity deems to be necessary or appropriate.
(q)    Headings and Captions. The headings and captions herein are provided for
reference and convenience only, shall not be considered part of this Plan, and
shall not be employed in the construction of this Plan.