ACE Limited Employee Stock Purchase Plan



 Exhibit 10.1 
 ACE LIMITED  
 EMPLOYEE STOCK PURCHASE PLAN 

SECTION 1. 
 GENERAL 
 1.1. Purpose.
The ACE Limited Employee Stock Purchase Plan (the “Plan”) has been established by ACE Limited (the “Company”) to provide eligible employees of the Company and the Related Companies with an opportunity to acquire a proprietary
interest in the Company through the purchase of common shares of the Company (“Stock”). The Plan is intended to qualify as an employee stock purchase plan under section 423 of the Code, and the provisions of the Plan are to be construed in
a manner consistent with the requirements of that section. 
 1.2. Operation and
Administration. The operation and administration of the Plan shall be subject to the provisions of Section 3. Capitalized terms in the Plan shall be defined as set forth in Section 6 or elsewhere in the Plan. 

SECTION 2. 
 
METHOD OF PURCHASE 
 2.1. Eligibility. Plan participation shall be
available to (and shall be limited to) all persons who are employees of the Employers, except that the following persons shall not be eligible to participate in the Plan: 

 

	 	 (a)
	 An employee who has been employed less than 500 hours and less than six months. 



 

	 	 (b)
	 An employee whose customary employment is 20 hours or less per week. 



 

	 	 (c)
	 An employee whose customary employment is for not more than five months in any calendar year. 



 

	 	 (d)
	 An employee who owns, or who would own upon the exercise of any rights extended under the Plan and the exercise of any other option held by the
employee (whether qualified or non-qualified), shares possessing 5% or more of the total combined voting power or value of all classes of stock of the Company or of any parent or subsidiary corporation. 



 

	 	 (e)
	 An employee who is a citizen or resident of a foreign jurisdiction (without regard to whether they are also citizens of the United States or
resident aliens (within the meaning of Section 7701(b)(1)(A) of the Code)) with respect to whom either one or both of the following apply: (i) the grant of an option under the Plan or an offering to a citizen or resident of the foreign
jurisdiction is prohibited under the laws of such jurisdiction; or (ii) compliance with the laws of the foreign jurisdiction would cause the Plan or offering to violate the requirements of Section 423 of the Code.



 Notwithstanding the foregoing provisions of this subsection 2.1, an individual may
participate in the Plan for any Subscription Period only if he is employed by an Employer on the first day of that period. 
 2.2. Participation Election. The Committee shall establish “Subscription Periods” of not longer than one year for the accumulation of funds necessary for
payment of the Purchase Price (as defined in subsection 2.3) of Stock under the Plan. For any Subscription Period, an eligible employee shall become a Plan ‘Participant’ by filing, with the Committee, a written payroll deduction
authorization with respect to Compensation otherwise payable to the Participant during the period. Such payroll deductions shall be any full percentage of the Compensation of the Participant, or any specified whole dollar amount, up to but not more
than 10% of his Compensation in either case. After the beginning of the Subscription Period, and except as otherwise provided in subsection 2.4, a Participant may not alter the rate of his payroll deductions for that period. Subject to the
limitations of subsection 2.3, each eligible employee who has elected to become a Participant for a Subscription 







 
Period in accordance with the foregoing provisions of this subsection 2.2 shall be granted on the first day of such Subscription Period an option to purchase (at the applicable Purchase Price) on
the Exercise Date (as defined in subsection 2.3) for such Subscription Period up to a number of whole shares of Stock determined by dividing such Participant’s accumulated payroll deductions as of such Exercise Date by the applicable Purchase
Price. Exercise of the option shall occur as provided in subsection 2.3, unless the Participant has terminated participation in the Plan prior to the Exercise Date as provided in subsection 2.4 or the Participant elects not to exercise the option as
provided in subsection 2.3(b). The option shall expire on the last day of the Subscription Period. 
 
2.3. Purchase of Stock. On the last day of each Subscription Period (the “Exercise Date”), a Participant shall become eligible to exercise his option to purchase the number of whole shares of Stock as his accumulated payroll
deductions for the Subscription Period will purchase, subject to the following: 
  

	 	 (a)
	 The “Purchase Price” per share shall be equal to 85% of the fair market value of Stock on the Exercise Date; provided, however, that in no
event shall the purchase price be less than the par value of the Stock. 


  

	 	 (b)
	 A Participant shall be deemed to have elected to purchase the shares of Stock which he became entitled to purchase on the Exercise Date unless he
shall notify the Committee within seven days following the Exercise Date, or such shorter period as the Committee may establish, that he elects not to make such purchase. 



 

	 	 (c)
	 Any accumulated payroll deductions that are not used to purchase full shares of Stock under the Plan shall be paid to the Participant without
interest. 


  

	 	 (d)
	 No employee shall have the right to purchase more than $25,000 in value of Stock under the Plan (and any other employee stock purchase plan
described in Code section 423 and maintained by the Company or any Related Company) in any calendar year, such value being based on the fair market value of Stock as of the date on which the option to purchase the Stock is granted, as
determined in accordance with subsection 2.2 of the Plan. 


 2.4.
Termination of Participation. A Participant may discontinue his participation in the Plan for any Subscription Period, whereupon all of the Participant’s payroll deductions for the Subscription Period will be promptly paid to him without
interest, and no further payroll deductions will be made from his pay for that period. If a Participant’s employment with the Employers terminates during a Subscription Period for any reason, all payroll deductions accumulated by the
Participant under the Plan for the period shall be paid to the Participant without interest. 

SECTION 3. 
 OPERATION AND ADMINISTRATION 

3.1. Effective Date. Subject to the approval of the shareholders of the Company at the
Company’s 1996 annual meeting of its shareholders, the Plan shall be effective as of the date on which it is adopted by the Board; provided, however, that to the extent that rights are granted under the Plan prior to its approval by
shareholders, they shall be contingent on approval of the Plan by the shareholders of the Company. The Plan shall be unlimited in duration and, in the event of Plan termination, shall remain in effect as long as any rights granted under the Plan are
outstanding. 
 3.2. Shares Subject to Plan. Shares of Stock to be purchased
under the Plan shall be subject to the following: 
  

	 	 (a)
	 The shares of Stock which may be purchased under the Plan shall be currently authorized but unissued shares, or shares purchased in the open market
by a direct or indirect wholly owned subsidiary of the Company (as determined by any executive officer of the Company). The Company may contribute to the subsidiary an amount sufficient to accomplish the purchase in the open market of the shares of
Stock to be so acquired (as determined by any executive officer of the Company). 










	 	 (b)
	 Subject to the provisions of subsection 3.3, an additional 1,500,000 shares of Stock in the aggregate shall be available for purchase under the
Plan, which 1,500,000 shares of Stock shall be in addition to any remaining shares of the 3,000,000 shares of Stock designated as available for purchase under the Plan since the Plan’s original Effective Date. 



 

	 	 (c)
	 A Participant will have no interest in shares of Stock covered by his Subscription Agreement until the shares are delivered to him.



 3.3. Adjustments to Shares. 

(a) If the Company shall effect any subdivision or consolidation of shares of Stock or other capital readjustment, payment
of stock dividend, stock split, combination of shares or recapitalization or other increase or reduction of the number of shares of Stock outstanding without receiving compensation therefor in money, services or property, then, subject to the
requirements of Code section 423, the Committee shall adjust the number of shares of Stock available under the Plan. 
 (b) If the Company is reorganized, merged or consolidated or is party to a plan of exchange with another corporation, pursuant to which reorganization, merger, consolidation or plan of exchange the
shareholders of the Company receive any shares of stock or other securities or property, or the Company shall distribute securities of another corporation to its shareholders, then, subject to the requirements of Code section 423, there shall be
substituted for the shares subject to outstanding rights to purchase Stock under the Plan an appropriate number of shares of each class of stock or amount of other securities or property which were distributed to the shareholders of the Company in
respect of such shares. 
 3.4. Limit on Distribution. Distribution of shares
of Stock or other amounts under the Plan shall be subject to the following: 
  

	 	 (a)
	 Notwithstanding any other provision of the Plan, the Company shall have no liability to issue any shares of Stock under the Plan unless such
delivery or distribution would comply with all applicable laws and the applicable requirements of any securities exchange or similar entity. 


  

	 	 (b)
	 In the case of a Participant who is subject to Section 16(a) and 16(b) of the Securities Exchange Act of 1934, the Committee may, at any time,
add such conditions and limitations with respect to such Participant as the Committee, in its sole discretion, deems necessary or desirable to comply with Section 16(a) or 16(b) and the rules and regulations thereunder or to obtain any
exemption therefrom. 


  

	 	 (c)
	 To the extent that the Plan provides for issuance of certificates to reflect the transfer of shares of Stock, the transfer of such shares may, at
the direction of the Committee, be effected on a non-certificated basis, to the extent not prohibited by the provisions of Rule 16b-3, applicable local law, the applicable rules of any stock exchange, or any other applicable rules.



 3.5. Withholding. All benefits under the Plan are
subject to withholding of all applicable taxes. 
 3.6. Transferability.
Except as otherwise permitted under Code section 424 and SEC Rule 16b-3, neither the amount of any payroll deductions made with respect to a Participant’s compensation nor any Participant’s rights to purchase shares of Stock under the
Plan may be pledged or hypothecated, nor may they be assigned or transferred other than by will and the laws of descent and distribution. During the lifetime of the Participant, the rights provided to the Participant under the Plan may be exercised
only by him. 
 3.7. Limitation of Implied Rights. 

(a) Neither a Participant nor any other person shall, by reason of the Plan, acquire any right in or title to any assets,
funds or property of the Employers whatsoever, including, without limitation, any specific funds, assets, or other property which the Employers, in their sole discretion, may set aside in anticipation of a liability under








 
the Plan. A Participant shall have only a contractual right to the amounts, if any, payable under the Plan, unsecured by any assets of the Employers. Nothing contained in the Plan shall
constitute a guarantee by any of the Employers that the assets of the Employers shall be sufficient to pay any benefits to any person. 
 (b) The Plan does not constitute a contract of employment, and participation in the Plan will not give any employee the right to be retained in the employ of an Employer or any Related Company, nor any
right or claim to any benefit under the Plan, unless such right or claim has specifically accrued under the terms of the Plan. Except as otherwise provided in the Plan, no right to purchase shares under the Plan shall confer upon the holder thereof
any right as a shareholder of the Company prior to the date on which he fulfills all service requirements and other conditions for receipt of such rights. 
 3.8. Evidence. Evidence required of anyone under the Plan may be by certificate, affidavit, document or other information which the person acting on it considers
pertinent and reliable, and signed, made or presented by the proper party or parties. 
 
3.9. Action by Employers. Any action required or permitted to be taken by any Employer shall be by resolution of its board of directors, or by action of one or more members of the board (including a committee of the board) who are duly
authorized to act for the board, or (except to the extent prohibited by the provisions of Rule 16b-3, applicable local law, the applicable rules of any stock exchange, or any other applicable rules) by a duly authorized officer of the Employer.

 3.10. Gender and Number. Where the context admits, words in any gender
shall include any other gender, words in the singular shall include the plural and the plural shall include the singular. 
 
SECTION 4. 
 COMMITTEE 
 4.1. Administration. The authority to control and manage the operation and administration of the Plan shall be vested in a committee (the “Committee”) in
accordance with this Section 4. 
 4.2. Selection of Committee. The
Committee shall be selected by the Board, and shall consist of not less than two members of the Board, or such greater number as may be required for compliance with SEC Rule 16b-3. 

4.3. Powers of Committee. The authority to manage and control the operation and
administration of the Plan shall be vested in the Committee, subject to the following: 
  

	 	 (a)
	 Subject to the provisions of the Plan, the Committee will have the authority and discretion to establish the terms, conditions, restrictions, and
other provisions applicable to the right to purchase shares of Stock under the Plan. 


  

	 	 (b)
	 The Committee will have the authority and discretion to interpret the Plan, to establish, amend, and rescind any rules and regulations relating to
the Plan, to determine the terms and provisions of any agreements made pursuant to the Plan, and to make all other determinations that may be necessary or advisable for the administration of the Plan. 



 

	 	 (c)
	 Any interpretation of the Plan by the Committee and any decision made by it under the Plan is final and binding on all persons.



 4.4. Delegation by Committee. Except to the extent
prohibited by the provisions of Rule 16b-3, applicable local law, the applicable rules of any stock exchange, or any other applicable rules, the Committee may allocate all or any portion of its responsibilities and powers to any one or more of
its members and may delegate all or any part of its responsibilities and powers to any person or persons selected by it. Any such allocation or delegation may be revoked by the Committee at any time. 







 4.5. Information to be Furnished to
Committee. The Employers and Related Companies shall furnish the Committee with such data and information as may be required for it to discharge its duties. The records of the Employers and Related Companies as to an employee’s or
Participant’s employment, termination of employment, leave of absence, reemployment and compensation shall be conclusive on all persons unless determined to be incorrect. Participants and other persons entitled to benefits under the Plan must
furnish the Committee such evidence, data or information as the Committee considers desirable to carry out the terms of the Plan. 
 4.6. Liability and Indemnification of Committee. No member or authorized delegate of the Committee shall be liable to any person for any action taken or omitted in
connection with the administration of the Plan unless attributable to his own fraud or willful misconduct; nor shall the Employers be liable to any person for any such action unless attributable to fraud or willful misconduct on the part of a
director or employee of the Employers. The Committee, the individual members thereof, and persons acting as the authorized delegates of the Committee under the Plan, shall be indemnified by the Employers, to the fullest extent permitted by law,
against any and all liabilities, losses, costs and expenses (including legal fees and expenses) of whatsoever kind and nature which may be imposed on, incurred by or asserted against the Committee or its members or authorized delegates by reason of
the performance of a Committee function if the Committee or its members or authorized delegates did not act dishonestly or in willful violation of the law or regulation under which such liability, loss, cost or expense arises. This indemnification
shall not duplicate but may supplement any coverage available under any applicable insurance. 

SECTION 5. 
 AMENDMENT AND TERMINATION 
 The Board may, at any time,
amend or terminate the Plan, provided that, subject to subsection 3.3 (relating to certain adjustments to shares), no amendment or termination may adversely affect the rights of any Participant or beneficiary with respect to shares that have
been purchased prior to the date such amendment is adopted by the Board. No amendment of the Plan may be made without approval of the Company’s shareholders to the extent that such approval is required to maintain compliance with the
requirements of Code section 423. 
 SECTION 6. 

DEFINED TERMS 
 For purposes of the Plan, the terms listed below shall be defined as follows: 
  

	 	 (a)
	 Board. The term “Board” shall mean the Board of Directors of the Company. 



 

	 	 (b)
	 Code. The term “Code” means the Internal Revenue Code of 1986, as amended. A reference to any provision of the Code shall include
reference to any successor provision of the Code. 


  

	 	 (c)
	 Compensation. The term “Compensation” means total compensation paid by an Employer for the applicable period specified in
Section 2.2, exclusive of any payment in cash or kind under any stock option plan, deferred compensation plan, or other employee benefit plan or program of the Company or Related Company. 



 

	 	 (d)
	 Dollars. As used in the Plan, the term “dollars” or numbers preceded by the symbol “$” shall mean amounts in United
States Dollars. 


  

	 	 (e)
	 Effective Date. The “Effective Date” shall be the date on which the Plan is adopted by the Board. 



 

	 	 (f)
	 Employer. The Company and each Related Company which, with the consent of the Company, adopts the Plan for the benefit of its eligible
employees are referred to collectively as the “Employers” and individually as an “Employer”. 










	 	 (g)
	 Fair Market Value. The “Fair Market Value” of a share of Stock of the Company as of any date shall be the closing market composite
price for such Stock as reported for the New York Stock Exchange—Composite Transactions on that date or, if Stock is not traded on that date, on the next preceding date on which Stock was traded. 



 

	 	 (h)
	 Participant. The term “Participant” means any employee of an Employer who is eligible and elects to participate pursuant to the
provisions of Section 2. 


  

	 	 (i)
	 Related Companies. The term “Related Company” means any company during any period in which it is a “subsidiary
corporation” (as that term is defined in Code section 424(f)) with respect to the Company.