Document:

Investment Agreement

    EXHIBIT
      10.16.1

    
 

    EXHIBIT
      D

    [BROKER'S
      LETTERHEAD]

     

    Date

    Via
      Facsimile

     

    Attention:

     

    Re:
      Seawright Holdings, Inc.

     

    Dear                                                                                    
      

    It
      is our
      understanding that the Form _________ Registration
      Statement bearing SEC File
      Number ( _______ -
      _______
)
      filed
      by Seawright Holdings, Inc., on Form __________ on
      ,
      ____________ 200X was declared effective on ,
      200X.

    

    This
      letter shall confirm that
      ______________ shares of the common stock of Seawright
      Holdings, Inc., are being sold on behalf of ______________ and
      that
      we
      shall comply with the prospectus delivery requirements set forth in that
      Registration Statement by filing the same with the purchaser.

    

    If
      you
      have any questions please do not hesitate to call.

     

    Sincerely,

     

     

     

    

      cc:
        .Investment Agreement

    EXHIBIT
      10.16.2

     

    EXHIBIT
      F

    

    Date:

    

    RE:
      Put
      Notice Number 

    Dear
      Mr.
      Leighton,

    

    This
      is
      to inform you that as of today, Seawright Holdings, Inc., a Delaware corporation
      (the "Company"), hereby elects to exercise its right pursuant to the Investment
      Agreement to require Dutchess Private Equities Fund, LP. to purchase shares
      of
      its common stock. The Company hereby certifies that:

    

    The
      amount of this put is $_____________

     

    The
      Pricing Period runs from 
      ________
      until __________

     

     

    The
      current number of shares issued and outstanding as of the Company
      are:

     

     

    Regards,

     

    Joel
      Sens

    Chief
      Executive Officer Seawright Holdings, Inc.Investment Agreement

    EXHIBIT
      10.16.3

     

    EXHIBIT
      G

    PUT
      SETTLEMENT SHEET

    

    Date:
      Joel,

    

    Pursuant
      to the Put given by Seawright Holdings, Inc. to Dutchess Private Equities Fund,
      L.P. on
      _____________________________ 200x, we are now submitting the amount
      of
      common shares for you to issue to Dutchess.

    

    Please
      have a certificate bearing no restrictive legend totaling
      _________________________ shares
      issued to Dutchess Private Equities Fund, LP immediately and send via DWAC
      to
      the following account:

    

    XXXXXX

    

    If
      not
      DWAC eligible, please send FedEx Priority Overnight to: XXXXXX

    

    Once
      these shares are received by us, we will have the funds wired to the
      Company.

    

    Regards,

    

    Douglas
      H. Leighton

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

                  
DATE              PRICE

    

    Date
      of
      Day 1         Closing
      Bid of Day 1

    Date
      of
      Day 2         Closing
      Bid of Day 2

    Date
      of
      Day 3         Closing
      Bid of Day 3

    Date
      of
      Day 4         Closing
      Bid of Day 4

    Date
      of
      Day 5         Closing
      Bid of Day 5

     

     

     

                   
      LOWEST 1 (ONE) CLOSING BID IN PRICING PERIOD
      PUT
      AMOUNT

    

    

    AMOUNT
      WIRED TO COMPANY

    

    

    PURCHASE
      PRICE (95% (NINETY-FIVE PERCENT)) 

     

     

    AMOUNT
      OF
      SHARES DUE

     

    The
      undersigned has completed this Put as of this     th
      day of
      ___________________ 2Oxx.

     

    Seawright
      Holdings, Inc.

    
       

       

      
        Joel
          Sens, CEOAmendment to Consulting Agreement

    
      EXHIBIT
        10.19.1

       

      
        	
                

              	 	 
	
                NFC

              	
                 

                National
                  Financial Communications Corp. 

              	
                Divisions:

                 

                National
                  Financial Network (NFN)

                OTC
                  Financial Network (OFN)

              

      

      

      

      SCHEDULE
        A- I

      

      PAYMENT
        FOR SERVICES

      AND
        REIMBURSEMENT OF EXPENSES

      

      A.
        For
        the services to be rendered and performed by Company during the term of the
        Agreement, Client shall pay to Company the sum of $2,500 per month payable
        in
        cash and/or free-trading shares- If the Client decides to pay for the entire
        base fee with 100% shares vs. cash, the Client must also issue three months
        worth of base fees at the signing of this agreement in those shares. The
        amount
        of shares will be determined by the bid price at the date of this contract.
        The
        Company will keep an accounting of the sales of stock and deduct those net
        proceeds from the base fee per month owed. If those net proceeds exceed the
        monthly fee, the excess amount will be credited to the next month's monthly
        fee.
        If there are not enough dollars to cover the monthly fee, the Client will
        either
        pay additional shares or cover the deficit or the Client will pay the deficit
        in
        cash for that particular month.

      

      **On
        September 6, 2006 National Financial Communications and Seawright Holdings,
        Inc.
        has agreed to amend the reimbursement schedule A-I to read:

      

      Client
        shall pay to company the sum of $2500.00 per month in cash. The verbage
        regarding stock compensation has been struck from the original contract.
        NFC
        also acknowledges that as of this date no compensation has been received
        in the
        form of stock.

       

      
 

      
        	
                National
                  Financial Communications Corp.

              
	 	 	 	 
	 	 	 	 
	
                By:

              	
                /s/
                  Geoffrey Eiten 

              	 	
                September
                  6, 2006

              
	 	
                Geoffrey
                  Eiten, President

              	 	
                Date

              
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	
                Seawright
                  Holdings. Inc.

              
	 	 	 	 
	
                By:

              	
                /s/
                  Joel Sens 

              	 	
                September
                  6, 2006

              
	 	
                Joel
                  Sens, CEO

              	 	
                Date

              

      

      

      

      

      n
        300
        Chestnut St., Suite 200, Needham, MA 02492 n
        Phone:
        781-444-6100 n
        Fax:
        701-444-6101 n
        Web:
        www.nationalfc.comExhibit
10.4.4

 

White
Mountains Long-Term Incentive Plan

 (as amended)

 

 

1.             PURPOSE

 

The purpose of the White
Mountains Long-Term Incentive Plan (the “Plan”) is to advance the interests of
White Mountains Insurance Group, Ltd. (the “Company”) and its stockholders
by providing long-term incentives to certain executives, consultants and
directors of the Company and of its subsidiaries.

 

 

2.             ADMINISTRATION

 

The Plan shall be
administered by the Compensation Committee (the “Committee”) of the Board of
Directors (the “Board”) of the Company; provided that each member of the
Committee qualifies as (a) a “non-employee director” under Rule 16b-3
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and
(b) an “outside director” under Section 162(m) of the Internal
Revenue Code of 1986, as amended (the “Code”). In the event that any member of
the Committee does not so qualify, the Plan shall be administered by a
sub-committee of Committee members who do so qualify. If it is later determined
that one or more members of the Committee do not so qualify, actions taken by
the Committee prior to such determination shall be valid despite such failure
to qualify.

 

The Committee shall have
exclusive authority to select the employees, directors and consultants to be
granted awards under the Plan (“Awards”), to determine the type, size and terms
of the Awards and to prescribe the form of the instruments embodying Awards.
With respect to Awards made to directors and consultants, the Committee shall,
and with respect to employees may, specify the terms and conditions applicable
to such Awards in an Award agreement. The Committee shall be authorized to
interpret the Plan and the Awards granted under the Plan, to establish, amend
and rescind any rules and regulations relating to the Plan and to make any
other determinations which it believes necessary or advisable for the
administration of the Plan. The Committee may correct any defect or supply any
omission or reconcile any inconsistency in the Plan or in any Award in the
manner and to the extent the Committee deems desirable to carry it into effect.
Any decision of the Committee in the administration of the Plan, as described
herein, shall be final and conclusive. The Committee may act only by a majority
of its members in office, except that the members thereof may authorize any one
or more of their number or any officer of the Company to execute and deliver
documents on behalf of the Committee. No member of the Company shall be liable
for anything done or omitted to be done by him or by any other member of the
Committee in connection with the Plan, except for his own willful misconduct or
as expressly provided by statute.

 

 

3.             PARTICIPATING SUBSIDIARIES

 

If a subsidiary of the
Company wishes to participate in the Plan and its participation shall have been
approved by the Board, the Board of Directors of the subsidiary shall adopt a
resolution in form and substance satisfactory to the Committee authorizing
participation by the subsidiary in the Plan. As used herein, “subsidiary” shall
mean a “subsidiary corporation” as defined in Section 424 (f) of the
Code.

 

 A subsidiary may cease to participate in the
Plan at any time by action of the Board or by action of the Board of Directors
of such subsidiary, which latter action shall be effective not earlier than the
date of delivery to the Secretary of the Company of a certified copy of a
resolution of the subsidiary’s Board of Directors taking such action.
Termination of participation in the Plan shall not relieve a subsidiary of any
obligations theretofore incurred by it under the Plan.

 

 

4.             AWARDS

 

(a)

Eligible
Participants. Any
employee, director or consultant of the Company or any of its subsidiaries is
eligible to receive an Award hereunder. The Committee shall select which
eligible employees, directors or consultants shall be granted Awards hereunder.
No employee, director or consultant shall have a right to receive an Award
hereunder and the grant of an Award to an employee, director or consultant
shall not obligate the Committee to continue to grant Awards to such employee,
director or consultant in subsequent periods.

 

 

(b)

Type of
Awards. Awards
shall be limited to the following five types: (i) “Stock Options,”
(ii) “Stock Appreciation Rights,” (iii) “Restricted Stock,”
(iv) “Performance Shares” and (v) “Performance Units.” Stock Options,
which include “Incentive Stock Options” and other stock options or combinations
thereof, are rights to purchase shares of Common Stock of the Company having a
par value of $1.00 per shares (“Shares”). A Stock Appreciation Right is a right
to receive, without payment to the Company, cash and/or Shares in lieu of the
purchase of Shares under the Stock Option to which the Stock Appreciation Right
relates.

 

 

1

 

(c)

Maximum
Number of Shares That May Be Issued. A maximum of 400,000 Shares (subject to adjustment as
provided in Section 15) may be granted at target pursuant to Awards made
under the Plan and, accordingly, up to 800,000 Shares (subject to adjustment as
provided in Section 15) may be issued by the Company in satisfaction of
its obligations with respect to such Award grants. For purposes of the
foregoing, the exercise of a Stock Appreciation Right shall constitute the
issuance of Shares equal to the Shares covered by the related Stock Option. If
any Shares issued as Restricted Stock shall be repurchased pursuant to the
Company’s option described in Section 6 below, or if any Shares issued
under the Plan shall be reacquired pursuant to restrictions imposed at the time
of issuance, such Shares may again be issued under the Plan.

 

 

(d)

Rights
With Respect to Shares.

 

(i)

A participant to whom
Restricted Stock has been issued shall have prior to the expiration of the
Restricted Period or the earlier repurchase of such Shares as herein provided,
ownership of such Shares, including the right to vote the same and to receive
dividends thereon, subject, however, to the options, restrictions and
limitations imposed thereon pursuant hereto.

 

(ii)

A participant to whom
Stock Options, Stock Appreciation Rights or Performance Shares are granted (and
any person succeeding to such employee’s rights pursuant to the Plan) shall
have no rights as a shareholder with respect to any Shares issuable pursuant
thereto until the date of the issuance of a stock certificate (whether or not
delivered) therefor. Except as provided in Section 15, no adjustment shall
be made for dividends, distributions or other rights (whether ordinary or
extraordinary, and whether in cash, securities or other property) the record
date for which is prior to the date such stock certificate is issued.

 

(iii)

The Company, in its
discretion, may hold custody during the Restricted Period of any Shares of
Restricted Stock

 

 

5.             STOCK OPTIONS AND STOCK
APPRECIATION RIGHTS

 

The Committee may grant
Stock Options (including, in its discretion, Stock Appreciation Rights) either
alone or, as provided in Section 7, in conjunction with Performance
Shares. A maximum of 10,000 Stock Options and Stock Appreciation Rights (not
including Stock Appreciation Rights attached to Stock Options) may be issued in
one year to a participant. Each Stock Option shall comply with the following
terms and conditions:

 

(a)

The per share exercise
price shall not be less than the greater of (i) the fair market value per
Share at the time of grant, as determined in good faith by the Committee, or
(ii) the par value per Share. However, the exercise price of an Incentive
Stock Option granted to a participant who owns stock representing more than ten
percent (10%) of the voting power of all classes of stock of the Company or of
a subsidiary (a “Ten Percent Employee”) shall not be less than the greater of
110% of such fair market value, or the par value per Share.

 

(b)

The Committee shall
initially determine the number of Shares to be subject to each Stock Option.
The number of Shares subject to a Stock Option will subsequently be reduced
(i) on a Share-for-Share basis to the extent that Shares under such Stock
Option are used to calculate the cash and/or Shares received pursuant to
exercise of a Stock Appreciation Right attached to such Stock Option, and
(ii) on a one-for-one basis to the extent that any Performance Shares
granted in conjunction with such Stock Option pursuant to Section 7(a) are
paid, such reduction to be made in accordance with the provisions of
Section 7(g)(ii).

 

(c)

The Stock Option shall
not be transferable by the optionee otherwise than by will or the laws of
descent and distribution, and shall be exercisable during his lifetime only by
him.

 

(d)

The Stock Option shall
not be exercisable:

 

2

 

(i)

after the expiration of
ten years from the date it is granted and may be exercised during such period
only at such time or times as the Committee may establish;

 

(ii)

unless payment in full is
made for the Shares being acquired thereunder at the time of exercise
(including any federal, state or local income or other taxes which the
Committee determines are required to be withheld in respect of such shares);
such payment shall be made (A) in United States dollars by cash or check,
(B) by tendering to the Company Shares owned by the person exercising the
Stock Option and having a fair market value equal to the cash exercise price
thereof, such fair market value to be determined in such reasonable manner as
may be provided for from time to time by the Committee or as may be required in
order to comply with or to conform to the requirements of any applicable or
relevant laws or regulations, or (C) by a combination of United States
dollars and Shares pursuant to (A) and (B) above;

 

(iii)

by participants who were
employees of the Company or one of its subsidiaries at the time of the grant of
the Stock Option unless such participant has been, at all times during the
period beginning with the date of grant of the Stock Option and ending on the
date three months prior to such exercise, an officer or employee of the Company
or a subsidiary, or of a corporation, or a parent or subsidiary of a
corporation, issuing or assuming the Stock Option in a transaction to which
Section 424(a) of the Code is applicable, except that:

 

(A)

if such person shall
cease to be an officer or employee of the Company or one of its subsidiary
corporations solely by reason of a period of Related Employment as defined in
Section 10, he may, during such period of Related Employment (but in no
event after the Stock Option has expired under the provisions of
Section 5(d)(i) hereof), exercise such Stock Option as if he continued
to be such an officer or employee; or

 

(B)

if an optionee shall
become disabled as defined in Section 9 he may, at any time within three
years of the date he becomes disabled (but in no event after the Stock Option
has expired under the provisions of Section 5(d)(i) hereof), exercise
the Stock Option with respect to (i) any Shares as to which he could have
exercised the Stock Option on the date he became disabled and (ii) if the
Stock Option is not fully exercisable on the date he becomes disabled, the
number of additional Shares as to which the Stock Option would have become
exercisable had he remained an employee through the next two dates on which
additional Shares were scheduled to become exercisable under the Stock Option;
or

 

(C)

if an optionee shall die
while holding a Stock Option, his executors, administrators, heirs or
distributees, as the case may be, at any time within one year after the date of
such death (but in no event after the Stock Option has expired under the
provisions of Section 5(d)(i) hereof), may exercise the Stock Option
with respect to (i) any Shares as to which the decedent could have
exercised the Stock Option at the time of his death, and if the Stock Option is
not fully exercisable on the date of his death, the number of additional Shares
as to which the Stock Option would have become exercisable had he remained an
employee through the next two dates on which additional Shares were scheduled
to become exercisable under the Stock Option provided, however, that if death occurs
during the three-year period following a disability as described in
Section 5(d)(iii)(B) hereof, the three-year period following a retirement
as described in Section 5(d)(iii)(D) hereof or any period following a
voluntary termination in respect of which death, the number of additional
Shares as to which the Stock Option would have become exercisable had he
remained an employee through the next date or, if applicable, two dates on
which additional Shares were scheduled to become exercisable under the Stock
Option provided, however, that if death occurs during the three-year period
following a disability as described in Section 5(d)(iii)(B) hereof, the
three-year period following a retirement as described in
Section 5(d)(iii)(D) hereof or any period following a voluntary
termination in respect of which the Board has exercised its discretion to grant
continuing exercise rights as provided in Section 5(d)(iii)(E) hereof, the
Stock Option shall not become exercisable as to any Shares in addition to those
as to which the decedent could have exercised the Stock Option at the time of
his death; or

 

(D)

if such person shall
retire with the approval of the Committee in its sole discretion while holding
a Stock Option which has not expired and has not been fully exercised, such
person, at any time within three years after his retirement (but in no event
after the Stock Option has expired under the provisions of
Section 5(d)(i) hereof), may exercise the Stock Option with respect
to any Shares as to which he could have exercised the Stock Option on the date
he retired; or

 

(E)

if such person shall
voluntarily terminate his employment with the Company, the Board may determine
that the optionee may exercise the Stock Option with respect to some or all of
the Shares subject to the Stock Option as to which it would not otherwise be 

 

 

3

 

exercisable on the date
of his voluntary termination provided, however, that in no event may such
exercise take place after the Stock Option has expired under the provisions of
Section 5(d)(i) hereof.

 

(e)

The aggregate market
value of Shares (determined at the time of grant of the Stock Option pursuant
to Section 5(a) of the Plan) with respect to which Incentive Stock Options
granted to any participant under the Plan are exercisable for the first time by
such participant during any calendar year may not exceed the maximum amount
permitted under Section 422(d) of the Code at the time of the Award grant.
In the event this limitation would be exceeded in any year, the optionee may
elect either (i) to defer to a succeeding year the date on which some or
all of such Incentive Stock Options would first become exercisable or
(ii) convert some or all of such Incentive Stock Options into non-qualified
Stock Options.

 

(f)

If the Committee, in its
discretion, so determines, there may be related to the Stock Option, either at
the time of grant or by amendment, a Stock Appreciation Right which shall be
subject to such terms and conditions, not inconsistent with the Plan, as the
Committee shall impose, including the following:

 

(i)

A Stock
Appreciation Right may be exercised only:

 

(A)

to the extent that the
Stock Option to which it relates is at the time exercisable, and

 

(B)

if

 

(1)

in the case of a Stock
Option other than an Incentive Stock Option only, such Stock Option will expire
by its terms within 30 days (90 days if the optionee is at the time
an officer of the Company who is required to file reports pursuant to
Section 16(a) of the Exchange Act;

 

(2)

the optionee has become
disabled or ceased to be an officer or employee by reason of his retirement
with the approval of the Committee in its sole discretion; or

 

(3)

the optionee has died.

 

However, if the Stock
Option to which the Stock Appreciation Right relates is exercisable and if the
optionee is at the time an officer of the Company who is required to file
reports pursuant to Section 16(a) of the Exchange Act, the Stock
Appreciation Right may, subject to the approval of the Committee, be exercised
during such periods, as may be specified by the Committee;

 

(ii)

A Stock Appreciation
Right shall entitle the optionee (or any person entitled to act under the
provisions of Section 5(d)(iii)(C) hereof) to surrender unexercised the
related Stock Option (or any portion of such Option) to the Company and to
receive from the Company in exchange therefor that number of Shares having an
aggregate market value equal to the excess of the market value of one Share
(provided that, if such value exceeds 150% of the per share exercise price
specified in such Stock Option, such value shall be deemed to be 150% of such
Stock Option price) over the exercise price of such Stock Option price per
share, times the number of Shares subject to the Stock Option, or portion
thereof, which is so surrendered. The Committee shall be entitled to elect to
settle the obligation arising out of the exercise of a Stock Appreciation Right
by the payment of cash equal to the aggregate value of the Shares it would
otherwise be obligated to deliver or partly by the payment of cash and partly
by the delivery of Shares. Any such election shall be made within 15 business
days after the receipt by the Committee of written notice of the exercise of
the Stock Appreciation Right. The market value of a Share for this purpose
shall be the market value thereof on the last business day preceding the date
of the election to exercise the Stock Appreciation Right, provided that if
notice of such election is received by the Committee more than three business
days after the date of such election (as such date of election is stated in the
notice of election), the Committee may, but need not, determine the market
value of a Share as of the day preceding the date on which the notice of
election is received;

 

(iii)

No fractional Shares
shall be delivered under this Section 5(f), but in lieu thereof a cash
adjustment shall be made; and

 

4

 

(iv)

In the case of a Stock
Appreciation Right attached to an Incentive Stock Option, such Stock
Appreciation Right shall only be transferable when such Incentive Stock Option
is transferable pursuant to Section 5 (c) hereof,

 

(g)

Notwithstanding anything
herein to the contrary:

 

(i)

in the event an
Unfriendly Change in Control, as defined in Section 11(b), occurs, then as
of the Acceleration Date, as defined in Section 11(b), each Stock Option
granted hereunder shall be exercisable in full; and

 

(ii)

in the event a Change in
Control as defined in Section 11(a) occurs and within 24 months thereafter:
(A) there is a Termination Without Cause, as defined in Section 12,
of an optionee’s employment; or (B) there is a Constructive Termination as
defined in Section 13, of an optionee’s employment; or (C) there
occurs an Adverse Change in the Plan, as defined in Section 14, in respect
of an optionee affecting any Award held by such optionee and if the optionee
then holds a Stock Option,

 

(A)

in the case of a
Termination Without Cause or a Constructive Termination, the optionee may
exercise the entire Stock Option, at any time within 30 days of such
Termination Without Cause or such Constructive Termination (but in no event
after the option has expired under the provisions of Sections (5)(d)(i)), and

 

(B)

in the case of an Adverse
Change in the Plan, the optionee may exercise the entire Stock Option at any
time after such Adverse Change in the Plan in respect of him and prior to the
date 30 days following his termination of employment as a result of a
Termination Without Cause or a Constructive Termination (but in no event after
the option has expired under the provisions of Section 5(d)(i)).

 

 

6.             RESTRICTED STOCK

 

Each Award of Restricted
Stock shall comply with the following terms and conditions:

 

(a)

The Committee shall
determine the number of Shares to be issued to a participant pursuant to the
Award.

 

(b)

Shares issued may not be
sold, assigned, transferred, pledged, hypothecated or otherwise disposed of,
except by will or the laws of descent and distribution, for such period from
the date on which the Award is granted (the “Restricted Period”) as the
Committee shall determine. The Company shall have the option to repurchase the
Shares subject to the Award at such price as the Committee shall have fixed, in
its sole discretion, when the Award was made, which option will be exercisable
if the participant’s continuous employment with the Company or a subsidiary
shall terminate for any reason, except solely by reason of an event described
in Section 6(c), prior to the expiration of the Restricted Period or the
earlier lapse of the option. Such option shall be exercisable on such terms, in
such manner and during such period as shall be determined by the Committee when
the Award is made. Certificates for Shares issued pursuant to Restricted Stock
Awards shall bear an appropriate legend referring to the foregoing option and
other restrictions. Any attempt to dispose of any such Shares in contravention
of the foregoing option and other restrictions shall be null and void and
without effect. If Shares issued pursuant to a Restricted Stock Award shall be
repurchased pursuant to the option described above, the participant to whom the
Award was granted, or in the event of his death after such option become
exercisable, his executor or administrator, shall forthwith deliver to the
Secretary of the Company any certificates for the Shares awarded to the
participant, accompanied by such instruments of transfer, if any, as may
reasonably be required by the Secretary of the Company. If the option described
above is not exercised by the Company, such option and the restriction imposed
pursuant to the first sentence of this Section 6(b) shall terminate and be
of no further force and effect. Notwithstanding anything to the contrary in
this Section 6(b), neither any Restricted Period nor any option shall
lapse to the extent the Company or any subsidiary would be unable to take a
deduction with respect to such lapse by reason of Section 162(m) of the
Code.

 

(c)

If a participant who has
been in the continuous employment of the Company or of a subsidiary shall:

 

(i)

die or become disabled
(as defined in Section 9) during the Restricted Period, the option of the
Company to repurchase (and any and all other restrictions on) all Shares
awarded to him under such Award shall lapse and cease to be effective as of the
date on which his death or disability occurs, or

 

 

5

 

(ii)

voluntarily terminate his
employment with the Company or retire during the Restricted Period, the Board
may determine that the option to repurchase and any and all other restrictions
on some or all of the Shares awarded to him under such Award, if such option
and other restrictions are still in effect, shall lapse and cease to be
effective as the date on which such voluntary termination or retirement occurs.

 

(d)

In the event within
24 months after a Change in Control as defined in Section 11(a) and
during the Restricted Period

 

(i)

there is a Termination
Without Cause, as defined in Section 12, of the employment of a participant;

 

(ii)

there is a Constructive
Termination, as defined in Section 13, of the employment of a participant;
or

 

(iii)

there occurs an Adverse
Change in the Plan, as defined in Section 14, in respect of a participant,
then

 

the option to repurchase
(and any and all other restrictions on) all Shares awarded to him under his
Award shall lapse and cease to be effective as of the date on which such event
occurs.

 

 

7.             PERFORMANCE SHARES

 

The grant of a
Performance Share Award to a participant will entitle him to receive, without
payment to the Company, all or part of a specified amount (the “Actual Value”)
determined by the Committee, if the terms and conditions specified herein and
in the Award are satisfied. Payment in respect of an Award shall be made as provided
in Section 7(h). Each Performance Share Award shall be subject to the
following terms and conditions:

 

(a)

The Committee shall
determine the target number of Performance Shares to be granted to a
participant and whether or not such Performance Shares are granted in
conjunction with a Stock Option (the “Associated Stock Option”). The maximum
number of Performance Shares that may be earned by a participant for any single
Award Period of one year or longer shall not exceed 50,000. Performance Share
Awards may be granted in different classes or series having different terms and
conditions. In the case of any Performance Shares granted in conjunction with
an Associated Stock Option, the number of Performance Shares shall initially be
equal to the number of Shares which are subject to the Associated Stock Option,
but the number of such Performance Shares shall be reduced on a one for one
basis to the extent that (A) Shares are purchased upon exercise of the
Associated Stock Option, or (B) Shares may no longer be purchased under
the Associated Stock Option because the Associated Stock Option or a part
thereof has been surrendered unexercised pursuant to exercise of a Stock
Appreciation Right attached to such Associated Stock Option.

 

(b)

The Actual Value of a Performance
Share Award shall be the product of (i) the target number of Performance
Shares subject to the Performance Share Award, (ii) the Performance
Percentage (as determined below) applicable to the Performance Share Award and
(iii) the market value of a Share on the date the Award is paid or becomes
payable to the employee. The “Performance Percentage” applicable to a
Performance Share Award shall be a percentage of no less than 0% and no more
than 200%, which percentage shall be determined by the Committee based upon the
extent to which the Performance Objectives (as determined below) established
for such Award are achieved during the Award Period. The method for determining
the applicable Performance Percentage shall also be established by the Committee.

 

(c)

At the time each
Performance Share Award is granted, the Committee shall establish performance
objectives (“Performance Objectives”) to be attained within the Award Period as
the means of determining the Performance Percentage applicable to such Award.
The Performance Objectives shall be approved by the Committee (i) while
the outcome for that Award Period is substantially uncertain and (ii) no
more than 90 days after the commencement of the Award Period to which the
Performance Objective relates or, if less than 90 days, the number of days
which is equal to 25 percent of the relevant Award Period. The Performance
Objectives established with respect to a Performance Share Award shall be
specific performance targets established by the Committee with respect to one
or more of the following criteria selected by the Committee:
(i) consolidated earnings before or after taxes (including earnings before
interest, taxes, depreciation and amortization); (ii) net income;
(iii) operating income; (iv) earnings per Share; (v) book value
per Share; (vi) return on stockholders’ equity; (vii) expense
management; (viii) return on investment; (ix) improvements in capital
structure; (x) stock price; (xi) combined ratio; (xii) operating
ratio; (xiii) profitability of an identifiable business unit or 

 

6

 

product;
(xiv) maintenance or improvement of profit margins; (xv) market
share; (xvi) revenues or sales; (xvii) costs; (xviii) cash flow;
(xix) working capital; (xx) return on assets; (xxi) customer
satisfaction; (xxii) employee satisfaction; and (xxiii) economic
value per Share (computed based on book value per Share determined in
accordance with generally accepted accounting principles (“GAAP”) adjusted for
changes in the intrinsic value of assets and liabilities whose value differs
from their GAAP carrying value). The foregoing criteria may relate to the
Company, one or more of its subsidiaries or one or more of its divisions,
units, partnerships, joint ventures or minority investments, product lines or
products or any combination of the foregoing, and may be applied on an absolute
basis and/or be relative to one or more peer group companies or indices, or any
combination thereof, all as the Committee shall determine. In addition, to the
degree consistent with Section 162(m) of the Code (or any successor
section thereto), the Performance Objectives may be calculated without regard
to extraordinary items.

 

(d)

The award period (the “Award
Period”) in respect of any grant of a Performance Share Award shall be such
period as the Committee shall determine commencing as of the beginning of the
fiscal year of the Company in which such grant is made. An Award Period may
contain a number of performance periods; each performance period shall commence
on or after the first day of the Award Period and shall end no later than the
last day of the Award Period. If the Committee does not specify in a
Performance Share Award agreement or elsewhere the performance periods
contained in an Award Period, each 12-month period beginning with the first day
of such Award Period shall be deemed to be a performance period.

 

(e)

Except as otherwise
determined by the Committee, Performance Shares shall be canceled if the
participant’s continuous employment with the Company or any of its subsidiaries
shall terminate for any reason prior to the end of the Award Period (in which
event the Associated Stock Option, if any, shall continue in effect in
accordance with its terms), except by reason of a period of Related Employment
as defined in Section 10, and except as otherwise specified in this
Section 7(e) or in Section 7(f). Notwithstanding the foregoing and
without regard to Section 7(g), if an employee participant shall:

 

(i)

while in such employment,
die or become disabled as described in Section 9 prior to the end of an
Award Period, the Performance Shares for such Award Period shall be immediately
canceled and he, or his legal representative, as the case may be, shall receive
as soon as administratively feasible a payment in respect of such canceled
Performance Shares equal to the product of (1) the target number of
Performance Shares for such Award, (2) the market value of a Share at the
time of the death or disability and (3) a fraction, the numerator of which
is equal to the number of performance periods within the Award Period during
which employee was continuously employed by the Company or its subsidiaries
(including, for this purpose, the performance period in which the death or
disability occurs), and the denominator of which is equal to the total number
of performance periods within such Award Period; provided, however, that no
such continuation shall be deemed to have occurred for purposes of applying
Section 7(f) in the event of an Adverse Change in the Plan in respect of
the participant following a Change in Control; or

 

(ii)

retire prior to the end
of the Award Period, the Performance Shares shall be immediately canceled and
any payments made to the participant in respect of such canceled Performance
Shares shall be in the sole discretion of the Committee, and

 

(f)

If within 24 months
after a Change in Control as defined in Section 11(a):

 

(i)

there is a Termination
Without Cause, as defined in Section 12, of the employment of a
participant;

 

(ii)

there is a Constructive
Termination, as defined in Section 13, of the employment of a participant;
or

 

(iii)

there occurs an Adverse
Change in the Plan, as defined in Section 14, in respect of a participant
(any such occurrence under the above clauses (i), (ii) or (iii), a “Trigger
Event”), then with respect to Performance Share Awards that were outstanding on
the date of the Change of Control (each, an “Applicable Award”), each such
Award, to the extent still outstanding at the time of the Trigger Event, shall
be canceled and, in respect of each Applicable Award (including those not still
outstanding), such participant shall be entitled to receive a cash payment
equal to the sum of the amounts calculated under (A) and (B) below,
less any amounts, if any, previously paid in respect of such Applicable Award
(i.e., payments in respect of Awards outstanding as of the Change of Control
and subsequently paid out by the Company prior to the applicable Trigger
Event):

 

7

 

(A)

An employee shall be
entitled to receive the following with respect to each Applicable Award: the
product of (i) the Applicable Performance Shares (as determined below),
(ii) 200% (representing the applicable Performance Percentage) and (iii) the
Applicable Share Value (as determined below). For this purpose, (i) “Applicable
Performance Shares” is equal to the number of target Performance Shares for
each Applicable Award multiplied by a fraction, the numerator of which is the
number of full months elapsed since the first day of the applicable Award
Period to the end of the first month in which the applicable Trigger Event
occurs and the denominator of which is the total number of months in the Award
Period (but which fraction shall not in any event be greater than 1), and
(ii) the “Applicable Share Value” is equal to the greater of the market
value of a Share immediately prior to the Change in Control and the market
value, if any, of a Share on the date the applicable Trigger Event occurs; and

 

(B)

For Awards no longer
outstanding on the date of the Trigger Event, the Company shall, in addition to
the amounts payable under (A) above, pay to the employee an amount equal
to the product of (i) (x) the total number of target Performance Shares in
the Award less (y) the Applicable Performance Shares in the Award (as determined
above), (ii) the Applicable Share Value (as determined above) and
(iii) the applicable Performance Percentage determined as follows:

 

(1)

Prior to the consummation
of any Change in Control, the Committee shall determine a Performance
Percentage for each then outstanding Award Period based on the extent to which
the applicable Performance Objectives were being achieved for each such Award
Period to the date of the Change in Control,

 

(2)

If the Performance
Percentage for an Award Period was determined by the Committee (pursuant to
subsection (1) above) to be greater than 100%, then the Performance
Percentage applicable to the remaining Performance Shares of such Award Period
shall be such determined Performance Percentage, and

 

(3)

If the Performance
Percentage for an Award Period was determined by the Committee (pursuant to
subsection (1) above) to be less than or equal to 100%, then the
Performance Percentage applicable to the remaining Performance Shares of such
Award Period shall be the greater of (x) such other Performance Percentage
which may be specified by the Committee (or any sub-committee of the Board
which performs duties comparable to the Committee) for such Award Period at the
time of the Trigger Event and (y) 100%.

 

(g)

Except as otherwise
provided in Section 7(f), as soon as practicable after the end of the
Award Period or such earlier date as the Committee in its sole discretion may
designate, the Committee shall (i) determine, based on the extent to which
the applicable Performance Objectives have been achieved, the Performance
Percentage applicable to an Award of Performance Shares, (ii) calculate
the Actual Value of the Performance Share Award and (iii) shall certify
the foregoing to the Board of Directors. If the Performance Shares:

 

(i)

were not awarded in
conjunction with an Associated Stock Option, the Committee shall cause an
amount equal to the Actual Value of the Performance Shares earned by the
participant to be paid to him or his beneficiary; or

 

(ii)

were awarded in
conjunction with an Associated Stock Option, the Committee shall determine, in
accordance with criteria specified by the Committee when the Award was made,
(A) to cancel the Performance Shares, in which event no amount in respect
thereof shall be paid to the participant or his beneficiary, and the Associated
Stock Option shall continue in effect in accordance with its terms, (B) to
pay the Actual Value of the Performance Shares to the participant or his beneficiary,
in which event the Associated Stock Option shall be cancelled, or (C) to
pay to the participant or his beneficiary the Actual Value of only a portion of
the Performance Shares, in which event (1) all such Performance Shares
shall be cancelled and (2) the Associated Stock Option shall be cancelled
only as to a number of Shares equal to the number of Performance Shares so
paid. Such determination by the Committee shall, if practicable, be made during
the three-month period following the end of the performance period, or during
such earlier period as shall be designated by the Committee and shall be made
pursuant to criteria, specified by the Committee, which shall be uniform for
all Awards having the same performance period.

 

 

8

 

(h)

Unless payment is
deferred in accordance with an election made by the participant in accordance
with procedures adopted by the Company, payment of any amount in respect of the
Performance Shares shall be made by the Company no later than 21⁄2 months
after the end of the Company’s fiscal year in which such Performance Shares are
earned, and may be made in cash, in Shares or partly in cash and partly in
Shares as determined by the Committee.

 

 

8.             PERFORMANCE UNITS

 

The grant of a
Performance Unit Award to a participant will entitle him to receive, without
payment to the Company, all or part of a specified amount (the “Earned Value”)
determined by the Committee, if the terms and conditions specified herein and
in the Award are satisfied. Payment in respect of a Performance Unit Award
shall be made as provided in Section 8(h). Each Performance Unit Award
shall be subject to the following terms and conditions:

 

(a)

The Committee shall
determine the target number of Performance Units to be granted to a
participant. The maximum number of Performance Units that may be earned by a
participant for any single Award Period of one year or longer shall not exceed
50,000. Performance Unit Awards may be granted in different classes or series having
different terms and conditions.

 

(b)

The Earned Value of an
Award of Performance Units shall be the product of (i) the target number
of Performance Units subject to the Performance Unit Award, (ii) the
Performance Percentage (as determined below) applicable to the Performance Unit
Award and (iii) the Value (as determined below) of a Unit on the date the
Award is paid or becomes payable to the employee. The “Performance Percentage”
applicable to a Performance Unit Award shall be a percentage of no less than 0%
and no more than 200%, which percentage shall be determined by the Committee
based upon the extent to which the Performance Objectives (as determined below)
established for such Award are achieved during the Award Period. The method for
determining the applicable Performance Percentage shall also be established by
the Committee. The “Value” of a Unit shall be determined by multiplying $100 by
the sum of (i) 100% and (ii) the aggregate standard pre-tax insurance
return-on-equity of the Company, any of its subsidiaries or any combination
thereof as set forth in the Award Agreement over the Award Period (or such
earlier date as required by the Plan), as determined in good faith by the
Committee.

 

(c)

At the time each
Performance Unit Award is granted the Committee shall establish performance
objectives (“Performance Objectives”) to be attained within the Award Period as
the means of determining the Performance Percentage applicable to such Award.
The Performance Objectives shall be approved by the Committee (i) while
the outcome for that Award Period is substantially uncertain and (ii) no
more than 90 days after the commencement of the performance period to
which the performance objective relates or, if less than 90 days, the
number of days which is equal to 25 percent of the relevant performance
period. The Performance Objectives established with respect to a Performance
Unit Awards shall be specific performance targets established by the Committee
with respect to one or more of the following criteria selected by the
Committee: (i) consolidated earnings before or after taxes (including
earnings before interest, taxes, depreciation and amortization); (ii) net
income; (iii) operating income; (iv) earnings per Share;
(v) book value per Share; (vi) return on stockholders’ equity;
(vii) expense management; (viii) return on investment;
(ix) improvements in capital structure; (x) stock price;
(xi) combined ratio; (xii) operating ratio; (xiii) profitability
of an identifiable business unit or product; (xiv) maintenance or
improvement of profit margins; (xv) market share; (xvi) revenues or
sales; (xvii) costs; (xviii) cash flow; (xix) working capital;
(xx) return on assets; (xxi) customer satisfaction;
(xxii) employee satisfaction; and (xxiii) economic value per share
(computed based on book value per share determined in accordance with generally
accepted accounting principles (“GAAP”) adjusted for changes in the intrinsic
value of assets and liabilities whose value differs from their GAAP carrying
value). The foregoing criteria may relate to the Company, one or more of its
subsidiaries or one or more of its divisions, units, partnerships, joint
ventures or minority investments, product lines or products or any combination
of the foregoing, and may be applied on an absolute basis and/or be relative to
one or more peer group companies or indices, or any combination thereof, all as
the Committee shall determine.

 

In addition, to the
degree consistent with Section 162(m) of the Code (or any successor
section thereto), the Performance Objectives may be calculated without regard
to extraordinary items.

 

(d)

The award period (the “Award
Period”) in respect of any grant of a Performance Unit Award shall be such
period as the Committee shall determine commencing as of the beginning of the
fiscal year of the Company in which such grant is made. An Award Period may
contain a number of performance periods; each performance period shall commence
on or after the first day of the Award Period and shall end no later than the
last day of the Award Period. If the Committee does not specify in a
Performance Unit Award agreement or elsewhere the performance periods contained
in an Award Period, each 12-month period beginning with the first day of such
Award Period shall be deemed to be a performance period.

 

 

9

 

(e)

Except as otherwise
determined by the Committee, Performance Units shall be cancelled if the
participant’s continuous employment with the Company or any of its subsidiaries
shall terminate for any reason prior to the end of the Award Period, except
solely by reason of a period of Related Employment as defined in
Section 10, and except as otherwise specified in this Section 8(e) or
in Section 8(f). Notwithstanding the foregoing and without regard to
Section 8(f), if an employee participant shall:

 

(i)

while in such employment,
die or become disabled as described in Section 9 prior to the end of an
Award Period, the Performance Units for such Award Period shall be immediately
canceled and he, or his legal representative, as the case may be, shall receive
as soon as administratively feasible a payment in respect of such canceled
Performance Units equal to the product of (1) the target number of
Performance Units for such Award, (2) the Value of a Unit at the time of
the death or disability and (3) a fraction, the numerator of which is
equal to the number of performance periods within the Award Period during which
employee was continuously employed by the Company or its subsidiaries (including,
for this purpose, the performance period in which the death or disability
occurs), and the denominator of which is equal to the total number of
performance periods within such Award Period; provided, however, that no such
continuation shall be deemed to have occurred for purposes of applying
Section 8(f) in the event of an Adverse Change in the Plan in respect of
the participant following a Change in Control; or

 

(ii)

retire prior to the end
of the Award Period, the Performance Units shall be immediately canceled and
any payments made to the participant in respect of such canceled Performance
Units shall be in the sole discretion of the Committee, and

 

(f)

 

If within 24 months
after a Change in Control as defined in Section 11(a), a Trigger Event
occurs, then with respect to Performance Unit Awards that were outstanding on
the date of the Change of Control (each, an “Applicable Award”), each such
Award, to the extent still outstanding at the time of the Trigger Event, shall
be canceled and, in respect of each Applicable Award (including those not still
outstanding), such participant shall be entitled to receive a cash payment
equal to the sum of the amounts calculated under (A) and (B) below,
less any amounts, if any, previously paid in respect of the Applicable Award
(i.e., payments in respect of Awards outstanding as of the Change of Control
and subsequently paid out by the Company prior to the applicable Trigger
Event):

 

(A)

An employee shall be
entitled to receive the following with respect to each Award canceled under
this Section 8(f): the product of (i) the Applicable Performance
Units (as determined below), (ii) 200% (representing the applicable
Performance Percentage) and (ii) the Applicable Unit Value. For this
purpose, (i) “Applicable Performance Units” is equal to the number of
target Performance Units for each Applicable Award multiplied by a fraction,
the numerator of which is the number of full months elapsed since the first day
of the applicable Award Period to the end of the first month in which the
applicable Trigger Event occurs and the denominator of which is the total
number of months in the Award Period (but which fraction shall not in any event
be greater than 1), and (ii) the “Applicable Unit Value” is equal to the
greater of the Value of a Unit immediately prior to the Change in Control and
the Value of a Unit on the date of the applicable Trigger Event occurs; and

 

(B)

For Awards no longer
outstanding on the date of the Trigger Event, the Company shall, in addition to
the amounts payable under (A) above, pay to the employee an amount equal
to the product of (i) (x) the total number of target Performance Units in
the Award less (y) the Applicable Performance Units in the Award (as
determined above), (ii) the Applicable Unit Value (as determined above)
and (iii) the applicable Performance 
Percentage determined as follows:

 

(1)

Prior to the consummation
of any Change in Control, the Committee shall determine a Performance
Percentage for each then outstanding Award Period based on the extent to which
the applicable Performance Objectives were being achieved for each such Award
Period to the date of the Change in Control,

 

(2)

If the Performance
Percentage for an Award Period was determined by the Committee (pursuant to
subsection (1) above) to be greater than 100%, then the Performance
Percentage applicable to the remaining Performance Units of such Award Period
shall be such determined Performance Percentage, and

 

(3)

If the Performance
Percentage for an Award Period was determined by the Committee (pursuant to
subsection (1) above) to be less than or equal to 100%, then the
Performance Percentage applicable to the remaining Performance Units of such
Award Period shall be 

 

10

 

the greater of (x) such
other Performance Percentage which may be specified by the Committee (or any
sub-committee of the Board which performs duties comparable to the Committee)
for such Award Period at the time of the Trigger Event and (y) 100%.

 

(g)

Except as otherwise
provided in Section 8(f), as soon as practicable after the end of the
Award Period or such earlier date as the Committee in its sole discretion may
designate, the Committee shall (i) determine, based on the extent to which
the applicable Performance Objectives have been achieved, the Performance
Percentage applicable to an Award of Performance Units, (ii) calculate the
Earned Value of the Performance Unit Award and (iii) shall certify all of
the foregoing to the Board of Directors. The Committee shall cause an amount
equal to the Earned Value of the Performance Units earned by the participant to
be paid to him or his beneficiary.

 

(h)

Unless payment is
deferred in accordance with an election made by the participant in accordance
with procedures adopted by the Company, payment of any amount in respect of the
Performance Units shall be made by the Company no later than 21⁄2 months
after the end of the Company’s fiscal year in which such Performance Units are
earned, and may be made in cash, in Shares or partly in cash and partly in
Shares as determined by the Committee.

 

 

9.             DISABILITY

 

For the purposes of this
Plan, a participant shall be deemed to be disabled if the Committee shall
determine that the physical or mental condition of the participant is such as
would entitle him to payment of long-term disability benefits under any
disability plan of the Company or a subsidiary in which he is a participant.

 

 

10.          RELATED EMPLOYMENT

 

For the purposes of this
Plan, Related Employment shall mean the employment of a participant by an
employer which is neither the Company nor a subsidiary provided: (i) such
employment is undertaken by the participant and continued at the request of the
Company or a subsidiary; (ii) immediately prior to undertaking such employment,
the participant was an officer or employee of the Company or a subsidiary, or
was engaged in Related Employment as herein defined; and (iii) such
employment is recognized by the Committee, in its sole discretion, as Related
Employment for the purposes of this Section 10. The death or disability of
a participant during a period of Related Employment as herein defined shall be
treated, for purposes of this Plan, as if the death or onset of disability had
occurred while the participant was an officer or employee of the Company.

 

 

11.          CHANGE IN CONTROL

 

(a)

For purposes of this
Plan, a “Change in Control” within the meaning of this Section 11(a) shall
occur if:

 

(i)

Any person or group
(within the meaning of Section 13(d) and 14(d)(2) of the Exchange Act),
other than John J. Byrne, Berkshire Hathaway, Inc. or one of its wholly
owned subsidiaries, or an underwriter temporarily holding Shares in connection
with a public issuance thereof or an employee benefit plan of the Company or
its affiliates, becomes the beneficial owner (within the meaning of
Rule 13d-3 under the Exchange Act) of thirty-five percent (35%) or more of
the Company’s then outstanding Shares;

 

(ii)

the Continuing Directors,
as defined in Section 11(c), cease for any reason to constitute a majority
of the Board of the Company; or

 

(iii)

the business of the
Company for which the participant’s services are principally performed is
disposed of by the Company pursuant to a sale or other disposition of all or
substantially all of the business or business related assets of the Company
(including stock of a subsidiary of the Company). A Change in Control within
the meaning of this Section 11(a) also may constitute an Unfriendly Change
in Control within the meaning of this Section 11(b).

 

(b)

A Change in Control shall
be deemed an “Unfriendly Change in Control” if:

 

11

 

(i)

any person or group
(within the meaning of Section 13(d) and 14(d)(2) of the Exchange Act)
becomes the beneficial owner (within the meaning of Rule 13d-3 under the
Exchange Act) of thirty-five percent (35%) or more of the Company’s then
outstanding Shares through a transaction that is opposed by the Company’s
Chairman and Chief Executive Officer, and

 

(ii)

a majority of the Company’s
Continuing Directors, as defined in Section 11(c), by resolution adopted
within 30 days following the date the Company becomes aware that
Section 11(b)(i) has been satisfied, determines that a Change in
Control has occurred.

 

For purposes of
Section 5(g), “Acceleration Date” shall mean the date on which a majority
of the Company’s Continuing Directors adopts a resolution (or takes other
action) making the determination that a Change in Control has occurred.

 

(c)

For the purposes of this
Plan, “Continuing Director” shall mean a member of the Board (A) who is
not an employee of the Company or its subsidiaries or of a holder of, or an
employee or an affiliate of an entity or group that holds, thirty-five percent
(35%) or more of the Company’s Shares and (B) who either was a member of
the Board on December 31, 2004, or who subsequently became a director of
the Company and whose election, or nomination for election, by the Company’s
shareholders was approved by a vote of a majority of the Continuing Directors
then on the Board (which term, for purposes of this definition, shall mean the
whole Board and not any committee thereof). Any action, approval of which shall
require the approval of a majority of the Continuing Directors, may be
authorized by one Continuing Director, if he is the only Continuing Director on
the Board, but no such action may be taken if there are not Continuing
Directors on the Board.

 

(d)

In the event of a Change
in Control, the Committee as constituted immediately prior to the Change in
Control shall determine the manner in which “market value” of Shares will be
determined following the Change in Control.

 

 

12.          TERMINATION WITHOUT CAUSE

 

For purposes of this
Plan, “Termination Without Cause” shall mean a termination of the participant’s
employment with the Company or a subsidiary by the Company or the subsidiary
other than (i) for death or disability as described in Section 9 or
(ii) for Cause. “Cause” shall mean (a) an act or omission by the
participant that constitutes a felony or any crime involving moral turpitude;
or (b) willful gross negligence or willful gross misconduct by the
participant in connection with his employment by the Company or by a subsidiary
which causes, or is likely to cause, material loss or damage to the Company.
Notwithstanding anything herein to the contrary, if the participant’s
employment with the Company or one of its subsidiaries shall terminate due to a
Change in Control as described in Subsection 11(a)(iii), where the purchaser,
as described in such subsection, formally assumes the Company’s obligations
under this Plan or places the participant in a similar or like plan with no
diminution of the value of the awards, such termination shall not be deemed to
be a “Termination Without Cause.”

 

 

13.          CONSTRUCTIVE TERMINATION

 

“Constructive Termination”
shall mean a termination of employment with the Company or a subsidiary at the
initiative of the participant that the participant declares by prior written
notice delivered to the Secretary of the Company to be a Constructive
Termination by the Company or a subsidiary and which follows (a) a
material decrease in his total compensation opportunity or (b) a material
diminution in the authority, duties or responsibilities of his position with
the result that the participant makes a determination in good faith that he
cannot continue to carry out his job in substantially the same manner as it was
intended to be carried out immediately before such diminution. Notwithstanding
anything herein to the contrary, Constructive Termination shall not occur
within the meaning of this Section 13 until and unless 30 days have
elapsed from the date the Company receives such written notice without the
Company curing or causing to be cured the circumstance or circumstances
described in this Section 13 on the basis of which the declaration of
Constructive Termination is given.

 

 

14.          ADVERSE CHANGE IN THE PLAN

 

An “Adverse Change in the
Plan” shall mean

 

(a)

termination of the Plan
pursuant to Section 19(a);

 

(b)

amendment of the Plan
pursuant to Section 18 that materially diminishes the value of Awards that
may be granted under the Plan, either to individual participants or in the
aggregate, unless there is substituted concurrently authority to grant
long-term incentive awards of comparable value to individual participants in
the Plan or in the aggregate, as the case may be; or,

 

12

 

(c)

in respect of any holder
of an Award a material diminution in his rights held under such Award (except
as may occur under the terms of the Award as originally granted) unless there
is substituted concurrently a long-term incentive award with a value at least
comparable to the loss in value attributable to such diminution in rights.

 

 

15.          DILUTION AND OTHER ADJUSTMENTS

 

In the event of any
change in the Outstanding Shares of the Company by reason of any stock split,
stock or extraordinary cash dividend, recapitalization, merger, consolidation,
reorganization, combination or exchange of Shares or other similar event, or in
the event of an extraordinary cash dividend or other similar event, and if the
Committee shall determine, in its sole discretion, that such change equitably
requires an adjustment in the number or kind of Shares that may be issued under
the Plan pursuant to Section 4 in the number or kind of Shares subject to,
or the Stock Option price per share under, any outstanding Stock Option, in the
number or kind of Shares which have been awarded as Restricted Stock or in the
repurchase option price per share relating thereto, in the target number of
Performance Shares which have been awarded to any participant, or in any
measure of performance, then such adjustment shall be made by the Committee and
shall be conclusive and binding for all purposes of the Plan.

 

 

16.          DESIGNATION OF BENEFICIARY BY
PARTICIPANT

 

A participant may name a
beneficiary to receive any payment to which he may be entitled in respect of
Performance Shares or Performance Units under the Plan in the event of his
death, on a form to be provided by the Committee. A participant may change his
beneficiary from time to time in the same manner. If no designated beneficiary
is living on the date on which any amount becomes payable to a participant’s
executors or administrators, the term “beneficiary” as used in the Plan shall
include such person or persons.

 

 

17.          MISCELLANEOUS PROVISIONS

 

(a)

No employee or other
person shall have any claim or right to be granted an Award under the Plan.
Neither the Plan nor any action taken hereunder shall be construed as giving an
employee any right to be retained in the employ of the Company or any
subsidiary.

 

(b)

A participant’s rights
and interest under the Plan may not be assigned or transferred in whole or in
part either directly or by operation of law or otherwise (except in the event
of a participant’s death), including but not limited to, execution, levy,
garnishment, attachment, pledge, bankruptcy or in any other manner and no such
right or interest of any participant in the Plan shall be subject to any
obligation or liability or such participant.

 

(c)

No Shares shall be issued
hereunder unless counsel for the Company shall be satisfied that such issuance
will be in compliance with applicable Federal and state securities laws and
Bermuda law.

 

(d)

The Company and its
subsidiaries shall have the right to deduct from any payment made under the
Plan any federal, state or local income or other taxes required by law to be
withheld with respect to such payment. It shall be a condition to the
obligation of the Company to issue Shares upon exercise of a Stock Option, upon
settlement of a Stock Appreciation Right, or upon payment of a Performance
Share or a Performance Unit that the participant (or any beneficiary or person
entitled to payment under Section 5(d)(iii)(C) hereof) pay to the Company,
upon its demand, such amount as may be required by the Company for the purpose
of satisfying any liability to withhold Federal, state or local income or other
taxes. If the amount requested is not paid, the Company may refuse to issue
Shares.

 

(e)

The expenses of the Plan
shall be borne by the Company. However, if an Award is made to an employee of a
subsidiary:

 

(i)

if such Award results in
payment of cash to the participant, such subsidiary shall pay to the Company an
amount equal to such cash payment; and

 

13

 

(ii)

if the Award
results in the issuance to the participant of Shares, such subsidiary shall pay
to the Company an amount equal to fair market value thereof, as determined by
the Committee, on the date such Shares are issued (or, in the case of issuance
of Restricted Stock or of Shares subject to transfer and forfeiture conditions,
equal to the fair market value thereof on the date on which such Shares are no
longer subject to applicable restriction), minus the amount, if any received by
the Company in exchange for such Shares.

 

(f)

The Plan
shall be unfunded. The Company shall not be required to establish any special
or separate fund or to make any other segregation of assets to assure the payment
of any Award under the Plan.

 

(g)

By accepting
any Award or other benefit under the Plan, each participant and each person
claiming under or through him shall be conclusively deemed to have indicated
his acceptance and ratification of, and consent to, any action taken under the
Plan by the Company, the Board or the Committee.

 

 

18.          AMENDMENT

 

The Plan may
be amended at any time and from time to time by the Board, but no amendment
which increases the aggregate number of Shares which may
be issued pursuant to the Plan or the class of employees eligible to
participate shall be effective unless and until the same is approved by the
shareholders of the Company. No amendment of the Plan shall adversely affect
any right of any participant with respect to any Award previously granted
without such participant's written consent.

 

19.          TERMINATION

 

This Plan
shall terminate upon the earlier of the following dates or events to occur:

 

(a)

the adoption
of a resolution of the Board terminating the Plan; or

 

(b)

ten years
from the date the Plan is initially or subsequently approved and adopted by the
shareholders of the Company in accordance with Section 19 hereof.

 

No
termination of the Plan shall alter or impair any of the rights or obligations
of any person, without his consent, under any Award previously granted under
the Plan.

 

 

20.          SHAREHOLDER ADOPTION

 

The Plan
shall be submitted to the shareholders of the Company for their approval or
adoption. The Plan shall not be effective and no Award shall be made hereunder
unless and until the Plan has been so approved and adopted by the shareholders
in the manner required by the laws of Bermuda and the State of Delaware.

 

As originally
approved by the Board of Directors, September 4, 1985 and adopted by the
sole shareholder September 23, 1985. The Plan was amended by the Board of Directors on August 13, 1986. The
Plan was further amended on February 15,1995 and subsequently approved by
shareholders on May 24, 1995. The Plan was further amended on May 21,
2001 and subsequently adopted by shareholders on August 23, 2001. The Plan
was further amended on May 18, 2003 and subsequently adopted by
Shareholders on May 19, 2003. The Plan was further amended on
February 23, 2005.

 

14

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