Document:

WTM 9-30-2012 Ex. 10.4

SURPLUS NOTE PURCHASE AGREEMENT
Between
BUILD AMERICA MUTUAL ASSURANCE COMPANY, 
as Issuer 
and

HG HOLDINGS LTD.
and
HG RE LTD. 
as Purchasers 
Dated as of July 17, 2012

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TABLE OF CONTENTS
Page
		
	ARTICLE I
	DEFINITIONS    1

		
	Section 1.01
	Definitions    1

		
	Section 1.02
	Other Definitional Provisions.    3

		
	ARTICLE II
	PURCHASE AND SALE OF SURPLUS NOTES    4

		
	Section 2.01
	Purchase and Sale of Surplus Notes    4

		
	Section 2.02
	Delivery and Payment    4

		
	Section 2.03
	Forms of Surplus Notes    4

		
	ARTICLE III
	TERMS AND CONDITIONS OF REPAYMENT; MATURITY    5

		
	Section 3.01
	Interest    5

		
	Section 3.02
	Principal    5

		
	Section 3.03
	Payments by the Issuer.    5

		
	Section 3.04
	Priority of Payment    6

		
	Section 3.05
	Pre-Payment    6

		
	ARTICLE IV
	REGISTRATION OF SURPLUS NOTES; TRANSFER AND EXCHANGE    6

		
	Section 4.01
	Surplus Note Register    6

		
	Section 4.02
	Exchanges and Transfers    6

		
	ARTICLE V
	PURCHASERS' REPRESENTATIONS    7

		
	Section 5.01
	Investment Intent    7

		
	ARTICLE VI
	EVENTS OF DEFAULT    7

		
	Section 6.01
	Events of Default    7

		
	Section 6.02
	Remedies Upon an Event of Default    7

		
	ARTICLE VII
	REPRESENTATIONS AND WARRANTIES    7

		
	Section 7.01
	Representations and Warranties    7

		
	ARTICLE VIII
	COVENANTS OF THE ISSUER    8

		
	Section 8.01
	Covenants    8

		
	ARTICLE IX
	SUBORDINATION    9

		
	Section 9.01
	Subordination    9

		
	ARTICLE X
	REDEMPTION    9

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	Section 10.01
	Redemption of Surplus Notes.    9

		
	Section 10.02
	Effect of Redemption Notice    10

		
	Section 10.03
	No Other Redemption    10

		
	ARTICLE XI
	MISCELLANEOUS    10

		
	Section 11.01
	Notices    10

		
	Section 11.02
	IRS Forms.    10

		
	Section 11.03
	Amendments, Waivers.    10

		
	Section 11.04
	Successors and Assigns; Third Party Beneficiaries    11

		
	Section 11.05
	Severability    11

		
	Section 11.06
	Binding Effect    11

		
	Section 11.07
	GOVERNING LAW; CONSENT TO JURISDICTION    11

		
	Section 11.08
	Execution in Counterparts    11

		
	Section 11.09
	Entire Agreement    11

		
	Section 11.10
	Limited Recourse    11

		
	Section 11.11
	Headings    12

SCHEDULES AND EXHIBITS
Schedule I    Notice Information
Exhibit A-1    Form of Series A Notes
Exhibit A-2    Form of Series B Notes

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This SURPLUS NOTE PURCHASE AGREEMENT, dated as of July 17, 2012, is made by and between Build America Mutual Assurance Company, a New York mutual insurance company (together with its successors and assigns, the "Company" or the "Issuer"), HG Holdings Ltd., an exempted Bermuda limited company (together with its successors and assigns, the "Series 2012-A Purchaser"), and HG Re Ltd., an exempted Bermuda limited company (together with its successors and assigns, the "Series 2012-B Purchaser" and, together with the Series 2012-A Purchaser, the "Purchasers" and each a "Purchaser").
RECITALS
WHEREAS, the Issuer was formed as a mutual property and casualty insurance company to issue surety and financial guaranty insurance coverages; and
WHEREAS, in order to provide the Issuer with sufficient capital support to conduct its insurance business, upon the terms and subject to the conditions of this Agreement, (i) the Issuer desires to issue and sell to the Series 2012-A Purchaser, and the Series 2012-A Purchaser desires to purchase from the Issuer, surplus notes (the "Series 2012-A Notes") in an aggregate principal amount of U.S.$203,000,000, and (ii) the Issuer desires to issue and sell to the Series 2012-B Purchaser, and the Series 2012-B Purchaser desires to purchase from the Issuer, surplus notes (the “Series 2012-B Notes” and, together with the Series 2012-A Notes, the "Surplus Notes") in an aggregate principal amount of U.S.$300,000,000.
NOW, THEREFORE, for full and fair consideration, the parties hereto agree as follows:
ARTICLE I 
DEFINITIONS
Section 1.01    Definitions.  The following capitalized terms shall have the following meanings:
"Agreement" means this Surplus Note Purchase Agreement, as the same may from time to time be amended, supplemented or otherwise modified in accordance with the terms hereof.
"Business Day" means any day other than a Saturday or a Sunday or any day on which banking institutions, in New York, New York, or the Islands of Bermuda, are authorized or obligated by law, regulation or executive order to be closed.
"Dollar" or "U.S.$" means a dollar or other equivalent unit in such coin or currency of the United States as at the time shall be legal tender for all debts, public and private.
"Event of Default" has the meaning specified in Section 6.01 hereof.
"Holder" means, with respect to any Surplus Note, the Person in whose name such Surplus Note is registered in the Surplus Note Register.
"Insolvency Event" means that (x) an involuntary bankruptcy, insolvency or similar proceeding shall be commenced or an involuntary petition shall be filed in a court of competent 

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jurisdiction seeking (i) relief in respect of the Issuer or of all or substantially all of its property or assets under any applicable bankruptcy, insolvency, receivership or similar law, (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator, rehabilitator, liquidator or similar official with respect to the Issuer or all or substantially all of its property or assets, or (iii) the winding-up, liquidation or dissolution of the Issuer, and any such proceeding or petition shall continue undismissed for a period of thirty (30) or more consecutive calendar days or an order or decree approving or ordering any of the foregoing shall be entered, or (y) the Issuer shall (i) voluntarily commence any proceeding or file any petition seeking relief (or take any similar or analogous action) under any applicable bankruptcy, insolvency, receivership or similar law, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner to, any proceeding or the filing of any petition described in clause (x) above, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator, rehabilitator, liquidator or similar official with respect to the Issuer or all or substantially all of its property or assets, (iv) file an answer admitting the material allegations of a petition filed against it in any proceeding or petition described in clause (x) above, (v) make a general assignment for the benefit of its creditors, or (vi) become unable, admit in writing its inability, or fail generally to pay its debts or contractual obligations as they become due. 
"Interest Payment Date" means each March 1, June 1, September 1 and December 1, commencing December 1, 2012, provided that if such day is not a Business Day, the next succeeding Business Day.
"Interest Period" means, with respect to any Surplus Note, (a) in the case of the initial interest period with respect to such Surplus Note, the period from, and including, the date such Surplus Note was issued to the Purchaser to, but excluding, the immediately following Payment Date, (b) thereafter, the period from, and including, the preceding Payment Date to, but excluding, the next succeeding Payment Date, and (c) in the case of the final interest period with respect to such Surplus Note, the period from, and including, the preceding Payment Date to, but excluding, the Maturity Date.
"Interest Rate" means a per annum interest rate of 8.0%.
"Issue Date" means, with respect to any Surplus Note, the date on which the Issuer issues such Surplus Note.
"Maturity Date" means, with respect to any Surplus Notes, the date on which all outstanding unpaid principal on such Surplus Note becomes due and payable as therein or herein provided, whether at the Stated Maturity Date or by declaration of acceleration.
"Payment Date" means any Interest Payment Date or the Maturity Date.
"Person" means an individual, corporation (including a business trust), partnership, limited liability company, joint venture, association, joint stock company, trust (including any beneficiary thereof), unincorporated association or government or any agency or political subdivision thereof.
"Purchasers" has the meaning specified in the introduction to this Agreement.

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"Record Date" means the date on which the Holders of any Surplus Note entitled to receive a payment with respect to principal or interest on the next succeeding Payment Date are determined, such date as to any Payment Date being five (5) Business Days prior to such Payment Date.
"Redemption Date" has the meaning specified in Section 10.01(b) hereof.
"Redemption Notice" has the meaning specified in Section 10.01(b) hereof.
"Redemption Price" has the meaning specified in Section 10.01(a) hereof.
"Regulatory Authority" means, with respect to the Issuer, the Superintendent of the New York State Department of Financial Services.
"Regulatory Approval" means, with respect to any action by the Issuer, approval of the Superintendent of the New York State Department of Financial Services.
"Series 2012-A Notes" means Surplus Notes of the Issuer denominated as Series 2012-A Notes in an aggregate principal amount of U.S.$203,000,000 and issued in denominations of U.S.$1,000,000.
"Series 2012-B Notes" means Surplus Notes of the Issuer denominated as Series 2012-B Notes in an aggregate principal amount of U.S.$300,000,000 and issued in denominations of U.S.$1,000,000.
"Series 2012-A Purchaser" has the meaning specified in the introduction to this Agreement.
"Series 2012-B Purchaser" has the meaning specified in the introduction to this Agreement.
"Stated Maturity Date" means April 1, 2042.
"Superintendent" means the Superintendent of the New York State Department of Financial Services.
"Surplus Note Register" has the meaning specified in Section 4.01 hereof.
"Surplus Notes" has the meaning specified in the recitals hereof.
"Wire Transfer" means the payment instructions given by the Purchaser or the Issuer, respectively, in connection with the payment of the purchase price or the Redemption Price of the Surplus Notes, as the case may be.
Section 1.02    Other Definitional Provisions.
(a)    All terms defined in this Agreement shall have the defined meanings when used in any certificate or other document made or delivered pursuant hereto.
(b)    The words "hereof," "herein" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular 

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provision of this Agreement; and Section and subsection references contained in this Agreement are references to Sections or subsections in or to this Agreement unless otherwise specified.
ARTICLE II     
PURCHASE AND SALE OF SURPLUS NOTES
Section 2.01    Purchase and Sale of Surplus Notes.  Upon the terms and subject to the conditions set forth in this Agreement, and in reliance on the covenants and agreements herein set forth,
(c)    on July 17, 2012, the Issuer shall issue and the Series 2012-A Purchaser shall purchase all of the Series 2012-A Notes; and
(d)    on July 17, 2012, the Issuer shall issue and the Series 2012-B Purchaser shall purchase all of the Series 2012-B Notes.
Section 2.02    Delivery and Payment.  The Issuer shall duly execute and deliver the Series 2012-A Surplus Notes and the Series 2012-B Notes to the respective Purchaser on the dates specified in Section 2.01 hereof, in a combined aggregate principal amount of U.S.$503,000,000.  Against such delivery,
(a)    the Series 2012-A Purchaser shall pay and/or transfer to the Issuer, immediately available funds by Wire Transfer to such account of the Issuer as has been previously specified to the Purchasers, in the amount of U.S.$203,000,000, on the date that Surplus Notes are executed and delivered to Series 2012-A Purchaser pursuant to Section 2.01(a) hereof; and
(b)    the Series 2012-B Purchaser shall pay and/or transfer to the Issuer, immediately available funds by Wire Transfer to such account of the Issuer as has been previously specified to the Purchasers, in the amount of U.S.$300,000,000, on the date that Surplus Notes are executed and delivered to Series 2012-B Purchaser pursuant to Section 2.01(b) hereof.
Section 2.03    Forms of Surplus Notes.  The Surplus Notes shall be issued substantially in the form of the Surplus Notes attached as Exhibit A-1 and Exhibit A-2 hereto and shall be duly executed and delivered by the Issuer as hereinafter provided.
ARTICLE III     
TERMS AND CONDITIONS OF REPAYMENT; MATURITY
Section 3.01    Interest.  The Surplus Notes shall bear interest during each Interest Period at the Interest Rate on the outstanding principal amount of the Surplus Notes.  Interest shall be due and payable on each Interest Payment Date, subject to the receipt of Regulatory Approval and the priority of payments set forth in Section 3.04.  

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Interest shall be computed on the basis of a 360-day year comprised of twelve 30-day months.
Section 3.02    Principal.  Subject to the receipt of Regulatory Approval and the priority of payments set forth in Section 3.04, the principal of the Surplus Notes shall be due and payable on the Stated Maturity Date.
Section 3.03    Payments by the Issuer.
(a)    Unless Regulatory Approval has previously been obtained, not later than fifteen (15) calendar days prior to any Interest Payment Date or Stated Maturity Date, the Issuer shall request Regulatory Approval for (i) the payment of the interest scheduled to be paid on such Interest Payment Date and (ii) the payment of principal of the Surplus Notes on the Stated Maturity Date, as applicable, and use its reasonable best efforts to obtain such approval.  If Regulatory Approval is granted for the payment of interest on any Interest Payment Date, the Issuer shall pay interest on the Surplus Notes in accordance with the terms of this Agreement; otherwise, such interest payment shall be deferred until the granting of Regulatory Approval for the payment of such interest, and no interest shall accrue on any such deferred interest.  If Regulatory Approval is granted for the payment of principal on the Surplus Notes, the Issuer shall pay the amount due on the Stated Maturity Date; otherwise, the amount of principal otherwise payable shall be deferred until Regulatory Approval shall have been obtained for such payment.  Pursuant to Section 1307(b) of the New York Insurance Law, interest and principal shall be repaid only out of free and divisible surplus of the Issuer with the approval of the Superintendent whenever, in his judgment, the financial condition of the Issuer warrants. In the event of insolvency of the Issuer, unearned premiums shall be deemed to be part of its free and divisible surplus.
(b)    Principal that has not been paid on the Stated Maturity Date shall continue to accrue interest at a rate per annum equal to the Interest Rate from and including the Payment Date therefore, up to but excluding the date on which such amount is actually paid.
(c)    All payments required to be made by the Issuer with respect to this Article III shall be made:  (i) by Wire Transfer of immediately available funds not later than 1:00 p.m., New York City time, and (ii) to the account of the applicable Holders, or to such other account as such Holders may have most recently designated in writing for such purpose by notice to the Issuer.
(d)    The Issuer and any agent of the Issuer may treat the Person in whose name any Surplus Note is registered on the Surplus Note Register as the owner of such Surplus Note on the applicable Record Date for the purpose of receiving payments of principal and interest on such Surplus Note and on any other date for all other purposes whatsoever (whether or not such payment is overdue), and neither the Issuer nor any agent of the Issuer shall be affected by notice to the contrary.
Section 3.04    Priority of Payment.  As funds become available, they will be used on each Payment Date to make payments in the following order, satisfying each 

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category of payment in full before beginning payments on the subsequent category:  (i) the interest due and payable on Series 2012-A Notes and Series 2012-B Notes in pari passu, (ii) the outstanding principal of Series 2012-A Notes, and (iii) the outstanding principal of Series 2012-B Notes.  The Issuer shall not make any payment of principal on Series 2012-B Notes, or on any other debt subordinated to the Surplus Notes, until all interest due and all outstanding principal on Series 2012-A Notes has been paid.  The Issuer shall not make any payment of principal on any debt subordinated to the Surplus Notes until all interest due and all outstanding principal on all of the Surplus Notes has been paid.
Section 3.05    Pre-Payment.  Subject to the receipt of Regulatory Approval and the priority of payments set forth in Section 3.04, the Issuer may, at its sole option, pre-pay the principal on the Surplus Notes on any Interest Payment Date, upon fifteen (15) calendar days' prior written notice to the Holders in accordance with Section 11.01.
ARTICLE IV     
REGISTRATION OF SURPLUS NOTES; TRANSFER AND EXCHANGE
Section 4.01    Surplus Note Register.  The Issuer shall keep a register (the "Surplus Note Register") at its office in New York, New York, in which it shall provide for the registration of the Surplus Notes and the registration of transfers of the Surplus Notes.  Such Surplus Note Register shall be in written form or in any other form capable of being converted into written form within a reasonable time.  Upon surrender for registration of transfer of any Surplus Note at the office of the Issuer and in compliance with the restrictions set forth in any legend appearing on any Surplus Note, the Issuer shall execute and deliver, in the name of the designated transferee or transferees, one or more new Surplus Notes of like terms.
Section 4.02    Exchanges and Transfers.  At the option of any Holder, Surplus Notes may be exchanged for one or more Surplus Notes to effectuate the division of any Surplus Notes held by the Holder into paid and unpaid portions and the surrender of the paid portion, upon surrender of the Surplus Notes to be exchanged at the office of the Issuer or such other office as the Issuer may designate for such purposes.  Whenever any Surplus Note is surrendered for exchange, the Issuer shall execute and deliver the Surplus Note that the Holder making the exchange is entitled to receive.  Any Surplus Notes issued upon any registration of transfer or exchange of a Surplus Note shall be the valid obligations of the Issuer, evidencing the same debt, and entitled to the same benefits under this Agreement, as the Surplus Note surrendered upon such registration of transfer or exchange.  Every Surplus Note presented or surrendered for registration of transfer or exchange shall be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Issuer duly executed by the Holder thereof or its attorney duly authorized in writing.  No service charge shall be made to a purchaser for any registration of transfer or exchange of a Surplus Note, but the Issuer may require payment of a sum sufficient to cover the 

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expenses of delivery (if any) not made by regular mail or any tax or other governmental charge payable in connection therewith.
ARTICLE V     
PURCHASERS’ REPRESENTATIONS
Section 5.01    Investment Intent.  Each Purchaser represents that it is purchasing the Surplus Notes for its own account for investment and not with a view to the distribution thereof and has no present intention of selling, negotiating or otherwise disposing of the Surplus Notes, except for contributions to direct or indirect wholly-owned subsidiaries.
ARTICLE VI     
EVENTS OF DEFAULT
Section 6.01    Events of Default.  The occurrence of any of the following events shall constitute an "Event of Default" hereunder:
(a)    default is made in the payment of any installment of interest on the Surplus Notes when such interest becomes due and payable and such default continues for a period of 30 calendar days, provided that the Issuer has obtained Regulatory Approval for such interest payment in accordance with Section 3.03(a) hereof; or
(b)    default is made in the payment of the principal of the Surplus Notes when such principal becomes due and payable, provided that the Issuer has obtained Regulatory Approval for such principal payment in accordance with Section 3.03(a) hereof; or
(c)    an Insolvency Event; or
(d)    the Issuer fails to comply with the covenants set forth in Sections 8.01(b) or 8.01(c) within thirty (30) calendar days following receipt of written notice from a Holder of a breach of the applicable covenant; or
(e)    the Issuer violates the covenant set forth in Section 8.01(d).
Section 6.02    Remedies Upon an Event of Default.  Upon the occurrence of an Event of Default, to the extent provided in any Regulatory Approval, and subject to the priority of payments set forth in Section 3.04, each Holder of a Surplus Note may give notice of such Event of Default to the Issuer, and demand payment of the entire outstanding principal amount of such Surplus Note, plus accrued interest, plus interest on such overdue principal at the Interest Rate, plus such further amounts as shall be necessary to cover the Holder's costs and expenses of collection, including reasonable attorneys' fees.
ARTICLE VII     
REPRESENTATIONS AND WARRANTIES

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Section 7.01    Representations and Warranties.  The Company hereby represents and warrants to the Purchasers:
(a)    The Company has been duly incorporated and is validly existing in good standing under the laws of the State of New York, and has the necessary power, capacity and authority to conduct its business as described in its Charter;
(b)    The Company has full power and authority to execute and deliver this Agreement and the certificates representing the Surplus Notes and to consummate the transactions contemplated hereby and thereby and has taken all necessary corporate or other action to approve and authorize the same;
(c)    The Company expects to be licensed as an insurance company in the State of New York;
(d)    The issuance of the Surplus Notes and compliance by the Company with all of the provisions of the Surplus Notes and this Agreement, and the consummation of the transactions herein and therein contemplated, will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement, or other agreement or instrument to which the Company is a party or by which the Company is bound or to which any of the property or assets of the Company is subject, or which affects the validity, performance or consummation of the transactions contemplated by this Agreement, nor will such action result in any violation of any statute or any order, rule or regulation of any court or insurance regulatory authority or other governmental agency or body having jurisdiction over the Company or any of its properties; and
(e)    This Agreement has been duly authorized, executed and delivered by the Company.
ARTICLE VIII     
COVENANTS OF THE ISSUER
Section 8.01    Covenants.  So long as any amount shall remain owing by the Issuer under this Agreement or the Surplus Notes, the Issuer shall take the following actions:
(a)    Payment of Interest and Principal.  Subject to the receipt of Regulatory Approval, the Issuer shall duly and punctually pay the interest and principal on the Surplus Notes, in accordance with the terms hereof.
(b)    Reporting Requirements.
(i)    The Issuer shall publish and shall provide to the Holders annual audited statutory financial statements promptly after it has filed the same with the Regulatory Authority; and

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(ii)    The Issuer shall provide to the Holders quarterly and annual unaudited statutory financial statements promptly after they have filed the same with the Regulatory Authority.
(c)    Limitation on Payments.  The Issuer shall request Regulatory Approval, and use reasonable best efforts to obtain such approval, as provided in Section 3.03(a) to make any payment of interest or principal on the Surplus Notes.
(d)    Limitation on Additional Debt.  Until the full principal amount of the Surplus Notes and any interest incurred thereon has been paid to the Holders, the Issuer shall not issue any debt obligations (i) to which the Surplus Notes would be subordinated or with which they would rank pari passu or (ii) the principal of which is payable, in whole or in part, prior to the payment in full of the principal of the Surplus Notes and interest incurred thereon.
ARTICLE IX     
SUBORDINATION
Section 9.01    Subordination.  The Issuer covenants and agrees, and the Holders by their acceptance of the Surplus Notes, likewise covenant and agree, that in the event of the liquidation of the Issuer pursuant to the New York Insurance Code, the payment of the principal and interest on the Surplus Notes shall be expressly subordinate and junior in right of payment to the prior payment in full of all policy obligations and all other liabilities of the Issuer other than any indebtedness that is expressly subordinate to the Surplus Notes, but prior to the distribution of assets to members.  Amounts distributable to the holders of the Surplus Notes shall nevertheless be distributed in accordance with the priority of payments set forth in Section 3.04.
ARTICLE X     
REDEMPTION
Section 10.01    Redemption of Surplus Notes.
(a)    Subject to the receipt of Regulatory Approval and the priority of payments set forth in Section 3.04, the Issuer may at its option, subject to Section 10.01(b), redeem any or all of the Surplus Notes on any Interest Payment Date at a purchase price equal to (i) such portion of the outstanding principal amount of such Surplus Notes to be redeemed plus (ii) all accrued but unpaid interest up to but not including the date of redemption (collectively, the "Redemption Price"), subject to the satisfaction by or on behalf of the Holders of the requirements set forth in this Article X.
(b)    Not later than fifteen (15) calendar days prior to the proposed date on which the Issuer desires to effect the redemption (the "Redemption Date"), the Issuer shall mail a written notice the ("Redemption Notice") to the Holders which shall state:
		
	(1)
	the Redemption Date, which shall be a Business Day;

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	(2)
	that Surplus Notes must be surrendered to the Issuer to collect payment of the Redemption Price;

		
	(3)
	that the Redemption Price for the Surplus Notes as to which a Redemption Notice has been duly given, as set forth in such Redemption Notice, will be paid promptly following the later of the Redemption Date and the time of surrender of Surplus Notes as described in clause (2); and

		
	(4)
	that, unless the Issuer defaults in making payment of such Redemption Price on the Surplus Notes surrendered for purchase, interest on the Surplus Notes surrendered for purchase will cease to accrue on and after the Redemption Date.

Any redemption by the Issuer contemplated pursuant to the provisions of this Section 10.01 shall be consummated by the delivery to the Holder by Wire Transfer of immediately available funds in an amount equal to Redemption Price promptly following the later of (x) the Redemption Date and (y) the time of delivery of the Surplus Notes to the Issuer.
Section 10.02    Effect of Redemption Notice.  Upon receipt by the Holder of the Redemption Notice, the Holder shall thereafter be entitled to receive solely the Redemption Price with respect to the Surplus Notes.  Such Redemption Price shall be paid to the Holder promptly following the later of (x) the Redemption Date and (y) the time of delivery of the Surplus Notes to the Issuer.
Section 10.03    No Other Redemption.  Except as provided in Sections 3.05, 10.01 and 10.02, the Holders shall not have the right to require the redemption or repurchase of the Surplus Notes prior to the Stated Maturity Date.
ARTICLE XI     
MISCELLANEOUS
Section 11.01    Notices.  Except in the case of notices and other communications expressly permitted to be given by telephone, all notices and other communications provided for herein shall be delivered by the following means:  (i) hand delivery, (ii) overnight courier service (e.g., FedEx or DHL); (iii) registered or certified U.S. mail, postage prepaid and return receipt requested; or (iv) facsimile transmission.  If any notice or other communication provided for herein is sent by any party by electronic e-mail it shall not be deemed to have been delivered to the addressee if the party sending such notice or communication receives a response from the intended addressee that he or she will not be able to retrieve e-mail due to vacation, other absence from the office, system failure or other reason.  All such notices shall be delivered to the parties as set forth on Schedule I hereof.  All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt.

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Section 11.02    IRS Forms.    Each Holder, by its acceptance of a Surplus Note, agrees to provide a completed Form W-8 BEN, or other similar form required by the Internal Revenue Service, if requested by the Company, establishing that the interest paid on the Surplus Note is not subject to U.S. withholding tax.
Section 11.03    Amendments, Waivers.
(a)    Except as otherwise expressly provided herein, no amendment or waiver of any provision of this Agreement shall in any event be effective unless the same shall be in writing and signed by the parties hereto.
(b)    Each such amendment, waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.  A failure or delay in exercising any right, power or privilege with respect to this Agreement will not be presumed to operate as a waiver, and a single or partial exercise of any right, power or privilege will not be presumed to preclude any subsequent or further exercise of that right, power or privilege or the exercise of any other right, power or privilege.
Section 11.04    Successors and Assigns; Third Party Beneficiaries.  The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors.  This Agreement shall not be transferred or assigned except as mutually agreed by the parties in writing.  Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto and their respective successors and permitted transferees) any legal or equitable right, remedy or claim under or by reason of this Agreement.  In the event the Issuer consolidates or merges into another entity or transfers substantially all of its assets to another entity, the entity into which the Company consolidates or merges or to which the assets of the Issuer are transferred must assume the liability of the Company hereunder.
Section 11.05    Severability.  Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.
Section 11.06    Binding Effect.  This Agreement shall remain in full force and effect until such time as all of the Surplus Notes issued to either Purchaser shall have been repaid in full and cancelled.
Section 11.07    GOVERNING LAW.  THIS AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK AND APPLICABLE REGULATIONS ISSUED PURSUANT THERETO.

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Section 11.08    Execution in Counterparts.  This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement.  Delivery of an executed counterpart of a signature page of this Agreement by telecopy shall be effective as delivery of a manually executed counterpart of this Agreement.
Section 11.09    Entire Agreement.  This Agreement constitutes the entire agreement between the parties relating to the subject matter hereof and supersedes any and all previous agreements and understandings, oral or written, relating to the subject matter hereof.
Section 11.10    Limited Recourse.  The obligation of the Issuer to pay the Surplus Notes shall not be part of the legal liabilities of the Issuer and shall not be a basis of any set-off but until the Surplus Notes are repaid, all statements published by the Issuer or filed with the Superintendent shall show, as a footnote, the amount then remaining unpaid.
Section 11.11    Headings.  Article and Section headings used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.
[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the first date written above.
BUILD AMERICA MUTUAL ASSURANCE COMPANY 
as Issuer
By:          
Name: 
Title:

HG HOLDINGS LTD. 
as Purchaser
By:          
Name: 
Title:

HG RE LTD. 
as Purchaser
By:          
Name: 
Title:

#PageNum#

SCHEDULE I 
to 
Surplus Note Purchase Agreement between Build America Mutual Assurance Company, 
HG Holdings Ltd. and HG Re Ltd.

NOTICE INFORMATION
	
		
	

Address for Notices to Issuer:
	 

Build America Mutual Assurance Company
ATTN:  General Counsel
1345 Avenue of the Americas, 29th Floor
New York, NY  10105
Telephone: 212-365-7561
Email: amakowski@buildamerica.com

Address for Notices to Series 2012-A Purchaser:

HG Holdings Ltd.
ATTN:  President
14 Wesley Street, Fifth Floor
Hamilton HM 11
Bermuda
Telephone: (441) 278-3148
Fax: (441) 278-3145
Email: sheila.nicoll@siriusgroup.com 

With a copy to:

White Mountains Insurance Group, Ltd.
ATTN: General Counsel
80 South Main Street
Hanover, NH 03755
Telephone: (603) 640-2202
Fax: (603) 643-4592
Email: rseelig@whitemountains.com

Address for Notices to Series 2012-B Purchaser:

HG Re Ltd.
ATTN:  President
14 Wesley Street, Fifth Floor

Hamilton HM 11
Bermuda
Telephone: (441) 278-3148
Fax: (441) 278-3145
Email: sheila.nicoll@siriusgroup.com 

With a copy to:

White Mountains Insurance Group, Ltd.
ATTN: General Counsel
80 South Main Street
Hanover, NH 03755
Telephone: (603) 640-2202
Fax: (603) 643-4592
Email: rseelig@whitemountains.com

EXHIBIT A-1 
 
FORM OF SERIES A NOTE
[ISSUE DATE] 
Series 2012-A
Build America Mutual Assurance Company, a mutual insurance company duly organized and existing under the laws of the State of New York (the "Company"), for value received hereby promises to pay to HG Holdings Ltd., or its assigns, the outstanding balance of the principal sum of U.S.$1,000,000 (One Million Dollars) in cash on April 1, 2042; to pay interest thereon quarterly on the first day of March, June, September and December in each year, commencing December 1, 2012, at the rate per annum set forth below, until the principal hereof is paid in full, except that the final payment of any accrued and unpaid interest shall be concurrent with the final payment of principal; and, subject to the provisions of Paragraph 1 of this Surplus Note, to pay the principal of the Surplus Notes on April 1, 2042.  The per annum rate of interest will be 8.0%.  Interest will be computed on the basis of a 360-day year of twelve 30-day months.  All principal and interest shall be paid at the principal corporate office of the Company or such other place, which shall be acceptable to the Company, as the holder hereof shall designate in writing to the Company, in collected and immediately available funds in lawful money of the United States of America.  Principal and interest shall be payable on the terms and conditions set forth below:
1.No payment of principal or interest shall be permitted on this Surplus Note without the prior written approval of the Superintendent of the New York State Department of Financial Services (the "Superintendent").  The Company covenants that it shall use its best efforts to obtain such approvals on or prior to the date on which such principal or interest shall become due and payable.
2.    Subject to the provisions of Paragraph 1 hereof, the Issuer may, at its sole option, pre-pay the principal on the Surplus Notes on any interest payment date, upon fifteen (15) calendar days' prior written notice to HG Holdings Ltd. or its assigns.
3.    The Issuer hereby covenants it shall not make any payment of principal on Series 2012-B Notes, or on any other debt subordinated to this Surplus Note, until all outstanding principal and all interest due on Series 2012-A Notes has been paid. 
4.    Subject to the provisions of Paragraph 1 hereof, the Company may redeem this Surplus Note on any interest payment date, on not less than 15 calendar days’ prior written notice.  The redemption price shall be equal to such portion of the outstanding principal amount of this Surplus Note to be redeemed plus any accrued and unpaid interest thereon up to but not including the date of redemption.
5.    To the extent that a payment of all or a portion of the principal of this Surplus Note or interest hereon is prohibited pursuant to the provisions of Paragraph 1 hereof, such prohibition shall not be considered to be a forgiveness of the indebtedness hereunder, and interest shall continue to be accrued and paid at the rate provided herein through the date of payment on 

any such unpaid principal (but not on interest the payment of which was prohibited pursuant to the provisions of Paragraph 1 hereof, during the period of such prohibition), and promptly (and in no event later than 30 calendar days) after the removal of any such prohibition the Company shall make payment of all amounts then past due and owing hereunder.
6.    Upon the occurrence of an Event of Default (as defined in the Surplus Note Purchase Agreement pursuant to which this Surplus Note was issued) the Company will, upon demand by the holder of this Surplus Note, and subject to the provisions of Paragraph 1 hereof, pay to it the whole amount of the principal of this Surplus Note, plus accrued interest, with interest upon the overdue principal; and, in addition thereof, such further amount as shall be sufficient to cover the costs and expenses of collection, including reasonable attorneys' fees.
7.    In the event of the liquidation of the Company pursuant to the New York Code, the claims under this Surplus Note shall only be paid out of any assets remaining after the payment of all policy obligations and all other liabilities of the Company but before distribution of assets to members; provided, however, that the claims of the holder of this Surplus Note shall not be subordinated to the claims of the holder of any indebtedness expressly subordinated to the Surplus Note.
8.    Except for the events described in Paragraphs 1 and 6 above, no provision of this Surplus Note shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and interest on this Surplus Note at the times, place and rate, and in the coin or currency, herein prescribed.  No provision of this Surplus Note shall extinguish ultimate liability for the payment of principal and interest hereunder.
9.    The obligation of the Company to pay this Surplus Note shall not form a part of the Company's legal liabilities until authorized for payment by the Superintendent and shall not be a basis of any set off, but, until authorized for repayment by the Superintendent, all statements published or filed with the Superintendent by the Company shall show the amount thereof then remaining unpaid as a special surplus account.  The obligation of the Company under this Surplus Note may not be offset or be subject to recoupment with respect to any liability or obligation owed to the Company.
10.    Each payment made hereunder will be credited first to accrued but unpaid interest, if any, and the balance of such payment will be credited to the principal amount hereof.
11.    In the event that any payment of principal or interest on this Surplus Note is scheduled to be made on a day that is not a Business Day, then such payment shall be made on the next following Business Day and no additional interest shall accrue as a result of payment on such following Business Day.  For the purpose of this Paragraph 11, "Business Day" shall mean any day that is not a Saturday, Sunday or any other day on which banking institutions in the State of New York are permitted or required by any applicable law to close.
12.    No agreement or interest securing any obligation of the Company, whether existing on the date of this Surplus Note or subsequently entered into, shall apply to or secure the obligation of the Company under this Surplus Note.

13.    In the event the Company consolidates or merges into another entity or transfers substantially all of its assets to another entity, the entity into which the Company consolidates or merges or to which the assets of the Company are transferred must assume the liability of the Company hereunder.
14.    This Surplus Note shall in all respects be governed by, and construed in accordance with, the laws of the State of New York and applicable regulations issued pursuant thereto.
IN WITNESS WHEREOF, the Company has caused this Surplus Note to be executed in its name and attested to by its authorized officer, and its corporate seal to be hereunto affixed, all as of the date first written above.
BUILD AMERICA MUTUAL ASSURANCE COMPANY
(CORPORATE SEAL)
		
	By:
	 
Name:   
Title:

Attest:_________________________

EXHIBIT A-2 
 
FORM OF SERIES B NOTE
[ISSUE DATE] 
Series 2012-B
Build America Mutual Assurance Company, a mutual insurance company duly organized and existing under the laws of the State of New York (the "Company"), for value received hereby promises to pay to HG Re Ltd., or its assigns, the outstanding balance of the principal sum of U.S.$1,000,000 (One Million Dollars) in cash on April 1, 2042; to pay interest thereon quarterly on the first day of March, June, September and December in each year, commencing December 1, 2012, at the rate per annum set forth below, until the principal hereof is paid in full, except that the final payment of any accrued and unpaid interest shall be concurrent with the final payment of principal; and, subject to the provisions of Paragraph 2 of this Surplus Note, to pay the principal of the Surplus Notes on April 1, 2042.  The per annum rate of interest will be 8.0%.  Interest will be computed on the basis of a 360-day year of twelve 30-day months.  All principal and interest shall be paid at the principal corporate office of the Company or such other place, which shall be acceptable to the Company, as the holder hereof shall designate in writing to the Company, in collected and immediately available funds in lawful money of the United States of America.  Principal and interest shall be payable on the terms and conditions set forth below:
1.    Other than contributions to direct or indirect wholly-owned subsidiaries, this Surplus Note may not be sold, transferred or assigned, in whole or in part, unless it has been released from the trust account established pursuant to the Supplemental Trust Agreement dated as of July 17, 2012, among the Company, HG Re Ltd., an exempted Bermuda limited company and The Bank of New York Mellon, as trustee.
2.    No payment of principal or interest shall be permitted on this Surplus Note without the prior written approval of the Superintendent of the New York State Department of Financial Services (the "Superintendent").  The Company covenants that it shall use its best efforts to obtain such approvals on or prior to the date on which such principal or interest shall become due and payable.
3.    Payment of principal hereof shall be subject to the priority of payments set forth in the Surplus Note Purchase Agreement dated as of July 17, 2012, pursuant to which this Surplus Note was issued.  The Issuer hereby covenants it shall not make any payment of principal on any debt subordinated to this Surplus Note until all outstanding principal and all interest due on Series 2012-B Notes has been paid. 
4.    Subject to the provisions of Paragraph 2 hereof, the Issuer may, at its sole option, pre-pay the principal on the Surplus Notes on any interest payment date, upon fifteen (15) calendar days' prior written notice to HG Re Ltd. or its assigns.
5.    Subject to the provisions of Paragraph 2 hereof, the Company may redeem this Surplus Note on any interest payment date, on not less than 15 calendar days’ prior written 

notice.  The redemption price shall be equal to such portion of the outstanding principal amount of this Surplus Note to be redeemed plus any accrued and unpaid interest thereon up to but not including the date of redemption.
6.    To the extent that a payment of all or a portion of the principal of this Surplus Note or interest hereon is prohibited pursuant to the provisions of Paragraph 2 hereof, such prohibition shall not be considered to be a forgiveness of the indebtedness hereunder, and interest shall continue to be accrued and paid at the rate provided herein through the date of payment on any such unpaid principal (but not on interest the payment of which was prohibited pursuant to the provisions of Paragraph 2 hereof, during the period of such prohibition), and promptly (and in no event later than 30 calendar days) after the removal of any such prohibition the Company shall make payment of all amounts then past due and owing hereunder.
7.    Upon the occurrence of an Event of Default (as defined in the Surplus Note Purchase Agreement pursuant to which this Surplus Note was issued) the Company will, upon demand by the holder of this Surplus Note, and subject to the provisions of Paragraph 2 hereof, pay to it the whole amount of the principal of this Surplus Note, plus accrued interest, with interest upon the overdue principal; and, in addition thereof, such further amount as shall be sufficient to cover the costs and expenses of collection, including reasonable attorneys' fees.
8.    In the event of the liquidation of the Company pursuant to the New York Code, the claims under this Surplus Note shall only be paid out of any assets remaining after the payment of all policy obligations and all other liabilities of the Company but before distribution of assets to members or any indebtedness expressly subordinated to the Surplus Note; provided, however, that the claims of the holder of this Surplus Note shall be subordinated to the claims of the holder of the Surplus Notes of the Issuer denominated as Series 2012-A Notes in an aggregate principal amount of U.S.$203,000,000.
9.    Except for the events described in Paragraphs 2 and 7 above, no provision of this Surplus Note shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and interest on this Surplus Note at the times, place and rate, and in the coin or currency, herein prescribed.  No provision of this Surplus Note shall extinguish ultimate liability for the payment of principal and interest hereunder.
10.    The obligation of the Company to pay this Surplus Note shall not form a part of the Company's legal liabilities until authorized for payment by the Superintendent and shall not be a basis of any set off, but, until authorized for repayment by the Superintendent, all statements published or filed with the Superintendent by the Company shall show the amount thereof then remaining unpaid as a special surplus account.  The obligation of the Company under this Surplus Note may not be offset or be subject to recoupment with respect to any liability or obligation owed to the Company.
11.    Each payment made hereunder will be credited first to accrued but unpaid interest, if any, and the balance of such payment will be credited to the principal amount hereof.

12.    In the event that any payment of principal or interest on this Surplus Note is scheduled to be made on a day that is not a Business Day, then such payment shall be made on the next following Business Day and no additional interest shall accrue as a result of payment on such following Business Day.  For the purpose of this Paragraph 12, "Business Day" shall mean any day that is not a Saturday, Sunday or any other day on which banking institutions in the State of New York are permitted or required by any applicable law to close.
13.    No agreement or interest securing any obligation of the Company, whether existing on the date of this Surplus Note or subsequently entered into, shall apply to or secure the obligation of the Company under this Surplus Note.
14.    In the event the Company consolidates or merges into another entity or transfers substantially all of its assets to another entity, the entity into which the Company consolidates or merges or to which the assets of the Company are transferred must assume the liability of the Company hereunder.
15.    This Surplus Note shall in all respects be governed by, and construed in accordance with, the laws of the State of New York and applicable regulations issued pursuant thereto.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the Company has caused this Surplus Note to be executed in its name and attested to by its authorized officer, and its corporate seal to be hereunto affixed, all as of the date first written above.
BUILD AMERICA MUTUAL ASSURANCE COMPANY
(CORPORATE SEAL)
		
	By:
	 
Name:   
Title:

Attest:_________________________ACN.8.31.2012 10-K Exhibit 10.23

Exhibit 10.23
ACCENTURE LTD
2001 SHARE INCENTIVE PLAN 
AND FRENCH RSU SUBPLAN

RESTRICTED SHARE UNIT AGREEMENT

(Key Executive Performance-Based Award – France [___year___])

Accenture Ltd, an exempted company registered in Bermuda (the “Company”), hereby grants, as of [___date___],  to [___Name___] (the “Participant”), a total number of [___number___]  Restricted Share Units (“RSUs”), on the terms and conditions set forth herein. This grant is made pursuant to the terms of the Accenture Ltd 2001 Share Incentive Plan, as amended by the Subplan for Restricted Share Units in France (as so amended, the “Plan”), which Plan, as further amended from time to time, are incorporated herein by reference and made a part of this Restricted Share Unit Agreement.  Each RSU represents the unfunded, unsecured right of the Participant to receive a Share on the date(s) specified herein subject to the conditions specified herein.  Capitalized terms not otherwise defined herein shall have the same meanings ascribed to them in the Plan.

The terms and conditions of the RSUs granted hereunder, to the extent not controlled by the terms and conditions contained in the Plan, are as follows:

1. Performance-Based Vesting. 

(a) Performance Period. The RSUs shall vest, if at all, based upon the attainment of specific pre-established financial performance objectives (the “Performance Objectives”) by the Company for the period commencing on [___date___] and ending on [___date + [3 years]___] (the “Performance Period”), as set forth in this Section 1.

(b) Service Relationship. Except as provided in Section 2(a), RSUs that are unvested as of the termination of the Participant’s full-time employment status with the Company or any of its Subsidiaries (collectively, the “Constituent Companies”) shall be immediately forfeited as of such termination and the Company shall have no further obligations with respect thereto. Such employment status shall hereinafter be referred to in this Agreement as “Qualified Status.”

(c) Total Shareholder Return. 

(i) Up to twenty-five percent (25%) of the RSUs granted to the Participant pursuant to this Agreement shall vest, if at all, based upon the Total Shareholder Return for the Company, as compared to the Comparison Companies, for the Performance Period in the manner set forth on Exhibit 1-A hereto.

(ii) For purposes of this Agreement, Total Shareholder Return with respect to the Company and each of the Comparison Companies shall mean the quotient of (A) the Fair Market Value of the stock of the particular company or index on [___end date___], divided by (B) the Fair Market Value of the stock of such company or index on [___start date___]. For purposes of calculating a company’s Total Shareholder Return, the Fair Market Value of the stock of any company on [___end date___] shall be adjusted to reflect any and all cash, stock or in-kind dividends paid on the stock of such company during the Performance Period as follows: the Fair Market Value of the stock of the company on [___end date___] shall be multiplied by the sum of (Y) one (1) plus (Z) the number of whole and fractional shares of the stock of the company that (i) were actually received in respect of one share (or such greater number of shares that are deemed to have been held at such time pursuant to this clause (c)(ii)) by way of a stock dividend and (ii) would otherwise result assuming each cash dividend paid on the stock (or fair market value of any in-kind dividend, as determined by the Committee) of the company during the Performance Period was used to purchase additional whole and/or fractional shares of stock of the company on the record date of such dividend based on the fair market value of the stock of the company (as determined by the Committee), or with respect to the Company, the Fair Market Value of a Share, on the record date of such dividend.

(iii) If at any time prior to the completion of the Performance Period, a Comparison Company ceases to be a publicly-traded company, merges or consolidates with another company, is acquired or disposes of a significant portion of its businesses as they exist on the date of this Agreement or experiences any other extraordinary event as determined by the Committee in its sole discretion, the Committee, in its sole discretion, may remove such Comparison Company.

(iv) For purposes of this Agreement: (i) “Comparison Companies” shall mean Affiliated Computer Services, Inc. (ACS), BearingPoint, Inc. (BE), Cap Gemini S.A., Computer Sciences Corporation (CSC), EMC Corporation (EMC),  Hewitt 

Associates, Inc. (HEW), Hewlett-Packard Company (HPQ), International Business Machines Corporation (IBM),  Oracle Corporation (ORCL), Sapient Corporation (SAPE), Sun Microsystems, Inc. (SUNW), Unisys Corporation (UIS) and the S&P 500 Index (SPX); and (ii) the “Fair Market Value” of (A) a share of stock of a company on a given date shall mean the average of the high and low trading price of the stock of the company, as reported on the principal exchange on which the stock of such company is traded (or, if the stock is not traded on an exchange but is quoted on Nasdaq or a successor quotation system, the average of the mean between the closing representative bid and asked prices for the stock) and (B) for the S&P 500 Index on a given date shall mean the average of the high and low values for such index as reported in the Wall Street Journal (or, if the S&P 500 Index is not reported in the Wall Street Journal, in such other reliable source as the Company may determine), in each case for the ten (10) consecutive trading days immediately preceding such date.

(d) Operating Income Growth Rate. Up to 75% of the RSUs granted to the Participant pursuant to this Agreement shall vest, if at all, based upon the achievement of Operating Income targets by the Company for the Performance Period, as set forth on Exhibit 1-B hereto. For purposes of this Agreement:

“Target Cumulative Operating Income” shall mean the aggregate of the “Operating Income Plan,” as approved by the Committee, for each of the Company’s [___number___] fiscal years during the Performance Period.  Within a reasonable period following the availability of all relevant data (as determined by the Committee in its sole discretion), the Committee will approve the Company’s operating income plan for each applicable fiscal year during the Performance Period (each an “Operating Income Plan”). 

“Actual Cumulative Operating Income” shall mean the aggregate of the Company’s actual operating income for the Company’s [___number___] fiscal years during the Performance Period, as determined from the Company’s final, audited financial statements for such fiscal years.  

In the event that, as determined in the sole discretion of the Committee and due to a required change in generally accepted accounting practices, a change in the accounting methods of the Company or an extraordinary and material event in the Company’s business (each of the foregoing events being referred to herein as a “Material Event”), Actual Cumulative Operating Income determined after the occurrence of a Material Event would be materially different as a result of the occurrence thereof, the Committee may instruct the Company to determine Actual Cumulative Operating Income for such period, solely for purposes of this Agreement, as if the Material Event had not happened or was not effective. Such instruction may be limited to apply to fiscal periods in which the applicable Operating Income Plan did not account for the occurrence of the Material Event.

(e) Certification. No RSUs granted to the Participant hereunder shall vest in accordance with Sections 1(c) or (d) unless and until the Committee makes a certification in writing with respect to the achievement of the Performance Objectives for the Performance Period. Following the end of the Performance Period, the Committee shall review and determine whether the Performance Objectives have been met within a reasonable period following the availability of all data necessary to determine whether the Performance Objectives have been achieved, and not later than [___date___], shall certify such finding to the Company and to the Participant.

2. Termination of Employment. 

(a) Termination as a result of death, Disability, or Involuntary Termination. Notwithstanding anything in Section 1 to the contrary, the RSUs granted hereunder shall vest upon the termination of the Participant’s Qualified Status as a result of death, Disability, Involuntary Termination, all as follows:

(i) Termination as a result of death or Disability. In the event the Participant’s Qualified Status is terminated during the Performance Period as a result of death or Disability, the RSUs granted to the Participant hereunder shall remain outstanding throughout the Performance Period and shall vest, if at all, in accordance with Sections 1(c) or (d) upon completion of the Performance Period.  In the event of the death of the Participant during the Performance Period, the Participant’s heirs can, within a period of six months as from the date of death, request the release (upon the completion of the Performance Period) of the Shares underlying any vested Restricted Share Units.

(ii) Involuntary Termination. In the event the Participant’s Qualified Status is terminated during the Performance Period due to an Involuntary Termination, the RSUs granted to the Participant hereunder shall remain outstanding throughout the Performance Period. Upon completion of the Performance Period, the Participant shall vest in the number of RSUs granted hereunder equal to the product of (i) the aggregate number of RSUs that would otherwise vest upon completion of the Performance Period in accordance with Sections 1(c) or (d), multiplied by (ii) a fraction, the numerator of which is the whole 

number of months that have elapsed from the commencement of the Performance Period through the effective date of the Participant’s Involuntary Termination and the denominator of which is [___number of months in Performance Period___].

(iii) Age-Based Contingent Vesting. Not applicable.

(b) Termination for reasons other than death, Disability, Involuntary Termination. In the event the Participant’s Qualified Status is terminated during the Performance Period for any reason other than death, Disability, Involuntary Termination, the RSUs granted hereunder shall be immediately forfeited as of such termination and the Company shall have no further obligation with respect thereto.

(c) Definitions. For purposes of this Agreement, the following terms shall have the meaning specified below:

(i) “Cause” shall mean “cause” as defined in any employment or consultancy agreement (or similar agreement) or in any letter of appointment then in effect between the Participant and the Company or any Affiliate or if not defined therein (it being the intent that the definition of “Cause” shall include, at a minimum, the acts set forth below), or if there shall be no such agreement, to the extent legally permissible, (a) the Participant’s embezzlement, misappropriation of corporate funds, or other material acts of dishonesty, (b) the Participant’s commission or conviction of any felony, or of any misdemeanor involving moral turpitude, or entry of a plea of guilty or nolo contendere to any felony or misdemeanor, (c) engagement in any activity that the Participant knows or should know could harm the business or reputation of the Company or an Affiliate, (d) the Participant’s material failure to adhere to the Company’s or an Affiliate’s corporate codes, policies or procedures as in effect from time to time, (e) the Participant’s continued failure to meet minimum performance standards as determined by the Company or an Affiliate, (f) the Participant’s violation of any statutory, contractual, or common law duty or obligation to the Company or an Affiliate, including, without limitation, the duty of loyalty, or (g) the Participant’s material breach of any confidentiality or non-competition covenant entered into between the Participant and the Company or an Affiliate, including, without limitation, the covenants contained in this Agreement. The determination of the existence of Cause shall be made by the Company in good faith, which determination shall be conclusive for purposes of this Agreement.

(ii)  “Disability” shall mean a termination which results from a determination of “disability (“constat d’inaptitude”) as that term is defined by French law (article 341-4 of the French social security Code).

(iii) “Involuntary Termination” shall mean termination of Qualified Status, as applicable, with the Constituent Companies (other than for Cause) which is not voluntary and which is acknowledged as being “involuntary” in writing by an authorized officer of the Company.

3. Form and Timing of Issuance or Transfer. 

(a) Vested RSUs. Distribution of RSUs shall be made hereunder only in respect of vested RSUs, and shall be made in Shares on a one-for-one basis.

(b) Distribution Date. Vested RSUs, if any, shall be distributed to the Participant in the manner set forth in Section 3(a) on the date the Committee makes a certification in writing with respect to the achievement of the Performance Objectives for the Performance Period as provided in Section 1(e).

(c) Upon any transfer or issuance of Shares underlying RSUs, the Participant shall certify in a manner acceptable to the Company that the Participant is in compliance with the terms and conditions of this Agreement and the Plan.

4. Changes to Capital or Business Structure.  The grant of the RSUs shall not in any way affect the right or power of the Company to make adjustments, reclassification, or changes in its capital or business structure, or to merge, consolidate, dissolve, liquidate, sell or transfer all or any part of its business or assets.

5. Cancellation and Rescission of Shares

(a) In the following circumstances, the Participant shall, to the extent legally permitted, transfer to the Company the Shares that have been issued or transferred under this Agreement (without regard to whether the Participant continues to own or control such previously delivered Shares) and the Participant shall bear all costs of issuance or transfer, including any transfer taxes that may be payable in connection with any transfer:

(i) the Participant’s Qualified Status with the Constituent Companies is terminated for Cause, or

(ii) the Participant engages in any of the Restricted Activities defined in subsection (b) below.

(b) The Participant shall not, for a period of twelve months following the termination of the Participant’s Qualified Status with the Constituent Companies engage in any Restricted Activities, which for the purposes of this Agreement include the following:

(i) associate (including, but not limited to, association as a sole proprietor, owner, employer, partner, principal, investor, joint venturer, shareholder, associate, employee, member, consultant, contractor or otherwise) with any Competitive Enterprise or any of the affiliates, related entities, successors, or assigns of any Competitive Enterprise; provided, however, that with respect to the equity of any Competitive Enterprise which is or becomes publicly traded, the Participant’s ownership as a passive investor of less than 1% of the outstanding publicly traded stock of a Competitive Enterprise shall not be deemed a violation of this Section 5(b)(i);

(ii) directly or indirectly (A) solicit, or assist any other individual, person, firm or other entity in soliciting, any Client or Prospective Client for the purpose of performing or providing any Consulting Services; (B) perform or provide, or assist any other individual, person, firm or other entity in performing or providing, Consulting Services for any Client or Prospective Client; (C) interfere with or damage (or attempt to interfere with or damage) any relationship and/or agreement between the Company or any Affiliates and a Client or Prospective Client; or

(iii) directly or indirectly, solicit, employ or retain, or assist any other individual, person, firm or other entity in soliciting, employing or retaining, any employee or other agent of the Company or an Affiliate, including, without limitation, any former employee or other agent of the Company, its Affiliates and/or their predecessors who ceased working for the Company, its Affiliates and/or their predecessors within an eighteen-month period before or after the date on which the Participant’s Qualified Status with the Constituent Companies terminated.

(c) For purposes of this Agreement: 

(i) “Client” shall mean any person, firm, corporation or other organization whatsoever for whom the Company, its Affiliates and/or their predecessors provided services within a twelve-month period before the date on which the Participant’s employment with the Constituent Companies terminated, or about which the Participant learned confidential information within the twelve months prior to the date on which the Participant’s Qualified Status with the Constituent Companies terminated.

(ii) “Competitive Enterprise” shall mean a business enterprise that engages in, or owns or controls a significant interest in any entity that engages in, the performance of services of the type provided by the Company, its Affiliates and/or their predecessors.  “Competitive Enterprise” shall include, but not be limited to, the entities set forth on the list maintained by the Company on the myHoldings website, which list may be updated by the Company from time to time.

(iii) “Consulting Services” shall mean the performance of any services of the type provided by the Company, its Affiliates and/or their predecessors at any time, past, present or future.

(iv) “Prospective Client” shall mean any person, firm, corporation, or other organization whatsoever with whom the Company, its Affiliates and/or their predecessors had any negotiations or discussions regarding the possible performance of services by the Company or any of its Affiliates or any of their predecessors within the twelve months prior to the date of the termination of the Participant’s Qualified Status with the Constituent Companies.

(v) “solicit” shall mean to have any direct or indirect communication of any kind whatsoever, regardless of by whom initiated, inviting, advising, encouraging or requesting any person or entity, in any manner, to take or refrain from taking any action.

(d) If, during the twelve-month period following the termination of the Participant’s employment with the Constituent Companies, the Participant is presented with an opportunity that might involve participation in any Restricted Activity under 5(b)(i) above, Participant shall notify the Company in writing of the nature of the opportunity (the “Conflicting Activity”).  Following receipt of sufficient information concerning the Conflicting Activity, the Company will advise Participant in writing whether the Company considers the Participant’s RSUs to be subject to be subject to Section 5(a)(ii) above.  The Company retains sole discretion to determine whether Participant’s RSUs are subject to Section 5(a)(ii) and to alter its determination should additional or different facts become known to the Company.

6. No Acquired Rights. By participating in the Plan, and accepting the grant of RSUs under this Agreement, the Participant agrees and acknowledges that:

(a) the Plan is discretionary in nature and that the Company can amend, cancel or terminate the Plan at any time; 

(b) the grant of the RSU under the Plan is voluntary and occasional, and does not create any contractual or other right to receive future grants of any RSUs or benefits in lieu of any RSUs, even if RSUs have been granted repeatedly in the past;

(c) the value of the RSUs is an extraordinary item of compensation, which is outside the scope of the Participant’s Qualified Status contract, if any;

(d) the RSUs are not part of normal or expected compensation or salary for any purpose, including, but not limited to, calculating any termination, severance, resignation, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments;

(e) the future value of the shares subject to the RSUs is unknown and cannot be predicted with any certainty;

(f) the Participant shall not make any claim or have any entitlement to compensation or damages in connection with the termination of the RSUs or diminution in value of the RSUs under the Plan, and Participant hereby irrevocably releases the Company and all of its Affiliates from any such claim or entitlement; and

(g) the Participant’s participation in the Plan shall not create a right to employment or further employment with or to provide services as a director, consultant or advisor to the Company or any of its Affiliates, and shall not interfere with or limit the ability of the Company to terminate the Participant’s employment relationship or other services at any time, with or without cause.

(h) no terms of any contract of employment or consultancy (or similar agreement) of the Participant shall be affected in any way by the Plan, this Agreement or related instruments, except as otherwise expressly provided herein.

7. No Rights of a Shareholder. The Participant shall not have any rights as a shareholder of the Company until the Shares in question have been registered in the Company’s register of shareholders.

8. Unfunded Obligation; Unsecured Creditor. The RSUs granted hereunder are an unfunded obligation of the Company and no assets or shares of the Company shall be set segregated or earmarked by the Company in respect of any RSUs awarded hereunder. The RSUs granted hereunder shall be an unsecured obligation of the Company and the rights and interests of the Participant herein shall make him only a general, unsecured creditor of the Company.

9. Legend on Certificates. Any Shares issued or transferred to the Participant pursuant to Section 3 of this Agreement shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the Plan or the rules, regulations, and other requirements of the Securities and Exchange Commission, any stock exchange upon which such Shares are listed, any applicable Federal or state laws or relevant securities laws of the jurisdiction of the domicile of the Participant or to ensure compliance with any additional transfer restrictions that may be in effect from time to time, and the Committee may cause a legend or legends to be put on any certificates representing such Shares to make appropriate reference to such restrictions.

10. Transferability Restrictions. 

(a) RSUs/Underlying Shares. RSUs may not be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by the Participant otherwise than by will or by the laws of descent and distribution, and any purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance not permitted by this Section 10 shall be void and unenforceable against the Company and/or any applicable Constituent Company.  

(b) Except in the event of Death, Disability and any further specific provision set out in the French Commercial Code with respect to a minimum holding period, from and after the definitive date of their release, none of the Shares issued pursuant hereto may be transferred or disposed of in any fashion for a period of two years.

(c) In addition, no Shares issued pursuant hereto may be transferred or disposed of within the periods as set forth in Article L. 225-197-1, I of the French Commercial Code, as the same may be amended, modified or replaced while the Participant holds such Shares.  Such periods are initially: 

(i) the ten trading days on the New York Stock Exchange (or such other principle exchange on which the Shares may then be traded) (“Trading Days”) preceding and the ten Trading Days following the date on which the Company’s consolidated financial statements or, if no such financial statements are published,  the annual accounts, are published; and 
(ii) at all times management of the Company is aware of non-public information, which, if published, might have a significant effect on the price of the Shares, and the ten Trading Days following the publication of such information.

(d) Any Shares issued or transferred to the Participant shall be subject to compliance by the Participant with such policies as the Committee or the Company may deem advisable from time to time, including, without limitation, the policies relating to certain minimum share ownership requirements.  Such policies shall be binding upon the permitted respective legatees, legal representatives, successors and assigns of the Participant.  The Company shall give notice of any such additional or modified terms and restrictions applicable to Shares delivered or deliverable under the Agreement to the holder of the RSUs and/or the Shares so delivered, as appropriate, pursuant to the provisions of Section 11 or, if a valid address does not appear to exist in the personnel records, to the last address known by the Company of such holder. Notice of any such changes may be provided electronically, including, without limitation, by publication of such changes to a central website to which any holder of the RSUs or Shares issued therefrom has access. 

(e) [Reserved.]

(f) The Company may take such action(s) as it, in its sole discretion, deems necessary, desirable or appropriate to prevent the sale or transfer of Shares during the periods referenced in this Section 10.

(g) The Participant acknowledges that he/she is solely responsible for, and represents and warrants that he or she will at all times, comply with the restrictions on disposition and transfer of Shares contained in this Section 10.  Participant further acknowledges that neither the Company nor any Constituent Companies shall be liable or responsible in the event the Participant does not receive any tax benefits or treatment that may be desired in connection with such restrictions, whether as a result of Participant’s failure to comply with such restrictions or otherwise.  

11. Notices. Any notice to be given under this Agreement shall be delivered personally, or sent by certified, registered or express mail, postage prepaid, addressed to the Company in care of its General Counsel at

Accenture Ltd
50 W. San Fernando Street
San Jose, CA 95113
Telecopy: (408) 817-2799
Attn: General Counsel

(or, if different, the then current principal business address of the duly appointed General Counsel of the Company) and to the Participant at the address appearing in the personnel records of the Company for the Participant or to either party at such other address as either party hereto may hereafter designate in writing to the other. Any such notice shall be deemed effective upon receipt thereof by the addressee.

12. Withholding. The Participant may be required to pay to the Company or any Affiliate and the Company or any Affiliate shall have the right and is hereby authorized to withhold from any compensation or other amount otherwise payable to the Participant, applicable withholding taxes and social security contributions required to be withheld with respect to the RSUs, this Agreement or any issuance or transfer under this Agreement or under the Plan and to take such action as may be necessary in the opinion of the Company to satisfy all obligations for the payment of such taxes and social security contributions.

13. Choice of Law, Forum and Jurisdiction. The Participant acknowledges that, (a) as of the date hereof, the Shares underlying the RSUs granted to the Participant hereunder are publicly traded in the State of New York on the New York Stock Exchange, (b) the Company and its Affiliates have significant operations and numbers of employees in New York, and (c) the Company, for the purpose of ensuring predictability and uniformity of results, desires that there be a common body of law interpreting and enforcing this Agreement.  The Parties acknowledge and agree that the State of New York has a reasonable relationship to this Agreement and the subject matter hereof and to the Parties’ relationship to one another.  The Parties therefore agree that:  THE INTERPRETATION, PERFORMANCE AND ENFORCEMENT OF THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.  THE PARTICIPANT AND COMPANY EACH AGREE THAT ANY DISPUTE OR CONTROVERSY ARISING OUT OF OR CONCERNING THE AGREEMENT SHALL BE EXCLUSIVELY BROUGHT IN, AND RESOLVED EXCLUSIVELY BY, THE COURTS IN THE STATE OF NEW YORK.  THE 

PARTICIPANT AND THE COMPANY EACH CONSENT TO THE JURISIDICTION OF THE COURTS IN THE STATE OF NEW YORK.

14.  Severability.  This Agreement shall be enforceable to the fullest extent allowed by law.  In the event that a court or appointed arbitrator holds any provision of this Agreement to be invalid or unenforceable, then, if allowed by law, the provision shall be reduced, modified or otherwise conformed to the relevant law, judgment or determination to the degree necessary to render it valid and enforceable without affecting the rest of this Agreement.  Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be deemed severable from the remainder of this Agreement, and the remaining provisions contained in this Agreement shall be construed to preserve to the maximum permissible extent the intent and purposes of this Agreement.  Any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

15. RSUs Subject to Plan. By entering into this Agreement, the Participant agrees and acknowledges that the Participant has received and read a copy of the Plan. All RSUs are subject to the Plan. In the event of a conflict between any term or provision contained herein and a term or provision of the Plan, the applicable terms and provisions of the Plan will govern and prevail.

16. Rule 16b-3. The grant of the RSUs to the Participant hereunder is intended to be exempt from the provisions of Section 16(b) of the Securities Exchange Act of 1934, as amended from time to time (the “Exchange Act”) pursuant to Rule 16b-3 promulgated under the Exchange Act.

17. Signature in Counterparts. This Agreement may be signed in counterparts, each of which shall be deemed an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. 

18. Entire Agreement. This Agreement and the Plan constitute the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the parties with respect to the subject matter hereof.

19. Data Protection. The Participant consents to the processing (including international transfer) of personal data as set out in Appendix A for the purposes specified therein.

20. Administration; Consent. In order to manage compliance with the terms of this Agreement, Common Shares delivered pursuant to the Agreement may, at the sole discretion of the Company, be registered in the name of the nominee for the holder of the Common Shares and/or held in the custody of a custodian until otherwise determined by the Company. To that end, by acceptance of this Agreement, the holder hereby appoints the Company, with full power of substitution and resubstitution, his or her true and lawful attorney-in-fact to assign, endorse and register for transfer into such nominee’s name or deliver to such custodian any such Common Shares, granting to such attorneys, and each of them, full power and authority to do and perform each and every act and thing whatsoever that such attorney or attorneys may deem necessary, advisable or appropriate to carry out fully the intent of this paragraph as such person might or could do personally. It is understood and agreed by each holder of the Common Shares delivered under the Agreement that this appointment, empowerment and authorization may be exercised by the aforementioned persons with respect to all Common Shares delivered pursuant to the Agreement of such holder, and held of record by another person or entity, for the period beginning on the date hereof and ending on the later of the date the Agreement is terminated and the date that is ten years following the last date Common Shares are delivered pursuant to this Agreement. The form of the custody agreement and the identity of the custodian and/or nominee shall be as determined from time to time by the Company in its sole discretion. A holder of Common Shares delivered pursuant to the Agreement acknowledges and agrees that the Company may refuse to register the transfer of and enter stop transfer orders against the transfer of such Common Shares except for transfers deemed by it in its sole discretion to be in compliance with the terms of this Agreement. Each holder of Common Shares delivered pursuant to the Agreement agrees to execute such additional documents and take such other actions as may be deemed reasonably necessary or desirable by the Company to effect the provisions of the Agreement, as in effect from time to time. Each holder of Common Shares delivered pursuant to the Agreement acknowledges and agrees that the Company may impose a legend on any document relating to or Common Shares issued or issuable pursuant to this Agreement conspicuously referencing the restrictions applicable to such Common Shares.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of the date set forth above.

	
			
	ACCENTURE LTD

	By:
	 
	 

	 
	 
	 

	Douglas G. Scrivner

	General Counsel and Secretary

	 
	 
	 

	PARTICIPANT

	By:
	 

	 
	Name:
	 

	 
	Address:
	 

APPENDIX A
DATA PROTECTION PROVISION
		
	(a)
	By participating in the Plan or accepting any rights granted under it, the Participant consents to the collection and processing by the Company and its Affiliates of personal data relating to the Participant by the Company and its Affiliates so that they can fulfill their obligations and exercise their rights under the Plan, issue certificates (if any), statements and communications relating to the Plan and generally administer and manage the Plan, including keeping records of participation levels from time to time.  Any such processing shall be in accordance with the purposes and provisions of this data protection provision.  References in this provision to the Company and its Affiliates include the Participant’s employer.

These data will include data:
(i)    already held in the Participant’s records such as the Participant’s name and address, ID number, payroll number, length of service and whether the Participant works full-time or part time;
(ii)    collected upon the Participant accepting the rights granted under the Plan (if applicable); and
(iii)    subsequently collected by the Company or any of its Affiliates in relation to the Participant’s continued participation in the Plan, for example, data about shares offered or received, purchased or sold under the Plan from time to time and other appropriate financial and other data about the Participant and his or her participation in the Plan (e.g., the date on which the shares were granted, termination of employment and the reasons of termination of employment or retirement of the Participant).
		
	(b)
	This consent is in addition to and does not affect any previous consent provided by the Participant to the Company or its Affiliates.

		
	(c)
	In particular, the Participant expressly consents to the transfer of personal data about the Participant as described in paragraph (a) above by the Company and its Affiliates.  Data may be transferred not only within the country in which the Participant is based from time to time or within the EU or the European Economic Area, but also worldwide, to other employees and officers of the Company and its Affiliates and to the following third parties for the purposes described in paragraph (a) above:

(i)    Plan administrators, auditors, brokers, agents and contractors of, and third party service providers to, the Company or its Affiliates such as printers and mail houses engaged to print or distribute notices or communications about the Plan;
(ii)    regulators, tax authorities, stock or security exchanges and other supervisory, regulatory, governmental or public bodies as required by law;
(iii)    actual or proposed merger partners or proposed assignees of, or those taking or proposing to take security over, the business or assets of the Company or its Affiliates and their agents and contractors; 
(iv)    other third parties to whom the Company or its Affiliates may need to communicate/transfer the data in connection with the administration of the Plan, under a duty of confidentiality to the Company and its Affiliates; and 
(v)    the Participant’s family members, physicians, heirs, legatees and others associated with the Participant in connection with the Plan.
Not all countries, where the personal data may be transferred to, have an equal level of data protection as in the EU or the European Economic Area.  Countries to which data are transferred include the USA and Bermuda.
All national and international transfer of personal data is only done in order to fulfill the obligations and rights of the Company and/or its Affiliates under the Plan. 

The Participant has the right to be informed whether the Company or its Affiliates hold personal data about the Participant and, to the extent they do so, to have access to those personal data at no charge and require them to be corrected if they are inaccurate or to be destroyed if the Participant wishes to withdraw his or her consent.  The Participant is entitled to all the other rights provided for by applicable data protection law, including those detailed in any applicable documentation or guidelines provided to the Participant by the Company or its Affiliates in the past.  More detailed information is available to the Participant by contacting the appropriate local data protection officer in the country in which the Participant is based from time to time.  If the Participant has a complaint regarding the manner in which personal information relating to the Participant is dealt with, the Participant should contact the appropriate local data protection officer referred to above.
		
	(d)
	The processing (including transfer) of data described above is essential for the administration and operation of the Plan.  Therefore, in cases where the Participant wishes to participate in the Plan, it is essential that his/her personal data are processed in the manner described above.  At any time the Participant may withdraw his or her consent.

EXHIBIT 1-A

Determination of RSU Vesting pursuant to Section 1(c) of the Agreement

		
	1.
	Determine Percentile Rank (PR) for each of the Comparison Companies in accordance with the following formula:

PR = (PB/N)(100)

Where:

PB = ordinal position from the lowest TSR among the Comparison Companies. The Comparison Company with the lowest TSR is the first position from the bottom.

N = number of Comparison Companies in the computation. 

		
	2.
	After determining and ordering the PR for each Comparison Company, if the TSR of the Company is equal to the TSR of any other Comparison Company (rounded to the nearest 0.01), then the Company’s PR shall equal the PR of such Comparison Company. If the Company’s TSR is not equal to the TSR of any other Comparison Company, then the Company’s PR shall be determined by interpolation, using the TSRs and PRs of the Comparison Companies having the next highest and next lowest TSRs in comparison to the Company’s TSR. If there is no Comparison Company with a TSR that is higher than the Company’s TSR, then the Company’s PR shall be 100. If there is no Comparison Company with a TSR that is lower than the Company’s TSR, then the Company’s PR shall be equal to the PR of the lowest ranked Comparison Company.

		
	3.
	Upon determining the PR of the Company, the percentage of maximum RSUs granted under the Agreement that vest shall be determined as follows:

	
			
	Performance level
	Company PR
(measured as a percentile)
	Percentage of maximum RSUs granted
under the Agreement that vest

	Maximum
	The Company is ranked at or above the 75th percentile.
	     25%

	Target
	The Company is ranked at the 60th percentile.
	16.67%

	Threshold
	The Company is ranked at the 40th percentile.
	8.33%

	 
	The Company is ranked below the 40th percentile.
	     0%

Performance Between Threshold and Target. If the Company’s Percentile Rank is between “Threshold” and “Target,” the percentage of the maximum RSUs granted to the Participant under the Agreement that shall vest pursuant to Section 1(c) of the Agreement shall equal (a) 8.33% of the RSUs granted under the Agreement plus (b) an additional percentage of the maximum RSUs granted to the Participant under the Agreement, which percentage shall be determined in accordance with the following formula:

	
	
	(PR — 40) x 8.34

	20

where, PR equals the Percentile Rank of the Company, as determined above. 

Performance Between Target and Maximum. If the Company’s Percentile Rank is between “Target” and “Maximum,” the percentage of the RSUs granted to the Participant under the Agreement that shall vest pursuant to Section 1(c) of the Agreement shall equal (a) 16.67% of the RSUs granted under the Agreement plus (b) an additional percentage, not to exceed 8.33%, of the maximum RSUs granted to the Participant under the Agreement, which percentage shall be determined in accordance with the following formula:

	
	
	(PR — 60) x 8.33

	15

where, PR equals the Percentile Rank of the Company, as determined above.

EXHIBIT 1-B

Determination of RSU Vesting pursuant to Section 1(d) of the Agreement

		
	1.
	Determine the Company actual percentage of Target Cumulative Operating Income  (“AP”) by dividing the Company’s Actual Cumulative Operating Income by the Target Cumulative Operating Income and expressing the result as a percentage (the resulting percentage being referred to as the “Performance Rate” or “PR”).

		
	2.
	Upon determining the Company’s Performance Rate, the percentage of maximum RSUs granted under the Agreement that vest shall be determined as follows:

	
			
	

	

	Percentage of RSUs

	 
	 
	granted under the

	Performance level
	Company’s Performance Rate
	Agreement that vest

	 
	 
	 

	Maximum
	125% or greater
	75%

	Target
	100%
	50%

	Threshold
	80%
	25%

	 
	Less than 80%
	0%

Performance Between Threshold and Target. If the Company’s Performance Rate is between “Threshold” and “Target,” the percentage of the maximum RSUs granted to the Participant under the Agreement that shall vest pursuant to Section 1(d) of the Agreement shall equal (a) 25% of the maximum RSUs granted under the Agreement, plus (b) an additional percentage of the maximum RSUs granted to the Participant under the Agreement, which percentage shall be determined in accordance with the following formula:

	
				
	(

	PR – 80  

	)

	x 1.25

where, PR equals the Company’s Performance Rate, as determined above. 

Performance Between Target and Maximum. If the Company’s Performance Rate is between “Target” and “Maximum,” the percentage of the maximum RSUs granted to the Participant under the Agreement that shall vest pursuant to Section 1(d) of the Agreement shall equal (a) 50% of the maximum RSUs granted under the Agreement, plus (b) an additional percentage, not to exceed 25%, of the maximum RSUs granted to the Participant under the Agreement, which percentage shall be determined in accordance with the following formula:

	
			
	(

	PR – 100

	)

where, PR equals the Company’s Performance Rate, as determined above.

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