Document:

EXHIBIT
10.13

 

Tyco
Electronics Ltd.

2007 Stock and Incentive Plan

 

TERMS AND CONDITIONS

OF

RESTRICTED UNIT AWARD

 

RESTRICTED UNIT AWARD made as of                                 ,
2007.

 

1.             Grant of Award.  Tyco Electronics Ltd. (“the
Company”) has granted you Restricted Units, the amount of which is set forth in
a separate grant notification letter (“Grant Letter”), subject to the
provisions of this Award Agreement.  The
Company will hold the Restricted Units in a bookkeeping account on your behalf
until they become payable or are forfeited or cancelled.

 

2.             Payment Amount.  Each Restricted Unit represents
one (1) Share of Common Stock.

 

3.             Form of Payment.  Vested Restricted Units will be
redeemed solely for Shares, subject to Section 15.

 

4.             Time of Delivery.  Except
as otherwise provided for in this Award Agreement, all vested Restricted Units
and Dividend Equivalent Units shall be delivered to participants as soon as is
administratively feasible following the Normal Vesting of the award.

 

5.             Dividends.  Restricted Units are a promise
to deliver Common Stock upon vesting. 
For each Restricted Unit that is unvested, you will be credited with a
Dividend Equivalent Unit (DEU) for any cash or stock dividends distributed by
the Company on Company Common Stock. 
DEUs will be calculated at the same dividend rate paid to other holders
of Common Stock.  DEUs will vest and be delivered
in accordance with the vesting and payment schedules applicable to the
underlying Units.

 

6.             Normal  Vesting.  Except in the event of your Normal Retirement
(Termination of Employment on or after age 60 if the sum of your age and years
of service is at least 70), Retirement (Termination of Employment on or after
age 55 if the sum of your age and years of service is at least 60), Termination
of Employment, Death or Disability or a Change in Control, all restrictions on
the Restricted Units will lapse in installments as follows: one third (1/3) of
the Shares specified in your Grant Letter, two (2) years from the Grant Date;
an additional one third (1/3) of the Shares, three (3) years from the Grant
Date; and the remaining one third (1/3), four (4) years from the Grant
Date.  Your vested right will be
calculated on the anniversary of the Grant Date.  No credit will be given for periods following
Termination of Employment, except as specifically provided herein.

 

7.             Termination of Employment. 
Any Restricted Units that have not vested as of your Termination of
Employment, other than as set forth in paragraphs 8, 9, 10 and
11 will immediately be forfeited, and your rights with respect to those
Restricted Units will end.

 

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8.             Death or Disability. 
If your Termination of Employment is as a result of your Death or
Disability, your Award will immediately become fully vested.  Such vested Restricted Units will be delivered
as soon as is administratively possible upon your Termination of Employment.  If you are deceased, the Company will make a
payment to your estate immediately after the Committee or its designee has
determined that the payee is the duly appointed executor or administrator of
your estate.

 

9.             Retirement.  If upon grant of the Restricted
Units, you are, or will become within the Normal Vesting period, eligible for
Retirement or Normal Retirement, then different vesting and delivery rules may
apply to your Restricted Units.  Termination
of Employment as a result of your Retirement (as defined in paragraph 6) or
Normal Retirement (as defined in paragraph 6) within
12 months of the Grant Date will result in the forfeiture of your Restricted
Units, except as otherwise provided for in paragraphs 8, 10, and 11.  If you remain employed with the Company for a
period of 12 months after the grant of the Restricted Units then the vesting of
your Restricted Units shall accelerate on the following terms:

 

(a) Retirement:  Once you have satisfied the 12 month
employment requirement following the date of grant of the Restricted Units,
upon becoming Retirement eligible, your Restricted Units will vest pro rata
rounded down to the nearest Unit (in full-month increments) each month based
on (i) the number of whole months that you have completed from Grant Date through the end of the
current month, over the original number of months of the vesting period, times
(ii) the total number of Units awarded under the Grant minus (iii) the number
of Units previously vested under the Normal Vesting terms;

 

(b)  Normal Retirement: 
Once you have satisfied the 12 month employment requirement following
the date of grant of the Restricted Units, upon becoming normal retirement
eligible, your Restricted Units will immediately be fully vested.

 

In the case of
Retirement and Normal Retirement eligible participants, the Restricted Units
will be delivered upon the earlier of: (1) termination from service, which
qualifies as a Retirement or Normal Retirement, or (2) the normal delivery schedule
in paragraph 4.

 

10.           Change in Control.  If
your employment is terminated following a Change in Control, as defined in the
Plan, your Restricted Units will immediately become fully vested and delivered,
provided that:

 

(a) your employment is terminated by the
Company or a Subsidiary for any reason other than Cause, Disability or Death in
the twelve-month period following the Change in Control; or

 

(b) you terminate your employment with the
Company or your employing Subsidiary within the twelve-month period following
the Change in Control as a result of, and within 180 days following, the
occurrence of one of the following events:

 

i.  the Company or your employing Subsidiary (1) assigns or causes to be
assigned to you duties inconsistent in any material respect with your position
as in effect immediately prior to the Change in Control; (2) makes or causes to
be

 

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made any material adverse
change in your position, authority, duties or responsibilities; or (3) takes or
causes to be taken any other action which, in your reasonable judgment, would
cause you to violate your ethical or professional obligations (after written
notice of such judgment has been provided by you to the Company and the Company
has been given a 15-day period within which to cure such action), or which
results in a significant diminution in such position, authority, duties or responsibilities;
or

 

ii. the Company or your employing subsidiary, without your consent, (1)
requires you to relocate to a principal place of employment more than fifty
(50) miles from your existing place of employment; or (2) reduces your base
salary, annual bonus, or retirement, welfare, stock incentive, perquisite (if
any) and other benefits taken as a whole.

 

11.           Termination of Employment as a Result of
Divestiture or Outsourcing.
If your Termination of Employment is as a result of a Disposition of Assets,
Disposition of a Subsidiary or Outsourcing Agreement, your Restricted Unit
Award will vest pro rata (in full-month increments) and will be delivered
immediately.  The pro rated vesting will
be based on (i) the number of whole months that you have completed from Grant Date through the closing date
of the applicable transaction over the original number of months of the vesting
period, times (ii) the total number of shares awarded under the Grant minus
(iii) the number of shares previously vested under the Normal Vesting terms.

 

Notwithstanding
the foregoing, you shall not be eligible for such pro-rata vesting if, (i) your
Termination of Employment occurs on or prior to the closing date of such
Disposition of Assets or Disposition of a Subsidiary, as applicable, or on such
later date as is specifically provided in the applicable transaction agreement
or related agreements, or on the effective date of such Outsourcing Agreement
applicable to you (the “Applicable Employment Date”), and (ii) you are offered
Comparable Employment with the buyer, successor company or outsourcing agent,
as applicable, but do not commence such employment on the Applicable Employment
Date.

 

For
the purposes of this Section 11, (a) “Comparable Employment” shall mean
employment at a base salary rate and bonus target that is at least equal to the
base salary rate and bonus target in effect immediately prior to your
termination of employment and at a location that is no more than 50 miles from
your job location in effect immediately prior to your termination of
employment; (b) “Disposition of Assets” shall mean the disposition by the
Company or a Subsidiary of all or a portion of the assets used by the Company
or Subsidiary in a trade or business to an unrelated corporation or
entity;  (c) “Disposition of a Subsidiary”
shall mean the disposition by the Company or a Subsidiary of its interest in a
subsidiary or controlled entity to an unrelated individual or entity, provided
that such subsidiary or entity ceases to be an affiliated company as a result
of such disposition; and (d) “Outsourcing Agreement” shall mean a written
agreement between the Company or a Subsidiary and an unrelated third party (“Outsourcing
Agent”) pursuant to which the Company transfers the performance of services
previously

 

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performed by employees of the Company or Subsidiary to
the Outsourcing Agent, and the Outsourcing Agreement includes an obligation of
the Outsourcing Agent to offer employment to any employee whose employment is
being terminated as a result of or in connection with said Outsourcing
Agreement.

 

 12.          Withholdings. 
The Company will have the right, prior to any issuance or delivery of
Shares on your Restricted Units, to withhold or require from you the amount
necessary to satisfy applicable tax requirements, as determined by the
Committee.  If you have not satisfied
your tax withholding requirements in a timely manner, the Company will have the
right to sell the number of shares necessary to satisfy such requirements.

 

13.           Transfer of Award. 
You may not transfer any interest in Restricted Units except by will or
the laws of descent and distribution. 
Any other attempt to dispose of your interest in Restricted Units will
be null and void.

 

14.           Covenant; Forfeiture of Award; Agreement to
Reimburse Company.

 

(a)           If you have been terminated for Cause,
any unvested restricted units shall be immediately rescinded and, in addition,
you hereby agree and promise immediately to deliver to the Company the number
of Shares (or, in the discretion of the Committee, the cash value of said
shares) you received for Restricted Units that vested during the period six (6)
months prior to your Termination of Employment through the date of Termination
of Employment.

 

(b)           If, after your Termination of
Employment, the Committee determines in its sole discretion that while you were
a Company or Subsidiary employee you engaged in activity that would have
constituted grounds for the Company or Subsidiary to terminate your employment
for Cause, then you hereby agree and promise immediately to deliver to the
Company the number of Shares (or, in the discretion of the Committee, the cash
value of said shares) you received for Restricted Units that vested during the
period six (6) months prior to your Termination of Employment through the date
of Termination of Employment.

 

(c)           If the Committee determines, in its sole
discretion, that at any time after your Termination of Employment and prior to
the second anniversary of your Termination of Employment you (i) disclosed
business confidential or proprietary information related to any business of the
Company or Subsidiary or (ii) have entered into an employment or consultation
arrangement (including any arrangement for employment or service as an agent,
partner, stockholder, consultant, officer or director) with any entity or
person engaged in a business and (A) such employment or consultation
arrangement would likely (in the Committee’s sole discretion) result in the
disclosure of business confidential or proprietary information related to any
business of the Company or a Subsidiary to a business that is competitive with
any Company or Subsidiary business as to which you have had access to business
strategic or confidential information, and 
(B) the Committee has not approved the arrangement in writing, then you
hereby agree and promise immediately to deliver to the Company the number of
Shares (or, in the discretion of the Committee, the cash value of said shares)
you received for Restricted Units that vested during the period six (6) months
prior to your Termination of Employment through the date of Termination of
Employment.

 

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15.           Adjustments.  In the event of any stock
split, reverse stock split, dividend or other distribution (whether in the form
of cash, Shares, other securities or other property), extraordinary cash
dividend, recapitalization, merger, consolidation, split-up, spin-off,
reorganization, combination, repurchase or exchange of Shares or other
securities, the issuance of warrants or other rights to purchase Shares or
other securities, or other similar corporate transaction or event, the
Committee shall adjust the number and kind of Shares covered by the Restricted
Units and other relevant provisions to the extent necessary to prevent dilution
or enlargement of the benefits or potential benefits intended to be provided by
the Restricted Units.

 

16.           Restrictions on Payment of Shares. 
Payment of Shares for your Restricted Units is subject to the conditions
that, to the extent required at the time of delivery, (a) the Shares underlying
the Restricted Units will be duly listed, upon official notice of redemption,
upon the NYSE, and (b) a Registration Statement under the Securities Act of 1933
with respect to the Shares will be effective. 
The Company will not be required to deliver any Common Stock until all
applicable federal and state laws and regulations have been complied with and
all legal matters in connection with the issuance and delivery of the Shares
have been approved by counsel of the Company.

 

17.           Disposition of Securities. 
By accepting the Award, you acknowledge that you have read and
understand the Company’s insider trading policy, and are aware of and
understand your obligations under federal securities laws in respect of trading
in the Company’s securities.  The Company
will have the right to recover, or receive reimbursement for, any compensation
or profit realized on the disposition of Shares received for Restricted Units to
the extent that the Company has a right of recovery or reimbursement under
applicable securities laws.

 

18.           Plan Terms Govern. 
The redemption of Restricted Units, the disposition of any Shares
received for Restricted Units, and the treatment of any gain on the disposition
of these Shares are subject to the terms of the Plan and any rules that the
Committee may prescribe.  The Plan
document, as may be amended from time to time, is incorporated into this Award
Agreement.  Capitalized terms used in this
Award Agreement have the meaning set forth in the Plan, unless otherwise stated
in this Award Agreement.  In the event of
any conflict between the terms of the Plan and the terms of this Award
Agreement, the Plan will control.  By
accepting the Award, you acknowledge receipt of the Plan and the prospectus, as
in effect on the date of this Award Agreement.

 

19.           Personal Data.  To comply with applicable law
and to administer the Plan and this Award Agreement properly, the Company and
its agents may hold and process your personal data and/or sensitive personal
data.  Such data includes, but is not
limited to, the information provided in this grant package and any changes
thereto, other appropriate personal and financial data about you, and
information about your participation in the Plan and Shares obtained under the
Plan from time to time.  By accepting the
Award, you hereby give your explicit consent to the Company’s processing any
such personal data and/or sensitive personal data.  You also hereby give your explicit consent to
the Company’s transfer of any such personal data and/or sensitive personal data
outside the country in which you work or reside and to the United States.  The legal persons for whom your personal data
are intended include the Company and any of its Subsidiaries (or former
Subsidiaries as are deemed necessary), the outside Plan administrator as
selected by the Company from time to time, and any other person that the
Company may find in

 

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its administration of
the Plan to be appropriate.  You have the
right to review and correct your personal data by contacting your local Human
Resources Representative.  You understand
that the transfer of the information outlined here is important to the administration
of the Plan, and that failure to consent to the transmission of such
information may limit or prohibit your participation in the Plan.

 

20.           No Contract of Employment or Promise of Future
Grants.  By accepting the Award, you agree to be bound
by the terms and conditions of this Award Agreement and acknowledge that the
Award is granted at the sole discretion of the Company and is not considered
part of any contract of employment with the Company or of your ordinary or
expected salary or other compensation and will not be considered as part of
such salary or compensation for purposes of any pension benefits or in the
event of severance, redundancy or resignation. 
If your employment with the Company or a Subsidiary is terminated for
any reason, whether lawfully or unlawfully, you agree that you will not be
entitled by way of damages for breach of contract, dismissal or compensation
for loss of office or otherwise to any sum, shares or other benefits to
compensate you for the loss or diminution in value of any actual or prospective
rights, benefits or expectation under or in relation to the Plan.

 

21.           Limitations.  Nothing in this Award Agreement
or the Plan gives you any right to continue in the employ of the Company or any
of its Subsidiaries or to interfere in any way with the right of the Company or
any Subsidiary to terminate your employment at any time.  Payment of your Restricted Units is not
secured by a trust, insurance contract or other funding medium, and you do not
have any interest in any fund or specific asset of the Company by reason of
this Award or the account established on your behalf.  You have no rights as a stockholder of the
Company pursuant to the Restricted Units until Shares are actually delivered to
you.

 

22.           Incorporation of Other Agreements. 
This Award Agreement and the Plan constitute the entire understanding
between you and the Company regarding the Restricted Units.  This Award Agreement supercedes any prior
agreements, commitments or negotiations concerning the Restricted Units.

 

23.           Severability.  The invalidity or
unenforceability of any provision of this award Agreement will not affect the
validity or enforceability of the other provisions of the Agreement, which will
remain in full force and effect. 
Moreover, if any provision is found to be excessively broad in duration,
scope or covered activity, the provision will be construed so as to be
enforceable to the maximum extent compatible with applicable law.

 

24.           Delayed Payment.  Notwithstanding
anything in this Award Agreement to the contrary, if the Employee (i) is
subject to US Federal income tax on any part of the payment of the Restricted
Units, (ii) is a “specified employee” within the meaning of section
409A(a)(2)(B) of the Internal Revenue Code and the regulations thereunder, and
(iii) is or will become eligible for Retirement or Normal Retirement prior to
the Normal Vesting of some or all of the Restricted Units, then any payment of
Restricted Units that is made on account of his separation from service within
the meaning of section 409A(a)(2)(A)(i) of the Internal Revenue Code and the
regulations thereunder shall be delayed until six months following such
separation from service.

 

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By accepting this
Award, you agree to the following:

 

(i)            you have carefully read, fully
understand and agree to all of the terms and conditions described in this Award
Agreement and the Plan; and

 

(ii)           you understand and agree that this Award Agreement and the Plan
constitute the entire understanding between you and the Company regarding the
Award, and that any prior agreements, commitments or negotiations concerning
the Restricted Units are replaced and superseded.

 

You will be deemed to
consent to the application of the terms and conditions set forth in this Award
Agreement and the Plan unless you contact Tyco Electronics, Ltd., c/o Equity
Plan Administration, 1050 Westlakes Drive, Berwyn, PA 19312 in writing within
thirty (30) days of the date of this Award Agreement.  Notification of your non-consent will nullify
this grant unless otherwise agreed to in writing by you and the Company.

 

 

	
   

  	
  Thomas J. Lynch

  
	
   

  	
  Chief Executive
  Officer,

  
	
   

  	
  Tyco Electronics,
  Ltd.

  

 

7EXHIBIT 10.16

 

 

TYCO
ELECTRONICS LTD.

DEFERRED COMPENSATION PLAN FOR DIRECTORS

 

Effective
September 26, 2007

 

 

ARTICLE 1

PURPOSE

 

1.1          Deferred Compensation Plan
for Directors.  Tyco Electronics
Ltd. hereby adopts the Tyco Electronics Ltd. Deferred Compensation Plan for
Directors, effective September 26, 2007, to allow outside directors of the
Company the opportunity to defer the receipt of compensation that would
otherwise be payable to them.  The Company intends that the Plan will at
all times be maintained on an unfunded basis for Federal income tax purposes
under the Code.  The provisions of this Plan shall apply to Compensation
Deferrals beginning on or after September 26, 2007 and to any earnings or
dividend equivalents credited thereon.

 

1.2          Compliance with Code Section
409A.  The terms of
this Plan are intended to, and shall be interpreted and applied so as to comply
in all respects with the provisions of Code Section 409A and regulations and
rulings thereunder.

 

ARTICLE 2

DEFINITIONS

 

The following words and terms shall have the
indicated meanings wherever they appear in the Plan:

 

2.1           “Administrator” means the person or persons named as such by
the Committee or its designee, or if no such designee is named, the Senior Vice
President of Human Resources of the Company. 

 

2.2          “Annual Deferral Amount” means that portion of a Participant’s
Compensation for any calendar year that a Participant elects to have deferred and
is actually deferred.  All cash deferrals are made in U.S. dollars.

 

2.3          “Beneficiary” or “Beneficiaries”
means the person or persons
designated by the Participant to receive payments under this Plan in the event
of the Participant’s death as provided in Section 4.4.

 

2.4          “Board of Directors,”  “Directors,”
or “Director” means, respectively,
the Board of Directors, the Directors, or a Director of the Company. 
Director shall also mean any former Director during the period immediately
following service as a Director while he/she is in the role of a paid advisor.

 

2.5          “Cash Account” means the account maintained on the books of
the Company used solely to calculate the amount payable to each Participant who
defers cash Compensation under this Plan to such account and shall not
constitute a separate fund of assets.

 

2.6          “Code” means the Internal Revenue Code of 1986, as
amended.

 

2.7          “Committee” means the Management Development and
Compensation Committee of the Board of Directors.

 

2.8          “Company” means Tyco Electronics Ltd.

 

 

2.9          “Compensation” means that portion of a Director’s retainer
and/or meeting fees payable in cash, or DSUs granted to a Director for any
reason, but does not include travel expense allowance or any other expense
reimbursement.

 

2.10        “Compensation Deferral(s)” means that portion of Compensation as to
which a Participant has made an annual irrevocable election to defer receipt
pursuant to Article III.

 

2.11        “Deferral Year” means any calendar year commencing on or
after January 1, 2008 for which a Participant elects to have some or all of
his/her Compensation deferred in accordance with Section 3.2.

 

2.12        “Deferred Stock Unit” or “DSU” means an
award of deferred stock units granted under and subject to the terms of the
Tyco Electronics Ltd. 2007 Stock and Incentive Plan and any award agreement
thereunder.

 

2.13        “Disability” means that a Participant is unable to engage
in any substantial gainful activity by reason of any medically determinable
physical or mental impairment which can be expected to result in death or can
be expected to last for a continuous period of not less than 12 months.

 

2.14        “Measurement Funds” means one or more of the independently
established funds or indices that are identified by the Committee and listed in
Appendix A.  These Measurement Funds are used solely to calculate the
earnings that are credited to each Participant’s Cash Account(s) in accordance
with Section 3.3, and do not represent any beneficial interest on the part of
the Participant in any asset or other property of the Company.  The
determination of the increase or decrease in the performance of each
Measurement Fund shall be made by the Administrator in its reasonable
discretion.  Measurement Funds may be replaced, new funds may be added, or
both, from time to time in the discretion of the Committee.

 

2.15        “Notice Form” means the form attached hereto and marked as
Appendix B or any other document which incorporates information substantially
similar to Appendix B.

 

2.16        “Participant” means each non-employee Director of the
Company who participates in the Plan in accordance with its terms and conditions.

 

2.17        “Plan” means the Tyco Electronics Ltd. Deferred
Compensation Plan for Directors as set forth herein, or as it may be amended
from time to time by the Board of Directors.  The effective date of this
Plan is September 26, 2007.

 

2.18        “Stock Account” means the account maintained on the books of
the Company used solely to calculate the amount distributable to each
Participant who defers Compensation under this Plan in the form of whole or
fractional stock units and shall not constitute a separate fund of assets.

 

2.19        “Stock Unit” means a unit with an equivalent value to one
(1) share of Company common stock and which is credited to a Participant’s
Stock Account.

 

2.20        “Time Certain Payout” means the payout form described in Section 4.1.

 

3

 

2.21        “Trust” shall mean the trust arrangement, if any,
between the Company and the trustee named therein, as amended from time to
time.

 

ARTICLE 3

PARTICIPATION

 

3.1          Eligibility.  Each non-employee Director is eligible
to participate in the Plan by filing an election in accordance with Section
3.2.

 

3.2          Notice Form Timing and
Duration.  A Director
may elect to participate in the Plan by filing a properly completed Notice Form
with the Administrator.  In order to defer compensation for any Deferral
Year, a Notice Form must be filed with the Administrator on or before December
31st of the year preceding the Deferral Year and must be irrevocable
for the full Deferral Year.   Notwithstanding
the previous sentence, a newly-appointed Director may elect to defer
Compensation by filing a Notice Form with the Administrator no later than 30
days after the date on which he/she becomes a Director, but such Notice Form
will only be effective for compensation payable on and after the first day of
the calendar quarter following the date on which the Notice Form is filed and
such Notice Form will be irrevocable for the remainder of the Deferral
Year.   In addition, a Director who
received a Founders’ Grant of DSUs on July 2, 2007 may file a Notice Form with
the Administrator on or before December 31, 2007 making a deferral election
with respect to such DSUs; provided, that no such election shall be effective until
January 1, 2008.  Once filed with the
Administrator, a Notice Form shall remain in effect until the earlier of (i)
the termination of the Participant’s services as a Director, or (ii) the last
day of the Deferral Year.

 

3.3          Compensation Deferral.  A Participant may elect on the Notice
Form that the payment of all or a specified portion of the Compensation
otherwise payable to him/her with respect to a Deferral Year for services as a
Director be deferred until such time as elected by the Participant pursuant to
the terms of this Plan.   Any
Compensation earned by a Director that is not deferred under the Plan shall be
paid to the Director in accordance with normal Company policy and the
applicable terms of any Company plan and any grant agreement thereunder.

 

3.4          Investment Measurements.   At the time that a Participant makes an
election to defer cash Compensation under the Plan, the Participant shall elect
the manner in which the Annual Deferral Amount shall be deemed to be invested
under the Plan.   Any Compensation
in the form of DSUs for which a deferral election is made will automatically be
credited to the Participant’s Stock Account at the time shares would have been
payable under the terms of such DSU but for such deferral election.  The Participant may change and/or make new
investment elections in accordance with procedures established by the
Administrator.

 

(a)           A Participant may elect to invest all
or a specified portion of his/her Cash Account in some or all of the
Measurement Funds listed in Appendix A, to the extent the Committee makes such
investment alternatives available under the Plan.  The specified portion
of a Cash Account that is deemed invested in a Measurement Fund shall be
adjusted for investment experience (either gains or losses) in a manner that
equals the investment experience attributable to such investment.  Deemed
investments in a Measurement Fund shall be credited and debited in accordance
with procedures established by the Administrator.  In the event that a 

 

4

 

Participant
does not submit a complete and accurate investment election, the Cash Account
shall be deemed invested in the Interest Income Measurement Fund or, if none,
as determined by the Administrator.  

 

(b)           A Participant may elect to convert
his/her deferred cash Compensation to Stock Units and to have such Stock Units
invested in the Participant’s Stock Account as of the date on which such cash
Compensation would otherwise have been payable but for the Participant’s
deferral election.  The number of Stock
Units credited to the Stock Account in such case shall be equal to the amount
of the cash Compensation so deferred divided by the fair market value of a
share of Company stock on such date. 
Once deferred cash Compensation is converted to Stock Units, it must
remain deferred in the form of Stock Units until payment.

 

(c)           The Company shall not be required to
acquire any securities in connection with deemed investment elections under
this Plan.   No Participant shall
have any right to receive a distribution in kind from the Plan with respect to
the Participant’s Cash Account or to have the right to vote any security in
which a Participant’s Cash Account is deemed invested.  All distributions from a Participant’s Stock
Account shall be made in the form of whole shares of Company stock corresponding
to the number of Stock Units to be distributed (with cash being distributed in
lieu of fractional Stock Units).

 

(d)           Each Participant shall receive a
statement of the balance of his/her Cash Account and Stock Account at least
annually or within a reasonable period following the Administrator’s receipt of
a request for a statement.

 

3.5          Dividend Equivalents.  As of each date on which a cash dividend is
paid on Company stock, there shall be credited to each Participant’s Stock
Account that number of Stock Units (including fractional units) determined by
(i) multiplying the amount of such dividend (per share) by the number of Stock
Units in such Stock Account on the record date for such dividend; and (ii)
dividing the total so determined by the fair market value of a share of Company
stock on the date of payment of such cash dividend.  The additions to a Director’s Stock Account
pursuant to this Section 3.5 shall continue until the Director’s Stock Account
is fully distributed in accordance with Article 4 below.  

 

ARTICLE 4

PAYMENTS TO PARTICIPANTS

 

4.1          Time and Form of Payment.  (a) At the election of the
Participant, which shall be made on the Notice Form applicable to each Annual
Deferral Amount, payment or distribution of each such Annual Deferral Amount,
as adjusted for the investment results or dividend equivalent accruals thereon,
as applicable, shall be made (i) in substantially equal annual installments
over a number of years not to exceed ten (10) years or (ii) in a lump sum cash payment
or total distribution.  Such payment or
distribution will be made or will commence, as applicable, either (i) within
the period that is sixty (60) days after the end of the calendar year in which
the Director terminates service from the Board or (ii) as a Time Certain Payout
within sixty (60) days after the first day of the calendar year, as elected by
the Participant, that is at least five (5) years after the first day of the
calendar year to which the applicable Annual Deferral Amount election relates.  In no event may the distribution or
commencement of distribution of a 

 

5

 

Participant’s Stock Account occur before the
participant’s termination of service from the Board. Notwithstanding the
Participant’s election of a Time Certain Payout (or any change in payment
election described in Section 4.2), any unpaid Annual Deferral Amounts, as
adjusted for the investment results or dividend accruals thereon, as
applicable, will be paid to the Participant in a lump sum cash payment or total
distribution, as applicable, within the period that is sixty (60) days after
the end of the calendar year in which occurs the later of (i) the Participant’s
attainment of age seventy and (ii) the Participant’s termination of service
from the Board.  

 

(b)           In the absence of an election as to
the time and form of the payment of an Annual Deferral Amount with respect to a
deferral of cash Compensation, such Annual Deferral Amount shall be paid to the
Participant in a lump sum payment or total distribution, as applicable, within the
period that is sixty (60) days after the first day of the calendar year that is
five (5) years after the first day of the calendar year to which the applicable
Annual Deferral Amount election relates. 

 

(c)           In the absence of an election as to
the time and form of the distribution of an Annual Deferral Amount with respect
to a deferral of DSUs, such Annual Deferral Amount shall be distributed to the
Participant in
substantially equal annual installments over five (5) years, with the
first such distribution commencing within the period that is sixty (60) days
after the Participant’s termination of service from the Board. 

 

4.2          Change in Election.  A Participant may postpone the payment date
for an Annual Deferral Amount, by filing a new payment election, in the form
specified by the Administrator, at least twelve (12) months prior to the
original payment date and twelve (12) months prior to termination.  Under
the new election, the Participant may postpone the payment of the Annual
Deferral Amount so that it will be paid (or commence payment or distribution,
as applicable) (a) within sixty (60) days of the first day of the calendar year
that is at least five (5) years after the original payment date or (b) within the
period that is sixty (60) days after the calendar year in which the Director
terminates service from the Board, provided that in no event may any payment
under such election occur before the date that is at least five (5) years after
the original payment date.

 

4.3          Death or Disability
Benefit/Beneficiary Designation.  (a) Upon the death or Disability of a Participant, the
Participant or the Participant’s Beneficiary, as applicable, shall be paid the
balance in his or her Cash Account or Stock Account in the form of a lump sum
payment or total distribution, as applicable, with such payment to be made as
soon as practicable after the Participant’s death or Disability.

 

(b)           Each Participant may designate in
writing a Beneficiary or Beneficiaries (which Beneficiary may be an entity
other than a natural person) to receive any payments which may be made under
the Plan following the Participant’s death.  No Beneficiary designation
shall become effective until it is in writing and it is filed with the
Administrator.  Such designation may be changed or canceled by the
Participant at any time without the consent of any such Beneficiary.  Any
such designation, change or cancellation must be made in a form approved by the
Administrator and shall not be effective until received by the Administrator,
or its designee.  If no Beneficiary has been named, or the designated
Beneficiary or Beneficiaries shall have predeceased the Participant, the
Beneficiary shall be deemed to be the Participant’s estate.  If a 

 

6

 

Participant
designates more than one Beneficiary, the interests of such Beneficiaries shall
be paid in equal shares, unless the Participant has specifically designated
otherwise.

 

4.4          Valuation of Cash Payments. 
Any lump sum cash payment of
an Annual Deferral Amount shall be made in an amount equal to the value of the
portion of the Participant’s Cash Account attributable to such Annual Deferral
Amount and the investment results thereon as of January 1 of the calendar year
that includes the relevant payment date, with the Measurement Funds being
deemed to have been liquidated on that date to make the payment.

 

4.5          Effect of Payment.  The full payment of the Participant’s Cash
Account and Stock Account under this Article IV shall completely discharge all
obligations on the part of the Company to the Participant (and each
Beneficiary) with respect to the operation of this Plan, and the Participant’s
(and Beneficiary’s) rights under this Plan shall terminate.

 

ARTICLE 5

GENERAL

 

5.1          Unsecured Obligation of
Company.  The right of
any Participant, beneficiary, or estate to receive payment of any unpaid
balance in any Cash Account or Stock Account of the Participant shall be an
unsecured claim against the general assets of the Company.  No Participant
or other person shall have any right or claim to the payment of any amount that
is in any manner superior or different from the right or claim of a general and
unsecured creditor of the Company.

 

5.2          Nonalienation of Benefits.  During a Participant’s lifetime, any
payment under the Plan shall be made only to him/her.  No sum or other
interest under the Plan shall be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, or charge, and any
attempt by a Participant or any beneficiary under the Plan to do so shall be
void.  No interest under the Plan shall
in any manner be liable for or subject to the debts, contracts, liabilities,
engagements, or torts of a Participant or beneficiary entitled thereto.

 

5.3          Plan Administration.  Except as otherwise provided herein,
the Plan shall be administered by the Administrator which shall have the full
discretionary power and authority to administer the Plan, including without
limitation, the power and authority to:  (i) construe the Plan’s terms;
(ii) make factual determinations; (iii) prepare forms to be used for making
elections under the Plan; (iv) establish rules and procedures for administering
and operating the Plan; (v) evaluate requests made by Participants; (vi)
correct defects under the Plan; (viii) establish the manner in which decisions
are made by the Administrator; (ix) retain such legal, actuarial, accounting,
clerical, and other services as may be necessary to operate and administer the
Plan; (x) establish recordkeeping procedures for the Plan; and (xi) take any
and all similar actions to the extent necessary to administer the Plan. 
The Administrator may delegate all or some of its authority under the Plan to
any other person or entity.  Any findings or determinations made by the
Administrator in the administration of the Plan shall be final, conclusive, and
binding on all parties.

 

5.4          Plan Amendment/Termination.  The Plan may at any time or from time
to time be amended, modified, or terminated by the Board of Directors, provided
that no amendment, 

 

7

 

modification, or termination shall adversely affect
the balance in a Participant’s Cash Account or Stock Account without his/her
consent.  In addition, the Plan, and/or the terms of any election made
hereunder, may be amended at any time and in any respect by the Company or by
the Plan Administrator if and to the extent recommended by counsel in order to
conform to the requirements of Code Section 409A and regulations
thereunder.  In the event of any suspension or termination of the Plan,
payment of Participants’ Cash Accounts and Stock Accounts shall be made under
and in accordance with the terms of the Plan and the applicable elections
(except that the Plan Administrator may determine, in its sole discretion, to
accelerate payments to all Participants if and to the extent that such
acceleration is permitted under Code Section 409A and regulations thereunder).

 

5.5          No Additional Rights.  Nothing contained herein shall be
deemed to give any Director the right to be retained in the service of the
Company.

 

5.6          Governing Law.  This Plan shall be governed by and
construed in accordance with the laws of the Commonwealth of Bermuda,
notwithstanding the conflict of law rules applicable therein.  

 

5.7          Company’s Right to Offset.  If a Participant becomes entitled to a
distribution of benefits under the Plan, and if at such time the Participant
has outstanding any debt, obligation, or other liability representing an amount
owing to the Company, then the Company may offset such amount owed to it
against the amount of benefits otherwise distributable.

 

ARTICLE 6

TRUST

 

6.1          Establishment of Trust.  The Company may establish a Trust, and
the Company may, at least annually, transfer over to the Trust such assets, if
any, as the Company determines, in its sole discretion, are necessary to
provide for the liabilities created with respect to the Plan for that
year.  The trustees of the Trust shall be selected by the Company from
time to time.

 

6.2          Governing Documents.  The provisions of the Plan shall
govern the rights of a Participant to receive distributions pursuant to the
Plan.  The provisions of the Trust, if any, shall govern the rights of the
Participant and the creditors of the Company to any assets transferred to the
Trust.  The Company shall at all times remain liable to carry out its
obligations under the Plan.  The Company’s obligations under the Plan may
be satisfied with Trust assets distributed pursuant to the terms of the Trust.

 

8

 

APPENDIX A

MEASUREMENT
FUNDS

(as of September
29, 2007)

 

Interest Income Measurement Fund

 

U.S. Equity Index Commingled Measurement Fund

 

A-1

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