Document:

SECOND AMENDMENT

         THIS SECOND AMENDMENT dated as of April 5, 2002 (this "Amendment")
amends the Reimbursement Agreement dated as of August 24, 2001 and as
amended as of October 23, 2001 (the "Reimbursement Agreement") among ACE
Limited, a Cayman Islands company (the "Parent"), ACE Bermuda Insurance
Ltd., a Bermuda company ("ACE Bermuda"), and ACE Tempest Reinsurance Ltd.,
a Bermuda company ("Tempest") (Ace Bermuda and Tempest, together with the
Parent, the "Account Parties"), various financial institutions (the
"Banks"), and Wachovia Bank, National Association (formerly known as First
Union National Bank) ("Wachovia"), as administrative agent (in such
capacity, the "Administrative Agent"). Terms defined in the Reimbursement
Agreement are, unless otherwise defined herein or the context otherwise
requires, used herein as defined therein.

         WHEREAS, the Account Parties, the Banks, Fleet National Bank, as
Documentation Agent, Wachovia, as Issuing Bank, and the Administrative
Agent have entered into the Reimbursement Agreement; and

         WHEREAS, the parties hereto desire to amend the Reimbursement
Agreement in certain respects as more fully set forth herein;

         NOW, THEREFORE, the parties hereto agree as follows:

     SECTION 1. Amendment to Representations and Warranties of Account
Parties. Effective on (and subject to the occurrence of) the Amendment
Effective Date (as defined below), Section 4.01(b) of the Reimbursement
Agreement is amended by adding "as of the Effective Date" at the end
thereof.

     SECTION 2. Amendment to Negative Covenants. Effective on (and subject
to the occurrence of) the Amendment Effective Date (as defined below),
Section 5.02 of the Reimbursement Agreement shall be amended as set forth
below:

     2.1 Amendment to Section 5.02(a)(xvii). Section 5.02(a)(xvii) of the
Reimbursement Agreement shall be amended by deleting the word "and"
immediately after the semi-colon at the end thereof.

     2.2 Amendment to Section 5.02(a)(xviii). Section 5.02(a)(xviii) of the
Reimbursement Agreement shall be amended by deleting the period at the end
thereof and adding a semi-colon and the word "and" at the end thereof.

     2.3 Amendment to Section 5.02(a). Section 5.02(a) of the Reimbursement
Agreement shall be amended by adding the following immediately after the
word "and" following the semi-colon at the end of subsection (xviii)
thereof:

                  (xix) Liens securing up to an aggregate amount of
                  $200,000,000 of obligations of Tempest, the Parent or any
                  wholly owned Subsidiary, arising out of catastrophe bond
                  financing.

     SECTION 3. Representations and Warranties. Each Account Party
represents and warrants to the Administrative Agent and the Banks that (a)
each warranty set forth in Article IV of the Reimbursement Agreement is
true and correct as of the date of the execution and delivery of this
Amendment by the Parent, with the same effect as if made on such date
(except to the extent such representations and warranties expressly refer
to an earlier date, in which case they were true and correct as of such
earlier date), (b) the execution and delivery by the Parent of this
Amendment and the performance by each Account Party of its respective
obligations under the Reimbursement Agreement, as amended hereby (as so
amended, the "Amended Reimbursement Agreement") (i) are within the
corporate or limited liability company power, as applicable, of such
Account Party, (ii) have been duly authorized by all necessary corporate
action, as applicable, on the part of such Account Party, (iii) have
received all necessary governmental and regulatory approval and (iv) do not
and will not contravene or conflict with any provision of law or of the
organizational documents of any Account Party or of any indenture, loan

<PAGE>

agreement or other contract, order or decree which is binding upon any
Account Party and (c) the Amended Reimbursement Agreement is the legal,
valid and binding obligation of each Account Party, enforceable against
such Account Party in accordance with its terms, except as enforceability
may be limited by bankruptcy, insolvency or other similar laws of general
application affecting the enforcement of creditors' rights or by general
principles of equity limiting the availability of equitable remedies.

     SECTION 4. Effectiveness. The amendments set forth in Sections 1 and 2
above shall become effective on such date (the "Amendment Effective Date")
when the Administrative Agent shall have received each of the following
documents, each in form and substance satisfactory to the Administrative
Agent:

     4.1 Executed Counterparts. Counterparts of this Amendment executed by
the Parent and the Required Banks.

     4.2 Confirmation. A confirmation, substantially in the form of Annex I
attached hereto, executed by each of ACE Bermuda and Tempest.

     4.3 Other Documents. Such other documents as the Administrative Agent
or any Bank may reasonably request in connection with the authorization,
execution and delivery of this Amendment.

     SECTION 5. Miscellaneous.

     5.1 Continuing Effectiveness, etc. As herein amended, the
Reimbursement Agreement shall remain in full force and effect and is hereby
ratified and confirmed in all respects. After the Amendment Effective Date,
all references in the Reimbursement Agreement and the other Loan Documents
to "Reimbursement Agreement", "Agreement" or similar terms shall refer to
the Amended Reimbursement Agreement.

     5.2 Counterparts. This Amendment may be executed in any number of
counterparts and by the different parties on separate counterparts, and
each such counterpart shall be deemed to be an original but all such
counterparts shall together constitute one and the same Amendment.

     5.3 Governing Law. This Amendment shall be a contract made under and
governed by the laws of the State of New York applicable to contracts made
and to be fully performed within such state.

     5.4 Successors and Assigns. This Amendment shall be binding upon each
Account Party, the Banks and the Administrative Agent and their respective
successors and assigns, and shall inure to the benefit of the Account
Parties, the Banks and the Administrative Agent and the respective
successors and assigns of the Banks and the Administrative Agent.

                                     2
<PAGE>

         Delivered at Chicago, Illinois, as of the day and year first above
written.

                            ACE LIMITED

                            By:
                                     ------------------------------------------
                            Title:
                                     ------------------------------------------

                            WACHOVIA BANK, NATIONAL ASSOCIATION, as
                            Administrative Agent

                            By:
                                     ------------------------------------------

                            Title:
                                     ------------------------------------------

                            FLEET NATIONAL BANK

                            By:
                                     ------------------------------------------

                            Title:
                                     ------------------------------------------

                            MELLON BANK, N.A.

                            By:
                                     ------------------------------------------

                            Title:
                                     ------------------------------------------

                            ROYAL BANK OF CANADA, NEW YORK BRANCH

                            By:
                                     ------------------------------------------

                            Title:
                                     ------------------------------------------

                            BANK ONE, N.A.

                            By:
                                     ------------------------------------------

                            Title:
                                     ------------------------------------------

                                     S-1
<PAGE>

                           (signatures continued)

                            COMERICA BANK

                            By:
                                     -----------------------------------------

                            Title:
                                     -----------------------------------------

                            DEUTSCHE BANK AG, NEW YORK BRANCH

                            By:
                                     -----------------------------------------

                            Title:
                                     -----------------------------------------

                            By:
                                     -----------------------------------------

                            Title:
                                     -----------------------------------------

                            STATE STREET BANK AND TRUST COMPANY

                            By:
                                     -----------------------------------------

                            Title:
                                     -----------------------------------------

                            THE BANK OF BERMUDA LIMITED

                            By:
                                     -----------------------------------------

                            Title:
                                     -----------------------------------------

                            THE BANK OF N.T. BUTTERFIELD & SON LIMITED

                            By:
                                     -----------------------------------------

                            Title:
                                     -----------------------------------------

                            CREDIT SUISSE FIRST BOSTON

                            By:
                                     -----------------------------------------

                            Title:
                                     -----------------------------------------

                                     S-2
<PAGE>

                                                                      ANNEX I

                                CONFIRMATION

                         Dated as of April 5, 2002

To:      Wachovia Bank, National Association, individually and as
         Administrative Agent, and the other financial institutions party
         to the Reimbursement Agreement referred to below

         Please refer to: (a) the Reimbursement Agreement dated as of
August 24, 2001 and as amended as of October 23, 2001 (the "Reimbursement
Agreement") among ACE Limited, ACE Bermuda Insurance Ltd. and ACE Tempest
Reinsurance Ltd. (Ace Bermuda and Tempest, together with ACE Limited, the
"Account Parties"), various financial institutions (the "Banks"), and
Wachovia Bank, National Association (formerly known as First Union National
Bank) ("Wachovia"), as administrative agent (in such capacity, the
"Administrative Agent"); (b) the other "Loan Documents" (as defined in the
Reimbursement Agreement); and (c) the Second Amendment dated as of April 5,
2002 to the Reimbursement Agreement (the "Second Amendment").

         Each of the undersigned hereby confirms to the Administrative
Agent and the Banks that, after giving effect to the Second Amendment and
the transactions contemplated thereby, each Loan Document to which such
undersigned is a party continues in full force and effect and is the legal,
valid and binding obligation of such undersigned, enforceable against such
undersigned in accordance with its terms.

                            ACE LIMITED

                            By:
                               ----------------------------------------------
                            Name Printed:
                                         ------------------------------------
                            Title:
                                  -------------------------------------------

                            ACE BERMUDA INSURANCE LTD.

                            By:
                               ----------------------------------------------
                            Name Printed:
                                         ------------------------------------
                            Title:
                                  -------------------------------------------

                            ACE TEMPEST REINSURANCE LTD.

                            By:
                               ----------------------------------------------
                            Name Printed:
                                         ------------------------------------
                            Title:
                                  -------------------------------------------ACE LIMITED 1995
                              ----------------
                           OUTSIDE DIRECTORS PLAN
                           ----------------------
                  (AS AMENDED THROUGH THE FIFTH AMENDMENT)
                  ----------------------------------------

<PAGE>

                              ACE LIMITED 1995
                           OUTSIDE DIRECTORS PLAN

                                 SECTION 1

                                  GENERAL

1.1.  Purpose. The ACE Limited 1995 Outside Directors Plan (the "Plan") has
been established by ACE Limited (the "Company") to promote the interests of
the Company and its shareholders by enhancing the Company's ability to
attract and retain the services of experienced and knowledgeable directors
and by encouraging such directors to acquire an increased proprietary
interest in the Company.

1.2.  Operation and Administration.  The operation and administration of the
Plan shall be subject to the provisions of Section 4. Capitalized terms in
the Plan shall be defined as set forth in Section 7 or elsewhere in the
Plan.

                                 SECTION 2

                              RETAINER AWARDS

2.1.     General.

(a)      For each Plan Year, each Director who is an Eligible Director on the
         first day of that Plan Year shall be granted a "Retainer
         Award" for the year, which shall be in the form of shares of Stock
         having a Fair Market Value of $35,000. Except as otherwise
         provided in this subsection 2.1, the Retainer Award for any Plan
         Year shall be made as of the first business day of that Plan Year
         (the "Award Date" for that Retainer Award), and the Fair Market
         Value of the Stock so awarded shall be determined as of that date.
         Notwithstanding the foregoing, for the Plan Year beginning in 1999
         (the "1999 Plan Year"), the Retainer Award for such Plan Year
         shall include an additional award (the "1999 Additional Award"),
         in the form of shares having a Fair Market Value of $8,750 (and
         for the 1999 Plan Year, reference in the Plan to the "Retainer
         Award" shall include reference to such 1999 Additional Award).
         Except as otherwise provided in this subsection 2.1, the 1999
         Additional Award shall be made as of the first business day
         following the adoption of the Second Amendment of the Plan (the
         "1999 Additional Award Date"), and the Fair Market Value of the
         Stock so awarded shall be determined as of that date.

(b)      If a Director becomes an Eligible Director during a Plan
         Year, on a date other than the first day of the Plan Year, he
         shall be granted a Retainer Award for the year, which shall be in
         the form of shares of Stock having a Fair Market Value equal to
         $35,000, subject to a pro-rata reduction to reflect the portion of

<PAGE>

         the Plan Year prior to the date on which he becomes an Eligible
         Director; provided, however, that with respect to the 1999 Plan
         Year, such Retainer Award subject to pro rata reduction shall
         include the 1999 Additional Award. A Director's Retainer Award
         under this paragraph (b) shall be made on the first business day
         on which he is an Eligible Director (the "Award Date" for that
         Retainer Award), and the Fair Market Value of the Stock so awarded
         shall be determined as of that date; provided, however, that if a
         Director becomes eligible for a Retainer Award under this
         Paragraph (b) on a date before the 1999 Additional Award Date,
         then that portion of the 1999 Additional Award to which he becomes
         entitled shall be made as of the 1999 Additional Award Date, and
         the Fair Market Value of the Stock so awarded shall be determined
         as of that date.

(c)      The shares awarded under this subsection 2.1 shall be
         subject to the vesting provision set forth in subsection 2.3.

(d)      A Participant may elect to defer receipt of his Retainer
         Awards in accordance with Supplement A of the Plan.

        2.2. Fractional Shares. If the Retainer Award that would otherwise be
made to a Participant as of any Award Date under paragraph 2.1 is not a whole
number, then the number of shares otherwise awardable shall be reduced to
the next lowest whole number and, instead, the Fair Market Value
(determined as of the Award Date) of the shares subject to the reduction
shall be paid to the Participant in cash as soon as practicable after the
Award Date.

        2.3. Vesting. A Participant who ceases to be a Director shall forfeit
the Retainer Award which is not vested on his Date of Termination; provided,
however, that (i) if a Participant ceases to be a Director by reason of his
death or Disability, any portion of the Retainer Award that is not then
vested shall vest on his Date of Termination; and (ii) any portion of the
Retainer Award that is held by an individual serving as a Director on the
date of a Change in Control that is not then vested shall vest on the date
of the Change of Control. Except as otherwise provided in this subsection
2.3, a Participant shall become vested in 100% of the Retainer Award shares
for any Plan Year on the last day of that Plan Year; provided that a
Participant shall become vested in the Retainer Award shares for the Plan
Year only if such Participant's Date of Termination does not occur prior to
the last day of that year.

        2.4. Limit on Stock.  Stock granted as a Retainer Award shall be
subject to the following:

(a)      Such Stock may not be sold, assigned, transferred, pledged
         or otherwise encumbered prior to the date it is vested.

(b)      Each certificate issued in respect of such Stock shall be
         registered in the name of the Participant and deposited, together
         with a stock power endorsed in blank, with the Company.

                                     3
<PAGE>

(c)      Except as otherwise provided by the Plan, the Participant as owner
         of shares of Stock granted to him as a Retainer Award shall have
         all the rights of a shareholder, including but not limited to the
         right to vote such shares and the right to receive all dividends
         paid on such shares; provided, however, that no dividends shall be
         payable to or for the benefit of a Participant with respect to
         record dates for such dividends occurring on or after the date, if
         any, on which the Participant has forfeited the Stock.

                                 SECTION 3

                         COMMITTEE CHAIRMAN AWARDS

(a)      Each Eligible Director who serves as the chairman of any committee
         of the Board (a "Committee Chairman") during any Plan Year Quarter
         shall be granted a Committee Chairman Award as of the first
         business day of the next following Plan Year Quarter, which shall
         be the "Award Date" for such award.

(b)      The amount of the Committee Chairman Award shall be the number of
         shares of Stock having a Fair Market Value (determined as of the
         Award Date) of $1,250 per quarter. If an individual serves as a
         Committee Chairman for less than a full Plan Year Quarter, then
         the size of the Committee Chairman Award shall be subject to a
         pro-rata reduction to reflect the portion of the Plan Year Quarter
         during which he was not Committee Chairman.

(c)      The shares granted as a Committee Chairman Award under this
         Section 3 shall be fully vested at the time of award.

(d)      A Participant may elect to defer receipt of his Committee
         Chairman Awards in accordance with Supplement A of the Plan.

(e)      A Participant may elect to receive his Committee Chairman Award in
         cash.

                                SECTION 3A

                               MEETING AWARDS

(a)      Each Eligible Director who is otherwise eligible to receive cash
         compensation for attendance at a meeting of the Board or for
         attendance at a meeting of any committee of the Board, may in lieu
         of such cash compensation, elect to receive to such compensation
         in Stock, and such compensation payable in Stock shall be
         considered the grant of a "Meeting Award." An election to receive
         a Meeting Award in lieu of cash compensation must be made in
         accordance with the requirements of paragraph (c) of this Section
         3A. A Meeting Award shall be granted as of the first business day
         coincident with or next following the date of the Board or
         committee meeting to which it relates, which shall be the "Award
         Date" for such award.

                                     4
<PAGE>

(b)      The amount of the Meeting Award for attendance at a Board meeting
         shall be the number of shares of Stock having a Fair Market Value
         (determined as of the Award Date) of $3,000 per meeting. The
         amount of the Meeting Award for attendance at a committee meeting
         shall be the number of shares of Stock having a Fair Market Value
         (determined as of the Award Date) of $1,000 per meeting.

(c)      Except as otherwise provided in this paragraph (c), an
         election to receive a Meeting Award in lieu of cash compensation
         for attendance at Board and committee meetings during a Plan Year
         shall be filed at such time and in such form as established by the
         Committee. An individual who becomes an Eligible Director on a
         date other than the first day of the Plan Year may elect to
         receive a Meeting Award in lieu of cash compensation for the
         remainder of the year by filing a Meeting Award election filed at
         such time and in such form as established by the Committee. An
         election to receive a Meeting Award rather than cash compensation
         shall apply to all Board and committee meetings in the Plan Year
         for which the election is made, provided, however, that such
         election shall be effective only with respect to compensation for
         meetings occurring after the date such election is filed.

(d)      The shares granted as a Meeting Award under this Section 3A
         shall be fully vested at the time of award.

(e)      A Participant may elect to defer receipt of his Meeting
         Awards in accordance with Supplement A of the Plan.

(f)      If a Participant has made no election under this Section 3A with
         respect to the form of payment of compensation for his attendance
         at Board or committee meetings, then such compensation shall be
         paid in cash.

                                SECTION 3B

                               OPTION AWARDS

         3B.1.    General.

(a)      For each Plan Year, each Director who is an Eligible Director on
         the first day of that Plan Year shall be granted an "Option Award"
         which shall entitle the Eligible Director to purchase shares of
         Stock. The number of shares subject to the Option Award with
         respect to the Option Award granted in the Plan Year beginning in
         2001 (the "2001/2002 Plan Year") and in each Plan Year thereafter
         shall be 4,000, unless and until the number of shares underlying
         an Option Award in any subsequent Plan Year is modified by the
         Board. Except as otherwise provided in this subsection 3B.1, the
         Option Award for any Plan Year shall be granted as of the first
         business day of that Plan Year (the "Award Date" for that Option
         Award).

                                     5
<PAGE>

(b)      If a Director becomes an Eligible Director during a Plan
         Year, on a date other than the first day of the Plan Year, he
         shall be granted an Option Award which shall entitle the Eligible
         Director to purchase shares of Stock. The number of shares of
         Stock subject to the Option Award shall be the number which would
         have been subject to the Option if he had become an Eligible
         Director on the first day of the Plan Year, except that such
         number of shares shall be subject to a pro rata reduction to
         reflect the portion of the Plan Year prior to the date on which he
         becomes an Eligible Director. In no event shall an Option Award be
         granted with respect to a fractional share, and the amount of any
         pro-rata reduction shall be rounded to the nearest whole share. An
         Option Award made under this paragraph (b) shall be granted on the
         first business day on which the Director is an Eligible Director
         (the "Award Date" for that Option Award).

(c)      In addition to any Option Award granted in accordance with
         paragraphs (b) or (c) of this subsection 3B.1, an individual who
         is an Eligible Director on the first day of the 2001/2002 Plan
         Year shall be granted an Option Award, entitling him to purchase
         2,000 shares of Stock. Such Option Award shall be granted as the
         first business day of the 2001/2002 Plan Year (the "Award Date"
         for that Option Award).

         3B.2.    Terms of Option Awards.

(a)      An Option Award shall entitle the Director to purchase shares of
         Stock at a per-share price equal to the greater of: (i) 100% of
         the Fair Market Value of a share of Stock as of the Award Date; or
         (ii) the par value of a share of Stock.

(b)      The full purchase price of each share of Stock purchased upon the
         exercise of any Option Award shall be paid at the time of such
         exercise and, as soon as practicable thereafter, a certificate
         representing the shares so purchased shall be delivered to the
         person entitled thereto.

(c)      The Option Award purchase price shall be payable in cash or in
         shares of Stock (valued at Fair Market Value as of the day of
         exercise), or in any combination thereof. A Director may elect to
         pay the purchase price upon the exercise of an Option Award
         granted pursuant to this Section 3B through a cashless exercise
         procedure established by the Company.

                                     6
<PAGE>

(d)      The Option Award granted to an Eligible Director shall
         become exercisable with respect to one-third of the shares covered
         by the Option Award on the last day of the Plan Year for which it
         was granted; with respect to an additional one-third of the shares
         covered by the Option Award on the last day of the Plan Year next
         following the Plan Year for which it was granted; and with respect
         to the remaining one-third of the shares covered by the Option
         Award on the last day of the next following Plan Year; provided,
         however, that such portion of the Option Award shall become
         exercisable only if such Director's Date of Termination does not
         occur on or prior to the last day of the applicable Plan Year.
         Notwithstanding any provision of the Plan to the contrary, the
         foregoing vesting schedule shall be subject to acceleration, to
         the extent permitted by the Committee, in the event of the
         Participant's death, Disability, retirement, or involuntary
         termination or in the event of a Change in Control.

(e)      An Option Award shall expire on the earlier of: (i) the
         ten-year anniversary of the Award Date or (ii) the one-year
         anniversary of the Director's Date of Termination. Notwithstanding
         the foregoing, the Committee may provide that, following a
         Director's Date of Termination, an Option Award shall expire on
         any date later than the one-year anniversary of the Director's
         Date of Termination, provided that such date of expiration may not
         be later than the ten-year anniversary of the date on which the
         Option Award was granted. No Option shall be exercisable following
         a Director's Date of Termination except to the extent that the
         Option is exercisable prior to, or becomes exercisable as of, such
         Date of Termination.

                                 SECTION 4

                        OPERATION AND ADMINISTRATION

        4.1. Effective Date. Subject to the approval of the shareholders of the
Company at the Company's 1996 annual meeting of its shareholders, the Plan
shall be effective as of the Effective Date; provided, however, that to the
extent that Awards are made under the Plan prior to its approval by
shareholders, they shall be contingent on approval of the Plan by the
shareholders of the Company. The Plan shall be unlimited in duration and,
in the event of Plan termination, shall remain in effect as long as any
shares of Stock awarded under it are outstanding and not fully vested, or
any Option Awards granted under it are outstanding and not exercised;
provided, however, that no new Awards shall be made under the Plan after
the tenth anniversary of the Effective Date. With respect to any individual
who is an Eligible Director on the Effective Date, receipt of Awards under
the Plan shall be contingent on the Director relinquishing, as of the
Effective Date, and subject to this Plan being approved by the shareholders
at the 1996 annual meeting, the ownership rights to any shares of Stock
awarded to him by the Company before the Effective Date, but only with
respect to the shares that had not vested on or before February 1, 1996.

        4.2. Shares Subject to Plan. The shares of Stock with respect to which
Awards may be made under the Plan shall be shares currently authorized but
unissued shares, or shares purchased in the open market by a direct or
indirect wholly owned subsidiary of the Company (as determined by the
Chairman or any Executive Vice President of the Company). The Company may
contribute to the subsidiary an amount sufficient to accomplish the
purchase in the open market of the shares of Stock to be so acquired (as
determined by the Chairman or any Executive Vice President of the Company).
The number of shares of Stock available for Awards under the Plan during
any fiscal year of the Company shall equal:

                                     7
<PAGE>

(a)      0.5% of the adjusted average of the outstanding Stock, as that
         number is determined by the Company to calculate fully diluted
         earnings per share for the preceding fiscal year;

         REDUCED BY

(b)      any shares of Stock granted pursuant to Awards under the
         Plan, and any shares of Stock subject to any outstanding award
         under the Plan;

provided however, that no reduction shall be made in the number of shares
otherwise available under paragraph 4.2(a) for any shares of Stock subject
to an Award under the Plan to the extent that such shares are not issued by
reason of a lapse, forfeiture, expiration or termination of the Award for
any reason without issuance of shares (whether or not cash or other
consideration is paid to a Participant in respect of such shares).

        4.3. Fractional Shares. No fractional shares of Stock shall be
distributed under the Plan and, instead, the Fair Market Value of such
fractional share shall be distributed in cash, with the Fair Market Value
determined as of the date the fractional share would otherwise have been
distributable.

        4.4.     Adjustments to Shares.

(a)      If the Company shall effect any subdivision or consolidation of
         shares of Stock or other capital readjustment, payment of stock
         dividend, stock split, combination of shares or recapitalization
         or other increase or reduction of the number of shares of Stock
         outstanding without receiving compensation therefor in money,
         services or property, then the Committee shall adjust (i) the
         number of shares of Stock available under the Plan; (ii) the
         number of shares available under any limits; (iii) the number of
         shares of Stock subject to outstanding (non-vested) Awards and to
         deferred Stock Awards; (iv) the number of shares of Stock subject
         to future grants; and (v) the per-share price under any
         outstanding Option Award.

(b)      If the Company is reorganized, merged or consolidated or is
         party to a plan of exchange with another corporation, pursuant to
         which reorganization, merger, consolidation or plan of exchange
         the shareholders of the Company receive any shares of stock or
         other securities or property, or the Company shall distribute
         securities of another corporation to its shareholders, there shall
         be substituted for the shares subject to outstanding (non-vested)
         Awards and to deferred Stock Awards an appropriate number of
         shares of each class of stock or amount of other securities or
         property which were distributed to the shareholders of the Company
         in respect of such shares; provided that, upon the occurrence of a
         reorganization of the Company or any other event described in this
         paragraph (b), any successor to the Company shall be substituted
         for the Company.

                                     8
<PAGE>

(c)      The existence of this Plan and the Awards granted hereunder shall
         not affect in any way the right or power of the Company or its
         shareholders to make or authorize any or all adjustments,
         recapitalizations, reorganizations or other changes in the
         Company's capital structure or its business, any merger or
         consolidation of the Company, any issue of bonds, debentures,
         preferred or prior preference stocks ahead of or affecting the
         Company's Stock or the rights thereof, the dissolution or
         liquidation of the Company, any sale or transfer of all or any
         part of its assets or business, or any other corporate act or
         proceeding, whether of a similar character or otherwise.

(d)      Except as expressly provided by the terms of this Plan, the issue
         by the Company of shares of stock of any class, or securities
         convertible into shares of stock of any class, for cash or
         property or for labor or services, either upon direct sale, upon
         the exercise of rights or warrants to subscribe therefor or upon
         conversion of shares or obligations of the Company convertible
         into such shares or other securities, shall not affect, and no
         adjustment by reason thereof shall be made with respect to Awards
         then outstanding hereunder.

        4.5.  Limit on Distribution.  Distribution of shares of Stock or
other amounts under the Plan shall be subject to the following:

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

(b)      The Committee shall add such conditions and limitations to any
         Award to any Participant who is subject to Section 16(a) and 16(b)
         of the Securities Exchange Act of 1934, as is necessary to comply
         with Section 16(a) or 16(b) and the rules and regulations
         thereunder or to obtain any exemption therefrom.

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

        4.6.  Taxes.  All Awards and other payments under the Plan are subject
to all applicable taxes.

                                     9
<PAGE>

        4.7.  Distributions to Disabled Persons. Notwithstanding any other
provision of the Plan, if, in the Committee's opinion, a Participant or other
person entitled to benefits under the Plan is under a legal disability or is in
any way incapacitated so as to be unable to manage his financial affairs,
the Committee may direct that payment be made to a relative or friend of
such person for his benefit until claim is made by a conservator or other
person legally charged with the care of his person or his estate, and such
payment or distribution shall be in lieu of any such payment to such
Participant or other person. Thereafter, any benefits under the Plan to
which such Participant or other person is entitled shall be paid to such
conservator or other person legally charged with the care of his person or
his estate.

        4.8.  Transferability.  Awards under the Plan are not transferable
except as designated by the Participant by will or by the laws of descent and
distribution.

        4.9.  Administration.  The authority to control and manage the operation
and administration of the Plan shall be vested in a committee (the "Committee")
in accordance with Section 5.

        4.10. Form and Time of Elections. Any election required or permitted
under the Plan shall be in writing, and shall be deemed to be filed when
delivered to the Secretary of the Company. Any deferral election made under
Supplement A shall be irrevocable after it is filed with respect to the
Plan Year for which it is filed, and such deferral shall remain in effect
and be irrevocable with respect to any future Plan Year unless a new
election with respect to such Plan Year is filed in accordance with rules
established by the Committee, in which case such new election shall be
irrevocable with respect to such Plan Year.

        4.11. Agreement With Company. Each Award of Stock granted under
Sections 2 and 3 shall be evidenced by an Agreement (an "Agreement") duly
executed on behalf of the Company and by the Participant to whom such Award is
granted and dated as of the applicable date of grant. Each Agreement shall
comply with and be subject to the terms of the Plan.

        4.12. Evidence.  Evidence required of anyone under the Plan may be by
certificate, affidavit, document or other information which the person acting
on it considers pertinent and reliable, and signed, made or presented by the
proper party or parties.

        4.13. Action by Company. Any action required or permitted to be taken
by the Company shall be by resolution of the Board, or by action of one or
more members of the Board (including a committee of the Board) who are duly
authorized to act for the board, by a duly authorized officer of the Board,
or (except to the extent prohibited by the provisions of Rule 16b-3,
applicable local law, the applicable rules of any stock exchange, or any
other applicable rules) by a duly authorized officer of the Company.

        4.14.    Gender and Number.  Where the context admits, words in any
gender shall include any other gender, words in the singular shall include the
plural and the plural shall include the singular.

                                    10
<PAGE>

                                 SECTION 5

                                 COMMITTEE

        5.1.  Selection of Committee.  The Committee shall be selected by the
Board, and shall consist of not less than two members of the Board.

        5.2. Powers of Committee. The authority to manage and control the
operation and administration of the Plan shall be vested in the Committee. The
Committee will have the authority to establish, amend, and rescind any
rules and regulations relating to the Plan, to determine the terms and
provisions of any agreements made pursuant to the Plan, and to make all
other determinations that may be necessary or advisable for the
administration of the Plan.

        5.3. Information to be Furnished to Committee. The Company shall
furnish the Committee with such data and information as may be required for it
to discharge its duties. The records of the Company as to the period of a
Director's service shall be conclusive on all persons unless determined to
be incorrect. Participants and other persons entitled to benefits under the
Plan must furnish the Committee such evidence, data or information as the
Committee considers desirable to carry out the terms of the Plan.

        5.4. Liability and Indemnification of Committee. No member or authorized
delegate of the Committee shall be liable to any person for any action
taken or omitted in connection with the administration of the Plan unless
attributable to his own fraud or willful misconduct; nor shall the Company
be liable to any person for any such action unless attributable to fraud or
willful misconduct on the part of a director or employee of the Company.
The Committee, the individual members thereof, and persons acting as the
authorized delegates of the Committee under the Plan, shall be indemnified
by the Company, to the fullest extent permitted by law, against any and all
liabilities, losses, costs and expenses (including legal fees and expenses)
of whatsoever kind and nature which may be imposed on, incurred by or
asserted against the Committee or its members or authorized delegates by
reason of the performance of a Committee function if the Committee or its
members or authorized delegates did not act dishonestly or in willful
violation of the law or regulation under which such liability, loss, cost
or expense arises. This indemnification shall not duplicate but may
supplement any coverage available under any applicable insurance.

                                 SECTION 6

                         AMENDMENT AND TERMINATION

         The Board may, at any time, amend or terminate the Plan, provided
that, subject to subsection 4.4 (relating to certain adjustments to
shares), no amendment or termination may adversely affect the rights of any
Participant or beneficiary under any Award made under the Plan prior to the
date such amendment is adopted by the Board. Notwithstanding the provisions
of this Section 6, in no event shall the provisions of the Plan relating to
Awards under the Plan be amended more than once every six months, other
than to comport with changes in the Code, the Employee Retirement Income
Security Act, or the rules thereunder; provided, however, that the
limitation set forth in this sentence shall be applied only to the extent
required under SEC Rule 16b-3(c)(2)(ii)(B) or any successor provision
thereof.

                                    11
<PAGE>

                                 SECTION 7

                               DEFINED TERMS

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

(a)      Award. The term "Award" shall mean the Retainer Award, the Option
         Award, the Committee Chairman Award, and the Meeting Award granted
         to any person under the Plan.

(b)      Board.  The term "Board" shall mean the Board of Directors of the
         Company.

(c)      Change in Control.  The term "Change in Control" shall mean the
         occurrence of any one of the following events:

         (i)  any "person," as such term is used in Sections 3(a)(9) and 13(d)
         of the Securities Exchange Act of 1934, becomes a "beneficial
         owner," as such term is used in Rule 13d-3 promulgated under that
         act, of 50% or more of the Voting Stock (as defined below) of the
         Company;

         (ii) the majority of the Board consists of individuals other than
         Incumbent Directors, which term means the members of the Board on
         the date of this Agreement; provided that any person becoming a
         director subsequent to such date whose election or nomination for
         election was supported by three-quarters of the directors who then
         comprised the Incumbent Directors shall be considered to be an
         Incumbent Director;

         (iii) the Company adopts any plan of liquidation providing for the
         distribution of all or substantially all of its assets;

         (iv)  all or substantially all of the assets or business of the Company
         is disposed of pursuant to a merger, consolidation or other
         transaction (unless the shareholders of the Company immediately
         prior to such merger, consolidation or other transaction
         beneficially own, directly or indirectly, in substantially the
         same proportion as they owned the Voting Stock of the Company, all
         of the Voting Stock or other ownership interests of the entity or
         entities, if any, that succeed to the business of the Company); or

         (v) the Company combines with another company and is the surviving
         corporation but, immediately after the combination, the
         shareholders of the Company immediately prior to the combination
         hold, directly or indirectly, 50% or less of the Voting Stock of
         the combined company (there being excluded from the number of
         shares held by such shareholders, but not from the Voting Stock of
         the combined company, any shares received by Affiliates (as
         defined below) of such other company in exchange for stock of such
         other company).

                                    12
<PAGE>

         For the purpose of this definition of "Change in Control", (I) an
         "Affiliate" of a person or other entity shall mean a person or
         other entity that directly or indirectly controls, is controlled
         by, or is under common control with the person or other entity
         specified and (II) "Voting Stock" shall mean capital stock of any
         class or classes having general voting power under ordinary
         circumstances, in the absence of contingencies, to elect the
         directors of a corporation.

(d)      Date of Termination.  A Participant's "Date of Termination" shall be
         the day following the last day on which he serves as a Director.

(e)      Director.  The term "Director" means a member of the Board.

(f)      Disability. A Participant shall be considered to have a
         "Disability" during the period in which he is unable, by reason of
         a medically determinable physical or mental impairment, to engage
         in any substantial gainful activity, which condition, in the
         opinion of a physician selected by the Committee, is expected to
         have a duration of not less than 120 days.

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

(h)      Effective Date.  The "Effective Date" means the date on which Directors
         begin their yearly term of office on the Board following their election
         at the Company's 1996 annual shareholders meeting.

(i)      Eligible Director.  Each Director who is not an employee of the Company
         or any Related Company shall be an "Eligible Director".

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

(k)      Participant.  A "Participant" is any person who has received an Award
         under the Plan.

(l)      Plan Year. The term "Plan Year" means the period (i) beginning on
         the date on which members of the Board begin their yearly term as
         Board members following the election of Directors at the Company's
         annual shareholders meeting and (ii) ending on the day immediately
         prior the first day of the following Plan Year. The first Plan
         Year shall begin on the Effective Date.

                                    13
<PAGE>

(m)      Plan Year Quarter.  For any Plan Year, the first Plan Year Quarter
         shall begin on the first day of the plan year, and shall end on the
         90th day of the Plan Year; the second Plan Year Quarter shall begin on
         the 91st day of the Plan Year, and shall end on the 180th day of the
         Plan Year; the third Plan Year Quarter shall begin on the 181st day of
         the Plan Year, and shall end on the 270th day of the Plan Year; and
         the fourth Plan Year Quarter shall begin on the 271st day of the Plan
         Year, and shall end on the last day of the Plan Year.  Notwithstanding
         the foregoing, with respect to only the 1999 Plan Year, there shall be
         an additional Plan Year Quarter, so that the fourth Plan Year Quarter
         shall begin on the 271st day of the Plan Year, and shall end on the
         360th day of the Plan Year; and the fifth Plan Year Quarter shall
         begin on the 361st day of the Plan Year, and shall end on the last day
         of the Plan Year.

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

(o)      SEC.  "SEC" shall mean the Securities and Exchange Commission.

(p)      Stock.  The term "Stock" shall mean shares of common stock of the
         Company.

                                    14
<PAGE>

                                SUPPLEMENT A
                             ELECTIVE DEFERRAL

                               SECTION A- 1

                             DEFERRAL ELECTION

         A-1 - 1. General. An individual who is otherwise entitled to
receive a Retainer Award or a Committee Chairman Award, or who is otherwise
eligible to receive cash payment for services provided as a Director ("Cash
Compensation"), may elect to defer delivery of all or a portion of such
shares of Stock and such cash, subject to the following terms of this
Section A-1.

         A-1 - 2.  Stock Deferral Election.

(a)      An individual who is an Eligible Director on the first day of a
         Plan Year may elect to defer the receipt of all or a portion of
         the Stock awarded as the Retainer Award for the Plan Year, to
         defer receipt of all or a portion of the Stock awarded as the
         Meeting Award for the Plan Year, or to defer the receipt of all or
         a portion of the Stock awarded as a Committee Chairman Award for
         any quarter of a Plan Year, by filing a deferral election with
         respect to the Plan Year at such time and in such form as
         established by the Committee; provided, however, that such
         election shall be effective only with respect to compensation
         payable after the date such election is filed.

(b)      An individual who becomes an Eligible Director on a date other
         than the first day of a Plan Year may elect to defer all or a
         portion of the Stock awarded as the Retainer Award for the
         remainder of the year by filing a deferral election with respect
         to the remainder of the year at such time and in such form as
         established by the Committee; provided, however, that such
         election shall be effective only with respect to compensation
         payable after the date such election is filed.

(c)      An individual who becomes a Committee Chairman on a date other
         than the first day of a Plan Year may elect to defer all or a
         portion of the Committee Chairman Award for the remainder of the
         year by filing a deferral election prior to the date on which he
         becomes Committee Chairman; and, by filing a deferral election
         within 30 days after becoming a Committee Chairman, he may defer
         receipt of the portion of the Committee Chairman Award for the
         portion of the Plan Year following the 30-day period.

(d)      An individual who becomes an Eligible Director on a date other
         than the first day of a Plan Year may elect to defer all or a
         portion of the Meeting Award for the remainder of the year by
         filing a deferral election with respect to the remainder
         of the year at such time and in such form as established by the
         Committee; provided, however, that such election shall be
         effective only with respect to compensation payable after the date
         such election is filed.

                                    15
<PAGE>

         A-1 - 3. Cash Deferral Election.

(a)      An election to defer the receipt of all or a portion of the Cash
         Compensation for any Plan year shall be filed with respect to a
         Plan Year at such time and in such form as established by the
         Committee; provided, however, that such election shall be
         effective only with respect to Cash Compensation payable after the
         date such election is filed.

(b)      An individual who becomes an Eligible Director on a date other
         than the first day of a Plan Year may elect to defer all or a
         portion of the Cash Compensation for the remainder of the year by
         filing a deferral election with respect to the remainder of the
         year at such time and in such form as established by the
         Committee; provided, however, that such election shall be
         effective only with respect to Cash Compensation payable after the
         date such election is filed.

                                SECTION A-2

                                  ACCOUNTS

         A-2 - 1. Stock Account. A Stock Account shall be maintained on
behalf of each Participant who elects to defer the distribution of shares
of Stock under this Supplement A, for the period during which delivery of
shares of Stock is deferred. A Participant's Stock Account shall be subject
to the following adjustments:

(a)      The Stock Account will be credited with Share Units equal to the
         number of shares of Stock as to which the Participant has elected
         deferred receipt, with such Share Units to be credited as of the
         date on which the shares would otherwise have been delivered to
         him in the absence of the deferral.

(b)      As of each dividend record date for the Stock following the date
         any Share Units are credited to the Participant's Stock Account,
         and prior to the date of distribution of shares of Stock with
         respect to those Share Units, the Participant's Stock Account
         shall be credited with additional Share Units (including
         fractional Share Units) equal to (i) the amount of the dividend
         that would be payable with respect to the number of shares of
         Stock equal to the number of Share Units credited to the
         Participant's Stock Account on the dividend record date; divided
         by (ii) the Fair Market Value of a share of Stock on the date of
         payment of the dividend.

(c)      As of the date of any distribution of shares of Stock with respect
         to a Participant's Stock Account under Section A-3, the Share
         Units credited to a Participant's Stock Account shall be reduced
         by the number of Shares so distributed to the Participant.

                                    16
<PAGE>

         A-2 -2. Cash Account. A Cash Account shall be maintained on behalf
of each Participant who elects to defer the distribution of cash under this
Supplement A, for the period during which delivery of cash is deferred. A
Participant's Cash Account shall be credited with interest, with the
applicable interest rate for any calendar year equal to the prime rate as
of the first business day of that calendar year, as reported in The Wall
Street Journal. As of the date of any distribution with respect to a
Participant's Account under Section A-3, the balance credited to a
Participant's Account shall be reduced by the amount of the distribution to
the Participant.

         A-2 - 3. Statement of Accounts. As soon as practicable after the
end of each Plan Year, the Company shall provide each Participant having
one or more Accounts under the Plan with a statement of the transactions in
his Accounts during that year and his Account balances as of the end of the
year.

                               SECTION A- 3

                               DISTRIBUTIONS

         A-3 - 1.  General.

(a)      Subject to the terms of this Section A-3, a Participant shall
         specify, as part of his deferral election with respect to Stock
         Awards, and as part of his deferral election with respect to Cash
         Compensation, the time of distribution of the amounts deferred
         pursuant to such election; provided, however, that distribution of
         shares of Stock, and of Cash Compensation, shall be made in a lump
         sum not later than the first anniversary of the date on which the
         individual ceases to be a Director; and further provided that a
         Participant may elect only a single date for distribution of all
         of his deferred Stock Awards and only a single date for
         distribution of all of his deferred Cash Compensation under the
         Plan, provided that the distribution date for the Participant's
         deferred Stock Awards and for deferred Cash Compensation may
         differ.

                                    17
<PAGE>

(b)      At the time of distribution of deferred shares in accordance with
         the Participant's election, the Participant shall receive a
         distribution of shares of Stock equal to the number of share units
         credited to his Account immediately prior to such distribution. If
         the scheduled distribution date would otherwise occur after a
         dividend record date but before the payment of the dividend,
         distribution shall be deferred (not more than 30 days) until the
         dividend is paid.

(c)      At the time of distribution of Cash Compensation in accordance
         with the Participant's election, the Participant shall receive the
         amount then credited to the Participant's Cash Account as of the
         date of distribution.

(d)      In determining a Participant's right to distributions of stock
         under this Section A-3, the vesting provisions of subsection 2.3
         of the Plan shall apply to the share units credited to the
         Participant's Stock Account as though each unit represented one
         share of Stock, and with all units attributable to payment of
         dividends being fully vested as of the date they are credited to
         the Participant's Stock Account.

(e)      Notwithstanding the foregoing provisions of this Section A-3, if
         any share units are credited to a Participant's Stock Account as
         of the date of a Change in Control, the Participant shall receive
         a distribution of shares of Stock equal to the number of such
         share units. Such distribution shall be in settlement of the
         Participant's rights to distribution under this Section A-3,
         provided that if the record date for a dividend is prior to a
         Change in Control, but the dividend payment is to occur after such
         Change in Control, the additional shares attributable to such
         dividends shall be distributed as soon as practicable thereafter.

         A-3 - 2. Limitation of Implied Rights. Neither the Participant
nor any other person shall, by reason of deferral of shares of Stock or the
deferral of Cash Compensation, under this Supplement A, acquire any right
in or title to any assets, funds or property of the Company whatsoever
prior to the date such shares are distributed. A Participant shall have
only a contractual right to the shares and cash, if any, distributable
under the Plan, unsecured by any assets of the Company. Nothing contained
in the Plan shall constitute a guarantee by the Company that the assets of
the Company shall be sufficient to provide any benefits to any person.

                                    18
<PAGE>

                             Table of Contents

                                                                           Page

SECTION 1      GENERAL........................................................2

           1.1.     Purpose...................................................2

           1.2.     Operation and Administration..............................2

SECTION 2      RETAINER AWARDS................................................2

           2.1.     General...................................................2

           2.2.     Fractional Shares.........................................3

           2.3.     Vesting...................................................3

           2.4.     Limit on Stock............................................3

SECTION 3      COMMITTEE CHAIRMAN AWARDS......................................4

         SECTION 3A  MEETING AWARDS...........................................4

         SECTION 3B  OPTION AWARDS............................................5

SECTION 4      OPERATION AND ADMINISTRATION...................................7

           4.1.     Effective Date............................................7

           4.2.     Shares Subject to Plan....................................7

           4.3.     Fractional Shares.........................................8

           4.4.     Adjustments to Shares.....................................8

           4.5.     Limit on Distribution.....................................9

           4.6.     Taxes.....................................................9

           4.7.     Distributions to Disabled Persons.........................9

           4.8.     Transferability..........................................10

           4.9.     Administration...........................................10

           4.10.    Form and Time of Elections...............................10

           4.11.    Agreement With Company...................................10

           4.12.    Evidence.................................................10

           4.13.    Action by Company........................................10

           4.14.    Gender and Number........................................10

SECTION 5      COMMITTEE.....................................................10

           5.1.     Selection of Committee...................................10

           5.2.     Powers of Committee......................................10

           5.3.     Information to be Furnished to Committee.................11

                                         i

<PAGE>

           5.4.     Liability and Indemnification of Committee...............11

SECTION 6      AMENDMENT AND TERMINATION.....................................11

SECTION 7      DEFINED TERMS.................................................11

                    (a)  Award...............................................12

                    (b)  Board...............................................12

                    (c)  Change in Control...................................12

                    (d)  Date of Termination.................................13

                    (e)  Director............................................13

                    (f)  Disability..........................................13

                    (g)  Dollars.............................................13

                    (h)  Effective Date......................................13

                    (i)  Eligible Director...................................13

                    (j)  Fair Market Value...................................13

                    (k)  Participant.........................................13

                    (l)  Plan Year...........................................13

                    (m)  Plan Year Quarter...................................13

                    (n)  Related Companies...................................14

                    (o)  SEC.................................................14

                    (p)  Stock...............................................14

         A-1 - 1.      General...............................................15

         A-1 - 2.      Stock Deferral Election...............................15

         A-1 - 3.      Cash Deferral Election................................16

SECTION A-2    ACCOUNTS......................................................16

         A-2 - 1.      Stock Account.........................................16

         A-2 - 2.      Cash Account..........................................16

         A-2 - 3.      Statement of Accounts.................................17

SECTION A-3     DISTRIBUTIONS................................................17

         A-3 - 1.      General...............................................17

         A-3 - 2.      Limitation of Implied Rights..........................18

                                        ii

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