Document:

Exhibit 10.04

 

AMENDED AND RESTATED

TELETECH HOLDINGS, INC.

1999 STOCK OPTION AND INCENTIVE PLAN

 

1.         Preamble.

 

TeleTech Holdings, Inc., a Delaware corporation (the “Company”), hereby establishes the Amended and Restated TeleTech Holdings, Inc. 1999 Stock Option and Incentive Plan (the “Plan”) as a means whereby the Company may, through Awards (as herein defined):

 

(a)        provide employees of the Company and its Subsidiaries (as herein defined) with additional incentive to promote the success of the Company’s and its Subsidiaries’ businesses and encourage such employees to remain in the employ of the Company and its Subsidiaries;

 

(b)        provide incentive for potential, employees to accept employment with the Company; and

 

(c)        provide directors of the Company who are not otherwise employees of the Company, and consultants and other independent contractors who provide services to the Company, with additional incentive to promote the success of the Company’s business.

 

The provisions of the Plan do not apply to or affect any option, stock appreciation right, or stock award heretofore or hereafter granted under any other stock plan of the Company or any subsidiary, and all such options, stock appreciation rights or stock awards continue to be governed by and subject to the applicable provisions of the plan or agreement under which they were granted.

 

2.         Definitions.

 

2.1        “Award” means an award or benefit granted under the Plan, including, without limitation, Dividend Equivalent Rights, Options, Phantom Stock, Restricted Stock, RSUs or SARs, or any combination of the foregoing.

 

2.2        “Board” or “Board of Directors” means the board of directors of the Company.

 

2.3        “Cause” means, as determined in the sole discretion of the Board, a Participant’s (a) commission of a felony or the commission of any crime involving moral turpitude, theft, embezzlement, fraud, misappropriation of funds, breach of fiduciary duty, abuse of trust or the violation of any other law or ethical rule relating to the Company; (b) material or repeated dishonesty or misrepresentation involving the Company or any Subsidiary; (c) material or repeated misconduct in the performance or non-performance of Participant’s responsibilities as an employee, officer, Director, consultant or independent contractor; (d) violation of a material condition of employment; (e) unauthorized use of trade secrets or confidential information (or the

 

 

Company’s reasonable belief that a Participant has or has attempted to do so); or (f) aiding a competitor of the Company or any Subsidiary.

 

2.4       “Code” means the Internal Revenue Code of 1986, as it exists now and as it may be amended from time to time.

 

2.5       “Committee” means the committee comprised of two or more Directors appointed by the Board to administer the Plan.

 

2.6       “Common Stock” means the common stock of the Company, $.01 par value per share.

 

2.7       “Company” means TeleTech Holdings, Inc., a Delaware corporation, and any successor thereto.

 

2.8       “Director” means a member of the Board.

 

2.9       “Dividend Equivalent Right” means an Award granted under Section 12 that entitles the Participant to receive bookkeeping credits, cash payments and/or Common Stock distributions equal in amount to the distributions that would have been made to the Participant had the Participant held a specified number of shares of Common Stock during the period that the Participant held the Dividend Equivalent Right.

 

2.10     “Exchange Act” means the Securities Exchange Act of 1934, as it exists now or from time to time may hereafter be amended.

 

2.11     “Fair Market Value” means for the relevant day:

 

(a)        If shares of Common Stock are listed or admitted to unlisted trading privileges on any national or regional securities exchange, the last reported sale price, regular way, on the composite tape of that exchange on the day Fair Market Value is to be determined or, if no sales prices are reported on that date, on the last preceding date on which such prices of the Common Stock are so reported;

 

(b)        If the Common Stock is not listed or admitted to unlisted trading privileges as provided in paragraph (a), and if sales prices for shares of Common Stock are reported by the National Association of Securities Dealers, Inc. Automated Quotations, Inc. National Market System (“Nasdaq System”), then the last sale price for Common Stock reported as of the close of business on the day Fair Market Value is to be determined, or if no such sale takes place on that day, the average of the high bid and low asked prices so reported and, if Common Stock is not traded on that day, the next preceding day on which such stock was traded; or

 

(c)        If trading of the Common Stock is not reported by the Nasdaq System or on a stock exchange, Fair Market Value will be determined by the Committee in its discretion based upon the best available data.

 

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Notwithstanding any provision of this Section to the contrary, Fair Market Value shall be determined in a manner that results in compliance with Section 409A.

 

2.12      “ISO” means incentive stock options within the meaning of Section 422 of the Code.

 

2.13      “Naked SAR” means a SAR issued not in connection with an ISO or NSO.

 

2.14      “NSO” means non-qualified stock options, which are not intended to qualify under Section 422 of the Code.

 

2.15      “Option” means the right of a Participant, whether granted as an ISO or an NSO, to purchase a specified number of shares of Common Stock, subject to the terms and conditions of the Plan.

 

2.16      “Option Date” means the date upon which an Award is granted to a Participant under the Plan.

 

2.17      “Option Price” means the price per share at which an Option may be exercised.

 

2.18      “Outside Director” means a non-employee Director as defined in Section 16b-3(b)(3)(i) of the Exchange Act.

 

2.19      “Participant” means an individual to  whom an Award has been granted under the Plan.

 

2.20      “Phantom Stock” means a hypothetical share of Common Stock issued as phantom stock under the Plan, which has been awarded to a Participant pursuant to the Plan and subject to the restrictions contained in Section 11.

 

2.21      “Plan” means the Amended and Restated TeleTech Holdings, Inc. 1999 Stock Option and Incentive Plan, as set forth herein and as from time to time amended.

 

2.22      “Restricted Stock” means Common Stock awarded to a Participant pursuant to the Plan and subject to the restrictions contained in Section 9.

 

2.23      “RSU” means a restricted stock unit, which is a right, granted in accordance with Section 10, to receive Common Stock or a cash payment of the Fair Market Value of Common Stock, or both.

 

2.24      “SAR” means a stock appreciation right awarded to a Participant pursuant to the Plan and subject to the restrictions contained in Section 8. A SAR may be a Naked SAR or a Tandem SAR.

 

2.25      “Section 409A” means Section 409 A of the Code and any related guidance and regulations (including, until finalized, proposed Treasury regulations issued in October of 2005) promulgated thereunder.

 

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2.26     “Securities Act” means the Securities Act of 1933, as it exists now or from time to time may hereinafter be amended.

 

2.27     “Subsidiary” means any corporation or other entity of which the majority voting power or equity interest is owned directly or indirectly by the Company.

 

2.28     “Tandem SAR” means a SAR associated with and issued in connection with an ISO or NSO.

 

2.29     Rules of Construction.

 

(a)        Governing Law. The construction and operation of the Plan are governed by the laws of the State of Delaware.

 

(b)        Undefined Terms. Unless the context requires another meaning, any term not specifically defined in the Plan has the meaning given to it by the Code.

 

(c)        Headings. All headings in this document are for reference only and are not to be utilized in construing the Plan.

 

(d)        Gender. Unless clearly appropriate, all nouns of whatever gender refer indifferently to persons of any gender.

 

(e)        Singular and Plural. Unless clearly inappropriate, singular terms refer also to the plural and vice versa.

 

(f)        Severability. If any provision of the Plan is determined to be illegal or invalid for any reason, the remaining provisions shall continue in full force and effect and shall be construed and enforced as if the illegal or invalid provision did not exist, unless the continuance of the Plan in such circumstances is not consistent with its purposes.

 

(g)        Termination of Employment. For all purposes of the Plan, an employee will have terminated employment with the Company when the employee’s employment relationship with the Company and all of its subsidiaries is terminated. Additionally, for all purposes of the Plan, (i) a consultant’s or independent contractor’s “employment with the Company” shall be considered terminated upon the termination of any consulting or independent contractor agreement, or when the consultant or independent contractor no longer performs any services for the Company, and (ii) a non-employee Director’s “employment with the Company” shall be considered terminated at the time such Director ceases to serve on the Board.

 

3.         Stock Subject to the Plan.

 

Except as otherwise provided in Section 15, the aggregate number of shares of Common Stock that may be issued as Options or as Restricted Stock under the Plan may not exceed 14,000,000 shares of Common Stock. The maximum number of shares of Common Stock that may be issued pursuant to Options intended to qualify as ISOs shall

 

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be 14,000,000 shares of Common Stock. Reserved shares may be either authorized but unissued shares or treasury shares, in the Board’s discretion. If any Awards hereunder shall terminate or expire, as to any number of shares, new Options and Restricted Stock may thereafter be awarded with respect to such shares. Except as otherwise provided in Section 15, no Participant may be granted Awards under the Plan in any calendar year in respect of more than 300,000 shares of Common Stock.

 

4.         Administration.

 

4.1       Plan Administrator. The Plan shall be administered by the Committee.

 

4.2       Committee Powers.  In addition to any other powers set forth in the Plan, the Committee has the exclusive authority:

 

(a)        to construe and interpret the Plan, and to remedy any ambiguities or inconsistencies therein;

 

(b)        to establish, amend and rescind appropriate rules and regulations relating to the Plan;

 

(c)        subject to the express provisions of the Plan, to determine the individuals who will receive Awards, the type of Awards, the times when they will receive them, the number of shares of Common Stock to be subject to each Award and the Option Price, payment terms, payment method, and expiration date applicable to each Award;

 

(d)        to contest on behalf of the Company or Participants, at the expense of the Company, any ruling or decision on any matter relating to the Plan or to any Awards;

 

(e)        generally, to administer the Plan, and to take all such steps and make all such determinations in connection with the Plan and the Awards granted thereunder as it may deem necessary or advisable;

 

(f)        to determine the form in which payment of an Award, which is a SAR, a Phantom Stock or RSU and which has been granted hereunder, will be made (i.e., cash, Common Stock or a combination thereof) or to approve a Participant’s election to receive cash in whole or in part in settlement of such Award;

 

(g)        to determine the form in which tax withholding under Section 18 of the Plan will be made; and

 

(h)        to amend the Plan or any Award granted or awarded hereunder as may be necessary in order for any business combination involving the Company to qualify for pooling-of-interest treatment under APB No. 16.

 

4.3       No    Exercise    of   Authority    Resulting    in    Nonqualified    Deferred Compensation.    Notwithstanding any other provision of the Plan to the contrary, the

 

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Committee shall exercise its authority with respect to the Plan or any Award in a manner so that the terms and conditions applicable to any Award (or portion thereof), which is granted to a Participant who is subject to taxation under the Code and which constitutes “deferred compensation” subject to Section 409A of the Code, comply with, or are exempt from, Section 409A. The terms of any such Award (or portion thereof) permitting the deferral of payment or other settlement thereof or providing for settlement in cash in lieu of shares of Common Stock shall be subject to such requirements and shall be administered in such manner as the Committee may determine to be necessary or appropriate to comply with the applicable provisions of Section 409A.

 

5.         Eligible Participants.

 

Subject to the provisions of the Plan, the Committee shall determine from time to time (a) those employees, officers, Directors, consultants and independent contractors of the Company or a Subsidiary, and non-employees and non-officers to whom the Company or any Subsidiary has extended an offer of employment, who shall be designated as Participants, and (b) the number and type of Awards to be granted to each such Participant; provided, however, that no ISOs or Tandem SARs granted with respect to ISOs shall be awarded under the Plan more than ten years after the date the Plan is adopted by the Board. In addition, no ISOs may be awarded to a Participant who is not an employee of the Company or a Subsidiary.

 

6.         Terms and Conditions of Incentive Stock Options.

 

The Committee, in its discretion, may grant ISOs to any Participant under the Plan; provided, however, that no ISOs may be granted to a Director or other Participant who is not an employee of the Company or a Subsidiary. Each ISO shall be evidenced by an agreement between the Company and the Participant in a form approved by the Committee; provided, however, no such agreement shall contain any provision that would result in such ISO being considered “nonqualified deferred compensation,” within the meaning of Section 409A, so as to cause such ISO or the Plan to become subject to the requirements of Section 409A. Unless the Committee, in its discretion, determines otherwise, each ISO agreement shall be subject to the following terms and conditions and to such other terms and conditions as the Committee may deem appropriate;

 

(a)       Option Period.  Each ISO will expire as of the earliest of:

 

(i)        the date on which it is forfeited under the provisions of Section 14;

 

(ii)       10 years (or five years as specified in Section 6(e)) from the Option Date;

 

(iii)      three months    after    the    Participant’s    termination    of employment with the Company for any reason other than death; or

 

(iv)      six months after the Participant’s death.

 

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(b)       Option Price. Subject to the provisions of Section 6(e), the Option Price per share shall be determined by the Committee at the time any ISO is granted, and shall not be less than the Fair Market Value of the Common Stock subject to the ISO on the Option Date.

 

(c)       Other Option Provisions. The form of ISO authorized by the Plan may contain such other provisions as the Committee may, from time to time, determine; provided, however, that such other provisions may not be inconsistent with any requirements imposed on qualified stock options under Section 422 of the Code. The terms and conditions of the respective Option agreements need not be identical.

 

(d)       Limitations on Awards. To the extent that the aggregate Fair Market Value, determined as of the Option Date, of Common Stock with respect to which ISOs are exercisable by a Participant for the first time during any calendar year under all ISO plans of the Company and any parent corporation or subsidiary corporation (both as defined in Section 424 of the Code) exceeds $100,000 (or such other individual limit as may be in effect under the Code on the date of grant), such ISOs shall be treated as NSOs. The Committee shall determine, in accordance with applicable provisions of the Code, Treasury Regulations and other administrative pronouncements, which of a Participant’s Options, which were intended by the Committee to be ISOs when granted to the Participant, will not constitute ISOs because of such limitation and shall notify the Participant of-such determination as soon as practicable after such determination.

 

(e)       Awards to Certain Stockholders. Notwithstanding Sections 6(a) and 6(b) hereof, if an ISO is granted to a Participant who owns stock representing more than 10% of the voting power of all classes of stock of the Company or a Subsidiary (as determined under the Code), the exercise period specified in the ISO agreement for which the ISO thereunder is granted shall not exceed five years from the Option Date and the Option Price shall be at least 110% of the Fair Market Value (as of the Option Date) of the Common Stock subject to the ISO.

 

7.         Terms and Conditions of Non-Qualified Stock Options.

 

The Committee, in its discretion, may grant NSOs to any Participant under the Plan. Each NSO shall be evidenced by an agreement between the Company and the Participant in a form approved by the Committee; provided, however, no such agreement shall contain any provision that would result in such NSO being considered “nonqualified deferred compensation,” within the meaning of Section 409A, so as to cause such NSO or the Plan to become subject to the requirements of Section 409A. Unless the Committee, in its discretion, determines otherwise, each NSO agreement shall be subject to the following terms and conditions and to such other terms and conditions as the Committee may deem appropriate:

 

(a)       Option Period. Each NSO will expire as of the earliest of:

 

(i)        the date on which it is forfeited under the provisions of Section 14;

 

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(ii)       the date three months after the Participant’s termination of employment with the Company for any reason other than death; or

 

(iii)      the date six months after the Participant’s death.

 

(b)        Option Price. At the time when the NSO is granted, the Committee will fix the Option Price. The Option Price may be greater than or equal to Fair Market Value on the Option Date, as determined in the sole discretion of the Committee.

 

(c)        Other Option Provisions. The form of NSO authorized by the Plan may contain such other provisions as the Committee may from time to time determine. The terms and conditions of the respective Option Agreements need not be identical.

 

8.         Terms and Conditions of Stock Appreciation Rights.

 

The Committee may, in its discretion, grant a SAR to any Participant under the Plan. Each SAR shall be evidenced by an agreement between the Company and the Participant, in a form approved by the Committee, and may be a Naked SAR or a Tandem SAR; provided, however, the terms and conditions of any such agreement shall comply with any applicable requirements of Section 409A. Unless the Committee, in its discretion, determines otherwise, each SAR awarded to Participants under the Plan shall be subject to the following terms and conditions and to such other terms and conditions as the Committee may deem appropriate:

 

(a)       Tandem SARs. Tandem SARs shall terminate on the same date as the related ISO or NSO. A Tandem SAR shall be exercisable only if the Fair Market Value of a share of Common Stock on the date of surrender exceeds the Option Price for the related Option, and then shall be exercisable to the extent, and only to the extent, that the related Option is exercisable. A Tandem SAR shall entitle the Participant to whom it is granted the right to elect, so long as such Tandem SAR is exercisable and subject to such limitations as the Committee shall have imposed, to surrender any then exercisable portion of his related Option, in whole or in part, and receive from the Company in exchange, without any payment of cash (except for applicable employee withholding taxes), that number of shares of Common Stock having an aggregate Fair Market Value on the date of surrender equal to the product of (i) the excess of the Fair Market Value of a share of Common Stock on the date of surrender over the per share Option Price, and (ii) the number of shares of Common Stock subject to such Option or portion thereof which is surrendered. Any Option or portion thereof which is surrendered shall no longer be exercisable. The Committee, in its sole discretion, may allow the Company to settle all or part of the Company’s obligation arising out of the exercise of a Tandem SAR by the payment of cash equal to the aggregate Fair Market Value of the shares of Common Stock which the Company would otherwise be obligated to deliver.

 

(b)       Naked SARs. Naked SARs shall terminate as provided in the Participant’s SAR agreement. The Committee may at the time of granting any Naked SAR add such conditions and limitations to the Naked SAR as it shall deem advisable,

 

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including but not limited to, limitations on the period within which the Naked SAR shall be exercisable and the maximum amount of appreciation to be recognized with regard to such Naked SAR.

 

(c)        Other Conditions. If a Participant is subject to Section 16(a) and Section 16(b) of the Exchange Act, the Committee may at any time add such additional conditions and limitations to such SAR which the Committee, in its discretion, deems necessary or desirable in order to comply with Section 16(a) or Section 16(b) of the Exchange Act and the rules and regulations issued thereunder, or in order to obtain any exemption therefrom.

 

9.         Terms and Conditions of Restricted Stock Awards.

 

The Committee, in its discretion, may grant Restricted Stock to any Participant under the Plan. Each grant of Restricted Stock shall be evidenced by an agreement between the Company and the Participant in a form approved by the Committee; provided, however, the terms and conditions of any such agreement shall comply with any applicable requirements of Section 409A. Unless the Committee, in its discretion, determines otherwise, all shares of Common Stock awarded to Participants under the Plan as Restricted Stock shall be subject to the following terms and conditions and to such other terms and conditions as the Committee may deem appropriate:

 

(a)       Restricted Period. Shares of Restricted Stock awarded to Participants may not be sold, transferred, pledged or otherwise encumbered before they vest. Subject to the provisions of subparagraphs (b) and (c) below and any other restrictions imposed by law, certificates evidencing shares of Restricted Stock that vest will be transferred to the Participant or, in the event of his death, to the beneficiary or beneficiaries designated by writing filed by the Participant with the Committee for such purpose or, if none, to his estate.

 

(b)       Forfeitures. A Participant shall forfeit all unpaid accumulated dividends and all shares of Restricted Stock which have not vested prior to the date that his employment with the Company is terminated for any reason.

 

(c)        Certificates Deposited With Company. Each certificate issued in respect of shares of Restricted Stock awarded under the Plan shall be registered in the name of the Participant and deposited with the Company. Each such certificate shall bear the following (or a similar) legend:

 

“The transferability of this certificate and the shares of stock represented hereby are subject to the terms and conditions (including forfeiture) relating to Restricted Stock contained in the TeleTech Holdings, Inc. 1999 Stock Option and Incentive Plan and an agreement entered into between the registered owner and TeleTech Holdings, Inc. Copies of such Plan and agreement are on file at the principal office of TeleTech Holdings, Inc.”

 

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(d)       Stockholder Rights. Subject to the foregoing restrictions, each Participant shall have all the rights of a stockholder with respect to his shares of Restricted Stock including, but not limited to, the right to vote such shares.

 

(e)       Dividends. On each Common Stock dividend payment date, each Participant shall receive an amount equal to the dividend paid on that date on a share of Common Stock, multiplied by his number of shares of Restricted Stock.

 

10.       Terms and Conditions of Restricted Stock Unit Awards.

 

The Committee, in its discretion, may grant an RSU to any Participant under the Plan. Each grant of RSU shall be evidenced by an agreement between the Company and the Participant in a form approved by the Committee; provided, however, the terms and conditions of any such agreement shall comply with any applicable requirements of Section 409A. Unless the Committee, in its discretion, determines otherwise, each RSU awarded to Participants under the Plan shall be subject to the following terms and conditions and to such other terms and conditions as the Committee may deem appropriate:

 

(a)       Settlement. Unless deferral of payment in settlement of RSUs is permitted or required under the terms of the Award thereof and such deferral complies with Section 409A, RSUs shall be settled upon or as soon as reasonably practicable following the vesting thereof, but in no event later than March 15 of the calendar year following the calendar year in which the RSU vests. Settlement shall be made in cash, shares of Common Stock or any combination thereof, as determined by the Committee.

 

(i)         Settlement of RSUs in shares of Common Stock shall be made by delivery of one share of Common Stock for each such RSU then being settled.

 

(ii)        Settlement of RSUs in cash shall be made by payment of an aggregate amount equal to: the product of (A) the Fair Market Value of Common Stock on the applicable settlement date specified by the Committee, multiplied by (B) the number of RSUs then being settled.

 

(b)       Other Conditions. If a Participant is subject to Section 16(a) and Section 16(b) of the Exchange Act, the Committee may at any time add such additional conditions and limitations to such RSU which the Committee, in its discretion, deems necessary or desirable in order to comply with Section 16(a) or Section 16(b) of the Exchange Act and the rules and regulations issued thereunder, or in order to obtain any exemption therefrom.

 

11.       Terms and Conditions of Phantom Stock.

 

The Committee may, in its discretion, award Phantom Stock to any Participant under the Plan. Each award of Phantom Stock shall be evidenced by an agreement between the Company and the Participant; provided, however, the terms and conditions of any such agreement shall comply with any applicable requirements of Section 409A. The Committee may at the time of awarding any Phantom Stock add such additional

 

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conditions and limitations to the Phantom Stock as it shall deem advisable, including, but not limited to, limitations on the period or periods within which the Phantom Stock may be surrendered and the maximum amount of appreciation to be recognized with regard to such Phantom Stock. An award of Phantom Stock shall entitle the Participant to whom it is awarded the right to elect, so long as such Phantom Stock is vested and subject to such limitations as the Committee shall have imposed, to surrender any then vested portion of the Phantom Stock, in whole or in part, and receive from the Company in exchange therefor the Fair Market Value on the date of surrender of the Common Stock to which the surrendered Phantom Stock relates in cash or in shares of Common Stock as the Committee may determine. If a Participant is subject to Section 16(a) and Section 16(b) of the Exchange Act, the Committee may at any time add such additional conditions and limitations to such Phantom Stock which, in its discretion, the Committee deems necessary or desirable in order to comply with Section 16(a) or Section 16(b) of the Exchange Act and the rules and regulations promulgated thereunder, or in order to obtain any exemption therefrom.

 

12.       Terms and Conditions of Dividend Equivalent Rights.

 

The Committee may, in its discretion, award a Dividend Equivalent Right to any Participant under the Plan. Each Dividend Equivalent Right awarded shall be set forth in an agreement that is separate and apart from any other Award and may not be awarded as a component of any other Award agreement. The terms and conditions under which any Dividend Equivalent Right Award is made shall comply with any applicable requirements of Section 409A.

 

(a)       Other Conditions. The Committee may at the time of awarding any Dividend Equivalent Right add such additional conditions and limitations to the Dividend Equivalent Right as it shall deem advisable, including, but not limited to, whether the Participant is to receive credits currently in cash, is to have such credits reinvested (at Fair Market Value determined as of the date of reinvestment) in additional shares of Common Stock or is to be entitled to choose among such alternatives.

 

(b)       Settlement. Awards of Dividend Equivalent Rights may be settled in cash or in shares of Common Stock, as set forth in the applicable award agreement.

 

(c)        Interest Equivalents. The agreement for a Dividend Equivalent Right Award may provide for the crediting of interest on a Dividend Equivalent Right Award to be settled in cash at a future date, at a rate set forth in the agreement, on the amount of cash payable thereunder.

 

13.       Manner of Exercise of Options.

 

To exercise an Option in whole or in part, a Participant, any permitted transferee of a Participant or, after a Participant’s death, a Participant’s executor or administrator, must give written notice to the Committee, stating the number of shares to which he intends to exercise the Option. The Company will issue the shares with respect to which the Option is exercised upon payment in full of the Option Price. The Option Price may

 

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be paid (i) in cash, (ii) in shares of Common Stock having an aggregate Fair Market Value, as determined on the date of delivery, equal to the Option Price, or (iii) by delivery of irrevocable instructions to a broker to promptly deliver to the Company the amount of sale or loan proceeds necessary to pay for all Common Stock acquired through such exercise and any tax withholding obligations resulting from such exercise. The Option Price may be paid in shares of Common Stock which were received by the Participant upon the exercise of one or more Options. The Option Price may be paid in shares of Common Stock which were received by the Participant as an award of Restricted Stock under the Plan. The Option Price may be paid by surrender of Tandem SARs equal to the Option Price.

 

14.      Vesting.

 

(a)       A Participant may not exercise an Option, surrender a SAR, an RSU or Phantom Stock or transfer, pledge or dispose of any Restricted Stock until it has become vested. The portion of an Option, SAR or Phantom Stock award or Restricted Stock that is vested depends upon the period that has elapsed since the Option Date. Unless the Committee establishes a different vesting schedule at the time an Award is granted, all Awards granted under the Plan shall vest according to the following schedule:

 

	
 
    	
 
    	
Cumulative
    
	
Period   Elapsed
    	
 
    	
Vested   Percentage
    
	
 
    	
 
    	
 
    
	
First Anniversary of   Option Date
    	
 
    	
20%
    
	
Second Anniversary of Option   Date
    	
 
    	
40%
    
	
Third Anniversary of   Option Date
    	
 
    	
60%
    
	
Fourth Anniversary of   Option Date
    	
 
    	
80%
    
	
Fifth Anniversary of   Option Date
    	
 
    	
100%
    

 

Except as provided below, if a Participant’s employment with the Company or its Subsidiaries is terminated, for any reason, such Participant automatically forfeits any Awards that are not yet vested. A transfer of employment from the Company to a Subsidiary or affiliate, or vice versa, is not a termination of employment for purposes of the Plan. Unless the Committee in its sole discretion specifically waives the application of this sentence, then notwithstanding the vesting schedule contained herein or in the Participant’s agreement, if the Participant’s employment, or if a Director, his membership on the Board, is terminated for Cause, all Awards granted or awarded to the Participant will be immediately cancelled and forfeited by the Participant upon delivery to him of notice of such termination.

 

(b)       If permitted under Section 409A and if the Committee determines that special circumstances exist, the Committee, in its sole discretion, may accelerate the time in which an Award under the Plan vests, even if, under its existing terms, such Award would not then be exercisable.

 

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15.       Adjustments to Reflect Changes in Capital Structure.

 

If there is any change in the corporate structure or shares of the Company, the Board of Directors may, in its discretion, make any adjustments necessary to prevent accretion, or to protect against dilution, in the number and kind of shares authorized by the Plan and, with respect to outstanding Awards, in the number and kind of shares covered thereby and in the applicable Option Price; provided, however, no adjustment will be made for the issuance of preferred stock or the conversion of convertible preferred stock. For the purpose of this Section 15, a change in the corporate structure or shares of the Company includes, without limitation, any change resulting from a recapitalization, consolidation, rights offering, spin-off, reorganization, or liquidation and any transaction in which shares of Common Stock are changed into or exchanged for a different number or kind of shares of stock or other securities of the Company or another corporation. Notwithstanding the foregoing, any such adjustment made with respect to an Award which is an ISO shall comply with the requirements of Section 424(a) of the Code, and in no event shall any such adjustment be made which would render any ISO granted under the Plan to be other than an “incentive stock option” for purposes of Section 422 of the Code. Notwithstanding any other provision of the Plan to the contrary, no adjustment shall be made to any outstanding Award under the Plan that would result in such Award being considered “nonqualified deferred compensation,” within the meaning of Section 409A, so as to cause such Award or the Plan to become subject to the requirements of Section 409A.

 

16.       Non-Transferability of Options, SARs and Phantom Stock.

 

The Options and SARs granted or Phantom Stock awarded under the Plan are not transferable, voluntarily or involuntarily, other than by will or the laws of descent and distribution or, to the extent permissible under Section 422 of the Code, pursuant to a qualified domestic relations order as defined in Section 414(p) of the Code; provided, however, that the Compensation Committee, in its discretion, may permit Options to be transferrable by a Participant to members of such Participant’s immediate family or to family trusts, partnerships and other entities comprised solely of the Participant or members of the Participant’s immediate family.

 

17.       Rights as Stockholder.

 

No Common Stock may be delivered upon the exercise of any Option until full payment of the Option Price has been made and all income tax withholding requirements thereon have been satisfied. A Participant has no rights whatsoever as a stockholder with respect to any shares covered by an Option or awarded with respect to an RSU or a Dividend Equivalent Right until the date of the issuance of a stock certificate for the shares. A Participant who has been granted SARs or Phantom Stock shall have no rights whatsoever as a stockholder with respect to such SARs or Phantom Stock.

 

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18.       Withholding Tax.

 

The Company shall have the right to withhold or to require a Participant to remit to the Company, in cash or shares of Common Stock, with respect to any payments made under Awards to Participants under the Plan, any taxes required by law to be withheld because of such payments. Subject to the consent of the Committee with respect to (a) the exercise of an NSO, (b) the lapse of restrictions on Restricted Stock, (c) a “disqualifying disposition” of an ISO, as determined pursuant to the Code, or (d) the issuance of any other stock award under the Plan, a Participant may make an irrevocable election (an “Election”) to (i) have shares of Common Stock otherwise issuable withheld, or (ii) tender back to the Company shares of Common Stock received pursuant to (a), (b), or (d), or (iii) deliver back to the Company pursuant to (a), (b), or (d) previously acquired shares of Common Stock having a Fair Market Value sufficient to satisfy all or part of the Participant’s estimated tax obligations. Such Election must be made by a Participant prior to the date on which the relevant tax obligation arises. The Committee may disapprove of any Election, may suspend or terminate the right to make Elections, or may provide with respect to any award under the Plan that the right to make Elections shall not apply to such award.

 

19.       No Right To Employment.

 

Participation in the Plan will not give any Participant a right to be retained as an employee of the Company or any subsidiary, or any right or claim to any benefit under the Plan, unless the right or claim has specifically accrued under the Plan.

 

20.       Amendment of the Plan.

 

The Committee may from time to time amend or revise the terms of the Plan in whole or in part and may without limitation, adopt any amendment deemed necessary, subject only to applicable laws, regulations and the rules and regulations of the Nasdaq Stock Exchange or any national stock exchange upon which the Common Stock may be listed; provided, however, that (a) except as provided in Section 4(h), no change in any award previously granted to a Participant may be made that would impair the rights of the Participant without the Participant’s consent, or (b) no amendment may extend the period during which a Participant may exercise an ISO beyond the period set forth in Section 6(a)(ii) or 6(e). Any approval required or desired from the Company’s stockholders to any amendment shall require a vote of the majority of the shares of the Company’s Common Stock and preferred stock voting together as one class, present in person or by proxy at a duly held stockholders meeting or by written consent. All amendments shall be in writing and consented to by a majority of the members of the Committee.

 

21.       Conditions Upon Issuance of Shares.

 

An Option shall not be exercisable, a share of Common Stock shall not be issued pursuant to the exercise of an Option, and Restricted Stock shall not be awarded until such time as the Plan has been approved by the Stockholders of the Company and unless the award of Restricted Stock, exercise of such Option and the issuance and delivery of

 

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such share pursuant thereto shall comply with all relevant provisions of law, including, without limitation, the Securities Act, the Exchange Act, the rules and regulations promulgated thereunder, and the requirements of any stock exchange upon which the shares of Common stock may then be listed, and shall be further subject to the approval of counsel for the Company with respect to such compliance. As a condition to the exercise of an Option, the Company may require the person exercising such Option to represent and warrant at the time of any such exercise that the Common Stock is being purchased only for investment and without any present intention to sell or distribute such shares if, in the opinion of counsel for the Company, such a representation is required by any of the aforementioned relevant provisions of law.

 

22.       Effective Date and Termination of Plan.

 

(a)       Effective Date. The Plan is effective as of the later of the date of its adoption by the Board or, if approval of the Company’s stockholders is sought, the date the Plan is approved by the stockholders of the Company.

 

(b)       Termination of the Plan. The Committee may terminate the Plan at any time with respect to any shares that are not then subject to Options or Restricted Stock. Termination of the Plan will not affect the rights and obligations of any Participant with respect to any Awards awarded or granted before termination. Any termination of the Plan pursuant to this Article 22 shall comply with all applicable requirements of Section 409A.

 

23.       Annual Option Grants to Outside Directors.

 

On the date of each annual meeting of stockholders, each Outside Director who does not own, directly or indirectly, over 5% of the issued and outstanding Common Stock shall be granted an Option to purchase 15,000 shares of Common Stock and, for each committee on which such director has been appointed to serve, such committee member shall be granted an option to purchase 8,000 shares of Common Stock.

 

15OEH-EX10.1_2012.12.31-10K

Exhibit 10.1

[Orient-Express Hotels Ltd. 2000 Stock Option Plan, as amended]

ORIENT-EXPRESS HOTELS LTD.

2000 STOCK OPTION PLAN

[As adopted by the Board of Directors on June 5, 2000 and approved by the sole shareholder on June 5, 2000, and amended by the Board of Directors on February 2, 2009 and December 7, 2012.]

1.       The Plan

Orient-Express Hotels Ltd. (the "Company") may grant, in the manner and upon the terms and conditions set forth herein, options to purchase not in excess of an aggregate of 750,000 Class A or Class B common shares of the Company (adjusted, if necessary, in accordance with Section 12) to eligible directors, officers and employees of the Company and its subsidiaries (as determined in accordance with Section 3).  Shares may be either authorized but unissued shares or acquired shares.  

2.       Administration of the Plan

The Plan shall be administered, and the options hereunder shall be granted, by the Board of Directors of the Company or a committee thereof from time to time constituted pursuant to the Bye‐Laws of the Company.  Any decision of the Board or the committee shall be final and conclusive in all matters relating to the Plan.  The Board or the committee may make or vary regulations for the administration and operation of the Plan not inconsistent with the provisions hereof.  The Board or the committee may act only by a majority of its members in office, except that the members may authorize any one or more of their number or the Secretary of the Company to execute and deliver documents on their behalf.  No member of the Board or the committee shall be liable for anything done or omitted to be done by him or by any other member in connection with the Plan, except for his own willful misconduct or as expressly provided by statute.  

The Board or the committee shall have authority to (a) adopt a subsidiary plan (the "U.K. Plan") under the Plan which provides for the grant of options on shares reserved under the Plan to eligible United Kingdom resident directors, officers and employees and complies with the requirements imposed by the United Kingdom Board of Inland Revenue, and (b) prescribe the form of options granted under the Plan, provided in each case that the terms and conditions of the U.K. Plan and the form of the option are not inconsistent with the terms and conditions of the Plan.  Any option granted under the U.K. Plan shall be deemed to be outstanding also under the Plan.

The Board or the committee is authorized, in its discretion exercised at the time of grant, to designate options as "United States incentive stock options" within the meaning of Section 422 of the United States Internal Revenue Code.

3.       To Whom Options May Be Granted

Options may be granted to those directors, officers and employees of the Company or any subsidiary who, in the opinion of the Board or the committee, have contributed significantly to the growth and progress of the Company or any subsidiary or to persons who, in the opinion of the Board or the committee, hold promise of contributing to the growth and progress of the Company or any subsidiary and who can be attracted to directorship, officership or employment through the grant of options under the Plan.  The Board or the committee is hereby given the authority to determine which of the eligible directors, officers and employees are to be granted options and the number of shares to be allocated to each.

No United States incentive stock option shall be granted to a person who is not an employee or (except as provided in Sections 4 and 7) to an employee who owns (or would be regarded as owning) shares possessing more than ten percent of the total combined voting power of all classes of shares of the Company or its subsidiaries at the time the option is granted.  In addition, in the case of United States incentive stock options, the aggregate fair market value (determined at the time the option is granted) of the shares with respect to which incentive stock options are exercisable for the first time by an employee during any calendar year (under all United States incentive stock option plans of the Company and its subsidiaries) shall not exceed U.S.$100,000.

    
The term "subsidiary" means any corporation in an unbroken chain of corporations beginning with the Company, each of which owns at the time such option is granted (except in the case of the last such corporation in the chain) shares possessing 50 percent or more of the total combined voting power of all classes of shares in one of the other corporations in such chain.

4.      Option Price

The option price per share shall be not less than the fair market value of the shares subject to the option at the time it is granted, as determined in good faith by the Board or the committee.  If a United States incentive stock option is granted to an employee who at the time the option is granted owns (or would be regarded as owning) shares possessing more than ten percent of the total combined voting power of all classes of shares of the Company or its subsidiaries, the option price shall be at least 110 percent of the fair market value of the shares subject to the option at the time it is granted.  The option price shall be subject to adjustment in accordance with Section 12.

5.       Circumstances Under Which Options May Be Granted

Options may be granted at any time and from time to time on or after the date on which the Plan is adopted by the Board of Directors of the Company and before the expiration of ten years therefrom.  If prior to the expiration of ten years from the date on which the Plan is adopted, an option shall expire or otherwise terminate without having been exercised in full, the unexercised shares shall thereupon become available for the granting of options to other eligible directors, officers and employees.  No option shall be granted unless, at the time such option is granted, the Company shall have available at least the number of shares covered by such option and by all other options then outstanding under the Plan.

6.       Options Not Assignable

Every option granted under the Plan shall provide that it is not transferable by the person to whom it is granted, otherwise than by will or the laws of descent and distribution, and that it is exercisable, during his lifetime, only by him.

7.    Manner of Exercise of Options  

Any person to whom an option has been granted may exercise the same, subject to the provisions of Section 10, at any time and from time to time before the expiration of not more than ten years (or, in the case of any United States incentive stock option granted to an employee subject to the second sentence of Section 4, not more than five years) from the date the option was granted.  Any such exercise shall be effected by giving written notice to the Company, in a form satisfactory to the Board or the committee, specifying the number of shares with respect to which the option is being exercised.  Any person to whom an option has been granted under the U.K. Plan may exercise the same under the Plan, subject to all the provisions hereof and provided that in the written notice of exercise the person states that he is exercising under the Plan and not under the U.K. Plan.

8.     Manner of Payment on Exercise of Options  

At the time of giving such notice, such person shall pay or cause to be paid to the Company the full option price of the shares as to which the option is exercised.  As soon as practicable thereafter, the Company shall cause a certificate or certificates for such shares to be registered in the name of such person, in such denominations as such person may direct, and shall deliver said certificate or certificates to or upon the order of such person.

Notwithstanding the foregoing, on concurrence by the Board or the committee (which concurrence may be granted or withheld in its sole discretion) the person exercising an option may elect to defer, for a term not to exceed five years from the date of exercise, payment of all or a portion of the option price of the shares as to which the option is exercised, provided, however that:

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(a)  in the case of an optionee who is a "United States person" within the meaning of Regulation X of the Board of Governors of the Federal Reserve System of the United States of America, the portion of the option price so deferred for future payment shall not exceed the "good faith loan value" of the shares, within the meaning of the applicable provisions of Regulation G of such Board and as may be in effect on the date of exercise if such deferral is then subject to such regulation;

(b)  the shares for which the option is exercised shall be issued to and registered in the name of the person exercising the option but shall be endorsed by the person in blank (either on the certificate or on a separate stock power) and held by the Company as collateral for the deferred portion of the option price;

(c) the person exercising the option shall execute a promissory note or other instrument of like effect in favor of the Company in a principal amount equal to the deferred portion of the option price, which instrument shall provide for the payment of interest at the rate, determined by the Board or the committee, of at least four percent per annum, payable quarterly;

(d)  the person exercising the option shall have the right at any time and from time to time to withdraw part or all of the option shares from the collateral so held by the Company upon payment of a corresponding portion of the deferred option price, together with any accrued interest thereon, and that upon such payment the person exercising the option shall be discharged under the promissory note or other instrument, pro tanto, and shall then be free to dispose of the shares in any manner he may deem appropriate, subject to the relevant conditions and restrictions of the Plan; and 

(e)  the deferred payment arrangement shall be subject to such further terms and conditions as may be prescribed by the Board or the committee upon the exercise of options.

The person exercising an option shall be entitled, from the date of exercise, to all the rights of a shareholder as to the shares covered by the exercise, including the right to vote the shares and to receive and retain all dividends paid thereon.

8A.    Cashless Exercise

In lieu of exercising any option and making payment as specified in Section 8, any person exercising an option may elect to receive, and the Company will issue to such option holder, upon the surrender of the option (or specified portion thereof), that number of shares equal to the value of the option (or specified portion thereof), computed using the following formula (a “Cashless Exercise”):

X    =       [Y (A - B)] / A 

where:    X    =    the number of shares to be issued in a Cashless Exercise.
Y       =     the number of shares issuable upon exercise  of the option (or specified 
portion thereof).

A       =     the current share price of the shares, as defined below.

B        =     the exercise price of the option (or specified portion thereof) as to which
Cashless Exercise has been elected by the  person exercising the option.

In the case of any Cashless Exercise, the “current share price” of the shares shall mean the closing price of a share on the New York Stock Exchange (or any other national securities exchange in the United States of America on which the Company's class A common shares are listed) on the business day immediately preceding the date on which the Cashless Exercise takes place.

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The Company shall not be required to issue any fractional shares in connection with any Cashless Exercise.  If a fraction of a share would otherwise be issuable on the exercise of an option (or specified portion thereof), the Company shall pay to the person exercising the option an amount in cash equal to the current share price multiplied by such fraction.

Upon the Cashless Exercise of an option pursuant to the provisions of this Section 8A, the option holder will pay to the Company in cash an amount equal to the par value of each share to be issued in the Cashless Exercise ($0.01 per share).

9.       Exercise After Death of Person to Whom Granted

In the event the person to whom an option is granted shall die owning but without having fully exercised the option, his estate or any person who acquired the right to exercise the option by bequest or inheritance or by reason of the death of the optionee may, subject to the provisions of Section 10 (except subsection 10(b) and (d)), exercise the option at any time and from time to time before the expiration of the period of one year after the date of death, notwithstanding that the exercise may occur less than three years or more than ten years after the date of grant thereof, but only if the person so exercising the option shall have furnished the Company with evidence satisfactory to the Company of the person's right to exercise the option and of payment or provision for the payment of any estate, transfer, inheritance or death taxes payable with respect to the option or the shares to which it relates.  Any such exercise shall be effected in the manner described in Sections 7 and 8.  Any such exercise, however, shall not be permitted in the case of a United States incentive stock option after the expiration of ten years from the date the option was granted.

10.       Circumstances Under Which Options May Not Be Exercised

Every option under the Plan shall provide that it may not be exercised (except as may be otherwise provided in Sections 9 and 11):

(a)  until the shares reserved for issuance upon the exercise thereof have been listed upon any national securities exchange in the United States of America or the United Kingdom on which the Company's Class A or B common shares are then listed;

(b)  until the expiration of a period of three years from the date the option was granted, and in any event not after (i) the expiration of a period of three months from the date a person ceases to be a director, officer or employee of the Company or a subsidiary thereof under circumstances not involving misconduct, impropriety or inefficiency on his part or (ii) the termination of the directorship, officership or employment of a person by the Company or a subsidiary thereof or the shareholders for reasons involving misconduct, impropriety or inefficiency on his part, except that a person ceasing to be a director, officer or employee of the Company or a subsidiary thereof on account of (i) retirement at or after the normal retirement date, (ii) early retirement not earlier than five years before the normal retirement date, (iii) injury or disability, (iv) dismissal for redundancy or (v) on concurrence of the Board or the committee (which concurrence may be granted or withheld in its sole discretion), the sale or other disposition of the subsidiary for which the person acts as director or officer or which employs the employee or the operating division of the Company or a subsidiary for which the employee performs his employment shall be entitled to exercise an option at any time prior to the expiration of a period of three months from the date he ceases to be a director, officer or employee of the Company or a subsidiary thereof notwithstanding that such exercise is made prior to the expiration of a period of three years from the date such option was granted (and for purposes of this Section 10 hereof, the directorship, officership or employment of any person with the Company or a subsidiary thereof shall not be deemed to have ceased or terminated so long as such person shall continuously since the date of grant of the option be a director, officer or employee either of the Company or a subsidiary thereof or of Sea Containers Ltd. or a subsidiary thereof);

        

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(c)  unless the Board or the committee shall be satisfied that the issuance of shares upon exercise will be in compliance with all relevant rules and regulations of the United States Securities and Exchange Commission; or

(d)  after the expiration of ten years from the date the option is granted.

11.      Change in Control

For purposes of this Section 11, "Change in Control" means any of the following events:

(a)   any "person" (as that term is defined for the purposes of Section 13(d) or 14(d) of the U.S. Securities Exchange Act of 1934) shall directly or indirectly become the beneficial owner (as determined pursuant to Rule 13d-3 under that Act) of more than 40% of the voting shares of the Company then outstanding and then entitled to vote generally in the election of directors of the Company (in this definition, “voting shares”); or

(b)  individuals who, on December 7, 2012, constitute the Company's Board of Directors (or the successors of such individuals nominated by such Board of Directors or a committee thereof on which such individuals or their successors constitute a majority) shall cease to constitute a majority of the Company's Board of Directors; or

(c) the Company amalgamates, merges or consolidates with or into any other entity or entities, or the Company or its holders of voting shares effects any reorganization, cash tender or exchange offer or other securities sale or business combination, except (in any case) if more than 50% of the outstanding voting shares of the surviving or resulting entity are beneficially owned (directly or indirectly) by the holders of the Company's voting shares immediately before the transaction or series of transactions; or

(d)  the Company sells, leases, exchanges or otherwise disposes of all or substantially all of its assets and business, except (in any case) to an entity of which more than 50% of the outstanding voting shares are beneficially owned (directly or indirectly) by the holders of the Company's voting shares immediately before the transaction or series of transactions.

In the event of a Change in Control, and notwithstanding anything to the contrary in Section 3, any outstanding option granted under the Plan which an optionee shall not then have been entitled to exercise shall become exercisable immediately prior to or concurrently with the occurrence of the Change in Control and the optionee shall have the right to exercise all such options.

Notwithstanding anything in the Plan to the contrary, in the event of exercise of an option following a Change in Control, the optionee may elect, in the written notice provided for in Sections 7 and 8, (i) to pay or cause to be paid to the Company the full option price of the shares as to which the option is exercised, or (ii) to surrender to the Company all or any part of an option and receive from the Company upon such surrender an amount in cash equal to the excess, if any, of the determined value of the shares subject to the option or portion thereof so surrendered over the aggregate exercise price of such shares as set forth in the applicable option grant letter.  The term "determined value" as used herein means the higher of (A) the highest sale price per Class A or B common share of the Company on the New York Stock Exchange (or, if any of such shares are not listed on that exchange at that time, then the highest sale price of the shares on the principal stock exchange on which such shares are listed, or if such shares are not listed, then the over‐the‐counter market) during the 12 months immediately preceding the date of the  Change in Control, or (B) the highest price per share actually paid in connection with any Change in Control (including, without limitation, prices paid in any subsequent amalgamation, merger or combination with any entity that acquires control of the Company), in either case multiplied by the number of shares subject to the option or portion thereof so surrendered.  In the event of a surrender of all or a portion of an option pursuant to this Section, the number of shares as to which the option was surrendered shall not again become available for use under the Plan.

    

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The obligations of the Company under the Plan shall be binding upon any successor corporation or organization resulting from any amalgamation, merger, consolidation or other reorganization of the Company, or upon any successor corporation or organization succeeding to all or substantially all of the assets and business of the Company, in any such case which would constitute a Change in Control.  The Company agrees that it will make appropriate provisions for the preservation of all optionees' rights under the Plan in any agreement or plan that it may enter into or adopt to effect any such amalgamation, merger, consolidation, reorganization or transfer of assets constituting a Change in Control.

12.     Adjustment of Number or Kind of Shares

If the Company shall effect one or more share splits, share dividends, combinations of shares, exchanges of shares or similar capital adjustments, the Board or the committee shall appropriately adjust the aggregate number and kind of shares with respect to which options have been granted or may be granted under the Plan.  Every option granted under the Plan shall provide that, in the event of any such capital adjustments, the number and kind of the shares with respect to which it may be exercised, and the option price, shall be appropriately adjusted.

13.      Amendment

The Plan may be amended from time to time by the Board of Directors of the Company.  No amendment shall alter or impair any of the rights or obligations of any person, without his consent, under any option theretofore granted under the Plan.

14.      Termination

The Plan shall terminate upon the first of the following dates or events to occur:

(a)  if the Company is a participant in any corporate amalgamation, merger, consolidation or other transaction and no provision is made at the time of the transaction to continue the Plan, except as provided in Section 11;

(b)  resolution of the Board of Directors of the Company terminating the Plan; or

(c)  on June 1, 2010.

In the event of termination of the Plan in any of the ways provided hereinabove, the provisions of the Plan shall continue in full force and effect as regards any options granted prior to such termination.

15.    Effect of Options Upon Employment

Nothing in the Plan shall be construed as giving any person acting as a director or officer of or employed by the Company or any subsidiary thereof the right to be retained in such directorship, officership or employment.  The Company and any subsidiary thereof and the shareholders shall have the right to dismiss any director, officer or employee at any time with or without cause and without liability for the effect which such dismissal might have upon him as a participant under the Plan, and under no circumstances shall a person ceasing to be a director, officer or employee by reason of dismissal or otherwise be entitled to or claim against the Company or any subsidiary thereof any compensation for or in respect of any consequent reduction or loss of his rights or benefits (actual or prospective) under any option held by him in connection with the Plan.

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16.      Construction

In all respects the Plan shall be governed by, and be construed in accordance with, the laws of the Islands of Bermuda.

    *     *     *     *     *

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