Exhibit 10.39
Performance Based Restricted
Stock Award Terms
under the
ACE Limited 2004 Long-Term
Incentive Plan
The Participant has been granted a
Performance Based Restricted Stock Award by ACE Limited (the
“Company”) under the ACE Limited 2004 Long-Term
Incentive Plan (the “Plan”). The Performance Based
Restricted Stock Award for which the Grant Date occurs in 2006 and
any associated Premium Award shall be subject to the following
Performance Based Restricted Stock Award Terms:
1. Terms of Award . The
following words and phrases used in these Performance Based
Restricted Stock Award Terms shall have the meanings set forth in
this paragraph 1:
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(a)
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The
“Participant” is
, who is the individual recipient of the Performance Based
Restricted Stock Award on the specified Grant Date.
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(b)
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The
“Grant Date” is [Insert Date].
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(c)
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The number of
“Covered Performance Shares” is
, which is 25% of that portion of the Participant’s annual
Long-Term Incentive Award which is granted in the form of
restricted shares for the year in which the Grant Date occurs, as
reflected in the corporate records and shown in the Record-Keeping
System in the Participant’s individual account
records.
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Other words and phrases used in
these Performance Based Restricted Stock Award Terms are defined
pursuant to paragraph 10 or elsewhere in these Performance Based
Restricted Stock Award Terms.
2. Restricted Period .
Subject to the limitations of these Performance Based Restricted
Stock Award Terms, the “Restricted Period” for each
Installment of Covered Performance Shares of the Performance Based
Restricted Stock Award shall begin on the Grant Date and end as
described below (but only if the Date of Termination has not
occurred before the end of the Restricted Period):
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(a)
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The Restricted
Period shall end with respect to one quarter (1/4) of the
Covered Performance Shares (the “First Installment”) on
the one-year anniversary of the Grant Date if the Performance Goal
has been satisfied for the measurement period beginning on the
Grant Date and ending on such one-year anniversary (the
“First Installment Primary Performance Measurement
Period”). If the Performance Goal with respect to the First
Installment Primary Performance Measurement Period has not been
satisfied on the one-year anniversary of the Grant Date, then the
Restricted Period for the First Installment shall end on the
earliest of the two-year, three-year, or four-year anniversary of
the Grant Date on which the Performance Goal has been satisfied for
the measurement period beginning on the Grant Date and ending on
such two-year, three-year, or four-year anniversary date, as
applicable (any such later measurement period referred to herein as
the “First Installment Secondary Performance Measurement
Period”).
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(b)
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The Restricted
Period shall end with respect to one quarter (1/4) of the
Covered Performance Shares (the “Second Installment”)
on the two-year anniversary of the Grant Date if the Performance
Goal has been satisfied for the measurement period beginning on the
one-year anniversary of the Grant Date and ending on the two-year
anniversary of the Grant Date (the “Second Installment
Primary Performance Measurement Period”). If the Performance
Goal has not been satisfied with respect to the Second Installment
Primary Performance Measurement Period on the two-year anniversary
of the Grant Date, then the Restricted Period for the Second
Installment shall end on the earlier of the three-year anniversary
or the four-year anniversary of the Grant Date on which the
Performance Goal has been satisfied for the measurement period
beginning on the one-year anniversary of the Grant Date and ending
on such three-year or four-year anniversary date, as applicable
(any such later measurement period referred to herein as the
“Second Installment Secondary Performance Measurement
Period”).
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(c)
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The Restricted
Period shall end with respect to one quarter (1/4) of the
Covered Performance Shares (the “Third Installment”) on
the three-year anniversary of the Grant Date if the Performance
Goal has been satisfied for the measurement period beginning on the
two-year anniversary of the Grant Date and ending on the three-year
anniversary of the Grant Date (the “Third Installment Primary
Performance Measurement Period”). If the Performance Goal has
not been satisfied with respect to the Third Installment Primary
Performance Measurement Period on the three-year anniversary of the
Grant Date, then the Restricted Period for the Third Installment
shall end on the four-year anniversary of the Grant Date if the
Performance Goal has been satisfied for the measurement period
beginning on the two-year anniversary of the Grant Date and ending
on the four-year anniversary date (such later measurement period
referred to herein as the “Third Installment Secondary
Performance Measurement Period”).
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(d)
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The Restricted
Period shall end with respect to one quarter (1/4) of the
Covered Performance Shares (the “Fourth Installment”)
on the four-year anniversary of the Grant Date if the Performance
Goal has been satisfied for the measurement period beginning on the
three-year anniversary of the Grant Date and ending on the
four-year anniversary of the Grant Date (which measurement period
shall be both the “Fourth Installment Primary Performance
Measurement Period” and the “Fourth Installment
Secondary Performance Measurement Period”).
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Notwithstanding the foregoing
provisions of this paragraph 2, the Restricted Period with respect
to any Installment shall end only upon the Committee’s
certification that the Performance Goal with respect to such
Installment for the applicable Performance Measurement Period has
been satisfied. Also notwithstanding the foregoing provisions of
this paragraph 2, if a Change in Control occurs both (i) on or
before the Date of Termination and (ii) when the Restricted
Period for one or more Installments of Covered Performance Shares
has not previously occurred, the Restricted Period for such
Installments shall end upon the Change in Control.
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3. Transfer and Forfeiture of Shares .
The transfer and forfeiture of Installments of the Covered
Performance Shares shall be subject to the following:
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(a)
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Except as
otherwise determined by the Committee in its sole discretion, the
Participant shall forfeit any Installment of the Covered
Performance Shares as of the Participant’s Date of
Termination, if such Date of Termination occurs prior to the end of
the Restricted Period which applies to such Installment.
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(b)
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The Participant
shall forfeit on the four-year anniversary of the Grant Date each
Installment of the Covered Performance Shares for which the
Restricted Period has not ended on or prior to such four-year
anniversary date, as a result of the Performance Goals not having
been met during any Performance Measurement Period applicable to
such Installment or otherwise.
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(c)
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If the
Participant’s Date of Termination has not occurred prior to
the last day of the Restricted Period with respect to any
Installment of the Covered Performance Shares, then, at the end of
such Restricted Period, that Installment of Covered Performance
Shares shall be transferred to the Participant free of all
restrictions.
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4. Premium Award . If the
Cumulative Performance of ACE Limited during the period beginning
on the Grant Date and ending on the four-year anniversary of the
Grant Date (the “Premium Award Performance Measurement
Period”) satisfies the criteria described below, then the
Participant shall be entitled to a “Premium Award” on
the four-year anniversary of the Grant Date, which Premium Award
shall be separate from the associated Performance Based Restricted
Stock Award and shall consist of the number of additional shares of
Stock described below:
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(a)
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If the
Cumulative Performance of ACE Limited exceeds the 75th percentile
of the Cumulative Performance of the Peer Companies during the
Premium Award Performance Measurement Period, then the Participant
shall be entitled to additional shares of Stock equal to 100% of
that number of Covered Performance Shares for which the Restricted
Period ended on or before the four-year anniversary of the Grant
Date.
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(b)
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If the
Cumulative Performance of ACE Limited exceeds the 65th percentile
of the Cumulative Performance of the Peer Companies during the
Premium Award Performance Measurement Period, then the Participant
shall be entitled to additional shares of Stock equal to 50% of
that number of Covered Performance Shares for which the Restricted
Period ended on or before the four-year anniversary of the Grant
Date.
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(c)
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If the
Cumulative Performance of ACE Limited exceeds the 65th percentile
but is less than the 75th percentile of the Cumulative Performance
of the Peer Companies during the Premium Award Performance
Measurement Period, then the Participant shall be entitled to
additional shares of Stock eq
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