Exhibit 10.63
Incentive Stock Option
Terms
under the
ACE Limited 2004 Long-Term
Incentive Plan
The Participant has been granted an
Option by ACE Limited (the “Company”) under the ACE
Limited 2004 Long-Term Incentive Plan (the “Plan”). The
Option shall be subject to the following Incentive Stock Option
Terms (sometimes referred to as the “Option
Terms”):
1. Terms of Award . The
following words and phrases used in these Option Terms shall have
the meanings set forth in this paragraph 1:
(a) The “Participant” is
the individual recipient of the Incentive Stock Option Award on the
specified Grant Date.
(b) The “Grant Date”
is
(c) The number of “Covered
Shares” shall be that number of shares of Stock awarded to
the Participant on the Grant Date as reflected in the corporate
records and shown in the Record-Keeping System in the
Participant’s individual account records.
(d) The “Exercise Price”
is $ per share.
Other words and phrases used in
these Option Terms are defined pursuant to paragraph 8 or elsewhere
in these Option Terms.
2. Incentive Stock Option .
The Option is intended to constitute an “incentive stock
option” as that term is used in Code section 422. To the
extent that the aggregate fair market value (determined at the time
of grant) of Shares with respect to which incentive stock options
are exercisable for the first time by the Participant during any
calendar year under all plans of the Company and its Subsidiaries
exceeds $100,000, the options or portions thereof which exceed such
limit (according to the order in which they were granted) shall be
treated as nonstatutory stock options. It should be understood that
there is no assurance that the Option will, in fact, be treated as
an incentive stock option.
3. Date of Exercise . Subject
to the limitations of these Option Terms, each Installment of
Covered Shares of the Option shall be exercisable on and after the
Vesting Date for such Installment as described in the following
schedule (but only if the Date of Termination has not occurred
before the Vesting Date):
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INSTALLMENT
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VESTING DATE
APPLICABLE TO
INSTALLMENT
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100% of Covered Shares
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Five year anniversary of the Grant
Date
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Notwithstanding the foregoing
provisions of this paragraph 3, the Option shall become fully
vested and exercisable as follows, with the exception of paragraph
(c):
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(a)
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The Option
shall become fully exercisable upon the Date of Termination, if the
Date of Termination occurs by reason of the Participant’s
death or Disability.
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(b)
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The Option
shall become fully exercisable upon a Change in Control that occurs
on or before the Date of Termination.
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(c)
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For
Installments as to which the Restricted Period has not ended prior
to the Date of Termination, if the Date of Termination occurs by
reason of the Participant’s Retirement, vesting shall
continue pursuant to the foregoing schedule following the Date of
Termination. Following the Date of Termination the Restricted
Period shall end in accordance with the above schedule.
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Except as specified in (c), the
Option may be exercised on or after the Date of Termination only as
to that portion of the Covered Shares for which it was exercisable
(or became exercisable) immediately prior to the Date of
Termination.
4. Expiration . The Option
shall not be exercisable after the Company’s close of
business on the last business day that occurs prior to the
Expiration Date. The “Expiration Date” shall be the
earliest to occur of:
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(a)
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the ten-year
anniversary of the Grant Date;
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(b)
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if the
Participant’s Date of Termination occurs by reason of death
or Disability, the one-year anniversary of such Date of
Termination;
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(c)
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if the
Participant’s Date of Termination occurs by reason of
Retirement, the date on which the Expiration Date would occur if
the Participant’s Date of Termination occurred on the
ten-year anniversary of the Grant Date, or if earlier, the date of
the Participant’s death; or
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(d)
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if the
Participant’s Date of Termination occurs for any reason other
than those listed in subparagraph (b) or (c) of this
paragraph 4, the three-month anniversary of such Date of
Termination.
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5. Method of Option Exercise
. Subject to these Option Terms and the Plan, the Option may be
exercised in whole or in part by filing a written notice (or by
such other method as may be provided by the Committee, including
but not limited to processes provided in electronic record-keeping
systems utilized for management of the Plan) with the Secretary of
the Company at its corporate headquarters prior to the
Company’s close of business on the last business day that
occurs prior to the Expiration Date. Such notice shall specify the
number of shares of Stock which the Participant elects to purchase,
and shall be accompanied by payment of the Exercise Price for such
shares of Stock indicated by the Participant’s election.
Payment shall be by cash or by check payable to the Company. Except
as otherwise provided by the Committee before the Option is
exercised: (i) all or a portion of the Exercise Price may be
paid by the Participant by delivery of shares of Stock owned by the
Participant and acceptable to the Committee having an aggregate
Fair Market Value (valued as of the date of exercise) that is equal
to the amount of cash that would otherwise be required; and
(ii) the Participant may pay the Exercise Price by authorizing
a third party to sell shares of Stock (or a sufficient portion of
the shares) acquired upon exercise of the Option and remit to the
Company a sufficient portion of the sale proceeds to pay the
entire
2
Exercise Price and any tax withholding resulting
from such exercise. The Option shall not be exercisable if and to
the extent the Company determines that such exercise would violate
applicable s
