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Exhibit
10.33
Conformed Copy
ACE LIMITED 1995
LONG-TERM INCENTIVE
PLAN
(As Amended Through the Third
Amendment thereof, effective November 16, 2006)
SECTION 1
GENERAL
1.1. Purpose . The ACE
Limited 1995 Long-Term Incentive Plan (the “Plan”) has
been established by ACE Limited (the “Company”)
to:
| (a) |
attract and retain Directors of the Company and employees of
the Company and Related Companies; |
| (b) |
motivate participating employees and Directors, by means of
appropriate incentives, to achieve long-range goals; |
| (c) |
provide incentive compensation opportunities that are
competitive with those of other major corporations; and |
| (d) |
further identify Participants’ interests with those of
the Company’s other shareholders through compensation that is
based on the Company’s common stock; |
and thereby promote the long-term
financial interest of the Company and the Related Companies,
including the growth in value of the Company’s equity and
enhancement of long-term shareholder return.
1.2. Participation .
Subject to the terms and conditions of the Plan, the Committee
shall determine and designate, from time to time from among the
employees of the Employers and from among the Directors of the
Company those persons who will be granted one or more Awards under
the Plan, and thereby become “Participants” in the
Plan. In the discretion of the Committee, and subject to the terms
of the Plan, a Participant may be granted any Award permitted under
the provisions of the Plan, and more than one Award may be granted
to a Participant. Except as otherwise agreed by the Committee and
the Participant, or except as otherwise provided in the Plan, an
Award under the Plan shall not affect any previous Award under the
Plan or an award under any other plan maintained by the Company or
the Related Companies.
1.3. Operation and
Administration . The operation and administration of the Plan,
including the Awards made under the Plan, shall be subject to the
provisions of Section 6. Capitalized terms in the Plan shall
be defined as set forth in Section 10 or elsewhere in the
Plan.
SECTION 2
OPTIONS
2.1. Definitions . The
grant of an Option under this Section 2 entitles the
Participant to purchase shares of Stock at a price fixed at the
time the Option is granted, or at a price
determined under a method established at
the time the Option is granted, subject to the terms of this
Section 2. Options granted under this Section 2 may be
either Incentive Stock Options or Non-Qualified Stock Options, as
determined in the discretion of the Committee, except that, to the
extent required by the Code, a Director who is not an employee of
the Company or a Related Company may not be granted an Incentive
Stock Option. An “Incentive Stock Option” is an Option
that is intended to satisfy the requirement applicable to an
“incentive stock option” described in section 422(b) of
the Code. A “Non-Qualified Option” is an Option that is
not intended to be an “incentive stock option” as that
term is described in section 422(b) of the Code.
2.2. Eligibility . The
Committee shall designate the Participants to whom Options are to
be granted under this Section 2 and shall determine the number
of shares of Stock to be subject to each such Option. To the extent
that the aggregate fair market value of Stock with respect to which
Incentive Stock Options are exercisable for the first time by any
individual during any calendar year (under all plans of the Company
and all Related Companies) exceeds $100,000, such options shall be
treated as Non-Qualified Stock Options, to the extent required by
section 422 of the Code.
2.3. Price . The
determination and payment of the purchase price of a share of Stock
under each Option granted under this Section 2 shall be
subject to the following:
| (a) |
The purchase price shall be established by the Committee or
shall be determined by a method established by the Committee at the
time the Option is granted; provided, however, that in no event
shall such price be less than the greater of (i) 100% of the
Fair Market Value of a share of Stock as of the date on which the
Option is granted; or (ii) the par value of a share of Stock
on such date. |
| (b) |
Subject to the following provisions of this subsection 2.3, the
full purchase price of each share of Stock purchased upon the
exercise of any Option 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 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, as determined by the
Committee. |
| (d) |
A Participant may elect to pay the purchase price upon the
exercise of an Option through a cashless exercise arrangement as
may be established by the Committee. |
2.4. Exercise . Except
as otherwise expressly provided in the Plan, an Option granted
under this Section 2 shall be exercisable in accordance with
the following terms of this subsection 2.4:
| (a) |
The terms and conditions relating to exercise of an Option
shall be established by the Committee, and may include, without
limitation, conditions relating to completion of a specified period
of service, achievement of performance standards, or achievement of
Stock ownership objectives by the Participant. |
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| (b) |
No Option may be exercised by a Participant: (i) prior to
the date on which the Participant completes one Year of Service
with the Company or any Related Company after the date as of which
the Option is granted (provided, however, that the Committee may
permit exercise following the Participant’s Date of
Termination for any period, ending not later than the Expiration
Date for the Option as the Committee determines, regardless of
whether the Participant had completed one Year of Service at the
Date of Termination); or (ii) after the Expiration Date
applicable to that Option. |
| (c) |
The exercise of an Option will result in the surrender of the
corresponding rights under a tandem Stock Appreciation Right, if
any. |
2.5. Post-Exercise
Limitations . The Committee, in its discretion, may impose such
restrictions on shares of Stock acquired pursuant to the exercise
of an Option (including stock acquired pursuant to the exercise of
a tandem Stock Appreciation Right) as it determines to be
desirable, including, without limitation, restrictions relating to
disposition of the shares and forfeiture restrictions based on
service, performance, Stock ownership by the Participant, and such
other factors as the Committee determines to be
appropriate.
2.6. Expiration Date .
The “Expiration Date” with respect to an Option means
the date established as the Expiration Date by the Committee at the
time of the grant; provided, however, that the Expiration Date with
respect to any Option shall not be later than the earliest to occur
of:
| (a) |
the ten-year anniversary of the date on which the Option is
granted; |
| (b) |
if the Participant’s Date of Termination occurs by reason
of death or Disability, the one-year anniversary of such Date of
Termination; or |
| (c) |
if the Participant’s Date of Termination occurs by reason
of Retirement, the date on which the Expiration Date would expire
if the Participant’s Date of Termination occurred on the
ten-year anniversary of such date on which the Option is granted
or, if earlier, the date of the Participant’s death;
or |
| (d) |
if the Participant’s Date of Termination occurs for
reasons other than Retirement, death or Disability, the three-month
anniversary of such Date of Termination. |
Notwithstanding any provision of the
Plan to the contrary, the Committee may provide that, following a
Participant’s Date of Termination, regardless of the reason
for such Date of Termination, the Expiration Date with respect to
any Option granted to such Participant shall be any date determined
by the Committee, provided that such Expiration Date may not be
later than the ten-year anniversary of the date on which the Option
was granted.
2.7. Restoration
Option . In the event the Participant exercises an Option and
pays all or a portion of the purchase price in Common Stock, in the
manner permitted by subsection 2.3, such Participant may, in the
Committee’s discretion, be issued a new Option to purchase
additional shares of Stock equal to the number of shares of Stock
surrendered to the Company in such payment plus the number of
shares surrendered to satisfy the Participant’s tax
liability. Such new Option shall have an exercise price equal to
the Fair Market Value per share on the date such new Option is
granted, shall first be exercisable not less than six months from
the date of grant of the new Option and shall have an Expiration
Date that is the same as the Expiration Date of the original Option
so exercised by payment of the purchase price in shares of
Stock.
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2.8. Limited Stock
Appreciation Rights . The Committee may award Limited Stock
Appreciation Rights in tandem with an Option, regardless of whether
the Option is in tandem with a Stock Appreciation Right. An award
of Limited Stock Appreciation Rights entitles the Participant to
receive, in connection with a Change in Control, a cash payment in
cancellation of the tandem Options (and any Stock Appreciation
Rights in tandem with such Options) which are outstanding on the
date the Change in Control occurs (regardless of whether such
Options are then presently exercisable). The payment amount shall
be equal to the difference between the exercise price per share of
any Stock covered by the tandem Option and the “Market
Price” of a share of Stock. For purposes of this subsection
2.8, the term “Market Price” shall mean the greater of
(a) the highest price per share of Stock paid in connection
with the Change in Control and (b) the highest price per share
of Stock as reported on the Composite Transaction Reporting System
on the New York Stock Exchange (which includes other participating
exchanges and over-the-counter markets) during the 30-day period
ending on the date of the Change in Control.
SECTION 3
STOCK APPRECIATION
RIGHTS
3.1. Definition .
Subject to the terms of this Section 3, a Stock Appreciation
Right granted under the Plan entitles the Participant to receive,
in cash or Stock (as determined in accordance with subsection 3.4),
value equal to all or a portion of the excess of: (a) the Fair
Market Value of a specified number of shares of Stock at the time
of exercise; over (b) a specified price which shall not be
less than 100% of the Fair Market Value of the Stock at the time
the Stock Appreciation Right is granted, or, if granted in tandem
with an Option, the exercise price with respect to shares under the
tandem Option.
3.2. Eligibility .
Subject to the provisions of the Plan, the Committee shall
designate the Participants to whom Stock Appreciation Rights are to
be granted under the Plan, shall determine the exercise price or a
method by which the price shall be established with respect to each
such Stock Appreciation Right, and shall determine the number of
shares of Stock on which each Stock Appreciation Right is based. A
Stock Appreciation Right may be granted in connection with all or
any portion of a previously or contemporaneously granted Option or
not in connection with an Option. If a Stock Appreciation Right is
granted in connection with an Option, then, in the discretion of
the Committee, the Stock Appreciation Right may, but need not be
granted in tandem with the Option.
3.3. Exercise . The
exercise of Stock Appreciation Rights shall be subject to the
following:
| (a) |
The terms and conditions relating to exercise of a Stock
Appreciation Right shall be established by the Committee, and may
include, without limitation, conditions relating to completion of a
specified period of service, achievement of performance standards,
or achievement of Stock ownership objectives by the
Participant. |
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| (b) |
If a Stock Appreciation Right is not in tandem with an Option,
then the Stock Appreciation Right shall be exercisable in
accordance with the terms established by the Committee in
connection with such rights; provided, however, that except as
otherwise expressly provided in the Plan, no Stock Appreciation
Right may be exercised by a Participant (i) prior to the date
on which he completes one Year of Service with the Company or any
Related Company after the date as of which the Stock Appreciation
Right is granted (provided, however, that the Committee may permit
earlier exercise following the Participant’s Date of
Termination by reason of death or Disability); or (ii) after
the Expiration Date applicable to that Stock Appreciation
Right. |
| (c) |
If a Stock Appreciation Right is in tandem with an Option, then
the Stock Appreciation Right shall be exercisable at the time the
tandem Option is exercisable. The exercise of a Stock Appreciation
Right will result in the surrender of the corresponding rights
under the tandem Option. |
3.4. Settlement of
Award . Upon the exercise of a Stock Appreciation Right, the
value to be distributed to the Participant, in accordance with
subsection 3.1, shall be distributed in shares of Stock (valued at
their Fair Market Value at the time of exercise), in cash, or in a
combination thereof, in the discretion of the Committee.
3.5. Post-Exercise
Limitations . The Committee, in its discretion, may impose such
restrictions on shares of Stock acquired pursuant to the exercise
of a Stock Appreciation Right as it determines to be desirable,
including, without limitation, restrictions relating to disposition
of the shares and forfeiture restrictions based on service,
performance, ownership of Stock by the Participant, and such other
factors as the Committee determines to be appropriate.
3.6. Expiration Date .
If a Stock Appreciation Right is in tandem with an Option, then the
“Expiration Date” for the Stock Appreciation Right
shall be the Expiration Date for the related Option. If a Stock
Appreciation Right is not in tandem with an Option, then the
“Expiration Date” for the Stock Appreciation Right
shall be the date established as the Expiration Date by the
Committee; provided, however, that subject to the following
provisions of this subsection 3.6, the Expiration Date with respect
to any Stock Appreciation Right shall not be later than the
earliest to occur of:
| (a) |
the ten-year anniversary of the date on which the Stock
Appreciation Right is granted; |
| (b) |
if the Participant’s Date of Termination occurs by reason
of death or Disability, the one-year anniversary of such Date of
Termination; or |
| (c) |
if the Participant’s Date of Termination occurs by reason
of Retirement, the three-year anniversary of such Date of
Termination; or |
| (d) |
if the Participant’s Date of Termination occurs for
reasons other than Retirement, death or Disability, the three-month
anniversary of such Date of Termination. |
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SECTION 4
RESTRICTED
STOCK
4.1. Definition .
Subject to the terms of this Section 4, Restricted Stock
Awards under the Plan are grants of Stock to Participants, the
vesting of which is subject to such conditions as may be
established by the Committee, with some or all of those conditions
relating to performance or events occurring after the date of
grant.
4.2. Eligibility . The
Committee shall designate the Participants to whom Restricted Stock
is to be granted, and the number of shares of Stock that are
subject to each such Award. The Award of shares under this
Section 4 may, but need not be made in conjunction with a
cash-based incentive compensation program maintained by the
Company, and may, but need not, be in lieu of cash otherwise
awardable under such program.
4.3. Terms and Conditions
of Awards . Shares of Restricted Stock granted to Participants
under the Plan shall be subject to the following terms and
conditions:
| (a) |
Restricted Stock granted to Participants may not be sold,
assigned, transferred, pledged or otherwise encumbered, except as
hereinafter provided, for a period of not less than one year after
the time of the grant of such Stock (the “Restricted
Period”). Except for such restrictions, the Participant as
owner of such shares shall have all the rights of a shareholder,
including but not limited to the right to vote such shares and,
except as otherwise provided by the Committee, the right to receive
all dividends paid on such shares. |
| (b) |
Except as otherwise determined by the Committee, a Participant
whose Date of Termination occurs prior to the end of the Restricted
Period for any reason shall forfeit all shares of Restricted Stock
remaining subject to any outstanding Restricted Stock
Award. |
| (c) |
The Committee may, in its discretion, condition the vesting of
shares of Restricted Stock on the achievement of performance
goals. |
| (d) |
Each certificate issued in respect of such Stock shall be
registered in the name of the Participant and deposited in a bank
designated by the Committee. 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)
contained in the ACE Limited 1995 Long-Term Incentive Plan and an
agreement entered into between the registered owner and ACE
Limited. A copy of such plan and agreement is on file in the office
of the General Counsel of ACE Limited, The ACE Building, 30
Woodbourne Avenue, Hamilton HM 08, Bermuda.”
| (e) |
Subject to the limitations of the Plan and the Award of
Restricted Stock, at the end of the Restricted Period for
Restricted Stock, such Restricted Stock will be transferred free of
all restrictions to a Participant (or his or her legal
representative, beneficiary or heir). |
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SECTION 5
STOCK PURCHASE
PROGRAM
5.1. Purchase of Stock
. The Committee may, from time to time, establish one or more
programs under which Participants will be permitted to purchase
shares of Stock under the Plan on a periodic basis, and shall
designate the Participants eligible to participate under such Stock
purchase programs. The purchase price for shares of Stock available
under such programs, and other terms and conditions of such
programs, shall be established by the Committee. The purchase price
may not be less than the Fair Market Value of the Stock at the time
of purchase (or, in the Committee’s discretion, the value of
the Stock based on the average Fair Market Value for a number of
days determined by the Committee); provided, however, that with
respect to shares of Stock purchased under a program that do not
result in an award of matching shares (as provided in subsection
5.2), the purchase price may not be less than 50% of the Fair
Market Value of the Stock at the time of purchase (or, in the
Committee’s discretion, the value of the Stock based on the
average Fair Market Value for a number of days determined by the
Committee).
5.2. Matching Shares .
Except as otherwise provided in subsection 5.1, any Stock purchase
program established by the Committee under this Section 5 may
provide for the award of matching shares of Stock, except that in
no event shall the matching rate exceed one share for each one
share purchased by the Participant.
5.3. Restrictions on
Shares . The Committee may impose such restrictions with
respect to shares purchased under subsection 5.1, or matching
shares awarded pursuant to subsection 5.2, as the Committee
determines to be appropriate. Such restrictions may include,
without limitation, restrictions of the type that may be imposed
with respect to Restricted Stock under Section 4.
SECTION 6
OPERATION AND
ADMINISTRATION
6.1. 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 date on which it is adopted by the
Board; 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 Awards
under it are outstanding; provided, however, that no new Awards
shall be made under the Plan after the tenth anniversary of the
Effective Date.
6.2. Shares Subject to
Plan . The shares of Stock with respect to which Awards may be
made under the Plan shall be currently
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