Exhibit 10.2
For Awards made after
August 16, 2006
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
“Commencement Date” is January 1, 2006.
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(d)
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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 11 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 later of the applicable Certification Date (as defined below)
or the one-year anniversary of the Grant Date, if the Performance
Goal has been satisfied for the measurement period beginning on the
Commencement Date and ending on the one-year anniversary of the
Commencement Date (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 Commencement
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 (or, if later than the anniversary of
the Grant Date, on the applicable Certification Date) on which the
Performance Goal has been satisfied for the measurement period
beginning on the Commencement Date and ending on the two-year,
three-year, or four-year anniversary of the Commencement Date, as
applicable (each, a “First Installment Secondary Performance
Measurement Period”).
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1
For Awards made after August 16,
2006
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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 later of the applicable Certification Date or 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 Commencement Date and ending on the two-year
anniversary of the Commencement Date (the “Second Installment
Primary Performance Measurement Period”). If the Performance
Goal with respect to the Second Installment Primary Performance
Measurement Period has not been satisfied on the two-year
anniversary of the Commencement 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 (or, if later than the anniversary of the Grant Date, on the
applicable Certification Date) on which the Performance Goal has
been satisfied for the measurement period beginning on the one-year
anniversary of the Commencement Date and ending on the three-year
or four-year anniversary date of the Commencement Date, as
applicable (each, a “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 later of the applicable Certification Date or 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 Commencement Date and ending on the three-year
anniversary of the Commencement Date (the “Third Installment
Primary Performance Measurement Period”). If the Performance
Goal with respect to the Third Installment Primary Performance
Measurement Period has not been satisfied on the three-year
anniversary of the Commencement Date, then the Restricted Period
for the Third Installment shall end on the four-year anniversary of
the Grant Date (or, if later than the anniversary of the Grant
Date, on the applicable Certification Date) if the Performance Goal
has been satisfied for the measurement period beginning on the
two-year anniversary of the Commencement Date and ending on the
four-year anniversary of the Commencement Date (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 later of the applicable Certification Date or 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 Commencement Date and ending on the four-year
anniversary of the Commencement 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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For the avoidance of doubt, 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 (which date of certification
with respect to any Installment is the “Certification
Date” applicable to such Installment).
2
For Awards made after August 16,
2006
3. Death, Long-Term Disability
and Change in Control . Notwithstanding the provisions of
paragraph 2, the Restricted Period for one or more Installments of
Covered Performance Shares shall end prior to the date specified in
the schedule set forth in paragraph 2 to the extent set forth
below:
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(a)
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For
Installments as to which the Restricted Period has not ended prior
to the Date of Termination, the Restricted Period for such
Installments shall end upon the Participant’s Date of
Termination, if the Date of Termination occurs by reason of the
Participant’s death.
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(b)
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For
Installments as to which the Restricted Period has not ended prior
to the Date of Termination, the Restricted Period for such
Installments shall end upon the Participant’s Date of
Termination, if the Date of Termination occurs by reason of the
Participant’s Long-Term Disability.
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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 a Change in Control, the Restricted Period for such
Installments shall end upon a Change in Control, provided that such
Change in Control occurs on or before the Date of
Termination.
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4. 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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5. Premium Award . If the
Cumulative Performance of ACE Limited during the period beginning
on the Commencement Date and ending on the four-year anniversary of
the Commencement Date (the “Premium Award Performance
Measurement Period”) satisfies the criteria described below,
then the Participant shall be entitled to a “Premium
Award” on the later of the Premium Certification Date (as
defined below) or the four-year anniversary of the Grant
3
For Awards made after August 16,
2006
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 (or applicable Certification Date, if later).
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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
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