UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K/A
(Amendment No. 1)
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): May 6, 2008
Willis Group Holdings Limited
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(Exact Name of Registrant as Specified in Its Charter)
Bermuda
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(State or Other Jurisdiction of Incorporation)
001-16503 98-0352587
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(Commission File Number) (IRS Employer Identification No.)
c/o Willis Group Limited
51 Lime Street
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London EC3M 7DQ, England
(Address of Principal Executive Offices)
(44) (20) 7488-8111
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(Registrant's Telephone Number, Including Area Code)
Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Explanatory Note:
This Amendment No. 1 on Form 8-K/A to the Form 8-K originally filed on May 12,
2008 (the "Original Form 8-K") is made solely to: (i) change the date of report
on the cover page to May 6, 2008, from May 5, 2008; (ii) correct the caption of
Item 5.02; (iii) reflect in Item 5.02, under the heading "Grant of Options under
the 2008 Plan," the correct grant date (May 6, 2008, rather than May 5, 2008)
and the higher, correct exercise price ($37.06 per share rather than $36.72 per
share); (iv) make minor textual corrections and additions; and (v) add Item 9.01
to include two exhibits. Item 5.02 below reflects the complete text of the Item,
as amended. Except for the foregoing, all other information in the Original Form
8-K remains the same.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of
Certain Officers.
(e)
Shareholder Approval of 2008 Plan
On April 23, 2008, at the Annual General Meeting, the Shareholders of
Willis Group Holdings Limited (the "Company") voted to approve and adopt the
Willis Group Holdings Limited 2008 Share Purchase and Option Plan (the "2008
Plan"), which had previously been approved by the Company's Board of Directors.
Awards made under the 2008 Plan may be in the form of grants of options to
purchase shares of Company common stock, restricted stock, restricted stock
units and other share-based grants to any of the Company's employees and
Directors and those of any associate companies as designated by the Board as
being eligible for participation in the 2008 Plan. The maximum number of shares
available to be granted under the 2008 Plan is 8,000,000.
Unless sooner terminated by the Company's Board of Directors, the 2008 Plan
will expire 10 years after its approval by shareholders. Any termination or
expiration will not affect the validity of any grant outstanding on the date of
the plan's termination or expiration.
The Company's Board of Directors and the Compensation Committee administer
the 2008 Plan, including, without limitation, the determination of the employees
to whom grants will be made, the number of shares subject to each grant and the
various terms of those grants (including, without limitation, the acceleration
of the vesting of any award). The 2008 Plan allows the Compensation Committee to
delegate to the Chief Executive Officer and to the Company's other senior
officers its duties under the Plan except that only the Compensation Committee
may designate and make grants to employees who are subject to Section 16 of the
Securities Exchange Act. The Compensation Committee may from time to time amend
the terms of any grant so long as such amendment is consistent with the terms of
the plan, and the Company's Board of Directors retains the right to amend,
suspend or terminate the 2008 Plan at any time.
Grant of Options under the 2008 Plan
On May 6, 2008, the Company awarded grants of options to its senior
executive officers under the 2008 Plan at the closing price of the shares as
reported by the New York Stock Exchange on that date ($37.06 per share). The
following named executive officers received grants of options as detailed below:
Options
Name Position Granted
- ---- -------- -------
Patrick C. Regan Group Chief Financial Officer and Chief 125,000
Operating Officer
Grahame J. Millwater Group President and Chairman, Willis Re 140,000
Peter Hearn Chief Executive Officer, Willis Re 100,000
David B. Margrett Chairman and Chief Executive, Willis Limited 100,000
For each of the next three years, subject to the optionee being in the
employment of the Company or any of its subsidiaries at each respective date,
these options will be deemed earned if the Company achieves certain financial
targets. One-half of the award is earned against an Adjusted EPS target and
one-half is earned against an Adjusted Operating Margin target, in each case
reflecting those advised at the Company's 2007 Investor Day. Specifically, for
2008, one-sixth is earned if Adjusted EPS is at least $2.85, and one-sixth is
earned if Adjusted Operating Margin is at least 24%; for 2009, one-sixth is
earned if Adjusted EPS is at least $3.30, and one-sixth is earned if Adjusted
Operating Margin is at least 26%; and for 2010, one-sixth is earned if Adjusted
EPS is at least $4.00, and one-sixth is earned if Adjusted Operating Margin is
at least 28%. Adjusted EPS or Adjusted Operating Margin-based options not earned
for 2008 or 2009 may be earned nonetheless if the corresponding Adjusted EPS or
the Adjusted Operating Margin target for 2010 is achieved. Options remaining
unearned are forfeited. As provided in the 2008 Plan, in determining whether
these targets have been achieved, the Compensation Committee may make
adjustments to take into account, among other things, extraordinary transactions
and mergers.
Subject to the optionee being in the employment of the Company or any of
its subsidiaries at each respective date, options that have been earned will
vest 50% on the third anniversary of the grant and 25% on each of the fourth and
fifth anniversaries of the grant. Subject to continued employment, vested
options are generally exercisable until the seventh anniversary of the grant.
Upon the occurrence of a merger, amalgamation under Bermuda law, consolidation
or other corporate event the Compensation Committee may elect to cancel all
outstanding awards granted under the 2008 Plan or cause them to remain
outstanding and be adjusted to reflect the effect of any such event on the
Shares. However, if the outstanding options are not assumed or exchanged for
substitute options, the Compensation Committee may, in its discretion, allow
exercisable earned options to be exercised before the closing of the event;
otherwise the exercisable earned options shall terminate upon the closing of
such event.
In consideration for the grant of these options, the optionee must execute
an Option Agreement, which sets forth the terms and conditions of the option
grant. The optionee also may be required to execute an Agreement of Restrictive
Covenants and Other Obligations if the optionee is not already subject to
substantially similar restrictive covenants and confidentiality obligations.
The agreement executed by Mr. Hearn prohibits him from competing with the
Company for 12 months following the date of his termination during which time he
will continue to receive his normal salary and benefits. It also contains
post-employment non-solicitation and non-dealing restrictive covenants for12
months following the date of his termination with respect to clients and
employees of the Company and runs concurrent to any existing obligations in his
employment agreement or otherwise.
A copy of the form of Willis Partners Plan Option Agreement for the May 6,
2008 grant and a copy of the Agreement of Restrictive Covenants and Other
Obligations dated as of May 6, 2008 between the Company and Peter Hearn.are
filed as Exhibits 10.1 and 10.2, respectively, to this Report, and incorporated
herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
10.1 Form of Willis Partners Plan Option Agreement (May 6, 2008) under
the Willis Group Holdings Limited 2008 Share Purchase and Option
Plan
10.2 Agreement of Restrictive Covenants and Other Obligations dated as
of May 6, 2008 between the Company and Peter Hearn
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
WILLIS GROUP HOLDINGS LIMITED
Date: June 26, 2008 By: /s/ Adam G. Ciongoli
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Name: Adam G. Ciongoli
Title: General Counsel
Exhibit Index
Exhibit No. Description of Exhibit
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10.1 Form of Willis Partners Plan Option Agreement (May 6, 2008) under
the Willis Group Holdings Limited 2008 Share Purchase and Option
Plan
10.2 Agreement of Restrictive Covenants and Other Obligations dated as
of May 6, 2008 between the Company and Peter Hearn
Exhibit 10.1
Willis Partners Plan
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OPTION AGREEMENT
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THIS AGREEMENT, effective as of May 6, 2008 is made by and between Willis
Group Holdings Limited, hereinafter referred to as the "Company" and the
individual (the "Optionee") who has duly completed, executed and delivered the
Option Acceptance Form, a copy of which is set out in Schedule A attached hereto
and deemed to be a part hereof and, if applicable, the Agreement of Restrictive
Covenants and Other Obligations, a copy of which is set out in Schedule B
attached hereto and deemed to be a part hereof.
WHEREAS, the Company wishes to carry out the Plan (as hereinafter defined),
the terms of which are hereby incorporated by reference and made a part of this
Agreement; and
WHEREAS, the Board (as hereinafter defined) has determined that it would be
to the advantage and best interest of the Company and its shareholders to grant
the Option (as hereinafter defined) provided for herein to Optionee as an
incentive for increased efforts on the part of Optionee during Optionee's
employment with the Company or its subsidiaries, and has advised the Company
thereof and instructed the undersigned officer to grant said Option.
NOW, THEREFORE, the parties hereto do hereby agree as follows:
ARTICLE I
DEFINITIONS
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Whenever the following terms are used in this Agreement, they shall have
the meaning specified in the Plan or below unless the context clearly indicates
to the contrary.
Section 1.1 - Adjusted Earnings Per Share
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"Adjusted Earnings Per Share" shall mean the adjusted earnings per share as
stated by the Company in its annual financial results as published by the New
York Stock Exchange.
Section 1.2 - Adjusted Operating Margin
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"Adjusted Operating Margin" shall mean the adjusted operating margin as
stated by the Company in its annual financial results as published by the New
York Stock Exchange.
Section 1.3 - Board
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"Board" shall mean the Board of Directors of the Company.
Section 1.4 - Cause
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"Cause" shall mean (i) Optionee's continued and/or chronic failure to
adequately and/or competently perform his or her material duties with respect to
the Company or its subsidiaries after having been provided reasonable notice of
such failure and a period of at least ten days after Optionee's receipt of such
notice to cure and/or correct such performance failure, (ii) willful misconduct
by Optionee in connection with Optionee's employment which is injurious to the
Company or its subsidiaries (willful misconduct shall be understood to include,
but not be limited to, any breach of the duty of loyalty owed by Optionee to the
Company or its subsidiaries), (iii) conviction of any criminal act (other than
minor road traffic violations not involving imprisonment), (iv) any breach of
Optionee's restrictive covenants as provided in this Agreement (if applicable),
in Optionee's employment agreement (if any), or any other non-compete agreement
and/or confidentiality agreement entered into between Optionee and the Company
or any of its subsidiaries (other than an insubstantial, inadvertent and
non-recurring breach), or (v) any material violation of any written Company
policy after reasonable notice and an opportunity to cure such violation within
ten (10) days after Optionee's receipt of such notice.
Section 1.5 - Committee
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"Committee" means the Compensation Committee of the Board (or if no such
committee is appointed, the Board provided that a majority of the Board are
"independent directors" for the purpose of the rules and regulations of the New
York Stock Exchange).
Section 1.6 - Earned Date
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"Earned Date" shall mean the date that the annual financial results of the
Company are published by the New York Stock Exchange.
Section 1.7 - Earned Performance Shares
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"Earned Performance Shares" shall mean shares subject to the Option in
respect of which the applicable performance conditions, as set out in section
3.1, have been achieved and shall become exercisable as set out in section 3.2.
Section 1.8 - Good Reason
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"Good Reason" shall mean (i) a reduction in Optionee's base salary or a
material adverse reduction in Optionee's benefits other than (a) in the case of
base salary, a reduction that is offset by an increase in Optionee's bonus
opportunity upon the attainment of reasonable performance targets established by
the Board, (b) a general reduction in the compensation or benefits of, or a
shift in the general compensation or benefits schemes affecting, a broad group
of employees of the Company or any of its subsidiaries, or (c) in the case of
base salary, a reduction which is imposed in accordance with normal
administration and application of a producer compensation plan, if applicable to
Optionee, (ii) a material adverse reduction in Optionee's principal duties and
responsibilities, which continues beyond ten days after written notice by
Optionee to the Company or the applicable Subsidiary of such reduction or (iii)
a significant transfer of Optionee away from Optionee's primary service area or
primary workplace, other than as permitted by Optionee's existing service
contracts; provided, however, that Optionee shall have a period of ten days
following any of the foregoing occurrences or the last event in a series of
events which culminate in providing the basis for such notice during which such
Optionee may claim that a basis for a Good Reason termination by Optionee has
occurred.
Section 1.9 - Grant Date
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"Grant Date" shall be May 6, 2008.
Section 1.10 - Option
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"Option" shall mean the option to purchase common shares of the Company
granted in accordance with this Agreement.
Section 1.11 - Option Exercise Price
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"Option Exercise Price" shall mean the exercise price of the common shares
of the Company covered by the Option, as set forth in Section 2.2 of this
Agreement.
Section 1.12 - Permanent Disability
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Optionee shall be deemed to have a "Permanent Disability" if Optionee meets
the requirements of the definition of such term, or of an equivalent term, as
defined in the Company's or Subsidiary's long-term disability plan applicable to
Optionee or, if no such plan is applicable, in the event Optionee is unable by
reason of physical or mental illness or other similar disability, to perform the
material duties and responsibilities of his job for a period of 180 consecutive
business days out of 270 business days.
Section 1.13 - Plan
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"Plan" shall mean the Willis Group Holdings Limited 2008 Share Purchase and
Option Plan, as amended from time to time.
Section 1.14 - Pronouns
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The masculine pronoun shall include the feminine and neuter, and the
singular the plural, where the context so indicates.
Section 1.15 - Secretary
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"Secretary" shall mean the Secretary of the Company.
Section 1.16 - Shares or Common Shares
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"Shares" or "Common Shares" means common shares of the Company which may be
authorised but unissued.
Section 1.17 - Subsidiary
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"Subsidiary" shall mean a direct and/or indirect subsidiary of the Company
as well as any associate company which is designated by the Company as being
eligible for participation in the Plan.
ARTICLE II
GRANT OF OPTIONS
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Section 2.1 - Grant of Options
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On and as of the Grant Date the Company grants to Optionee an Option to
purchase any part or all of an aggregate number of Shares, as stated in Schedule
A to this Agreement, upon the terms and conditions set forth in this Agreement.
In circumstances where Optionee is required to enter into the Restrictive
Covenant agreement set forth in Schedule B, Optionee agrees that the grant of an
Option pursuant to this Agreement is sufficient consideration for Optionee
entering into such agreement.
Optionee acknowledges and agrees that the Company may provide grants of an
Option and/or Shares pursuant to this Plan in lieu of any grants the Company is
obligated to make under any pre-existing plans, agreements or letters and that
such grants when made pursuant to this Plan shall fully discharge the Company's
obligations to make any such grant under any pre-existing plan, agreement or
letter.
Section 2.2 - Exercise Price
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Subject to Section 2.4, the exercise price of each Share subject to the
Option shall be as stated in Schedule A to this Agreement.
Section 2.3 - Employment Rights
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Subject to the terms of the Agreement of Restrictive Covenants and Other
Obligations where applicable, the rights and obligations of Optionee under the
terms of his office or employment with the Company or any Subsidiary shall not
be affected by his participation in this Plan or any right which he may have to
participate in it and Optionee hereby waives any and all rights to compensation
or damages in consequence of the termination of his office or employment for any
reason whatsoever insofar as those rights arise or may arise from his ceasing to
have rights under or be entitled to exercise any Option as a result of such
termination.
Section 2.4 - Adjustments in Options Pursuant to Merger, Consolidation, etc.
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Subject to Section 10 of the Plan, in the event that the outstanding Shares
subject to an Option are, from time to time, changed into or exchanged for a
different number or kind of Shares or other securities, by reason of a
recapitalization, reclassification, stock split, stock dividend, spin-off, stock
combination, Change of Control (as defined in the Plan), merger or other similar
event, the Board shall make an appropriate and equitable adjustment in the
number and kind of Shares and/or the amount of consideration as to which or for
which, as the case may be, such Option, and/or portions thereof then
unexercised, shall be exercisable. Any such adjustment made by the Board shall
be final and binding upon Optionee, the Company and all other interested
persons.
Section 2.5 - Employer Costs
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In the case of Optionees who are U.K. residents, the grant of this Option
shall be conditional upon the execution of a joint election with his employing
company to accept the liability for employer's National Insurance arising on
exercise, sale or release of the Option. In the case of Optionees resident in
any other country (excluding the USA), such Optionee agrees that if his
employing company incurs any social security or payroll costs or taxes on
exercise, sale or release of the Option he shall, if requested, reimburse the
employing company in respect thereof.
ARTICLE III
PERIOD OF EXERCISABILITY
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Section 3.1 - Commencement of Earning
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3.1(a) Subject to 3.1(b), the Shares subject to Option shall become Earned
Performance Shares subject to the Participant being in the employment of the
Company or any Subsidiary at each respective date and provided the performance
conditions applicable are achieved.
(b) The performance conditions are:
(i) One-sixth of the Shares subject to the Option shall become Earned
Performance Shares with effect from the Earned Date in respect of the year
ending December 31, 2008 if in respect of 2008 the Company achieves an Adjusted
Earnings Per Share of not less than $2.85 and further one-sixth of the Shares
subject to the Option shall become Earned Performance Shares if in respect of
2008 the Company achieves an Adjusted Operating Margin of not less than 24%.
Shares that are eligible to become Earned Performance Shares by virtue of this
sub-section shall be referred to as "2008 Performance Shares";
(ii)One-sixth of the Shares subject to the Option shall become Earned
Performance Shares with effect from the Earned Date in respect of the year
ending December 31, 2009 if in respect of 2009 the Company achieves an Adjusted
Earnings Per Share of not less than $3.30 and further one-sixth of the Shares
subject to the Option shall become Earned Performance Shares if in respect of
2009 the Company achieves an Adjusted Operating Margin of not less than 26%.
Shares that are eligible to become Earned Performance Shares by virtue of this
sub-section shall be known as "2009 Performance Shares";
(iii) One-sixth of the Shares subject to the Option shall become Earned
Performance Shares with effect from the Earned Date in respect of the year ended
December 31, 2010 if in respect of 2010 the Company achieves an Adjusted
Earnings Per Share of not less than $4.00 and further one-sixth of the Shares
subject to the Option shall become Earned Performance Shares if in respect of
2010 the Company achieves an Adjusted Operating Margin of not less than 28%.
Shares that are eligible to become Earned Performance Shares by virtue of this
sub-section shall be referred to as "2010 Performance Shares";
(iv)The 2008 and 2009 Performance Shares that are subject to the
achievement of an Adjusted Earnings Per Share target and have not become Earned
Performance Shares in accordance with sub-sections (b)(i) and (b)(ii) above will
become Earned Performance Shares with effect from the Earned Date in respect of
the year ending December 31, 2010 if the Adjusted Earnings Per Share target for
2010 of not less than $4.00 is achieved.
(v) The 2008 and 2009 Performance Shares that are subject to the
achievement of an Adjusted Operating Margin target and have not become Earned
Performance Shares in accordance with sub-sections (b)(i) and (b)(ii) above will
become Earned Performance Shares with effect from the Earned Date in respect of
the year ending December 31, 2010 if the Adjusted Operating Margin target for
2010 of not less than 28% is achieved.
(c) All Shares subject to an Option that do not become Earned Performance
Shares in accordance with sub-sections 3.1 (b)(i) to (b)(v) shall be forfeited
as from the Earned Date in 2010.
Section 3.2 - Commencement of Vesting and Exercisability
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(a) The Earned Performance Shares shall vest and become exercisable as
follows:
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Percentage of Earned Performance
Shares
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Third anniversary of date of grant 50%
25%
Fourth anniversary of date of grant
25%
Fifth anniversary of date of grant
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(b) In the event of a termination of Optionee's employment as a result of
Death or Permanent Disability, then (i) the Earned Performance Shares and the
Option in respect thereof shall become immediately exercisable with respect to
all Common Shares underlying such Option as set forth in Section 3.3 (b)(ii) and
(ii) any portion of the Option which then has not become an Earned Performance
Share shall immediately terminate and will at no time be exercisable.
(c) In the event of a termination of Optionee's employment for any reason
other than Death or Permanent Disability, then (i) the Earned Performance Shares
that have vested and become exercisable and the Option in respect thereof shall
remain exercisable as set forth in Section 3.3 (b)(iii) or 3.3 (b)(iv) below and
(ii) the Option over Earned Performance Shares that have not yet vested shall
immediately terminate and will at no time become exercisable, except that the
Board may, for termination of employment for reasons other than Cause, determine
in its discretion that the Option over Earned Performance Shares that have not
yet vested and become exercisable, shall become exercisable.
(d) In the event of a termination of Optionee's employment for any reason
other than set out in (b) and (c) above and subject to section 3.3 all Options
will lapse with effect from that date of termination.
Section 3.3 - Expiration of Options
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(a) The Option shall immediately lapse upon:
(i) Termination of Optionee's employment, subject to, and except as
otherwise specified within, the terms and conditions of Section 3.2 above;
or
(ii) Optionee's failure to execute the Agreement for Restrictive
Covenants, if applicable, and Other Obligations pursuant to Article V below
within 45 days of the Grant Date; or
(iii) Optionee's failure to execute the form of joint election with his
employing company as described in Section 2.5 above within 45 days of the
Grant Date; or
(iv) Optionee's failure to execute and deliver the Option Acceptance
Form within 45 days of the Grant Date.
(b) The Option over Earned Performance Shares that have become vested and
exercisable in accordance with Section 3.2 will cease to be
exercisable by Optionee upon the first to occur of the following
events:
(i) The seventh anniversary of the Grant Date; or
(ii) The first anniversary of the date of Optionee's termination of
employment by reason of Death or Permanent Disability; or
(iii) Ninety days after the date of any termination of Optionee's
employment by the Company for Cause or by Optionee without Good Reason; or
(iv) Ninety days after the date of termination of Optionee's employment
other than as set forth in Section 3.2(b) or (c), above or where the Board
has exercised its discretion in accordance with Section 3.2(c)(ii), the
period shall be six calendar months after the date of termination;
(v) If the Board so determines pursuant to Section 10 of the Plan, the
effective date of a Change of Control, merger, amalgamation pursuant to
Bermuda law, or other consolidation of the Company or group of companies
collectively known as Willis Group, or other similar event, as provided in
the Plan, so long as Optionee has a reasonable opportunity to exercise his
Options prior to such effective date.
ARTICLE IV
EXERCISE OF OPTION
------------------
Section 4.1 - Person Eligible to Exercise
- -----------------------------------------
During the lifetime of Optionee, only he may exercise an Option or any
portion thereof. After the death of Optionee, any exercisable portion of an
Option may, prior to the time when an Option becomes unexercisable under Section
3.3, be exercised by his personal representative or by any person empowered to
do so under Optionee's will or under then applicable laws of inheritance.
Section 4.2 - Partial Exercise
- ------------------------------
Any exercisable portion of an Option or the entire Option, if then wholly
exercisable, may be exercised in whole or in part at any time prior to the time
when the Option or portion thereof becomes unexercisable under Section 3.3;
provided, however, that any partial exercise shall be for whole Shares only.
Section 4.3 - Manner of Exercise
- --------------------------------
An Option, or any exercisable portion thereof, may be exercised solely by
delivering to the Secretary or his office all of the following prior to the time
when the Option or such portion becomes unexercisable under Section 3.3:
(a) Notice in writing signed by Optionee or the other person then entitled
to exercise the Option or portion thereof, stating that the Option or
portion thereof is thereby exercised, such notice complying with all
applicable rules established by the Board and made available to
Optionee (or such other person then entitled to exercise the Option);
(b) Full payment (in cash, by cheque, electronic transfer, by way of a
cashless exercise as approved by the Company, by way of surrender of
Shares to the Company or by a combination thereof) for the Shares with
respect to which such Option or portion thereof is exercised;
(c) Full payment to the Company or any Subsidiary ("Group Member") by
which Optionee is employed, of all amounts which, under federal, state
or local law, it is required to withhold upon exercise of the Option;
and
(d) In a case where any Group Member is obliged to (or would suffer a
disadvantage if it were not to) account for any tax (in any
jurisdiction) for which Optionee is liable by virtue of the exercise
of the Option and/or for any social security contributions recoverable
from the person in question (together, the "Tax Liability"), Optionee
has either:
(i) made full payment to the Group Member of an amount equal to the Tax
Liability, or
(ii) entered into arrangements acceptable to that or another Group
Member to secure that such a payment is made (whether by authorizing the
sale of some or all of the Shares on his behalf and the payment to the
Group Member of the relevant amount out of the proceeds of sale);
(e) In the event the Option or any portion thereof shall be exercised
pursuant to Section 4.1 by any person or persons other than Optionee,
appropriate proof of the right of such person or persons to exercise
the Option.
Without limiting the generality of the foregoing, the Board may in the case
of U.S. resident employees of the Company or any Subsidiary require an opinion
of counsel reasonably acceptable to it to the effect that any subsequent
transfer of Shares acquired on exercise of an Option does not violate the Act,
and may issue stop-transfer orders in the U.S. covering such Shares.
Section 4.4 - Conditions to Issuance of Share Certificates
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The Shares deliverable upon the exercise of an Option, or any portion
thereof, may be either previously authorized but unissued Shares or issued
Shares held by any other person. Such Shares shall be fully paid. The Company
shall not be required to issue or deliver any certificate or certificates for
Shares granted upon the exercise of an Option or portion thereof prior to
fulfillment of all of the following conditions:
(a) The obtaining of approval or other clearance from any state or federal
governmental agency which the Board shall, in its absolute discretion, determine
to be necessary or advisable; and
(b) The lapse of such reasonable period of time following the exercise of
the Option as the Board may from time to time establish for reasons of
administrative convenience.
Section 4.5 - Rights as Shareholder
- -----------------------------------
The holder of an Option shall not be, nor have any of the rights or
privileges of, a shareholder of the Company in respect of any Shares that may be
received upon the exercise of the Option or any portion thereof unless and until
certificates representing such shares shall have been issued by the Company to
such holder.
ARTICLE V
AGREEMENT OF RESTRICTIVE COVENANTS AND OTHER OBLIGATIONS
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Section 5 - Restrictive Covenants and Other Obligations
- -------------------------------------------------------
In consideration of the grant of an Option, Optionee shall enter into the
Agreement of Restrictive Covenants and Other Obligations, a copy of which is
attached hereto as Schedule B. In the event Optionee does not sign and return
the Agreement of Restrictive Covenants and Other Obligations within 45 days of
the Grant Date the Options shall lapse pursuant to section 3.3(a)(ii). If no
such agreement is required, Schedule B shall state none or not applicable.
ARTICLE VI
MISCELLANEOUS
Section 6.1 - Administration
- ----------------------------
The Board shall have the power to interpret the Plan and this Agreement and
to adopt such rules for the administration, interpretation and application of
the Plan as are consistent therewith and to interpret or revoke any such rules.
All actions taken and all interpretations and determinations made by the Board
shall be final and binding upon Optionee, the Company and all other interested
persons. No member of the Board shall be personally liable for any action,
determination or interpretation made in good faith with respect to the Plan or
the Options. In its absolute discretion, the Board may at any time and from time
to time exercise any and all rights and duties of the Board under the Plan and
this Agreement.
Section 6.2 - Options Not Transferable
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Neither the Options nor any interest or right therein or part thereof shall
be subject to the debts, contracts or engagements of Optionee or his successors
in interest or shall be subject to disposition by transfer, alienation,
anticipation, pledge, encumbrance, assignment or any other means whether such
disposition be voluntary or involuntary or by operation of law by judgment,
levy, attachment, garnishment or any other legal or equitable proceedings
(including bankruptcy), and any attempted disposition thereof shall be null and
void and of no effect; provided, however, that this Section 6.2 shall not
prevent transfers made solely for estate planning purposes or under a will or by
the applicable laws of inheritance.
Section 6.3 - Binding Effect
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The provisions of this Agreement shall be binding upon and accrue to the
benefit of the parties hereto and their respective heirs, legal representatives,
successors and assigns.
Section 6.4 - Notices
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Any notice to be given under the terms of this Agreement to the Company
shall be addressed to the Company at the following address:
Willis Group Holdings Limited
c/o Willis Group Limited
51 Lime Street
London England EC3M 7DQ
Attention: Company Secretary
and any notice to be given to Optionee shall be at the address set forth in the
Option Acceptance Form.
By a notice given pursuant to this Section 6.4, either party may hereafter
designate a different address for notices to be given to him. Any notice that is
required to be given to Optionee shall, if Optionee is then deceased, be given
to Optionee's personal representatives if such representatives have previously
informed the Company of their status and address by written notice under this
Section 6.4. Any notice shall have been deemed duly given when enclosed in a
properly sealed envelope or wrapper addressed as aforesaid, deposited (with
postage prepaid) in a post office or branch post office regularly maintained by
the United States Postal Service or the United Kingdom's Post Office or in the
case of a notice given by an Optionee resident outside the United States of
America or the United Kingdom, with a recognized international courier service.
Section 6.5 - Titles
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Titles are provided herein for convenience only and are not to serve as a
basis for interpretation or construction of this Agreement.
Section 6.6 - Applicability of Plan
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The Options shall be subject to all of the terms and provisions of the
Plan, to the extent applicable to the Options. In the event of any conflict
between this Agreement and the Plan, the terms of the Plan shall control.
Section 6.7 - Amendment
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This Agreement may be amended only by a document executed by the parties
hereto, which specifically states that it is amending this Agreement.
Section 6.8 - Governing Law
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This Agreement shall be governed by, and construed in accordance with the
laws of Bermuda; provided, however, that the Agreement of Restrictive Covenants
and Other Obligations, if applicable, shall be governed by and construed in
accordance with the laws specified in that agreement.
Section 6.9 - Jurisdiction
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The courts of Bermuda shall have jurisdiction to hear and determine any suit,
action or proceeding and to settle any disputes which may arise out of or in
connection with this Agreement and, for such purposes, the parties hereto
irrevocably submit to the jurisdiction of such courts; provided, however, where
applicable, that with respect to the Agreement of Restrictive Covenants and
Other Obligations the courts specified in such agreement shall have jurisdiction
to hear and determine any suit, action or proceeding and to settle any disputes
which may arise out of or in connection with that agreement.
Section 6.10 - Counterparts
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This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original and all of which together shall constitute one
and the same instrument.
IN WITNESS WHEREOF the Company and Optionee have each executed this
Agreement.
WILLIS GROUP HOLDINGS LIMITED
By: /s/ Michael P Chitty
--------------------
Name: Michael P Chitty
Title: Company Secretary
Exhibit 10.2
SCHEDULE B
AGREEMENT OF RESTRICTIVE COVENANTS AND OTHER OBLIGATIONS
This Agreement of Restrictive Covenants and Other Obligations (the
"Agreement") is entered into by and between Willis Group Holdings Limited (the
"Company") and Peter Hearn ("Optionee") to be effective as of May 6, 2008.
RECITALS
Whereas, Optionee is employed by a subsidiary of the Company;
Whereas, on May 6, 2008 the Company granted Optionee an option for a
specified number of shares of common stock of Willis Group Holdings Limited (the
"Option");
Whereas, such grant is subject to the terms of the Willis Group Holdings
Limited 2008 Share Purchase and Option Plan (the "Plan"), the Option Agreement
(the "Option Agreement"), and this Agreement and in consideration of the grant,
Optionee shall enter into and acknowledge his or her agreement to the terms of
the Plan, the Option Agreement and this Agreement;
Whereas, Optionee acknowledges and agrees that he or she desires to receive
the Option, and understands and agrees such Option is subject to the terms and
conditions set forth in the Plan, the Option Agreement and this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein and for other valuable consideration, in particular the grant
of the Option to Optionee by the Company, the receipt and sufficiency of which
is hereby acknowledged, the parties hereby agree as follows:
AGREEMENT
1. Section 1 - Recitals
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The Recitals set forth above are an integral part of this Agreement, and
are incorporated herein by reference.
2. Section 2 - Definitions
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2.1 "Business" shall mean insurance brokerage, reinsurance brokerage,
surety brokerage, bond brokerage, insurance agency, underwriting
agency, managing general agency, risk management, claims
administration, self-insurance, risk management consulting or other
business performed by the Restricted Group.
2.2 "Competitor" shall mean any business principally engaged in insurance
brokerage, reinsurance brokerage, surety brokerage, bond brokerage,
insurance agency, underwriting agency, managing general agency, risk
management, claims administration, self-insurance, risk management
consulting or other business which is either performed by the
Restricted Group or is a business in which the Restricted Group has
taken steps toward engaging. It is further provided that Competitor
includes, but is not limited to, the following businesses and their
respective subsidiaries and/or other affiliates: Aon Corporation,
Arthur J Gallagher & Co and Marsh Incorporated.
2.3 "Confidential Information" shall mean all trade secrets and non-public
information concerning the financial data, strategic business plans,
and other non-public, proprietary, and confidential information of the
Company or any of its Subsidiaries.
2.4 "directly or indirectly" shall mean Optionee acting either alone or
jointly with or on behalf of or by means of any other person, firm or
company (whether as principal, partner, manager, employee, contractor,
director, consultant, investor or similar capacity).
2.5 "Employer" shall mean the Subsidiary that employs Optionee. If the
Company ever becomes an employer of Optionee, then the term Employer
shall refer to the Company.
2.6 "Employment Agreement" shall mean the contractual terms and conditions
which govern the employment of Optionee by Employer.
2.7 "Key Personnel" shall mean any person who is at the date Optionee
ceases to be an employee of Employer or was at any time during the
period of 12 months prior to that date employed by the Restricted
Group and who was an employee with whom Optionee had dealings other
than in a minimal and non-material way and who was employed by or
engaged in the Business in an executive or senior managerial capacity,
or was an employee with insurance, reinsurance or other technical
expertise.
2.8 "Option" shall have the meaning as set forth in the recitals.
2.9 "Option Agreement" shall have the meaning set forth in the recitals.
2.10 "Plan" shall have the meaning set forth in the recitals.
2.11 "Relevant Area" shall mean the counties, parishes, districts,
municipalities, cities, metropolitan regions, localities and similar
geographic and political subdivisions, within and outside of the
United States of America, in which the Company or any of its
Subsidiaries has carried on Business in which Optionee has been
involved or concerned or working on other than in a minimal and
non-material way at any time during the period of 12 months prior to
the date on which Optionee ceases to be an employed by Employer.
2.12 "Relevant Client" shall mean any person, firm or company who or which
at any time during the period of 12 months prior to the date on which
Optionee ceases to be employed by Employer is or was a client or
customer of the Company or any of its Subsidiaries or was in the habit
and/or practice of dealing under contract with the Company or any of
its Subsidiaries and with whom or which Optionee had dealings related
to the Business (other than in a minimal and non-material way) or for
whose relationship with the Company or any of its Subsidiaries
Optionee had responsibility at any time during the said period.
2.13 "Relevant Period" shall mean the period of 12 months following the
date on which Optionee ceases to be employed by Employer.
2.14 "Relevant Prospect" shall mean any person, firm or company who or
which at any time during the period of 12 months prior to the date on
which Optionee ceases to be employed by Employer was an active
prospective client of the Company or any of its Subsidiaries with whom
or with which Optionee had dealings related to the Business (other
than in a minimal and non-material way).
2.15 "Restricted Group" shall mean the Company and its Subsidiaries, as in
existence during Optionee's employment with Employer and as of the
date such employment ceases.
2.16 "Subsidiary" shall mean a direct and/or indirect subsidiary of the
Company as well as any associate company which is designated by the
Company as being eligible for participation in the Plan.
Section 3 - Non-Compete and other Obligations:
- ----------------------------------------------
3.1 Optionee acknowledges that by virtue of his or her senior management
position and as an employee of Employer, Optionee has acquired and
will acquire knowledge of Confidential Information of the Restricted
Group and their Business. Optionee further acknowledges that the
Confidential Information which the Restricted Group has provided and
will provide to Optionee would give Optionee a significant advantage
if Optionee were to directly or indirectly be engaged in any Business
at a Competitor of the Restricted Group.
3.2 Without the Company's prior written consent, Optionee shall not
directly or indirectly, at any time during or after Optionee's
employment with any Employer, disclose any Confidential Information
and shall use Optionee's best efforts to prevent the taking or
disclosure of any Confidential Information, except as reasonably may
be required to be disclosed by Optionee in the ordinary performance of
his or her duties for Employer or as required by law.
3.3 For a period of twelve months after the date on which Optionee's
employment with any Employer ceases, Optionee shall not work for or be
engaged or concerned in, or have a financial interest in (other than
an ownership position of less than 5% in any company whose shares are
publicly traded or any non-voting non-convertible debt securities in
any company) any Competitor of the Restricted Group within the
Relevant Area. During this period, Optionee shall receive payments
equal to the base salary payments Optionee would have received if
Optionee had been in Employer's employ during this non-compete period.
Employer will also pay the cost of COBRA Medical coverage for Optionee
for the duration of the non-compete period. These payments will be
made on the same frequency as such salary payments were made during
Optionee's employment.
3.4 The Company or Employer shall have the discretion to apply a shorter
period than the twelve-month periods set forth in 3.3 and 3.5.
3.5 Optionee shall not, for the Relevant Period, directly or indirectly:
3.5.1 within the Relevant Area, solicit any Relevant Client or
Relevant Prospect for the purposes of any Business which competes or
will compete or seeks to compete with the Restricted Group;
3.5.2. within the Relevant Area, accept, perform services for, or deal
with any Relevant Client or Relevant Prospect for the purposes of any
Business which competes or will compete or seeks to compete with the
Restricted Group;
3.5.3 solicit for employment or entice away from the Restricted Group
any Key Personnel; or
3.5.4 employ or engage or endeavour to employ or engage any Key
Personnel.
3.6 The restrictions contained in Section 3.5 including subsections, run
concurrently with the non-compete in Section 3.3. Additionally, to the
extent Optionee is a party to an employment agreement or other
agreement with the Restricted Group that contains a post-employment
restriction, the post-employment restrictions run concurrently with
the post-employment restrictions contained in this Section 3. Thus, by
way of example, if Optionee's employment agreement with Employer
contains a 24-month restriction on solicitation of the Restricted
Group's clients, then the non-solicitation in the employment agreement
would be effective for 12 months after the non-solicitation in this
Section 3 expires.
3.7 Optionee acknowledges that the provisions of this Section 3 are fair,
reasonable and necessary to protect the goodwill and interests of the
Restricted Group.
Section 4 - Governing Law & Jurisdiction
- ----------------------------------------
4.1 This Agreement shall be governed by and construed in accordance with
the laws of the state of New York without regard to its conflicts of
law principles.
4.2 Any suit, action or proceeding against Optionee with respect to this
Agreement may be brought in any court of competent jurisdiction in the
State of New York or located in the City of New York, as the Company
may elect in its sole discretion and Optionee hereby submits
accordingly to the nonexclusive jurisdiction of such courts for the
purpose of any such suit, action, proceeding or judgment. Optionee
hereby irrevocably waives any objections which he or she may now or
hereafter have to the laying of the venue of any suit, action or
proceeding arising out of or relating to this Agreement brought in any
court of competent jurisdiction in the State of New York or City of
New York. Provided further that nothing herein shall in any way be
deemed to limit the ability of the Restricted Group to bring a suit,
action or proceeding against Optionee with respect to this Agreement,
in jurisdictions other than the State of New York and/or City of New
York, and in such manner, as may be permitted by applicable law.
Optionee hereby further irrevocably waives any claim that any such
suit, action or proceeding brought in any such court has been brought
in any inconvenient forum. No suit, action or proceeding against the
Company or any Subsidiary with respect to this Agreement may be
brought by Optionee in any court other than in a court of competent
jurisdiction in the State of New York or City of New York, and
Optionee hereby irrevocably waives any right which he or she may
otherwise have had to bring such an action in any other court. The
Company hereby submits accordingly to the jurisdiction of the courts
of the State of New York or City of New York for the purpose of any
such suit, action or proceeding.
Section 5 - Consideration, Severability, Beneficiaries & Effect on other
- ------------------------------------------------------------------------
agreements
- ----------
5.1 Optionee acknowledges that the covenants and undertakings he or she
has made herein, including those made in Section 3, are being given
for the benefit of the Restricted Group, including Employer, and may
be enforced by the Company and/or by its Subsidiaries on behalf of all
or any of them and that such Subsidiaries are intended beneficiaries
of this Agreement.
5.2 The parties acknowledge that the provisions of this Agreement are
severable. If any part or provision of this Agreement shall be
determined by any court or tribunal to be invalid, then such partial
invalidity shall not cause the remainder of this Agreement to be or
become invalid. If any provision hereof is held unenforceable on the
basis that it exceeds what is reasonable for the protection of the
goodwill and interests of the Restricted Group, but would be valid if
part of the wording were modified or deleted, as permitted by
applicable law, then such restriction or obligation shall apply with
such deletions or modifications as may be necessary to make it
enforceable.
5.3 Optionee acknowledges that he or she remains bound by any Employment
Agreement or any other agreement entered into by Optionee with the
Restricted Group and this Agreement shall be in addition to, and not
in place of any such agreements. Optionee further acknowledges that in
the event of any breach by Optionee of any provision contained in such
agreements or this Agreement, the Company and/or any Subsidiary may,
in their discretion, enforce any term and condition of those
agreements and/or this Agreement.
Section 6 - Miscellaneous
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6.1 This Agreement may not be modified except by written agreement signed
by both parties hereto.
6.2 The rights of the Restricted Group under this Agreement shall inure to
the benefit of any and all of its/their successors, assigns, parent
companies, sister companies, subsidiaries and other affiliated
corporations.
6.3 The waiver by either party of any breach of this Agreement shall not
operate or be construed as a waiver of that party's rights on any
subsequent breach.
6.4 Optionee acknowledges and agrees that Optionee shall be obliged to
draw the provisions of Section 3 to the attention of any third party
who may, at any time before or after the termination of Optionee's
employment with Employer, offer to employ or engage him and for or
with whom Optionee intends to work within the Relevant Period.
6.5 The various section headings contained in this Agreement are for the
purpose of convenience only and are not intended to define or limit
the contents of such sections.
6.6 This Agreement may be executed in one or more counterparts, each of
which shall constitute an original and all of which taken together
shall constitute one and the same document. This Agreement will be
binding, notwithstanding that either party's signature is displayed
only on a facsimile copy of the signature page.
6.7 Any provisions which by their nature survive termination of this
Agreement, including the obligations set forth in Sections 3 and 4
shall survive termination of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement to
become effective as of the date first above written.
Willis Group Holdings Limited: Optionee:
/s/ Michael P Chitty SIGNATURE: ___________________
- --------------------
NAME: Michael P Chitty PRINT NAME: ___________________
DATE: May 6, 2008 DATE: ___________________
TITLE: Company Secretary