UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report April 21, 2005
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
Ten Trinity Square
London EC3P 3AX, England
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(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))
Item 1.01 Entry into a Material Definitive Agreement
On April 21, 2005, the Compensation Committee of the Board of Directors of
Willis Group Holdings Limited (the "Company") amended the Company's 2001 Share
Purchase and Option Plan (the "Plan") to restrict the maximum number of shares
of the Company's Common Stock that may be issued, sold or otherwise distributed
pursuant to the Plan as Restricted Shares, Purchase Shares or other Share Based
Grants to 3,500,000 shares.
Reference is made to the Plan, effective April 21, 2005, a copy of which is
filed as Exhibit 10.20 to this Current Report on Form 8-K and is incorporated
herein by reference.
Item 9.01 FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
a) Financial Statements of Business Acquired: None
b) Pro Forma Financial Information: None
c) Exhibits:
10.20 Willis Group Holdings Limited 2001 Share Purchase and Option
effective April 21, 2005.
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: April 21, 2005 By: /s/ William P. Bowden, Jr.
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Name: William P. Bowden, Jr.
Title: General Counsel
Exhibit 10.20
AMENDED AND RESTATED
WILLIS GROUP HOLDINGS LIMITED
2001 SHARE PURCHASE AND OPTION PLAN
1. Purpose of Plan
The Willis Group Holdings Limited ("Holdings") 2001 Share Purchase and
Option Plan (the "Plan") is designed:
(a) to promote the long term financial interests and growth of Holdings
and its Subsidiaries (collectively, "Willis Group") by attracting and
retaining personnel with the training, experience and ability to
enable them to make a substantial contribution to the success of
Willis Group's business;
(b) to motivate management personnel by means of growth-related incentives
to achieve long range goals; and
(c) to further the identity of interests of participants with those of the
shareholders of Willis Group through opportunities for increased
stock, or stock-based, ownership in Willis Group.
2. Definitions
As used in the Plan, the following words shall have the following
meanings:
(a) "Board of Directors" means the Board of Directors of Holdings.
(b) "Change in Control" means: (i) sale of all or substantially all of the
assets of Holdings or Willis Group to a Person or Group that is not
Kohlberg Kravis Roberts & Co. or an affiliate thereof (collectively,
the "KKR Partnerships"), (ii) a sale by any member of the KKR
Partnerships resulting in more than 50% of the voting stock of
Holdings or Willis Group being held by a Person or Group that is not a
member of the KKR Partnerships or (iii) a merger, consolidation,
recapitalization or reorganization of Holdings or Willis Group with or
into another Person which is not a member of the KKR Partnerships; and
following any of the foregoing events in (ii)-(iii), (x) the KKR
Partnerships no longer have the ability, without the approval of a
Person or Group who is not a member of the KKR Partnership, to elect a
majority of the Board of Directors of Holdings (or the resulting
entity) and (y) any Person or Group who is not a member of the KKR
Partnerships is or becomes the Beneficial Owner, directly or
indirectly, in the aggregate, of a greater percentage of the total
voting power of Holdings or Willis Group than that held, directly or
indirectly, in the aggregate, by the KKR Partnerships. For purposes of
this definition, "Beneficial Owner" shall have the same meaning as
defined in Rules 13d-3 and 13d-5 under the Exchange Act, which shall
in any event include having the power to vote (or cause to be voted)
pursuant to contract, irrevocable proxy or otherwise, and which, for
purposes of the calculation under clause (y), shall be deemed to
include shares that any such Person or Group has a right to acquire,
whether such right is exercisable immediately or only after the
passage of time.
(c) "Committee" means the Compensation Committee of the Board of Directors
(or, if no such committee is appointed, the Board of Directors).
(d) (Common Shares" or "Share" means common shares of Willis Group, which
may be authorized but unissued.
(e) "Director" means any member of the Board of Directors.
(f) "Employee" means a person, including a director and an officer, in the
employment of Willis Group.
(g) "Exchange Act" means the Securities Exchange Act of 1934 of the United
States, as amended.
(h) "Grant" means an award made to a Participant pursuant to the Plan and
described in Paragraph 5, including, without limitation, an award of a
Share Option, Restricted Share, Purchase Share, or Other Share-Based
Grant or any combination of the foregoing.
(i) "Grant Agreement" means an agreement between Holdings and a
Participant that sets forth the terms, conditions and limitations
applicable to a Grant.
(j) "Group" means a "group" as such term is used in Sections 13(d) and
14(d) of the Exchange Act, acting in concert.
(k) "Participant means an Employee or Director of any member of Willis
Group, to whom one or more Grants have been made, and such Grants have
not all been forfeited or terminated under the Plan.
(l) "Person" means "person" as such term is used in Sections 13(d) and
14(d) of the Exchange Act.
(m) "Share-Based Grants" means the collective reference to the grant of
Purchase Shares, Restricted Shares and Other Share-Based Grants.
(n) "Share Options" means options to purchase Common Shares, which may or
may not be incentive stock options ("Incentive Stock Options") within
the meaning of Section 422 of the Internal Revenue Code of 1986 of the
United States, as amended (the "Code").
(o) "Subsidiary" means a "subsidiary", as such term is defined in Section
86 of the Bermudan Companies Act 1981.
3. Administration of Plan
(a) The Plan shall be administered by the Committee. All of the members of
the Committee and any other Directors shall be eligible to be selected
for Grants under the Plan; provided, however, that to the extent the
Board determines it is necessary or desirable to satisfy any
regulation or rule, whether under Section 16 of the Exchange Act or
otherwise related to the Grants, the members of the Committee shall
qualify under such regulation or rules. The Committee may adopt its
own rules of procedure, and the action of a majority of the Committee,
taken at a meeting or taken without a meeting by a writing signed by
such majority, shall constitute action by the Committee. The Committee
shall have the power and authority to administer, construe and
interpret the Plan, to make rules for carrying it out and to make
changes in such rules. The Committee shall also have the power to
establish sub-plans, which may constitute separate schemes, for the
purpose of establishing schemes which qualify for approval by the UK
Inland Revenue or meet any special tax or regulatory requirements
anywhere in the world. Any such interpretations, rules, administration
and sub-plans shall be consistent with the basic purposes of the plan.
(b) The Committee may delegate to the Chief Executive Officer and to other
senior officers of Willis Group its duties under the Plan subject to
such conditions and limitations as the Committee shall prescribe
except that only the Committee may designate and make Grants to
Participants who are subject to section 16 of the Exchange Act.
(c) The Committee may employ attorneys, consultants, accountants,
appraisers, brokers of other person. The Committee, Willis Group, and
the officers and Directors of Willis Group shall be entitled to rely
upon the advice, opinions or valuations of any such persons. All
actions taken and all interpretations and determinations made by the
Committee in good faith shall be final and binding upon all
Participants, Willis Group and all other interested persons. No member
of the Committee shall be personally liable for any action,
determination or interpretation made in good faith with respect to the
Plan or the Grants, and all members of the Committee shall be fully
protected by Willis Group with respect to any such action,
determination or interpretation.
4. Eligibility
Subject to Section 11 of the Plan, the Committee may from time to time make
Grants under the plan to such Employees or Directors of Willis Group, and in
such form and having such terms, conditions and limitations as the Committee may
determine. Grants may be granted singly, in combination or in tandem. The terms,
conditions and limitations of each Grant under the plan shall be set forth in a
Schedule to the Plan (as described in Section 11 below), to be attached hereto,
and/or a Grant Agreement, in a form approved by the Committee, consistent,
however, with the terms of the Plan.
5. Grants
From time to time, the Committee will determine the forms and amounts of
Grants for Participants. Such Grants may take the following forms in the
Committee's sole discretion; provided, however, that in no event shall the
purchase price of any Grant be less than the par value of the Shares; and
provided further that the maximum number of Common Shares that may be issued,
sold or distributed as Restricted Shares, Purchase Shares or other Share-Based
Grants shall not exceed 3,500,000 Common Shares. The terms of any Grant may
include a requirement that the Participant enter into an agreement or election
under which the Participant agrees to pay his or her employer's social security
or National Insurance liability (or reimburse the employer for such liability)
in any jurisdiction arising on exercise of any Share Option, or at any other
time with respect to any other Share-Based Award, and if this requirement is not
permitted in any jurisdiction the Grant in such circumstances shall be null and
void
(a) Share Options - These are options to purchase Common Share, which may
or may not be Incentive Stock Options. Any options that are granted as
Incentive Stock Options shall have an exercise price at least equal to
the fair market value of one share of Common Shares on the date of
Grant (or, if the person to whom the option is being granted owns
Common Shares representing more than 10 percent of the voting power of
all classes of Company equity, the exercise price shall be at least
equal to 110 percent of the fair market value of one Common Share on
the date of Grant). At the time of the Grant the Committee shall
determine, and shall have contained in the Grant Agreement or other
Plan rules, the option exercise period, the option price, and such
other conditions or restrictions on the grant or exercise of the
option as the Committee deems appropriate, which may include the
requirement that the grant of options is predicated on the acquisition
of Purchase Shares under Section 5(c) by the Participation or as may
be required pursuant to applicable law, if such options shall be
Incentive Stock Options, Payment of the option price shall be made in
cash or in shares of Common Shares (provided, that such Shares have
been held by the Participation for not less than six months (or such
other period as established by the Committee from time to time)), or a
combination thereof, in accordance with the terms of the Plan, the
Grant Agreement and any applicable guidelines of the Committee in
effect at the time.
(b) Restricted Shares - Restricted Shares are common Shares delivered to a
Participant with or without payment of consideration with restrictions
or conditions on the Participant's right to transfer or sell such
shares; provided that the price of any Restricted Stock may not be
less than the par value of the Common Shares. The number of shares of
Restricted Shares and the restrictions or conditions on such shares
shall be as the Committee determines, in the grant Agreement or by
other Plan rules, and the certificate for the Restricted Shares shall
bear evidence of such restrictions or conditions. Subject to Section 9
and Section 11, Restricted Shares may NOT have a restriction period of
less than 6 months.
(c) Purchase Shares - Purchase Shares refers to shares of Common Shares
offered to a Participant at such price as determined by the Committee,
the acquisition of which may make him eligible to receive under the
Plan, among other things, Share Options.
(d) Other Share-Based Grants - The Committee may make other Grants under
the Plan pursuant to which shares of Common Shares or other equity
securities of Willis Group are or may in the future be acquired, or
Grants denominated in stock units, including ones valued using
measures other than market value. Other Share-Based Grants may be
granted with or without consideration.
6. Limitations and Conditions
(a) The number of Shares available for Grants under this Plan shall be
25,000,000 shares of the authorized Common Shares as of the effective
date of the Plan. The number of Shares subject to Grants under this
Plan to any one Participant shall not be more than 5,000,000 Share in
any one calendar year. Unless restricted by applicable law, Shares
related to Grants that are forfeited, terminated, cancelled or expire
unexercised, shall immediately become available for new Grants.
(b) No Grants shall be made under the Plan beyond ten years after the
effective date of the Plan, but the terms of Grants made on or before
the expiration of the Plan may extend beyond such expiration. At the
time a Grant is made or amended or the terms or conditions of a Grant
are changed, the Committee may provide for limitations or conditions
on such Grant.
(c) Nothing contained herein shall affect the right of Willis Group to
terminate any Participant's employment at any time or for any reason.
The rights and obligations of any individual under the terms of his
office or employment with any member of Willis Group shall not be
affected by his or her participation in this Plan or any right which
he or she may have to participate in it, and an individual who
participates in this Plan shall waive any and all rights to
compensation or damages in consequence of the termination of his or
her office or employment for any reason whatsoever insofar as those
rights arise or may arise from his or her ceasing to have rights under
or be entitled to exercise any Grant as a result of such termination.
(d) Deferrals of Grant payouts may be provided for, at the sole discretion
of the Committee, in the Grant Agreements.
(e) Except as otherwise prescribed by the Committee, the amounts of the
Grants for any employee of a Subsidiary, along with interest,
dividend, and other expenses accrued on deferred Grants shall be
charged to the Participant's employer during the period for which the
Grant is made. If the Participant is employed by more than one
Subsidiary or by both Willis Group and a Subsidiary during the period
for which the Grant is made, the Participant's Grant and related
expenses will be allocated between the companies employing the
Participant in a manner prescribed by the Committee.
(f) Other than as specifically provided pursuant to a Grant Agreement or
other related agreement between a Participant and Willis Group, no
benefit under the Plan shall be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, or
charge, and any attempt to do so shall be void. No such benefit shall,
prior to receipt thereof by the Participant, be in any manner liable
for or subject to the debts, contracts, liabilities, engagements, or
torts of the Participant.
(g) Participants shall not be, and shall not have any of the rights or
privileges of, shareholders of Willis Group in respect of any Shares
purchasable in connection with any Grant unless and until certificates
representing any such Shares have been issued by Willis Group to such
Participants, unless the Committee shall otherwise determine.
(h) No election as to benefits or exercise of Stock Options or other
rights may be made during a Participant's lifetime by anyone other
than the Participant except by a legal representative appointed for or
by the Participant.
(i) Absent express provisions to the contrary, any grant under this Plan
shall not be deemed compensation for purposes of computing benefits or
contributions under any retirement plan of any member of Willis Group
and shall not affect any benefits under any other benefit plan of any
kind now or subsequently in effect under which the availability or
amount of benefits is related to level of compensation. This Plan is
not a "Retirement Plan" or "Welfare Plan" under the Employee
Retirement Income Security Act of 1974 of the United States, as
amended.
(j) Unless the Board determines otherwise, no benefit or promise under the
Plan shall be secured by any specific assets of any member of Willis
Group, nor shall any assets of any member of Willis Group be
designated as attributable or allocated to the satisfaction of Willis
Group's obligations under the Plan.
7. Transfers and Leaves of Absence
For purposes of the Plan, unless the Committee determines otherwise: (a) a
transfer of a Participant's employment without an intervening period of
separation among Willis Group and any Subsidiary shall not be deemed a
termination of employment, and (b) a Participant who is granted in writing a
leave of absence shall be deemed to have remained in the employ of Willis Group
during such leave of absence.
8. Adjustments
In the event of any change in the outstanding Common Shares by reason of a
stock split, spin-off, stock dividend, stock combination or reclassification
recapitalization or merger, change of control, or similar event, the Committee
shall adjust appropriately the number of Shares subject to the Plan and
available for or covered by Grants and Share prices related to outstanding
Grants to the extent necessary, and may make such other revisions to outstanding
Grants as it deems are equitably required including, without limitation, in an
event that is not a change of control, providing for the payment of a dividend
in respect of the Share subject to any outstanding Grants, in all events in
order to allow Participants to participate to such event in an equitable manner.
9. Merger, Consolidation, Exchange, Acquisition, Liquidation or
Dissolution
In its absolute discretion, and on such terms and conditions as it deems
appropriate coincident with or after the grant of any Stock Option or any
Stock-Based Grant, the Committee may provide that such Stock Option or
Stock-Based Grant cannot be exercised after a Change in Control, a merger,
amalgamation pursuant to Bermuda law, or other consolidation of Holdings or
Willis Group with or into another company, the exchange of all or substantially
all of the assets of Holdings or Willis Group for the securities of another
company, the acquisition by another Person or Group of 80% or more of Holdings
or Willis Group's then outstanding shares of voting stock or the
recapitalization, reclassification, liquidation or dissolution of Holdings or
Willis Group, and if the Committee so provides, it shall, on such terms and
conditions as it deems appropriate in its absolute discretion, also provide,
either by the terms of such Stock Option or Stock-Based Grant or by a resolution
adopted prior to the occurrence of such Change in Control merger, consolidation,
exchange, acquisition, recapitalization, reclassification, liquidation or
dissolution, that, for some period of time prior to such event, such Stock
Option or Stock-Based Grant shall be exercisable as to all share subject
thereto, notwithstanding anything to the contrary herein (but subject to the
provisions of Section 6(b) and that, upon the occurrence of such event, such
Stock Option or Stock-Based Grant shall terminate and be of no further force or
effect; provided, however, that the Committee may also provide, in its absolute
discretion, that even if the Stock Option or Stock-Based Grant shall remain
exercisable after any such event, fro the after such event, any such Stock
Option or Stock-Based Grant shall be exercisable only for the kind and amount of
securities and/or other property, or the cash equivalent thereof, receivable as
a result of such event by the holder of a number of shares of stock for which
such Stock Option or Stock-Based Grant could have been exercised immediately
prior to such event.
10. Amendment and Termination
The Committee shall have the authority to make such amendments to any terms
and conditions applicable to outstanding Grants as are consistent with this
Plan. The Board of Directors may amend, suspend or terminate the Plan at any
time.
11. Foreign Options and Rights
The Committee or Board, as applicable, may establish rules or schemes in
order to make Grants to Employees who are subject to the laws of nations other
than Bermuda, which Grants may have terms and conditions that differ from the
terms thereof as provided elsewhere in the Plan for the purpose of complying
with foreign laws. In the event that the Committee or Board establishes such
rules or schemes, the substantive provisions thereof shall be set forth on
schedules attached hereto, and are hereby incorporated by reference as part of
the Plan, subject to any additional action required to be taken pursuant to the
applicable foreign law.
12. Withholding Taxes
(a) Willis Group shall have the right to deduct from any cash payment made
under the Plan any federal, state, local, national, provincial or
other income or other taxes required by law to be withheld with
respect to such payment. It shall be a condition to the obligation of
Willis Group to deliver shares upon the exercise of an Option, upon
delivery of Restricted Stock or upon exercise, settlement or payment
of any Other Stock-Based Grant that the Participant pay to Willis
Group such amount as may be requested by Willis Group for the purpose
of satisfying any liability for such withholding taxes. Any Grant
Agreement may provide that the Participant may elect, in accordance
with any conditions set forth in such Grant Agreement, to pay a
portion or the entire minimum amount of such withholding taxes in
shares of Common Shares:
(b) Notwithstanding anything set forth in section 12 (a), an option may
not be exercised unless:
(i) the Board considers that the issue or transfer of shares pursuant
to such exercise would be lawful in all relevant jurisdictions;
and
(ii) in a case where, if the option were exercised, Willis Group would
be obliged to (or would suffer a disadvantage if it were not to)
account for any tax (in any jurisdiction) for which the person in
question would be liable by virtue of the exercise of the option
and/or for any social security contributions that would be
recoverable from the person in question (together, the "Tax
Liability"), that person has either:
(x) made a payment to Willis Group of an amount at least equal
to the Holdings estimated of the Tax Liability; or
(y) entered into arrangements acceptable to Willis Group 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 Willis Group of the relevant amount out of the
proceeds of sale or otherwise).
13. Governing Law
This Plan shall be governed by the laws of Bermuda, without regard to
conflicts of laws.
14. Effective Date and Termination Dates
The Plan shall be effective on and as of the date of its original approval
by the Board of Directors of Holdings and shall be approved by a majority of the
shareholders of Holdings, and shall terminate ten years thereafter, subject to
earlier termination by the Board of Directors pursuant to Sections 9 and 10.
WILLIS GROUP SENIOR MANAGEMENT INCENTIVE PLAN
Section 1. Purposes.
The purpose of the Willis Group Senior Management Incentive Plan (the
"Plan") is to attract, retain and motivate selected employees of Willis Group
Holdings Limited (the "Company") and its subsidiaries and affiliates who are
executive officers of the Company and members of its Partners Group and any
successor thereto in order to promote the Company's long-term growth and
profitability. It is also intended that all Bonuses (as defined in Section 5(a))
payable under the Plan be considered "performance-based compensation" within the
meaning of Section 162(m)(4)(C) of the Internal Revenue Code of 1986, as amended
(the "Code"), and the regulations thereunder, and the Plan shall be interpreted
accordingly.
Section 2. Administration.
(a) Subject to Section 2(d), the Plan shall be administered by a committee
(the "Committee") appointed by the Board of Directors of the Company (the
"Board"), whose members shall serve at the pleasure of the Board. The Committee
at all times is intended to be composed of at least two directors of the
Company, each of whom is an "outside director" within the meaning of Section
162(m) of the Code and Treasury Regulation Section 1.162-27(e)(3) and a
"non-employee director" within the meaning of Rule 16b-3 promulgated under the
Securities Exchange Act of 1934, as amended. Unless otherwise determined by the
Board, the Committee shall be the Compensation Committee of the Board.
(b) The Committee shall have complete control over the administration of
the Plan, and shall have the authority in its sole and absolute discretion to:
(i) exercise all of the powers granted to it under the Plan; (ii) construe,
interpret and implement and implement the Plan; (iii) prescribe, amend and
rescind rules and regulations relating to the Plan, including rules and
regulations governing its own operations; (iv) make all determinations necessary
or advisable in administering the Plan (including, without limitation,
calculating the size of the Bonus payable to each Participant (as defined in
Section 4(a))); (v) correct any defect, supply any omission and reconcile any
inconsistency in the Plan, and (vi) amend the Plan to reflect changes in or
interpretations of applicable law, rules or regulations.
(c) The determination of the Committee on all matters relating to the Plan
and any amounts payable thereunder shall be final, binding and conclusive on all
parties.
(d) Notwithstanding anything to the contrary contained herein, the
Committee may allocate among its members and may delegate some or all of its
authority or administrative responsibility to such individual or individuals who
are not members of the Committee as it shall deem necessary or appropriate;
provided, however, the Committee may not delegate any of its authority or
administrative responsibility hereunder (and no such attempted delegation shall
be effective) if such delegation would cause any Bonus payable under the Plan
not to be considered performance-based compensation within the meaning of
Section 162(m)(4)(C) of the Code.
(e) No member of the Board or the Committee or any employee of the Company
or any of its subsidiaries or affiliates (each such person a "covered Person")
shall have any liability to any person (including, without limitation, any
Participant) for any action taken or omitted to be taken or any determination
made in good faith with respect to the Plan or any Bonus. Each Covered Person
shall be indemnified and held harmless by the Company against and from any loss,
cost, liability or expense (including attorneys' fees) that may be imposed upon
or incurred by such Covered Person in connection with or resulting from any
action, suit or proceeding to which such Covered Person may be a party or in
which such Covered Person may be involved by reason of any action taken or
omitted to be taken under the Plan and against and from any and all amounts paid
by such Covered Person, with the Company's approval, in settlement thereof, or
paid by such Covered Person in satisfaction of any judgment in any such action,
suit or proceeding against such covered Person, provided that the Company shall
have the right, at its own expense to assume and defend any such action, suit or
proceeding and, once the Company gives notice to its intent to assume the
defense, the Company shall have sole control over such defense with counsel of
the Company's choice. The foregoing right of indemnification shall not be
available to a Covered Person to the extent that a court of competent
jurisdiction in a final judgment or other final adjudication, in either case,
not subject to further appeal, determines that the acts or omissions of such
Covered person giving rise to the indemnification claim resulted from such
Covered Person's bad faith, fraud or willful criminal act or omission. The
foregoing right of indemnification shall not be exclusive of any other rights of
indemnification to which Covered Persons may be entitled under the Company's
Restated Certificate of Incorporation or Amended and Restated Bylaws, as a
matter of law, or otherwise, or any other power that the Company may have to
indemnify such person or hold them harmless.
Section 3. Performance Period.
The Plan shall peerage for successive periods (each a "Performance
Period"). The first Performance Period shall commence on January 1, 2005 and
shall terminate on December 31, 2005. Thereafter, each Performance Period shall
be one full fiscal year and/or portions of fiscal years of the Company, as
determined by the Committee.
Section 4. Participation.
(a) Prior to the 90th day after the beginning of a Performance Period, or
otherwise in a manner not inconsistent with Treasury Regulation Section
1.162-27(e)(2) (the "Participation Date"), the Committee shall designate those
individuals who shall participate in the Plan for the Performance Period (the
"Participants").
(b) Except as provided below, the Committee shall have the authority at any
time (i) during the Performance Period to remove Participants from the Plan for
that Performance Period and (ii) prior to the Participation Date (or later in a
manner consistent with the requirements of Section 162(m) of the Code) to add
Participants to the Plan for a particular Performance Period.
Section 5. Bonus Amounts.
(a) Each Participant shall be paid a bonus amount equal to 5% of the
Company's "Earnings" (as defined in Section 5(c)) with respect to each
Performance Period. Notwithstanding anything to the contrary in this Plan, the
Committee may, in its sole discretion, reduce (but ot increase) the bonus amount
for any Participant for a particular Performance Period at any time prior to the
payment of bonuses to Participants pursuant to Section 6 (a Participant's bonus
amount for each Performance Period, as so reduced, the "Bonus").
(b) If a Participant's employment with the Company terminates for any
reason before the end of a Performance Period or before the date that the Bonus
is paid pursuant to Section 6, the Committee shall have the discretion to
determine whether (i) such Participant shall be entitled to any Bonus at all,
(ii) such Participant's Bonus shall be reduced on a pro-rata basis to reflect
the portion of such Performance Period the Participant was employed by the
Company or (iii) to make such other arrangements as the Committee deems
appropriate in connection with the termination of such Participant's employment.
(c) For purposes of this Section 5, "Earnings" means the Company's
operating income before taxes and extraordinary loss to be reported in its
audited consolidated financial statements for the relevant fiscal year, adjusted
to eliminate, with respect to such fiscal year: (i) losses related to the
impairment of goodwill and other intangible assets: (ii) restructuring expenses;
(iii) gains or losses on disposal of assets or segments of the previously
separate companies of a business combination within two years of the date of
such combination; (iv) gains or losses that are the direct result of a major
casualty or natural disaster; (v) losses resulting from any newly-enacted law,
regulation or judicial order; (vi) the cumulative effect of accounting changes;
(vii) any extraordinary gains or losses; and (viii) accounting expenses
associated with the grant of employee share options. The above adjustments to
Earnings shall be computed in accordance with US GAAP. Following the completion
of each Performance Period, the Committee shall certify in writing the Company's
Earnings for such Performance Period.
Section 6. Payment of Bonus Amount; Voluntary Deferral.
Each Participant's Bonus shall be payable by such Participant's
Participating Employer (as defined in Section 7(j)), or in the case of a
Participant employed by more than one Participating Employer, by each such
employer as determined by the Committee. The Bonus shall be payable in the
discretion of the Committee in cash and/or an equity-based award of equivalent
value (provided that in determining the number of Company restricted or deferred
stock units payable in cash or shares of the Company's common stock, restricted
shares of the Company's common stock or unrestricted shares of the Company's
common stock that is equivalent to a dollar amount, that dollar amount shall be
divided by the closing price of the Company common stock on the date of grant by
the Committee (with fractional shares being rounded to the nearest whole share).
The cash portion of the Bonus shall be paid at such time as bonuses are
generally paid by the Participating Employer(s) for the relevant fiscal year.
Subject to approval by the Committee and to any requirements imposed by the
Committee in connection with such approval, each Participant may be entitled to
defer receipt, under the terms and conditions of any applicable deferred
compensation plan of the Company, of part or all of any payments otherwise due
under this Plan. Any equity-based award shall be subject to such terms and
conditions (including vesting requirements) as the Committee and the
administrative committee of the plan under which such equity-based award is
granted may determine.
Section 7. General Provision.
(a) Amendment, Termination, etc. The Board reserves the right at any time
and from time to time to modify, alter, amend, suspend, discontinue or terminate
the Plan, including in any manner that adversely affects the rights of
Participants. No Participant shall have any rights to payment of any amounts
under this Plan unless and until the Committee determines the amount of such
Participant's bonus, that such Bonus shall be paid and the method and timing of
its payment. No amendment that would require stockholder approval in order for
Bonuses paid pursuant to the Plan to constitute performance-based compensation
within the meaning of Section 162(m)(4)(C) of the Code shall be effective
without the approval of the stockholders of the Company as required by Section
162(m) of the Code and the regulations thereunder.
(b) Nonassignability. No rights of any Participant (or of any beneficiary
pursuant to this Section 7(b)) under the Plan may be sold, exchanged,
transferred, assigned, pledged, hypothecated or otherwise disposed of (including
through the use of any cash-settled instrument), either voluntarily or
involuntarily by operation of law, other than by will or by the laws of descent
and distribution. Any ale, exchange, transfer, assignment, pledge, hypothecation
or other disposition in violation of the provisions of this Section 7(b) shall
be void. In the event of a Participant's death, any amounts payable under the
Plan shall be paid in accordance with the Plan to a Participant's estate. A
Participant's estate shall have no rights under the Plan to receive such
amounts, if any, as may be payable under this Section 7(b), and all of the terms
of this Plan shall be binding upon any such Participant's estate.
(c) Plan Creates No Employment Rights. Nothing in the Plan shall confer
upon any Participant the right to continue in the employ of the Company for the
Performance Period or thereafter or affect any right which the Company may have
to terminate such employment.
(d) Governing Law. All rights and obligations under the Plan shall be
governed by and construed in accordance with the laws of the state of New York,
without regard to principles of conflict of laws.
(e) Tax Withholding. In connection with any payments to a Participant or
other event under the Plan that gives rise to a federal, state, local or other
tax withholding obligation relating to the Plan (including, without limitation,
FICA tax), (i) the Company and any Participating Employer may deduct or withhold
(or cause to be deducted or withheld) from any payment or distribution to such
Participant whether or not pursuant to the Plan or (ii) the Committee shall be
entitled to require that such Participant remit cash (through payroll deduction
or otherwise), in each case in an amount sufficient in the opinion of the
Company to satisfy such withholding obligation.
(f) right of Offset. The Company and any Participating Employer shall have
the right to offset against the obligation to pay a Bonus to any Participant,
any outstanding amounts (including, without limitation, travel and entertainment
or advance account balances or amounts repayable to it pursuant to tax
equalization, housing, automobile or other employee programs) such Participant
then owes to it.
(g) Severability; Entire Agreement. If any of the provisions of this Plan
is finally held to be invalid, illegal or unenforceable (whether in while or in
part), such provision shall be deemed modified to the extent, but only to the
extent, of such invalidity, illegality or unenforceability and the remaining
provisions shall not be affected thereby. This Plan shall not supersede any
other agreement, written or oral, pertaining to the matters covered herein,
except to the extent of any inconsistency between this Plan and any prior
agreement, in which case this Plan shall prevail.
(h) No Third Party Beneficiaries. The Plan shall not confer on any person
other than the Company and any Participant any rights or remedies hereunder.
(i) Participating Employers. Each subsidiary or affiliate of the Company
that employs a Participant shall adopt this Plan by executing Schedule A (a
"Participating Employer"). Except for purposes of determining the amount of each
Participant's Bonus, this Plan shall be treated as a separate plan maintained by
each Participating Employer and the obligation to pay the Bonus to each
Participant shall be the sole liability of the Participating Employer(s) by
which the Participant is employed, and neither the Company nor any other
Participating Employer shall have any liability with respect to such amounts.
(j) Successors and Assigns. The terms of this Plan shall be binding upon
and inure to the benefit of the Company, each Participating Employer and their
successors and assigns and each permitted successor or assign of each
Participant as provided in Section 7(b).
(k) Plan Headings. The headings in this Plan are for the purpose of
convenience only and are not intended to define or limit the construction of the
provisions hereof.
(l) Construction. In the construction of this Plan, the singular shall
include the plural, and vice versa, in all cases where such meanings would be
appropriate. Nothing in this Plan shall preclude or limit the ability of the
Company, its subsidiaries and affiliates to pay any compensation to a
Participant under any other plan or compensatory arrangement whether or not in
effect on the date this Plan was adopted.
(m) Plan Subject to Stockholder Approval. The Plan is adopted subject to
the approval of the stockholders of the Company at the Company's 2005 Annual
Meeting in accordance with Section 162(m)(4)(C) of the Code and Treasury
Regulation Section 1.162-27(e)(4), and no Bonus shall be payable hereunder
absent such stockholder approval.