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 (Date of earliest event reported): May 16, 2012
ACE LIMITED
(Exact name of registrant as specified in its charter)
Switzerland | 1-11778 | 98-0091805 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
Baerengasse 32
CH-8001 Zurich, Switzerland
(Address of principal executive offices)
Registrants telephone number, including area code: +41 (0)43 456 76 00
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 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers |
(e) At the companys 2012 annual general meeting, the companys shareholders approved the Employee Stock Purchase Plan, as amended through the fourth amendment (the ESPP), increasing the number of common shares available for issuance under the ESPP by 1,500,000 shares, which shares are in addition to the 3,000,000 common shares previously reserved under the ESPP. In addition to increasing the number of common shares available for issuance, the fourth amendment adds a provision excluding certain employees who are a citizen or resident of a foreign jurisdiction and makes clarifying and technical changes to certain defined terms and other provisions in the ESPP. A more complete description of the ESPP is contained in companys proxy statement, dated April 4, 2012, as filed with the Securities and Exchange Commission, under the heading Amendment to the ACE Limited Employee Stock Purchase Plan, which is hereby incorporated herein by reference. For the full text of the ESPP, see Exhibit 10.1 hereto, which is hereby incorporated herein by reference.
Item 5.03 | Amendment to the Articles of Incorporation or Bylaws; Change in Fiscal Year |
At the companys 2012 annual general meeting, the companys shareholders approved an amendment to Article 6 of the Articles of Association to authorize the companys Board of Directors to increase the companys share capital within two years following the 2012 annual general meeting to a maximum amount equal to CHF 4,237,800,000, or 140,000,000 shares. In connection therewith, the company has undertaken to limit the number of shares (to a maximum of 68,000,000) that it will issue pursuant to, and during the two-year effective period of, this Article 6 share capital authorization without either providing the companys shareholders with the opportunity to exercise pre-emptive rights or seeking specific shareholder approval for such issuance, all as further described in the companys proxy statement dated April 4, 2012. The companys amended Articles of Association containing these amendments will become effective with publication in the Swiss Commercial Gazette, retroactive to their registration in the daily register of the Canton of Zurich, Switzerland on May 18, 2012, the same day the company filed these amendments in the Commercial Register of the Canton of Zurich, Switzerland (the Swiss Commercial Register).
At the companys 2012 annual general meeting, the companys shareholders also prospectively approved amendments to the companys Articles of Association in conjunction with their approval of payments of a dividend in the form of distribution through par value reduction, as further described in the companys proxy statement dated April 4, 2012. Such amendments will become effective with the registration of each quarterly par value reduction in the Swiss Commercial Register.
A copy of the amended Articles of Association is attached hereto as Exhibit 3.1 and incorporated herein by reference.
Item 5.07 | Submission of Matters to a vote of Security Holders |
The company convened its annual general meeting of shareholders on May 16, 2012 pursuant to notice duly given. The matters voted upon at the meeting and the results of such voting are set forth below:
1.1 | Election of Michael G. Atieh |
Shares Voted For |
Shares Voted Against |
Shares Abstained |
Broker Non-Votes |
|||
273,910,618 |
1,630,683 | 188,192 | 6,684,461 |
1.2 | Election of Mary A. Cirillo |
Shares Voted For |
Shares Voted Against |
Shares Abstained |
Broker Non-Votes |
|||
271,974,457 |
3,581,965 | 173,071 | 6,684,461 |
2
1.3 | Election of Thomas J. Neff |
Shares Voted For |
Shares Voted Against |
Shares Abstained |
Broker Non-Votes |
|||
269,509,678 |
5,011,068 | 1,208,747 | 6,684,461 |
2.1 | Approval of the annual report |
Shares Voted For |
Shares Voted Against |
Shares Abstained |
Broker Non-Votes |
|||
281,138,309 |
26,800 | 1,248,845 | 0 |
2.2 | Approval of the statutory financial statements of ACE Limited |
Shares Voted For |
Shares Voted Against |
Shares Abstained |
Broker Non-Votes |
|||
281,161,934 |
25,652 | 1,226,368 | 0 |
2.3 | Approval of the consolidated financial statements |
Shares Voted For |
Shares Voted Against |
Shares Abstained |
Broker Non-Votes |
|||
281,148,329 |
38,645 | 1,226,980 | 0 |
3. | Allocation of disposable profit |
Shares Voted For |
Shares Voted Against |
Shares Abstained |
Broker Non-Votes |
|||
282,039,512 |
50,317 | 324,125 | 0 |
4. | Discharge of the Board of Directors |
Shares Voted For |
Shares Voted Against |
Shares Abstained |
Broker Non-Votes |
|||
276,920,593 |
1,211,852 | 4,248,087 | 0 |
5 | Amendment of the Articles of Association relating to authorized share capital for general purposes |
Shares Voted For |
Shares Voted Against |
Shares Abstained |
Broker Non-Votes |
|||
271,623,903 |
2,637,276 | 1,468,314 | 6,684,461 |
6.1 | Election of PricewaterhouseCoopers AG (Zurich) as the companys statutory auditor until the companys next annual ordinary general meeting |
Shares Voted For |
Shares Voted Against |
Shares Abstained |
Broker Non-Votes |
|||
281,071,230 |
1,160,824 | 181,900 | 0 |
6.2 | Ratification of appointment of independent registered public accounting firm PricewaterhouseCoopers LLP (United States) for purposes of United States securities law reporting for the year ending December 31, 2012 |
Shares Voted For |
Shares Voted Against |
Shares Abstained |
Broker Non-Votes |
|||
280,793,365 |
1,440,977 | 179,612 | 0 |
3
6.3 | Election of BDO AG (Zurich) as special auditing firm until the companys next annual ordinary general meeting |
Shares Voted For |
Shares Voted Against |
Shares Abstained |
Broker Non-Votes |
|||
281,839,361 |
397,330 | 177,263 | 0 |
7. | Approval of the payment of a distribution to shareholders through reduction of the par value of the companys shares, such payment to be made in four quarterly installments at such times during the period through the companys next annual general meeting as shall be determined by the Board of Directors |
Shares Voted For |
Shares Voted Against |
Shares Abstained |
Broker Non-Votes |
|||
281,124,229 |
81,939 | 1,207,786 | 0 |
8. | Advisory vote to approve executive compensation |
Shares Voted For |
Shares Voted Against |
Shares Abstained |
Broker Non-Votes |
|||
245,233,557 |
28,431,532 | 2,064,404 | 6,684,461 |
9. | Amendment to the ACE Limited Employee Stock Purchase Plan |
Shares Voted For |
Shares Voted Against |
Shares Abstained |
Broker Non-Votes |
|||
273,214,660 |
1,891,630 | 623,203 | 6,684,461 |
Under the companys Articles of Association, shareholder approval of proposals is generally determined by simple majority of votes cast, such that abstentions and broker non-votes are disregarded in the tabulation of the vote to determine approval. The exceptions to this are matters for which a specific vote requirement or tabulation is required by applicable law or by specific provision of the Articles of Association. At the 2012 annual general meeting, abstentions and broker non-votes were not considered in the vote (and thus should be disregarded) with respect for all items above, other than Agenda Item No. 5. With respect to Agenda Item No. 5, which under Article 16 of the companys Articles of Association required the affirmative vote of two-thirds of the votes present (in person or by proxy), broker non-votes and abstentions had the effect of against votes because they were counted as present but were not counted as affirmative for votes.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
Exhibit Number |
Description | |
3.1 | Articles of Association of the company as amended | |
4.1 | Articles of Association of the company as amended (Incorporated by reference to Exhibit 3.1) | |
10.1 | ACE Limited Employee Stock Purchase Plan (as amended through the Fourth Amendment)* |
* | Management Contract or Compensation Plan |
4
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 thereunto duly authorized.
ACE LIMITED | ||
By: | /s/ Robert F. Cusumano | |
Robert F. Cusumano | ||
General Counsel |
DATE: May 22, 2012
EXHIBIT INDEX
Exhibit
|
Description |
|
3.1 | Articles of Association of the company as amended | |
4.1 | Articles of Association of the company as amended (Incorporated by reference to Exhibit 3.1) | |
10.1 | ACE Limited Employee Stock Purchase Plan (as amended through the Fourth Amendment)* |
* | Management Contract or Compensation Plan |
Exhibit 3.1
Die Gesellschaft kann im In- und Ausland Grundstücke erwerben, halten und veräussern. |
The Company may acquire, hold and sell real estate in Switzerland and abroad. |
|
b) Die Gesellschaft kann alle Geschäfte tätigen, die geeignet sind, den Zweck der Gesellschaft zu fördern und mit dem Zweck im Zusammenhang stehen. |
b) The Company may engage in all types of transactions and may take all measures that appear appropriate to promote the purpose of the Company or that are related to the same. |
|
II. Aktienkapital und Aktien | II. Share Capital and Shares | |
Artikel 3 Aktienkapital
a) Das Aktienkapital der Gesellschaft beträgt CHF 10377537111.24 und ist eingeteilt in 342832412 auf den Namen lautende Aktien im Nennwert von CHF 30.27 je Aktie. Das Aktienkapital ist vollständig liberiert. |
Article 3 Share Capital
a) The share capital of the Company amounts to CHF 10,377,537,111.24 and is divided into 342,832,412 registered shares with a nominal value of CHF 30.27 per share. The share capital is fully paid-in. |
|
b) Auf Beschluss der Generalversammlung können jederzeit Namenaktien in Inhaberaktien und Inhaberaktien in Namenaktien umgewandelt werden. |
b) Upon resolution of the General Meeting of Shareholders, registered shares may be converted into bearer shares and bearer shares may be converted into registered shares, at any time. |
|
Artikel 4 Bedingtes Aktienkapital für Anleihensobligationen und ähnliche Instrumente der Fremdfinanzierung
a) Das Aktienkapital der Gesellschaft wird im Maximalbetrag von CHF 998910000 durch Ausgabe von höchstens 33000000 vollständig zu liberierenden Namenaktien mit einem Nennwert von CHF 30.27 je Aktie erhöht, bei und im Umfang der Ausübung von Wandel- und/oder Optionsrechten, welche im Zusammenhang mit von der Gesellschaft oder ihren Tochtergesellschaften emittierten oder noch zu emittierenden Anleihensobligationen, Notes oder ähnlichen Obligationen oder Schuldverpflichtungen eingeräumt wurden/werden, einschliesslich Wandelanleihen. |
Article 4 Conditional Share Capital for Bonds and Similar Debt Instruments
a) The share capital of the Company shall be increased by an amount not exceeding CHF 998,910,000 through the issue of a maximum of 33,000,000 registered shares, payable in full, each with a nominal value of CHF 30.27 through the exercise of conversion and/or option or warrant rights granted in connection with bonds, notes or similar instruments, issued or to be issued by the Company or by subsidiaries of the Company, including convertible debt instruments. |
2
3
4
5
6
7
III. Organisation |
III. Organization | |
A. Die Generalversammlung |
A. The General Meeting |
|
Artikel 9 Befugnisse
Die Generalversammlung ist das oberste Organ der Gesellschaft. Sie hat die folgenden unübertragbaren Befugnisse: |
Article 9 Authorities
The General Meeting is the supreme corporate body of the Company. It has the following non-transferable powers: |
|
1. die Festsetzung und Änderung der Statuten; |
1. to adopt and amend the Articles of Association; |
|
2. die Wahl der Mitglieder des Verwaltungsrates und der Revisionsstelle; |
2. to elect and remove the members of the Board of Directors and the Auditors; |
|
3. die Genehmigung des Jahresberichts, der Jahresrechnung und der Konzernrechnung sowie die Beschlussfassung über die Verwendung des Bilanzgewinns, insbesondere die Festsetzung der Dividende; |
3. to approve the statutory required annual report, the annual accounts and the consolidated financial statements as well as to pass resolutions regarding the allocation of profits as shown on the balance sheet, in particular to determine the dividends; |
|
4. die Entlastung der Mitglieder des Verwaltungsrats; |
4. to grant discharge to the members of the Board of Directors; and |
|
5. die Beschlussfassung über die Gegenstände, die der Generalversammlung durch das Gesetz oder die Statuten vorbehalten sind oder welche ihr vom Verwaltungsrat vorgelegt werden. |
5. to pass resolutions regarding items which are reserved to the General Meeting by law or by the Articles of Association or which are presented to it by the Board of Directors. |
|
Artikel 10 Generalversammlungen sowie deren Einberufung
a) Die ordentliche Generalversammlung findet alljährlich innerhalb von sechs Monaten nach Abschluss des Geschäftsjahres statt. Zeitpunkt und Ort, welcher im In- oder Ausland sein kann, werden durch den Verwaltungsrat bestimmt. |
Article 10 Meetings and Convening the Meeting
a) The ordinary General Meeting shall be held annually within six months after the close of the business year at such time and at such location, which may be within or outside Switzerland, as determined by the Board of Directors. |
8
b) Ausserordentliche Generalversammlungen finden satt, wenn es die Generalversammlung, die Revisionsstelle oder der Verwaltungsrat für notwenig erachten. Ausserdem müssen ausserordentliche Generalversammlungen einberufen werden, wenn stimmberechtigte Aktionäre, welche zusammen mindestens 10% des Aktienkapitals vertreten, es verlangen. |
b) Extraordinary General Meetings may be called by resolution of the General Meeting, the Auditors or the Board of Directors, or by shareholders with voting powers, provided they represent at least 10% of the share capital. |
|
Artikel 11 Einberufung
Die Generalversammlung wird durch den Verwaltungsrat, nötigenfalls durch die Revisionsstelle oder die Liquidatoren, einberufen. Die Einladung erfolgt mindestens 20 Tage vor der Versammlung durch Publikation im Schweizerischen Handelsamtsblatt. |
Article 11 Notice
The General Meeting is summoned by the Board of Directors or if necessary by the Auditors or the liquidators. Notice of the General Meeting shall be given by publication in the Schweizerisches Handelsamtsblatt at least 20 days before the date of the meeting. |
|
Artikel 12 Traktanden
a) Der Verwaltungsrat nimmt die Traktandierung der Verhandlungsgegenstände vor. |
Article 12 Agenda
a) The Board of Directors shall state the matters on the agenda. |
|
b) Ein oder mehrere mit Stimmrecht eingetragene Aktionäre können, gemäss den gesetzlichen Bestimmungen, vom Verwaltungsrat die Traktandierung eines Verhandlungsgegenstandes verlangen. Das Begehren um Traktandierung ist schriftlich unter Angabe der Verhandlungsgegenstände und der Anträge an den Präsidenten des Verwaltungsrates mindestens 45 Tage vor der Generalversammlung einzureichen. |
b) One or more registered Shareholders may in compliance with the legal requirements demand that matters be included in the agenda. Such demands shall be in writing and shall specify the items and the proposals and has to be submitted to the Chairman up to 45 days before the date of the meeting. |
|
c) Über Anträge zu nicht gehörig angekündigten Verhandlungsgegenständen, welche auch nicht im Zusammenhang mit einem gehörig traktandierten Verhandlungsgegenstand stehen, können keine Beschlüsse gefasst werden, ausser in den gesetzlich vorgesehenen Fällen. |
c) No resolution shall be passed on matters proposed only at the General Meeting and which have no bearing on any of the proposed items of the agenda, apart from those exceptions permitted by law. |
9
10
11
(bb) alle Aktien der Gesellschaft, welche direkt oder indirekt von einer natürlichen oder juristischen Person als wirtschaftlich Berechtigte gehalten werden, wobei als solche jede Person gilt, die: |
(bb) all Shares of the Company directly, indirectly beneficially owned by such individual or entity; provided that |
|
(i) direkt oder indirekt, durch jede Art von Vertrag, Vereinbarung, anderweitige Rechtsbeziehung oder sonstwie alleine oder zusammen mit anderen derartigen Personen über Folgendes verfügt: |
(i) a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares: |
|
(1) Einfluss auf das Stimmrecht der betreffenden Aktien, sei dies direkt oder indirekt; und/oder |
(1) voting power which includes the power to vote, or to direct the voting of, such security; and/or |
|
(2) Einfluss auf die Verfügungsberechtigung an den betreffenden Aktien, sei dies direkt oder indirekt; |
(2) investment power which includes the power to dispose, or to direct the disposition of, such security. |
|
(ii) direkt oder indirekt Trusts, Vollmachten, übrige Vertretungsberechtigungen oder sonstige vertragliche Abreden errichtet oder benutzt in der Absicht, ihre wirtschaftliche Berechtigung an den Aktien zu überdecken, um die einschlägigen Bestimmungen dieser Statuten über die als kontrolliert geltenden Aktien zu umgehen; |
(ii) Any person who, directly or indirectly, creates or uses a trust, proxy, power of attorney, pooling arrangement or any other contract, arrangement, or device with the purpose or effect of divesting such person of beneficial ownership of shares of the Company or preventing the vesting of such beneficial ownership as part of a plan or scheme to evade the provisions of these articles of association shall be deemed to be the beneficial owner of such shares. |
|
(iii) die das Recht hat innerhalb von 60 Tagen die wirtschaftliche Berechtigung an Aktien zu erwerben, insbesondere, jedoch nicht abschliessend, |
(iii) A person shall be deemed to be the beneficial owner of shares if that person has the right to acquire beneficial ownership of such shares within 60 |
12
durch: (A) Ausübung von Wandel-, Options- oder sonstigen Rechten; (B) durch die Umwandlung eines Wertpapiers; (C) durch die automatische Aufhebung eines Trusts, eines Vermögensverwaltungskontos oder einer ähnlichen Vereinbarung; oder (D) durch Ablauf der Dauer eines Trusts, eines Vermögensverwaltungskontos oder einer ähnlichen Vereinbarung. |
days, including but not limited to any right to acquired: (A) through the exercise of any option, warrant or right; (B) through the conversion of a security; (C) pursuant to the power to revoke a trust, discretionary account, or similar arrangement; or (D) pursuant to the automatic termination of a trust, discretionary account or similar arrangement. |
|
d) Der Verwaltungsrat hat das Recht die Bestimmungen des Artikels 14 der Statuten auszulegen und die Berechtigung von natürlichen und juristischen Personen an Aktien der Gesellschaft zur Sicherstellung der Umsetzung dieser Bestimmungen festzulegen. Bei der Auslegung kann der Verwaltungsrat Gesetze, Reglemente und übrige Bestimmungen sowie Rechtsprechung aus dem In- und Ausland beiziehen, welche Art. 14 der Statuten ähnlich sind. |
d) The Board of Directors shall have the authority to interpret the provisions of this Article 14 and to determine the ownership of shares by any individual or entity so as to fully implement the provisions of this Article 14. In so interpreting this Article 14, the Board of Directors may look to laws, rules, regulations and court decisions (including of countries outside of Switzerland) having language substantially similar to this Article 14. |
|
e) Der Verwaltungsrat kann in besonderen Fällen Ausnahmen von den vorerwähnten Stimmrechtsbeschränkungen gewähren. |
e) The Board of Directors may in special cases allow exceptions from this limitation on voting rights. |
|
Artikel 15 Beschlüsse
a) Die Generalversammlung ist beschlussfähig ohne Rücksicht auf die Zahl der anwesenden Aktionäre oder der vertretenen Aktien. |
Article 15 Resolutions
a) The General Meeting may pass resolutions without regard to the number of shareholders present or shares represented. |
|
b) Die Generalversammlung fasst ihre Beschlüsse und vollzieht ihre Wahlen, soweit das Gesetz oder diese Statuten nichts anderes vorsehen, mit der einfachen Mehrheit der abgegebenen Stimmen (wobei Enthaltungen, sog. Broker Nonvotes, leere oder ungültige Stimmen für die Bestimmung des Mehr nicht berücksichtigt werden). |
b) Unless otherwise required by law or the Articles of Association, the General Meeting shall pass its resolutions and carry out its elections with the simple majority of the votes cast (whereby abstentions, broker non-votes, blank or invalid ballots shall be disregarded for purposes of establishing the majority). |
|
c) Der Vorsitzende bestimmt das Abstimmungsverfahren. Erfolgen die Wahlen nicht elektronisch haben sie mittels Stimmzettel zu erfolgen, wenn mindestens 50 anwesende Aktionäre dies per Handzeichen verlangen. Die Weisungserteilung via Internet oder Telefon kann durch den Vorsitzenden gestattet werden. |
c) The Chairman of the General Meeting shall determine the voting procedure. Provided that the voting is not done electronically, voting shall be by ballot if more than 50 of the shareholders present so demand by a show of hands. The accord of instructions by using the internet or the telephone can be permitted by the Chairman. |
13
Artikel 16 Quorum
Ein Beschluss der Generalversammlung, der mindestens zwei Drittel der vertretenen Stimmen und die absolute Mehrheit der vertretenen Aktiennennwerte auf sich vereinigt, ist erforderlich für: |
Article 16 Quorums
A resolution of the General Meeting passed by at least two thirds of the represented share votes and the absolute majority of the represented shares par value is required for: |
|
1. die in Art. 704 Abs. 1 OR aufgeführten Geschäfte, d.h. für: |
1. the cases listed in art. 704 para. 1 CO, i.e.: |
|
(a) die Änderung des Gesellschaftszwecks; |
(a) the change of the company purpose; |
|
(b) die Einführung von Stimmrechtsaktien; |
(b) the creation of shares with privileged voting rights; |
|
(c) die Beschränkung der Übertragbarkeit von Namenaktien; |
(c) the restriction of the transferability of registered shares; |
|
(d) eine genehmigte oder bedingte Kapitalerhöhung; |
(d) an increase of capital, authorized or subject to a condition; |
|
(e) die Kapitalerhöhung aus Eigenkapital, gegen Sacheinlage oder zwecks Sachübernahme und die Gewährung von besonderen Vorteilen; |
(e) an increase of capital out of equity, against contribution in kind, or for the purpose of acquisition of assets and the granting of special benefits; |
|
(f) die Einschränkung oder Aufhebung des Bezugsrechts; |
(f) the limitation or withdrawal of pre-emptive rights; |
|
(g) die Verlegung des Sitzes der Gesellschaft; |
(g) the change of the domicile of the Company; |
|
2. Fusion, Spaltung und Umwandlung der Gesellschaft (zwingende gesetzliche Bestimmungen vorbehalten); |
2. the merger, de-merger or conversion of the Company (subject to mandatory law); |
|
3. die Lockerung und die Aufhebung von Übertragungsbeschränkungen der Namenaktien; |
3. the alleviating or withdrawal of restrictions upon the transfer of registered shares; |
|
4. die Umwandlung von Namenaktien in Inhaberaktien und umgekehrt; |
4. the conversion of registered shares into bearer shares and vice versa; |
14
15
16
17
18
19
20
Zürich, 16. Mai 2012/ Zurich, May 16, 2012
/s/ Evan G. Greenberg |
/s/ Chris Kearns |
|||
Evan G. Greenberg |
Chris Kearns |
21
Exhibit 10.1
ACE LIMITED
EMPLOYEE STOCK PURCHASE PLAN
GENERAL
1.1. Purpose . The ACE Limited Employee Stock Purchase Plan (the Plan) has been established by ACE Limited (the Company) to provide eligible employees of the Company and the Related Companies with an opportunity to acquire a proprietary interest in the Company through the purchase of common shares of the Company (Stock). The Plan is intended to qualify as an employee stock purchase plan under section 423 of the Code, and the provisions of the Plan are to be construed in a manner consistent with the requirements of that section.
1.2. Operation and Administration . The operation and administration of the Plan shall be subject to the provisions of Section 3. Capitalized terms in the Plan shall be defined as set forth in Section 6 or elsewhere in the Plan.
SECTION 2.
2.1. Eligibility . Plan participation shall be available to (and shall be limited to) all persons who are employees of the Employers, except that the following persons shall not be eligible to participate in the Plan:
(a) |
An employee who has been employed less than 500 hours and less than six months. |
(b) |
An employee whose customary employment is 20 hours or less per week. |
(c) |
An employee whose customary employment is for not more than five months in any calendar year. |
(d) |
An employee who owns, or who would own upon the exercise of any rights extended under the Plan and the exercise of any other option held by the employee (whether qualified or non-qualified), shares possessing 5% or more of the total combined voting power or value of all classes of stock of the Company or of any parent or subsidiary corporation. |
(e) |
An employee who is a citizen or resident of a foreign jurisdiction (without regard to whether they are also citizens of the United States or resident aliens (within the meaning of Section 7701(b)(1)(A) of the Code)) with respect to whom either one or both of the following apply: (i) the grant of an option under the Plan or an offering to a citizen or resident of the foreign jurisdiction is prohibited under the laws of such jurisdiction; or (ii) compliance with the laws of the foreign jurisdiction would cause the Plan or offering to violate the requirements of Section 423 of the Code. |
Notwithstanding the foregoing provisions of this subsection 2.1, an individual may participate in the Plan for any Subscription Period only if he is employed by an Employer on the first day of that period.
2.2. Participation Election . The Committee shall establish Subscription Periods of not longer than one year for the accumulation of funds necessary for payment of the Purchase Price (as defined in subsection 2.3) of Stock under the Plan. For any Subscription Period, an eligible employee shall become a Plan Participant by filing, with the Committee, a written payroll deduction authorization with respect to Compensation otherwise payable to the Participant during the period. Such payroll deductions shall be any full percentage of the Compensation of the Participant, or any specified whole dollar amount, up to but not more than 10% of his Compensation in either case. After the beginning of the Subscription Period, and except as otherwise provided in subsection 2.4, a Participant may not alter the rate of his payroll deductions for that period. Subject to the limitations of subsection 2.3, each eligible employee who has elected to become a Participant for a Subscription
Period in accordance with the foregoing provisions of this subsection 2.2 shall be granted on the first day of such Subscription Period an option to purchase (at the applicable Purchase Price) on the Exercise Date (as defined in subsection 2.3) for such Subscription Period up to a number of whole shares of Stock determined by dividing such Participants accumulated payroll deductions as of such Exercise Date by the applicable Purchase Price. Exercise of the option shall occur as provided in subsection 2.3, unless the Participant has terminated participation in the Plan prior to the Exercise Date as provided in subsection 2.4 or the Participant elects not to exercise the option as provided in subsection 2.3(b). The option shall expire on the last day of the Subscription Period.
2.3. Purchase of Stock . On the last day of each Subscription Period (the Exercise Date), a Participant shall become eligible to exercise his option to purchase the number of whole shares of Stock as his accumulated payroll deductions for the Subscription Period will purchase, subject to the following:
(a) |
The Purchase Price per share shall be equal to 85% of the fair market value of Stock on the Exercise Date; provided, however, that in no event shall the purchase price be less than the par value of the Stock. |
(b) |
A Participant shall be deemed to have elected to purchase the shares of Stock which he became entitled to purchase on the Exercise Date unless he shall notify the Committee within seven days following the Exercise Date, or such shorter period as the Committee may establish, that he elects not to make such purchase. |
(c) |
Any accumulated payroll deductions that are not used to purchase full shares of Stock under the Plan shall be paid to the Participant without interest. |
(d) |
No employee shall have the right to purchase more than $25,000 in value of Stock under the Plan (and any other employee stock purchase plan described in Code section 423 and maintained by the Company or any Related Company) in any calendar year, such value being based on the fair market value of Stock as of the date on which the option to purchase the Stock is granted, as determined in accordance with subsection 2.2 of the Plan. |
2.4. Termination of Participation . A Participant may discontinue his participation in the Plan for any Subscription Period, whereupon all of the Participants payroll deductions for the Subscription Period will be promptly paid to him without interest, and no further payroll deductions will be made from his pay for that period. If a Participants employment with the Employers terminates during a Subscription Period for any reason, all payroll deductions accumulated by the Participant under the Plan for the period shall be paid to the Participant without interest.
OPERATION AND ADMINISTRATION
3.1. Effective Date . Subject to the approval of the shareholders of the Company at the Companys 1996 annual meeting of its shareholders, the Plan shall be effective as of the date on which it is adopted by the Board; provided, however, that to the extent that rights are granted under the Plan prior to its approval by shareholders, they shall be contingent on approval of the Plan by the shareholders of the Company. The Plan shall be unlimited in duration and, in the event of Plan termination, shall remain in effect as long as any rights granted under the Plan are outstanding.
3.2. Shares Subject to Plan . Shares of Stock to be purchased under the Plan shall be subject to the following:
(a) |
The shares of Stock which may be purchased under the Plan shall be currently authorized but unissued shares, or shares purchased in the open market by a direct or indirect wholly owned subsidiary of the Company (as determined by any executive officer of the Company). The Company may contribute to the subsidiary an amount sufficient to accomplish the purchase in the open market of the shares of Stock to be so acquired (as determined by any executive officer of the Company). |
(b) |
Subject to the provisions of subsection 3.3, an additional 1,500,000 shares of Stock in the aggregate shall be available for purchase under the Plan, which 1,500,000 shares of Stock shall be in addition to any remaining shares of the 3,000,000 shares of Stock designated as available for purchase under the Plan since the Plans original Effective Date. |
(c) |
A Participant will have no interest in shares of Stock covered by his Subscription Agreement until the shares are delivered to him. |
(a) If the Company shall effect any subdivision or consolidation of shares of Stock or other capital readjustment, payment of stock dividend, stock split, combination of shares or recapitalization or other increase or reduction of the number of shares of Stock outstanding without receiving compensation therefor in money, services or property, then, subject to the requirements of Code section 423, the Committee shall adjust the number of shares of Stock available under the Plan.
(b) If the Company is reorganized, merged or consolidated or is party to a plan of exchange with another corporation, pursuant to which reorganization, merger, consolidation or plan of exchange the shareholders of the Company receive any shares of stock or other securities or property, or the Company shall distribute securities of another corporation to its shareholders, then, subject to the requirements of Code section 423, there shall be substituted for the shares subject to outstanding rights to purchase Stock under the Plan an appropriate number of shares of each class of stock or amount of other securities or property which were distributed to the shareholders of the Company in respect of such shares.
3.4. Limit on Distribution . Distribution of shares of Stock or other amounts under the Plan shall be subject to the following:
(a) |
Notwithstanding any other provision of the Plan, the Company shall have no liability to issue any shares of Stock under the Plan unless such delivery or distribution would comply with all applicable laws and the applicable requirements of any securities exchange or similar entity. |
(b) |
In the case of a Participant who is subject to Section 16(a) and 16(b) of the Securities Exchange Act of 1934, the Committee may, at any time, add such conditions and limitations with respect to such Participant as the Committee, in its sole discretion, deems necessary or desirable to comply with Section 16(a) or 16(b) and the rules and regulations thereunder or to obtain any exemption therefrom. |
(c) |
To the extent that the Plan provides for issuance of certificates to reflect the transfer of shares of Stock, the transfer of such shares may, at the direction of the Committee, be effected on a non-certificated basis, to the extent not prohibited by the provisions of Rule 16b-3, applicable local law, the applicable rules of any stock exchange, or any other applicable rules. |
3.5. Withholding . All benefits under the Plan are subject to withholding of all applicable taxes.
3.6. Transferability . Except as otherwise permitted under Code section 424 and SEC Rule 16b-3, neither the amount of any payroll deductions made with respect to a Participants compensation nor any Participants rights to purchase shares of Stock under the Plan may be pledged or hypothecated, nor may they be assigned or transferred other than by will and the laws of descent and distribution. During the lifetime of the Participant, the rights provided to the Participant under the Plan may be exercised only by him.
3.7. Limitation of Implied Rights .
(a) Neither a Participant nor any other person shall, by reason of the Plan, acquire any right in or title to any assets, funds or property of the Employers whatsoever, including, without limitation, any specific funds, assets, or other property which the Employers, in their sole discretion, may set aside in anticipation of a liability under
the Plan. A Participant shall have only a contractual right to the amounts, if any, payable under the Plan, unsecured by any assets of the Employers. Nothing contained in the Plan shall constitute a guarantee by any of the Employers that the assets of the Employers shall be sufficient to pay any benefits to any person.
(b) The Plan does not constitute a contract of employment, and participation in the Plan will not give any employee the right to be retained in the employ of an Employer or any Related Company, nor any right or claim to any benefit under the Plan, unless such right or claim has specifically accrued under the terms of the Plan. Except as otherwise provided in the Plan, no right to purchase shares under the Plan shall confer upon the holder thereof any right as a shareholder of the Company prior to the date on which he fulfills all service requirements and other conditions for receipt of such rights.
3.8. Evidence . Evidence required of anyone under the Plan may be by certificate, affidavit, document or other information which the person acting on it considers pertinent and reliable, and signed, made or presented by the proper party or parties.
3.9. Action by Employers . Any action required or permitted to be taken by any Employer shall be by resolution of its board of directors, or by action of one or more members of the board (including a committee of the board) who are duly authorized to act for the board, or (except to the extent prohibited by the provisions of Rule 16b-3, applicable local law, the applicable rules of any stock exchange, or any other applicable rules) by a duly authorized officer of the Employer.
3.10. Gender and Number . Where the context admits, words in any gender shall include any other gender, words in the singular shall include the plural and the plural shall include the singular.
COMMITTEE
4.1. Administration . The authority to control and manage the operation and administration of the Plan shall be vested in a committee (the Committee) in accordance with this Section 4.
4.2. Selection of Committee . The Committee shall be selected by the Board, and shall consist of not less than two members of the Board, or such greater number as may be required for compliance with SEC Rule 16b-3.
4.3. Powers of Committee . The authority to manage and control the operation and administration of the Plan shall be vested in the Committee, subject to the following:
(a) |
Subject to the provisions of the Plan, the Committee will have the authority and discretion to establish the terms, conditions, restrictions, and other provisions applicable to the right to purchase shares of Stock under the Plan. |
(b) |
The Committee will have the authority and discretion to interpret the Plan, to establish, amend, and rescind any rules and regulations relating to the Plan, to determine the terms and provisions of any agreements made pursuant to the Plan, and to make all other determinations that may be necessary or advisable for the administration of the Plan. |
(c) |
Any interpretation of the Plan by the Committee and any decision made by it under the Plan is final and binding on all persons. |
4.4. Delegation by Committee . Except to the extent prohibited by the provisions of Rule 16b-3, applicable local law, the applicable rules of any stock exchange, or any other applicable rules, the Committee may allocate all or any portion of its responsibilities and powers to any one or more of its members and may delegate all or any part of its responsibilities and powers to any person or persons selected by it. Any such allocation or delegation may be revoked by the Committee at any time.
4.5. Information to be Furnished to Committee . The Employers and Related Companies shall furnish the Committee with such data and information as may be required for it to discharge its duties. The records of the Employers and Related Companies as to an employees or Participants employment, termination of employment, leave of absence, reemployment and compensation shall be conclusive on all persons unless determined to be incorrect. Participants and other persons entitled to benefits under the Plan must furnish the Committee such evidence, data or information as the Committee considers desirable to carry out the terms of the Plan.
4.6. Liability and Indemnification of Committee . No member or authorized delegate of the Committee shall be liable to any person for any action taken or omitted in connection with the administration of the Plan unless attributable to his own fraud or willful misconduct; nor shall the Employers be liable to any person for any such action unless attributable to fraud or willful misconduct on the part of a director or employee of the Employers. The Committee, the individual members thereof, and persons acting as the authorized delegates of the Committee under the Plan, shall be indemnified by the Employers, to the fullest extent permitted by law, against any and all liabilities, losses, costs and expenses (including legal fees and expenses) of whatsoever kind and nature which may be imposed on, incurred by or asserted against the Committee or its members or authorized delegates by reason of the performance of a Committee function if the Committee or its members or authorized delegates did not act dishonestly or in willful violation of the law or regulation under which such liability, loss, cost or expense arises. This indemnification shall not duplicate but may supplement any coverage available under any applicable insurance.
AMENDMENT AND TERMINATION
The Board may, at any time, amend or terminate the Plan, provided that, subject to subsection 3.3 (relating to certain adjustments to shares), no amendment or termination may adversely affect the rights of any Participant or beneficiary with respect to shares that have been purchased prior to the date such amendment is adopted by the Board. No amendment of the Plan may be made without approval of the Companys shareholders to the extent that such approval is required to maintain compliance with the requirements of Code section 423.
DEFINED TERMS
For purposes of the Plan, the terms listed below shall be defined as follows:
(a) |
Board . The term Board shall mean the Board of Directors of the Company. |
(b) |
Code . The term Code means the Internal Revenue Code of 1986, as amended. A reference to any provision of the Code shall include reference to any successor provision of the Code. |
(c) |
Compensation . The term Compensation means total compensation paid by an Employer for the applicable period specified in Section 2.2, exclusive of any payment in cash or kind under any stock option plan, deferred compensation plan, or other employee benefit plan or program of the Company or Related Company. |
(d) |
Dollars . As used in the Plan, the term dollars or numbers preceded by the symbol $ shall mean amounts in United States Dollars. |
(e) |
Effective Date . The Effective Date shall be the date on which the Plan is adopted by the Board. |
(f) |
Employer . The Company and each Related Company which, with the consent of the Company, adopts the Plan for the benefit of its eligible employees are referred to collectively as the Employers and individually as an Employer. |
(g) |
Fair Market Value . The Fair Market Value of a share of Stock of the Company as of any date shall be the closing market composite price for such Stock as reported for the New York Stock ExchangeComposite Transactions on that date or, if Stock is not traded on that date, on the next preceding date on which Stock was traded. |
(h) |
Participant . The term Participant means any employee of an Employer who is eligible and elects to participate pursuant to the provisions of Section 2. |
(i) |
Related Companies . The term Related Company means any company during any period in which it is a subsidiary corporation (as that term is defined in Code section 424(f)) with respect to the Company. |