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Ace Limited 1999 Replacement Long Term Incentive

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Sectors: Insurance
Effective Date: January 11, 1999
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Statement of Purpose

The ACE Limited 1999 Replacement Long-Term Incentive Plan (the "Plan") has been established by ACE Limited (the "Company") to award substitute restricted stock awards in satisfaction of its obligations under Section 5.3(b) of the acquisition agreement dated as of January 11, 1999 by and among the Company, CIGNA Corporation ("CIGNA") and CIGNA Holdings, Inc. (the "Acquisition Agreement") and to provide selected individuals substitute restricted stock awards in replacement of certain CIGNA equity-based awards which terminate or expire in connection with the closing of the transaction contemplated by the Acquisition Agreement (the "Transaction").


For all purposes of this Plan, except as otherwise expressly provided or defined herein or unless the context otherwise requires, the terms defined in this Article shall have the following meanings:

2.1 "Board of Directors" or "Board" means the board of directors of
the Company or any duly authorized committee of that board.

2.2 "CEO" means the Chief Executive Officer of the Company.

2.3 "Change of Control" means the occurrence of any one of the following

(a) any "person," as such term is used in Sections 3(a)(9)
and 13(d) of the United States Securities Exchange Act of
1934, becomes a "beneficial owner," as such term is used
in Rule 13d-3 promulgated under that act, of 50% or more
of the Voting Stock (as defined below) of the Company;

(b) the majority of the Board consists of individuals other
than Incumbent Directors, which term means the members of
the Board on the Effective Date; provided that any person
becoming a director subsequent to such date whose
election or nomination for election was supported by
three-quarters of the directors who then comprised the
Incumbent Directors shall be considered to be an
Incumbent Director;

(c) the Company adopts any plan of liquidation providing for the
distribution of all or substantially all of its assets;


(d) all or substantially all of the assets or business of the
Company is disposed of pursuant to a merger,
consolidation or other transaction (unless the
shareholders of the Company immediately prior to such
merger, consolidation or other transaction beneficially
own, directly or indirectly, in substantially the same
proportion as they owned the Voting Stock of the Company,
all of the Voting Stock or other ownership interests of
the entity or entities, if any, that succeed to the
business of the Company); or

(e) the Company combines with another company and is the
surviving corporation but, immediately after the
combination, the shareholders of the Company immediately
prior to the combination hold, directly or indirectly,
50% or less of the Voting Stock of the combined company
(there being excluded from the number of shares held by
such shareholders, but not from the Voting Stock of the
combined company, any shares received by Affiliates (as
defined below) of such other company in exchange for
stock of such other company).

2.4 "Code" means the Internal Revenue Code of 1986, as amended.

2.5 "Committee" means the Committee selected by the Board of Directors
or any successor committee with responsibility for compensation.

2.6 "Company" means ACE Limited, a Cayman Island company.

2.7 "Deferred Compensation Account" means a separate account
established pursuant to a Deferred Compensation Plan.

2.8 "Deferred Compensation Plan" means a deferred compensation plan or
other arrangement of the Company or a Subsidiary which has been
designated by the Committee as a "Deferred Compensation Plan" for
purposes of this Plan.

2.9 "Disability" means permanent and total disability as defined in Code
Section 22(e)(3).

2.10 "Eligible Employee" means any person who (i) is entitled to
substitute restricted stock awards pursuant to the Acquisition
Agreement or (ii) is holding CIGNA equity awards that terminate or
expire in connection with the closing of the Transaction and is
selected by the Committee to receive Substitute Restricted Stock
under the Plan.

2.11 "Exchange Act" means the Securities Exchange Act of 1934, as amended.

2.12 "Fair Market Value" means except as otherwise provided by the
Committee, the "Fair Market Value" of a share of Stock as of any
date shall be the closing market composite price for such Stock as
reported for the New York Stock Exchange - Composite Transactions
on that date or, if Stock is not traded on that date, on the next
preceding date on which Stock was traded.


2.13 "Ordinary Shares" means the ordinary shares, par value $0.041666667
per share, of the Company.

2.14 "Participant" means an Eligible Employee to whom any one or more
of the awards authorized by this Plan shall have been granted.

2.15 "Plan" means this ACE Limited 1999 Replacement Long-Term Incentive
Plan, as it may be amended from time to time.

2.16 "Restricted Period" means the period during which Ordinary Shares
awarded under Article 5 are subject to restrictions on sale,
transfer, assignment, pledge or other disposition.

2.17 "Retirement" means the occurrence of a Participant's Date of
Termination with the consent of the Participant's employer after
the Participant is eligible for retirement under the ACE Limited
qualified retirement plan the individual is participating in at
the time; provided, however, that the Committee may impose such
additional conditions or restrictions on Retirement as it
determines to be appropriate.

2.18 "SEC" means the Securities and Exchange Commission.

2.19 "Subsidiary" means any corporation of which more than 50% of the
total combined voting power of all classes of stock entitled to
vote, or other equity interest, is directly or indirectly owned by
the Company; or a partnership, joint venture or other
unincorporated entity of which more than a 50% interest in the
capital, equity or profits is directly or indirectly owned by the

2.20 "Substitute Restricted Stock" means Ordinary Sh
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