-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, GtIEmlRSLI9cibNGJVr+jpnjgVY1GibihYBMTZMNMT/8YN2d2gx2EpqSyRJopHPZ ltXyB03On+ZeW6qk1BpDtg== 0000003449-95-000005.txt : 199507100000003449-95-000005.hdr.sgml : 19950710 ACCESSION NUMBER: 0000003449-95-000005 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 8 FILED AS OF DATE: 19950707 EFFECTIVENESS DATE: 19950726 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALEXANDER & ALEXANDER SERVICES INC CENTRAL INDEX KEY: 0000003449 STANDARD INDUSTRIAL CLASSIFICATION: INSURANCE AGENTS BROKERS & SERVICES [6411] IRS NUMBER: 520969822 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: 1933 Act SEC FILE NUMBER: 033-60905 FILM NUMBER: 95552620 BUSINESS ADDRESS: STREET 1: 1185 AVE OF THE AMERICAS CITY: NEW YORK STATE: NY ZIP: 10036 BUSINESS PHONE: 2128408500 FORMER COMPANY: FORMER CONFORMED NAME: ALEXANDER & ALEXANDER INC DATE OF NAME CHANGE: 19751029 S-8 1 As filed with the Securities and Exchange Commission on July 7, 1995. Registration No. 33-_____ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ALEXANDER & ALEXANDER SERVICES INC. (Exact name of registrant as specified in its charter) MARYLAND 52-0969822 (State or other jurisdiction or (I.R.S. Employer Identification No.) incorporation or organization) 1185 Avenue of the Americas, New York, New York 10036 (Address of Principal Executive Offices) (Zip Code) ALEXANDER & ALEXANDER SERVICES INC. 1995 LONG-TERM INCENTIVE PLAN (Full title of the plan) ALBERT A. SKWIERTZ, JR., ESQ. Vice President and General Counsel Alexander & Alexander Services Inc. 1185 Avenue of the Americas New York, New York 10036 (212) 840-8500 (Name, address, telephone number, including area code, of agent for service) CALCULATION OF REGISTRATION FEE Title of Proposed Proposed Securities to Amount Maximum Maximum Amount of Be Registered: to be Offering Price Aggregate Registration Common Stock Registered: Per Share (2): Offering Price: Fee: ($1.00 Par Value)(1)4,700,000 shs.$23.69 $111,343,000 $38,395 (1)Includes the preferred share purchase rights associated with the Common Stock. (2)Estimated solely for the purpose of determining the registration fee pursuant to Rule 457(h). The proposed maximum offering price per share is based upon the average of the high and low prices for the stock on the New York Stock Exchange on July 3, 1995. PART I. INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS The information required by Part I is included in documents that will be sent or given to participants in the Alexander & Alexander Services Inc. 1995 Long-Term Incentive Plan, (the "1995 Plan") pursuant to Rule 428(b)(1). Such documents are not being filed with the Securities and Exchange Commission (the "Commission") either as part of this Registration Statement or as prospectuses or prospectus supplements pursuant to Rule 424. PART II. INFORMATION REQUIRED IN THE REGISTRATION STATEMENT Item 3.Incorporation of Documents by Reference. Incorporated by reference in this Registration Statement are the following documents heretofore filed by Alexander & Alexander Services Inc. (the "Company") with the Securities and Exchange Commission (the "Commission") pursuant to the Securities Act of 1933, as amended (the "Securities Act") and the Securities Exchange Act of 1934, as amended (the "Exchange Act"): (a) The Company's latest annual report filed pursuant to Sections 13(a) or 15(d) of the Exchange Act; (b) All other reports filed pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 since the end of the last fiscal year for which financial statements were included in the report referred to in (a) above; and (c) The description of the Company's Common Stock, $1.00 par value and the description of the Rights to Purchase Series A Junior Participating Preferred Stock, $1.00 par value, each contained in a registration statement filed under the Exchange Act, and any amendment or report filed for the purpose of updating such description. All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended, prior to the filing of a post-effective amendment which indicates that all securities offered hereby have been sold or which deregisters all securities remaining unsold, shall be deemed to be incorporated by reference herein and to be a part hereof from the date of the filing of such documents. Item 4.Description of Securities. Not Applicable. Item 5.Interests of Named Experts and Counsel. Albert A. Skwiertz, Jr., Esq., whose opinion with respect to the validity of the securities being registered is an exhibit to this Registration Statement, is Vice President and General Counsel of the Company. Mr. Skwiertz will be a participant in the 1995 Plan. Mr. Skwiertz owns no shares directly or indirectly of the Company's Common Stock and holds options for 28,500 shares of Common Stock. In addition, 1,342 shares of Common Stock are attributed to Mr. Skwiertz's account under the Thrift Plan. Item 6.Indemnification of Directors and Officers. Section 2-418 of the Maryland General Corporation Law establishes provisions whereby a Maryland corporation may indemnify any director or officer made party to an action or proceeding by reason of service in that capacity, against judgments, penalties, fines, settlements and reasonable expenses incurred in connection with such action or proceeding unless it is proved that the director or officer (i) acted in bad faith or with active and deliberate dishonesty; (ii) actually received an improper personal benefit in money, property or services; or (iii) in the case of a criminal proceeding had reasonable cause to believe that his act was unlawful. However, if the proceeding is a derivative suit in favor of the corporation, indemnification may not be made if the individual is adjudged to be liable to the corporation. In no case may indemnification be made until a determination has been reached that the director or officer has met the applicable standard of conduct. Indemnification for reasonable expenses is mandatory if the director or officer has been successful on the merits or otherwise in the defense of any action or proceeding covered by the indemnification statute. The statute also provides for indemnification of directors and officers by court order. The indemnification provided or authorized in the indemnification statute does not preclude a corporation from extending other rights (indemnification or otherwise) to directors and officers. The Company's Bylaws provide for indemnification of any person who is serving or has served as a director or officer of the Company, against all liabilities and expenses incurred in connection with any action, suit or proceeding arising out of such service to the full extent permitted under Maryland law. The Company currently maintains policies of insurance under which the Company and the directors and officers of the Company are insured, within the limits of the policies, against certain expenses in connection with the defense of actions, suits or proceedings, and certain liabilities which might be imposed as a result of such actions, suits or proceedings, to which directors and officers of the Company are parties by reason of being or having been such directors or officers. Item 7.Exemption from Registration Claimed. Not Applicable. Item 8.Exhibits. Exhibit Number Exhibit Title 4.1 Amended and Restated Articles of Incorporation of the Company (incorporated herein by reference to the Company's Annual Report on Form 10-K for the year ended December 31, 1991). 4.2 Articles of Amendment, dated July 15, 1994, to the Articles of Incorporation of the Company (incorporated herein by reference to the Company's Report on Form 10-Q for the quarter ended June 30, 1994). 4.3 Articles Supplementary of the Company, dated March 18, 1993 relating to the $3.625 Series A Convertible Preferred Stock (incorporated herein by reference to the Company's Annual Report on Form 10-K for the year ended December 31, 1992). 4.4 Articles Supplementary of the Company, dated July 15, 1994 relating to the 8% Series B Cumulative Convertible Preferred Stock (incorporated herein by reference to the Company's Report on Form 10-Q for the quarter ended June 30, 1994). 4.5 Articles Supplementary of the Company, dated July 15, 1994 relating to the Series A Junior Participating Preferred Stock (incorporated herein by reference to the Company's Report on Form 10-Q for the quarter ended June 30, 1994). 4.6 Amended and Restated Bylaws of the Company, dated as of January 14, 1994 (incorporated herein by reference to the Company's Annual Report on Form 10-K for the year ended December 31, 1993). 4.7 Amendment No. 1 to By-Laws of the Company, dated March 21, 1995 (incorporated herein by reference to the Company's Annual Report on Form 10-K for the year ended December 31, 1994). 4.8 Rights Agreement dated as of June 11, 1987, amended and restated as of March 27, 1990, between the Company and First Chicago Trust Company of New York, formerly Morgan Shareholder Services Trust Company, as Rights Agent (incorporated herein by reference to the Company's Registration Statement on Form 8 filed with the Commission on June 19, 1987, as amended by Amendment No. 1 on Form 8 filed on March 28, 1990. Amendment No. 2 on Form 8-A filed on April 23, 1992, Amendment No. 3 on Form 8-A/A filed on December 1, 1993 and Amendment No. 4 on Form 8-A/A filed on July 15, 1994). 4.9 Form of Trust Agreement dated as of June 11, 1987, amended and restated as of March 28, 1990, between the Company and Montreal Trust Company of Canada, as successor to The Canada Trust Company (incorporated herein by reference to Registration Statement on Form 8- A filed with the Commission on June 19, 1987 as amended by Amendment No. 1 on Form 8 filed on March 28, 1990). 4.10 Alexander & Alexander Services Inc. 1995 Long-Term Incentive Plan, effective as of May 18, 1995. 4.11 Alexander & Alexander Services Inc. Performance Bonus Plan for Executive Officers, effective as of January 1, 1995. 4.12 Form of Limited Stock Appreciation Rights Agreement. 4.13 Form of Restricted Stock Award Agreement. 4.14 Form of Stock Option Award Agreement. 5.1 Opinion of Albert A. Skwiertz, Jr., Esq., Vice President and General Counsel of the Company, as to the legality of the securities registered hereunder. 23.1 Independent Auditors' Consent. 23.2 Consent of Albert A. Skwiertz, Jr., Esq., Vice President and General Counsel of the Company (incorporated by reference to Exhibit 5). 24.1 Power of Attorney is included in the Signature Page contained in Part II of this Registration Statement. Item 9.Undertakings. (a) The undersigned registrant hereby undertakes: (1) That, for the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (2) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (b) The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the Registration Statement shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (c) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, State of New York, on the 7th day of July, 1995. ALEXANDER & ALEXANDER SERVICES INC. By: /s/ Frank G. Zarb Frank G. Zarb, Chairman of the Board, Chief Executive Officer, President and Director POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Frank G. Zarb and Albert A. Skwiertz, Jr., and each of them, his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments (including pre-effective and post-effective amendments) to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them acting singly, full power and authority to do and perform each and every act and thing necessary and requisite to be done, as fully and to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated. Signature Title Date /s/ Frank G. Zarb Chairman of the Board, July 7, 1995 Frank G. Zarb Chief Executive Officer, President and Director (Principal Executive Officer) /s/ Edward F. Kosnik Director, Executive Vice July 7, 1995 Edward F. Kosnik President and Chief Financial Officer (Principal Financial Officer) /s/ Richard P. Sneeder, Jr. Controller (Principal July 7, 1995 Richard P. Sneeder, Jr. Accounting Officer) [SIGNATURES CONTINUED] [SIGNATURES CONTINUED] /s/ Robert E. Boni Director July 7, 1995 Robert E. Boni /s/ W. Peter Cooke Director July 7, 1995 W. Peter Cooke /s/ E. Gerald Corrigan Director July 7, 1995 E. Gerald Corrigan /s/ Joseph L. Dionne Director July 7, 1995 Joseph L. Dionne /s/ Gerald R. Ford Director July 7, 1995 Gerald R. Ford /s/ Peter C. Godsoe Director July 7, 1995 Peter C. Godsoe /s/ Angus M.M. Grossart Director July 7, 1995 Angus M.M. Grossart /s/ Maurice H. Hartigan II Director July 7, 1995 Maurice H. Hartigan II /s/ James Bickford Hurlock Director July 7, 1995 James Bickford Hurlock /s/ Ronald A. Iles Director July 7, 1995 Ronald A. Iles Director Vincent R. McLean /s/ James D. Robinson III Director July 7, 1995 James D. Robinson III EXHIBIT INDEX Page Number in Regulation S-K Sequentially Numbered Exhibit Number Description of Document Copy Exhibit 4.10 Alexander & Alexander Services Inc. 1995 Long-Term Incentive Plan, effective as of May 18, 1995 Exhibit 4.11 Alexander & Alexander Services Inc. Performance Bonus Plan for Executive Officers, effective as of January 1, 1995 Exhibit 4.12 Form of Limited Stock Appreciation Rights Agreement Exhibit 4.13 Form of Restricted Stock Award Agreement Exhibit 4.14 Form of Stock Option Award Agreement Exhibit 5.1 Opinion of Albert A. Skwiertz, Jr., Esq., Vice President and General Counsel of the Company, as to the legality of the securities to be registered Exhibit 23.1 Independent Auditors' Consent Exhibit 23.2 Consent of Albert A. Skwiertz, Jr., Esq. (included in Exhibit 5.1) ht:Z:WP:FORMS8:/95PLAN EX-4.10 2 Alexander & Alexander Services Inc. 1995 Long-Term Incentive Plan Section 1. Purpose The purpose of the 1995 Long-Term Incentive Plan (the "Plan") is to promote the success of Alexander & Alexander Services Inc. (the "Company") by providing incentives for certain key employees which will link their personal interest to both the long term financial success of the Company and the growth of stockholder value. The Plan is intended to enhance the Company's ability to attract, retain and motivate qualified personnel upon whom, in large measure, the progress, growth and profitability of the Company depends. The various types of long-term incentive awards provided under the Plan will enable the Company to respond to changes in compensation practices, tax laws, accounting regulations, and the size and diversity of its businesses. Section 2. Definitions For purposes of the Plan, the following terms shall have the meanings indicated below unless the context clearly indicates otherwise: (a) "Award" shall mean any grant of Stock, or of a right to receive either Stock or an amount of cash calculated by reference to the value of Stock, made under the Plan. (b) "Award Agreement" shall mean an agreement between a Participant and the Company covering the specific terms and conditions of an Award. (c) "Board of Directors" shall mean the Board of Directors of the Company. (d) "Bonus Equity Plan" shall mean the program described in Section 6.4 of the Plan. (e) "Code" shall mean the Internal Revenue Code of 1986, as it may be amended from time to time. (f) "Committee" shall mean the committee appointed by the Board of Directors to administer the Plan pursuant to Section 4. (g) "Company" shall mean Alexander & Alexander Services Inc. and its Subsidiaries. (h) "Disability" shall mean permanent disability within the meaning of Section 22(e)(3) of the Code. (i) "Incentive Stock Option" shall mean an option to purchase Stock granted under Section 6.1 of the Plan which is designated as an Incentive Stock Option and is intended to meet the requirements of Section 422 of the Code. (j) "Nonqualified Stock Option" shall mean an option to purchase Stock granted under Section 6.1 of the Plan which is not intended to be an Incentive Stock Option. (k) "Option" shall mean an Incentive Stock Option or a Nonqualified Stock Option. (l) "Option Period" shall mean the period from the date of the grant of an Option to the date when the Option expires as stated in the terms of the Award Agreement. (m) "Optionee" shall mean a Participant who has been granted an option to purchase shares of Stock under the provisions of the Plan. (n) "Other Stock Based Awards" shall have the meaning specified in Section 6.6 of the Plan. (o) "Participant" shall mean an employee who has an outstanding Award granted under the Plan. (p) "Performance Share/Unit" shall mean the grant of contingent shares of Stock or units under Section 6.5 of the Plan. (q) "Performance Award" shall mean an Award granted under the conditions specified in Section 7 of the Plan. (r) "Plan" shall mean the Alexander & Alexander Services Inc. 1995 Long-Term Incentive Plan, as it may be amended from time to time. (s) "Replacement Option" shall mean an Option to purchase Stock granted under Section 6.1(f) of the Plan. (t) "Restricted Period" shall mean the period of time from the date of grant of Restricted Stock to the date when the restrictions placed on the Stock in the Award Agreement lapse. (u) "Restricted Stock" shall mean an Award of Stock granted under Section 6.3 or Section 6.4 of the Plan. (v) "Retirement" shall mean termination of employment with the Company or any of its Subsidiaries at or after age 60 (or such earlier age as the Committee shall determine) and pursuant to a retirement plan of the Company or the Subsidiary. (w) "Stock" shall mean the Company's common stock, $1.00 par value per share. (x) "Stock Appreciation Right" shall mean a right to receive an amount, payable in cash or Stock or partly in cash and partly in Stock, equal to the difference between the fair market value of the Stock on the date the Award is exercised and the exercise price of the Stock Appreciation Right as stated in the Award Agreement. (y) "Subsidiary" shall mean any corporation which at the time qualifies as a subsidiary of the Company under the definition of "subsidiary corporation" in Section 424(f) of the Code. (a) "Termination of Employment" shall be deemed to have occurred at the close of business on the last day on which a Participant is carried as an active employee on the records of the Company or any of its Subsidiaries. Section 3. Stock Subject to the Plan 3.1 Authorized Stock Subject to adjustment as provided in this Section 3, the aggregate number of shares of Stock that may be delivered under the Plan shall not exceed the sum of (a) 4,700,000 plus (b) the number of shares remaining available for issuance on the effective date of the Plan under the Company's 1988 Long-Term Incentive Compensation Plan (the "Predecessor Plan") plus (c) the lesser of (i) 2,000,000 shares of Stock or (ii) the number of shares of Stock received by the Company after the effective date of the Plan upon exercise of any Option, whether issued under the Plan or the Predecessor Plan. No more than 940,000 shares shall be issued as Restricted Stock under Sections 6.3 and 6.4 of the Plan. The exercise of a Stock Appreciation Right, whether paid in cash or Stock, shall be deemed to be an issuance of Stock under the Plan. The payment of Performance Share/Unit and Other Stock Based Awards shall not be deemed to constitute an issuance of Stock under the Plan unless payment is made in Stock, in which case only the number of shares issued in payment of the Performance Share/Unit or Other Stock Based Awards shall constitute an issuance of Stock under the Plan. 3.2 Effect of Expirations Except as otherwise provided in Section 3.1, in the event that (a) any Award granted under the Plan or (b) any Award granted under the Predecessor Plan and outstanding on the effective date of the Plan, shall expire or terminate for any reason, including by reason of its reacquisition (through a purchase, exchange, surrender or otherwise) and cancellation by the Company, or if the amount of Stock subject to an Award or to be delivered upon exercise of an Award is reduced for any reason whatsoever, the Stock no longer subject to such Award shall be available to be reawarded under the Plan. 3.3 Adjustments in Authorized Shares In the event of any merger, reorganization, consolidation, recapitalization, separation, liquidation, stock dividend, split-up, share combination, or other change in the corporate structure of the Company affecting the Stock, the number and class of shares which may be delivered under the Plan, and the number and class of and/or price of shares subject to outstanding Awards granted under the Plan shall be adjusted in a manner determined to be appropriate and equitable by the Committee, in its sole discretion, to prevent dilution or enlargement of rights; and provided that the number of shares subject to any Award shall always be a whole number. Any adjustment of an Incentive Stock Option under this paragraph or paragraph 3.4 shall be made in such a manner so as not to constitute a "modification" within the meaning of Section 424(h)(3) of the Code. 3.4 Adjustment for Purposes of Tender Offers In the event of the offer to holders of Stock generally relating to the acquisition of their shares, the Committee may make such adjustment as it deems appropriate and equitable in respect of outstanding Awards so that they may be exercisable for or payable in the consideration payable in the acquisition transaction. Any adjustment of an Incentive Stock Option under this paragraph shall be made in such a manner so as not to constitute a "modification" within the meaning of Section 424(h)(3) of the Code. Section 4. Administration 4.1 The Committee The Plan shall be administered by a committee (the "Committee") consisting of not less than two directors who shall be appointed from time to time by, and shall serve at the discretion of, the Board of Directors. A director may serve on the Committee only if he or she has not received an Award under the Plan or any similar plan of the Company or any of its Subsidiaries for at least one year before his or her appointment and otherwise satisfies the definition of a "disinterested person" for purposes of Rule 16b-3 under the Securities Exchange Act of 1934, as amended. 4.2 Authority of the Committee Subject to the provisions of the Plan, the Committee shall have full power to construe and interpret the Plan; to establish, amend or waive rules and regulations for its administration; to accelerate the exercisability of any Award or the end of a performance period or the termination of any Restricted Period under an Award; to correct errors, omissions or inconsistencies in the Plan or in any Award Agreement, or any other instrument relating to an Award under the Plan, and (subject to the provisions of Section 8) to amend the terms and conditions of any outstanding Award to the extent such terms and conditions are within the discretion of the Committee as provided in the Plan. The Committee's decisions and all related orders or resolutions of the Board of Directors with respect to the interpretation and administration of the Plan shall be final, conclusive and binding on all persons, including the Company, its stockholders, employees, Participants and their estates and beneficiaries. Notwithstanding the foregoing, no action of the Committee may, without the consent of the person or persons entitled to exercise or receive payment of any other outstanding Award, adversely affect the rights of such person or persons. No member of the Committee shall be liable, in the absence of bad faith, for any act or omission with respect to his or her services on the Committee. Service on the Committee shall constitute service as a director of the Company so that members of the Committee shall be entitled to indemnification, any limitation of liability and reimbursement as directors with respect to their services as members of the Committee. 4.3 Selection of Participants The Committee shall have the authority to grant Awards under the Plan from time to time to any employee of the Company and any of its Subsidiaries (including officers and directors who are employees) selected by the Committee. Except as otherwise provided in Section 6.4(b), the Committee shall select Participants from among employees identified by the Company as eligible to participate in the Plan. 4.4 Delegation of Certain Responsibilities The Committee may, in its sole discretion, delegate to appropriate officers of the Company the administration of the Plan under this Section 4; provided, however, that no such delegation by the Committee shall be made (i) if such delegation would not be permitted under applicable law or (ii) with respect to the administration of the Plan as it affects executive officers or directors of the Company, and provided further that the Committee may not delegate its authority to correct errors, omissions or inconsistencies in the Plan. Subject to the above limitations, the Committee may delegate to the Chief Executive Officer of the Company its authority under this Section 4 to grant Awards to employees who are not executive officers or directors of the Company. All authority delegated by the Committee under this Section 4.4 shall be exercised in accordance with the provisions of the Plan and any guidelines for, conditions on, or limitations to the exercise of such authority that may from time to time be established by the Committee. 4.5 Award Agreements Each Award under the Plan shall be evidenced by an Award Agreement which shall be signed by an officer of the Company and by the Participant, and shall contain such terms and conditions as may be approved by the Committee, which need not be the same in all cases. Any Award Agreement may be supplemented or amended in writing from time to time as approved by the Committee, provided that the terms of such agreements as amended or supplemented, as well as the terms of the original Award Agreement, are not inconsistent with the provisions of the Plan. Nothing contained in the Plan or any resolutions adopted or to be adopted by the Board of Directors or by the stockholders of the Company shall constitute the granting of an Award under the Plan. An employee who receives an Award under the Plan shall not, with respect to such Award, be deemed to have become a Participant and/or an Optionee, or to have any rights with respect to such Award, unless and until such employee has executed an Award Agreement or other instrument evidencing the Award and shall have delivered an executed copy thereof to the Company, and has otherwise complied with the applicable terms and conditions of the Award. Section 5. Eligibility Except with respect to Awards under Section 6.4 (the Bonus Equity Plan), all officers of the Company and each other employee of the Company and its Subsidiaries who are expected to contribute substantially to the growth and profitability of the Company and its Subsidiaries are eligible to receive Awards under the Plan. Eligibility criteria for participation in the Bonus Equity Plan are specified in Section 6.4(b). Section 6. Awards Under the Plan Any Award granted under the Plan may be made either alone or in conjunction with any other type of Award which may be granted under the Plan; provided that an Optionee shall not be granted Options for more than 1,000,000 shares of Stock in any twelve month period. 6.1 Stock Option Awards (a) Option Price - The purchase price per share of Stock covered by an Option shall be determined by the Committee but shall not be less than 100% of the fair market value of such Stock on the date the Option is granted. Such fair market value shall be determined by the Committee, which may use any reasonable valuation method. An Incentive Stock Option granted to any person who, at the time the Option is granted, owns (within the meaning of Section 424(d) of the Code) stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or of its parent or any Subsidiary, shall have an exercise price which is at least 110% of the fair market value of the Stock subject to the Option. (b) Option Period - The Option Period shall be determined by the Committee, but no Incentive Stock Option shall be exercisable later than ten years from the date of grant and no Nonqualified Stock Option shall be exercisable later than ten years and one day from the date of grant. Notwithstanding the foregoing, in the case of an Optionee owning (within the meaning of Section 424(d) of the Code), at the time an Incentive Stock Option is granted, more than 10% of the total combined voting power of all classes of stock of the Company or any Subsidiary, such Incentive Stock Option shall not be exercisable later than five years from the date of grant. (c) Limitation on Amount of Incentive Stock Options - Subject to the overall limitations of Section 3 (relating to the aggregate amount of Stock subject to the Plan), the aggregate fair market value (determined as of the time the Option is granted) of Stock with respect to which Incentive Stock Options are exercisable for the first time by a Participant during any calendar year under the Plan (and all other incentive stock option plans of the Company, any Subsidiary or any parent corporation) shall not exceed $100,000. In no event, however, shall an acceleration of exercisability pursuant to the terms of the Plan operate to reduce or limit the number of shares which may be exercised pursuant to such Incentive Stock Options. Shares in excess of the $100,000 limit described herein which become exercisable as a result of acceleration shall be treated as shares subject to a Nonqualified Stock Option. (d) Exercisability - An Option shall become exercisable at such time or times as determined by the Committee at or subsequent to grant. (e) Method of Exercise (i) In order to exercise an Option under the Plan, the Optionee or other person(s) entitled to exercise the Option shall give written notice of exercise to the Company specifying the number of full shares to be purchased. Such notice shall be accompanied either by (A) payment in full (in such form as provided in this Section 6.1(e)) for the Stock being purchased plus, in the case of Nonqualified Stock Options, any required withholding tax as provided in Section 9 or (B) delivery of a properly executed notice together with irrevocable instructions to a securities broker to deliver promptly to the Company the amount of sale or loan proceeds. (ii) Unless the Committee shall in its sole discretion determine otherwise, payment in full or in part may be made by tendering to the Company Stock owned by the Optionee (or by the Optionee and his or her spouse, jointly) and acquired more than six months prior to such tender. The amount of Stock tendered in payment shall have a fair market value equal to the aggregate purchase price of the number of full shares covered by the Option to be purchased, such fair market value to be determined in any reasonable manner as may be provided for from time to time by the Committee or as may be required to order to comply with or to conform to the requirements of any applicable or relevant laws or regulations. (iii) The Committee in its sole discretion may also permit payment in full or in part to be made by tendering Restricted Stock awarded under Section 6.4 of the Plan at least six months prior to such tender. The value of such Restricted Stock shall be specified by the Committee at the time it agrees to accept it in payment; provided that, if no value is specified by the Committee, the value of the Restricted Stock tendered shall be calculated in accordance with subparagraph 6.1(e)(ii). (iv) If the exercise price of an Option is paid by delivery of Restricted Stock awarded under Section 6.4, then the shares issued upon exercise of the Option shall also be Restricted Stock and shall remain so for the remainder of the restricted period applicable to the shares of Restricted Stock tendered in payment. (f) Replacement Options -- At the time an Option is granted or upon the exercise of an Option granted under the Plan, the Committee may, at its sole discretion, authorize the issuance of or grant to the Optionee a Replacement Option. A Replacement Option shall be authorized or granted only if Stock or Restricted Stock is tendered in payment of the exercise price of the Option. The Replacement Option shall permit the Optionee to purchase a number of shares of Stock equal to the number of shares of Stock tendered in payment of the exercise price of the Option, and, if applicable, in satisfaction of any withholding taxes due upon exercise of the Option. The exercise price of the Replacement Option shall be equal to the fair market value of the Stock on the date the original Option is exercised, and, subject to the other provisions contained herein, may contain such terms as the Committee shall determine (including the date or dates on which the Option shall become exercisable and the length of the Option Period). (g) Termination of Employment - Unless otherwise specified by the Committee at or subsequent to the grant, an Option may be exercised after an Optionee's Termination of Employment only with respect to the number of shares of Stock (subject to adjustment as provided in Section 3.3 or 3.4) which the Optionee could have acquired by an exercise of the Option immediately prior to the Termination of Employment, but in no event after the expiration date of the Option as specified in the applicable Award Agreement. Except to the extent otherwise provided by the Committee, an Optionee's right to exercise any Option following Termination of Employment shall terminate: (i) At the expiration of three months (Incentive Stock Options) or three years (Nonqualified Stock Options) after the Optionee's Retirement; provided, however, if an Incentive Stock Option is not exercised within three months of the Optionee's Termination of Employment, it will be treated as a Nonqualified Stock Option for purposes of the Plan when it is exercised; or (ii) At the expiration of one year (Incentive Stock Options) or three years (Nonqualified Stock Options) following a finding that the Optionee has a Disability; the determination of the Committee on any question involving disability to be conclusive and binding; or; At the expiration of one year in the event of the Disability of the Optionee, the determination of the Committee on any question involving disability shall be conclusive and binding; or (iii) At the expiration of one year after the Optionee's death if the Optionee's Termination of Employment occurs by reason of death or if the Optionee had the right to exercise an Option on the date of death pursuant to subparagraph (i) of this Section 6.1(g). Any Option exercised under this subparagraph (iii) may be exercised in full by the legal representative of the estate of the Optionee or by the person or persons who acquire the right to exercise such Option by bequest or inheritance; or (iv) Thirty days following the Optionee's Termination of Employment for any other reason, except that, if such Termination of Employment would constitute "discharge", as defined in the Company's Severance Benefit Plan (as in effect on the effective date of the Plan), the Optionee's right to exercise any Option shall end immediately upon such Termination of Employment. (h) The person or persons entitled to exercise, or who have exercised, an Option shall not be entitled to any rights as a stockholder of the Company with respect to any shares subject to the Option until such person or persons shall have become the holder of record of such shares. 6.2 Stock Appreciation Right Awards (a) Grants - Stock Appreciation Rights may be awarded alone or in conjunction with all or part of any Option granted under the Plan. The Committee, in its sole discretion, shall establish all terms of a stand-alone Stock Appreciation Right, including its exercise price and expiration date and any other terms the Committee believes appropriate at the time of grant. Awards of Stock Appreciation Rights in conjunction with Options shall be made as follows: (i) In the case of a Nonqualified Stock Option, such rights may be granted either at the time the Option is granted or at any subsequent time during the term of the Option; and (ii) In the case of an Incentive Stock Option, such rights may be granted only at the time the Option is granted. (b) Terms and Conditions - Stock Appreciation Rights awarded in conjunction with an Option shall be subject to all terms and conditions of the Option. In addition, all Stock Appreciation Rights shall be subject to the following terms and conditions, and may contain additional terms and conditions, not inconsistent with the Plan, as the Committee shall determine: (i) Price and Fair Market Value - The purchase price per share of Stock subject to a Stock Appreciation Right shall be determined by the Committee at the time of grant. Both the purchase price and the fair market value of Stock on the date of exercise of a Stock Appreciation Right shall be determined by the Committee in the manner specified in Section 6.1(a) with respect to Options. (ii) Exercisability - Stock Appreciation Rights awarded in conjunction with an Option shall be exercisable only to the extent that the Option is exercisable and shall terminate and shall no longer be exercisable upon the expiration or exercise of the related Option. Stock Appreciation Rights not granted in conjunction with an Option shall be exercisable as specified by the Committee at or subsequent to the date of grant. However, no Stock Appreciation Right or any related Option may be exercised until at least 6 months after the date of grant, except that this limitation shall not apply in the event of the death or Disability of the Participant prior to the expiration of the 6- month period. (iii) Termination of Employment - Except as otherwise provided by the Committee at the time a Stock Appreciation Right is awarded, the right to exercise a Stock Appreciation Right shall terminate as specified in Section 6.1(g) of the Plan as if the Stock Appreciation Right were a Non-Qualified Stock Option. (c) Method of Exercise - A Stock Appreciation Right awarded in conjunction with an Option may be exercised by the Optionee surrendering the applicable portion of the related Option. Options which have been so surrendered, in whole or in part, shall no longer be exercisable to the extent the related Stock Appreciation Right has been exercised. Upon the exercise of any Stock Appreciation Right, a Participant shall be entitled to receive an amount, in cash or whole shares of Stock or partly in cash and partly in Stock (as determined by the Committee in its sole discretion), equal to the amount by which the fair market value of one share of Stock (determined by the Committee as if the Stock Appreciation Right were a Non-Qualified Option) exceeds the exercise price per share specified in the Award, multiplied by the number of shares in respect of which the Stock Appreciation Right has been exercised. Shares of Stock delivered to the Participant upon exercise of a Stock Appreciation Right, if any, shall be valued at their fair market value (determined as specified in Section 6.1(a) above) on the date of exercise. (d) Limited Stock Appreciation Rights - Notwithstanding anything else in this Section 6.2 to the contrary, the Committee may grant Stock Appreciation Rights which (i) become exercisable solely upon the occurrence of a Change of Control as defined in Section 9.12 hereof and which remain exercisable for a specified period of time (not exceeding 90 days) following such Change of Control, and (ii) provide that upon exercise, the amount payable to the holder thereof may be based upon either (A) the fair market value of a share of Stock (determined as specified in Section 6.1(a) above) or (B) the highest price per share paid in any transaction reported on the New York Stock Exchange Composite Index, or paid or offered in any bona fide transaction related to a Change of Control, at any time during the 60 day period immediately preceding the occurrence of the Change of Control, in each case as determined by the Committee except that, in the case of any such Stock Appreciation Right relating to an Incentive Stock Option, the amount payable shall be based solely on the fair market value of a share of Stock. 6.3 Restricted Stock Awards (a) Restricted Period - Except as otherwise specified by the Committee, the Restricted Period shall commence on the date of grant of the Award and shall expire 3 years thereafter. During the Restricted Period, the Participant shall not sell, transfer, pledge, assign or otherwise dispose of shares of Stock subject to a Restricted Stock Award. Any attempt by the Participant to sell, transfer, pledge, assign or otherwise dispose of such Stock shall constitute immediate forfeiture of such Award. (b) Rights of Participant - Except as provided in paragraph (a) of this Section 6.3, the Participant shall have, with respect to the shares subject to the Restricted Stock Award, all the rights of a stockholder of the Company, including the right to vote the shares and the right to receive all dividends and other distributions with respect to such shares, provided that the Participant has become the holder of record of such shares. In the event of any adjustment as provided in Section 3.3 or 3.4 or any securities received as a dividend on the Award shares, such new or additional shares or securities shall be subject to the same terms and conditions as relate to the original Restricted Stock Award. (c) Lapse of Restrictions - At the conclusion of the Restricted Period, the restrictions on the Restricted Stock Award shall lapse, whereupon the Company shall, subject to the provisions of Section 9.3 or 9.5, promptly deliver to the Participant a stock certificate evidencing those shares. (d) Termination of Employment - Except as otherwise provided by the Committee either at the time the Restricted Stock Award is granted or thereafter, the Restricted Period shall end and any other restrictions specified in the Award Agreement shall automatically be removed upon the Participant's Termination of Employment by reason of death, Disability or Retirement during the Restricted Period. In the event of the Participant's Termination of Employment during the Restricted Period for any other reason, the Participant's rights to the shares subject to the Restricted Stock Award shall be forfeited and all such shares shall immediately be surrendered to the Company. 6.4 Bonus Equity Plan (a) Grants - Awards will be made in the form of Restricted Stock, based on a percentage of the cash incentive compensation otherwise payable to a Participant under any incentive compensation plans, programs or arrangements of the Company or any Subsidiary, and will be granted at such time as the Committee may in its sole discretion determine ("BEP Awards"). The percentage of incentive compensation used to determine the size of BEP Awards will be determined by a formula or formulas approved by the Committee. (b) Eligibility - Officers and other key employees of the Company or any of its Subsidiaries who are entitled to receive cash incentive compensation shall be eligible to receive Awards under this Section 6.4. The Committee shall, in its sole discretion, select Participants to receive BEP Awards from among those officers and employees who are entitled to receive cash incentive compensation and who (i) are nominated to participate in the Bonus Equity Plan by the Company or (ii) voluntarily elect to participate. Participation in the Bonus Equity Plan by Participants nominated by the Company shall be mandatory upon approval by the Committee. (c) Amount - The number of shares of Restricted Stock subject to a BEP Award will be calculated by valuing the Stock at not less than 75% of its fair market value ("BEP Value"). For purposes of this Section 6.4, the BEP Value shall be determined by the Committee based on the average of the Stock's closing prices on the Composite Tape of the New York Stock Exchange for the five trading days prior to the date of the Award. The dollar value of each Participant's specified percent of cash incentive compensation to be subject to a BEP Award (determined by formulas approved by the Committee) will be divided by the BEP Value to determine the number of whole shares of Restricted Stock subject to each BEP Award. The value of any fractional shares will be paid in cash. (d) Form - Each Participant who receives a BEP Award may, but need not, be issued a stock certificate in respect of such shares of Restricted Stock. A "book entry" (i.e., a computerized or manual entry) may instead be made in the records of the Company to evidence a Participant's BEP Award. Such Company records shall, absent manifest error, be binding on all Participants. (e) Restrictions - a BEP Award shall be subject to the following restrictions and conditions: (i) Except as otherwise specified by the Committee either at the time of grant or thereafter, the Restricted Period shall be three years from the date a BEP Award is granted. During the Restricted Period, except as provided in Section 6.1(e) of the Plan, the Participant shall not sell, transfer, pledge, assign or otherwise dispose of such shares and any attempt by a Participant to do so shall constitute immediate forfeiture of the BEP Award. (ii) Unless the Committee in its sole discretion shall determine otherwise at or prior to the time a BEP Award is granted, during the Restricted Period the Participant shall have all such rights with respect to shares of Restricted Stock granted under this Section 6.4 as are specified in Section 6.3(b) with respect to other shares of Restricted Stock. (f) Lapse of Restrictions - At the conclusion of the Restricted Period, the restrictions on the BEP Award shall lapse and the Participant shall thereafter have the right to sell or otherwise transfer the BEP Award Shares. (g) Termination of Employment - Except as otherwise provided by the Committee either at the time of grant or thereafter, the Restricted Period shall end and any other restrictions specified in the BEP Award Agreement shall automatically be removed upon the Participant's Termination of Employment by reason of death, Disability or Retirement during the Restricted Period. In the event of the Participant's Termination of Employment during the Restricted Period for any other reason, unless the Committee shall otherwise determine, the Participant's rights to the shares subject to the BEP Award shall be forfeited and all such shares shall immediately be surrendered to the Company. 6.5 Performance Share/Unit Awards (a) Grants - Performance Share/Unit Awards granted under the Plan shall be in such form as the Committee may from time to time approve, subject to the terms and conditions of this Section 6.5 and may contain any terms and conditions (which terms and conditions need not be the same in each case), not inconsistent with the Plan, as the Committee shall deem desirable. (b) Performance Period - The Committee shall, at the time of grant, establish a performance period for the Award. Such period shall commence and end on the dates specified by the Committee. Notwithstanding the above, the Committee may, in its sole discretion, accelerate the end of a performance period. (c) Performance Criteria and Valuation - The Committee shall, at the time of grant, establish performance criteria with respect to the Performance Share/Unit Award. These performance criteria may include any measures of performance of the Company or its Subsidiaries or such other criteria as the Committee shall select. At the end of the performance period established by the Committee pursuant to Section 6.5(b), the Committee shall evaluate actual performance during such performance period compared to the performance criteria established for the Award, and shall determine the value, if any, of the Performance Share/Unit Award and the amount payable in respect thereof. (d) Dividents and Interest - Subject to the provisions of the Plan and the Award Agreement, a Participant who receives a Performance Share Award under this Section 6.5 shall be entitled to receive, currently or on a deferred basis, interest or dividends, or interest or dividend equivalents, with respect to the number of shares of Stock covered by the Award, as determined at the time of the Award by the Committee in its sole discretion, and the Committee may provide that such amounts (if any) shall be deemed to have been reinvested in additional Stock or otherwise been reinvested. (e) Payment shall be made in cash or in Stock having a fair market value on the date of payment (determined by the Committee using any reasonable valuation method) equal to the amount payable, or partly in cash and partly in Stock, as determined by the Committee. No fractional shares of Stock will be issued. (f) Termination of Employment (i) If a Participant's employment terminates during the performance period specified in the Award Agreement by reason of death, Disability or Retirement, any payment to the Participant, or to the Participant's estate or to those person(s) who acquire the right to receive such payment by bequest or inheritance, shall be determined by the Committee at the end of that performance period based on the criteria established under Section 6.5(c). Any such payment shall be prorated to reflect the period of time the Participant was employed during the performance period. Notwithstanding the above, the Committee, in its sole discretion, may accelerate such payment by taking into consideration the extent to which the performance criteria were achieved at the time of the Termination of Employment. (ii) In the event the Participant's Termination of Employment occurs prior to the end of the specified performance period for any reason other than those specified in Section 6.5(f)(i), the Participant's right to the Performance Share/Unit Award shall be forfeited as of the date of his or her Termination of Employment, except that the Committee may, in its sole discretion, make provisions for payment, if any, as it deems appropriate. 6.6 Other Stock Based Awards (a) Grants - Awards of Stock and Awards that are valued in whole or in part by reference to, or are otherwise based on, Stock ("Other Stock Based Awards") may be granted under the Plan. The provisions of Other Stock Based Awards need not be the same in each case. The Committee, in its sole discretion, may grant Other Stock Based Awards as it deems appropriate (i) to take advantage of the compensation practices or tax and accounting regulations applicable at the time of the grant, even if such practices or regulations are different from those in effect on the effective date of the Plan and (ii) to conform to and comply with tax, securities or other law or regulations in jurisdictions outside the United States. (b) Terms and Conditions - Other Stock Based Awards made pursuant to this Section 6.6 shall be subject to the following terms and conditions: (i) Subject to the provisions of the Plan and the Award Agreement, a Participant who receives an Award under this Section 6.6 shall be entitled to receive, currently or on a deferred basis, interest or dividends, or interest or dividend equivalents, with respect to the number of shares of Stock covered by the Award, as determined at the time of the Award by the Committee in its sole discretion, and the Committee may provide that such amounts (if any) shall be deemed to have been reinvested in additional Stock or otherwise been reinvested. (ii) Any Award under this Section 6.6 and any Stock covered by any such Award may be forfeited to the extent so provided in the Award Agreement as determined by the Committee in its sole discretion. (c) Termination of Employment - Unless otherwise specified by the Committee, all Other Stock Based Awards granted under this Section 6.6 will be forfeited upon the Participant's Termination of Employment, except that, in the event the Participant's Termination of Employment occurs by reason of death, Retirement or Disability, the Committee may, in its sole discretion, waive any or all of the remaining limitations, restrictions or requirements, if any, imposed pursuant to the Plan or in the applicable Award Agreement. Section 7. Performance Related Awards 7.1 Performance Objectives. (a) Notwithstanding anything else in the Plan to the contrary, unless the Committee otherwise determines at the time of grant, any Award (other than an Option or a Stock Appreciation Right) intended to qualify as "other performance based compensation" within the meaning of Section 162(m)(4)(C) of the Code, including of Restricted Stock, Performance Shares, Performance Units or Other Stock Based Awards, (other than an award which will vest solely on the basis of the passage of time) granted to an officer who is (i) subject to the reporting requirements of Section 16(a) of the Securities Exchange Act of 1934, as amended, and (ii) whose compensation is deductible under the Code in the United States, shall become vested, if at all, only upon the determination by the Committee that performance objectives established by the Committee have been attained, in whole or in part. An Award subject to such a determination by the Committee shall be known as a Performance Award. (b) Performance objectives for Performance Awards shall be determined over a measurement period or periods established by the Committee and shall relate to at least one of the following criteria: (i) operating margin (operating income divided by operating revenues); (ii) operating income; (iii) income before income taxes and minority interest, (iv) return on equity; and (v) earnings per share, (as such criteria may relate to the performance of (A) the Company, (B) a Subsidiary, (C) a division or unit of any of the foregoing or (D) any of the foregoing compared to that of other companies or of each other (the "Performance Criteria"). (c) The maximum number of shares of Stock that may be subject to any such Performance Award in any 12 month period shall not exceed 500,000 shares, as such number may be adjusted pursuant to Section 3. 7.2 Annual Incentive Compensation. The Committee may, in addition to the Performance Awards described above, pay cash amounts under the Plan to any officer of the Company or of any Subsidiary described in Section 7.1(a) above who is subject to the reporting requirements of Section 16(a) of the Exchange Act upon the achievement, in whole or in part, of performance goals or objectives established in writing by the Committee with respect to such performance periods as the Committee shall determine. Any such goals or objectives shall be based on one or more of the Performance Criteria. Notwithstanding anything else contained herein to the contrary, the maximum amount of such cash payment to any single officer with respect to any 12 month period shall not exceed the lesser of (A) $3,000,000 or (B) three times the officer's annual base salary as in effect on the last day of the fiscal year preceding the calendar year in which such cash payment is made. 7.3 Interpretation. Notwithstanding anything else in the Plan to the contrary, to the extent required to qualify any Performance Award as "other performance based compensation" within the meaning of Section 162(m) (4) (C) of the Code, the Committee shall not be entitled to exercise any discretion otherwise authorized under the Plan (such as the right to accelerate vesting without regard to the achievement of the relevant performance objectives) with respect to such Performance Award if the ability to exercise such discretion (as opposed to the exercise of such discretion) would cause such award to fail to qualify as other performance based compensation. Section 8. Amendments and Termination 8.1 The Board of Directors may terminate, suspend, amend or alter the Plan, but no such action may impair or adversely affect the rights of a Participant under an Option or other Award theretofore granted, without the Participant's consent, other than as provided in Section 9.12. In addition, no amendment shall become effective without the approval of stockholders if such amendment would (i) Increase the amount of Stock which may be issued under the Plan (except as authorized in accordance with Section 3 of the Plan) in a manner that would require stockholder approval for the Plan to continue to qualify for the exemption available under Rule 16b-3 under the Securities Exchange Act of 1934, as amended (the "1934 Act"); (ii) Permit the grant of Options with an exercise price which is less than the fair market value of the Stock on the date of grant; (iii) Expand the class of eligible participants in the Plan to include any member of the Company's Board of Directors who is not also an employee of the Company or one of its Subsidiaries; (iv) Extend the duration of Awards to a period greater than that permitted under Section 9.13; (v) Modify any provision of the Plan in a manner that would cause compensation payable pursuant to any Award to fail to be deductible for U.S. federal income tax purposes if such compensation is (x) intended to pay compensation qualifying as other performance based compensation under Section 162(m) of the Code and (y) granted to an executive officer who is subject to the reporting requirements under Section 16(a) of the 1934 Act and whose compensation is deductible by the Company or a Subsidiary under U.S. tax law; or (vi) Extend the period during which Awards under the Plan may be granted past the date specified in Section 12. 8.2 In granting an Award, the Committee may establish any conditions that it determines are consistent with the purposes and provisions of the Plan, including, without limitation, a condition that the granting of an Award is subject to the surrender for cancellation of any or all outstanding Awards held by the Participant. Any new Award made under this section may contain such terms and conditions as the Committee may determine, including an exercise price that is lower than that of any surrendered Option or Stock Appreciation Right. 8.3 Any amendment or alteration of the Plan may be limited to, or may exclude from its effect, particular Participants or particular groups of Participants. Section 9. General Provisions 9.1 Unfunded Status of Plan - The Plan is intended to constitute an "unfunded" plan for incentive compensation, and is not intended to be subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended. With respect to any payments not yet made to a Participant by the Company, nothing contained herein shall give any such Participant any rights that are greater than those of a general creditor of the Company. In its sole discretion, the Committee may authorize the creation of trusts or other arrangements to meet the obligations created under the Plan to deliver Stock or payments with respect to Options, Stock Appreciation Rights and/or other Awards hereunder, provided, however, that the existence of such trusts or other arrangements is consistent with the unfunded status of the Plan. 9.2 Transfers, Leaves of Absence and Other Changes in Employment Status - For purposes of the Plan: (a) A transfer of an employee from the Company to a Subsidiary, or vice versa, or from one Subsidiary to another; or (b) A leave of absence, duly authorized in writing by the Company, for military service or sickness, or for any other purpose approved by the Company if the period of such leave does not exceed ninety days; or (c) Any leave of absence in excess of ninety days approved by the Company, provided the employee's right to reemployment is guaranteed either by a statute or by contract; shall not be deemed a Termination of Employment. The Committee, in its sole discretion, shall determine the disposition of all Awards made under the Plan in all cases involving any substantial change in employment status other than as specified herein. 9.3 Distribution of Stock - The Committee may require Participants receiving Stock in connection with any Award under the Plan to represent to and agree with the Company in writing that the Participant is acquiring the shares for investment without a view to distribution thereof. The certificates for such shares may include any legend which the Committee deems appropriate to reflect any restrictions on transfer. 9.4 Limits on Transfer - Subject to the provisions of the Plan and the Award Agreement, and except as provided in Section 6.1(e) with respect to BEP Awards, no Award may be sold, transferred, pledged, assigned, encumbered or otherwise alienated or hypothecated, other than by will, by the laws of descent and distribution or to a member of the Participant's family or to a trust or similar vehicle for the benefit of such family members to whom or to which the Committee shall permit an Award to be transferred upon such terms and conditions as the Committee shall establish. 9.5 Stop Transfer Orders/Restrictions - All certificates for shares of Stock delivered under the Plan pursuant to any Restricted Stock Award, BEP Award or Other Stock Based Award shall be subject to such stop-transfer orders and other restrictions as the Committee may deem advisable under the rules, regulations, and other requirements of the Securities and Exchange Commission, any stock exchange upon which the Stock is then listed, and any applicable Federal, state or foreign securities law, and the Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions. 9.6 Payment for Restricted Stock, BEP, Performance Share/Unit, or Other Stock Based Awards - Except as otherwise required in the applicable Award Agreement, recipients of Awards under the Plan (other than Options) shall not be required to make any payment or provide consideration for the receipt of such Awards, other than the rendering of services. 9.7 Other Compensation Plans - Nothing contained in the Plan shall prevent the Board of Directors from adopting other compensation arrangements, subject to stockholder approval if such approval is required. 9.8 Grants Under Predecessor Plan - Subject to the approval of the Plan by stockholders at the Company's 1995 Annual Stockholders' Meeting, the provisions of the Plan shall apply to, and govern, existing and subsequent awards under the Predecessor Plan (as defined in Section 3.1) and, unless otherwise determined by the Committee, existing and subsequent awards under the Predecessor Plan shall be deemed to be amended to provide any additional rights applicable to Awards hereunder, subject to the right of any affected participant in the Predecessor Plan to refuse to consent to such amendment. 9.9 Subsidiary Plans - The Committee may approve or adopt incentive compensation plans under the Plan for employees of Subsidiaries as required to meet the provisions of the tax or securities laws or other applicable laws, rules or regulations in the jurisdictions in which any Subsidiary operates. Any shares of Stock issued under any such Subsidiary plans shall be deemed to have been issued under the Plan. The Committee, in its sole discretion, may delegate its authority under this Section 9.9 to the Chief Executive Officer or any other appropriate officer of the Company, provided that no such delegation shall be made with respect to any plan of a Subsidiary that would provide Awards to an executive officer or a director of the Company. 9.10 Authority Limited to Committee - No person shall at any time have any right to receive an Award hereunder and no person shall have authority to enter into an agreement on behalf of the Company for the granting of an Award or to make any representation or warranty with respect thereto, except as granted by the Committee pursuant to the Plan or as provided in Section 4.4. Participants shall have no rights with respect to any Award except as set forth in the Plan and the applicable Award Agreement. 9.11 No Right to Employment - Neither the action of the Company in establishing the Plan, nor any action taken by it or by the Board of Directors or by the Committee under the Plan or any Award Agreement, nor any provision of the Plan, shall be construed as giving to any person the right to be retained in the employ of the Company or any Subsidiary. 9.12 Change of Control (a) For the purposes of the Plan, a "change of control" shall be deemed to have taken place if: (i) Any individual, firm, corporation or other entity, or any group (as defined in Section 13(d)(3) of the 1934 Act) becomes, directly or indirectly, the beneficial owner (as defined in the General Rules and Regulations of the Securities and Exchange Commission with respect to Sections 13(d) and 13(g) of the 1934 Act) of more than 35% of the then outstanding shares of the Company's capital stock entitled to vote generally in the election of directors of the Company; or (ii) Any individual, firm, corporation or other entity or any group (as defined in Section 13(d)(3) of the 1934 Act) commences a tender or exchange offer subject to Section 14(d)(1) of the 1934 Act for any class of the Company's capital stock; or (iii) The stockholders of the Company approve a definitive agreement for (A) the merger or other business combination of the Company with or into another corporation pursuant to which the stockholders of the Company do not own, immediately after the transaction, more than 50% of the voting power of the corporation that survives and is a publicly owned corporation and not a subsidiary of another corporation, or (B) the sale, exchange or other disposition of all or substantially all of the assets of the Company; or (iv) During any period of two years or less, individuals who at the beginning of such period constituted the Board of Directors of the Company cease for any reason to constitute at least a majority thereof unless the election, or the nomination for the election by the stockholders of the Company, of each new director was approved by a vote of at least 75% of the directors then still in office who were directors at the beginning of the period; provided, however, that a "change of control" shall not be deemed to have taken place if beneficial ownership is acquired by, or a tender or exchange offer is commenced or announced by, the Company or any of its Subsidiaries, any profit-sharing, employee ownership or other employee benefit plan of the Company or any Subsidiary or any trustee of or fiduciary with respect to any such plan when acting in such capacity, or any group comprised solely of such entities (b) In the event of a "change of control" as defined in subsection (a) above, Awards granted under the Plan will be subject to the following provisions: (i) All outstanding Options and Stock Appreciation Rights granted under the Plan shall become exercisable in full whether or not otherwise exercisable at such time, and any such Option or Stock Appreciation Right shall remain exercisable in full thereafter until it expires pursuant to its terms; (ii) All restrictions contained in Restricted Stock Awards and BEP Awards granted under Sections 6.3 and 6.4, respectively, of the Plan shall lapse, and the Participant shall thereupon own the stock free and clear of such restrictions; (iii) With respect to Performance Share/Unit Awards granted under the Plan, the performance period established for such Awards shall be deemed to have been completed, and such Awards shall become payable in an amount equal to the greater of the amount payable upon achievement of the performance criteria established for the Award at the time of grant or the actual performance achieved to the date of the "change of control"; and (iv) With respect to Other Stock Based Awards, such Awards shall become fully exercisable or payable in accordance with the terms and conditions specified in the Award Agreement. 9.13 Award Period - No Award granted under the Plan shall be exercisable or payable more than 10 years from the date of grant except for Nonqualified Stock Options, which shall not be exercisable for more than 10 years and one day from the date of grant. Section 10. Taxes 10.1 Pursuant to Section 83(b) of the Code, if any Participant properly elects (within thirty days of the date on which property subject to a substantial risk of forfeiture and non- transferable is transferred to such Participant pursuant to an Award) to include in gross income for U.S. Federal income tax purposes an amount equal to the fair market value (on the date of such transfer) of the Stock subject to the Award (or the difference between the fair market value and the option price on the date of exercise of an Option), such Participant shall make arrangements satisfactory to the Committee to pay to the Company, at the time of such transfer (or at the time of exercise in the case of an Option), any U.S. Federal, state or local taxes required to be withheld with respect to such shares. If such Participant shall fail to make such tax payments as are required, the Company and its Subsidiaries shall, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to the Participant. 10.2 Any Participant who does not or cannot make the election described in Section 10.1 with respect to an Award, shall, no later than the date as of which the value of the Award first becomes includable in the gross income of the Participant for income tax purposes, pay to the Company, or make arrangements satisfactory to the Company regarding payment of, any taxes of any kind required by law to be withheld with respect to the Stock or other property subject to such Award, and the Company and its Subsidiaries shall, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to the Participant. 10.3 Unless the Committee shall in its sole discretion determine otherwise (and subject to any limitations imposed by Section 16 of the 1934 Act, payment of any taxes required to be withheld may be made, in whole or in part, by an election by a Participant (in accordance with rules adopted by the Committee from time to time): (i) to have the Company withhold shares of Stock otherwise issuable pursuant to the Plan having a fair market value equal to such tax liability and/or (ii) to tender to the Company shares of Stock owned by the Participant (or by the Participant and his or her spouse, jointly) and acquired more than six months prior to such tender (excluding any shares of Restricted Stock awarded under Section 6.3 or Section 6.4 of the Plan) and having a fair market value equal to such tax liability. The fair market value of any Stock so tendered shall be determined in such reasonable manner as may be required in order to comply with or to conform to the requirements of any applicable or relevant laws or regulations. Section 11. Effective Date of Plan The Plan shall be effective on the date it is approved by an affirmative vote of the holders of a majority of the shares of voting stock of the Company represented at the meeting at which the Plan is adopted and entitled to vote. Section 12. Term of Plan Unless terminated earlier by the Board of Directors, no Award shall be made under the Plan after December 31, 2005, except that the foregoing shall not apply to or prevent any amendment, modification or suspension at any time of any Award or the waiver at any time of any terms or conditions thereof by the Committee under the provisions of the Plan or the amendment or modification by the Board of Directors of the Plan under Section 8.1. EX-4.11 3 ALEXANDER & ALEXANDER SERVICES INC. PERFORMANCE BONUS PLAN FOR EXECUTIVE OFFICERS ARTICLE I PURPOSE The purpose of the Alexander & Alexander Services Inc. Performance Bonus Plan for Executive Officers (the "Plan") is to enable the Company to recruit and retain qualified executive officers by paying them, upon the attainment of performance criteria established in accordance with the Plan, incentive compensation up to the maximum amount that may be paid under the Plan, including that portion of the bonus paid in the form of restricted stock under the Company's Bonus Equity Plan. The Plan is intended, among other things, to address the limitations under Section 162(m) of the Internal Revenue Code of 1986, as amended, on the deductibility of certain compensation in excess of $1 million per year paid by the Company to those executive officers of the Company who, on the last day of the Company's fiscal year, are (a) the Chief Executive Officer and (b) other executive officers covered by Section 162(m). ARTICLE II DEFINITIONS The following words and phrases shall have the meanings indicated for purposes of the Plan, unless the context clearly indicates otherwise: (a)Average Total Capital shall mean the sum of (A) short- term debt and the current portion of long-term debt, (B) long-term debt, and (C) total stockholders' equity, such sum to be averaged over the period beginning with the end of the previous Bonus Year and including each of the first three financial quarters of the current Bonus Year and the end of the current Bonus Year, respectively, each amount as disclosed in the Consolidated Balance Sheets in the Company's Annual and Quarterly Reports for the relevant periods. (b)Average Total Stockholders' Equity shall mean the total stockholders' equity of the Company averaged over the period beginning with the end of the previous Bonus Year and including each of the first three financial quarters of the current Bonus Year and the end of the current Bonus Year, respectively, all as disclosed in the Consolidated Balance Sheets in the Company's Annual and Quarterly Reports for the relevant periods. (c)BEP shall mean the Company's Bonus Equity Plan, as the same shall be in effect from time to time. (d)BEP Stock Value shall mean the discounted value, determined in accordance with the terms of the BEP, of the shares of the Company's common stock awarded to any Covered Employee in respect of a Bonus Award. (e)Board shall mean the Board of Directors of the Company. (f)Bonus Award shall mean the amount of bonus compensation payable to any Covered Employee for each Bonus Year, whether payable in cash or in restricted stock under the BEP. (g)Bonus Year shall mean a calendar year. (h)Cash Flow shall mean the sum of (a) net cash provided (used) by operating activities (excluding amounts, if any, attributable to discontinued operations and changes in accounting), and (b) net purchases of property and equipment, all amounts as disclosed in the Consolidated Statement of Cash Flows in the Company's Annual Report for the Bonus Year. (i)Chief Executive Officer shall mean the Chief Executive Officer of the Company or the individual acting in such capacity. (j)Committee shall mean the Compensation, Benefits and Nominating Committee of the Board, or any similar committee thereof comprised of at least two Outside Directors. (k)Company shall mean Alexander & Alexander Services Inc. (l)Covered Employee shall mean the Chief Executive Officer and each of those other executive officers of the Company who, on the last day of the Bonus Year, are "covered employees" within the meaning of Section 162(m). (m)Earnings per Share shall mean net income per share available for Common Shareholders of the Company's common stock, as disclosed in the Consolidated Statement of Operations in the Company's Annual Report for the Bonus Year. (n)Income from Continuing Operations shall mean the consolidated income from continuing operations of the Company, as disclosed in the Consolidated Statement of Operations in the Company's Annual Report for the Bonus Year. (o)Operating Income shall mean the operating income of the Company, as disclosed in the Consolidated Statement of Operations in the Company's Annual Report for the Bonus Year. (p)Specified Bonus Award shall mean the target Bonus Award payable to each Covered Employee in the event that certain specified Performance Goals are met. (q)Variable Bonus Award shall mean incentive compensation over and above the Specified Bonus Award payable to a Covered Employee in the event that the Performance Goals related thereto are met. (r)Outside Director shall mean a member of the Board who is an "outside director" as that term is defined under Section 162(m). (s)Performance Goals shall mean the financial measurements of performance that must be met in order for a Covered Employee to receive a Bonus Award. (t)Return on Capital shall mean the earnings (loss) available for common shareholders (as disclosed in the Consolidated Statement of Operations in the Company's Annual Report for the Bonus Year) divided by the Average Total Capital. (u)Return on Equity shall mean the earnings (loss) available for common shareholders (as disclosed in the Consolidated Statement of Operations in the Company's Annual Report for the Bonus Year) divided by the Average Total Stockholders' Equity. (v)Section 162(m) shall mean Section 162(m) of the Internal Revenue Code of 1986, as amended, and the regulations and rules issued thereunder. ARTICLE III ADMINISTRATION OF THE PLAN Section 3.1The Plan shall be administered by the Committee. If, however, the Committee shall fail to be composed solely of Outside Directors, then those members of the Committee that are Outside Directors shall act as the Committee. Section 3.2The Plan shall be interpreted and construed in accordance with Section 162(m). Any specific action by the Committee that would cause any Bonus Award to fail to be deductible under Section 162(m) shall be void. Otherwise, the Committee shall have full and exclusive authority, power and discretion to construe and interpret the Plan (subject to the advice of appropriate legal counsel with respect to any question of law), and generally to determine any and all questions arising under the Plan, including the sole authority to establish Performance Goals and to determine whether any Bonus Award is payable solely in cash or partly in cash and partly in BEP stock. The Committee shall have the authority to reduce the Bonus Award of any Covered Employee earned under this Plan, or any portion thereof, even if the Performance Goals that would provide the maximum amount of such Bonus Award have been met. The Committee shall not, however, have any authority hereunder to increase the amount of any Bonus Award calculated in accordance with the Plan. Section 3.3The Committee shall certify to the Company in writing that any applicable Performance Goals have been met before any amounts are paid in respect of Bonus Awards under the Plan. If permitted under Section 162(m), such certification may be based upon reasonably estimated financial information available prior to the end of the Bonus Year. ARTICLE IV CALCULATION OF BONUS AMOUNTS FOR COVERED EMPLOYEES Section 4.1Each Covered Employee shall be eligible to receive a Specified Bonus Award under the Plan, as more fully described in Section 4.2. In addition, each Covered Employee who receives a Specified Bonus Award for a given Bonus Year shall also be eligible to receive a Variable Bonus Award, as more fully described in Section 4.3. Payment in respect of any Bonus Award shall be made either in cash or in a combination of cash and restricted shares of the Company's common stock issued under the BEP, provided that in no event shall more than 50% of any Bonus Award be paid in shares of BEP stock. The total Bonus Award paid to any Covered Employee in respect of a Specified Bonus Award and a Variable Bonus Award for any Bonus Year shall not exceed the sum of $5 million plus the excess, if any, of (a) the fair market value of any shares of BEP stock on the date the Committee certifies that the applicable Performance Goals have been met, over (b) the BEP Stock Value of such shares of BEP stock. The amount payable in respect of a Bonus Award shall be paid as soon as practicable following the certification described in Section 3.3 above, subject to the Committee's discretion in Section 3.2 to reduce the amount of any Bonus Award. Section 4.2A Specified Bonus Award shall be paid to a Covered Employee if one or both of the following Performance Goals, established by the Committee in accordance with Section 162(m), is achieved: (a) a specified amount of Income from Continuing Operations as of the end of the Bonus Year or a specified minimum increase in such income as compared to the end of the prior Bonus Year; or (b) a specified amount of Operating Income for the Bonus Year. Subject to the limitations contained in Section 4.1, the maximum Specified Bonus Award that each Covered Employee shall be entitled to receive and the actual Performance Goals for each Bonus Year shall be determined by the Committee in writing at the beginning of the Bonus Year within the time required under Section 162(m). Section 4.3The amount of any Variable Bonus Award that may be payable to any Covered Employee for a particular Bonus Year shall be based on such Covered Employee's achievement of one or more additional Performance Goals established by the Committee for such Covered Employee. These additional Performance Goals shall relate to any one or more of the following financial measurements as each relates to the Company and its consolidated subsidiaries or, with respect to 4.3(a) or (b), as such measurement relates to any one or more of the Company's operating units: (a) Return on Capital; (b) Return on Equity; (c) Earnings per Share; (d) Cash Flow and (e) an increase in Operating Income above the amount specified under Section 4.2(b). Different Variable Bonus Award Performance Goals may be established for each Covered Employee. The amount of each Covered Employee's Variable Bonus Award may be expressed as a formula pursuant to which additional amounts may be paid for incremental increases in actual performance against a stated Performance Goal. Section 4.4In the event that any person who was a Covered Employee at the end of the prior Bonus Year, is not a Covered Employee at the conclusion of the current Bonus Year, the Specified and Variable Bonus Award Performance Goals and maximum Bonus Award applicable to such person shall be applicable to the executive officer who replaces him or her as a Covered Employee for such Bonus Year. In any year in which there is a change in more than one Covered Employee, the determination as to which executive officer replaces which prior Covered Employee shall be made on the basis of the salary payable for such Bonus Year, so that the new Covered Employee with the greatest amount of salary replaces the prior Covered Employee having the greatest amount of salary for the prior Bonus Year and so on, except that any new Chief Executive Officer (who was not also a Covered Employee as of the end of the last Bonus Year) shall replace the person who was the Chief Executive Officer at the end of the prior Bonus Year. Nothing in this Section 4.4 shall be construed to change the Performance Goals and maximum Bonus Award for any Bonus Year with respect to any person who was a Covered Employee for both the prior and the current Bonus Years. Section 4.5The Committee may defer to a succeeding year payment of any portion (up to $1 million) of a Bonus Award which may be payable to a Covered Employee for a particular Bonus Year. Payment of such deferred award may be conditioned upon such terms as the Committee shall determine, including the achievement of extraordinary performance by such Covered Employee. ARTICLE V CHANGE OF MEASUREMENT PERIOD If permitted by Section 162(m), the Committee may establish a measurement period for determining the achievement of any Performance Goal other than the Bonus Year if the Committee concludes that such alternative measurement period is appropriate under the circumstances. Any such change must be made before the new measurement period begins. In such event, all relevant criteria will be based upon the books and records of the Company for the specified measurement period in a manner consistent with the terms of the Plan. ARTICLE VI STOCKHOLDER APPROVAL AND AMENDMENT Section 6.1This Plan shall become effective as of January 1, 1995, subject, however, to the approval of the Company's stockholders at the 1995 Annual Meeting of the Stockholders of the Company. Section 6.2The Plan may be amended at any time by the Committee, which shall act in accordance with Section 3.1 of the Plan. In the event that Section 162(m) is modified or interpreted in a manner which causes the Plan to fail to provide for the deductibility of compensation payable hereunder, the Committee shall retain the right to modify the Plan for Covered Employees to the extent necessary to bring any provisions hereof into compliance, including but not limited to deletion of any non-conforming provisions, or to discontinue the Plan altogether. No amendment shall be made without approval of the stockholders of the Company if such approval is required in order for the Plan to continue to meet the requirements of Section 162(m). EX-4.12 4 1995 Long Term Incentive Plan Limited Stock Appreciation Right Agreement between Alexander & Alexander Services Inc. and ____________________ ("Employee") Alexander & Alexander Services Inc. (the "Company"), by action of the Compensation, Benefits and Nominating Committee of the Board of Directors (the "Committee") pursuant to the 1995 Long Term Incentive Plan (the "Plan") has granted to the Employee Limited Stock Appreciation Rights ("LSAR") with respect to the shares of the Company's Common Stock, $1.00 par value (the "Stock"), subject to the option (the "Option") granted to the Employee under the Plan on ______________. The LSAR is subject to the provisions of the Plan, a copy of which has been furnished to the Employee and receipt of which the Employee acknowledges by acceptance of this Agreement. The Plan is incorporated by reference into this Agreement. In addition to the provisions of the Plan, the following terms, conditions and restrictions set forth in this Agreement are applicable to the LSAR: (a) The Employee's right to exercise the LSAR shall begin on the date which is 6 months from the date on which it is granted and shall terminate on the latest of the following (i) such time as the Employee is no longer subject to the provisions of Section 16(b) of the Securities Exchange Act of 1934; (ii) the occurrence of an event specified in Section 6.2(b)(iii) of the Plan; or (iii) the exercise in full of the Option. The right of an Employee who is no longer subject to the provisions of Section 16(b) of the Act to exercise his Option shall continue as provided in Section 6.1 of the Plan. (b) The LSAR shall be exercisable only by the Employee. Any attempt by the Employee to transfer, assign, pledge, hypothecate or otherwise dispose of, or any attempt to subject to execution, attachment or similar process, any part of the LSAR, contrary to the provisions of the Plan and this Agreement shall be void and ineffectual, shall give no right to the purported transferee, and shall result in the forfeiture of the LSAR. (c) Any question concerning Termination of Employment, Disability, Retirement or changes in employment status specified in Section 9.2 of the Plan, shall be determined by the Committee, whose determination shall be final. (d) Nothing contained in this Agreement shall restrict the right of the Company or any of its subsidiary corporations to terminate the Employee's employment at any time, with or without cause. (e) The Employee may exercise the LSAR, or any portion thereof, in lieu of the Option. Exercise of the LSAR shall be by written notice to the Company or its agent and shall be subject to the terms and conditions set forth in the Plan. Any exercise of the LSAR shall result in the cancellation of a corresponding portion of the underlying Option and any exercise of the underlying Option shall result in the cancellation of a corresponding portion of this LSAR. (f) For a period of 30 days following the later to occur of (i) a "change of control" as defined in Section 9.12 of the Plan and (ii) [the date which is 6 months after the date of grant] the Employee may surrender all or a portion of his Option in exchange for an amount in cash equal to the product of (x) the number of shares subject to the Option being so surrendered times (y) (A) the excess of (1) the highest price offered in connection with any purchase, tender offer, merger or other transaction resulting in a "change of control" or (2) if a "change of control" occurs by reason of a change in the composition of the Board of Directors, the highest average of the high and low sales prices of a share of Stock on the New York Stock Exchange on any date during the thirty calendar day period ending on the date the change in the composition of the Board occurs over (B) [the exercise price of the Option.] (g) The LSAR shall be deemed not to have been exercised unless all the preceding provisions of this Agreement shall have been complied with, and for all purposes of the Plan, the date of the exercise with respect to any particular shares shall be the date on which the notice specified in paragraph (e) above has been received by the Company or its agent. In consideration of the LSAR covered by this Agreement, and for other good and valuable consideration, the parties hereto indicate their agreement by their signatures below. ALEXANDER & ALEXANDER SERVICES INC. _____________________________________________ Pursuant to Paragraph 4.5 of the Plan, the Employee's right to the LSAR covered by this Agreement is subject to execution of the Agreement. Please indicate acceptance of the LSAR covered by this Agreement, subject to the restrictions and upon the terms and conditions set forth above and in the Plan, by executing this Agreement (in duplicate) and immediately returning the enclosed duplicate original (one copy) to _____________ ___________________. It will be assumed that the LSAR has been declined if acceptance has not been received within thirty (30) days of the receipt of this Agreement. Accepted & Agreed to: ____________________________________ Employee's Signature Date EX-4.13 5 1995 LONG-TERM INCENTIVE PLAN RESTRICTED STOCK AWARD AGREEMENT Between Alexander & Alexander Services Inc. and __________________ ("Employee") Effective __________________ the Compensation, Benefits and Nominating Committee (the "Committee") of the Board of Directors of Alexander & Alexander Services Inc. (the "Company") awarded to the Employee ______ shares (the "Shares") of the Company's Common Stock subject to the terms and conditions described below (the "Restricted Stock Award"). The Restricted Stock Award is made pursuant to and is subject in all respects, to the provisions of the 1995 Long- Term Incentive Plan (the "Plan"), a copy of which has been furnished to the Employee and receipt of which the Employee acknowledges by acceptance of this Agreement. The Plan is incorporated by reference into this Agreement. In addition to the provisions of the Plan, the following terms and conditions set forth in this Agreement are applicable to the Restricted Stock Award. The Plan will control if there is any conflict between the Plan and this Agreement, and on such matters as are not contained in this Agreement. Capitalized terms not defined in this Agreement have the meanings given to them in the Plan. 1. Restrictions on Disposition of Shares The Employee agrees not to sell, exchange, transfer, pledge, hypothecate or otherwise dispose of any shares subject to the Restricted Stock Award (or any new, additional or different Shares received pursuant to Section 3 of the Plan), for a ______ year period (the "Restricted Periods") ending on the following dates: a) With respect to _____ of the Shares, __________________; and b) With respect to _____ Shares, __________________; and c) With respect to _____ Shares, __________________; provided, however, that the Restricted Periods shall end earlier as provided in Section 6.3(d) of the Plan. The foregoing restrictions shall be in addition to any restriction on the Employee's ability to sell, exchange, transfer, pledge, hypothecate or otherwise dispose of any Shares subject to the Restricted Stock Award under the Federal or any state securities laws. Any attempt by the Employee to sell, transfer, pledge assign or otherwise dispose of the Shares subject to the Restricted Stock Award shall constitute immediate forfeiture of such Award. 2. Issuance of Shares Upon receipt of a signed copy of this Agreement by the Company or its agent, the Shares shall be issued to the Employee, who shall thereupon be a stockholder with respect thereto. The Employee shall have the right to vote such Shares and to receive all dividends and distributions paid with respect to such Shares, but the right to sell or otherwise dispose of them shall be subject to the restrictions specified in Paragraph 1 of this Agreement. 3. Lapse of Restrictions The restrictions imposed in Paragraph 1 of this Agreement shall lapse upon the expiration of each relevant Restricted Period and the shares shall thereupon be free and clear of the restrictions imposed in Paragraph 1 of this Agreement. 4. Change of Control Notwithstanding Paragraph 3 of this Agreement, the restrictions imposed in Paragraph 1 of this Agreement shall lapse commencing on the date of a "change of control" of the Company under the terms and conditions specified in Section 9.12 of the Plan. 5. Investment Representations The Employee consents and agrees that he or she will make no distribution of the Shares in violation of the Securities Act of 1933, as amended, or any other federal or state securities statutes, rules or regulations. 6. Non-Competition Agreement In consideration of the Restricted Stock Award and the Employee's employment with the Company, the Employee agrees to the terms of the Non- Competition Agreement set forth as Exhibit A of this Agreement. Any agreements on the same or similar subject matter heretofore entered into between the Employee and the Company or any of its Subsidiaries are hereby confirmed, shall remain in full force and effect and shall not be terminated, amended or otherwise modified as a result of the Employee's agreement to the terms of Exhibit A or as a result of any invalidity or unenforceability in whole or in part of any of the terms of Exhibit A. 7. Interpretation, etc. The Plan and this Agreement shall be administered by the Committee in accordance with the applicable provisions of the Plan. All determinations by the Committee as to any matter, including matters of interpretation of this Agreement and the Plan and questions concerning Termination of Employment, Disability, Retirement or changes in employment status specified in Section 9.2 of the Plan shall be conclusive and binding upon the Employee. 8. Income Tax Withholding To the extent necessary, the Employee hereby authorizes the Company to withhold from his or her salary any withholding tax resulting from the Restricted Stock Award as may be required by Federal or state tax law. 9. Miscellaneous This Agreement and the Plan embody the entire agreement and understanding between the Company and the Employee with respect to the Restricted Stock Award and the other matters referred to herein and may not be changed, modified or terminated orally but only by a written instrument executed by the Employee and the Company. This Agreement shall be construed and enforced in accordance with, and governed by, the laws of the State of Maryland. The provisions of this Agreement are intended to be separate and divisible and if, for any reason, any one or more of such provisions should be held to be invalid and unenforceable in whole or in part, the Employee agrees that the same shall not be held to affect the validity or enforceability of any other provision of this Agreement. Nothing contained in this Agreement or in the Plan shall restrict the right of the Company or any of its Subsidiaries to terminate the Employee's employment at any time, with or without cause. The Termination of Employment, whether by the Company or any of its Subsidiaries or otherwise, regardless of the reason therefore, shall have the results provided for in Section 6.3(d) of the Plan. ALEXANDER & ALEXANDER SERVICES INC. By:_______________________________ Pursuant to Sections 4.5 and 9.5 of the Plan, the Employee's right to the Restricted Stock Award covered by this Agreement is subject to execution of this Agreement and of the Non-Competition Agreement. To indicate your acceptance of the Restricted Stock Award granted by this Agreement upon the terms and conditions set forth above and in the Plan, please execute and return, within 30 days of receipt of this Agreement: one original copy of this Agreement one original Non-Competition Agreement (Exhibit A) Personal Data Form to: __________________________________________________ . If all the above are not received within the 30 day period, the Restricted Stock Award granted under this Agreement shall be forfeited. ACCEPTED AND AGREED TO: _______________________________________ Employee's Signature Date EX-4.14 6 1995 Long Term Incentive Plan Stock Option Award Agreement between Alexander & Alexander Services Inc. and ___________________________ ("Employee") Alexander & Alexander Services Inc. (the "Company"), by action of the Compensation, Benefits and Nominating Committee of its Board of Directors (the "Committee") pursuant to the 1995 Long Term Incentive Plan (the "Plan") has granted to the Employee, as of __________, an option (the "Option") to purchase _______ shares of the Common Stock, $1 par value (the "Stock"), of the Company at $________ per share, which price is the closing price of the Stock on the New York Stock Exchange on the date of grant. The Option is intended to be a "non qualified option" within the meaning of Section 2(j) of the Plan. The terms of this Agreement shall pertain to the Option except as otherwise provided. The Option is subject in all respects to the provisions of the Plan, a copy of which has been furnished to the Employee and receipt of which the Employee acknowledges by acceptance of this Agreement. The Plan is incorporated by reference into this Agreement. In addition to the provisions of the Plan, the following terms, conditions and restrictions are applicable to the Option: (a) Neither the Option nor any part thereof may be exercised unless and until any Stock to be received upon exercise of the Option shall be listed or approved for listing on the New York Stock Exchange and registered under the Securities Act of 1933, unless the issuance of the Stock shall, in the opinion of counsel to the Company, be exempt from registration. (b) Subject to the provisions of subparagraph (a) of this Agreement, the Option shall be exercisable as to an initial installment of not more than ____% of the total number of shares covered hereby on and after________, and additional installments of ____%, ____% and ____% on or after ____________, ____________, and ____________. Each installment shall remain exercisable until _____________ (the "Expiration Date"), a date 10 years from the date of grant, or such earlier date as (1) all shares covered by the Option shall have been purchased or (2) the Option shall have expired as provided in Section 6.1(g) of the Plan. To the extent not exercised, installments shall accumulate, provided that the Option shall expire in any event on the Expiration Date. To the extent that any installment or part of any installment of the Option may not be exercised as provided for above because shares of Stock are not registered under the Securities Act of 1933 or the issuance of Stock, in the opinion of counsel to the Company, is not exempt from registration, then such installment or part of such installment shall become exercisable when shares of Stock first become registered or the issuance of shares of Stock may be exempt, but in no event prior to the times set forth above or after the Expiration Date. (c) Notwithstanding paragraph (b) of this Agreement, the Option shall become exercisable commencing on the date of a "change of control" of the Company under the terms and conditions specified in Section 9.12 of the Plan. (d) The Option shall not be transferable by the Employee otherwise than by will and the laws of descent and distribution. During the Employee's lifetime, the Option shall be exercisable only by the Employee. Any attempt by the Employee to transfer, assign, pledge, hypothecate or otherwise dispose of, or any attempt to subject to execution, attachment or similar process, any part of the Option, contrary to the provisions of the Plan and this Agreement shall be void and ineffectual, shall give no right to the purported transferee, and shall result in the forfeiture of the Option. (e) Any question concerning Termination of Employment, Disability, Retirement, or changes in employment status specified in Section 9.2 of the Plan, shall be determined by the Committee, whose determination shall be final. (f) Nothing contained in this Agreement shall restrict the right of the Company or any of its Subsidiary corporations to terminate the Employee's employment at any time, with or without cause. Termination of Employment, whether by the Company or any of its Subsidiary corporations or otherwise, and regardless of the reason therefore, shall have the results provided for in the relevant sections of the Plan and this Agreement. (g) Subject to the terms and conditions set forth in this Agreement and in the Plan, the Option shall be exercised by notice to the Plan administrator as designated from time to time by the Company. Information concerning the procedures and requirements for exercising the Option shall be made available to the Employee on or before the first date on which any portion of the Option becomes exercisable. (h) The date of the exercise of the Option with respect to any particular shares shall be the date on which the notice and payment, as specified by the Plan administrator, shall be received by the Company or its agent. [(i) In the event that the Employee tenders Stock in full or partial payment for the exercise of the Option, a Replacement Option to purchase that number of shares of Stock equal to the number of shares tendered shall immediately and automatically be issued to the Employee. If the Employee has tendered Stock in payment of any withholding tax obligation incurred upon exercise of the Option, the number of shares subject to the Replacement Option shall be increased by the number of shares of Stock tendered in payment of such tax. The purchase price of the stock subject to the Replacement Option shall be equal to the closing price of the Stock on the New York Stock Exchange on the date the Option is exercised, as specified in paragraph (h) of this Agreement. The Replacement Option shall be exercisable with respect to ____% of the shares on ___________________ and additional installments of ____%, and ____% on _________________ and ________________. Each installment shall remain exercisable until the Expiration Date.] (j) In addition to the terms and conditions of this Agreement and the provisions of the Plan, the Option is subject to execution by the Employee of the attached Non- Competition Agreement which is hereby incorporated into this Agreement by reference. In consideration of the Option covered by this Agreement, and for other good and valuable consideration, the parties hereto indicate their agreement by their signatures below. ALEXANDER & ALEXANDER SERVICES INC. _____________________________________________ Pursuant to Section 4.5 of the Plan, the Employee's right to the Option covered by this Agreement is subject to execution of the Agreement. Please indicate acceptance of the Option covered by this Agreement, subject to the restrictions and upon the terms and conditions set forth above and in the Plan, by executing this Agreement and the attached Non- Competition Agreement (in duplicate) and immediately returning to ________________________________ the enclosed duplicate originals (one copy). It will be assumed that the Option has been declined if acceptance has not been received within thirty (30) days of the receipt of this Agreement. Accepted & Agreed to: ___________________________________________ Employee's Signature Date EX-5.1 7 Exhibit 5.1 [LETTERHEAD OF A&A] July 7, 1995 Board of Directors Alexander & Alexander Services Inc. 1185 Avenue of the Americas New York, NY 10036 Re: Alexander & Alexander Services Inc. 1995 Long-Term Incentive Plan Gentlemen: I am General Counsel of Alexander & Alexander Services Inc., a Maryland corporation (the "Company"), and have acted as counsel for the Company in connection with the Registration Statement on Form S-8 (the "Registration Statement") to be filed under the Securities Act of 1933, to register 4,700,000 shares of the Company's Common Stock, $1.00 par value per share (the "Shares"), to be issued from time to time by the Company pursuant to the 1995 Long-Term Incentive Plan, (the "1995 Plan"). In connection with the foregoing, I have examined the originals or copies of such corporate records, documents, certificates and other instruments as I have deemed necessary or appropriate for the purposes of rendering this opinion. Based on the foregoing, it is my opinion that the Shares, when issued and delivered as contemplated by the 1995 Plan, will be validly issued, fully paid and non-assessable. The foregoing opinions are limited to the laws of the state of Maryland and I do not express any opinion herein concerning any other law. I hereby consent to the filing of this opinion as an exhibit to the Registration Statement. In giving this consent, I do not thereby admit that I am within the category of persons whose consent is required under Section 7 of the Securities Act of 1933. Very truly yours, /s/ Albert A. Skwiertz, Jr. Albert A. Skwiertz, Jr. Vice President and General Counsel ht:Z:WP:FORMS8/95PLAN EX-23.1 8 EXHIBIT 23.1 INDEPENDENT AUDITORS' CONSENT We hereby consent to the incorporation by reference in this Registration Statement of Alexander & Alexander Services Inc on Form S-8 of our report dated February 15, 1995 (February 28, March 16 and 27, 1995 with respect to certain information in Notes 2,5,8 and 14), appearing in the Annual Report on Form 10-K/A of Alexander & Alexander Services Inc. for the year ended December 31, 1994. /s/ Deloitte & Touche LLP DELOITTE & TOUCHE LLP Baltimore, Maryland July 7, 1995 -----END PRIVACY-ENHANCED MESSAGE-----