-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, ESJX11nM0PbAtn2NabVJaVmORQzF4/h9vNjYTS9wNIGJkINC8rlUR05QXhpZsKgW q9MIX+fKP0pNaUJvuiYJbg== 0001169232-03-005735.txt : 20030916 0001169232-03-005735.hdr.sgml : 20030916 20030916164638 ACCESSION NUMBER: 0001169232-03-005735 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 20030916 EFFECTIVENESS DATE: 20030916 FILER: COMPANY DATA: COMPANY CONFORMED NAME: STEWART W P & CO LTD CENTRAL INDEX KEY: 0000750443 STANDARD INDUSTRIAL CLASSIFICATION: SECURITY BROKERS, DEALERS & FLOTATION COMPANIES [6211] IRS NUMBER: 980201080 STATE OF INCORPORATION: X0 FILING VALUES: FORM TYPE: S-8 SEC ACT: 1933 Act SEC FILE NUMBER: 333-108844 FILM NUMBER: 03897983 BUSINESS ADDRESS: STREET 1: TRINITY HALL 43 CEDAR AVE PO BOX 2905 STREET 2: HAMILTON HM LX CITY: BERMUDA STATE: X0 ZIP: 10022 BUSINESS PHONE: 4412958585 MAIL ADDRESS: STREET 1: C/O W P STEWART & CO INC STREET 2: 527 MADISON AVE CITY: NEW YORK STATE: NY ZIP: 10022 FORMER COMPANY: FORMER CONFORMED NAME: STEWART W P & CO INC DATE OF NAME CHANGE: 19980320 S-8 1 d56937_s-8.txt FORM S-8 As filed with the Securities and Exchange Commission on September 16, 2003 Registration No. 333-_______ ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------- FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ---------- W.P. STEWART & CO., LTD. (Exact name of registrant as specified in its charter) Bermuda 98-0201080 (State or other jurisdiction (I.R.S. Employer of incorporation) Identification No.) Trinity Hall, 43 Cedar Avenue, Hamilton HM LX, Bermuda Not Applicable (Address of principal executive offices) (Zip Code) W.P. STEWART & CO., LTD. 2001 EMPLOYEE EQUITY INCENTIVE PLAN (Full title of the plan) Michael W. Stamm, Esq. c/o W.P. Stewart & Co., Inc. 527 Madison Avenue New York, New York 10022-4212 (212) 750-8585 (Name, address and telephone number, including area code, of agent for service) ---------- CALCULATION OF REGISTRATION FEE
======================================================================================================================== Proposed maximum Proposed maximum Title of securities Amount to be offering price per aggregate offering Amount of to be registered registered share (1) price (1) registration fee - ------------------------------------------------------------------------------------------------------------------------ Common Shares, $.001 par value 625,167 shares(2) $20.075 $12,550,227 $1,016 ========================================================================================================================
(1) Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(c) and (h)(1) under the Securities Act of 1933, as amended, based upon the average of the high and low sales prices of the Common Shares as reported on the New York Stock Exchange on September 15, 2003. (2) Consists of 625,167 Common Shares issuable upon exercise of options or the purchase of restricted shares granted or to be granted under the 2001 Employee Equity Incentive Plan. PART I. INFORMATION REQUIRED IN SECTION 10(a) PROSPECTUS Item 1. Plan Information.* Item 2. Registrant Information and Employee Plan Annual Information.* * Information required by Part I to be contained in the Section 10(a) prospectus is omitted from this Registration Statement in accordance with Rule 428 of the Securities Act of 1933, as amended (the "Securities Act"), and the Note to Part I of Form S-8. PART II. INFORMATION REQUIRED IN THE REGISTRATION STATEMENT Item 3. Incorporation of Documents by Reference. The following documents that we have filed with the Securities and Exchange Commission (the "Commission") are incorporated by reference into this Registration Statement: o our Annual Report on Form 20-F for the year ended December 31, 2002, filed on March 31, 2003; o our Report of Foreign Issuer on Form 6-K, filed on May 15, 2003; o our Report of Foreign Issuer on Form 6-K, filed on August 14, 2003; o the description of our common shares contained in any registration statement or report filed by us under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), including any amendment or report filed for the purpose of updating such description. All documents filed or furnished by us pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this Registration Statement and prior to the filing of a post-effective amendment indicating that all securities offered by this Registration Statement have been sold, or deregistering all securities remaining unsold, shall be deemed to be incorporated by reference in this Registration Statement and to be a part of this Registration Statement from the respective dates of filing or furnishing of such documents. Item 4. Description of Securities. Not applicable. Item 5. Interests of Named Experts and Counsel. Richard D. Spurling, one of our directors is a partner of Appleby, Spurling & Kempe. As one of our non-executive directors, Mr. Spurling purchased 3,000 common shares and was granted options to acquire 6,000 common shares of W.P. Stewart & Co., Ltd. pursuant to the 2001 Employee II-2 Equity Incentive Plan. Additionally, Mr. Spurling may be eligible for future grants to non-executive directors under such Plan. Item 6. Indemnification of Directors and Officers. No provision is made in Bermuda statutory law for indemnification of officers and directors. Section 98 of the Companies Act 1981 of Bermuda provides generally that a Bermudian company may indemnify its directors, officers and auditors against any liability which may be imposed by virtue of any rule of law in respect of any negligence, default, breach of duty or breach of trust in relation to the Company or its subsidiaries, except in cases where such liability arises from the fraud or dishonesty of which such director, officer or auditor may be guilty in relation to W.P. Stewart & Co., Ltd. Section 98 of the Bermuda Companies Act 1981 further provides that a Bermudian company may indemnify its directors, officers and auditors against any liability incurred by them in defending any proceedings, whether civil or criminal, in which judgment is awarded in their favor or they are acquitted or granted relief by the Supreme Court of Bermuda under Section 281 of that Act. The bye-laws of W.P. Stewart & Co., Ltd. provide for indemnification of its officers and directors against all liabilities, loss, damage or expense incurred or suffered by such party as an officer or director of W.P. Stewart & Co., Ltd.; provided that such indemnification shall not extend to any matter which would render it void pursuant to the Bermuda Companies Act as in effect from time to time in Bermuda. The directors and officers of W.P. Stewart & Co., Ltd. are covered by a directors' and officers' liability insurance policy maintained by it. Item 7. Exemption from Registration Claimed. Not applicable. Item 8. Exhibits. 4.1 Copy of 2001 Employee Equity Incentive Plan, and Exhibits A through D thereto 4.2 Amendment No. 1 to 2001 Employee Equity Incentive Plan 4.3 Amendment No. 2 to 2001 Employee Equity Incentive Plan 5.1 Opinion of Appleby Spurling & Kempe 23.1 Consent of PricewaterhouseCoopers 23.2 Consent of Appleby Spurling & Kempe (contained in Exhibit 5.1 to this registration statement) 24 Power of Attorney (included in the signature page hereof) Item 9. Undertakings. (a) The undersigned Registrant hereby undertakes: II-3 (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act; (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) above do not apply if the registration statement is on Form S-3, Form S-8 or Form F-3, and the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the registrant pursuant to Section 13 or Section 15(d) of the Exchange Act of 1934 that are incorporated by reference in the registration statement. (2) That, for the purpose of determining any liability under the Securities Act, each such 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. (3) 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, each filing of the registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act 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. II-4 (c) Insofar as indemnification for liabilities arising under the Securities Act 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 Commission such indemnification is against public policy as expressed in the Securities 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 other 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 Securities Act and will be governed by the final adjudication of such issue. II-5 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 Hamilton, Bermuda, on September 16, 2003. W.P. STEWART & CO., LTD. By /s/ William P. Stewart ----------------------------- William P. Stewart Chief Executive Officer POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints John C. Russell and Michael W. Stamm, and each of them, his or her true and lawful attorneys-in-fact and agents, each acting alone, with full powers of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments to this Registration Statement on Form S-8, and any and all amendments (including post-effective amendments) thereto, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that such attorneys-in-fact and agents or any of them, or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof. II-6 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/ William P. Stewart Chairman, Chief Executive September 16, 2003 - ------------------------------ Officer and Director William P. Stewart (principal executive officer) /s/ Richard C. Breeden Director September 16, 2003 - ------------------------------ Richard C. Breeden /s/ Edgar H. Brunner Director September 16, 2003 - ------------------------------ Edgar H. Brunner /s/ John C. Russell Deputy Chairman, Managing Director September 16, 2003 - ------------------------------ and Director John C. Russell /s/ Henry B. Smith Director September 16, 2003 - ------------------------------ Henry B. Smith /s/ Heinrich Spangler Director September 16, 2003 - ------------------------------ Heinrich Spangler /s/ Richard D. Spurling Director September 16, 2003 - ------------------------------ Richard D. Spurling /s/ Rocco Macri Deputy Managing Director - September 16, 2003 - ------------------------------ Chief Financial Officer Rocco Macri (principal financial officer) /s/ Susan G. Leber Deputy Managing Director - September 16, 2003 - ------------------------------ Financial Operations Susan G. Leber (principal accounting officer) /s/ Michael W. Stamm Authorized Representative September 16, 2003 - ------------------------------ in the United States W.P. Stewart & Co., Inc. By: Michael W. Stamm, Esq. General Counsel and Secretary
II-7 EXHIBIT INDEX 4.1 Copy of 2001 Employee Equity Incentive Plan, and Exhibits A through D thereto 4.2 Amendment No. 1 to 2001 Employee Equity Incentive Plan 4.3 Amendment No. 2 to 2001 Employee Equity Incentive Plan 5.1 Opinion of Appleby Spurling & Kempe 23.1 Consent of PricewaterhouseCoopers 23.2 Consent of Appleby Spurling & Kempe (contained in Exhibit 5.1 to this registration statement) 24.1 Power of Attorney (included in the signature page hereof) EX-4.1 3 d56937_ex4-1.txt COPY OF 2001 EMPLOYEE EQUITY INCENTIVE PLAN EXHIBIT 4.1 W.P. STEWART & CO., LTD. 2001 EMPLOYEE EQUITY INCENTIVE PLAN Section 1. Purpose The purpose of the Plan is to promote the interests of the Company and its shareholders by aiding the Company and its Affiliates in attracting and retaining full-time employees capable of assuring the future success of the Company, to offer such persons incentives to put forth maximum efforts for the success of the Company's business and to afford such persons an opportunity to acquire a proprietary interest in the Company. Section 2. Definitions As used in the Plan, the following terms shall have the meanings set forth below: (a) "Affiliate" shall mean (i) any entity that, directly or indirectly through one or more intermediaries, is controlled by the Company and (ii) any entity in which the Company has a significant equity interest, in each case as determined by the Committee. (b) "Award" shall mean any Option or Restricted Shares, granted under the Plan. (c) "Award Agreement" shall mean any written agreement, contract or other instrument or document evidencing any Award granted under the Plan. (d) "Board" shall mean the Board of Directors of the Company. (e) "Code" shall mean the U.S. Internal Revenue Code of 1986, as amended from time to time, and any regulations promulgated thereunder. (f) "Committee" shall mean the Compensation Committee of the Board that is hereby designated by the Board to administer the Plan. (g) "Company" shall mean W.P. Stewart & Co., Ltd., a Bermuda company, and any successor company. (h) "Director" shall mean a member of the Board. (i) "Eligible Person" shall mean any full-time employee of the Company or its Affiliates whom the Committee determines to be an Eligible Person. (j) "Fair Market Value" shall mean, with respect to any property (including, without limitation, any Shares or other securities), the fair market value of such property determined by such methods or procedures as shall be established from time to time by the Committee. Notwithstanding the foregoing, unless otherwise determined by the Committee, the Fair Market Value of Shares as of a given date shall be the closing sales price as reported by New York Stock Exchange, Inc. ("NYSE") on such date, or if the NYSE is not open for trading on such date, on the most recent preceding date when it is open for trading. 1 (k) "Incentive Stock Option" shall mean an option granted under Section 6(a) of the Plan that is intended to meet the requirements of Section 422 of the Code or any successor provision. (l) "Non-Qualified Share Option" shall mean an option granted under Section 6(a) of the Plan that is not intended to be an Incentive Stock Option. (m) "Option" shall mean an Incentive Stock Option or a Non-Qualified Share Option. (n) "Participant" shall mean an Eligible Person designated to be granted an Award under the Plan. (o) "Person" shall mean any individual, corporation, partnership, association or trust. (p) "Plan" shall mean the 2001 W.P. Stewart & Co., Ltd. Employee Equity Incentive Plan, as amended from time to time, the provisions of which are set forth herein. (q) "Restricted Shares" shall mean any Shares granted under Section 6(b) of the Plan. (r) "Share" or "Shares" shall mean shares, $0.001 par value per share, of the Company or such other securities or property as may become subject to Awards pursuant to an adjustment made under Section 4(c) of the Plan. (s) "vest" shall mean, in the case of a Share subject to an Option, to become purchasable by the Participant pursuant to such Option, and, in the case of a Restricted Share, to become no longer subject to forfeiture by the Participant. Section 3. Administration (a) Power and Authority of Management and the Committee. The Plan shall be administered by the management of the Company, subject to oversight by the Committee. Subject to the express provisions of the Plan and to applicable law, the management of the Company shall have full power and authority to: (i) designate Participants as instructed by the Committee or based upon the recommendations of management of the Company, which the Committee shall periodically review and approve; (ii) determine the type or types of Awards to be granted by the Committee on behalf of the Company to each Participant under the Plan, subject to approval by the Committee; (iii) determine the number of Shares to be covered by (or with respect to which payments, rights or other matters are to be calculated in connection with) each Award, subject to approval by the Committee; (iv) determine the terms and conditions of any Award or Award Agreement, subject to approval by the Committee; (v) amend the terms and conditions of any Award or Award Agreement and accelerate the exercisability of Options or the lapse of restrictions relating to Restricted Shares; (vi) determine whether, to what extent and under what circumstances Awards may be exercised in cash, Shares, other securities, other Awards or other property, or canceled, forfeited or suspended; (vii) determine whether, to what extent and under what circumstances cash, Shares, promissory notes, other securities, other Awards, other property and other amounts payable with respect to an Award under the Plan shall be deferred either automatically or at the election of the holder thereof or the Company, subject to approval by the Committee; (viii) interpret and administer the Plan and any instrument or agreement, including an Award Agreement, relating to the Plan, subject to review by the Committee; (ix) establish, amend, suspend or waive such rules and regulations and appoint such agents as management shall deem appropriate for the proper administration of the Plan, subject to review by the Committee; and (x) make any other determination and take any other action that the Committee deems necessary or desirable for the administration of the Plan. Unless otherwise expressly provided in the Plan, all designations, determinations, interpretations and other decisions under or with respect to the Plan or any Award shall be within the sole discretion of the 2 Committee and the management of the Company as provided above, may be made at any time and shall be final, conclusive and binding upon any Participant, any holder or beneficiary of any Award and any employee of the Company or any Affiliate. (b) Delegation. The Committee may delegate its powers and duties under the Plan to one or more Directors or to a committee of Directors, subject to such terms, conditions and limitations as the Committee may establish in its sole discretion. (c) Power and Authority of the Board of Directors. Notwithstanding anything to the contrary contained herein, the Board may, at any time and from time to time, without any further action of the Committee, exercise the powers and duties of the Committee under the Plan. Section 4. Shares Available for Awards (a) Shares Available. Subject to adjustment as provided in Section 4(c) of the Plan, the aggregate number of Shares that may be issued under all Awards under the Plan shall be 1,500,000, provided, that (i) each Award made in each respective calendar year shall be substantially in the proportions set forth in Exhibit A hereto; provided, however, that each Award shall specify whether and, if so, how many Restricted Shares must be purchased by the Participant as a condition to the vesting of the Options included in such Award, and (ii) the aggregate number of Shares that may vest under the Plan in any calendar year shall not exceed 1% of the Company's outstanding Shares on a fully diluted basis. Shares to be delivered under the Plan may be either authorized but unissued Shares to be issued by the Company or existing issued Shares which the Company causes to be transferred to the Participant. Any Shares that are used by a Participant as full or partial payment of the purchase price relating to an Award, or in connection with the satisfaction of tax obligations relating to an Award, shall again be available for granting Awards (other than Incentive Stock Options) under the Plan. In addition, if any Shares covered by an Award or to which an Award relates are not purchased or are forfeited, or if an Award otherwise terminates in whole or in part without delivery of any Shares, then the number of Shares counted against the aggregate number of Shares available under the Plan with respect to such Award, to the extent of any such forfeiture or termination, shall again be available for granting Awards under the Plan. Notwithstanding the foregoing, the number of Shares available for granting Incentive Stock Options under the Plan shall not exceed 1,500,000, subject to adjustment as provided in the Plan and subject to the provisions of Section 422 or 424 of the Code or any successor provision. (b) Accounting for Awards. For purposes of this Section 4, if an Award entitles the holder thereof to receive or purchase Shares, the number of Shares covered by such Award or to which such Award relates shall be counted on the date of grant of such Award against the aggregate number of Shares available for granting Awards under the Plan. (c) Adjustments. In the event that the Committee shall determine that any dividend or other distribution (whether in the form of cash, Shares, other securities or other property), recapitalization, share split, reverse share split, reorganization, amalgamation, split-up, spin-off, combination, repurchase or exchange of Shares or other securities of the Company, issuance of warrants or other rights to purchase Shares or other securities of the Company or other similar corporate transaction or event affects the Shares such that an adjustment is determined by the Committee to be appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan, then the Committee shall, in such manner as it may deem equitable, adjust any or all of (i) the number and type of Shares (or other securities or other property) that thereafter may be made the subject of Awards, (ii) the number and type of Shares (or other securities or other property) subject to outstanding Awards and (iii) the purchase or exercise price with respect to any Award; 3 provided, however, that the number of Shares covered by any Award or to which such Award relates shall always be a whole number. Section 5. Eligibility Any Eligible Person shall be eligible to be designated a Participant. In determining which Eligible Persons shall receive an Award and the terms of any Award, the Committee shall periodically review the recommendations of management of the Company and may take into account the nature of the services rendered by the respective Eligible Persons, their present and potential contributions to the success of the Company or such other factors as the Committee, in its discretion, shall deem relevant. Notwithstanding the foregoing, Incentive Stock Options may only be granted to full time employees (which term as used herein includes, without limitation, officers and Directors who are also employees), and an Incentive Stock Option shall not be granted to an employee of an Affiliate unless such Affiliate is also a "subsidiary corporation" of the Company within the meaning of Section 424(f) of the Code or any successor provision. Section 6. Awards (a) Options. The Committee is hereby authorized to grant Options to Participants with the following terms and conditions and with any additional terms and conditions not inconsistent with the provisions of the Plan: (i) Exercise Price. The purchase price per Share purchasable under an Option shall be the Fair Market Value of a Share on the date of grant of such Option. (ii) Vesting. Options shall vest over periods of up to seven years in equal amounts on each anniversary of the date of grant, and the portion that vests on a particular date may be considered a separate option. (iii) Exercise Period. The vested portion of each Option shall be exercisable only during the 365-day period commencing on and including the vesting date (the "Exercise Period"). Under no circumstances shall an Option be exercisable after the tenth anniversary of the date on which it was granted. (iv) Time and Method of Exercise. Subject to the foregoing, the Option may be exercised in whole or in part from time to time by serving written notice of exercise on the Company at its principal office within the Exercise Period. The notice shall state the number of Shares as to which the Option is being exercised and shall be accompanied by payment of the purchase price. The Participant may pay the option price in cash, by check (bank check, certified check or personal check), by money order, or (i) by delivering to the Company for cancellation, by way of a purchase of its own Shares by the Company made in compliance with Section 42A of the Companies Act 1981 of Bermuda, or by transferring to a nominee of the Company, vested Shares of the Company that the Participant has held for at least six (6) months as of the date of exercise, with a Fair Market Value as of the date of exercise equal to the option price or the portion thereof being paid by tendering such Shares; (ii) by delivering to the Company the full option price in the Participant's full recourse liability promissory note, in such form as the Company shall require, secured by the Shares received thereunder with a term not to exceed three years, which promissory note shall provide for interest on the unpaid balance thereof equal to the greatest of (A) 10%, (B) the applicable U.S. federal short-term rate under Section 1274(d) of the Code or any counterpart to such rate as may be prescribed under the tax laws of the Participant's country of residence 4 or employment, as appropriate, as of the date of exercise, or (C) a market rate, as determined by the Company as of the date of exercise; or (iii) by delivering a combination of cash, the Participant's promissory note and Shares of the Company with an aggregate Fair Market Value as of the date of exercise and a principal amount equal to the option price. If the Participant pays all or part of the option price by the Participant's promissory note, any aggregate unpaid balance due under said note shall accelerate and become immediately payable in full upon termination of employment for any reason whatsoever. (v) Incentive Stock Options. Notwithstanding anything in the Plan to the contrary, the following additional provisions shall apply to the grant of Options which are intended to qualify as Incentive Stock Options: (A) The aggregate Fair Market Value (determined as of the time the Option is granted) of the Shares with respect to which Incentive Stock Options are exercisable for the first time by any Participant during any calendar year (under this Plan and all other plans of the Company and its Affiliates) shall not exceed $100,000. (B) Unless sooner exercised, in the case of a grant of an Incentive Stock Option to a participant who, at the time such Option is granted, owns (within the meaning of Section 422 of the Code) shares possessing more than 10% of the total combined voting power of all classes of shares of the Company or of its Affiliates, such Incentive Stock Option shall expire and no longer be exercisable no later than five years from the date of grant. (C) The purchase price per Share for an Incentive Stock Option shall be not less than 100% of the Fair Market Value of a Share on the date of grant of the Incentive Stock Option; provided, however, that, in the case of the grant of an Incentive Stock Option to a participant who, at the time such Option is granted, owns (within the meaning of Section 422 of the Code) shares possessing more than 10% of the total combined voting power of all classes of shares of the Company or of its Affiliate, the purchase price per Share purchasable under an Incentive Stock Option shall be not less than 110% of the Fair Market Value of a Share on the date of grant of the Inventive Share Option. (D) Any Incentive Stock Option authorized under the Plan shall contain all provisions required in order to qualify the Option as an Incentive Stock Option. (vi) Option Agreement. The Company and the Participant shall execute an Option Agreement with respect to each grant of an Incentive Stock Option in substantially the form attached hereto as Exhibit B or a similar form with respect to each grant of a Non-Qualified Share Option, with such differences as shall be necessary to reflect the fact that such Option is not intended to constitute an Incentive Stock Option and/or such differences as the Company may consider necessary or appropriate under the laws of the Participant's country of residence or employment (or, in either case, such other form as the Company shall determine). (b) Restricted Shares. The Committee is hereby authorized to grant Participants the right to purchase Restricted Shares with the following terms and conditions and with any additional terms and conditions not inconsistent with the provisions of the Plan: (i) Price. The purchase price per Share purchasable pursuant to a Restricted Share Award shall be the Fair Market Value of a Share on the date of grant, less up to 20%, as determined by the Committee in its discretion on the date of such grant. 5 (ii) Vesting. Restricted Shares shall vest in equal amounts each calendar quarter for a period of 28 quarters (seven years), commencing with the quarter ending after the date of grant; provided, however that Restricted Shares purchased by any resident of the United Kingdom shall vest immediately, subject to call in whole or in part by the Company under the related Purchase Agreement described in clause (iv) below in the event of termination of Participant's employment during that period. (iii) Payment. The aggregate purchase price for Restricted Shares shall be paid either in cash, by secured promissory note or a combination thereof. If all or a portion of such purchase price is paid by a promissory note, the Participant shall deliver a Promissory Note and a Pledge and Assignment Agreement substantially in the forms attached hereto as Exhibit C, subject to inclusion of such additional or different provisions as the Company may consider necessary or appropriate under the laws of the Participant's country of residence or employment, (or such other form as the Company shall determine). (iv) Purchase Agreement. The Company and the Participant shall execute a Purchase Agreement with respect to each grant of Restricted Shares substantially in the form attached hereto as Exhibit D, subject to inclusion of such additional or different provisions as the Company may consider necessary or appropriate under the laws of the Participant's country of residence or employment, (or such other form as the Company shall determine). (v) No Share Certificates. Any unvested Restricted Shares granted under the Plan shall not be represented by certificates, and the Participant's ownership of the Shares shall be evidenced only in the register of shareholders of the Company. (vi) Forfeiture. Upon termination of employment during the applicable restriction period, all then unvested Restricted Shares shall be forfeited and reacquired by the Company in accordance with the terms and conditions of the Purchase Agreement. (c) General (i) Awards May Be Granted Separately or Together. Awards may, in the discretion of the Committee, be granted either alone or in addition to, in tandem with or in substitution for any other Award or any award granted under any plan of the Company or any Affiliate other than the Plan. Awards granted in addition to or in tandem with other Awards or in addition to or in tandem with awards granted under any such other plan of the Company or any Affiliate may be granted either at the same time as or at a different time from the grant of such other Awards or awards. (ii) Limits on Transfer of Awards. No Option and no right under any such Option shall be transferable by a Participant otherwise than by will or by the laws of descent and distribution and the Company shall not be required to recognize any attempted assignment of such rights by any Participant. Each Option or right under any Option shall be exercisable during the Participant's lifetime only by the Participant or, if permissible under applicable law, by the Participant's guardian or legal representative. No Option or right under any such Option may be pledged, alienated, attached or otherwise encumbered, and any purported pledge, alienation, attachment or encumbrance thereof shall be void and unenforceable against the Company or any Affiliate. (iii) Restrictions; Securities Exchange Listing. All Shares or other securities delivered under the Plan pursuant to any Award or the exercise thereof shall be subject to such restrictions as the Committee may deem advisable under the Plan, applicable securities laws and regulatory requirements, and the Company may cause appropriate entries to be made to reflect such restrictions. If any securities of the Company are traded on a securities exchange, the Company shall not be required to deliver any Shares or other securities covered by an Award unless and until such Shares or other securities have been admitted for trading on such securities exchange. 6 Section 7. Amendment and Termination; Adjustments (a) Amendments to the Plan. The Board may amend, alter, suspend, discontinue or terminate the Plan at any time; provided, however, that, notwithstanding any other provision of the Plan or any Award Agreement, without the approval of the shareholders of the Company, no such amendment, alteration, suspension, discontinuation or termination shall be made that, absent such approval: (i) would violate the rules or regulations of the NYSE or any other securities exchanges that are applicable to the Company; or (ii) would cause the Company to be unable, under the Code, to grant Incentive Stock Options under the Plan. (b) Amendments to Awards. The Committee may waive or approve the waiver of any conditions of or rights of the Company under any outstanding Award, prospectively or retroactively. Except as otherwise provided herein or in the Award Agreement, the Company may not amend, alter, suspend, discontinue or terminate any outstanding Award, prospectively or retroactively, if such action would adversely affect the rights of the holder of such Award, without the consent of the Participant or holder or beneficiary thereof. (c) Correction of Defects, Omissions and Inconsistencies. The Committee may correct any defect, supply any omission or reconcile any inconsistency in the Plan or any Award in the manner and to the extent it shall deem desirable to carry the Plan into effect. Section 8. Income Tax Withholding In order to comply with all applicable income tax laws or regulations, the Company may take such action as it deems appropriate to ensure that all applicable payroll, withholding, income or other taxes, which are the sole and absolute responsibility of a Participant, are withheld or collected from such Participant. In order to assist a Participant in paying all or a portion of the taxes to be withheld or collected upon exercise or receipt of (or the lapse of restrictions relating to) an Award, the Company, in its discretion and subject to such additional terms and conditions as it may adopt, may permit the Participant to satisfy such tax obligation by (i) electing to have the Company withhold a portion of the Shares otherwise to be delivered upon exercise or receipt of (or the lapse of restrictions relating to) such Award with a Fair Market Value at that time equal to the amount of such taxes or (ii) delivering to the Company, by way of a purchase of its own Shares by the Company made in compliance with Section 42A of the Companies Act 1981 of Bermuda, or by transferring to a nominee of the Company, Shares, other than Shares issuable upon exercise or receipt of (or the lapse of restrictions relating to) such Award, with a Fair Market Value at that time equal to the amount of such taxes. The election, if any, must be made on or before the date that the amount of tax to be withheld is determined. Section 9. General Provisions (a) No Rights to Awards. No Eligible Person, Participant or other Person shall have any claim to be granted any Award under the Plan, and there is no obligation for uniformity of treatment of Eligible Persons, Participants or holders or beneficiaries of Awards under the Plan. The terms and conditions of Awards need not be the same with respect to any Participant or with respect to different Participants. 7 (b) Award Agreements. No Participant will have rights under an Award granted to such Participant unless and until an Award Agreement shall have been duly executed on behalf of the Company and, if requested by the Company, signed by the Participant. (c) Plan Provisions Control. In the event that any provision of an Award Agreement conflicts with or is inconsistent in any respect with the terms of the Plan as set forth herein or subsequently amended, the terms of the Plan shall control. (d) No Limit on Other Compensation Arrangements. Nothing contained in the Plan shall prevent the Company or any Affiliate from adopting or continuing in effect other or additional compensation arrangements, and such arrangements may be either generally applicable or applicable only in specific cases. (e) No Right to Employment. The grant of an Award shall not be construed as giving a Participant the right to be retained in the employ of the Company or any Affiliate, nor will it affect in any way the right of the Company or an Affiliate to terminate such employment at any time, with or without cause. In addition, the Company or an Affiliate may at any time dismiss a Participant from employment free from any liability or any claim under the Plan or any Award, unless otherwise expressly provided in the Plan or in any Award Agreement. (f) Governing Law. The validity, construction and effect of the Plan or any Award, and any rules and regulations relating to the Plan or any Award, shall be determined in accordance with the laws of Bermuda without regard to conflict of laws principles. (g) Severability. If any provision of the Plan or any Award is or becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to applicable laws, or if it cannot be so construed or deemed amended without, in the determination of the Committee, materially altering the purpose or intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction or Award, and the remainder of the Plan or any such Award shall remain in full force and effect. (h) No Trust or Fund Created. Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company or any Affiliate and a Participant or any other Person. To the extent that any Person acquires a right to receive payments from the Company or any Affiliate pursuant to an Award, such right shall be no greater than the right of any unsecured general creditor of the Company or any Affiliate. (i) No Fractional Shares. No fractional Shares shall be issued or delivered pursuant to the Plan or any Award, and the Committee shall determine whether cash shall be paid in lieu of any fractional Shares or whether such fractional Shares or any rights thereto shall be canceled, terminated or otherwise eliminated. (j) Headings. Headings are given to the Sections and subsections of the Plan solely as a convenience to facilitate reference. Such headings shall not be deemed in any way material or relevant to the construction or interpretation of the Plan or any provision thereof. Section 10. Effective Date of the Plan The Plan shall be effective as of July 24, 2001 (the "Effective Date"), provided that no Option shall be exercisable prior to approval of the Plan by the shareholders of the Company. 8 Section 11. Term of the Plan No Award shall be granted under the Plan after three years from the Effective Date or any earlier date of discontinuation or termination established pursuant to Section 7(a) of the Plan; provided, however, that unless otherwise expressly provided in the Plan or in an applicable Award Agreement, any Award theretofore granted may extend beyond such date. 9 EXHIBIT A Year Restricted Shares Options ---- ------------------ ------- 2001 33% 67% 2002 20% 80% 2003 10% 90% A-1 EXHIBIT B FORM OF INCENTIVE STOCK OPTION AGREEMENT W.P. STEWART & CO., LTD. INCENTIVE STOCK OPTION AGREEMENT This Incentive Stock Option Agreement (the "Agreement") is made this _____ day of ___________, _____, by and between W.P. Stewart & Co., Ltd., a Bermuda company (the "Company") and _____________________, an individual resident of _______________, ______________ ("Employee"). WITNESSETH, THAT: WHEREAS, the Company has adopted the W.P. Stewart & Co., Ltd. 2001 Employee Equity Incentive Plan (the "Plan") which is attached hereto as Exhibit A and which permits issuance of share options for the purchase of shares of the Company, and the Company has taken all necessary actions to grant the following option pursuant and subject to the terms of the Plan. NOW THEREFORE, in accordance with the terms and conditions of the Plan and the mutual covenants herein contained, the parties hereto agree as follows: All capitalized terms used but not defined herein shall have the meanings ascribed to them in the Plan. 1. Grant of Option. As more fully described in Section 2 hereof, the Company hereby grants Employee the right and options (collectively, the "Option") to purchase all or any part of an aggregate of ___________________ (_____) shares of the Company, par value US$0.001 per share ("Shares"), at the Option price of US$______ per share on the terms and conditions set forth in this Agreement and in the Plan. It is understood and agreed that the Option price is the per share Fair Market Value of such Shares on the date of this Agreement. The Option is intended to be an Incentive Stock Option governed by the provisions of Section 422 of the U.S. Internal Revenue Code of 1986, as amended (the "Code"). The terms of the Plan and the Option shall be interpreted and administered so as to satisfy the requirements of the Code. The Option is issued pursuant to the Plan and is subject to its terms. The Option shall terminate at the close of business [seven (7)] years from the date hereof or such shorter period as is prescribed herein. B-1 2. Vesting of Option Rights. (a) Except as otherwise provided in Section 3 of this Agreement, the Option may be exercised by Employee in accordance with the following schedule: On or after each of The option to purchase the following dates the following number of (each, a "Vesting Date") Shares shall be exercisable ----------------------------------------------------------------------- [List up to 7 anniversaries of the date of grant.] Notwithstanding the foregoing, (i) the Option shall in no event be exercisable prior to the approval of the Plan at a general meeting of the Company and (ii) the Option may be exercised as to 100% of the Shares for which the Option was granted on the date of a "change of control", as hereinafter defined. A "change of control" shall mean any of the following: (i) the consummation of an amalgamation of the Company with or into another entity or any other corporate reorganization, if more than 50% of the combined voting power of the continuing or surviving entity's securities outstanding immediately after such amalgamation or other reorganization is owned by persons who were not shareholders of the Company immediately prior to such amalgamation or other reorganization; (ii) a public announcement that any person has acquired beneficial ownership of 51% or more of the then outstanding shares of the Company and, for this purpose, the terms "person" and "beneficial ownership" shall have the meanings provided in Section 13(d) of the U.S. Securities Exchange Act of 1934 or related rules promulgated by the U.S. Securities and Exchange Commission; (iii) the commencement of or public announcement of an intention to make a tender or exchange offer for 51% or more of the then outstanding shares of the Company; (iv) a sale of all or substantially all of the assets of the Company; or (v) the Board of Directors of the Company, in its sole and absolute discretion, determines that there has been a sufficient change in the share ownership of the Company to constitute a change in control of the Company. B-2 (b) Employee may exercise the Option, with respect to those Shares as to which the Option shall have vested (as defined in the Plan) in accordance with the vesting schedule set forth above, at any time within a period of 365 days commencing on and including the respective Vesting Date for such Shares (the "Exercise Period"). The Option shall expire, as of the close of business on the last day of an Exercise Period, as to any unexercised portion of the Option that shall have vested on the Vesting Date included in such Exercise Period, but not as to any Shares as to which the Option may vest after such Exercise Period. (c) Employee understands that to the extent that the aggregate Fair Market Value (determined at the time the Option was granted) of the Shares with respect to which all options that are Incentive Stock Options within the meaning of Section 422 of the Code are exercisable for the first time by Employee during any calendar year exceed $100,000, in accordance with Section 422(d) of the Code, such options shall be treated as options that do not qualify as Incentive Stock Options. 3. Exercise of Option after Death or Termination of Employment. The Option shall terminate and may no longer be exercised if Employee ceases to be employed by the Company or its Affiliates, except that: (a) If Employee's employment shall be terminated for any reason, voluntary or involuntary, other than for "Cause" (as defined below) or Employee's death or disability (as set forth in Section 3(c)), Employee may at any time within a period of [ninety (90)] days after such termination exercise the Option to the extent the Option was exercisable by Employee on the date of the termination of Employee's employment. Employee understands that if the Option or any portion of the Option is exercised later than ninety days from the date of termination of employment, the Option or such portion of the Option may not qualify for treatment as an Incentive Stock Option within the meaning of Section 422 of the Code. (b) If Employee's employment is terminated for Cause, the Option shall be terminated as of the date of the act giving rise to such termination. As used herein, "Cause" shall mean (i) Employee's willful failure to comply with any lawful directive of the Board of Directors of the Company or any of its Affiliates, (ii) dishonesty, gross negligence or malfeasance by Employee in the performance of Employee's duties, (iii) conviction of any felony, (iv) conviction of any crime relating to the trading of securities or commodities, the provision of investment advisory services, the financial services industry or Employee's services to the Company or its Affiliates, (v) the occurrence of any event specified in paragraphs (3) through (6) of Item 401(f) of SEC Regulation S-K ("bad conduct" rule) as in effect with respect to Employee (the "Rule"), or (vi) the entry by Employee into any agreement or undertaking with any governmental agency which shall have substantially the same effect as an order, judgment or decree described in subparagraph (3) of the Rule. (c) If Employee shall die while the Option is still exercisable according to its terms, or if employment is terminated because Employee has become disabled (within the meaning of Code Section 22(e)(3)) while in the employ of the Company or its Affiliates and Employee shall not have fully exercised the Option, such Option may be exercised at any time within 12 months after Employee's death or date of termination of employment for disability by Employee, personal representatives or administrators, or guardians of Employee, as applicable, or by any person or persons to whom the Option is transferred by will or the applicable laws of descent and distribution, to the extent of the full number of shares Employee was entitled to purchase under the Option on the date of death, termination of employment, if earlier, or date of termination for such disability. B-3 (d) Notwithstanding the above, in no case may the Option be exercised to any extent by anyone after the termination date of the Option. 4. Method of Exercise of Option. (a) Subject to the foregoing, the vested portion of the Option may be exercised in whole or in part from time to time by serving written notice of exercise on the Company at its principal office within the Exercise Period for such vested portion. The date on which the Company receives such notice shall be considered the date of exercise for purposes of this Agreement. The notice shall state the number of Shares as to which the Option is being exercised and shall be accompanied by payment of the purchase price. (b) Employee may pay the option price in cash, by check (bank check, certified check or personal check), by money order, or (i) by delivering to the Company for cancellation, by way of purchase of its own shares by the Company in compliance with Section 42A of the Companies Act 1981 of Bermuda, or by transferring to a nominee of the Company, vested Shares of the Company that Employee has held for at least six (6) months as of the date of exercise, with a fair market value as of the date of exercise equal to the option price or the portion thereof being paid by tendering such Shares; (ii) by delivering to the Company the full option price in Employee's full recourse liability promissory note (in such form as the Company may require) secured by the Shares received thereunder with a term not to exceed three years, which promissory note shall provide for interest on the unpaid balance thereof equal to the greatest of (A) 10%, (B) the applicable U.S. federal short-term rate under Section 1274(d) of the Code as of the date of exercise, or (C) a market rate, as determined by the Company as of the date of exercise; or (iii) by delivering a combination of cash, Employee's promissory note and Shares of the Company with an aggregate Fair Market Value as of the date of exercise and a principal amount equal to the option price. If Employee pays all or part of the option price by Employee's promissory note, any aggregate unpaid balance due under said note shall accelerate and become immediately payable in full upon termination of Employee's employment for any reason whatsoever. 5. Miscellaneous. (a) Neither the Plan nor this Agreement shall (i) be deemed to give any individual a right to remain an employee of the Company or any of its Affiliates, (ii) restrict the right of the Company to discharge any employee, with or without cause, or (iii) be deemed to be a written contract of employment. Employee shall have none of the rights of a shareholder with respect to Shares subject to the Option until such Shares shall have been issued to Employee upon exercise of the Option and Employee has been registered in the register of shareholders of the Company as the holder of the relevant Shares. (b) The exercise of all or any parts of the Option shall only be effective at such time that the sale of Shares of the Company pursuant to such exercise will not violate any state or federal securities or other laws. (c) The Option may not be transferred, except by will or the laws of descent and distribution to the extent provided in subsection 3(c), and during Employee's lifetime the Option is exercisable only by Employee. (d) If there shall be any change in the Shares subject to the Option through an amalgamation, reorganization, recapitalization, dividend or other distribution, share split or other similar corporate transaction or event of the Company, appropriate adjustments shall be made by the B-4 Company in the number of Shares and the price per share of the Shares subject to the Option in order to prevent dilution or enlargement of the Option rights granted hereunder; provided, however, that the number of Shares subject to the Option shall always be a whole number. (e) The Company shall at all times during the term of the Option reserve and keep available such number of Shares as will be sufficient to satisfy the requirements of this agreement. (f) If Employee shall dispose of any of the Shares acquired upon exercise of the Option within two (2) years from the date the Option was granted or within one (1) year after the date of exercise of the Option, then, in order to provide the Company with the opportunity to claim the benefit of any income tax deduction, Employee shall promptly notify the Company of the dates of acquisition and disposition of such Shares, the number of Shares so disposed of, and the consideration, if any, received for such Shares. In order to comply with all applicable U.S. income tax laws or regulations, the Company may take such action as it deems appropriate to assure (i) notice to the Company of any disposition of the Shares of the Company within the time periods described above, and (ii) that, if necessary, all applicable U.S. payroll, withholding, income or other taxes are withheld or collected from Employee. (g) The Company, in its sole and absolute discretion, may allow Employee to satisfy Employee's income tax withholding obligations upon exercise of the Option by (i) having the Company withhold a portion of the Shares otherwise to be delivered upon exercise of the Option having a Fair Market Value at that time of withholding equal to the amount of income tax required to be withheld upon such exercise, in accordance with such rules as the Company may from time to time establish, or (ii) delivering to the Company, by way of purchase of its own shares by the Company in compliance with Section 42A of the Companies Act 1981 of Bermuda, or by transferring to a nominee of the Company, shares of the Company, other than the Shares issuable upon exercise of the Option, with a Fair Market Value at that time of transfer equal to such taxes, in accordance with such rules. [Signature page follows this page] B-5 IN WITNESS WHEREOF, the Company and Employee have executed this agreement on the date set forth in the first paragraph. W.P. STEWART & CO., LTD. By: ------------------------------- Its: ------------------------------- EMPLOYEE: ---------------------------------- B-6 Exhibit A to Incentive Stock Option Agreement Plan B-7 EXHIBIT C FORMS OF PROMISSORY NOTE AND PLEDGE AND ASSIGNMENT AGREEMENT SECURED PROMISSORY NOTE US$_______ Dated: __________________ FOR VALUE RECEIVED, ____________ an individual residing at ___________________________ ("__________"), hereby promises to pay to W.P. Stewart Asset Management, Ltd., a company organized under the laws of Bermuda ("Lender"), or its assigns, in lawful money of the United States of America, in good and immediately available funds, the principal amount of ____________________________________________ (US$_______), payable in 28 quarterly installments (each, a "Principal Payment") on the 20th day following the end of each calendar quarter, commencing on ____________ (each, a "Payment Date") until paid in full. The undersigned further agrees to pay interest, in like funds, from the date hereof on the unpaid principal amount hereof from time to time outstanding at an annual rate equal to [ten percent (10%)] calculated on the basis of a 360 day year based on the actual number of days elapsed. Interest shall accrue commencing on the date hereof, and accrued interest shall be payable quarterly (each, an "Interest Payment") on the twentieth day following the end of each calendar quarter commencing on ______________. Any and all interest or principal outstanding hereunder may be prepaid at any time without penalty; provided, however, any prepaid principal shall be applied to reduce pro rata the outstanding principal over the remaining quarterly payment periods. All payments and prepayments on this Note shall be made to Lender at Trinity Hall, 43 Cedar Avenue, P.O. Box HM 2905, Hamilton HM LX, Bermuda or such other address provided by Lender to Borrower in writing. The holder of this Note is authorized to record the date and amount of each payment or prepayment of principal hereof on the schedule annexed hereto and made a part hereof, and any such recordation shall constitute prima facie evidence of the information so recorded; provided, that neither the failure of the holder hereof to make any such recordation nor the existence of any error in such recordation shall affect the obligations of Borrower hereunder. Notwithstanding anything to the contrary contained herein, any amounts of principal or interest which remain outstanding under this Note on _____________ shall be immediately due and payable on that date. If any payment under this Note is due on a day other than a Business Day, such payment shall be made on the last Business Day preceding such day. A "Business Day" shall mean any day other than a Saturday, Sunday or other day on which commercial banks are required to be closed in New York City. If any payment of principal or interest due hereunder is not paid, Lender shall provide written notice thereof to Borrower specifying the amount overdue. If such amount has not been paid within seven (7) days after the receipt of such notice, there shall be an event of default, and all amounts outstanding under this Note may be declared to be, and thereupon shall become, immediately due and payable. If Borrower shall cease to be an employee of Lender and its affiliates, all amounts outstanding under this Note may be declared to be, and, upon such cessation and demand therefor, shall become, immediately due and payable ("Acceleration"), subject to the provisions of Section 6 of that C-1 certain Purchase Agreement, dated as of _______________, among W.P. Stewart & Co., Ltd., Lender and Borrower (the "Purchase Agreement"). Borrower is obligated to pay the principal described herein and any stated interest thereon only to the holder of this Note at the address set forth above or as otherwise specified in writing, and only the person whose name has been notified to Borrower shall be entitled to payment of principal and interest on the obligation evidence hereby. This Note may be assigned or transferred by Lender to any affiliate without the consent of Borrower. This Note is secured by and enjoys the benefit of that certain Pledge and Assignment Agreement, dated as of ______________, between Lender and Borrower (the "Pledge"). In case an Event of Default (as defined in the Pledge) shall occur and be continuing, the principal of, and accrued interest on, this Note may be declared to be, and thereupon shall become, immediately due and payable. Borrower hereby expressly waives presentment, demand, protest or notice of any kind. This Note shall inure to the benefit of, and be binding upon, the successors and permitted assigns of Borrower. THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF BERMUDA WITHOUT REGARD TO THE CONFLICTS OF LAWS PROVISIONS THEREOF. ___________________________________ Name:______________________________ Address:___________________________ ___________________________________ ___________________________________ C-2 Schedule to Note PAYMENTS OF PRINCIPAL - -------------------------------------------------------------------------------- Amount of Unpaid Notation Date Principal Repaid Principal Balance Made By - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- C-3 PLEDGE AND ASSIGNMENT AGREEMENT This PLEDGE AND ASSIGNMENT AGREEMENT (the "Agreement"), dated as of _____________, is between W.P. Stewart Asset Management, Ltd., a company organized under the laws of Bermuda ("Lender") and ______________, an individual residing at _____________________________("Borrower"). RECITALS Lender is a wholly-owned subsidiary of W.P. Stewart & Co., Ltd., a company organized under the laws of Bermuda (the "Issuer"). The Issuer is the issuer of shares of the Company, par value US$0.001 per share (the "Shares"). On the date hereof, Borrower has subscribed for and is purchasing _______ Shares (the "Purchase Shares") from the Issuer pursuant to a certain Purchase Agreement of even date herewith among Lender, the Issuer and Borrower (the "Purchase Agreement") and under the terms of the W.P. Stewart & Co., Ltd. 2001 Employee Equity Incentive Plan (the "Plan"). Lender has agreed to lend to Borrower a portion of the purchase price of the Purchase Shares (the "Loan"), which Loan shall be represented by a secured promissory note made by Borrower in favor of Lender, in substantially the form attached hereto as Exhibit A (the "Note"). Borrower is delivering the Note simultaneously herewith. As a condition to making the Loan represented by the Note, Lender requires that Borrower grant to Lender a first priority perfected security interest in the Purchase Shares and a first priority perfected security interest in and assignment to Lender of any and all Distributions (as such term is defined herein) received pursuant to the ownership of the Purchase Shares. To induce Lender to make such Loan, Borrower desires to grant the same to the Lender. In consideration of the mutual promises herein set forth, the parties hereto agree as follows: 1. Definitions. Capitalized terms which are not otherwise defined in this Agreement shall have the definitions ascribed thereto in the Note. 2. Security Interest. As security and collateral for the payment by Lender of the amounts due under the Note when and as due and payable, and for the due performance of and compliance with the terms and provisions of the Purchase Agreement and the Note by Borrower (collectively, the "Obligations"), Borrower hereby pledges, hypothecates, delivers, sets over, transfers and grants to Lender a security interest in, and assigns to Lender all of Borrower's right, title and interest, whether now owned or hereafter acquired, in and to the property described in Section 3 hereof (collectively and severally, the "Collateral"). 3. Collateral. (a) The Collateral shall consist of the following: C-4 i. All of the Purchase Shares now owned or hereafter acquired by Borrower, together with all certificates representing the same, if any, together with all new, substituted and additional securities, and certificates representing the same which are or may be issued at any time with respect to such Purchase Shares (collectively and severally, the "Pledged Shares"). ii. All rights of the holder of Pledged Shares with respect to such Pledged Shares, whether now existing or hereafter arising, including all rights to dividends and distributions, whether cash or otherwise, interests, rights, profits and other property, including securities, at any time received, receivable or otherwise distributed in respect of the Pledged Shares (collectively and severally, "Distributions"); iii. All books and records relating to the Collateral; and iv. All Proceeds (as such term is defined herein) of the Collateral. For purposes of this Agreement, "Proceeds" shall mean and include all proceeds, products, rents, profits, and anything else received or receivable upon the sale, collection, exchange, or other disposition, whether voluntary or involuntary, of Collateral or proceeds, including without limitation in connection with any distribution upon dissolution or merger of Lender or Borrower. (b) Upon the written request of Borrower, Lender shall release vested Shares from the security interest created by this Agreement, together with any proceeds thereof, if, after giving effect to such release of vested Shares, the value of the remaining Collateral would be at least equal to 150% of the Obligations then outstanding. For purposes of the foregoing computation, the value of each Share shall be deemed to be the average closing price per Share as reported on the New York Stock Exchange during the most recent 30 day period. 4. Delivery of Pledged Shares. If at any time the Pledged Shares or any securities received as Distributions are represented by a certificate or certificates, Borrower shall deliver to Lender or its designated agent all of such certificates, together with a stock power or powers duly executed in blank therefor. Upon execution of this Agreement and the Note, Lender shall note the existence of the pledge and assignment created by this Agreement on the stock records of lender. 5. Use of Distributions. In addition to any provisions of this Agreement governing of the administration of the Collateral, the following provisions shall govern the administration of the Pledged Shares and the Distributions:(a) All Distributions shall be paid into Borrower's account with Lender or such account as Lender from time to time may designate and shall be applied (i) first, to any and all Obligations due and payable at the time of any such Distribution, and any and all Obligations which are to become due and payable within 20 days following such Distribution (collectively, "Due and Payable Obligations"), and (ii) second, any excess shall be released to Borrower. Borrower hereby irrevocably appoints Lender as Borrower's attorney-in-fact to exercise such rights and powers as Borrower otherwise might exercise with respect to Distributions, including without limitation the right to endorse, receive, issue receipts for, or collect, by legal proceedings or otherwise, all Distributions, and to apply directly to the Due and Payable Obligations all such amounts received. (b) After all Due and Payable Obligations have been satisfied in accordance with Section 5(a) and unless and until an Event of Default (as defined herein) shall have occurred and be continuing, Borrower shall have a license and be entitled to receive all of the remaining Distributions assigned and pledged pursuant to Section 3(a)(ii), as record and beneficial owner of the Pledged Shares; provided that the foregoing license and entitlement shall apply to Distributions of securities issued by Lender only if such securities have been pledged to Lender as additional Pledged Shares hereunder. Borrower shall receive and may retain all Distribution payments to which Borrower is entitled under this Section 5(b) and the same shall be released, automatically, and without any further action by Lender, from the lien created by this Agreement. C-5 6. Voting. Unless and until there shall have occurred and be continuing an Event of Default, Borrower shall be entitled to vote or consent with respect to the Pledged Shares in any manner not inconsistent with this Agreement, the Plan, the Purchase Agreement or any document or instrument delivered or to be delivered pursuant to or in connection herewith or therewith. Notwithstanding anything to the contrary set forth in this Section 6, Borrower hereby grants to Lender an irrevocable proxy for the Pledged Shares, to remain in effect during the term of this Agreement, entitling Lender to vote or consent in its discretion and to the extent permitted by applicable Law (as such term is defined herein) upon the occurrence and during the continuation of any Event of Default. Borrower shall deliver such further evidence of the foregoing proxy as Lender reasonably may request. For purposes of this Agreement, "Law" shall mean and include each and every constitution, treaty, law, rule, regulation, order, ordinance, statute, requirement, code, decree, directive, mandate, judicial or arbitral decision, permit or license, or any voluntary restraint, policy or guideline not having the force of law of any kind whatsoever issued by any governmental authority applicable to or affecting Lender, Borrower, the Note or the Purchase Agreement or the use, possession, maintenance, management, rental, income or profits of any property or any alteration to or restoration of any property. 7. Defaults. (a) For purposes of this Agreement, an "Event of Default" shall mean and include any non-payment of any amount due or failure to perform or default under, breach of or non-compliance with, this Agreement, the Plan, the Note or the Purchase Agreement, regardless of notice to Borrower thereof. In case an Event of Default shall have occurred and be continuing, Lender shall be entitled to exercise all of the rights, powers and remedies (whether under this Agreement or by law or otherwise, including without limitation those of a secured party under the Uniform Commercial Code as in effect in the jurisdiction of Borrower's residence) for the protection and enforcement of its rights in respect of the Collateral, including without limitation to take the following actions: i. Vote and consent, give waivers and ratifications, exercise the proxy with respect to the Pledged Shares in accordance with Section 6, and otherwise act with respect to such Pledged Shares and the Collateral as though it were the outright owner thereof; ii. Terminate Borrower's license to receive and retain Distributions and, instead, to receive and retain for itself all Distributions in respect of the Pledged Shares in accordance with Section 5(b); iii. Foreclose or otherwise enforce Lender's security interest in the Collateral in any manner permitted by Law or provided in this Agreement; iv. Prepare the Collateral, or any part thereof, for sale or other disposition in any manner and to the extent Lender in its absolute discretion deems appropriate; v. Sell or otherwise dispose of the Collateral, or any part thereof, at one or more public or private sales at any place or places, on such terms and in such manner as Lender in its absolute discretion may determine; vi. Require Borrower to assemble the Collateral and/or books and records relating thereto and make the same available to Lender at Lender's reasonable convenience; vii. Recover from Borrower all costs and expenses, including without limitation reasonable attorneys' fees, which are incurred by Lender in exercising any right, power or remedy provided or permitted by this Agreement or by Law; or viii. Enter into property where any Collateral or books and records relating thereto are located and take possession thereof, with or without judicial process. (b) Without limiting the generality of the foregoing, Lender, in its absolute discretion, may restrict the prospective bidders or purchasers at any sale of Pledged Shares to persons or C-6 entities who or which agree to be bound by the terms of the call provisions of Section 6 of the Purchase Agreement. Disposition of any or all of the Pledged Shares pursuant to any private sale made as provided above may be at prices and on other terms less favorable to Borrower than if the Pledged Shares were sold at a public sale. Lender has no obligation to delay the sale of any Pledged Shares for public sale under the Act. Any private or intrastate sale or sales of the Pledged Shares made in accordance with this Section 7(b) shall be conclusively deemed to have been made in a commercially reasonable manner. (c) Borrower shall execute such applications, instruments and other documents that may be necessary in connection with obtaining, and will use its best efforts to obtain, any consent, approval, or authorization of any state, municipal, or other governmental department, agency, or authority which may be necessary to effectuate any sale or other disposition of some or all of the Pledged Shares in accordance with this Agreement. (d) Upon any sale or other disposition of some or all of the Collateral pursuant to this Agreement, Lender shall have the right to deliver, assign and transfer the same to the purchaser or other transferee thereof, and each such purchaser or other transferee at any such sale or other disposition shall take and hold such Collateral free from any claim or right of any kind, including an equitable right of redemption, of Borrower, and Borrower specifically waives, to the fullest extent permitted by Law, all rights of redemption, stay or appraisal that it has or may have under any Law now existing or thereafter adopted. 8. Cumulative Rights. The rights, powers and remedies of Lender under this Agreement shall be in addition to all rights, powers and remedies of Lender under any Law, the Plan, the Purchase Agreement, the Note or any other agreement or document, all of which rights, powers and remedies shall be cumulative and may be exercised successively or concurrently without impairing Lender's security interest. 9. Waiver. Any waiver, forbearance, failure or delay by or on the part of Lender in exercising, or the exercise or commencement of exercise by Lender of, any right, power or remedy shall not preclude the further, simultaneous or later exercise thereof, and every right, power or remedy of Lender shall continue in full force and effect unless and until such right, power or remedy is expressly waived in a writing signed by Lender. 10. Successor. All rights of Lender under this Agreement shall inure to the benefit of Lender and its successors and assigns, and all obligations of Borrower hereunder shall be binding upon Borrower's heirs, successors, and legal representatives. This Agreement shall not be assigned by Borrower without the consent of Lender in its sole discretion. 11. Severability. If any provision of this Agreement shall be declared illegal or unenforceable under any law, rule or regulation of any federal, state or local government, or any agency or bureau thereof, having jurisdiction over any of the parties hereto, such illegality or unenforceability shall not affect the validity and enforceability of any of the other provisions hereof, and the parties shall use reasonable efforts to modify this Agreement, to the extent possible, so as to eliminate such invalidity. 12. Choice of Law. This Agreement shall be governed by and construed in accordance with the laws of Bermuda, without reference to conflicts of law provisions thereof. 13. Amendment. This Agreement shall not be amended or modified except by a writing signed by both of the parties hereto. 14. Notice. All notice or other communication given by either party in connection with this Agreement shall be in writing and delivered to the other party by United States registered or certified mail, postage prepaid, at the address set forth in the Note or to such other address as either party shall furnish by like notice. C-7 15. Termination. This Agreement shall terminate at such time as the Obligations terminate and have been paid or otherwise discharged in full. Upon such termination of this Agreement, and at the request of Borrower, Lender shall (a) assign, transfer and deliver to Borrower such of the Collateral as may be in Lender's possession and which has not therefore been sold or otherwise applied or released pursuant to this Agreement, and (b) execute and deliver any documents and perform any acts reasonably necessary to implement the termination of this Agreement or the transfer of the Collateral. 16. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, and all of which together shall constitute one and the same instrument. [Signature page follows this page.] C-8 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. Borrower: _____________________________________ Lender: W.P. STEWART ASSET MANAGEMENT, LTD. By:__________________________________ Title:_______________________________ C-9 Exhibit A to Pledge and Assignment Agreement The Note (attached hereto) C-10 EXHIBIT D FORM OF PURCHASE AGREEMENT PURCHASE AGREEMENT This PURCHASE AGREEMENT (the "Agreement"), dated as of ______________, is among W.P. Stewart & Co., Ltd., a company organized under the laws of Bermuda (the "Company"), W.P. Stewart Asset Management, Ltd., a company organized under the laws of Bermuda (the "Lender") and ______________ an individual residing at _______________________________ ("Purchaser"). RECITALS: The Company has adopted the W.P. Stewart & Co., Ltd. 2001 Employee Equity Incentive Plan (the "Plan"), which is attached hereto as Exhibit A and which permits the purchase of restricted shares of the Company, and the Company has taken all necessary actions to grant the following right to purchase restricted shares pursuant and subject to the terms of the Plan. The Company is the issuer of shares of the Company, par value US$0.001 per share (the "Shares"). Purchaser wishes to subscribe for and purchase Shares from the Company, and the Company is willing to sell Shares to Purchaser, on the terms and conditions herein set forth and under the Plan. Lender is willing to lend to Purchaser the funds required to purchase the Shares. In consideration of the mutual promises herein set forth, the parties hereto agree as follows: Any capitalized terms used but not defined herein shall have the meanings ascribed to them in the Plan. 1. Sale and Purchase. At the Closing (as defined herein), the Company hereby agrees to sell to Purchaser, and Purchaser hereby agrees to purchase, ________Shares (the "Purchase Shares"), at the purchase price of US$______ per share, for an aggregate purchase price of US$_______. Purchaser shall pay such aggregate purchase price to the Company upon the execution of this Agreement by check in the amount of US$___________. 2. Loan. Lender agrees to lend to Purchaser funds in the amount of US$_______ to be used by Purchaser solely for the purchase of the Purchase Shares. Such loan shall be evidenced by a secured promissory note, of even date herewith, from Purchaser to Lender, in the principal amount of US$________ (the "Note") in substantially the form attached as Exhibit B hereto, together with a Pledge and Assignment Agreement signed by Purchaser (the "Pledge") in substantially the form attached as Exhibit C hereto. 3. Certificates. Purchaser acknowledges that the Purchase Shares, until vested (as defined in the Plan), will not be represented by certificates and that Purchaser's ownership of such Shares shall be evidenced only in the register of shareholders of the Company. 4. Vesting. The Purchase Shares shall vest (as defined in the Plan) in equal amounts each calendar quarter for a period of 28 quarters, commencing with the quarter ending __________________; provided that, in the event of a termination of employment with the Company or its affiliates, no additional vesting shall occur following the end of the calendar quarter in which such termination occurs. Notwithstanding any other provision of this Agreement, the Committee may grant accelerated vesting of the Purchase Shares at such times and in such circumstances as it deems appropriate and equitable in its absolute discretion. 5. Distributions. Purchaser shall be entitled to receive all dividends, distributions or profits on or in connection with the Purchase Shares which are paid or payable on or after _________________. 6. Termination. In the event Purchaser, for any reason whatsoever, is not in the employment of the Company or its affiliates ("Termination of Employment"), Purchaser or Purchaser's heirs, executors, legal representatives or permitted assigns shall transfer to the Company all rights to any of the Purchase Shares which have not vested at the time of such termination, and the Company promptly shall return to Purchaser the lesser of the price per share paid for such unvested Purchase Shares or the average closing price per share as reported on the New York Stock Exchange during the most recent 30 day period, in either case multiplied by the number of such unvested Purchase Shares. If Purchaser is, at that time, indebted to Lender under the Note, Purchaser agrees that the Company will, before making any payment to Purchaser, pay to Lender any amount otherwise due to Purchaser under this Section 6 to the extent of, and in partial or full repayment (on behalf of Purchaser) of, any amount due under the Note. 7. Change in Control. Notwithstanding any other provision of this Agreement, all Purchase Shares shall be deemed to be fully vested upon any Change in Control (as defined herein). For purposes of this Agreement, a "Change of Control" shall mean any of the following: (i) the consummation of an amalgamation of the Company with or into another entity or any other corporate reorganization, if more than 50% of the combined voting power of the continuing or surviving entity's securities outstanding immediately after such amalgamation or other reorganization is owned by persons who were not shareholders of the Company immediately prior to such amalgamation or other reorganization; (ii) a public announcement that any person has acquired beneficial ownership of 51% or more of the then outstanding shares of the Company and, for this purpose, the terms "person" and "beneficial ownership" shall have the meanings provided in Section 13(d) of the U.S. Securities Exchange Act of 1934 or related rules promulgated by the U.S. Securities and Exchange Commission; (iii) the commencement of or public announcement of an intention to make a tender or exchange offer for 51% or more of the then outstanding shares of the Company; (iv) a sale of all or substantially all of the assets of the Company; or (v) the Board of Directors of the Company, in its sole and absolute discretion, determines that there has been a sufficient change in the share ownership of the Company to constitute a change in control of the Company. 8. Closing. The Closing of the transactions contemplated in this Agreement (the "Closing") shall be deemed to occur as of ____________________, or such other time and place as the parties shall agree. All documents delivered and all actions taken at the Closing shall be deemed to have occurred simultaneously. At the Closing the following documents shall be delivered and the following actions shall be taken: (a) Purchaser and the Company each shall execute and deliver this Purchase Agreement; (b) Purchaser shall deliver payment in full for the Purchase Shares as provided in Section 1, by means of a check; (c) If all or part of the payment for the Purchase Shares is being made by means of a Note, Lender shall make the Loan, and Purchaser shall deliver a Note and a Pledge and Assignment Agreement. 9. Tax Election. Concurrently with the execution of this Agreement, Purchaser may deliver to the Company two copies of a statement signed by Purchaser (both of which bear Purchaser's original signature) with respect to Purchaser's election to include in Purchaser's gross income for U.S. tax purposes the excess, if any, of the fair market value of the Purchase Shares over the total purchase price therefor in accordance with Section 83(b) of the U.S. Internal Revenue Code of 1986, as amended. In that case, Purchaser shall submit one copy of such statement with Purchaser's ____ U.S. federal tax return and hereby authorizes the Company to file one copy of such statement with the Internal Revenue Service on Purchaser's behalf. 10. Company Representations and Warranties. The Company represents and warrants to Purchaser that: (i) the Company is duly organized, validly existing and in good standing under the laws of Bermuda; (ii) the Purchase Shares are being sold to Purchaser free and clear of all claims, liens, charges and encumbrances, and are duly and validly authorized and, upon payment therefore by Purchaser, will be duly and validly issued, outstanding, fully paid and nonassessable; and (iii) the issuance of the Purchase Shares will not violate any provision of the organizational documents of the Company, or any law or regulation, or any court or administrative order, or any agreement by which the Company or any of its property may be bound. 11. Severability. If any provision of this Agreement shall be declared illegal or unenforceable under any law, rule or regulation of any federal, state or local government, or any agency or bureau thereof, having jurisdiction over any of the parties hereto, such illegality or unenforceability shall not affect the validity and enforceability of any of the other provisions hereof, and the parties shall use reasonable efforts to modify this Agreement, to the extent possible, so as to eliminate such invalidity. 12. Choice of Law. This Agreement shall be governed by and construed in accordance with the laws of Bermuda, without reference to conflicts of law provisions thereof. 13. Amendment. This Agreement shall not be amended or modified except by a written agreement signed by both of the parties hereto. 14. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, and all of which together shall constitute one and the same instrument. 15. Entire Agreement; Conflict. This Agreement, together with the Note and the Pledge, if any, and the Plan contain the entire agreement of the parties with respect to the subject matter hereof and supersede any written or oral agreement between the Company and Purchaser relating thereto. If there is any conflict between this Agreement and the Plan, the terms and conditions of the Plan shall govern. [Signature page follows this page.] IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. The Company: W.P. STEWART & CO., LTD. By:___________________________________ Title:________________________________ The Lender: W.P. STEWART ASSET MANAGEMENT, LTD. By:___________________________________ Title:________________________________ Purchaser: ______________________________________ Exhibit A to Purchase Agreement 2001 Employee Equity Incentive Plan (attached hereto) Exhibit B to Purchase Agreement Note (attached hereto) Exhibit C to Purchase Agreement Pledge and Assignment Agreement (attached hereto) EX-4.2 4 d56937_ex4-2.txt AMEND # 1 TO 2001 EMPLOYEE EQUITY INCENTIVE PLAN EXHIBIT 4.2 Amendment No. 1 to W.P. Stewart & Co., Ltd. 2001 Employee Equity Incentive Plan WHEREAS, on July 24, 2001, the Board of Directors of W.P. Stewart & Co., Ltd., a Bermuda company (the "Company") adopted the Company's 2001 Employee Equity Incentive Plan (the "Plan"); WHEREAS, all Company shares heretofore made available for awards under the Plan are currently subject to outstanding awards and the Company considers it desirable and in its best interests to make additional shares available for awards under the Plan; WHEREAS, the Company considers it desirable and in its best interests that the Plan be amended to make non-employee directors eligible to receive awards under the Plan; WHEREAS, the Company considers it desirable to provide for more flexibility in the determination of the payment terms of promissory notes that may be executed by participants under the Plan; and WHEREAS, the Company considers it desirable to eliminate the requirement that awards under the Plan contain options and restricted shares in certain proportions and to make certain technical corrections to the text of the Plan; NOW, THEREFORE, the Plan is hereby amended as follows: 1. Section 1 is amended by adding "and non-employee directors" after "employees". 2. Section 2(i) is amended by adding "and any Director, in each case" after "Affiliates". 3. Section 4(a) is amended by substituting "2,500,000" for "1,500,000" in the first sentence thereof and in the fifth sentence thereof, by substituting "calendar year 2001" for "each respective calendar year" in clause (i) of the first sentence thereof, and by adding "except in the event of a change of control (as defined in any option agreement or purchase agreement executed pursuant to an Award)," at the beginning of clause (ii) of the first sentence thereof. 4. Section 6(a)(iv) is amended by deleting ", which promissory note shall provide for interest on the unpaid balance thereof equal to the greatest of (A) 10%, (B) the applicable U.S. federal short-term rate under Section 1274(d) of the Code or any counterpart to such rate as may be prescribed under the tax laws of the Participant's country of residence or employment, as appropriate, as of the date of exercise, or (C) a market rate, as determined by the Company as of the date of exercise" and by adding "or service as a Director" after "employment" in the last sentence thereof. 5. Section 6(b) is amended by adding "or service as a Director" after "employment" in clauses (ii) and (vi) thereof. 6. Exhibit A is amended by deleting the lines for the years 2002 and 2003. 7. Section 4(b) of Exhibit B is amended by substituting "__%" for "10%" in clause (A) thereof. 8. The first paragraph of Exhibit C is amended by substituting "___ percent (__%)" for "[ten percent (10%]". 9. Section 7 of Exhibit D is amended by substituting "Change of Control" for "Change in Control." The date of this Amendment is January 25, 2002. EX-4.3 5 d56937_ex4-3.txt AMEND # 2 TO 2001 EMPLOYEE EQUITY INCENTIVE PLAN EXHIBIT 4.3 Amendment No. 2 to W.P. Stewart & Co., Ltd. 2001 Employee Equity Incentive Plan WHEREAS, on July 24, 2001, the Board of Directors of W.P. Stewart & Co., Ltd., a Bermuda company (the "Company"), adopted the Company's 2001 Employee Equity Incentive Plan, and on January 25, 2002, the Board of Directors of the Company adopted Amendment No. 1 thereto (as so amended, the "Plan"); WHEREAS, the Company considers it desirable and in its best interests to make additional shares available for awards under the Plan; and WHEREAS, the Company considers it desirable to provide for longer periods during which vested options may be exercised; NOW, THEREFORE, the Plan is hereby amended as follows: 1. Section 4(a) is amended by substituting "3,000,000" for "2,500,000" in the first sentence thereof and in the fifth sentence thereof. 2. Section 6(a)(iii) is amended by substituting the first sentence thereof in its entirety with "In the case of Options granted prior to May 12, 2003, the vested portion of each Option shall be exercisable only during the 365-day period commencing on and including the vesting date, and, in the case of Options granted on or after May 12, 2003, the vested portion of each Option shall be exercisable only during the period commencing on and including the vesting date and ending on the day immediately prior to the second anniversary of such vesting date (in each case, such period being hereinafter referred to as the 'Exercise Period')." 3. Section 2(b) of Exhibit B is amended by deleting "of 365 days" and by adding "and ending on the day immediately prior to the [first][second] anniversary of such Vesting Date" before "(the 'Exercise Period')" in the first sentence thereof. The date of this Amendment is May 12, 2003. EX-5.1 6 d56937_ex5-1.txt OPINION OF APPLEBY SPURLING & KEMPE EXHIBIT 5.1 OPINION OF COUNSEL [LETTERHEAD OF APPLEBY SPURLING & KEMPE] 16 September 2003 W.P. Stewart & Co., Ltd. Trinity Hall 43 Cedar Avenue Hamilton HM 12 Bermuda Dear Sirs W.P. Stewart & Co., Ltd. (the "Company") We have acted as legal counsel in Bermuda to the Company in connection with the filing by the Company with the Securities and Exchange Commission under the Securities Act of 1933, as amended, of a registration statement on Form S-8 (the "Registration Statement") in relation to a total of 625,167 additional shares of the Company of par value US$0.001 each ("Shares") which may be issued in accordance with the W.P. Stewart & Co., Ltd. 2001 Employee Equity Incentive Plan (the "Plan"), following the amendment of the Plan on 13 May 2003 to increase the total number of Shares which may be issued pursuant to awards granted under the Plan. For the purposes of this opinion we have examined and relied upon the documents listed (which, in some cases, are also defined) in the Schedule to this opinion (the "Documents"). Assumptions In stating our opinion we have assumed:- (a) the authenticity, accuracy and completeness of all Documents submitted to us as originals and the conformity to authentic original Documents of all Documents submitted to us as certified, conformed, notarised, faxed or photostatic copies; (b) that each of the Documents and other such documentation which was received by electronic means is complete, intact and in conformity with the transmission as sent; (c) the genuineness of all signatures on the Documents; (d) the authority, capacity and power of natural persons signing the Documents; (e) that any factual statements made in any of the Documents are true, accurate and complete; (f) that any awards under the Plan relevant to this opinion ("Awards") will constitute, the legal, valid and binding obligations of each of the parties to them; (g) that the Resolutions are in full force and effect and have not been rescinded, either in whole or in part, and accurately record (in the case of directors' resolutions) the resolutions passed by the directors of the Company and (in the case of shareholders' resolutions) the resolutions passed by the shareholders of the Company in board and shareholder meetings which were duly convened and at which a duly constituted quorum was present and voting throughout; (h) that each director of the Company, when the board of directors of the Company (the "Board") passed the Resolutions which are directors' resolutions, discharged his fiduciary duty owed to the Company and acted honestly and in good faith with a view to the best interests of the Company; (i) that the Company has entered into its obligations under the Plan in good faith for the purpose of carrying on its business and that, at the time it did so, there were reasonable grounds for believing that the transactions contemplated by the Plan would benefit the Company; (j) that, at the time of issue by the compensation committee of the Board (the "Committee") of any Award under the Plan, or of Shares pursuant to Awards, relevant to this opinion, the Committee has been duly constituted and remains a duly constituted committee of the board of directors of the Company having the necessary powers and authorities to issue Awards and Shares pursuant to Awards; (k) that the approval of the issue of any Awards and of any Shares under Awards pursuant to the Plan is duly made either at a duly convened and quorate meeting of the Board, or, at a duly convened and quorate meeting of the Committee in a manner complying with the terms of its constitution then in force and within the authority then given to the Committee by the board of directors of the Company; (l) that when the issue of any Shares under the Plan is authorised, the issue price will not be less than the par value of the Shares and the Company will have sufficient authorised share capital to effect the issue and will continue to hold the necessary consent from the Bermuda Monetary Authority for such share issue; (m) that, if new Shares are paid for, upon the exercise of an Award, by the transfer by the allottee of Shares to the Company, the payment of the purchase price in that manner is duly effected as a purchase of own shares by the Company in accordance with section 42A of the Companies Act 1981 of Bermuda; (n) that, if new Shares are paid for, upon the exercise of an Award, by the issue by the allottee to the Company of a promissory note, the Company is reasonably satisfied at the time of issue that the promissory note represents good value to the Company at its aggregate capital amount; (o) that, if new Shares are issued by the Company pursuant to the Plan on the terms of an Award which does not require the allottee to pay to the Company a cash subscription price for the Shares, the Company receives in any event a transfer to it of cash or assets from the allottee with a fair value at least equivalent to the aggregate par value of the Shares issued to him pursuant to that Award; (p) that the records which were the subject of the search made on 16 September 2003 of the Register of Companies at the office of the Registrar of Companies referred to in paragraph 7 of the Schedule to this opinion were complete and accurate at the time of such search and disclosed all information which is material for the purposes of this opinion and such information has not since such date been materially altered; (q) that the records which were the subject of the search made on 16 September 2003 in the Supreme Court Causes Book at the Registry of the Supreme Court referred to in paragraph 7 of the Schedule to this opinion were complete and accurate at the time of such search and disclosed all information which is material for the purposes of this opinion and such information has not since such date been materially altered; and (r) that the approval of the shareholders of the Company is not required under Section 7(a) of the Plan for the purposes of the amendments of the Plan made by the Resolutions referred to in paragraphs 3.4 and 3.6 of the Schedule to this opinion. Opinion Based upon and subject to the foregoing and subject to the reservations set out below and to any matters not disclosed to us, we are of the opinion that, when duly issued and allotted by the Board or by the Committee pursuant to Awards and when fully paid for pursuant to and in accordance with the terms of the Plan, as contemplated by the Plan, the new Shares will be validly issued, fully-paid and non-assessable shares of the Company. Reservations We have the following reservations:- (a) We express no opinion as to any law other than Bermuda law and none of the opinions expressed in this opinion relates to compliance with or matters governed by the laws of any jurisdiction except Bermuda. This opinion is limited to Bermuda law as applied by the Courts of Bermuda at the date of this opinion. (b) The reference in this opinion to Shares being "non-assessable" shall mean, in relation to fully-paid Shares and subject to any contrary provision in any agreement in writing between the Company and the holder of the Shares, that no shareholder shall be obliged to contribute further amounts to the capital of the Company, either in order to complete payment for their Shares, to satisfy claims of creditors of the Company, or otherwise; and no shareholder shall be bound by an alteration of the memorandum of association or bye-laws of the Company after the date on which he became a shareholder, if and so far as the alteration requires him to take, or subscribe for additional shares, or in any way increases his liability to contribute to the share capital of, or otherwise to pay money to, the Company. (c) Searches of the Register of Companies at the office of the Registrar of Companies and of the Supreme Court Causes Book at the Registry of the Supreme Court are not conclusive and it should be noted that the Register of Companies and the Supreme Court Causes Book do not reveal: (i) details of matters which have been lodged for filing or registration which as a matter of best practice of the Registrar of Companies or the Registry of the Supreme Court would have or should have been disclosed on the public file, the Causes Book or the Judgment Book, as the case may be, but for whatever reason have not actually been filed or registered or are not disclosed or which, notwithstanding filing or registration, at the date and time the search is concluded are for whatever reason not disclosed or do not appear on the public file, the Causes Book or Judgment Book; (ii) details of matters which should have been lodged for filing or registration at the Registrar of Companies or the Registry of the Supreme Court but have not been lodged for filing or registration at the date the search is concluded; and (iii) whether an application to the Supreme Court for a winding-up petition or for the appointment of a receiver or manager has been prepared but not yet been presented or has been presented but does not appear in the Causes Book at the date and time the search is concluded. (d) In order to issue this opinion we have carried out the searches as referred to in paragraph 7 of the Schedule and have not enquired as to whether there has been any change since the date of such search. (e) We have relied upon the statements made in the certificate referred to in paragraph 5 of the Schedule. We have made no independent verification of the matters referred to in the certificate and we qualify this opinion to the extent that the statements made in the certificate are not accurate in any respect. Disclosure This opinion is addressed to you in connection with the filing with the US Securities and Exchange Commission of the Registration Statement and is not to be made available to, or relied on by any other person or entity, or for any other purpose, without our prior written consent. We consent to the filing of this opinion as an exhibit to the Registration Statement by the Company. This opinion is addressed to you solely for your benefit and is neither to be transmitted to any other person, nor relied upon by any other person or for any other purpose nor quoted or referred to in any public document nor filed with any governmental agency or person, without our prior written consent, except as stated in the preceding paragraph or as may be required by law or regulatory authority. Further, this opinion speaks as of its date and is strictly limited to the matters stated herein and we assume no obligation to review or update this opinion if applicable laws or the existing facts or circumstances should change. This opinion is governed by and is to be construed in accordance with Bermuda law. It is given on the basis that it will not give rise to any legal proceedings with respect to it in any jurisdiction other than Bermuda. Yours faithfully APPLEBY SPURLING & KEMPE SCHEDULE 1. An electronic copy of the Registration Statement (excluding the exhibits and excluding the documents incorporated by reference). 2. An electronic copy of the Plan (excluding its exhibits). 3. Copies of:- 3.1 minutes of a meeting of the shareholders of the Company held on 29 June 1998; 3.2 minutes of a meeting of the board of directors of the Company held on 24 July 2001; 3.3 minutes of a meeting of the board of directors of the Company held on 2 November 2001; 3.4 an extract from the minutes of a meeting of the board of directors of the Company held on 25 January 2002, 3.5 minutes of a meeting of shareholders of the Company held on 3 May 2002; and 3.6 an extract from the minutes of a meeting of the board of directors of the Company held on 12 May 2003, (together, the "Resolutions"). 4. Copies of the certificate of incorporation, memorandum of association and bye-laws of the Company (together, the "Constitutional Documents"). 5. An officer's certificate dated 16 September 2003 and signed by Debra Randall as secretary of the Company confirming the authorised and issued share capital of the Company as at that date. 6. A copy of a letter from the Bermuda Monetary Authority to the Company dated 30 November 2000. 7. The entries and filings shown in respect of the Company on the file of the Company maintained in the Register of Companies at the office of the Registrar of Companies in Hamilton, Bermuda and the entries and filings shown in the Supreme Court Causes Book maintained at the Registry of the Supreme Court in Hamilton, Bermuda as revealed by searches made on 16 September 2003. EX-23.1 7 d56937_ex23-1.txt CONSENT OF PRICEWATERHOUSECOOPERS EXHIBIT 23.1 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in this Registration Statement on Form S-8 of our report dated February 28, 2003 relating to the financial statements of W.P. Stewart & Co., Ltd., which appears in W.P. Stewart & Co., Ltd.'s Annual Report on Form 20-F for the year ended December 31, 2002. PricewaterhouseCoopers LLP New York, New York September 15, 2003 -----END PRIVACY-ENHANCED MESSAGE-----