PRE 14A
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the
Registrant þ
Filed by a party other than the
Registrant o
Check the appropriate box:
þ Preliminary
Proxy Statement
o Confidential,
for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
o Definitive
Proxy Statement
o Definitive
Additional Materials
o Soliciting
Material Pursuant to §240.14a-12
PLATINUM UNDERWRITERS HOLDINGS, LTD.
(Name of Registrant as Specified In
Its Charter)
N/A
(Name of Person(s) Filing Proxy
Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
þ No
fee required.
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Fee computed on table below per Exchange Act
Rules 14a-6(i)(1)
and 0-11.
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(1)
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Title of each class of securities to which transaction applies:
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Aggregate number of securities to which transaction applies:
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(3)
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Per unit price or other underlying value of transaction computed
pursuant to Exchange Act
Rule 0-11
(set forth the amount on which the filing fee is calculated and
state how it was determined):
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(4)
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Proposed maximum aggregate value of transaction:
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or Schedule
and the date of its filing.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration Statement No.:
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The Belvedere Building
69 Pitts Bay Road
Pembroke HM 08 Bermuda
NOTICE OF ANNUAL GENERAL MEETING
OF SHAREHOLDERS
TO BE HELD ON APRIL 29, 2009
To the Shareholders of Platinum Underwriters Holdings, Ltd.:
Notice is hereby given that the 2009 Annual General Meeting of
Shareholders (the Annual Meeting) of Platinum
Underwriters Holdings, Ltd. (the Company) will be
held at the Fairmont Hamilton Princess Hotel, 76 Pitts Bay Road,
Pembroke HM 11 Bermuda, on Wednesday, April 29, 2009 at
3:00 p.m., local time, for the following purposes:
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1.
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To elect seven directors to the Companys Board of
Directors to serve until the Companys 2010 Annual General
Meeting of Shareholders.
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2.
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To consider and take action on a proposal to approve the Amended
and Restated Bye-laws of the Company to take advantage of
several developments in the laws of Bermuda and the United
States that involve matters covered by, and to improve the
organization of, the Companys Bye-laws.
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3.
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To consider and take action on a proposal to approve the
nomination of KPMG, a Bermuda partnership, as the Companys
independent registered public accounting firm for the 2009
fiscal year and to authorize the Audit Committee to set the
remuneration of such independent registered public accounting
firm.
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At the Annual Meeting, shareholders will receive the audited
consolidated financial statements of the Company and its
subsidiaries as of and for the year ended December 31, 2008
with the independent registered public accounting firms
report thereon, and may also be asked to consider and take
action with respect to such other business as may properly come
before the meeting, or any postponement or adjournment thereof.
The Companys Board of Directors has fixed the close of
business on March 16, 2009 as the record date for the
determination of shareholders entitled to notice of, and to vote
at, the Annual Meeting and any postponement or adjournment
thereof. You are cordially invited to be present. Shareholders
who do not expect to attend in person are requested to sign and
return the enclosed form of proxy in the envelope provided. At
any time prior to their being voted at the Annual Meeting,
proxies are revocable by written notice to the Secretary of the
Company, by a duly executed proxy bearing a later date or by
voting in person at the Annual Meeting.
By order of the Board of Directors,
Michael E. Lombardozzi
Executive Vice President, General Counsel,
Chief Administrative Officer and Secretary
Pembroke, Bermuda
March 30, 2009
Important Notice Regarding the Availability of Proxy
Materials for the Platinum Underwriters
Holdings, Ltd. 2009 Annual Meeting of Shareholders to be Held
on April 29, 2009.
The proxy statement, proxy and 2008 Annual Report to
Shareholders are available at
www.platinumre.com/proxymaterials.
PLATINUM
UNDERWRITERS HOLDINGS, LTD.
The Belvedere Building
69 Pitts Bay Road
Pembroke HM 08 Bermuda
PROXY
STATEMENT
FOR
ANNUAL GENERAL MEETING OF SHAREHOLDERS
April 29, 2009
TABLE OF
CONTENTS
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GENERAL
INFORMATION
This proxy statement and the accompanying form of proxy are
being furnished to holders of the common shares (the
Common Shares) of Platinum Underwriters Holdings,
Ltd. (the Company) to solicit proxies on behalf of
the Board of Directors of the Company (the Board)
for the 2009 Annual General Meeting of Shareholders (the
Annual Meeting) to be held at the Fairmont Hamilton
Princess Hotel, 76 Pitts Bay Road, Pembroke HM 11 Bermuda, on
Wednesday, April 29, 2009 at 3:00 p.m., local time.
These proxy materials are first being mailed to shareholders on
or about March 30, 2009.
The Board has fixed the close of business on March 16, 2009
as the record date for the determination of shareholders
entitled to notice of, and to vote at, the Annual Meeting. As of
such date, there were
[ ]
Common Shares outstanding and entitled to vote. Each shareholder
is entitled to one vote for each Common Share held of record on
the record date with respect to each matter to be acted upon at
the Annual Meeting, provided that if the number of
Controlled Shares (as defined below) of any
shareholder constitutes 10% or more of the combined voting power
of the issued Common Shares (such holder, a 10%
Shareholder), the vote of any such shareholder is limited
to 9.9% of the voting power of the outstanding Common Shares
pursuant to the Companys Bye-laws. Controlled
Shares of any person refers to all Common Shares owned
(i) directly, (ii) with respect to persons who are
United States persons, by application of the attribution and
constructive ownership rules of Sections 958(a) and 958(b)
of the U.S. Internal Revenue Code of 1986, as amended (the
Internal Revenue Code), or (iii) beneficially,
directly or indirectly, within the meaning of Rule 13(d)(3)
of the Securities Exchange Act of 1934, as amended (the
Exchange Act), and the rules and regulations
thereunder.
Because the applicability of the voting power reduction
provisions to any particular shareholder depends on facts and
circumstances that may be known only to the shareholder or
related persons, the Company requests that any holder of Common
Shares with reason to believe that it is a 10% Shareholder (as
defined in the Companys Bye-laws and described above)
contact the Company promptly so that the Company may determine
whether the voting power of such holders Common Shares
should be reduced. By submitting a proxy, a holder of Common
Shares will be deemed to have confirmed that, to its knowledge,
it is not, and is not acting on behalf of, a 10% Shareholder.
The directors of the Company are empowered to require any
shareholder to provide information as to that shareholders
beneficial ownership of Common Shares, the names of persons
having beneficial ownership of the shareholders Common
Shares, relationships with other shareholders or any other facts
the directors may consider relevant to the determination of the
number of Controlled Shares attributable to any person. The
directors may disregard the votes attached to Common Shares of
any holder who fails to respond to such a request or who, in
their judgment, submits incomplete or inaccurate information.
The directors retain certain discretion to make such final
adjustments that they consider fair and reasonable in all the
circumstances as to the aggregate number of votes attaching to
the Common Shares of any shareholder to ensure that no person
shall be entitled to cast more than 9.9% of the voting power of
the outstanding Common Shares at any time.
The presence, in person or by proxy, of holders of more than 50%
of the Common Shares outstanding and entitled to vote on the
matters to be considered at the Annual Meeting is required to
constitute a quorum for the transaction of business at the
Annual Meeting. Each of the proposals to be considered at the
Annual Meeting will be decided by the affirmative vote of a
majority of the voting power of the Common Shares present, in
person or by proxy, at the Annual Meeting, and entitled to vote
thereon. A hand vote will be taken unless a poll is requested
pursuant to the Companys Bye-laws.
2
SOLICITATION
AND REVOCATION
Proxies in the form enclosed are being solicited on behalf of
the Board. Common Shares may be voted at the
Annual Meeting by returning the enclosed proxy card or by
attending the Annual Meeting and voting in person. The enclosed
proxy card authorizes each of Dan R. Carmichael, Michael D.
Price and Michael E. Lombardozzi to vote the Common Shares
represented thereby in accordance with the instructions given
or, if no instructions are given, in their discretion. They may
also vote such Common Shares to adjourn or postpone the meeting
and will be authorized to vote such Common Shares at any
adjournment or postponement of the Annual Meeting. Common Shares
held in street name by a broker, bank or other
nominee (hereinafter referred to as a broker) must
be voted by the broker according to the instructions given by
the beneficial owner of the Common Shares or if no instructions
are given and the particular proposal to be voted on is
considered to be a routine matter, in the brokers
discretion. In this proxy statement, proposals 1 (to elect
directors) and 3 (to approve the Companys independent
registered public accounting firm and to authorize the Audit
Committee to set its remuneration) are considered to be routine
and proposal 2 (to approve the Amended and Restated
Bye-laws of the Company) is considered to be a non-routine
matter on which a broker will not have discretionary authority
to vote.
Proxies may be revoked at any time prior to the Annual Meeting
by giving written notice to the Secretary of the Company, by a
duly executed proxy bearing a later date or by voting in person
at the Annual Meeting. For Common Shares held in street
name by a broker, new voting instructions must be
delivered to the broker prior to the Annual Meeting.
If a shareholder abstains from voting on a particular proposal,
or if a shareholders Common Shares are treated as a broker
non-vote, those Common Shares will not be considered as votes
cast in favor of or against the proposal but will be included in
the number of Common Shares represented for the purpose of
determining whether a quorum is present. Generally, broker
non-votes occur when Common Shares held for a beneficial owner
are not voted on a particular proposal because the broker has
not received voting instructions from the beneficial owner, and
the broker does not have discretionary authority to vote the
Common Shares on the particular proposal because it is
non-routine. If a quorum is not present, the shareholders who
are represented may adjourn the Annual Meeting until a quorum is
present. The time and place of the adjourned meeting will be
announced at the time the adjournment is taken, and no other
notice need be given. An adjournment will have no effect on the
business that may be conducted at the adjourned meeting.
The Company will bear all costs of this proxy solicitation.
Proxies may be solicited by mail, in person, by telephone or by
facsimile by officers, directors, and employees of the Company.
The Company may also reimburse brokerage firms, banks,
custodians, nominees and fiduciaries for their expenses incurred
in forwarding proxy materials to beneficial owners. The Company
has retained Mellon Investor Services, LLC to assist in the
solicitation of proxies and will pay a fee of $6,000 plus
reimbursement of out-of-pocket expenses for those services.
THE
COMPANY
The Company provides property and marine, casualty and finite
risk reinsurance coverages, through reinsurance intermediaries,
to a diverse clientele of insurers and select reinsurers on a
worldwide basis. The Company operates primarily through two
licensed reinsurance subsidiaries: Platinum Underwriters
Bermuda, Ltd. (Platinum Bermuda) and Platinum
Underwriters Reinsurance, Inc. (Platinum US).
PROPOSAL 1
ELECTION OF DIRECTORS
The Board currently consists of the following eight members,
each of whom was elected as a director on April 23, 2008 at
the Companys 2008 Annual General Meeting of Shareholders:
H. Furlong Baldwin, Jonathan F. Bank, Dan R. Carmichael, Robert
V. Deutsch, A. John Hass, Edmund R. Megna, Michael D. Price and
Peter T. Pruitt. The term of office of each of the current
directors will expire at the Annual Meeting. The Board, after
considering the recommendation of the Governance Committee,
nominated Messrs. Baldwin, Carmichael, Hass, Megna, Price
and Pruitt for reelection as directors at the Annual Meeting to
serve until the Companys 2010 Annual General Meeting of
Shareholders.
3
At the recommendation of the Governance Committee, the Board has
nominated James P. Slattery for election as a director at the
Annual Meeting to serve until the Companys 2010 Annual
General Meeting of Shareholders. Mr. Slattery was
recommended to the Governance Committee by Mr. Carmichael,
the Companys non-executive Chairman of the Board and
Chairman of the Governance Committee. If elected,
Mr. Slattery will be appointed Chairman of the Audit
Committee.
The Board voted to decrease the authorized number of directors
from eight to seven as of the Annual Meeting. The Board has no
reason to believe that any of its seven nominees would be unable
or unwilling to serve if elected. If a nominee becomes unable or
unwilling to accept nomination or election, the Board may select
a substitute nominee and the Common Shares represented by
proxies may be voted for such substitute nominee unless
shareholders indicate otherwise.
Information
Concerning Nominees
Set forth below is biographical and other information regarding
the nominees for election as directors, including their
principal occupations during the past five years.
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H. Furlong Baldwin
Age: 77
Director since 2002
Chairman of the Audit
Committee and member of the
Governance Committee
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Mr. Baldwin was Chairman of Mercantile Bankshares Corporation, a
bank holding company, from March 2001 until his retirement
in March 2003. Mr. Baldwin is the Chairman of the Board of
Directors of The NASDAQ OMX Group, Inc. and a director of W.R.
Grace & Company and Allegheny Energy, Inc.
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Dan R. Carmichael
Age: 64
Director since 2002
Non-executive Chairman of
the Board, Chairman of
the Governance Committee and
member of the Audit Committee
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Mr. Carmichael has been an adviser and consultant with Proudfoot
Consulting, a management consulting firm, since January 2008.
From August 2007 to October 2008, he was an executive consultant
to Liberty Mutual Agency Markets, a business unit of Liberty
Mutual Group. Prior thereto, Mr. Carmichael was President, Chief
Executive Officer and a director of Ohio Casualty Corporation,
an insurance holding company. Mr. Carmichael is a director of
Alleghany Corporation.
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A. John Hass
Age: 43
Director since 2007
Member of the Audit and
Compensation Committees
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Mr. Hass has been a partner at PEAK6 Investments, LP since
September 2008. He was the Chief Executive Officer of
OptionsHouse, Inc., a brokerage company and subsidiary of PEAK6
Investments, LP, from October 2006 until September 2008. Prior
thereto, Mr. Hass was employed at Goldman Sachs & Co., a
financial services company, most recently serving as a Managing
Director in the Investment Banking Division.
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Edmund R. Megna
Age: 62
Director since 2007
Member of the Compensation and
Governance Committees
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Mr. Megna was Vice Chairman of Guy Carpenter & Co., Inc.,
the reinsurance intermediary division of Marsh & McLennan
Companies, Inc., from November 2002 until his retirement in
April 2007.
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Michael D. Price
Age: 42
Director since 2005
Member of the Executive Committee
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Mr. Price has been President and Chief Executive Officer of the
Company since October 2005 and was Chief Operating Officer of
the Company from August 2005 until October 2005. Prior thereto,
he was President of Platinum US.
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Peter T. Pruitt
Age: 76
Director since 2002
Member of the Audit and
Compensation Committees
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Mr. Pruitt was Chairman of Willis Re Inc., a reinsurance
intermediary, from June 1995 until his retirement in December
2001.
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James P. Slattery
Age: 57
Nominee
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Mr. Slattery was Senior Vice President Insurance of
Alleghany Corporation, a property and casualty insurance holding
company, and President of Alleghany Insurance Holdings, LLC, the
insurance holding company subsidiary of Alleghany Corporation,
from April 2002 until his retirement in July 2008. He has also
been President of JPS & Co., LLC, an insurance and
investment consulting company, since April 2001.
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL
NOMINEES TO THE COMPANYS BOARD OF DIRECTORS.
CORPORATE
GOVERNANCE
Independence
of Directors
New York Stock Exchange (NYSE) listing standards
require the Company to have a majority of independent directors
serving on the Board. A member of the Board qualifies as
independent if the Board affirmatively determines that the
director has no material relationship with the Company either
directly or as a partner, shareholder or officer of an
organization that has a relationship with the Company. The Board
has determined that Messrs. Baldwin, Bank, Carmichael,
Deutsch, Hass, Megna and Pruitt, constituting a majority of the
Board, have no material relationship with the Company other than
in their capacities as members of the Board and committees
thereof, and thus are independent directors of the Company. The
Board has also determined that Mr. Slattery, a nominee for
election as a director of the Company, has no material
relationship with the Company and thus would be an independent
director if elected at the Annual Meeting. Messrs. Baldwin,
Bank, Carmichael, Hass and Megna do not have any relationship
with the Company other than as a director and member of
committees of the Board.
Mr. Deutsch has been the President and a director of
Ironshore, Inc., an insurance holding company, since December
2006. He was the Chief Executive Officer of Ironshore, Inc. from
December 2007 until December 2008 and was the Chief
Executive Officer and a director of Ironshore Insurance, Ltd., a
privately held insurance company and subsidiary of Ironshore,
Inc., from January 2007 until December 2007. During 2008, the
Company provided reinsurance coverage to a subsidiary of
Ironshore, Inc. resulting in premiums to the Company of
approximately $1.12 million, representing approximately
0.08% of the Companys consolidated total revenue for 2008.
Mr. Deutsch does not receive any special benefits from the
contract. Based on the foregoing, the Board has determined that
Mr. Deutsch has no material relationship with the Company.
Mr. Pruitts son is a partner of the law firm of
Dewey & LeBoeuf LLP. Dewey & LeBoeuf LLP
provides, and one of its predecessor firms provided, legal
services to the Company. Mr. Pruitts son is not
involved in the provision of these legal services to the
Company. In addition, payments made by the Company to
Dewey & LeBoeuf LLP and its predecessor firm did not
exceed the greater of $1 million or 2% of the consolidated
gross revenues of such firm in any of the last three fiscal
years. Based on the foregoing, the Board has determined that
Mr. Pruitt has no material relationship with the Company.
In addition, the Board reviewed and approved
Mr. Pruitts relationship with Dewey &
LeBoeuf LLP and determined that it does not constitute a
conflict of interest under the Companys Code of Business
Conduct and Ethics because Mr. Pruitt does not have a
significant financial interest in, and is not an affiliate of, a
company with which the Company does business or proposes to do
business.
5
Mr. Slattery is party to a letter agreement with the
Company dated June 5, 2008 pursuant to which he is
providing consulting services to the Board and Audit Committee
from July 1, 2008 until the date of the Annual Meeting, at
which time the letter agreement will expire. Mr. Slattery
will receive a total of $90,000 in fees for these consulting
services, payable in three equal installments on or about
September 30, 2008, December 31, 2008 and
March 31, 2009. Based on the foregoing, the Board has
determined that Mr. Slattery has no material relationship
with the Company.
Non-Executive
Chairman of the Board
Mr. Carmichael is the non-executive Chairman of the Board
and the Chairman of the Governance Committee and, as such, he
presides at the meetings of non-management directors (each of
whom is independent) that are held after each Board meeting.
Standing
Committees of the Board of Directors
The Board maintains four standing committees: the Audit, the
Compensation, the Governance and the Executive Committees. Each
of the Audit, Compensation, Governance and Executive Committees
operates pursuant to a charter. Each of these charters is posted
on the Companys website at www.platinumre.com and
may be found under the Investor Relations section by
selecting Corporate Governance. Copies of these
charters may also be obtained, without charge, upon written
request to the Secretary of the Company at the Companys
principal executive offices.
Audit
Committee
The Audit Committee presently consists of Messrs. Baldwin
(Chairman), Bank, Carmichael, Deutsch, Hass and Pruitt.
Following the Annual Meeting, if elected, Mr. Slattery will
be appointed as Chairman of the Audit Committee and the Audit
Committee will consist of Messrs. Baldwin, Carmichael, Hass
and Slattery (Chairman). The Board has determined that each
member of the Audit Committee is independent as defined in the
NYSE listing standards and meets the NYSE standards of financial
literacy and accounting or related financial management
expertise. The Board has also determined that each of
Messrs. Baldwin and Deutsch is an audit committee
financial expert as defined by the United States
Securities and Exchange Commission (SEC). In
addition, the Board has determined that Mr. Slattery would
be independent as defined in the NYSE listing standards, would
meet the NYSE standards of financial literacy and accounting or
related financial management expertise and would be an
audit committee financial expert if elected at the
Annual Meeting and appointed to the Audit Committee as planned.
The Audit Committees primary responsibilities, as set
forth in its charter, are to:
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engage the independent registered public accounting firm
(subject to ratification by the shareholders of the Company as
required by Bermuda law), determine the compensation and oversee
the performance of the independent registered public accounting
firm, and approve in advance all audit services and all
permitted non-audit services to be provided to the Company by
the independent registered public accounting firm;
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assess and take appropriate action regarding the independence of
the Companys independent registered public accounting firm;
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oversee the compensation, activities and performance of the
Companys internal audit function and review the quality
and adequacy of the Companys internal controls and
internal auditing procedures;
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periodically review with management and the independent
registered public accounting firm the Companys accounting
policies, including critical accounting policies and practices
and the estimates and assumptions used by management in the
preparation of the Companys financial statements;
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review with management and the independent registered public
accounting firm any material financial or other arrangements of
the Company which do not appear on the Companys financial
statements;
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discuss with management the Companys guidelines and
policies with respect to corporate risk assessment and risk
management;
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discuss with management each of the earnings press releases;
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review with management and the independent registered public
accounting firm the financial statements to be included in the
quarterly and annual reports of the Company, including
managements discussion and analysis of financial condition
and results of operations, and recommend to the Board whether
the audited financial statements should be included in the
annual reports of the Company;
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approve a code of ethics, as required by SEC rules, for senior
financial officers and such other employees and agents of the
Company as the Audit Committee determines;
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establish procedures for the handling of complaints received by
the Company regarding accounting, internal accounting controls
or auditing matters; and
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annually review and evaluate Audit Committee performance and
assess the adequacy of the Audit Committee charter.
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Compensation
Committee
The Compensation Committee presently consists of
Messrs. Bank (Chairman), Deutsch, Hass, Megna and Pruitt.
Following the Annual Meeting, if elected, Mr. Hass will be
appointed as Chairman of the Compensation Committee and the
Compensation Committee will consist of Messrs. Hass
(Chairman), Megna and Pruitt. The Board has determined that each
member of the Compensation Committee is independent as defined
in the NYSE listing standards.
The Compensation Committees primary responsibilities, as
set forth in its charter, are to:
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review the compensation policies and practices of the Company
and its subsidiaries, including incentive compensation plans and
equity-based plans that are subject to Board approval;
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review the recommendations of the Chief Executive Officer
concerning the compensation of those officers of the Company and
its subsidiaries reporting directly to the Chief Executive
Officer and of any consultants, agents and other persons to the
extent that determinations with respect to the compensation of
such consultants, agents and other persons are expressly
delegated to the Committee, and make determinations with respect
thereto;
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review a report from the Chief Executive Officer concerning the
compensation of those officers of the Company and its
subsidiaries with a title of Senior Vice President and more
senior (other than those officers reporting directly to the
Chief Executive Officer), and make such recommendations (if any)
to the Chief Executive Officer with respect thereto as the
Committee deems appropriate;
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review and approve the corporate goals and objectives relevant
to the Chief Executive Officers compensation, evaluate the
Chief Executive Officers performance in light of those
goals and objectives and set the Chief Executive Officers
compensation level based on such evaluation after consultation
with each of the directors on the Board;
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review and make recommendations relating to director
compensation for discussion and approval by the Board;
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review the recommendation of the Chief Executive Officer
concerning the aggregate amount available for the annual
incentive bonus program each year, and make a determination with
respect thereto;
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oversee the administration of the Companys
incentive-compensation plans and equity-based plans, and any
other plans that provide for administration by the Compensation
Committee, amend and interpret such plans and the awards and
agreements issued pursuant thereto, and make awards to eligible
persons under such plans and to determine the terms of such
awards;
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review and discuss with management the Companys
Compensation Discussion and Analysis, recommend whether the
Compensation Discussion and Analysis should be included in the
Companys proxy statement, and produce an annual report to
such effect for inclusion in the Companys proxy
statement; and
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annually review and evaluate Compensation Committee performance
and assess the adequacy of the Compensation Committee charter.
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Compensation Process and
Procedures. The Compensation Committee
charter provisions set forth above outline the scope of
authority of the Compensation Committee. The Compensation
Committee has the sole authority to set the Chief Executive
Officers compensation. As noted above, the Compensation
Committee consults with each of the other directors on the Board
in setting such compensation. In determining any long-term
incentive component of the Chief Executive Officers
compensation, the Compensation Committee considers, among other
factors, the Companys financial performance and
shareholder return, the value of similar incentive awards to
chief executive officers at comparable companies and awards
given to the Companys Chief Executive Officer in past
years.
Compensation determinations for the other named executive
officers of the Company are also made by the Compensation
Committee. The Compensation Committee receives recommendations
regarding such compensation from the Chief Executive Officer,
who considers, among other factors, competitive compensation
information. The Compensation Committee also consults with the
Chief Executive Officer regarding the form of compensation and
benefits to be provided to the other named executive officers.
The Compensation Committee may request a report from a
compensation consulting firm in support of such proposed
compensation and may consider comparative competitive data
prepared by a compensation consulting firm or the Companys
human resources personnel.
Director compensation is reviewed by the Compensation Committee,
which makes recommendations with respect to director
compensation for discussion and approval by the Board. When
making recommendations, the Compensation Committee considers the
complexity and size of the Company. To create a direct linkage
between director compensation and the Companys
performance, a portion of a directors compensation is paid
in share units which convert into Common Shares. The Chief
Executive Officer is not involved in making decisions regarding
director compensation.
Pursuant to its charter, the Compensation Committee may retain
professional firms and outside experts to assist in the
discharge of its duties. The Compensation Committee has the sole
authority to retain, evaluate and replace such firms, including
the sole authority to approve the firms fees and other
retention terms. In 2006 and at other times since the
Companys inception, the Compensation Committee has engaged
Fredrick W. Cook & Co. (FWC), a
professional compensation consulting firm, to provide
competitive compensation data. In May 2007, the Compensation
Committee engaged FWC to assist in the adoption of the Amended
and Restated Change in Control Severance Plan (the CIC
Plan). FWC provided guidance with respect to the scope of
the CIC Plan, the payment levels under the CIC Plan and the
terms of the CIC Plan. In June 2008, the Compensation Committee
engaged Grahall Partners, LLC (Grahall), a
professional compensation consulting firm, to assist in a
comprehensive review of the competitiveness of the compensation
of the Companys named executive officers and to provide
advice with respect to a new employment agreement with the Chief
Executive Officer. The Compensation Committee selects the peer
group of companies used by compensation consulting firms and
reviews the methodology employed by such firms in their reports
to the Compensation Committee.
Governance
Committee
The Governance Committee presently consists of
Messrs. Carmichael (Chairman), Baldwin, Bank and Megna.
Following the Annual Meeting, if elected, the Governance
Committee will consist of Messrs. Carmichael (Chairman),
Baldwin and Megna. The Board has determined that each member of
the Governance Committee is independent as defined in the NYSE
listing standards.
8
The Governance Committees primary responsibilities, as set
forth in its charter, are to:
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develop a Board that is diverse in nature and provides
management with experienced and seasoned advisors with an
appropriate mix of skills in fields related to the current or
future business directions of the Company and seek qualified
candidates for Chief Executive Officer with the necessary skills
and experience to contribute to the achievement of the business
objectives of the Company;
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identify, interview and screen individuals qualified to become
members of the Board and committees thereof, and to become the
Chief Executive Officer, for recommendation to the Board;
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develop and recommend to the Board a set of corporate governance
guidelines applicable to the Company addressing, among other
matters determined by the Committee to be appropriate, director
qualifications and responsibilities, director orientation and
continuing education, management succession and the annual
performance evaluation of the Board;
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regularly review issues and developments relating to corporate
governance and recommend to the Board proposed changes to the
corporate governance guidelines from time to time as the
Committee determines to be appropriate;
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evaluate at least annually the overall effectiveness of the
Board and the Companys senior management, coordinate the
annual evaluations of the committees of the Board and make
recommendations to the Board with respect thereto as
appropriate, provided that any determinations or recommendations
relating to compensation are reserved for the Compensation
Committee;
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review at least annually all committees of the Board and
recommend to the Board changes, as appropriate, in the
composition, responsibilities, charters and structure of the
committees;
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recommend that the Board establish such special committees as
may be necessary or appropriate to address ethical, legal or
other matters that may arise; and
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annually review and evaluate Governance Committee performance
and assess the adequacy of the Governance Committee charter.
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Director Nomination Process. The
Governance Committee regularly assesses the appropriate size of
the Board and whether any vacancies on the Board are expected
due to retirement or for other reasons, and is responsible for
identifying and recommending to the Board qualified candidates
for nomination to the Board. The Governance Committee believes
that members of the Board should have the highest professional
and personal ethics and values, consistent with the
Companys ethics and values. Directors should be committed
to enhancing shareholder value and should have sufficient time
to carry out their duties and to provide insight and practical
wisdom based on experience. Their service on other boards of
public companies should be limited to a number that permits
them, given their individual circumstances, to perform
responsibly all their duties as directors of the Company. In
evaluating candidates, the Governance Committee will seek to
assure that specific talents, skills and other characteristics
that are needed to promote the Boards effectiveness are
possessed by an appropriate combination of directors. Each
director must represent the interests of all shareholders.
Candidates may come to the attention of the Governance Committee
through current Board members, professional search firms,
shareholders or other persons. These candidates will be
evaluated at regular or special meetings of the Governance
Committee and may be considered at any point during the year.
Candidates recommended by shareholders for nomination to the
Board will be considered and evaluated by the Governance
Committee using the same criteria that is used to evaluate all
other candidates. Any shareholder recommendations should include
the candidates name and qualifications for Board
membership and should be submitted in writing to the Governance
Committee in care of the Secretary of the Company at the
Companys principal executive offices.
9
Executive
Committee
The Executive Committee presently consists of
Messrs. Baldwin (Chairman), Deutsch and Price. Following
the Annual Meeting, if elected, Mr. Carmichael will be
appointed as Chairman of the Executive Committee and the
Executive Committee will consist of Messrs. Baldwin,
Carmichael (Chairman) and Price. The Executive Committee is
authorized to exercise all of the powers of the Board when the
Board is not in session (i) upon a written determination of
the Chairman of the Board that it is impracticable to convene a
meeting of the Board to exercise such powers, (ii) only as
specifically delegated to the Executive Committee by the Board
in writing, and (iii) subject to additional limitations set
forth in its charter or as may from time to time be established
by resolution of the Board.
Meetings
and Attendance
During 2008, the Board met six times, the Audit Committee met
four times, the Compensation Committee met five times, the
Governance Committee met six times and the Executive Committee
did not meet. Each director attended at least 75% of the
aggregate number of meetings of the Board and meetings of the
committees of the Board on which he served that were held in
2008.
Board members are encouraged to attend the Companys Annual
General Meetings of Shareholders. All directors attended the
Companys 2008 Annual General Meeting of Shareholders held
on April 23, 2008 in Bermuda.
Corporate
Governance Guidelines and Code of Conduct
The Company has adopted Corporate Governance Guidelines and a
Code of Business Conduct and Ethics. Copies of these documents
are available at the Companys website at
www.platinumre.com and may be found under the Investor
Relations section by selecting Corporate
Governance. Copies of these documents may also be
obtained, without charge, upon written request to the Secretary
of the Company at the Companys principal executive offices.
Executive
Sessions
In accordance with the Companys Corporate Governance
Guidelines and the NYSEs corporate governance rules,
separate executive sessions of non-management directors (each of
whom is independent) are held after each Board meeting.
Mr. Carmichael, as non-executive Chairman of the Board and
Chairman of the Governance Committee, presides at such sessions.
Compensation
Committee Interlocks and Insider Participation
Messrs. Bank, Deutsch, Hass, Megna and Pruitt served on the
Compensation Committee of the Board during 2008. Each member of
the Compensation Committee is an independent director and no
member of the Compensation Committee was an officer or an
employee of the Company during 2008 or a former officer of the
Company. Additionally, no member of the Compensation Committee
had any relationship with the Company requiring disclosure under
Item 404 of SEC
Regulation S-K.
No executive officer of the Company served on any board of
directors or compensation committee of any other company for
which any of our directors served as an executive officer at any
time during the 2008 fiscal year.
Communications
with the Board
Interested parties may communicate with the Board, anonymously
if they wish, by writing to the General Counsel at Platinum
Underwriters Holdings, Ltd., The Belvedere Building, 69 Pitts
Bay Road, Pembroke HM 08 Bermuda. Communications that are
intended specifically for non-management directors should be
sent to the above address to the attention of the Chairman of
the Board (as the independent director who presides at meetings
of such directors), in care of the General Counsel. All such
communications will be treated as confidential and delivered to
the appropriate Board member or members.
10
DIRECTOR
COMPENSATION
The following information relates to compensation of each
director who served on the Board in 2008, other than
Mr. Price whose compensation as President and Chief
Executive Officer of the Company is reflected in the Summary
Compensation Table below.
Director
Compensation for Fiscal Year ending December 31,
2008
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Fees Earned or
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Stock
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Option
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All Other
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Paid in
Cash(1)
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Awards(2)
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Awards(3)
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Compensation(4)
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Total
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Name
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($)
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($)
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($)
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($)
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($)
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(a)
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(b)
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(c)
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(d)
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(g)
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(h)
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H. Furlong Baldwin
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73,836
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114,005
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507
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188,348
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Jonathan F. Bank
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80,000
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120,179
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517
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200,696
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Dan R. Carmichael
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95,859
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136,021
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517
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232,397
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Robert V. Deutsch
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68,750
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108,950
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23,763
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382
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201,845
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A. John Hass
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62,500
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102,671
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382
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165,553
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Edmund R. Megna
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66,250
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106,374
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382
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173,006
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Peter T. Pruitt
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65,000
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105,200
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507
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170,707
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Steven H.
Newman(5)
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86,126
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1,565,000
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575,201
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2,226,327
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(1) |
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These amounts represent the portion of director fees earned in
cash with respect to 2008. Messrs. Baldwin, Bank,
Carmichael and Hass, each elected to receive this portion of
their director fees in share units rather than in cash. |
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(2) |
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The amounts shown in the Stock Awards column represent the
amount we recognized for financial statement reporting purposes
in 2008 for share unit awards granted to the directors in 2008
and prior years, in accordance with Statement of Financial
Accounting Standards No. 123R Share-Based
Payment (SFAS 123R), excluding the impact
of estimated forfeitures related to service-based vesting
conditions, as required by SEC rules. These amounts do not
reflect the amount of compensation actually received by the
directors during the fiscal year. These amounts represent:
(i) the dollar amount of the 2008 compensation cost of the
share unit portion of director fees paid pursuant to the Share
Unit Plan for Nonemployee Directors, and (ii) the dollar
amount of the 2008 compensation cost of the annual share unit
awards made under the 2006 Share Incentive Plan, which
amount was $40,138 for each of Messrs. Baldwin, Bank,
Carmichael, Deutsch, Hass, Megna and Pruitt. The grant date fair
value of each of the annual share unit awards computed in
accordance with SFAS 123R was $40,000. The grant date fair
value of the share unit portion of 2008 director fees
computed in accordance with SFAS 123R was as follows:
Mr. Bank: $80,041; Mr. Baldwin: $73,867;
Mr. Carmichael: $95,883; Mr. Deutsch: $68,812;
Mr. Hass: $62,533; Mr. Megna: $66,236;
Mr. Newman: $0; and Mr. Pruitt: $65,062. The number of
Common Shares underlying outstanding Stock Awards held by each
of the Companys directors as of December 31, 2008 was
as follows: Mr. Bank: 21,777; Mr. Baldwin: 14,980;
Mr. Carmichael: 20,770; Mr. Deutsch: 7,792;
Mr. Hass: 5,263; Mr. Megna: 3,917; and
Mr. Pruitt: 11,119. The assumptions made in the valuation
of these stock awards are discussed in Note 11 to the
Companys consolidated financial statements contained in
the Companys Annual Report on
Form 10-K
for the year ended December 31, 2008 (the 2008
Form 10-K). |
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The amounts shown in the Option Awards column represent the
amount we recognized for financial statement reporting purposes
in 2008 for option awards granted to the directors in 2008 and
prior years, in accordance with SFAS 123R, excluding the
impact of estimated forfeitures related to service-based vesting
conditions, as required by SEC rules. These amounts do not
reflect the amount of compensation actually received by the
directors during the fiscal year. The amount for
Mr. Deutsch represents the dollar amount of the 2008
compensation cost of an option to purchase 25,000 Common Shares
with an exercise price of $27.40 per Common Share received by
Mr. Deutsch upon his election to the Board at the 2005
Annual General Meeting of Shareholders held on April 26,
2005, which option has a ten-year term and is exercisable in
three equal annual installments beginning on April 26,
2006. The amount shown for Mr. Newman |
11
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represents the dollar amount of the 2008 compensation cost of an
option to purchase 500,000 Common Shares with an exercise price
of $36.00 per Common Share received by Mr. Newman on
April 23, 2008, which option is fully vested and
exercisable through April 23, 2010. The number of Common
Shares underlying outstanding Option Awards held by each of the
Companys directors as of December 31, 2008 was as
follows: Mr. Bank: 35,000; Mr. Baldwin: 35,000;
Mr. Carmichael: 35,000; Mr. Deutsch: 25,000;
Mr. Newman: 500,000; and Mr. Pruitt: 35,000. The
assumptions made in the valuation of these option awards are
discussed in Note 11 to the Companys consolidated
financial statements contained in the 2008
Form 10-K. |
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(4) |
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The amounts for each of Messrs. Baldwin, Bank, Carmichael,
Deutsch and Pruitt represent the dollar value of dividends paid
on the annual share unit grant and the share unit portion of
director fees which converted in 2008 that were not factored
into the grant date fair value computation. The amount for
Mr. Newman represents: (i) Platinum US consulting fees
in the amount of $459,826; (ii) a payment for unused
corporate jet hours of $57,200; (iii) the non-business use
of the Companys participation in a corporate jet rental
program for 3.7 hours at a cost to the Company of $27,049;
(iv) an allowance for office, secretarial and
administration services in the amount of $23,562; and
(v) the dollar value of dividends paid on the share unit
portion of director fees that were not factored into the grant
date fair value computation in the amount of $7,565. |
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Mr. Newman retired from the Board as of April 23,
2008. Mr. Newman serves as a consultant to Platinum US. See
Director Compensation Agreements with Steven
H. Newman below. |
Nonemployee
Director Compensation Policy
Director
Compensation Policy in Effect Until the Annual
Meeting
Annual Retainers and Other
Fees. Currently and until the date of the
Annual Meeting, Mr. Carmichael, as non-executive Chairman
of the Board, receives an annual retainer of $150,000 and each
other nonemployee director (a director who is not an employee of
the Company or any of its affiliates) receives an annual
retainer of $75,000. In addition, the Chairman of the Audit
Committee receives an annual retainer of $20,000 per year, and
each member of that committee receives an annual retainer of
$10,000 per year. The Chairmen of the Compensation and
Governance Committees each receive an annual retainer of $15,000
per year, and each other nonemployee member of the Compensation,
Governance and Executive Committees receives an annual retainer
of $7,500 per year. Each nonemployee director also receives
$2,500 for attendance at each meeting of the Board and of any
committee of which he is a member.
Pursuant to the Amended and Restated Share Unit Plan for
Nonemployee Directors (the Share Unit Plan), prior
to January 1, 2009, 50% of all fees earned by a nonemployee
director (including annual retainers, committee retainers and
per meeting attendance fees) during each calendar quarter were
mandatorily converted into that number of share units equal to
the amount of such fees divided by the closing price of the
Common Shares on the last day of the calendar quarter. For 2008
Messrs. Baldwin, Bank, Carmichael and Hass elected to have
100% of their fees converted into share units. A nonemployee
director receives a distribution under the Share Unit Plan in
respect of his share units upon the expiration of five calendar
years following the year in which he was credited with such
share units or upon termination of his service on the Board, if
earlier, each such share unit valued at the closing price of one
Common Share on the date of such expiration or termination. Each
distribution under the Share Unit Plan is made, in the
discretion of the Board, either in cash or Common Shares or a
combination thereof. Prior to distribution, share units
accumulate dividend equivalent rights in cash equal to any
dividends paid on the Common Shares. These dividend equivalent
rights are settled upon a distribution under the Share Unit Plan
in respect of the share units to which they relate. In January
2009, each of Messrs. Baldwin, Bank, Carmichael and Pruitt
received a distribution of Common Shares and cash dividends with
respect to share units credited to them as fees for 2003.
In October 2008, as a result of the enactment of
Section 457A of the Internal Revenue Code, the Board, upon
the recommendation of the Compensation Committee, approved
amendments to the Share Unit Plan intended to eliminate the
deferral of income tax on compensation for services performed
after December 31, 2008 by any director of the Company who
is a taxpayer in the United States. The Share Unit Plan was
amended to
12
provide that, after crediting each nonemployee director with
share units for fees earned in respect of the fourth calendar
quarter of 2008, no additional share units shall be granted or
credited under the Share Unit Plan. Dividend equivalent rights
will continue to accumulate in cash on share units that were
outstanding as of January 1, 2009 and such share units and
all dividend equivalent amounts will be settled in accordance
with the terms of the Share Unit Plan. In lieu of receiving
share units under the Share Unit Plan, each nonemployee director
will be paid, following the end of each calendar quarter
commencing with the first calendar quarter of 2009, 100% of the
aggregate dollar amount of his annual retainers, committee
retainers and per meeting attendance fees in cash.
Annual Share Unit Award. Prior to the
date of the Annual Meeting, on the date of each Annual General
Meeting of Shareholders of the Company, each nonemployee
director (other than Mr. Newman) who was elected at such
Annual General Meeting of Shareholders received an annual grant
under the 2006 Share Incentive Plan of that number of share
units equal to $40,000 divided by the closing price of the
Common Shares on the business day immediately preceding the date
of such grant. Each of the nonemployee directors received
1,112 share units on the date of the Companys 2008
Annual General Meeting of Shareholders. These share units will
vest and convert on a one-to-one basis into Common Shares on
April 23, 2009, provided that the director continues to
serve on the Board through the date of conversion. Any dividends
paid on the Common Shares prior to vesting are credited to the
directors as dividend equivalent rights that accumulate as cash.
The dividend equivalent rights are subject to the same vesting
requirements as the share units.
Director
Compensation Policy Effective as of the Annual
Meeting
To simplify the nonemployee director compensation program, in
October 2008, the Board, upon the recommendation of the
Compensation Committee, revised the nonemployee director
compensation program, effective as of the date of the Annual
Meeting. The revisions eliminate annual retainers for membership
on a Board committee and per meeting attendance fees, provide
for the payment of nonemployee director retainer fees entirely
in cash and increase the value of the annual equity grant to
nonemployee directors from $40,000 to $50,000. While these
changes may lower the total value of the compensation paid to
nonemployee directors, the Board believes our nonemployee
director compensation will be competitive with the compensation
earned by nonemployee members of the boards of directors of our
peer group of companies.
Annual Retainers. Each nonemployee
director will receive a $100,000 annual retainer.
Mr. Carmichael will receive an additional $75,000 annual
retainer for his service as the non-executive Chairman of the
Board and the Chairman of the Governance Committee, the Chairman
of the Audit Committee will receive an additional $45,000 annual
retainer, and the Chairman of the Compensation Committee will
receive an additional $25,000 annual retainer. All annual
retainers will be paid in cash, quarterly in arrears.
Nonemployee directors will no longer receive per meeting
attendance fees or fees for membership on Board committees.
Annual Share Unit Award. On the date of
the Annual Meeting and each subsequent Annual General Meeting of
Shareholders, each nonemployee director who is elected at such
Annual General Meeting of Shareholders will receive an annual
grant under the 2006 Share Incentive Plan of that number of
share units equal to $50,000 divided by the closing price of the
Common Shares on the business day immediately preceding the date
of such grant. These share units will vest and convert on a
one-to-one basis into Common Shares on the earlier to occur of
the first anniversary of the date of the grant and the date of
the Companys next Annual General Meeting of Shareholders
following the date of the grant, provided that the director
continues to serve on the Board through the date of conversion.
Any dividends paid on the Common Shares prior to vesting are
credited to the directors as dividend equivalent rights that
accumulate as cash. The dividend equivalent rights are subject
to the same vesting requirements as the share units.
Agreements
with Steven H. Newman
On October 27, 2005, the Company entered into a letter
agreement with Mr. Newman, pursuant to which
Mr. Newman served as Chairman of the Board (the
Chairman Agreement) and Platinum US entered into a
consulting agreement with Mr. Newman and SHN Enterprises,
Inc. (SHN), a company established by
Mr. Newman, the sole shareholder of which is
Mr. Newman (the Old Consulting Agreement). The
Chairman
13
Agreement provided that Mr. Newman, as Chairman of the
Board, was entitled to receive an annual fee of $275,000 payable
in equal quarterly installments. The Old Consulting Agreement
provided SHN with a consulting fee at the annual rate of
$270,000 and an allowance for office, secretarial and
administrative services at the annual rate of $75,000. The Old
Consulting Agreement also provided SHN with twenty hours per
year of non-business use of a corporate jet chartered or leased
by Platinum US or the Company. On March 3, 2008, the
Company and Platinum US entered into a letter agreement (the
Letter Agreement) with Mr. Newman and SHN.
Pursuant to the Letter Agreement, effective as of April 23,
2008, the date of the Companys 2008 Annual General Meeting
of Shareholders: (i) Mr. Newman retired from the
Board; (ii) the Chairman Agreement was terminated; and
(iii) the Old Consulting Agreement was terminated.
Pursuant to the Letter Agreement, Platinum US and SHN entered
into a new consulting agreement, dated March 3, 2008 (the
New Consulting Agreement), which provides that SHN
will be engaged as a consultant to Platinum US for the two-year
period commencing April 23, 2008, and will perform services
as are reasonably requested by the President of Platinum US, for
a consulting fee of $500,000 per year. Unless otherwise agreed
by Platinum US, the services to be performed by SHN under the
New Consulting Agreement will be performed by Mr. Newman.
SHN and Mr. Newman agreed that they will not acquire any
interest in, or become employed or otherwise involved in, any
entity which is primarily engaged in the reinsurance business
during the term of the New Consulting Agreement. The New
Consulting Agreement provides that it may be terminated by
Platinum US for cause or by SHN upon five days written
notice to Platinum US. In addition, pursuant to the Letter
Agreement, on April 23, 2008 Mr. Newman received an
option to purchase 500,000 Common Shares of the Company, which
option is fully vested and exercisable through April 23,
2010 at an exercise price equal to $36.00 per Common Share,
which was the fair market value of the Common Shares on the date
of the 2008 Annual General Meeting of Shareholders. The Letter
Agreement also contains provisions relating to non-solicitation
of employees, non-solicitation of proxies, confidentiality,
cooperation and communication on the part of Mr. Newman,
and a mutual non-disparagement provision, and provides for
mutual releases.
TRANSACTIONS
WITH RELATED PERSONS
Our Code of Business Conduct and Ethics, which is in writing and
which was recommended by the Audit Committee and approved by the
Board, provides that our employees and directors must avoid any
interest that conflicts or appears to conflict with the
interests of the Company. A conflict of interest exists if
actions by an employee or director are, or could reasonably
appear to be, influenced directly or indirectly by personal
considerations, duties owed to or interests in persons or
entities other than the Company, or by actual or potential
personal benefit or gain. Although the Code of Business Conduct
and Ethics states that it is not possible to describe every
conceivable conflict of interest, conflicts may include an
employee or director conducting Company business with family
members, employees, directors or their family members having a
financial interest in another company with which the Company
does business or that competes with the Company in the
reinsurance market, and an employee taking a second job in the
reinsurance industry or serving as a director of another entity.
Any time that an employee believes that a conflict of interest
may exist, the conflict must be reported to and approved by that
employees compliance officer and reported to the
Companys General Counsel. A conflict of interest that
involves an officer who is a Senior Vice President or more
senior or its equivalent, including all of our named executive
officers, must be approved by the Board.
The Code of Business Conduct and Ethics provides that
nonemployee directors may not have significant financial
interests in or be affiliated with any entity with which the
Company does business or proposes to do business unless the
director:
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(i)
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discloses any such relationship promptly after the director
becomes aware of it;
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(ii)
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removes himself or herself from any Board activity that directly
impacts the relationship between the Company and any such entity
with respect to which the director has a significant financial
interest or with which the director is affiliated; and
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(iii)
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obtains prior approval of the Board for any transaction of which
the director is aware between the Company and any such entity
that is not in the ordinary course of the Companys
business.
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Further, our Corporate Governance Guidelines, which are in
writing and which were recommended by the Governance Committee
and approved by the Board, provide that, except as authorized by
the Board, no director shall have a direct economic relationship
with the Company (other than fees for services as a member of
the Board or any committee thereof).
Steven H. Newman, the former Chairman of the Board, was a party
to the Old Consulting Agreement with Platinum US and SHN and is
a party to the Letter Agreement with the Company and Platinum US
and the New Consulting Agreement with Platinum US. The Old
Consulting Agreement, the Letter Agreement and the New
Consulting Agreement were reviewed and approved by the Board in
accordance with the Corporate Governance Guidelines and are
described above under Director Compensation
Agreements with Steven H. Newman.
SHARE
OWNERSHIP GUIDELINES
The Company has adopted share ownership guidelines intended to
align the interests of the Companys nonemployee directors,
Chief Executive Officer and executive officers reporting
directly to the Chief Executive Officer with shareholders. Under
the guidelines, such persons are expected to retain a portion of
the Common Shares received by them as compensation until they
have accumulated Common Shares at target ownership levels
established by the Compensation Committee. In addition, the
employment agreements of certain of our named executive officers
require them to accumulate a specific number of Common Shares in
accordance with the guidelines. The target ownership level for
nonemployee directors is 10,000 Common Shares and for executive
officers ranges from a minimum of 30,000 Common Shares to a
maximum of 100,000 Common Shares. The Board may adjust the
levels from time to time. Until the nonemployee directors, the
Chief Executive Officer and the other executive officers reach
their target ownership levels, they must retain Common Shares
with a fair market value on the date of exercise or vesting
equal to at least a specified percentage of the after-tax gain
from the exercise of options or the after-tax value upon the
vesting of restricted shares and the vesting of share units. The
specified percentages are 75% of the after-tax gain or after-tax
value for the nonemployee directors and the Chief Executive
Officer and 50% of the after-tax gain or after-tax value for the
other executive officers. Once the target ownership level is
attained, the nonemployee directors, Chief Executive Officer and
other executive officers are expected to maintain that level
until termination of service or employment unless the Chairman
of the Compensation Committee waives compliance with the
specified share ownership level. Common Shares owned outright,
including Common Shares held in street name accounts, jointly
with a spouse, or in a trust for the benefit of the executive
officer, are counted toward fulfilling the share ownership
requirement. Common Shares that are subject to unexercised share
options, unvested restricted shares and unvested share units are
not counted toward fulfilling this requirement. Of our
nonemployee directors, each of Messrs. Baldwin, Carmichael,
Deutsch and Pruitt has achieved his target share ownership
level. Of our executive officers, each of Michael D. Price,
Michael E. Lombardozzi, H. Elizabeth Mitchell, Robert S.
Porter and Neal J. Schmidt has achieved his or her target share
ownership level.
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INFORMATION
CONCERNING EXECUTIVE OFFICERS
Set forth below is biographical and other information regarding
the Companys executive officers, including their principal
occupations during the past five years.
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Michael D. Price
Age: 42
President and Chief Executive Officer
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Mr. Price has been President and Chief Executive Officer of the
Company since October 2005 and was Chief Operating Officer of
the Company from August 2005 until October 2005. Prior thereto,
he was President of Platinum US.
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James A. Krantz
Age: 48
Executive Vice President and Chief Financial Officer
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Mr. Krantz has been Executive Vice President and Chief Financial
Officer of the Company since June 2007. He served as Senior Vice
President and Chief Accounting Officer of the Company from
August 2006 to May 2007. Mr. Krantz was Senior Vice
President, Chief Financial Officer and Treasurer of Platinum US
from March 2003 until August 2006.
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Kenneth A. Kurtzman
Age: 41
Executive Vice President and Chief Risk Officer of Platinum
Administrative Services, Inc.
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Mr. Kurtzman has been Executive Vice President and Chief Risk
Officer of Platinum Administrative Services, Inc. since March
2006. Mr. Kurtzman was head of casualty underwriting at Swiss Re
Underwriters Agency, Inc., a division of Swiss Reinsurance
Company, from July 2004 until March 2006. Prior thereto,
Mr. Kurtzman was head of property and casualty risk management
at Swiss Reinsurance Company.
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Michael E. Lombardozzi
Age: 47
Executive Vice President, General
Counsel, Chief Administrative Officer and Secretary
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Mr. Lombardozzi has been Executive Vice President and General
Counsel of the Company since September 2002 and Chief
Administrative Officer of the Company since August 2005. Mr.
Lombardozzi has also served as the Companys Secretary
since November 2002.
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H. Elizabeth Mitchell
Age: 47
President and Chief Executive Officer of Platinum US
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Ms. Mitchell has been President of Platinum US since August 2005
and Chief Executive Officer of Platinum US since November 2007.
Ms. Mitchell was Executive Vice President of Platinum US from
November 2002 until August 2005 and Chief Operating Officer of
Platinum US from September 2003 until August 2005.
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Robert S. Porter
Age: 44
Chief Executive Officer of Platinum Bermuda
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Mr. Porter has been Chief Executive Officer of Platinum Bermuda
since March 2006. Mr. Porter was Chief Executive Officer of
Platinum Re (UK) Limited from June 2003 until March 2006. Prior
thereto, Mr. Porter was a Senior Vice President of
Platinum US.
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Neal J. Schmidt
Age: 52
Executive Vice President
and Chief Actuary of Platinum Administrative Services, Inc.
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Mr. Schmidt has been Executive Vice President and Chief Actuary
of Platinum Administrative Services, Inc. since January 2005 and
was Executive Vice President and Chief Actuary of Platinum US
from November 2002 until December 2004.
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16
EXECUTIVE
COMPENSATION
Compensation
Discussion and Analysis
Objectives
of Our Compensation Program
We seek to achieve attractive long-term returns for our
shareholders through disciplined risk management and market
leadership in selected classes of property and marine, casualty
and finite risk reinsurance by employing the following strategy:
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We operate as a multi-class reinsurer, offering a broad range of
reinsurance coverages to our ceding company clients. In support
of this strategy, our business plan contemplates a mix of
property and casualty underwriting. We believe that this
approach enables us to more effectively serve our clients,
diversify our risk and leverage our capital. Although our
property reinsurance business can be very profitable in periods
when there are few catastrophic events, it is also subject to
large losses if catastrophes are frequent or severe. Our
casualty reinsurance business is typically less volatile,
providing steadier earnings from year to year and moderating the
volatility of our property business. However, there tends to be
a greater time lag between the occurrence, reporting and payment
of casualty reinsurance claims, requiring a longer term
perspective on the part of our management for this aspect of our
business.
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We exercise disciplined underwriting and risk management,
emphasizing profitability rather than premium volume or market
share. The property and casualty reinsurance business has
historically been a cyclical industry, characterized by periods
of intense price competition due to excessive underwriting
capacity as well as periods when shortages of capacity permitted
favorable pricing. Our strategy of emphasizing profitability
requires us to focus on business that meets our risk selection
and pricing criteria, rather than writing business simply to
meet production levels.
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We seek to operate from a position of financial strength. In
support of this strategy, our business plan contemplates
maintaining a financial strength rating of A
(Excellent) from A.M. Best. Financial strength ratings are
used by ceding companies as an important means of assessing the
quality of reinsurers. Our capital base has been maintained at a
level that supports an A (Excellent) rating. We
believe our rating, which indicates A.M. Bests
opinion that we have an excellent ability to meet our ongoing
obligations to ceding company clients, allows us to compete for
a broader array of business.
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Our executive compensation program provides for compensation to
our executive officers, including Messrs. Price, Krantz,
Lombardozzi and Porter and Ms. Mitchell, who comprise our
named executive officers for purposes of this proxy statement.
The principal elements of our executive compensation program are
base salary, annual incentive bonus awards under the Amended and
Restated Annual Incentive Plan (the Annual Incentive
Plan), long-term incentive awards under the
2006 Share Incentive Plan and long-term incentive awards
under the Amended and Restated Executive Incentive Plan (the
Executive Incentive Plan), each comprising roughly a
quarter of the target compensation package. Our executive
compensation program is designed to motivate our named executive
officers to achieve both short-term and long-term financial
results consistent with the strategies supporting our business
goal. Accordingly, our program is significantly weighted towards
performance-based compensation, and provides the named executive
officers with an opportunity to ultimately earn total annual
compensation equal to three to four times their base salaries if
financial targets are met, and, for the Chief Executive Officer,
over five times his base salary for superior financial results.
The principal financial performance measures that we use in our
compensation program are our return on common shareholders
equity and the Companys share price. The focus on share
price provides a direct link to our business goal of achieving
attractive long-term returns for our shareholders. In addition,
we believe that sustained returns on equity contribute to share
appreciation over time. Both our Annual Incentive Plan and our
Executive Incentive Plan, which comprise roughly half of the
compensation package for our named executive officers, employ
return on equity as the measure of corporate performance. All of
our long-term incentive
17
awards are settled in Common Shares. These measures are
described in more detail below under Performance
Measures.
Our compensation program is also designed to retain highly
qualified personnel. We promote the retention of our named
executive officers by offering a level of compensation that we
believe is competitive in the reinsurance industry and delayed
vesting of the long-term incentive awards. These features are
described below under Retention.
Performance
Measures
Return on
Equity
Currently, both our Annual Incentive Plan and our Executive
Incentive Plan employ return on equity as the measure of
financial performance. We believe return on equity, which takes
into account both our net income and capital used to produce
that net income, is an important measure of our profitability.
Since premium volume and market share are not objectives of our
business plan, none of our compensation programs utilizes
revenue as a measure of corporate performance. With respect to
the Annual Incentive Plan, at the beginning of a plan year, the
Compensation Committee may, in its discretion, select net
income, return on equity, another measure of the Companys
performance, or a combination of these performance criteria as
the measure of financial performance.
For each of the Annual Incentive Plan and the Executive
Incentive Plan, return on equity is determined on an annual
basis by dividing our net income or loss attributable to holders
of our Common Shares by beginning shareholders equity,
adjusted by the Compensation Committee for the weighted average
effect of material capital transactions during the year, less
the par value and capital attributable to preferred shares.
Thus, for the Annual Incentive Plan there is one calculation for
the year, and for the Executive Incentive Plan, one calculation
will be done for each of the three years in a performance cycle,
which amounts will then be added together and divided by three.
In February 2008, the Compensation Committee determined that
return on equity would be the measure of financial performance
for 2008 under the Annual Incentive Plan. In addition, the
Compensation Committee determined that in order for participants
to receive payouts at target levels for awards made under our
Annual Incentive Plan in respect of 2008 and under our Executive
Incentive Plan for the
2008-2010
performance cycle, the Company would have to achieve a return on
equity of at least 12%. We believe that such returns over the
long term would be attractive to investors. The Compensation
Committee also determined that the bonus pool under the Annual
Incentive Plan in respect of 2008 would fund at 100% of the sum
of all participants target bonuses at a target return on
equity for 2008 of 12% to 15%, with a range of funding from 50%
of such sum (for return on equity of 4%) to 200% of such sum
(for return on equity of 20% or more). The amounts below and
above the target will be determined through straight-line
interpolation. The bonus pool available to our named executive
officers does not fund if return on equity is below 4%. The
long-term incentive awards made under the Executive Incentive
Plan in 2008 for the
2008-2010
performance cycle provide for a payout at 100% if the Company
achieves an average return on equity for the three-year period
of 12%, with a range of payout from 0% (for return on equity of
less than 6%) to 200% (for a return on equity of 18% or more),
to be determined through straight-line interpolation.
In February 2009, the Compensation Committee determined that
return on equity would be the measure of financial performance
for 2009 under the Annual Incentive Plan and that in order for
participants to receive payouts at target levels for awards made
under our Annual Incentive Plan in respect of 2009 the Company
would have to achieve a return on equity of at least 10%. In
light of significant declines in interest rates since the
beginning of 2008, the Compensation Committee believes that the
minimum return on equity required in order for participants to
receive payouts at target levels should be lower for 2009 than
it was for 2008 and that this return would be attractive to
investors. The Compensation Committee also determined that the
bonus pool under the Annual Incentive Plan in respect of 2009
will fund at 100% of the sum of all participants target
bonuses at a target return on equity for 2009 of 10% to 13%,
with a range of funding from 50% of such sum (for return on
equity of 4%) to 200% of such sum (for return on equity of 20%
or more). The amounts below and above the target are determined
through straight-line interpolation. The bonus pool available to
our named
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executive officers will not fund if return on equity is below
4%. For the long-term incentive awards made under the Executive
Incentive Plan in 2009 for the
2009-2011
performance cycle, the Compensation Committee determined that
the same targets and payout levels will apply for awards made
under our Executive Incentive Plan for the
2009-2011
performance cycle as applied for awards made for the
2008-2010
performance cycle.
Share
Price
Share price is a significant performance-based element of our
compensation program, which is designed to result in the
accumulation of Common Shares by our named executive officers in
order to align their interests with those of our other
shareholders. Changes in share price directly impact the value
of our equity-based compensation. All of the long-term equity
incentives granted under our 2006 Share Incentive Plan and
our Executive Incentive Plan are settled in Common Shares and we
expect our named executive officers to attain a meaningful level
of ownership of our Common Shares through our share ownership
guidelines described above. We believe the combination of
share-based compensation and share ownership guidelines
motivates our named executive officers to focus on increasing
the market value of our Common Shares. In addition, the Company
prohibits executive officers and directors from hedging the
economic risk of their share ownership.
We have granted long-term equity incentives under our
2006 Share Incentive Plan in the form of restricted shares,
share units that convert into Common Shares and options to
purchase Common Shares. Our Executive Incentive Plan provides
for awards of share units that are settled after a three-year
performance cycle in cash, Common Shares or a combination of
cash and Common Shares, in the discretion of the Compensation
Committee. The number of share units is determined by dividing
the dollar amount of the award by the fair market value of the
Common Shares on the date of grant. The Compensation Committee
has determined that any settlement of awards of share units
under our Executive Incentive Plan will be made entirely in
Common Shares.
Our share ownership guidelines are described in detail under
Share Ownership Guidelines above. The specified
levels of share ownership for our named executive officers are
100,000 Common Shares for Mr. Price, 50,000 Common Shares
for Mr. Lombardozzi, and 30,000 Common Shares for each of
the other named executive officers. The share ownership levels
of 100,000, 50,000 and 30,000 Common Shares would represent an
investment in the Company of about $3.6 million,
$1.8 million and $1.1 million, respectively, based on
the closing price of $36.08 per Common Share on
December 31, 2008. We believe that the levels of share
ownership specified above provide a meaningful alignment of the
interests of our named executive officers with the interests of
our shareholders, which furthers our goal to provide attractive
long-term returns for our shareholders. Mr. Price attained
his target share ownership level during 2007 and
Mr. Lombardozzi, Mr. Porter and Ms. Mitchell each
attained their target ownership level during the first quarter
of 2009.
Retention
We seek to employ senior executives having substantial
experience and expertise in their fields, and who will maintain
a high level of commitment to our business goal. The retention
of such executives is an important objective of our compensation
program, particularly in light of the competition for talented
reinsurance professionals, especially in Bermuda and New York.
Our retention strategies are discussed below.
Competitive
Market Practices
With the assistance of compensation consultants engaged from
time to time and our human resources personnel, the Compensation
Committee considers several factors, including competitive
compensation practices and trends and market demand for talent,
to assess the effectiveness and competitiveness of our
compensation structure. The Compensation Committee evaluates
base salary and incentive compensation awards for named
executive officers using available market data compiled by
compensation consultants or our human resources personnel. This
market data is derived from publicly available information
relating to companies in the reinsurance industry with which we
compete for business and talent. This group of
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companies can vary depending on changes in market dynamics and
the extent to which the particular companies have business
strategies and executive officer positions that compare to ours.
We consider compensation information for a group of ten public
companies, selected by the Compensation Committee, with
significant operations in Bermuda. Although none of the ten
companies fit our profile exactly, they share similar
characteristics such as location, public nature and certain
elements of their business. Each company has reinsurance as at
least a substantial component of its business. Those companies
are Arch Capital Group Ltd., Axis Capital Holdings Limited,
Endurance Specialty Holdings Ltd., Everest Re Group, Ltd., Max
Capital Group Ltd., Montpelier Re Holdings Ltd., Odyssey Re
Holdings Corp., PartnerRe Ltd., RenaissanceRe Holdings Ltd. and
Transatlantic Holdings, Inc. In 2008, Grahall provided the
Compensation Committee with benchmarking data for executive
officer compensation from our peer companies as well as other
companies in the reinsurance industry in connection with the
Compensation Committees comprehensive review of the
competitiveness of the compensation, including the base salaries
and long-term incentive compensation, of our named executive
officers. Grahall also provided advice with respect to the Chief
Executive Officers compensation and a new employment
agreement with the Chief Executive Officer. In 2007, our human
resources personnel prepared comparisons using this group of
peer companies with respect to the form of payment of annual
incentive bonuses and the form of our long-term incentive
awards. In 2006, FWC compiled compensation information for the
five highest paid executive officers at each of those companies
for 2004 (which was the latest information available at the time
of the February 2006 Compensation Committee meeting at which
2006 compensation was considered), and used that information to
derive various levels of compensation, against which we compared
the base salaries, annual incentive bonuses and long-term
incentives of our named executive officers for 2006. The results
of these exercises are discussed below under Elements of
Compensation.
Delayed
Vesting of Long-Term Incentives
Awards granted under our 2006 Share Incentive Plan have
been in the form of restricted shares, share units that convert
on a one-to-one basis into Common Shares and options to purchase
Common Shares. All of these awards vest over a period of time.
For example, annual awards under our 2006 Share Incentive
Plan made in February 2008 and in prior years have been made
half in share units, which vest in equal installments on the
third and fourth anniversaries of the date of grant, and half in
options, which become exercisable in equal annual installments
on the first four anniversaries of the date of grant. Special
restricted share awards granted under our 2006 Share
Incentive Plan to our named executive officers in July 2008 vest
in three equal annual installments on the first three
anniversaries of the date of grant. All of these awards are
generally conditioned upon the continued employment of the
recipient on each installment date.
Awards granted under our Executive Incentive Plan in 2008 will
be settled after completion of a three-year performance cycle.
In general, settlement is conditioned upon the continued
employment of the participant and the return on equity achieved
throughout the three-year performance cycle.
The vesting of awards under the 2006 Share Incentive Plan
and the Executive Incentive Plan may be accelerated under
limited circumstances as discussed below under
Acceleration Events.
Change in
Control Severance Plan
In May 2007, with the assistance of the compensation consultant
FWC as described above, the Compensation Committee adopted the
CIC Plan, which provides severance benefits to certain of our
employees, including the named executive officers, in the event
of a termination of employment by the Company without cause or
by the employee for good reason during the two-year period
following a change in control. The purpose of the CIC Plan is to
secure the continued services, dedication and objectivity of our
employees in the event of any possible or actual change in
control without concern as to whether such employees might be
hindered or distracted by personal uncertainties and risks
created thereby.
In determining whether to adopt the CIC Plan and the benefits
available to our named executive officers under the CIC Plan,
the Compensation Committee reviewed estimates of the total cost
of the CIC Plan to the Company and considered the
recommendations of FWC regarding the CIC Plan with respect to
the scope of
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participation, the provision for excise tax
gross-ups
for any parachute payments under Section 280G
of the Internal Revenue Code, and restrictive covenants
applicable to participants. By adopting the CIC Plan, we have
increased the severance multiples for our named executive
officers to levels in line with those typically provided to
senior executives of our peer companies in change in control
situations. We believe that the CIC Plan, when combined with our
other retention strategies, further strengthens our ability to
retain our senior executive officers in the event of a change in
control. The severance benefits provided under the CIC Plan are
described in more detail under Elements of
Compensation Acceleration Events,
Elements of Compensation Severance
Arrangements and Potential Payments Upon Termination
or Change in Control below.
Retention
Bonus Plan
In March 2007, the Board authorized the adoption of a Retention
Bonus Plan, effective April 27, 2007, in order to ensure
our employees continued dedication and efforts, to help
retain qualified employees and to maintain a stable work
environment. The Company made cash bonus awards pursuant to the
Retention Bonus Plan to all employees with a title of Senior
Vice President and below. Mr. Krantz, who had not yet been
promoted to his current position of Executive Vice President and
Chief Financial Officer at the time of these awards, received a
cash award of $150,000 under the Retention Bonus Plan, which was
paid in a single lump-sum payment on March 31, 2008 in
accordance with the terms of the Retention Bonus Plan.
Elements
of Compensation
The principal elements of executive compensation are base
salary, annual incentive bonus awards under the Annual Incentive
Plan, long-term incentive awards under the 2006 Share
Incentive Plan and long-term incentive awards under the
Executive Incentive Plan. These elements, as well as perquisites
and other compensation, are reviewed by the Compensation
Committee on an annual basis at a meeting generally held in
February of each year, and may be reviewed at other times if the
Board or the Compensation Committee determines a review is
necessary and appropriate. Pursuant to the charter of the
Compensation Committee, the Compensation Committee determines
the Chief Executive Officers compensation after
consultation with each of the directors on the Board, and
reviews the recommendations of the Chief Executive Officer
concerning the compensation of the other named executive
officers and makes determinations with respect thereto. The
elements of compensation are discussed below.
At its meeting in February 2008, the Compensation Committee
determined that it should undertake a comprehensive review of
the competitiveness of our executive compensation program and
deferred compensation adjustments for our named executive
officers pending completion of this review. As described above,
this review was conducted in June and July of 2008 with the
assistance of the compensation consultant Grahall. The review
showed that certain elements of our executive compensation
program were not competitive and resulted in the implementation
by the Compensation Committee, at its meeting in July 2008, of
changes to the compensation arrangements for each of our named
executive officers and a new employment agreement for
Mr. Price.
The initial term of Mr. Prices old employment
agreement was to expire on August 1, 2009. The Board and
Compensation Committee determined that it was in the best
interests of the Company to retain Mr. Price as the Chief
Executive Officer beyond that date. Therefore, in July 2008 the
Compensation Committee implemented a new compensation
arrangement with Mr. Price in order to ensure his continued
service. The various components of the new compensation
arrangement are described below, and are set forth in a new
three-year employment agreement with Mr. Price dated
July 24, 2008 (the Price Agreement), which was
approved by the Board, upon the recommendation of the
Compensation Committee, in July 2008 and is described below
under Employment Agreements and Arrangements with Named
Executive Officers Michael D. Price.
The Compensation Committee also considered whether the Company
should seek to enter into new employment agreements with each of
the other named executive officers. Because each of the other
executive officers has either an automatically renewing
employment agreement (Messrs. Lombardozzi, Porter and
Krantz) or a continuous employment arrangement
(Ms. Mitchell) with the Company, the Compensation
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Committee determined that new employment agreements were not
required at this time. However, in order to increase the
retention and stability of the executive management team,
internal compensation parity among the named executive officers
and the proportion of their compensation that is based on the
Companys performance and to bring their compensation in
line with the compensation of executives at our competitors and
peer companies, the Compensation Committee approved certain
changes to the compensation arrangements for each of these named
executive officers. The changes included base salary increases
effective as of March 1, 2008, grants of restricted shares
under the 2006 Share Incentive Plan, and increases in the
target payouts for the share unit awards under the Executive
Incentive Plan. In addition, the Compensation Committee
increased the target bonus percentages for the annual incentive
bonus awards for Mr. Porter, Ms. Mitchell and
Mr. Krantz under the Annual Incentive Plan.
Base
Salary
The Compensation Committee reviews and determines the base
salary of the Chief Executive Officer and reviews and makes
determinations with respect to the base salaries of the other
named executive officers based on the recommendations of the
Chief Executive Officer. Base salaries are generally adjusted to
reflect promotions, increases in responsibilities and
competitive considerations. Otherwise, we do not generally make
annual increases in the base salaries of our named executive
officers, preferring instead to focus on the performance-based
elements of our compensation program. In July 2008, in
connection with its review of the competitiveness of the
compensation of our named executive officers, the Compensation
Committee determined to increase the base salaries of
Messrs. Lombardozzi, Porter and Krantz and
Ms. Mitchell. The Compensation Committee had not increased
the base salaries of Mr. Lombarozzi and Ms. Mitchell
since 2005 and had not increased Mr. Porters base
salary since 2006. Mr. Krantzs base salary was
increased in 2007 in connection with his promotion to Chief
Financial Officer of the Company and was further increased in
2008 to improve internal compensation parity among the executive
officers, particularly in light of the importance of the Chief
Financial Officer function. Mr. Lombardozzis base
salary was increased by 7.0% from $467,500 to $500,000,
Mr. Porters base salary was increased by 17.6% from
$425,000 to $500,000, Ms. Mitchells base salary was
increased by 11.8% from $425,000 to $475,000 and
Mr. Krantzs base salary was increased by 16.4% from
$365,000 to $425,000. The base salary increases were retroactive
to March 1, 2008 because that is the date that increases
would have taken effect if approved by the Compensation
Committee at its February 2008 meeting, the meeting at which
base salary reviews typically take place.
Awards granted to our named executive officers under each of the
Annual Incentive Plan, the 2006 Share Incentive Plan and
the Executive Incentive Plan, as discussed below, are generally
based on a specified percentage of base salary, and thus any
adjustments in base salary would generally result in
corresponding adjustments in the value of future awards under
those plans.
Annual
Incentive Plan
Our Annual Incentive Plan is structured to reward our named
executive officers based on short-term corporate performance,
subject to adjustment in the discretion of the Compensation
Committee based on individual performance. The Compensation
Committee established return on equity as the corporate
performance measure under the Annual Incentive Plan for the
years 2008 and 2009.
The Annual Incentive Plan provides for the determination of an
aggregate bonus pool in respect of the prior year equal to the
sum of all participants target bonuses, which is a
percentage of the participants base salaries, multiplied
by the performance bonus multiplier that applies based on return
on equity for the year. The actual annual incentive bonuses
payable to our named executive officers out of the bonus pool
are determined in the discretion of the Compensation Committee
and reflect the individual performance of the named executive
officers.
In February 2008, the Compensation Committee determined that the
2008 target bonus for Mr. Price would be 200% of his base
salary earned in 2008, that the 2008 target bonus for each of
Messrs. Lombardozzi and Porter and Ms. Mitchell would
be 100% of his or her base salary earned in 2008 and that the
2008 target bonus for Mr. Krantz would be 75% of his base
salary earned in 2008. The Compensation Committee also
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determined that the performance bonus multiplier for 2008 would
be 100% if return on equity was between 12% and 15%, 0% if
return on equity was below 4%, 50% to 100% if return on equity
was between 4% and 12%, and 100% to 200% if return on equity was
between 15% and 20% or more, in each case determined through
straight-line interpolation. For 2008, return on equity was
13.0%, and thus the performance bonus multiplier for the year
was 100%.
In July 2008, in connection with its review of the
competitiveness of the compensation of our named executive
officers, the Compensation Committee determined that the target
bonuses for the annual incentive bonus awards expected to be
made under the Annual Incentive Plan commencing in February 2009
to each of Mr. Krantz, Ms. Mitchell and
Mr. Porter with respect to the 2009 calendar year and
subsequent calendar years would be increased to 100%, 125% and
125% of earned base salary, respectively, from 75%, 100% and
100%, respectively, in order to bring their annual incentive
bonus compensation in line with that of our peer companies. In
addition, with respect to Ms. Mitchell and Mr. Porter,
the Compensation Committee wanted to increase the proportion of
their total compensation that is performance-based because, as
heads of our operating subsidiaries, they have the ability to
directly influence the Companys results of operations. In
approving the increase to Mr. Krantzs target bonus,
the Compensation Committee also considered internal compensation
parity among the named executive officers and the importance of
the Chief Financial Officer function. In addition, the
Compensation Committee determined that the target bonus for
Mr. Prices annual incentive bonus award will continue
to be $1,500,000 (equal to 200% of his earned base salary) and
the actual annual incentive bonus award paid to Mr. Price
will continue to be equal to his target bonus multiplied by the
performance bonus multiplier, provided that the Compensation
Committee in its sole discretion may reduce the actual annual
incentive bonus by an amount that is no greater than 20% of the
product of the target bonus multiplied by the performance bonus
multiplier. This limit on the Compensation Committees
discretion was agreed to as part of the negotiation of the Price
Agreement, which is described below under Employment
Agreements and Arrangements with Named Executive
Officers Michael D. Price. Previously, the
Compensation Committee, in its sole discretion, was permitted to
reduce or increase the actual amount of Mr. Prices
annual incentive bonus by any amount.
In February 2009, the Compensation Committee confirmed its July
2008 determinations that the 2009 target bonus for
Mr. Price would be $1,500,000 (equal to 200% of his base
salary earned in 2009), that the 2009 target bonus for each of
Mr. Porter and Ms. Mitchell would be 125% of his or
her base salary earned in 2009 and that the 2009 target bonus
for Mr. Krantz would be 100% of his base salary earned in
2009. The Compensation Committee also determined that
Mr. Lombardozzis target bonus for 2009 would be 100%
of his base salary earned in 2009. The Compensation Committee
also determined that the performance bonus multiplier for 2009
would be 100% if return on equity is between 10% and 13%, 0% if
return on equity is below 4%, 50% to 100% if return on equity is
between 4% and 10%, and 100% to 200% if return on equity is
between 13% and 20% or more, in each case determined through
straight-line interpolation.
At its February 2008 meeting, in addition to the financial
objectives discussed above, the Compensation Committee approved
non-financial individual objectives for the Chief Executive
Officer for 2008 which included developing a succession plan and
reporting the plan to the Board, maintaining our current
A.M. Best and Standard & Poors
(S&P) ratings, continuing personal
on-site
meetings with investors, continuing the fostering of teamwork in
the executive group by conducting at least two executive
management meetings outside the United States and managing any
excess capital that may have developed in 2008. In February
2009, the Compensation Committee determined that Mr. Price
substantially met these individual objectives. As a result,
Mr. Prices annual incentive bonus for 2008 was
determined to be $1,500,000, which equals 200% of his earned
base salary of $750,000, multiplied by the Companys
performance bonus multiplier of 100% for 2008.
The Compensation Committee also approved non-financial
individual objectives for the Chief Executive Officer for 2009
at its February 2009 meeting, which include monitoring tax
legislation that may be considered in the United States,
assessing alternative domiciles for the Company and Platinum
Bermuda, maintaining our current A.M. Best and S&P
ratings, continuing personal
on-site
meetings with investors, continuing the fostering of teamwork in
the executive group by conducting at least two executive
management meetings outside the United States and managing any
excess capital that may develop in 2009.
23
The Chief Executive Officer made a recommendation to the
Compensation Committee that Mr. Krantz receive an annual
incentive bonus for 2008 equal to 75% of his earned base salary
in 2008 multiplied by the performance bonus multiplier of 100%,
and that each of Mr. Lombardozzi, Mr. Porter and
Ms. Mitchell receive an annual incentive bonus for 2008 of
100% of his or her earned base salary in 2008 multiplied by the
performance bonus multiplier of 100%. The Chief Executive
Officers recommendation was based on the financial
performance of the Company and reflects his assessment of the
individual performance of each named executive officer. In
February 2009, the Compensation Committee determined to accept
the Chief Executive Officers recommendation. The actual
amounts of the annual incentive bonuses received by the named
executive officers in respect of 2008 were paid in the first
quarter of 2009.
We typically pay the annual incentive bonuses earned by our
named executive officers under the Annual Incentive Plan in a
combination of cash and share units that vest immediately and
that convert on a one-to-one basis into Common Shares, or in all
cash if a named executive officer has achieved his or her target
share ownership level. The share unit portion of the annual
incentive bonus will convert into Common Shares 30 days
after the award date, regardless of employment status at that
time. We believe that paying the annual incentive bonus award in
cash once an executive officer achieves his or her required
level of share ownership increases the competitiveness of our
compensation structure in that it better aligns our compensation
with that of our peer group of companies, most of which pay
annual incentive bonuses entirely in cash. The annual incentive
bonus in respect of 2008 for each of Messrs. Price,
Lombardozzi and Porter and Ms. Mitchell was paid entirely
in cash because each had achieved his or her target share
ownership level, and the annual incentive bonus in respect of
2008 for Mr. Krantz was paid 50% in cash and 50% in
fully-vested share units.
Long-Term
Incentives
2006 Share Incentive Plan. The
2006 Share Incentive Plan, which replaced a predecessor
plan and was approved by shareholders at our 2006 Annual General
Meeting of Shareholders, provides that the Compensation
Committee has authority to grant equity awards in the form of
restricted shares, share units, options to purchase Common
Shares and share appreciation rights. These equity awards, which
vest over time, focus our named executive officers on improving
our share price over the long term and provide a significant
retention incentive.
We generally grant equity awards under the 2006 Share
Incentive Plan to our named executive officers with a value of
up to approximately 100% of base salary per year, and may also
grant additional equity awards to our named executive officers
in other circumstances, such as for new hires and promotions.
Ordinarily, annual equity awards are made at the Compensation
Committees February meeting.
In February 2008, the annual equity awards were made with half
of the value in the form of share units and half of the value in
the form of options. We believe that this allocation provides an
incentive balanced between preserving the Companys share
price for that portion of the award with embedded value (share
units) and increasing the share price in order to realize any
value (options). The embedded value of share units also provides
a more significant incentive to remain with the Company during
the vesting period. Mr. Lombardozzi received an equity
award valued at approximately $467,500, half in the form of
6,892 share units and half in the form of options to
purchase 32,065 Common Shares at an exercise price of $33.92 per
Common Share. Ms. Mitchell received an equity award valued
at approximately $425,000, half in the form of 6,265 share
units and half in the form of options to purchase 29,150 Common
Shares at an exercise price of $33.92 per Common Share.
Mr. Porter received an equity award valued at approximately
$425,000, half in the form of 6,265 share units and half in
the form of options to purchase 29,150 Common Shares at an
exercise price of $33.92 per Common Share. Mr. Krantz
received an equity award valued at approximately $273,750, half
in the form of 4,036 share units and half in the form of
options to purchase 18,776 Common Shares at an exercise price of
$33.92 per Common Share. For each named executive officer, the
number of options was calculated based on a Black-Scholes
calculation that valued each option at approximately $7.29 per
share. The share units will convert on a one-to-one basis into
Common Shares in equal installments on the third and fourth
anniversaries of the date of grant and the options will become
exercisable in equal annual installments on the first four
anniversaries of the date of grant, based on the continued
employment of the recipient on each installment date. Any
dividends paid on our Common Shares during the vesting period
are credited to the
24
named executive officers in respect of share units held by them
as dividend equivalent rights that accumulate as cash. These
dividend equivalent rights are subject to the same vesting
requirements as the share units.
In connection with entering into a five-year employment
agreement in 2004, Mr. Price received an award of 98,531
restricted shares which vest in equal installments on each of
the first five anniversaries of the date of grant. This award
had a value of approximately $2.75 million as of the date
of grant. In light of this award, no equity awards under the
2006 Share Incentive Plan or the predecessor plan were made
to Mr. Price in 2005, 2006 or 2007. In July 2008, in
connection with entering into the Price Agreement and the
Compensation Committees review of the competitiveness of
our executive officer compensation, Mr. Price received an
award of 100,000 restricted shares which vest in equal
installments on each of the first three anniversaries of the
date of grant. This award had a value of approximately
$3.61 million on the date of grant. Any dividends paid on
our Common Shares during the vesting period are paid to
Mr. Price in cash in respect of restricted shares held by
him. Pursuant to the Price Agreement, Mr. Price will not be
eligible to receive additional equity awards under the
2006 Share Incentive Plan during the term of the Price
Agreement, which ends on July 31, 2011.
In July 2008, in connection with the Compensation
Committees review of the competitiveness of our executive
officer compensation, Messrs. Lombardozzi, Krantz and
Porter and Ms. Mitchell received awards of restricted
shares which vest in equal installments on each of the first
three anniversaries of the date of grant. In making these
awards, the Compensation Committee and the Chief Executive
Officer desired to increase the retention and stability of our
executive management team for the next several years and
considered restricted shares to be the best form of equity award
for this purpose. Mr. Lombardozzi and Mr. Porter each
received an award of 40,000 restricted shares valued at
approximately $1.41 million on the date of grant;
Ms. Mitchell received an award of 35,000 restricted shares
valued at approximately $1.23 million on the date of grant;
and Mr. Krantz received an award of 30,000 restricted
shares valued at approximately $1.06 million on the date of
grant. Any dividends paid on our Common Shares during the
vesting period are paid to the named executive officers in cash
in respect of restricted shares held by them. In light of these
awards, no annual equity awards under the 2006 Share
Incentive Plan were made to these named executive officers in
February 2009.
In connection with entering into a three-year employment
agreement and an increase in his responsibilities to include
serving as Chief Administrative Officer in 2005,
Mr. Lombardozzi received an equity award valued at
approximately $1.05 million on the date of grant. This
award was made half in the form of 18,428 restricted shares that
vested in equal annual installments on each of the first three
anniversaries of the date of grant and half in the form of
options to purchase 69,105 Common Shares at an exercise price of
$28.49 per Common Share which became exercisable in equal annual
installments on the first three anniversaries of the date of
grant. This number of options to purchase Common Shares was
determined based on a Black-Scholes calculation that valued each
restricted share at approximately 3.75 times one share option.
In light of these awards, no equity award under the
2006 Share Incentive Plan was made to Mr. Lombardozzi
in 2006.
In connection with entering into a three-year employment
agreement and his promotion to Chief Executive Officer of our
Bermuda operating subsidiary in February 2006, Mr. Porter
received an equity award valued at approximately $950,000 on the
date of grant. This award was made half in the form of 15,534
restricted shares that vested in equal annual installments on
the first three anniversaries of the date of grant and half in
the form of options to purchase 58,253 Common Shares (based on
the Black-Scholes calculation described above) at an exercise
price of $30.58 per Common Share which became exercisable in
equal annual installments on the first three anniversaries on
the date of grant.
Equity Award Policy. The
2006 Share Incentive Plan provides that equity awards may
be granted by the Compensation Committee, by an officer of the
Company pursuant to delegation of authority by the Compensation
Committee and, for grants to nonemployee directors, by the
Board. In order to provide uniformity among awards, and to
establish certainty with respect to certain award terms, in
October 2006 the Compensation Committee adopted an equity award
policy that applies to all awards made under the 2006 Share
Incentive Plan to nonemployee directors (other than formula
grants, the timing of which is predetermined), executive
officers and other employees. This policy is also used for
equity awards made pursuant to our Annual Incentive Plan and
Executive Incentive Plan.
25
The equity award policy provides that, in general, awards shall
be granted to eligible persons once per year, at a meeting of
the Compensation Committee (or, in the case of awards to
nonemployee directors, the Board) held around the time of the
public release of the Companys year-end financial results
in February. Awards may also be granted at other times if the
Compensation Committee or the Board determines necessary under
provided that the date of grant and fair market value of any
such awards shall be determined in accordance with the equity
award policy, as described below.
The equity award policy provides that each award shall have a
date of grant and fair market value that are determined in a
consistent manner. In July 2008, in order to provide more
flexibility, the Compensation Committee amended the equity award
policy to provide that the date of grant of each award may be
any day falling within the Companys open
window periods for securities trading on or after the date
the award is made. Prior to the July 2008 amendment, the equity
award policy provided that the date of grant of an award was
required to be the second business day after the quarterly or
annual release of earnings next succeeding the date on which the
award was made. The fair market value, for purposes of
determining the initial value of an award, including the
exercise price of an award of options, is determined using the
closing sales price of our Common Shares on the trading day
immediately preceding the date of grant. The equity award policy
is designed to ensure that the value of each award, which is
based on the market price of our Common Shares, is determined at
a time when there is no material non-public information relating
to the Company and when our most recent financial results have
been released to the public, with the opportunity for those
results to be disseminated to the market over at least one full
business day and reflected in the market price of our Common
Shares. We believe that this removes any concern that material
non-public information could be a factor in the timing and
consequent valuation of equity awards.
The equity award policy also documents the Compensation
Committees delegation of authority to make awards. This
delegation authorizes the Chief Executive Officer of the Company
to grant awards to employees or prospective employees of the
Company with the title of Vice President or below, provided that
the maximum number of Common Shares that the Chief Executive
Officer may grant in any calendar year may not exceed 10,000
Common Shares to any one individual or 50,000 Common Shares to
all such individuals. For purposes of calculating these
maximums, each Common Share that may be issued pursuant to an
award of options will be deemed to be one Common Share, and each
Common Share that may be issued pursuant to an award of
restricted shares or share units will be deemed to be 2.67
Common Shares (for example, an award of 1,000 share units
would be deemed to be 2,670 Common Shares). The policy provides
that the Chief Executive Officer may grant awards at any time
that he determines to be necessary under the circumstances,
provided that the date of grant and fair market value of any
such awards shall be determined as described above.
The equity award policy provides that once a date of grant has
been specified for an award, it may not be changed. Also,
promptly following the date of grant of an award, an award
agreement, which shall identify the date of grant and the fair
market value, the vesting and the term, and any other relevant
terms and conditions of the award, shall be prepared and signed
by the Company and the recipient. These provisions are designed
to avoid any ambiguity regarding the terms of an award.
Executive Incentive Plan. Our
compensation program includes as an important element a
long-term incentive for our named executive officers which
measures performance over a three-year period. Our Executive
Incentive Plan focuses our executive officers on profitability
over a longer term than our Annual Incentive Plan, which is
oriented toward single-year results. We believe that a portion
of the compensation earned by our executive officers should be
based upon the multi-year financial impact of their decisions. A
longer term view is important for the success of our casualty
business where, due to the greater time lag between the
occurrence, reporting and payment of claims (as compared with
property damage claims), results are not known for several
years. We also believe that the Executive Incentive Plan
provides a significant benefit in the retention of named
executive officers over time. Average return on equity is the
performance measure under the Executive Incentive Plan for each
performance cycle.
The Executive Incentive Plan provides for awards of share units,
determined by dividing the dollar amount of the award by the
fair market value of the Common Shares on the date of grant.
After the completion of the three-year performance cycle and
determination of the average return on equity, the number of
share units will
26
be multiplied by the performance percentage that applies based
on that average return on equity for the cycle. In February
2008, for the
2008-2010
performance cycle, the Compensation Committee granted an award
of share units to Mr. Price with a value approximately
equal to 100% of his 2008 base salary and awards of share units
to Messrs. Lombardozzi, Porter and Krantz and
Ms. Mitchell with a value approximately equal to 75% of
their 2008 base salaries. The percentage for Mr. Price was
higher than the percentage for the other named executive
officers because the Compensation Committee wanted to deliver a
relatively higher percentage of Mr. Prices
compensation as a long-term performance-based award. The
Compensation Committee also determined that the share units will
be multiplied by a performance percentage of 0% for average
return on equity of less than 6% and 1% to 200% for average
return on equity of between 6% and 18% or more, determined
through straight-line interpolation.
In July 2008, in connection with its review of the
competitiveness of the compensation of our named executive
officers, the Compensation Committee determined that the target
value of the share unit awards expected to be made under the
Executive Incentive Plan commencing in February 2009 to each of
Messrs. Lombardozzi, Porter and Krantz and
Ms. Mitchell with respect to the three-year performance
cycles commencing with the
2009-2011
performance cycle would be increased from 75% to 100% of base
salary in order to bring their long-term incentive compensation
in line with that of our competitors and peer companies,
increase the retention and stability of our executive management
team and increase the proportion of their total compensation
that is performance-based. Accordingly, in February 2009 the
Compensation Committee granted an award of share units for the
2009-2011
performance cycle to each of our named executive officers with a
value equal to 100% of their 2009 base salaries. The
Compensation Committee also determined that the share units will
be multiplied by a performance percentage of 0% for average
return on equity of less than 6% and 1% to 200% for average
return on equity of between 6% and 18% or more, determined
through straight-line interpolation.
Although the Executive Incentive Plan provides that share units
may be settled in cash, Common Shares or a combination of cash
and Common Shares as determined by the Compensation Committee in
its sole discretion, we intend to settle the share units in
Common Shares, by multiplying the number of share units awarded
by the applicable performance percentage and converting that
number of share units into Common Shares on a one-to-one basis.
In general, settlement is conditioned upon the continued
employment of the participant at the time of settlement. The
share units under the Executive Incentive Plan do not carry
dividend equivalent rights. The share unit awards made to each
of Messrs. Price, Lombardozzi and Porter and
Ms. Mitchell under the Executive Incentive Plan for the
2006-2008
performance cycle vested in February 2009. In February 2009, the
Compensation Committee determined that, for purposes of the
Executive Incentive Plan, average return on equity over the
2006-2008
performance cycle was greater than 18%, resulting in a payout to
each of these named executive officers of that number of Common
Shares equal to the number of share units awarded for the
performance cycle multiplied by the maximum performance
percentage for the performance cycle of 200%.
Perquisites
Almost all of the perquisites that we pay to our named executive
officers relate to the fact that our headquarters and Platinum
Bermuda are located in Bermuda. All of our named executive
officers except for Ms. Mitchell, who is the President and
Chief Executive Officer of Platinum US, work in Bermuda and have
relocated there from the United States or the United Kingdom.
This relocation involved establishing a home in Bermuda. We
follow the practice of many Bermuda companies of providing
allowances to executives who have relocated to Bermuda.
The principal perquisites for the named executive officers who
have relocated to Bermuda consist of housing and automobile
allowances. The amounts paid in respect of these allowances are
driven primarily by market conditions in Bermuda and the income
taxes that may be assessed on such allowances. These named
executive officers received payments to cover relocation
expenses when they moved to Bermuda. We also pay the membership
fees associated with a club membership in Bermuda, which fees
did not exceed $7,000 for any named executive officer in 2008.
Finally, the employment agreements of certain of our named
executive officers provide for our payment of the costs of
airfare for a specified number of visits by them and their
families to the United States.
27
Other
Items Comprising All Other Compensation
In addition to the elements of compensation discussed above, we
make employer contributions to the Companys various
qualified and non-qualified defined contribution savings and
profit-sharing plans totaling 10% of base salary for each of our
employees, including our named executive officers. As described
below under Other Considerations, as a result of the
enactment of Section 457A of the Internal Revenue Code, the
Executive Retirement Savings Plan of Platinum US was amended to
provide that our Bermuda-based named executive officers,
Messrs. Price, Lombardozzi, Porter and Krantz, will not be
eligible to participate therein for any periods after
December 31, 2008. Instead, each of those named executive
officers will receive an amount in cash equal to the amount we
would have contributed to the Executive Retirement Savings Plan
for him. We do not have a defined benefit pension plan or any
supplemental retirement benefits.
Acceleration
Events
As discussed above under Retention, our long-term
incentives are subject to delayed vesting coupled with
forfeiture for certain departures prior to vesting. These awards
are also subject to accelerated vesting or payment under certain
circumstances as discussed below.
Annual equity awards have been made to our named executive
officers under the 2006 Share Incentive Plan in the form of
share units and options. Ordinarily, the share units convert on
a one-to-one basis into Common Shares and vest in equal
installments on the third and fourth anniversaries of the date
of grant, and the options become exercisable in equal annual
installments on the first four anniversaries of the date of
grant, based on the continued employment of the named executive
officer on each installment date. In the event of the death or
disability of the named executive officer or upon a change in
control of the Company, the share units would automatically vest
and convert on a one-to-one basis into Common Shares and the
options would vest and become fully exercisable.
Equity awards have also been made to certain of our named
executive officers under the 2006 Share Incentive Plan or
our predecessor plan in connection with entering into new or
amended employment agreements or a comprehensive review of our
executive compensation arrangements, as described above under
2006 Share Incentive Plan. The restricted share
awards made to each of our named executive officers in July 2008
vest over a period of three years. These restricted shares would
vest upon a change in control of the Company or in the event
that the named executive officers employment is terminated
without cause by the Company or for good reason by the
executive. In addition, for all of our named executive officers
other than Mr. Price, these restricted shares would vest in
the event of the death or disability of the named executive
officer. For Mr. Price, in the event of his death or
disability, the number of these restricted shares that would
have vested in the one-year period following his death or
disability would vest. Pursuant to the Price Agreement, all
unvested equity awards held by Mr. Price (other than awards
under the Executive Incentive Plan) would vest and become fully
exercisable in the event that his employment is terminated
without cause by the Company or by him for good reason. In
addition, in the event of Mr. Prices death or
disability, all equity awards held by Mr. Price (other than
awards under the Executive Incentive Plan) that would have
vested or that would have become exercisable within one year
after his death or disability would vest or become fully
exercisable.
Our Executive Incentive Plan provides for the award of share
units at the beginning of a three-year performance cycle.
Ordinarily, the share units are settled in Common Shares after
completion of the cycle. However, under certain circumstances a
named executive officer would be entitled to a prorated
settlement of Common Shares in respect of his or her share units
prior to completion of the cycle. In the event of the death or
disability of the named executive officer, his or her retirement
with the consent of the Compensation Committee, the termination
of employment without cause or for good reason, or a change in
control of the Company (provided that the named executive
officer continues to be employed by the Company at the time of
the change in control), the named executive officer would be
entitled to receive a settlement of Common Shares on a prorated
basis, based upon the period of service prior to the event and
the performance of the Company as of the end of the fiscal
quarter following a termination of employment or prior to a
change in control. In addition, pursuant to the Price Agreement,
in the event Mr. Prices employment terminates upon or
after the expiration of the term of the Price Agreement, he is
entitled to receive payment in respect of each
28
award granted to him under the Executive Incentive Plan in 2009,
2010 and 2011 on a prorated basis based on his period of service
prior to the termination of employment and the performance of
the Company as of the end of the fiscal quarter preceding the
termination of employment, provided he signs a release. Our view
is that this portion of the award will have been earned at the
time of termination, and the named executive officers
termination will have been involuntary or with the consent of
the Company.
Pursuant to the CIC Plan, in the event of a termination of a
named executive officers employment by the Company without
cause or by the named executive officer for good reason during
the two-year period following a change in control, all share
options, restricted shares or other equity incentives held by a
participant, that have not previously vested (other than share
units awarded under our Executive Incentive Plan, which vest in
accordance with their terms) will vest, and all share options
will remain exercisable for one year following the termination
of employment (or the expiration of the full original term of
the option, if earlier). Other severance benefits provided for
under the CIC Plan are more fully described under
Severance Arrangements and Potential Payments
Upon Termination or Change in Control below.
For purposes of these acceleration events, in general
cause means the willful failure to perform duties,
conviction of a felony, fraud or dishonesty, or, in certain
cases, the willful engagement in illegal conduct or gross
misconduct which is injurious to the Company, the breach of
restrictive covenants contained in an employment or award
agreement, the sale of Common Shares other than as permitted by
the Company or the abandonment of Bermuda as a primary residence
or principal office without consent; good reason
means reduction of base salary or target bonus, reduction in the
scope of duties or responsibilities or change in location of
employment, or, in certain cases, an adverse change in titles or
offices with the Company, a breach by the Company of a material
provision of an employment agreement; and change in
control means an acquisition of at least 50% of the Common
Shares by an individual or group other than any such acquisition
directly from the Company, a change in the composition of a
majority of the Board during any two-year period without the
approval of at least two-thirds of the directors who were in
office at the beginning of the period or who subsequently
received such two-thirds approval, or certain mergers or
consolidations involving the Company.
Except as discussed below under Severance
Arrangements and Potential Payments Upon Termination
or Change in Control, the named executive officers are not
entitled to any other post-termination payments or benefits in
the event of a change in control or retirement.
Severance
Arrangements
Change in Control Severance Plan. The
severance benefits to which each of the named executive officers
is entitled under the CIC Plan in the event of a termination of
employment by the Company without cause or by the employee for
good reason during the two-year period following a change in
control include a severance payment equal to the sum of one
years base salary in the last twelve months plus target
bonus for the year of termination then multiplied by a severance
multiple of 200%; continued health care, disability and life
insurance coverage for the executive and his or her dependents
for two years; and reasonable relocation expenses to return to
his or her home country. Any amounts payable to a participant in
the CIC Plan under any other plan or agreement with us on
account of the participants termination will be offset
against payments made to the participant pursuant to the CIC
Plan to the extent necessary to avoid duplication of benefits.
These severance benefits are more fully described under
Potential Payments Upon Termination or Change in
Control below.
Employment Agreements. Each of our
named executive officers has an employment or other agreement
that provides for a lump sum cash payment equal to one
years base salary and target bonus in the event that his
or her employment is terminated by the Company without cause or
by the executive for good reason. In addition, the Price
Agreement provides that Mr. Price will receive a prorated
payment of his annual incentive bonus award under the Annual
Incentive Plan for the year in which a termination by the
Company without cause or by Mr. Price for good reason
occurs. These provisions were included in the employment
agreements in order to attract qualified professionals, and we
believe that these provisions have continued utility for us in
that the separation payment that is required to be made to each
of our named executive officers is fixed in advance at
29
a reasonable level, and it is payable only upon execution of a
release by the named executive officer in favor of the Company.
We also view the one-year period as a reasonable length of time
for the named executive officer to secure employment in an
equivalent executive position.
Other
Considerations
Section 162(m) of the Internal Revenue Code imposes a
limitation of $1 million per year on the
U.S. corporate income tax deduction for compensation paid
to our named executive officers that are employees of our
U.S. operating subsidiary. Among other exceptions, the
deduction limit does not apply to compensation that meets the
specified requirements for performance-based
compensation. Of our named executive officers, only
Ms. Mitchell is employed by our U.S. operating
subsidiary. The 2006 Share Incentive Plan was designed to
meet the requirements for performance-based compensation, and
our Section 162(m) Performance Incentive Plan, which was
approved by shareholders at our 2003 Annual General Meeting, was
utilized for the grant to Ms. Mitchell in 2008 and 2009 of
other incentive compensation under the Annual Incentive Plan and
the Executive Incentive Plan in a manner that meets the
requirements for performance-based compensation under
Section 162(m). For 2008, the performance criteria for the
Section 162(m) Performance Incentive Plan was the
Companys 2008 net income and the maximum bonus award
to any officer with a title of Executive Vice President or above
was 1% of net income, subject to reduction in the discretion of
the Compensation Committee. In February 2009, the Compensation
Committee determined that the same performance criteria and
maximum bonus would apply for awards made pursuant to the
Section 162(m) Performance Incentive Plan with respect to
2009. Platinum US has not paid any compensation that is not
deductible by it under Section 162(m). Nevertheless, the
Compensation Committee retains the flexibility under
circumstances that it considers appropriate to pay compensation
that may not be deductible by our U.S. based subsidiaries
under Section 162(m).
In July 2008, the Board, upon the recommendation of the
Compensation Committee, approved amendments to certain of the
compensation plans of the Company that are applicable to our
named executive officers, including the CIC Plan, the Executive
Incentive Plan and our executive bonus deferral plans, in order
to conform these plans to the requirements of Section 409A
of the Internal Revenue Code. In general, these amendments
included specifying that the timing of payments under the plans
must comply with Section 409A, clarifying when a
separation from service, as such term is defined in
Section 409A, occurs, and providing for a six-month delay
in the payment of deferred compensation amounts due to any
specified employee, as such term is defined in
Section 409A. In 2008, the Compensation Committee approved
similar amendments to our forms of agreement for awards made
under the Executive Incentive Plan.
In October 2008, as a result of the enactment of
Section 457A of the Internal Revenue Code, the Board, upon
the recommendation of the Compensation Committee, approved
amendments to or terminations of certain of the compensation
plans of the Company that are applicable to our named executive
officers, including the Executive Retirement Savings Plan and
the executive bonus deferral plans applicable to our
Bermuda-based employees. The amendment of the Executive
Retirement Savings Plan was intended to eliminate the deferral
of income tax on compensation for services performed after
December 31, 2008 by any employee of the Company or our
Bermuda operating subsidiary who is a taxpayer in the United
States of America (a U.S. Taxpayer). The
amendment provides that any participant in the Executive
Retirement Savings Plan who is a U.S. Taxpayer will not be
eligible to participate in the plan for any periods after
December 31, 2008, with the result being that such
U.S. Taxpayer will not be entitled to any matching offset
contributions or any discretionary employer contributions made
by us to such plan after December 31, 2008. Therefore, in
lieu of a U.S. Taxpayers participation in the
Executive Retirement Savings Plan, the Board, upon the
recommendation of the Compensation Committee, approved a new
compensation arrangement which provides that for 2009 and later
years we will pay the U.S. Taxpayer an amount in cash equal
to the amount we would have contributed to the
U.S. Taxpayer pursuant to the Executive Retirement Savings
Plan. In addition, the Board authorized the officers of the
Company to take all necessary action so that, in accordance with
the provisions of Section 457A, all amounts under the
Executive Retirement Savings Plan payable to a
U.S. Taxpayer are includable in gross income by such
U.S. Taxpayer no later than the last taxable year beginning
before 2018. Our Bermuda-based named executive officers,
Messrs. Price, Lombardozzi, Porter and Krantz, are all
affected by these
30
amendments. Our executive bonus deferral plans applicable to
Bermuda-based employees had no participants and were terminated.
No wealth accumulation analyses were utilized in connection with
our 2008 compensation determinations because we have only been
in operation since November 2002.
Conclusion
Our compensation program provides our named executive officers
with an opportunity to ultimately earn total annual compensation
equal to three to four times their base salaries if financial
targets are met, and, for our Chief Executive Officer, over five
times his base salary for superior financial results. Taken
together, the elements of the program are designed to achieve
several goals. Base salary, which is paid throughout the year in
cash, provides a current stream of income to our named executive
officers. Our Annual Incentive Plan promotes the achievement of
short-term financial results. All of the long-term incentives
are settled in Common Shares to promote a focus on the
preservation and appreciation of our share price over time.
Finally, the Executive Incentive Plan promotes the achievement
of long-term financial results over a multi-year period. Our
compensation program is also designed to provide significant
retention incentives by paying compensation that we believe is
competitive in the industry and that vests over time. All of
these elements work together, providing a balanced approach to
achieving our business goal of attractive long-term returns for
our shareholders, while establishing the Company as a
disciplined risk manager and market leader in selected classes
of property and casualty reinsurance.
Summary
Compensation Table
The following sets forth information relating to compensation of
the Chief Executive Officer and the Chief Financial Officer
serving during the fiscal year ended December 31, 2008 and
the three next most highly compensated executive officers of the
Company for 2008 who were serving as executive officers at the
end of the fiscal year ended December 31, 2008,
collectively referred to in this proxy statement as the
named executive officers.
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Non-Equity
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Stock
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Option
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Incentive Plan
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All Other
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Name and
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Salary
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Bonus(1)
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Awards(2)
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Awards(3)
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Compensation
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Compensation(4)
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Total
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Principal Position
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Year
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($)
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($)
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($)
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($)
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($)
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($)
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($)
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(a)
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(b)
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(c)
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(d)
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(e)
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(f)
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(g)
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(i)
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(j)
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Michael D. Price
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2008
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750,000
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2,394,729
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1,500,000
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621,748
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5,266,477
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President and Chief Executive
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2007
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750,000
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1,716,790
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2,500,000
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611,483
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5,578,273
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Officer of the Company
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2006
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750,000
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965,000
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1,500,000
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687,831
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3,902,831
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James A. Krantz
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2008
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415,000
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150,000
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|
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708,990
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128,345
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155,625
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367,606
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1,925,566
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Executive Vice President and
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2007
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337,917
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450,944
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74,226
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253,438
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394,140
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1,510,665
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Chief Financial Officer of the Company since June 2007
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Michael E. Lombardozzi
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2008
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494,583
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1,197,506
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441,895
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494,583
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579,851
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3,208,418
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Executive Vice President,
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2007
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467,500
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1,266,741
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366,555
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467,500
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558,916
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3,127,212
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General Counsel, Chief
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2006
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467,500
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419,012
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502,674
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935,000
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568,039
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2,892,225
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Administrative Officer and Secretary of the Company
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Robert S. Porter
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2008
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487,500
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1,084,132
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354,739
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487,500
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508,371
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2,922,242
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Chief Executive Officer of
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2007
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425,000
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|
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|
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1,076,079
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304,933
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425,000
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|
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497,977
|
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2,728,989
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Platinum Bermuda
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2006
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383,919
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330,627
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338,150
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850,000
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556,937
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2,459,633
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H. Elizabeth Mitchell
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2008
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466,667
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1,062,299
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353,041
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466,667
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56,392
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2,405,066
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President and Chief Executive
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2007
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425,000
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1,083,114
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227,785
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425,000
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42,500
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2,203,399
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Officer of Platinum US
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2006
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425,000
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270,545
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328,257
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850,000
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42,500
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1,916,302
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(1) |
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The amount shown in the Bonus column represents the amount paid
to Mr. Krantz pursuant to the Retention Bonus Plan. |
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(2) |
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The amounts shown in the Stock Awards column represent the
amount we recognized for financial statement reporting purposes
in the applicable fiscal year for share unit and restricted
share awards granted to |
31
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the named executive officers in such fiscal year and prior
years, in accordance with SFAS 123R, excluding the impact
of estimated forfeitures related to service-based vesting
conditions, as required by SEC rules. These amounts do not
reflect the amount of compensation actually received by the
named executive officer during the fiscal year. The assumptions
made in the valuation of stock awards are discussed in
Note 11 to the Companys consolidated financial
statements contained in the Companys 2008
Form 10-K. |
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(3) |
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The amounts shown in the Option Awards column represent the
amount we recognized for financial statement reporting purposes
in the applicable fiscal year for option awards granted to the
named executive officers in such fiscal year and prior years, in
accordance with SFAS 123R, excluding the impact of
estimated forfeitures related to service-based vesting
conditions, as required by SEC rules. These amounts do not
reflect the amount of compensation actually received by the
named executive officer during the fiscal year. The assumptions
made in the valuation of option awards are discussed in
Note 11 to the Companys consolidated financial
statements contained in the Companys 2008
Form 10-K. |
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(4) |
|
The amounts for 2008 include: |
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Michael D.
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James A.
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Michael E.
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Robert S.
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H. Elizabeth
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Price
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Krantz
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Lombardozzi
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Porter
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Mitchell
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|
|
Housing allowance
|
|
$
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480,000
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|
|
$
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288,000
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|
|
$
|
480,000
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|
|
$
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432,000
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|
|
$
|
|
|
401(k) and non-qualified plan contributions
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|
|
75,000
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41,500
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49,458
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|
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48,750
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46,667
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Personal financial, legal or tax advice fees
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4,000
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|
6,985
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|
|
4,605
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|
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Automobile allowance
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|
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8,400
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|
|
|
8,400
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|
8,400
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8,400
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|
|
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|
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Dividends paid on stock awards
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|
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25,459
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|
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6,023
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|
|
|
12,100
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|
|
|
10,425
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|
|
|
9,725
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|
Home leave allowance
|
|
|
21,439
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|
|
|
9,698
|
|
|
|
24,838
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|
|
|
802
|
|
|
|
|
|
Club fees
|
|
|
7,000
|
|
|
|
7,000
|
|
|
|
|
|
|
|
7,000
|
|
|
|
|
|
Disability insurance premiums
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
994
|
|
|
|
|
|
Credit card fees
|
|
|
450
|
|
|
|
|
|
|
|
450
|
|
|
|
|
|
|
|
|
|
All other compensation total
|
|
|
621,748
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|
|
|
367,606
|
|
|
|
579,851
|
|
|
|
508,371
|
|
|
|
56,392
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32
Grants of
Plan-Based Awards in Fiscal Year Ended December 31,
2008
The following table shows the equity and non-equity awards
granted to the named executive officers under our equity and
non-equity incentive plans as well all other share and option
awards during the fiscal year ended December 31, 2008.
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|
|
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|
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|
|
|
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All Other
|
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|
All Other
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|
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|
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Stock
|
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|
Option
|
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|
|
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|
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Grant
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|
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|
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|
|
Awards:
|
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Awards:
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Exercise
|
|
|
|
|
|
Date Fair
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Estimated Future
|
|
|
Number of
|
|
|
Number of
|
|
|
or Base
|
|
|
|
|
|
Value of
|
|
|
|
|
|
|
|
|
|
Estimated Possible Payouts Under
|
|
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Payouts Under Equity
|
|
|
Shares of
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|
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Securities
|
|
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Price of
|
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Closing
|
|
|
Stock and
|
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|
|
|
|
|
Non-Equity Incentive Plan Awards
|
|
|
Incentive Plan Awards
|
|
|
Stock or
|
|
|
Underlying
|
|
|
Option
|
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|
Price on
|
|
|
Option
|
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|
|
Grant
|
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|
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Threshold
|
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Target
|
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Maximum
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Thresho
|
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Target
|
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Maximum
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Units
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Options
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Awards
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Grant
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Awards
|
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Name
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Date
|
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Action
|
|
|
($)
|
|
|
($)
|
|
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($)
|
|
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(#)
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(#)
|
|
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(#)
|
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(#)
|
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(#)
|
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($/Sh)
|
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Date (6)
|
|
|
($)
|
|
(a)
|
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(b)
|
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Date
|
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(c)
|
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(d)
|
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(e)
|
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(f)
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(g)
|
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(h)
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(i)
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(j)
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(k)
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($/Sh)
|
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(l)
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|
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Michael D. Price
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|
2/21/08
|
(1)
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2/20/08
|
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$
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750,000
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$
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1,500,000
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$
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3,000,000
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2/21/08
|
(2)
|
|
|
2/20/08
|
|
|
|
|
|
|
|
|
|
|
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|
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222
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|
22,111
|
|
|
|
44,222
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|
|
|
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|
|
|
|
|
|
|
|
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$
|
750,000
|
|
|
|
|
8/1/08
|
(5)
|
|
|
7/24/08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
3,610,000
|
|
James A. Krantz
|
|
|
2/21/08
|
(1)
|
|
|
2/20/08
|
|
|
$
|
77,813
|
|
|
$
|
155,625
|
|
|
$
|
311,250
|
|
|
$
|
77,813
|
|
|
$
|
155,625
|
|
|
$
|
311,250
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
155,625
|
|
|
|
|
2/21/08
|
(2)
|
|
|
2/20/08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
81
|
|
|
|
8,071
|
|
|
|
16,142
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
273,768
|
|
|
|
|
2/21/08
|
(3)
|
|
|
2/20/08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,036
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
136,901
|
|
|
|
|
2/21/08
|
(4)
|
|
|
2/20/08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18,776
|
|
|
$
|
33.92
|
|
|
$
|
34.52
|
|
|
$
|
136,877
|
|
|
|
|
7/24/08
|
(5)
|
|
|
7/23/08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,055,700
|
|
Michael E. Lombardozzi
|
|
|
2/21/08
|
(1)
|
|
|
2/20/08
|
|
|
$
|
247,292
|
|
|
$
|
494,583
|
|
|
$
|
989,167
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/21/08
|
(2)
|
|
|
2/20/08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
104
|
|
|
|
10,337
|
|
|
|
20,674
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
350,631
|
|
|
|
|
2/21/08
|
(3)
|
|
|
2/20/08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,892
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
233,777
|
|
|
|
|
2/21/08
|
(4)
|
|
|
2/20/08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32,065
|
|
|
$
|
33.92
|
|
|
$
|
34.52
|
|
|
$
|
233,754
|
|
|
|
|
7/24/08
|
(5)
|
|
|
7/23/08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,407,600
|
|
Robert S. Porter
|
|
|
2/21/08
|
(1)
|
|
|
2/20/08
|
|
|
$
|
243,750
|
|
|
$
|
487,500
|
|
|
$
|
975,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/21/08
|
(2)
|
|
|
2/20/08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
94
|
|
|
|
9,398
|
|
|
|
18,796
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
318,780
|
|
|
|
|
2/21/08
|
(3)
|
|
|
2/20/08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,265
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
212,509
|
|
|
|
|
2/21/08
|
(4)
|
|
|
2/20/08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
29,150
|
|
|
$
|
33.92
|
|
|
$
|
34.52
|
|
|
$
|
212,504
|
|
|
|
|
7/24/08
|
(5)
|
|
|
7/23/08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,407,600
|
|
H. Elizabeth Mitchell
|
|
|
2/21/07
|
(1)
|
|
|
2/20/08
|
|
|
$
|
233,333
|
|
|
$
|
466,667
|
|
|
$
|
933,333
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/21/08
|
(2)
|
|
|
2/20/08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
94
|
|
|
|
9,398
|
|
|
|
18,796
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
318,780
|
|
|
|
|
2/21/08
|
(3)
|
|
|
2/20/08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,265
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
212,509
|
|
|
|
|
2/21/08
|
(4)
|
|
|
2/20/08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
29,150
|
|
|
$
|
33.92
|
|
|
$
|
34.52
|
|
|
$
|
212,504
|
|
|
|
|
7/24/08
|
(5)
|
|
|
7/23/08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
35,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,231,650
|
|
33
|
|
|
(1) |
|
Awards made pursuant to the Annual Incentive Plan in respect of
2008. The terms of the Annual Incentive Plan are described above
under Executive Compensation Compensation
Discussion and Analysis Elements of
Compensation Annual Incentive Plan. The
threshold amounts were calculated assuming payout of the awards
based on achievement of 4% return on equity for 2008, the
minimum return on equity that would result in payment pursuant
to the awards. The named executive officers would not have
received any payments under these awards if return on equity
were less than 4%. As these awards were paid on
February 23, 2009, amounts reported in columns
(c) (h) represent estimated possible payouts.
The payout of the amounts reported in columns (f)
(h) for Mr. Krantz was made in share units based on
the fair market value of our Common Shares on the date of payout
of $28.65 per share, and such share units were converted into
Common Shares after 30 days. The actual amounts of the
Annual Incentive Plan awards paid to our named executive
officers are as reported in the Summary Compensation Table in
column (e), Stock Awards, with respect to the expense related to
the portion of the Annual Incentive Plan awards paid in share
units and in column (g), Non-Equity Incentive Plan Compensation,
with respect to the Non-Equity Incentive Plan portion of the
Annual Incentive Plan awards paid in cash. |
|
(2) |
|
Awards made pursuant to the Executive Incentive Plan for the
2008-2010
performance cycle. The terms of the Executive Incentive Plan are
described above under Executive Compensation
Compensation Discussion and Analysis Elements of
Compensation Long-Term Incentives
Executive Incentive Plan. The threshold amounts were
calculated assuming payout of the awards based on achievement of
6% average return on equity for the
2008-2010
performance cycle, the minimum return on equity that would
result in payment pursuant to the awards. The named executive
officers will not receive any payments under these awards if
return on equity is less than 6%. |
|
(3) |
|
Information relates to share units granted to our named
executive officers in 2008 under the 2006 Share Incentive
Plan. All the share units vest according to the following
schedule: 50% on February 21, 2011 and 50% on
February 21, 2012. |
|
(4) |
|
Information relates to stock option grants made to our named
executive officers in 2008 under the 2006 Share Incentive
Plan. All options expire ten years from the grant date and vest
in four equal annual installments beginning on February 21,
2009. |
|
(5) |
|
Information relates to restricted shares granted to our named
executive officers in 2008 under the 2006 Share Incentive
Plan. Mr. Prices restricted shares vest in three
equal annual installments on each of July 31, 2009, 2010
and 2011. The restricted shares granted to the other named
executive officers vest in three equal annual installments on
each of July 24, 2009, 2010 and 2011. |
|
(6) |
|
As described under Executive Compensation
Compensation Discussion and Analysis Elements of
Compensation Long-Term Incentives Equity
Award Policy above, the Companys equity award policy
provides that the fair market value, for purposes of determining
the initial value of an award, including the exercise price of
an award of options, is determined using the closing sales price
of our Common Shares on the trading day immediately preceding
the date of grant. |
Employment
Agreements and Arrangements with Named Executive
Officers
The awards and other compensation items set forth in the Summary
Compensation Table and the Grants of Plan-Based Awards Table are
described in more detail above under Executive
Compensation Compensation Discussion and
Analysis in this proxy statement. The material terms of
our employment agreements and arrangements with each of our
named executive officers are described below.
Michael
D. Price
On July 24, 2008, Mr. Price entered into the Price
Agreement, which superseded the employment agreement between
Mr. Price and the Company dated August 4, 2004 and the
amendment thereto dated February 21, 2007. The term of
Mr. Prices employment under the Price Agreement
commenced on August 1, 2008 and will end on July 31,
2011. Pursuant to the Price Agreement, Mr. Price receives a
base salary at the rate of $750,000 per year, and is eligible to
receive an annual incentive bonus pursuant to the terms of the
Annual Incentive Plan with a target equal to $1,500,000. The
actual annual incentive bonus paid to Mr. Price will be
34
equal to the target multiplied by a performance bonus
multiplier, as defined in the Annual Incentive Plan, which may
range from 0% to 200% depending upon the achievement of the
performance goals relative to the performance criteria
established by the Compensation Committee for all participants
in the Annual Incentive Plan. The Compensation Committee in its
sole discretion may reduce the actual annual incentive bonus by
an amount that is no greater than 20% of the product of the
target bonus multiplied by the performance bonus multiplier.
Pursuant to the Price Agreement, on August 1, 2008
Mr. Price received a grant of 100,000 restricted shares
under the terms of the 2006 Share Incentive Plan, which
award will vest in three equal installments on July 31 of each
of 2009, 2010 and 2011. Mr. Price will not be eligible for
additional equity awards during the term of the Price Agreement
except as provided in the Price Agreement. The Price Agreement
also provides that, on or prior to February 28 of each of 2009,
2010 and 2011, Mr. Price will receive an award under the
Executive Incentive Plan of the number of share units equal to
$750,000 divided by the fair market value of one Common Share on
the date of grant, the payout of which will be subject to the
achievement by the Company of certain performance objectives
over a three-year period. Mr. Price is required to maintain
ownership of 100,000 Common Shares in accordance with the
Companys share ownership guidelines. In addition, he
receives reimbursement for air travel for four visits by him and
his family to the United States and certain housing and
automobile allowances to compensate for the costs of living in
Bermuda.
James
A. Krantz
Mr. Krantz entered into an employment agreement with the
Company dated June 1, 2007 (the Krantz
Agreement) in connection with his appointment as Executive
Vice President and Chief Financial Officer of the Company. The
term of Mr. Krantzs employment under the Krantz
Agreement commenced on June 1, 2007 and will end on the
third anniversary of that date (which date will be automatically
extended annually for an additional year, unless written notice
is provided by one party to the other, at least thirty days
prior to the end of the term, that the term shall not be
extended). Pursuant to the Krantz Agreement, Mr. Krantz
receives a base salary at a minimum rate of $365,000 per year
and is eligible to receive an annual incentive bonus pursuant to
the terms of the Annual Incentive Plan with a target equal to
75% of earned base salary and a range of 0% to 150% of earned
base salary, depending upon the achievement of performance
criteria established under the Annual Incentive Plan. As
discussed above, in July 2008 Mr. Krantzs base salary
was increased to the rate of $425,000 per year as of
March 1, 2008 and his target for the annual incentive bonus
pursuant to the Annual Incentive Plan was increased to 100% of
earned base salary with a range of 0% to 200% of earned base
salary with respect to awards made for 2009 and future years.
The Krantz Agreement also provides that Mr. Krantz will
participate in the Executive Incentive Plan, with an expected
target annual award opportunity of 75% of his base salary if the
Company achieves certain performance objectives over a
multi-year period. As discussed above, in July 2008
Mr. Krantzs target annual award opportunity under the
Executive Incentive Plan was increased to 100% of his base
salary for awards made in 2009 and future years. Mr. Krantz
is required to accumulate 30,000 Common Shares of the Company in
accordance with the Companys share ownership guidelines.
In addition, he receives certain housing and automobile
allowances to compensate for the costs of living in Bermuda. In
2006, Mr. Krantz relocated to Bermuda in connection with
his appointment as the Companys Senior Vice President and
Chief Accounting Officer. In connection with this appointment,
Mr. Krantz was entitled to be reimbursed by the Company for
$55,000 of costs and expenses incurred in connection with his
relocation to Bermuda, which amount was paid in 2007.
Michael
E. Lombardozzi
Mr. Lombardozzi entered into an agreement with the Company
effective as of November 1, 2005 (the Lombardozzi
Agreement). The term of Mr. Lombardozzis
employment under the Lombardozzi Agreement commenced on
November 1, 2005, was automatically extended for an
additional year on November 1, 2008 (the third anniversary
of that date), and will be automatically extended annually for
an additional year unless written notice is provided by one
party to the other, at least ninety days prior to the end of the
term, that the term shall not be extended. Pursuant to the
Lombardozzi Agreement, Mr. Lombardozzi receives a base
salary at a minimum rate of $467,500 per year and is eligible to
receive an annual incentive bonus pursuant to the terms of the
Annual Incentive Plan with a target equal to 100% of base salary
and a range of 0% to 200% of
35
base salary, depending upon the achievement of performance
objectives established under the Annual Incentive Plan. As
discussed above, in July 2008 Mr. Lombardozzis base
salary was increased to the rate of $500,000 per year as of
March 1, 2008. Pursuant to the Lombardozzi Agreement, in
2005 Mr. Lombardozzi received grants of 18,428 restricted
shares and an option to purchase 69,105 Common Shares at $28.49
per Common Share under the terms of the predecessor plan to the
2006 Share Incentive Plan, which awards vested or became
exercisable in equal annual installments on each of the first
three anniversaries of the date of grant. The Lombardozzi
Agreement also provides that Mr. Lombardozzi will
participate in the Executive Incentive Plan, with an expected
target annual award opportunity of 75% of his base salary if the
Company achieves certain performance objectives over a
multi-year period. As discussed above, in July 2008
Mr. Lombardozzis target annual award opportunity
under the Executive Incentive Plan was increased to 100% of his
base salary for awards made in 2009 and future years.
Mr. Lombardozzi is required to accumulate 50,000 Common
Shares in accordance with the Companys share ownership
guidelines. Mr. Lombardozzi receives reimbursement for air
travel for four visits for him and his family to the United
States and certain housing and automobile allowances to
compensate for the costs of living in Bermuda.
H.
Elizabeth Mitchell
Ms. Mitchell currently receives a base salary at the rate
of $475,000 per year, and she is eligible to receive an annual
incentive bonus pursuant to the terms of the Annual Incentive
Plan, with a target equal to 100% of base salary and a range of
0% to 200% of base salary, depending upon the achievement of
performance objectives established under the Annual Incentive
Plan. As discussed above, in July 2008 Ms. Mitchells
target for the annual incentive bonus pursuant to the Annual
Incentive Plan was increased to 125% of earned base salary with
a range of 0% to 250% of earned base salary with respect to
awards made for 2009 and future years. Ms. Mitchell is a
participant in the Executive Incentive Plan, with an expected
target annual award opportunity of 75% of her base salary if the
Company achieves certain performance objectives over a
multi-year period. As discussed above, in July 2008
Ms. Mitchells target annual award opportunity under
the Executive Incentive Plan was increased to 100% of her base
salary for awards made in 2009 and future years.
Ms. Mitchell is expected to accumulate 30,000 Common Shares
in accordance with the Companys share ownership guidelines.
Robert
S. Porter
Mr. Porter entered into an employment agreement dated
February 26, 2006 with Platinum Bermuda (the Porter
Agreement), pursuant to which he was appointed Chief
Executive Officer of Platinum Bermuda. The term of
Mr. Porters employment under the Porter Agreement
commenced on March 1, 2006, was automatically extended for
an additional year on March 1, 2009 (the third anniversary
of that date), and will be automatically extended annually for
an additional year unless written notice is provided by one
party to the other, at least ninety days prior to the end of the
term, that the term shall not be extended. Pursuant to the
Porter Agreement, Mr. Porter receives a base salary at a
minimum rate of $425,000 per year, which salary shall be
reviewed annually by the Chairman of Platinum Bermuda, and
Mr. Porter is eligible to receive an annual incentive bonus
pursuant to the terms of the Annual Incentive Plan with a target
equal to 100% of base salary and a range of 0% to 200% of base
salary, depending upon the achievement of performance objectives
established under the Annual Incentive Plan. As discussed above,
in July 2008 Mr. Porters base salary was increased to
the rate of $500,000 per year as of March 1, 2008 and his
target for the annual incentive bonus pursuant to the Annual
Incentive Plan was increased to 125% of earned base salary with
a range of 0% to 250% of earned base salary with respect to
awards made for 2009 and future years. Pursuant to the Porter
Agreement, Mr. Porter received a grant of 15,534 restricted
shares and options to purchase 58,253 Common Shares at $30.58
per Common Share under the terms of the 2006 Share
Incentive Plan, which awards vested or became exercisable in
equal annual installments on each of the first three
anniversaries of the date of grant. The Porter Agreement also
provides that Mr. Porter will participate in the Executive
Incentive Plan, with an expected target annual award opportunity
of 75% of his base salary if the Company achieves certain
performance objectives over a multi-year period. As discussed
above, in July 2008 Mr. Porters target annual award
opportunity under the Executive Incentive Plan was increased to
100% of his base salary for awards made in 2009 and future
years. Mr. Porter is required to accumulate 30,000 Common
Share in accordance
36
with the Companys share ownership guidelines.
Mr. Porter receives certain housing and automobile
allowances to compensate for the costs of living in Bermuda.
Outstanding
Equity Awards at Fiscal Year-End 2008
The following table sets forth the information with respect to
the named executive officers concerning the outstanding equity
securities held as of December 31, 2008.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
Awards:
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan
|
|
|
Market
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
|
or Payout
|
|
|
|
|
|
|
|
|
|
Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Value of
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
|
|
|
|
|
|
|
|
|
|
Market
|
|
|
Unearned
|
|
|
Unearned
|
|
|
|
Number of
|
|
|
Number of
|
|
|
Number of
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Value of
|
|
|
Shares,
|
|
|
Shares,
|
|
|
|
Securities
|
|
|
Securities
|
|
|
Securities
|
|
|
|
|
|
|
|
|
Shares or
|
|
|
Shares or
|
|
|
Units or
|
|
|
Units or
|
|
|
|
Underlying
|
|
|
Underlying
|
|
|
Underlying
|
|
|
|
|
|
|
|
|
Units of
|
|
|
Units of
|
|
|
Other
|
|
|
Other
|
|
|
|
Unexercised
|
|
|
Unexercised
|
|
|
Unexercised
|
|
|
Option
|
|
|
|
|
|
Stock That
|
|
|
Stock That
|
|
|
Rights
|
|
|
Rights That
|
|
|
|
Options
|
|
|
Options
|
|
|
Unearned
|
|
|
Exercise
|
|
|
Option
|
|
|
Have Not
|
|
|
Have Not
|
|
|
That Have
|
|
|
Have Not
|
|
|
|
(#)
|
|
|
(#)
|
|
|
Options
|
|
|
Price
|
|
|
Expiration
|
|
|
Vested
|
|
|
Vested(1)
|
|
|
Not Vested
|
|
|
Vested(1)
|
|
Name
|
|
Exercisable
|
|
|
Unexercisable
|
|
|
(#)
|
|
|
($)
|
|
|
Date
|
|
|
(#)
|
|
|
($)
|
|
|
(#)
|
|
|
($)
|
|
(a)
|
|
(b)
|
|
|
(c)
|
|
|
(d)
|
|
|
(e)
|
|
|
(f)
|
|
|
(g)
|
|
|
(h)
|
|
|
(i)
|
|
|
(j)
|
|
|
Michael D. Price
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19,706
|
(2)
|
|
$
|
710,992
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,054
|
(3)
|
|
$
|
723,548
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
49,052
|
(4)
|
|
$
|
1,769,796
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
48,050
|
(5)
|
|
$
|
1,733,644
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100,000
|
(6)
|
|
$
|
3,608,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
44,222
|
(7)
|
|
$
|
1,595,530
|
|
James A. Krantz
|
|
|
20,000
|
|
|
|
|
|
|
|
|
|
|
$
|
22.75
|
|
|
|
03/02/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,659
|
|
|
|
1,220
|
(9)
|
|
|
|
|
|
$
|
30.75
|
|
|
|
02/23/2015
|
|
|
|
650
|
(8)
|
|
$
|
23,452
|
|
|
|
|
|
|
|
|
|
|
|
|
3,315
|
|
|
|
3,315
|
(11)
|
|
|
|
|
|
$
|
28.29
|
|
|
|
07/31/2016
|
|
|
|
1,768
|
(10)
|
|
$
|
63,789
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,538
|
(5)
|
|
$
|
632,771
|
|
|
|
|
7,441
|
|
|
|
22,321
|
(13)
|
|
|
|
|
|
$
|
34.34
|
|
|
|
05/29/2017
|
|
|
|
7,281
|
(12)
|
|
$
|
262,698
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18,776
|
(15)
|
|
|
|
|
|
$
|
33.92
|
|
|
|
02/20/2018
|
|
|
|
4,036
|
(14)
|
|
$
|
145,619
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,000
|
(16)
|
|
$
|
1,082,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,142
|
(7)
|
|
$
|
582,403
|
|
Michael E. Lombardozzi
|
|
|
150,000
|
|
|
|
|
|
|
|
|
|
|
$
|
22.50
|
|
|
|
10/31/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,849
|
(3)
|
|
$
|
174,952
|
|
|
|
|
18,296
|
|
|
|
6,098
|
(9)
|
|
|
|
|
|
$
|
30.75
|
|
|
|
02/23/2015
|
|
|
|
3,252
|
(8)
|
|
$
|
117,332
|
|
|
|
|
|
|
|
|
|
|
|
|
69,105
|
|
|
|
|
|
|
|
|
|
|
$
|
28.49
|
|
|
|
10/31/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22,932
|
(4)
|
|
$
|
827,387
|
|
|
|
|
14,881
|
|
|
|
44,643
|
(13)
|
|
|
|
|
|
$
|
34.34
|
|
|
|
05/29/2017
|
|
|
|
14,561
|
(12)
|
|
$
|
525,361
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22,464
|
(5)
|
|
$
|
810,501
|
|
|
|
|
|
|
|
|
32,065
|
(15)
|
|
|
|
|
|
$
|
33.92
|
|
|
|
02/20/2018
|
|
|
|
6,892
|
(14)
|
|
$
|
248,663
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40,000
|
(16)
|
|
$
|
1,443,200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,674
|
(7)
|
|
$
|
745,918
|
|
Robert S. Porter
|
|
|
50,000
|
|
|
|
|
|
|
|
|
|
|
$
|
22.50
|
|
|
|
10/31/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50,000
|
|
|
|
|
|
|
|
|
|
|
$
|
26.74
|
|
|
|
06/15/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,005
|
|
|
|
2,668
|
(9)
|
|
|
|
|
|
$
|
30.75
|
|
|
|
02/23/2015
|
|
|
|
1,423
|
(8)
|
|
$
|
51,342
|
|
|
|
|
|
|
|
|
|
|
|
|
38,836
|
|
|
|
19,417
|
(18)
|
|
|
|
|
|
$
|
30.58
|
|
|
|
02/27/2016
|
|
|
|
5,178
|
(17)
|
|
$
|
186,822
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,848
|
(4)
|
|
$
|
752,196
|
|
|
|
|
12,649
|
|
|
|
37,947
|
(13)
|
|
|
|
|
|
$
|
34.34
|
|
|
|
05/29/2017
|
|
|
|
12,377
|
(12)
|
|
$
|
446,562
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,420
|
(5)
|
|
$
|
736,754
|
|
|
|
|
|
|
|
|
29,150
|
(15)
|
|
|
|
|
|
$
|
33.92
|
|
|
|
02/20/2018
|
|
|
|
6,265
|
(14)
|
|
$
|
226,041
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40,000
|
(16)
|
|
$
|
1,443,200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18,796
|
(7)
|
|
$
|
678,160
|
|
H. Elizabeth Mitchell
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,548
|
(3)
|
|
$
|
164,092
|
|
|
|
|
18,296
|
|
|
|
6,098
|
(9)
|
|
|
|
|
|
$
|
30.75
|
|
|
|
02/23/2015
|
|
|
|
3,252
|
(8)
|
|
$
|
117,332
|
|
|
|
|
|
|
|
|
|
|
|
|
13,030
|
|
|
|
13,029
|
(19)
|
|
|
|
|
|
$
|
30.58
|
|
|
|
02/27/2016
|
|
|
|
6,949
|
(20)
|
|
$
|
250,720
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,848
|
(4)
|
|
$
|
752,196
|
|
|
|
|
19,606
|
|
|
|
58,817
|
(13)
|
|
|
|
|
|
$
|
34.34
|
|
|
|
05/29/2017
|
|
|
|
19,184
|
(12)
|
|
$
|
692,159
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,420
|
(5)
|
|
$
|
736,754
|
|
|
|
|
|
|
|
|
29,150
|
(15)
|
|
|
|
|
|
$
|
33.92
|
|
|
|
02/20/2018
|
|
|
|
6,265
|
(14)
|
|
$
|
226,041
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
35,000
|
(16)
|
|
$
|
1,262,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18,796
|
(7)
|
|
$
|
678,160
|
|
|
|
|
(1) |
|
Calculated by multiplying the number of shares or units by
$36.08, the closing price of our Common Shares on
December 31, 2008. |
37
|
|
|
(2) |
|
Unvested portion remaining from award of restricted shares
originally vesting in five equal annual installments on
August 1, 2005, 2006, 2007, 2008 and 2009. |
|
(3) |
|
Common Shares which vest on February 22, 2010, subject to
satisfaction of performance criteria for the
2005-2009
performance cycle. Number of Common Shares is based on achieving
the target performance goal of 13% average annual return on
equity during the performance period. |
|
(4) |
|
Share units which vest on February 28, 2009, subject to
satisfaction of performance criteria for the
2006-2008
performance cycle. Number of share units is based on achieving
the maximum performance goal of at least 18% average annual
return on equity during the performance period. |
|
(5) |
|
Share units which vest on February 21, 2010, subject to
satisfaction of performance criteria for the
2007-2009
performance cycle. Number of share units is based on achieving
the maximum performance goal of at least 18% average annual
return on equity during the performance period. |
|
(6) |
|
Restricted shares which vest in three equal annual installments
on July 31 of each of 2009, 2010 and 2011. |
|
(7) |
|
Share units which vest on February 21, 2011, subject to
satisfaction of performance criteria for the
2008-2010
performance cycle. Number of share units is based on achieving
the maximum performance goal of at least 18% average annual
return on equity during the performance period. |
|
(8) |
|
Unvested portion remaining from award of share units originally
vesting in two equal annual installments on February 24,
2008 and 2009. |
|
(9) |
|
Unexercisable portion remaining from award of options to acquire
Common Shares originally vesting in four equal annual
installments on February 24, 2006, 2007, 2008 and 2009. |
|
(10) |
|
Share units which vest in two equal annual installments on
August 1, 2009 and August 1, 2010. |
|
(11) |
|
Unexercisable portion remaining from award of options to acquire
Common Shares originally vesting in four equal annual
installments on August 1, 2007, 2008, 2009 and 2010. |
|
(12) |
|
Share units which vest in two equal annual installments on
February 21, 2010 and 2011. |
|
(13) |
|
Unexercisable portion remaining from award of options to acquire
Common Shares originally vesting in four equal annual
installments on February 21, 2008, 2009, 2010 and 2011. |
|
(14) |
|
Share units which vest in two equal annual installments on
February 21, 2011 and 2012. |
|
(15) |
|
Options to acquire Common Shares which vest in four equal annual
installments on February 21, 2009, 2010, 2011 and 2012. |
|
(16) |
|
Restricted shares which vest in three equal annual installments
on July 24 of each of 2009, 2010 and 2011. |
|
(17) |
|
Unvested portion remaining from award of restricted shares
originally vesting in three equal annual installments on
February 28, 2007, 2008 and 2009. |
|
(18) |
|
Unexercisable portion remaining from award of options to acquire
Common Shares which vest in three equal annual installments on
February 28, 2007, 2008 and 2009. |
|
(19) |
|
Unexercisable portion remaining from award of options to acquire
Common Shares which vest in four equal annual installments on
February 28, 2007, 2008, 2009 and 2010. |
|
(20) |
|
Share units which vest in two equal annual installments on
February 28, 2009 and 2010. |
38
Option
Exercises and Stock Vested for Fiscal Year-End 2008
The following table sets forth the information with respect to
the named executive officers concerning option exercises and
share units and restricted shares vested on an aggregated basis
for the fiscal year ended December 31, 2008.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
Number of Shares
|
|
|
Value
|
|
|
Number of Shares
|
|
|
Value
|
|
|
|
Acquired on
|
|
|
Realized
|
|
|
Acquired on
|
|
|
Realized
|
|
|
|
Exercise
|
|
|
on
Exercise(1)
|
|
|
Vesting
|
|
|
on
Vesting(2)
|
|
Name
|
|
(#)
|
|
|
($)
|
|
|
(#)
|
|
|
($)
|
|
(a)
|
|
(b)
|
|
|
(c)
|
|
|
(d)
|
|
|
(e)
|
|
|
Michael D.
Price(3)
|
|
|
|
|
|
|
|
|
|
|
19,706
|
|
|
$
|
707,642
|
|
James A.
Krantz(4)
|
|
|
|
|
|
|
|
|
|
|
8,123
|
|
|
$
|
265,036
|
|
Michael E.
Lombardozzi(5)
|
|
|
|
|
|
|
|
|
|
|
23,178
|
|
|
$
|
754,514
|
|
Robert S.
Porter(6)
|
|
|
|
|
|
|
|
|
|
|
19,131
|
|
|
$
|
636,777
|
|
H. Elizabeth
Mitchell(7)
|
|
|
|
|
|
|
|
|
|
|
15,783
|
|
|
$
|
518,882
|
|
|
|
|
(1) |
|
The value realized upon exercise is calculated by multiplying
the number of Common Shares acquired on exercise by the
difference between the closing price of our Common Shares on the
date of exercise and the exercise price of the option. |
|
(2) |
|
The value realized on vesting is calculated by multiplying the
number of Common Shares acquired on vesting by the closing price
of our Common Shares on the vesting date or, with respect to
share units which vested on a weekend or holiday, the trading
date immediately preceding the vesting date. |
|
(3) |
|
On August 1, 2008, Mr. Price acquired 19,706 Common
Shares on vesting of the fourth of five equal annual
installments of an award of 98,531 restricted shares originally
granted to him on August 4, 2004. The closing price of our
Common Shares on August 1, 2008 was $35.91 per share. |
|
(4) |
|
On February 24, 2008, Mr. Krantz acquired 651 Common
Shares on vesting of the first of two annual installments of an
award of 1,301 share units originally granted to him on
February 24, 2005. The closing price of our Common Shares
on February 22, 2008 (the trading date immediately
preceding the vesting date) was $34.44 per share. On
March 22, 2008, Mr. Krantz acquired 7,472 Common
Shares on conversion of an award of share units originally
granted to him pursuant to the Annual Incentive Plan on
February 21, 2008. The closing price of our Common Shares
on March 20, 2008 (the trading date immediately preceding
the vesting date) was $32.47 per share. |
|
(5) |
|
On February 24, 2008, Mr. Lombardozzi acquired 3,253
Common Shares on vesting of the first of two annual installments
of an award of 6,505 share units originally granted to him
on February 24, 2005. The closing price of our Common
Shares on February 22, 2008 (the trading date immediately
preceding the vesting date) was $34.44 per share. On
March 22, 2008, Mr. Lombardozzi acquired 13,783 Common
Shares on conversion of an award of share units originally
granted to him pursuant to the Annual Incentive Plan on
February 21, 2008. The closing price of our Common Shares
on March 20, 2008 (the trading date immediately preceding
the vesting date) was $32.47 per share. On November 1,
2008, Mr. Lombardozzi acquired 6,142 Common Shares on
vesting of the third of three equal annual installments of an
award of 18,428 restricted shares originally granted to him on
November 1, 2005. The closing price of our Common Shares on
November 1, 2008 was $31.74 per share. |
|
(6) |
|
On February 24, 2008, Mr. Porter acquired 1,423 Common
Shares on vesting of the first of two annual installments of an
award of 2,846 share units originally granted to him on
February 24, 2005. The closing price of our Common Shares
on February 22, 2008 (the trading date immediately
preceding the vesting date) was $34.44 per share. On
February 28, 2008, Mr. Porter acquired 5,178 Common
Shares on vesting of the second of three equal annual
installments of an award of 15,534 restricted shares originally
granted to him on February 28, 2006. The closing price of
our Common Shares on February 28, 2008 was $34.94 per
share. On March 22, 2008, Mr. Porter acquired 12,530
Common Shares on conversion of an award of share units
originally granted to him pursuant to the Annual Incentive Plan
on February 21, |
39
|
|
|
|
|
2008. The closing price of our Common Shares on March 20,
2008 (the trading date immediately preceding the vesting date)
was $32.47 per share. |
|
(7) |
|
On February 24, 2008, Ms. Mitchell acquired 3,253
Common Shares on vesting of the first of two annual installments
of an award of 6,505 share units originally granted to her
on February 24, 2005. The closing price of our Common
Shares on February 22, 2008 (the trading date immediately
preceding the vesting date) was $34.44 per share. On
March 22, 2008, Ms. Mitchell acquired 12,530 Common
Shares on conversion of an award of share units originally
granted to her pursuant to the Annual Incentive Plan on
February 21, 2008. The closing price of our Common Shares
on March 20, 2008 (the trading date immediately preceding
the vesting date) was $32.47 per share. |
Potential
Payments Upon Termination or Change In Control
Following is information relating to potential payments to our
named executive officers upon termination of their employment or
a change in control of the Company, other than payments that do
not discriminate in scope, terms or operation in favor of the
named executive officers and that are available generally to all
salaried employees (including, among other things, any accrued
but unpaid base salary and other amounts accrued or owing
through the date of termination, the distribution of balances
under the Companys 401(k) plan and profit sharing plan and
payments under the Companys health and welfare plans).
Change
in Control Severance Plan
Our CIC Plan provides severance benefits to each of our named
executive officers in the event their employment is terminated
by the Company without cause or by the executive for good reason
during the two-year period following a change in control. The
severance benefits we are required to provide pursuant to the
CIC Plan include the following: (i) payment of all accrued
compensation and vacation and sick pay within 30 days
following the termination; (ii) a severance payment equal
to the sum of the participants highest rate of base salary
in the last twelve months plus the participants target
bonus for the year of termination multiplied by a severance
multiple (which has been set at 200% for the named executive
officers); (iii) the immediate vesting of all share
options, restricted shares or other equity incentives held by
the named executive officer, that have not previously vested
(other than share units awarded under our Executive Incentive
Plan, which vest in accordance with their terms), and all share
options will remain exercisable for one year following the
termination of employment (or the expiration of the full
original term of the option, if earlier); (iv) continued
health care, disability and life insurance coverage for the
participant and the participants dependents commencing on
the termination of employment and continuing for the period of
time equal to one year multiplied by the severance multiple (or
two years for each of our named executive officers); and
(v) the participants reasonable relocation expenses
to return to his or her home country within 30 days after
submission of supporting documentation. In July 2008, the Board,
upon the recommendation of the Compensation Committee, amended
the CIC Plan to provide that change in control payments be
deposited in a rabbi trust so that the payments would be
available to the participants in the event of a termination of
employment after a change in control unless the Company becomes
insolvent.
The CIC Plan also provides that if any payments to a participant
under the CIC Plan would be subject to the excise tax on
excess parachute payments under Section 280G of
the Internal Revenue Code, the participant will be entitled to a
full
gross-up
payment to be made whole for the effects of the tax, provided
that if such payments to the participant under the CIC Plan
would not exceed the excise tax limit by more than 10%, such
payments will be reduced below the limit.
A participants receipt of severance benefits pursuant to
the CIC Plan is conditioned upon the participants
execution of a full waiver and release of any and all claims
against the Company, its affiliates and their officers and
directors, and agreement to comply with covenants relating to
non-solicitation of customers and employees (which apply for a
period following termination equal to one year multiplied by the
applicable severance multiple, which is 200% for each of our
named executive officers), non-disparagement of the Company and
confidentiality.
40
Any amounts payable to a participant in the CIC Plan under any
other plan or agreement with us on account of the
participants termination will be offset against payments
made to the participant pursuant to the CIC Plan to the extent
necessary to avoid duplication of benefits.
For purposes of the CIC Plan, change in control,
cause and good reason have the following
meanings:
|
|
|
|
|
change in control means (i) an acquisition by
any individual or group of 50% or more of the Common Shares,
other than any acquisition directly from the Company, by the
Company, and by an employee benefit plan sponsored or maintained
by the Company or any subsidiary; (ii) a change in the
composition of the Board during any two-year period without the
approval of at least two-thirds of the directors who were in
office at the beginning of the period or who subsequently
received such two-thirds approval, or (iii) certain mergers
or consolidations involving the Company;
|
|
|
|
cause means the participants (i) willful
and continued failure to perform substantially his or her duties
(other than any such failure resulting from the
participants incapacity due to physical or mental illness)
after a written demand for substantial performance is delivered
to the participant by the Board, (ii) willful engaging in
illegal conduct or gross misconduct which is demonstrably and
materially injurious to the Company or its affiliates, or
(iii) conviction of, or plea of guilty or nolo contendere
to, a felony or other crime involving moral turpitude; and
|
|
|
|
good reason means the occurrence of any of the
following events without the express written consent of the
participant: (i) the Company reduces his or her base salary
or the target for his or her annual incentive bonus;
(ii) the Company reduces the scope of his or her duties,
responsibilities or authority (including reporting
responsibilities); (iii) any requirement that he or she be
principally based in any location other than the location in
which he or she was principally based immediately prior to the
change in control; or (iv) a breach by the Company of any
of the material provisions of any employment agreement between
the participant and the Company.
|
Severance
Arrangements under Employment Agreements
Each of our named executive officers has an employment or other
agreement that provides for a lump sum cash payment equal to one
years base salary and target bonus in the event that his
or her employment is terminated without cause by the Company or
for good reason by the executive. In addition, the Price
Agreement provides that Mr. Price will receive a prorated
payment of his annual incentive bonus award under the Annual
Incentive Plan for the year in which a termination by the
Company without cause or by Mr. Price for good reason
occurs and that, following his separation from service from the
Company (other than resulting from a termination for cause or a
resignation other than for good reason), the Company shall
reimburse him up to a maximum of $50,000 for the costs and
expenses reasonably incurred by him within the first twelve
months after the separation from service in connection with his
familys relocation from Bermuda. The Price Agreement also
provides that in the event that Mr. Prices employment
with the Company terminates upon the expiration of the term of
the agreement on July 31, 2011, he will be entitled to
receive a prorated annual incentive bonus under the Annual
Incentive Plan, prorated payment in respect of each incentive
award he received under the Executive Incentive Plan during the
term of the agreement, and any earned but unpaid base salary and
other amounts (including reimbursable expenses and any vested
amounts or benefits under our employee benefit plans or
arrangements) accrued or owing through the date of effectiveness
of such termination.
For all of our named executive officers, cause means
(i) their willful and continued failure to substantially
perform their duties; (ii) their conviction of, or plea of
guilty or nolo contendere to, a felony or other crime involving
moral turpitude; and (iii) their engagement in any
malfeasance or fraud or dishonesty of a substantial nature in
connection with their position with the Company or any of its
subsidiaries, or other willful act that materially damages the
reputation of the Company or any of its subsidiaries. For
Messrs. Price, Lombardozzi and Porter, cause
also means a violation of the share ownership guidelines that
apply to them and a breach of confidentiality and
non-solicitation covenants that are applicable to them. For
Mr. Price, cause also means an abandonment of
Bermuda as his primary residence prior to August 1, 2011 or
a failure
41
to maintain Bermuda as the location of his principal business
office without the prior written consent of the Governance
Committee.
For all of our named executive officers, good reason
means, without their express written consent, (i) a
reduction in their base salary or their target bonus;
(ii) a reduction in the scope of their duties,
responsibilities or authority; (iii) a change in the person
or persons to whom they are required to report; (iv) a
change in the location of employment; and (v) a breach by
the Company or its subsidiaries of any material provision of
their employment agreement. For Mr. Lombardozzi, good
reason also means the failure by the Company to extend the
term of his employment agreement.
These severance payments would be made in a lump sum immediately
upon the effectiveness of such termination by Platinum US in the
case of Ms. Mitchell, by Platinum Bermuda in the case of
Mr. Porter, and by the Company in the case of the other
named executive officers. These severance payments are
conditioned upon the named executive officer executing and
honoring a standard waiver and release of claims in favor of the
Company.
In addition, each of our named executive officers is subject to
certain confidentiality and non-solicitation covenants which
prohibit them from disclosing trade secrets and confidential or
proprietary information of the Company following a termination
of employment for any reason and from soliciting senior
executives of the Company for a period of at least
12 months following a termination of employment for any
reason. Mr. Price is also subject to a non-competition
covenant which prohibits him, without the express written
consent of the Governance Committee, from engaging in, holding
an interest in, owning, managing, operating, controlling,
directing, being connected with as a stockholder (other than as
a holder of less than 2% of a publicly-traded security), joint
venturer, partner, consultant or employee, or otherwise engaging
or participating in or being connected in any manner with, any
reinsurance business, any business directly engaged in the sale
of derivatives used primarily as an alternative to reinsurance,
or any insurance business that competes with any insurance
business engaged in by us or any of our subsidiaries or in which
we or any of our subsidiaries have plans to engage at the time
of the termination of his employment for a period of
24 months following the termination of his employment for
any reason. We have the right to enjoin any breach by our named
executive officers of these confidentiality, non-solicitation
and non-competition covenants.
Accelerated
Vesting and Payment of Incentives
In addition to the severance provisions described above, our
annual and long-term incentives are subject to accelerated
vesting or payment under certain circumstances as discussed
below.
As described above, pursuant to the CIC Plan, if a named
executive officers employment is terminated by the Company
without cause or by the named executive officer for good reason
during the two-year period following a change in control, all of
the share options, restricted shares or other equity incentives
held by the named executive officer that have not previously
vested (other than share units awarded under our Executive
Incentive Plan, which vest in accordance with their terms) will
vest, and all share options will remain exercisable for one year
following the termination of employment (or the expiration of
the full original term of the option, if earlier).
Pursuant to the Annual Incentive Plan, a named executive officer
would be entitled to receive a prorated portion of his or her
target annual incentive bonus for the year in which his or her
death or disability or a change in control of the Company
occurs. The prorated portion of the target annual incentive
bonus would be based on the period of service for the plan year
during which the change in control occurs and the performance
goals achieved by the Company as of the end of the fiscal
quarter immediately preceding the date of the change in control,
as determined by the Compensation Committee prior to the change
in control in its sole discretion. In addition, the Price
Agreement provides that Mr. Price will receive a prorated
payment of his annual incentive bonus award under the Annual
Incentive Plan for the year in which a termination by the
Company without cause or by Mr. Price for good reason
occurs.
Equity awards made to our named executive officers under our
2006 Share Incentive Plan and our predecessor plan
typically have been in the form of share units or restricted
shares and options which vest over a period of
42
years. In the event of the death or disability of the named
executive officer or upon a change in control of the Company,
the share units would automatically vest and convert on a
one-to-one basis into Common Shares and the options would vest
and become fully exercisable. Restricted shares would vest upon
a change in control of the Company or in the event that the
named executive officers employment is terminated without
cause by the Company or for good reason by the executive. In
addition, for all of our named executive officers other than
Mr. Price, restricted shares would vest in the event of the
death or disability of the named executive officer. For
Mr. Price, in the event of his death or disability, the
number of restricted shares that would have vested in the
one-year period following his death or disability would vest.
In addition, pursuant to the Porter Agreement, the restricted
shares and options granted under the 2006 Share Incentive
Plan to Mr. Porter in connection with entering into that
agreement would vest and become fully exercisable in the event
that his employment is terminated without cause by the Company
or for good reason by Mr. Porter. The awards made to
Mr. Porter pursuant to the Porter Agreement were fully
vested or became fully exercisable as of February 28, 2009.
Pursuant to the Price Agreement, all unvested equity awards held
by Mr. Price (other than awards under the Executive
Incentive Plan) would vest and become fully exercisable in the
event that his employment is terminated without cause by the
Company or by him for good reason. In addition, in the event of
Mr. Prices death or disability, all equity awards
held by Mr. Price (other than awards under the Executive
Incentive Plan) that would have vested or that would have become
exercisable within one year after his death or disability would
vest or become fully exercisable.
Our Executive Incentive Plan provides for the award of share
units at the beginning of a three-year performance cycle.
Ordinarily, the share units convert into Common Shares after
completion of the cycle. However, under certain circumstances a
named executive officer would be entitled to a prorated
settlement of Common Shares in respect of his or her share units
prior to completion of the cycle. In the event of the death or
disability of the named executive officer, his or her retirement
with the consent of the Compensation Committee, the termination
of employment without cause or for good reason, or a change in
control of the Company (provided that the named executive
officer continues to be employed by the Company at the time of
the change in control), the named executive officer would be
entitled to receive a payment of Common Shares on a prorated
basis, based upon the period of service prior to the event and
the performance of the Company as of the end of the fiscal
quarter following a termination of employment or prior to a
change in control. In addition, pursuant to the Price Agreement,
in the event Mr. Prices employment terminates upon or
after the expiration of the term of the Price Agreement,
Mr. Price is entitled to receive payment in respect of each
award granted to him under the Executive Incentive Plan in 2009,
2010 and 2011 on a prorated basis based on his period of service
prior to the termination of employment and the performance of
the Company as of the end of the fiscal quarter preceding the
termination of employment.
For purposes of these acceleration events, change in
control means an acquisition of at least 50% of the Common
Shares by an individual or group other than any such acquisition
directly from the Company, a change in the composition of a
majority of the Board during any two-year period without the
approval of at least two-thirds of the directors who were in
office at the beginning of the period or who subsequently
received such two-thirds approval, or certain mergers or
consolidations involving the Company. All of the benefits
payable upon the occurrence of these acceleration events would
be payable by the Company within the time frames provided in its
plans, as soon as practicable following the occurrence of the
acceleration event and in accordance with Section 409A of
the Internal Revenue Code.
43
Estimated
Payments and Benefits Upon Termination or Change in
Control
The estimated payments and benefits that would be provided to
our named executive officers in the circumstances described
above in the event that such circumstances occurred on
December 31, 2008 are as follows:
Termination
Without Cause or For Good Reason following a Change in
Control(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accelerated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vesting of
|
|
|
Prorated
|
|
|
Payment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
Payment of
|
|
|
of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards
|
|
|
Outstanding
|
|
|
Continued
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
under 2006
|
|
|
Share Units
|
|
|
Health
|
|
|
Payment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share
|
|
|
Awarded
|
|
|
Care, Life
|
|
|
of
|
|
|
|
|
|
|
|
|
|
|
|
|
Prorated
|
|
|
Incentive
|
|
|
under
|
|
|
Insurance
|
|
|
Relocation
|
|
|
Parachute
|
|
|
|
|
|
|
|
|
|
Payment
|
|
|
Plan and
|
|
|
Executive
|
|
|
and
|
|
|
Expenses
|
|
|
Tax Gross
|
|
|
|
|
|
|
Severance
|
|
|
of Annual
|
|
|
Predecessor
|
|
|
Incentive
|
|
|
Disability
|
|
|
to Home
|
|
|
Up
|
|
|
|
|
|
|
Payment(2)
|
|
|
Incentive(3)
|
|
|
Plan(4)
|
|
|
Plan(5)
|
|
|
Coverage(6)
|
|
|
Country(7)
|
|
|
Payment(8)
|
|
|
Total
|
|
|
Michael D. Price
|
|
$
|
4,500,000
|
|
|
$
|
1,500,000
|
|
|
$
|
4,318,992
|
|
|
$
|
3,535,010
|
|
|
$
|
38,325
|
|
|
$
|
50,000
|
|
|
$
|
4,679,466
|
|
|
$
|
18,621,793
|
|
James A. Krantz
|
|
|
1,472,500
|
|
|
|
311,250
|
|
|
|
1,689,680
|
|
|
|
502,522
|
|
|
|
13,010
|
|
|
|
50,000
|
|
|
|
1,261,701
|
|
|
|
5,300,663
|
|
Michael E. Lombardozzi
|
|
|
1,989,167
|
|
|
|
494,583
|
|
|
|
2,513,998
|
|
|
|
1,564,140
|
|
|
|
35,605
|
|
|
|
50,000
|
|
|
|
1,779,710
|
|
|
|
8,427,203
|
|
Robert S. Porter
|
|
|
1,975,000
|
|
|
|
487,500
|
|
|
|
2,603,973
|
|
|
|
1,337,305
|
|
|
|
31,475
|
|
|
|
50,000
|
|
|
|
1,598,414
|
|
|
|
8,083,667
|
|
H. Elizabeth Mitchell
|
|
|
1,883,333
|
|
|
|
466,667
|
|
|
|
2,818,519
|
|
|
|
1,424,330
|
|
|
|
11,482
|
|
|
|
|
|
|
|
1,790,926
|
|
|
|
8,395,257
|
|
Termination
Without Cause or For Good Reason other than following a Change
in Control
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prorated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accelerated
|
|
|
Payment of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vesting of
|
|
|
Outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Awards
|
|
|
Share Units
|
|
|
Payment
|
|
|
|
|
|
|
|
|
|
|
|
|
under 2006
|
|
|
Awarded
|
|
|
of
|
|
|
|
|
|
|
|
|
|
Prorated
|
|
|
Share Incentive
|
|
|
under
|
|
|
Relocation
|
|
|
|
|
|
|
|
|
|
Payment
|
|
|
Plan and
|
|
|
Executive
|
|
|
Expenses
|
|
|
|
|
|
|
Severance
|
|
|
of Annual
|
|
|
Predecessor
|
|
|
Incentive
|
|
|
to Home
|
|
|
|
|
|
|
Payment(9)
|
|
|
Incentive(3)
|
|
|
Plan(4)
|
|
|
Plan(5)
|
|
|
Country(7)
|
|
|
Total
|
|
|
Michael D. Price
|
|
$
|
2,250,000
|
|
|
$
|
1,500,000
|
|
|
$
|
4,318,992
|
|
|
$
|
3,535,010
|
|
|
$
|
50,000
|
|
|
$
|
11,654,002
|
|
James A. Krantz
|
|
|
726,250
|
|
|
|
|
|
|
|
1,082,400
|
|
|
|
502,522
|
|
|
|
|
|
|
|
2,311,172
|
|
Michael E. Lombardozzi
|
|
|
989,167
|
|
|
|
|
|
|
|
1,443,200
|
|
|
|
1,564,140
|
|
|
|
|
|
|
|
3,996,507
|
|
Robert S. Porter
|
|
|
975,000
|
|
|
|
|
|
|
|
1,736,816
|
|
|
|
1,337,305
|
|
|
|
|
|
|
|
4,049,121
|
|
H. Elizabeth Mitchell
|
|
|
933,333
|
|
|
|
|
|
|
|
1,262,800
|
|
|
|
1,424,330
|
|
|
|
|
|
|
|
3,620,463
|
|
Termination
due to Death or Disability or Change in Control without
Termination
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prorated Payment of
|
|
|
|
|
|
|
|
|
|
|
|
|
Accelerated Vesting of
|
|
|
Outstanding Share
|
|
|
|
|
|
|
|
|
|
Prorated Payment
|
|
|
Equity Awards under
|
|
|
Units Awarded under
|
|
|
Payment of
|
|
|
|
|
|
|
of Annual
|
|
|
2006 Share Incentive Plan
|
|
|
Executive Incentive
|
|
|
Relocation Expenses
|
|
|
|
|
|
|
Incentive(3)
|
|
|
and Predecessor
Plan(4)(10)
|
|
|
Plan(5)
|
|
|
to Home
Country(7)
|
|
|
Total
|
|
|
Michael D. Price
|
|
$
|
1,500,000
|
|
|
$
|
4,318,992
|
|
|
$
|
3,535,010
|
|
|
$
|
50,000
|
|
|
$
|
9,354,002
|
|
James A. Krantz
|
|
|
311,250
|
|
|
|
1,689,680
|
|
|
|
502,522
|
|
|
|
|
|
|
|
2,503,452
|
|
Michael E. Lombardozzi
|
|
|
494,583
|
|
|
|
2,513,998
|
|
|
|
1,564,140
|
|
|
|
|
|
|
|
4,572,721
|
|
Robert S. Porter
|
|
|
487,500
|
|
|
|
2,603,973
|
|
|
|
1,337,305
|
|
|
|
|
|
|
|
4,428,778
|
|
H. Elizabeth Mitchell
|
|
|
466,667
|
|
|
|
2,818,519
|
|
|
|
1,424,330
|
|
|
|
|
|
|
|
4,709,516
|
|
|
|
|
(1) |
|
In accordance with the terms of the CIC Plan, which provides
that any amounts payable to a participant in the CIC Plan under
any other plan or agreement with us on account of the
participants termination will be offset against payments
made to the participant pursuant to the CIC Plan to the extent
necessary to avoid duplication of benefits, this table does not
include a lump sum cash payment equal to one years base
salary and target bonus that would have been payable under each
named executive officers employment agreement in the event
of a termination without cause by the Company or for good reason
by the executive. |
44
|
|
|
(2) |
|
Represents the sum of highest base salary during 2008 and 2008
target bonus multiplied by a 200% severance multiple. |
|
(3) |
|
Estimate of the prorated portion of the named executive
officers target annual incentive bonus for 2008 assuming a
performance bonus multiplier of 100%. Because the performance
period for annual incentive bonus awards ends on
December 31, 2008, this amount represents one years
target bonus. |
|
(4) |
|
Represents the value that would be realized on December 31,
2008 due to the accelerated vesting of any outstanding
restricted share, option or share unit awards held by a named
executive officer that would vest in the event of the applicable
termination or change in control scenario, calculated using the
closing price of the Common Shares on such date of $36.08 per
share. |
|
(5) |
|
Represents the value that would be realized on December 31,
2008 from a prorated award of Common Shares, based upon the
completion of the applicable portion of the performance period
for each award (one, two, three or four years) and the
performance of the Company as of December 31, 2008,
calculated using the closing price of the Common Shares on such
date of $36.08 per share. |
|
(6) |
|
Represents the value of continued medical, dental, accident,
disability and life insurance coverage for each named executive
officer and such named executive officers dependents for
two years based on the annual cost to the Company of providing
these benefits in 2008. |
|
(7) |
|
Estimate of the reasonable relocation expenses (up to a maximum
of $50,000 for Mr. Price) to return the named executive
officer to his or her home country, including moving expenses,
real estate fees and commissions and related expenses, based on
past costs to the Company of relocating executive officers
between Bermuda and their home countries. |
|
(8) |
|
Estimate of the
gross-up
payment needed to make the named executive officer whole for the
effects of the excise tax on excess parachute
payments under Section 280G of the Internal Revenue
Code. |
|
(9) |
|
Represents the value of 2008 earned base salary plus 2008 target
bonus. |
|
(10) |
|
For Mr. Price, in the case of a termination due to death or
disability, this amount would be reduced to $1,913,647. Pursuant
to the terms of the Price Agreement, if Mr. Prices
employment is terminated on account of his death or disability,
then only the unvested restricted shares that would have vested
in the one-year period following his death or disability would
become fully vested. |
COMPENSATION
COMMITTEE REPORT
The Compensation Committee has reviewed and discussed with the
Companys management the disclosure set forth under the
heading Compensation Discussion and Analysis
appearing on pages 17 to 31 of this proxy statement. Based on
such review and discussions, the Compensation Committee has
recommended to the Board that such Compensation Discussion
and Analysis be included in this proxy statement.
Jonathan F. Bank, Chairman
Robert V. Deutsch
A. John Hass
Edmund R. Megna
Peter T. Pruitt
The foregoing Report of the Compensation Committee shall not
be deemed to be soliciting material or
filed with the SEC or incorporated by reference in
any previous or future document filed by the Company with the
SEC under the Securities Act of 1933, as amended (the
Securities Act) or the Exchange Act, or subject to
Regulation 14A or 14C or to the liabilities of
Section 18 of the Exchange Act except to the extent that
the Company specifically requests that such Report be treated as
soliciting material or specifically incorporates such Report by
reference in any such document.
45
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Security
Ownership of Certain Beneficial Owners
The following table sets forth information with respect to the
beneficial ownership of Common Shares as of February 28,
2009 of those persons known by the Company to be the beneficial
owners of more than 5% of the outstanding Common Shares of the
Company:
|
|
|
|
|
|
|
|
|
|
|
Amount and Nature
|
|
|
|
|
Name and Address
|
|
of Beneficial
|
|
|
|
|
of Beneficial Owner
|
|
Ownership
|
|
|
Percent of
Class(4)
|
|
|
Wellington Management Company, LLP
|
|
|
4,403,612
|
(1)
|
|
|
8.3
|
|
75 State Street
Boston, MA 02109
|
|
|
|
|
|
|
|
|
FMR LLC
|
|
|
3,154,621
|
(2)
|
|
|
5.9
|
|
Edward C. Johnson 3d
82 Devonshire Street
Boston, MA 02109
|
|
|
|
|
|
|
|
|
Barclays Global Investors, NA
|
|
|
2,407,979
|
(3)
|
|
|
4.5
|
|
Barclays Global Fund Advisors
400 Howard Street
San Francisco, CA 94105
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
In an amendment filed on February 17, 2009 to a
Schedule 13G, Wellington Management Company, LLP, an
investment advisor (Wellington), reported beneficial
ownership of 4,403,612 Common Shares held of record by clients
of Wellington who had the right to receive, or the power to
direct the receipt of, dividends from, or the proceeds from the
sale of, such securities; no such client was known to have such
right or power with respect to more than 5% of the class of such
securities. Wellington reported shared voting power over
3,453,580 Common Shares and shared dispositive power over
4,365,512 Common Shares. |
|
(2) |
|
In a Schedule 13G filed on February 17, 2009, FMR LLC
(FMR) and its Chairman, Edward C. Johnson 3d,
reported beneficial ownership of a total of 3,154,621 Common
Shares, consisting of (i) 2,781,521 Common Shares which are
held by various investment companies (the Funds) to
which Fidelity Management & Research Company, a wholly
owned subsidiary of FMR, is investment adviser, and of which FMR
and Mr. Johnson report that each has sole power to dispose
but that neither has sole power to vote or direct the voting,
which power resides with Funds Board of Trustees and
(ii) 373,100 Common Shares which are held by various
institutional accounts of which Pyramis Global Advisors
Trust Company, an indirect wholly owned subsidiary of FMR,
is investment manager, and of which FMR and Mr. Johnson
report that each has sole dispositive power over 373,100 Common
Shares and sole power to vote or to direct the voting of 327,300
Common Shares. The Schedule 13G reported that various
persons have the right to receive, or the power to direct the
receipt of, dividends from, or the proceeds from the sale of,
the Common Shares, and that no one persons interest in the
Common Shares is more than 5% of the outstanding Common Shares
of the Company. |
|
(3) |
|
In a Schedule 13G filed on February 5, 2009, Barclays
Global Investors, NA, a bank, reported sole voting power over
993,924 Common Shares of the Company and sole dispositive power
over 1,176,670 Common Shares of the Company and Barclays Global
Fund Advisors, an investment adviser, reported sole voting
power and sole dispositive power over 1,231,309 Common Shares of
the Company, for an aggregate reported beneficial ownership of
2,407,979 Common Shares of the Company. |
|
(4) |
|
Based on 53,158,033 outstanding Common Shares as of
February 28, 2009. |
46
Security
Ownership of Management
The following table sets forth the beneficial ownership of the
Common Shares as of February 28, 2009 of each of the
directors and executive officers. Each of these persons had sole
voting power and sole dispositive power with respect to the
Common Shares beneficially owned by him or her.
|
|
|
|
|
|
|
|
|
|
|
Amount and Nature
|
|
|
|
|
|
|
of Beneficial
|
|
|
Percent
|
|
Name of Beneficial Owner
|
|
Ownership
|
|
|
of
Class(4)
|
|
|
Michael E. Lombardozzi
|
|
|
395,194
|
(1)
|
|
|
*
|
|
Robert S. Porter
|
|
|
294,933
|
(1)
|
|
|
*
|
|
Michael D. Price
|
|
|
271,561
|
(1)
|
|
|
*
|
|
Neal J. Schmidt
|
|
|
244,252
|
(1)
|
|
|
*
|
|
H. Elizabeth Mitchell
|
|
|
166,448
|
(1)(2)
|
|
|
*
|
|
James A. Krantz
|
|
|
93,072
|
(1)
|
|
|
*
|
|
Kenneth A. Kurtzman
|
|
|
67,624
|
(1)
|
|
|
*
|
|
Robert V. Deutsch
|
|
|
53,716
|
(3)
|
|
|
*
|
|
Dan R. Carmichael
|
|
|
53,266
|
(3)
|
|
|
*
|
|
H. Furlong Baldwin
|
|
|
50,316
|
(3)
|
|
|
*
|
|
Peter T. Pruitt
|
|
|
49,302
|
(3)
|
|
|
*
|
|
Jonathan F. Bank
|
|
|
42,490
|
(3)
|
|
|
*
|
|
A. John Hass
|
|
|
2,307
|
(3)
|
|
|
*
|
|
Edmund R. Megna
|
|
|
2,307
|
(3)
|
|
|
*
|
|
James P. Slattery
|
|
|
565
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
All directors, nominees and executive officers as a group
(15 persons)
|
|
|
1,787,353
|
|
|
|
3.3
|
|
|
|
|
* |
|
Represents less than 1% of the outstanding Common Shares. |
|
(1) |
|
Includes unvested restricted shares as follows: Mr. Krantz:
30,000 Common Shares; Mr. Lombardozzi: 40,000 Common
Shares; Ms. Mitchell: 35,000 Common Shares;
Mr. Porter: 40,000 Common Shares; and Mr. Price:
119,706 Common Shares. Includes Common Shares beneficially owned
pursuant to options that are currently exercisable or
exercisable within 60 days after February 28, 2009 as
follows: Mr. Krantz: 47,769 Common Shares;
Mr. Kurtzman: 44,348 Common Shares; Mr. Lombardozzi:
281,278 Common Shares; Ms. Mitchell: 90,439 Common Shares;
Mr. Porter: 201,512 Common Shares; and Mr. Schmidt:
212,400 Common Shares. Includes Common Shares beneficially owned
pursuant to the conversion of share units within 60 days
after February 28, 2009 as follows: Mr. Krantz: 5,432
Common Shares and Mr. Kurtzman: 7,333 Common Shares. |
|
(2) |
|
Ms. Mitchell has pledged 23,791 Common Shares in accordance
with the terms and conditions of a brokerage firms
customary margin account requirements. |
|
(3) |
|
Does not include nonemployee director fee share units issued to
Messrs. Baldwin, Bank, Carmichael, Deutsch, Hass, Megna and
Pruitt as more fully described under Director
Compensation. As of February 28, 2009, the following
nonemployee directors were credited with the following number of
director fee share units: Mr. Baldwin: 13,464 share
units; Mr. Bank: 20,144 share units;
Mr. Carmichael: 19,524 share units; Mr. Deutsch:
7,131 share units; Mr. Hass: 5,000 share units;
Mr. Megna: 3,221 share units; and Mr. Pruitt:
9,072 share units. Includes 1,112 Common Shares
beneficially owned pursuant to the conversion of share units
awarded to each of Messrs. Baldwin, Bank, Carmichael,
Deutsch, Hass, Megna and Pruitt at the 2008 Annual General
Meeting of Shareholders that are convertible into Common Shares
within 60 days after February 28, 2009. Includes
Common Shares beneficially owned pursuant to options that are
currently exercisable or exercisable within 60 days after
February 28, 2009 as follows: Mr. Baldwin: 35,000
Common Shares; Mr. Bank: 35,000 Common Shares;
Mr. Carmichael: 35,000 Common Shares; Mr. Deutsch:
25,000 Common Shares; and Mr. Pruitt: 35,000 Common Shares. |
47
|
|
|
(4) |
|
Based on 53,158,033 outstanding Common Shares as of
February 28, 2009, adjusted to include Common Shares
covered by options that are currently exercisable or exercisable
within 60 days after February 28, 2009 and share units
that are convertible into Common Shares within 60 days
after February 28, 2009 held by such person or group. |
SECTION 16(A)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under the Exchange Act, the Companys directors and
executive officers and any persons holding more than 10% of the
Common Shares are required to report their initial ownership of
Common Shares and any subsequent changes in that ownership to
the SEC. Specific filing dates for these reports have been
established by the SEC and the Company is required to disclose
in this proxy statement any failure by such persons to file
these reports in a timely manner during 2008. The Company has
determined that no person who at any time during 2008 was a
director, executive officer or beneficial owner of more than 10%
of the Common Shares failed to file on a timely basis reports
required by Section 16(a) of the Exchange Act during 2008,
except that one Form 4 for Mr. Baldwin was filed late
to report one transaction. This determination was based solely
upon the review by the Company of Forms 3, 4 and 5, and
written representations that no Forms 5 were required that
were submitted to the Company with respect to 2008.
PROPOSAL 2
APPROVAL OF THE AMENDED AND RESTATED BYE-LAWS
The Companys Bye-laws were adopted in early 2002. Since
that time, there have been several developments in the laws of
Bermuda and the United States and in public company practice
that involve matters covered by the Bye-laws. In 2006, the
Bermuda Companies Act 1981 (the Companies Act),
which is the primary corporate statute that applies to Bermuda
companies, was amended by the enactment of the Companies
Amendment Act 2006 (the Amendment Act). The
Amendment Act made significant changes to the Companies Act for
the benefit of Bermuda companies and their shareholders, but in
many cases those benefits are not available until a
companys bye-laws explicitly provide for them. For
example, the Amendment Act allows a company to hold treasury
shares, but only if permitted to do so by its memorandum of
association or bye-laws.
In the United States, the Sarbanes-Oxley Act of 2002 amended the
federal securities laws by adding a provision requiring the
audit committee of the board of directors of a public company to
be directly responsible for the appointment, compensation and
oversight of the work of the companys auditors. That
provision of law was also incorporated into the NYSEs
corporate governance rules. In 2007, the SEC, in an effort to
take advantage of advances in communications technology, adopted
a voluntary notice and access system under which
issuers can satisfy their proxy delivery requirements by posting
proxy materials on an Internet website. In addition, United
States federal income tax practice as it relates to the
insurance and reinsurance industry in Bermuda has evolved with
the significant growth in the industry in the last several
years, and has resulted in a more flexible and less formulaic
approach to mitigating tax risks to U.S. shareholders of
Bermuda companies in the industry.
We also considered the organization and clarity of the Bye-laws.
The Bye-laws deal with certain subjects, such as dividends,
shareholder voting and powers of the Board, in several different
provisions, and we believe that the Bye-laws could be improved
by consolidating provisions relating to each subject.
In light of the foregoing, the Board unanimously determined, at
its meeting held on February 24, 2009, that it was in the
best interests of the Company and its shareholders to amend and
restate the Companys
Bye-laws,
and the Board approved, and recommended that shareholders
approve, the Amended and Restated Bye-laws (the Amended
Bye-laws). The Amended Bye-laws are set forth in
Appendix A to this proxy statement.
The Amended Bye-laws represent a complete rewriting of the
Bye-laws, and reflect a comprehensive reorganization and
conformance with modern practice. Following is a summary of the
material changes in the Amended Bye-laws, which is qualified in
its entirety by reference to the Amended Bye-laws. Shareholders
are urged to carefully review the Amended Bye-laws set forth in
Appendix A. If approved by shareholders, the Amended
Bye-laws will become effective at the conclusion of the Annual
Meeting.
48
Summary
of Material Changes in the Amended Bye-laws
Treasury
Shares
Currently, the Company is required to cancel any shares that it
repurchases and, as a result, those shares are not available for
later reissuances. As permitted by the Amendment Act, the
Amended Bye-laws would enhance the Companys flexibility by
providing that the Company may hold shares that it repurchases
as treasury shares.
Responsibilities
of the Audit Committee
Pursuant to its charter, the Audit Committee of the Board has
been responsible for the selection of the Companys
auditors, as required by the United States federal securities
laws and the NYSEs corporate governance rules, subject to
the approval thereof by the Companys shareholders, as
required by Bermuda law. This responsibility has been made
explicit in the Amended Bye-laws.
Electronic
Delivery of Proxy and Other Materials
As permitted by the Amendment Act, the Amended Bye-laws allow
the Company, with the consent of a shareholder, to deliver
information and documents to the shareholder by posting them on
a website and sending a notice to the shareholder of the
availability of such information and documents on the website.
This conforms with the voluntary proxy notice and access rules
recently enacted by the SEC and will allow the Company in its
discretion to offer that delivery method to its shareholders in
the future.
Limited
Voting Restrictions in lieu of Comprehensive Ownership and
Voting Restrictions to Mitigate the Risk of Attribution of our
Income to Direct or Indirect U.S. Shareholders pursuant to the
Controlled Foreign Corporation Rules under the U.S. Internal
Revenue Code
The Bye-laws provide for (i) mandatory share issuance and
transfer restrictions that limit to less than 10% the direct and
beneficial ownership of the Companys shares by any person
other than The Travelers Companies, Inc., formerly known as The
St. Paul Companies, Inc. (St. Paul), RenaissanceRe
Holdings Ltd. (RenRe) or their affiliates and
(ii) a formulaic limitation on voting rights held by direct
or beneficial owners of Common Shares to less than 10%. The
Company also has a unilateral right to repurchase its shares
from shareholders if the Board determines that such share
ownership may result in adverse tax, regulatory or legal
consequences. The primary purpose of those Bye-law provisions is
to mitigate the risk of a direct or indirect
U.S. shareholder having current income inclusions pursuant
to the controlled foreign corporation rules under the Internal
Revenue Code.
The Amended Bye-laws update those Bye-law provisions with a more
flexible, more straightforward and less formulaic approach to
the mitigation of the income attribution risk to our direct and
indirect U.S. shareholders. The prohibition on the
ownership of 10% or more of the Companys shares has been
replaced with discretionary provisions allowing the Board to
refuse to issue or transfer shares if it determines such action
may result in non-de minimis adverse tax, regulatory or legal
consequences (although, as described below, the Amended Bye-laws
also provide that the Board may refuse to transfer shares
without assigning any reason therefor). Also, the Company no
longer would have a unilateral right to repurchase shares and,
further, the Company would not be permitted to repurchase shares
if the Board determines that any such repurchase may result in
non-de minimis adverse tax, regulatory or legal consequences. As
there are no longer any prohibitions on owning 10% or more of
the Companys shares, there is no need to exempt St. Paul
and RenRe from those prohibitions and thus those companies are
not mentioned in the Amended Bye-laws.
While the Bye-laws limit the voting power of all direct and
beneficial holders of the Companys shares, including
non-U.S. shareholders,
the Amended Bye-laws would limit the voting power only of
U.S. persons that own shares of the Company (directly or
indirectly through
non-U.S. entities
). Also, voting power would be limited in the Amended Bye-laws
to less than 9.5% instead of less than 10%. As the statutory
triggering amount for income inclusions is 10%, the reduction to
9.5% provides an increased margin of protection to shareholders.
49
As a result of the elimination of the prohibition on 10% share
ownership, a U.S. holder (directly or indirectly through
non-U.S. entities)
whose voting power over the Companys shares is limited to
less than 9.5% as a result of the application of the limitation
on voting rights in the Amended Bye laws would continue to hold
a higher proportion of the total value of the Companys
shares, which in turn may effectively result in that holder
being deemed to hold the same higher proportion of the voting
power of the Companys subsidiaries. To ensure that voting
power remains at less than 9.5% at the subsidiary level, the
Amended Bye-laws incorporate a voting
push-up
provision, whereby the votes with respect to a Company
subsidiary will be pushed up for exercise by the Companys
shareholders in the unexpected event that both the voting rights
are limited and the Company would be characterized as a
controlled foreign corporation under the U.S. Internal
Revenue Code before the application of the limitation on voting
rights, assuming for this purpose that the Company itself had
insurance income.
A non U.S. corporation that earns insurance income is
considered a controlled foreign corporation if 10%
U.S. Shareholders own (directly, indirectly through
non U.S. entities or constructively, i.e., by application
of certain constructive ownership rules of the
U.S. Internal Revenue Code) more than 25% of either the
total combined voting power of all classes of shares or the
total value of all shares of that non U.S. corporation. A
10% U.S. Shareholder is a U.S. person that
owns (directly, indirectly though non U.S. entities or
constructively) at least 10% of the total combined voting power
of all classes of shares of a non U.S. corporation. Thus,
the Company would be a controlled foreign corporation for this
purpose in the unexpected event that 10% U.S. Shareholders
hold more than 25% of either the voting power or the total value
of the Companys shares.
Jurisdictional
Limits on Corporate Action
The Bye-laws provide that Board meetings, execution of written
resolutions by directors, and director and shareholder
participation in meetings by means of communication facilities
shall take place outside the United States and the United
Kingdom, in order to avoid any determination that the Company is
conducting business in those jurisdictions, which could result
in the imposition on the Company of U.S. federal income tax
and additional branch profits tax or U.K. corporation tax. As
the Companys operations in the United Kingdom are
winding down, the risk of taking those actions in the United
Kingdom has decreased significantly, and thus the Amended
Bye-laws omit the references to the United Kingdom from those
provisions. Also, to be consistent with the restrictions on
directors, the Amended Bye laws provide that shareholder
meetings and execution of written resolutions by shareholders
shall take place outside the United States.
Number
of Authorized Shares
The Bye-laws identify the number of Common Shares and Preferred
Shares into which the share capital of the Company is divided.
As the authorized capital of the Company can be increased by
resolution of the shareholders at any time, which increase would
supersede the numbers appearing in the Bye-laws, the numbers
have been omitted from the Amended Bye-laws to avoid confusion.
Number
of Directors
The Bye-laws provide that the Board shall consist of not less
than seven directors or such number in excess thereof as the
Board may determine up to a maximum of 12 directors.
Although the Board has no intention of adjusting the number of
directors beyond the range set forth in the Bye-laws, the
Companies Act permits more flexibility above a minimum number of
two directors. To take advantage of that flexibility, the
Amended Bye-laws provide that the Board shall consist of not
less than two directors or such number in excess thereof as the
Board may from time to time determine by resolution to be
advisable and in the best interests of the Company.
50
Board
Meeting Notice
The Companies Act does not require a minimum number of
days notice to directors for a meeting of the Board, so
the Amended Bye-laws omit the three days notice set forth
in the Bye-laws to provide greater flexibility to call Board
meetings on short notice.
Director
Actions
The Bye-laws provide that two directors or any director and the
Secretary (among others) may convene a special general meeting
of shareholders, whenever in their judgment such a meeting is
necessary, and may call a meeting of the Board. In order to
facilitate discussion among directors and more of a consensus
regarding the issues to be dealt with at such meetings, the
Amended Bye-laws require that, to the extent directors are
involved in such decisions, they shall act by a majority.
Generally
Accepted Auditing Standards
The requirement in the Bye-laws to use United States generally
accepted auditing standards has been omitted in favor of a
provision stating that generally accepted auditing standards may
be those of a country or jurisdiction other than Bermuda,
although the Company intends to continue to employ United States
generally accepted auditing standards for the foreseeable future.
Failure
of a Shareholder to Pay a Call
The Bye-laws provide the Company with the right to a first lien
on shares held by a shareholder for any debts owed by the
shareholder to the Company. The Amended Bye-laws omit that
provision in favor of the more customary provision limiting the
Companys right to require such shares to be forfeited to
the Company only for the failure by the shareholder to pay a
call in respect of such shares.
Unclaimed
Dividends
The Bye-law provision that unclaimed dividends shall be
forfeited to the Company after six years has been omitted from
the Amended Bye-laws. Unclaimed dividends will be forfeited in
accordance with the time frame provided by Bermuda law.
Transfer
of Shares
The Bye-laws provide that the directors may refuse to register a
transfer of shares for any reason and shall notify the proposed
transferor and transferee within thirty days of such refusal. In
order to clarify the implicit authority of the Board, the
Amended Bye-laws provide the Board with the right to refuse to
register share transfers in its discretion and without assigning
any reason therefor. The Amended Bye-laws provide that the Board
must furnish a notice of such refusal within three months.
The Bye laws contain several provisions requiring a written
instrument for the transfer of shares. Notwithstanding these Bye
law provisions, the Act allows shares to be transferred without
a written instrument if transferred by an appointed agent
(within the meaning of the Act) or otherwise in accordance with
the Act. This provision was added to the Amended Bye laws to
make clear that the Acts provision is available to the
Company notwithstanding the Bye law requirement for a written
instrument.
Officer
Positions
As a result of the Amendment Act, there are no longer any
specific titles required for officers except
Secretary. Thus, the Amended Bye-laws omit the
reference to Deputy Chairman. In addition, the
Amended Bye-laws give the position of Chief Executive Officer
many of the same powers given to the positions of Chairman and
President in the Bye-laws.
51
Time
When Notice to Shareholders is Deemed Delivered
The Bye-laws provide that certain notices to shareholders shall
be deemed to have been delivered at the time when the same would
be delivered in the ordinary course of transmission. In order to
avoid the uncertainty of the timing of such delivery, the
Amended Bye-laws provide that in all events notice will be
deemed to have been delivered not later than ten days after the
date on which notice is deposited, with postage prepaid, in the
mail of the United States, Bermuda or any member state of the
European Union.
Quorum
at General Meetings
The Bye-laws provide that a quorum at any general meeting must
exist for the duration of the meeting. The Amended Bye-laws
provide that the determination of a quorum need only be made at
the commencement of the meeting, providing more certainty that a
meeting can continue.
Casting
of Votes
The Amended Bye-laws add a provision that allows a person
entitled to more than one vote to cast such votes in different
ways. For example, some votes held by a person may be cast in
favor of a particular proposal while the remaining votes held by
such person may be cast against such proposal.
Alternate
Directors
Bermuda law and the Bye-laws allow each director to appoint an
alternate director who has the right to attend Board meetings
and vote in the absence of the appointing director. The Amended
Bye-laws omit that provision. In the Boards view, only an
individual elected by the shareholders to serve as a director or
appointed by the Board to fill a vacancy on the Board should be
entitled to act as a director.
Remuneration
of Directors
The Amended Bye-laws make clear that the Board determines the
remuneration of directors, which has been the Companys
practice and is in accord with common law applicable to Bermuda
companies. Pursuant to the proxy rules promulgated under the
United States federal securities laws, the shareholders are
provided with that information in the proxy statement in
connection with the election of directors.
Director
and Officer Liability
While the Bye-laws provide that the Company may in its
discretion maintain insurance against liability incurred by
directors and officers acting in those capacities, and may
advance defense costs subject to repayment if any allegation of
fraud or dishonesty is proved, the Amended Bye-laws follow the
more customary practice of obligating the Company to take those
steps, and, in the case of indemnification and advancement of
defense costs, to do so to the fullest extent permitted by law.
The Board has determined that it is important to ensure that our
directors and officers are adequately protected from liability
so that they can focus on the best interests of the Company, and
so that the Company can maintain its competitiveness in
attracting and keeping well qualified directors and employees.
Corporate
Seal
The Amendment Act conforms Bermuda law to modern practice by
eliminating the requirement that share certificates, deeds and
other documents be executed under seal. The Amended Bye-laws
reflect that change.
THE FOREGOING SUMMARY DESCRIBES THE MATERIAL CHANGES IN THE
AMENDED BYE-LAWS. HOWEVER, AS THE AMENDED BYE-LAWS REPRESENT A
COMPLETE REWRITING OF THE BYE-LAWS, SHAREHOLDERS ARE URGED TO
CAREFULLY REVIEW THE AMENDED BYE-LAWS SET FORTH IN
APPENDIX A TO THIS PROXY STATEMENT.
THE BOARD RECOMMENDS A VOTE FOR THE APPROVAL OF
THE AMENDED AND RESTATED BYE-LAWS.
52
AUDIT
COMMITTEE REPORT
The Audit Committee of the Board is a separately-designated
standing audit committee established in accordance with
Section 3(a)(58)(A) of the Exchange Act. The Audit
Committee is currently composed of the directors whose names
appear at the end of this report. The members are independent as
defined in the NYSE listing standards, which provide, among
other things, that directors shall have no relationship with the
Company that may interfere with the exercise of their
independence from management and the Company. The Board has
determined that the members of the Audit Committee also meet the
qualifications set forth in the NYSE listing standards regarding
financial literacy and accounting or related financial
management expertise. The Board has also determined that each of
Messrs. Baldwin and Deutsch is an audit committee
financial expert as defined by the SEC.
The Audit Committee is responsible for, among other things,
reviewing with management and the independent registered public
accounting firm the audited financial statements to be included
in the Companys Annual Report on
Form 10-K,
reviewing with the independent registered public accounting firm
the matters required to be discussed by Statement on Auditing
Standards No. 61, Communications With Audit
Committees, as amended by Statement on Audit Standards
No. 90, Audit Committee Communications
(SAS No. 61) and recommending whether the
audited financial statements should be included in the
Companys Annual Report on
Form 10-K.
The Companys management has the primary responsibility for
the financial statements and the reporting process, including
the system of internal controls.
In this context, the Audit Committee has reviewed and discussed
the Companys audited financial statements as of
December 31, 2008 and for the year then ended, including
managements discussion and analysis of financial condition
and results of operations, with management and KPMG LLP, a
U.S. limited liability partnership (KPMG US),
the Companys independent registered public accounting firm
for the 2008 fiscal year. The Audit Committee has also discussed
with KPMG US the matters required to be discussed by SAS
No. 61, including the quality, not just the acceptability,
of the accounting principles, the reasonableness of significant
judgments, and the disclosures in the financial statements.
The Audit Committee also discussed with KPMG US the critical
accounting policies and practices used in the preparation of the
audited financial statements as of December 31, 2008 and
for the year then ended; any alternative treatments within
accounting principles generally accepted in the United States of
America for policies and practices related to material items
that have been discussed with management, including the
ramifications of the use of such alternative treatments and the
treatment preferred by KPMG US; and any material written
communications between KPMG US and management.
KPMG US provided a report to the Audit Committee describing KPMG
USs internal quality-control procedures and related
matters. KPMG US also provided to the Audit Committee the
written disclosures and the letter required by applicable
requirements of the Public Company Accounting Oversight Board
regarding the independent accountants communications with
the Audit Committee concerning independence, and the Audit
Committee discussed with KPMG US its independence. When
considering KPMG USs independence, the Audit Committee
considered, among other matters, whether KPMG USs
provision of non-audit services to the Company is compatible
with maintaining the independence of KPMG US.
In addition, the Audit Committee reviewed key initiatives and
programs aimed at strengthening the effectiveness of the
Companys system of internal controls. As part of this
process, the Audit Committee monitored the scope and adequacy of
the Companys internal auditing function, reviewing steps
taken to implement recommended improvements in internal
procedures and controls.
53
Based on the reviews and discussions with management and KPMG US
referred to above, the Audit Committee has recommended to the
Board that the audited financial statements as of
December 31, 2008 and for the fiscal year then ended be
included in the Companys Annual Report on
Form 10-K
for such fiscal year.
H. Furlong Baldwin, Chairman
Jonathan F. Bank
Dan R. Carmichael
Robert V. Deutsch
A. John Hass
Peter T. Pruitt
The foregoing Report of the Audit Committee shall not be
deemed to be soliciting material or
filed with the SEC or incorporated by reference in
any previous or future document filed by the Company with the
SEC under the Securities Act or the Exchange Act or subject to
Regulation 14A or 14C or to the liabilities of
Section 18 of the Exchange Act, except to the extent that
the Company specifically requests that such Report be treated as
soliciting material or specifically incorporates such Report by
reference in any such document.
PROPOSAL 3
APPROVAL OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR
THE 2009 FISCAL YEAR AND AUTHORIZATION OF THE AUDIT COMMITTEE TO
SET THE REMUNERATION OF SUCH INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
The Audit Committee has nominated KPMG, a Bermuda partnership
(KPMG Bermuda), to serve as the Companys
independent registered public accounting firm for the 2009
fiscal year. In accordance with Bermuda law, the Companys
shareholders have the authority to approve the Audit
Committees nomination of the Companys independent
registered public accounting firm and to authorize the Audit
Committee to set the remuneration of the independent registered
public accounting firm. A proposal will be submitted to
shareholders at the Annual Meeting for approval of the
nomination and the authorization of the Audit Committee to set
the remuneration of KPMG Bermuda.
Change in
Independent Registered Public Accounting Firm
KPMG US has served as the Companys independent registered
public accounting firm since the Companys formation in
2002, including during the 2008 fiscal year. Although there have
been no disagreements between KPMG US and the Company, as
described in more detail below, the Audit Committee, at its
meeting held on February 23, 2009, determined that the
Company would be better served by the geographical proximity of
KPMG Bermuda, which is expected to result in more interaction
between the Companys management and the independent
registered public accounting firm of the Company.
If the nomination of KPMG Bermuda is approved by shareholders at
the Annual Meeting, the engagement of KPMG US will be
terminated, and KPMG US will be dismissed as the Companys
independent registered public accounting firm, as of the date of
the Annual Meeting, and KPMG Bermuda will be engaged as the
Companys independent registered public accounting firm as
of the day after the date of the Annual Meeting.
A representative of KPMG Bermuda is expected to attend the
Annual Meeting and will have an opportunity to make a statement
and respond to questions. No representative of KPMG US is
expected to attend the Annual Meeting.
The audit reports of KPMG US on the Companys consolidated
financial statements as of and for the fiscal years ended
December 31, 2007 and 2008 did not contain any adverse
opinion or disclaimer of opinion, and were not qualified or
modified as to uncertainty, audit scope, or accounting
principles. The audit reports of KPMG US on the effectiveness of
internal control over financial reporting as of
December 31, 2007 and 2008 did not contain any adverse
opinion or disclaimer of opinion, and were not qualified or
modified as to uncertainty, audit scope, or accounting
principles. During the two fiscal years ended December 31,
2007 and 2008 and the subsequent interim period through the date
of the Audit Committees determination not to renominate
KPMG US, (1) there were no disagreements between the
Company and KPMG US on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or
procedure, which
54
disagreements, if not resolved to the satisfaction of KPMG US,
would have caused KPMG US to make reference to the subject
matter of the disagreements in connection with its reports on
the consolidated financial statements of the Company, and
(2) there were no reportable events involving
the Company within the meaning set forth in
Item 304(a)(1)(v) of
Regulation S-K.
The Company has not, nor has anyone on its behalf, consulted
KPMG Bermuda during the fiscal years ended December 31,
2007 and 2008 and the subsequent interim period through the date
of the Audit Committees nomination of KPMG Bermuda
regarding either (1) the application of accounting
principles to a specific transaction, either completed or
proposed, or the type of audit opinion that might be rendered on
the consolidated financial statements of the Company, or
(2) any matter that was either the subject of a
disagreement or a reportable event as described in
the preceding paragraph. Further, no written report or oral
advice was provided by KPMG Bermuda to the Company that KPMG
Bermuda concluded was an important factor considered by the
Company in reaching a decision as to any accounting, auditing or
financial reporting issue.
The Company provided KPMG US and KPMG Bermuda with a copy of the
foregoing disclosure and each has stated in response that it
agrees with such disclosure in all respects.
Audit
Fees, Audit-Related Fees, Tax Fees and All Other Fees
The following table summarizes the aggregate fees billed by KPMG
US and its affiliates for services rendered for the years ended
December 31, 2008 and 2007:
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
2007
|
|
|
Audit
fees(1)
|
|
$
|
1,541,000
|
|
|
$
|
1,734,500
|
|
Audit-related
fees(2)
|
|
|
51,680
|
|
|
|
62,072
|
|
Tax fees
|
|
|
0
|
|
|
|
0
|
|
All other fees
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
1,592,680
|
|
|
$
|
1,796,572
|
|
|
|
|
(1) |
|
The amount shown for Audit fees for 2008 represents
fees for professional services rendered by KPMG US and its
affiliates for (a) the audit of the Companys annual
financial statements and internal control over financial
reporting for 2008; (b) the review of the Companys
financial statements included in its Quarterly Reports on
Form 10-Q
for the quarters ended March 31, 2008, June 30, 2008
and September 30, 2008; and (c) statutory audits for
the Companys insurance subsidiaries. The amount shown for
Audit fees for 2007 represents fees for professional
services rendered by KPMG US and its affiliates for (a) the
audit of the Companys annual financial statements and
internal control over financial reporting for 2007; (b) the
review of the Companys financial statements included in
its Quarterly Reports on
Form 10-Q
for the quarters ended March 31, 2007, June 30, 2007
and September 30, 2007; and (c) statutory audits for
the Companys insurance subsidiaries. |
|
(2) |
|
The amounts shown for Audit-related fees for 2008
and 2007 represent professional services and consultation in
relation to review of certain accounting and auditing
information. |
Pre-Approval
Policies and Procedures
The Audit Committee is primarily responsible for managing the
Companys relationship with its independent registered
public accounting firm. Subject to approval by the shareholders
of the Company as required by Bermuda law, the Audit Committee
has the sole authority to approve the engagement, determine the
remuneration and oversee the performance of the Companys
independent registered public accounting firm. The Audit
Committee has considered whether the provision by the
Companys independent registered public accounting firm of
non-audit services to the Company is compatible with maintaining
the independence of the independent registered public accounting
firm. It is the Companys policy that all audit services
and all permitted non-audit services to be provided to the
Company by the independent registered public accounting
55
firm are approved in advance by the Audit Committee (or by one
or more of its members if duly authorized by the Audit
Committee).
THE BOARD RECOMMENDS A VOTE FOR THE APPROVAL OF
KPMG BERMUDA AS THE COMPANYS INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM FOR THE 2009 FISCAL YEAR AND THE AUTHORIZATION
OF THE AUDIT COMMITTEE TO SET THE REMUNERATION OF SUCH
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.
ADDITIONAL
INFORMATION
Other
Action at the Annual Meeting
As of the date of this proxy statement, the Board knows of no
business that will be presented for consideration at the Annual
Meeting other than that referred to above. As to other business,
if any, that may come before the Annual Meeting, proxies in the
enclosed form will be voted in accordance with the discretion of
the person or persons voting the proxies.
Shareholder
Proposals for the 2009 Annual General Meeting of
Shareholders
In accordance with
Rule 14a-8
of the Exchange Act, any proposal of a shareholder intended to
be presented at the 2010 Annual General Meeting of Shareholders
must be received by the Company no later than the close of
business on November 30, 2009 in order for the proposal to
be considered for inclusion in the Companys proxy
statement for such meeting. Proposals should be addressed to the
Secretary, Platinum Underwriters Holdings, Ltd., The Belvedere
Building, 69 Pitts Bay Road, Pembroke HM 08 Bermuda.
Pursuant to
Rule 14a-4(c)(1)
of the Exchange Act, if a shareholder who intends to present a
proposal at the 2010 Annual General Meeting of Shareholders does
not notify the Company of such a proposal on or before
February 13, 2010, then proxies received by the Company for
that meeting will be voted by the persons named as such proxies
in their discretion with respect to such proposals. Notices of
such proposals are to be sent to the above address.
By order of the Board of Directors,
Michael E. Lombardozzi
Executive Vice President, General Counsel,
Chief Administrative Officer and Secretary
Pembroke, Bermuda
March 30, 2009
56
APPENDIX A
AMENDED
AND RESTATED
BYE-LAWS
OF
PLATINUM UNDERWRITERS HOLDINGS, LTD.
(as adopted by the Members on
,
2009)
TABLE OF
CONTENTS
|
|
|
INTERPRETATION
|
1.
|
|
Definitions
|
SHARES
|
2.
|
|
Power to Issue Shares
|
3.
|
|
Power of the Company to Purchase its Shares
|
4.
|
|
Rights Attaching to Shares
|
5.
|
|
Calls on Shares
|
6.
|
|
Prohibition on Financial Assistance
|
7.
|
|
Forfeiture of Shares
|
8.
|
|
Share Certificates
|
9.
|
|
Fractional Shares
|
REGISTRATION OF SHARES
|
10.
|
|
Register of Members
|
11.
|
|
Registered Holder Absolute Owner
|
12.
|
|
Transfer of Registered Shares
|
13.
|
|
Transmission of Registered Shares
|
ALTERATION OF SHARE CAPITAL
|
14.
|
|
Power to Alter Capital
|
15.
|
|
Variation of Rights Attaching to Shares
|
DIVIDENDS AND CAPITALISATION
|
16.
|
|
Dividends
|
17.
|
|
Power to Set Aside Profits
|
18.
|
|
Method of Payment
|
19.
|
|
Capitalisation
|
MEETINGS OF MEMBERS
|
20.
|
|
Annual General Meetings
|
21.
|
|
Special General Meetings
|
22.
|
|
Requisitioned General Meetings
|
23.
|
|
Notice
|
24.
|
|
Giving Notice and Access
|
25.
|
|
Postponement of General Meeting
|
26.
|
|
Electronic Participation in Meetings
|
27.
|
|
Quorum at General Meetings
|
28.
|
|
Chairman to Preside at General Meetings
|
29.
|
|
Voting on Resolutions
|
30.
|
|
Power to Demand a Vote on a Poll
|
31.
|
|
Voting by Joint Holders of Shares
|
32.
|
|
Votes of Members General
|
33.
|
|
Adjustment of Voting Power
|
34.
|
|
Other Adjustments of Voting Power
|
35.
|
|
Professional Assistance
|
36.
|
|
Board Determination Binding
|
37.
|
|
Requirement of Members to Provide Information and Notice
|
38.
|
|
Instrument of Proxy
|
39.
|
|
Representation of Corporate Member
|
40.
|
|
Adjournment of General Meeting
|
41.
|
|
Written Resolutions
|
42.
|
|
Directors Attendance at General Meetings
|
CERTAIN SUBSIDIARIES
|
43.
|
|
Voting of Certain Subsidiary Shares
|
44.
|
|
Bye-laws or Articles of Association of Certain Subsidiaries
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DIRECTORS AND OFFICERS
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45.
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Election of Directors
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46.
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Number of Directors
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47.
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Term of Office of Directors
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48.
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Removal of Directors
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49.
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Vacancy in the Office of Director
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50.
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Remuneration of Directors
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51.
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Defect in Appointment
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52.
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Directors to Manage Business
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53.
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Powers of the Board of Directors
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54.
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Register of Directors and Officers
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55.
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Appointment of Officers
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56.
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Appointment of Secretary
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57.
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Duties of Officers
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58.
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Remuneration of Officers
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59.
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Conflicts of Interest
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60.
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Indemnification and Exculpation of Directors and Officers
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MEETINGS OF THE BOARD OF DIRECTORS
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61.
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Board Meetings
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62.
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Notice of Board Meetings
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63.
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Electronic Participation in Meetings
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64.
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Quorum at Board Meetings
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65.
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Board to Continue in the Event of Vacancy
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66.
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Chairman to Preside at Board Meetings
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67.
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Written Resolutions
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68.
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Validity of Prior Acts of the Board
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CORPORATE RECORDS
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69.
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Minutes
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70.
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Place Where Corporate Records Kept
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71.
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Form and Use of Seal
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ACCOUNTS
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72.
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Books of Account
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73.
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Financial Year End
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AUDITS
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74.
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Annual Audit
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75.
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Appointment of Auditor
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76.
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Remuneration of Auditor
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77.
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Duties of Auditor
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78.
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Access to Records
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79.
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Financial Statements
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80.
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Distribution of Auditors Report
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81.
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Vacancy in the Office of Auditor
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VOLUNTARY WINDING UP AND DISSOLUTION
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82.
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Winding Up
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CHANGES TO CONSTITUTION
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83.
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Changes to Bye-laws
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84.
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Changes to the Memorandum of Association
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85.
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Discontinuance
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Platinum
Underwriters Holdings, Ltd.
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Page A-1
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INTERPRETATION
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1.1
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In these Bye-laws, the following words and expressions shall,
where not inconsistent with the context, have the following
meanings, respectively:
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Act
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the Companies Act 1981 as amended from time to time;
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Attribution Percentage
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with respect to a Member, the percentage of the Members
shares that are treated as Controlled Shares of a Tentative 9.5%
U.S. Member;
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Auditor
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includes an individual or partnership;
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Board
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the board of directors appointed or elected pursuant to these
Bye-laws and acting by resolution in accordance with the Act and
these Bye-laws or the directors present at a meeting of
directors at which there is a quorum;
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business day
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any day, other than a Saturday, a Sunday or any day on which
banks in Hamilton, Bermuda are authorized or obligated by law or
executive order to close;
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these Bye-laws
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these Amended and Restated Bye-laws as adopted by the Members on
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2009;
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Code
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the United States Internal Revenue Code of 1986, as amended from
time to time;
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Common Shares
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the common shares, par value U.S. $0.01 per share, of the
Company, and includes a fraction of a Common Share;
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Company
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the company for which these Bye-laws are approved and confirmed;
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Confidential Information
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any information provided by any Member to the Company pursuant
to Bye-law 37 or for purposes of making the analysis required by
Bye-laws 33 and 34;
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Platinum
Underwriters Holdings, Ltd.
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Page A-2
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Controlled Shares
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all shares of the Company directly, indirectly or constructively
owned by a person as determined pursuant to sections 957 and 958
of the Code and the Treasury Regulations promulgated thereunder;
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Director
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a director of the Company;
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indirect
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when referring to a holder or owner of shares, ownership of
shares within the meaning of section 958 (a)(2) of the Code;
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Member
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the person registered in the Register of Members as the holder
of shares in the Company and, when two or more persons are so
registered as joint holders of shares, means the person whose
name stands first in the Register of Members as one of such
joint holders or all of such persons, as the context so requires;
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9.5% U.S. Member
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a U.S. Person whose Controlled Shares constitute nine and
one-half percent (9.5%) or more of the voting power of all
issued shares of the Company and who generally would be required
to recognize income with respect to the Company under section
951 (a)(1) of the Code, if the Company were a controlled foreign
corporation as defined in section 957 of the Code and if the
ownership threshold under section 951(b) of the Code were 9.5%;
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notice
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written notice as further provided in these Bye-laws unless
otherwise specifically stated;
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Officer
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any person appointed by the Board to hold an office in the
Company;
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Preferred Shares
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the preferred shares, par value U.S. $0.01 per share, of the
Company, and includes a fraction of a Preferred Share;
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Register of Directors and Officers
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the register of Directors and Officers referred to in these
Bye-laws;
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Platinum
Underwriters Holdings, Ltd.
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Page A-3
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Register of Members
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the register of Members referred to in these Bye-laws;
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Resident Representative
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any person appointed to act as resident representative and
includes any deputy or assistant resident representative;
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Secretary
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the person appointed to perform any or all of the duties of
secretary of the Company and includes any deputy or assistant
secretary and any person appointed by the Board to perform any
of the duties of the Secretary;
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shares
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shares of any class of shares in the capital of the Company, and
includes a fraction of a share;
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subsidiary
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a company more than fifty percent (50%) of the voting power of
which is owned, directly or indirectly, by the Company and/or
one or more of its subsidiaries;
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Tentative 9.5% U.S. Member
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a U.S. Person that, but for adjustments or restrictions on
exercise of the voting power of shares pursuant to Bye-law 20,
would be a 9.5% U.S. Member;
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Treasury Share
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a share of the Company that was or is treated as having been
acquired and held by the Company and has been held continuously
by the Company since it was so acquired and has not been
cancelled;
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U.S. Person
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(i) an individual who is a citizen or resident of the United
States, (ii) a corporation or partnership that is, as to the
United States, a domestic corporation or partnership, (iii) an
estate that is subject to United States federal income tax on
its income, regardless of its source, (iv) a U.S. Trust, or (v)
any person that is treated as one of the foregoing for U.S.
federal income tax purposes; and
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Platinum
Underwriters Holdings, Ltd.
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Page A-4
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U.S. Trust
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any trust (A) if and only if (i) a court within the United
States is able to exercise primary supervision over the
administration of the trust, and (ii) one or more U.S. trustees
have the authority to control all substantial decisions of the
trust or (B) that has otherwise validly elected to be treated as
a domestic trust under applicable U.S. Treasury regulations.
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1.2
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In these Bye-laws, where not inconsistent with the context:
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(a)
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words denoting the plural number include the singular number and
vice versa;
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(b)
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words denoting the masculine gender include the feminine and
neuter genders;
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(c)
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words importing persons include companies, associations or
bodies of persons whether corporate or not;
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(d) the words:
(i) may shall be construed as
permissive; and
(ii) shall shall be construed as
imperative; and
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(e)
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unless otherwise provided herein, words or expressions defined
in the Act shall bear the same meaning in these Bye-laws.
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1.3
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In these Bye-laws expressions referring to writing or its
cognates shall, unless the contrary intention appears, include
facsimile, printing, lithography, photography, electronic mail
and other modes of representing words in visible form.
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1.4
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Headings used in these Bye-laws are for convenience only and are
not to be used or relied upon in the construction hereof.
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SHARES
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2.1
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Subject to these Bye-laws and to any resolution of the Members
to the contrary, and without prejudice to any special rights
previously conferred on the holders of any existing shares or
class of shares, the Board shall have the power to issue any
unissued shares on such terms and conditions as it may determine
and any shares or class of shares may be issued with such
preferred, deferred or other special rights or such
restrictions, whether in regard to dividend, voting, return of
capital, or otherwise as the Board may determine. Further, the
Board may create and issue shares of a new class or of any
existing class of shares and the Board may generally exercise
the powers of the Company set out in Sections 45(1)(b), (c),
(d) and (e) of the Act, without the need of any
approval of the Members as might
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Platinum
Underwriters Holdings, Ltd.
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Page A-5
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otherwise be required by such
Sections of the Act. The Board may also issue options, warrants
or other rights to purchase or acquire shares or, subject to
Section 43 of the Act, securities convertible into or
exchangeable for shares (including any employee benefit plan
providing for the issue of shares or options or rights in
respect thereof), at such times, for such consideration and on
such terms and conditions as it may determine. The Board may
create and issue shares including, but not limited to, series of
preferred shares (which may or may not be separate classes of
preferred shares), at such times, for such consideration and on
such terms and conditions, with similar or different rights or
restrictions as any other series (or class) and to establish
from time to time the number of preferred shares to be included
in each such series (or class), and to fix the designation,
powers, preferences, voting rights, dividend rights, repurchase
provisions, and other rights, qualifications, limitations or
restrictions thereof, as it may determine.
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2.2
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Subject to the Act, any preference shares may be issued or
converted into shares that (at a determinable date or at the
option of the Company or the holder) are liable to be redeemed
on such terms and in such manner as may be determined by the
Board (before the issue or conversion).
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2.3
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Notwithstanding the foregoing or any other provision of these
Bye-laws, the Company may not issue any shares in a manner that
the Board determines in its sole discretion may result in a
non-de minimis adverse tax, legal or regulatory consequence to
the Company, any of its subsidiaries or any direct or indirect
holder of shares.
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3. |
Power of the Company to Purchase its Shares
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3.1
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The Company may purchase its own shares for cancellation or
acquire them as Treasury Shares in accordance with the Act on
such terms as the Board shall think fit. Notwithstanding the
foregoing or any other provision of these Bye-laws, any such
purchase or acquisition may not be made if the Board determines
in its sole discretion that the purchase or acquisition may
result in a non-de minimis adverse tax, legal or regulatory
consequence to the Company, any of its subsidiaries or any
direct or indirect holder of shares.
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3.2
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The Board may exercise all the powers of the Company to purchase
or acquire all or any part of its own shares in accordance with
the Act.
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4. |
Rights Attaching to Shares
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4.1
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The share capital of the Company shall be divided into Common
Shares and Preferred Shares.
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4.2
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The holders of Common Shares shall, subject to the provisions of
these Bye-laws:
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(a)
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be entitled to one vote per Common Share (subject to any
adjustments or eliminations of voting power of any shares
pursuant to Bye-laws 33 and 34);
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Platinum
Underwriters Holdings, Ltd.
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Page A-6
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(b)
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be entitled to such dividends as the Board may from time to time
declare;
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(c)
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in the event of a liquidation, winding up or dissolution of the
Company, whether voluntary or involuntary or for the purpose of
a reorganisation or otherwise or upon any distribution of
capital, be entitled to share equally and ratably in the assets
of the Company, if any, remaining after the payment of all debts
and liabilities of the Company and the liquidation preference of
any outstanding Preferred Shares; and
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(d)
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generally be entitled to enjoy all of the rights attaching to
shares.
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4.3
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The Board is authorised, subject to limitations prescribed by
law, to issue the Preferred Shares in series, to establish from
time to time the number of Preferred Shares to be included in
each such series, and to fix the designation, powers,
preferences and rights of each such series and the
qualifications, limitations or restrictions thereof. The terms
of any series of Preferred Shares shall be set forth in a
certificate of designations in the minutes of the Board. The
authority of the Board with respect to each series of Preferred
Shares shall include, but not be limited to, determination of
the following:
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(a)
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the number of Preferred Shares constituting that series and the
distinctive designation of that series;
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(b)
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the rate of dividend, and whether (and if so, on what terms and
conditions) dividends shall be cumulative (and if so, whether
unpaid dividends shall compound or accrue interest) or shall be
payable in preference or in any other relation to the dividends
payable on any other class or classes of shares or any other
series of the Preferred Shares;
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(c)
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whether that series shall have voting rights in addition to the
voting rights provided by law and, if so, the terms and extent
of such voting rights (subject to any adjustments or
eliminations of voting power of any shares pursuant to Bye-laws
33 and 34);
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(d)
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whether the Preferred Shares may be redeemed and, if so, the
terms and conditions on which they may be redeemed (including,
without limitation, the dates upon or after which they may be
redeemed and the price or prices at which they may be redeemed,
which price or prices may be different in different
circumstances or at different redemption dates);
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(e)
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whether the Preferred Shares shall be issued with the privilege
of conversion or exchange and, if so, the terms and conditions
of such conversion or exchange (including, without limitation
the price or prices or the rate or rates of conversion or
exchange or any terms for adjustment thereof);
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(f)
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the amounts, if any, payable upon the Preferred Shares in the
event of voluntary liquidation, dissolution or winding up of the
Company in preference of shares of any other class or series and
whether the
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Platinum
Underwriters Holdings, Ltd.
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Page A-7
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Preferred Shares shall be entitled
to participate generally in distributions on the Common Shares
under such circumstances;
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(g)
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the amounts, if any, payable upon the Preferred Shares in the
event of involuntary liquidation, dissolution or winding up of
the Company in preference to shares of any other class or series
and whether the Preferred Shares shall be entitled to
participate generally in distributions on the Common Shares
under such circumstances;
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(h)
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sinking fund provisions, if any, for the redemption or purchase
of the Preferred Shares (the term sinking fund being
understood to include any similar fund, however
designated); and
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(i)
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any other relative rights, preferences, limitations and powers
of that series.
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4.4
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All the rights attaching to a Treasury Share shall be suspended
and shall not be exercised by the Company while it holds such
Treasury Share and, except where required by the Act, all
Treasury Shares shall be excluded from the calculation of any
percentage or fraction of the share capital, or shares, of the
Company.
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5.1
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The Board may make such calls as it thinks fit upon the Members
in respect of any moneys (whether in respect of nominal value or
premium) unpaid on the shares allotted to or held by such
Members and, if a call is not paid on or before the day
appointed for payment thereof, the Member may at the discretion
of the Board be liable to pay the Company interest on the amount
of such call at such rate as the Board may determine, from the
date when such call was payable up to the actual date of
payment. The Board may differentiate between the holders as to
the amount of calls to be paid and the times of payment of such
calls.
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5.2
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The joint holders of a share shall be jointly and severally
liable to pay all calls and any interest, costs and expenses in
respect thereof.
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5.3
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The Company may accept from any Member the whole or a part of
the amount remaining unpaid on any shares held by him, although
no part of that amount has been called up.
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6. |
Prohibition on Financial Assistance
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The Company shall not give, whether directly or indirectly,
whether by means of loan, guarantee, provision of security or
otherwise, any financial assistance for the purpose of the
acquisition or proposed acquisition by any person of any shares
in the Company, but nothing in this Bye-law shall prohibit
transactions permitted under the Act.
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7.1
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If any Member fails to pay, on the day appointed for payment
thereof, any call in respect of any share allotted to or held by
such Member, the Board may, at any time thereafter during such
time as the call remains unpaid, direct the Secretary to
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Platinum
Underwriters Holdings, Ltd.
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Page A-8
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forward such Member a notice in
writing in the form, or as near thereto as circumstances admit,
of the following:
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Notice of
Liability to Forfeiture for Non-Payment of Call
(the Company)
You have failed to pay the call of [amount of call] made on the
[ ] day of [ ], 200[ ], in respect of the
[number] share(s) [number in figures] standing in your name
in the Register of Members of the Company, on the
[ ] day of [ ], 200[ ], the day appointed for
payment of such call. You are hereby notified that unless you
pay such call together with interest thereon at the rate of
[ ] per annum computed from the said [ ] day
of [ ], 200[ ] at the registered office of the Company the
share(s) will be liable to be forfeited.
Dated this [ ] day of [ ], 200[ ]
[Signature of Secretary] By Order of the Board
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7.2
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If the requirements of such notice are not complied with, any
such share may at any time thereafter before the payment of such
call and the interest due in respect thereof be forfeited by a
resolution of the Board to that effect, and such share shall
thereupon become the property of the Company and may be disposed
of as the Board shall determine. Without limiting the generality
of the foregoing, the disposal may take place by sale,
repurchase, redemption or any other method of disposal permitted
by and consistent with these Bye-laws and the Act.
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7.3
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A Member whose share or shares have been so forfeited shall,
notwithstanding such forfeiture, be liable to pay to the Company
all calls owing on such share or shares at the time of the
forfeiture, together with all interest due thereon and any costs
and expenses incurred by the Company in connection therewith.
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7.4
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The Board may accept the surrender of any shares which it is in
a position to forfeit on such terms and conditions as may be
agreed. Subject to those terms and conditions, a surrendered
share shall be treated as if it had been forfeited.
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8.1
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Every Member shall be entitled to a certificate bearing the
signature (or a facsimile thereof) of a Director or an Officer
or the Secretary or a person authorised by the Board to sign
specifying the number and, where appropriate, the class of
shares held by such Member and whether the same are fully paid
up and, if not, specifying the amount paid on such shares. The
Board may by resolution determine, either generally or in a
particular case, that any or all signatures on certificates may
be printed thereon or affixed by mechanical means.
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Platinum
Underwriters Holdings, Ltd.
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Page A-9
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8.2
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The Company shall be under no obligation to complete and deliver
a share certificate unless specifically called upon to do so by
the person to whom the shares have been allotted.
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8.3
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If any share certificate shall be proved to the satisfaction of
the Board to have been worn out, lost, mislaid, or destroyed the
Board may cause a new certificate to be issued and request an
indemnity for the lost certificate if it sees fit.
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The Company may issue its shares in fractional denominations and
deal with such fractions to the same extent as its whole shares
and shares in fractional denominations shall have in proportion
to the respective fractions represented thereby all of the
rights of whole shares including (but without limiting the
generality of the foregoing) the right to vote, to receive
dividends and distributions and to participate in a winding up.
REGISTRATION
OF SHARES
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10.1
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The Board shall cause to be kept in one or more books a Register
of Members and shall enter therein the particulars required by
the Act.
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10.2
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The Register of Members shall be open to inspection without
charge at the registered office of the Company on every business
day, subject to such reasonable restrictions as the Board may
impose, so that not less than two hours in each business day be
allowed for inspection. The Register of Members may, after
notice has been given in accordance with the Act, be closed for
any time or times not exceeding in the whole thirty days in each
year.
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11. |
Registered Holder Absolute Owner
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The Company shall be entitled to treat the registered holder of
any share as the absolute owner thereof and accordingly shall
not be bound to recognise any equitable claim or other claim to,
or interest in, such share on the part of any other person.
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12. |
Transfer of Registered Shares
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12.1
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An instrument of transfer shall be in writing in the form of the
following, or as near thereto as circumstances admit, or in such
other form as the Board may accept:
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Transfer of
a Share or Shares
(the Company)
FOR VALUE RECEIVED................. [amount], I, [name of
transferor] hereby sell, assign and transfer unto [transferee]
of [address], [number] of shares of the Company.
DATED this [ ] day of [ ], 200[ ]
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Platinum
Underwriters Holdings, Ltd.
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Page A-10
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Signed by:
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In the presence of:
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Transferor
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Witness
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Transferee
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Witness
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12.2
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Such instrument of transfer shall be signed by or on behalf of
the transferor and transferee, provided that, in the case of a
fully paid share, the Board may accept the instrument signed by
or on behalf of the transferor alone. The transferor shall be
deemed to remain the holder of such share until the same has
been registered as having been transferred to the transferee in
the Register of Members.
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12.3
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The Board may refuse to recognise any instrument of transfer
unless it is accompanied by the certificate in respect of the
shares to which it relates and by such other evidence as the
Board may reasonably require to show the right of the transferor
to make the transfer.
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12.4
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The joint holders of any share may transfer such share to one or
more of such joint holders, and the surviving holder or holders
of any share previously held by them jointly with a deceased
Member may transfer any such share to the executors or
administrators of such deceased Member.
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12.5
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The Board may in its sole discretion and without assigning any
reason therefor refuse to register the transfer of a share. The
Board shall refuse to register a transfer unless all applicable
consents, authorisations and permissions of any governmental
body or agency in Bermuda have been obtained. If the Board
refuses to register a transfer of any share the Secretary shall,
within three months after the date on which the transfer was
lodged with the Company, send to the transferor and transferee
notice of the refusal. Without limiting the generality of the
foregoing, the Board may in its sole discretion refuse to
register any transfer of shares if it appears to the Board that
any non-de minimis adverse tax, regulatory or legal consequences
to the Company, any of its subsidiaries or any direct or
indirect holder of shares would result from such transfer.
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12.6
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Notwithstanding anything to the contrary in these Bye-laws,
shares may be transferred without a written instrument if
transferred by an appointed agent (within the meaning of the
Act) or otherwise in accordance with the Act.
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13. |
Transmission of Registered Shares
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13.1
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In the case of the death of a Member, the survivor or survivors
where the deceased Member was a joint holder, and the legal
personal representatives of the deceased Member where the
deceased Member was a sole holder, shall be the only persons
recognised by the Company as having any title to the deceased
Members interest in the shares. Nothing herein contained
shall release the estate of a deceased joint
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Platinum
Underwriters Holdings, Ltd.
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Page A-11
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holder from any liability in
respect of any share which had been jointly held by such
deceased Member with other persons. Subject to the Act, for the
purpose of this Bye-law, legal personal representative means the
executor or administrator of a deceased Member or such other
person as the Board may, in its sole discretion, decide as being
properly authorised to deal with the shares of a deceased Member.
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13.2
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Any person becoming entitled to a share in consequence of the
death or bankruptcy of any Member may be registered as a Member
upon such evidence as the Board may deem sufficient or may elect
to nominate some person to be registered as a transferee of such
share, and in such case the person becoming entitled shall
execute in favour of such nominee an instrument of transfer in
writing in the form, or as near thereto as circumstances admit,
of the following:
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Transfer by
a Person Becoming Entitled on Death/Bankruptcy of a Member
(the Company)
I/We, having become entitled in consequence of the
[death/bankruptcy] of [name and address of deceased/bankrupt
Member] to [number] share(s) standing in the Register of
Members of the Company in the name of the said [name of
deceased/bankrupt Member] instead of being registered
myself/ourselves, elect to have [name of transferee] (the
Transferee) registered as a transferee of such
share(s) and I/we do hereby accordingly transfer the said
share(s) to the Transferee to hold the same unto the Transferee,
his or her executors, administrators and assigns, subject to the
conditions on which the same were held at the time of the
execution hereof; and the Transferee does hereby agree to take
the said share(s) subject to the same conditions.
DATED this [ ] day of [ ], 200[ ]
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Signed by:
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In the presence of:
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Transferor
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Witness
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Transferee
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Witness
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13.3
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On the presentation of the foregoing materials to the Board,
accompanied by such evidence as the Board may require to prove
the title of the transferor, the transferee shall be registered
as a Member. Notwithstanding the foregoing, the Board shall, in
any case, have the same right to refuse to register the transfer
as it would have had in the case of a transfer of the share by
that Member before such Members death or bankruptcy, as
the case may be.
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13.4
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Where two or more persons are registered as joint holders of a
share or shares, then in the event of the death of any joint
holder or holders the remaining joint holder or holders shall be
absolutely entitled to such share or shares and the
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Platinum
Underwriters Holdings, Ltd.
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Page A-12
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Company shall recognise no claim
in respect of the estate of any joint holder except in the case
of the last survivor of such joint holders.
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ALTERATION
OF SHARE CAPITAL
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14. |
Power to Alter Capital
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14.1
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The Company may if authorised by resolution of the Members
increase, divide, consolidate, subdivide, change the currency
denomination of, diminish or otherwise alter or reduce its share
capital in any manner permitted by the Act.
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14.2
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Where, on any alteration or reduction of share capital,
fractions of shares or some other difficulty would arise, the
Board may deal with or resolve the same in such manner as it
thinks fit.
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15. |
Variation of Rights Attaching to Shares
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If, at any time, the share capital is divided into different
classes of shares, the rights attached to any class (unless
otherwise provided by the terms of issue of the shares of that
class) may, whether or not the Company is being
wound-up, be
varied with the consent in writing of the holders of
three-fourths of the issued shares of that class or with the
sanction of a resolution passed by a majority of the votes cast
at a separate general meeting of the holders of the shares of
the class at which meeting the necessary quorum shall be two
persons holding or representing by proxy at least one-third of
the issued shares of the class. The rights conferred upon the
holders of the shares of any class issued with preferred or
other rights shall not, unless otherwise expressly provided by
the terms of issue of the shares of that class, be deemed to be
varied by the creation or issue of further shares ranking pari
passu therewith. Notwithstanding the foregoing or any other
provision of these Bye-laws, the Company shall not vary or alter
the rights attaching to any class of shares if the Board, after
taking into account any adjustments to or restrictions on
exercise of voting rights under Bye-laws
33-37
(inclusive), determines in its sole discretion that any non-de
minimis adverse tax, regulatory or legal consequences to the
Company, any of its subsidiaries or any direct or indirect
holder of shares may result from such variation.
DIVIDENDS
AND CAPITALISATION
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16.1
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The Board may, subject to these Bye-laws and in accordance with
the Act, and subject to any rights or restrictions for the time
being lawfully attached to any class or series of shares,
declare a dividend to be paid to the Members, in proportion to
the number of shares held by them, and such dividend may be paid
in cash or wholly or partly in specie in which case the Board
may fix the value for distribution in specie of any assets. No
unpaid dividend shall bear interest as against the Company.
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Platinum
Underwriters Holdings, Ltd.
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Page A-13
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16.2
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The Board may fix any date as the record date for determining
the Members entitled to receive any dividend.
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16.3
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The Company may pay dividends in proportion to the amount paid
up on each share where a larger amount is paid up on some shares
than on others.
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16.4
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The Board may declare and make such other distributions (in cash
or in specie) to the Members as may be lawfully made out of the
assets of the Company. No unpaid distribution shall bear
interest as against the Company.
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17. |
Power to Set Aside Profits
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The Board may, before declaring a dividend, set aside out of the
surplus or profits of the Company, such amount as it thinks
proper as a reserve to be used to meet contingencies or for
equalising dividends or for any other purpose.
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18.1
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Any dividend, interest, or other moneys payable in cash in
respect of the shares may be paid by cheque or draft sent
through the post directed to the Member at such Members
address in the Register of Members, or to such person and to
such address as the holder may in writing direct.
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18.2
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In the case of joint holders of shares, any dividend, interest
or other moneys payable in cash in respect of shares may be paid
by cheque or draft sent through the post directed to the address
of the holder first named in the Register of Members, or to such
person and to such address as the joint holders may in writing
direct. If two or more persons are registered as joint holders
of any shares any one can give an effectual receipt for any
dividend paid in respect of such shares.
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18.3
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The Board may deduct from the dividends or distributions payable
to any Member all moneys due from such Member to the Company on
account of calls or otherwise.
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19.1
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The Board may capitalise any amount for the time being standing
to the credit of any of the Companys share premium or
other reserve accounts or to the credit of the profit and loss
account or otherwise available for distribution by applying such
amount in paying up unissued shares to be allotted as fully paid
bonus shares pro rata to the Members.
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19.2
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The Board may capitalise any amount for the time being standing
to the credit of a reserve account or amounts otherwise
available for dividend or distribution by applying such amounts
in paying up in full, partly or nil paid shares of those Members
who would have been entitled to such amounts if they were
distributed by way of dividend or distribution.
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Platinum
Underwriters Holdings, Ltd.
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Page A-14
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MEETINGS
OF MEMBERS
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20. |
Annual General Meetings
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The annual general meeting shall be held in each year (other
than the year of incorporation) at such time and place (other
than the United States) as the Chairman, the Chief Executive
Officer, the President or a majority of the Directors shall
determine.
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21. |
Special General Meetings
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The Chairman, the Chief Executive Officer, the President or a
majority of the Directors may convene a special general meeting
whenever in their judgment such a meeting is necessary, provided
that any such meeting shall be held outside the United States.
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22. |
Requisitioned General Meetings
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The Board shall, on the requisition of Members holding at the
date of the deposit of the requisition not less than one-tenth
of such of the
paid-up
share capital of the Company as at the date of the deposit
carries the right to vote at general meetings, forthwith proceed
to convene a special general meeting and the provisions of the
Act shall apply.
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23.1
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At least five days notice of an annual general meeting
shall be given to each Member entitled to attend and vote
thereat, stating the date, place and time at which the meeting
is to be held, that the election of Directors will take place
thereat, and as far as practicable, the other business to be
conducted at the meeting.
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23.2
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At least five days notice of a special general meeting
shall be given to each Member entitled to attend and vote
thereat, stating the date, time, place and the general nature of
the business to be considered at the meeting.
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23.3
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The Board may fix any date as the record date for determining
the Members entitled to receive notice of and to vote at any
general meeting.
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23.4
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A general meeting shall, notwithstanding that it is called on
shorter notice than that specified in these Bye-laws, be deemed
to have been properly called if it is so agreed by (i) all
the Members entitled to attend and vote thereat in the case of
an annual general meeting; and (ii) by a majority in number
of the Members having the right to attend and vote at the
meeting, being a majority together holding not less than 95% in
nominal value of the shares giving a right to attend and vote
thereat in the case of a special general meeting.
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23.5
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The accidental omission to give notice of a general meeting to,
or the non-receipt of a notice of a general meeting by, any
person entitled to receive notice shall not invalidate the
proceedings at that meeting.
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24. |
Giving Notice and Access
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24.1
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A notice may be given by the Company to a Member:
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(a)
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by delivering it to such Member in person; or
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Platinum
Underwriters Holdings, Ltd.
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Page A-15
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(b)
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by sending it by post or courier to such Members address
in the Register of Members; or
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(c)
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by transmitting it by electronic means (including facsimile and
electronic mail, but not telephone) in accordance with such
directions as may be given by such Member to the Company for
such purpose; or
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(d)
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in accordance with Bye-law 24.4.
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24.2
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Any notice required to be given to a Member shall, with respect
to any shares held jointly by two or more persons, be given to
whichever of such persons is named first in the Register of
Members and notice so given shall be sufficient notice to all
the holders of such shares.
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24.3
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Any notice (save for one delivered in accordance with Bye-law
24.4) shall be deemed to have been delivered at the time when
the same would be delivered in the ordinary course of
transmission, but in all events such notice shall be deemed to
have been delivered not later than ten (10) days after the
date on which such notice is deposited, with postage prepaid, in
the mail of the United States, Bermuda or any member state of
the European Union. In proving such delivery, it shall be
sufficient to prove that the notice was properly addressed and
prepaid, if posted, and the time when it was posted, delivered
to the courier, or transmitted by electronic means.
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24.4
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Where a Member indicates his consent (in a form and manner
satisfactory to the Board) to receive information or documents
by accessing them on a website rather than by other means, the
Board may deliver such information or documents by sending a
notice to the Member in accordance with Bye-law 24.1 of the
availability of such information or documents on a website and
including in such notice the address of the website, the place
on the website where the information or document may be found,
and instructions as to how the information or document may be
accessed on the website.
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24.5
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In the case of information or documents delivered in accordance
with Bye-law 24.4, delivery shall be deemed to have been made
upon the later of (i) the date that the Member is notified
in accordance with that Bye-law; and (ii) the date that the
information or document is published on the website.
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25. |
Postponement of General Meeting
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The Secretary may postpone any general meeting called in
accordance with these Bye-laws (other than a meeting
requisitioned under these Bye-laws) provided that notice of
postponement is given to the Members before the time for such
meeting. Fresh notice of the date, time and place for the
postponed meeting shall be given to each Member in accordance
with these Bye-laws.
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26. |
Electronic Participation in Meetings
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Members may participate in any general meeting by such
telephonic or electronic means from anywhere in the world (other
than the United States) as permit all persons
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Platinum
Underwriters Holdings, Ltd.
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Page A-16
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participating in the meeting to
communicate with each other simultaneously and instantaneously,
and participation in such a meeting shall constitute presence in
person at such meeting.
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27. |
Quorum at General Meetings
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27.1
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At any general meeting two or more persons present in person and
representing in person or by proxy in excess of 50% of the total
issued voting shares in the Company at the commencement of the
meeting shall form a quorum for the transaction of business,
provided that if the Company shall at any time have only one
Member, one Member present in person or by proxy shall form a
quorum for the transaction of business at any general meeting
held during such time.
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27.2
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If within half an hour from the time appointed for the meeting a
quorum is not present, then, in the case of a meeting convened
on a requisition, the meeting shall be deemed cancelled and, in
any other case, the meeting shall stand adjourned to the same
day one week later, at the same time and place or to such other
day, time or place as the Secretary may determine. Unless the
meeting is adjourned to a specific date, time and place
announced at the meeting being adjourned, fresh notice of the
resumption of the meeting shall be given to each Member entitled
to attend and vote thereat in accordance with these Bye-laws.
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28. |
Chairman to Preside at General Meetings
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Unless otherwise agreed by a majority of those attending and
entitled to vote thereat, the Chairman, if there be one, and if
not the Chief Executive Officer, if there be one, and if not the
President, if there be one, shall act as chairman at all general
meetings at which such person is present. In their absence a
chairman shall be appointed or elected by those present at the
meeting and entitled to vote.
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29. |
Voting on Resolutions
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29.1
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Subject to the Act and these Bye-laws, any question proposed for
the consideration of the Members at any general meeting shall be
decided by the affirmative votes of a majority of the votes cast
in accordance with these Bye-laws and in the case of an equality
of votes the resolution shall fail.
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29.2
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No Member shall be entitled to vote at a general meeting unless
such Member has paid all the calls on all shares held by such
Member.
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29.3
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At any general meeting a resolution put to the vote of the
meeting shall, in the first instance, be voted upon by a show of
hands and, subject to any rights or restrictions for the time
being lawfully attached to any class or series of shares and
subject to these Bye-laws, every Member present in person and
every person holding a valid proxy at such meeting shall be
entitled to one vote for each share carrying the right to vote
of which such person is the holder or for which such person
holds a proxy (subject to any adjustments or eliminations of
voting power of any share pursuant to Bye-laws 33 and 34).
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Platinum
Underwriters Holdings, Ltd.
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Page A-17
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29.4
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In the event that a Member participates in a general meeting by
telephonic or electronic means, the chairman of the meeting
shall direct the manner in which such Member may cast his vote
or votes on a show of hands.
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29.5
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At any general meeting if an amendment is proposed to any
resolution under consideration and the chairman of the meeting
rules on whether or not the proposed amendment is out of order,
the proceedings on the substantive resolution shall not be
invalidated by any error in such ruling.
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29.6
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At any general meeting a declaration by the chairman of the
meeting that a question proposed for consideration has, on a
show of hands, been carried, or carried unanimously, or by a
particular majority, or lost, and an entry to that effect in a
book containing the minutes of the proceedings of the Company
shall, subject to these Bye-laws, be conclusive evidence of that
fact.
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30. |
Power to Demand a Vote on a Poll
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30.1
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Notwithstanding the foregoing, at any general meeting a poll may
be demanded on a resolution put to the vote at the meeting by
any of the following persons:
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(a)
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the chairman of such meeting; or
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(b)
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at least three Members present in person or represented by
proxy; or
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(c)
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any Member or Members present in person or represented by proxy
and holding between them not less than one-tenth of the total
voting rights of all the Members having the right to vote at
such meeting; or
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(d)
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any Member or Members present in person or represented by proxy
and holding between them voting shares on which an aggregate sum
has been paid up equal to not less than one-tenth of the total
amount paid up on all such voting shares.
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30.2
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Where a poll is demanded, the vote shall be counted by ballot as
described herein, or in the case of a general meeting at which
one or more Members are present by telephonic or electronic
means, in such manner as the chairman of the meeting may direct,
and the result of such poll shall be deemed to be the resolution
of the meeting at which the poll was demanded and shall replace
any previous resolution upon the same matter which has been the
subject of a show of hands. A person entitled to more than one
vote need not use all his votes or cast all the votes he uses in
the same way.
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30.3
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A poll demanded for the purpose of electing a chairman of the
meeting or on a question of adjournment shall be taken
forthwith. A poll demanded on any other question shall be taken
at such time and in such manner during such meeting as the
chairman (or acting chairman) of the meeting may direct. Any
business other than that upon which a poll has been demanded may
be conducted pending the taking of the poll.
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Platinum
Underwriters Holdings, Ltd.
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Page A-18
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30.4
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Where a vote is taken by poll, each person physically present
and entitled to vote shall be furnished with a ballot paper on
which such person shall record his vote in such manner as shall
be determined at the meeting having regard to the nature of the
question on which the vote is taken, and each ballot paper shall
be signed or initialled or otherwise marked so as to identify
the voter and the registered holder in the case of a proxy. Each
person present by telephonic or electronic means shall cast his
vote in such manner as the chairman shall direct. At the
conclusion of the poll, the ballot papers and votes cast in
accordance with the chairmans directions shall be examined
and counted by a committee of not less than two Members or proxy
holders appointed by the chairman for the purpose and the result
of the poll shall be declared by the chairman.
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31. |
Voting by Joint Holders of Shares
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In the case of joint holders, the vote of the senior who tenders
a vote (whether in person or by proxy) shall be accepted to the
exclusion of the votes of the other joint holders, and for this
purpose seniority shall be determined by the order in which the
names stand in the Register of Members.
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32. |
Votes of Members General
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Subject to the provisions of Bye-laws 33 and 34 below, and
subject to any rights or restrictions for the time being
attached to any class or series of shares, every Member shall
have one vote for each share carrying the right to vote on the
matter in question of which he is the holder. Notwithstanding
any other provisions of these Bye-laws, all determinations in
these Bye-laws that are made by or subject to a vote or approval
of Members shall be based upon the voting power of such
Members shares as determined pursuant to Bye-laws 33 and
34.
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33. |
Adjustment of Voting Power
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33.1
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The voting power of all shares is hereby adjusted (and shall be
automatically adjusted in the future) to the extent necessary so
that there is no 9.5% U.S. Member. The Board shall
implement the foregoing in the manner provided herein; provided,
however, that the foregoing provision and the remainder of this
Bye-law 33 shall not apply in the event that one Member owns
greater than 75% of the voting power of the issued shares of the
Company determined without applying the voting power adjustments
or eliminations under this Bye-law 33.
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33.2
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The Board shall from time to time, including prior to any time
at which a vote of Members is taken, take all reasonable steps,
including those specified in Bye-law 37, through communications
with Members or otherwise, necessary to ascertain whether there
exists, or will exist at the time any vote of Members is taken,
a Tentative 9.5% U.S. Member.
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33.3
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In the event that a Tentative 9.5% U.S. Member exists, the
aggregate votes conferred by shares held by a Member and treated
as Controlled Shares of that Tentative 9.5% U.S. Member
shall be reduced to the extent necessary such that
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Platinum
Underwriters Holdings, Ltd.
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Page A-19
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the Controlled Shares of the
Tentative 9.5% U.S. Member will constitute less than 9.5%
of the voting power of all issued and outstanding shares. In
applying the previous sentence where shares held by more than
one Member are treated as Controlled Shares of such Tentative
9.5% U.S. Member, the reduction in votes shall apply to
such Members in descending order according to their respective
Attribution Percentages, provided that, in the event of a tie,
the reduction shall apply pro rata to such Members. The votes of
Members owning no shares treated as Controlled Shares of any
Tentative 9.5% U.S. Member shall, in the aggregate, be
increased by the same number of votes subject to reduction as
described above; provided, however, that no shares shall be
conferred votes to the extent that doing so will cause any
person to be treated as a 9.5% U.S. Member. Such increase
shall be apportioned to all such Members in proportion to their
voting power at that time, provided that such increase shall be
limited to the extent necessary to avoid causing any person to
be a 9.5% U.S. Member. The adjustments of voting power
described in this Bye-law 33 shall apply repeatedly until there
is no 9.5% U.S. Member. The Board of Directors may deviate
from any of the principles described in this Bye-law 33 and
determine that shares held by a Member shall carry different
voting rights as it determines appropriate (i) to avoid the
existence of any 9.5% U.S. Member or (ii) to avoid
adverse tax, legal or regulatory consequences to the Company,
any subsidiary of the Company, or any direct or indirect holder
of shares. For the avoidance of doubt, in applying the
provisions of Bye-laws 33 and 34, a share may carry a fraction
of a vote.
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34. |
Other Adjustments of Voting Power
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In addition to the provisions of Bye-law 33, a share shall not
carry a right to vote to the extent that the Board of Directors
determines that it is necessary that such share should not carry
the right to vote in order to avoid adverse tax, legal or
regulatory consequences to the Company, any of its subsidiaries
or any direct or indirect holder of shares, provided that no
adjustment pursuant to this sentence shall cause any person to
become a 9.5% U.S. Member.
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35. |
Professional Assistance
|
Prior to the meeting at which Members shall vote on any matter
(or prior to any vote in the case of notification to Members
specified in item (iii) of this Bye-law 35), the Board may,
in its sole discretion, (i) retain the services of an
internationally recognized accounting firm or other organization
with comparable professional capabilities in order to assist the
Company in applying the principles of Bye-laws 33 and 34 and
(ii) obtain from such firm or organization a statement
describing the information obtained and procedures followed and
setting forth the determinations made with respect to Bye-laws
33 and 34, and (iii) notify in writing or orally each
Member of the voting power conferred by its shares determined in
accordance with Bye-laws 33 and 34. For the avoidance of doubt,
any failure by the Board to take any of the actions described in
this Bye-law 35 shall not invalidate any votes cast or the
proceedings at the meeting.
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Platinum
Underwriters Holdings, Ltd.
|
Page A-20
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36. |
Board Determination Binding
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Any determination by the Board as to any adjustments or
eliminations of voting power of any shares made pursuant to
Bye-laws 33 and 34 shall be final and binding and any vote taken
based on such determination shall not be capable of being
challenged solely on the basis of such determination.
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37. |
Requirement of Members to Provide Information and Notice
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37.1
|
The Board shall have the authority to request from any direct or
indirect holder of shares, and such holder of shares shall
provide, such information as the Board may reasonably request
for the purpose of determining whether any holders voting
rights are to be adjusted. If such holder fails to respond to
such a request, or submits incomplete or inaccurate information
in response to such a request, the Board may determine in its
sole discretion that such holders shares shall carry no
voting rights, in which case such holder shall not exercise any
voting rights in respect of such shares until otherwise
determined by the Board.
|
|
|
37.2
|
Any direct or indirect holder of shares shall give notice to the
Company within ten days following the date that such holder
acquires actual knowledge that it is the direct or indirect
holder of Controlled Shares of 9.5% or more of the voting power
of all issued shares of the Company (without giving effect to
voting power adjustments or eliminations under Bye-laws 33 and
34.
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|
|
37.3
|
Notwithstanding the foregoing, no Member shall be liable to any
other Member or the Company for any losses or damages resulting
from such Members failure to respond to, or submission of
incomplete or inaccurate information in response to, a request
under Bye-law 37.1 or from such Members failure to give
notice under Bye-law 37.2.
|
|
|
37.4
|
Any Confidential Information shall be used by the Company solely
for the purposes contemplated by this Bye-law 37(except as may
be required otherwise by applicable law or regulation). The
Company shall hold such Confidential Information in strict
confidence and shall not disclose any Confidential Information
that it receives, except (i) to the U.S. Internal
Revenue Service if and to the extent the Confidential
Information is required to be provided thereto, (ii) to any
firm or organization engaged by the Company pursuant to Bye-law
35 to assist the Company in applying the principles of Bye-laws
33 and 34, or (iii) as otherwise required by applicable law
or regulation.
|
|
|
37.5
|
For the avoidance of doubt, the Company shall be permitted to
disclose to the Members and others the relative voting
percentages of all Members after application of Bye-laws 33 and
34. At the written request of a Member, the Confidential
Information of such Member shall be destroyed or returned to
such Member after the later to occur of (i) such Member
ceasing to be a Member or (ii) the last day of the seventh
(7th) year after the year during which the Confidential
Information was obtained by the Company, provided that the Board
may determine that such Confidential Information should instead
be
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Platinum
Underwriters Holdings, Ltd.
|
Page A-21
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|
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retained for a longer period in
order to avoid adverse tax, legal or regulatory consequences to
the Company, any of its subsidiaries or any direct or indirect
holder of shares.
|
|
|
|
|
38.1
|
An instrument appointing a proxy shall be in writing in
substantially the following form or such other form as the
chairman of the meeting shall accept:
|
Proxy
(the Company)
I/We, [insert names here], being a Member of the Company with
[number] shares, HEREBY APPOINT [name] of [address] or
failing him, [name] of [address] to be my/our proxy to vote for
me/us at the meeting of the Members to be held on the
[ ] day of [ ], 200[ ] and at any
adjournment thereof. (Any restrictions on voting to be inserted
here.)
Signed this [ ] day of [ ], 200[ ]
Member(s)
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|
|
|
38.2
|
The instrument appointing a proxy must be received by the
Company at the registered office or at such other place or in
such manner as is specified in the notice convening the meeting
or in any instrument of proxy sent out by the Company in
relation to the meeting at which the person named in the
instrument appointing a proxy proposes to vote, and an
instrument appointing a proxy which is not received in the
manner so prescribed shall be invalid.
|
|
|
38.3
|
A Member who is the holder of two or more shares may appoint
more than one proxy to represent him and vote on his behalf in
respect of different shares.
|
|
|
38.4
|
The decision of the chairman of any general meeting as to the
validity of any appointment of a proxy shall be final.
|
|
|
39. |
Representation of Corporate Member
|
|
|
|
|
39.1
|
A corporation which is a Member may, by written instrument,
authorise such person or persons as it thinks fit to act as its
representative at any meeting and any person so authorised shall
be entitled to exercise the same powers on behalf of the
corporation which such person represents as that corporation
could exercise if it were an individual Member, and that Member
shall be deemed to be present in person at any such meeting
attended by its authorised representative or representatives.
|
|
|
39.2
|
Notwithstanding the foregoing, the chairman of the meeting may
accept such assurances as he thinks fit as to the right of any
person to attend and vote at general meetings on behalf of a
corporation which is a Member.
|
|
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Platinum
Underwriters Holdings, Ltd.
|
Page A-22
|
|
|
40. |
Adjournment of General Meeting
|
The chairman of a general meeting may, with the consent of the
Members at any general meeting at which a quorum is present, and
shall if so directed by the Members, adjourn the meeting. Unless
the meeting is adjourned to a specific date, place and time
announced at the meeting being adjourned, fresh notice of the
date, place and time for the resumption of the adjourned meeting
shall be given to each Member entitled to attend and vote
thereat in accordance with these Bye-laws.
|
|
|
|
41.1
|
Subject to these Bye-laws, anything which may be done by
resolution in general meeting (whether by Members of the Company
generally or by any class of the Members) may be done without a
meeting by written resolution in accordance with this Bye-law,
provided that any such resolution shall be valid only if the
Board in its sole discretion determines that (i) none of
the Members signed the written resolution in the United States,
and (ii) the written resolution or its use would not result
in a more than de minimis adverse tax, regulatory or legal
consequence to the Company, any of its subsidiaries or any
direct or indirect holder of shares.
|
|
|
41.2
|
Notice of a written resolution, along with a copy of such
written resolution, shall be given to all Members who would be
entitled to attend a meeting and vote thereon. The accidental
omission to give notice to, or the non-receipt of a notice by,
any Member does not invalidate the passing of a written
resolution.
|
|
|
41.3
|
A written resolution is passed when it is signed by, or in the
case of a Member that is a corporation, on behalf of, all the
Members who at the date of the resolution would be entitled to
attend the meeting and vote on the resolution.
|
|
|
41.4
|
A written resolution may be signed in any number of counterparts.
|
|
|
41.5
|
A written resolution made in accordance with this Bye-law is as
valid as if it had been passed by the Company in general meeting
or by a meeting of the relevant class of Members, as the case
may be, and any reference in any Bye-law to a meeting at which a
resolution is passed or to Members voting in favour of a
resolution shall be construed accordingly.
|
|
|
41.6
|
A written resolution made in accordance with this Bye-law shall
constitute minutes for the purposes of the Act.
|
|
|
41.7
|
This Bye-law shall not apply to:
|
|
|
|
|
(a)
|
a resolution passed to remove an Auditor from office before the
expiration of his term of office; or
|
|
|
(b)
|
a resolution passed for the purpose of removing a Director
before the expiration of his term of office.
|
|
|
|
|
41.8
|
For the purposes of this Bye-law, the effective date of a
written resolution is the date when the resolution is signed by,
or in the case of a Member that is a
|
|
|
Platinum
Underwriters Holdings, Ltd.
|
Page A-23
|
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|
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|
|
corporation, on behalf of, the
last Member whose signature is required pursuant to Bye-law
41.3, and any reference in any Bye-law to the date of passing of
a resolution is, in relation to a resolution made in accordance
with this Bye-law, a reference to such date.
|
|
|
42. |
Directors Attendance at General Meetings
|
The Directors shall be entitled to receive notice of, attend and
be heard at any general meeting.
CERTAIN
SUBSIDIARIES
|
|
43. |
Voting of Certain Subsidiary Shares
|
Notwithstanding any provision of these Bye-laws to the contrary,
if (i) the voting rights of any shares of the Company are
adjusted pursuant to Bye laws
33-37
(inclusive), (ii) the Company would be characterized as a
controlled foreign corporation under section 957(b) of the
Code before the application of Bye-laws
33-37
(inclusive) (assuming for this purpose that the Company itself
had insurance income), and (iii) the Company is required or
entitled to vote at a general meeting of any direct
non-U.S. subsidiary
of the Company, the Board shall refer the subject matter of such
vote to the Members of the Company on a poll (subject to
Bye-laws
33-37
(inclusive)) and seek authority from the Members for the
Companys corporate representative or proxy to vote in
favour of the resolution proposed by the subsidiary. The Board
shall direct the Companys corporate representative or
proxy to vote the Companys shares in the subsidiary pro
rata to the votes received at the general meeting of the
Company, with votes for or against the directing resolution
being taken, respectively, as an instruction for the
Companys corporate representative or proxy to vote the
appropriate proportion of its shares for and the appropriate
proportion of its shares against the resolution proposed by the
subsidiary. The Board shall have authority to resolve any
ambiguity.
|
|
44. |
Bye-laws or Articles of Association of Certain
Subsidiaries
|
The Board in its discretion shall require that the Bye-laws or
Articles of Association or similar organizational documents of
each subsidiary of the Company organized under the laws of a
jurisdiction outside the United States of America, other than
any
non-U.S. subsidiary
that is a direct or indirect subsidiary of a U.S. Person,
shall contain provisions substantially similar to Bye-law 43 and
this Bye-law 44. The Company shall enter into agreements, as and
when determined by the Board, with each such subsidiary, only if
and to the extent reasonably necessary and permitted under
applicable law, to effectuate or implement this Bye-law.
|
|
Platinum
Underwriters Holdings, Ltd.
|
Page A-24
|
DIRECTORS
AND OFFICERS
|
|
45. |
Election of Directors
|
|
|
|
|
45.1
|
The Board of Directors shall be elected or appointed in the
first place at the statutory meeting of the Company and
thereafter, except in the case of a casual vacancy, at the
annual general meeting or at any special general meeting called
for that purpose.
|
|
|
45.2
|
At any general meeting the Members may authorise the Board to
fill any vacancy in their number left unfilled at a general
meeting.
|
The Board shall consist of not less than two Directors or such
number in excess thereof as the Board may from time to time
determine by resolution to be advisable and in the best
interests of the Company. Candidates for election at each annual
general meeting or special general meeting called for the
purpose shall be nominated by the Board.
|
|
47. |
Term of Office of Directors
|
Directors shall hold office for such term as the Members may
determine or, in the absence of such determination, until the
next annual general meeting or until their successors are
elected or appointed or their office is otherwise vacated.
|
|
|
|
48.1
|
Subject to any provision to the contrary in these Bye-laws, the
Members entitled to vote for the election of Directors may, at
any special general meeting convened and held in accordance with
these Bye-laws, remove a Director provided that the notice of
any such meeting convened for the purpose of removing a Director
shall contain a statement of the intention so to do and be
served on such Director not less than 14 days before the
meeting and at such meeting the Director shall be entitled to be
heard on the motion for such Directors removal.
|
|
|
48.2
|
If a Director is removed from the Board under this Bye-law the
Members may fill the vacancy at the meeting at which such
Director is removed. In the absence of such election or
appointment, the Board may fill the vacancy.
|
|
|
49. |
Vacancy in the Office of Director
|
|
|
|
|
49.1
|
The office of Director shall be vacated if the Director:
|
|
|
|
|
(a)
|
is removed from office pursuant to these Bye-laws or is
prohibited from being a Director by law;
|
|
|
(b)
|
is or becomes bankrupt, or makes any arrangement or composition
with his creditors generally;
|
|
|
(c)
|
is or becomes of unsound mind or dies; or
|
|
|
(d)
|
resigns his office by notice to the Company.
|
|
|
Platinum
Underwriters Holdings, Ltd.
|
Page A-25
|
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49.2
|
The Board shall have the power to appoint any person as a
Director to fill a vacancy on the Board occurring as a result of
the death, disability, disqualification or resignation of any
Director.
|
|
|
50. |
Remuneration of Directors
|
The remuneration, if any, of the Directors shall be determined
by the Board and shall be deemed to accrue from day to day. The
Directors may also be paid all travel, hotel and other expenses
properly incurred by them in attending and returning from the
meetings of the Board, any committee appointed by the Board,
general meetings, or in connection with the business of the
Company or their duties as Directors generally.
|
|
51. |
Defect in Appointment
|
All acts done in good faith by the Board, any Director, a member
of a committee appointed by the Board, any person to whom the
Board may have delegated any of its powers, or any person acting
as a Director shall, notwithstanding that it be afterwards
discovered that there was some defect in the appointment of any
Director or person acting as aforesaid, or that he was, or any
of them were, disqualified, be as valid as if every such person
had been duly appointed and was qualified to be a Director or
act in the relevant capacity.
|
|
52. |
Directors to Manage Business
|
The business of the Company shall be managed and conducted by
the Board. In managing the business of the Company, the Board
may exercise all such powers of the Company as are not, by the
Act or by these Bye-laws, required to be exercised by the
Company in general meeting.
|
|
53. |
Powers of the Board of Directors
|
The Board may:
|
|
|
|
(a)
|
appoint, suspend, or remove any Officer, manager, secretary,
clerk, agent or employee of the Company and may fix their
remuneration and determine their duties;
|
|
|
(b)
|
exercise all the powers of the Company to borrow money and to
mortgage or charge its undertaking, property and uncalled
capital, or any part thereof, and may issue debentures,
debenture stock and other securities whether outright or as
security for any debt, liability or obligation of the Company or
any third party;
|
|
|
(c)
|
appoint one or more Directors to the office of Chief Executive
Officer
and/or
President of the Company, who shall, subject to the control of
the Board, supervise and administer all of the general business
and affairs of the Company;
|
|
|
(d)
|
appoint a person to act as manager of the Companys
day-to-day business and may entrust to and confer upon such
manager such powers and duties as it deems appropriate for the
transaction or conduct of such business;
|
|
|
Platinum
Underwriters Holdings, Ltd.
|
Page A-26
|
|
|
|
|
(e)
|
by power of attorney, appoint any company, firm, person or body
of persons, whether nominated directly or indirectly by the
Board, to be an attorney of the Company for such purposes and
with such powers, authorities and discretions (not exceeding
those vested in or exercisable by the Board) and for such period
and subject to such conditions as it may think fit and any such
power of attorney may contain such provisions for the protection
and convenience of persons dealing with any such attorney as the
Board may think fit and may also authorise any such attorney to
sub-delegate all or any of the powers, authorities and
discretions so vested in the attorney;
|
|
|
(f)
|
procure that the Company pays all expenses incurred in promoting
and incorporating the Company;
|
|
|
(g)
|
delegate any of its powers (including the power to sub-delegate)
to a committee of one or more persons appointed by the Board
which may consist partly or entirely of
non-Directors,
provided that every such committee shall conform to such
directions as the Board shall impose on them, and provided
further that the meetings and proceedings of any such committee
shall be governed by the provisions of these Bye-laws regulating
the meetings and proceedings of the Board, so far as the same
are applicable and are not superseded by directions imposed by
the Board;
|
|
|
(h)
|
delegate any of its powers (including the power to sub-delegate)
to any person on such terms and in such manner as the Board may
see fit;
|
|
|
(i)
|
present any petition and make any application in connection with
the liquidation or reorganisation of the Company;
|
|
|
(j)
|
in connection with the issue of any share, pay such commission
and brokerage as may be permitted by law; and
|
|
|
(k)
|
authorise any company, firm, person or body of persons to act on
behalf of the Company for any specific purpose and in connection
therewith to execute any deed, agreement, document or instrument
on behalf of the Company.
|
|
|
54. |
Register of Directors and Officers
|
The Board shall cause to be kept in one or more books at the
registered office of the Company a Register of Directors and
Officers and shall enter therein the particulars required by the
Act.
|
|
55. |
Appointment of Officers
|
The Board may appoint such Officers (who may or may not be
Directors) as the Board may determine.
|
|
56. |
Appointment of Secretary
|
The Secretary shall be appointed by the Board from time to time.
|
|
Platinum
Underwriters Holdings, Ltd.
|
Page A-27
|
The Officers shall have such powers and perform such duties in
the management, business and affairs of the Company as may be
delegated to them by the Board from time to time.
|
|
58. |
Remuneration of Officers
|
The Officers shall receive such remuneration as the Board may
determine.
|
|
59. |
Conflicts of Interest
|
|
|
|
|
59.1
|
Any Director, or any Directors firm, partner or any
company with whom any Director is associated, may act in any
capacity for, be employed by or render services to the Company
and such Director or such Directors firm, partner or
company shall be entitled to remuneration as if such Director
were not a Director. Nothing herein contained shall authorise a
Director or Directors firm, partner or company to act as
Auditor to the Company.
|
|
|
59.2
|
A Director who is directly or indirectly interested in a
contract or proposed contract or arrangement with the Company
shall declare the nature of such interest as required by the Act.
|
|
|
59.3
|
Following a declaration being made pursuant to this Bye-law, and
unless disqualified by the chairman of the relevant Board
meeting, a Director may vote in respect of any contract or
proposed contract or arrangement in which such Director is
interested and may be counted in the quorum for such meeting.
|
|
|
60. |
Indemnification and Exculpation of Directors and Officers
|
|
|
|
|
60.1
|
The Directors, Secretary and other Officers (such term to
include any person appointed to any committee by the Board) for
the time being acting in relation to any of the affairs of the
Company, any subsidiary thereof, and the liquidator or trustees,
if any, for the time being acting in relation to any of the
affairs of the Company or any subsidiary thereof and every one
of them, and their heirs, executors and administrators, shall to
the fullest extent permitted by law be indemnified and secured
harmless out of the assets of the Company from and against all
actions, costs, charges, losses, damages and expenses which they
or any of them, their heirs, executors or administrators, shall
or may incur or sustain by or by reason of any act done,
concurred in or omitted in or about the execution of their duty,
or supposed duty, or in their respective offices or trusts, and
none of them shall be answerable for the acts, receipts,
neglects or defaults of the others of them or for joining in any
receipts for the sake of conformity, or for any bankers or other
persons with whom any moneys or effects belonging to the Company
shall or may be lodged or deposited for safe custody, or for
insufficiency or deficiency of any security upon which any
moneys of or belonging to the Company shall be placed out on or
invested, or for any other loss, misfortune or damage which may
happen in the execution of their respective offices or trusts,
or in relation thereto, provided that this indemnity shall not
extend to any matter in respect of any fraud
|
|
|
Platinum
Underwriters Holdings, Ltd.
|
Page A-28
|
|
|
|
|
|
or dishonesty which may attach to
any of the said persons. Each Member agrees to waive any claim
or right of action such Member might have, whether individually
or by or in the right of the Company, against any Director,
Secretary or other Officer on account of any action taken by
such Director, Secretary or other Officer, or the failure of
such Director, Secretary or other Officer to take any action in
the performance of his duties with or for the Company or any
subsidiary thereof, provided that such waiver shall not extend
to any matter in respect of any fraud or dishonesty which may
attach to such Director, Secretary or other Officer.
|
|
|
|
|
60.2
|
The Company shall purchase and maintain insurance for the
benefit of any Director, Secretary or other Officer against any
liability incurred by him under the Act in his capacity as
Director, Secretary or other Officer or indemnifying such
Director, Secretary or other Officer in respect of any loss
arising or liability attaching to him by virtue of any rule of
law in respect of any negligence, default, breach of duty or
breach of trust of which such Director, Secretary or other
Officer may be guilty in relation to the Company or any
subsidiary thereof.
|
|
|
60.3
|
The Company shall to the fullest extent permitted by law advance
moneys to any Director, Secretary or other Officer for the
costs, charges and expenses incurred by such Director, Secretary
or other Officer in defending any civil or criminal proceedings
against him, on condition that such Director, Secretary or other
Officer shall repay the advance if any allegation of fraud or
dishonesty is proved against him.
|
MEETINGS
OF THE BOARD OF DIRECTORS
The Board may meet for the transaction of business, adjourn and
otherwise regulate its meetings as it sees fit. Such meetings
may be held within or outside of Bermuda, except not in the
United States. A resolution put to the vote at a meeting of the
Board shall be carried by the affirmative votes of a majority of
the votes cast and in the case of an equality of votes the
resolution shall fail.
|
|
62. |
Notice of Board Meetings
|
The Chairman, if there be one, and if not the Chief Executive
Officer, if there be one, and if not the President, if there be
one, may, and the Secretary on the requisition of a majority of
the Directors then in office shall, at any time summon a meeting
of the Board. Notice of a meeting of the Board shall be deemed
to be duly given to a Director if it is given to such Director
verbally (including in person or by telephone) or otherwise
communicated or sent to such Director by post, electronic means
or other mode of representing words in a visible form at such
Directors last known address or in accordance with any
other instructions given by such Director to the Company for
this purpose.
|
|
Platinum
Underwriters Holdings, Ltd.
|
Page A-29
|
|
|
63. |
Electronic Participation in Meetings
|
Directors may participate in any meeting by such telephonic or
electronic means from anywhere in the world (other than the
United States) as permit all persons participating in the
meeting to communicate with each other simultaneously and
instantaneously, and participation in such a meeting shall
constitute presence in person at such meeting.
|
|
64. |
Quorum at Board Meetings
|
The quorum necessary for the transaction of business at a
meeting of the Board shall be a majority of the Directors then
in office, present in person or represented.
|
|
65. |
Board to Continue in the Event of Vacancy
|
The Board may act notwithstanding any vacancy in its number but,
if and so long as its number is reduced below the number fixed
by these Bye-laws as the quorum necessary for the transaction of
business at meetings of the Board, the continuing Directors or
Director may act only for the purpose of (i) summoning a
general meeting; or (ii) preserving the assets of the
Company.
|
|
66. |
Chairman to Preside at Board Meetings
|
Unless otherwise agreed by a majority of the Directors
attending, the Chairman, if there be one, and if not the Chief
Executive Officer, if there be one, and if not the President, if
there be one, shall act as chairman at all meetings of the Board
at which such person is present. In their absence a chairman
shall be appointed or elected by the Directors present at the
meeting.
A resolution signed by all the Directors, which may be in
counterparts, shall be as valid as if it had been passed at a
meeting of the Board duly called and constituted, such
resolution to be effective on the date on which the last
Director signs the resolution, provided that any such resolution
shall be valid only if the Board in its sole discretion
determines that (i) none of the directors signed the
written resolution in the United States, and (ii) the
written resolution or its use would not result in a more than de
minimis adverse tax, regulatory or legal consequence to the
Company, any of its subsidiaries or any direct or indirect
holder of shares.
|
|
68. |
Validity of Prior Acts of the Board
|
No regulation or alteration to these Bye-laws made by the
Company in general meeting shall invalidate any prior act of the
Board which would have been valid if that regulation or
alteration had not been made.
|
|
Platinum
Underwriters Holdings, Ltd.
|
Page A-30
|
CORPORATE
RECORDS
The Board shall cause minutes to be duly entered in books
provided for the purpose:
|
|
|
|
(a)
|
of all elections and appointments of Officers;
|
|
|
(b)
|
of the names of the Directors present at each meeting of the
Board and of any committee appointed by the Board; and
|
|
|
(c)
|
of all resolutions and proceedings of general meetings of the
Members, meetings of the Board, meetings of managers and
meetings of committees appointed by the Board.
|
|
|
70. |
Place Where Corporate Records Kept
|
Minutes prepared in accordance with the Act and these Bye-laws
shall be kept by the Secretary at the registered office of the
Company.
|
|
|
|
71.1
|
The Company may adopt a seal in such form as the Board may
determine. The Board may adopt one or more duplicate seals for
use in or outside Bermuda.
|
|
|
71.2
|
A seal may, but need not, be affixed to any deed, instrument,
share certificate or document, and if the seal is to be affixed
thereto, it shall be attested by the signature of (i) any
Director, or (ii) any Officer, or (iii) the Secretary,
or (iv) any person authorised by the Board for that purpose.
|
|
|
71.3
|
A Resident Representative may, but need not, affix the seal of
the Company to certify the authenticity of any copies of
documents.
|
ACCOUNTS
|
|
|
|
72.1
|
The Board shall cause to be kept proper records of account with
respect to all transactions of the Company and in particular
with respect to:
|
|
|
|
|
(a)
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all amounts of money received and expended by the Company and
the matters in respect of which the receipt and expenditure
relates;
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(b)
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all sales and purchases of goods by the Company; and
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(c)
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all assets and liabilities of the Company.
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72.2
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Such records of account shall be kept at the registered office
of the Company, or subject to the Act, at such other place as
the Board thinks fit and shall be available for inspection by
the Directors during normal business hours.
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Platinum
Underwriters Holdings, Ltd.
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Page A-31
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The financial year end of the Company may be determined by
resolution of the Board and failing such resolution shall be
31st December in each year.
AUDITS
Subject to any rights to waive the appointment of an Auditor
pursuant to the Act, the accounts of the Company shall be
audited at least once in every year.
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75. |
Appointment of Auditor
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75.1
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Subject to the Act, the Audit Committee of the Board shall be
directly responsible for the nomination of the Auditor of the
accounts of the Company for each fiscal year, which nomination
shall be submitted to the Members for their approval at the
annual general meeting or at a subsequent special general
meeting.
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75.2
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The Auditor may be a Member but no Director, Officer or employee
of the Company shall, during his continuance in office, be
eligible to act as an Auditor of the Company.
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76. |
Remuneration of Auditor
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Save in the case of an Auditor appointed pursuant to Bye-law 81,
the remuneration of the Auditor shall be fixed by the Company in
general meeting or in such manner as the Members may determine.
In the case of an Auditor appointed pursuant to Bye-law 81, the
remuneration of the Auditor shall be fixed by the Board.
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77.1
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The financial statements provided for by these Bye-laws shall be
audited by the Auditor in accordance with generally accepted
auditing standards. The Auditor shall make a written report
thereon in accordance with generally accepted auditing standards.
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77.2
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The generally accepted auditing standards referred to in this
Bye-law may be those of a country or jurisdiction other than
Bermuda or such other generally accepted auditing standards as
may be provided for in the Act. If so, the financial statements
and the report of the Auditor shall identify the generally
accepted auditing standards used.
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The Auditor shall at all reasonable times have access to all
books kept by the Company and to all accounts and vouchers
relating thereto, and the Auditor may call on the Directors or
Officers of the Company for any information in their possession
relating to the books or affairs of the Company.
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Platinum
Underwriters Holdings, Ltd.
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Page A-32
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Subject to any rights to waive laying of accounts pursuant to
the Act, financial statements as required by the Act shall be
laid before the Members in general meeting. A written resolution
made in accordance with Bye-law 41 receiving, accepting,
adopting, approving or otherwise acknowledging financial
statements shall be deemed to be the laying of such statements
before the Members in general meeting.
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80. |
Distribution of Auditors Report
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The report of the Auditor shall be submitted to the Members in
general meeting.
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81. |
Vacancy in the Office of Auditor
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The Board may fill any casual vacancy in the office of the
Auditor.
VOLUNTARY
WINDING UP AND DISSOLUTION
If the Company shall be wound up the liquidator may, with the
sanction of a resolution of the Members, divide amongst the
Members in specie or in kind the whole or any part of the assets
of the Company (whether they shall consist of property of the
same kind or not) and may, for such purpose, set such value as
he deems fair upon any property to be divided as aforesaid and
may determine how such division shall be carried out as between
the Members or different classes of Members. The liquidator may,
with the like sanction, vest the whole or any part of such
assets in the trustees upon such trusts for the benefit of the
Members as the liquidator shall think fit, but so that no Member
shall be compelled to accept any shares or other securities or
assets whereon there is any liability.
CHANGES
TO CONSTITUTION
No Bye-law may be rescinded, altered or amended and no new
Bye-law may be made save in accordance with the Act and until
the same has been approved by a resolution of the Board and by a
resolution of the Members.
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84. |
Changes to the Memorandum of Association
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No alteration or amendment to the Memorandum of Association may
be made save in accordance with the Act and until same has been
approved by a resolution of the Board and by a resolution of the
Members.
The Board may exercise all the powers of the Company to
discontinue the Company to a jurisdiction outside Bermuda
pursuant to the Act.
Page
1 of 3
Proxy Card — PLATINUM UNDERWRITERS HOLDINGS, LTD.
THE BOARD OF DIRECTORS
RECOMMENDS A VOTE “FOR” ITEMS ITEMS 1, 2 and 3.
PLEASE MARK YOUR VOTE IN BOX IN THE FOLLOWING MANNER
x
USING DARK INK ONLY. |
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Please
mark
your votes as
indicated in
this example |
ý |
THIS PROXY WILL BE VOTED IN ACCORDANCE
WITH SPECIFICATIONS MADE. IF NO CHOICES ARE INDICATED, THIS PROXY WILL BE VOTED “FOR” ITEMS 1, 2 AND
3. |
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1. |
To elect the
following nominees to the
Company’s Board of Directors:
Nominees:
01 H. Furlong Baldwin,
02 Dan R. Carmichael,
03 A. John Hass,
04 Edmund R. Megna,
05 Michael D. Price,
06 Peter T. Pruitt, and
07 James P. Slattery.
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FOR
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WITHHOLD
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FOR ALL EXCEPT
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FOR
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AGAINST
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ABSTAIN
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2. |
To consider and take action upon
a proposal to approve
the Amended and Restated Bye-laws of the Company. |
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3. |
To consider and take action upon
a proposal to approve
the nomination of KPMG, a Bermuda partnership, as the
Companys independent registered public accounting firm
for the 2009 fiscal year and to authorize the Audit
Committee to set the renumeration of such independent
registered public accounting firm. |
o |
o |
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Upon such other
business as may properly come before the meeting or any
postponement or adjournment thereof. |
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PLACE “X” HERE IF YOU PLAN TO ATTEND AND
VOTE YOUR SHARES AT THE MEETING |
o |
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(INSTRUCTIONS: To
withhold authority to vote for any individual nominee, mark the
For All Except box and write that nominees name in the space provided below.) |
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Mark Here for
Address
Change or Comments
SEE REVERSE |
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Signature
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Signature |
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Date |
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Please sign exactly as your name appears above.
If shares are held in the name of joint holders, each should sign. If you are signing as a trustee, guardian, executor, etc.,
please so indicate. |
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Page
2 of 3
Proxy Card
— PLATINUM UNDERWRITERS HOLDINGS, LTD.
Important Notice Regarding the Availability
of Proxy Materials for the Platinum Underwriters
Holdings, Ltd. 2009 Annual General Meeting of Shareholders to be Held on April 29, 2009.
The proxy statement, proxy and 2009 Annual
Report to Shareholders
are available at www.platinumre.com/proxymaterials.
Platinum Underwriters Holdings, Ltd.
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Page
3 of 3
Proxy Card
— PLATINUM UNDERWRITERS HOLDINGS, LTD.
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PLATINUM UNDERWRITERS HOLDINGS, LTD. |
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The Belvedere Building
69 Pitts Bay Road
2nd Floor
Pembroke HM 08 Bermuda
This proxy is solicited
on behalf of the Board of Directors and will be voted FOR Items 1, 2 and 3 if no instructions
to the contrary are indicated.
The undersigned hereby
appoints DAN R. CARMICHAEL, MICHAEL D. PRICE and MICHAEL E. LOMBARDOZZI, jointly
and severally, proxies, with the power of substitution and with the authority in each to act in the absence of the other, to
vote all shares the undersigned is entitled to vote at the Annual General Meeting of Shareholders on April 29, 2009 or
postponements or adjournments thereof on all matters that may properly come before the meeting, and particularly to vote
as hereinafter indicated. The undersigned hereby acknowledges receipt of the Notice of Annual General Meeting of
Shareholders and Proxy Statement dated March 30, 2009.
IMPORTANT - This proxy must be signed and dated
on the reverse side.
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BNY MELLON SHAREOWNER SERVICES
P.O. BOX 3550
SOUTH HACKENSACK, NJ 07606-9250 |
Address Change/Comments
(Mark the corresponding box on the reverse side) |
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