UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
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| | Filed by the Registrant x | Filed by a Party other than the Registrant o |
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ox | | Preliminary Proxy Statement |
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| o | | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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xo | | Definitive Proxy Statement |
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| o | | Definitive Additional Materials |
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| o | | Soliciting Material Pursuant to §240.14a-12 |
ENSTAR GROUP LIMITED
(Name of Registrant as Specified Inin Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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| | Payment of Filing Fee (Check the appropriate box): |
| x | | No fee required. |
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| | | (2) | | Aggregate number of securities to which transaction applies: |
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| | | (5) | | Total fee paid: |
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| o | | 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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Enstar Group Limited | 2 | 2018 Proxy Statement |
Dear Fellow Shareholders:Shareholder:
On behalf of Enstar Group Limited's Board of Directors, I invite you to join us at our 2018 Annual Generala Special Meeting of Shareholders on Wednesday, June 13, 2018, November , 2019 at 9:00 a.m. Atlantic time. The meetingtime, which will be held at our headquarters, Windsor Place, 3rd Floor, 22 Queen Street, in Hamilton, Bermuda,Bermuda.
The Special Meeting has been called to vote on the matters described in the noticeapprove an amendment and restatement of the Annual General MeetingEnstar Group Limited 2016 Equity Incentive Plan. The proposed amendments would allow us to make equity awards through the use of a Joint Share Ownership Plan, or JSOP, structure. In connection with implementing the JSOP structure, we are also seeking authorization of an additional 650,000 ordinary shares for use under the Amended and Restated Plan. The addition of the Proxy Statement that follow. We also encourage youJSOP to read our 2017 Annual Report on Form 10-K to learn more about our performance.
STRATEGY
Enstar's strategy isthe Amended and Restated Plan will enable us to provide long-term value by delivering market-leading insurance solutions through innovation, discipline, financial optimization, and operational excellence. One of the ways we measure long-term value is our book value per share, which increased nearly 11% to reach $159.19, driven by our highest ever net earnings of $311.5 million. It was a difficult yearequity incentive awards that are tax-efficient for our industry, but Enstar delivered a strong performance, primarily due to investment returns and run-off results.
Executing our acquisition objectives is vital to achieving sustained growth. Last year we again succeeded in bringing in new portfolios and integrating those recently acquired, and we are particularly proud that the strategic relationships we have built over the years are creating new business opportunities. To keep growing profitably, we need flexibility to fund attractive opportunities as and when they arise. To this end, our Board is overseeing several capital planning and management initiatives. We also took advantage of the opportunity in 2017 to divest of the majority of our life business, as we saw better growth opportunities on the P&C legacy side of our business.
Investable assets constituted over $500 per share in 2017, making proper management of our investment portfolios critical to our continued success. Our Board's Investment Committee works closely with our executives and our investment team to oversee investment policies, strategies, and material allocation decisions. Fixed income duration and regulated entity portfolio rebalancings were our primary strategic objectives this past year, as well as investments in alternative asset classes that provide opportunities for enhanced, risk-adjusted returns.
GOVERNANCE & COMPENSATION
Under the leadership of its Chair, Sandra Boss, our Board’s Risk Committee drove significant enhancements to our enterprise risk management and reporting framework, including the development of a new risk appetite framework and a refreshed management risk committee. Risk management remains at the core of our business model, and our Board will continue to focus on ensuring our platform is well-prepared to manage existing and emerging risks.
In 2017, we solidified the commitments of key members of our current executive management team through employment agreements that extend into 2020, which was a high priority for our Board. Led by our Nominating and Governance Committee, we are emphasizing succession planning and have undertaken several initiatives geared at developing and advancing Enstar's next generation of leaders.
Over the last two years, we have made significant changes to our annual and long-term incentive programs, taking into account the views of our shareholders and implementing robust performance metrics into both programs. At the forefront of our 2017 compensation decisions were the long-term incentive plan awards granted to our executivesU.K. tax residents. For more information, see "The Proposal" section in the form of performance stock units, which, although they are reported as received in 2017, will only be earned by our executives if Enstar achieves targeted levels of growth in fully diluted book value per share at the end of a three-year period. We believe this award structure incentivizes the creation of long-term value and aligns executive and shareholder interests.
SHAREHOLDER ENGAGEMENT
We again benefited from our shareholder engagement program, in which we heard perspectives from shareholders holding approximately 40% of our outstanding shares and the majoraccompanying proxy advisory firms. Topics discussed included executive compensation, board composition and diversity, risk oversight, and succession planning. The dialogue is valuable, and we will look to continue and expand our program in the years ahead.
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Enstar Group Limited | i | 2018 Proxy Statement |
VOTINGstatement.
Your support is important, so please vote as soon as possible by completing, dating, signing and returning the enclosed proxy card in the enclosed postage prepaid envelope. You may also vote using the internet,Internet or telephone or, if you received a proxy/voting instruction card, by marking, dating, and signing it, and returning it by mail. I hope to see you atfollowing the 2018 Annual General Meeting. As always, thank you for your continued support of Enstar.instructions on the enclosed proxy card.
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| Sincerely, |
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| Robert J. Campbell |
| Chairman of the Board |
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Enstar Group Limited | ii | 2018 Proxy Statement |
ENSTAR GROUP LIMITED
NOTICE OF 2018 ANNUAL GENERALSPECIAL MEETING OF SHAREHOLDERS
June 13, 2018November , 2019
To the shareholders of Enstar Group Limited:
Notice is hereby given that the 2018 Annual Generala Special Meeting of Shareholders (the "Special Meeting") of Enstar Group Limited (the "Company" or "Enstar") will be held at the following time and location and for the following purposes:purpose:
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| When: | Wednesday, June 13, 2018 , November , 2019 at 9:00 a.m. Atlantic time |
| Where: | Windsor Place, 3rd Floor 22 Queen Street Hamilton, Bermuda HM11 |
ItemsItem of Business: | 1. | To elect four Class III Directors nominated by our Boardapprove an amendment and restatement of Directors to hold office until 2021. |
| 2. | To hold an advisory vote to approve executive compensation. |
| 3. | To ratify the appointment of KPMG AuditEnstar Group Limited as our independent registered public accounting firm for 2018 and to authorize the Board of Directors, acting through the Audit Committee, to approve the fees for the independent registered public accounting firm. |
| 4. | To act on the election of directors for our subsidiaries.2016 Equity Incentive Plan. |
| Who Can Vote: | Only holders of record of our voting ordinary shares at the close of business on April 17, 2018October , 2019 are entitled to notice of and to vote at the meeting. |
You are cordially invited to attend the Annual GeneralSpecial Meeting in person. To ensure that your vote is counted at the meeting, however, please vote as promptly as possible. Submitting your proxy now will not prevent you from voting your shares at the meeting if you desire to do so, as your vote by proxy is revocable at your option in the manner described in the accompanying proxy statement.
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| By Order of the Board of Directors, |
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| Audrey B. Taranto |
| General Counsel and Corporate Secretary |
| Hamilton, Bermuda |
April 27, 2018 |
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IMPORTANT NOTICE REGARDING THE AVAILABILITY
OF PROXY MATERIALS FOR THE ANNUAL GENERAL MEETING
OF SHAREHOLDERS TO BE HELD ON JUNE 13, 2018
This notice of meeting, the proxy statement, the proxy card and the annual report to shareholders
for the year ended December 31, 2017 are available at https://investor.enstargroup.com/annual-reports.
October , 2019 |
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Enstar Group Limited | iii | 2018 Proxy Statement |
TABLE OF CONTENTS
Cautionary Statement Regarding Forward-Looking Statements
This proxy statement contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 with respect to our compensation policies and practices. Statements that include words such as "estimate", "project", "plan", "intend", "expect", "anticipate", "believe", "would", "should", "could", "seek", "may" and similar statements of a future or forward-looking nature identify forward-looking statements for purposes of the federal securities laws or otherwise. Forward-looking statements may appear throughout this proxy statement, including in the Annual Incentive Plan section under the caption "Compensation Discussion and Analysis".
These statements include statements regarding the intent, belief or current expectations of the Company and its management team. Investors are cautioned that any such forward-looking statements speak only as of the date they are made, are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those projected in the forward-looking statements as a result of various factors. Additional important risk factors regarding the Company can be found under the heading "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2018. Furthermore, the Company undertakes no obligation to update any written or oral forward-looking statements or publicly announce any updates or revisions to any of the forward-looking statements contained herein, to reflect any change in its expectations with regard thereto or any change in events, conditions, circumstances or assumptions underlying such statements, except as required by law.
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Enstar Group Limited | iv | 2018 Proxy Statement |
PROXY STATEMENT SUMMARY
To assist you in reviewing our proxy statement, we have summarized several key topics below. The following description is only a summary and does not contain all of the information that you should consider before voting. For more complete information, you should carefully review the rest of our proxy statement, as well as our Annual Report to Shareholders for the year ended December 31, 2017.
Annual General Meeting of Shareholders Information |
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Date and Time
June 13, 2018
9:00 a.m., Atlantic time
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Enstar Group Limited’s Corporate Headquarters
Windsor Place, 3rd Floor, 22 Queen Street, Hamilton, Bermuda
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Record Date
April 17, 2018
| Voting
Your vote is very important and we urge you to vote as soon
as possible. See Question and Answer No. 10 on
Page 3 for voting instructions. |
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Proposal | Board of Directors’ Vote
Recommendation
| Page References |
1. Election of Directors:
Sandra L. Boss
Hans-Peter Gerhardt
Dominic F. Silvester
Poul A. Winslow
| FOR the Director Nominees | Page 6 (Nominee Biographies) |
2. Advisory Approval of Enstar’s Executive Compensation | FOR | Page 34 (Compensation Discussion and Analysis)Page 50 (Summary Compensation Table) |
3. Ratification of KPMG Audit Limited as the Independent Registered Public Accounting Firm for 2018 | FOR | Page 62 (Audit and Non-Audit Fees Table) |
4. Acting on Election of Directors for our Subsidiaries | FOR each Subsidiary Director Nominee | Appendix A (Subsidiary Director Nominee Biographies) |
Board Composition
The following describes our current Board composition and current committee assignments of each of our directors.
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| Director | Age | Director Since | Primary Occupation | Independent | Board Committee Membership* | Other Current Public Boards |
Robert J. Campbell (Chairman) | 69 | 2007 | Partner, Beck Mack and Oliver | þ | AC, CC, NGC, IC, EC | 1 |
| Dominic F. Silvester | 57 | 2001 | CEO, Enstar Group Limited | | EC | 0 |
| B. Frederick Becker | 71 | 2015 | Chairman, Clarity Group, Inc. | þ | AC, CC, NGC | 0 |
| Sandra L. Boss | 51 | 2015 | Bank of England Policy Committee Member; former McKinsey partner | þ | CC, NGC, RC, EC | 1 |
| James D. Carey | 51 | 2013 | Senior Principal, Stone Point Capital | | IC | 0 |
| Hans-Peter Gerhardt | 62 | 2015 | Former CEO of Asia Capital Re, PARIS RE and AXA Re | þ | | 0 |
| Jie Liu | 39 | 2017 | Managing Director, Hillhouse Capital | | IC | 0 |
| Paul J. O’Shea | 60 | 2001 | President, Enstar Group Limited | | | 0 |
| Hitesh R. Patel | 57 | 2015 | Former CEO, Lucida plc; former KPMG Partner | þ | AC, NGC, RC | 0 |
| Poul A. Winslow | 52 | 2015 | Managing Director, CPPIB | þ | CC, IC, EC | 0 |
*Committee Legend: AC - Audit CC - Compensation NGC - Nominating and Governance RC - Risk IC - Investment EC - Executive |
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Enstar Group Limited | v | 2018 Proxy Statement |
Board Statistics
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● | Added 1 new director in early 2017 | ● | 7:3 ratio of Internationally Residing vs. US Directors provides global perspective |
● | Average Board Tenure: 6.6 years (Median 3 years) | ● | Average and Median Board Age: 57 |
Corporate GovernanceEnstar is committed to sound governance, and we employ a number of practices that the Board believes are in the best interests of the Company and our shareholders. Highlights of these practices are listed below.
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● | An independent director serves as Chairman of the Board | ● | No "over-boarding" - none of our current directors serve on the Board of more than one other publicly traded company |
● | Majority of independent directors, entirely independent Audit, Compensation, and Nominating and Governance Committees | ● | Shareholder engagement program to solicit feedback on governance and compensation programs |
● | Robust Share Ownership Guidelines for executives and non-employee directors | ● | Shareholder advisory vote on executive compensation held annually |
● | Majority voting standard in uncontested elections of directors | ● | Compensation Committee engages an independent compensation consultant |
● | No super-majority voting requirements other than as required by Bermuda law | ● | Clawback Policy |
● | No shareholder rights plan ("poison pill") | ● | Robust code of conduct that requires all employees and directors to adhere to high ethical standards |
● | Annual risk assessment of compensation programs | ● | Regular executive sessions of independent directors |
● | No tax gross-ups on change of control | ● | Anti-hedging policy (applicable to directors and all employees) |
● | Board and Committee oversight of Enterprise Risk Management programs and processes | ● | Equity incentive plan prohibits re-pricing of underwater stock options and stock appreciation rights ("SARs") |
● | Annual Board and Committee performance evaluations are conducted | ● | Executive officer contractual change in control payments are "double trigger" |
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Enstar Group Limited | vi | 2018 Proxy Statement |
Business Highlights
Enstar is a multi-faceted insurance group that offers innovative capital release solutions and specialty underwriting capabilities through its network of group companies in Bermuda, the United States, the United Kingdom, Continental Europe, Australia, and other international locations. Select highlights of our successful 2017 included:
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Increased book value per share: |
● | We increased fully diluted book value per share 10.8% from $143.68 in 2016 to $159.19 in 2017. |
● | Since initiating our public listing process in 2006, our book value per share has increased by a 15.8% compound annual growth rate. |
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Significantgrowth throughtransactions:
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● | We completed three major run-off transactions in 2017, and negotiated three other large transactions ultimately completed in early 2018. We acquired approximately $2.5 billion of new run-off business during 2017, and a further $1.5 billion thus far in 2018. |
● | Total assets as of December 31, 2017 increased 5.8% to $13.6 billion, from $12.9 billion in 2016, with further increases in connection with 2018 transactions. |
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Increased net earnings by 17.6% to record high: |
● | We posted net earnings of $311.5 million in 2017, up 17.6% from $264.8 million in 2016. |
● | Our results were driven in large part by higher net investment income and net realized and unrealized gains in the year, due to an increase in average invested assets and the book yield we achieved. |
● | Our non-life run-off segment earnings remained strong (contributing $343.8 million to net earnings in 2017). |
● | Atrium and StarStone contributed $5.4 million and $2.8 million, respectively, to net earnings in 2017, reflecting the impact of the significant catastrophe losses in the third quarter. |
● | Net losses from our other activities (which include our remaining life business and various other miscellaneous items) partially offset our earnings by $40.6 million. |
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Enstar Group Limited | vii | 2018 Proxy Statement |
Executive Compensation
Philosophy:
We are a rapidly growing company operating in an extremely competitive and changing industry. Our compensation program is based on these core principles:
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Incentivize performance consistent with clearly defined corporate objectives |
Align our executives’ long-term interests with those of our shareholders |
Fairly compensate our executives |
Retain and attract qualified executives who are able to contribute to our long-term success |
2017 Performance Versus Peers:
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* | Source: SNL Financial for peer company data. Peer group includes the companies selected as our peers by our Compensation Committee, as described in "Executive Compensation - Compensation Discussion and Analysis - Peer Group." |
Key Compensation Decisions for 2017 Performance Year:
Our Compensation Committee made the key compensation decisions listed below.
Long-term Incentives - Granted long term equity incentive awards consisting of 75% performance share units ("PSUs") and 25% restricted share units ("RSUs") to the CEO, President and COO. The ultimate value of the PSUs is subject to the achievement by the Company of certain levels of growth in three-year fully diluted book value per share. These equity awards are intended to cover a three-year period, and no new equity awards will be granted to the recipients until the end of such period.
Reported Compensation - The full grant date fair value of these equity awards is reported as 2017 compensation in the Summary Compensation Table, although the executives will not receive value for the PSU portion of awards unless the financial metric is achieved at the end of 2019.
Annual Incentive Awards - Company financial performance component achieved at "target." Following a detailed review of each executive's performance, individual operational objectives were determined to meet "target" levels.
Executive Agreements - Entered into new employment contracts to secure the executive officer team, eliminated several legacy provisions such as automatic renewal and cost-of-living salary increase requirements, and added contractual clawback language.
Base Salaries - Base salaries for the CEO, President, CFO and COO were increased by 2% for 2017; for 2018, the CEO, President and COO base salaries have not been increased; our newly named CFO received an increase at the time of his appointment.
Share Ownership Guidelines - Adopted robust share ownership guidelines applicable to all executive officers and non-employee directors.
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Enstar Group Limited | viii | 2018 Proxy Statement |
Shareholder Engagement:
In 2018, we continued our shareholder engagement efforts from prior years.
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Results of 2017 Say-on-Pay: At last year's annual general meeting held on June 13, 2017, our shareholders approved the compensation of our executive officers with 90.4% of the total votes cast in favor of the proposal. While we aim to achieve higher approval results, our Board of Directors considers the results as indicative of a reasonable level of support for decisions and a recognition of the changes made to our compensation programs in the last two years.
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Engagement with Large Shareholders: We sought feedback from our large shareholders and proxy advisory firms, speaking to the holders of approximately 40% of our outstanding voting shares, as described on page 35. |
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Enstar Group Limited | ix | 2018 Proxy Statement |
ENSTAR GROUP LIMITED
Windsor Place, 3rd Floor
22 Queen Street
Hamilton, Bermuda
PROXY STATEMENT
2018 ANNUAL GENERALSPECIAL MEETING OF SHAREHOLDERS
QUESTIONS AND ANSWERS
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| 1. | Why am I receiving these proxy materials? |
We have made these proxy materials available to you on the internet or, in some cases, have delivered printed copies of these proxy materials to you by mail in connection with the solicitation of proxies by the Board of Directors (the "Board") of Enstar Group Limited (the "Company" or "Enstar") for use at the 2018 Annual Generala Special Meeting of Shareholders (the "Special Meeting") of the Company to be held on Wednesday, June 13, 2018November , 2019 at 9:00 a.m. Atlantic time at our Company headquarters, Windsor Place, 3rd Floor, 22 Queen Street, Hamilton, Bermuda, and at any postponement or adjournment thereof. These proxy materials are first being sent or given to shareholders on April 27, 2018.October , 2019. You are invited to attend the Annual GeneralSpecial Meeting and are requested to vote on the proposalsamendment and restatement of the Enstar Group Limited 2016 Equity Incentive Plan (the "Amended and Restated Plan") as described in this proxy statement.statement (the "Proxy Statement").
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| 2. | Why did I receive a one-page noticeWhat is included in the mail regarding the internet availability of proxy materials instead of a full set ofthese proxy materials? |
Pursuant to rules adopted byThese "proxy materials" include the Securities and Exchange Commission (the "SEC"), we have elected to provide access to our proxy materials via the internet. Accordingly, we are sending a Noticenotice of Internet Availability of Proxy MaterialsSpecial Meeting (the "Notice") to our shareholders. All shareholders will have, this Proxy Statement and the ability to access theaccompanying proxy materials on the website referred to in the Notice or request to receive a printed set of the proxy materials. Instructions on how to access the proxy materials over the internet or to request a printed copy are included in the Notice. In addition, shareholders may request proxy materials in printed form by mail or electronically by email on an ongoing basis.
We believe that providing access to our proxy materials via the internet will expedite shareholders’ receipt of materials, while lowering costs and reducing the environmental impact of our Annual General Meeting because we will print and mail fewer full sets of materials.card.
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| 3. | What is included in these proxy materials? |
These "proxy materials" include this proxy statement, our Annual Report to Shareholders for the year ended December 31, 2017 and, if you received printed copies of the proxy materials by mail, the proxy card. We have included the Annual Report for informational purposes and not as a means of soliciting your proxy.
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4. | What matters are being voted on at the Annual GeneralSpecial Meeting? |
Shareholders will vote on the following proposals at the Annual GeneralSpecial Meeting:
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| 1. | To elect four Class III Directors nominated by our Boardapprove an amendment and restatement of Directors to hold office until 2021.the Enstar Group Limited 2016 Equity Incentive Plan. |
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| 2. | To hold an advisory vote to approve executive compensation. |
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3. | To ratify the appointment of KPMG Audit Limited ("KPMG") as our independent registered public accounting firm for 2018 and to authorize the Board of Directors, acting through the Audit Committee, to approve the fees for the independent registered public accounting firm. |
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4. | To act on the election of directors for our subsidiaries. |
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5. | To transact such other business as may properly come before the meeting and any postponement or adjournment thereof. |
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| 4. | Why is the Company seeking shareholder approval of the Amended and Restated Plan? |
The Amended and Restated Plan (as described below under "The Proposal - Approval of the Amended and Restated Enstar Group Limited 2016 Equity Incentive Plan") will enable the Company to provide long-term equity incentive awards that are tax-efficient for U.K. tax residents. The proposed amendments would allow us to make equity awards through the use of a Joint Share Ownership Plan ("JSOP") structure. In connection with implementing the JSOP structure, we are also seeking authorization of an additional 650,000 ordinary shares for use under the Amended and Restated Plan.The Amended and Restated Plan will be an amendment and restatement of the existing 2016 Equity Incentive Plan, and therefore shareholder approval is required. In order to implement the Amended and Restated Plan in 2019, the Company has called the Special Meeting as described in the Notice included in this Proxy Statement.
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| 5. | What areis the Board’s voting recommendations?recommendation? |
The Board recommends that you vote your shares:shares "FOR" approval of the amendment and restatement of the Company's 2016 Equity Incentive Plan.
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| 6. | What happens if shareholders do not approve the Amended and Restated Plan? |
If shareholders do not approve the Amended and Restated Plan, our existing 2016 Equity Incentive Plan will continue to remain in full force and effect without modification, and we would not be able to offer JSOP awards to key executives who are U.K. tax residents. This would limit our flexibility to make tax-efficient awards that would help us retain and incentivize key executives. Failure of our shareholders to approve the Amended and Restated Plan also would not affect the rights of existing award holders under our existing 2016 Equity Incentive Plan or under any previously granted awards under that plan.
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| Enstar Group Limited | 1 | 2018Special Meeting Proxy Statement |
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1. | "FOR" the nominees to serve on our Board (Proposal No. 1).
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2. | "FOR" advisory approval of the resolution on our executive compensation (Proposal No. 2).
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3. | "FOR" the ratification of the appointment of KPMG as our independent registered public accounting firm for 2018 and the authorization of our Board, acting through the Audit Committee, to approve the fees for the independent registered public accounting firm (Proposal No. 3).
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4. | "FOR" each of the subsidiary director nominees (Proposal No. 4).
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6.7. | How can I get electronic access toAre the proxy materials?materials also available electronically? |
The Notice includes instructions regarding how to:
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1. | View on the internet our proxy materials for the Annual General Meeting; and |
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2. | Instruct us to send future proxy materials to you by email.
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Our proxy materials are also available on our website under "Annual General Meeting Materials" at https://investor.enstargroup.com/annual-reports.
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Choosing to receive future proxy materials by email will save us the cost of printing and mailing documents
to you. If you choose to receive future proxy materials by email, you will receive an email message next year
with instructions containing a link to those materials and a link to the proxy voting website. Your election
to receive proxy materials by email will remain in effect until you terminate it.
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7.8. | Who may vote at the Annual GeneralSpecial Meeting? |
Only holders of record of our voting ordinary shares as of the close of business on April 17, 2018October , 2019 (the "record date""Record Date") are entitled to notice of and to vote at the Annual GeneralSpecial Meeting. Holders of our non-voting convertible common shares are welcome to attend the Annual GeneralSpecial Meeting but may not vote these shares at the meeting or any postponement or adjournment thereof. As used in this proxy statement,Proxy Statement, the term "ordinary shares" does not include our non-voting convertible common shares. As of the record date,Record Date, there were 16,431,010 ordinary shares issued and outstanding and entitled to vote at the Annual GeneralSpecial Meeting, which number includes 16,585 unvested restricted shares. Except as set forth in our bye-laws, eachEach ordinary share entitles the holder thereof to one vote. In accordance with our bye-laws, certain shareholders whose shares would otherwise represent 9.5% or more of the voting power of our ordinary shares are entitled to less than one vote for each ordinary share held by them.
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8.9. | What is the difference between a shareholder of record and a beneficial owner of shares held in street name? |
Shareholder of Record. If your shares are represented by certificates or book entries in your name so that you appear as a shareholder on the records of American Stock Transfer & Trust Company, our stock transfer agent, you are considered the shareholder of record with respect to those shares, and the Notice or, in some cases, the proxy materials were sent directly to you. If you request printed copies of the proxy materials, you will also receive a proxy card.
Beneficial Owner of Shares Held in Street Name. If your shares are held in an account at a brokerage firm, bank, broker-dealer or other similar institution, then you are the beneficial owner of shares held in street name, and the Notice wasproxy materials were forwarded to you by that institution. The institution holding your account is considered the shareholder of record for purposes of voting at the Annual GeneralSpecial Meeting. As a beneficial owner, you have the right to instruct that institution on how to vote the shares held in your account.
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9.10. | What do I do if I received more than one Notice orset of proxy card?materials? |
If you receive more than one Notice orset of proxy cardmaterials because you have multiple accounts, you should provide voting instructions for all accounts referenced to be sure all of your shares are voted.
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Enstar Group Limited | 2 | 2018 Proxy Statement |
We hope that you will be able to attend the Annual GeneralSpecial Meeting in person. Whether or not you expect to attend the Annual GeneralSpecial Meeting in person, we urge you to vote your shares at your earliest convenience by one of the methods described below, so that your shares will be represented.
Shareholders of record can vote any one of four ways:
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| VIA THE INTERNET |
You may vote by proxy via the internetInternet by following the instructions provided in the Notice.
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| BY MAIL | If you received printed copies of the proxy materials, youYou may vote by proxy by filling out the proxy card and sending it back in the envelope provided.
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| BY TELEPHONE |
You may vote by proxy by calling the telephone number found on the internetInternet voting site or on the proxy card, if you received a printed copy of the proxy materials. However, if you plan to vote for subsidiary directors on an individual basis under Proposal No. 4, you can do so only via the internet, by mail, or in person.
card.
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| IN PERSON |
You, or a personal representative with an appropriate proxy, may vote by ballot at the Annual GeneralSpecial Meeting. We will give you a ballot when you arrive. If you need directions to the Annual GeneralSpecial Meeting, please call our offices at (441) 292-3645.
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If you own shares in street name, you will receive instructions from the holder of record that you must follow in order for your shares to be voted. Internet and/or telephone voting also will be offered to shareholders owning shares
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| Enstar Group Limited | 2 | Special Meeting Proxy Statement |
through most banks and brokers. If you own shares in street name and you wish to attend the Annual GeneralSpecial Meeting to vote in person, you must obtain a legal proxy from the institution that holds your shares and attend the Annual GeneralSpecial Meeting, or send a personal representative with the legal proxy, to vote by ballot. You should contact your bank or brokerage account representative to learn how to obtain a legal proxy.
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11.12. | What is the voting deadline if voting by internetInternet or telephone? |
If you vote by internetInternet or by telephone, you must transmit your vote by 11:59 p.m. Eastern time on June 12, 2018.November , 2019.
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12.13. | How can I attend the Annual GeneralSpecial Meeting? |
You may attend the Annual GeneralSpecial Meeting if you were an Enstar shareholder of record as of the close of business on April 17, 2018October , 2019 or you hold a valid proxy for the Annual GeneralSpecial Meeting. You should be prepared to present photo identification for admittance. If you are a shareholder of record, your name will be verified against the list of shareholders of record on the record dateRecord Date prior to your being admitted to the Annual GeneralSpecial Meeting. If you are not a shareholder of record but hold shares through a broker, trustee or nominee, you should provide proof of beneficial ownership on the record date,Record Date, such as a recent account statement showing your ownership, a copy of the voting instruction card provided by your broker, trustee or nominee, or other similar evidence of ownership.
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13.14. | What is the quorum requirement for the Annual GeneralSpecial Meeting? |
Two or more shareholders present in person or by proxy and entitled to vote at least a majority of the shares entitled to vote at the meeting constitute a quorum for the transaction of business at the meeting. Abstentions and broker non-votes will be included in determining the presence of a quorum at the meeting. A broker non-vote occurs when a beneficial owner of shares held in street name does not provide voting instructions and, as a result, the institution that holds the shares is prohibited from voting those shares on certain proposals. Shares that are properly voted on the internetInternet or by telephone or for which proxy cards are properly executed and returned, but lacking voting directions, will be counted toward the presence of a quorum.
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Enstar Group Limited | 3 | 2018 Proxy Statement |
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14.15. | How are proxies voted? |
Shares that are properly voted on the internetInternet or by telephone or for which proxy cards are properly executed and returned will be voted at the Annual GeneralSpecial Meeting in accordance with the directions given or, in the absence of directions, in accordance with the Board’s recommendations as set forth in "What areis the Board’s voting recommendations?recommendation?" above. If any other business is brought before the meeting, proxies will be voted, to the extent permitted by applicable law, in accordance with the judgment of the persons voting the proxies.
The manner in which your shares may be voted depends on how your shares are held. If you own shares of record, you may vote by proxy, meaning you authorize individuals named on the proxy to vote your shares. If you do not vote by proxy or in person at the Annual GeneralSpecial Meeting, your shares will not be voted. If you own shares in street name, you may instruct the institution holding your shares on how to vote your shares. If you do not provide voting instructions, the institution may neverthelessnot vote your shares on your behalf with respect to the ratification of the appointment of KPMG as the Company’s independent registered public accounting firm for 2018, but not on any other matters being considered at the meeting.Special Meeting.
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15.16. | What are the voting requirements to approve each of the proposals?proposal? |
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| Proposal | Voting Requirements | Effect of Abstentions | Effect of Broker Non-Votes |
1. | ElectionApproval of Directorsthe amendment and restatement of the Company's 2016 Equity Incentive Plan | Affirmative Vote of Majority of Votes Cast | No effect on outcome | No effect on outcome |
2. | Advisory approval of the Company’s executive compensation | Affirmative Vote of Majority of Votes Cast (to be approved on an advisory basis) | No effect on outcome | No effect on outcome |
3. | Ratification of the appointment of KPMG as our independent registered public accounting firm for 2018 and to authorize the Board, acting through the Audit Committee, to approve its fees | Affirmative Vote of Majority of Votes Cast | No effect on outcome | Not applicable |
4. | Election of Subsidiary Directors | Board will Cause our Corporate Representative or Proxy to Vote Subsidiary Shares in the Same Proportion as Votes Received | No effect on outcome | No effect on outcome |
Each of the proposalsThe proposal to be voted on at the meetingSpecial Meeting is adopted by a majority of votes cast (as indicated in the table above), which means that athe proposal must receive more votes "for" than votes "against" to be adopted.
For the director election in Proposal 1, each nominee must receive more votes "for" than votes "against" to have a seat on the Board. For the subsidiary directors in Proposal 4, our Board will cause our corporate representative or proxy to vote the shares we hold in these subsidiaries in the same proportion as the votes received at the meeting. Where we wholly own the subsidiary, each nominee must receive more votes "for" than votes "against" to have a seat on the subsidiary board. Voting thresholds will vary where we own less than 100% of a subsidiary's shares.
Abstentions and broker non-votes are not considered votes for the purposes of any of the above listed proposals,proposal, and therefore have no effect on the electionadoption of the director nominees or the adoptionproposal.
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| Enstar Group Limited | 3 | Special Meeting Proxy Statement |
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16.17. | CanHow can I change my vote after I have voted? |
You may revoke your proxy and change your vote at any time before the final vote at the Annual GeneralSpecial Meeting. You may vote again on a later date via the internetInternet or by telephone (in which case only your latest internetInternet or telephone proxy submitted prior to 11:59 p.m. Eastern time on June 12, 2018November , 2019 will be counted), by filling out and returning a new proxy card bearing a later date, or by attending the Annual GeneralSpecial Meeting and voting in person. However, your attendance at the Annual GeneralSpecial Meeting will not automatically revoke your proxy unless you vote again at the Annual GeneralSpecial Meeting or specifically request that your prior proxy be revoked by delivering a written notice of revocation prior to the Annual GeneralSpecial Meeting to our Corporate Secretary at Enstar Group Limited, P.O. Box HM 2267, Windsor Place, 3rd Floor, 22 Queen Street, Hamilton, HM JX Bermuda.
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Enstar Group Limited | 4 | 2018 Proxy Statement |
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17.18. | Who is paying forHow are proxies being solicited and who pays the cost of this proxy solicitation?related expenses? |
We will bear the cost of preparing and soliciting proxies, including the reasonable charges and expenses of brokerage firms or other nominees for forwarding proxy materials to the beneficial owners of our ordinary shares. In addition to solicitation by mail, certain of our directors, officers and employees may solicit proxies personally or by telephone or other electronic means without extra compensation, other than reimbursement for actual expenses incurred in connection with the solicitation. In addition, we have retained Innisfree M&A Incorporated, located at 501 Madison Avenue, 20th Floor, New York, NY, 10022, a professional proxy solicitation firm, to provide customary solicitation services for a fee of approximately $22,500 plus out of pocket expenses.
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| 19. | To which periods do the compensation-related disclosures contained in this Proxy Statement relate? |
In accordance with the applicable rules of the Securities and Exchange Commission, the director and executive compensation-related disclosures in this Proxy Statement generally relate to our most recently completed fiscal year, which is fiscal year 2018. Where appropriate, in certain instances, we have also included updated information related to the currently ongoing fiscal year 2019. For example, in "Executive Compensation - Compensation Discussion and Analysis", we have included updated information regarding our financial performance during the first six months of 2019, as well as the results of our shareholder vote on compensation at our most recent 2019 annual general meeting. However, this updated information did not influence or impact our compensation-related decisions in respect of fiscal year 2018.
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| 20. | Who should I contact if I have questions about this Proxy Statement, the Proposal or voting my shares at the Special Meeting? |
If you have any questions about the proxy materials, Special Meeting or how to vote your shares, please call our proxy solicitor, Innisfree M&A Incorporated, toll-free at (888) 750-5834.
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| Enstar Group Limited | 4 | Special Meeting Proxy Statement |
THE PROPOSAL
APPROVAL OF THE AMENDED AND RESTATED
ENSTAR GROUP LIMITED 2016 EQUITY INCENTIVE PLAN
On September 19, 2019, our Board adopted, subject to shareholder approval, an amendment and restatement of our 2016 Equity Incentive Plan, which is referred to, as so amended and restated, as the "Amended and Restated Plan", and is referred to, prior to such amendment and restatement, as the "2016 Equity Incentive Plan" or the "Equity Plan". The Amended and Restated Plan includes a new "Joint Share Ownership Plan" or "JSOP" as a sub-plan of the Amended and Restated Plan.
Summary of Proposed Amendments
We established the Equity Plan on June 14, 2016, and it was approved by 99% of votes cast at our 2016 Annual General Meeting. The Equity Plan is intended to provide stock-based awards to our employees, non-employee directors and consultants, but does not currently provide for awards granted through a JSOP. The only changes in the proposed Amended and Restated Plan from the Equity Plan are: (i) those related to the addition of the JSOP structure and sub-plan and (ii) the authorization of an additional 650,000 ordinary shares of the Company (the "Additional Shares") for use under the Amended and Restated Plan. To date, the Equity Plan has allowed us to make equity-based compensation awards to our senior employee population beyond our executive officers, to promote alignment of interests with our shareholders and to motivate, retain and recruit the talented individuals critical to our future growth and profitability. Our Board believes that the addition of the JSOP to the Amended and Restated Plan will enable us to provide long-term equity incentive awards that are tax-efficient for U.K. tax residents, which is a useful tool that would help us retain and incentivize key executives.
As of September 30, 2019, there were 432,293 ordinary shares of the Company ("Shares") available for issuance in connection with awards granted under the Equity Plan, and awards outstanding under the Equity Plan comprised 183,327 PSUs, 94,147 SARs, 78,359 RSUs and 11,430 restricted share awards. The closing sale price of our Shares as of October 15, 2019 was $190.83 per share, as reported on The NASDAQ Global Select Market. The Amended and Restated Plan would increase the maximum number of Shares that are available under the plan by 650,000. If approved, these Additional Shares will be available to make awards to eligible individuals under the Amended and Restated Plan, including through the JSOP.
Under the JSOP, Grantees would acquire jointly held interests in Shares together with the trustee of an employee benefit trust (an "EBT") at fair market value, pursuant to the terms of a joint ownership agreement. A Grantee in the JSOP makes a payment to the Company equal to either the initial value of the Shares underlying the grant or the tax due on the initial fair market value of the Grantee's interest. The Shares underlying any JSOP grant remain in the EBT, and the Grantee receives the value of the appreciation above a threshold on a set number of Shares, measured between date of grant and a pre-set measuring date. Our Compensation Committee (the "Committee"), in granting a JSOP award, can set performance and other conditions, typically related to share price appreciation above a hurdle, that must be met in order for the award to vest. At vesting, the trustee of the EBT will decide, based on the recommendation of the Committee, whether to sell Shares in the market and deliver cash to the Grantee or to deliver the Shares directly to the Grantee. The JSOP structure is designed to allow the Grantee to pay capital gains tax (rather than income tax) on the value received from the award at vesting. The JSOP structure is intended to be a tax-favored means of providing for long-term incentive compensation to Grantees who are U.K. tax residents.
Because a JSOP award delivers value above a threshold but the full number of Shares are held by the EBT, the JSOP can require a significant number of Shares. However, any JSOP we establish would be established on the basis that any Shares not delivered to the Grantee would be available solely for future JSOP awards under the Amended and Restated Plan. If the Company terminates the EBT, any remaining Shares in the EBT would revert to the Company, but such Shares would not be available for issuance in connection with any other awards under the Amended and Restated Plan.
The Committee has undertaken preliminary analysis and consideration of a potential long-term incentive award to our Chief Executive Officer, a U.K. tax resident. Subject to further review, the award would likely be structured as a JSOP award that is subject to time-based and performance-based vesting conditions to be determined, which may include share price appreciation above a hurdle. As of the date of this Proxy Statement, however, we have no definitive agreements or understandings to issue any JSOP awards and any future grants will be subject to the discretion of the Committee. Accordingly, if the Amended and Restated Plan is approved by shareholders, the Additional Shares may be contributed to an EBT in connection with a future JSOP award to our Chief Executive Officer, or they may be used to make other awards (including JSOP awards) to other eligible individuals under the Amended and Restated Plan.
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| Enstar Group Limited | 5 | 2018Special Meeting Proxy Statement |
CORPORATE GOVERNANCEIf our shareholders approve this proposal, we expect that any JSOP awards will be structured as issuances to non-U.S. persons outside of the United States that are exempt from registration pursuant to Regulation S under the Securities Act of 1933, as amended (the "Securities Act"). With respect to other equity compensation awards, we intend to file, pursuant to the Securities Act, a registration statement on Form S-8 to register the Additional Shares available for issuance pursuant to the Amended and Restated Plan.
Board of Directors
Our Board is divided into three classes designated Class I, Class II and Class III. The term of office for each of our Class III directors expires at this year’s Annual General Meeting; the term of office for each of our Class I directors expires atCommittee monitors our annual general meeting in 2019;burn rate and total dilution by granting only the termnumber of officeshare-based awards that it believes is necessary to attract, reward and retain our talent. "Burn rate" refers to how quickly a company uses its supply of Shares authorized for eachissuance under a plan. "Dilution" measures the degree to which our shareholders' ownership has been diluted by the share-based compensation we award under our plan.
The table set forth below shows our burn rate and dilution percentages over the past three years under the Equity Plan. We calculate burn rate by dividing the number of our Class II directors expiresShares subject to equity awards granted during the fiscal year by the weighted-average number of Shares (basic) outstanding during such fiscal year. We calculate dilution by dividing the number of Shares subject to equity awards outstanding at our annual general meeting in 2020. At each annual general meeting, the successorsend of the classfiscal year by the number of directors whose term expires at that meeting will be elected to hold office for a term expiringShares outstanding (basic) at the annual general meetingend of the fiscal year. The calculations below do not include Shares related to be heldour Employee Share Purchase Plan or our Amended and Restated Enstar Group Limited Deferred Compensation and Ordinary Share Plan for Non-Employee Directors.
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| | 2018 | 2017 | 2016 | 3-Year Average |
| Burn Rate | 0.21% | 0.95% | 0.23% | 0.46% |
| Dilution | 1.02% | 1.16% | 0.41% | 0.86% |
Summary of the Key Terms of the Amended and Restated Plan
This section summarizes the material terms of the Amended and Restated Plan. The full text of the Amended and Restated Plan is set forth in Appendix A to this Proxy Statement. Certain features of the Amended and Restated Plan are summarized below, but the summary is qualified in its entirety by reference to the full text of the Amended and Restated Plan. All capitalized terms not defined in this proposal have the meanings set forth in the third year following the year of their election.Amended and Restated Plan.
The Board believes that all of its directors have demonstrated professional integrity, abilityAmended and judgment, as well as leadership and strategic management abilities, and have each performed exceptionally well in their respective time served as directors. Several of our current directors have served as directors of the Company for a number of years, and during this time, we have experienced significant growth and success.
In recent years we have enhanced and refreshed our Board and our newer directors have made significant contributions, drawing on backgrounds that are highly complementary to our growing Company. In early 2017, we added Jie Liu of Hillhouse Capital Management Ltd. ("Hillhouse Capital") to the Board, to fill a vacancy. During 2015, we added five independent directors: B. Frederick (Rick) Becker, Hitesh R. Patel, Poul A. Winslow, Hans-Peter Gerhardt, and Sandra L. Boss.
Particular attributes that are significant to each individual director’s selection to serve on the Board are described below.
NomineesRestated Plan Snapshot
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| SANDRA L. BOSS |
| What the Amended and Restated Plan DOES | What the Amended and Restated Plan DOES NOT DO |
| þ | Performance-based awards vest on a pro rata basis upon a Change in Control | ý | Director Since: 2015
Age:No 51liberal Change in Control definition
Class: III
Enstar Committees: Risk (Chair), Compensation, Nominating and Governance
UK resident; Dual US / UK citizen
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| þ | Requires 12-month minimum vesting period for options/SARs (with 5% carve out pool) | ý | Biographical Information:NoSandra Boss has served since September 2014 as an external member evergreen renewal provision
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| þ | Applies annual award limits for employees and directors | ý | No granting of the Bank of England’s Prudential Regulation Committee, which is responsible for the prudential regulation of banks, insurers, building societies, credit unions and major investment firms authorized in the United Kingdom. She is also an external member and Risk Committee Chair of the Bank’s RTGS/CHAPS Board, which oversees the United Kingdom’s high value payment system. From 2005reload options |
| þ | Awards under plan are subject to 2014, Ms. Boss was a Senior Partner with McKinsey & Company, a global management consulting firm, where she held a number of senior management positions in both the United States and the United Kingdom and served as a strategic advisor to global banks and investment banks as well as to a number of public sector institutions and industry bodies on financial services policy and financial markets structure.our Clawback Policy | ý | No excise tax gross-up provision |
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| Shareholder approval is required to issue additional shares | ý | Certain Other DirectorshipsNo: Ms. Boss has served as single-trigger acceleration of awards upon a non-executive director of Elementis plc,Change in Control if acquirer assumes the award or substitutes a FTSE 250 specialty chemicals company, since February 2017.new award
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Skillsþ
| All stock options and Qualifications: Regulatory experience, financial acumen, strategic management expertiseMs. Boss bringsSARs must have an exercise price or base price equal to our Board her financial acumen, global experience in prudential regulation of financial institutions, and strategy development and oversight abilities gained from years of consulting at a highly respected, international firm. These skills are very useful to our Board as it sets strategy and oversees performance. Ms. Boss provides a unique perspective on our industry and regulatory environment, and also has a keen understandingor greater than the fair market value of the financial markets in which we operate. As Chairunderlying Shares on the grant date
| ý | No repricing or cash buy-out of the Risk Committee, she draws on her experienceunderwater options and leads the committee in enhancing our oversight of enterprise risk.SARs without shareholder approval |
Eligibility for Participation
All employees, non-employee directors and consultants are legally eligible to participate in the Equity Plan. As of October 14, 2019, total eligible participants included eight executive officers, the Company's nine non-employee directors and approximately 1,500 others. Such employees, non-employee directors and consultants will continue to be eligible to receive an award under the Amended and Restated Plan if he or she is selected to receive an award by the Committee. An individual who receives an award under the Amended and Restated Plan is referred to in this proposal as a "Grantee". Although eligible under the Amended and Restated Plan, the Committee does not currently have any intention of granting JSOP awards to non-employee directors or consultants.
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| Enstar Group Limited | 6 | Special Meeting Proxy Statement |
Administration of the Amended and Restated Plan
The Committee would administer the Amended and Restated Plan, select the employees, non-employee directors and consultants who are eligible to participate, and determine the timing and amounts of any awards and the specific provisions of award agreements.
Available Shares under the Amended and Restated Plan
Of the Shares authorized for issuance in connection with awards made under the Equity Plan, there were 432,293 Shares available as of September 30, 2019. In addition, the Equity Plan also authorizes any Shares that are subject to an award under our 2006 Equity Incentive Plan (“the 2006 Equity Plan”) that expires or is canceled, terminated, forfeited or settled in cash which underlying Shares would have become available for future award under the 2006 Equity Plan. The maximum aggregate number of Shares that may be issued under the Amended and Restated Plan is equal to the (i) number of Shares that remain available for use in connection with Awards under the Equity Plan immediately prior to the date on which the amendment and restatement is approved by our shareholders, (ii) any Shares that are subject to an award under the 2016 Equity Incentive Plan as of the date on which the amendment and restatement is approved by our shareholders that expires or is canceled, terminated, forfeited or settled in cash and would have become available for future award under the 2016 Equity Incentive Plan (including Shares that would have become available for future award under the 2006 Equity Plan as described above) and (iii) the Additional Shares. Shares issuable under the Amended and Restated Plan consist of authorized but unissued Shares and/or previously issued Shares that the Company reacquires.
In general, if any outstanding awards granted under the Amended and Restated Plan expire, terminate, are forfeited or are settled in cash, the Shares reserved for those awards will be available for subsequent awards. However, the following Shares will not again become available for issuance under the Amended and Restated Plan: (i) awarded Shares that are withheld by the Company to satisfy any tax withholding obligation or any previously acquired Shares tendered in payment of taxes relating to an award; (ii) Shares that would have been issued upon exercise of an option but for the fact that the exercise was pursuant to a "net-exercise" arrangement; (iii) Shares covered by a stock appreciation right that are not issued in connection with the stock settlement of the stock appreciation right upon its exercise; and (iv) Shares that are repurchased by the Company using option exercise proceeds. In addition, with respect to JSOP awards, the EBT would retain any Shares not used to settle the JSOP award solely for use in future JSOP awards under the Amended and Restated Plan. When the EBT is no longer needed for future JSOP awards, the Company intends to terminate the EBT and have its remaining Shares returned to the Company, but such Shares would not be available for issuance in connection with any other awards under the Amended and Restated Plan.
Stock Options
A stock option entitles a Grantee, on the exercise thereof, to purchase Shares at a specified price for a specified period of time. Stock options, including incentive stock options (available to employees only) and non-qualified stock options (available to employees, directors and consultants), may be granted under the Amended and Restated Plan under terms and conditions established by the Committee.
Options must have an exercise price of not less than the fair market value of a Share on the date of grant. The fair market value generally is the quoted closing price of a Share, as reported by the NASDAQ Global Select Market, on the relevant date. The exercise price of an option may be paid in cash, or to the extent permitted by an award agreement, through delivery of previously held Shares, newly acquired Shares, a cashless exercise or any combination thereof.
Options, including ISOs, for more than 120,000 Shares may not be granted in any calendar year to any one Grantee. If an option is canceled, the Shares covered by the canceled option will be counted against the maximum number of Shares that may be subject to options granted to a single Grantee in any calendar year.
Except as otherwise provided under an award agreement, options will become exercisable in three equal annual installments. This means that an option will generally become exercisable with respect to one-third of the covered Shares on the first anniversary of the grant date, and with respect to an additional one-third on each of the next two anniversaries of the grant date. In addition, except as otherwise provided under the Amended and Restated Plan or an award agreement, options will not become exercisable earlier than one year after the date of grant, provided that the aggregate amount of options and stock appreciation rights up to a maximum of 5% of the Shares available for awards under the Amended and Restated Plan may be granted without regard to the minimum one-year exercise requirement. The Committee may establish performance-based criteria for exercisability of any option.
Stock Appreciation Rights
A stock appreciation right ("SAR") is an award entitling a Grantee, on exercise, to receive an amount in cash,
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| Enstar Group Limited | 7 | Special Meeting Proxy Statement |
Shares or a combination thereof (as determined by the Committee), equal to the excess of the Share’s fair market value on the date of exercise over its fair market value on the date of grant.
SARs may be granted under terms and conditions determined by the Committee, provided that the aggregate number of Shares subject to stock-settled SARs granted to any one Grantee in a calendar year shall not exceed 120,000 Shares. In addition, the aggregate number of cash-settled SARs granted to any one Grantee under the Amended and Restated Plan in a calendar year shall not exceed 300,000. If a SAR is canceled, the Shares covered by the canceled SAR shall be counted against the maximum number of Shares that may be subject to SARs granted to a single Grantee in any calendar year.
SARs may be granted in connection with an option or may be granted independently. SARs that are granted in connection with an option may only be exercised upon the surrender of the right to exercise the option for an equivalent number of Shares.
Except as otherwise provided under an award agreement, SARs will become exercisable in three equal annual installments. This means that a SAR will generally become exercisable with respect to one-third of the covered Shares on the first anniversary of the grant date, and with respect to an additional one-third on each of the next two anniversaries of the grant date. In addition, except as otherwise provided under the Amended and Restated Plan or an award agreement, SARs will not become exercisable earlier than one-year after the date of grant, provided that the aggregate amount of options and SARs up to a maximum of 5% of the Shares available for awards under the Amended and Restated Plan may be granted without regard to the minimum one-year exercise requirement. The Committee may establish performance-based criteria for exercisability of any SAR.
Restricted Stock Awards
A restricted stock award is an award of Shares that is subject to restrictions and conditions established by the Committee. The Committee may condition the vesting of such Shares on continued service through a stated period of time ("Restricted Stock") or the attainment of certain performance goals during a stated performance period ("Performance Stock"). The performance period selected by the Committee will be no less than one year and no more than five years. Restricted Stock will become fully vested if a Grantee’s service terminates due to disability (as defined in the Amended and Restated Plan) or death.
Restricted Stock awards may be granted under terms and conditions determined by the Committee, provided that the maximum aggregate number of Shares subject to Performance Stock and performance stock units ("PSUs"), in the aggregate, that can be granted to a single Grantee in any calendar year is 120,000. If a PSU is settled for cash, the Shares covered by the cash-settled PSU will be counted against the maximum number of Shares that may be subject to PSUs and Performance Stock granted to one Grantee in any calendar year.
Restricted Stock Unit/Performance Stock Unit Awards
Each vested stock unit award allows a Grantee to receive either one Share, cash equal to the fair market value of such Share, or a combination thereof, as decided by the Committee. The Committee may condition the vesting of stock unit awards on continued service through a stated period of time ("RSUs") or the attainment of certain performance goals during a stated performance period. The performance period selected by the Committee will be no less than one year and no more than five years. RSUs become fully vested if a Grantee terminates service due to disability (as defined in the Amended and Restated Plan) or death. Shares or cash, as applicable, will be delivered upon vesting unless a Grantee’s award agreement provides for a later delivery date.
Stock unit awards may be granted under terms and conditions determined by the Committee, provided that the maximum number of Shares subject to PSUs and Performance Stock, in the aggregate, that can be granted to a single Grantee in any calendar year is 120,000 Shares. If a PSU is settled for cash, the Shares covered by the cash-settled PSU shall be counted against the maximum number of Shares that may be subject to PSUs and Performance Stock granted to a Grantee in any calendar year.
The Committee may grant dividend equivalent rights in connection with RSUs and PSUs. Generally, the terms and conditions (e.g., the payment date, vesting schedule and impact of any termination of service) of such dividend equivalent rights will be substantially identical to the terms and conditions of the associated RSUs and PSUs.
Bonus Share Awards
A bonus share award ("Bonus Share") is an award of Shares by the Committee for any reason. The Committee may award Shares under the Amended and Restated Plan as full or partial payment of an award under the Enstar Group Limited Annual Incentive Compensation Program ("Incentive Compensation Program") or may award Bonus Shares that are unrelated to the Incentive Compensation Program. The maximum aggregate number of Bonus Shares
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| Enstar Group Limited | 8 | Special Meeting Proxy Statement |
that may be granted under the Amended and Restated Plan to any one Grantee is 120,000.
Dividend Equivalent Rights
A dividend equivalent right is the right to receive an amount equal to the cash dividend paid by the Company on one Share. The Committee may grant dividend equivalent rights with respect to an RSU or PSU or may grant dividend equivalent rights as a separate award unrelated to any other award under the Amended and Restated Plan.
Dividend equivalent rights accumulate and are paid when they vest. After the vesting date, dividend equivalent rights will be paid at the same time as the corresponding cash dividends are paid to other ordinary shareholders until the earlier of the expiration date of the award or the Grantee’s termination of service.
Joint Stock Ownership Plan
A description of the JSOP appears above under the heading "Summary of Proposed Amendments".
Termination of Service
In general, all unvested incentives are forfeited immediately upon a Grantee’s termination of service, except as described above or as the Committee may otherwise determine. In the event of Approved Retirement (as defined in the Amended and Restated Plan), disability (as defined in the Amended and Restated Plan) or death, any options and SARs remain exercisable until the earlier of (i) one year after termination of service or (ii) expiration of the award. For any other termination (except terminations for Cause (as defined in the Amended and Restated Plan)), options and SARs remain exercisable until the earlier of (i) three months after termination of service or (ii) expiration of the award. If a Grantee’s service is terminated for Cause (as defined in the Amended and Restated Plan), any options and SARs will terminate immediately.
Clawback Policy
The Committee may require any Grantee whose service is terminated for Cause to disgorge any profit, gain or other benefit received in respect of an award within the 12-month period prior to the Grantee’s termination of service for Cause. In addition, any awards under the Amended and Restated Plan will be subject to any compensation recovery or clawback policy the Company adopts, including any policy required to comply with applicable law or listing standards, as such policy may be amended from time to time. In February 2016, the Company adopted a clawback policy that would apply to Plan awards, as described below in "Compensation Discussion and Analysis - Clawback of Incentive Compensation".
No Repricing
Without shareholder approval, the Committee shall not have the power or authority to reduce, whether through amendment or otherwise, the exercise price of any outstanding option or SAR, nor to grant any new Options, SARs or other awards, including cash, in substitution for or upon the cancellation of options or SARs previously granted, which shall have the effect of reducing the exercise price of any outstanding option or SAR.
Transferability
In general, awards under the Amended and Restated Plan cannot be sold, pledged, assigned or otherwise transferred, with limited exceptions, such as the Grantee’s death or as otherwise provided in an award agreement.
Change in Capitalization
In the event of a stock dividend, stock split or another similar change in the capitalization of the Company, the following will be proportionately adjusted to reflect the capitalization change: (i) the maximum number of Shares available under the Amended and Restated Plan; (ii) the maximum number of Shares that may be awarded to any Grantee; (iii) the number of Shares issuable or deliverable upon exercise or vesting of outstanding awards; (iv) the per-Share exercise price of outstanding options; and (v) the fair market value of a Share on the date an outstanding SAR was awarded.
Change in Control
The Committee will not fully vest outstanding awards and will not make any payments in respect of outstanding awards if the Committee determines, prior to a Change in Control, that the surviving or successor corporation will assume all outstanding awards, or substitute a new award of the same type for each outstanding award. If such assumption or substitution does not occur, the Committee may fully vest all outstanding awards in the event of a Change in Control, other than Performance Stock and PSUs, and may terminate such outstanding awards in exchange for a settlement payment based upon the price per Share received in connection with the Change in Control. Unless otherwise determined by the Committee, Performance Stock and PSUs with respect to completed performance periods
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| Enstar Group Limited | 9 | Special Meeting Proxy Statement |
shall be paid if earned and with respect to in-progress performance periods, a pro-rata portion of the target award opportunity shall be paid based on the portion of the performance period that has been completed as of the date of the Change in Control.
Unless the Committee determines otherwise, JSOP awards will fully vest on a Change in Control. In the Committee's discretion, an individual JSOP agreement may require the satisfaction of performance conditions for accelerated vesting of a JSOP award to occur following a Change in Control. In a Change in Control involving stock consideration payable to our shareholders, the EBT trustee will have discretion to exchange Shares subject to the JSOP award for the stock consideration payable to our other shareholders (which would be held on the terms of the JSOP award).
Amendment or Termination of the Amended and Restated Plan
The Company may amend the Amended and Restated Plan as it deems necessary or appropriate at any time, provided such amendment does not adversely affect any outstanding award. Certain amendments require the approval of the Company’s shareholders.
The Company may terminate the Amended and Restated Plan at any time and for any reason. No awards may be granted after the Amended and Restated Plan is terminated or after the ten-year anniversary of its approval by our shareholders.
Tax Consequences
The tax consequences of participating in the Amended and Restated Plan vary depending on a Grantee's tax jurisdiction, as described below. There are no tax consequences of Amended and Restated Plan participation to Bermuda taxpayers.
Applicable Federal Tax Rules
The following discussion is based on U.S. federal tax laws and regulations as of the date of this Proxy Statement, and you should not consider it to be a complete description of the federal income tax consequences that apply to Grantees. Accordingly, information relating to tax consequences is qualified by reference to current tax laws.
Incentive Stock Options (ISOs): A Grantee will not recognize taxable income on the grant of an ISO. A Grantee will also generally not recognize taxable income on exercise of an ISO, provided the Grantee was an employee of the Company (or of any of its subsidiary companies) during the entire period from the date of grant of the ISO until the ISO is exercised. If the Grantee terminates service before exercising the ISO, the employment requirement will be met (and the Grantee will not recognize taxable income) if the ISO is exercised within three months following the Grantee’s termination of service for reasons other than death or disability, within one year following the termination of service due to disability (as defined in the Amended and Restated Plan) or before the expiration of the option in the event of death. If the employment requirements described above are not met, the tax consequences relating to NQSOs, discussed below, will apply.
If a Grantee sells Shares acquired under an ISO at least two years after the date of grant and at least one year following the date the Shares are transferred to the Grantee following the exercise of the ISO, the Grantee will recognize a long-term capital gain or loss, equal to the difference between the amount realized on the sale and the exercise price, assuming the Grantee held the Shares as capital assets. If the Grantee sells the Shares within two years after the date of grant or within one year after the Shares are transferred to the Grantee following the exercise of the ISO, the Grantee generally will recognize ordinary income on the sale of the Shares in an amount equal to the lesser of (i) the fair market value of the Shares on the date of exercise minus the exercise price, or (ii) the amount realized on the sale minus the exercise price. Such disqualifying dispositions may also, depending on the sales price, result in either long-term or short-term capital gain or loss.
Non-Qualified Stock Options (NQSOs): A Grantee will not recognize taxable income on the grant of an NQSO. However, a Grantee will recognize ordinary income at the time an NQSO is exercised, in an amount equal to the excess of the Shares’ fair market value at the time of the exercise over the exercise price. Gain or loss recognized after a sale of Shares acquired under an NQSO will be short-term or long-term capital gain or loss, assuming the Grantee held the Shares as capital assets.
Stock Appreciation Rights (SARs): A Grantee recognizes no taxable income on the grant of an SAR. However, a Grantee will recognize ordinary income on the date an SAR is exercised in an amount equal to the excess of the fair market value of the Shares on the exercise date over the fair market value of the Shares on the date of grant to which the SAR relates. If a Grantee receives Shares when an SAR is exercised, gain or loss recognized after a sale of Shares acquired under the SAR will be short-term or long-term capital gain or loss, assuming the Grantee held the Shares as
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| Enstar Group Limited | 10 | Special Meeting Proxy Statement |
capital assets.
Restricted Stock and Performance Stock: The federal income tax treatment on grant and vesting of Restricted Stock and Performance Stock depends on whether the Grantee made a timely election under Section 83(b) of the Internal Revenue Code (a "Section 83(b) election"). If a Grantee does not make a timely Section 83(b) election, the Grantee will not recognize income when Restricted Stock or Performance Stock is awarded. When the conditions stated in the award agreement are met (i.e., when the award vests), the Grantee will recognize ordinary income equal to the fair market value of the Shares vested under the award on the date the vesting occurs (less any purchase price paid for the Shares). If a Grantee made a Section 83(b) election, the fair market value of the Shares awarded, as of the date of grant, will be included in the Grantee’s ordinary income on the date the award is granted. He or she will not recognize ordinary income when the award vests. When the Grantee sells his or her vested Shares, the Grantee will recognize a short-term or long-term capital gain or loss, assuming the Grantee held the Shares as capital assets.
RSUs and PSUs: A Grantee will not recognize taxable income upon the grant of an RSU or PSU. With respect to Shares delivered to a Grantee under an RSU or PSU, the Grantee will recognize ordinary income in an amount equal to the fair market value of the Shares on the date of delivery. When a Grantee sells his or her Shares, the Grantee will recognize a short-term or long-term capital gain or loss, assuming the Grantee held the Shares as capital assets.
Dividend Equivalents: A Grantee will recognize ordinary income as of the date the Dividend Equivalents are paid to him or her.
Bonus Shares: On the date of grant, the Grantee will recognize ordinary income (equal to the closing price of the Shares on the date of grant) for federal income tax purposes. When a Grantee sells Bonus Shares, the Grantee will recognize a capital gain (or loss), assuming the Grantee held the Shares as capital assets.
JSOP Awards: Currently the Company expects that Grantees of JSOP awards will be U.K. tax residents. A Grantee who is granted a JSOP award and is subject to U.K. tax will make an election under section 431 of the Income Tax (Earnings and Pensions) Act 2003 when he or she acquires the JSOP interest in Shares. The Grantee will either pay the fair market value for his or her interest or will pay income tax on that amount. When the Grantee sells his or her JSOP interest, the Grantee will be subject to capital gains tax. In the event that a Grantee of a JSOP award is subject to U.S. federal income tax with respect to that award, the Grantee would recognize ordinary compensation income equal to the excess of the value of the cash or Shares delivered in respect of the award in connection with vesting, over any amount the Grantee paid to participate in the JSOP award. Any such value would be determined on the later of payment in respect of the award and vesting of the award.
Calculation of Capital Gains and Losses: The amount of the capital gain (or loss) will equal the sales price minus the amount the Grantee recognized as ordinary income (the "tax basis"). How the Grantee’s capital gain (or loss) is treated depends on how long the Grantee has held the Shares. The Grantee’s "holding period" is measured from the day after the date the Grantee recognized ordinary income (i.e., the grant/exercise/vesting date, as applicable) to the date the Grantee sells the Shares. A holding period of one year or less results in a short-term capital gain (or loss). Any net capital gain (the excess of the Grantee’s net long-term capital gains for the year over net short-term capital losses for the year) is taxed for federal income tax purposes at a maximum capital gain rate of 20%. Any excess of capital losses over capital gains can be used to offset only up to $3,000 per year of ordinary income (reduced to $1,500 if the Grantee is married and filing separately) or carried forward to a subsequent year.
Tax Withholding: When a Grantee recognizes ordinary income with respect to an award, federal and some state and local tax regulations require the Company to collect income taxes at withholding rates. The Company will either deduct the amount required to be withheld from any payments made to the Grantee under the Amended and Restated Plan, or require the Grantee to remit the appropriate amount of withholding. The Company may also allow the Grantee to elect to have Shares withheld from the award or to deliver previously held Shares to satisfy the withholding obligation.
Excise Taxes: Under certain circumstances, the accelerated vesting of an award in connection with a Change in Control of the Company might be deemed an "excess parachute payment" for purposes of the golden parachute tax provisions of Section 280G of the Code. To the extent they are considered excess parachute payments, a Grantee may be subject to a 20% excise tax and the Company may be unable to receive a tax deduction.
Tax Consequences to the Company: In general, the Company will be entitled to an income tax deduction equal to the amount of ordinary income recognized by a Grantee on an award. However, there is a $1,000,000 per year limit on the amount of the allowable deduction for certain compensation paid or accrued with respect to certain executive employees.
New Plan Benefits
No awards have been made under the Amended and Restated Plan, other than awards previously outstanding
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| Enstar Group Limited | 11 | Special Meeting Proxy Statement |
under the 2016 Equity Incentive Plan. In addition, although the Committee has undertaken certain preliminary analysis and consideration of a potential long-term incentive award to our Chief Executive Officer that would likely be structured as a JSOP award, we have no definitive agreements or understandings to issue any JSOP awards.
Any future awards, including any JSOP awards, are subject to the discretion of the Committee and, therefore, we cannot currently determine the benefits or number of Shares subject to awards that may be granted in the future to employees, officers, directors, consultants or non-employee directors. The total benefits that may be received by any particular person or group under the Amended and Restated Plan after it is approved are not determinable at this time, and therefore no New Plan Benefits table is being provided.
Approval by Shareholders of the Amended and Restated Plan
Approval of the Amended and Restated Plan will require the affirmative vote of a majority of the votes cast by shareholders at the Special Meeting. Upon approval of the Amended and Restated Plan by our shareholders, the Amended and Restated Plan will go into effect immediately.
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THE BOARD RECOMMENDS THAT YOU VOTE FOR APPROVAL OF THE AMENDED AND RESTATED PLAN |
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| Enstar Group Limited | 612 | 2018Special Meeting Proxy Statement |
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| HANS-PETER GERHARDT |
Director Since: 2015
Age: 62
Class: III
Swiss resident; German citizen
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Biographical Information: Hans-Peter Gerhardt served as the Chief Executive Officer of Asia Capital Reinsurance Group from October 2015 through June 2017. He has served continuously in the reinsurance industry since 1981. He is the former Chief Executive Officer of PARIS RE Holdings Limited, serving in that position from the company’s initial formation in 2006 through the completion of its merger into Partner Re Ltd. in June 2010. He previously served as the Chief Executive Officer of AXA Re from 2003 to 2006, also serving as Chairman of AXA Liabilities Managers, the AXA Group’s run-off operation, during that time.
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Certain Other Directorships:Mr. Gerhardt also serves as a non-executive director of Asia Capital Reinsurance Group and as a non-executive director of Tokio Marine Kiln, Tokio Millennium Re and African Risk Capacity (all privately held). He previously served as an independent director of Brit Insurance Holdings PLC until the company’s acquisition by Fairfax Financial Holdings in 2015.
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Skills and Qualifications: Underwriting expertise; proven industry veteran
Mr. Gerhardt brings decades of underwriting expertise to our Board, which is important to us as we run our active underwriting businesses, Atrium and StarStone. He is a proven industry veteran, with significant leadership experience, including several successful tenures in CEO roles.
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| DOMINIC F. SILVESTER |
Director Since: 2001
Age: 57
Class: III
Enstar Officer Title: Chief Executive Officer
UK resident; UK citizen
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Biographical Information: Dominic Silvester has served as a director and the Chief Executive Officer of the Company since its formation in 2001. In 1993, Mr. Silvester began a business venture in Bermuda to provide run-off services to the insurance and reinsurance industry. In 1995, the business was assumed by Enstar Limited, which is now a subsidiary of the Company, and for which Mr. Silvester has since then served as Chief Executive Officer. Prior to co-founding the Company, Mr. Silvester served as the Chief Financial Officer of Anchor Underwriting Managers Limited from 1988 until 1993.
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Skills and Qualifications:Company leader; industry expertise; corporate strategy
As a co-founder and CEO of the Company, Mr. Silvester contributes to the Board his intimate knowledge of the Company and the run-off industry. He is well known in the industry and is primarily responsible for identifying and developing our business strategies and acquisition opportunities on a worldwide basis. Mr. Silvester has served as our CEO since the Company’s inception, demonstrating his proven ability to manage and grow the business.
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Enstar Group Limited | 7 | 2018 Proxy Statement |
EQUITY COMPENSATION PLAN INFORMATION The following table presents information regarding our equity compensation plans as of December 31, 2018.
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| Plan Category | Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights | Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights | Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (Excluding Securities Reflected in the First Column) |
| Equity compensation plans approved by security holders | — |
| $ | — |
| 625,508 |
| (1) |
| Equity compensation plans not approved by security holders | 50,935 |
| $ | 121.16 |
| 49,065 |
| (2) |
| Total | | |
| 674,573 |
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| (1) | POUL A. WINSLOW |
Director Since: 2015
Age: 52
Class: III
Consists of 512,284 ordinary shares that are available for future issuance under the Equity Plan and 113,224 ordinary shares available under the Enstar Committees: Compensation, Investment Canadian resident; Danish citizen
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Biographical Information: Poul Winslow has been a Managing DirectorGroup Limited Employee Share Purchase Plan as of Canada Pension Plan Investment Board ("CPPIB") since 2009. Mr. Winslow also serves as Head of External Portfolio Management and Head of Thematic Investing for CPPIB, roles he has held since 2009 and 2014, respectively. Prior to joining CPPIB, Mr. Winslow had several senior management and investment roles at Nordea Investment Management in Denmark, Sweden and the United States. He also served as the Chief Investment Officer of Andra AP-Fonden (AP2) in Sweden.
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Certain Other Directorships:Mr. Winslow serves as a director for the Standards Board for Alternative Investments, a standard setting body for the hedge fund industry, and Viking Cruises Ltd, a private company.
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Skills and Qualifications: Investment expertise; compensation and governance experience
Mr. Winslow brings significant investment expertise to our Board gained from his years in senior investment roles, which is highly valuable to our Investment Committee as it oversees our investment strategies and portfolios. His experiences at CPPIB, including exposure to compensation and governance policies, are valuable in his role on our Compensation Committee.
December 31, 2018. |
Continuing Directors
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| (2) | ROBERT J. CAMPBELL |
Director Since: 2007
Age: 69
Class: I
Enstar Committees: Audit (Chair),Consists of ordinary shares available for future issuance under the Deferred Compensation Investment (Chair), Nominating and Governance
US resident; US citizen
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Biographical Information: Robert Campbell was appointed as the independent Chairman of the Board in November 2011. Mr. Campbell has been a Partner with the investment advisory firm of Beck, Mack & Oliver, LLC since 1990.
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Certain Other Directorships: Mr. Campbell is a director and chairman of the audit committee of AgroFresh Solutions, Inc. (formerly Boulevard Acquisition Corp.), a publicly traded global agricultural technologies company. From 2015 through 2017, he was also a director of Boulevard Acquisition Corp. II, a blank check company that completed its initial public offering in September 2015. He previously served as a director of Camden National Corporation, a publicly traded company, from 1999 to 2014.
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Skills and Qualifications: Financial, accounting, and investment expertise; leadership skills
Mr. Campbell brings to the Board his extensive understanding of finance and accounting, which he obtained through over 40 years of analyzing financial services companies andPlan, which is very valuable in his role as chairman of our Audit Committee. In addition, Mr. Campbell’s investment management expertise makes him a key member of our Investment Committee, of which he serves as chairman. Mr. Campbell continues to spend considerable time and energy in his role, which is significant to the leadership and function of our Board.
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Enstar Group Limited | 8 | 2018 Proxy Statement |
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| B. FREDERICK (RICK) BECKER |
Director Since: 2015
Age: 71
Class: II
Enstar Committees: Audit, Compensation (Chair), Nominating and Governance (Chair)
US resident; US citizen
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Biographical Information: Rick Becker is the Chairman of Clarity Group, Inc., a US national healthcare professional liability and risk management organization, which he co-founded over 15 years ago. Prior to co-founding Clarity Group, Inc., he served as Chairman and Chief Executive Officer of MMI Companies, Inc. from 1985 until its sale to The St. Paul Companies in 2000. Mr. Becker has previously served as President and CEO of Ideal Mutual and McDonough Caperton Employee Benefits, Inc., and also served as State Compensation Commissioner for the State of West Virginia.
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Certain Other Directorships: Mr. Becker currently serves as a director of private companies West Virginia Mutual Insurance Company, Barton and Associates, Inc., and Dorada Holdings Ltd. (Bermuda).
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Skills and Qualifications:Compensation, governance, and risk management experience; industry knowledge
Mr. Becker has over 35 years of experience within the insurance and healthcare industries. The Board also values Mr. Becker’s corporate governance experience, which he has gained from serving on many other boards over the years. In addition, his previous work on compensation matters makes him well-suited to serve as Chairman of our Compensation Committee. He has an extensive background in risk management, which enhances our risk oversight and monitoring capabilities.
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| JAMES D. CAREY |
Director Since: 2013
Age: 51
Class: II
Enstar Committees: Investment
US resident; US citizen
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Biographical Information: James Carey is a senior principal of Stone Point Capital LLC, a private equity firm based in Greenwich, Connecticut. Stone Point Capital serves as the manager of the Trident Funds, which invest exclusively in the global financial services industry. Mr. Carey has been with Stone Point Capital and its predecessor entities since 1997. He previously served as a director of the Company from its formation in 2001 until the Company became publicly traded in 2007. Mr. Carey rejoined the Board in 2013.
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Certain Other Directorships: Mr. Carey currently serves on certain private company boards of the portfolio companies of the Trident Funds, including Alliant Insurance Services Inc., Amherst Pierpont Securities LLC, Citco III Limited, Eagle Point Credit Management LLC, Kestra Financial Holdings GP LLC, Privilege Underwriters, Inc. and Sedgwick Claims Management Services, Inc. He previously served as non-executive Chairman of PARIS RE Holdings Limited and as a director of Alterra Capital Holdings Limited (until 2013), Cunningham Lindsay Group Limited and Lockton International Holdings Limited. Mr. Carey also serves as a director of StarStone Insurance Holdings Limited and the holding companies that we and Trident established in connection with the Atrium/Arden and StarStone co-investment transactions.
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Skills and Qualifications: Investment expertise; industry knowledge; significant acquisition experience
Having worked in the private equity business for 20 years, Mr. Carey brings to our Board an extensive background and expertise in the insurance and financial services industries. His in-depth knowledge of investments and investment strategies is significant in his role on our Investment Committee. We also value his contributions as an experienced director in the insurance industry as well as his extensive knowledge of the Company.
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Enstar Group Limited | 9 | 2018 Proxy Statement |
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| HITESH R. PATEL |
Director Since: 2015
Age: 57
Class: II
Enstar Committees: Audit, Nominating and Governance, Risk
UK resident; UK citizen
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Biographical Information: Hitesh Patel served as Chief Executive Officer of Lucida, plc, a UK life insurance company, from 2012 to 2013, and prior to that as its Finance Director and Chief Investment Officer since 2007. Mr. Patel has over 30 years of experience working in the insurance industry, having served in the United Kingdom as KPMG LLP's Lead Partner on Insurance Accounting and Regulatory Services from 2000 to 2007. He originally joined KPMG in 1982 and trained as an auditor.
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Certain Other Directorships:Mr. Patel serves as a non-executive director at Aviva Life Holdings UK Ltd and Aviva Insurance Limited (subsidiaries of Aviva plc) and as Chairman of its Audit Committee and member of the Risk and Investment Committees. He is the Independent Non-Executive Chairman of Capital Home Loans Limited, a privately held buy-to-let mortgage provider and also a non-executive director of Landmark Mortgages Limited. Mr. Patel chairs the Audit Committee and is a member of the Risk Committee and Nomination and Remuneration Committee for Capital Home Loans and Landmark Mortgages Limited. He has served as the Chair of the Insurance Committee of the Institute of Chartered Accountants of England and Wales since 2012.
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Skills and Qualifications: Accounting expertise; regulatory and governance skills; industry experience
Mr. Patel brings significant accounting expertise to our Board, obtained from over two decades of auditing and advising insurance companies on accounting and regulatory issues, which is highly valuable to our Audit Committee. His experience with insurance regulations and the regulatory environment is also a key attribute because our company is regulated in many jurisdictions around the world. As a former industry CEO, he also has significant knowledge of corporate governance matters and practices, which is valuable to our Board and the Nominating and Governance Committee.
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| JIE LIU |
Director Since: 2017
Age: 39
Class: I
Enstar Committees: Investment
Hong Kong resident; Canadian citizen
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Biographical Information:Jie Liu is a Managing Director at Hillhouse Capital. Prior to joining Hillhouse Capital in 2015, Mr. Liu spent more than 10 years in the financial services industry in North America. From 2010 to 2015, he was Head of Credit and a Senior Portfolio Manager at Sentry Investments, a leading Canadian asset manager. Before that, he worked at RBC Capital Markets and Standard & Poor’s. Mr. Liu obtained his M.A. in Economics from the University of Toronto and M.Sc. in Finance from the University of New Brunswick. He is also a CFA charterholder.
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Skills and Qualifications: Investment management industry knowledge and relationships; financial expertise
Mr. Liu brings to our Board his extensive knowledge of global investment markets and the investment management industry, as well as finance skills and a global perspective that we consider highly valuable to our Board’s oversight of our investment portfolios, international operations, and growth opportunities.
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Enstar Group Limited | 10 | 2018 Proxy Statement |
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| PAUL J. O’SHEA |
Director Since: 2001
Age: 60
Class: I
Enstar Officer Title: President
Bermuda resident; Irish citizen
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Biographical Information: Paul O’Shea was appointed as President of the Company in December 2016, when he was also named Executive Chairman of StarStone. He previously served as Executive Vice President and Joint Chief Operating Officer of the Company since our formation in 2001, and has also been a director throughout this time. He leads our mergers and acquisitions operations, including overseeing our transaction sourcing, due diligence, and negotiations processes. In 1994, Mr. O’Shea joined Dominic F. Silvester in the run-off business venture in Bermuda, and he served as a director and Executive Vice President of Enstar Limited, which is now a subsidiary of the Company, from 1995 until 2001. Prior to co-founding the Company, he served as the Executive Vice President, Chief Operating Officer and a director of Belvedere Group/Caliban Group from 1985 until 1994.
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Skills and Qualifications: Company leader; long track record of successful acquisitions; industry expertise
Mr. O’Shea is a qualified chartered accountant who has spent more than 30 years in the insurance and reinsurance industry, including many years in senior management roles. As a co-founder of the Company, Mr. O’Shea has intimate knowledge and expertise regarding the Company and our industry. He has been instrumental in sourcing, negotiating and completing numerous significant transactions since our formation.
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Directorship Arrangements
On June 3, 2015, CPPIB purchased shares from the First Reserve partnerships ("First Reserve") representing 9.3% of our voting shares and a 9.9% economic interest. In connection with the 2015 transaction: (i) First Reserve's shareholder rights terminated and (ii) we and CPPIB entered into a new Shareholder Rights Agreement granting CPPIB contractual shareholder rights that are substantially similar to those rights previously held by First Reserve, including the right to designate one representative to our Board. CPPIB designated Poul A. Winslow as a director of the Company, and he was appointed in September 2015. The designation right terminates if CPPIB ceases to beneficially own at least 75% of the total number of voting and non-voting shares acquired by it from First Reserve. CPPIB has subsequently acquired additional shares, and its current direct and indirect holdings constitute an economic interest of approximately 19.8%.
Independence of Directors
Our Board currently consists of ten directors, of which eight are non-management directors, and six are independent. Nasdaq listing standards require that a majority of our directors be independent. For a director to be considered independent, the Board must determine that the director meets the definition of independence included in Nasdaq Marketplace Rule 5605(a)(2). This requires a determination that the director does not have any direct or indirect material relationship with us either directly or as a partner, owner, or executive officer of an organization that has a relationship with us. Our Board makes these determinations primarily based on a review of the responses of the directors to questions regarding employment and compensation history, family relationships and affiliations, discussions with the directors, and any other known relevant facts and circumstances.
The Board determined that the following six directors are independent as defined by Nasdaq Marketplace Rule 5605(a)(2):
Robert Campbell
Rick Becker
Sandra Boss
Hans-Peter Gerhardt
Hitesh Patel
Poul Winslow
For details about certain relationships and transactions among us and our executive officers and directors, see "Certain Relationships and Related Transactions." Our Board, in making its independence determinations, considered the relationships noted in that section with respect to CPPIB (for Mr. Winslow), which has an ownership interest in Wilton Re Ltd. ("Wilton Re"). Although Mr. Winslow is an employee of CPPIB and serves as its designated representative, he does not have a material direct or indirect interest in any of the reported transactions. Mr. Winslow had no involvement in the sale of life settlements businesses to us by Wilton Re, which was completed before CPPIB invested in us, nor
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Enstar Group Limited | 11 | 2018 Proxy Statement |
in the reinsurance we have with Continental Assurance Company, where our reinsurance recoverable existed prior to Wilton Re's acquisition of this company.
In determining Ms. Boss' independence, the Board considered that Ms. Boss serves as an External Member of the Prudential Regulation Committee of the Bank of England ("PRC"), which regulates our UK insurance subsidiaries, including our Lloyd's operations. To avoid any potential conflicts, she has enacted broad recusals with the PRC so that she does not participate in non-life company matters or insurance policy matters (our only PRC-regulated companies are non-life companies). The Board reviewed these matters and is satisfied that the recusals are effective in addressing any potential issues. The Board also considered Ms. Boss' husband's partnership interest in Sainty Hird, an executive recruiting firm that provided professional services to us during 2017 in the amount of £15,000 (approximately $20,254) in fees, which constituted less than 1% of the firm's annual consolidated gross revenue. The Board determined that Ms. Boss' husband's indirect interest was de minimis and would not impair her ability to exercise independent judgment or challenge management in her role as a director or committee member.
Board Leadership Structure
The Company has separated the positions of Chairman of the Board and Chief Executive Officer. Robert J. Campbell, an independent director, has served as Chairman since 2011. The Board believes that separating the roles of Chairman and CEO and having Mr. Campbell serve as Chairman is the most effective leadership structure for us at this time.
The Board believes Mr. Campbell is well suited to assist with the execution of strategy and business plans, to play a prominent role in setting the Board’s agenda, to act as the liaison between the Board and our senior management, and to preside at Board and shareholder meetings.
The Board believes that our corporate governance structure appropriately satisfies the need for objectivity, and includes several effective oversight means, such as:
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● | the roles of Chairman and CEO are separated; |
● | the Chairman is an independent director; |
● | a majority of our directors are independent; |
● | before or after regularly scheduled Board meetings, the independent directors meet in executive session to review, among other things, the performance of our executive officers; and |
● | the Audit, Compensation and Nominating and Governance committees of the Board consist solely of independent directors who perform key functions, such as: |
| - | overseeing the integrity and quality of our financial statements and internal controls; |
| - | establishing senior executive compensation; |
| - | reviewing director candidates and making recommendations for director nominations; and |
| - | overseeing our corporate governance structure and practices. |
The Board recognizes, however, that no single leadership model is right for all companies at all times and that, depending on the circumstances in the future, other leadership models might be appropriate for us.
Board Committees
The Board has an Audit Committee, a Compensation Committee, a Nominating and Governance Committee, a Risk Committee, and an Investment Committee. In 2017, the Board established the Risk Committee to replace the Underwriting and Risk Committee. Each of our committees operates under a written charter that has been approved by the Board. Each Committee reviews its charter annually, and recommends any proposed changes to the Board. Current copies of the charters for all of our committees are available on our website at http://www.enstargroup.com/corporate-governance. In addition, any shareholder may receive copies of these documents in print, without charge, by contacting the Corporate Secretary at P.O. Box HM 2267, Windsor Place, 3rd Floor, 22 Queen Street, Hamilton, HM JX, Bermuda.
Our Board of Directors met a total of five times during the year ended December 31, 2017.
The primary responsibilities of each of our committees, as well as the current composition of our committees and the number of committee meetings held during 2017, are described below.
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Enstar Group Limited | 12 | 2018 Proxy Statement |
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Audit Committee |
The primary responsibilities of our Audit Committee include:
• overseeing our accounting and financial reporting process, including our internal controls over financial reporting;
• overseeing the quality and integrity of our financial statements;
• reviewing the qualifications and independence of our independent auditor;
• reviewing the performance of our internal audit function and independent auditor;
• reviewing related party transactions;
• overseeing our compliance with legal and regulatory requirements;
• appointing and retaining our independent auditors;
• pre-approving compensation, fees and services of the independent auditors and reviewing the scope and results of their audit; and
• periodically reviewing our risk exposures and the adequacy of our controls over such exposures.
Each member of the Audit Committee is a non-management director and is independent as defined in Nasdaq Marketplace Rule 5605(a)(2) anddescribed above under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Our Board has determined that Messrs. Campbell, Becker, and Patel qualify as audit committee financial experts pursuant to the definition set forth in Item 407(d)(5)(ii) of Regulation S-K, as adopted by the SEC.
| Committee Members:
Robert Campbell (Chair)
Rick Becker
Hitesh Patel
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Number of Meetings in
2017:
6
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Compensation Committee |
The primary responsibilities of our Compensation Committee include:
• determining the compensation of our executive officers;
• establishing our compensation philosophy;
• overseeing the development and implementation of our compensation programs, including our incentive plans and equity plans;
• overseeing the risks associated with the design and operation of our compensation programs, policies and practices; and
• periodically reviewing the compensation of our directors and making recommendations to our Board with respect thereto.
Each member of the Compensation Committee is a non-management director, is independent as defined in Nasdaq Marketplace Rule 5605(a)(2), and meets the enhanced independence standards applicable to compensation committee members in Nasdaq Marketplace Rule 5605(d)(2) and the Exchange Act. Additional information on the Compensation Committee and the role of management in setting compensation is provided below in "Executive"Director Compensation - Deferred Compensation Discussion and Analysis."
| Committee Members:
Rick Becker (Chair)
Sandra Boss Robert Campbell
Poul Winslow
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Number of Meetings in
2017:
5
Plan". |
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| Enstar Group Limited | 13 | 2018 Proxy Statement |
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Nominating and Governance Committee |
The primary responsibilities of our Nominating and Governance Committee include:
• identifying individuals qualified to become directors and reviewing any candidates proposed by directors, management or shareholders;
• recommending committee appointments to the Board;
• recommending the annual director nominees to the Board and the shareholders;
• establishing director qualification criteria;
• supporting the succession planning process; and
• advising the Board with respect to corporate governance-related matters.
Each member of the Nominating and Governance Committee is a non-management director and is independent as defined in Nasdaq Marketplace Rule 5605(a)(2).
| Committee Members:
Rick Becker (Chair) Sandra Boss
Robert Campbell Hitesh Patel
|
Number of Meetings in
2017:
3
|
|
| |
Risk Committee |
The primary responsibilities of our Risk Committee include:
• assisting the Board in overseeing the integrity and effectiveness of the Company's enterprise risk management framework;
• reviewing and evaluating the risks to which we are exposed, as well as monitoring and overseeing the guidelines and policies that govern the processes by which we identify, assess, and manage our exposure to risk;
• reviewing and monitoring our overall risk strategy and Board-approved risk appetite and overseeing any significant mitigating actions required;
• reviewing the Company’s forward-looking risk and solvency assessment and general capital management;
• periodically reviewing and approving the level of risk assumed in underwriting, investment and operational activities; and
• reviewing and monitoring the potential impact of emerging risks.
Ms. Boss and Mr. Patel are non-management directors, and both are independent as defined in Nasdaq Marketplace Rule 5605(a)(2).
*Walker Rainey is a non-executive director of our subsidiary StarStone Specialty Holdings Limited, and serves as chair of its Underwriting and Risk Committee.
*Orla Gregory is the Company's Chief Operating Officer. The Board has included Ms. Gregory on the Risk Committee because of her strategic and operational involvement with the Chief Risk Officer and as the Chair of the Company's Management Risk Committee.
| Committee Members:
Sandra Boss (Chair)
Hitesh Patel
Walker Rainey*
Orla Gregory*
|
Number of Meetings in
2017:
3
|
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Enstar Group Limited | 14 | 2018 Proxy Statement |
|
| |
Investment Committee |
The primary responsibilities of our Investment Committee include:
• determining our investment strategy;
• developing and reviewing our investment guidelines and overseeing compliance with these guidelines and various regulatory requirements and any applicable loan covenants;
• overseeing our investments, including approval of investment transactions;
• overseeing the selection, retention and evaluation of outside investment managers;
• overseeing investment-related risks, including those related to the Company’s cash and investment portfolios and investment strategies; and
• reviewing and monitoring the Company’s investment performance quarterly and annually against plan and external benchmarks agreed from time to time.
Four members of the Investment Committee (Messrs. Campbell, Carey, Winslow, and Liu) are non-management directors, and two members (Messrs. Campbell and Winslow) are independent under Nasdaq Marketplace Rule 5605(a)(2).
*Orla Gregory is the Company's Chief Operating Officer. The Board has included Ms. Gregory on the Investment Committee because it believes her strategic and operational involvement with the Chief Investment Officer and Enstar investment team provides a significant benefit to the functioning of the committee.
| Committee Members:
Robert Campbell (Chair)
James Carey
Poul Winslow
Jie Liu
Orla Gregory*
|
Number of Meetings in
2017:
4
|
|
| |
Executive Committee |
The primary responsibility of our Executive Committee is to exercise the power and authority of the Board when the entire Board is not available to meet, except that the Executive Committee may not authorize the following:
• the issuance of equity securities of the Company;
• the merger, amalgamation, or other change in control transaction of the Company;
• the sale of all or substantially all of the assets of the Company;
• the liquidation or dissolution of the Company;
• any transaction that, in the aggregate, exceeds 10% of the Company’s total assets;
• any action that requires approval of the entire Board by the Company’s Memorandum of Association or the Company’s Bye-laws; or
• any action prescribed by applicable law, rule or regulation, including but not limited to those prescribed by listing rules or SEC regulations (such as those powers granted to the Compensation, Audit, and Nominating and Governance Committees and requiring independent director decisions).
* It is not unexpected for the Executive Committee to hold no meetings in a given year, as it is only used in situations where the full Board cannot reasonably be convened.
| Committee Members:
Robert Campbell (Chair)
Sandra Boss
Dominic Silvester
Poul Winslow
|
Number of Meetings in
2017:
0*
|
Attendance at Meetings
We expect our directors to attend all meetings of our Board, all meetings of all committees of the Board on which they serve and each annual general meeting of shareholders, absent extraordinary circumstances.
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Enstar Group Limited | 15 | 2018 Proxy Statement |
In 2017, during the time they were serving, all of the directors attended at least 75% of the meetings of the Board and the committees of the Board on which the director served.
All directors then serving attended the 2017 annual general meeting of shareholders. In addition, in 2017, our independent directors met each quarter in executive sessions without management.
Board Oversight of Risk Management
Risk assumption is inherent in our business, and appropriately setting risk appetite and executing our business strategies accordingly is key to our successful performance. Effective risk oversight is an important priority for the Board, which has placed strong emphasis on ensuring that we have a robust risk management framework to identify, measure, manage, monitor, and report risks that may affect the achievement of our strategic, operational and financial objectives. The overall objective of our enterprise risk management ("ERM") framework is to support good risk governance while facilitating the achievement of business objectives. Our ERM framework also contributes to an effective business strategy, efficiency in operations and processes, strong financial performance, reliable financial reporting, regulatory compliance, a good reputation with key stakeholders, business continuity planning, and capital planning. Our Board and its committees have risk oversight responsibility and play an active role in overseeing management of the risks we face.
In 2017, the Board replaced the Underwriting and Risk Committee with a dedicated Risk Committee to streamline board-level risk oversight. The underwriting strategy oversight responsibilities of the Underwriting and Risk Committee were delegated to the management members that regularly report to the full Board. Each of our active underwriting businesses (StarStone and Atrium) has dedicated underwriting and risk committees that monitor underwriting activities and risk taking in line with subsidiary board-approved risk appetites (which are aligned to the Company's risk appetite). These committees provide regular reporting to the Risk Committee.
While all of the Board's committees play a role in risk management, the Risk Committee, reporting to the full Board, oversees our enterprise risk. Our ERM framework consists of numerous processes and controls that have been designed by management, with oversight by our Board and its committees, and implemented by employees across our organization.
The Board and its committees receive management information from the management relating to performance against strategy and regularly review information regarding, among other things, acquisitions, active underwriting, loss reserves, credit, liquidity, investments, operations, and information security, and the risks associated with each. Our Risk Committee assists the Board in overseeing the integrity and effectiveness of our ERM framework, including by reviewing and evaluating the risks to which we are exposed, as well as monitoring and overseeing the guidelines and policies that govern the processes by which we identify, assess and manage our exposure to risk.
Management is responsible for the day-to-day operation of the Company’s risk management function, including identifying, monitoring, prioritizing, and addressing risks. And our ERM governance structure is supported by a management risk committee that reports to our Board's Risk Committee. In addition, the Company's Chief Risk Officer attends Board, Risk Committee, Audit Committee, and Investment Committee meetings.
Our Risk Committee was active in its inaugural year, in which it oversaw major changes to our ERM reporting and framework, developed a new risk appetite framework, re-designed the management risk committee, assessed the third quarter catastrophe events with the underwriters, actuaries, and risk management teams, and considered revisions to our risk, capital management and modeling functions. The Risk Committee regularly meets with members of management to evaluate the material risks we face, including the leaders of our investments, underwriting, capital management, actuarial, tax, and regulatory/compliance areas.
For more information on our ERM framework and risk profile, refer to "Item. 1 Business - Enterprise Risk Management" of our Annual Report on Form 10-K for the year ended December 31, 2017.
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Enstar Group Limited | 16 | 2018 Proxy Statement |
Our committees support the Board’s oversight of risk management in the following ways:
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Committee
| | Risk Management Responsibilities |
Risk Committee | Ÿ | Assists the Board in overseeing the integrity and effectiveness of the Company's ERM framework |
Ÿ | Reviews and evaluates the risks to which the Company is exposed |
Ÿ | Monitors the guidelines and policies that govern the process by which the Company identifies, assesses, and manages its exposure to risk |
Ÿ | Reviews reinsurance programs and practices to ensure consistency with the Company's business plan and aggregate written exposures |
Ÿ | Reviews our overall risk appetite with input from management |
Audit Committee | Ÿ | Oversees the Company's internal controls over financial reporting |
Ÿ | Receives direct reports on internal controls from the Company’s Internal Audit leadership, who meets with the committee on a quarterly basis and maintains an open dialogue with the Audit Committee Chairman |
Ÿ | Reviews information security matters and makes recommendations to the Board |
Ÿ | Receives direct reports on ERM at least annually |
Compensation Committee | Ÿ | Oversees risks relating to the Company's compensation programs and plans (as more fully described in "Executive Compensation - Compensation Discussion and Analysis - Compensation Risk Assessment" on page 48) |
Ÿ | Conducts an annual risk assessment of our compensation programs to ensure they are properly aligned with Company performance and do not provide incentives for employees to take inappropriate or excessive risks |
Nominating and Governance Committee | Ÿ | Oversees risks relating to corporate governance matters, including with respect to reviewing Board and Committee composition and the Company’s relations with shareholders |
Ÿ | Oversees and supports the Board in management succession planning |
Investment Committee | Ÿ | Regularly evaluates and tests the Company's investment portfolio and investment strategies under various stress scenarios |
Ÿ | Oversees compliance with investment guidelines, which assist the Company in monitoring the Company's investment-related risks |
Ÿ | Monitors and evaluates the Company's internal investment management department and external investment managers |
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Enstar Group Limited | 17 | 2018Special Meeting Proxy Statement |
Director Nominations, Qualifications and Recommendations
When identifying and evaluating director nominees, our Nominating and Governance Committee considers the nominees’ personal and professional integrity, judgment, ability to represent the interests of the shareholders, and knowledge regarding insurance, reinsurance and investment matters, as well as other factors discussed below. The Nominating and Governance Committee has primarily identified candidates through its periodic solicitation of recommendations from members of the Board and individuals known to the Board, use of third-party search firms retained by the Nominating and Governance Committee, and shareholders. However, in certain private placement or acquisition-related transactions, parties have obtained the right to designate a board representative.
Following the resignation of the director representative from Goldman Sachs in late 2016, the Board appointed Jie Liu in February 2017, a Managing Director of Hillhouse Capital, to fill the vacancy. Several directors had opportunities to meet with Mr. Liu prior to his nomination to serve as a director. The Board determined that Mr. Liu, who has significant investment and finance expertise stemming from his role at Hillhouse Capital, was a natural fit to fill the vacancy on the Board given his investment expertise. In 2015, we added five independent directors to the Board, which benefited the quality, diversity, and function of the Board as a whole.
Each year, the Board and each committee conduct performance evaluations, which include consideration of whether we have the collective skill sets necessary to effectively oversee the Company's affairs. If the Board identifies areas where a director or directors with additional expertise would enhance the composition of the Board, the Nominating and Governance Committee will lead our efforts to identify suitable candidates. The Nominating and Governance Committee may use third-party search firms and consider suggestions from Board members familiar with potential candidates who may be available in the market. Once a candidate is identified, the Nominating and Governance Committee undertakes an evaluation process.
The evaluation of new director candidates involves several steps, not necessarily taken in any particular order. The Nominating and Governance Committee reviews and verifies the candidate's qualifications and background information and evaluates the candidate's attributes relative to the identified needs of the Board. If the Nominating and Governance Committee wishes to pursue a candidate further, it arranges candidate interviews with committee members and other directors. After assessing feedback, the Nominating and Governance Committee presents each nominated candidate to the Board for consideration.
For incumbent directors, the Nominating and Governance Committee reviews each director’s overall service to the Company during the director’s term, including the director’s level of participation and quality of performance. The Nominating and Governance Committee considered and nominated the candidates proposed for election as directors at the Annual General Meeting, with the Board unanimously agreeing on the nominees.
While the Board is currently satisfied with the collective skillset of the directors, the directors have noted that additional information technology experience would enhance the Board's oversight and involvement in the Company's strategic information technology initiatives and oversight of cybersecurity risk, especially in light of the recent focus on technology and data-driven changes in the insurance industry. Accordingly, we expect to look for these attributes in the event that we identify a director nominee in the future.
Director Qualifications
We seek to identify candidates who represent a mix of backgrounds and experiences that will improve the Board’s ability, as a whole, to serve our needs and the interests of our shareholders. While we do not have a formal diversity policy for selection of directors, we consider diversity broadly to include not only traditional notions of diversity, such as gender, ethnicity, and nationality, but also differences in professional experience, individual attributes and skill sets, perspective, knowledge and expertise in substantive matters pertaining to our business and industry.
Our Board has identified several categories of primary skills and/or experience that we look for in our directors. The Board reviews these categories from time to time, alongside its consideration of whether there are new areas that would benefit it in executing its oversight duties. These include:
extensive insurance industry experience - including in executive, director, or other leadership roles at major insurance institutions
risk management - in terms of establishing risk appetite levels and risk management processes for our operations, acquisitions, and investment portfolios
finance and accounting - including developing and understanding our finance and capital management needs in line with our Company strategies, as well as financial reporting and audit-related expertise
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Enstar Group Limited | 18 | 2018 Proxy Statement |
investment - expertise related to assessing our investment portfolios and determining our investment strategy in line with our risk appetite
strategy - challenging management on setting and/or adjusting business strategies, including acquisitions, divestitures, operations, and investments
corporate governance - including understanding, developing, and championing governance procedures and protections that drive Board and management accountability and protection of shareholder interests
regulatory and government - a deep understanding of the highly regulated environment in which we operate, and the ever-changing regulations and requirements that govern our operations and shape our future strategies
|
|
Given the complex nature of our business and the insurance and reinsurance industry,
we seek to include directors whose experiences, although varying and diverse, are also
complementary to and demonstrate a familiarity with the substantive matters necessary to lead the
Company and navigate our insurance businesses.
|
Board Skills Summary
The chart below highlights several categories of skills for our directors, and we have indicated the particular strengths of each director in the columns shown. While many of our directors have a wide range of experience covering all of these areas, we specifically designate expertise or leading experience.
|
| | | | | | | |
| Extensive Insurance Industry Experience | Risk Management | Finance and Accounting | Investment | Strategy | Corporate Governance | Regulatory and Government |
Robert Campbell | | þ | þ | þ | | þ | |
Rick Becker | þ | þ | þ | | þ | þ | |
Sandra Boss | | þ | þ | | þ | þ | þ |
James Carey | þ | | þ | þ | þ | | |
Hans-Peter Gerhardt | þ | | | | þ | | þ |
Jie Liu | | | þ | þ | þ | | |
Paul O'Shea | þ | | þ | | þ | | þ |
Hitesh Patel | þ | þ | þ | þ | | þ | þ |
Dominic Silvester | þ | | þ | | þ | | |
Poul Winslow | | þ | þ | þ | | þ | |
Shareholder Recommendations
In accordance with its charter, the Nominating and Governance Committee will consider director candidates submitted by shareholders. Shareholders may recommend candidates to serve as directors by submitting a written notice to the Nominating and Governance Committee at Enstar Group Limited, P.O. Box HM 2267, Windsor Place, 3rd Floor, 22 Queen Street, Hamilton, HM JX, Bermuda. Shareholder recommendations must be accompanied by sufficient information to assess the candidate’s qualifications and contain the candidate’s consent to serve as director if elected. Shareholder nominees will be evaluated by the Nominating and Governance Committee in the same manner as nominees it selects itself.
Compensation Committee Interlocks and Insider Participation
No member of the Compensation Committee is or was during 2017 an employee, or is or ever has been an officer, of the Company. During the year ended December 31, 2017, no executive officer served as a member of the Compensation Committee or as a director of another entity having an executive officer serving on our Compensation Committee or as one of our directors.
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Enstar Group Limited | 19 | 2018 Proxy Statement |
Code of Conduct
We have adopted a Code of Conduct that applies to all of our directors and employees, including all senior executives and financial officers. A copy of our Code of Conduct is available on our website at http://www.enstargroup.com/corporate-governance by clicking on "Code of Conduct."
In addition, any shareholder may receive a copy of the Code of Conduct or any of our committee charters in print, without charge, by contacting Investor Relations at Enstar Group Limited, P.O. Box HM 2267, Windsor Place, 3rd Floor, 22 Queen Street, Hamilton HM JX, Bermuda. We intend to post any amendments to our Code of Conduct on our website. In addition, we intend to disclose any waiver of a provision of the Code of Conduct that applies to our senior executives and financial officers by posting such information on our website or by filing a Form 8-K with the SEC within the prescribed time period. No such waivers currently exist.
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Enstar Group Limited | 20 | 2018 Proxy Statement |
Shareholder Communications with the Board
Shareholders and other interested parties may send communications to the Board by sending written notice to: |
|
Enstar Group Limited
Attention: Corporate Secretary
P.O. Box HM 2267
Windsor Place, 3rd Floor
22 Queen Street
Hamilton, HM JX
Bermuda
|
The notice may specify whether the communication is directed to the entire Board, to the independent directors, or to a particular Board committee or individual director.
Our Corporate Secretary will handle routine inquiries and requests for information. If our Corporate Secretary determines the communication is made for a valid purpose and is relevant to the Company and its business, our Corporate Secretary will forward the communication to the entire Board, to the independent directors, to the appropriate committee chairman or to the individual director as the notice was originally addressed. At each regular meeting of the Board, our Corporate Secretary will present a summary of all communications received since the previous meeting that were not forwarded and will make those communications available to the directors on request.
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Enstar Group Limited | 21 | 2018 Proxy Statement |
DIRECTOR COMPENSATION
2017
Overview and Composition of Our Board
Our Board currently is composed of 10 directors and has five committees: an Audit Committee, a Compensation Committee, a Nominating and Governance Committee, a Risk Committee and an Investment Committee. We also have an Executive Committee, the primary responsibility of which is to exercise the power and authority of the Board when the entire Board is not available to meet.
The following describes our current Board composition and current committee assignments of each of our directors.
|
| | | | | | |
| Director | Age | Director Since | Primary Occupation | Independent | Board Committee Membership* | Other Current Public Boards |
Robert J. Campbell (Chairman) | 70 | 2007 | Partner, Beck Mack and Oliver | þ | AC, CC, NGC, IC, EC | 1 |
| Dominic F. Silvester | 58 | 2001 | CEO, Enstar Group Limited | | EC | 0 |
| B. Frederick Becker | 72 | 2015 | Chairman, Clarity Group, Inc. | þ | AC, CC, NGC | 0 |
| Sandra L. Boss | 52 | 2015 | Bank of England Policy Committee Member; former McKinsey Partner | þ | CC, NGC, RC, EC | 1 |
| James D. Carey | 52 | 2013 | Senior Principal, Stone Point Capital | | IC | 1 |
| Hans-Peter Gerhardt | 63 | 2015 | Former CEO of Asia Capital Re, PARIS RE and AXA Re | þ | RC | 0 |
| Jie Liu | 40 | 2017 | Partner, Hillhouse Capital | | IC | 0 |
| Paul J. O’Shea | 61 | 2001 | President, Enstar Group Limited | | | 0 |
| Hitesh R. Patel | 58 | 2015 | Former CEO, Lucida plc; former KPMG Partner | þ | AC, NGC, RC | 0 |
| Poul A. Winslow | 53 | 2015 | Managing Director, CPPIB | þ | CC, IC, EC | 0 |
*Committee Legend: AC - Audit; CC - Compensation; NGC - Nominating and Governance; RC - Risk; IC - Investment; EC - Executive |
2018 Director Compensation Program
Our Compensation Committee is responsible for periodically reviewing non-employee director compensation and making recommendations to our Board with respect to any changes. The Compensation Committee conducts a comprehensive review no less than biennially, which may include working with our independent compensation consultant.
In 2017,2018, our director compensation program included:
a retainer payable quarterly for non-employee directors, and additional retainers payable quarterly for the Chairman of the Board and certain committee chairs;
an equity retainer payable annually in the form of restricted ordinary shares with a one-year vesting period for non-employee directors and the Chairman of the Board; and
meeting fees for all Board and committee meetings attended.
Directors who are employees of the Company receive no fees for their services as directors. Pursuant to the terms of his employment with Canada Pension Plan investment Board ("CPPIB"), cash fees earned by Mr. Winslow are paid directly to CPPIB, and he has waived his equity retainer fee. In addition, pursuant to the terms of his employment with Hillhouse Capital, cash fees earned by Mr. Liu are paid directly to Hillhouse Capital.
Our director retainer and meeting fees in place as of December 31, 20172018 are set forth below. Committee fees differ due to workload and composition of each committee and are periodically evaluated by the Compensation Committee.
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| Enstar Group Limited | 14 | Special Meeting Proxy Statement |
| | | 2017 Retainer Fees | Annual Amounts Payable | | 2017 Meeting Fees | Amounts Payable for Attendance | |
| 2018 Retainer Fees | | Annual Amounts Payable | | 2018 Meeting Fees | Amounts Payable for Attendance |
Non-Employee Directors(1) | $ | 150,000 |
| | Board Meetings | $ | 3,500 |
| $ | 150,000 |
| | Board Meetings (in Person) | $ | 3,500 |
|
Chairman of the Board(1) | $ | 150,000 |
| | Telephonic Board Meetings | $ | 1,000 |
| $ | 150,000 |
| | Board Meetings (by Phone) | $ | 1,000 |
|
| Audit Committee Chairman | $ | 10,000 |
| | Audit Committee Meetings | $ | 1,500 |
| $ | 10,000 |
| | Audit Committee Meetings | $ | 1,500 |
|
| Compensation Committee Chairman | $ | 10,000 |
| | Compensation Committee Meetings | $ | 1,250 |
| $ | 10,000 |
| | Compensation Committee Meetings | $ | 1,250 |
|
| Nominating and Governance Committee Chairman | $ | 5,000 |
| | Nominating and Governance Committee Meetings | $ | 1,000 |
| $ | 5,000 |
| | Nominating and Governance Committee Meetings | $ | 1,000 |
|
| Investment Committee Chairman | $ | 5,000 |
| | Investment Committee Meetings | $ | 1,250 |
| $ | 5,000 |
| | Investment Committee Meetings | $ | 1,250 |
|
| Risk Committee Chairman | $ | 10,000 |
| | Risk Committee Meetings | $ | 1,250 |
| $ | 10,000 |
| | Risk Committee Meetings | $ | 1,250 |
|
| |
| (1) | The non-employee director fee and the chairman'sChairman of the Board fee are each payable half in cash and half in restricted ordinary shares subject to a one-year vesting period. |
Deferred Compensation Plan
The Amended and Restated Enstar Group Limited Deferred Compensation and Ordinary Share Plan for Non-Employee Directors (the "Deferred Compensation Plan") provides each non-employee director with the opportunity to elect (i) to defer receipt of all or a portion of his or her cash or equity compensation until retirement or termination and (ii) to receive all or a portion of his or her cash compensation for services as a director in the form of our ordinary shares instead of cash.
Non-employee directors electing to defer compensation have such compensation converted into share units payable as a lump sum distribution after the director leaves the Board. The lump sum share unit distribution is made in the form of ordinary shares, with fractional shares paid in cash. Non-employee directors electing to receive compensation in the form of ordinary shares receive whole ordinary shares (with any fractional shares payable in cash) as of the date compensation would otherwise have been payable. A director's participation in the Deferred Compensation Plan does not affect the vesting schedule of the equity portion of the retainer fees described above.
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| Enstar Group Limited | 2215 | 2018Special Meeting Proxy Statement |
Director Compensation Table for 2018
The following table summarizes the 20172018 compensation of our non-employee directors who served during the year. Messrs. Silvester and O'Shea, as employees, are not eligible to receive compensation for Board service.
| | | Name | Fees Earned or Paid in Cash ($)(1)(2) | Stock Awards ($)(2)(3) | Total ($) | Fees Earned or Paid in Cash(1)(2) | Stock Awards(2)(3) | Total |
| Robert J. Campbell | $ | 203,250 |
| $ | 150,000 |
| $ | 353,250 |
| $ | 211,500 |
| $ | 150,000 |
| $ | 361,500 |
|
| Rick Becker | $ | 124,750 |
| $ | 75,000 |
| $ | 199,750 |
| $ | 133,000 |
| $ | 75,000 |
| $ | 208,000 |
|
| Sandra L. Boss | $ | 108,250 |
| $ | 75,000 |
| $ | 183,250 |
| $ | 118,750 |
| $ | 75,000 |
| $ | 193,750 |
|
| James D. Carey | $ | 94,000 |
| $ | 75,000 |
| $ | 169,000 |
| $ | 94,000 |
| $ | 75,000 |
| $ | 169,000 |
|
| Hans-Peter Gerhardt | $ | 86,500 |
| $ | 75,000 |
| $ | 161,500 |
| $ | 92,500 |
| $ | 75,000 |
| $ | 167,500 |
|
| Hitesh R. Patel | $ | 106,000 |
| $ | 75,000 |
| $ | 181,000 |
| $ | 119,250 |
| $ | 75,000 |
| $ | 194,250 |
|
Jie Liu(4) | $ | 77,264 |
| $ | 83,015 |
| $ | 160,279 |
| $ | 95,000 |
| $ | 75,000 |
| $ | 170,000 |
|
Poul A. Winslow(5) | $ | 75,000 |
| $ | — |
| $ | 75,000 |
| $ | 106,000 |
| $ | — |
| $ | 106,000 |
|
| |
| (1) | Director fees listed in this column may be deferred by directors under the Deferred Compensation Plan. See footnote 3. |
| |
| (2) | Share units (rounded to the nearest whole share) acquired in lieu of the cash compensation portion of director retainer fees for 20172018 under the Deferred Compensation Plan were as follows: (a) Mr. Campbell — 997- 1,032 units; (b) Mr. Becker — 301- 324 units; (c) Mr. Carey — 462- 459 units; and (d) Mr. Patel — 125- 367 units. Total share units under the Deferred Compensation Plan held by directors as of the record dateSeptember 30, 2019 are described in the footnotes to the Principal Shareholders and Management Ownership table. |
| |
| (3) | This column lists the aggregate grant date fair value of Enstar restricted ordinary shares awarded to directors as part of their Board retainer and Chairman of the Board retainer, computed in accordance with FASB Accounting Standards Codification (ASC) Topic 718. The value of the restricted ordinary shares is determined based on the closing price of our ordinary shares on the grant date. For information on the valuation assumptions with respect to awards made, refer to Note 19 to our consolidated financial statements for the year ended December 31, 2017,2018, as included in our Annual Report on Form 10-K for the year ended December 31, 2017.2018. The amounts above reflect the grant date fair value for these awards, excluding the accounting effect of any estimate of future forfeitures, and do not necessarily correspond to the actual value that might be recognized by the directors. |
Restricted ordinary shares are subject to a one-year vesting period and are forfeited in their entirety if a director leaves the Board prior to the vesting date. Restricted ordinary share awards listed in this column may be deferred by directors under the Deferred Compensation Plan in the form of restricted share units, subject to the same one-year vesting period ("RSUs"). The number of restricted ordinary shares or RSUs (rounded to nearest whole share) acquired by our directors during 20172018 was as follows: (a) Mr. Campbell — 786- 717 RSUs; (b) Mr. Becker — 393- 359 RSUs; (c) Ms. Boss — 393- 359 restricted ordinary shares; (d) Mr. Carey – 393- 359 RSUs; (e) Mr. Gerhardt — 393- 359 restricted ordinary shares; (f) Mr. Liu — 435- 359 restricted ordinary sharesshares; and (f)(g) Mr. Patel — 393- 359 RSUs. Fractional amounts are payable in cash at the time of vesting. Total restricted ordinary shares and RSUs held by directors as of the record dateSeptember 30, 2019 are described in the footnotes to the Principal Shareholders and Management Ownership table.
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| (4) | Fees earned by Mr. Liu in cash are payable directly to Hillhouse Capital pursuant to the terms of his employment. |
| |
| (5) | Mr. Winslow has waived his equity retainer. Fees earned by him in cash are payable directly to CPPIB pursuant to the terms of his employment. |
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| Enstar Group Limited | 2316 | 2018Special Meeting Proxy Statement |
EXECUTIVE OFFICERS
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DOMINIC F. SILVESTER
|
| Title: Chief Executive Officer Since: 2001 Age: 57
|
Biographical Information: Dominic Silvester has served as a director and the Chief Executive Officer of the Company since its formation in 2001. In 1993, Mr. Silvester began a business venture in Bermuda to provide run-off services to the insurance and reinsurance industry. In 1995, the business was assumed by Enstar Limited, which is now a subsidiary of the Company, and for which Mr. Silvester has since then served as Chief Executive Officer. Prior to co-founding the Company, Mr. Silvester served as the Chief Financial Officer of Anchor Underwriting Managers Limited from 1988 until 1993.
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PAUL J. O’SHEA
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| Title: President Since: 2001 Age: 60
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Biographical Information: Paul O’Shea was appointed as President in December 2016, when he was also named Executive Chairman of StarStone. He previously served as EVP and Joint Chief Operating Officer of the Company since our formation in 2001, and has also been a director throughout this time. He leads our mergers and acquisitions operations, including overseeing our transaction sourcing, due diligence, and negotiations processes. In 1994, Mr. O’Shea joined Messrs. Silvester and Packer in their run-off business venture in Bermuda, and he served as a director and EVP of Enstar Limited, which is now a subsidiary of the Company, from 1995 until 2001. Prior to co-founding the Company, he served as the Executive Vice President, Chief Operating Officer and a director of Belvedere Group/Caliban Group from 1985 until 1994.
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ORLA M. GREGORY
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| Title: Chief Operating Officer Since: 2015 Age: 44
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Biographical Information: Orla Gregory was appointed as Chief Operating Officer during 2016. She previously served as Chief Integration Officer from February 2015; EVP of Mergers and Acquisitions of our subsidiary, Enstar Limited, from May 2014; and SVP of Mergers and Acquisitions from 2009. She has been with the Company since 2003. Ms. Gregory served as Financial Controller of Irish European Reinsurance Company Ltd. in Ireland from 2001 to 2003, and she was an Investment Accountant with Ernst & Young Bermuda 1999 to 2001. Prior to that, Ms. Gregory worked for QBE Insurance & Reinsurance (Europe) Limited in Ireland from 1993 to 1998 as a Financial Accountant.
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GUY T.A. BOWKER
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| Title: Chief Financial Officer Since: 2017 Age: 40
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Biographical Information: Guy Bowker became Chief Financial Officer on January 1, 2018. He previously served as Chief Accounting Officer since joining the Company in September 2015. From 2010 to 2015, Mr. Bowker held the role of Senior Vice President - Controller of Platinum Underwriters Holdings, Ltd. From 2007 to 2010, he was the Director of Finance for American International Group in Bermuda. He is an alumnus of Deloitte’s insurance practice and a member of Chartered Professional Accountants Bermuda and Chartered Accountants Australia and New Zealand. He is also a Chartered Insurer and Fellow of the Chartered Insurance Institute in the United Kingdom.
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Enstar Group Limited | 24 | 2018 Proxy Statement |
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DAVID J. ATKINS
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| Title: Chief Executive Officer, Enstar (EU) Limited Since: 2017 Age: 43
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Biographical Information: David Atkins was appointed the Chief Executive Officer of Enstar (EU) Limited ("Enstar EU") in January 2016 and continues to serve as Group Head of Claims. From October 2010 to December 2015, he served as Chief Operating Officer of Enstar EU; from April 2007 to October 2010 as Head of Claims and Commutations; and from 2003 to 2007 as Manager of Commutations. Prior to 2003, he served as Manager of Commutation Valuations for Equitas Management Services Limited in London from 2001 to 2003, and as an Analyst in the Reserving and Commutations Department from 1997 to 2001.
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PAUL M.J. BROCKMAN
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| Title: Chief Executive Officer, Enstar (US), Inc Since: 2017 Age: 45
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Biographical Information: Paul Brockman is the President and Chief Executive Officer of Enstar (US) Inc. ("Enstar US"). He served as President and Chief Operating Officer of Enstar US since November 2014. From October 2012 to November 2014, he served as Senior Vice President, Head of Commutations for Enstar US. Before joining Enstar US, he worked as Head of Reinsurance for Resolute Management Services UK Ltd. in its London office from April 2007 to October 2012 and, from April 2001 to April 2007, he worked as Manager of Reinsurance Cash Collection and Debt Litigation within the reinsurance asset division of Equitas Management Services Ltd in London.
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Enstar Group Limited | 25 | 2018 Proxy Statement |
PRINCIPAL SHAREHOLDERS AND MANAGEMENT OWNERSHIP
The table below sets forth information as of April 17, 2018September 30, 2019 (unless otherwise provided herein) regarding beneficial ownership of our voting ordinary shares by each of the following, in each case based on information provided to us by these individuals:
each person or group known to us to be the beneficial owner of more than 5% of our ordinary shares;
each of our current directors and director nominees;directors;
each of the individuals named in the Summary Compensation Table; and
all of our current directors and executive officers as a group.
The table describes the ownership of our voting ordinary shares (including restricted voting ordinary shares), which are the only shares entitled to vote at the Annual GeneralSpecial Meeting. Percentages are based on 16,431,01017,991,350 ordinary shares outstanding as of April 17, 2018.September 30, 2019. Certain shareholders listed in the table also hold non-voting ordinary shares, as described in "-Non-Voting Ordinary Shares."Shares".
Trident and Hillhouse Capital have agreed to receive additional shares of Enstar pursuant to a transaction in which we will acquire the remaining 51.8% of the shares of our equity method investee, KaylaRe Holdings Ltd. The transaction will increase their voting interests to 9.7% and 9.1%, respectively, and is expected to close during the second quarter of 2018 and is discussed under "Certain Relationships and Related Party Transactions - Transactions Involving Related Parties."
Voting Ordinary Shares
Unless otherwise indicated, each person has sole voting and dispositive power with respect to all shares shown as beneficially owned by them.
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| Name of Beneficial Owner | Number of Shares | Percent of Class(1) |
Canada Pension Plan Investment Board(2) | 1,501,211 |
| 9.1% |
Akre Capital Management, LLC(3) | 1,455,058 |
| 8.9% |
Trident V, L.P. and related affiliates(4) | 1,350,000 |
| 8.2% |
FMR LLC(5) | 975,509 |
| 5.9% |
Poul A. Winslow(6) | 741,735 |
| 4.5% |
Dominic F. Silvester(7) | 495,732 |
| 3.0% |
Paul J. O’Shea(8) | 189,085 |
| 1.2% |
Robert J. Campbell(9) | 182,619 |
| 1.1% |
Orla M. Gregory(10) | 10,879 |
| * |
Mark W. Smith(11) | 8,947 |
| * |
James. D. Carey(12) | 5,898 |
| * |
Rick Becker(13) | 2,492 |
| * |
Hitesh R. Patel(14) | 1,804 |
| * |
Hans-Peter Gerhardt(15) | 1,458 |
| * |
Sandra L. Boss(16) | 1,409 |
| * |
Jie Liu(17) | 793 |
| * |
Guy T.A. Bowker(18) | 235 |
| * |
All Current Executive Officers and Directors as a group (15 persons)19 | 1,645,269 |
| 10.0% |
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| | Name of Beneficial Owner | Number of Shares | Percent of Class |
(1) | Hillhouse Capital Management, Ltd. | 1,747,840 |
| 9.7% |
(2) | Stone Point Capital LLC | 1,635,986 |
| 9.1% |
(3) | Canada Pension Plan Investment Board | 1,501,211 |
| 8.3% |
(4) | FMR LLC | 991,801 |
| 5.5% |
(5) | The Vanguard Group | 958,253 |
| 5.3% |
(6) | Poul A. Winslow (as a Trustee of CPPIB Epsilon Ontario Trust) | 741,735 |
| 4.1% |
(7) | Dominic F. Silvester | 528,507 |
| 2.9% |
(8) | Paul J. O’Shea | 198,210 |
| 1.1% |
(9) | Robert J. Campbell | 179,541 |
| 1.0% |
(10) | Orla M. Gregory | 18,783 |
| * |
(11) | James D. Carey | 4,901 |
| * |
(12) | B. Frederick Becker | 3,282 |
| * |
(13) | Hitesh R. Patel | 2,743 |
| * |
(14) | Guy T.A. Bowker | 3,203 |
| * |
(15) | Paul M.J. Brockman | 2,399 |
| * |
(16) | Hans-Peter Gerhardt | 7,886 |
| * |
(17) | Sandra L. Boss | 1,837 |
| * |
(18) | Jie Liu | 1,221 |
| * |
(19) | W. Myron Hendry | — |
| * |
(20) | All Current Executive Officers and Directors as a group (17 persons) | 1,702,123 |
| 9.4% |
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| (1) | Our bye-laws would reduce the totalBased on a Schedule 13D filed on May 24, 2018 by Hillhouse Capital Management, Ltd ("Hillhouse"). Hillhouse has sole voting power of any US shareholder or direct foreign shareholder group owning 9.5% or more of our ordinary shares to less than 9.5%and sole dispositive power over all of the voting power of all of our shares.shares reported. The principal address for Hillhouse is Cayman Corporate Centre, 3rd Floor, 18 Fort Street, George Town, Grand Cayman. |
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| (2) | Based on information provided in a Schedule 13D/A filed jointly on April 24,May 15, 2018 by Stone Point Capital LLC (“Stone Point”), Trident V, L.P. (“Trident V”), Trident Capital V, L.P. (“Trident V GP”), Trident V Parallel Fund, L.P. (“Trident V Parallel”), Trident Capital V-PF, L.P. (“Trident V Parallel GP”), Trident V Professionals Fund, L.P. (“Trident V Professionals”) and Stone Point GP Ltd. (“Trident V Professionals GP”), together with information with respect to Trident Public Equity GP LLC ("TPE GP") and Trident Public Equity LP ("TPE LP") on a prior amendment to such Schedule 13D/A. Of the reported ordinary shares: 1,350,000 are held by TPE LP, of which TPE GP is the general partner; 163,871 are held by Trident V, of which Trident V GP is the general partner; 114,925 are held by Trident V Parallel, of which Trident V Parallel GP is the general partner; and 7,190 are held by Trident V Professionals, of which Trident V Professionals GP is the general partner. Trident V, Trident V Parallel, Trident V Professionals and each of their respective general partners may be deemed to beneficially own the ordinary shares held by TPE LP. Stone Point, as the manager of Trident V, Trident V Parallel and Trident V Professionals may be deemed to beneficially own all the shares held by these entities, including the shares held by TPE LP. James Carey, a member of our Board, is a member and senior principal of Stone Point, an owner of one of four general partners of each of Trident V GP and |
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| Enstar Group Limited | 17 | Special Meeting Proxy Statement |
Trident V Parallel GP, and a shareholder and director of Trident V Professionals GP. See footnote 13 with respect to 4,901 ordinary shares issuable to Mr. Carey pursuant to the Deferred Compensation Plan and not included in Stone Point’s total reported holdings of 1,635,986 shares. Although these share units accrue to Mr. Carey personally, he holds these share units solely for the benefit of Stone Point, which may be deemed an indirect beneficial owner. The principal address for each Stone Point entity is c/o Stone Point at its principal address, which is 20 Horseneck Lane, Greenwich, CT 06830.
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| (3) | Based on information provided in a Schedule 13D/A filed jointly on June 15, 2018 by (i) CPPIB, (ii) CPPIB Epsilon Ontario Limited Partnership ("CPPIB LP"), (iii) CPPIB Epsilon Ontario Trust ("CPPIB Trust"), and (iv) Poul A. Winslow and (v) R. Scott Lawrence. CPPIB's reported holding of 1,501,211 ordinary shares excludes 741,735 ordinary shares held indirectly through CPPIB LP. CPPIB Trust is the general partner of CPPIB LP, and Mr.Messrs. Winslow is a trusteeand Lawrence are trustees of CPPIB Trust. By virtue of his roletheir roles as a trustee of CPPIB Trust, Mr.Messrs. Winslow hasand Lawrence have shared voting and shared dispositive power over the shares, but has no pecuniary interest in the shares (see footnote 6).shares. CPPIB also owns 1,192,941 Series C non-voting ordinary shares and 404,771 Series E non-voting ordinary shares. The principal address of the above persons and entities is One Queen Street East, Suite 2500 Toronto, ON M5C 2W5 Canada. |
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Enstar Group Limited | 26 | 2018 Proxy Statement |
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(3) | Based on a Schedule 13G filed jointly on February 14, 2018 by Akre Capital Management, LLC ("Akre Capital"), Akre Focus Fund, and Charles T. Akre, Jr. Akre Capital and Mr. Akre have shared voting and shared dispositive power over 1,444,006 shares. Akre Focus Fund has shared voting and shared dispositive power over 921,000 shares, and Mr. Akre has sole voting and sole dispositive power over 11,052 shares. The principal address of Akre Capital and Mr. Akre is P.O. Box 998, Middleburg, Virginia 20118. The principal address of Akre Focus Fund is 2020 East Financial Way, Suite 100, Glendora, California 91741. |
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| (4) | Based on information provided in a Schedule 13D/A13G filed jointly on November 25, 2016February 13, 2019 by Trident V, L.P. ("Trident V"), Trident V Parallel Fund, L.P. ("Trident V Parallel"), Trident V Professionals Fund, L.P. ("Trident V Professionals"FMR LLC. FMR LLC has sole voting power over 27,489 shares and together with Trident VFMR LLC and Trident V Parallel, the "Stone Point Partnerships"), Trident Capital V, L.P. ("Trident V GP"), Trident Public Equity GP LLC ("TPE GP"), Trident Public Equity LP ("TPE LP"), and Stone Point Capital LLC ("Stone Point"). Consists of 1,350,000 ordinary shares held by TPE LP. TPE LP, TPE GP, the Stone Point Partnerships and Trident V GPAbigail P. Johnson each have shared voting and sharedsole dispositive power over 991,801 shares. Members of the Johnson family, including Abigail P. Johnson, are the predominant owners, directly or through trusts, of Series B voting common shares of FMR LLC, representing 49% of the voting power of FMR LLC. The Johnson family group and all other Series B shareholders have entered into a shareholders' voting agreement under which all Series B voting common shares will be voted in accordance with the majority vote of Series B voting common shares. Accordingly, through their ownership of voting common shares and the execution of the shareholders' voting agreement, members of the Johnson family may be deemed, under the Investment Company Act of 1940, to form a controlling group with respect to allFMR LLC. Neither FMR LLC nor Abigail P. Johnson has the sole power to vote or direct the voting of the ordinary shares heldowned directly by TPE LP. Trident V GP, Trident Capital V-PF, L.P.the various investment companies registered under the Investment Company Act ("Trident V Parallel GP"Fidelity Funds") advised by Fidelity Management & Research Company ("FMR Co"), Stone Point GP Ltd. ("Trident V Professionals GP") and TPE GP (together,a wholly owned subsidiary of FMR LLC, which power resides with the "GPs") areFidelity Funds' Boards of Trustees. FMR Co carries out the sole general partners of Trident V, Trident V Parallel, Trident V Professionals and TPE LP, respectively. Pursuant to TPE LPs limited partnership agreement, any action by TPE LP with respect to the ordinary shares must be approved by a unanimous votevoting of the limited partnersshares under written guidelines established by the Fidelity Funds' Boards of TPE LP. Therefore, each of the Stone Point Partnerships may be deemed to beneficially own any shares directly held by TPE LP. In addition, the limited partnership agreements of each of the Stone Point Partnerships and TPE LP have the effect of conferring dispositive and voting power over the ordinary shares held by TPE LP to the GPs. Pursuant to certain management agreements, Stone Point has received delegated authority from the GPs to exercise voting rights of the ordinary shares on behalf of the partnerships, subject to certain limitations, but Stone Point does not have dispositive power over the ordinary shares. Each of the GPs and the Stone Point Partnerships has disclaimed beneficial ownership of the ordinary shares that are, or may be deemed to be, directly beneficially owned by TPE LP, except to the extent of their respective pecuniary interests therein. James Carey, a member of our Board, is a member and senior principal of Stone Point, an owner of one of four general partners of each of Trident V GP and Trident V Parallel GP, and a shareholder and director of Trident V Professionals GP. See footnote 12 with respect to 3,926 ordinary shares issuable to Mr. Carey pursuant to the Deferred Compensation Plan and not included in the Partnerships’ total reported holdings of 1,350,000 shares. Although these share units accrue to Mr. Carey personally, he holds these share units solely for the benefit of Stone Point, which may be deemed an indirect beneficial owner.Trustees. The principal address for the Stone Point Partnerships, Trident V GP, TPE GP, TPE LP and Stone PointFMR LLC is c/o Stone Point at its principal address, which is 20 Horseneck Lane, Greenwich, CT 06830.245 Summer Street, Boston, Massachusetts 02210. |
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| (5) | Based on a Schedule 13G filed jointly on February 13, 201811, 2019 by FMR LLC. FMR LLCThe Vanguard Group ("Vanguard"). Vanguard has sole voting power over 31,98212,377 shares, andshared voting power over 1,091 shares, sole dispositive power over 975,509945,900 shares and shared dispositive power over 12,353 shares. The principal address for Vanguard is 100 Vanguard Blvd., Malvern, PA 19355. |
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| (6) | Mr. Winslow disclaims any beneficial ownershipConsists of the741,735 shares ownedheld by CPPIB. See footnote 2.CPPIB LP. Mr. Winslow is thea trustee of the CPPIB Trust, which is the general partner of CPPIB LP, but he has no pecuniary interest in the shares held by CPPIB LP. Mr. Winslow disclaims any beneficial ownership of the shares owned by CPPIB. See footnote 3. |
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| (7) | Consists of (a) 35,33945,339 ordinary shares held directly by Mr. Silvester and (b) 455,393483,168 shares held indirectly by Rock Pigeon Limited, a Guernsey company, of which Mr. Silvester and his spouse own 58.66% and 41.34%, respectively, and (c)respectively. Does not include 5,000 RSUs scheduled to vest on May 10, 2018. Does not include 10,000 RSUs scheduled to vest in two equal annual installments on May 10, 2019 and 2020. Does not include 45,000 PSUs scheduled to vest following a three-year performance period that began on January 1, 2017, subject to the achievement of Company financial performance objectives.2017. |
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| (8) | Consists of (a) 31,62937,879 ordinary shares held directly by Mr. O’Shea and (b) 154,331160,331 ordinary shares held by the Elbow Trust (of which Mr. O'Shea and his immediate family are the sole beneficiaries), and (c). Does not include 3,125 RSUs scheduled to vest on May 10, 2018. Does not include 6,250 RSUs scheduled to vest in two equal annual installments on May 10, 2019 and 2020. Does not include 28,125 PSUs scheduled to vest following a three-year performance period that began on January 1, 2017, subject to the achievement of Company financial performance objectives.2017. The trustee of the Elbow Trust is R&H Trust Co. (BVI) Ltd. |
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| (9) | Consists of (a) 44,256 ordinary shares held directly by Mr. Campbell, (b) 42,500 ordinary shares held by a self-directed pension plan, (c) 32,300 ordinary shares owned by Mr. Campbell’s spouse, (d) 25,050 ordinary shares owned by Osprey Partners, (e) 12,60012,400 ordinary shares owned by Mr. Campbell’s children, (f) 3,000 ordinary shares owned by the Robert J. Campbell Family Trust, (g) 2,500 ordinary shares owned by the F.W. Spellissy Trust, (h) 500 ordinary shares owned by the Amy S. Campbell Family Trust and (i) 14,91317,035 ordinary shares issuable pursuant to the Enstar Group Limited Deferred Compensation and Ordinary Share Plan for Non-Employee Directors. Does not include 717857 RSUs scheduled to vest on April 2, 2019. Mr. Campbell disclaims beneficial ownership of the ordinary shares that are, or may be deemed to be, beneficially owned by Beck Mack.1, 2020. |
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| (10) | Consists of (a) 8,79618,783 ordinary shares held directly by Ms. Gregory, (b)Gregory. Does not include 2,083 RSUs scheduled to vest on May 10, 2018. Does not include 4,167 RSUs scheduled to vest in two approximately equal annual installments on May 10, 20192020 and 2020. Does not include 18,750 PSUs scheduled to vest following a three-year performance period that began on January 1, 2017, subject to the achievement of Company financial performance objectives.2017. |
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| (11) | Consists of 8,947 ordinary shares held directly by Mr. Smith. |
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(12) | Includes 3,9264,901 ordinary shares issuable pursuant to the Deferred Compensation Plan held by Mr. Carey solely for the benefit of Stone Point, of which Mr. Carey is a senior principal. Does not include 358428 RSUs scheduled to vest April 2, 2019.1, 2020. Mr. Carey disclaims beneficial ownership of these share units, except to the extent of his pecuniary interest therein, if any. Stone Point may be deemed an indirect beneficial owner of these ordinary shares. Does not include the ordinary shares held by the Trident V funds described in footnote 4.2. Mr. Carey is a member of the investment committee and owner of one of the four general partners of both of Trident V GP (the general partner of Trident V) and Trident Capital V-PF (the general partner of Trident V Parallel). Mr. Carey is also a member and senior principal of Stone Point and a shareholder and director of Stone PointTrident V Professionals GP, Ltd., which is the general partner of Trident V Professionals. Mr. Carey disclaims beneficial ownership of the shares held of record or beneficially by the Partnerships,Stone Point, except to the extent of any pecuniary interest therein. |
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(13)(12) | Consists of 2,4923,282 ordinary shares issuable to Mr. Becker pursuant the Deferred Compensation Plan. Does not include 358428 RSUs scheduled to vest April 2, 2019.1, 2020. |
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(14)(13) | Consists of 1,8042,743 ordinary shares issuable to Mr. Patel pursuant to the Deferred Compensation Plan. Does not include 358428 RSUs scheduled to vest April 2,1, 2020. |
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| (14) | Does not include 293 RSUs that vest on November 17, 2020; 1,021 RSUs that vest in two approximately equal annual installments beginning on November 17, 2020; 549 PSUs scheduled to vest following a three-year performance period that began on January 1, 2017; 1,871 PSUs scheduled to vest following a three-year performance period that began on January 1, 2018; and 2,844 PSUs scheduled to vest following a three-year performance period that began on January 1, 2019. |
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| (15) | Does not include 670 RSUs that vest in two equal annual installments beginning on November 17, 2020; 1,004 PSUs scheduled to vest following a three-year performance period that began on January 1, 2017; 1,127 PSUs scheduled to vest following a three-year performance period that began on January 1, 2018; and 1,867 PSUs scheduled to vest following a three-year performance period that began on January 1, 2019. |
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| (16) | Includes 358428 restricted ordinary shares held directly by Mr. Gerhardt scheduled to vest April 2, 2019.1, 2020. |
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(16)(17) | Includes 358428 restricted ordinary shares held directly by Ms. Boss scheduled to vest April 2, 2019. |
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(17) | Includes 358 restricted ordinary shares held directly by Mr. Liu scheduled to vest April 2, 2019.1, 2020. |
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| Enstar Group Limited | 2718 | 2018Special Meeting Proxy Statement |
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| (18) | Consists of 235Includes 428 restricted ordinary shares held directly by Mr. Bowker. Does not include 366 RSUs that vest in two equal annual installments on November 17, 2018 and 2019 and 889 RSUs that vest in three approximately equal annual installments beginning on November 17, 2018. Does not include 549 PSUsLiu scheduled to vest following a three-year performance period that began on JanuaryApril 1, 2017 and 1,871 PSUs scheduled to vest following a three-year performance period that began on January 1, 2018.2020. |
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| (19) | Does not include 320 RSUs scheduled to vest April 1, 2020. |
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| (20) | See footnotes 67 through 18.19. |
Non-Voting Ordinary Shares
In addition to voting ordinary shares, there were a total of 3,004,4433,509,682 issued and outstanding non-voting ordinary shares as of April 17, 2018.September 30, 2019. These shares are held by CPPIB and Hillhouse, as set forth in the table below. Of these shares:
CPPIB owns 1,192,941 Series C non-voting ordinary shares and 404,771 Series E non-voting ordinary shares that, together with its voting ordinary shares held directly and indirectly, represented an economic interest of approximately 19.8% as of April 17, 2018.Funds managed by Hillhouse Capital own 1,406,731 Series C non-voting shares which, together with their voting shares and warrants, represented an economic interest of approximately 10% as of April 17, 2018, which will increase to approximately 17.1% upon closing of the KaylaRe Holdings Ltd. transaction discussed under "Certain Relationships and Related Party Transactions - Transactions Involving Related Parties." |
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| Name of Beneficial Owner | Ordinary Voting Shares | Series C Non-Voting Ordinary Shares | Series E Non-Voting Ordinary Shares | Economic Interest (Excluding Warrants) |
Hillhouse(1) | 1,747,840 |
| 1,406,731 |
| 505,239 |
| 17.0% |
| CPPIB and CPPIB Trust | 2,242,946 |
| 1,192,941 |
| 404,771 |
| 17.9% |
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| (1) | Does not include warrants outstanding to acquire 175,901 Series C Non-Voting Ordinary Shares for an exercise price of $115.00 per share, subject to certain adjustments. |
For additional information on our non-voting ordinary shares, refer to Note 17 to our consolidated financial statements ofincluded in our Annual Report on Form 10-K for the year ended December 31, 2017.
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Enstar Group Limited | 28 | 2018 Proxy Statement |
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires our directors and executive officers and persons who own more than ten percent of a registered class of our equity securities to file with the SEC and The Nasdaq Stock Market, LLC reports on Forms 3, 4 and 5 regarding their ownership of ordinary shares and other equity securities of the Company. Under SEC rules, we must be furnished with copies of these reports.
Based solely on our review of the copies of such forms received by us and written representations from our executive officers and directors, we believe that, during the year ended December 31, 2017, all filing requirements applicable to our directors and executive officers and persons who own more than ten percent of a registered class of our equity securities under Section 16(a) were complied with on a timely basis other than with respect to one late Form 4 filing relating to two open market purchases by Mark Smith (then-CFO) of an aggregate of 2,700 shares.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Related Party Transaction Procedures
From time to time, we have participated in transactions in which one or more of our directors, executive officers or large shareholders has an interest. These transactions, called related-party transactions, are described below. All related party transactions require the approval of our Audit Committee (comprised entirely of independent directors), which reviews each transaction for fairness, business purpose, and reasonableness. Each transaction involving the Company and an affiliate entered into during 2017 was approved by our Audit Committee. Investment transactions with related parties are also subject to the review and approval of our Investment Committee.
In addition, our Board has adopted a Code of Conduct, which states that our directors, officers and employees must avoid engaging in any activity that might create a conflict of interest or a perception of a conflict of interest. The Code of Conduct requires these individuals to raise any proposed or actual transaction that they believe may create a conflict of interest for Audit Committee consideration and review. In any situation where an Audit Committee member could be perceived as having a potential conflict of interest, that member is expected to recuse himself from the matter, and the non-interested members of the Audit Committee review the transaction.
On an annual basis, each director and executive officer completes a Directors’ and Officers’ Questionnaire that requires disclosure of any transactions with the Company in which he or she, or any member of his or her immediate family, has a direct or indirect material interest. A summary of responses from the questionnaires is reported to the Audit Committee.
Transactions Involving Related Parties
Transactions with Trident and its Affiliates
Following several private transactions occurring from May 2012 to July 2012, Trident V, L.P., Trident V Parallel Fund, L.P. and Trident V Professionals Fund, L.P. (collectively, "Trident") acquired 1,350,000 of our ordinary shares (which as of April 17, 2018 constitute approximately 8.2% of our ordinary shares). On November 6, 2013, we appointed James D. Carey to our Board of Directors. Mr. Carey is the sole member of an entity that is one of four general partners of the entities serving as general partners for Trident, is a member of the investment committees of such general partners, and is a member and senior principal of Stone Point Capital LLC ("Stone Point"), the manager of the Trident funds.
Prior to Trident’s acquisition of our ordinary shares in 2012, we invested in SKY Harbor Global Funds ("SKY Harbor"), which is managed by companies in which the Trident funds have indirect ownership interests. Additional allocations to this investment were approved by our Audit and Investment Committees and made in subsequent years. As of December 31, 2017, we had made aggregate investments of $150.0 million in Sky Harbor, which had an aggregate fair value of approximately $173.0 million. The manager of SKY Harbor charges certain fees to the funds it manages. These fees are deducted within the net asset value of the fund and totaled approximately $0.8 million for the year ended December 31, 2017. We are treated no less favorably than similarly situated investors in the fund.
We have made the following commitments to invest in funds managed by Stone Point: (i) up to $20.0 million in Trident VI Parallel Fund and Trident VI Parallel AIV-I, L.P. made in 2014, (ii) $15.8 million in T-VI Co-Invest-A LP (collectively with Trident VI Parallel Fund and Trident VI Parallel AIV-I, LP, the "Trident VI funds") made in 2015, and (iii) up to $10.0 million in Trident VII, L.P. made in 2017.
As of December 31, 2017, we had funded $24.2 million of our commitments to the Trident VI funds and Trident VII fund, and such investments had a fair value of $34.8 million. Stone Point charges fees to the funds it manages (other than T-VI Co-Invest-A, L.P.), which are deducted within the net asset value of the funds and totaled approximately $0.3 million for the year ended December 31, 2017. We are treated no less favorably than similarly situated investors
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Enstar Group Limited | 29 | 2018 Proxy Statement |
in the funds. The Trident VI funds collectively own an approximate 48% interest in Alliant Insurance Services, an insurance brokerage firm. Alliant Insurance Services has provided brokerage services to our StarStone companies in the ordinary course of business and receives commission fees for business produced on an arm's-length basis.
During 2014, we invested in Eagle Point Credit Fund L.P., which is managed by Eagle Point Credit Management LLC, a company indirectly owned by Trident (the "EP Manager"). Mr. Carey is a director of the Board of Managers of the EP Manager. As of December 31, 2017, our investment totaled $8.6 million, and its fair value was $11.7 million. The EP Manager charges certain fees to the fund, which are deducted within the net asset value of the fund and totaled approximately $0.4 million for the year ended December 31, 2017. We are treated no less favorably than similarly situated investors in the fund. We also invested $23.2 million in shares of common stock of Eagle Point Credit Company, a registered investment company indirectly owned, in part, by Trident. As of December 31, 2017, the fair value of this investment was $22.1 million. We also have separate accounts managed by the EP Manager and PRIMA Capital Advisors, LLC, a registered investment adviser, which is indirectly owned, in part, by Trident. These accounts had a balance of $98.0 million and $85.4 million, respectively, as of December 31, 2017, and we incurred approximately $0.2 million for each account in management fees for the year ended December 31, 2017.
During 2016, we invested in Marble Point Investments LP ("Marble Point"), the general partner of which is an affiliate of the EP Manager. As of December 31, 2017, we had invested $29.4 million with a fair value of $35.7 million, in Marble Point. We incurred fees in connection with this investment of $0.1 million during the year ended December 31, 2017.
Before Mr. Carey joined our board, we invested in Sound Point Capital Floating Rate Fund, a fund managed by Sound Point Capital. Mr. Carey has an indirect minority ownership interest in, and serves as a director on the board of managers of, Sound Point Capital. As of December 31, 2017, our total investment was $4.0 million, and its fair value was $7.0 million. During 2014, we invested $17.5 million in Sound Point Credit Opportunities Offshore Fund, Ltd., a fund managed by Sound Point Capital. This investment had a fair value of $20.5 million as of December 31, 2017. Sound Point Capital charges certain fees to the funds it manages, which are deducted from the net asset value of the funds and totaled approximately $0.4 million for the year ended December 31, 2017. We are treated no less favorably than similarly situated investors in the funds.
Sound Point Capital has acted as collateral manager for certain of our direct investments in CLO equity securities. The fair value of these investments was $17.8 million as of December 31, 2017. During 2016, we opened a separate account managed by Sound Point Capital, with a fair value of $63.6 million as of December 31, 2017, with respect to which we incurred approximately $0.3 million in management fees for the year.
Fees charged pursuant to investments affiliated with entities owned by Trident or Sound Point Capital were on an arm's-length basis.
In addition, we have entered into certain agreements with Trident with respect to Trident’s co-investments in Atrium Underwriting Group Limited ("Atrium"), Arden Reinsurance Company Ltd. ("Arden"), and StarStone. These include investors’ agreements and shareholders’ agreements, which provide for, among other things: (i) our right to redeem Trident’s 39.3% equity interest in the Atrium/Arden and StarStone transactions in cash at fair market value within the 90 days following September 6, 2018 and April 1, 2019, respectively, and at any time following September 6, 2020 and April 1, 2021, respectively; and (ii) Trident’s right to have its 39.3% equity co-investment interests in the Atrium/Arden and StarStone transactions redeemed by us at fair market value (which we may satisfy in either cash or our ordinary shares) following September 6, 2020 and April 1, 2021, respectively. As of December 31, 2017, we included $459.6 million as redeemable noncontrolling interest on our balance sheet relates to these Trident co-investment transactions. Pursuant to the terms of the shareholders’ agreements, Mr. Carey serves as a Trident representative on the boards of StarStone and the holding companies established in connection with the Atrium/Arden and StarStone co-investment transactions. Trident also has a second representative on these boards who is a Stone Point employee.
In August 2017, we engaged Amherst Pierpont to provide analytic support to StarStone's U.S. mortgage risk underwriting. The Trident IV funds managed by Stone Point have as approximate 35% direct and indirect interest in Amherst Pierpont, and Mr. Carey serves as a director of Amherst Pierpont. We have incurred approximately $0.1 million in fees from our engagement of Amherst Pierpont.
From time to time, certain of our directors and executive officers have made personal commitments and investments in entities that are affiliates of or otherwise related to funds managed by Stone Point or Sound Point Capital, including some of the entities listed above.
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Enstar Group Limited | 30 | 2018 Proxy Statement |
Transactions with CPPIB
CPPIB owns approximately 9.1% of our voting ordinary shares and additional non-voting shares that, together with its voting ordinary shares held indirectly, represented an economic interest of approximately 19.8% as of April 17, 2018. Poul Winslow, of CPPIB, was appointed to our Board on September 29, 2015 in connection with CPPIB's shareholder rights agreement with us. Approximately 4.5% of our voting ordinary shares are held indirectly by CPPIB through CPPIB LP. CPPIB is the sole limited partner of CPPIB LP. CPPIB Trust is the general partner of CPPIB LP, and Mr. Winslow is a trustee of CPPIB Trust. By virtue of his role as a trustee of CPPIB Trust, in its capacity as general partner of CPPIB LP, Mr. Winslow has shared voting and shared dispositive power over the shares, but has no pecuniary interest in the shares.
We have a pre-existing reinsurance recoverable carried on our balance sheet at $7.0 million as of December 31, 2017 from Continental Assurance Company, a company acquired by Wilton Re Ltd. ("Wilton Re") after the reinsurance recoverable was established. CPPIB, together with management of Wilton Re, owns 100% of the common stock of Wilton Re.
KaylaRe
On December 15, 2016, our equity method investee, KaylaRe Holdings Ltd. ("KaylaRe") completed an initial capital raise of $620.0 million. We, through our subsidiary, own approximately 48.4% of KaylaRe's common shares. We also have a warrant to purchase up to 900,000 common shares of KaylaRe, exercisable upon an initial public offering or listing of KaylaRe’s common shares at an exercise price of $20.00 per share ("Warrant"). We have recorded the investment in KaylaRe using the equity method basis of accounting. Our investment in the common shares and warrants of KaylaRe was carried at $309.8 million in other assets on our consolidated balance sheet as of December 31, 2017.
In connection with our investment in KaylaRe, we entered into a Shareholders Agreement with the other shareholders in KaylaRe, including Trident (which owns approximately 8.0% of KaylaRe's common shares and a Warrant to purchase up to 150,000 common shares of KaylaRe) and HH KaylaRe Holdings, Ltd., an affiliate of Hillhouse Capital (which owns approximately 43.4% of KaylaRe's common shares and a Warrant to purchase up to 810,000 common shares of KaylaRe). The Shareholders Agreement (i) provides us with the right to appoint one member to the KaylaRe Board of Directors until the date that we own less than 1,250,000 common shares, (ii) includes a five-year lock-up period on common shares of KaylaRe (unless KaylaRe completes an initial public offering before the expiry of this five-year lock-up period), and (iii) provides customary tag-along rights and rights of first refusal in the case of certain proposed transfers by any other shareholder and customary preemptive rights in the event of a proposed new issuance of equity securities by KaylaRe. In the event that KaylaRe has not consummated an initial public offering by March 31, 2021, Trident has the right to require us and Hillhouse Capital to purchase on a pro rata basis all of their common shares in KaylaRe at the then-current fair market value.
On February 2, 2018, we entered into an agreement to purchase the remaining 51.8% of KaylaRe from the existing shareholders. In exchange for the shareholdings in KaylaRe, we have agreed to issue an aggregate of 2,007,017 ordinary shares comprising 1,501,778 voting ordinary shares and 505,239 non-voting ordinary shares, with a signing date value of $398.3 million. In the transaction, Hillhouse Capital will increase its overall economic interest in Enstar from 10.0% to 17.1% and its voting interest from 3.2% to 9.7%, and Stone Point will increase its economic interest from 6.9% to 7.6% and its voting interest from 8.2% to 9.1%. In addition, the Shareholders Agreement among Enstar and the other KaylaRe shareholders will be effectively terminated. The transaction is subject to regulatory approval and is expected to close during the second quarter of 2018.
Our subsidiary, Enstar Limited, acts as insurance and reinsurance manager to KaylaRe's subsidiary, KaylaRe Ltd. Affiliates of Enstar have also entered into various reinsurance agreements with KaylaRe Ltd., and KaylaRe Ltd. will also have the opportunity to participate in future Enstar legacy transactions. We also provide administrative services to KaylaRe and KaylaRe Ltd.
Through a Quota Share Agreement dated December 31, 2017, (the "KaylaRe-StarStone QS") several of our StarStone affiliates have entered into a Quota Share Treaty with KaylaRe Ltd. pursuant to which KaylaRe Ltd. reinsures 35% of all business written by these StarStone affiliates for risks attaching from January 1, 2016, net of the StarStone affiliates’ reinsurance programs. During the year ended December 31, 2017, StarStone ceded $234.1 million of premium earned, $155.4 million of net incurred losses and loss adjustment expenses and $99.5 million of acquisition costs to KaylaRe Ltd. under the KaylaRe-StarStone QS. These amounts were recorded in their appropriate category on our consolidated statement of earnings in accordance with prospective reinsurance accounting.
Fitzwilliam Insurance Limited ("Fitzwilliam"), one of our Non-life Run-off subsidiaries, ceded $177.2 million of loss reserves to KaylaRe Ltd. during the year ended December 31, 2016, on a funds held basis. Under the terms of this
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Enstar Group Limited | 31 | 2018 Proxy Statement |
reinsurance agreement, Fitzwilliam is entitled to receive a profit commission calculated with reference to reserve savings made. During the year ended December 31, 2017, Fitzwilliam recognized $18.8 million of profit commission, recorded as fees and commission income. Fitzwilliam did not cede any reserves to KaylaRe Ltd. during the year ended December 31, 2017.
Our consolidated balance sheet as of December 31, 2017 included the following balances related to transactions between us and KaylaRe and KaylaRe Ltd.: reinsurance recoverable of $357.4 million, prepaid reinsurance premiums of $116.4 million, funds held of $174.2 million recorded in other liabilities, insurance and reinsurance balances payable of $232.9 million, and ceded acquisition costs of $36.1 million recorded as a reduction of deferred acquisition costs.
Hillhouse Capital
Gaoling Fund, L.P. and YHG Investment, L.P., investment funds managed by Hillhouse Capital, collectively own approximately 3.3% of Enstar’s voting ordinary shares. These funds also own non-voting ordinary shares and warrants to purchase additional non-voting ordinary shares, which, together with their voting ordinary shares, represent an approximate 10% economic interest in Enstar. In February 2017, Jie Liu, a Managing Director of Hillhouse Capital, was appointed to our Board. In connection with Hillhouse Capital's investment in KaylaRe, Mr. Liu also served as a director of KaylaRe until resigning from that board in connection with the transaction described above.
As of December 31, 2017, our equity method investee, KaylaRe, had investments in Hillhouse InRe Fund L.P., a fund managed by Hillhouse Capital with a fair value of $456.7 million.
As of December 31, 2017, our wholly-owned subsidiary, Cavello Bay, had transferred $100 million to each of Gaoling Fund, L.P. and China Value Fund, L.P., which are funds managed by Hillhouse Capital. These funds were invested on January 2, 2018.
From time to time, certain of our directors and executive officers have made personal commitments and investments in entities that are affiliates of or otherwise related to funds managed by Hillhouse Capital.
Other
On January 6, 2018, our subsidiary committed to make a $50.0 million investment in shares of Citco III Limited ("Citco"), a fund administrator with global operations. Pursuant to an investment agreement and in consideration for participation therein, a related party of Hillhouse Capital provided investment support to our subsidiary. In a private transaction that preceded our co-investment opportunity, certain Citco shareholders, including Trident, agreed to sell all or a portion of their interests in Citco. As of December 31, 2017, Trident owned an approximate 12% interest in Citco. Mr. Carey currently serves as a director of Citco in connection with Trident's investment therein.
Consulting Arrangement
Pursuant to a Transition Agreement dated May 19, 2017, Mark Smith, our former Chief Financial Officer, provides consulting services to the Company for which he receives a fee of $62,500 monthly for a two-year term that began on January 1, 2018.
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| Enstar Group Limited | 3219 | 2018Special Meeting Proxy Statement |
Indemnification of Directors and Officers; Director Indemnity Agreements
We have Indemnification Agreements with each of our directors. Each Indemnification Agreement provides, among other things, that we will, to the extent permitted by applicable law, indemnify and hold harmless each indemnitee if, by reason of such indemnitee’s status as a director or officer of the Company, such indemnitee was, is or is threatened to be made a party or participant in any threatened, pending or completed proceeding, whether of a civil, criminal, administrative, regulatory or investigative nature, against all judgments, fines, penalties, excise taxes, interest and amounts paid in settlement and incurred by such indemnitee in connection with such proceeding. In addition, each of the Indemnification Agreements provides for the advancement of expenses incurred by the indemnitee in connection with any proceeding covered by the agreement, subject to certain exceptions. None of the Indemnification Agreements precludes any other rights to indemnification or advancement of expenses to which the indemnitee may be entitled, including but not limited to, any rights arising under our governing documents, or any other agreement, any vote of our shareholders or any applicable law.
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Enstar Group Limited | 33 | 2018 Proxy Statement |
EXECUTIVE COMPENSATION
COMPENSATION DISCUSSION AND ANALYSIS
Introduction
In accordance with the applicable rules of the Securities and Exchange Commission, the compensation-related disclosures below relate to our most recently completed fiscal year, which is fiscal year 2018. Where appropriate, in certain instances, we have also included updated information related to the currently ongoing fiscal year 2019. For example, we have included updated information regarding the results of our shareholder vote on compensation at our most recent 2019 annual general meeting as well as new disclosures relating to the proposed Amended and Restated Plan that appear under the heading "Long-Term Incentive Compensation" below.
We reported consolidated net earnings of $590.6 million for the first six months of 2019, an increase of $623.6 million over the same period in 2018. However, this updated information did not influence or impact our compensation-related decisions in respect of fiscal year 2018. Our performance during 2018, which formed the basis for our 2018 compensation decisions, is summarized under the heading "Executive Summary" below.
Executive Summary
Company Performance
Enstar's performance2018 was a year of many accomplishments for Enstar, mixed with several challenges. The Company posted a net loss of $162.4 million. This was the first reported annual net loss in 2017our history, and was primarily driven by unrealized losses on our fixed income investments and equities and other investments, as well as losses in our StarStone segment. These losses caused Enstar to miss threshold levels of financial objectives achievement within the Annual Incentive Plan.
Despite the challenges faced in 2018, the fundamentals of our business remain strong. Our core non-life run-off segment had a very strong, with the Company exceedingsuccessful year in terms of reductions in net claims reserves, and we acquired more new run-off business in 2018 than in any prior year. The key elements of our 2018 reported results and financial expectations and completing a number of major run-off transactions. Select highlights for the yearposition included:
GrowthA decrease of 2.2% in fully dilutedbasic book value per share, compared to a peer median decrease of 10.8%3.8% (a compound annual growth rate of 15.8%14.2% since 2006, immediately prior to our public listing);
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| • | Net unrealized losses on fixed income investments of $211.4 million, reflected with the accounting classification we use for these securities;1 |
Net earningsunrealized losses on equities and other investments of $311.5$173.8 million, most of which were experienced in the fourth quarter during a 17.6%period of heightened market volatility;
Total gross reserves for losses and loss adjustment expenses increased 27.2% to $9.4 billion (an increase from 2016;of 108.7% since 2014);
Completed three majorCompletion of eight run-off transactions, adding approximately $2.5$3.2 billion inof gross loss reserves, and several new run-off business, and negotiated two other major reinsurance-to-close transactions in our Lloyd's business that we completed in early 2018; andsignificant minority investments;
Total assets increased 5.4%21.7% to $13.6$16.6 billion (an increase of 57.8%66.6% since 2013)2014), with further increases;
Reserve savings of $306.1 million ("net incurred losses & LAE" on our Non-life Run-off GAAP statement of net earnings) from our Non-life Run-off segment; and
Completion of two public offerings of preferred shares, adding a combined $510 million in connection withcapital.
1 Many insurance companies predominantly use available-for-sale accounting, where unrealized amounts are recorded directly to shareholders’ equity and therefore do not impact earnings. Unrealized amounts would only become realizable in the event of a sale of the specific securities prior to maturity or a credit default. Because most of our investments are held as "trading" for accounting purposes, the unrealized losses we experienced in 2018 transactions.on such investments negatively impacted our reported earnings.
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| Enstar Group Limited | 20 | Special Meeting Proxy Statement |
The graphs below show that we have outperformed the peer median in GAAP return on equity and growth in basic book value per common share (compounded annually) during the one-three- and three-yearone-year periods ended December 31, 2017. Several2018. However, we fell below the median of our peers experienced a fairly large impact frompeer group for GAAP return on equity due to the 2017 catastrophe events, which weakened their returns, and created volatility in the collective peer comparison.losses described above. Our Board monitors our performance versus our industry peers for background information purposes only, and relative performance metrics are not built into our incentive programs because of the unique nature of our business (as described in "- Peer"-Peer Group" below).
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| * | Source: SNL FinancialS&P Market Intelligence for peer company data. Peer group includes the companies selected as our peers by our Compensation Committee, as described in "- Peer Group."Group". |
Management Team
We are a growth company operating in an extremely competitive and changing industry. We believe that the skill, talent, judgment, and dedication of our executive officers are critical factors affecting the long-term value of our company.Company. During 2017,2018, our namedprincipal executive officer, principal financial officer, and three most highly compensated executive officers were:
Dominic Silvester - Chief Executive Officer ("CEO") and co-founder;
Guy Bowker - Chief Financial Officer ("CFO");
Paul O'Shea - President and co-founder;
Orla Gregory - Chief Operating Officer ("COO");
Mark Smith - Chief Financial Officer ("CFO") (until December 31, 2017); and
Guy BowkerPaul Brockman - Chief Accounting Officer and Deputy CFO (became CFO on January 1, 2018)CEO, Enstar (US), Inc. ("U.S. CEO").
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Enstar Group Limited | 34 | 2018 Proxy Statement |
Key Compensation Decisions for 20172018 Performance Year
After considering our financial, operational and strategic performance, the Compensation Committee made the following key compensation decisions:
CEO / President / COO Long-term Incentives - Granted long termNo new long-term equity incentive awards consisting of 75% performance share units ("PSUs")were granted to Messrs. Silvester and 25% restricted share units ("RSUs")O'Shea and Ms. Gregory following grants made to the CEO, President and COO. The ultimate value of the PSUs is subject to the achievement by the Company of certain levels of growththem in three-year fully diluted book value per share. These2017. Reported compensation for these executives therefore does not include a long-term equity incentive component, as awards aregranted in 2017 were intended to cover a three-year period, and no new equity awards will be granted to the recipients until the end of such period.
Reported CompensationAnnual Incentive Awards - The full grant date fair value of these equity awards is reported as 2017 compensation in the Summary Compensation Table, although the executives will not receive value for the PSU portion of awards unless the financial metric is achieved at the end of 2019.
Annual Incentives - Company financial performance component was not achieved, at "target." Following a detailed reviewand this portion of each executive's performance, individual operational objectives were determined to meet "target" levels.
Executive Agreements - Entered into new employment contracts to secure the executive officer team, eliminated several legacy provisions such as automatic renewalawards was not paid. Plan awards to Messrs. Silvester and cost-of-livingO'Shea and Ms. Gregory were further reduced. Mr. Silvester's award was 29% of his base salary, increase requirements,down from 115% in 2017. Awards for Mr. O'Shea and added contractual clawback language.Ms. Gregory were similarly reduced to 38% and 36% of base salaries, respectively.
Base Salaries - Base salaries for the CEO, President, CFOMessrs. Silvester and COOO'Shea and Ms. Gregory were not increased by 2% for 2017; for 2018, the CEO, President and COO base salaries have not been increased; our newly named CFOduring 2018. Mr. Bowker received an increase atto reflect his promotion from Deputy CFO the timeprior year, and Mr. Brockman received a 1.5% cost of his appointment.living adjustment.
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| Enstar Group Limited | 21 | Special Meeting Proxy Statement |
Share Ownership GuidelinesOther Long-term Incentives - Adopted robustGranted long-term equity incentive awards consisting of 65% performance share ownership guidelines applicableunits ("PSUs") and 35% restricted share units ("RSUs") to all executive officersthe CFO and non-employee directors.U.S. CEO (due to the timing of the grant dates, only the PSUs are reported as 2018 compensation).
Results of Shareholder Vote on Compensation; Shareholder Engagement
At last year'sthe 2019 and 2018 annual general meetingmeetings, held on June 11, 2019 and June 13, 2017,2018, respectively, our shareholders approved the compensation of our executive officers with 90.4%85% and 89%, respectively, of the total votes cast in favor of the applicable proposal. While we seek to achieve higher approval results, our Board of Directors considers thethese results as indicative of a reasonable level of support for our compensation decisions and a recognition of our continued progress on improving our compensation programs. The Board emphasized that meaningful shareholder engagement should continue as it helps understand the issues around our compensation and governance that are important to our shareholders.
Shareholder Engagement
The engagement program was led by two of our independent directors, Messrs. Campbell (Chairman of the Board; member of the Compensation Committee) and Becker (Chairman of the Compensation Committee and the Nominating and Governance Committee). WeIn connection with our 2019 annual general meeting, we spoke with shareholders representing approximately 40%20% of our outstanding voting ordinary shares, as well as with two major proxy advisory firms, and invited conversations with additional shareholders representing 9% ownership of our outstanding ordinary shares, who advised that they did not feel a need to meet at that time.with us this year. Directors whose firms represent an additional 23% of our outstanding voting ordinary shares are actively involved in our Board's oversight of compensation and governance matters, and were not included in the engagement program. We have taken, and continue to take, the feedback we receive from our shareholders and advisory firms into account in making compensation decisions and designing future compensation programs. We will undertake another shareholder engagement program in early 2020 ahead of our next annual meeting of shareholders.
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| Enstar Group Limited | 3522 | 2018Special Meeting Proxy Statement |
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| What We Heard | What We Did |
| Establish rigorous performance objectives tied to defined pay-out levels for Annual Incentive Plan Awards, rather than relying on full discretion | The 20172018 award cycle under the new Annual Incentive Plan built upon the changes made for 2016, when, in response to shareholder feedback, the Compensation Committee moved away from our previous fully discretionary plan and adopted performance objectives based on a combination of financial and operational goals, corresponding to threshold, target and maximum annual incentive award payments. |
Use of discretion under our Annual Incentive Plan should be strictly limited and, where used, explained thoroughly | The Compensation Committee's authority to make up to a 10%an adjustment on the Annual Incentive Plan payout was used in 20172018 to make a single downward adjustment.adjustments for the CEO, President and COO and to make upward adjustments for the CFO and U.S. CEO. The Compensation Committee believes this flexibility is valuable in light ofnecessary for our opportunistic business strategy, but takes into consideration shareholder perspective that it should be used in limited circumstances. We have also disclosed the rationale for such adjustmentadjustments in "-Annual Incentive Compensation-Committee Adjustment Amount."Amount". |
| Individual performance objectives carry meaningful weight under our Annual Incentive Plan and may be challenging for shareholders to assess | We understand that our shareholders are more accustomed to a smaller allocation to individual performance objectives than the 50% that our Operational Performance Objectives comprise and have included detailed disclosure on why we use this structure, as well as on how the Committee'sCompensation Committee made its 20172018 assessments. |
| Develop long-term incentive ("LTI") awards that vest over at least a three-year period and are weighted at least two-thirds to performance-based awards | We discontinued the use of SARs, which our shareholders expressed in prior years were not sufficiently performance-based. We developed a PSU and RSU program and made executive awards in 2017.2017 and continued that program in 2018. The PSUs "cliff vest" following the 2019 year,a three-year performance period, subject to performance conditions, and comprise 75% of the LTI award for our CEO, President and COO. RSUs comprise 25% of the awards and vest pro-ratapro rata over three years. For our newly appointed CFO and U.S. CEO, the split between PSUs and RSUs is 65% to 35%, respectively. |
DescribeWhere possible, avoid using the intent behindsame metric in Annual and LTI awards | We clarified that are not expected to be partalthough book value per share is one of the performance metrics used in our Annual Incentive Plan award program, this is an annual grant cycle, to better explain how these awards appear in the compensation tables | With respect to the PSUs and RSUs granted to our CEO, President and COO in 2017, we have specified that these comprise the LTI component of compensation formeasure, as distinguished from the three-year period following grant,growth in book value per share metric used in our LTI awards. Nonetheless, the Compensation Committee values this input and are not part of a recurring annual program. The shareholders we engaged indicated an understanding that reporting the awards as 2017 compensation may have a skewing effect on the presentation of 2017 annual compensationwill continue to consider it in the tables.designing future awards. |
| Disclose LTI metrics for in-process awards unless competitively harmful | We have disclosed the metrics for our material executive PSU awards below under "-Long-Term Compensation."Compensation". |
Adopt robust share ownership guidelinesFocus on board composition, director nomination processes and diversity | In response to shareholder comments, we have enhanced our disclosure of the mix of skills on our Board. We adopted Share Ownership Guidelines in 2017 applicablehave also included a Board skills matrix to all executive officers and directors. |
Explanationgive shareholders a view of our selection of peersBoard composition. Those we spoke with were also pleased to hear that we adopted a Board Diversity Policy in early 2019 as discussed above in "Corporate Governance - Director Nominations, Qualifications and the relative compensation of executives continues to be important to shareholders' understanding of our program structure | We have not identified any other company that uses Enstar as a peer, which makes relative comparisons challenging. We continue to explain our peer group selection process, and we updated our peer group for 2017 to include one new company following the removal of two due to mergers, as described below in "Recommendations".-Peer Group."
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Objectives of our Executive Compensation Program
Our Compensation Committee is responsible for establishing the philosophy and objectives of our compensation program, designing and administering the various elements of our compensation program, and assessing the performance of our executive officers and the effectiveness of our compensation program in achieving their objectives.
We are a growth company operating in an extremely competitive and changing industry. We believe that the skill, talent, judgment and dedication of our executive officers are critical factors affecting the long-term value of our company.Company. Therefore, our goal is to maintain an executive compensation program that will:
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Enstar Group Limited | 36 | 2018 Proxy Statement |
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| Incentivize performance consistent with clearly defined corporate objectives |
| Align our executives’ long-term interests with those of our shareholders |
| Fairly compensate our executives |
| Retain and attract qualified executives who are able to contribute to our long-term success |
We have specifically identified growing our net book value per share as our primary corporate objective over the long term. We believe growth in our net book value is driven primarily by growth in our net earnings, which is in turn driven in large part by: (i) successfully completing new acquisitions; (ii) effectively managing companies and portfolios
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| Enstar Group Limited | 23 | Special Meeting Proxy Statement |
of business that we have acquired; (iii) executing on our active underwriting strategies; and (iv) prudently managing our investments in deploying ourand capital.
We use additional financial metrics in our annual incentive compensation program,Annual Incentive Compensation Program, which included net earnings, growth in fully diluted book value per share and return on equity. We also incorporated operational performance objectives similarly designed to drive success in these measures and to achieve long-term growth and success.
Roles of Executive Officers
The Compensation Committee makes compensation determinations for all of theour executive officers. As part of the determination process, Mr. Silvester, our CEO, assesses our overall performance and the individual contribution of each member of the executive leadership team. On an annual basis, he reviews the prior year’s compensation and presents recommendations to the Compensation Committee for salary adjustments and annual incentive awards for each executive officer, taking into consideration each executive's achievement of his or her operational performance objectives. He also makes recommendations regarding the overall size of the executive/employee bonus pool for our 2016-2018 Annual Incentive Program.
The Compensation Committee discusses all recommendations with Mr. Silvester and then meets in executive session without Mr. Silvester present to evaluate his recommendations, review the performance of all of the executive officers, discuss CEO compensation and make final compensation decisions.
Ms. Gregory, our Chief Operating Officer,COO, attends portions of the meetings of our Compensation Committee from time to time in connection with providingto provide information relating to our financial results and plans, performance assessments of our executive officers and other personnel-related data.
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| Enstar Group Limited | 3724 | 2018Special Meeting Proxy Statement |
Principal Elements of Executive Compensation
Our executive compensation program currently consists of three principal elements: base salaries, annual incentive compensation and long-term incentive compensation. Executives also receive certain other benefits, including those pursuant to their employment agreements. The table below describes the elements of our executive compensation as well as the other components of our program, each of which is described in more detail later in this proxy statement.Proxy Statement. |
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| Principal Element | Description | Key Features |
| Base Salary | Provides the fixed portion of an executive’s compensation that reflects scope of skills, experience and performance | • Provides a base component of total compensation • Established largely based on scope of responsibilities, market conditions and individual and Company factors |
| Annual Incentive Compensation | Provides "at risk""at-risk" pay that reflects annual Company performance and individual performance | • Aligns executive and shareholder interests • Designed to reward performance consistent with financial and individual operational performance objectives • 20172018 was our secondthird year using defined performance objectives, following our previous use of a fully discretionary program |
| Long-Term Incentive ("LTI") Compensation | Includes PSUs that "cliff vest" following a three-year performance period subject to the Company's achievement of financial performance metrics selected by the Compensation Committee. RSUs vest in three equal annual installments beginning on the one-year anniversary of the grant date | • Aligns executive and shareholder interests • Drives long-term performance and promotes retention • Shareholder dilution issues are considered when making equity awards • PSUs do not vest unless performance measurements are met and can vest from 50% to 150%, depending on the level of achievement • The top three executives received an LTI allocation ofawards in 2017 comprising 75% PSUs and 25% RSUs; other executives receivedreceive annual awards comprising 65% PSUs and 35%, respectively
RSUs
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| Other Benefits and Perquisites | Reflects the Bermuda location of our corporate headquarters, as well as specific local market and competitive practices such as retirement benefits, Bermudian payroll and social insurance tax contributions and CEO housing expense | • Provides benefits consistent with certain local market practices in our Bermuda location in order to remain competitive in the marketplace for industry talent • Promotes retention of executive leadership team |
| Employment Agreements | Provides certain protections for executives and their families in the event of death or long-term disability, termination or change in control Change in controlChange-in-control contractual benefits are payable only in a "double trigger""double-trigger" situation where employment is terminated following a change of control
| • Provides Enstar with protections such as restrictive covenants (non-competition, non-solicitation, confidentiality, etc.) • Promotes retention over a multi-year term and a sense of security among the leadership team • Consistent with competitive conditions and legal requirements in Bermuda and the U.K. |
Compensation Allocations among Elements
For 2017,2018, consistent with historic practices, we did not have a pre-established policy or target for the allocation of the components of our program, and the Compensation Committee considers all compensation components in total when evaluating and making decisions with respect to each individual component. Although it does not mandate a specific allocation among the components of pay, the Compensation Committee believes that a meaningful portion of each executive’s total compensation should be "at risk" and performance-based.
Performance-based compensation during 20172018 reported in the Summary Compensation Table constituted 82%22% of the Chief Executive Officer’sour CEO's total compensation consisting ofbecause Mr. Silvester was not granted a long term equitylong-term incentive award and annual incentive compensation, excluding other benefits and perquisites. On average for all other executive officers, the percentage for 2017 was 76%, consisting of long-term equity incentive awards and annual incentive compensation. The large allocation of long term incentive compensation was primarily the result of long-term incentive awards granted to our CEO, President, and COOduring 2018 following the vesting of their legacy SAR awards. These awards are2017 grant intended to cover a three-year period, and no additional awards will be grantedperiod. Our CEO's annual incentive award was significantly lower than in previous years due to these individuals until these awards vest. In accordance with SEC rules, however, these awards arethe impact of the Company's 2018 financial results; if "target" levels of performance had been achieved, his annual incentive award would have constituted 52% of total reported compensation.
For our other executive officers, the percentages of performance-based compensation during 2018 reported in ourthe Summary Compensation Table at theirwas impacted by Mr. O'Shea and Ms. Gregory not being granted a long-term incentive award during 2018 following the 2017 grant, date fair value.and lower bonuses for these executives. Messrs. Bowker and Brockman's reported compensation includes PSUs granted in January 2018. The percentage of performance-based compensation for 2018 for our other executive officers was as follows: (i) Paul O'Shea - 27% (target: 60%); (ii) Orla
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| Enstar Group Limited | 3825 | 2018Special Meeting Proxy Statement |
*Excludes other benefitsGregory - 27% (target: 59%); (iii) Guy Bowker - 61% (equivalent to target); and perquisites.(iv) Paul Brockman - 57% (target, including his 2018 PSU award: 63%).
Role of Compensation Consultants
The Compensation Committee has the authority under its charter to retain compensation consultants and outside legal counsel or other advisors and, before selecting a consultant or advisor, must consider its independence. During 2017,2018, the Compensation Committee engaged Willis Towers WatsonMcLagan, an Aon Hewitt Company ("WTW"McLagan"), to provide analysis and benchmarking ofregarding annual incentive plan performance objectives for our 2017 grants of equity compensationexecutive officers in comparison to our executive officers. WTW reportspeer group. McLagan reported directly to the Compensation Committee. WTW's and has no personal or business relationship with any Committee member or member of Company management. McLagan provides no other services to the Company. McLagan's fees for its services were £16,759 (approximately $22,630) during 2017. WTW also provides$19,000. McLagan is a division of Aon plc ("Aon"), the parent company of subsidiaries that provide insurance brokerage-related services to our subsidiaries and affiliates unrelated to the compensation consulting services. Fees for these WTWAon services were $367,474approximately $2 million for the year, and constituted a de minimis portion of WTW's 2017 revenue. Aon's 2018 revenue (less than 0.018%).
The Compensation Committee assessed the independence of WTWMcLagan in light of applicable SEC and Nasdaq rules and reviewed responses from the consultant addressing factors related to its independence. Following this review, the Compensation Committee concluded that the firm was independent and that their advisory services did not raise any conflicts of interest.
Peer Group
In making compensatory decisions with respect to the 20172018 performance year, including assessing whether we were meeting our goal of providing competitive compensation, the Compensation Committee reviewed publicly available executive officer compensation information described in the periodic filings of a group of other publicly traded companies. Two years ago, ourThe Compensation Committee worked with an independent compensation consultant to review and refreshreviews our peer group.group annually. During 2017,2018, the Compensation Committee itself reviewed theadded Arch Capital Group Ltd. and Everest Re Group Ltd. to our peer group usingfollowing the same principles, while reflecting uponloss of several peers to merger activity in the industry and ongoing suitability. Following that review, the Committee determined it was appropriate to maintain a stable group ofseveral other peers and added W.R. Berkley following the removal of Endurance Specialty Holdings and Allied World Assurance Company Holdings due to mergers.falling below our size criteria.
The Compensation Committee generally seeks to include in our peer group companies that fall approximately within our size guidelines and include comparable aspects of our business (e.g., acquisitive business models, active specialty underwriters and a property and casualty insurer with run-off business). However, establishing a reliable peer group presents challenges for Enstar because our primary business is acquiring and operating companies and portfolios in run-off, whereas most in our industry focus primarily on writing new (re)insurance business. Run-off is a niche within the insurance industry, fragmented with only a handful of smaller specialist managers, and divisions within significantly larger insurance franchises. Our run-off businesses generate the substantial share of our earnings. Certain aspects of our business also resemble that of private equity firms, but funds with publicly available data are typically size mismatches for Enstar. We have not identified another company that lists Enstar as its peer.
While pay at theseour peer companies is generally relevant to provide a frame of reference to the Compensation Committee in determining executive compensation, the Compensation Committee reviewed the compensation paid by these companies for informational and overall comparison purposes only. We did not compensate our executives to align
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Enstar Group Limited | 39 | 2018 Proxy Statement |
with a specific benchmark or target percentile or precise position within our peer group. Instead, we sought only to be generally competitive relative to our peers with the compensation we offer our executives. Given the significant differences between us and our most similar peers relating to business, operations and executive team structure, we believe that formulaic benchmarking against our peer group or other companies to set 20172018 compensation would not have provided meaningful guidance, although we will continue to evaluate our methodologies and views in future years.
The following companies were reviewed to provide an overall backdrop to the Compensation Committee’s decisions:
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| Ÿ | Alleghany Corporation | Ÿ | Third Point ReinsuranceHanover Insurance Group |
| Ÿ | Arch Capital Group Ltd. | Ÿ | Hiscox Ltd. |
| Ÿ | Argo Group International Holdings | Ÿ | Navigators GroupRenaissanceRe Holdings Ltd. |
| Ÿ | Aspen Insurance Holdings | Ÿ | OneBeacon Insurance Group(1)
Third Point Re Ltd. |
| Ÿ | AXIS Capital Holdings | Ÿ | RenaissanceRe Holdings |
Ÿ | Hanover Insurance Group | Ÿ | Validus Holdings(1)
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Ÿ | Hiscox Ltd | Ÿ | White Mountains Insurance Group |
| Ÿ | Maiden HoldingsEverest Re Group Ltd. | Ÿ | W.R. Berkley |
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(1)Enstar Group Limited | Will not appear in our peer group in future years following recent merger activity.26 | Special Meeting Proxy Statement |
The peer group selection process focused on three criteria, which was consistent with prior years: (i) industry; (ii) geography (with a significant preference for the use of Bermuda companies); and (iii) size, with reference to: (A) total shareholders’ equity within approximately 0.5 to 2.5 times of our total shareholders’ equity and (B) total assets within approximately 0.5 to 2.5 times of total assets.
Industry. Given the lack of companies directly comparable to Enstar, we have designed our peer group around companies primarily focused on property and casualty (re)insurance, which are the companies against which we compete for talent. Where possible, we look for aspects of other companies that reflect elements similar to operations or strategies we have.
Geography. Publicly traded Bermuda companies (or publicly traded companies domiciled elsewhere with prominent Bermuda operations) are most relevant because these are the companies against which Enstar generally competes for talent, and the Compensation Committee believes market conditions across other Bermuda-based companies are largely what drives executives’ views as to whether they are compensated fairly and competitively. In recent years, we added several companies domiciled in the United States (Alleghany Corporation, Hanover Insurance Group and Navigators Group)W.R. Berkley) to our peer group for diversification given our significant U.S. growth in recent years. Our most recent addition, W.R. Berkley, is also a U.S.-based company.presence.
Size. Run-off profits are derived primarily from reserve releases rather than revenue, making peer comparison on the basis of revenue a much less relevant metric for us. The Compensation Committee designed our peer group targeting companies with approximately 0.5 to 2.5 times our shareholder equity or total assets (measured using financial data available at the time of consideration), which are metrics we find most relevant for purposes of comparison. The Compensation Committee also considers market capitalization in selecting a peer group.
Base Salaries
We set the base salaries of our CEO and our other executive officers as one element of total compensation, based on the scope of the executives’ responsibilities, taking into account the Compensation Committee's view of competitive market total compensation figures for similar executive officer positions based on publicly available information. Our goal is to provide base salary amounts at levels necessary to achieve our compensation objectives of fairly compensating our executives and retaining and attracting qualified executives who are able to contribute to our long-term success. Given the competitive market for highly qualified employees in our industry and our geographic location, we believe that below-market compensation could, in the long run, jeopardize our ability to retain our executive officers.
Any base salary adjustments are generally based on competitive conditions, market increases in salaries, individual performance, our overall financial results and performance, estimates of the cost of living and changes in job duties and responsibilities. Pursuant to the employment agreements we have with Messrs. Silvester and O'Shea and Ms. Gregory, once increased, such executive officer’s annual salary cannot be decreased without his or her written consent.
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Enstar Group Limited | 40 | 2018 Proxy Statement |
The Compensation Committee increased 2017 executive base salaries (effective April 1, 2017) by 2% in connection with the annual compensation review as follows: (i) Dominic Silvester - $2,320,092 (converted into £1,848,090 at the exchange rate in effect on the date of his new U.K. employment agreement); (ii) Paul O'Shea - $1,271,535; (iii) Orla Gregory - $1,122,000; and (iv) Mark Smith - $1,040,400. At its February 2018 meeting, the Compensation Committee determined it woulddid not increase base salaries for these executive officersMessrs. Silvester and O'Shea and Ms. Gregory during 2018. Pursuant to his contract, as a U.K.-based employee, Mr. Silvester is paid in 2018.
Guy Bowker was named Deputy Chief Financial OfficerBritish Pounds, and Chief Accounting Officer in May 2017 in connection withtherefore the Company's announcement of our CFO succession plan, with a base salary of $500,000. On June 13, 2017, the Board designated Mr. Bowker asSummary Compensation Table indicates an executive officer. Effective January 1, 2018, the Compensation Committee increasedincrease to his base salary 15% to $575,000 ineven though no such increase was made, as a result of the conversion of his salary into our reporting currency of U.S. Dollars.
In connection with his appointment as Chief Financial Officer. This reflected the committee's view of hispromotion to CFO from Deputy CFO, Mr. Bowker's base salary was increased responsibilities and the results of a comparison to $575,000 effective January 1, 2018. In connection with our peer group of overall CFOannual compensation includingreview, Mr. Brockman's base salary.salary was increased by 1.5% to $468,930 effective April 1, 2018.
Annual Incentive Compensation
Operation of 2016-2018 Annual Incentive Compensation Program
Our 2016-2018 Annual Incentive Compensation Program (the "Annual Incentive Plan") rewards performance consistent with our primary corporate objective of increasing our net book value per share over the long termlong-term through growth in our net earnings year over year. The Annual Incentive Plan provided for the grant of annual bonus compensation (a "bonus award") to all bonus-eligible employees, including our executive officers, and excluding StarStone and Atrium staff. StarStone and Atrium has ahave different bonus program,programs, in which our executive officers are not eligible to participate.
Executive Officer 20172018 Annual Incentive Plan Targets
In 2017,2018, we continued and improved upon the approach we took during 2016, in which we implemented a setuse of Company financial and operational performance objectives under our Annual Incentive Plan and established a threshold, target and maximum annual incentive award payment structure. This change to our program followed an evaluation of the voting results from our 2015 annual general meeting and our
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| Enstar Group Limited | 27 | Special Meeting Proxy Statement |
engagement with shareholders. Our longstandinglong-standing prior practice was to use a fully discretionary annual incentive award plan as a way of addressing our acquisitive business model, in which our executives are encouraged to pursue new transactions on an opportunistic basis. We often adapt our financial, strategic and operational plans during the course of the year to pursue these developing opportunities, and our results during early years of integrating new business can be difficult to predict. In moving to the newdifferent approach, the Compensation Committee designed a program it believed was better aligned with the expectations of our shareholders and would incentivize our executives to achieve our strategic goals.
The 20172018 program operated as follows:
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Base Salary ($) x Company Financial Performance Objective (%) | + | Base Salary ($) x Operational Performance Objective (%) | +/- | Committee Adjustment Amount | = | 20172018 Bonus Award |
Company financial objectives and individual operations performance objectives each comprise half of the executive's bonus potential.
Bonus Potential
The Compensation Committee establishes threshold, target and maximum bonus potential levels for each executive officer, each of which is expressed as a percentage of base salary. In connection with shifting from a fully discretionary plan to the new target-based program in 2016, these levels were initially set taking the historic compensation levels of our executives into consideration to ensure the new program would continue to reward strong performance, as well as motivate and retain our executives. Those 2016Minor realignment adjustments were made in 2017 for Messrs. Silvester and O'Shea and Ms. Gregory, and no changes were made to the bonus potential levels were largely maintained for 2017, except for the following alignment changes: (i) Mr. Silvester's maximum bonus potential was increased from 130% in 2016 to 140% in 2017 to provide greater incentive if significant out-performance levels were achieved, (ii) Mr. O'Shea's maximum bonus potential was reduced from 200% in 2016 to 180% in 2017 to better align his percentages with Ms. Gregory's, and (iii) Ms. Gregory's bonus potential was redesigned as set forth below to reflect her promotion to Chief Operating Officer in December 2016.2018.
The table below sets forth each executive's bonus potential, expressed as a percentage of base salary.
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Enstar Group Limited | 41 | 2018 Proxy Statement |
| | | Executive | Base Salary | Threshold (% of Base Salary) | Target (% of Base Salary) | Maximum (% of Base Salary) | Base Salary | Threshold (% of Base Salary) | Target (% of Base Salary) | Maximum (% of Base Salary) |
Dominic Silvester(1) | £ | 1,848,090 |
| 100% | 115% | 140% | £ | 1,848,090 |
| 100% | 115% | 140% |
| Paul O’Shea | $ | 1,271,535 |
| 100% | 150% | 180% | $ | 1,271,535 |
| 100% | 150% | 180% |
| Orla Gregory | $ | 1,100,000 |
| 100% | 145% | 175% | $ | 1,122,000 |
| 100% | 145% | 175% |
| Mark Smith | $ | 1,020,000 |
| 85% | 100% | 115% | |
Guy Bowker(2) | $ | 575,000 |
| 85% | 100% | 115% | |
| Guy Bowker | | $ | 575,000 |
| 85% | 100% | 115% |
| Paul Brockman | | $ | 468,930 |
| 100% | 125% | 150% |
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| (1) | Mr. Silvester's annual incentive award was calculated with reference to his annual base salary rate denominated in and paid in British Pounds ("GBP"). All actual amountsThe annual incentive award amount paid to Mr. Silvester in GBP werewas converted to USDU.S. Dollars for presentation in this proxy statementProxy Statement using the prevailing exchange rate on the date of payment. |
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(2) | In connection with his succession to CFO, which was contemplated and announced in May 2017 and took effect on January 1, 2018, Mr. Bowker's 2017 annual incentive award was calculated with reference to his 2018 annual base salary rate of $575,000. His annual base salary in effect as of April 1, 2017 was $500,000.approval. |
Company Financial Objectives
To determine the Company financial objectives, the Compensation Committee reviewed the 20172018 business plan with the full Board and the executive officers and put in place a challenging set of financial objectives. The Compensation Committee used three financial metrics:
net earnings;
growth in fully diluted book value per share; and
return on equity.
The Compensation Committee then selected a threshold, target and maximum objective for each of these metrics based on the Company's business plan, which correspond to each executive’s bonus potential. For 2017, the Compensation Committee used net earnings instead of earnings before income taxes (which was the metric utilized in 2016), as it believed a post-tax figure was more aligned to the Board's and shareholders' view of total performance. The financial objectives were set as follows:
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| Enstar Group Limited | 28 | Special Meeting Proxy Statement |
| | | Financial Metric | 2016 Actual | 2017 Threshold | 2017 Target | 2017 Maximum | 2017 Actual | Weighting | 2017 Actual | 2018 Threshold | 2018 Target | 2018 Maximum | 2018 Actual | Weighting |
| Net Earnings | $264.81 | $255.34 | $300.40 | $345.46 | $311.46 | 20% | $311.46 | $255.34 | $300.40 | $345.46 | $(162.90) | 20% |
| Growth in Fully Diluted Book Value Per Share | 10.8% | 9.2% | 10.8% | 12.4% | 10.8% | 15% | 10.8% | 9.2% | 10.8% | 12.4% | (2.0)% | 15% |
| Return on Equity | 10.5% | 9.1% | 10.7% | 12.3% | 11.1% | 15% | 11.1% | 9.1% | 10.7% | 12.3% | (5.6)% | 15% |
| | | | Total | 50% | | | Total | 50% |
In establishing financial metrics,objective levels, the Compensation Committee increased the net earnings target by 13.8% versus 2016 actuals, maintained the fully diluted book value per share targettargets relatively in line with 20162017 actuals, taking into consideration the 2018 Board-approved business plan and noting that 2017 was a year of record net earnings, and moderately increased the return on equity target. The Compensation Committee also considered the Company's risk appetite in building its 2017 business plan and assessedthe anticipated market environment. Specifically, the selected financial objective levels reflected the persistent low interest rate environment, regulatory constraints on our capital and investments and the impact of integrating recent transactions on short-term returns,results, as well as the very challenging active underwriting environment and the Company's corresponding strategy to maintain a high level of discipline in its underwriting practices. Itenvironment. The Compensation Committee established metrics that it believed would be challenging and only achievable with strong performance and precise execution, with maximum levels achievable only with extraordinary performance.
Net earnings was achieved slightly above target at $311.46 million, representing an 18% increase from 2016 andDespite our highest net earnings to date. Growth in fully diluted book value per share was achieved in line with target, and return on equity was achieved 0.4% above target at 11.1%. Accordingly, the Compensation Committee determined thatexecutives' achievement of many operational objectives as described below, the Company achieveddid not achieve the threshold level of performance for any of the financial objectives at target level, noting also that 102.8%objectives. The primary reasons for this are described above in the "Executive Summary" section. As a result, the Company Financial Performance Objective component of target had been achieved overall on a weighted-average basis.annual incentive plan awards for 2018 was not paid to any executive officers.
Operational Performance Objectives
In early 2017,2018, the Compensation Committee asked each executive to provide a proposed set of individual operational performance goals to the CEO. The CEO reviewed and discussed these goals with each executive and provided the agreed goals to the Compensation Committee for review, deliberation and revision. The CEO submitted his proposed set of individual goals directly to the Compensation Committee.
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Enstar Group Limited | 42 | 2018 Proxy Statement |
At2018, the Compensation Committee reviewed interim self-appraisals to track each executive's progress. Following year-end, each executive submitted a final self-appraisal of his or her performance versus the goals to the Compensation Committee and the CEO. The Compensation Committee discussed each appraisal with the CEO before making a determination and considered his thoughts and views on overall achievement levels. The Compensation Committee considers achievement of "threshold" level to partially meet operational performance expectations, with "target" level corresponding to meeting expectations, and "maximum" level corresponding to exceptional performance.
Dominic Silvester: Mr. Silvester's operational performance objectives included several strategic and operational objectives which were as follows: acquire at least the specified level of new non-life run-off loss reserves, in lineincluding by fostering relationships with new and existing partners; develop and implement enhancements to the Company's investment strategy and asset deployment opportunities; evaluate, recommend and oversee several contemplated strategic business growth objectives; fortifytransactions; oversee the M&A department capabilities forimplementation of a new capital management function; strengthen the long-termleadership team; and enhancecontinue the development of the Company's succession planning in identified roles; oversee strategic development of KaylaRe, the total return reinsurer we sponsored with Hillhouse Capital and Stone Point Capital; and oversee execution of the Company's investment strategies.roles.
The Compensation Committee determined that Mr. Silvester partially achieved goals consistent with the target level of his bonus potential.collective operational performance objectives, exceeding or meeting his objectives in some areas and not fully achieving them in others. The Compensation Committee assessed that he exceeded his run-off acquisition objective and met his investment strategy objective. Under Mr. Silvester's leadership, Enstar completed run-off transactions in 20172018 involving approximately $2.5$3.2 billion of gross loss reserves, our largest year to date in terms of acquired reserves, and Enhanzed Re, a joint venture launched with Allianz and Hillhouse capitalized with $470 million. Mr. Silvester also oversaw the implementation of a new run-off business,private equity mandate and the Company continues to see a strong pipelinesuccessful completion of future run-off opportunities. He successfully oversaw enhancements to the structure, leadershipseveral private company investments and resources of the M&A team, as wellother transactions, such as the CFO succession plan announcement and transition. Mr. Silvester was heavily involved in overseeing the progressacquisition of KaylaRe, which will become a wholly-owned subsidiary following completion of our pending accretive transaction to acquire the remainder of its shares. He also led the continued evolution of our investment function as it became more central to our overall strategy during the year, with investment returns increasing versus 2016 and contributing significantly to our ability to meet our target performance levels even with the impact of unfavorable market conditions and catastrophe events in our active underwriting segments.
Paul O'Shea: Mr. O’Shea's operational performanceKaylaRe. While many other objectives were as follows: drivemet or partially met, the strategic directionCompensation Committee determined that additional progress was needed. The Compensation Committee also took into consideration the underperformance of StarStone, although it recognized that he significantly strengthened StarStone's leadership in the Company and lead our pursuitsecond half of larger scale transactions; oversee specified leadership and strategic objectives in our StarStone segment; assist with a review of our M&A function and implement any subsequently agreed recommendations; and contribute to efforts to succession plan and strengthen our leadership and M&A teams.2018.
The Compensation Committee determined thatreduced Mr. O’Shea achieved goals collectively at the target levelSilvester's formulaic annual incentive plan award amount by 26%, resulting in a total award amount of 29% of his bonus potential, exceeding his strategic M&A objectives, partially achieving his StarStone-related operational objectives givenbase salary. This determination, which Mr. Silvester recommended, reflects the impact to income from market events,Compensation Committee's view that the awards for the CEO, President, and meeting other objectives. The Compensation Committee recognized his out-performance in working with our strategic partners duringCOO should be impacted the year, which has led to a number of transaction opportunities. Mr. O'Shea was a primary contributor to our completion of transactions involving approximately $2.5 billion of new run-off business during the year, as well as our progression of significant transactions with Allianz SE, Neon Underwriting Ltd., AXIS Managing Agency and Zurich Insurance Group, which ultimately closed in early 2018. He also oversaw the successful divestiture of our Pavonia business, which closed during 2017. Mr. O'Shea made significant contributions to our succession planning initiatives and the development of our next generation leaders. As Executive Chairman of StarStone, he oversaw the continued steady approach to managing the business in a soft market, while at the same time keeping teams engaged on successful delivery of systems transformation initiatives. Although the catastrophe activity in 2017 was within our risk appetite, and StarStone fared comparatively better than many competitors, these events negatively impacted StarStone's operating results and combined ratio.
Orla Gregory: Ms. Gregory's operational performance objectives were as follows: continue leadership over ongoing restructuring and improvement of several key critical group functions; lead our large-scale effort to optimize our IT infrastructure to support future growth; define and implement a target operating model for centralized Group services to enhance management reporting; contribute to efforts to strengthen our leadership team and achieve our succession planning goals and promote company-wide adoption of strategic objectives.
The Compensation Committee determined that Ms. Gregory achieved goals at the target level of her bonus potential. The Compensation Committee recognized that throughout the year she was primarily responsible for efforts to achieve our operational modernization initiatives, including spearheading a change in program management and scoping of our ongoing IT infrastructure optimization project. Ms. Gregory led efforts to re-organize our finance function, leading to the build-out of our budgeting, forecasting, and management reporting teams and processes. In addition, she chaired our ongoing systems transformation program and led the hire and successful transition of a new Chief Information Officer. She was instrumental in overseeing the transition to a new Chief Investment Officer and the design and successful implementation of a new target operating model for our investment function. She also drove significant improvements in our internal audit, risk management and human resource functions.
Mark Smith: Mr. Smith's operational performance objectives were as follows: work with M&A leadership to finance new acquisitions; progress ongoing initiatives to provide internal organizational efficiencies through entity rationalization; increase financing capacity within debt-to-capital limits; contribute tomost by the Company's ongoing efforts$162 million reported net loss, given their positions as the most senior leaders in the group.
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Paul O'Shea: Mr. O’Shea's operational performance objectives were as follows: deliver the acquisition of at least the specified level of new non-life run-off loss reserves; oversee process advancements within the acquisitions function; oversee the Company's interactions with itsglobal regulators and rating agencies to enhance its position;agencies; further develop the long-term strategic direction of the Company and transition responsibilities to Mr. Bowkercomplete approved projects aimed at providing accretive returns; oversee specified leadership and strategic objectives in connection with hisour StarStone segment; and improve leadership development and succession to the role of CFO.planning within specified functions.
The Compensation Committee determined that Mr. SmithO’Shea partially achieved his collective operational performance objectives, at the target level ofexceeding or meeting his bonus potential.objectives in some areas and not fully achieving them in others. The Compensation Committee assessed that he exceeded his run-off acquisition objective; met his acquisition processes objective; met his regulatory and rating agency objective; partially achieved his strategic transaction objective; and did not sufficiently achieve his StarStone-related operational objective, although the committee recognized that progress was made in many areas. Mr. Smith's contributions to the successful financing of new transactions and our communications with ratings agencies, and his role in our ongoing consolidation and entity rationalization project resulted in a reduction in entities and associated costs, as well as the elimination of significant intercompany account balances. Mr. Smith seamlessly facilitated the transition of his responsibilities in finance and treasury to his successor, Mr. Bowker, andO'Shea was a keyprimary contributor to our significant acquisitions of new run-off business. He also engaged with several of our key regulators and rating agencies during 2018, which resulted in favorable outcomes, and played a key role in the accretive purchase of KaylaRe and the launch of Enhanzed Re. The Compensation Committee also took into consideration the underperformance of StarStone in determining Mr. O'Shea's 2018 award.
The Compensation Committee reduced Mr. O'Shea's formulaic annual incentive plan award amount by 28%, resulting in a total award amount of 38% of his base salary.
Orla Gregory: Ms. Gregory's operational performance objectives were as follows: oversee enhancements to the Company's risk management function; drive specified organizational efficiency projects; redefine IT strategy under new leadership; support the CEO and President in completing strategic transactions and opportunities aimed at increasing long-term value; oversee our large-scale effort to optimize our IT infrastructure to support future growth; and implement a new capital planning efforts and our regulatory relationships. While the overall achievement level was assessed at target level, themanagement function.
The Compensation Committee determined that Ms. Gregory partially achieved her collective operational performance objectives, meeting several and partially achieving others. The Compensation Committee assessed that she met her risk management, organizational efficiencies and IT strategy objectives, and partially achieved her strategic transaction, IT infrastructure and capital management objectives. Ms. Gregory drove significant enhancements in the Company's risk management function, advancing our capital modeling, investment and other risk analyses and improving reporting. She managed organizational efficiency projects and successfully oversaw the implementation of a new IT strategy framework. She has been instrumental in the implementation of our transformational IT optimization project, which went live during 2018, although it was appropriate to exercise its discretionaryexperienced some delays. The Compensation Committee Adjustment Amount (described below) to reducealso took into consideration the overall payment to Mr. Smithunderperformance of StarStone in determining Ms. Gregory's 2018 award.
The Compensation Committee reduced Ms. Gregory formulaic annual incentive plan award amount by 10%41%, resulting in recognitiona total award amount of the conclusion36% of his tenure with the Company and transition to the role of consultant.her base salary.
Guy Bowker: Mr. Bowker's operational performance objectives were as follows: provide executive support and leadership to key functions; manage strategic rating agency and regulatory interactions; oversee several operational improvement initiatives withinthe development of the finance function; contribute to treasury team efforts to increase our financing capacityoperations function and improve liquidity planning;its management reporting; oversee the integrationfinance portion of accounting processes for acquired entities;our IT infrastructure optimization project; lead the provision of capital management information and lead initiatives to provide internaldesign and develop greater organizational efficiencies through entity rationalization.capabilities in this area; implement specified organizational efficiency initiatives; and further develop the finance function.
The Compensation Committee determined that Mr. Bowker achieved his operational performance objectives collectively at thehis target level of his bonus potential.level. Mr. Bowker led several operational improvements tosignificant financing and treasury initiatives that improved our capital position during 2018 and oversaw finance support for the M&A function which includedas the implementationCompany acquired $3.2 billion of new accounting tools that enhanced our reporting processes. Mr. Bowker had a lead rolegross loss reserves in managing the reporting and communications around our 2017run-off transactions. He also successfully oversaw several treasury initiativesmanaged interactions with the Bermuda Monetary Authority (our Group Supervisor) and led rating agency interactions that have positioned the Company wellresulted in improvements to take advantage of future opportunities and optimize its current liquidity position. Working with Mr. Smith,our credit ratings. In addition, Mr. Bowker drove significant enhancements to our capital planning and budgeting processes, and oversaw the successful completion of the first phase of the finance portion of our IT infrastructure optimization project. He also progressed our ongoing consolidationsuccessfully led capital management work and entity rationalization project, which resulted in a more efficient organizational structureimplemented enhanced capital modeling and capital forecasting capabilities. During the elimination of significant intercompany account balances. year, Mr. Bowker strengthened the finance function and improved its efficiency.
The Compensation Committee also recognizedincreased Mr. Bowker's formulaic annual incentive plan award amount by 102%, resulting in a total award amount approximately equal to his base salary. The Compensation Committee determined that this adjustment to Mr. Bowker's annual incentive award was appropriate in recognition of his success leading the stepscompletion of $2.2 billion of financing initiatives and capital markets transactions, notable improvements in the strength of the finance function and additional responsibilities taken on during the year.
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Paul Brockman: Mr. Brockman's operational performance objectives were as follows: deliver on challenging U.S. technical business plan; execute our acquisition strategy in preparationthe U.S.; support U.S. operational and acquisition integration initiatives; manage U.S. regulatory interactions; oversee the U.S. claims portion of our IT infrastructure optimization project; implement specified organizational efficiency initiatives; and develop U.S. leadership team succession planning.
The Compensation Committee determined that Mr. Brockman achieved his operational performance objectives at his target level. Mr. Brockman led the U.S. business to achieve its challenging technical run-off plan, which contributed significantly to our reserve savings for the year, and which the Committee weighted heavily. He was very involved in acquisition sourcing and provided critical support to reviewing and integrating several new deals, including with respect to several loss portfolio transfers and our acquisition of Maiden Reinsurance North America. Mr. Brockman continued to strengthen our U.S. regulatory relationships, which are critical to our ability to operate effectively and grow, and was actively involved in landmark regulatory and legislative initiatives. The U.S. claims IT infrastructure optimization project was completed, and he implemented several important organizational efficiency initiatives.
The Compensation Committee increased Mr. Brockman's formulaic annual incentive plan award amount by 34%, resulting in a total award amount of 84% of his transitionbase salary. The Compensation Committee determined that this adjustment to Mr. Brockman's award was appropriate given impressive U.S. technical plan results and the roleoverall success of CFO, which he assumed on January 1, 2018.the U.S. business, his vital support of acquisition sourcing and integration and his continued strong leadership as U.S. CEO.
Committee Adjustment Amount
The Committee Adjustment Amount allows for a positive or negative discretionary adjustment of up to 10% on the formulaic bonus outcome described above. Any Committee Adjustment Amount is applied based on the Compensation Committee's judgment of the executive’s overall performance, including for exceptional individual or team achievements.
The Committee Adjustment Amount set forth in the 20172018 Bonus Calculations table reflect the views of the Compensation Committee summarized above. 2018 was a difficult year in which to apply a strict formula and stay within the 10% limit because the Company reported a net loss that was driven primarily by the accounting treatment for unrealized investment losses that occurred due to market forces outside of management's control and losses in the StarStone segment. The Committee determined that these factors masked strong underlying performance of our core non-life run-off business, which had a successful year in terms of claims reserve savings, and the notable acquisitions of record levels of new run-off business.
2017Mr. Silvester recommended, and the Committee agreed, that awards for himself, Mr. O'Shea and Ms. Gregory should be reduced from the formula in excess of 10%, given their greater involvement in overseeing strategic initiatives and StarStone, while awards for Messrs. Bowker and Brockman should be increased. While the Committee prefers to stay within the formula of the annual incentive plan, it determined these adjustments were appropriate, noting that the aggregate negative discretion of over $700,000 significantly outweighed the aggregate positive discretion of $392,250.
2018 Bonus Calculations
| | | Executive | Base Salary | Company Financial Objective Achieved | Corresponding % of Base Salary | Individual Operational Performance Objective Achieved | Corresponding % of Base Salary | Committee Adjustment Amount (% of formulaic bonus) | 2017 Bonus Award | Base Salary | Company Financial Objective Achieved | Corresponding % of Base Salary | Individual Operational Performance Objective Achieved | Corresponding % of Base Salary | Committee Adjustment Amount (% of formulaic bonus) | 2018 Annual Incentive Plan and Bonus Award |
Dominic Silvester(1) CEO | £1,848,090 | Target | 57.5% | Target | 57.5% | —% | £2,125,304 | £1,848,090 | — | —% | Partial | 39% | (26)% | £531,326 |
Paul O’Shea President | $1,271,535 | Target | 75.0% | Target | 75.0% | —% | $1,907,303 | $1,271,535 | — | —% | Partial | 52% | (28)% | $476,826 |
Orla Gregory COO | $1,122,000 | Target | 72.5% | Target | 58.0% | —% | $1,626,900 | $1,122,000 | — | —% | Partial | 61% | (41)% | $406,725 |
Mark Smith CFO | $1,040,400 | Target | 50.0% | Target | 50.0% | (10.0)% | $936,360 | |
Guy Bowker Chief Accounting Officer & Deputy CFO | $575,000 | Target | 50.0% | Target | 50.0% | —% | $575,000 | |
Guy Bowker
CFO | | $575,000 | — | —% | Target | 50% | 102% | $579,750 |
Paul Brockman CEO, Enstar (US), Inc. | | $468,930 | — | —% | Target | 63% | 34% | $393,081 |
| |
| (1) | Mr. Silvester's bonusannual incentive award was calculated with reference to his GBP base salary and paid in GBP. Converted to USDU.S. Dollars using the prevailing exchange rate on the date of payment,approval, Mr. Silvester's bonusannual incentive award amounted to $2,899,926,$696,604, as reported below in the Summary Compensation Table. |
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| Enstar Group Limited | 31 | Special Meeting Proxy Statement |
Long-Term Incentive Compensation
We established the 2016 Equity Incentive Plan (the "2016 Equity Plan") to provide our employees with long-term equity-based incentive compensation, which we believe furthers our objective of aligning the interests of management and the other plan participants with those of our shareholders. The 2016 Equity Plan was approved by a 99% vote of our shareholders at our 2016 annual general meeting and is administered by the Compensation Committee. In
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Enstar Group Limited | 44 | 2018 Proxy Statement |
considering whether to make long-term equity-based compensatory awards and how to design them, the Compensation Committee takes into account shareholder dilution and burn rate issues and related concerns.
2016 Equity Plan Snapshot
|
| | | |
What the Plan DOES | What the Plan DOES NOT DO |
þ | Shareholder approval is required to issue additional shares | ý | No liberal share recycling
|
þ | Requires 12-month minimum vesting period for options/SARs (with 5% carve out pool) | ý | No evergreen renewal provision
|
þ | Applies annual award limits for employees and directors | ý | No granting of reload options
|
þ | Awards under plan are subject to our Clawback Policy | ý | No excise tax gross-up provision
|
þ | Pool was constituted solely of the shares that remained under the expired 2006 Equity Plan | ý | No liberal Change in Control definition
|
þ | Performance-based awards vest on a pro-rata basis at target level upon a Change in Control | ý | No single-trigger acceleration of awards upon a Change in Control if acquirer assumes the award or substitutes a new award
|
þ | All stock options and SARs must have an exercise price or base price equal to or greater than the fair market value of the underlying shares on the grant date | ý | No repricing or cash buy-out of underwater options and SARs without shareholder approval
|
2017 Awards
Following the adoption of the new equity plan in 2016,Equity Plan, the Compensation Committee worked with our independent compensation consultant to develop a long-term incentive program for senior management based on principles of equity compensation it believes are aligned with shareholder expectations and best practice.expectations. The awards included a combination of three-year cliff-vesting performance stock unit awards ("PSUs") tied to growth in fully diluted book value per share ("FDBVPS") and three-year tranche-vesting restricted stock unit awards ("RSUs"), with the ratio of PSUs to RSUs increasing with relative levels of seniority.
The legacy stock appreciation right ("SAR") awards for Messrs. Silvester and O'Shea and Ms. Gregory vested inIn 2017, meaning that these executives no longer had a long-term incentive component to their compensation, which is inconsistent with our compensation philosophy. Accordingly, the Compensation Committee worked with our independent compensation consultant to assess the structure and amount of awards, considering the comparative total direct compensation data for executives in our peer group and the value of historic compensation received from prior awards. The Compensation Committee awarded PSU and RSUmake long-term incentive awards to these executivesour CEO, President and COO using the using the framework of the senior management program, but choseprogram.
As discussed above in "The Proposal - Approval of Amended and Restated Enstar Group Limited 2016 Equity Incentive Plan", the Amended and Restated Plan proposed by the Company in this Proxy Statement would amend the Equity Plan to increase levelsallow the Company to grant JSOP awards. In connection with implementing the JSOP structure, we are also seeking authorization of an additional 650,000 ordinary shares for use under the Amended and Restated Plan.We called the Special Meeting to approve the Amended and Restated Plan in 2019 because it gives us the opportunity to grant long-term incentive awards on a tax-efficient basis to U.K. tax resident grant recipients. We believe a JSOP award recipient’s interests are aligned with those of our shareholders given that the JSOP award only delivers value to the recipient to the extent the value of the Shares subject to the JSOP award increases above a specified threshold and if any performance requiredand other conditions determined by the Committee are met. If shareholders do not approve the Amended and Restated Plan, our existing Equity Plan will continue to achieve threshold, target,remain in full force and maximum payouts. Theeffect without modification. Failure of our shareholders to approve the Amended and Restated Plan also would not affect the rights of existing award holders under our existing Equity Plan or under any previously granted awards consistedunder that plan.
Equity Awards
No new equity awards were made to Messrs. Silvester and O'Shea and Ms. Gregory during 2018. In 2017, they each received long-term incentive awards consisting of 75% PSUs and 25% RSUs in amounts detailed below in "Executive Compensation Tables - Grants of Plan-Based Awards in 2017," which reflects the Compensation Committee's view that a significant portion of the awards should be performance-based and payable only upon achievement of our long-term performance objectives.
These awards are intended to cover a three-year period, and the Compensation Committee has indicated that, similar to the SAR legacy awards, no additional equity grants will be made to the recipients until after the PSUs / RSUs vest. These awards had the effect of increasing reported compensation for these three executives in the Summary Compensation Table for the 2017 grant year, as the full grant date fair value is shown in the "Stock Awards" column.
period. The PSUs for Messrs. Silvester and O'Shea and Ms. Gregory would vest as follows duringaccording to the performance targets following the performance period from January 1, 2017 to December 31, 2019:
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Enstar Group Limited | 45 | 2018 Proxy Statement |
our 2018 financial results, we currently carry the 3-year 2017 PSU awards granted to our CEO, President and COO at "threshold" value based on our current expectation that these awards will vest at or below the “threshold” level of achievement, which would result in either significantly diminished or zero payout upon vesting. “Threshold” represents 50% of the original number of PSUs granted.
|
| |
| Growth in 3-Year FDBVPS | PSU Vesting as a Percentage of Target(1) |
| Less than 30.3% (Below Threshold) | —% |
| 30.3% (Threshold) | 50% |
| 35.7% (Target) | 100% |
| 41% or greater (Maximum) | 150% |
| |
| (1) | Actual payout levels between threshold and target and target and maximum is determined by straight-line interpolation. |
Mr.Messrs. Bowker and Brockman received a grantgrants of PSUs and RSUs under our senior management long-term equity incentive program during 2017, asin early 2018 in the amounts set forth in "Executive Compensation Tables -the Grants of Plan-Based Awards Table. These awards were intended to accompany RSUs granted in 2017."late 2017, such that the total award comprised 65% PSUs and 35% RSUs. Unlike the grants tocurrent treatment for Messrs. Silvester and O'Shea and Ms. Gregory, Mr.Messrs. Bowker isand Brockman are considered eligible for annual long-term equity incentive program awards, althoughand the amountamounts of thesuch awards isare subject to the Compensation Committee's determination each year. For Mr.
In addition, Messrs. Bowker the Compensation Committee structured his awards withand Brockman received grants of 65% PSUs and 35% RSUs under our senior management program in early 2019. The performance targets applicable to Messrs. Bowker and Brockman's
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| Enstar Group Limited | 32 | Special Meeting Proxy Statement |
outstanding PSUs relate to succeeding three-year performance periods measuring growth in three-year fully diluted book value per grant cycle, although due to the timing of awards and the increased allocation to long-term incentive compensation with his role changes, those percentages are not calculableshare from the Grantsyear of Plan-Based Awards table.grant.
Alignment of Pay and Performance
Our executive compensation program links compensation to Company and individual performance over both the short-short-term and long-term.
|
| | | | |
| What We Reward: | | How We Link Pay to Performance: | | How We Pay: |
Long-term performance over a 3-year period in our LTI programprogram. Strong financial and operational performance, as measured against Board-approved plan in our Annual Incentive ProgramProgram. Achievement of individual strategic goalsgoals. | è | Significant allocation of executive compensation is to PSU awards that vest according to level of financial resultsresults. Annual Incentive Plan payments are tied in large part to achievement of net earnings, growth in FDBVPS and return on equityequity. Annual Incentive Plan drives accountability for executing individual strategic objectivesobjectives. | è | CEO Reported Pay
IncreasedReduced vs. 2016,2017, primarily reflectingdue to the 2017 reflection of the grant date fair value of an equity award intended to cover a 3-year period and a significantly reduced annual incentive award for 2018.
Other NEO Reported Pay
Collectively increaseddecreased vs. 2016,2017, primarily reflectingdue to the 2017 grant date fair value of equity awardawards granted to the President and COO intended to cover a 3-year period
We outperformed our net earnings target and met our other Annual Incentive Plan targets; a number of critical financial and operational goals were achieved, including major transactions and other accomplishmentsperiod.
|
Other Benefits and Perquisites
We provide certain additional benefits in furtherance of our objective of retaining and attracting key talent and pursuant to contractual provisions. In 2017,2018, our executive officers participated in the same group insurance and employee benefit plans, including long-term disability insurance, life insurance and medical and dental benefits on the same basis as our other Bermuda salaried employees, and Mr. Silvester received certain additional expense reimbursements for non-plan medical and dental items. We pay the employee’s share of Bermudian government payroll and social insurance taxes for all of our Bermuda employees, including our executive officers, which we believe is common practice at other Bermuda-based public companies. Our executive officers also receive payment in lieu of a retirement benefit contribution, as described below in the "Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table" under "Retirement and Other Benefits."
BecauseBenefits", and Mr. Brockman participates in our business is global but our headquarters are in Bermuda, our executives may have relocated from their home countries. This can result in maintaining a second residence or having to travel to see family who may be in a different location, and we may provide reimbursements for certain costs related to such travel and living arrangements. During 2017, we reimbursed Mr. Silvester for certain housing expenses, and certain expenses related to his relocation,U.S. 401(k) plan, which occurred in April 2017.has matching contributions.
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Enstar Group Limited | 46 | 2018 Proxy Statement |
Executive Employment Agreements
Employment contracts are required in themost jurisdictions in which our NEOs are based. During 2017, the Compensation Committee negotiated new employment agreements with Messrs. Silvester and O'Shea and Ms. Gregory, as their respective contracts were due to expire at the end of 2017 and the Board determined it was critical to retain these executives into at least 2020. In February 2017, the Compensation Committee approved an acceleration of vesting of Mr. Silvester's legacy SARs from August 13, 2017 to March 2, 2017, and a simultaneous shortening of the expiration date from August 13, 2018 to December 31, 2017, which was done in connection with entering into his new employment agreement.
for additional terms. The Compensation Committee also approved Mr. Bowker's CFO employment contract, which was entered into on December 28, 2017 and took effect January 1, 2018.
We entered into an employment agreement with Mr. Brockman effective January 8, 2018. See "Executive Compensation Tables - Narrative Disclosure to Summary Compensation Table and Grants of Plan Based Awards Table - Employment Agreements with Executive Officers" below for a summary of the material terms of these employment agreements.
Post-Termination Payments
Our employment agreements with our executive officers each provide for certain benefits in the event of a change in control followed by termination of the executive’s employment for specified reasons (referred to as a "double trigger"), including a cash payment, accelerated vesting of equity awards, family medical benefits and, in certain circumstances, payment of annual incentive bonus. We believe these benefits are common features in many of our peers’ compensation programs. See “Executive Compensation Tables - Narrative Disclosure to Summary Compensation Table and Grants of Plan Based Awards Table - Employment Agreements with Executive Officers" below for a summary of these employment agreements. The terms of the employment agreements reflect arm’s-length negotiations between us and each executive officer.
Separately from our employment agreements and equally applicable to any participant, our 2016 Equity Plan only provides for plan participants to receive accelerated vesting upon a change in control if the acquirer does not assume or convert the awards, or substitute new awards. In the case of performance-based awards granted under the 2016 Equity
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| Enstar Group Limited | 33 | Special Meeting Proxy Statement |
Plan, if the acquirer does not assume, convert or substitute awards, absent a Compensation Committee determination otherwise, only a pro-ratapro rata portion of the target opportunity for the performance period would accelerate upon a change in control, based on the portion of the performance period that has been completed.
Clawback of Incentive Compensation
Our Clawback Policyclawback policy (the "Clawback Policy") applies to all cash and equity incentive awards granted after its adoption. The Clawback Policy allows the Board of Directors or the Compensation Committee to recoup or "clawback" incentive compensation if an employee: (i) engages in misconduct pertaining to a financial reporting requirement under the federal securities laws that requires a restatement to correct an error; (ii) receives incentive compensation based on inaccurate financial or operating measure that when corrected causes significant harm to the Company; (iii) engages in any fraud, theft, misappropriation, embezzlement or dishonesty to the detriment of our financial results; or (iv) engages in conduct that is not in good faith and disrupts, damages, impairs or interferes with our business, reputation or employees.
In addition, our 2016-2018 Annual Incentive Plan works in conjunction with our Clawback Policy in that it allows the Compensation Committee to cancel an award if the program participant has engaged in conduct or acts determined to be materially injurious, detrimental or prejudicial to the Company's interest, and allows us to recoup any amount in excess of what the participant should have received under the terms of the award for any reason, including financial restatement, mistake in calculations or other administrative error. Awards made under our 2016 Equity Plan are also subject to the Clawback Policy. In addition to the policy, our equity planEquity Plan provides that the Compensation Committee has the authority to require disgorgement of any profit, gain or other benefit received in respect of restricted shares, options and stock appreciation rights for a period of up to 12 months prior to the grantee’sGrantee’s termination for cause.
Once final rules are adopted regarding clawback requirements under the Dodd-Frank Act, we will consider and adopt any additional responsive policies required. As a publicly traded company, the mandates of the Sarbanes-Oxley Act requiring clawback of compensation under specified circumstances also apply to us.
Other Matters
Hedging Prohibition
Under our Code of Conduct, our employees, officers and directors are prohibited from engaging in any hedging or monetization transactions involving our securities, such as zero-cost collars and forward sale contracts, and are
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Enstar Group Limited | 47 | 2018 Proxy Statement |
also prohibited from trading in derivatives in our securities, such as exchange-traded put or call options and forward transactions.
Share Ownership Guidelines
In November 2017, we adopted Share Ownership Guidelines applicable to our directors and executive officers, which took effect on January 1, 2018. Our Share Ownership Guidelines require our executive officers and directors to achieve and maintain ownership of our ordinary shares at the levels specified in the table below within five years of becoming subject to the guidelines. An individual may not sell or otherwise dispose of Company shares (including during the five yearfive-year accumulation period) until he or she has met his or her minimum ownership requirement, except that shares may be withheld upon vesting to satisfy tax obligations.
|
| |
| Covered Person | Ownership Requirement |
| CEO | 6x base salary |
| President | 3x base salary |
| COO | 3x base salary |
| CFO & Other Executive Officers | 1x base salary |
| Non-Employee Directors | 3x annual cash retainer |
Individuals may satisfy their ownership requirements with: (i) shares owned directly or indirectly (including any shares held in retirement account or deferred compensation planDeferred Compensation Plan maintained by the Company), (ii) time vestedtime-vested restricted stock, RSUs or phantom stock, (iii) performance shares or PSUs (counted at target), or (iv) share units held in non-employee director deferred compensation plan.Deferred Compensation Plan. Shares are valued based on the closing price of the last completed calendar year. All covered persons are currently in compliance with our Share Ownership Guidelines. The Compensation Committee elected to use a 1x multiplier for the CFO and our Other Executive Officersother executive officers because these executives were each newlyrecently appointed to their officer roles; it expects to reassess this figure in future years as the officers serve additional time in these roles.
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| Enstar Group Limited | 34 | Special Meeting Proxy Statement |
Tax and Accounting Treatment of Compensation
Section 162(m) of the Internal Revenue Code places a limit of $1,000,000 on the amount of compensation that we may deduct from our USU.S. source income in any one year with respect to certain of our executive officers. As a Bermuda-based company, thisThis limitation has not historically impacted our decisions regarding executive compensation.compensation, including because nearly all of our executive officers are based outside of the U.S.
We account for equity compensation paid to our employees based on the guidance of the Share-Based Payment topic of the Financial Accounting Standards Board Accounting Standards Codification, which requires us to estimate and record an expense for each award of equity compensation over the service period of the award. Accounting rules also require us to record cash compensation as an expense at the time the obligation is accrued.
Compensation Risk Assessment
As part of our risk management practices, the Compensation Committee reviews and considers risk implications of and incentives created by our executive compensation program and our compensation policies and practices for the Company as a whole. At the Compensation Committee’s direction, representatives from our risk management and legal departments conducted a risk assessment of our compensation policies and practices for executives and all employees, which was discussed and reviewed by the Compensation Committee.
The review analyzes compensation governance processes, situations where compensation programs may have the potential to raise material risks to the Company, internal controls that mitigate the risk of incentive compensation having an adverse effect and program elements that further mitigate these risks.
Through this review, the Compensation Committee has concluded that our compensation program does not create risks that are reasonably likely to have a material adverse effect on us.
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Enstar Group Limited | 48 | 2018 Proxy Statement |
Compensation Committee Interlocks and Insider Participation
No member of the Compensation Committee is or was during 2018 an employee, or is or ever has been an officer, of the Company. During the year ended December 31, 2018, no executive officer served as a member of the Compensation Committee or as a director of another entity having an executive officer serving on our Compensation Committee or as one of our directors.
Compensation Committee Report
The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis set forth above with our management. Based on its review and discussions, the Compensation Committee recommended to our Board of Directors that the Compensation Discussion and Analysis be included in this proxy statementProxy Statement and incorporated by reference into our Annual Report on Form 10-K filed with the SEC for the year ended December 31, 2017.2018.
COMPENSATION COMMITTEE
B. Frederick Becker
Sandra L. Boss
Robert J. Campbell
Poul A. Winslow
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| Enstar Group Limited | 4935 | 2018Special Meeting Proxy Statement |
EXECUTIVE COMPENSATION TABLES
Summary Compensation Table
The following table sets forth compensation earned in 2018, 2017 2016 and 20152016 by our Chief Executive Officer, Chief Financial Officer, President, Chief Operating Officer and Deputy CFO and Chief Accounting Officer.Executive Officer of Enstar (US), Inc. These individuals are referred to in this proxy statementProxy Statement as the "named"executive officers". The following table only includes information for the year or years in which such individuals qualified as named executive officers." Mr. Smith was succeeded by Mr. Bowker as Chief Financial Officer on January 1, 2018. Reported 2017 total compensation for Messrs. Silvester and O'Shea and Ms. Gregory includes long-term incentive plan awards meant to cover a three-year period, as discussed in footnote 1 to the table.officers under SEC rules.
|
| | | | | | | | | | | | | | | | | | | |
| Name and Principal Position | Year | Salary | Bonus | Stock Awards(1) | Non-Equity Plan Incentive Compensation(2) | All Other Compensation | Total |
Dominic F. Silvester(3) | 2017 | $ | 2,366,424 |
| $ |
|
| $ | 11,070,000 |
| $ | 2,899,926 |
| $ | 534,740 |
| $ | 16,871,090 |
|
| Chief Executive Officer | 2016 | $ | 2,263,450 |
| $ |
|
| $ | — |
| $ | 2,800,000 |
| $ | 882,939 |
| $ | 5,946,389 |
|
| 2015 | $ | 2,230,000 |
| $ | 2,000,000 |
| $ |
|
| $ |
|
| $ | 685,796 |
| $ | 4,915,796 |
|
| | | | | | | | |
Mark W. Smith(4) | 2017 | $ | 1,035,300 |
| $ |
|
| $ | — |
| $ | 936,360 |
| $ | 169,808 |
| $ | 2,141,468 |
|
| Chief Financial Officer | 2016 | $ | 1,015,000 |
| $ |
|
| $ | 1,000,145 |
| $ | 1,020,000 |
| $ | 147,283 |
| $ | 3,182,428 |
|
| | 2015 | $ | 376,984 |
| $ | 500,000 |
| $ | — |
| $ |
|
| $ | 59,058 |
| $ | 936,042 |
|
| | | | | | | | |
Paul J. O’Shea(5) | 2017 | $ | 1,265,302 |
| $ |
|
| $ | 6,918,750 |
| $ | 1,907,303 |
| $ | 197,642 |
| $ | 10,288,997 |
|
| President | 2016 | $ | 1,240,492 |
| $ |
|
| $ | — |
| $ | 2,000,000 |
| $ | 169,832 |
| $ | 3,410,324 |
|
| 2015 | $ | 1,222,160 |
| $ | 1,600,000 |
| $ | — |
| $ |
|
| $ | 164,665 |
| $ | 2,986,825 |
|
| | | | | | | | |
Orla M. Gregory(6) | 2017 | $ | 1,116,500 |
| $ |
|
| $ | 4,612,500 |
| $ | 1,626,900 |
| $ | 181,284 |
| $ | 7,537,184 |
|
| Chief Operating Officer | 2016 | $ | 1,050,000 |
| $ | 199,250 |
| $ | — |
| $ | 1,300,750 |
| $ | 150,783 |
| $ | 2,700,783 |
|
| | 2015 | $ | 787,500 |
| $ | 1,000,000 |
| $ | — |
| $ |
|
| $ | 121,199 |
| $ | 1,908,699 |
|
| | | | | | | | |
Guy T.A. Bowker(7) | 2017 | $ | 468,750 |
| $ |
|
| $ | 309,828 |
| $ | 575,000 |
| $ | 105,334 |
| $ | 1,458,912 |
|
| Deputy CFO and Chief Accounting Officer | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | |
| Name and Principal Position | Year | Salary(1) | Bonus | Stock Awards(2) | Non-Equity Plan Incentive Compensation(3) | All Other Compensation | Total |
Dominic Silvester(4) | 2018 | $ | 2,470,126 |
| $ |
|
| $ | — |
| $ | 696,604 |
| $ | 277,858 |
| $ | 3,444,588 |
|
| Chief Executive Officer | 2017 | $ | 2,366,424 |
| $ |
|
| $ | 11,070,000 |
| $ | 2,899,926 |
| $ | 534,740 |
| $ | 16,871,090 |
|
| 2016 | $ | 2,263,450 |
| $ |
|
| $ |
|
| $ | 2,800,000 |
| $ | 882,939 |
| $ | 5,946,389 |
|
| | | | | | | | |
Guy Bowker(5) | 2018 | $ | 575,000 |
| $ | 263,500 |
| $ | 373,639 |
| $ | 316,250 |
| $ | 261,880 |
| $ | 1,790,269 |
|
| Chief Financial Officer | 2017 | $ | 468,750 |
| $ |
|
| $ | 309,828 |
| $ | 575,000 |
| $ | 105,334 |
| $ | 1,458,912 |
|
| | | | | | | | |
Paul O’Shea(6) | 2018 | $ | 1,271,535 |
| $ |
|
| $ | — |
| $ | 476,826 |
| $ | 295,297 |
| $ | 2,043,658 |
|
| President | 2017 | $ | 1,265,302 |
| $ |
|
| $ | 6,918,750 |
| $ | 1,907,303 |
| $ | 197,642 |
| $ | 10,288,997 |
|
| 2016 | $ | 1,240,492 |
| $ |
|
| $ | — |
| $ | 2,000,000 |
| $ | 169,832 |
| $ | 3,410,324 |
|
| | | | | | | | |
Orla Gregory(7) | 2018 | $ | 1,122,000 |
| $ |
|
| $ | — |
| $ | 406,725 |
| $ | 290,570 |
| $ | 1,819,295 |
|
| Chief Operating Officer | 2017 | $ | 1,116,500 |
| $ |
|
| $ | 4,612,500 |
| $ | 1,626,900 |
| $ | 181,284 |
| $ | 7,537,184 |
|
| | 2016 | $ | 1,050,000 |
| $ | 199,250 |
| $ | — |
| $ | 1,300,750 |
| $ | 150,783 |
| $ | 2,700,783 |
|
| | | | | | | | |
Paul Brockman(8) | 2018 | $ | 467,198 |
| $ | 70,692 |
| $ | 225,062 |
| $ | 322,389 |
| $ | 18,500 |
| $ | 1,103,841 |
|
| Chief Executive Officer, Enstar (US), Inc. | | | | | | | |
| |
| (1) | All base salary amounts are presented in United States Dollars ("USD"). The change in Mr. Silvester's salary from 2017 to 2018 was the result of exchange rate fluctuation between British Pounds ("GBP") and USD; his salary was not increased in 2018. Mr. Silvester's nominal base salary is £1,848,090. Amounts paid to Mr. Silvester in GBP have been converted to USD for presentation in this Summary Compensation Table as described below in footnote 4. |
| |
| (2) | The amount shown in the Stock Awards column represents the aggregate grant date fair value of time-vested restricted shares, RSUs and PSUs granted to our named executive officers in the applicable fiscal year, computed in accordance with FASB ASC Topic 718, excluding the effect of estimated forfeitures. Each of Messrs. Silvester and O'Shea and Ms. Gregory received a grant consisting of 75% PSUs and 25% RSUs during 2017 as described below in "Grants of Plan-Based Awards in 2017." These awards are meant to cover a three-year period and no additional RSUs or PSUs will be granted to these individuals until vesting is complete in 2020. Amounts reported in the table in respect of PSUs granted in 2018 reflect a "target" level of performance. If the maximum level of performance were to be achieved, then the number of shares that would be received in respect of such 2018 PSUs would be 150% of the number of PSUs granted, and the grant date value of such awards would have been as follows: Dominic F. Silvester - $12,453,750; Paul J. O'Shea - $7,783,594; Orla M. Gregory - $5,189,063; and Guy T.A. Bowker - $162,971.$560,458 and Paul Brockman - $337,593. Whether the recipients of PSUs will receive any shares in respect of PSU awards depends on whether Enstar achieves certain levels of growth in fully diluted book value per share. Due to the negative impact of our 2018 financial results, we currently carry the 3-year 2017 PSU awards granted to our CEO, President and COO at "threshold" value based on our current expectation that these awards will vest at or below the “threshold” level of achievement, which would result in either significantly diminished or zero payout upon vesting. “Threshold” represents 50% of the original number of PSUs granted. |
| |
(2)(3) | The amounts reported reflect the actual performance-based annual incentive bonuses paid to each named executive officer for the applicable fiscal year pursuant to the Annual Incentive Plan. The bonuses paid pursuant to the Annual Incentive Plan are described above in "Compensation Discussion and Analysis - Annual Incentive Compensation.”Compensation”. |
| |
(3)(4) | All Other Compensation for 20172018 represents: (a) perquisites valued at aggregate incremental cost to Enstar, including (i) certain housing expenses ($63,630); (ii) shipping expenses relating to relocation to the United Kingdom ($6,216); (iii) professional advisor fees in connection with relocation to the United Kingdom ($336,566); and (iv)comprising additional medical and dental expense reimbursement pursuant to employment agreement ($34,599);27,401) and accommodation expense reimbursement and (b) other compensation including (i)consisting of a payment in respect of retirement benefit contribution ($76,299)247,013). The retirement benefit contribution is a payment we provide to all of our U.K.-based employees. Pursuant to his employment agreement, we began compensating Mr. Silvester in GBP in April 2017, and amounts paid to him in GBP have been converted to USD at the then-prevailing exchange rate on the relevant payroll date or, in the case of annual incentive awards for 2018, on the date of approval by the Compensation Committee. |
| |
| (5) | All Other Compensation for 2018 represents other compensation, including: (i) cash payment in respect of retirement benefit contribution ($57,500) and (ii) payment of the employee'semployee’s share of Bermudian payroll and social insurance tax ($17,430)204,380). Both the retirement benefit contribution and the payroll and social insurance tax payment are payments we provide to all of our Bermuda-based employees. Pursuant to his employment agreement, we began compensating Mr. Silvester in British Pounds ("GBP") in April 2017, and amounts paid to him in GBP have been converted to United States Dollars ("USD") at the then-prevailing exchange rate on the day of payment. |
| |
(4)(6) | All Other Compensation for 20172018 represents other compensation, includingincluding: (i) cash payment in respect of retirement benefit contribution ($103,530)127,154) and (ii) payment of the employee’s share of Bermudian payroll and social insurance tax ($66,278)168,143). Both the retirement benefit contribution and the payroll and social insurance tax payment are payments we provide to all of our Bermuda-based employees. |
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(5)(7) | All Other Compensation for 20172018 represents other compensation, including: (i) cash payment in respect of retirement benefit contribution ($126,530)112,200) and (ii) payment of the employee’s share of Bermudian payroll and social insurance tax ($71,112)178,370). Both the retirement benefit contribution and the payroll and social insurance tax payment are payments we provide to all of our Bermuda-based employees. |
| |
(6)(8) | All Other Compensation foir 2017for 2018 represents other compensation, including: (i) cash payment in respectconsisting of retirement benefita Company matching contribution under our 401(k) plan ($111,650) and (ii) payment of the employee’s share of Bermudian payroll and social insurance tax ($69,634)18,500). Both the retirement benefitThis Company matching contribution and the payroll and social insurance tax payment are payments we provideunder our 401(k) plan is offered to all of our Bermuda-basedU.S.-based employees. |
| |
(7) | All Other Compensation for 2017 represents other compensation, including: (i) cash payment in respect of retirement benefit contribution ($46,875) and (ii) payment of the employee’s share of Bermudian payroll and social insurance tax ($58,459). Both the retirement benefit contribution and the payroll and social insurance tax payment are payments we provide to all of our Bermuda-based employees. |
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| Enstar Group Limited | 5036 | 2018Special Meeting Proxy Statement |
Grants of Plan-Based Awards in 20172018
|
| | | | | | | | | | | |
| Name | Award Type | Approval Date | Grant Date | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(1) | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | All Other Stock Awards: Number of Shares of Stock or Units (#)(3) | Grant date fair value of Stock and Option Awards(4) |
| | | | | Threshold | Target | Maximum | Threshold | Target | Maximum | | |
| Dominic F. Silvester | AIP |
| n/a | $2,306,472 | $2,947,158 | $3,946,629 |
|
|
|
|
|
| | RSUs | May 9, 2017 | May 10, 2017 |
|
|
|
|
|
| 15,000 | $2,767,500 |
| | PSUs | May 9, 2017 | May 10, 2017 |
|
|
| 22,500 | 45,000 | 67,500 |
| $8,302,500 |
| Mark W. Smith | AIP |
| n/a | $795,906 | $1,040,400 | $1,316,106 |
|
|
|
|
|
| Paul J. O'Shea | AIP |
| May 10, 2017 | $1,144,382 | $1,907,303 | $2,517,639 |
|
|
|
|
|
| | RSUs | May 9, 2017 | May 10, 2017 |
|
|
|
|
|
| 9,375 | $1,729,688 |
| | PSUs | May 9, 2017 | May 10, 2017 |
|
|
| 14,063 | 28,125 | 42,188 |
| $5,189,063 |
| Orla M. Gregory | AIP |
| n/a | $1,009,800 | $1,626,900 | $2,159,850 |
|
|
|
|
|
| | RSUs | May 9, 2017 | May 10, 2017 |
|
|
|
|
|
| 6,250 | $1,153,125 |
| | PSUs | May 9, 2017 | May 10, 2017 |
|
|
| 9,375 | 18,750 | 28,125 |
| $3,459,375 |
Guy T.A. Bowker(5) | AIP |
| n/a | $439,875 | $575,000 | $727,375 |
|
|
|
|
|
| | RSUs | November 6, 2017 | November 17, 2017 |
|
|
|
|
|
| 889 | $201,181 |
| | PSUs | November 7, 2016 | January 3, 2017 |
|
|
| 275 | 549 | 824 |
| $108,647 |
|
| | | | | | | | | | |
| Name | Award Type | Approval Date | Grant Date | Estimated Possible Payouts under Non-Equity Incentive Plan Awards(1) | Estimated Future Payouts under Equity Incentive Plan Awards(2) | Grant Date Fair Value of Stock and Option Awards(3) |
| | | | | Threshold | Target | Maximum | Threshold | Target | Maximum | |
| Dominic Silvester | AIP | n/a | n/a | $2,122,381 | $2,711,932 | $3,631,631 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Guy Bowker | AIP | n/a | n/a | $439,875 | $575,000 | $727,375 |
|
|
|
|
| PSUs | 11/6/2017 | 1/2/2018 |
|
|
| 936 | 1,871 | 2,807 | $373,639 |
|
|
|
|
|
|
|
|
|
|
|
| Paul O'Shea | AIP | n/a | 5/10/2017 | $1,144,382 | $1,907,303 | $2,517,639 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Orla Gregory | AIP | n/a | n/a | $1,009,800 | $1,626,900 | $2,159,850 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Paul Brockman | AIP | n/a | n/a | $422,037 | $586,163 | $773,735 |
|
|
|
|
| PSUs | 11/6/2017 | 1/2/2018 |
|
|
| 564 | 1,127 | 1,691 | $225,062 |
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|
|
|
|
|
|
|
|
|
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| (1) | The amounts reported in these columns represent estimated possible payouts of performance-based annual incentive cash bonuses under the 2016-20162016-2018 Annual Incentive Plan ("AIP") in respect of 2017,2018, assuming threshold achievement, target achievement and maximum achievement of the applicable performance metrics and assuming full negative and positive exercise of the Committee Adjustment Amount for threshold and maximum awards, respectively. The Committee Adjustment Amount is described in detail in "Compensation Discussion and Analysis - Annual Incentive Compensation - Committee Adjustment Amount."Amount". The actual amounts paid to our named executive officers in respect of 20172018 are included in the Summary Compensation Table in the "Non-Equity Incentive Plan Compensation" column. |
| |
| (2) | The amounts reported in these columns represent grants pursuant to the 2016 Equity Plan during 20172018 of PSUs that cliff vest following a three-year performance period, subject to the Company's of achievement of certain levels of growth in fully diluted book value per share selected by the Compensation Committee. Failure by the Company to attain at least a threshold level of financial performance during the performance period in respect of an award would result in zero vesting of performance share unitsPSUs under such award. |
| |
| (3) | The amounts reported in this column represent grants pursuant to the 2016 Equity Plan during 2017 of time-based restricted share units that vest in three substantially equal annual installments beginning on the first anniversary of their respective grant dates. |
| |
(4) | The amounts reported in this column represent the grant date fair value of time-vested restricted share units and performance share units granted to our named executive officers in the applicable fiscal year, computed in accordance with FASB ASC Topic 718, excluding the effect of estimated forfeitures. The assumptions made in the valuation of stock awards are discussed in Note 19 - Share-Based Compensation and Pensions ofto our 2017consolidated financial statements in our Annual Report on Form 10-K. |
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(5) | In connection with his promotion to10-K for the role of CFO, the Compensation Committee used Mr. Bowker's 2018 annual rate of base salary as the reference salary to calculate his 2017 bonus award.year ended December 31, 2018. |
Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table
Employment Agreements with Named Executive Officers
We have employment agreements with all of our named executive officers. Our agreements with Messrs. Silvester and O’Shea originally became effective as of May 1, 2007 following our public listing on the NASDAQ stock exchange
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Enstar Group Limited | 51 | 2018 Proxy Statement |
and have been extended on subsequent occasions. Our employment agreements with Mr. Smith, Ms. Gregory and Mr. Bowker originally became effective as of May 11, 2015, August 18, 2015 and July 28, 2015, respectively.
On March 28, 2017, we entered into a new employment agreement with Mr. Silvester (subsequently amended on April 12, 2017) with a three-year term extending until April 17, 2020, which reflects his relocation to the United Kingdom on such date, among other changes. On May 19, 2017, we entered into new employment agreements with Mr. O'Shea and Ms. Gregory with three-years terms extending to May 19, 2020. The new agreements for Messrs. Silvester and O'Shea and Ms. Gregory no longer contain an automatic renewal clause, nor a mandatory cost-of-living base salary increase (as existed in the prior contracts)agreements). Contractual clawbacks have also been added to supplement our Company policy.
In connection with his appointment as Chief Financial Officer, we entered into a new employment agreement with Mr. Bowker effective as of January 1, 2018. Mr. Bowker's employment agreement continues for an indefinite term until terminated in accordance with its terms.
Mr. Brockman's employment agreement was entered into on January 8, 2018 and continues for an indefinite term until terminated in accordance with its terms.
The material terms of each of the employment agreements are described below in the section entitled "Potential Payments upon Termination or Change in Control,"Control", and are substantially similar for the executives other than as noted. The employment agreements also provide for certain benefits and certain restrictive covenants upon termination of employment for various reasons.
Transition Agreement Terms for Mark Smith
On May 19, 2017, we entered into a Transition Agreement with former Chief Financial Officer Mark Smith (the "Transition Agreement"), which provided for the transition |
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| Enstar Group Limited | 37 | Special Meeting Proxy Statement |
Table of certain of his responsibilities and the amendment of his prior employment agreement dated May 11, 2015 (the "Existing Agreement"). Under the Transition Agreement, Mr. Smith served as our Chief Financial Officer until December 31, 2017 and began a consulting role for the Company beginning January 1, 2018 for a two-year term for which he receives a fee of $62,500 monthly. Mr. Smith continued to receive his regular base salary through December 31, 2017, and he remained eligible to receive a performance bonus in respect of 2017 pursuant to our 2016-2018 Annual Incentive Plan, as reflected in the Summary Compensation Table above. In connection with the transition, Mr. Smith also received (i) a cash payment in lieu of 2017 retirement benefit contribution of as set forth in the Summary Compensation Table above and (ii) continued comprehensive medical and dental benefits through December 31, 2019 on the same terms as provided generally to Enstar's Bermuda employees. In addition, his outstanding equity award continued to vest in accordance with its terms notwithstanding his transition to a consulting role.Contents
Incentive Awards
Awards granted under our 2016 Annual Incentive Plan and our equity incentive plans are described in "Compensation Discussion and Analysis - Annual Incentive Compensation" and "Long-Term Incentive Compensation,"Compensation", respectively.
Retirement and Other Benefits
We maintain retirement plans and programs for our employees in Bermuda, Australia, the United Kingdom, Europe and the United States. On an annual basis, our employees and executive officers in Bermuda receive an amount equal to 10% of their base salaries in respect of a retirement benefit contribution. Our employees and executives in the United States receive a Company matching contribution under our 401(k) plan of up to 6% of base salary. The amounts paid to each of our executive officers in respect of these retirement benefits are included in the amounts shown in the "All Other Compensation" column of the Summary Compensation Table above. Amounts for other benefits included in the "All Other Compensation" column of the Summary Compensation Table are described in "Compensation Discussion and Analysis - Other Benefits and Perquisites."Perquisites".
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Enstar Group Limited | 52 | 2018 Proxy Statement |
Outstanding Equity Awards at 20172018 Fiscal Year-End
The following table sets forth information regarding all outstanding equity awards held by the executive officers at December 31, 2017.2018.
|
| | | | | | | | | | | | | | | | | | |
| | | | Option Awards | Stock Awards(1) |
| Name | Grant Date | | Number of Securities Underlying Unexercised Options Exercisable (#) | Option Exercise Price | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) |
| Dominic F. Silvester | May 10, 2017 | (2) | | | | 15,000 |
| $ | 3,011,250 |
| | |
| | May 10, 2017 | (3) | | | | | | 22,500 |
| $ | 4,516,875 |
|
| Mark W. Smith | March 2, 2016 | (4) | | | | 2,083 |
| $ | 418,162 |
| | |
| Paul J. O'Shea | May 10, 2017 | (2) | | | | 9,375 |
| $ | 1,882,031 |
| | |
| | May 10, 2017 | (3) | | | | | | 14,063 |
| $ | 2,823,147 |
|
| Orla M. Gregory | June 9, 2014 | (5) | 20,000 |
| $ | 147.75 |
| June 9, 2024 | | | | |
| | May 10, 2017 | (2) | | | | 6,250 |
| $ | 1,254,688 |
| | |
| | May 10, 2017 | (3) | | | | | | 9,375 |
| $ | 1,882,031 |
|
| Guy T.A. Bowker | November 17, 2016 | (2) | | | | 366 |
| $ | 73,475 |
| | |
| | January 3, 2017 | (3) | | | | | | 275 |
| $ | 55,206 |
|
| | November 17, 2017 | (2) | | | | 889 |
| $ | 178,467 |
| | |
|
| | | | | | | | | | | | | | | | | | |
| | | | Option Awards | Stock Awards(1) |
| Name | Grant Date | | Number of Securities Underlying Unexercised Options Exercisable (#) | Option Exercise Price | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) |
| Dominic Silvester | 5/10/2017 | (2) |
|
|
|
|
| 10,000 |
| $ | 1,675,700 |
|
|
|
|
|
| 5/10/2017 | (3) |
|
|
|
|
|
|
|
|
| 22,500 |
| $ | 3,770,325 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Guy Bowker | 11/17/2016 | (2) |
|
|
|
|
| 183 |
| $ | 30,665 |
|
|
|
|
|
| 1/3/2017 | (3) |
|
|
|
|
|
|
|
|
| 275 |
| $ | 45,998 |
|
| 11/17/2017 | (2) |
|
|
|
|
| 593 |
| $ | 99,369 |
|
|
|
|
|
| 1/2/2018 | (3) |
|
|
|
|
|
|
|
|
| 936 |
| $ | 156,762 |
|
| | | | | | | | | | |
| Paul O'Shea | 5/10/2017 | (2) |
|
|
|
|
| 6,250 |
| $ | 1,047,313 |
|
|
|
|
|
| 5/10/2017 | (3) |
|
|
|
|
|
|
|
|
| 14,063 |
| $ | 2,356,537 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Orla Gregory | 6/9/2014 | (4) | 20,000 |
| $ | 147.75 |
| 6/9/2024 |
|
|
|
|
|
|
|
|
| 5/10/2017 | (2) |
|
|
|
|
| 4,167 |
| $ | 698,264 |
|
|
|
|
|
| 5/10/2017 | (3) |
|
|
|
|
|
|
|
|
| 9,375 |
| $ | 1,570,969 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Paul Brockman | 5/13/2014 | (5) |
|
|
|
|
| 735 |
| $ | 123,164 |
|
|
|
|
|
| 1/3/2017 | (3) |
|
|
|
|
|
|
|
|
| 502 |
| $ | 84,120 |
|
| 11/17/2017 | (2) |
|
|
|
|
| 119 |
| $ | 19,941 |
|
|
|
|
|
| 1/2/2018 | (3) |
|
|
|
|
|
|
|
|
| 564 |
| $ | 94,426 |
|
| | | | | | | | | | |
| |
| (1) | Market value of stock awards based on 200.75$167.57 per share, the closing price of our ordinary shares on December 31, 2017.2018. |
| |
| (2) | Represents a grant pursuant to the 2016 Equity Plan of RSUs that vest in three equal annual installments beginning on the first anniversary of the grant date. |
| |
| (3) | Represents a grantgrants pursuant to the 2016 Equity Plan of PSUs that cliff vest following a three-year performance period that began on January 1, 2017 for awards granted during 2017 and January 1, 2018 for awards granted during 2018, subject to the Company's of achievement of certain levels of growth in fully diluted book value per share selected by the Compensation Committee. The numberamounts of unearned PSUs relatedrelating to the 2017-2019 and 2018-2020 performance period isperiods are reported in the “Equity Incentive Plan Awards: Market Value of Unearned Shares That Have Not Vested” column based on the threshold number of PSUs (50% of target) that may be earned for the performance period. |
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| (4) | Represents a grant pursuant to the 2006 Equity Incentive Plan of restricted shares that began vesting in three equal annual installments on March 31, 2016. |
| |
(5) | Represents fully vested cash-settled SARs granted in 2014. No shares of stock may be issued upon exercise. |
|
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| Enstar Group Limited | 38 | Special Meeting Proxy Statement |
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| (5) | Represents a grant pursuant to the 2006 Equity Incentive Plan of restricted shares that began vesting in five equal annual installments on March 31, 2015. |
Option Exercises and Stock Vested during 20172018 Fiscal Year
The following table sets forth information regarding the vesting of restricted shares held by the executive officers during the 20172018 fiscal year.
|
| | | | | | | | | | | | |
| | | | | Stock Awards | |
| Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | |
| Dominic F. Silvester | 250,000 |
| $ | 12,637,500 |
| (1) | | | |
| Mark W. Smith | | | | 2,082 |
| $ | 398,287 |
| (2) |
| Paul J. O'Shea | 183,333 |
| $ | 10,431,648 |
| (3) | | | |
| Orla M. Gregory | | | | | | |
| Guy T.A. Bowker | | | | 183 |
| $ | 41,413 |
| (4) |
|
| | | | | | |
| | Stock Awards | |
| Name | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | |
| Dominic Silvester | 5,000 |
| $ | 1,050,250 |
| (1) |
| Guy Bowker | 479 |
| $ | 84,864 |
| (2) |
| Paul O'Shea | 3,125 |
| $ | 656,406 |
| (3) |
| Orla Gregory | 2,083 |
| $ | 437,534 |
| (4) |
| Paul Brockman | 913 |
| $ | 186,070 |
| (5) |
| |
| (1) | Based on the exercise of cash-settled SARs with an exercise price of $141.10 and the closing price of our ordinary shares on March 13, 2017 of $191.65 (the date of exercise). No shares were issued upon exercise. On February 20, 2017, the Compensation Committee accelerated the vesting date of Mr. Silvester's SARs so that they became fully exercisable on March 2, 2017 and amended the expiration date so that the SARs expired on December 31, 2017. |
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(2) | Based on $191.30$210.05 per share, the closing price of our ordinary shares on March 31, 2017May 10, 2018 (the vesting date). |
| |
| (2) | Based on $177.17 per share, the closing price of our ordinary shares on November 17, 2018 (the vesting date). |
| |
| (3) | Based on the exercise of cash-settled SARs with an exercise price of $141.10 and the closing price of our ordinary shares on August 13, 2017 of $198.00 (the date of exercise). No shares were issued upon exercise. |
|
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Enstar Group Limited | 53 | 2018 Proxy Statement |
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(4) | Based on $226.30$210.05 per share, the closing price of our ordinary shares on November 17, 2017May 10, 2018 (the vesting date). |
| |
| (4) | Based on $210.05 per share, the closing price of our ordinary shares on May 10, 2018 (the vesting date). |
| |
| (5) | Based on $210.25 per share, the closing price of our ordinary shares on March 31, 2018 (the vesting date for 735 restricted shares) and $177.17, the closing price of our ordinary shares on November 17, 2018 (the vesting date for 178 RSUs). |
Potential Payments upon Termination or Change in Control
This section describes payments that would be made to our executive officers following termination of employment or upon a change in control of the Company. In the first part of this section, we describe benefits under employment agreements and general plans that apply to any executive officer participating in those plans. We then provide estimated amounts of benefits assuming the occurrence of certain hypothetical termination events as of December 31, 20172018.
Employment Agreements for Dominic F. Silvester, Paul J. O'Shea, and Orla M. GregoryOur Named Executive Officers
Our named executive officers are entitled to certain benefits under their employment agreements upon termination of their employment. An executive officer’s employment may terminate under any of the following circumstances: (i) by us for "cause" (as defined in the applicable executive’s agreement) or by the executive without "good reason" (as defined in the applicable executive’s agreement), (ii) by us without "cause" or by the executive with "good reason", (iii) following a "change of control" (as defined in the applicable executive’s agreement), (iv) upon the executive’s death or disability and (v) after expiration of the term of employment.
Upon termination for any reason, each executive is entitled to any salary, bonuses, expense reimbursement and similar amounts (including pension benefits) that were already earned, but not yet paid.
Under our employment agreements with Messrs. Silvester and O'Shea and Ms. Gregory, "cause" means: (i) fraud or dishonesty in connection with the executive’s employment that results in a material injury to us, (ii) the executive officer’s conviction of any felony or crime involving fraud or misrepresentation, (iii) a specific material and continuing failure of the executive officer to perform his/her duties following written notice and failure by the executive officer to cure such failure within 30 days, or (iv) a specific material and continuing failure of the executive officer to follow reasonable instructions of the Board following written notice and failure by the executive officer to cure such failure within 30 days.
Under the employment agreements, without "good reason" means resigning in circumstances other than: (i) a material breach by us of our obligations under the agreement following written notice and failure by us to cure such breach within 30 days, (ii) the relocation of the executive officer’s principal business office outside of Bermuda (or in the case of Mr. Silvester, the United Kingdom) without his/her consent, or (iii) any material reduction in the executive officer’s duties or authority.
Termination for "Cause" or Voluntary Termination without "Good Reason."Reason". If we terminate the employment agreement of Mr. Silvester, Mr. O'Shea, or Ms. Gregory or Mr. Bowker for "cause,""cause", or if one of them voluntarily terminates his/her employment agreement with us without "good reason,"reason", we will not be obligated to make any payments to the executive officer other than amounts that have been fully earned by, but not yet paid to, the executive officer. If we terminate the employment agreement of Mr. Brockman for "cause", we will not be obligated to make any payments to him other than amounts that have been fully earned by, but not yet paid to, him.
Termination "without"Without Cause" or Termination with "Good Reason"." Messrs. Silvester and O'Shea and Ms. Gregory Our executive officers are entitled to the benefits described below if: (i) we terminate the executive officer’s employment "without cause" or (ii) the executive officer terminates his/her employment with "good reason": (A) any amounts (including salary, bonuses, expense reimbursement, etc.) that have been fully earned by but not yet paid to the executive officer as of the date of termination; (B) a lump sum amount equal to three times the executive officer’s annual base salary (for Messrs. Silvester and O'Shea) and, two times (for Ms. Gregory), one time (for Mr. Bowker) and a continuation of base salary payments for a period of six months (for Mr. Brockman); (C) continued medical benefits coverage for the executive officer, his/her spouse and dependents at our expense for 36 months (for Messrs. Silvester and O'Shea) and, 24 months (for Ms. Gregory) and 12 months (for Mr. Bowker); (D) vesting of each outstanding unvested equity incentive award, if any, granted to the executive officer before, on or within three years of the effective date of the employment agreement;agreement (for Messrs. Silvester and O'Shea and Ms. Gregory); and (E) for the year in which the executive officer’s employment terminates, provided that we achieve any performance goals established in accordance with any incentive plan in which the executive officer participates, an amount equal to the bonus that the executive officer would have received had he or she been employed by us for the full year (an "Incentive Plan Payment"). for Messrs. Silvester and O'Shea and Ms.
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| Enstar Group Limited | 39 | Special Meeting Proxy Statement |
Gregory and an Incentive Plan Payment reduced on a pro rata basis to reflect the amount of calendar days during the year that he was employed (a "Pro Rata Incentive Plan Payment") for Messrs. Bowker and Brockman.
Termination followingFollowing a Change in Control. Our employment agreements with Messrs. Silvester and O'Shea and Ms. Gregoryour named executive officers are "double trigger" in nature, meaning that in the event of a change in control as defined in the employment agreements, the executive officer is entitled to the prescribed employment agreement benefits only following termination of employment. Termination of employment must be either: (i) termination by us "without cause" or (ii) termination by executive with "good reason."reason". The termination must also occur within one year of a change in control. If these conditions are met, the executive would be entitled to the same benefits described above under "Termination without Cause/"Without Cause" or Termination with Good Reason.""Good Reason".
If the executive ends his/her employment following a change in control without "good reason,"reason", the executive would receive only earned but unpaid compensation as of the termination date under his/her employment agreement. In the event of termination by Mr. Brockman for any reason (other than for "cause"), we will not be obligated to make any payments to him other than amounts that have been fully earned by but not yet paid to him unless we elect to make his termination effective prior to the end of his six-month notice period.
Death of Executive. In the event of an executive officer’s death, his/her employment agreement automatically terminates, and his/her designated beneficiary or legal representatives are entitled to: (A) a lump sum payment equal to five times the executive officer’s annual base salary in effect at the time of his/her death, pursuant to life insurance benefits we maintain;maintain (for Messrs. Silvester and O'Shea and Ms. Gregory); (B) an Incentive Plan Payment reduced on a pro rata basis to reflect the amount of calendar days during the year that he/she was employed (a "ProPro Rata Incentive Plan Payment");Payment; and (C) continued medical
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Enstar Group Limited | 54 | 2018 Proxy Statement |
benefits coverage under the employment agreement for the executive officer’s spouse and dependents for a period of 36 months (for Messrs. Silvester and O'Shea) and, 24 months (for Ms. Gregory) and 12 months (for Mr. Bowker) following death.
Disability of Executive. For Messrs.Mr. Silvester, andMr. O'Shea, and Ms. Gregory and Mr. Bowker, either the executive officer or we may terminate his/her employment agreement if the executive officer becomes disabled by providing 30 days’ prior written notice to(as defined in the other party. Under the executive officers’ employment agreements, disability means the executive officer has been materially unable to perform his/her duties for any reason for 120 days during any period of 150 consecutive days.applicable executive’s agreement). If the executive officer’s employment ends because of disability, then he/she is entitled to: (A) any amounts (including salary, bonuses, expense reimbursement, etc.) that have been fully earned by, but not yet paid to, the executive officer as of the date of such termination; (B) base salary for a period of 36 months (for Messrs. Silvester and O'Shea) or, 24 months (for Ms. Gregory) and 12 months (for Mr. Bowker) - with base salary payments being offset by any payments to the executive officer under the Company's disability insurance policies; (C) a Pro Rata Incentive Plan Payment;Payment (for Mr. Silvester, Mr. O'Shea, Ms. Gregory and Mr. Bowker); and (D) continued medical benefits coverage for the executive officer, his/her spouse and dependents at our expense for 36 months (for Messrs. Silvester and O'Shea) and, 24 months (for Ms. Gregory) and 12 months (for Mr. Bowker).
Restrictive Covenants. In addition, eachthe employment agreement providesagreements of Messrs. Silvester and O'Shea and Ms. Gregory provide the Company with certain protections in the form of restrictive covenants, including that if the executive fails to remain employed through the current term (other than in the event of termination by the Company "without cause" or by the executive with "good reason"), he/she may not compete with us for a specified period following the date of termination of employment. Such specified periods are 18 months with respect to Messrs. Silvester and O'Shea and 12 months with respect to Ms. Gregory. TheThese agreements, and the agreements for Messrs. Bowker and Brockman, also include restrictive covenants regarding non-solicitation, confidentiality and non-disparagement.
Mark Smith Transition Arrangement
The benefits actually received by Mr. Smith following his transition Messrs. Bowker and Brockman are subject to the rolerestrictive covenants regarding post-termination non-solicitation for periods of consultant on December 31, 2017 are described above in "-Narrative Disclosure to Summary Compensation Table12 months and Grants of Plan Based Awards Table - Transition Agreement Terms for Mark Smith."
Guy Bowker Employment Agreement
In connection with Mr. Smith's transition, Mr. Bowker assumed the role of Chief Financial Officer on January 1, 2018. We also entered into a new employment agreement with Mr. Bowker, effective on January 1, 2018. Pursuant to his prior employment agreement, Mr. Bowker would have been entitled to the benefits described below (in addition to any amounts earned but not yet paid) in the event of the occurrence of a hypothetical termination event on December 31, 2017.
In the event of termination for any reason other than by us for cause, Mr. Bowker would have been entitled to (i) three months' written notice of termination under his prior agreement, which could be satisfied in our discretion with payment in lieu of notice and (ii) a repatriation benefit comprising reimbursement for airfare for him and his family and reimbursement of reasonable shipping expenses not to exceed $15,000. If Mr. Bowker's employment were terminated by us due to conditions of redundancy, he would also be entitled to receive a payment of severance allowance equal to 14 weeks' base salary in addition to the benefits described above.six months, respectively.
Annual Incentive Plan
Under the Annual Incentive Plan, a change in control would accelerate payment of bonuses by changing the measurement period to determine bonuses from the calendar year to a period that begins on the first day of the calendar year and ends on the date of the change in control.
Equity Incentive Plans
Our 2016 Equity Plan provides that the Compensation Committee will not fully vest outstanding awards and will not make any payments in respect of outstanding awards if the Compensation Committee determines, prior to a Change in Control, that the surviving or successor corporation will assume all outstanding awards, or substitute a new award of the same type for each outstanding award. If such assumption or substitution does not occur, the Compensation Committee may fully vest all outstanding awards in the event of a Change in Control other than performance stock and PSUs, and may terminate such outstanding awards in exchange for a settlement payment based upon the price per Share received in connection with the Change in Control. Unless otherwise determined by the Compensation Committee, performance stock and PSUs with respect to completed performance periods shall be paid if earned and with respect to in-progress performance periods, a pro-ratapro
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| Enstar Group Limited | 40 | Special Meeting Proxy Statement |
rata portion of the target award opportunity shall be paid based on the portion of the performance period that has been completed as of the date of the Change in Control.
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Enstar Group Limited | 55 | 2018 Proxy Statement |
Hypothetical Payments and Benefits
The following table sets forth the benefits payable to each executive officer assuming the occurrence of certain hypothetical events on December 31, 2017. The benefits actually received by Mr. Smith following his transition from executive officer to consultant on December 31, 2017 are described above and are not included in the table.2018.
| | | Name | Executive Voluntary Termination or Company Termination for Cause(1) | Executive Voluntary Termination for Good Reason, Company Termination Without Cause(2) | | Change in Control | Death | Disability | | Executive Voluntary Termination or Company Termination for Cause(1) | Executive Voluntary Termination for Good Reason, Company Termination Without Cause(2) | | Change in Control | Death | Disability | |
| Dominic F. Silvester | | | | | |
| Dominic Silvester | |
| |
| |
| Base Salary | $ | — |
| $ | 7,486,378 |
| (3) | $ | — |
| $ | — |
| $ | 7,486,378 |
| (4) | $ | — |
| $ | 7,074,605 |
| (3) | $ | — |
| $ | — |
| $ | 7,074,605 |
| (4) |
Bonus(5) | — |
| 2,125,304 |
| | — |
| 2,125,304 |
| 2,125,304 |
| | $ | — |
| $ | 696,604 |
| | $ | — |
| $ | 696,604 |
| $ | 696,604 |
| |
Medical Benefits(6) | — |
| 100,144 |
| | — |
| 100,144 |
| 100,144 |
| | $ | — |
| $ | 106,492 |
| | $ | — |
| $ | 106,492 |
| $ | 106,492 |
| |
Life Insurance(7) | — |
| — |
| | — |
| 12,477,296 |
| — |
| | $ | — |
| $ | — |
| | $ | — |
| $ | 11,791,008 |
| $ | — |
| |
Accelerated Vesting(8) | — |
| 12,045,000 |
| | 6,022,500 |
| 6,022,500 |
| 6,022,500 |
| | $ | — |
| $ | 9,216,350 |
| | $ | 6,702,800 |
| $ | 6,702,800 |
| $ | 6,702,800 |
| |
| TOTAL | $ | — |
| $ | 21,756,825 |
| | $ | 6,022,500 |
| $ | 20,725,244 |
| $ | 15,734,325 |
| | $ | — |
| $ | 17,094,051 |
| | $ | 6,702,800 |
| $ | 19,296,905 |
| $ | 14,580,501 |
| |
| Paul J. O'Shea | | | | | |
| | |
|
|
|
| |
| |
| Guy Bowker | |
|
|
|
| |
|
|
|
|
|
| |
| Base Salary | | $ | — |
| $ | 575,000 |
| (3) | $ | — |
| $ | — |
| $ | 575,000 |
| (4) |
Bonus(5) | | $ | — |
| $ | 579,750 |
| | $ | — |
| $ | 579,750 |
| $ | 579,750 |
| |
Medical Benefits(6) | | $ | — |
| $ | 38,089 |
| | $ | — |
| $ | 38,089 |
| $ | 38,089 |
| |
| Life Insurance | | $ | — |
| $ | — |
| | $ | — |
| $ | — |
| $ | — |
| |
Accelerated Vesting(8) | | $ | — |
| $ | 234,542 |
| | $ | 295,873 |
| $ | 295,873 |
| $ | 295,873 |
| |
| TOTAL | | $ | — |
| $ | 1,427,381 |
| | $ | 295,873 |
| $ | 913,712 |
| $ | 1,488,712 |
| |
| | |
|
|
|
| |
|
|
|
|
|
| |
| Paul O'Shea | |
|
|
|
| |
|
|
|
|
|
| |
| Base Salary | $ | — |
| $ | 3,814,606 |
| (3) | $ | — |
| $ |
|
| $ | 3,814,606 |
| (4) | $ | — |
| $ | 3,814,605 |
| (3) | $ | — |
| $ | — |
| $ | 3,814,605 |
| (4) |
Bonus(5) | — |
| 1,907,303 |
| | — |
| 1,907,303 |
| 1,907,303 |
| | $ | — |
| $ | 476,826 |
| | $ | — |
| $ | 476,826 |
| $ | 476,826 |
| |
Medical Benefits(6) | — |
| 110,848 |
| | — |
| 110,848 |
| 110,848 |
| | $ | — |
| $ | 117,185 |
| | $ | — |
| $ | 117,185 |
| $ | 117,185 |
| |
Life Insurance(7) | — |
| — |
| | — |
| 6,357,676 |
| — |
| | $ | — |
| $ | — |
| | $ | — |
| $ | 6,357,675 |
| $ | — |
| |
Accelerated Vesting(8) | — |
| 7,528,125 |
| | 3,764,063 |
| 3,764,063 |
| 3,764,063 |
| | $ | — |
| $ | 5,760,219 |
| | $ | 4,189,250 |
| $ | 4,189,250 |
| $ | 4,189,250 |
| |
| TOTAL | $ | — |
| $ | 13,360,882 |
| | $ | 3,764,063 |
| $ | 12,139,890 |
| $ | 9,596,819 |
| | $ | — |
| $ | 10,168,834 |
| | $ | 4,189,250 |
| $ | 11,140,935 |
| $ | 8,597,865 |
| |
| Orla M. Gregory | | | | | |
| | |
|
|
|
| |
| |
| Orla Gregory | |
|
|
|
| |
| |
| Base Salary | $ | — |
| $ | 2,244,000 |
| (3) | $ | — |
| $ | — |
| $ | 2,244,000 |
| (4) | $ | — |
| $ | 2,244,000 |
| (3) | $ | — |
| $ | — |
| $ | 2,244,000 |
| (4) |
Bonus(5) | — |
| 1,626,900 |
| | — |
| 1,626,900 |
| 1,626,900 |
| | $ | — |
| $ | 406,725 |
| | $ | — |
| $ | 406,725 |
| $ | 406,725 |
| |
Medical Benefits(6) | — |
| 28,917 |
| | — |
| 27,859 |
| 27,859 |
| | $ | — |
| $ | 30,469 |
| | $ | — |
| $ | 30,469 |
| $ | 30,469 |
| |
Life Insurance(7) | — |
| — |
| | — |
| 5,610,000 |
| — |
| | $ | — |
| $ | — |
| | $ | — |
| $ | 5,610,000 |
| $ | — |
| |
Accelerated Vesting(8) | — |
| 5,018,750 |
| | 2,509,375 |
| 2,509,375 |
| 2,509,375 |
| | $ | — |
| $ | 3,840,202 |
| | $ | 2,792,889 |
| $ | 2,792,889 |
| $ | 2,792,889 |
| |
| TOTAL | $ | — |
| $ | 8,918,567 |
| | $ | 2,509,375 |
| $ | 9,774,134 |
| $ | 6,408,134 |
| | $ | — |
| $ | 6,521,395 |
| | $ | 2,792,889 |
| $ | 8,840,083 |
| $ | 5,474,083 |
| |
Guy T.A. Bowker(9) | | | | | |
| | |
|
|
|
| |
| |
| Paul Brockman | |
|
|
|
| |
| |
| Base Salary | $ | — |
| $ | 125,000 |
| (3) | $ | — |
| $ | — |
| $ |
|
| | $ | — |
| $ | 234,465 |
| (3) | $ | — |
| $ | — |
| $ | — |
| |
Bonus(5) | — |
| — |
| | — |
| — |
| — |
| | $ | — |
| $ | 393,081 |
| | $ | — |
| $ | — |
| $ | — |
| |
| Medical Benefits | — |
| — |
| | — |
| — |
| — |
| | $ | — |
| $ | — |
| | $ | — |
| $ | — |
| $ | — |
| |
Life Insurance(7) | — |
| — |
| | — |
| — |
| — |
| | |
| Life Insurance | | $ | — |
| $ | — |
| | $ | — |
| $ | — |
| $ | — |
| |
Accelerated Vesting(8) | — |
| — |
| | 270,343 |
| 270,343 |
| 270,343 |
| | $ | — |
| $ | 206,055 |
| | $ | 318,215 |
| $ | 318,215 |
| $ | 318,215 |
| |
| TOTAL | $ | — |
| $ | 125,000 |
| | $ | 270,343 |
| $ | 270,343 |
| $ | 270,343 |
| | $ | — |
| $ | 833,601 |
| | $ | 318,215 |
| $ | 318,215 |
| $ | 318,215 |
| |
| | | | | | |
| |
| (1) | Upon termination, the executive officer would be entitled only to amounts (including salary, bonus, expense reimbursement, etc.) that have been fully earned but not yet paid on the date of termination. |
| |
| (2) | Pursuant to the "double trigger" nature of the executive officer employment agreements, any executive officer terminated without cause or resigning with good reason within one year of a change in control would receive benefits equivalent to those set forth in this column. |
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| Enstar Group Limited | 41 | Special Meeting Proxy Statement |
| |
| (3) | Reflects a lump sum payment equal to three times annual base salary in effect on December 31, 20172018 for Messrs. Silvester and O'Shea; two times annual base salary for Ms. Gregory, one time annual base salary for Mr. Bowker and 3six months continuation of base salary for Mr. Bowker.Brockman. |
| |
| (4) | Reflects annual base salary in effect on December 31, 20172018 for a period of 36 months for Messrs. Silvester and O'Shea, and 24 months for Ms. Gregory and 12 months for Mr. Bowker, payable in accordance with our regular payroll practices, which would be offset by any amounts we recover under the Company's disability insurance policies. |
| |
| (5) | Bonus payments for the 20172018 year were determined in accordance with the process described in "Compensation Discussion and Analysis - Annual Incentive Compensation", the bonus amount is assumed to be equal to the actual bonus awarded to the executive officer for the year ended December 31, 2017,2018, which was paid in cash in 2018.2019. |
| |
| (6) | Reflects the value of continued coverage under medical plans for thecertain executive officers and their respective families and assumes continuation of premiums paid by us as of December 31, 20172018 for the maximum coverage period of 36 months for Messrs. Silvester and O'Shea, and 24 months for Ms. Gregory.Gregory and 12 months for Mr. Bowker. |
| |
| (7) | Reflects a lump sum payment of life insurance benefits equal to five times annual base salary pursuant to a life insurance policy maintained on behalf of the executive by the Company. |
| |
| (8) | Based on $200.75$167.57 per share, the closing price of our ordinary shares on December 31, 2017.2018. |
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| Enstar Group Limited | 5642 | 2018 Proxy Statement |
| |
(9) | Mr. Bowker's new employment agreement, which took effect January 1, 2018 in connection with his promotion to the role of CFO, provides that if his employment is terminated by us without “cause” or by him for “good reason,” including if such termination occurs within one year of a change in control, Mr. Bowker would be entitled to payment of: (i) one year of base salary, (ii) one year of continued medical benefits, and (iii) a pro rata bonus in respect of the year of termination. |
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Enstar Group Limited | 57 | 2018Special Meeting Proxy Statement |
CEO PAY RATIO
SEC rules require the Company to determine the annual total compensation of our median-compensated employee for 20172018 and present a comparison of that person's compensation to the annual total compensation of our CEO, Dominic Silvester. Our pay ratio was calculated using the ratio of Mr. Silvester's annual total compensation (as reported in the Summary Compensation Table) to the annual total compensation of our median employee (calculated in accordance with the Summary Compensation Table rules), for fiscal year 2017.2018. Mr. Silvester's 20172018 annual total reported compensation was $16,871,090.$3,444,588. The 20172018 annual total compensation of our median compensated employee was $91,176.$89,410. Accordingly, our pay ratio for 20172018 was 39 to 1, compared to 185 to 1.
During 2017, Mr. Silvester received an equity award consisting1 for 2017. The decrease was primarily attributable to the inclusion of 75% PSUs and 25% RSUs with athe grant date fair value of $11,070,000, which isan equity award intended to cover a three-year period. Mr. Silvester will only realize value on the PSU component of his award if the Company achieves a requisite level of three-year growthperiod in fully diluted book value per share as described above in "Compensation Discussion and Analysis - Long-Term Incentive Compensation." According to SEC rules, however, the entire grant date fair value is reported as 2017 compensation in our Summary Compensation Table. Annualizing Mr. Silvester's equity2017 total compensation figure that did not reoccur in 2018. In addition, his annual incentive award overfor 2018 was significantly lower than the three-year vesting period would yield a pay ratio of 104 to 1.prior year.
To calculate our CEO pay ratio, we identified a median-compensated employee for whom 20172018 annual total compensation could be determined. We determined the median-compensated employee by collecting compensation data for all of our full- and part-time staff employed by us across all jurisdictions on October 1, 2017,2018, excluding Mr. Silvester. We excluded from this population all personnel classified as independent contractors whose compensation is determined by third parties. This process resulted in the use of a different person as the median-compensated employee than the prior year.
To identify the median-compensated employee, we used total cash compensation as our compensation measure, which included (i) base salary or wages, including overtime, and (ii) annual incentive payments made during the one-year period ended September 30, 2017.2018. Equity compensation, including any equity awards settled in cash, was not included in total cash compensation. We annualized total cash compensation for permanent employees hired during the period, but we did not make any cost-of-living or other adjustments, assumptions or estimates. Total cash compensation paid in a foreign currency was converted to U.S. Dollars at prevailing exchange rates as of September 29, 2017.20, 2018.
EQUITY COMPENSATION PLAN INFORMATION
The following table presents information regarding our equity compensation plans as of December 31, 2017.
|
| | | | | | | | |
| Plan Category | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights | Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in the First Column) |
| Equity compensation plans approved by security holders | — |
| $ | — |
| 664,813 |
| (1) |
| Equity compensation plans not approved by security holders | 46,962 |
| $ | 113.89 |
| 53,038 |
| (2) |
| Total | | |
| 717,851 |
| |
| |
(1) | Consists of 537,406 ordinary shares that are available for future issuance under the 2016 Equity Plan and 127,407 ordinary shares available under the Enstar Group Limited Employee Share Purchase Plan as of December 31, 2017. |
| |
(2) | Consists of ordinary shares available for future issuance under the Deferred Compensation Plan, which is described above under "Director Compensation - Deferred Compensation Plan." |
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Enstar Group Limited | 58 | 2018 Proxy Statement |
AUDIT COMMITTEE REPORT
The primary purpose of the Audit Committee is to assist the Board of Directors in its oversight of the integrity of the Company’s financial statements, the Company’s compliance with legal and regulatory requirements, the independent registered public accounting firm’s qualifications, independence and performance and the performance of the Company’s internal audit function. The Audit Committee is solely responsible for the appointment, retention and compensation of the Company’s independent registered public accounting firm. It is not the responsibility of the Audit Committee to plan or conduct audits or to determine that the Company’s financial statements are complete and accurate and are in accordance with generally accepted accounting principles and applicable rules and regulations. This is the responsibility of management and the independent auditors, as appropriate.
In performing its duties, the Audit Committee:
has reviewed the Company’s audited financial statements for the year ended December 31, 2017 and had discussions with management regarding the audited financial statements;
has discussed with the independent registered public accounting firm the matters required to be discussed by Auditing Standards No. 1301, as adopted by the Public Company Accounting Oversight Board, under which such firm must provide us with additional information regarding the conduct of the audit of the Company’s financial statements;
has received the written disclosures and the letter from the independent registered public accounting firm required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant’s communication with the Audit Committee concerning independence; and
has discussed with the independent registered public accounting firm their independence, the audited financial statements and other matters the Audit Committee deemed relevant and appropriate.
Based on these reviews and discussions, the Audit Committee recommended to the Board of Directors that the audited financial statements for the year ended December 31, 2017 be included in the Company’s Annual Report on Form 10-K for that year.
AUDIT COMMITTEE
Robert J. Campbell, Chairman
B. Frederick Becker
Hitesh R. Patel
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Enstar Group Limited | 59 | 2018 Proxy Statement |
PROPOSAL NO. 1 — ELECTION OF DIRECTORS
Four Class III directors are to be elected at the Annual General Meeting to hold office until our annual general meeting in 2021:
Dominic F. Silvester
Sandra L. Boss
Hans-Peter Gerhardt
Poul A. Winslow
Messrs. Silvester, Gerhardt, and Winslow and Ms. Boss are currently serving as directors, and their biographies are available above under "Corporate Governance - Board of Directors." Included in each nominee’s biography is an assessment of his or her specific qualifications, attributes, skills and experience.
Our Board nominated Messrs. Silvester, Gerhardt, and Winslow and Ms. Boss following the recommendation by our Nominating and Governance Committee, a committee comprised entirely of independent directors. Each nominee has consented to serve if elected. We do not expect that any nominee will become unavailable for election as a director, but if a nominee should become unavailable prior to the meeting, the proxies to vote for such nominee will instead either be voted for a substitute nominee recommended by our Board, or not voted, if the Board determines in its discretion that the position should remain vacant.
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THE BOARD RECOMMENDS THAT YOU VOTE
FOR THE ELECTION OF THE NOMINEES
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Enstar Group Limited | 60 | 2018 Proxy Statement |
PROPOSAL NO. 2 — ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION
We hold an advisory vote on our executive compensation each year. Accordingly, we are asking our shareholders to cast an advisory vote to approve the compensation of our executive officers as disclosed in this proxy statement.
Before you vote, we urge you to read the Compensation Discussion and Analysis and the Executive Compensation Tables sections of this proxy statement for additional details on our executive compensation, including its governance, framework, components, and the compensation decisions for our executive officers for 2017.
As an advisory vote, the results of this vote will not be binding on the Board or the Company. However, the Board values the opinions of our shareholders, and will, as it did last year, carefully consider the outcome of the vote when making future decisions on the compensation of our executive officers and our executive compensation principles, policies and procedures.
We ask our shareholders to approve the compensation of our executive officers by voting "FOR" the following resolution:
RESOLVED, that the Company’s shareholders approve, on an advisory basis, the compensation of the executive officers, as disclosed in the Company’s proxy statement for the 2018 Annual General Meeting of Shareholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, the Summary Compensation Table and the other related tables and disclosure.
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THE BOARD RECOMMENDS THAT YOU VOTE FOR APPROVAL OF THE COMPENSATION OF
OUR EXECUTIVE OFFICERS, AS DISCLOSED IN THIS PROXY STATEMENT
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Enstar Group Limited | 61 | 2018 Proxy Statement |
PROPOSAL NO. 3 — RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee of our Board has reappointed KPMG Audit Limited ("KPMG"), as our independent registered public accounting firm for the year ending December 31, 2018. At the Annual General Meeting, shareholders will be asked to ratify this appointment and to authorize our Board, acting through the Audit Committee, to approve the fees for KPMG. KPMG has served as our independent registered public accounting firm since our shareholders ratified its appointment at the 2012 annual general meeting. Representatives of KPMG are expected to be present at the meeting, will have the opportunity to make a statement if they desire to do so, and are expected to be available to respond to appropriate questions.
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THE BOARD RECOMMENDS THAT YOU VOTE FOR THE RATIFICATION OF THE APPOINTMENT
OF KPMG AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2018 AND
THE AUTHORIZATION OF OUR BOARD, ACTING THROUGH THE AUDIT COMMITTEE, TO
APPROVE THE FEES FOR THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
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Audit and Non-Audit Fees
Aggregate fees for professional services rendered to us by KPMG and KPMG member firms for the years ended December 2017 and 2016 are set forth below.
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| | | | | | |
| | 2017 | 2016 |
| | (in US dollars) |
| Audit Fees | $ | 7,640,000 |
| $ | 7,701,000 |
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| Audit-Related Fees | $ | 220,000 |
| $ | 75,000 |
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| Tax Fees | $ | 290,000 |
| $ | 170,000 |
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| All Other Fees | $ | — |
| $ | 110,000 |
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| Total | $ | 8,150,000 |
| $ | 8,056,000 |
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Audit Fees for the years ended December 31, 2017 and 2016 were for professional services rendered for the audit of our annual financial statements, for the review of our quarterly financial statements, for services in connection with the audits for insurance statutory and regulatory purposes in the various jurisdictions in which we operate and for the provision of consents relating to our filings with the SEC.
Audit-Related Fees for the years ended December 31, 2017 and 2016 consisted primarily of professional services rendered for financial accounting and reporting consultations.
Tax Fees for the years ended December 31, 2017 and 2016 were for professional services rendered for tax compliance and tax consulting.
All Other Fees for the year ended December 31, 2016 were for professional services rendered for certain subsidiary matters.
Consideration of Auditor Independence
The Audit Committee has concluded that the provision of the non-audit services by KPMG is compatible with maintaining its independence.
Procedures for Pre-Approval of Audit and Non-Audit Services
Our Audit Committee has adopted a policy to pre-approve all audit and permissible non-audit services provided by our independent registered public accounting firm. During 2017, the Audit Committee also granted its pre-approval for specific types of tax and other non-audit services with specified fee structures that may be provided by KPMG. Any engagements falling within these pre-approved outlines can be entered into, with KPMG and management reporting the details of any such pre-approved engagements to the Audit Committee at its next meeting. The Audit Committee will review the scope of the pre-approval annually. In the event it becomes necessary to engage the independent registered public accounting firm for additional services not contemplated in the original pre-approval at a time that does not correspond to a committee meeting, the Audit Committee has delegated authority to review and approve such services to the Audit Committee Chairman, who would report any such approvals to the full committee at its next meeting.
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Enstar Group Limited | 62 | 2018 Proxy Statement |
For the year ended December 31, 2017, the Audit Committee approved all audit and non-audit services by our independent registered public accounting firm either on an individual basis as the need arose or by way of the pre-approval process described above.
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Enstar Group Limited | 63 | 2018 Proxy Statement |
PROPOSAL NO. 4 — ELECTION OF DIRECTORS FOR OUR SUBSIDIARIES
Background
Under our bye-laws, if we or our subsidiaries are required or entitled to vote at a general meeting of our subsidiaries, our Board must refer the subject matter of any vote regarding the appointment, removal or remuneration of directors to our shareholders and seek authority from our shareholders for our corporate representative or proxy to vote in favor of the resolutions proposed by these subsidiaries. We are submitting the election of the directors identified below for each of our subsidiaries whose shareholders are required to elect directors to our shareholders at the Annual General Meeting. Our Board will cause our corporate representative or proxy to vote the shares in these subsidiaries in the same proportion as the votes received at the meeting from our shareholders on these matters. Biographies for the subsidiary directors are set forth in Appendix A to this Proxy Statement.
Directors Nominated are for Privately Held, Consolidated Enstar Subsidiaries
The subsidiary companies whose directors are nominated in this Proxy Statement consist of our operating insurance and reinsurance companies, internal holding companies, and service companies, the substantial majority of which are wholly owned by Enstar, with some entities majority-owned by us alongside shareholders with non-controlling interests, such as our joint venture partners and co-investors. None of these subsidiaries are publicly traded companies. The subsidiary directors largely consist of our own employees, which is consistent with commercial practice in the jurisdictions in which we operate; although, where appropriate, many of our subsidiaries also have non-employee and independent directors (for example, where applicable regulations require or where we believe such directors can add value to our subsidiary boards).
Special Voting Instructions
Shareholders have the ability to vote for the election of all subsidiary director nominees, to vote against the election of all subsidiary director nominees, or to abstain from the election of all subsidiary director nominees. Alternatively, shareholders may vote for, against, or abstain from the election of each subsidiary director nominee on an individual basis either by mail or Internet voting.
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THE BOARD RECOMMENDS THAT YOU VOTE FOR EACH OF
THE SUBSIDIARY DIRECTOR NOMINEES LISTED HEREIN
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Subsidiary Director Nominees
4.1 AG Australia Holdings Limited
Nominees:
Sandra O'Sullivan
Nicholas Hall
Brett Henry
4.2 Alopuc Limited
Nominees:
Richard Harries
James Lee
Brendan Merriman
4.3 Alpha Insurance SA
Nominees:
Serge Wibaut
Marie-Claire Pletinckx
Kieran Hayes
David Matthys
Brendan Merriman
Kim Torbeyns
David Atkins
Gregg Delforge
4.4 Arden Reinsurance Company Ltd.
Nominees:
Paul O'Shea
Theo Wilkes
Duncan Scott
Guy Bowker
4.5 Arena SA
Nominees:
Timothy Fillingham
Richard Etridge
Eddy Van Den Bosch
Kim Torbeyns
Gregg Delforge
4.6 Atrium Risk Management Services (British Columbia) Ltd.
Nominees:
Richard Harries
James Lee
Brendan Merriman
Lee Greenway
Peter Hargrave
4.7 Atrium Risk Management Services (Washington) Ltd.
Nominees:
Richard Harries
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Enstar Group Limited | 64 | 2018 Proxy Statement |
James Lee
Brendan Merriman
Lee Greenway
Peter Hargrave
4.8 B.H. Acquisition Limited
Nominees:
Paul O'Shea
Duncan Scott
Guy Bowker
4.9 Belmont Run-Off Limited
Nominees:
David Atkins
Derek Reid
C. Paul Thomas
4.10 Brake Systems, Inc.
Nominees:
Joseph A. Stancati
Vicki L. Stringham
4.11 Brittany Insurance Company Ltd
Nominees:
Paul O'Shea
Theo Wilkes
Duncan Scott
Guy Bowker
4.12 BWDAC, Inc.
Nominees:
Joseph A. Stancati
Vicki L. Stringham
4.13 Cavell Holdings Limited
Nominees:
Derek Reid
C. Paul Thomas
Siobhan Hextall
4.14 Cavello Bay Reinsurance Limited
Nominees:
Paul O'Shea
Orla Gregory
Duncan Scott
Guy Bowker
4.15 Chatsworth Limited
Nominees:
Duncan Scott
Theo Wilkes
Elizabeth DaSilva
4.16 Clarendon National Insurance Company
Nominees:
Paul Brockman
John Dore
Anna Hajek
Jennifer Miu
Theresa Reali
Robert Redpath
Michael Sheehan
Richard Seelinger
Cindy Traczyk
4.17 Copper Coast Funds ICAV
Nominees:
Orla Gregory
Barry McConville
Patrick O’Sullivan
Brendan Merriman
Paul Thomas
4.18 CP Product, LLC
Nominees:
Joseph A. Stancati
Vicki L. Stringham
4.19 Cranmore (UK) Limited
Nominees:
Desmond Allen
Philip Cooper
David Ellis
Adam Grange
Shaun Holden
Steve Norrington
C. Paul Thomas
David Atkins
4.20 Cranmore (US) Inc.
Nominees:
Paul Brockman
Chase Young
Steve Norrington
4.21 Cranmore Asia Pte Limited
Nominees:
Sandra O’Sullivan
Steve Norrington
Garred Clements
4.22 Cranmore Australia Pty Limited
Nominees:
Steve Norrington
Sandra O'Sullivan
Nicholas Hall
4.23 Cranmore Europe BVBA
Nominees:
Phillip Cooper
Gregg Delforge
Simon Storvik-Green
Steven Norrington
Jason Shortt
Kim Torbeyns
4.24 Cranmore Insurance & Reinsurance Services Europe Limited
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Enstar Group Limited | 65 | 2018 Proxy Statement |
Nominees:
Jason Shortt
David Ellis
Steve Norrington
4.25 DCo LLC
Nominees:
Paul Brockman
Jennifer Miu
Thomas Nichols
Robert Redpath
Joseph A. Stancati
Vicki L. Stringham
4.26 DLCM NO. 1 Limited
Nominees:
Derek Reid
C. Paul Thomas
Siobhan Hextall
4.27 DLCM NO. 2 Limited
Nominees:
Derek Reid
C. Paul Thomas
Siobhan Hextall
4.28 DLCM NO. 3 Limited
Nominees:
Derek Reid
C. Paul Thomas
Siobhan Hextall
4.29 East Point Reinsurance Company of Hong Kong Limited
Nominees:
Sandra O’Sullivan
Siobhan Hextall
Nicholas Hall
4.30 EFMG LLC
Nominees:
Joseph A. Stancati
Vicki L. Stringham
4.31 Enstar (EU) Finance Limited
Nominees:
Shaun Holden
C. Paul Thomas
Siobhan Hextall
Derek Reid
4.32 Enstar (EU) Holdings Limited
Nominees:
David Grisley
Shaun Holden
C. Paul Thomas
4.33 Enstar (EU) Limited
Nominees:
David Atkins
David Hackett
Shaun Holden
Michael Lynagh
Brendan Merriman
David Message
Derek Reid
Demian Smith
C. Paul Thomas
Darren Truman
4.34 Enstar (US) Inc.
Nominees:
Paul Brockman
Jennifer Miu
Steve Norrington
Robert Redpath
Richard Seelinger
R. Lincoln Trimble
4.35 Enstar (US Asia-Pac) Holdings Limited
Nominees:
Derek Reid
C. Paul Thomas
Siobhan Hextall
4.36 Enstar Acquisitions Limited
Nominees:
Derek Reid
C. Paul Thomas
Siobhan Hextall
4.37 Enstar Asia Pacific Pty Ltd
Nominees:
Sandra O’Sullivan
4.38 Enstar Australia Holdings Pty Limited
Nominees:
Gary Potts
Demian Smith
Bruce Bollom
David Atkins
4.39 Enstar Australia Limited
Nominees:
Sandra O'Sullivan
Nicholas Hall
Brett Henry
4.40 Enstar Financial Services, Inc.
Nominees:
Paul Brockman
Jennifer Miu
4.41 Enstar Holdings (US) LLC
Nominees:
Paul Brockman
Jennifer Miu
Steve Norrington
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Enstar Group Limited | 66 | 2018 Proxy Statement |
Robert Redpath
Richard Seelinger
R. Lincoln Trimble
4.42 Enstar Insurance Management Services Ireland Limited
Nominees:
Sinead Coffey
Orla Gregory
Brendan Merriman
C. Paul Thomas
4.43 Enstar Limited
Nominees:
Paul O'Shea
Duncan Scott
Elizabeth DaSilva
Karen Esdale
Orla Gregory
Guy Bowker
Jamie Saunders
4.44 Enstar USA, Inc.
Nominees:
Paul Brockman
Jennifer Miu
4.45 EPE, Inc.
Nominees:
Joseph A. Stancati
Vicki L. Stringham
4.46 Fitzwilliam Insurance Limited
Nominees:
Paul O'Shea
Orla Gregory
Guy Bowker
Duncan Scott
4.47 Flight Operations, Inc.
Nominees:
Joseph A. Stancati
Vicki L. Stringham
4.48 Friction Inc.
Nominees:
Joseph A. Stancati
Vicki L. Stringham
4.49 Friction Material, Inc.
Nominees:
Joseph A. Stancati
Vicki L. Stringham
4.50 Gordian Runoff Limited
Nominees:
Gary Potts
Demian Smith
Bruce Bollom
David Atkins
Robin Low
4.51 Goshawk Dedicated Limited
Nominees:
Derek Reid
C. Paul Thomas
Siobhan Hextall
4.52 Goshawk Insurance Holdings Limited
Nominees:
Derek Reid
C. Paul Thomas
Siobhan Hextall
4.53 Guillamene Holdings Limited
Nominees:
Brendan Merriman
4.54 Harper Holding, Sà r.l.
Nominees:
Guy Bowker
John Cassin
4.55 Harper Insurance Limited
Nominees:
Michael Handler
Andreas Iselin
Florian Von Meiss
Stefan Wehrenberg
Alan Turner
Richard Etridge
4.56 Hong Kong Reinsurance Company Limited
Nominees:
Sandra O’Sullivan
Siobhan Hextall
Nicholas Hall
4.57 Inter-Ocean Reinsurance (Ireland) Limited
Nominees:
Orla Gregory
Kevin O'Connor
4.58 Kenmare Holdings Ltd.
Nominees:
Guy Bowker
Duncan Scott
Orla Gregory
Paul O'Shea
4.59 Kinsale Brokers Limited
Nominees:
Shaun Holden
C. Paul Thomas
David Atkins
4.60 Knapton Holdings Limited
Nominees:
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Enstar Group Limited | 67 | 2018 Proxy Statement |
Derek Reid
C. Paul Thomas
Siobhan Hextall
4.61 Laguna Life Holdings Limited
Nominees:
Guy Bowker
Duncan Scott
Paul O'Shea
4.62 Laguna Life Holdings S.à r.l.
Nominees:
Guy Bowker
John Cassin
4.63 Lipe Corporation
Nominees:
Joseph A. Stancati
Vicki L. Stringham
4.64 LSU Limited
Nominees:
Siobhan Hextall
Derek Reid
4.65 Malakite Underwriting Partners Limited
Nominees:
Simon Schnorr
Tim Fillingham
Giles Hussey
4.66 Mercantile Indemnity Company Limited
Nominees:
David Atkins
C. Paul Thomas
Darren Truman
Alan Turner
Steven Western
4.67 Midland Brake, Inc.
Nominees:
Joseph A. Stancati
Vicki L. Stringham
4.68 North Bay Holdings Limited
Nominees:
Paul O'Shea
Orla Gregory
Guy Bowker
James Carey
Darran Baird
4.69 Northshore Holdings Limited
Nominees:
Guy Bowker
Paul O'Shea
Darran Baird
James Carey
Orla Gregory
4.70 Paladin Managed Care Services, Inc.
Nominees:
Paul Brockman
Jeffrey D. Miller
Richard Seelinger
Steve Norrington
4.71 Pavonia Life Insurance Company of New York
Nominees:
Paul Brockman
John Dore
Jennifer Miu
Daniel O'Brien
Robert Redpath
Richard Seelinger
Philip Toohey
4.72 Prattville Mfg., Inc.
Nominees:
Joseph A. Stancati
Vicki L. Stringham
4.73 Providence Washington Insurance Company
Nominees:
Paul Brockman
Jennifer Miu
Teresa Reali
Robert Redpath
Richard Seelinger
4.74 Regis Agencies Limited
Nominees:
C. Paul Thomas
Siobhan Hextall
4.75 Reinz Wisconsin Gasket LLC
Nominees:
Joseph A. Stancati
Vicki L. Stringham
4.76River Thames Insurance Company Limited
Nominees:
David Atkins
Patrick Cogavin
Max Lewis
Jeremy Riley
Ann Slade
C. Paul Thomas
Darren Truman
Alan Turner
Steve Western
4.77 Rombalds Run-Off Limited
Nominees:
David Atkins
C. Paul Thomas
Max Lewis
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Enstar Group Limited | 68 | 2018 Proxy Statement |
Gary Griffiths
Steve Western
4.78 SGL No.1 Limited
Nominees:
Guy Bowker
James Lee
Brendan Merriman
4.79 SGL No.3 Limited
Nominees:
Siobhan Hextall
Brendan Merriman
4.80 Shelbourne Group Limited
Nominees:
Siobhan Hextall
Brendan Merriman
Darren Truman
4.81 StarStone Bermuda Intermediaries Ltd.
Nominees:
Theo Wilkes
Duncan Scott
4.82 StarStone Corporate Capital 1 Limited
Nominees:
Alex Cliff
Demian Smith
4.83StarStone Corporate Capital 2 Limited
Nominees:
Alex Cliff
Demian Smith
4.84 StarStone Corporate Capital Limited
Nominees:
Mick Summersgill
Alex Cliff
4.85 StarStone Finance Limited
Nominees:
Alex Cliff
David Message
Mick Summersgill
4.86 StarStone Insurance Bermuda Limited
Nominees:
Paul O'Shea
Guy Bowker
Orla Gregory
Steven Brown
Duncan Scott
4.87 StarStone Insurance SE
Nominees:
Alex Cliff
Richard Etridge
Michael Handler
Donat Marxer
Udo Pickartz
Ian Poynton
Mick Summersgill
4.88 StarStone Insurance Services Limited
Nominees:
Alex Cliff
Timothy Fillingham
Bent Isachsen
Udo Pickartz
Simon Schnorr
Ben Wilson
4.89 StarStone National Insurance Company
Nominees:
Paul Brockman
Nancy Hammer
Jennifer Miu
Robert Redpath
Richard Seelinger
Mark Sioma
R. Lincoln Trimble
4.90 StarStone Specialty Holdings Limited
Nominees:
Paul O'Shea
Guy Bowker
Darran Baird
James Carey
Walker Rainey
John Shettle
Orla Gregory
Alexandra Cliff
Demian Smith
David Message
4.91 StarStone Specialty Insurance Company
Nominees:
Paul Brockman
Nancy Hammer
Jennifer Miu
Richard Seelinger
Robert Redpath
Mark Sioma
R. Lincoln Trimble
4.92 StarStone Specialty Insurance Company - Escritório de Representaҫão no Brasil Ltda.
Nominees:
Oscar Lolato
4.93 StarStone Underwriting Australia Pty Ltd
Nominees:
Robin Barham
Sandra O’Sullivan
Udo Pickartz
4.94 StarStone Underwriting Limited
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Enstar Group Limited | 69 | 2018 Proxy Statement |
Nominees:
Alex Cliff
Rachel Delhaise
Demian Smith
John Wardrop
Ewen Gilmour
Tim Fillingham
Richard Grainger
Darren Truman
Simon Urry
4.95 StarStone US Holdings, Inc.
Nominees:
Nancy Hammer
Steve Norrington
Mark Sioma
R. Lincoln Trimble
4.96 StarStone US Intermediaries, Inc.
Nominees:
Nancy Hammer
Steve Norrington
Mark Sioma
R. Lincoln Trimble
4.97 StarStone US Services, Inc.
Nominees:
Nancy Hammer
Steve Norrington
R. Lincoln Trimble
4.98 United Brake Systems Inc.
Nominees:
Joseph A. Stancati
Vicki L. Stringham
4.99 Vander Haeghen & Co SA
Nominees:
Roger VanderHaeghen
Bertrand VanderHaeghen
Frederic de Haan
Gregg Delforge
Kim Torbeyns
Richard Etridge
Timothy Fillingham
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Enstar Group Limited | 70 | 2018 Proxy Statement |
OTHER GOVERNANCE MATTERS
Shareholder Proposals for the 20192020 Annual General Meeting
Shareholder proposals intended for inclusion in the proxy statement for the 20192020 annual general meeting of shareholders pursuant to Rule 14a-8 under the Exchange Act should be sent to our Corporate Secretary at Enstar Group Limited, P.O. Box HM 2267, Windsor Place, 3rd Floor, 22 Queen Street, Hamilton, HM JX, Bermuda and must be received by December 28, 20182019 and otherwise comply with the requirements of Rule 14a-8 in order to be considered for inclusion in the 20192020 proxy materials. If the date of next year’s annual general meeting is moved more than 30 days before or after the anniversary date of this year’s annual general meeting, the deadline for inclusion of proposals in our proxy materials is instead a reasonable time before we begin to print and mail our proxy materials. If the December 28, 20182019 deadline is missed, a shareholder proposal may still be submitted for consideration at the 20192020 annual general meeting of shareholders if it is received no later than March 13, 2019,12, 2020, although it will not be included in the proxy statement. If a shareholder’s proposal is not timely received, then the proxies designated by our Board for the 20192020 annual general meeting of shareholders may vote in their discretion on any such proposal the ordinary shares for which they have been appointed proxies without mention of such matter in the proxy materials for such meeting.
Householding
Some banks, brokers and other nominee record holders may be participating in the practice of "householding" proxy statements and annual reports. This means that only one copy of the Notice and, if applicable, the proxy materials may have been sent to multiple shareholders in your household. We will promptly deliver a separate copy of the Notice and, if applicable, the proxy materials to you if you request them by calling or writing to Investor Relations at Enstar Group Limited, P.O. Box HM 2267, Windsor Place, 3rd Floor, 22 Queen Street, Hamilton, HM JX, Bermuda (Telephone: (441) 292-3645). If you want to receive separate copies of the Notice and, if applicable, the proxy materials in the future, or if you are receiving multiple copies and would like to receive only one copy for your household, you should contact your bank, broker or other nominee record holder, or you may contact the Company at the above address or phone number.
Other Matters
We know of no specific matter to be brought before the meeting that is not referred to in this proxy statement.Proxy Statement. If any other matter properly comes before the meeting, including any shareholder proposal properly made, the proxy holders will vote the proxies in accordance with their best judgment on such matter.
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WE WILL FURNISH, WITHOUT CHARGE TO ANY SHAREHOLDER, A COPY OF ANY EXHIBIT TO OUR ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2017 UPON WRITTEN REQUEST TO INVESTOR RELATIONS, C/O ENSTAR GROUP LIMITED, P.O. BOX HM 2267, WINDSOR PLACE, 3RD FLOOR, 22 QUEEN STREET, HAMILTON, HM JX, BERMUDA |
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| Enstar Group Limited | 7143 | 2018Special Meeting Proxy Statement |
APPENDIXAppendix A
Subsidiary Director Nominees’ Biographies
Proposal No. 4 of this Proxy Statement sets forth the names of the subsidiary director nominees and the subsidiary companies with respect to which they are nominated.
Biographies for James Carey, Paul O'Shea, and Dominic Silvester are included in the Proxy Statement above in “Corporate Governance - Board of Directors.” Biographies for David Atkins, Guy Bowker, Paul Brockman, and Orla Gregory are included in the Proxy Statement above in “Executive Officers.” Biographies for all other subsidiary director nominees are set forth below, in alphabetical order.
Desmond Allen has over 40 years of experience in the insurance industry and joined the Company in 2003 as Associate Director. In October 2014, he was appointed Director responsible for all third-party coverholder and TPA reviews administered by the Company. Prior to that, he worked for Minet Reinsurance Brokers, as an Executive Director of Reinsurance Claims. He previously worked in consulting and for a leading Lloyd’s syndicate.
Darran Baird is a Principal of Stone Point Capital LLC, a global private equity firm based in Greenwich, Connecticut. Mr. Baird began working with Stone Point in 2004, initially as the Deputy Head of Strategic Development for Marsh & McLennan Companies, Inc. (MMC) and then directly as a Principal of Stone Point. Prior to joining MMC, Mr. Baird was Managing Director at Securitas Capital, a private equity fund sponsored by Swiss Reinsurance Company (Swiss Re), from 1996 to 2004. At Securitas Capital, he was responsible for numerous private equity investments through the Securitas Capital Fund, as well as, leading the acquisitions of several reinsurance and financial services companies for Swiss Re. Prior to joining Swiss Re, he was an Associate at Smith Barney in the Insurance Investment Banking Group, where he specialized in the insurance industry and worked on a variety of merger and acquisition advisory and capital-raising assignments.
Robin Barham is the Managing Director of StarStone Australia Pty Ltd. Mr. Barham has over 29 years of experience in the insurance industry. He spent 19 years in Lloyd’s, underwriting Marine and Space risks, before transferring to Sydney, Australia, with the Catlin Group Ltd., with whom he served 10 years in Space and Aviation underwriting management positions. In 2012 he left Catlin and set up their global marketing vehicle, a scientific survey of the world’s coral reefs in partnership with The University of Queensland and Google, designed to promote scientific understanding and study the effects of global change on the physical environment. Prior to joining StarStone, he was Regional Director, Australasia, for Arch Underwriting at Lloyd’s (Australia), and founded a multi-class underwriting agency, Agile Underwriting Services. He is a Senior Associate of the Australian and New Zealand Institute of Insurance and Finance, and an Elected Member of the Royal Aeronautical Society.
Bruce Bollom has served as Non-Executive Independent Director of Enstar Australia Limited since 2008. He serves on a number of Insurance Industry Boards, including Insurance Brokers and a Premium Funding Company in Australia as a Non-Executive Director. Prior to this he was CEO of Willis Insurance Brokers in Australia and New Zealand from 2000 - 2005 and has over 30 years’ experience in insurance.
Steven Brown was appointed a director and Chief Financial Officer of Starstone Insurance Bermuda Limited in April 2018. Prior to that, he was a senior manager in the (re)insurance practice of Ernst & Young Ltd. in Bermuda, specializing in the audit of publicly listed reinsurers. From 2005 until 2014, he served in the assurance & advisory practice of Deloitte in London and Bermuda, specializing in audit, consulting and regulatory projects in the U.S., Lloyd’s and Bermuda insurance markets. He is a Chartered Accountant with the Institute of Chartered Accountants of Scotland.
John Cassin is a Non-Executive Director of Harper Holding SARL and Laguna Life Holdings SARL, and has been an independent consultant and director of various Luxembourg companies since retiring from a career in international banking in 2003. He was previously the Managing Director of the Prudential Bache International Bank, which he established in Luxembourg in 1984. He started his career in banking at the Marine Midland Bank in New York and held various senior management positions at the bank’s offices in New York, London and Paris.
Garred Clements has almost 30 years in the insurance and reinsurance arena, the last 17 of which have been in the audits, inspections and consultancy fields. He commenced work at brokers Bell Nicholson Henderson in 1989, moving to Willis in 1991 and entered the company market in 1994 at CNA Re and joining the newly created Equitas in 1997. He joined a third-party consultancy firm in 2001 before that business was integrated into another firm in 2003. In 2006 he became an independent consultant, a role which he continued until joining Cranmore as an Associate Director in April 2011. In 2016 he moved to Singapore as Managing Director of Cranmore Asia.
Alexandra Cliff was appointed as StarStone Group Chief Financial Officer in 2018 having served as Finance Director for StarStone International since 2016. Prior to joining StarStone, she held senior finance roles at Aspen Group and Arthur J Gallagher International having spent 8 years with PwC in both London and Boston, USA. A
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Enstar Group Limited | A-1 | 2018 Proxy Statement |
chartered accountant, qualifying with the Institute of Chartered Accountants in England & Wales, she also has an MA in History from the University of Edinburgh.
Sinead Coffey has been employed by the Enstar Group since 2015 and is currently a Senior Integration Manager for Enstar Group Limited. Prior to joining Enstar, she was a Financial Accountant for Arch Insurance Company Europe, an insurance company based in London for several years. She is a member of the Chartered Accountants Ireland.
Patrick Cogavin has served Enstar since November 2001 and has over 30 years of industry experience. He is currently a Director of one of Enstar’s UK-regulated insurance entities. From November 2012 to September 2014, he was Client Manager for six UK regulated insurance entities and prior to that was the Financial Controller for a number of our insurance subsidiaries. Before joining Enstar, he worked for Norwich Union and was the Financial and Systems Controller for the Travel and Leisure business unit between 1999 and 2001.
Philip Cooper has served as a Managing Director of Cranmore (UK) Adjusters Limited and has been a Director of the Company since 1999. He served as a Reinsurance Consultant for Peter Blem Adjusters Limited from 1996 to 1999 and from 1990 to 1992, as well as serving as Director of Training during the former period for Peter Blem Management Services Limited. From 1992 to 1996, he served as head of the Technical Support Group for Syndicate Underwriting Management, and prior to 1990, he served as Assistant Reinsurance Manager.
Elizabeth DaSilva has served with the Company since 1996 and is currently Vice President, Group Corporate Management of Enstar Limited. From 1993 until 1996, she worked as a reinsurance accountant for Powerscourt Group Ltd.
Frederic de Haan is a joint Managing Director of Vander Haeghen & Co. SA having joined the Company in 2004 as Sales Manager before taking his current role in 2011. He started his career as Sales Manager in a Real Estate Company, then joined Paratel, a local Dutch media and communication company, as a Sales Executive.
Gregg Delforge is the Chief Financial Officer of Alpha Insurance in Belgium since April 2017 having previously served as Head of Financial Reporting. Before joining Alpha Insurance, he worked as a senior associate at PriceWaterhouseCoopers from 2012 to 2016, auditing clients in both banking and real estate.
Rachel Delhaise joined StarStone in 2014 to develop the risk management practice and appointed Global Head of Risk in January 2015. She previously served as Managing Director of GC Securities (Guy Carpenter) following a long career at GC/Marsh focused on structuring and arranging reinsurance transactions for effective risk mitigation and capital management, ERM advisory and Insurance Linked Securities.
John A. Dore is the President of Sheridan Ridge Advisers, LLC, an insurance and reinsurance advisory practice where Mr. Dore does arbitrations, mediations and expert witness work in the insurance and reinsurance marketplace. He was previously president and CEO of several NASDAQ listed insurance and reinsurance holding companies.
David Ellis joined Cranmore (UK) Limited as a Reinsurance Consultant in 2000 and has served as Director since 2007. He served as a Reinsurance Consultant for Compre Administrators Limited from 1999 to 2000 and for Ward & Associates Limited from 1993 to 1999.
Karen Esdale, Chief Risk Officer, joined Enstar in May 2010. Karen has overall responsibility for the Enterprise Risk Management (‘ERM’) Framework for EGL and its subsidiaries, ensuring effective risk management processes are in place to meet the requirements of the Board(s) and regulators. Prior to joining Enstar, Karen was a manager in the Financial Reporting department of Bank of New York Mellon, Dublin. From 2005 to 2008, she worked as Financial Controller for The Adara Group, Bermuda. From 1999 to 2005, Karen worked for Ernst & Young, Bermuda where she was a manager in the Private Clients practice. She is a fellow of the Association of Certified Chartered Accountants.
Richard Etridge is the CEO of StarStone Insurance SE and Head of Continental Europe. He joined Glacier Insurance AG in 2004, and was appointed CEO in 2008. He joined StarStone following its acquisition of Glacier in July 2010. Primarily based in Zurich, Switzerland, Mr. Etridge leads StarStone Aerospace product lines, with previous experience at Converium, Faraday syndicate, GE Frankona, JFS (now Aon) and JLTRe.
Tim Fillingham is the Chief Executive Officer of StarStone Insurance SE, and Chairman of StarStone Insurance Services Limited. He joined StarStone when it was first incorporated in 2008, having previously been a director at Aon (UK) Ltd. In addition to his CEO responsibility he has responsibility for all business development and marketing activities in the UK and Continental Europe.
Ewen Gilmour is a Non-Executive Chairman of Starstone Underwriting Ltd. He joined Shelbourne Syndicate Services Ltd. as a non-executive director in October 2009 and was appointed Chief Executive Officer in 2011. In anticipation of the novation of the management of Shelbourne Syndicate 2008 to Starstone, he became non-executive Chairman of Starstone in March 2015 and relinquished his Shelbourne executive duties when novation was completed
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Enstar Group Limited | A-2 | 2018 Proxy Statement |
in July 2015. He is also non-executive Chairman of Antares Managing Agency Ltd. and Hampden Agencies Ltd. He served on the Council of Lloyd’s and was Deputy Chairman of Lloyd’s from 2006 to 2010. He is a Chartered Accountant and was Chief Executive of Chaucer Holdings plc until his retirement in December 2009. Formerly a corporate financier with Charterhouse Bank, he moved to the Lloyd’s market in 1993 to help facilitate the introduction of corporate capital.
Richard Grainger joined the Enstar group as part of its acquisition of StarStone in 2014. He is Enstar’s Group Head of Compliance and also serves as a Director of StarStone Underwriting Limited. Before joining StarStone in 2008, he was a senior manager in the regulatory practice of Ernst & Young, having been with EY since 1995, first in Bermuda and subsequently in London. He is a Fellow of the Institute of Chartered Accountants in England and Wales.
Adam Grange has served with the Company since 2007 and is currently a Director of Cranmore (UK) Limited. From April 2007 to September 2014, he held the position of Associate Director also at Cranmore. From April 2000 to March 2007, he worked as Audit Manager at Global Resource Managers, a business unit of the CNA Insurance Group. From 1997 to 2000, he worked at Bridgeway Management Ltd., from 1994 to 1997 at Lloyd’s Claims Office and from 1993 to 1994 at Roy T. Ward Consultants Ltd. He has a BSc (Hons) and is an Associate of the Chartered Insurance Institute.
Lee Greenway began his career at Lloyd’s in 1986 with Syndicate 47. He joined Atrium in 1998 to lead the Syndicate 570 Direct Property and Casualty Underwriting team and pioneered the AUGold online trading platform from inception in 2004. In 2006 Lee was seconded to Vancouver, Canada and now serves as President of Atrium’s North American service companies, Atrium Risk Management Services (Washington) Ltd. and Atrium Risk Management Services (British Columbia) Ltd.
Gary Griffiths was appointed Independent Non-Executive Director of Rombalds Run-Off Limited in August 2017He previously served as Independent Non-Executive Director of Marlon Insurance Company Limited and Shelbourne Syndicate Services Limited. From December 1994 to August 2012, he worked for Whittington Capital Management (now Asta Managing Agency Ltd) holding various roles including Managing Director, Chief Operating Officer and Claims Director. He is Deputy Chairman of the Lloyd’s Market Association (LMA) Academy Committee which seeks to raise the profile of education in the Lloyd's market.
David Grisley serves as Non-Executive Director of Enstar (EU) Holdings Limited. He served as Chief Information Officer of Enstar from 1996 to 2015. From 1993 until 1996, he served as IT Manager for Powerscourt Group Limited in Bermuda. Prior to 1993, he was the IT Manager for Anchor Underwriting Managers in Bermuda from 1988 and a senior IT consultant for the Bermuda office of Coopers & Lybrand from 1984 to 1987.
David Hackett has served as a Director of Enstar (EU) Limited since 1996. He also served as Vice President of Enstar Limited from 1993 to 1996. From 1991 until 1993, he served as Vice President for Anchor Underwriting Managers Limited in Bermuda. He was Senior Vice President for International Risk Management Limited in Bermuda from 1979 to 1991.
Anna Hajek is an External Director for Clarendon National Insurance Company. She is a co-founder and the President and CEO of Clarity Group, Inc., a healthcare resource company specializing in risk, quality and safety management. Prior to the Clarity Group, Ms. Hajek was the President of the Healthcare Risk Services Group and EVP of MMI Companies, Inc., an NYSE international insurance and reinsurance company. Prior to joining MMI, Ms. Hajek worked in hospital and academic settings. She is a certified Medical Technologist and holds a Master’s Degree in Health Professions Education from the University of Illinois College of Medicine at Chicago and a Certificate in E-Business from Lewis University, Graduate School of Management.
Nicholas Hall was appointed as a Director of Enstar Australia Limited effective February 2009. In addition to his role as a Director, he has served as Direct Claims and Ceded Reinsurance Manager of Enstar Australia Limited since his appointment in March 2008. He served as Senior Auditor of Cranmore Adjusters Limited from March 2003 to March 2008 in London and Sydney. From March 1997 until March 2003, he served in various roles for Gordian Run-off Limited and Cobalt Solutions Services Ltd. in London and Sydney.
Nancy Hammer was appointed as the StarStone US Chief Financial Officer in May 2017. She served as Controller of Sussex Insurance Company (Sussex) from December 2013 through November 2016 and joined Enstar through their acquisition of Sussex in January 2015. She has more than 20 years of experience in the insurance industry and worked previously at Burlington Insurance Group.
Michael H.P. Handler is a Non-Executive Director of Harper Insurance Limited and Chairman of its Board of Directors. He is also a non-executive director of StarStone Insurance SE and Chairman of its Board of Directors. In addition he is non-executive Chairman of the Guy Carpenter EMEA Advisory Council. He began his career with Guy Carpenter in 1974, working in New York and briefly in Copenhagen until his transfer to Zurich in 1996.
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Enstar Group Limited | A-3 | 2018 Proxy Statement |
Peter Hargrave joined the Atrium Group as Head of Human Resources in 2006. He is currently HR Director and a Director of Atrium’s overseas companies. Prior to joining Atrium Underwriting Group Limited he ran an HR consulting practice and before that held various senior HR positions in the Financial Services sector.
Richard Harries was appointed as a Chief Executive Officer of Atrium Group in July 2014. He joined the Atrium Syndicate in 1997 to underwrite the energy account, in 2008 he was promoted to be the Syndicate Active underwriter. Prior to joining Atrium Underwriters Limited, Mr. Harries was a broker at Willis, becoming an Executive Director of the Oil and Gas Department. He was appointed a Director of Atrium Underwriting Group Limited and Atrium Underwriters Limited in January 2008.
Kieran J. Hayes is a director of Alpha Insurance SA. He served as an Executive Director and Chief Executive Officer of Laguna Life Limited until its sale to Monument Re in 2017. Prior to that, from June 2004 to March 2011, Mr. Hayes held a number of senior management roles with Citigroup, including Managing Director & VP Operations of Citigroup’s life insurance business. From January 1998 to December 2002, he worked at Old Republic Insurance in Chicago, Illinois as Senior Vice President of Operations, and prior to that in a managerial capacity at Great West Life Insurance Company, also in Chicago.
Brett Henry has served as the Head of Finance of Enstar Australia Limited since 2011 and Financial Controller/Finance Manager between 2008 & 2011. Prior to his employment with Enstar in 2008, he was employed by AMP Limited in various financial management roles. He is a Certified Practicing Accountant (CPA Australia) and has a Bachelor of Economics degree (Accounting & Finance).
Siobhan Hextall has served as UK Head of Governance and Company Secretary since November 2007. Between 1998 to 2006 she was Finance Director for Chevanstall Limited, a London market reinsurance company. Prior to this she was a senior manager with Price Waterhouse, having trained with Deloitte & Touche. She is an Associate of the Institute of Chartered Accountants in England & Wales and a member of the Institute of Chartered Secretaries & Administrators.
Shaun Holden has served as a Director of Enstar (EU) Limited since August 2012. He has served as Financial Controller of Enstar (EU) Limited since 2004. From 1995 until 2004, he served as an Audit Manager for Menzies Chartered Accountants.
Giles Hussey is the Managing Partner of Malakite, which launched in Dubai in 2016 and targets specialty business in the MENA region. Mr. Hussey has more than 14 years’ experience in the Middle East where he served as head of MENA, Swiss Re Corporate Solutions. Before that he was CEO, Middle East & Asia at Lancashire Insurance following an extensive broking career with JLT and Marsh.
Bent Isachsen has served as Chief Operating Officer of StarStone International since September 2016 and has over 24 years’ experience in the London insurance market. From 2011 to 2016 he was Head of Operations StarStone International. Before joining StarStone, he was Operations Manager for Beazley, a Lloyd’s managing agent based in London with service companies globally and admitted underwriting company in the US. He started his career in 1993 working for Aon, a global broker. He is actively involved in the London market and sits on various London market committees.
Andreas Iselin joined the Board of Harper Insurance Limited in November 2009. Since 2008, he has worked as an independent management consultant providing services to the insurance industry. From 1998 to 2007, he was the Chief Reinsurance Executive of the Helvetia Insurance Group in St. Gallen, Switzerland. Before that, he held senior positions with both Winterthur Insurance Group and Swiss Re Group.
James Lee joined Atrium in April 2002 with prime responsibility for Legal, Compliance, Regulation and Company Secretarial matters. He was appointed to the board of AUL in October 2002 as Compliance Director, and to the board of AUGL in January 2006 as Chief Operating Officer. With effect from 1 July 2014, he was also appointed Agency Managing Director of AUL, a member of the Lloyd’s Market Association Regulatory Committee and served as Chairman for two years.
Max Lewis has served as an Independent Non-Executive Director of River Thames Insurance Company since 2003 and Rombalds Run-Off since August 2017. Max has worked in the insurance industry for 35 years in general management and regulatory positions and held a number of director positions at Sedgwick Group plc. He was until recently a non- executive director of Motors Insurance Company, a company which he helped to found and serves on the audit committee of his local Council.
Oscar Lolato joined StarStone in 2010 as representative of TSIC and Director/President of the subsidiary in Brazil responsible for the local aspects of the admitted reinsurance operation. He has also participated in other relevant StarStone projects. Oscar has 25 years’ experience in insurance, formerly with XL insurance as CFO Latin America
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Enstar Group Limited | A-4 | 2018 Proxy Statement |
responsible for Brazil, Mexico and Argentina, Director of Controls at Itau-XL, and Director/Officer at Winterthur International and Zurich Insurance. Oscar holds a Master degree in Economics and a Postgraduate degree in Strategic Intelligence.
Robin Low is a Chartered Accountant, with over 28 years international audit and risk experience, including 17 years as a partner with PricewaterhouseCoopers, specializing in financial services and insurance. Ms. Low is a director of a number of Boards, including insurance related entities, AUB Group Limited and the Australian Reinsurance Pool Corporation; as well as non-insurance based boards ; CSG Limited, IPH Limited and Appen Limited. In addition to her board positions, Ms. Low is the deputy chair of the Auditing and Assurance Standards Board and an independent member of the NSW Government Prequalification Scheme: Audit and Risk Committee Independent Chairs and Members.
Michael Lynagh joined the Board of Enstar (EU) Limited in March 2012 as an Independent Non-Executive Director. Since 1998, he has held various senior positions in investment companies based in the United Kingdom. During this time, he has also gained extensive media experience including being employed by BSKYB as a rugby commentator since 1998. He played international rugby for Australia from 1983 to 1995, holding the position of captain from 1992 to 1995, and was part of the Australia Rugby World Cup winning team in 1991.
Donat Marxer is a Non-Executive Director of StarStone Insurance SE. Mr. Marxer was appointed Non-Executive Director and member of the board of Glacier Insurance AG in October 2006. With the StarStone 2010 acquisition of Glacier, he became non-executive director and a member of the board. He is a Liechtenstein citizen and holds several other local non-executive directorships while running his own consultancy business. He also acts as Honorary Consul for Slovenia in Liechtenstein.
David Matthys is the Legal, Compliance and Risk Officer of Alpha Insurance. He joined Enstar in January 2016. He is a qualified lawyer and spent over five years practicing law before moving into insurance. Since joining the group he has gained experience of insurance control and management functions.
Barry McConville has over 25 years of experience in the financial services industry. Initially with Wang & Oracle and laterally with Linedata (formerly Global Investment Systems), a leading provider of systems and consultancy services to the global asset management & investment funds industry, where he was Managing Director. He holds the Professional Designation of Certified Investment Fund Director from The Institute of Banking and is a non-executive director of a number of investment funds and companies domiciled in Ireland and other offshore jurisdictions. Mr. McConville is an Irish resident.
Brendan Merriman has served as CFO of Enstar Europe since February 2017. He joined Atrium in July 2014 as the Group CFO having served as Interim CFO since December 2012. Previously Mr. Merriman served as CFO of the European operations of HCC Insurance Holdings (International) Ltd. 2000-2012.
David Message has served with StarStone since 2009 and is currently the Chief Underwriting Officer of StarStone’s international business. He has over 25 years of experience in the specialty insurance market, beginning his career in the late 1980s at Willis. He later moved into the offshore energy field with Hiscox. Prior to StarStone, he was Global Head of Offshore Energy and Regional Head of Marine at XL Group, which he joined in 2000.
Jeffrey D. Miller is both President and Chief Executive Officer of Paladin Managed Care Services, Inc., originally joining the Company as Chief Operating Officer in 2009. He has over 30 years of experience with market leading managed care companies servicing insurance carriers of all size and complexity. Jeffrey was an adjunct professor at California State University at Fullerton, where he taught senior-level courses in strategic and entrepreneurial management. He has a BA in business, an MBA and is certified as a Six Sigma Black Belt.
Jennifer Miu was appointed Chief Financial Officer of Enstar (US) Inc. in July 2016. Prior to that, Ms. Miu was part of Clarendon’s workers compensation accounting team after obtaining her undergraduate degree from the Leonard N. Stern School of Business at New York University in 2003. From 2006 to 2008, she was an Accounting Manager and from 2008 to 2011, she served as an Accounting Controller for Clarendon’s property and casualty insurance companies. Following Enstar’s acquisition of Clarendon Insurance Group in 2011, she continued as accounting controller until 2014 when she was made Vice President, Client Manager of Clarendon. From 2015 until July 2016, she served as Senior Vice President, Client Director of both Clarendon and SeaBright after that portfolio was assumed through a net retained liabilities agreement.
Thomas Nichols is a non-executive director of DCo LLC (f/k/a Dana Companies, LLC) since May 2017. Formerly he served as the Chief Financial Officer of Enstar Holdings (US) Inc. from July 2012 to October 2016. Prior to that he had previously been Client Director for a number of run-off clients of Enstar (EU) Limited. Before joining Enstar, heAMENDED AND RESTATED
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Enstar Group Limited | A-5 | 2018 Proxy Statement |
2016 EQUITY INCENTIVE PLAN
was at PricewaterhouseCoopers from 1999 to 2003 and is a member of the Institute of Chartered Accountants for England and Wales.
Steve Norrington is based in the U.S. and is the Executive Vice President of Enstar (US) Inc. and Chief Executive Officer of the Cranmore Group of Companies and the President of Cranmore (US) Inc. Prior to this promotion, he was the Managing Director of Cranmore Adjusters Limited from 1999 to December 2009. From 1993 to 1999, he served as a Reinsurance Consultant and Director of Peter Blem Adjusters Limited. From 1991 to 1993, he served as a Reinsurance Auditor for Insurance & Reinsurance Services Ltd., formerly the audit team of Walton Insurance Ltd. for whom he served from 1990. Prior to 1990, he worked for the Liquidator of Mentor Insurance Ltd. from 1988 to 1990 and for Alexander Howden Group in various roles from 1983 to 1988.
Daniel R. O’Brien has served as a Director of Pavonia Life Insurance Co. of NY, and its predecessor First Central National Life Insurance Co. of NY, since 1987. From July 1998 through March 2002 he served as Managing Director and CEO of Household Insurance Group and its affiliated companies. Prior to that he was CEO of Beneficial Insurance Group and its insurance affiliates. He began his insurance career with The Prudential Insurance Company in 1973.
Kevin O’Connor has served as a Director of Inter-Ocean Reinsurance (Ireland) Ltd. since April 2006. He has been a Senior Partner in O’Connor, Crossan & Co., a chartered certified accountancy practice in Ireland, since 2005. He worked previously as a sole practitioner from 1995 to 2004. In 1994, he worked as Assistant Financial Controller at Belvedere Insurance Company Ltd. in Bermuda.
Patrick O’Sullivan holds a Bachelor of Common Law degree from the National University of Ireland, is a qualified Solicitor and has over 35 years’ experience in global asset management. He is the Founder Partner of Ballybunion Capital Ltd. and previously worked as senior management with Bank of Ireland Asset Management, Barclays Capital & ING Barings. He is a non-executive Director of a number of Enstar Group investment vehicles.
Sandra O’Sullivan is the Chief Executive Officer of Enstar Australia Limited. She has also served as the Chief Financial Officer since March 2008. Between 2001 and March 2008, she was employed by AMP Limited in the capacity of Manager of Statutory and Management Reporting, Finance Executive and Finance Manager. Prior to her employment with AMP Limited, she was employed by GIO Australia Ltd. in several finance roles in insurance and investment services.
Udo Pickartz is the Enstar EU Head of Compliance and StarStone General Counsel since January 2017. He joined StarStone (then Torus) in 2011. Before that, Mr. Pickartz was Head of Compliance and Legal Counsel for Zurich Insurance Group in Germany and Director of Compliance for Hartford Life Limited. He started his career in insurance at Marsh & McLennan Companies in Germany. He is a qualified lawyer admitted to the German bar and holds a law degree from Cologne University and the University of Sydney.
Marie-Claire Pletinckx is a Non-Executive Director of Alpha Insurance. Her career covers 35 years of in depth experience in general management in insurance, as well as, bank insurance in the area of Life, Non-Life, Pension business. In the Fortis Group, she operated as Executive Vice President of Employee Benefits Europe, Executive Director Bank Insurance; AG Insurance and previous 10 years as Executive Director Life and CEO of FB Insurance, biggest life operator on the Belgian market.
Gary Potts is a Non-Executive Director of several of the Company’s Australian subsidiaries and was appointed as a part-time Commissioner (Australia) for three years in April 2006. Prior to his appointment, he had been an Associate Commissioner since 2002. Prior to 2002, he was an Executive Director and Deputy Secretary in the Australian Department of the Treasury for ten years, with responsibility for domestic economic forecasting, monetary and fiscal policy issues and policy development as it related to the financial sector, corporations law, the Trade Practices Act and foreign investment. In earlier years he held senior positions in the areas of tax policy and international economic policy. He was the Treasury’s representative in Tokyo from 1984 to 1987.
Ian Poynton is an Independent Non-Executive Director of Starstone Insurance SE, a position he has held since January 2015. Mr Poynton joined Freshfields in 1996. He was appointed to Partner in 1998; a position he held until his retirement in 2014. Mr Poynton currently holds several Directorships and is trustee of the Mahenye Charitable Trust.
Walker Rainey is a Non-Executive Director of StarStone Insurance Holdings Limited. Mr. Rainey has over 30 years of experience in the insurance industry, including eight years as Managing Director of Alterra Capital Europe Ltd., and eleven years as CFO of XL Europe Limited.
Teresa Reali has served Enstar (US) Inc. since March 2006. Since 2015, she has served as a Senior Vice President, Client Director. From April 2013 to November 2015, she held the position of Vice President, Client Management. From August 2012 to March 2013, she held the position of Assistant Vice President, Client Manager
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Enstar Group Limited | A-6 | 2018 Proxy Statement |
and from March 2006 to July 2012 she held the position of Senior Accountant. From July 2005 to March 2006, she was a Senior Accountant with FirstComp Insurance Company in Rhode Island. From 1995 to 2005, she worked for Providence Washington Insurance Company in Rhode Island.
Robert Redpath is currently the Senior Vice President of Enstar (US) Inc. Prior to joining Enstar in 2011, he served as the General Counsel of Clarendon National Insurance Company and subsidiaries from April 2006. From January 2002 until April 2006, he was Vice President in charge of litigation at Clarendon. From 1996 until 2002, he worked for Hannover Re in Hannover, Germany in the legal and claims departments. Prior to that, he worked for four years at the London law firm of Lawrence Graham specializing in insurance litigation. He has an LLB from University College, London, an LLM from the University of Mainz, Germany and a Diploma in Business Studies from the London School of Economics. He is licensed as an attorney both in England (solicitor - non-practicing) and in the State of New York.
Derek Reid has served as a Legal Director of Enstar (EU) Limited since January 2004. Previously, he was a partner in the insurance/reinsurance group at Clyde & Co in England handling a mixture of contentious and non-contentious insurance/reinsurance run-off work. He qualified as a solicitor in 1991 and joined Clyde & Co in 1994.
Jeremy Riley was appointed as Independent Non-Executive Director of River Thames Insurance Company in August 2017 having previously been a director on Knapton Insurance Limited and Unionamerica Insurance Company Limited. He has worked in the insurance sector for over 30 years and has held a number of executive and non-executive roles in the UK and global Insurance markets including CEO, CFO and COO. Currently, Jeremy is Managing Director of FTIs insurance practice, a leading independent global consulting firm.
Jamie Saunders is the Group Head of Integration and has been part of the Integration Team since the function’s formation in January 2015. Prior to that Jamie worked in the M&A team for over 4 years. He started his career at Enstar in the finance function holding positions of Accountant, Financial Controller and Client Manager for a number of the EU run-off entities. Jamie is a Chartered Management Accountant.
Simon Schnorr is CEO of StarStone Insurance Services Limited. He joined StarStone in November 2014 as Global Head of Marine, responsible for strategic development and day-to-day management of StarStone’s global Marine offering. From 2008 - 2014 Simon worked for Aon in London as Chief Commercial Officer for Marine, Global Head of P&I as well as being a member of Aon’s Global Marine Executive. During his time with Aon, Simon also spent 2 years in the Aon’s DIFC office in Dubai as Head of Marine in the UAE. Prior to Aon’s acquisition of Benfield, Simon was one of the founding team members of Benfield Corporate Risk, a boutique specialty broking division established in 2005. Simon holds both British and German citizenship and is a graduate of the London School of Economics and Political Science (LSE) with a BSc (Hons) in Economics.
Duncan Scott has served as the Vice President of Run-Off and Insolvency Operations of the Company since 2001. He served as Chief Financial Officer of Torus Insurance (Bermuda) Limited from April 2014 to December 2015. From 1995 until 2000, he served as Controller & General Manager of Stockholm Re (Bermuda) Ltd. From 1993 to 1994, he served as AVP Reinsurance of Stockholm Re (Bermuda) Ltd. He was a senior auditor in the Bermuda office of Ernst & Young from 1990 to 1992 and in the Newcastle, U.K. office of KPMG from 1986 to 1989.
Richard Seelinger is the Chief Operating Officer and Head of Claims of Enstar (US) Inc. He served as the Senior Vice President and US Head of Claims from 2013 to 2016 and as Senior Vice President of SeaBright Insurance Company since October 2003. Mr. Seelinger previously served as Chief Executive Officer of Paladin Managed Care Services, a wholly owned subsidiary of SeaBright Insurance Holdings, from 2007 to 2010. He had previously been Senior Vice President of Eagle Insurance Company from 2000 to 2003 and Workers’ Compensation Claim Officer of Kemper Insurance Company from 1994 to 1999. Prior to 1999, he held a variety of management positions at Kemper Insurance Company, including Director of Corporate Planning and Research.
Michael Sheehan joined Clarendon Insurance Group in September 2002 as Vice President of program business. Since 2006, he has been a Senior Vice President of program business at Clarendon. From 2000 to 2002, he worked for Realm National Insurance Company as a Senior Vice President. From 1994 to 2000, he worked as Claims Manager for an underwriting agency in Bermuda, and from 1988 to 1994, he worked for various syndicates at Lloyd’s in the claims and reinsurance areas.
John Shettle is an Operating Partner of Stone Point Capital. He also serves as the interim CEO and President of the U.S. operations of StarStone Insurance Holdings Limited and is a director of Atrium Underwriting Group Limited. Mr. Shettle has more than thirty years of experience in the global insurance industry. Prior to joining Stone Point, he was the President and CEO of the Victor O. Schinnerer Company, where he was responsible for running Victor O. Schinnerer & Company, Inc. and ENCON Group Inc. Mr. Shettle holds a B.A. from Washington and Lee University and an Executive M.B.A from The Sellinger School of Business and Management at Loyola College in Maryland.
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Enstar Group Limited | A-7 | 2018 Proxy Statement |
Jason Shortt has served with the Company since April 2014 and is currently Managing Director of Cranmore Insurance & Reinsurance Services (Europe) Ltd. Mr. Shortt has in excess of 24 years’ insurance industry experience. From 2006 to 2014, he held the position of Reinsurance & Aviation Insurance Claims Manager at Markel International (formerly Alterra) and from 2001 to 2006, he held various claims management positions with QBE in London and Dublin. Prior to that, Mr. Shortt held various claims positions in London and Dublin. He is a Chartered Insurance Practitioner and an Associate of the Chartered Insurance Institute.
Mark Sioma, CPCU has served with StarStone since 2010 and is Senior Vice President of StarStone and Head of US Management & Professional Liability. He has over 39 years of experience in the specialty insurance market and has held several senior management positions with other organizations including AIG and Crum & Forster. He holds a BBA from Western Michigan University and an MBA from Golden Gate University.
Ann Slade has served the Company since 2007 and is currently Enstar (EU) Head of Finance. Prior to this, she held the position of Client Manager for Unionamerica Insurance Company Limited. Before joining Enstar (EU) Ltd., she was Senior Finance Manager at Scottish Re (from 2004 to 2006) and Insurance Group Controller at GE Life (from 2000 to 2004). She trained as a Chartered Accountant with PricewaterhouseCoopers and is a fellow of the Institute of Chartered Accountants in England and Wales.
Demian Smith is currently the Chief Executive Officer of the StarStone Group. He joined StarStone as Global Head of Marine in 2010 from the Navigators Group-owned Lloyd’s Specialist Marine Syndicate 1221, where he was responsible for Marine and Energy Liabilities. In 2014, he was appointed Chief Executive Officer of StarStone’s international operations, which includes StarStone’s Lloyd’s London market and Continental Europe operations. An Associate of the Chartered Insurance Institute, Mr. Smith holds an MBA from Edinburgh University Management School and a B. Eng. (Hons) in Naval Architecture from the University of Strathclyde, Glasgow. He began his career at Miller in 1995.
Joseph A. Stancati is President of DCo LLC (f/k/a Dana Companies, LLC). Mr. Stancati has over 30 years of experience in Litigation Management, including his previous position as Director of Litigation for Dana Incorporated, where he also served as a Director and Administrator of the Dana Foundation.
Simon Storvik-Green has been Associate Director at Cranmore Europe BVBA in Belgium since January 2017 and is a languages specialist with nine years of experience in the insurance industry. Before relocating to Brussels, he served as an Auditor at Cranmore (UK) Limited in London between 2011 and 2017, and prior to this as a Graduate Trainee at Enstar (EU) Limited in Guildford between 2009 and 2011.
Vicki Stringham is the Vice President of DCo LLC (f/k/a Dana Companies, LLC). She has over 28 years of experience in claims handling and risk management, the last 13 years spent in supervising the national toxic tort litigation for a fortune 500 company.
Mick Summersgill is the Chief Operating Officer of StarStone Group. He joined Enstar (EU) Limited in 2013 and since May 2014 he has been the StarStone Head of Group Operations. He has worked in the insurance industry for 20 years at Zurich Financial Services, KPMG and EY. His principal area of expertise is in managing and leading large and complex restructuring and business transformation initiatives. He is a fellow of the Association of Chartered Certified Accountants.
C. Paul Thomas joined Enstar (EU) Limited in 2001 and is currently European NLRO Strategy Officer having previously served as Chief Financial Officer for the Enstar EU Group. From 2001 to 2012, he held the position of client director for a number of run-off clients of Enstar (EU) Limited and was appointed a director of Enstar (EU) Limited in 2006. Prior to joining Enstar, he served as Finance Director of Wasa International (UK) Insurance Company Limited from 1997 to 2001, having previously held senior financial positions within Friends Provident Group (1993 to 1997), NM Financial Management Limited (1988 to 1993) and Schroder Life Assurance Company Limited (1984 to 1988). He is a fellow of the Chartered Association of Certified Accountants.
Philip Toohey is a Non-Executive Director of Pavonia Life Insurance Company of New York. He has extensive regulatory and compliance expertise having served for 15 years as Senior Executive Vice President, General Counsel and Secretary of HSBC USA Inc. and HSBC Bank USA. He has served as Non-Executive Director of Pavonia and its predecessor since 2006.
Kim Torbeyns is the Chief Executive Officer of Alpha Insurance in Belgium having previously served as the Chief Financial Officer. Before joining Alpha Insurance in 2015, she served as a senior manager in the insurance and real estate division of PwC from 1996 to 2015. She is a member of the Institute of Chartered Accountants in Belgium.
Cindy Traczyk has served StarStone US since 2010 and is currently the Chief Pricing Actuary. Previously, she held the position of SVP and Actuary, Pricing for StarStone US. From August 1995 to August 2010, she worked as
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Enstar Group Limited | A-8 | 2018 Proxy Statement |
an insurance professional at CNA in Chicago, Illinois in a variety of actuarial, and underwriting roles. Her final position with CNA was SVP and Actuary, Commercial Actuarial from 2008 to 2010. She is a fellow of the Casualty Actuarial Society (CAS).
R. Lincoln Trimble, Jr. is the Executive Vice President of StarStone. He joined StarStone in 2009 to lead its casualty group and has more than 30 years of experience in insurance. Before joining the Company, he held several senior management positions with Chubb, St. Paul and Travelers, overseeing an array of insurance and reinsurance products for both the US domestic market and internationally. Additionally, he co-founded Statehouse Casualty Managers, an MGA specializing in small commercial liability business. He holds a BA in Economics from the University of Virginia.
Darren S. Truman is the Enstar Europe Chief Operating Officer.Hehas previously served as Enstar European Head of Claims and has served as a Claims and Reinsurance Director of Shelbourne Syndicate Services. He served as Senior Technical Manager of the Company for Enstar since April 2004. He also served as a Technical Manager for Gerling Global General and Re in London from July 2003 to March 2004. From September 1994 to June 2003, he held a number of positions within RiverStone Management in London, the last four years as a Workout Specialist. From September 1987 to September 1994, he held a number of positions within Thurgood Farmer and Hackett in London, the last two years as Section Head for LMX Broking.
Alan Turner is the Chief Financial Officer of KaylaRe Ltd. Previously, he was Chief Projects Officer for Enstar (EU) Limited and a director of a number of the Company’s U.K. subsidiaries. He served as Chief Executive Officer of Enstar (EU) Limited from April 2006 to December 2016 and prior to this he was responsible for the general management of several of the Company’s U.K. reinsurance company subsidiaries. From 1989 to 2000, he was employed by Deloitte & Touche in the U.K. and then Bermuda, specializing in audit and insolvency work. He obtained a U.K. Chartered Accountant designation in 1992 and also has a BA (Hons) Business Studies degree qualification.
Simon Urry is Active Underwriter for Syndicate 1301 with over 40 years’ experience working in the insurance market. Previously Mr. Urry worked as Marine and Energy Liability Underwriter for Octavian/Markel before joining StarStone (Torus) in 2009 as Head of Marine and Energy Liability.Mr. Urry is currently deputy chair of the Product Oversight Group. He has also had involvement in various Market committees (He is currently a member of the Joint Liability Committee and last year stepped down as a member of the IUA Marine Technical Committee ).
Eddy Van Den Bosch has served as a General Manager of Arena nv since 2004 having previously served as its authorized representative. He has 30 years of experience in the insurance industry and was head of underwriting at Zelia (Swiss Life) from 1998 to 2003. He obtained a Master in Law from the University of Leuven in 1984.
Bertrand VanderHaeghen is a joint Managing Director of Vander Haeghen & Co SA having joined the Company in 2004 as prestige & classic cars underwriting manager in 2004 before taking his current role in 2011. He started his career as underwriting assistant with Ibis Underwriting Agency.
Roger VanderHaeghen has served as a Chairman of the Board of the underwriting agency Vander Haeghen & Co SA for 20 years. He has more than 35 years of experience in the insurance and reinsurance market and in particular is a specialist in Belgian niche products. Before setting up Vander Haeghen he worked as a reinsurance manager for Mapfre Re and a casualty underwriter for Assubel, now Allianz Belgium.
Florian von Meiss is a Non-Executive Director of Harper Insurance Limited. He opened a law firm in 1980 under the name of Thurnherr von Meiss and Partners in Zurich. After a merger of his old firm in 2008 he is now counsel to the law firm Blum&Grob in Zurich. He continues to practice primarily in corporate matters and concentrates on the consumer industry. He holds law degrees from both the University of Zurich and the Columbia School of Law, New York.
John Wardrop is a Non-Executive Director of StarStone Underwriting Limited. He retired as a Partner from KPMG LLP’s insolvency practice in 2013 after a career of almost 30 years with the professional services firm. His management responsibilities as a Partner included membership on the U.K. Risk Management Panel, recruitment and mentoring of professional staff, managing team’s financial performance and assessing candidates for admission to the Partnership.
Stefan Wehrenberg is a Non-Executive Director of Harper Insurance Limited and Partner of Umbricht having previously been a partner at BLUM&GROB Attorneys at Law from 2008-2017. Previously, he was a partner and senior associate with two Zurich law firms. He continues to practice primarily in administrative law and international criminal law. He holds a law degree from the University of Zurich.
Steven Western joined Enstar (EU) Limited in 2007 and is currently Client Director for a number of run-off clients of Enstar (EU) Limited. Between 1995 and 2007, he held various positions within the Company including Chief Operating Officer of Castlewood Risk Management Ltd., from 1995 to 2003, and Director of Finance and Administration
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Enstar Group Limited | A-9 | 2018 Proxy Statement |
of Kinsale Brokers Limited between 2004 and 2007. Prior to 1995, he was Vice President of International Risk Management (Bermuda) Limited. He is a member of the Institute of Chartered Accountants in England & Wales.
Serge Wibaut is a Non-Executive Director of Alpha Insurance. He is a Professor of economics and finance with more than 25 years of experience and is a member of several executive committees and investment committees throughout Europe in financial institutions undergoing restructuring. He played a leading role in the definition of new strategies especially in the domain of investment, balance sheet overhaul of banks and insurances, real estate and risk management. He has extensive experience as a member of boards of directors in large and medium sized institutions throughout Europe, as well as, in several investment companies (mutual funds, real estate companies or private equity funds).
Theo Wilkes has served as Group Financial Controller since May 2016. He joined Enstar in 2010 and has held a number of positions including Chief Financial Officer of the StarStone European operations and Head of UK Finance. Prior to that he served as Group Financial Controller of the Alea Group where he worked between 2004 and 2010. He trained at Littlejohn Frazer where he specialized in the audit of Lloyd’s syndicates and progressed to Senior Manager in the Financial Services practice. He is a Chartered Accountant with the Institute of Chartered Accountants in England and Wales.
Ben Wilson is Head of Onshore Energy and Power with over 20 years of underwriting experience and 27 years working within the insurance market. He has been a member of the Board of StarStone Insurance Services Limited since 2017. He joined StarStone (then Torus) in 2008. Mr. Wilson previously worked as Lead Underwriter for Wellington Syndicate / Catlin Group.
Chase Young has served as Executive Vice President of Cranmore US since July 2016. Prior to that he served as Senior Vice President of Cranmore US with responsibility for the Enstar US TPA Management and Quality Assurance functions. Mr. Young has been with Cranmore since the start of his professional career.
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| Enstar Group Limited | A-1 | Special Meeting Proxy Statement |
ENSTAR GROUP LIMITED
AMENDED AND RESTATED
2016 EQUITY INCENTIVE PLAN
SECTION 1 - PURPOSE
The Plan is intended to provide a means whereby the Company may, through the grant of Awards to Employees, Consultants and Non-Employee Directors, attract and retain such individuals and motivate them to exercise their best efforts on behalf of the Company and of any Related Corporation. The Plan is amended and restated in its entirety effective as of the Restatement Effective Date to reflect (1) the inclusion of a Joint Stock Ownership Plan as a sub-plan reflected on Schedule A and (2) an increase of 650,000 Common Shares that may be used for Awards under the Plan.
SECTION 2 - DEFINITIONS
The following terms, when used herein, shall have the following meanings unless otherwise required by the context:
(a) “Approved Retirement”shall mean termination of a Grantee’s employment (i) on or after having met the conditions for normal or early retirement established under any defined benefit pension plan maintained by the Company or a Related Corporation and in which the Grantee participates or (ii) on or after attaining such age not less than 65 and completing such period of service, as the Committee shall determine from time to time. Notwithstanding the foregoing, the term “Approved Retirement” shall not apply to any Grantee whose employment with the Company or a Related Corporation has been terminated for Cause, whether or not such individual is deemed to be retirement eligible or is receiving retirement benefits under any defined benefit pension plan maintained by the Company or a Related Corporation and in which the Grantee participates or would otherwise satisfy the criteria set forth by the Committee as noted in the preceding sentence.
(b) “Award” shall mean an ISO, Jointly-Owned Shares, NQSO, Performance Stock, PSU, SAR, Restricted Stock, RSU, Bonus Share, or Dividend Equivalents, awarded under the Plan by the Company to an Employee, a Consultant or a Non-Employee Director.
(c) “Award Agreement” shall mean a written document evidencing the grant of an Award, as described in Section 11.
(d) “Board”shall mean the Board of Directors of the Company.
(e) “Bonus Shares” shall mean a grant of unrestricted Common Shares pursuant to Section 10(a).
(f) “Cause”shall mean (a) fraud or dishonesty that results in a material injury to the Company or any Related Corporation, (b) conviction or plea of nolo contendre of any felony or (c) any act or omission detrimental to the conduct of the business of the Company or any Related Corporation in any way.
(g) “Code” shall mean the United States Internal Revenue Code of 1986, as amended, including, for these purposes, any regulations promulgated by the Internal Revenue Service with respect to the provisions of the Code, and any successor thereto.
(h) “Committee” shall mean the Compensation Committee of the Board or such other committee of the Board as the Board shall designate from time to time, which committee shall consist solely of not fewer than two directors of the Company, each of whom shall be appointed by and serve at the pleasure of the Board, and each of whom are intended to be a “Non-Employee Director” within the meaning of Rule 16b-3 of the Exchange Act, an “outside director” within the meaning of Section 162(m) of the Code and an “independent director” within the meaning of Nasdaq Marketplace Rule 4200(a)(15), or any successors thereto.
(i) “Common Shares” shall mean the ordinary shares of the Company.
(j) “Company” shall mean Enstar Group Limited, a Bermuda corporation.
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| Enstar Group Limited | A-2 | Special Meeting Proxy Statement |
(k) “Consultant” shall mean an individual who is not an Employee or a Non-Employee Director and who has entered into a consulting arrangement with the Company or a Related Corporation to provide bona fide services that (i) are not in connection with the offer or sale of securities in a capital-raising transaction, and (ii) do not directly or indirectly promote or maintain a market for the Company’s securities.
(l) “Covered Employee” shall mean any Employee who is a “covered employee” within the meaning of Code section 162(m).
(m) “Dividend Equivalents” shall mean the right to receive an amount equal to the regular cash dividends paid by the Company upon one Common Share which is awarded to a Grantee in accordance with Section 9(e) or Section 10(b) of the Plan.
(n) “Employee” shall mean an officer or other employee of the Company or a Related Corporation.
(o) “Exchange Act” shall mean the United States Securities Exchange Act of 1934, as amended.
(p) “Fair Market Value” shall mean the following, arrived at by a good faith determination of the Committee:
(1) the closing price of the Common Shares on a registered securities exchange or an over-the-counter market on the applicable date; or
(2) such other method of determining fair market value that complies with Code §§422 and 409A and that is adopted by the Committee.
(q) “Grantee” shall mean an Employee, a Consultant or a Non-Employee Director who has been granted an Award under the Plan.
(r) “ISO” shall mean an Option which, at the time such Option is granted, qualifies as an incentive stock option within the meaning of Code §422 and is designated as an ISO in the applicable Award Agreement.
(s) "Jointly-Owned Shares" shall mean an award of Common Shares granted pursuant to Section 5(b) in accordance with the JSOP.
(t) "Joint Stock Ownership Plan" or "JSOP" shall mean a subplan designed to provide tax-efficient long-term equity incentive awards to our employees, non-employee directors and consultants who are U.K. tax residents.
(u) “Non-Employee Director” shall mean a director of the Company who is not an Employee.
(v) “NQSO” shall mean an Option which, at the time such Option is granted, does not qualify as an ISO (whether or not it is designated as an ISO in the applicable Award Agreement) or is not designated an ISO in the applicable Award Agreement.
(w) “Options” shall mean ISOs and NQSOs which entitle the Grantee on exercise thereof to purchase Common Shares at a specified exercise price for a specified period of time.
(x) “Performance Goals” shall mean the goal or goals applicable to a Grantee’s Award that are deemed by the Committee to be important to the success of the Company or any of its Related Corporations. The Committee shall establish the specific measures for each applicable goal for a Performance Period in accordance with the requirements of Section 3(d) hereof. Performance Goals need not be uniform with respect to each Grantee. In creating these measures, the Committee shall use one or more of the following business criteria: revenues, profit, consolidated net after-tax profit, income from operations, return on assets, return on net assets, return on equity, return on capital, market price appreciation of Common Shares, economic value added, total shareholder return, net income, pre-tax income, earnings per share, operating profit margin, net income margin, cash flow, market share, revenue growth, net revenue growth, net income growth, expense control and hiring of personnel. The business criteria may apply to the individual, a division, or to the Company and/or one or more Related Corporations and may be weighted and expressed in absolute terms or relative to the performance of other individuals or companies or an index.
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| Enstar Group Limited | A-3 | Special Meeting Proxy Statement |
(y) “Performance Period” shall mean a period of at least one (1) year and not more than five (5) years, selected by the Committee during which the performance of the Company or any Related Corporation or unit thereof or any individual is measured for the purpose of determining the extent to which an Award subject to Performance Goals has been earned.
(z) “Performance Stock” shall mean a type of Restricted Stock, where the lapse of restrictions is based on the actual achievement of Performance Goals.
(aa) “Plan” shall mean the Enstar Limited 2016 Equity Incentive Plan as set forth herein and as amended from time to time.
(bb) “PSU” shall mean a performance stock unit which is a type of RSU, the vesting of which is based on the actual achievement of Performance Goals.
(cc) “Related Corporation” shall mean each “subsidiary corporation” of the Company, as defined in Code §424(f).
(dd) "Restatement Effective Date" shall mean the date on which the Shareholders approve the amendment and restatement of the Plan, which occurred on [•].
(ee) “Restricted Period” shall mean the period of time during which RSUs or shares of Restricted Stock are subject to forfeiture or restrictions on transfer (if applicable) pursuant to Sections 8 and 9 of the Plan.
(ff) “Restricted Stock” shall mean Common Shares subject to restrictions determined by the Committee pursuant to Section 8.
(gg) “RSU” shall mean a restricted stock unit granted pursuant to Section 9.
(hh) “SAR” shall mean an Award entitling the recipient on exercise to receive an amount, in cash or Common Shares or in a combination thereof (such form to be determined by the Committee at or after grant, including after exercise of the SAR), determined by reference to appreciation in the value of Common Shares.
(ii) “Termination of Service” shall mean (i) with respect to an Award granted to an Employee, the termination of the employment relationship between the Employee and the Company and all Related Corporations; (ii) with respect to an Award granted to a Consultant, the termination of the consulting or advisory arrangement between the Consultant and the Company and all Related Corporations; and (iii) with respect to an Award granted to a Non-Employee Director, the cessation of the provision of services as a director of the Company and all Related Corporations; provided, however, that if the Grantee’s status changes from Employee, Consultant or Non-Employee Director to any other status eligible to receive an Award under the Plan, the Committee may provide that no Termination of Service occurs for purposes of the Plan until the Grantee’s new status with the Company and all Related Corporations terminates. For purposes of this paragraph, if a Grantee is an Employee, Consultant or Non-Employee Director of a Related Corporation and not the Company, the Grantee shall incur a Termination of Service when such corporation ceases to be a Related Corporation, unless the Committee determines otherwise. A Termination of Service shall not be deemed to have resulted by reason of a bona fide leave of absence approved by the Committee.
SECTION 3 - ADMINISTRATION
(a) Power to Grant. The Plan shall be administered by the Committee. Each member of the Committee, while serving as such, shall be deemed to be acting in his or her capacity as a director of the Company. Grantees shall be those Employees, Consultants and Non-Employee Directors designated by the affirmative action of the Committee to participate in the Plan. The Committee shall have full authority, subject to the terms of the Plan, to select the Employees, Consultants and Non-Employee Directors to be granted Awards under the Plan and the terms and conditions of any and all Awards including, but not limited to, (i) the number of Common Shares to be covered by each Award; (ii) the time or times at which Awards shall be granted; (iii) the terms and provisions of the instruments by which Options may be evidenced, including the designation of Options as ISOs or NQSOs; (iv) the determination of the period of time during which restrictions on Restricted Stock or RSUs shall remain in effect; (v) the establishment and administration of any Performance Goals and Performance Periods applicable to Awards granted under the Plan; and (vi) the development and implementation of specific stock-based programs for the
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| Enstar Group Limited | A-4 | Special Meeting Proxy Statement |
Company and any Related Corporation that are consistent with the intent and specific terms of the framework created by this Plan. Appropriate officers of the Company or any Related Corporation may suggest to the Committee the Employees, Consultants and Non-Employee Directors who should receive Awards, which the Committee may accept or reject in its sole discretion. The Committee shall determine the terms and conditions of each Award at the time of grant. The Committee may establish different terms and conditions for different Grantees and for the same Grantee for each Award such Grantee may receive, whether or not granted at different times.
(b) Rules, Interpretations and Determinations. The Committee may correct any defect, supply any omission, and reconcile any inconsistency in the Plan and in any Award granted hereunder, in the manner and to the extent it deems desirable. The Committee also shall have the authority (1) to establish such rules and regulations, not inconsistent with the provisions of the Plan, for the proper administration of the Plan, and to amend, modify, or rescind any such rules and regulations, (2) to adopt modifications, amendments, procedures, sub-plans and the like, which may be inconsistent with the provisions of the Plan, as are necessary to comply with the laws and regulations of other countries in which the Company operates in order to assure the viability of Awards granted under the Plan to individuals in such other countries, and (3) to make such determinations and interpretations under, or in connection with, the Plan, as it deems necessary or advisable. All such rules, regulations, determinations, and interpretations shall be binding and conclusive upon the Company, its shareholders, and all Grantees, upon their respective legal representatives, beneficiaries, successors, and assigns, and upon all other persons claiming under or through any of them. The Committee’s determinations under the Plan (including the determination of the Employees, Consultants and Non-Employee Directors to receive Awards, the form, amount and timing of such Awards, the terms and provisions of such Awards and the agreements hereunder) may vary, and need not be uniform, whether or not any such Employees, Consultants and Non-Employee Directors could be deemed to be similarly situated. Except as otherwise required by the by-laws of the Company or by applicable law, no member of the Board or the Committee shall be liable for any action or determination made in good faith with respect to the Plan or any Award granted under it.
(c) 409A Compliance. The Plan is intended to be administered in a manner consistent with the requirements, where applicable, of Section 409A of the Code. Where reasonably possible and practicable, the Plan shall be administered in a manner to avoid the imposition on Employees, Consultants and Non-Employee Directors of immediate tax recognition and additional taxes pursuant to such Section 409A. To that end, and without limiting the generality of the foregoing, unless otherwise expressly provided herein or in any Award Agreement, any amount payable or shares distributable hereunder in connection with the vesting of any Award (including upon the satisfaction of any applicable performance criteria) shall be paid not later than two and one-half months (or such other time as is required to cause such amounts not to be treated as deferred compensation under Section 409A of the Code) following the end of the taxable year of the Company or the Employee, Consultant and Non-Employee Director in which the Employee’s, Consultant’s or Non-Employee Director’s (as applicable) rights with respect to the corresponding Award (or portion thereof) ceased to be subject to a substantial risk of forfeiture. Notwithstanding the foregoing, neither the Company nor the Committee shall have any liability to any person in the event such Section 409A applies to any such Award in a manner that results in adverse tax consequences for the Employee, Consultant or Non-Employee Director or any of his beneficiaries or transferees.
(d) Performance Based Compensation Interpretations; Limitations on Discretion. Notwithstanding anything contained in the Plan to the contrary, to the extent the Committee has required upon grant that any Performance Stock or PSU must qualify as “other performance based compensation” within the meaning of Section 162(m)(4)(c) of the Code, the Committee shall (i) specify and approve the specific terms of any Performance Goals with respect to such Awards in writing no later than ninety (90) days from the commencement of the Performance Period to which the Performance Goal or Goals relate, and (ii) not be entitled to exercise any subsequent discretion otherwise authorized under the Plan (such as the right to authorize payout at a level above that dictated by the achievement of the relevant Performance Goals) with respect to such Award if the ability to exercise discretion (as opposed to the exercise of such discretion) would cause such Award to fail to qualify as other performance based compensation.
SECTION 4 - STOCK
Subject to any adjustment required by Section 12, the maximum aggregate number of Common Shares that may be delivered under the Plan is equal to the (1) number of Common Shares previously reserved and not subject to an outstanding award under the Plan immediately prior to the Restatement Effective Date, (2) any Common Shares that are subject to an award under the Plan as of the Restatement Effective Date that expires or is cancelled, terminated, forfeited or settled in cash and would have become available for future award under the Plan
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| Enstar Group Limited | A-5 | Special Meeting Proxy Statement |
and (3) 650,000 additional Common Shares (which total of (1), (2) and (3) is also the maximum aggregate number of shares that may be issued under the Plan through Options, SARs, Restricted Stock, RSUs, Performance Stock, PSUs, Bonus Shares Dividend Equivalents and Grants under the Joint Stock Ownership Plan), subject to the following limits:
(a) The aggregate number of Common Shares subject to Options granted to a Grantee during any calendar year under the Plan shall not exceed One Hundred Twenty Thousand (120,000) shares;
(b) The aggregate number of Common Shares subject to stock-settled SARs granted to a Grantee during any calendar year under the Plan shall not exceed One Hundred Twenty Thousand (120,000) shares; and
(c) The aggregate number of Common Shares subject to Performance Stock and PSUs granted to a Grantee during any calendar year under the Plan shall not exceed One Hundred Twenty Thousand (120,000) shares.
(d) The aggregate number of Common Shares subject to Bonus Shares granted to a Grantee under the Plan shall not exceed One Hundred Twenty Thousand (120,000) shares.
(e) The aggregate number of cash-settled SARs granted to a Grantee during any calendar year under the Plan shall not exceed Three Hundred Thousand (300,000) SARs.
These limits shall be subject to adjustment, as described in Section 12. Shares delivered under the Plan may be authorized but unissued shares or reacquired shares, and the Company may purchase shares required for this purpose, from time to time, if it deems such purchase to be advisable.
Except as provided herein, if any Award expires, terminates for any reason, is cancelled, is forfeited or is settled in cash rather than Common Shares, the number of Common Shares with respect to which such Award expired, terminated, was cancelled, was forfeited or was settled in cash, shall not count toward the maximum number of Common Shares that may be issued under the Plan as set forth in this Section 4 and shall continue to be available for future Awards granted under the Plan. However, if an Option or SAR is cancelled, or a PSU is settled for cash, (i) the Common Shares covered by the cancelled Option or SAR shall be counted against the maximum number of shares specified above for Options and SARs that may be granted to a single Grantee, and (ii) the cash-settled PSU shall be counted against the maximum number of shares specified above for PSUs and Performance Stock, in each case, that may be granted to a single Grantee. In addition, the following Common Shares shall not again become available for issuance under the Plan: (i) any and all awarded Common Shares that are withheld by the Company to satisfy any tax withholding obligation, or any previously-acquired Common Shares tendered in payment of taxes relating to any Award; (ii) Common Shares that would have been issued upon exercise of an Option but for the fact that the exercise was pursuant to a "net-exercise" arrangement, (iii) Common Shares covered by a SAR that are not issued in connection with the stock settlement of the SAR upon its exercise; and (iv) Common Shares that are repurchased by the Company using Option exercise proceeds.
SECTION 5 - GRANTING OF AWARDS
(a) The Committee may, on behalf of the Company, grant to Employees, Consultants and Non-Employee Directors such Awards as it, in its sole discretion, determines are warranted. More than one Award may be granted to an Employee, Consultant or Non-Employee Director under the Plan.
(b) An Award may be made in Common Shares where the Common Shares are jointly owned by the Grantee and the Enstar Employee Benefit Trust. The Grantee’s interest in the Jointly-Owned Shares shall be as determined by the Committee and shall be subject to such terms and conditions as may be established by the Committee. The Grantee 's interest in the Jointly-Owned Shares shall be settled by the delivery of Common Shares (or, at the trustee's election, cash) having a Fair Market Value equal to the value of such interest at the time of vesting. Any portion of the Jointly-Owned Shares that are not delivered to the Grantee shall continue to be available for future Grants under the JSOP but shall not otherwise be available for other forms of Awards under the Plan.
SECTION 6 - TERMS AND CONDITIONS OF OPTIONS
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| Enstar Group Limited | A-6 | Special Meeting Proxy Statement |
Subject to the provisions of Section 4, Options may be granted to Grantees at such time or times as shall be determined by the Committee. Except as otherwise provided herein, the Committee shall have complete discretion in determining the number of Options, if any, to be granted to a Grantee, except that ISOs may only be granted to Employees who satisfy the requirements for eligibility set forth under Code §424. The date of grant of an Option under the Plan will be the date on which the Option is awarded by the Committee or, if so determined by the Committee, the date on which occurs any event (including, but not limited to, the completion of an individual or corporate Performance Goal) the occurrence of which is an express condition precedent to the grant of the Option. Subject to Section 4, the Committee shall determine the number of Options, if any, to be granted to the Grantee. Each Option grant shall be evidenced by an Award Agreement that shall specify the type of Option granted and such other terms and conditions as the Committee shall determine which are not inconsistent with the provisions of the Plan. Options may be granted in tandem with SARs (as described in more detail in Section 7); provided, however, that grants of ISOs shall not be granted in tandem with any other Awards.
(a) Number of Shares. The Award Agreement shall state the number of Common Shares to which the Option pertains.
(b) Exercise Price. The Award Agreement shall state the exercise price (where relevant to the terms of the Award ) which shall be determined and fixed by the Committee in its discretion, but the exercise price shall not be less than the higher of 100 percent (110 percent in the case of an ISO granted to a more-than-ten-percent shareholder, as provided in subsection (i) below) of the Fair Market Value of the Common Shares subject to the Option on the date the Option is granted or the par value thereof. Except as a result of any Adjustment Event as defined in Section 12, without prior shareholder approval the Committee shall not have the power or authority to reduce, whether through amendment or otherwise, the exercise price of any outstanding Option or SAR nor to grant any new Options or SARS or other Awards, including cash, in substitution for or upon the cancellation of Options or SARs previously granted which shall have the effect of reducing the exercise price of any outstanding Option or SAR.
(c) Term. The term of each Option shall be determined by the Committee, in its discretion; provided, however, that the term of each Option shall be not more than ten years from the date of grant (with respect to an ISO, five years in the case of a more-than-ten-percent shareholder (as provided in subsection (g) below) from the date of grant of the ISO). Each Option shall be subject to earlier termination as provided in subsections (f) below.
(d) Exercise. Unless the Committee shall determine otherwise at the time of grant, one-third (1/3) of each Option granted pursuant to the Plan shall become exercisable on each of the first three (3) anniversaries of the date such Option is granted; provided that: (i) no Option shall become exercisable earlier than one (1) year after the date of grant (other than as may be permitted in Section 6(h)), and (ii) the Committee may establish performance-based criteria for exercisability of any Option.
Any exercisable Option may be exercised at any time up to the expiration or termination of the Option. Exercisable Options may be exercised, in whole or in part and from time to time, by giving notice of exercise to the Company at its principal office, specifying the number of shares to be purchased and accompanied by payment in full of the aggregate exercise price for such shares (except that, in the case of an exercise arrangement approved by the Committee and described in paragraph (4) below, payment may be made as soon as practicable after the exercise). Only full shares shall be issued, and any fractional share which might otherwise be issuable upon exercise of an Option shall be forfeited.
The Committee, in its sole discretion, shall determine from the alternatives set forth in paragraphs (1) through (5) the methods by which the exercise price may be paid. To the extent an Award Agreement does not include one or more alternative, the Committee hereby specifically reserves the right to exercise its discretion to allow the Grantee to pay the exercise price using such alternative:
(1) in cash or, if permitted by the Committee, its equivalent;
(2) in Common Shares previously acquired by the Grantee;
(3) in Common Shares newly acquired by the Grantee upon exercise of such Option (which shall constitute a disqualifying disposition in the case of an ISO);
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| Enstar Group Limited | A-7 | Special Meeting Proxy Statement |
(4) by delivering a properly executed notice of exercise of the Option to the Company and a broker, with irrevocable instructions to the broker promptly to deliver to the Company the amount necessary to pay the exercise price of the Option; or
(5) in any combination of paragraphs (1), (2), (3) and (4) above.
In the event the exercise price is paid, in whole or in part, with Common Shares, the portion of the exercise price so paid shall be equal to the aggregate Fair Market Value (determined as of the date of exercise of the Option) of the Common Shares used to pay the exercise price.
(e) ISO Annual Limit. The aggregate Fair Market Value (determined as of the date the ISO is granted) of the Common Shares with respect to which ISOs are exercisable for the first time by an Employee during any calendar year (counting ISOs under this Plan and under any other stock option plan of the Company or a Related Corporation) shall not exceed $100,000. If an Option intended as an ISO is granted to an Employee and the Option may not be treated in whole or in part as an ISO pursuant to the $100,000 limit, the Option shall be treated as an ISO to the extent it may be so treated under the limit and as an NQSO as to the remainder.
For purposes of determining whether an ISO would cause the limitation to be exceeded, ISOs shall be taken into account in the order granted.
(f) Termination of Service. Unless otherwise determined by the Committee at the time of grant and sets forth in the Award Agreement:
(1) For Cause. If a Grantee’s Termination of Service occurs prior to the expiration date fixed for his or her Options for Cause, any Options granted to such Grantee that are then not yet exercised shall be forfeited at the time of such termination and shall not be exercisable thereafter and the Committee may require that such Grantee disgorge any profit, gain or other benefit received in respect of the exercise of any such Award for a period of up to twelve (12) months prior to the Grantee’s Termination of Service for Cause.
(2) Approved Retirement. If a Grantee’s Termination of Service occurs prior to the expiration date fixed for his or her Option by reason of Approved Retirement, such Option may be exercised by the Grantee at any time prior to the earlier of (i) the expiration date specified in the Award Agreement, or (ii) one year after the date of such Termination of Service. Such Option may be exercised to the extent of the number of shares with respect to which the Grantee could have exercised it on the date of such Termination of Service, or to any greater extent permitted by the Committee, and shall terminate with respect to the remaining shares.
(3) Termination of Service for a Reason Other Than For Cause, Approved Retirement, Death or Disability. If a Grantee’s Termination of Service occurs prior to the expiration date fixed for his or her Option for any reason other than for Cause, Approved Retirement, death or disability, such Option may be exercised by the Grantee at any time prior to the earlier of (i) the expiration date specified in the Award Agreement, or (ii) three months after the date of such Termination of Service. Such Option may be exercised to the extent of the number of shares with respect to which the Grantee could have exercised it on the date of such Termination of Service, or to any greater extent permitted by the Committee, and shall terminate with respect to the remaining shares.
(4) Disability. If a Grantee becomes disabled (within the meaning of Code §22(e)(3)) prior to the expiration date fixed for his or her Option, and the Grantee’s Termination of Service occurs as a consequence of such disability, such Option may be exercised by the Grantee at any time prior to the earlier of (i) the expiration date specified in the Award Agreement, or (ii) one year after the date of such Termination of Service. Such Option may be exercised to the extent of the number of shares with respect to which the Grantee could have exercised it on the date of such Termination of Service, or to any greater extent permitted by the Committee, and shall terminate with respect to the remaining shares. In the event of the Grantee’s legal disability, such Option may be exercised by the Grantee’s legal representative.
(5) Death. Unless otherwise determined by the Committee at the time of grant and set forth in the Award Agreement, if a Grantee’s Termination of Service occurs as a result of death, prior to the expiration date fixed for his or her Option, or if the Grantee dies following his or her Termination of Service but prior to the expiration of the period determined under subsections (2), (3) or (4) above (including any extension of such period provided in the Award Agreement), such Option may be exercised by the Grantee’s estate, personal representative, or beneficiary who acquired the right to exercise such Option by bequest or inheritance or by reason of the death of
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the Grantee. Such post-death exercise may occur at any time prior to the earlier of (i) the expiration date specified in the Award Agreement, or (ii) one year after the date of the Grantee’s death. Such Option may be exercised to the extent of the number of shares with respect to which the Grantee could have exercised it on the date of his or her death, or to any greater extent permitted by the Committee, and shall terminate with respect to the remaining shares.
(g) More-Than-Ten-Percent Shareholder. If, after applying the attribution rules of Code §424(d), the Grantee owns stock possessing more than ten percent of the total combined voting power of all classes of stock of the Company or of a Related Corporation immediately before an ISO is granted to him or her, the exercise price for the ISO shall be not less than 110 percent of the Fair Market Value of the optioned Common Shares on the date the ISO is granted, and such ISO, by its terms, shall not be exercisable after the expiration of five years from the date the ISO is granted. The conditions set forth in this subsection shall not apply to NQSOs.
(h) Exception to Minimum One (1) Year Vesting. A combined number of Options and SARs up to a maximum of five percent (5%) of the Common Shares available for Awards under the Plan may be granted without regard to the minimum one (1) year minimum exercisability provision in Sections 6(d)(i) and 7(b)(i).
SECTION 7 - SARS
(a) Nature of SARs. An SAR entitles the Grantee to receive, with respect to each Common Share as to which the SAR is exercised, the excess of the share’s Fair Market Value on the date of exercise over its Fair Market Value on the date the SAR was granted. Such excess shall be paid in cash, Common Shares, or a combination thereof, as determined by the Committee. SARs may be granted to any Employee, Consultant or Non-Employee Director, all Employees, Consultants or Non-Employee Directors or any class of Employees, Consultants or Non-Employee Directors at such time or times as shall be determined by the Committee. SARs may be granted in tandem with an Option or on a freestanding basis, not related to any other Award. A grant of a SAR shall be evidenced in writing, whether as part of the agreement governing the terms of the Option, if any, to which such SARs relate or pursuant to a separate Award Agreement with respect to freestanding SARs, in each case containing such provisions not inconsistent with the Plan as the Committee shall approve.
(b) Exercise of SARs. Unless the Committee shall determine otherwise at the time of grant, one-third (1/3) of each SAR granted pursuant to the Plan shall become exercisable on each of the first three (3) anniversaries of the date such SAR is granted; provided that: (i) no SAR shall become exercisable earlier than one (1) year after the date of grant (other than as may be permitted by Section 7(d)), and (ii) the Committee may establish performance-based criteria for exercisability of any SAR. Any exercise of an SAR must be in writing, signed by the proper person, and delivered or mailed to the Company, accompanied by any other documents required by the Committee.
(c) Other Terms. Unless the Committee shall otherwise determine, the terms and conditions (including, without limitation, the exercise period of the SAR, the vesting schedule applicable thereto and the impact of any termination of service on the Grantee’s rights with respect to the SAR) applicable with respect to (i) SARs granted in tandem with an Option shall be substantially identical (to the extent possible taking into account the differences related to the character of the SAR) to the terms and conditions applicable to the tandem Options and (ii) freestanding SARs shall be substantially identical (to the extent possible taking into account the differences related to the character of the SAR) to the terms and conditions that would have been applicable under Section 6 were the grant of the SARs a grant of an Option. SARs that are granted in tandem with an Option may only be exercised upon the surrender of the right to exercise such Option for an equivalent number of shares and may be exercised only with respect to the shares of Stock for which the related Award is then exercisable.
(d) Exception to Minimum One (1) Year Vesting. A combined number of Options and SARs up to a maximum of five percent (5%) of the Shares available for Awards may be granted without regard to the minimum one (1) year minimum exercisability provision in Sections 6(d)(i) and 7(b)(i).
SECTION 8 - RESTRICTED STOCK
(a) General Requirements. The Committee, in its sole discretion, may make Awards to grantees of Restricted Stock. Any Award made hereunder of Restricted Stock shall be subject to the terms and conditions of the Plan and to any other terms and conditions not inconsistent with the Plan (including, but not limited to, requiring the Grantee to pay the Company an amount equal to the par value per share or such other amount for each share of
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Restricted Stock awarded) as shall be prescribed by the Committee in its sole discretion, either at the time of grant or thereafter. At the time Restricted Stock is granted, the Committee shall determine whether or not the Restricted Stock is Performance Stock.
(b) Shareholder Rights. Each Grantee who receives Restricted Stock shall have all of the rights of a shareholder with respect to such shares, subject to the restrictions set forth in subsection (c), including the right to vote the shares and receive dividends and other distributions. Any Common Shares or other securities of the Company received by a Grantee with respect to a share of Restricted Stock, as a stock dividend, or in connection with a stock split or combination, share exchange or other recapitalization, shall have the same status and be subject to the same restrictions as such Restricted Stock Any cash dividends with respect to a Grantee’s Restricted Stock shall be paid to the Grantee at the same time as such dividends are paid to other shareholders. Unless the Committee determines otherwise, certificates evidencing shares of Restricted Stock will remain in the possession of the Company until such shares are free of all restrictions under the Plan and the Grantee has satisfied any tax withholding obligations applicable to such shares.
(c) Restrictions. Except as otherwise specifically provided in the Plan, Restricted Stock may not be sold, assigned, transferred, pledged, or otherwise encumbered or disposed of, during the Restricted Period, except as hereinafter provided. Notwithstanding the foregoing, the Committee may permit (on such terms and conditions as it shall establish) shares of Restricted Stock to be transferred during the Restricted Periods pursuant to Section 17(d), provided that any shares of Restricted Stock so transferred shall remain subject to the provisions of this Section 8.
(d) Lapse of Restrictions.
(1) In General. Unless the Committee shall otherwise determine at the date an Award of Restricted Stock is made to the Grantee by the Committee, the Restricted Period shall commence upon the date of grant by the Committee and shall lapse with respect to the shares of Restricted Stock on the third (3rd)anniversary of the date of grant, unless sooner terminated as otherwise provided herein. Upon the lapse of all restrictions in accordance with this subsection (d) or Section 13, Common Shares shall cease to be Restricted Stock for purposes of the Plan.
(2) Termination of Service. Unless the Committee shall otherwise determine at the date of grant and sets forth in the Award Agreement:
(A) Due to Death or Disability. In the event a Grantee experiences a Termination of Service by reason of death or disability, the Restricted Period will lapse as to the entire portion of the shares of Restricted Stock transferred or issued to such Grantee under the Plan.
(B) Due to Cause. In the event a Grantee experiences a Termination of Service for Cause, any Restricted Stock granted to such Grantee shall be forfeited at the time of such termination, and the Committee may require that such Grantee disgorge any profit, gain or other benefit received in respect of the lapse of restrictions on any prior grant of Restricted Stock for a period of up to twelve (12) months prior to the Grantee’s Termination of Service for Cause.
(C) Due to Any Other Reason. In the event a Grantee experiences a Termination of Service for any other reason during the applicable vesting period, any Restricted Stock granted to such Grantee that is subject to a Restricted Period as of the date of Termination of Service shall be forfeited at the time of such termination.
(3) Performance Stock. With respect to Performance Stock, the Restricted Period shall lapse at the end of the applicable Performance Period to the extent the applicable Performance Goals established by the Committee for such Performance Stock have been achieved, as determined by the Committee. For any Covered Employees and to the extent the Committee intends to comply with the requirements for performance-based Awards described generally under Code section 162(m), the Committee must certify, prior to vesting of any Performance Stock, that any applicable Performance Goals and/or other requirements have been satisfied, and that such amounts are consistent with the limits provided under Section 4(c). In no event shall the Committee have discretion to increase the extent to which the restrictions applicable to Performance Stock shall lapse beyond the extent to which the Performance Goals have been satisfied. Except as provided in Section 13 or in a Grantee’s employment agreement, and unless the Committee shall otherwise determine at the date of grant and sets forth in the Award Agreement, if the Grantee’s Termination of Service occurs for any reason prior to the end
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| Enstar Group Limited | A-10 | 2018Special Meeting Proxy Statement |
of the Performance Period, the Grantee shall forfeit all Performance Stock granted with respect to such Performance Period.
(e) Notice of Tax Election. Any Grantee making an election under section 83(b) of the Code for the immediate recognition of income attributable to the award of Restricted Stock must provide a copy thereof to the Company within 10 days of the filing of such election with the United States Internal Revenue Service.
SECTION 9 - RSUs
(a) Nature of RSUs. An RSU entitles the Grantee to receive, with respect to each RSU that vests in accordance with subsection (c) or Section 13, one Common Share, cash equal to the Fair Market Value of a Common Share on the date of vesting, or a combination thereof as determined by the Committee and set forth in the Award Agreement. Any fractional RSU shall be payable in cash.
(b) Grant of RSUs. The Committee, in its sole discretion, may make Awards to Grantee of RSUs. Any Award made hereunder of Restricted Units shall be subject to the terms and conditions of the Plan and to any other terms and conditions not inconsistent with the Plan as shall be prescribed by the Committee in its sole discretion, either at the time of grant or thereafter. At the time of grant, the Committee shall determine the number of RSUs subject to the Award and whether or not the RSU is a PSU. The Company shall establish a bookkeeping account in the Grantee’s name which reflects the number and type of RSUs standing to the credit of the Grantee; no shares of Common Stock shall be issued at the time an Award of RSUs is made, and the Company shall not be required to set aside a fund for the payment of such Award. A Grantee shall not have any right, in respect of Restricted Units awarded pursuant to the Plan, to vote on any matter submitted to the Company’s stockholders until such time as Common Shares attributable to such Restricted Units have been issued to the Grantee.
(c) Vesting.
(1) In General. Unless the Committee shall otherwise determine at the date an Award of RSUs is made to the Grantee by the Committee, the Restricted Period shall commence upon the date of grant by the Committee and shall lapse with respect to the shares of RSUs on the third (3rd)anniversary of the date of grant, unless sooner terminated as otherwise provided herein.
(2) Termination of Service. Unless the Committee shall otherwise determine at the date of grant and sets forth in the Award Agreement:
(A) Due to Death or Disability. In the event a Grantee experiences a Termination of Service by reason of death or disability, the Restricted Period will lapse as to the entire portion of the shares of RSUs granted to such Grantee under the Plan.
(B) Due to Cause. In the event a Grantee experiences a Termination of Service for Cause, any RSUs granted to such Grantee shall be forfeited at the time of such termination, and the Committee may require that such Grantee disgorge any profit, gain or other benefit received in respect of the lapse of restrictions on any prior grant of RSUs for a period of up to twelve (12) months prior to the Grantee’s Termination of Service for Cause.
(C) Due to Any Other Reason. In the event a Grantee experiences a Termination of Service for any other reason during the applicable vesting period, any RSUs granted to such Grantee that are subject to a Restricted Period as of the date of Termination of Service shall be forfeited at the time of such termination.
(3) PSUs.With respect to PSUs, the Restricted Period shall lapse at the end of the applicable Performance Period to the extent the applicable Performance Goals established by the Committee for such PSUs have been achieved, as determined by the Committee. For any Covered Employees and to the extent the Committee intends to comply with the requirements for performance-based Awards described generally under Code section 162(m), the Committee must certify, prior to vesting of any PSUs, that any applicable Performance Goals and/or other requirements have been satisfied, and that such amounts are consistent with the limits provided under Section 4. In no event shall the Committee have discretion to increase the extent to which the restrictions applicable to PSUs shall become payable beyond the extent to which the Performance Goals have been satisfied. Except as provided in Section 13 or in a Grantee’s employment agreement that is approved by the Committee, and unless the Committee shall otherwise determine at the date of grant and sets forth in the Award Agreement, if the Grantee’s
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Termination of Service occurs for any reason prior to the end of the Performance Period, the Grantee shall forfeit all PSUs granted with respect to such Performance Period.
(d) Payment. Upon the vesting of an RSU in accordance with subsection (c) or Section 13, payment, in Common Shares or cash (as applicable), shall be made on the vesting date, unless a different date is specified in the Award Agreement.
(e) Dividend Equivalents. The Committee, in its sole discretion, may make Awards to Grantees of Dividend Equivalents in connection with the grant of RSUs and PSUs. Unless the Committee shall otherwise determine, the terms and conditions (including, without limitation, the payment date and vesting schedule applicable thereto and the impact of any termination of service on the Grantee’s rights with respect to such Dividend Equivalent) shall be substantially identical (to the extent possible taking into account the differences related to the character of the Dividend Equivalent) to the terms and conditions applicable to the associated RSU or PSU.
SECTION 10 - OTHER AWARDS
(a) Bonus Shares. The Committee may grant Bonus Shares under this Plan, including but not limited to awards under the Company's Annual Incentive Compensation Program. Such Bonus Shares shall be fully vested on the date made.
(b) Dividend Equivalents. The Committee, in its sole discretion, may make Awards to Grantees of Dividend Equivalents as a separate Award and not in connection with any other Award, except as otherwise specifically provided herein. Unless the Committee shall otherwise determine at the date an Award of Dividend Equivalents is made to the Grantee by the Committee, such Dividend Equivalents shall accumulate until the third anniversary of the date of grant, shall vest and be paid upon such third anniversary provided the Grantee has not incurred a Termination of Service prior to such date and shall thereafter prior to the earlier of the expiration date of such Award or the Grantee’s Termination of Service be paid to the Grantee at the same time as the corresponding cash dividends are paid to shareholders.
SECTION 11 - AWARD AGREEMENTS
Awards granted under the Plan shall be evidenced by Award Agreements in such form as the Committee shall from time to time approve, and containing such provisions, as the Committee shall deem advisable that are not inconsistent with the provisions of the Plan.
SECTION 12 - ADJUSTMENT IN CASE OF CHANGES IN COMMON SHARES
The following shall be adjusted, as deemed appropriate by the Committee, to reflect any stock dividend, stock split, reverse stock split, split-up, spin-off, distribution, recapitalization, reorganization, merger, consolidation, dissolution, liquidation, exchange of shares, warrants or rights offering to purchase Common Shares at a price substantially below Fair Market Value, share combination or reclassification, extraordinary cash dividend or similar change in the capitalization of the Company (an “Adjustment Event”):
(a) The maximum number and type of shares under the limits set forth in Section 4; and
(b) The number and type of shares issuable upon exercise or vesting of outstanding Options, SARs, PSUs, RSUs and Jointly-Owned Shares (as well as the option price per share under outstanding Options, the Fair Market Value of a share on the date an outstanding SAR was granted and the share price hurdle for any Joint Ownership Agreement).
In the event any such change in capitalization cannot be reflected in a straight mathematical adjustment of the number of shares issuable upon the exercise or vesting of outstanding Options, SARs, RSUs and Jointly-Owned Shares (and a straight mathematical adjustment of the exercise price or Fair Market Value on the date of grant of a SAR) or Grants under the Joint Stock Ownership Plan, the Committee shall make such adjustments as are appropriate to reflect most nearly such straight mathematical adjustment. Such adjustments shall be made only as necessary to maintain the proportionate interest of Grantees, and preserve, without exceeding, the value of Awards.
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To the extent deemed equitable and appropriate by the Committee and subject to any required action by shareholders of the Company, in any Adjustment Event that is a merger, consolidation, reorganization, liquidation, dissolution or similar transaction, any Award granted under the Plan shall be deemed to pertain to the securities and other property, including cash, to which a holder of the number of Common Shares covered by the Award would have been entitled to receive in connection with such Adjustment Event. Any shares of stock (whether Common Shares, shares of stock into which shares of Common Shares are converted or for
which shares of Common Shares are exchanged or shares of stock distributed with respect to Common Shares) or cash or other property received with respect to any Award granted under the Plan as a result of any Adjustment Event or any distribution of property shall, except as otherwise provided by the Committee, be subject to the same terms and conditions (and to the same extent) as were applicable to such Awards prior to the Adjustment Event.
SECTION 13 - CHANGE IN CONTROL
(a) Full Vesting. Unless determined otherwise by the Committee and subject to the provisions of Subsection 13(d) (relating to Section 409A) and Section 14 (relating to Options, SARs, Restricted Stock, and RSUs assumed or converted by an acquirer), in the event of a Change in Control, each Option and SAR then outstanding shall be fully exercisable regardless of the exercise schedule otherwise applicable to such Option and/or SAR, and the Restricted Period shall lapse as to each share of Restricted Stock and each RSU then outstanding. In connection with such a Change in Control, the Committee may, in its sole discretion, provide that each Option, SAR, Restricted Stock and/or RSU shall, upon the occurrence of such Change in Control, be cancelled in exchange for a payment per share/unit (the “Settlement Payment”) in an amount based on the Change in Control Price. Such Settlement Payment shall be in the form of cash or other property as determined by the Committee. Notwithstanding anything in the Section to the contrary, nothing herein shall increase the extent to which an Award is vested or exercisable if the Grantee’s Termination of Service occurs prior to the Change in Control.
(b) Performance-Based Awards. Unless determined otherwise by the Committee and subject to the provisions of Section 14, in the event of a Change in Control, (a) any outstanding Performance Stock and PSUs relating to Performance Periods ending prior to the Change in Control which have been earned but not paid shall become immediately payable, and (b) all then-in-progress Performance Periods for Performance Stock and PSUs that are outstanding shall end, and all Grantees shall be deemed to have earned an award equal to a pro-rata portion of the Grantee’s target award opportunity for the Performance Period in question based on the portion of the Performance Period which has been completed as of the date of the Change in Control. The Company may, in its sole discretion and on such terms and conditions as it deems appropriate, pay all such Awards either (i) in Common Shares and/or (ii) as a Settlement Payment in cash or other property on the 30th day following such Change in Control, based on the Change in Control Price.
(c) Definitions.
(1) For purposes of this Plan, a “Change in Control” with respect to the Company shall mean the first to occur of any of the following events:
(A) the acquisition by any person, entity or “group” required to file a Schedule 13D or Schedule 14D-1 under the Exchange Act (excluding, for this purpose, the Company, its subsidiaries, any employee benefit plan of the Company or its subsidiaries which acquires ownership of voting securities of the Company) of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) of 50% or more of either the then outstanding ordinary shares or the combined voting power of the Company’s then outstanding voting securities entitled to vote generally in the election of directors;
(B) the election or appointment to the Board, or resignation of or removal from the Board, of directors with the result that the individuals who as of the date hereof constituted the Board (the “Incumbent Board”) no longer constitute at least a majority of the Board, provided that any person who becomes a director subsequent to the date hereof whose appointment, election, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the Incumbent Board (other than an appointment, election or nomination of an individual whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of the directors of the Company) shall be, for purposes of this Plan, considered as though such person were a member of the Incumbent Board; or
(C) consummation, following approval by the shareholders of the Company, of: (i) a reorganization, merger or consolidation by reason of which persons who were the shareholders of the Company immediately prior
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to such reorganization, merger or consolidation do not, immediately thereafter, own more than 50% of the combined voting power of the reorganized, merged or consolidated company’s then outstanding voting securities entitled to vote generally in the election of directors, or (ii) a liquidation or dissolution of the Company or the sale, transfer, lease or other disposition of all or substantially all of the assets of the Company (whether such assets are held directly or indirectly).
(2) For purposes of this Plan, “Change in Control Price” means the highest price per Common Share paid in conjunction with any transaction resulting in a Change in Control (as determined in good faith by the Committee if any part of the offered price is payable other than in cash) or, in the case of a Change in Control occurring solely by reason of a change in the composition of the Board, the highest Fair Market Value of the Common Shares on any of the 30 trading days immediately preceding the date on which a Change in Control occurs; provided that, with respect to any portion of any Option or SAR, the Change in Control Price shall not exceed the Fair Market Value of the Common Shares on the date that a Change in Control occurs.
(d) Distribution of Amounts Subject to Section 409A. Notwithstanding anything in the Plan to the contrary, if any amount that is subject to Section 409A of the Code is to be paid or distributed solely on account of a Change in Control (as opposed to being paid or distributed on account of Termination of Service or within a reasonable time following the lapse of any substantial risk of forfeiture with respect to the corresponding Award), solely for purposes of determining whether such distribution or payment shall be made in connection with a Change in Control, the term Change in Control shall be deemed to be defined in the same manner as a "change in control event" is defined in Section 409A of the Code and the regulations thereunder. If any such distribution or payment cannot be made because an event that constitutes a Change in Control under the Plan is not a change of control event as defined under Section 409A, then such distribution or payment shall be distributed or paid at the next event, occurrence or date specified under the Plan or Award Agreement at which such distribution or payment could be made in compliance with the requirements of Section 409A of the Code.
SECTION 14 - ALTERNATIVE AWARDS
Notwithstanding Section 13, no cancellation, acceleration of exercisability, vesting, cash settlement or other payment shall occur with respect to any Option, SAR, Restricted Stock, RSU, Performance Stock and/or PSU if the Committee reasonably determines in good faith prior to the occurrence of a Change in Control that such Award shall be honored or assumed, or new rights substituted therefore (such honored, assumed or substituted award hereinafter called an “Alternative Award”), by a Grantee’s employer (or the parent or an affiliate of such employer) immediately following the Change in Control; provided that any such Alternative Award must:
(a) be based on stock that is traded on an established securities market;
(b) provide such Grantee with rights and entitlements substantially equivalent to or better than the rights, terms and conditions applicable under such Award, including, but not limited to, an identical or better exercise or vesting schedules;
(c) have substantially equivalent value to such Award (determined at the time of the Change in Control); and
(d) have terms and conditions which provide that in the event that the Grantee’s employment is involuntarily terminated for any reason other than for Cause, all of such Grantee’s Awards shall be deemed immediately and fully exercisable and/or all restrictions shall lapse, and shall be settled for a payment per each share of stock subject to the Alternative Award in cash, in immediately transferable, publicly traded securities, or in a combination thereof, in an amount equal to (i) the fair market value of such stock on the date of the Grantee’s termination (with respect to any Restricted Stock, and/or RSUs), (ii) the excess of the fair market value of such stock on the date of the Grantee’s termination over the corresponding exercise or base price per share, if any (with respect to any Option and/or SARs), or (iii) the Grantee’s target award opportunity for the Performance Period in question (with respect to any performance-based Awards).
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SECTION 15 - AMENDMENT OF THE PLAN AND OUTSTANDING AWARDS
The Board, pursuant to resolution, may at any time and from time to time amend, modify or suspend the Plan, in whole or in part, without notice to or consent of any Employee, Consultant or Non-Employee Director, provided, however, that the following amendments shall require the approval of shareholders:
(1) a change in the class or classes of employees eligible to participate in the Plan with respect to ISOs;
(2) except as permitted under Section 12, an increase in the maximum aggregate number of Common Shares with respect to which ISOs may be granted under the Plan;
(3) modification of the material terms of a “performance goal,” within the meaning of Treas. Reg. § 1.162-27(e)(4)(vi) or any successor thereto (to the extent compliance with section 162(m) of the Code is desired); and
(4) any amendment for which shareholder approval is required under the rules of the exchange or market on which the Common Shares are listed or traded.
Subject to the provisions of the Plan, the Committee may amend an outstanding Award in any respect whatsoever and at any time, in whole or in part, without notice to or consent of any Grantee.
No amendment, modification or termination of the Plan or any Award shall in any manner adversely affect any Award theretofore granted under the Plan, without the consent of the Grantee , provided, however, that (i) any change pursuant to, and in accordance with the requirements of, Section 14; (ii) any acceleration of payments of amounts accrued under the Plan
by action of the Committee or by operation of the Plan’s terms; or (iii) any decision by the Committee to limit participation (or other features of the Plan) prospectively under the Plan shall not be deemed to violate this provision.
SECTION 16 - TERMINATION OF PLAN; CESSATION OF ISO GRANTS
The Board, pursuant to resolution, may terminate the Plan at any time and for any reason. No Awards shall be granted hereunder after the 10th anniversary of the Restatement Effective Date. Nothing contained in this Section, however, shall terminate or affect the continued existence of rights created under Awards granted hereunder which are outstanding on the date the Plan is terminated and which by their terms extend beyond such date.
SECTION 17 - MISCELLANEOUS
(a) Effective Date. This Plan shall become effective on the date the shareholders of the Company approve the Plan.
(b) Rights. Neither the adoption of the Plan nor any action of the Board or the Committee shall be deemed to give any individual any right to be granted an Award, or any other right hereunder, unless and until the Committee shall have granted such individual an Award, and then his or her rights shall be only such as are provided in the Award Agreement and this Plan. Notwithstanding any provisions of the Plan or the Award Agreement with an Employee, the Company and any Related Corporation shall have the right, in its discretion but subject to any employment contract entered into with the Employee, to retire the Employee at any time pursuant to its retirement rules or otherwise to terminate his or her employment at any time for any reason whatsoever, or for no reason. A Grantee shall have no rights as a shareholder with respect to any shares covered by his or her Award until the issuance of a stock certificate to him or her for such shares, except as otherwise provided under Section 8(b) (regarding Restricted Stock).
(c) Indemnification of Board and Committee. Without limiting any other rights of indemnification which they may have from the Company and any Related Corporation, the members of the Board and the members of the Committee shall be indemnified by the Company against all costs and expenses reasonably incurred by them in connection with any claim, action, suit, or proceeding to which they or any of them may be a party by reason of any action taken or failure to act under, or in connection with, the Plan, or any Award granted hereunder, and
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against all amounts paid by them in settlement thereof (provided such settlement is approved by legal counsel selected by the Company) or paid by them in satisfaction of a judgment in any such action, suit, or proceeding, except a judgment based upon a finding of willful misconduct or recklessness on their part. Upon the making or institution of any such claim, action, suit, or proceeding, the Board or Committee member shall notify the Company in writing, giving the Company an opportunity, at its own expense, to handle and defend the same before such Board or Committee member undertakes to handle it on his or her own behalf. The provisions of this Section shall not give members of the Board or the Committee greater rights than they would have under the Company’s by-laws or Bermuda law.
(d) Transferability; Registration. No ISO, Jointly-Owned Shares, Restricted Stock or RSU shall be assignable or transferable by the Grantee other than by will or by the laws of descent and distribution. During the lifetime of the Grantee, an ISO shall be exercisable only by the Grantee or, in the event of the Grantee’s legal disability, by the Grantee’s guardian or legal representative. Except as provided in a Grantee’s Award Agreement, such limits on assignment, transfer and exercise shall also apply to NQSOs and SARs. If the Grantee so requests at the time of exercise of an Option or an SAR, or at the time of grant of Restricted Stock or vesting of an RSU, the certificate(s) shall be registered in the name of the Grantee and the Grantee’s spouse jointly, with right of survivorship.
(e) Beneficiary Designation. Each Grantee may designate the person(s) or entities as the beneficiary(ies) to whom the Grantee’s Award may (subject to the provisions of the Plan) be paid in the event of the Grantee’s death prior to the payment of such Award to him or her. Each beneficiary designation shall be substantially in the form determined by the Committee and shall be effective only when filed with the Committee during the Grantee’s lifetime. Any beneficiary designation may be changed by a Grantee without the consent of any previously designated beneficiary or any other person or entity, unless otherwise required by law, by the filing of a new beneficiary designation with the Committee. The filing of a new beneficiary designation shall cancel all beneficiary designations previously filed. If any Grantee fails to designate a beneficiary in the manner provided above, or if the beneficiary designated by a Grantee predeceases the Grantee, the Committee may direct such Grantee’s Award to be paid to the Grantee’s surviving spouse or, if the Grantee has no surviving spouse, then to the Grantee’s estate.
(f) Listing and Registration of Shares. Each Award shall be subject to the requirement that, if at any time the Committee shall determine, in its discretion, that the listing, registration, or qualification of the Common Shares covered thereby upon any securities exchange or under any state or federal law, or the consent or approval of any governmental regulatory body, is necessary or desirable as a condition of, or in connection with, the granting of such Award or the purchase of Common Shares thereunder, or that action by the Company, its shareholders, or the Grantee should be taken in order to obtain an exemption from any such requirement or to continue any such listing, registration, or qualification, no such Award may be exercised, in whole or in part, and no Jointly-Owned Shares, Restricted Stock, RSU or Bonus Shares may be awarded, unless and until such listing, registration, qualification, consent, approval, or action shall have been effected, obtained, or taken under conditions acceptable to the Committee. Without limiting the generality of the foregoing, each Grantee or his or her legal representative or beneficiary may also be required to give satisfactory assurance that such person is an eligible purchaser under applicable securities laws, and that the shares purchased or granted pursuant to the Award shall be for investment purposes and not with a view to distribution; certificates representing such shares may be legended accordingly.
(g) Withholding and Use of Shares to Satisfy Tax Obligations. The Company and any Related Corporation shall have the right and power to deduct from all payments or distributions hereunder, or require a Grantee to remit to the Company promptly upon notification of the amount due, an amount (which may include Common Shares) to satisfy any federal, state, local or foreign taxes or other obligations required by law to be withheld with respect thereto with respect to any Award. The Company may defer payments of cash or issuance or delivery of Common Shares until such withholding requirements are satisfied. The Committee may, in its discretion, permit a Grantee to elect, subject to such conditions as the Committee shall impose, (a) to have Common Shares otherwise issuable under the Plan withheld by the Company or (b) to deliver to the Company previously acquired Common Shares (through actual tender or attestation), in either case for the greatest number of whole shares having a Fair Market Value on the date immediately preceding the date of exercise not in excess of the amount required to satisfy the withholding tax obligations.
(h) Acquisitions. Notwithstanding any other provision of this Plan, Awards may be granted hereunder in substitution for awards held by employees, consultants or directors of other entities who are about to, or have, become Employees, Consultants or Non-Employee Directors as a result of a merger, consolidation, acquisition of
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| Enstar Group Limited | A-16 | Special Meeting Proxy Statement |
assets or similar transaction by the Company or Related Corporation. The terms of the substitute Awards so granted may vary from the terms set forth in this Plan to such extent the Committee may deem appropriate to conform, in whole or in part, to the provisions of the awards in substitution for which they are granted; provided, however, that no substitute Award shall be granted which will subject the Award to section 409A of the Code (if it previously was not subject to such Code section).
(i) Application of Funds. Any cash received in payment for shares pursuant to an Award shall be added to the general funds of the Company. Any Common Shares received in payment for shares shall become treasury stock.
(j) No Obligation to Exercise Award. The granting of an Award shall impose no obligation upon a Grantee to exercise such Award.
(k) Governing Law. The Plan shall be governed by the applicable Code provisions to the maximum extent possible. Otherwise, the laws of Bermuda (without reference to principles of conflicts of laws) shall govern the operation of, and the rights of Grantees under, the Plan, and Awards granted thereunder.
(l) Unfunded Plan. The Plan, insofar as it provides for Awards, shall be unfunded, and the Company shall not be required to segregate any assets that may at any time be represented by Awards under the Plan. Any liability of the Company to any person with respect to any Award under this Plan shall be based solely upon any contractual obligations that may be created pursuant to the Plan. No such obligation of the Company shall be deemed to be secured by any pledge of, or other encumbrance on, any property of the Company.
(m) No Guarantee of Participation. Except to the extent expressly selected by the Committee to be a Grantee, no person (whether or not an Employee, Consultant, Non-Employee Director or a Grantee) shall at any time have a right to be selected for (or additional) participation in the Plan, despite having previously participated in an incentive or bonus plan of the Company or an affiliate.
(n) No Limitation on Compensation; Scope of Liabilities. Nothing in the Plan shall be construed to limit the right of the Company to establish other plans if and to the extent permitted by applicable law. The liability of the Company or any Related Corporation under this Plan is limited to the obligations expressly set forth in the Plan, and no term or provision of this Plan may be construed to impose any further or additional duties, obligations, or costs on the Company or any affiliate thereof or the Committee not expressly set forth in the Plan.
(o) Requirements of Law. The granting of Awards and the issuance of Common Shares shall be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.
(p) No Impact On Benefits. Except as may otherwise be specifically provided for under any employee benefit plan, policy or program provision to the contrary, Awards shall not be treated as compensation for purposes of calculating an Employee’s right under any such plan, policy or program.
(q) No Constraint on Corporate Action. Except as provided in Section 15, nothing contained in this Plan shall be construed to prevent the Company or any Related Corporation, from taking any corporate action (including, but not limited to, the Company’s right or power to make adjustments, reclassifications, reorganizations or changes of its capital or business structure, or to merge or consolidate, or dissolve, liquidate, sell, or transfer all or any part of its business or assets) which is deemed by it to be appropriate, or in its best interest, whether or not such action would have an adverse effect on this Plan, or any Awards made under this Plan. No Employee, beneficiary, or other person, shall have any claim against the Company, or any Related Corporation, as a result of any such action.
(r) Distribution of Amounts Subject to Section 409A. Notwithstanding anything in the Plan to the contrary, if any amount that is subject to Section 409A of the Code is to be paid or distributed solely on account of a Change in Control (as opposed to being paid or distributed on account of Termination of Service or within a reasonable time following the lapse of any substantial risk of forfeiture with respect to the corresponding Award), solely for purposes of determining whether such distribution or payment shall be made in connection with a Change in Control, the term Change in Control shall be deemed to be defined in the same manner as a "change in control event" is defined in Section 409A of the Code and the regulations thereunder. If any such distribution or payment cannot be made because an event that constitutes a Change in Control under the Plan is not a change of control event as defined
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| Enstar Group Limited | A-17 | Special Meeting Proxy Statement |
under Section 409A, then such distribution or payment shall be distributed or paid at the next event, occurrence or date specified under the Plan or Award Agreement at which such distribution or payment could be made in compliance with the requirements of Section 409A of the Code.
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| Enstar Group Limited | A-18 | Special Meeting Proxy Statement |
SCHEDULE A
JOINT-STOCK OWNERSHIP PLAN SUB-PLAN
SECTION 1 - DEFINITIONS AND INTERPRETATION
In this Schedule and any Joint Ownership Agreement (as defined below), Plan refers to the Enstar Group Limited Amended and Restated 2016 Equity Incentive Plan, and unless otherwise stated, words and expressions defined in the Plan shall have the same meaning when used in this Schedule.
For the purposes of this Schedule and the Joint Ownership Agreement, Section 2 (Definitions) shall be extended to include the following:
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| (a) | “Eligible Individual” shall mean an Employee, Consultant or Non-Employee Director selected by the Committee to receive an Invitation. |
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| (b) | “Enstar Employee Benefit Trust” shall mean that certain trust entered into between the Company and a trustee selected by the Company pursuant to the deed of trust. |
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| (c) | “Grant” shall mean the acquisition of an Interest in Common Shares pursuant to the rules of the Plan and subject to the terms of a Joint Ownership Agreement. |
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| (d) | “Grant Date” shall mean the date on which the Employee, Consultant or Non-Employee Director executes the Joint Ownership Agreement. |
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| (e) | “Interest” shall mean a joint interest in Common Shares in the capital of the Company acquired by a Grantee pursuant to a Joint Ownership Agreement. |
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| (f) | “Invitation”shall mean an invitation from the Committee to an Eligible Individual to acquire an Interest given pursuant to Section 3 paragraph (a). |
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| (g) | “Joint OwnershipAgreement”shall mean an agreement made between the Company, the Grantee and the Trustee. |
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| (h) | “Trustee” shall mean the trustee or trustees for the time being of the Enstar Employee Benefit Trust. |
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| (i) | “Vest” shall mean in this Plan and in any related Joint Ownership Agreement, the date on which the Grantee becomes entitled to call for the sale of their Interest and “Vests”, “Vesting” and “Vested” shall be construed accordingly. |
SECTION 2 - GRANTING OF AWARDS
The Committee may, on behalf of the Company, make to Eligible Individuals such Grants as it, in its sole discretion, determines are warranted. More than one Grant may be made to an Eligible Individual under this Schedule.
SECTION 3 - TERMS AND CONDITIONS OF AWARDS
Subject to the provisions of Section 4 of the Plan, the Committee may, at any time, invite one or more Eligible Individuals, together with the Trustee, to acquire an Interest by subscribing jointly for a given number of Common Shares on, and subject to the terms of a Joint Ownership Agreement.
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| (b) | Acquisition of an Interest in Common Shares. |
Where an Eligible Individual receives an Invitation:
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| (i) | they may accept the Invitation (and acquire an Interest) by executing a Joint Ownership Agreement; |
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| Enstar Group Limited | A-19 | Special Meeting Proxy Statement |
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| (ii) | until they have accepted an Invitation pursuant to Section 3(b)(i) of this Schedule and the Committee has approved this, they shall have no rights to an Interest nor any rights under this Schedule; and |
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| (iii) | to the extent that a valuation of any Interest in the Common Shares is to be agreed for tax purposes with HM Revenue & Customs in connection with the provisions of the Income Tax (Earnings and Pensions) Act 2003 (“ITEPA”) or otherwise, the conduct of such valuation shall be undertaken by the Company. |
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| (i) | The Grantee and the Company or Related Corporation (as relevant) shall, on the Grant Date and as a condition of the Grant being made, enter into a joint election in respect of any Grant in accordance with section 431 of ITEPA to disapply in full the restricted securities legislation contained in Chapter 2 of Part 7 of ITEPA. |
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| (ii) | Every Grant shall be personal to the Grantee to whom it is granted and shall not be assigned, transferred or charged in any way (except as provided in any Joint Ownership Agreement or this Schedule). |
(d) Cessation of Employment or Office.
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| (i) | If a Grantee ceases to hold office or employment with the Company or a Related Corporation, a certificate issued by the Company as to the reason why the Grantee ceased to be a director, officer or employee shall be conclusive. |
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| (ii) | For the purposes of this Section 3(d), no person shall be treated as ceasing to hold an office or employment with the Company or a Related Corporation until that person no longer holds an office or employment with the Company or a Related Corporation. |
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| (iii) | For the purposes of this Section 3(d), if the Committee so determines, a Grantee will not be treated as ceasing to hold an office or employment with the Company or a Related Corporation if such Grantee is on an extended leave of absence, until the earlier of the date on which they notify their employer of their intention not to return or the date on which they cease to have any statutory or contractual rights to return to work. |
(e) Tax liability.
Each Grantee shall be responsible for, and indemnifies the Company and the Trustee against, all relevant taxes relating to their Award. The Company, or a Related Corporation, and/or the Trustee may withhold an amount equal to such relevant tax from any amounts due to the Grantee (to the extent such withholding is lawful) and/or make any other arrangements as it considers appropriate to ensure recovery of such relevant taxes including, without limitation, the sale of sufficient Common Shares acquired pursuant to the Grant to realise an amount equal to the relevant taxes (and the payment of that amount to the relevant authorities in satisfaction of the relevant taxes).
SECTION 4 - JOINT OWNERSHIP AGREEMENT
Grants made under this Schedule shall be evidenced by the Joint Ownership Agreement in such form as the Committee shall from time to time approve, and containing such provisions, as the Committee shall deem advisable that are not inconsistent with the provisions of this Schedule. The Joint Ownership Agreement shall, amongst other matters, set out:
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| (i) | the Vesting schedule and performance and other conditions for the Grant and the period during which the Grantee may serve notice on the Trustee requesting the Trustee to sell the Grantee's Interest; and |
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| (ii) | the treatment of any Grant if the Grantee's employment, engagement or service with the Company and any Related Corporation terminates. |
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| Enstar Group Limited | A-20 | Special Meeting Proxy Statement |
SECTION 5 - CHANGE IN CONTROL
Unless the Committee otherwise determines, Vesting of a Grant shall accelerate on a Change in Control so that the Grant is fully Vested as a result of such event and the Grantee may serve notice on the Trustee to accept the offer or other event with respect to the Grantee's Interest, unless the Trustee, in its discretion, decides to exchange the Common Shares subject to the Grant for the stock consideration payable to the Company's shareholders. Any stock consideration shall be held subject to the terms of the Grant as if the Change in Control event had not occurred. In the Committee's discretion, a Joint Ownership Agreement may require the satisfaction of performance conditions for accelerated vesting of a Grant to occur following a Change in Control.
SECTION 6 - ENSTAR EMPLOYEE BENEFIT TRUST AND TERMINATION THEREOF
Any Shares contributed to the Enstar Employee Benefit Trust may be used only for Grants of Jointly-Owned Shares and no other Awards. The Company in its discretion may terminate the Enstar Employee Benefit Trust, and upon such termination any Common Shares remaining in the Enstar Employee Benefit Trust shall revert to the Company. Upon termination of the Enstar Employee Benefit Trust, any Shares that revert to the Company shall no longer be available for Awards or Grants under the Plan and shall no longer be included in the number of available Shares determined under Section 4 of the Plan.
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| Enstar Group Limited | A-21 | Special Meeting Proxy Statement |
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ENSTAR GROUP LIMITED P.O. BOX HM 2267 WINDSOR PLACE, 3RD FLOOR 22 QUEEN STREET, HAMILTON HM JX, BERMUDA
[Investor Address] | | VOTE BY INTERNET - www.proxyvote.com/ESGR
Use the Internet to transmit your voting instructions and for electronic delivery of information up untilinformation. Vote by 11:59 P.M. Eastern Time the day before the cut-off date or meeting date.ET on November , 2019 for shares held directly and by 11:59 P.M. ET on November , 2019 for shares held in a plan. Have your proxy card in hand when you access the web sitewebsite and follow the instructions to obtain your records and to create an electronic voting instruction form.
ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our companyCompany in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years.
VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up untilinstructions. Vote by 11:59 P.M. Eastern Time the day before the cut-off date or meeting date.ET on November , 2019 for shares held directly and by 11:59 P.M. ET on November , 2019 for shares held in a plan. Have your proxy card in hand when you call and then follow the instructions. If you plan to vote for subsidiary directors on an individual basis under Proposal No. 4, you can do so only via Internet or mail by following the instructions on this proxy card.
VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. If you vote for subsidiary directors on an individual basis under Proposal No. 4, you must include the proxy card in the return envelope with the director booklet. |
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TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:x | |
| | E46818-P06558
| KEEP THIS PORTION FOR YOUR RECORDS |
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| | DETACH AND RETURN THIS PORTION ONLY |
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. |
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ENSTAR GROUP LIMITED | | | | | | | | | |
| The Board of Directors recommends you vote FOR the nominees for directors: | | | | | | | | | |
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| | 1. | Election of Directors | For | Against | Abstain | | | | | | |
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| | 1a. Sandra L. Boss | c | c | c | | | | | | |
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| | 1b. Hans-Peter Gerhardt | c | c | c | | | | | | |
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| | 1c. Dominic F. Silvester | c | c | c | | | | | | |
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| | 1d. Poul A. Winslow | c | c | c | | | | | | |
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| | The Board of Directors recommends you vote FOR Proposals No. 2 and 3.the following proposal. | | | | | | For | Against | Abstain | |
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| | 2.1. | Advisory vote to approve executive compensation.Approval of the amended and restated 2016 Enstar Group Limited Equity Incentive Plan. | c | c | c | |
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| | 3. | To ratify the appointment of KPMG Audit Limited as our independent registered public accounting firm for 2018 and to authorize the Board of Directors,NOTE: acting through the Audit Committee, to approve the fees for the independent registered public accounting firm.
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| The Board of Directors recommends you vote FOR each of the subsidiary director nominees listed in Proposal No. 4. | | | | |
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| 4. | Election of subsidiary directors as set forth in Proposal No. 4. | | c | c | c | |
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| Please refer to the back of the card for special voting instructions regarding Proposal No. 4. | | | | | |
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| In their discretion, the proxies are authorized to vote upon such other matters as may properly come before the meeting and any adjournment or postponement thereof. | | | | | |
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| | Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. | |
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| | | Signature [PLEASE SIGN WITHIN BOX] | Date | JOB # | Signature (Joint Owners) | Date | SEQUENCE # | |
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Enstar Group Limited | | 2018 Proxy Statement |
Important Notice Regarding the Availability of Proxy Materials for the AnnualSpecial Meeting:
The Notice and& Proxy Statement and Annual Report is/are available at www.proxyvote.com/ESGRwww.proxyvote.com.
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E46819-P06558
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ENSTAR GROUP LIMITED Annual GeneralSpecial Meeting of Shareholders
June 13, 2018November , 2019
This proxy is solicited by the Board of Directors |
The shareholder(s) hereby appoint(s) Dominic F. SilvesterPaul O'Shea and Paul J. O'Shea,Guy Bowker, or either of them, as proxies, each with the power to appoint his substitute, and hereby authorize(s) them to represent and to vote, as designated on the reverse side of this ballot, all of the ordinary shares of ENSTAR GROUP LIMITED that the shareholder(s) is/are entitled to vote at the Annual GeneralSpecial Meeting of Shareholders to be held at 9:00 AM,A.M., ADT on June 13, 2018November , 2019 at Enstar Group Limited, Windsor Place, 3rd Floor, 22 Queen Street, Hamilton, Bermuda, and any adjournment or postponement thereof.
This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors’ recommendations.
Special Voting Instructions Regarding Proposal No. 4:
You may vote FOR the election of all subsidiary director nominees, AGAINST the election of all subsidiary director nominees, or ABSTAIN from the election of all subsidiary director nominees by selecting the appropriate box next to Proposal No. 4.
Alternatively, you may vote FOR, AGAINST, or ABSTAIN from the election of each subsidiary director nominee on an individual basis either on the accompanying sheets by selecting the boxes next to each nominee's name and submitting your vote by mail, or on the Internet by following the instructions on the Internet voting page to vote on such an individual basis. If you mark any of the boxes next to Proposal No. 4 indicating a vote with respect to all subsidiary director nominees and also mark any of the boxes on the accompanying sheets indicating a vote with respect to a particular subsidiary director nominee, then your specific vote on the accompanying sheets will be counted and your vote on the other subsidiary director nominees will be governed by your vote on the reverse side.
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| Continued and to be signed on reverse side |
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Enstar Group Limited | | 2018 Proxy Statement |
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Enstar Group Limited | | 2018 Proxy Statement |
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Enstar Group Limited | | 2018 Proxy Statement |
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Enstar Group Limited | | 2018 Proxy Statement |
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Enstar Group Limited | | 2018 Proxy Statement |
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Enstar Group Limited | | 2018 Proxy Statement |
