| | FOR | | | 5. | To appoint Ernst & Young Ltd., an independent registered public accounting firm, | | | | | | | | | | | 4 | | Approval of: (i)the appointment of PricewaterhouseCoopers LLP (“PwC”) as our independent auditor, to serve until the Annual General Meeting to be held in 2019,2024; and to authorize (ii)the authorization of our Board of Directors, acting by the Audit Committee, to determine PwC’s remuneration | | | | FOR | | | | | | | | | | | | | | | 5 | | Transaction of any other business as may properly come before the independent auditor’s remuneration.Annual General Meeting and any adjournments or postponements thereof | | | | | | |
In addition, we will consider any other business as may properly come before the Annual General Meeting and any adjournments or postponements thereof.
Our audited financial statements as of and for the year ended December 31, 2017,2022, as approved by our Board of Directors, will be presented at the 2023 Annual General Meeting, pursuant to the provisions of the Companies Act 1981 of Bermuda, as amended, and the Company’s Bye-laws.Bye-laws of SiriusPoint Ltd. (the “Company,” “SiriusPoint,” “we,” “our” or “us”). YouShareholders of record at the close of business on April 10, 2023, are entitled to notice of and to vote at the Annual General Meeting and at any adjournments or postponements thereofthereof.
Even if you were a shareholder of record at the close of business on March 7, 2018 (the “Record Date”). Your vote is very important. Whether or not you plan to attend the meeting in person, please vote by submittingAnnual General Meeting virtually, you are encouraged to submit your proxy as soon as possible. You may vote your shares by internet, telephone or mail pursuant to the instructions included in the proxy card or voting instructions using one ofinstruction form. If you attend the voting methodsAnnual General Meeting virtually and want to revoke your previously submitted proxy, you may do so as described in the accompanying materials to ensure that your shares are represented atproxy statement and vote during the meeting on all matters properly brought before the Annual General Meeting. We encourage
If you to take advantage of our telephonehold shares beneficially in street name, you may direct your vote in the manner prescribed by your broker, bank or internet voting options. Please note that submitting a proxy using either of these methods will not preventother nominee or you from attendingmay vote during the Annual General Meeting andMeeting. Please refer to the voting in person.instruction form included by your broker, bank or nominee. This year, we will rely on the U.S. Securities and Exchange Commission’s “notice and access” rules that will permit us to electronically deliver proxy materials to some or all of our shareholders. These rules allow us to provide our shareholders with the information they need while lowering our printing and mailing costs, reducing the impact on the environment and more efficiently complying with our obligations under the federal securities laws. On or about March 27, 2018, we mailed a Notice of Internet Availability of Proxy Materials to our shareholders containing instructions on how to access our Proxy Statement and Annual Report and vote online or how to request a paper copy of the Proxy Statement and Annual Report, if desired. Shareholders who receive that notice will not receive a Proxy Card by mail unless they request one by following the instructions contained in the notice received, or below in the accompanying Proxy Statement.
Important Notice Regarding the Availability of Proxy Materials for the Annual General Meeting to be held on Wednesday, May 9, 2018: Third Point Reinsurance Ltd.’s Proxy Statement and 2017 Annual Report to Shareholders are available at: www.thirdpointre.com/investors/financial-information/financial-reports.
This Proxy Statement and the accompanying Proxy Card, Notice of Annual General Meeting of Shareholders, and the 2017 Annual Report to Shareholders (the “Annual Report”) were filed with the U.S. Securities and Exchange Commission (“SEC”) on March 27, 2018 and a Notice of Internet Availability of Proxy Materials was first mailed on or about March 27, 2018 to shareholders of record on the Record Date.
| | | | NOTICE OF 2023 ANNUAL GENERAL MEETING OF SHAREHOLDERS OF SIRIUSPOINT LTD. |
You can find detailed information regarding voting in the section entitled “General Information” in the accompanying proxy statement. | | | | | | | | | IMPORTANT NOTICE REGARDING THE AVAILABILITY OF
PROXY MATERIALS FOR THE ANNUAL GENERAL MEETING
OF SHAREHOLDERS TO BE HELD ON JUNE 1, 2023 | | By Order of the Board of Directors,
/s/ Janice R. WeidenbornerJIMMY YANG
Janice R. Weidenborner
Executive Vice President, GroupInterim General Counsel & Secretary
April 21, 2023 Pembroke, Bermuda
| The Company’s notice of the Annual General Meeting, proxy statement and SecretaryAnnual Report on Form 10-K for the fiscal year ended December 31, 2022, are available on: www.edocumentview.doc/SPNT. | | |
TABLE OF CONTENTS
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 122 | | AUDIT MATTERS | | | | | | | | | | | | | | | | | | | | | | | | | 131 | | INFORMATION ABOUT THE ANNUAL GENERAL MEETING AND VOTING | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS
AND THE ANNUAL GENERAL MEETING
Q: Why am I receiving these materials?
| | | A: | We are providing these proxy materials to you in connection with the solicitation by the Board of Directors of Third Point Reinsurance Ltd. of proxies to be voted at the Company’s Annual General Meeting and at any adjournments or postponements thereof. Because you were a Third Point Reinsurance Ltd. shareholder as of the close of business on the Record Date, our Board of Directors has made this Proxy Statement and Proxy Card available to you on the internet, in addition to delivering printed versions of this Proxy Statement and Proxy Card to certain shareholders by mail. This Proxy Statement provides notice of the Annual General Meeting, describes the five proposals presented for shareholder action and includes information required to be disclosed to shareholders. |
| | | Q: | Why did I receive a Notice of Internet Availability of Proxy Materials in the mail instead of a printed set of proxy materials?PROXY SUMMARY |
| | A: | Pursuant to rules adopted by the SEC, we are permitted to furnish our proxy materials over the internet to our shareholders by delivering a Notice of Internet Availability of Proxy Materials (“Notice”) in the mail. If you received a Notice by mail, you will not receive a printed copy of the proxy materials in the mail. Instead, the Notice instructs
This summary highlights information contained elsewhere in this proxy statement. This summary does not contain all of the information you should consider before voting. You should read the entire proxy statement carefully for a full understanding of the matters to be presented at the upcoming Annual General Meeting. Please note that information available on our website is not incorporated by reference into this proxy statement. We mailed a Notice of Internet Availability of Proxy Materials (the “Notice”) to each shareholder entitled to vote at the Annual General Meeting on or about April 21, 2023. The Notice contains instructions on how to access the proxy materials on the internet, how to vote online or by telephone and, if desired, how to access and review the Proxy Statement and Annual Report over the internet at www.envisionreports.com/TPRE. The Notice also instructs you on how you may submit your proxy over the Internet. If you received a Notice by mail and would like to receive a printed copy of our Proxy materials, you should follow the instructions for requesting these materials contained in the Notice. |
Shareholders who receive a printed set of proxy materials will not receive the Notice, but may still access our proxy materials and submit their proxies over the internet at www.envisionreports.com/TPRE.
Q: How do I get electronic access to the proxy materials?materials.
2023 ANNUAL GENERAL MEETING
| | | | | | | | | | | | | | | | | | | | | | | | A: | WHEN | | If | VIRTUAL WEBCAST | | | RECORD DATE | Thursday, June 1, 2023
10:00 a.m., Atlantic Daylight Time | | Via live audio webcast at www.meetnow.global/MMGN2CA | | April 10, 2023 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | 1 | | Election of two Class I director nominees named in this proxy statement for election to a 3-year term, expiring in 2026 | | | FOR each nominee | | | | | | | | | | •Franklin (Tad) Montross IV •Peter Wei Han Tan | | | | | | | | | | | | 2 | | Approval, by a non-binding advisory vote, of the executive compensation payable to the Company’s NEOs (Say-on-Pay) | | | FOR | | | 3 | | Approval of the 2023 Omnibus Incentive Plan | | | FOR | | | | | | | | | | | | 4 | | Approval of: (i)the appointment of PwC as our independent auditor, to serve until the Annual General Meeting to be held in 2024; and (ii)the authorization of our Board of Directors, acting by the Audit Committee, to determine PwC’s remuneration | | | FOR | | | | | | | | | | | | 5 | | Transaction of any other business as may properly come before the Annual General Meeting and any adjournments or postponements thereof | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | HOW TO VOTE | Your vote is important. Even if you plan to attend the meeting virtually, we encourage you to vote as soon as possible using one of the following methods. Have your proxy card or voting instruction form with the control number provided and follow the instructions. | | | | | | | | | | | | |
| | | INTERNET | | TELEPHONE | | MOBILE DEVICE | | MAIL | | AT THE MEETING | Registered Holders (your shares are held directly with our transfer agent, Computershare) | | envisionreports.com/ SPNT 24/7 | | Within the United States and Canada, 1-800-652-VOTE (8683) (toll-free, 24/7) | | Scan the QR code
| | Return a shareholder of record, you may elect to receive future annual reports or Proxy Statements electronically by visiting www-us.computershare.com/Investorproperly executed proxy card | | Attend the Annual General Meeting virtually and sign up, or while voting via the internet click the box to givecast yourconsent. If you hold your shares ballot | Beneficial Owners (holders in street name, you should contactname) | | www.proxyvote.com 24/7 | | Within the United States and Canada,
1-800-454-8683
(toll-free, 24/7) | | Scan the QR code
| | Return a properly executed voting instruction form, depending upon the method(s) your broker, bank or other nominee for information regarding electronic deliverymakes available | | To attend the annual general meeting virtually, you will need proof of ownership and a legal proxy materials.from your broker, bank or other nominee |
An electionABOUT SIRIUSPOINT
 We are a global underwriter of insurance and reinsurance, headquartered in Bermuda. Our common shares are listed on the New York Stock Exchange under the ticker SPNT. As of December 31, 2022, we had common shareholders’ equity of $1.9 billion, total capital of $2.9 billion and total assets of $11.0 billion. Our operating companies have a financial strength rating of A- from AM Best, S&P and Fitch. We have licenses to receive proxy materials electronically will remainwrite property, casualty and accident & health insurance and reinsurance globally, including admitted & non-admitted licensed companies in effectthe United States, a Bermuda Class 4 company, a Lloyd’s of London syndicate and managing agency, and an internationally licensed company domiciled in Sweden. Our business model is unique and diversified as we have three sources of earnings: (i) underwriting results where we are the risk taker; (ii) services fee income from Managing General Agents (“MGAs”) we consolidate; and (iii) investment results. Our purpose is to provide security and resilience in an uncertain world. Our vision is to be a best-in-class insurer and reinsurer, utilizing deep risk expertise to protect our customers, and blending our talent, expertise and data to provide intelligent risk solutions. Integrity, respect and trust are our core principles. We are customer focused because they are the reason we exist and we are solution driven; creating solutions is our mindset. Diversity and collaboration are part of our core values. We believe that diversity makes us stronger and collaboration drives outperformance.
BUSINESS SEGMENTS SiriusPoint reports on two operating segments: Reinsurance and Insurance & Services. Within our segments, we underwrite a variety of (re)insurance products. These are: | | | | | | | Reinsurance | | | Aviation & Space | Aviation operations and satellite insurance | | Casualty | Cross section of all Casualty lines including General Liability, Umbrella, Auto, Workers' Compensation, Professional Liability and other Specialty Classes | | Contingency | Covers event cancellation and non-appearance | | Credit & Bond | Short-term Commercial Credit and Bond Reinsurance | | Marine & Energy | Marine Reinsurance and yacht insurance; Offshore energy industry insurance | | Mortgage | Mortgage Reinsurance & Retrocession | | Property | Property Catastrophe Excess Reinsurance, Agriculture Reinsurance and Property Risk and Pro-Rata on a worldwide basis | | Insurance & Services | | | Accident & Health | A&H coverage, and our MGA units which include ArmadaCorp and International Medical Group (IMG) | | Environmental | Environmental Insurance book in the U.S. | | Workers’ Compensation | U.S. state-mandated Workers’ Compensation Insurance coverage | | Other | Property and Casualty lines, including, but not limited to, Property, General Liability, Excess Liability, Commercial Auto, Professional Liability, D&O, Cyber and other Specialty Classes |
BOARD OF DIRECTORS OVERVIEW | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | DIRECTOR AND
PRINCIPAL OCCUPATION | AGE | DIRECTOR SINCE | INDEPENDENT | COMMITTEE MEMBERSHIP | | AUDIT | COMPENSATION | GOVERNANCE & NOMINATING | INVESTMENT | RISK & CAPITAL MANAGEMENT | | CLASS I DIRECTORS, NOMINEES FOR ELECTION TO TERMS EXPIRING IN 2026 | | Franklin (Tad) Montross IV Former Chairman and CEO, General Re Corporation | 67 | 2021 | I | | | |
| | | Peter Wei Han Tan Chairman, CMIG International Holding Pte. Ltd. and CM Bermuda Ltd. | 50 | 2021 | | |
|
| | | | CLASS I DIRECTOR NOT STANDING FOR RE-ELECTION(1) | | Gretchen A. Hayes Managing Director, Sandbox Industries | 67 | 2018 | I | | | |
| | | CLASS II DIRECTORS, TERMS EXPIRING IN 2024 | | Daniel S. Loeb Chief Executive Officer, Third Point LLC | 61 | 2022 | | | | |
| | | Mehdi A. Mahmud President and CEO, First Eagle Investment Management; and President, First Eagle Funds | 50 | 2020 | I | | | | | | | Jason Robart Co-Founder and Managing Partner of Seae Ventures | 57 | 2022 | I | | | | | | | CLASS III DIRECTORS, TERMS EXPIRING IN 2025 | | Scott Egan Chief Executive Officer, SiriusPoint | 52 | 2022 | | | | | | | | Rafe de la Gueronniere Former Vice Chair, New Providence Asset Management | 70 | 2013 | I | | | | | | | Sharon M. Ludlow Former President, Aviva Insurance Company of Canada | 56 | 2021 | I | |
| | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Committee Chair | | Committee Member | | Interim Chair of the Board | I | Independent Director | | Audit Committee financial expert |
(1) Ms. Hayes is not standing for all future annual general meetings unless revoked. Shareholders requesting electronic delivery may incur costs, such as telephone and internet access charges, that must be borne byre-election to the shareholder.
Q: What proposals will be voted onBoard at the Annual General Meeting?Meeting.
DIRECTOR ATTRIBUTES Our board of directors (the “Board”) is comprised of nine directors, six of whom are independent. We believe our Board is well-balanced, reflecting diversity by age, gender, viewpoints, work experience, skills and expertise and race/ethnicity, including one director that identifies as African-American, two directors that identify as Asian, and two women directors. Our directors come from a variety of industries and have served in senior management and leadership positions, such as founders of companies, CEOs, CFOs, chief strategy officers and insurance industry executives. The Board has focused on identifying and appointing new directors with diverse skill sets to advise the Company as it focuses on creating a fully integrated, globally connected “One SiriusPoint”. BOARD REFRESHMENT We have added seven new directors to our Board since 2020, including one woman and three diverse men. Mr. Parkin resigned from the Board on April 6, 2022, Mr. Sankaran resigned from the Board on May 16, 2022 and Mr. Joshua L. Targoff resigned from the Board on May 20, 2022. Our annual Board evaluation process and director retirement policy at age 75 facilitates regular Board refreshment.
| | | | | | | | | | 2020 | 2021 | 2022 | | | | 1 new director joined | 3 new directors joined | 3 new directors joined | •Mehdi A. Mahmud | •Franklin (Tad) Montross IV •Peter Wei Han Tan •Sharon M. Ludlow | •Jason Robart •Daniel S. Loeb •Scott Egan |
CORPORATE GOVERNANCE HIGHLIGHTS CORPORATE GOVERNANCE POLICIES AND PRACTICES | | | | | | | | | | | | | | | | | | A:CORPORATE GOVERNANCE BEST PRACTICES | | There | Board Structure and Independence | | | | Six of our nine directors are five proposalsindependent, including all committee chairs | | Regular executive sessions of independent directors at each regularly scheduled Board meeting without management present | | | | 56% of our directors are women or ethnically/racially diverse | | Annual director self-evaluation and committee assessment to be votedensure Board effectiveness | | | | Balance of new and experienced directors and elected three new directors in 2021 and three new directors in 2022 | | Annual Board evaluation and external Board assessment every third year | | | | Highly skilled directors with diverse experience and backgrounds that provide a range of viewpoints and perspectives | | In 2022, all directors attended 100% of Board and committee meetings | | | | The Compensation Committee oversees the Company’s strategies related to diversity, equity and inclusion initiatives and key talent metrics | | | | | | Board Oversight | | | | Oversees the Company’s annual business plan and corporate strategy | | Proactive, comprehensive and strategic Board and senior management succession planning | | | | Director access to experts and advisors, both internal and external | | The Governance and Nominating Committee oversees Sustainability matters | | | | Strong risk management overseen by a separate Risk & Capital Management Committee | | Annual dedicated meeting focused on Company strategy | | | | Dedicated oversight over cybersecurity risk by Risk & Capital Management Committee | | Annual review of all corporate governance policies and committee charters to include best practices | | | | Strong Corporate Governance Practices | | | | Prohibition on hedging and pledging transactions by executive officers and directors | | Active and ongoing shareholder engagement | | | | Strong policy on public company board service resulting in no overboarded directors | | Comprehensive clawback policy for senior executives | | | | Robust Code of Business Conduct and Ethics with annual certification requirement | | Robust risk assessment of executive compensation program, policies and practices | | | | Director orientation and continuing education | | Strong commitment to Sustainability | | | | Director retirement policy at the Annual General Meeting:age 75 | | Meaningful share ownership requirements for senior executives and directors | | | | Our corporate governance documents, including charters of our Audit, Compensation, Governance and Nominating, Risk and Capital Management and Investment Committees, Code of Business Conduct and Ethics, Corporate Governance Guidelines, Board of Directors Communications Policy, Environmental Policy Statement, Related Person Transaction Policy, Vendor Code of Conduct and Whistleblower Polices are available on our website: investors.siriuspt.com/governance/governance-documents. | |
To elect three Class II directors
CORPORATE SOCIAL RESPONSIBILITY AND SUSTAINABILITY At SiriusPoint, our purpose is to provide security and oneresilience in an uncertain world. We aim to be a best-in-class insurer and reinsurer, utilizing deep risk expertise to protect our customers, and blending our talent, expertise and data to provide intelligent risk solutions. As we work to create value, making a positive social and environmental impact is important to us. We aim to reflect sound risk management, good governance and environmental and social responsibility throughout our company culture and operations. The Governance and Nominating Committee oversees our policies, practices and disclosures relating to Sustainability and receives regular updates on sustainability developments. The Company’s 2022 Sustainability journey is discussed further on page 35. For more information about our Sustainability Initiatives, please see our website, www.siriuspt.com/esg. EXECUTIVE COMPENSATION HIGHLIGHTS Our executive compensation program is designed to support the longevity and stability of the Company by driving long-term business outcomes, promoting strong governance practices and encouraging responsible risk-taking. This is achieved by linking individual pay with the Company’s performance on a diverse set of measures, including financial and strategic goals. Most senior executives’ compensation is variable and covers annual and multi-year performance periods. Long-term incentive awards are designed to align executives with the Company’s long-term performance through the use of restricted share units and stock options. Our executive compensation program, including our compensation principles and strategy, is discussed in detail under the Compensation Discussion and Analysis section of this proxy statement. Highlights of our 2022 executive compensation program include: | | | | | | | | | | | | | | | | Managed Substantial Executive Team Transition |
| Provided Sign-On Grants to Attract and Retain Talent |
| Significant Majority of NEOs’ Direct Compensation is At-Risk |
| | | BOARD OF DIRECTORS AND CORPORATE GOVERNANCE |
| | | | | | | PROPOSAL 1 | ELECTION OF DIRECTORS | | TO ELECT TWO CLASS I DIRECTORS TO OUR BOARD OF DIRECTORS TO HOLD OFFICE UNTIL THE ANNUAL GENERAL MEETING OF SHAREHOLDERS TO BE HELD IN 2026 OR UNTIL THEIR OFFICE SHALL OTHERWISE BE VACATED PURSUANT TO OUR BYE-LAWS |
Mr. Franklin (Tad) Montross IV and Mr. Peter Wei Han Tan have been nominated for election as Class I director,directors to serve for terms expiringuntil the annual general meeting of shareholders to be held in 20212026. Each director will hold his respective office until his successor has been elected and 2020, respectively,qualified or until their respectivethe director’s office shall otherwise be vacated pursuant to our Bye-laws; To approve and adoptBye-laws. The proxy will be voted in accordance with the amended and restated Bye-laws ofdirections thereon or, if no directions are indicated, the Company;
To approve, by a non-binding advisory vote, the executive compensation payable to the Company’s named executive officers as described in this Proxy Statement;
To elect certain individuals as Designated Company Directors of certain of our non-U.S. subsidiaries, as required by our Bye-laws; and
To appoint Ernst & Young Ltd., an independent registered public accounting firm, as our independent auditor to serve until the annual general meeting toproxy will be held in 2019 and to authorize our Board of Directors, acting by the Audit Committee, to determine the independent auditor’s remuneration.
Q: What is the Board of Directors’ voting recommendation?
| | A: | The Company’s Board of Directors recommends that you vote your shares: |
“FOR” the election of each of the nominees to the Board of Directors;
“FOR”the approval of the proposal to approve and adopt the amended and restated Bye-laws of the Company;
“FOR”the approval of the executive compensation payable to the Company’s named executive officers as disclosed in this Proxy Statement;
“FOR”voted for the election of the Designated Company Directors;two director nominees named above. The Board has proposed and
“FOR” recommended that each nominee be elected to hold office as described above. If any nominee shall, prior to the appointment of Ernst & Young Ltd., an independent registered public accounting firm,Annual General Meeting, become unavailable for election as a director, the Company’s independent auditor to serve untilpersons named in the annual general meeting toaccompanying proxy will vote in their discretion for such nominee, if any, as may be held in 2019, and to authorize our Board of Directors, actingrecommended by the Audit Committee,Board, or the Board may reduce the number of directors to determineeliminate the independent auditor’s remuneration.
vacancy.
Q: WhoIf a quorum is entitled to vote?
| | A: | All shares owned by you as of the Record Date, which is the close of business on March 7, 2018, may be voted by you, subject to certain restrictions on “controlled shares” described under the heading, “Will I be entitled to vote all of my shares at the Annual General Meeting?” below. You may cast one vote per common share that you held on the Record Date. These shares include shares that are: |
held directly in your name as the shareholder of record; and
held for you as the beneficial owner through a broker, bank or other nominee.
Holders of warrants are not entitled to votepresent at the Annual General Meeting, unless those warrants have been exercised and converted into shares aseach director will be elected by a plurality of the Record Date.
Onvotes cast in the Record Date, Third Point Reinsurance Ltd. had approximately 103,521,000 common shares outstanding, including 1,992,167 restricted shares.
Q: Will I be entitled to vote allelection of my shares at the Annual General Meeting?
| | A: | If your shares are treated as “controlled shares” (as determined pursuant to sections 957 and 958 of the Internal Revenue Code of 1986, as amended (the “Code”)) of any United States (“U.S.”) person (that owns shares directly or indirectly through non-U.S. entities) and such controlled shares constitute 9.5% or more of the votes conferred by our issued shares, the voting rights related to the controlled shares owned by such U.S. Person (as defined in our Bye-laws) will be limited, in the aggregate, to a voting power of less than 9.5%, under a formula specified in our Bye-laws. The formula is applied repeatedly until the voting power of all 9.5% shareholders (as defined in our Bye-laws) has been reduced to less than 9.5%. In addition, our Board of Directors may limit a shareholder’s voting rights when it deems it appropriate to do so to: (i) avoid the existence of any 9.5% shareholder; and (ii) avoid certain material adverse tax, legal or regulatory consequences to us, any of our subsidiaries or any direct or indirect shareholder or its affiliates. “Controlled shares” include, among other things, all shares that a U.S. Person is deemed to own directly, indirectly or constructively (within the meaning of section 958 of the Code). The amount of any reduction of votes that occurs by operation of the above limitations will generally be reallocated proportionately among our other shareholders whose shares were not “controlled shares” of the 9.5% shareholder so long as such reallocation does not cause any person to become a 9.5% shareholder. The applicability of the voting power reduction provisions to any particular shareholder depends on facts and circumstances that may be known only to the shareholder or related persons. Accordingly, we request that any holder of shares with reason to believe that they are a 9.5% shareholder, contact us promptly so that we may determine whether the voting power of such holder’s shares should be |
reduced. By submitting a proxy, a holder of shares will be deemed to have confirmed that, to their knowledge, they are not, and are not acting on behalf of, a 9.5% shareholder. The Board of Directors of the Company is empowered to require any shareholder to provide information as to that shareholder’s beneficial ownership of shares, the names of persons having beneficial ownership of the shareholder’s shares, relationships with other shareholders or any other facts the Board of Directors may consider relevant to the determination of the number of shares attributable to any person. The Board of Directors may disregard the votes attached to shares of any holder who fails to respond to such a request or who, in their judgment, submits incomplete or inaccurate information. The Board of Directors retain certain discretion to make such final adjustments that they consider fair and reasonable in all the circumstances as to the aggregate number of votes attaching to the shares of any shareholder to ensure that no person shall be a 9.5% shareholder at any time.
Q: What is the difference between holding shares as a shareholder of record and as a beneficial owner?
| | A: | Many of our shareholders hold their shares through a broker, bank or other nominee rather than directly in their own name. As summarized below, there are some differences between shares held of record and those owned beneficially. |
Shareholder of Record. If your shares are registered directly in your name with the Company’s transfer agent, Computershare, you are considered, with respect to those shares, the shareholder of record, and these proxy materials are being made available to you by the Company. As the shareholder of record, you have the right to grant your voting proxy directly to certain officers of Third Point Reinsurance Ltd. or to vote in person at the Annual General Meeting. You may vote on the internet or by telephone, or by mail if you received a Proxy Card by mail, as described below under the heading “How can I vote my shares without attending the Annual General Meeting?”.
Beneficial Owner. If your shares are held in an account at a broker, bank or other nominee, like many of our shareholders, you are considered the beneficial owner of shares held in street name, and these proxy materials were forwarded to you by that organization. As the beneficial owner, you have the right to direct your broker, bank or other nominee how to vote your shares, and you are also invited to attend the Annual General Meeting.
Since a beneficial owner is not the shareholder of record, you may not vote your shares in persondirectors at the Annual General Meeting, unless you obtain a “legal proxy” from the broker, bank, or other nominee that is the shareholder of record of your shares giving you the right to vote the shares at the Annual General Meeting. If you do not wish to voteeither in person or you will not be attending the Annual General Meeting, you may voterepresented by properly authorized proxy. This is done by proxy by completing, signing and returningmeans that the proxy card or overnominees who receive the internet or by telephone, as described below under the heading “How can I vote my shares without attending the Annual General Meeting?”.
Q: How can I vote my shares in person at the Annual General Meeting?
| | A: | Shareholder of Record. Shares held directly in your name as the shareholder of record may be voted in person at the Annual General Meeting. If you choose to vote your shares in person at the Annual General Meeting, please bring proof of identification, such as a driver’s license or passport. Even if you plan to attend the Annual General Meeting, the Company recommends that you vote your shares in advance as described below so that your vote will be counted if you later decide not to attend the Annual General Meeting.
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Beneficial Owner. Shares held in street name may be voted in person by you only if you obtain a signed proxy from the shareholderlargest number of record giving you the right to vote the shares.
Q: What must I do if I want to attend the Annual General Meeting in person?
| | A: | Attendance at the Annual General Meeting is limited to individuals who were shareholders as of the Record Date and admission will be on a first-come, first-served basis. Registration and seating will begin at 9:45 a.m.,
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Atlantic Daylight Time, on the date of the Annual General Meeting. Each shareholder“FOR” votes cast will be asked to present proof of identification, suchelected as a driver’s license or passport, prior to admissiondirector. For further information, see the answers to the Annual General Meeting. Beneficial owners of shares held in street name will need to bring proof of share ownership as of the Record Date, such as a bank or brokerage firm account statement or a letter from the intermediary holding your shares. Cameras, recording devices and other electronic devices will not be permitted at the Annual General Meeting.
Q: How can I vote my shares without attending the Annual General Meeting?
| | A: | Whether you hold your shares directly as the shareholder of record or beneficially own your shares in street name, you may direct your vote without attending the Annual General Meeting by voting in one of the following manners: |
Internet. Go to the website listed on your proxy card or voting instruction card and follow the instructions there. You will need the control number included on your proxy card or voting instruction form;
Telephone. Dial the number listed on your proxy card or your voting instruction form. You will need the control number included on your proxy card or voting instruction form; or
Mail. Complete and sign your proxy card or voting instruction card and mail it using the enclosed, prepaid envelope.
If you vote on the internet or by telephone, you do not need to return your proxy card or voting instruction card. Internet and telephone voting for shareholders will be available 24 hours a day, and will close at 5:00 p.m., Atlantic Daylight Time, on May 8, 2018.
Q: questions “What is the quorum requirement for the Annual General Meeting?
| | A: | A quorum is necessary to hold a valid Annual General Meeting. At the Annual General Meeting two or more persons present in person throughout the meeting and representing in person or by proxy in excess of 50% of the total issued voting shares in the Company throughout the meeting shall form a quorum for the transaction of business, provided, however that no shareholder may participate in any general meeting during which that shareholder (or, if any shareholder is an entity, its representative) is physically present in the United States. Abstentions and broker non-votes are counted as present for determining whether a quorum exists. A broker non-vote occurs when an intermediary holding shares for a beneficial owner does not vote on a particular proposal because the intermediary does not have discretionary voting power for that particular proposal and has not received instructions from the beneficial owner. |
Q: What happens if I do not give specific voting instructions?
| | A: | Shareholder of Record. If you are a shareholder of record and you submit a signed proxy card or submit your proxy by telephone or the internet, but do not specify how you want to vote your shares on a particular proposal, then the proxy holders will vote your shares in accordance with the recommendations of the Board of Directors on all matters presented in this Proxy Statement. With respect to any other matters properly presented for a vote at the Annual General Meeting, the proxy holders will vote your shares in accordance with their best judgment.
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Beneficial Owner. If you are a beneficial owner of shares held in street name” and do not provide the broker, bank or other nominee that holds your shares with specific voting instructions, under the rules of the New York Stock Exchange (the “NYSE”), the broker, bank or other nominee that holds your shares may generally vote on routine matters but cannot vote on non-routine matters such as the election of directors. If the broker, bank or other nominee that holds your shares does not receive instructions from you on how to vote your shares on a non-routine matter, the broker, bank or other nominee that holds your shares will inform the inspector of
election that it does not have the authority to vote on this matter with respect to your shares. This is generally referred to as a “broker non-vote.” Therefore, we urge you to give voting instructions to your broker. Shares represented by such broker non-votes will be counted in determining whether there is a quorum. Because broker non-votes are not considered entitled to vote, they will have no effect on the outcome other than reducing the number of shares present in person or by proxy and entitled to vote from which a majority is calculated.
Q: Which proposals are considered “routine” or “non-routine”?
| | A: | The appointment of Ernst & Young Ltd., an independent registered public accounting firm, as our independent auditor to serve until the annual general meeting to be held in 2019, and the authorization of the Board of Directors, acting by the Audit Committee, to determine the independent auditor’s remuneration (Proposal No. 5) is a matter considered routine under applicable rules. A broker or other nominee may generally vote on routine matters, and therefore no broker non-votes are expected to exist in connection with Proposal No. 5. The election of directors, the approval of amendments to the Company’s Bye-laws, the advisory vote on executive compensation, and the election of the Designated Company Directors (Proposal Nos. 1, 2, 3, and 4) are matters considered non-routine under applicable rules. A broker, bank or other nominee cannot vote without instructions on non-routine matters, and therefore there may be broker non-votes on Proposal Nos.1, 2, 3, and 4. |
Q: “What is the voting requirement to approve each of the proposals?”
The age, business experience, qualifications and directorships in other companies of each nominee for election are set forth herein under the section entitled “Information Regarding the Class I Director Nominees for Election to the Board.”
| | | | | | A: | Three Class II directors and one ClassTHE BOARD OF DIRECTORS UNANIMOUSLY RECOMMEND THAT YOU VOTE FOR THE ELECTION OF EACH OF THE CLASS I director have been nominated for election at the Annual General Meeting to hold office until the 2021 and 2020 annual general meetings, respectively, or until their respective office shall otherwise be vacated pursuant to our Bye-laws (Proposal No. 1). Each director will be elected by a plurality of the votes cast in the election of directors at the Annual General Meeting, either in person or represented by properly authorized proxy. This means that the four nominees who receive the largest number of “for” votes cast will be elected as directors. Abstentions and broker non-votes will have no effect on this proposal.DIRECTOR NOMINEES TO THE BOARD. |
In accordance with Bermuda law, only votes cast “for” a matter constitute affirmative votes. A properly executed proxy marked “abstain” with respect to Proposal Nos. 2, 3, 4, and 5 will not be voted, although it will be counted for purposes of determining whether there is a quorum. Since abstentions will not be votes cast “for” Proposal Nos. 2, 3, 4, and 5 they will have the same effect as negative votes or votes against that matter. Broker non-votes will have no effect on these proposals.
Q: What does it mean if I receive more than one proxy or voting instruction card?
| | | | | | | | | A: | It means your shares are registered differently or are in more than one account. Please provide voting instructions for all proxy and voting instruction cards you receive. |
Q: Who will count the votes?
| | A: | A representative of Computershare will tabulate the votes and act as the inspector of election. |
Q: Can I revoke my proxy or change my vote?
| | A: | Yes. You may revoke your proxy or change your voting instructions at any time prior to the vote at the Annual General Meeting by: |
providing written notice to the Secretary of the Company;
delivering a valid, later-dated proxy or a later-dated vote on the internet or by telephone; or
attending the Annual General Meeting and voting in person.
Please note that your attendance at the Annual General Meeting in person will not cause your previously granted proxy to be revoked unless you specifically so request. Shares held in street name may be voted in person by you at the Annual General Meeting only if you obtain a signed proxy from the shareholder of record giving you the right to vote the shares.
Q: Who will bear the cost of soliciting votes for the Annual General Meeting?
| | A: | Third Point Reinsurance Ltd. will pay the entire cost of preparing, assembling, printing, mailing and distributing these proxy materials. In addition to the mailing of these proxy materials, the solicitation of proxies or votes may be made in person, by telephone or by electronic and facsimile transmission by our directors, officers and employees, who will not receive any additional compensation for such solicitation activities. In addition, the Company may reimburse its transfer agent, brokerage firms and other persons representing beneficial owners of Third Point Reinsurance Ltd.’s common shares for their expenses in forwarding solicitation material to such beneficial owners. The Company has retained Georgeson LLC to assist in the solicitation of proxies for a customary fee plus reasonable expenses. |
Q: Is my vote confidential?
| | A: | Yes. The Company encourages shareholder participation in corporate governance by ensuring the confidentiality of shareholder votes. The Company has designated Computershare, the Company’s independent transfer agent and registrar, to receive and tabulate shareholder votes. Your vote on any particular proposal will be kept confidential and will not be disclosed to the Company or any of its officers or employees except: (i) where disclosure is required by applicable law; (ii) where disclosure of your vote is expressly requested by you; or (iii) where the Company concludes in good faith that a bona fide dispute exists as to the authenticity of one or more proxies, ballots or votes, or as to the accuracy of any tabulation of such proxies, ballots or votes. However, aggregate vote totals will be disclosed to the Company from time to time and publicly announced at the Annual General Meeting. |
Q: How can I obtain a copy of Third Point Reinsurance Ltd.’s Annual Report on Form 10-K?
| | A: | The Company’s Annual Report on Form 10-K for the year ended December 31, 2017, as filed with the SEC, is available to shareholders free of charge on Third Point Reinsurance Ltd.’s website at http://www.thirdpointre.com or by writing to Third Point Reinsurance Ltd., Investor Relations, Point House, 3 Waterloo Lane, Pembroke HM 08, Bermuda or via email at investorrelations@thirdpointre.bm. The Company’s 2017 Annual Report to Shareholders, which includes such Form 10-K, accompanies this Proxy Statement.
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Q: Where can I find the voting results of the Annual General Meeting?
| | A: | Third Point Reinsurance Ltd. will announce preliminary voting results at the Annual General Meeting and publish preliminary, or final results if available, in a Current Report on Form 8-K within four business days of the Annual General Meeting. |
Point House
3 Waterloo Lane
Pembroke HM 08, Bermuda
PROXY STATEMENT
The Board of Directors (the “Board of Directors” or “Board”) of Third Point Reinsurance Ltd. (the “Company”, “Third Point Re”, “we”, “us”, or “our”) is soliciting your proxy to vote at the 2018 Annual General Meeting of Shareholders to be held on May 9, 2018, at 10:00 a.m., Atlantic Daylight Time, and any adjournments or postponements of that meeting. The Annual General Meeting will be held at the Executive Boardroom, “The WaterFront Residence”, 11 Waterloo Lane, Pembroke HM 08, Bermuda. A Notice of Internet Availability of Proxy Materials, or this Proxy Statement and the accompanying Proxy Card, Notice of 2018 Annual General Meeting of Shareholders, and the 2017 Annual Report to Shareholders, were first mailed on or about March 27, 2018, to shareholders of record as of March 7, 2018 (the “Record Date”).
EXPLANATORY NOTES
Unless the context otherwise indicates or requires, as used in this Proxy Statement references to “Third Point Re”, “we”, “us”, “our”, and the “Company”, refer to Third Point Reinsurance Ltd. and its directly and indirectly owned subsidiaries, including Third Point Reinsurance Company Ltd. (“Third Point Re BDA”) and Third Point Reinsurance (USA) Ltd. (“Third Point Re USA”), as a combined entity, except where otherwise stated or where it is clear that the terms mean only Third Point Reinsurance Ltd. exclusive of its subsidiaries.
BOARD OF DIRECTORS EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Board of Directors
The Company’sOur business and affairs are managed under the direction of the Board of Directors, which is the Company’s ultimate decision-making body, except with respect toother than those matters reserved for the Company’s shareholders.
The Board of Directors’ mission is to maximize long-term shareholder value. The Board of Directors establishes the Company’s overall corporate policies, evaluates the Company’s Chief Executive Officer and the senior leadership team and acts as an advisor and counselor to senior management. The Board of Directors also oversees the Company’s business strategy and planning, as well as the performance of the Company’s management in executing the Company’s business strategy, assessing and managing risks and managing the Company’s day-to-day operations.
Executive Officers
Our executive officers are appointed by and serve at the discretion of the Board of Directors. The biographical information for our executive officers is provided below. The ages of our executive officers are as of February 28, 2018.
J. Robert Bredahl, 55. Mr. Bredahl is the President and Chief Executive Officer of Third Point Reinsurance Ltd. and has served in this position since March 1, 2017. He also serves as Chief Executive Officer of Third Point Reinsurance (USA) Ltd. and has served in this position since August 3, 2017. In addition, Mr. Bredahl was appointed to serve as a Class II Director of the Company on December 22, 2017. From November 24, 2015, to August 2, 2017, Mr. Bredahl served as the Chief Executive Officer of Third Point Reinsurance Company Ltd. From November 10, 2014, to February 28, 2017, Mr. Bredahl served as our President and Chief Operating Officer, prior to which Mr. Bredahl served as the Chief Financial Officer and Chief Operating Officer of the Company from January 26, 2012, and as the President and Chief Underwriting Officer of Third Point Reinsurance Company Ltd. until March 1, 2015, and March 1, 2017,
respectively. Prior to joining the Company, Mr. Bredahl was the Chief Executive Officer of Aon Benfield Securities, Aon’s Investment Banking Group, and the President of the Americas division of Aon Benfield, the premier reinsurance intermediary and capital advisor, from November 2008 to January 2012. Prior to Aon’s acquisition of Benfield in November 2008, Mr. Bredahl held various senior level positions at Benfield and at the time of acquisition was Chief Executive Officer of Benfield U.S. Inc. and of Benfield Advisory. Prior to joining Benfield in March 2002, he served as Chief Executive Officer of Inreon PLC and Managing Director and Head of U.S. Derivative Sales for Barclays Capital. Mr. Bredahl earned a Bachelor of Arts degree in Economics from Middlebury College. While at Aon Benfield Securities he held several securities licenses, including the Series 24, Series 7 and Series 63.
Nicholas J. D. Campbell, 49. Mr. Campbell is our Chief Risk Officer and has served in this position since November 5, 2014. Mr. Campbell also serves as Executive Vice President, Underwriting of Third Point Reinsurance Company Ltd. and has done so since May 3, 2017, prior to which he served as Senior Vice President, Underwriting from December 17, 2013, when he joined the Company. From May 2012 to July 2013, Mr. Campbell served as the Chief Risk Officer for Endurance Specialty Holdings Ltd. Mr. Campbell also served as Senior Vice President, Head of Specialty Treaty Reinsurance with Endurance Specialty Insurance Ltd. from November 2009 to June 2012. Prior to this, Mr. Campbell held several roles in the reinsurance industry, including Senior Vice President and Chief Actuary with ACE Capital Re International Ltd. and Vice President and Actuary with Centre Solutions Bermuda and Actuarial Consultant with Towers Perrin in the UK. Mr. Campbell is a graduate of Cambridge University, a Fellow of the Institute of Actuaries and a Member of the American Academy of Actuaries.
Christopher S. Coleman, 44. Mr. Coleman is our Chief Financial Officer and has served in this position since November 10, 2014, prior to which Mr. Coleman was the Chief Accounting Officer of the Company, in which position he served from April 1, 2013. Prior to joining the Company, Mr. Coleman was the Chief Financial Officer of Alterra Bermuda Limited, the principal operating subsidiary of Alterra Capital Holdings Limited (“Alterra”). Prior to Max Capital Group Ltd.’s acquisition of Harbor Point Limited to form Alterra in May 2010, Mr. Coleman was the Senior Vice President, Chief Accounting Officer of Harbor Point Limited. Mr. Coleman joined Harbor Point Limited in March 2006. From 2002 to 2006, Mr. Coleman worked for PricewaterhouseCoopers in Bermuda as a Senior Manager within the audit and advisory practice specializing in clients in the insurance and reinsurance industry. Mr. Coleman started his career with Arthur Andersen in 1995 working in the Hartford office before relocating to the Bermuda office in 2001. Mr. Coleman graduated from Central Connecticut State University in 1995 with a Bachelor of Science degree in Accounting. Mr. Coleman is a Certified Public Accountant and a Chartered Professional Accountant and is a member of the American Institute of Certified Public Accountants and the Institute of Chartered Professional Accountants of Bermuda.
Manoj K. Gupta, 42. Mr. Gupta is the Head of Investor Relations and Business Development of Third Point Reinsurance Ltd. He also serves as President of Third Point Reinsurance (USA) Ltd. and has served in this position since August 3, 2017. From March 1, 2017 to August 2, 2017, Mr. Gupta served as Executive Vice President, Underwriting of Third Point Reinsurance (USA) Ltd. Mr. Gupta served as the Senior Vice President, Underwriting of Third Point Reinsurance Company Ltd. from April 16, 2012, until April 1, 2016, and held the position of Lead Portfolio Manager of Third Point Reinsurance Investment Management Ltd. from June 15, 2012, until February 15. 2016. Prior to joining the Company Mr. Gupta was the lead portfolio manager for catastrophe reinsurance at Goldman Sachs Asset Management (“GSAM”), one of the world’s largest asset management firms and a subsidiary of Goldman Sachs Group. During his tenure at GSAM from October 2006 until April 2012, Mr. Gupta launched three standalone catastrophe risk funds and also placed reinsurance risk within the firm’s multi-strategy hedge funds. Prior to joining GSAM, Mr. Gupta was a leader of reinsurance broker Benfield’s alternative capacity and credit risk solutions efforts. Prior to joining Benfield in April 2003, Mr. Gupta was head of business development and strategic planning at Inreon, a reinsurance trading platform co-sponsored by Swiss Re and Munich Re, and a management consultant for McKinsey & Company. Mr. Gupta graduated from University of Waterloo with a Bachelor of Applied Science in Electrical Engineering.
Yan Leclerc, 40. Mr. Leclerc is our Chief Accounting Officer and has served in this position since March 1, 2017, prior to which Mr. Leclerc was the Financial Controller of the Company, in which position he served from May 1, 2014. Prior to joining the Company, he served as Assistant Controller at Renaissance Re from April 2013 to April 2014, at Alterra Bermuda Limited in various positions (including Financial Controller and Assistant Controller) from
2010 until March 2013, and at Harbor Point Re Limited in various positions (including Vice President and Assistant Controller) from 2006 to 2010. Mr. Leclerc started his career at Grant Thornton in Quebec, Canada before moving to Bermuda with PricewaterhouseCoopers in 2004. Mr. Leclerc is a Chartered Professional Accountant and is a member of the Chartered Professional Accountants of Bermuda and the Chartered Professional Accountants of Quebec, Canada. Mr. Leclerc graduated from Laval University in 2003 with a Bachelor of Administration and obtained a post-graduate diploma in accounting in 2004.
Daniel V. Malloy, 58. Mr. Malloy is the Chief Executive Officer of Third Point Reinsurance Company Ltd., and has served in that position since August 3, 2017. From March 1, 2017, to August 2, 2017, Mr. Malloy was the Chief Underwriting Officer of Third Point Reinsurance Company Ltd. Prior to this, Mr. Malloy served as the Executive Vice President, Underwriting of Third Point Reinsurance Company Ltd. from January 23, 2012. Prior to joining the Company, Mr. Malloy worked at Aon Benfield from 2003 where he co-led the Specialty Lines practice groups, which were responsible for providing clients and brokers with primary and reinsurance market updates, peer analytics, new product ideas, growth initiatives and placement assistance. Specialty Lines include the casualty, professional liability, surety, workers’ compensation, property risk, environmental, structured reinsurance and MGA practices. Mr. Malloy has over 35 years of reinsurance experience including 10 years of structured reinsurance underwriting. Before joining Aon Benfield, he was President and a board member of Stockton Reinsurance Ltd. in Bermuda from 1998 to 2003. His experience with structured reinsurance began when he served as President of Centre Re Bermuda where he was employed from 1993 to 1998. Mr. Malloy began his reinsurance career in 1981 working as a reinsurance broker for Sedgwick Re for 12 years. Mr. Malloy holds a Bachelor of Arts degree in biology from Dartmouth College.
Jonathan Norton, 59. Mr. Norton serves as the Chief Reserving Actuary of the Company and as Chief Actuary of Third Point Reinsurance (USA) Ltd. Prior to joining the Company in December 2014, Mr. Norton served as Chief Actuary of Alterra Reinsurance USA Inc. from its inception in May 2010 until completion of the Markel acquisition in May 2013. Mr. Norton was previously Chief Actuary of Harbor Point Services, Inc. from its inception in December 2005 until its merger with Max Capital in May 2010. Mr. Norton was the Chief Actuary of Chubb Re, Inc. from June 1999 through the creation of Harbor Point Services, Inc. in December 2005. Prior to Chubb Re, Mr. Norton worked for the actuarial and analytical unit within Guy Carpenter from 1988 to 1999 where he was a Managing Director and held the position of Chief Actuary. Mr. Norton also has prior experience within the consulting arms of PricewaterhouseCoopers and Ernst & Young (1981 - 1988). Mr. Norton holds a Bachelor’s degree in Civil Engineering from Duke University and a MBA from Emory University.
Janice R. Weidenborner, 53. Ms. Weidenborner is the Executive Vice President and Group General Counsel and has served in that position since January 1, 2016. On February 24, 2016, Ms. Weidenborner became Secretary of Third Point Reinsurance Ltd. and Third Point Reinsurance Company Ltd. Prior to joining the Company, Ms. Weidenborner was General Counsel for the Ariel Re group of companies, from January 2013 to December 2015. Ms. Weidenborner has held senior legal counsel positions in both Bermuda and the U.S., with a significant focus of her practice on insurance and reinsurance, and general corporate and transactional matters. From 1987 to 2012, Ms. Weidenborner held various roles at the ACE Group (and its predecessor companies) including Senior Vice President, Associate General Counsel and Regional Compliance Officer, ACE Bermuda Insurance Ltd., Associate General Counsel, ACE Tempest Reinsurance Ltd., and General Counsel, ACE Financial Solutions International. Ms. Weidenborner holds a B.S. in Aviation Management from Embry Riddle Aeronautical University. She began her career in New York as an Airline Underwriter for CIGNA Property and Casualty. After earning her MBA in Finance from Fordham University, Ms. Weidenborner served as a Senior Financial Analyst for CIGNA. She holds a Juris Doctor degree from Rutgers University.
Board Structure
The size of the Board of Directors may be fixed from time to time by our Board as provided in our Bye-laws. OurThe Board currently consists of nine directors. See “―Election and Classification of Directors has set.” ELECTION AND CLASSIFICATION OF DIRECTORS Two Class I directors will be elected at this year’s Annual General Meeting. The Class I directors elected at the sizeAnnual General Meeting will serve until the annual general meeting of shareholders to be held in 2026 when each such director’s successor is duly elected and qualified, or any such director’s earlier death, disability, disqualification, resignation or removal. In accordance with our Bye-laws, the Board at a maximum of eleven directors. Our Board of Directors is divided into three classes, Class I, Class II and Class III, with members of each class serving staggered three-year terms. Three Class II directors and one Class I director will be elected at this year’s Annual General Meeting. The Class II directors elected at the Annual General Meeting will serve until theAt each annual general meeting of shareholders, heldupon the expiration of the term of a class of directors, the successor to each such director in 2021 and the Class I directorclass will be elected to serve for a three-year term until the third annual general meeting of shareholders held in 2020,following his or in each case,her election and until any such director’shis or her successor is duly elected and qualified, or such director’s earlier death, resignation or removal.
Director Appointments
Third Point Reinsurance Ltd. was incorporated on October 6, 2011. On December 22, 2011, KIA TP Holdings, L.P. and KEP TP Holdings, L.P., which are affiliatesin accordance with the Bye-laws. Any additional directorships resulting from an increase in the number of Kelso & Company (collectively, “Kelso”) and Pine Brook LVR, L.P., an affiliatedirectors will be distributed among the three classes so that, as nearly as possible, each class will consist of Pine Brook Road Partners, LLC (collectively, “Pine Brook”, together with Kelso, the “Lead Investors” and each individually, a “Lead Investor”), Dowling Capital Partners I, L.P., an affiliate of Dowling Capital Management, LLC (collectively, “Dowling”), P RE Opportunities Ltd. (“PROL”), Third Point LLC, Daniel S. Loeb and affiliates associated with Mr. Loeb and John R. Berger (collectively, the “Founders”), together with certain members of management, committed $533.0 million to capitalize Third Point Reinsurance Ltd.
Pursuant to the Company’s existing Bye-laws, so long as a Lead Investor holds shares representing at least 25%one-third of the total number of shares held by such Lead Investor as of December 22, 2011, such Lead Investor shall havedirectors. For information regarding the right to appoint one Class III director to the Board of Directors at each annual general meeting at which the term of such Lead Investor’s appointee expires, and to fill any vacancies caused by such appointee’s resignation or otherwise.
Pursuant to the Company’s Bye-laws, Kelso has appointed Neil McConachie to our Board of Directors to fill the vacancy caused by its previous appointee’s resignation. Mr. McConachie, who is not affiliated with Kelso, was appointed at the request and recommendation of the Company. Mr. McConachie is not up for re-election at our Annual General Meeting; he shall serve as a Class III director until such class comes up for re-election in 2019.
Subsequent to the appointment noted above, Kelso has waived its appointment rights under the Bye-laws. Separately, Pine Brook no longer owns the requisite number of shares required in relation to such appointment rights. Therefore, neither Lead Investor’s appointment rights under the Bye-laws are currently in effect.
The Company’s Bye-laws also require Kelso, Daniel S. Loeb and Pine Brook to consent to a variety of significant corporate actions before they are taken and guarantee each of the Lead Investors (or their designees) certain rights related to inclusion on Committees of the Board of Directors. In addition, Daniel S. Loeb, Kelso, Pine Brook and PROL each has the right to appoint one of its representatives to attend Board of Directors’ meetings in an observer capacity so long as such rights holder holds shares in the Company.
Continuing Directors
The biographical informationapplicable voting standards for the election of directors, whose terms will continue aftersee the section entitled “Information About the Annual General Meeting and will expire atVoting—What is the annual general meetingvoting requirement to be held in 2019 (Class III) or the annual general meeting to be held in 2020 (Class I) is listed below. The agesapprove each of the continuing directors are as of February 28, 2018.
Steven E. Fass, 72 (Class I). Mr. Fass was re-appointed as Lead Independent Director in February 2018. He has served as a director of Third Point Reinsurance Ltd. since February 2012 and served as Interim Chairman from December 22, 2017, until February 2018. Mr. Fass’s insurance career spanned nearly 38 years. He retired in 2008 as the President and Chief Executive Officer of the White Mountains Insurance Group Ltd. From 1984 to 2006 he was the President and Chief Executive Officer of White Mountains Re, and its predecessor companies Folksamerica Holding Company and Folksamerica Reinsurance Company. He joined Folksamerica in 1980 as its Vice President, Treasurer and Chief
Financial Officer. Prior to joining Folksamerica he held various positions at American Re and Skandia America Re. Mr. Fass has held numerous directorships including Chairman of White Mountains Re, Chairman of Fund American Reinsurance Company Ltd., Chairman of Sirius International Insurance Company Ltd. and Chairman of Esurance Insurance Company. He was a director of both White Mountains (2000-2008) and One Beacon Insurance Group, both public companies.proposals?”
The Board feels strongly that a stable and consistent Board that understands the Company is vital to its transformation and turnaround. The classified board, a feature of Directorscorporate governance that has concluded that Mr. Fass should continue to serve asbeen common for nearly a director of our Company because, through his significant experience in various executive roles, including President, Chief Financial Officercentury, provides enhanced continuity and stability in the role of Chief Executive Officer of leading reinsurance companies, he brings extensive leadership, financial expertise, management and business development skills to our Board. Mary R. Hennessy, 65 (Class I). Ms. Hennessy has served as a director of Third Point Reinsurance Ltd. since February 2012. She is currently an independent consultant to the property and casualty insurance and reinsurance industry, which was her occupation from 2002 to 2008. From 2008 to 2010, she served as Chief Executive Officer of GMAC Insurance - Personal Lines. From 2000 to 2002, Ms. Hennessy served as the Chief Executive Officer, President and a memberBoard’s oversight of the board of directors of Overseas Partners, Ltd. From 1997 to 1999, she served as President, Chief Operating Officer, and as a member of TIG Holdings, Inc.’s board of directors after serving as the Executive Vice President and Chief Underwriting Officer from 1996 to 1997. From 1988 to 1996, Ms. Hennessy held various positions with American Re Corporation. Ms. Hennessy previously served as a director of Global Indemnity plc. She currently serves on the board of directors of GeoVera Insurance Holdings, Ltd. and serves as the Chair of its audit committee. She also serves on the boards of CSAA Insurance Exchange, AAA Club Alliance, and AAA Life Insurance Company (as currently Vice Chair, and Chairimplementation of the Audit Committee). She has previously served on the boardCompany’s new strategy. During this period of directors and audit committees of Bristol West Holdings, Inc. and Syncora Holdings Ltd. (formerly Security Capital Assurance Ltd.), and represented Overseas Partners, Ltd. on the board of Annuity & Life Re Holdings, Ltd., all of which were listed on the New York Stock Exchange at the time. Ms. Hennessy received a B.A. in Mathematics from the College of St. Elizabeth. She is a Fellowtransformation, two-thirds of the Casualty Actuarial Society.
The Board of Directors has concluded that Ms. Hennessy should continue to serve as a director because through herdirectors will have had prior experience she brings to our Board strong technical insurance expertise due to her actuarial background and her experience gained through the positions she has held in the industry. Ms. Hennessy has also had hands-on senior management experience in both primary and reinsurance company operations. This background, togetherfamiliarity with her many years of consulting experience in the industry and other company board and committee memberships, is valuable to our Company and our Board of Directors.
Rafe de la Gueronniere, 65 (Class III). Mr. de la Gueronniere has served as a director of Third Point Reinsurance Ltd. since November 2013. He is Chairmanoversight of the Advisory BoardCompany’s business and affairs while still annually providing an opportunity for the election of Continuity Logic. Previously, Mr. de la Gueronniere was Vice Chairman and Co-Founder of New Providence Asset Management, a company he co-founded in 2003. Prior to co-founding New Providence Asset Management, Mr. de la Gueronniere was a Principal at the Mariner Investment Group, Chairmanone-third of the Discount Corporation of New York,Board with new or continuing directors. This structure enables the Board to build on past experience and plan for the transformation and turnaround during a Memberreasonable period into the future. Further, a classified board encourages a long-term focus in overseeing the management of the Management Committeestrategy, business and Board at Paine Webber, Inc. Mr. de la Gueronniere began his career at J.P. Morgan & Co. where he was a Senior Vice President responsible for the fixed income and precious metals businesses. Mr. de la Gueronniere was a member of the Investment Committee of the John D. and Catherine T. MacArthur Foundation. He formerly served as a Trustee and Investment Committee Chair for both the Taft School and the Far Hills Country Day School and was a longstanding member of the U.S. Treasury Debt Management Advisory Committee. Mr. de la Gueronniere has a B.A. from Brown University and more than 40 years of experience in fixed income, equity investing, foreign exchange, and the precious metals business.
The Board of Directors has concluded that Mr. de la Gueronniere should continue to serve as a director because, through his experience in the investment and banking industries gained over a career spanning more than 30 years, he brings to our Board his expertise and extensive knowledge in fixed income, equity investing and foreign exchange trading.
Neil McConachie, 45 (Class III). Mr. McConachie has served as a directoraffairs of the Company, since December 2017. He previously workedand allows our directors to focus their attention on long-term shareholder value. If directors were up for election every year, they could feel pressure to generate short-term returns, which could be counter-productive in an environment where the Company is focused on a multi-year transformation strategy.
A classified board also fosters board independence as independent board members are provided with time to cultivate an understanding of the Company’s business and co-founded, Fidelis Insurance Holdings Limited where he served asoperations, making them less reliant on management’s perspective.
In addition to providing stability among the group’s Chief
Financial Officer June 2015directors, a classified board helps the Company attract and retain highly qualified individuals willing to June 2017. Mr. McConachie previously served ascommit the time and resources necessary to understand the Company and its management, operations and competitive environment. In addition, in the event that the Company becomes subject to an unsolicited takeover proposal, a directorclassified board permits greater time and a more orderly process for directors to consider any takeover bids and to explore all alternatives to maximize shareholder value. A classified board also makes it more likely that persons who may seek to acquire control of the Company from November 2013 to June 2015. Prior to this, Mr. McConachie worked forwill initiate such action through negotiations with the Lancashire Group (“Lancashire”) from February 2006 to June 2012 and during that time heldBoard. By reducing the rolesthreat of Chief Financial Officer, Chief Risk Officer, Chief Operating Officer and President. He also served as an executive memberabrupt change in the composition of the boardentire Board, classification of directors. Mr. McConachie was previously Senior Vice President, Treasurerdirectors provides the Board with an adequate opportunity to fulfill its duties to the Company’s shareholders to review any takeover proposal, study appropriate alternatives and Chief Accounting Officeract in the best interests of Montpelier Re Holdings Ltd. (“Montpelier”). Hethe Company and its shareholders.
As a result of these factors, the Board has had extensive involvementdetermined that maintaining a classified Board is in debtthe best interests of the Company, its shareholders, clients and equity capital markets transactions, includingemployees at this time. CERTAIN INVESTOR RIGHTS Certain of our investors have Board observer rights. For more information about these rights, see the initial public offeringsDaniel S. Loeb Investor Rights Agreement (as defined herein) and the CMB Investor Rights Agreement (as defined herein) described in the section “Certain Relationships and Related Party Transactions.” BOARD OF DIRECTORS FOLLOWING THE ANNUAL GENERAL MEETING Subject to the election of Lancashire and Montpelier. Prior to joining Montpelier, Mr. McConachie workedthe nominees for PricewaterhouseCoopersClass I directors set forth in London and Bermuda and at Stockton Holdings Limited. Mr. McConachie has a B.A. in Accounting and Finance from Heriot-Watt University and an M.B.A from Edinburgh Business School. The Board of Directors has concluded that Mr. McConachie should continue toProposal 1, the following table sets forth information regarding individuals who will serve as a director because, through his industry experience and service to many other companies, he brings a unique perspective and valuable management experience to our Board. Mr. McConachie is a director designated by Kelso, one of our Founders, pursuant to the termsmembers of the provisions of our existing Bye-laws described under “Director Designations”. Mr. McConachie will remain a director untilBoard following the 2019 annual general meeting. Kelso has waived this right under this Bye-law and Pine Brook no longer owns the requisite number of shares required therefore, neither Lead Investor’s right under the Bye-laws is currently in effect.Annual General Meeting.
| | | | | | | | | | | | | | | | CLASS I | | CLASS II | | CLASS III | | NOMINEES FOR ELECTION TO TERMS EXPIRING AT THE 2026 ANNUAL GENERAL MEETING | | TERMS EXPIRING AT THE 2024 ANNUAL GENERAL MEETING | | TERMS EXPIRING AT THE 2025 ANNUAL GENERAL MEETING | •Franklin (Tad) Montross IV •Peter Wei Han Tan | | •Mehdi A. Mahmud •Jason Robart •Daniel S. Loeb | | •Rafe de la Gueronniere •Sharon M. Ludlow •Scott Egan « |
Information Regarding the Nominees for Election to the Board of Directors
Qualifications
QUALIFICATIONS
In considering candidates for the Board of Directors, the Governance and Nominating Committee takes into account the Company’s Corporate Governance Guidelines and all other factors deemed appropriate by the Governance and Nominating Committee. The Governance and Nominating CommitteeBoard seeks members from diverse professional backgrounds who combine a broad spectrum of experience and expertise with a reputation for integrity. Individuals are considered for nominationThe Governance and Nominating Committee will recommend to the Board appropriate criteria for the selection of new directors in accordance with New York Stock Exchange listing standards and based on theirthe strategic needs of the Company and the Board. In evaluating suitability of director candidates and when considering whether to nominate a director for re-election as appropriate, the Governance and Nominating Committee and the Board take into account many factors as approved by the Board from time to time, such as general understanding of various business disciplines (i.e., finance, technology), tenure on the Company’s Board, experience in the Company’s business (reinsurance/insurance), educational and professional background, analytical ability, independence, diversity of experience, judgment, diversity,viewpoints and backgrounds, willingness to devote adequate time to Board duties and ability to act in and represent the balanced best interests of the Company and its shareholders as a whole, rather than special constituencies. In selecting directors, the Board requires a diverse candidate pool (including at least two diverse candidates) for all director searches and evaluates a nominee’s experience, gender, race, age, skillethnicity, national origin, sexual orientation, skills and background. Directors are expectedother qualities. The Board evaluates each director candidate in the context of the Board as a whole with the objective of retaining a group that is best equipped to make a significant time commitmenthelp ensure the Company’s success and represent shareholders’ interests through sound judgment. The Governance and Nominating Committee periodically reviews the criteria adopted by the Board and, if deemed desirable, recommends to the Company.Board changes to such criteria.
Our Board exhibits the right skills to constructively challenge management and guide us on our strategy. The chart below highlights the skills and experience of each our highly qualified directors.
BOARD SKILLS AND EXPERIENCE | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | DIRECTOR QUALIFICATIONS, SKILLS AND EXPERIENCE | | DIRECTOR | Board of Directors Service | CEO/
Business Head | Corporate Governance | Financial Literacy/
Accounting | Financial Services Industry | International/
Global Business | Investment Industry | Regulatory/
Government | (Re)insurance Industry | Risk Management | Digital Strategy | | Rafe de la Gueronniere | ■ | ■ | ■ | ■ | ■ | ■ | ■ | | | ■ | | Gretchen A. Hayes(1) | ■ | ■ | ■ | ■ | ■ | ■ | | | ■ | ■ | ■ | | Sharon M. Ludlow | ■ | ■ | ■ | ■ | ■ | ■ | ■ | ■ | ■ | ■ | ■ | | Mehdi A. Mahmud | ■ | ■ | ■ | ■ | ■ | ■ | ■ | | | ■ | ■ | | Franklin (Tad) Montross IV | ■ | ■ | ■ | ■ | ■ | ■ | | ■ | ■ | ■ | | Jason Robart
| ■ | ■ | | ■ | ■ | ■ | ■ | ■ | ■ | ■ | ■ | | Daniel S. Loeb | ■ | ■ | ■ | ■ | ■ | ■ | ■ | ■ | ■ | ■ | | | Peter Wei Han Tan | ■ | ■ | ■ | ■ | ■ | ■ | ■ | ■ | ■ | ■ | ■ | | Scott Egan | ■ | ■ | ■ | ■ | ■ | ■ | ■ | ■ | ■ | ■ | ■ | | Totals | 9/9 | 9/9 | 8/9 | 9/9 | 9/9 | 9/9 | 7/9 | 6/9 | 7/9 | 9/9 | 6/9 |
(1)Ms. Hayes is not standing for re-election to the Board at the Annual General Meeting. INFORMATION REGARDING THE CLASS I DIRECTOR NOMINEES FOR ELECTION TO THE BOARD Set forth below is biographical information concerning the nominees who are standing for re-electionelection at the Annual General Meeting. FollowingIncluded in the biographical information for the nominee is a description of sucheach nominee’s specific experience, qualifications, attributes and skills that the Governance and Nominating Committee and the Board of Directors considered in determining whether to recommend the nominee for election to the Board. Our director nominees hold and have held senior positions as leaders of various large, complex businesses and organizations, demonstrating their ability to develop and execute significant policy and operational objectives at the highest levels. Our nominees include current and former chief executive officers, chief financial officers, founders and members of senior management of large, global businesses. Our Board considered all of Directors.the aforementioned attributes when deciding to re-nominate the following directors.
| | | | | | | | | | | | | FRANKLIN (TAD) MONTROSS IV | KEY EXPERIENCE AND QUALIFICATIONS The Board concluded that Mr. Montross should continue to serve as a director because of his extensive experience in the property & casualty insurance industries and his qualification as an independent director. CAREER HIGHLIGHTS •General Re Corporation ◦Chairman and CEO (April 2009 to December 2016) ◦Member of Gen Re’s Executive Committee and the group’s President and Chief Underwriting Officer, with responsibilities including treaty underwriting, actuarial and claims (2001) | •General Re Corporation (continued) ◦Held a number of positions of increasing responsibility, both in the U.S. and internationally, including Chief Underwriter for the treaty business ◦Began his career as a Casualty Facultative Underwriter (1978) EDUCATION •BA in Economics, Harvard College | | CLASS I Age 67 Independent Director since February 2021 Committees •Audit •Compensation •Risk and Capital Management  | | | | | PETER WEI HAN TAN | KEY EXPERIENCE AND QUALIFICATIONS The Board concluded that Mr. Tan should continue to serve as a director because of his extensive investment experience working with over 40 investments in China, 12 of which eventually publicly listed on international stock exchanges and his service as the Chairman of CMIG International Holding Pte Ltd. and CM Bermuda Ltd. CAREER HIGHLIGHTS •CMIG International Holding Pte. Ltd. (“CMIG International”), an investment services company ◦Current Chairman •CM Bermuda Ltd. (“CM Bermuda”), an investment services company ◦Current Chairman •IDI, Inc. ◦Chief Executive Officer (2012) •SIG Asia Investments, LLLP, Susquehanna International Group’s private equity and venture capital fund ◦Partner and member of the founding team
| •White & Case LLP - Attorney (2003) •Perkins Coie LLP - Attorney (1997) OTHER CURRENT DIRECTORSHIPS AND ENGAGEMENTS •Skandia Holding de Colombia, S.A., Non-Executive Director •LuxAviation Group, Director PRIOR DIRECTORSHIPS AND ENGAGEMENTS •Chongqing Zongjin Investment Co., Ltd, the financial arm of Zongshen Industrial Group, Chairman •Israel Infinity Agriculture, Director •Harbour Air, Non-executive Director •Mr. Tan formerly served on the board of multiple companies prior to their U.S. listing, including: ◦Home Inns (NASDAQ: HMIN) ◦E-House (NYSE: EJ) ◦Bona Entertainment Group (NASDAQ: BONA) EDUCATION •LL.B Honors, the National University of Singapore | | CLASS I Age 50 Directorsince February 2021 Committees •Investment •Risk and Capital Management |
CONTINUING DIRECTORS The biographical information for the directors whose terms will continue after the Annual General Meeting and will expire at the annual general meeting to be held in 2024 (Class II) or the annual general meeting to be held in 2025 (Class III) are listed below. CLASS II DIRECTORS, SERVING IN OFFICE UNTIL THE 2024 ANNUAL GENERAL MEETING | | | | | | | | | | MEHDI A. MAHMUD | KEY EXPERIENCE AND QUALIFICATIONS The Board considered Mr. Mahmud’s extensive leadership, digital strategy and investment experience and his qualification as an independent director, and concluded that Mr. Mahmud should continue to serve as a director because he brings significant experience in managing investment portfolios to the Board. CAREER HIGHLIGHTS •First Eagle Investment Management, an investment management company and adviser to First Eagle Funds ◦President and Chief Executive Officer (March 2016 to present) •First Eagle Funds, an investment fund ◦President (March 2016 to present) •Jennison Associates ◦CEO and Chairman of the Board (2003 to 2016) | •Jennison Associates (continued) ◦Held several senior management positions relating to: ▪product and business strategy ▪investment supervision of the firm’s value, small-cap, opportunistic and income-equity capabilities ▪oversight of key support areas, including institutional, retail and sub-advisory client activities •J.P. Morgan Investment Management and Credit Suisse Asset Management ◦Served in a variety of investment and management roles EDUCATION •BS in Electrical Engineering, Yale University | | CLASS II Age 50 Independent Directorsince August 2020 Committees •Compensation •Governance and Nominating •Investment
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| | | | | | | | | | JASON ROBART | KEY EXPERIENCE AND QUALIFICATIONS The Board considered Mr. Robart’s extensive experience as an accomplished executive and substantial experience in a range of areas including business strategy, healthcare, venture investing, digital strategy and human capital management. The Board concluded that he should serve on the Board because he brings extensive leadership experience in developing early stage growth and health insurance companies to the Board and his deep experience in human capital management. CAREER HIGHLIGHTS •Seae Ventures, a healthcare service and technology venture fund ◦Co-Founder and Managing Director (2019 to present) •Blue Cross Blue Shield Massachusetts, an insurance company ◦Chief Strategy Officer (2011 to 2018) •Zaffre Investments, a wholly-owned subsidiary of Blue Cross Blue Shield Massachusetts ◦President and Chief Executive Officer (2014 to 2018)
| •Mercer Human Resources Consulting ◦Principal (2003 to 2009) •Ceridian Performance Partners, Canada ◦President
OTHER DIRECTORSHIPS AND ENGAGEMENTS •Blue Cross Blue Shield, Vermont •Several Seae Ventures companies, including Hurdle, Kiyatec, MyMeds and Moving Analytics
EDUCATION •BA in Political Science, Middlebury College | | CLASS II Age 57 Independent Directorsince March 2022 Committees •Audit •Compensation •Investment | | | | | DANIEL S. LOEB | KEY EXPERIENCE AND QUALIFICATIONS The Board considered Mr. Loeb’s extensive qualifications and experience as the Chief Executive Officer and Chief Investment Officer of Third Point LLC, and concluded that he should continue to serve on the Board because he brings experience in investment management, legal and regulatory matters, corporate governance, risk management and business development to the Board. CAREER HIGHLIGHTS •Third Point LLC, an investment adviser based in New York ◦Chief Executive Officer and Chief Investment Officer (1995 to present) |
PRIOR PUBLIC COMPANY BOARDS •Sotheby’s, Director
EDUCATION •A.B., Columbia University | | CLASS II Age 61 Director since May 2022 |
CLASS III DIRECTORS, SERVING IN OFFICE UNTIL THE 2025 ANNUAL GENERAL MEETING | | | | | | | | | | SCOTT EGAN | KEY EXPERIENCE AND QUALIFICATIONS The Board considered Mr. Egan’s over 25 years of industry experience and service as the Chief Executive Officer of Royal Sun Alliance (RSA) UK & International, and Mr. Egan’s experience as CEO of the Company, and concluded that Mr. Egan should continue to serve as a director because he brings a diverse set of skills, breadth of knowledge and valuable financial, strategic and risk management experience to our Board. CAREER HIGHLIGHTS •SiriusPoint Ltd. ◦CEO (September 21, 2022 to present) •Royal Sun Alliance (RSA) UK & International, a multinational general insurance company ◦Chief Executive Officer (January 2019 to December 2021) ◦Chief Financial Officer (September 2015 to December 2018) | •Towergate Insurance Limited, a European insurance intermediary ◦Interim Chief Executive Officer and Chief Financial Officer (April 2012 to September 2015)
EDUCATION •Masters Business Administration, Cranfield School of Management •Chartered Institute of Management Accountants, Member | | CLASS III Age 52 Director since September 2022
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| | | | | | | | | | RAFE DE LA GUERONNIERE | KEY EXPERIENCE AND QUALIFICATIONS The Board considered Mr. de la Gueronniere’s more than 40 years’ experience in the investment and banking industries and his qualification as an independent director and concluded that Mr. de la Gueronniere should continue to serve as a director given his deep understanding of SiriusPoint and because he brings his expertise and extensive knowledge in fixed income, equity investing and foreign exchange trading to our Board. CAREER HIGHLIGHTS •New Providence Asset Management, founded in 2003 ◦Vice Chair and Co-Founder (2003 to 2015) •Mariner Investment Group ◦Principal (1999 to 2003) •Discount Corporation of New York ◦Chairman •J.P. Morgan & Co. ◦Senior Vice President, responsible for the fixed income and precious metals businesses | •He has more than 40 years of experience in fixed income, equity investing, foreign exchange and the precious metals business PRIOR PUBLIC COMPANY BOARDS •Paine Webber, Inc., member of the Management Committee •Fusion Connect, Inc., Director
PRIOR DIRECTORSHIPS AND ENGAGEMENTS •John D. and Catherine T. MacArthur Foundation, member of the Investment Committee •Taft School, Trustee and Investment Committee Chair •Far Hills Country Day School, Trustee and Investment Committee Chair •U.S. Treasury Debt Management Advisory Committee, longstanding member
EDUCATION •BA in English, Brown University | | CLASS III Age 70 Independent Directorsince November 2013 Lead Independent Director until May 2022 Committees •Governance and Nominating •Investment | | | | | SHARON M. LUDLOW | KEY EXPERIENCE AND QUALIFICATIONS The Board concluded that Ms. Ludlow should continue to serve as a director because of her more than 25 years of experience in the life & health and property & casualty re-insurance industries and her qualification as an independent director and as a financial expert. CAREER HIGHLIGHTS •OMERS, one of Canada’s largest defined benefit pension plans ◦Head of Insurance Investment Strategy (2016 to 2018) •Aviva Insurance Company of Canada ◦President (2014 to 2016) •Swiss Re Canada ◦President & CEO (2010 to 2014)
| OTHER CURRENT PRIVATE COMPANY DIRECTORSHIPS AND ENGAGEMENTS •Green Shield Canada, Director and Chair of the Audit and Risk Committee •EIS Group, Director and Chair of the Audit Committee •Soteria Finance Holdings Limited, Director and Chair of the Audit and Risk Committee •Lombard International Group, Director and Chair of the Audit and Risk Committee EDUCATION •Institute of Corporate Directors designation (ICD.D) •Graduate of the Corporate Directors program, Rotman School of Management, University of Toronto •Fellow Chartered Professional Accountant/ Chartered Accountant (FCPA, FCA Canada) •Bachelor of Commerce, University of Toronto | | CLASS III Age 56 Independent Directorsince February 2021 Interim Chair of the Board since May 2022 Committees •Audit •Risk and Capital Management •Governance and Nominating |
CORPORATE GOVERNANCE FRAMEWORK Our Corporate Governance Guidelines, the charters of the standing committees of the Board (Audit, Compensation, Governance and Nominating, Investment, and Risk and Capital Management) and our Code of Business Conduct and Ethics provide the foundation of our governance framework. Key governance policies and processes also include our Whistleblower Policy, our comprehensive Enterprise Risk Management Program, our commitment to transparent financial reporting and our systems of internal checks and balances. Comprehensive management policies, many of which are approved at the Board and/or committee level, guide the Company’s operations. Our Board, along with management, regularly reviews our Corporate Governance Guidelines and practices to ensure that they are appropriate and reflect our Company’s mission, vision and values. In additionreviewing our Corporate Governance Guidelines and other key governance policies and practices, the Governance and Nominating Committee considers regulatory developments and trends in corporate governance. These Corporate Governance Guidelines address, among other things: •the composition and functions of the Board, •director independence, •compensation of directors, •management succession and review, •Board committees, and •selection of new directors. The Code of Business Conduct and Ethics applies to our Board and all of our employees, including our principal executive officer, principal financial officer, principal accounting officer and persons performing similar functions in carrying out their responsibilities to, and on behalf of, SiriusPoint Ltd. If we make any amendments to the information presented below,Code of Business Conduct and Ethics or grant any waiver that we are required to disclose, we will disclose the nature of such amendments or waiver on our website.
Director Resignation Policy Under the Company’s Bye-laws, a nominee for director to SiriusPoint’s Board in an uncontested election is elected if he or she receives the most votes (up to the number of directors to be elected). Following a review of the Company believes thatcorporate governance policies and Bye-laws, the Board determined to adopt a board compriseddirector resignation policy in the event a nominee for SiriusPoint’s Board receives a plurality of its nominees constitutesvotes cast, but less than an absolute majority of votes cast in an uncontested election. By accepting a board with a reputationnomination to stand for integrity, strong business acumen and the exercise of sound judgment; a board that is strong in its collective knowledge and leadership abilities; and a board that has a diversity of viewpoints and backgrounds. The ages of the nominees are as of February 28, 2018. J. Robert Bredahl, 55 (Class II). Mr. Bredahl has servedelection or re-election as a director of Third Point Reinsurance Ltd. since December 2017. Since March 1, 2017, Mr. Bredahl also servesthe Company or an appointment as Chief Executive Officera director to fill a vacancy or new directorship, each candidate, nominee or appointee agrees that if, in an uncontested election of directors, he or she receives less than a majority of votes cast, the director shall promptly tender a written offer of resignation to the Chair of the Company. He also servesBoard following certification of the shareholder vote from the meeting at which the election occurred. For purposes of this guideline, an “uncontested election of directors” is any election of directors in which the number of nominees for election does not exceed the number of directors to be elected.
The Governance and Nominating Committee of the Board will promptly consider the director’s offer of resignation and recommend to the Board whether to accept the tendered resignation or to take some other action, such as Chief Executive Officerrejecting the tendered resignation and addressing the apparent underlying causes of Third Point Reinsurance (USA) Ltd.the less than majority vote. In making this recommendation, the Governance and Nominating Committee will consider all factors deemed relevant by its members, including, without limitation, the stated reason or reasons why the shareholders cast
“withhold” votes for the director (if ascertainable), the qualifications of the director whose resignation has servedbeen tendered, the director’s contributions to SiriusPoint, the overall composition of the Board, and whether by accepting such resignation, SiriusPoint will no longer be in this position since August 3, 2017. Until August 2, 2017, Mr. Bredahl also servedcompliance with any applicable law, rule, regulation or governing document (including New York Stock Exchange (“NYSE”) listing standards, federal securities laws or the Corporate Governance Guidelines), and whether or not accepting the resignation is in the best interests of SiriusPoint and its shareholders. The Board will act on the Governance and Nominating Committee's recommendation within 90 days following certification of the shareholders’ vote. In considering the Governance and Nominating Committee’s recommendation, the Board will consider the information, factors and alternatives considered by the Governance and Nominating Committee and such additional information, factors and alternatives as the Chief Executive OfficerBoard believes to be relevant. Following the Board’s decision, SiriusPoint will promptly publicly disclose the Board’s decision (by press release, filing with the SEC or other public means of Third Point Reinsurance Company Ltd. The detailed biographical information for Mr. Bredahl can be found underdisclosure deemed appropriate). Any director who tenders his or her offer of resignation pursuant to this policy shall not participate in any deliberations or actions by the heading “Executive Officers” herein. TheGovernance and Nominating Committee or the Board of Directors has concluded that Mr. Bredahl shouldregarding his or her resignation, but shall otherwise continue to serve as a director because through his experience in the property and casualty insurance industry gained over twenty years,during this period.
If the majority of which was spentmembers of the Governance and Nominating Committee receive less than a majority vote in executive positions at leading reinsurance brokerage firms, he bringsthe same uncontested election of directors, so that a quorum of the Governance and Nominating Committee cannot be achieved, then the other independent directors on the Board will consider and decide what action to ourtake regarding the resignation of each director who received less than a majority of votes. If the only directors who did not receive less than a majority in the same election constitute three or fewer independent directors, then all independent directors on the Board extensive leadership, underwriting, managementshall participate in deliberations and business development skills which make him uniquely suitedactions regarding director resignations, except that no director can participate in the vote on his or her own resignation.
Director Retirement Age Policy Directors are required to retire from the Board when they reach the age of 75; however, the full Board may nominate candidates aged 75 or older if it believes that nomination is in the best interests of the Company and its shareholders. A director elected to the Board prior to his or her 75th birthday may continue to serve as a director.until the end of his or her three-year term. Joshua L. Targoff, 48 (Class II). Mr. Targoff was appointed Chairman in February 2018
Director Membership on Other Boards Our Board expects individual directors to allot significant time and served asattention to Company matters and to use their judgment and consider all of their commitments when accepting additional directorships of other corporations or charitable organizations. Specifically, our Corporate Governance Guidelines provide that a director should not serve on the boards of Third Point Reinsurance Ltd. since December 2011. He ismore than four other public companies (in addition to the Company’s Board). In addition, the Company’s CEO should not serve on more than one other public company board in addition to the Company’s Board. Additionally, our Corporate Governance Guidelines provide that a Partnerdirector who serves on the Audit Committee should not serve on more than two other public company audit committees.
All of our current directors comply with our policies set forth above. However, we are aware that some of our shareholders have their own board membership policies that are more restrictive than our policy. All of our directors are required to obtain approval prior to agreeing to serve on the board of any other public company to allow the Board to consider whether such director has sufficient time to be a productive member of our Board. Our Board believes that this policy strikes the right balance by allowing for the experience gained through membership on other boards and the Chief Operating Officertime commitment needed for engaged board service.
Trading in Company Securities We prohibit hedging and Generalpledging transactions in Company securities by executive officers, directors and employees. Hedging transactions are transactions designed to insulate the holder of securities from upside or downside price movement in Company shares. Executive officers, directors and employees are prohibited from entering into hedging or monetization transactions or similar arrangements with respect to Company shares, including the purchase or sale of puts or calls or the use of any other derivative instruments, or selling “short” Company shares. Executive officers, directors and employees may not hold Company securities in a margin account or pledge Company securities as collateral for a loan.
Counsel of Third Point LLC. From 1996 to 2003 he was an associate in the law firm of Debevoise & Plimpton LLP. From 2003 to 2008, Mr. Targoff served in the legal department of Jefferies & Company, Inc., most recently as General Counsel of Investment Banking. In May 2008, Mr. Targoff joined Third Point LLC, as General Counsel, and became Chief Operating Officer in 2009. Mr. Targoff serves as a director of Third Point Offshore Investors Limited, Third Point Offshore Fund, Ltd. and Third Point Ultra Ltd. Mr. Targoff received an A.B. from Brown University in 1991 and a J.D. from Yale Law School in 1996.
Director Share Ownership The Board believes that an ownership stake in the Company strengthens the alignment of Directors has concludedinterests between directors and shareholders. Our Corporate Governance Guidelines provide that Mr. Targoff should continueindependent directors are required to serve asown common shares having a value of at least three times the annual retainer fee within five years of becoming a director, becausewhich shall be maintained through histhe director’s term of service. In the event that the annual retainer fee is increased, directors have three years to meet the new ownership guidelines. The Board will evaluate whether exceptions should be made for any director on whom these guidelines would impose a financial hardship. All independent directors have achieved or are on track to achieve this requirement during the required time period.
Director and Officer Liability Insurance We have an insurance program in place to provide coverage for director and officer liability. The coverage provides that, subject to the policy terms and conditions, the insurers will: (i) reimburse us when we are legally permitted to indemnify our directors and officers; (ii) pay losses, including settlements, judgments and legal qualificationsfees, on behalf of our directors and experience asofficers when we cannot indemnify them; and (iii) pay our losses resulting from certain securities claims. The insurance program is effective from April 1, 2023 to May 1, 2024, and is provided by a consortium of insurers. Beazley Insurance Co. is the General Counsel of Investment Banking for Jefferies & Company, Inc., and as a Partner and the General Counsel and Chief Operating Officer of Third Point LLC, he bringslead insurer with various other insurers providing excess coverage. We expect to our Board experience in investment management, legal and regulatory matters, corporate governance, risk management and business development. Mark Parkin, 67 (Class II). Mr. Parkin has served as a director of Third Point Reinsurance Ltd. since November 2013. He was employed by Deloitte & Touche LLP (and its predecessor Touche Ross & Co.) for 37 years. For 26 years of his tenure, Mr. Parkin was a Partnerobtain similar coverage upon expiration of the firm serving audit clients who were primarily operating in thecurrent insurance industry. Mr. Parkin served as the Managing Partner of Deloitte & Touche LLP’s Insurance Audit and Enterprise Risk Services practice from 2009 to 2012, and as its Insurance Industry Professional Practice Director from 2006 to 2008. Mr. Parkin was the Chairman of the AICPA Property and Liability Insurance Entities Audit and Accounting Guide Overhaul Task Force and a member of the AICPA’s Insurance Expert Panel, Deposit Accounting Task Force and Reinsurance Accounting and Auditing Task Force. He is a CPA and a graduate of the University of Illinois (B.A. - English; MAS - Accountancy).program.
The Board of Directors has concluded that Mr. Parkin should continue to serve as a director because through his extensive experience as a senior partner of a top audit firm serving the insurance industry and additionally as the Chairman of the AICPA Property and Liability Insurance Entities Audit and Accounting Guide Overhaul Task Force and as a member of the AICPA’s Insurance Expert Panel, Deposit Accounting Task Force and Reinsurance Accounting and Auditing Task Force, he brings to our Board experience in accounting, finance and management which make him well suited to continue to serve as a director and as the Chairman of our Audit Committee.
Gretchen A. Hayes, 62 (Class I). Ms. Hayes was nominated as a director of Third Point Reinsurance Ltd. on February 28, 2018.In 2017, she became a venture partner at Sandbox Industries (“SBX”), a venture capital firm founded in 2003. Ms. Hayes served as Managing Director of Guy Carpenter’s (“GC”) Strategic Advisory Group from 2013 to 2016, where she developed and led their InsurTech strategy. Prior to joining GC, Ms. Hayes held a wide variety of executive positions over a 25-year career at AIG. She has been named as a top woman in the insurance industry in a variety of insurance and technology publications. Ms. Hayes received B.A. degrees in English and Economics from the University of the Pacific.
The Board of Directors has concluded that Ms. Hayes should serve as a director because of her extensive experience in the insurance industry, including at GC and AIG, through which she brings to our Board extensive underwriting and business development skills.
DIRECTOR INDEPENDENCE
| | |  Non-Independent Directors | | •Scott Egan | •Peter Wei Han Tan | •Daniel S. Loeb |
| | | Independent Directors | •Rafe de la Gueronniere | •Gretchen A. Hayes | •Sharon M. Ludlow | •Franklin (Tad) Montross IV | •Mehdi A. Mahmud | •Jason Robart |
Under the NYSE listing standards and our Corporate Governance Guidelines, in order to consider a director as independent, the board of directors must affirmatively determine that he or she has no material relationship with the company. The standards specifyCompany. In making its annual independence determinations, the criteria for determining whether directors are independentBoard considers transactions between each director nominee and contain guidelines for directorsthe Company including among other items, employment and their immediate family memberscompensatory relationships, relationships with respectour auditors, customer and business relationships, and contributions to employment or affiliation with the company or the independent registered public accounting firm serving as its independent auditor.nonprofit organizations. The Board of Directors undertook its annual review of director independence in February 2018.April 2023. As a result of this review, the Board affirmatively determined that Rafe de la Gueronniere, Steven E. Fass, Mary R. Hennessy, Neil McConachieGretchen A. Hayes, Sharon M. Ludlow, Franklin (Tad) Montross IV, Mehdi A. Mahmud and Mark ParkinJason Robart are “independent” as defined in the federal securities laws and applicable NYSE rules. Prior to his resignation from the Board, Mark Parkin was also considered an “independent” director as defined in the federal securities laws and applicable NYSE rules.
The standards for determiningMr. Egan is not considered an independent director independence are specified in Schedule Abecause he currently serves as CEO of the Company. Mr. Tan was determined to our Corporate Governance Guidelines, available onnot be an independent director due to his appointment to the Board as the representative director of CMIG International, which owns 100% of CM Bermuda, a holder of more than 10% of the shares of the Company. Mr. Loeb was determined to not be an independent director due to his employment by Third Point LLC, a related party (owned by a greater than 5% shareholder) and one of the Company’s website at www.thirdpointre.com/investors/corporate-governance/governance-documentsinvestment managers. For more information regarding the ownership of our capital stock, see “Security Ownership of Certain Beneficial Owners and Management,” and for more information about Third Point LLC’s relationship with the Company, see “Certain Relationships and Related Party Transactions.”
The Company’s Audit, Compensation, and Governance and Nominating Committees are currently composed of independent directors only. See the “Committees of the Board of Directors” section of this Proxy Statementproxy statement for further information.
BOARD MEETINGS AND DIRECTOR ATTENDANCE, ATTENDANCE AT THE ANNUAL GENERAL MEETING AND EXECUTIVE SESSIONS Board of Directors’ Meetings and Director Attendance
Our director meeting attendance policy is set forth in our Corporate Governance Guidelines. In addition to our attendance policy, our Bye-laws generally prohibit directors from participating in meetings of the Board or its committees while present in the United States or its territories, whether in person, via teleconference or otherwise. We held all four of our quarterly meetings in Bermuda during 2022.
TheOur directors discharged their oversight and fiduciary duties over the past fiscal year, including by holding regular, robust, virtual informational sessions designed to cover the same information normally covered at Board of Directors held four boardand committee meetings, supplemented by additional informational calls and twenty-four Committee meetings during 2017reports. When action requiring a formal Board or committee resolution was necessary, the Board or relevant committee acted by unanimous written resolutions in order to comply with our Bye-laws and did not act by written consent.operating guidelines. We believe we maintained good governance practices while complying with Bermuda law, as well as with our Bye-laws. All Directorsdirectors attended 100% of the total of all the meetings of the Board of Directors and CommitteesBoard committees on which they served in 2022.
| | | | | | | | | | | | | | | | | | | | | | Board | Audit Committee | Compensation Committee | Governance and Nominating Committee | Investment Committee | Risk and Capital Management Committee | | Formal Meetings | 4 | 4 | 4 | 3 | 4 | 4 | | Informational Sessions | 11 | 5 | 3 | 0 | 3 | 0 | | Action by Written Resolution | 10 | 2 | 8 | 3 | 3 | 2 |
Attendance at Annual General Meeting
All of our directors serving on our Board at the time of our 2022 Annual General Meeting of Shareholders attended the meeting virtually due to the COVID-19 pandemic. Our Board strongly encourages all of its members to attend the Annual General Meeting of Shareholders, but understands there may be exigent circumstances, especially during 2017.these unprecedented times.
Executive Sessions Executive sessions of independent directors enable the Board Leadership Structure
to discuss matters, such as strategy, the performance and compensation of the CEO and senior management, succession planning and Board effectiveness, without management present. Any director may request additional executive sessions of independent directors. During 2022, our independent directors met in three executive sessions at regularly scheduled Board meetings and/or informational calls. The rules of the NYSE also require the non-management directors of the Company to regularly meet in executive session without management, and the non-management directors met in three executive sessions at regularly scheduled Board of Directors believes that its practice of having separate offices of Chairman and Chief Executive Officer, a majoritymeetings and/or informational calls. Either our Lead Independent Director or, after her appointment, our Interim Chair presided at the executive sessions of independent directors and Audit, Compensation and Governance and Nominating Committees composed exclusively of independent directors provides an effective and appropriate leadership structure for the Company.non-management directors.
The Company’s Corporate Governance Guidelines provide that a Chairman be elected by the Board from among its members to preside at all meetings of the Board, or otherwise as in accordance with the Company’s Bye-laws. The Board does not have a policy with respect to the separation of the offices of Chairman and Chief Executive Officer.
BOARD LEADERSHIP STRUCTURE The Board believes it is importantthat the decision of whether to retain its flexibilitycombine or separate the positions of CEO and Chair varies from company to allocate the responsibilities of the offices of the Chairmancompany and Chief Executive Officer in any way that is in the best interest of the Companydepends upon a company’s particular circumstances at a given point in time. At this time,The Board believes that separating the Board of Directors separatesCEO and Chair positions is the roles of Chairmanappropriate leadership structure for our Company and the Chief Executive Officer. In February 2018 the Board concluded that it wasis in the best interestinterests of our shareholders at this time. Ms. Ludlow serves as the Interim Chair of the shareholders to appointBoard, while Mr. Joshua L. Targoff to serveEgan serves as Chairman, given his significant experience with the Company’s businessour CEO and industry, and focus on identifying strategic priorities and key business issues that impact all of the Company’s stakeholders. Mr. Targoff was appointed Chairman on February 28, 2018. Given the appointment of a non-independent director as Chairman, the Board determined it was in the best interest of the Company to appoint a Lead Independent Director. Mr. Steven E. Fass was re-appointed as Lead Independent Director on February 28, 2018.
Through the Company’s overall governance structure, the Board of Directors believes it has effectively balanced the need for strategic leadership by the Company’s newly-appointed Chairman, Mr. Targoff, and the Company’s Chief Executive Officer, Mr. Bredahl. Given the oversight and objectivity of the independent directors and the appointment of a Lead Independent Director, theOur Board believes that it has created an effectivethis structure best encourages the free and appropriate leadership structure that is conduciveopen dialogue of alternative views and provides for strong checks and balances. Additionally, the Interim Chair’s attention to the risk oversight process. The Board of Directors consists of a majority of independent directors. The independent directors’ reviewand committee matters allows Mr. Bredahl’s performance in his capacity as Chief Executive Officer. In addition, the independence ofEgan to focus more specifically on overseeing the Company’s governance structure is strengthened because each of its Governanceday-to-day operations and Nominating, Compensationunderwriting activities, as well as strategic opportunities and Audit Committees, is comprised exclusively of independent directors as of the date of this Proxy Statement. These Committees provide additional independent oversight of management.planning.
The Board of Directors recognizes that, depending on the circumstances, other leadership structures might be appropriate and in the best interest of the Company. Accordingly, the Board of Directors intends to regularly review its governance structure and has the discretion to modify its leadership structure in the future if it deems it in the best interest of the Company to do so. In the event the Board decides to combine the role of CEO and Chair, the Board is required to appoint a Lead Independent Director under the Company’s Corporate Governance Guidelines. Currently, the Board has an independent Chair so the Board is not required to have a Lead Independent Director.
BOARD AND BOARD COMMITTEE PERFORMANCE EVALUATIONS
Our Board continually seeks to improve its performance. Throughout the year, our Interim Chair, Chief Legal Officer and Secretary each routinely communicate with our Board members to obtain real-time feedback. We believe that this continuous feedback cycle along with our formal annual evaluation process helps to ensure the continued effectiveness of our Board.
Our Governance and Nominating Committee oversees the formal annual evaluation process of the effectiveness of our Board and its standing committees. In 2022, the Board Committee Performance Evaluations engaged an unaffiliated board assessment consulting firm to independently assess the Board’s performance. The consultant conducted confidential interviews with each director that included discussions of the overall functioning and effectiveness of the Board and its standing committees, the leadership structure of the Board, as well as a peer review. The consultant presented its findings and evaluation to the Board at an executive session. In addition, the results included feedback regarding each of the Audit Committee, Compensation Committee, Risk and Compliance Committee, Governance and Nominating Committee, Investment Committee and InvestmentRisk and Finance Committee each conducted a self-evaluation of their performance in 2017.
The Board also conducted a self-evaluation of its performance in 2017, the results of which were reviewed by the Governance and NominatingCapital Management Committee.
Committees of theOur annual Board of Directors
Assuming election of all nominees above,evaluations cover the following is a list of persons who will constitute the Company’s Board of Directors following the Annual General Meeting, including their expected Committee assignments.areas:
| | | | | | •Board efficiency and overall effectiveness | •Board and committee information needs and meeting cadence | •Board and committee structure | •Satisfaction with Board agendas and the frequency, duration and format of meetings and time allocations | •Board leadership and succession planning | •Areas where directors want to increase their focus | •Board and committee composition | •Board dynamics and culture | •Satisfaction with the performance of the Chair | •Strategy and Crisis Preparedness | •Board member access to the CEO and other members of senior management | •Board alignment with the Company’s mission, vision, ethics, values, long-term goals and strategy | •Quality of Board discussions and balance between presentations and discussion | •Other areas directors would like to have greater focus or oversight | •Quality and clarity of materials presented to directors | |
| | | | | | | | | | | | | | | Name | | Audit | | Compensation | | | Executive1 | | | | | | | | ANNUAL BOARD AND COMMITTEE EVALUATIONS | | | The Governance and Nominating | | Committee oversees the annual self-evaluation process. The process, including the evaluation method, is reviewed annually by the Governance and Nominating Committee and presented to the Board for discussion prior to implementing the process during the fourth quarter. Written questionnaires used for the Board and each standing committee are annually reviewed by the Governance and Nominating Committee and are updated and tailored each year to address the significant processes that drive Board effectiveness. Each director completes a written questionnaire on an unattributed basis for the Board and committees. The questionnaires include open-ended questions and space for candid commentary. Our processes enable directors to provide anonymous and confidential feedback, which is then reviewed and addressed by the Chair of the Governance and Nominating Committee. In addition, each committee’s chair reviews the feedback with respect to their respective committee.
When appropriate, and at least every third year, our Board engages a third-party evaluation firm to independently assess the Board’s performance. The third-party evaluation firm conducts confidential interviews with each director that includes discussions of the overall functioning and effectiveness of the Board and its standing committees, the leadership structure of the Board as well as a peer review. The evaluation firm presents the findings to the Board for consideration and feedback. Our Board believes that employing an independent third-party evaluation firm every third year to assist in the evaluation process provides valuable insights and will contribute to the overall functioning and ongoing effectiveness of the Board.
In 2022, the Board engaged an unaffiliated board assessment consultant to independently assess the Board’s performance. The consultant conducted confidential interviews with each director that included discussions of the overall functioning and effectiveness of the Board and its standing committees, the leadership structure of the Board as well as a peer review. The consultant presented its findings and evaluation to the Board at an executive session. In addition, the results included feedback regarding each of the Audit Committee, Compensation Committee, Governance and Nominating Committee, Investment Committee and Finance | | Underwriting | | Risk and ComplianceCapital Management Committee. | | J. Robert Bredahl | | | | | | ü
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| Joshua L. Targoff* | | 3 | | | | | | | | | | | | | BOARD AND COMMITTEE REVIEW | | | ChairmanThe Chair of the Governance and Nominating Committee leads a discussion of the written Board and committee evaluation results at the Board level during an executive session.
Directors also deliver feedback to the Interim Chair of the Board and suggest changes and areas for improvement.
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| | | | | | | | | | | | | | | | | | | | | | 4 | | | | | | | | ACTIONS | | | Following the review, changes in practices or procedures are considered and implemented, as appropriate. The Board finds that this process generates robust comments and provides the Board the opportunity to make changes that are designed to increase Board effectiveness and efficiency. Actions taken in response to the evaluation process over the years have included: •Initiating a search for an additional qualified financial expert director; •Re-evaluating all governing documents, including delegations of authority and board and committee charters for effectiveness; •Initiating executive sessions between the Board and CEO prior to board meetings; and •Conducting a board informational session on fiduciary duties of the Board, roles of special committees and observers, and other board education matters.
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Board’s Primary Role and Responsibilities, Structure and Processes
Our Board
The Board of Directors has established an Audit Committee, Compensation Committee, Governance and Nominating Committee, Underwriting Committee, Risk and Compliance Committee, Investment and Finance Committee and Executive Committee. Under the applicable requirements of the NYSE, each of the Audit, Compensation and Governance and Nominating Committees consists exclusively of members who qualify as independent directors. A description of each Board Committee is set forth below. Except as noted below, the members of each Board Committee have continued to serve through the date of this Proxy Statement.
Audit Committee
We have a separately-designated standing Audit Committee established in accordance with Section 3(a)(58)(A) of the Exchange Act. Our Audit Committee has bears the responsibility for among other things, assisting the Boardoversight of Directors in reviewing: our financial reporting and other internal control processes; our financial statements; the independent auditor’s qualifications, independence and performance; the performancemanagement on behalf of our internal audit function; andshareholders in order to ensure long-term value creation. In that regard, the primary responsibilities of our compliance with legal and regulatory requirements and our Code of Business Conduct and Ethics.
The Audit Committee held four meetings during 2017. In 2017, the membersBoard include, but are not limited to (i) oversight of the Committee were Mark Parkin (Chairman), Steven E. Fass,Company’s strategic direction and Mary R. Hennessy. Neil McConachie was appointed to serve onbusiness plan, (ii) ongoing succession planning and talent management, and (iii) risk management and oversight.
Oversight of Strategic Direction and Business Plan
Our Board oversees our strategic direction and business plan. At the Audit Committee on February 28, 2018. Eachbeginning of the members of the Audit Committee, qualifies as an “independent” director as defined under the NYSE rules and Rule 10A-3 of the Securities Exchange Act of 1934. All of the members of the Audit Committee are financially literate and have accounting or related financialeach year, our senior management expertise within the meaning of the NYSE rules. The Board also has determined that each of Mr. Fass, Mr. Parkin and Ms. Hennessy qualifies as an “Audit Committee financial expert” as defined by SEC rules. Please refer to the “Continuing Directors” section of this Proxy Statement for Mr. Fass, Ms. Hennessy and Mr. McConachie’s relevant experience and refer to “Information Regarding the Nominees for Electionpresents our consolidated annual business plan to the Board, and the Board discusses the Company’s results relative to the plan periodically throughout the year. Each year, the Board typically engages in a full-day strategy meeting with management where it conducts a comprehensive review and discussion of Directors” for Mr. Parkin’s relevant experience.the Company’s strategic goals over the short-, medium- and long-term, as well as management’s plans to achieve such goals.
Succession Planning and Talent Management
Compensation Committee
Our Compensation Committee is responsible for reviewing and approving the compensation and benefits of our employees, directors and consultants, overseeing the administration of our employee benefits plans, authorizing and administering restricted share grants and other incentive arrangements and reviewing and approving employment and related agreements of our executive officerscompensation program to support our ability to attract and directors.retain the right management talent to pursue our strategies successfully.
The Compensation Committee is involved in the critical aspects of the CEO succession planning process, including establishing selection criteria that reflect our business strategies, identifying and evaluating potential internal candidates and making key management succession decisions. Succession and development plans are regularly discussed with the CEO, as well as without the CEO present in executive sessions of the Board. The Compensation Committee makes sure that it has adequate opportunities to meet with and assess development plans for potential CEO and senior management successors to address identified gaps in skills and attributes. This occurs through various means, including informal meetings, Board dinners, presentations to the Board and committees, attendance at Board meetings and the comprehensive annual talent review. The Compensation Committee also periodically reviews management developmentoversees management’s succession planning for other key executive positions. Our Board calendar includes at least one meeting each year at which the Board conducts a detailed talent review which includes a review of the Company’s talent strategies, leadership pipeline and succession plans including establishing policies regarding succession in the event of an emergency or the retirement of the Chief Executive Officer.for key executive positions. The Compensation Committee held four meetings during 2017. In 2017, the members of the Compensation Committee were Rafe de la Gueronniere, Steven E. Fass (Chairman), Mary R. Hennessy, and Mark Parkin. Each of the members of the Compensation Committee qualifies as an “independent” director as defined under the applicable rules and regulations of the SEC and the NYSE.
Governance and Nominating Committee
Our Governance and Nominating Committee is responsible for, among its other duties and responsibilities, identifying and recommending candidates for election to our Board of Directors, reviewing the composition of the Board and its Committees, developing and recommending to the Board corporate governance guidelines that are applicable to us, and overseeing Board evaluations.
The Governance and Nominating Committee held four meetings during 2017. In 2017 the members of the Governance and Nominating Committee were Steven E. Fass, Mary R. Hennessy (Chairman), and Mark Parkin. Each of the members of the Governance and Nominating Committee qualifies as an “independent” director as defined under the applicable rules and regulations of the SEC and the NYSE.
Underwriting Committee
Our Underwriting Committee is responsible for overseeing our underwriting processes and procedures and monitoring our underwriting performance. The Underwriting Committee held four meetings during 2017. In 2017, the members of the Underwriting Committee were John R. Berger (Chairman), Steven E. Fass and Mary R. Hennessy. On December 22, 2017, Mr. Berger resigned from the Board of Directors and from the Underwriting Committee. J. Robert Bredahl was appointed to serve on the Underwriting Committee upon Mr. Berger’s resignation and Ms. Hennessy was appointed as Chairman.
Investment and Finance Committee
Our Investment and Finance Committee is responsible for overseeing the management of the Company’s investment portfolio and reviewing the performance of the Company’s investment manager. The Investment and Finance Committee also has oversight of the Company’s financial procedures and structure. The Investment and Finance Committee held four meetings during 2017. In 2017, the members of the Investment and Finance Committee were John R. Berger, Christopher L. Collins, Rafe de la Gueronniere (Chairman) and Steven E. Fass. On December 12, 2017, Mr. Collins
resigned from the Investment and Finance Committee at the time he resigned from the Board of Directors. On December 22, 2017, Mr. Berger resigned from the Board of Directors and from the Investment and Finance Committee. J. Robert Bredahl was appointed to serve on the Investment and Finance Committee upon Mr. Berger’s resignation. Neil McConachie was appointed to serve on the Investment and Finance Committee on February 28, 2018.
Risk and Compliance Committee
Our Risk and Compliance Committee is responsible for overseeing our risk appetite and risk management framework. The Risk and Compliance Committee held four meetings during 2017. In 2017, the members of the Risk and Compliance Committee were Steven E. Fass, Mary R. Hennessy (Chairman) and Mark Parkin. On February 28, 2018, Neil McConachie was appointed to serve as the Chairman of the Risk and Compliance Committee.
Executive Committee
Our Executive Committee is responsible for providing ongoing oversight of Company matters in the intervals between Board meetings and considering matters requiring approval at short notice in the intervals between Board meetings where it is not possible to convene a meeting of the Board. The Executive Committee did not meet during 2017. In 2017, the members of the Executive Committee were John R. Berger (Chairman), Christopher L. Collins, Steven E. Fass and Joshua L. Targoff. On December 12, 2017, Mr. Collins resigned from the Executive Committee at the time he resigned from the Board of Directors. On December 22, 2017, Mr. Berger resigned from the Board of Directors and from the Executive Committee. J. Robert Bredahl was appointed to serve on the Executive Committee upon Mr. Berger’s resignation and Ms. Hennessy was appointed to serve as Chairman. On February 28, 2018, Ms. Hennessy stepped down from the Executive Committee and Mr. Targoff was appointed to serve as the Chairman of the Executive Committee.
Committee Charters
The charters of the Audit Committee, Compensation Committee and Governance and Nominating Committee are available on our websitewww.thirdpointre.com/investors/corporate-governance/governance-documentsand may also be obtained upon request without charge by writing to the Secretary, Third Point Reinsurance Ltd., Point House, 3 Waterloo Lane, Pembroke HM 08, Bermuda. Each committee reviews its charter at least annually and recommends any proposed changes to the Board for approval.
Risk ManagementExecutive Sessions
Executive sessions of independent directors enable the Board to discuss matters, such as strategy, the performance and Oversightcompensation of the CEO and senior management, succession planning and Board effectiveness, without management present. Any director may request additional executive sessions of independent directors. During 2022, our independent directors met in three executive sessions at regularly scheduled Board meetings and/or informational calls. The rules of the NYSE also require the non-management directors of the Company to regularly meet in executive session without management, and the non-management directors met in three executive sessions at regularly scheduled Board meetings and/or informational calls. Either our Lead Independent Director or, after her appointment, our Interim Chair presided at the executive sessions of independent directors and non-management directors.
BOARD LEADERSHIP STRUCTURE The Board believes that the decision of whether to combine or separate the positions of CEO and Chair varies from company to company and depends upon a company’s particular circumstances at a given point in time. The Board believes that separating the CEO and Chair positions is the appropriate leadership structure for our Company and is in the best interests of our shareholders at this time. Ms. Ludlow serves as the Interim Chair of the Board, while Mr. Egan serves as our CEO and Director. Our Board believes that this structure best encourages the free and open dialogue of alternative views and provides for strong checks and balances. Additionally, the Interim Chair’s attention to Board and committee matters allows Mr. Egan to focus more specifically on overseeing the Company’s day-to-day operations and underwriting activities, as well as strategic opportunities and planning.
The Board recognizes that, depending on the circumstances, other leadership structures might be appropriate and in the best interest of the Company. Accordingly, the Board intends to regularly review its governance structure and has the discretion to modify its leadership structure in the future if it deems it in the best interest of the Company to do so. In the event the Board decides to combine the role of CEO and Chair, the Board is required to appoint a Lead Independent Director under the Company’s Corporate Governance Guidelines. Currently, the Board has an independent Chair so the Board is not required to have a Lead Independent Director.
BOARD AND BOARD COMMITTEE PERFORMANCE EVALUATIONS
Our Board continually seeks to improve its performance. Throughout the year, our Interim Chair, Chief Legal Officer and Secretary each routinely communicate with our Board members to obtain real-time feedback. We believe that this continuous feedback cycle along with our formal annual evaluation process helps to ensure the continued effectiveness of Directorsour Board.
Our Governance and Nominating Committee oversees the formal annual evaluation process of the effectiveness of our risk management process, includingBoard and its standing committees. In 2022, the Company-wide approachBoard engaged an unaffiliated board assessment consulting firm to risk management carried out by our management. independently assess the Board’s performance. The consultant conducted confidential interviews with each director that included discussions of the overall functioning and effectiveness of the Board and its standing committees, the leadership structure of the Board, as well as a peer review. The consultant presented its findings and evaluation to the Board at an executive session. In addition, the results included feedback regarding each of the Audit Committee, Compensation Committee, Governance and Nominating Committee, Investment Committee and Risk and Capital Management Committee.
Our annual Board evaluations cover the following areas:
| | | | | | •Board efficiency and overall effectiveness | •Board and committee information needs and meeting cadence | •Board and committee structure | •Satisfaction with Board agendas and the frequency, duration and format of meetings and time allocations | •Board leadership and succession planning | •Areas where directors want to increase their focus | •Board and committee composition | •Board dynamics and culture | •Satisfaction with the performance of the Chair | •Strategy and Crisis Preparedness | •Board member access to the CEO and other members of senior management | •Board alignment with the Company’s mission, vision, ethics, values, long-term goals and strategy | •Quality of Board discussions and balance between presentations and discussion | •Other areas directors would like to have greater focus or oversight | •Quality and clarity of materials presented to directors | |
| | | | | | | | | | | | | | | | | | | | | | 1 | | | | | | | | ANNUAL BOARD AND COMMITTEE EVALUATIONS | | | The Governance and Nominating Committee oversees the annual self-evaluation process. The process, including the evaluation method, is reviewed annually by the Governance and Nominating Committee and presented to the Board for discussion prior to implementing the process during the fourth quarter. Written questionnaires used for the Board and each standing committee are annually reviewed by the Governance and Nominating Committee and are updated and tailored each year to address the significant processes that drive Board effectiveness. Each director completes a written questionnaire on an unattributed basis for the Board and committees. The questionnaires include open-ended questions and space for candid commentary. Our processes enable directors to provide anonymous and confidential feedback, which is then reviewed and addressed by the Chair of the Governance and Nominating Committee. In addition, each committee’s chair reviews the feedback with respect to their respective committee.
When appropriate, and at least every third year, our Board engages a third-party evaluation firm to independently assess the Board’s performance. The third-party evaluation firm conducts confidential interviews with each director that includes discussions of the overall functioning and effectiveness of the Board and its standing committees, the leadership structure of the Board as well as a peer review. The evaluation firm presents the findings to the Board for consideration and feedback. Our Board believes that employing an independent third-party evaluation firm every third year to assist in the evaluation process provides valuable insights and will contribute to the overall functioning and ongoing effectiveness of the Board.
In 2022, the Board engaged an unaffiliated board assessment consultant to independently assess the Board’s performance. The consultant conducted confidential interviews with each director that included discussions of the overall functioning and effectiveness of the Board and its standing committees, the leadership structure of the Board as well as a peer review. The consultant presented its findings and evaluation to the Board at an executive session. In addition, the results included feedback regarding each of the Audit Committee, Compensation Committee, Governance and Nominating Committee, Investment Committee and Risk and Capital Management Committee. | | | | | | | | | 2 | | | | | | | | SUMMARY OF THE THIRD-PARTY EVALUATION | | | A written report is produced summarizing the written questionnaires, which include all responses. Every director received an individualized summary corresponding to their own roles as board and committee members, and as chairs of committees or the board, as appropriate. | | | | | | | | | 3 | | | | | | | | | | | | | BOARD AND COMMITTEE REVIEW | | | The Chair of the Governance and Nominating Committee leads a discussion of the written Board and committee evaluation results at the Board level during an executive session. Directors also deliver feedback to the Interim Chair of the Board and suggest changes and areas for improvement. | |
| | | | | | | | | | | | | | | | | | | | | | 4 | | | | | | | | ACTIONS | | | Following the review, changes in practices or procedures are considered and implemented, as appropriate. The Board finds that this process generates robust comments and provides the Board the opportunity to make changes that are designed to increase Board effectiveness and efficiency. Actions taken in response to the evaluation process over the years have included: •Initiating a search for an additional qualified financial expert director; •Re-evaluating all governing documents, including delegations of authority and board and committee charters for effectiveness; •Initiating executive sessions between the Board and CEO prior to board meetings; and •Conducting a board informational session on fiduciary duties of the Board, roles of special committees and observers, and other board education matters.
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Board’s Primary Role and Responsibilities, Structure and Processes
Our Board of Directors determinesbears the appropriate levels of risk for the Company generally, assesses the specific risks faced by us, and reviews the steps taken by management to manage those risks. While our Board of Directors maintains the ultimate oversight responsibility for the oversight of management on behalf of our shareholders in order to ensure long-term value creation. In that regard, the primary responsibilities of our Board include, but are not limited to (i) oversight of the Company’s strategic direction and business plan, (ii) ongoing succession planning and talent management, and (iii) risk management process, its Committees oversee riskand oversight.
Oversight of Strategic Direction and Business Plan
Our Board oversees our strategic direction and business plan. At the beginning of each year, our senior management presents our consolidated annual business plan to the Board, and the Board discusses the Company’s results relative to the plan periodically throughout the year. Each year, the Board typically engages in certain specified areas. In particular, oura full-day strategy meeting with management where it conducts a comprehensive review and discussion of the Company’s strategic goals over the short-, medium- and long-term, as well as management’s plans to achieve such goals.
Succession Planning and Talent Management
Our Compensation Committee is responsible for overseeing the management of risks relating to our executive compensation program to support our ability to attract and retain the right management talent to pursue our strategies successfully.
The Compensation Committee is involved in the critical aspects of the CEO succession planning process, including establishing selection criteria that reflect our business strategies, identifying and evaluating potential internal candidates and making key management succession decisions. Succession and development plans are regularly discussed with the CEO, as well as without the CEO present in executive sessions of the Board. The Compensation Committee makes sure that it has adequate opportunities to meet with and arrangements,assess development plans for potential CEO and senior management successors to address identified gaps in skills and attributes. This occurs through various means, including informal meetings, Board dinners, presentations to the Board and committees, attendance at Board meetings and the incentives created by the compensation awards it administers. comprehensive annual talent review. The AuditCompensation Committee plays aalso oversees management’s succession planning for other key role inexecutive positions. Our Board calendar includes at least one meeting each year at which the Board of Directors’ exercise of its risk oversight function. The Audit Committee is primarily responsible for overseeing matters involving the Company’s financial and operational risks, and the guidelines, policies and processes for managing such risks, including internal controls. The Audit Committee conducts its risk oversight in a variety of ways, including reviewing management’s assessmentdetailed talent review which includes a review of the Company’s internal control over financial reporting, reviewing the results of regulatory examinations,talent strategies, leadership pipeline and receiving quarterly reports on legal and regulatory matters. Additionally, the Company’s independent auditor regularly discusses risks and related mitigation measures that may arise during their regular reviews of the Company’s financial statements with the Audit Committee. The Company has also retained a third party consultant to assist with certain internal audit functions. To ensure candid and complete reporting, the Audit Committee regularly meets in separatesuccession plans for key executive sessions with management, the Company’s internal auditor and the Company’s independent auditor.positions. The Risk and Compliance Committee is responsible for overseeing the Company-wide risk appetite and enterprise risk management framework. Management regularly reports on the Company’s operational processes and controls that are designed to identify, mitigate and monitor the risks and exposures that could materially impact the Company.
Our Governance and Nominating Committee is responsible for overseeing the management of risks associated with the independence of our Board of Directors. As of the date of this Proxy Statement, five of the seven directors of the Company qualify as independent, representing 71.43% of the total Board. If the shareholders vote “FOR” the nominees for director at the Annual General Meeting of Shareholders, six of the eight members of our Board will be independent, representing 75% of the Board.
Pursuant to our Board’s instruction, management regularly reports on applicable risks to the relevant Committee or the Board, as appropriate, with additional review or reporting on risks conducted as needed or as requested by our Board and/or its Committees.Corporate Governance Guidelines and Code of Business Conduct and Ethics
Our Board has adopted Corporate Governance Guidelines which set forth a flexible framework within which our Board, assisted by our Board Committees, directs the affairs of the Company. These guidelines address, among other things, the composition and functions of the Board, director independence, compensation of directors, management succession and review, Board Committees and selection of new directors. In February 2018, the Board amended the Corporate Governance Guidelines to reflect a change in the director retirement age from 72 to 75 and allowing a director that reaches the retirement age of 75 to continue serving until the end of his or her three year term.
We have a Code of Business Conduct and Ethics that applies to our Board of Directors and all of our employees including our principal executive officer, principal financial officer, principal accounting officer and persons performing similar functions.
The Corporate Governance Guidelines and the Code of Business Conduct and Ethics are available on our website atwww.thirdpointre.com/investors/corporate-governance/governance-documents.
We will disclose any amendments to these governance documents or any waivers of their requirements, on our website.
Director Nominating Process and Diversity
The Board of Directors is responsible for nominating candidates for election to the Board of Directors and for filling vacancies on the Board of Directors that may occur between annual general meetings of shareholders. The Governance and Nominating Committee is responsible for identifying, screening and recommending candidates to the Board of Directors for Board membership. When formulating its Board of Directors’ recommendations, the Governance and Nominating Committee may also consider advice and recommendations from others, including shareholders, as it deems appropriate.
Pursuant to the Company’s Bye-laws, the Board of Directors has the power to appoint any person as a director to fill a vacancy on the Board occurring as a result of the death, disability, disqualification or resignation of any director, subject to the Lead Investors’ right to appoint a director to fill a vacancy created by the applicable Lead Investor’s designated director. Our Board of Directors is currently comprised of seven directors; following the election of the new Director nominee, the Board of Directors would be comprised of eight directors. The current terms of the Class I and Class III directors expire at the annual general meetings to be held in 2020 and 2019 respectively.
The Governance and Nominating Committee and the Board of Directors believe that diversity along multiple dimensions, including opinions, skills, perspectives, personal and professional experiences and other differentiating characteristics, are an important element of its nomination recommendations. The Governance and Nominating Committee has not identified any specific minimum qualifications which must be met for a person to be considered as a director candidate. However, board candidates are selected based upon various criteria including business and professional experience, judgment, diversity, age, skill, background, time availability in light of other commitments, and such other relevant factors that the Governance and Nominating Committee considers appropriate in the context of the needs of the Board of Directors. Although the Board of Directors does not have a formal diversity policy, the Governance and Nominating Committee and Board of Directors review all of these factors, including diversity, in considering candidates for Board membership. Board members are expected to prepare for, attend and participate in all Board of Directors’ meetings and applicable Committee meetings, and the Company’s annual general meetings of shareholders.
Candidates Nominated by Shareholders
The Governance and Nominating Committee will also consider nominees recommended by shareholders. In order to submit shareholder proposals for the 2019 annual general meeting of shareholders for inclusion in the Company’s proxy statement, the proposals must comply with all of the requirements of SEC Rule 14a-8. Pursuant to SEC Rule 14a-8, materials must be received by the Secretary at the Company’s principal office at that time, currently at Point House, 3 Waterloo Lane, Pembroke HM 08, Bermuda, no later than November 27, 2018.
The Company’s Bye-laws establish an advance notice procedure for shareholders to nominate candidates for election as directors or to bring other business before an annual general meeting of shareholders, however, unless these proposals are also provided to the Company in accordance with SEC Rule 14a-8, such proposals will not be included in the proxy statement for the meeting. Any notice given by or on behalf of a shareholder pursuant to these provisions of the Company’s Bye-laws (and not pursuant to Securities Exchange Act of 1934 Rule 14a-8) must be received no earlier than January 3, 2019, and no later than February 2, 2019.
The Bye-laws provide that any shareholder wishing to nominate persons for election as directors at, or bring other business before, an annual general meeting must deliver to the Company’s Secretary a written notice of the shareholder’s intention to do so. To be timely, the shareholder’s notice must be delivered to, or mailed and received by, us not less than 90 days nor more than 120 days before the anniversary date of the preceding annual general meeting, except that if the annual general meeting is set for a date that is not within 30 days before or after such anniversary date, the Company must receive the notice no earlier than 120 days prior to an annual general meeting and no later than 70 days prior to the date of such annual general meeting or the tenth day following the date on which public announcement of the annual general meeting was made. Nominations received will include the following for consideration:
the name and address of the shareholder who intends to make the nomination and the name and address of the person(s) to be nominated or the nature of the business to be proposed;
a representation that the shareholder is a holder of record of our common shares entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to nominate the person(s) or to introduce the business specified in the notice;
if applicable, a description of all arrangements or understandings between the shareholder and each nominee and any other person(s), naming such person(s), pursuant to which the nomination is to be made by the shareholder;
such other information regarding each nominee or each matter of business to be proposed by such shareholder as would be required to be included in a proxy statement filed under the SEC’s proxy rules if the nominee had been nominated, or intended to be nominated, or the matter had been proposed, or intended to be proposed, by the Board of Directors;
if applicable, the consent of each nominee to serve as a director if elected; and
such other information that the Board of Directors may request in its discretion.
For a complete description of the procedures and disclosure requirements to be complied with by shareholders in connection with submitting director nominations, shareholders should refer to the Company’s Bye-laws.
No candidates for director nominations were submitted by any shareholder in connection with the 2018 Annual General Meeting.
Communications with the Board of Directors
Any interested parties desiring to communicate with the Board of Directors or any of the independent directors regarding the Company may directly contact such director(s) by delivering such correspondence to such director(s) (or the entire Board) in care of the Secretary at Third Point Reinsurance Ltd., Point House, 3 Waterloo Lane, Pembroke HM 08, Bermuda.
The Audit Committee of the Board of Directors has established procedures, including through the use of a third party hotline, for employees, shareholders and others to submit confidential and anonymous reports regarding accounting, internal accounting controls, or auditing matters. Details of the hotline are available on our website atwww.thirdpointre.com/investors/corporate-governance/governance-documents.
Executive Sessions
Executive sessions of independent directors enable the Board to discuss matters, such as strategy, the performance and compensation of the CEO and senior management, succession planning and Board effectiveness, without management present. Any director may request additional executive sessions of independent directors. During 2022, our independent directors met in three executive sessions at regularly scheduled Board meetings and/or informational calls. The rules of the NYSE also require the non-management directors of the Company to regularly meet in executive session without management, and the non-management directors met in three executive sessions at regularly scheduled Board meetings and/or informational calls. Either our Lead Independent Director or, after her appointment, our Interim Chair presided at the executive sessions of independent directors and non-management directors.
BOARD LEADERSHIP STRUCTURE The Board believes that the decision of whether to combine or separate the positions of CEO and Chair varies from company to company and depends upon a company’s particular circumstances at a given point in time. The Board believes that separating the CEO and Chair positions is the appropriate leadership structure for our Company complies with these requirements.and is in the best interests of our shareholders at this time. Ms. Ludlow serves as the Interim Chair of the Board, while Mr. Egan serves as our CEO and Director. Our Board believes that this structure best encourages the free and open dialogue of alternative views and provides for strong checks and balances. Additionally, the Interim Chair’s attention to Board and committee matters allows Mr. Egan to focus more specifically on overseeing the Company’s day-to-day operations and underwriting activities, as well as strategic opportunities and planning.
The Board recognizes that, depending on the circumstances, other leadership structures might be appropriate and in the best interest of the Company. Accordingly, the Board intends to regularly review its governance structure and has the discretion to modify its leadership structure in the future if it deems it in the best interest of the Company to do so. In 2017,the event the Board decides to combine the role of CEO and Chair, the Board is required to appoint a Lead Independent Director under the Company’s Corporate Governance Guidelines statedGuidelines. Currently, the Board has an independent Chair so the Board is not required to have a Lead Independent Director.
BOARD AND BOARD COMMITTEE PERFORMANCE EVALUATIONS
Our Board continually seeks to improve its performance. Throughout the year, our Interim Chair, Chief Legal Officer and Secretary each routinely communicate with our Board members to obtain real-time feedback. We believe that this continuous feedback cycle along with our formal annual evaluation process helps to ensure the Chairmancontinued effectiveness of our Board.
Our Governance and Nominating Committee oversees the formal annual evaluation process of the effectiveness of our Board and its standing committees. In 2022, the Board engaged an unaffiliated board assessment consulting firm to independently assess the Board’s performance. The consultant conducted confidential interviews with each director that included discussions of the overall functioning and effectiveness of the Board (toand its standing committees, the extentleadership structure of the Board, as well as a peer review. The consultant presented its findings and evaluation to the Board at an executive session. In addition, the results included feedback regarding each of the Audit Committee, Compensation Committee, Governance and Nominating Committee, Investment Committee and Risk and Capital Management Committee.
Our annual Board evaluations cover the following areas:
| | | | | | •Board efficiency and overall effectiveness | •Board and committee information needs and meeting cadence | •Board and committee structure | •Satisfaction with Board agendas and the frequency, duration and format of meetings and time allocations | •Board leadership and succession planning | •Areas where directors want to increase their focus | •Board and committee composition | •Board dynamics and culture | •Satisfaction with the performance of the Chair | •Strategy and Crisis Preparedness | •Board member access to the CEO and other members of senior management | •Board alignment with the Company’s mission, vision, ethics, values, long-term goals and strategy | •Quality of Board discussions and balance between presentations and discussion | •Other areas directors would like to have greater focus or oversight | •Quality and clarity of materials presented to directors | |
| | | | | | | | | | | | | | | | | | | | | | 1 | | | | | | | | ANNUAL BOARD AND COMMITTEE EVALUATIONS | | | The Governance and Nominating Committee oversees the annual self-evaluation process. The process, including the evaluation method, is reviewed annually by the Governance and Nominating Committee and presented to the Board for discussion prior to implementing the process during the fourth quarter. Written questionnaires used for the Board and each standing committee are annually reviewed by the Governance and Nominating Committee and are updated and tailored each year to address the significant processes that drive Board effectiveness. Each director completes a written questionnaire on an unattributed basis for the Board and committees. The questionnaires include open-ended questions and space for candid commentary. Our processes enable directors to provide anonymous and confidential feedback, which is then reviewed and addressed by the Chair of the Governance and Nominating Committee. In addition, each committee’s chair reviews the feedback with respect to their respective committee.
When appropriate, and at least every third year, our Board engages a third-party evaluation firm to independently assess the Board’s performance. The third-party evaluation firm conducts confidential interviews with each director that includes discussions of the overall functioning and effectiveness of the Board and its standing committees, the leadership structure of the Board as well as a peer review. The evaluation firm presents the findings to the Board for consideration and feedback. Our Board believes that employing an independent third-party evaluation firm every third year to assist in the evaluation process provides valuable insights and will contribute to the overall functioning and ongoing effectiveness of the Board.
In 2022, the Board engaged an unaffiliated board assessment consultant to independently assess the Board’s performance. The consultant conducted confidential interviews with each director that included discussions of the overall functioning and effectiveness of the Board and its standing committees, the leadership structure of the Board as well as a peer review. The consultant presented its findings and evaluation to the Board at an executive session. In addition, the results included feedback regarding each of the Audit Committee, Compensation Committee, Governance and Nominating Committee, Investment Committee and Risk and Capital Management Committee. | | | | | | | | | 2 | | | | | | | | SUMMARY OF THE THIRD-PARTY EVALUATION | | | A written report is produced summarizing the written questionnaires, which include all responses. Every director received an individualized summary corresponding to their own roles as board and committee members, and as chairs of committees or the board, as appropriate. | | | | | | | | | 3 | | | | | | | | | | | | | BOARD AND COMMITTEE REVIEW | | | The Chair of the Governance and Nominating Committee leads a discussion of the written Board and committee evaluation results at the Board level during an executive session. Directors also deliver feedback to the Interim Chair of the Board and suggest changes and areas for improvement. | |
| | | | | | | | | | | | | | | | | | | | | | 4 | | | | | | | | ACTIONS | | | Following the review, changes in practices or procedures are considered and implemented, as appropriate. The Board finds that this process generates robust comments and provides the Board the opportunity to make changes that are designed to increase Board effectiveness and efficiency. Actions taken in response to the evaluation process over the years have included: •Initiating a search for an additional qualified financial expert director; •Re-evaluating all governing documents, including delegations of authority and board and committee charters for effectiveness; •Initiating executive sessions between the Board and CEO prior to board meetings; and •Conducting a board informational session on fiduciary duties of the Board, roles of special committees and observers, and other board education matters.
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Board’s Primary Role and Responsibilities, Structure and Processes
Our Board bears the responsibility for the oversight of management on behalf of our shareholders in order to ensure long-term value creation. In that regard, the primary responsibilities of our Board include, but are not limited to (i) oversight of the Company’s strategic direction and business plan, (ii) ongoing succession planning and talent management, and (iii) risk management and oversight.
Oversight of Strategic Direction and Business Plan
Our Board oversees our strategic direction and business plan. At the beginning of each year, our senior management presents our consolidated annual business plan to the Board, and the Board discusses the Company’s results relative to the plan periodically throughout the year. Each year, the Board typically engages in a full-day strategy meeting with management where it conducts a comprehensive review and discussion of the Company’s strategic goals over the short-, medium- and long-term, as well as management’s plans to achieve such directorgoals.
Succession Planning and Talent Management
Our Compensation Committee is responsible for overseeing our executive compensation program to support our ability to attract and retain the right management talent to pursue our strategies successfully.
The Compensation Committee is involved in the critical aspects of the CEO succession planning process, including establishing selection criteria that reflect our business strategies, identifying and evaluating potential internal candidates and making key management succession decisions. Succession and development plans are regularly discussed with the CEO, as well as without the CEO present in executive sessions of the Board. The Compensation Committee makes sure that it has adequate opportunities to meet with and assess development plans for potential CEO and senior management successors to address identified gaps in skills and attributes. This occurs through various means, including informal meetings, Board dinners, presentations to the Board and committees, attendance at Board meetings and the comprehensive annual talent review. The Compensation Committee also oversees management’s succession planning for other key executive positions. Our Board calendar includes at least one meeting each year at which the Board conducts a detailed talent review which includes a review of the Company’s talent strategies, leadership pipeline and succession plans for key executive positions.
Risk Management and Oversight OUR BOARD TAKES AN ENTERPRISE-WIDE APPROACH TO RISK MANAGEMENT WHICH SEEKS TO COMPLEMENT OUR ORGANIZATIONAL OBJECTIVES, STRATEGIC OBJECTIVES, LONG-TERM PERFORMANCE AND THE OVERALL ENHANCEMENT OF SHAREHOLDER VALUE. | | | | | | | FULL BOARD | Our Board assesses and considers the risks we face on an ongoing basis, including risks that are associated with: •our financial position, •our competitive position, •underwriting results, •investment performance, •cybersecurity vulnerabilities, •catastrophic events, and •other risks germane to the insurance and reinsurance industry. | Our Board determines the appropriate levels of risk for the Company generally, assesses the specific risks faced by us, and reviews the steps taken by management to manage those risks. While our Board maintains the ultimate oversight responsibility for the risk management process, its committees oversee risk in certain specified areas. |
 | | | | | | | | | | | | | | | | | | | | | | | | | | | | AUDIT COMMITTEE | | COMPENSATION COMMITTEE | | GOVERNANCE AND NOMINATING COMMITTEE | | INVESTMENT COMMITTEE | | RISK AND CAPITAL MANAGEMENT COMMITTEE | Our Audit Committee is responsible for overseeing: •Management’s assessment of the Company’s internal control over financial reporting, •The Company’s financial statements and disclosures, •Quarterly reports on legal and regulatory matters, •The Company’s annual internal audit plan, audit findings and recommendations, and •The Company’s compliance with legal and regulatory requirements.
| Our Compensation Committee is responsible for overseeing: •The Company’s general compensation philosophy, including the development and implementation of our compensation program, •Our executive compensation plans and arrangements, •Succession planning, •Diversity and talent management, and •Incentive compensation risk oversight. | Our Governance and Nominating Committee is responsible for: •Identifying, evaluating, and recommending to the Board individuals qualified and suitable to become board members, •Developing and recommending to the Board a set of corporate governance guidelines applicable to the Company, •Overseeing the annual performance evaluation of the Board and its committees, •Recommending directors to serve on the various committees of the Board, and •Reviewing and considering the Company’s position, strategy and policies that relate to current and emerging ESG matters.
| Our Investment Committee is responsible for: •Overseeing the performance of the Company’s investment portfolio, •Establishing the investment policy and guidelines, •Receiving reports from the Chief Investment Officer on the performance and asset allocation of the Company’s investments, and •Reviewing quarterly the compliance with the investment guidelines. | | Our Risk and Capital Management Committee is responsible for: •Overseeing management’s identification, mitigation and monitoring of the Company’s material risks and exposures, including: insurance underwriting risk; investment, liquidity and concentration risk; market risk; credit risk; cyber, systems and operations risk (operational risk); group risk; strategic risk; reputational risk; legal, compliance and litigation risks; and other unusual material risks that could have a significant impact on the Company. |
 | | | | MANAGEMENT | We use our comprehensive Enterprise Risk Management (“ERM”) program to identify, aggregate, monitor and manage risks. The program also defines our risk appetite, governance, culture and capabilities. The implementation and execution of the ERM program is headed by our Chief Risk Officer. There are several internal management committees, including the Enterprise Risk & Capital Committee (“ERCC”), co-chaired by our Chief Risk Officer and Chief Financial Officer. The ERCC is the highest-level management committee to oversee all firm-wide risks and is responsible for risk governance, risk oversight and risk appetite. It maintains the enterprise risk appetite framework and monitors compliance with limits and escalations defined in it. The ERCC oversees implementation of certain risk policies Company-wide. The ERCC reviews key risk exposures, trends and concentrations, significant compliance matters, and provides guidance on the steps to monitor, control and report major risks. Pursuant to our Board’s instruction, management regularly reports on applicable risks to the relevant committee or the Board, as appropriate, with additional review or reporting on risks conducted as needed or as requested by our Board and/or its committees. Below are areas the ERCC identified as key strategy and risk oversight areas.
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| | | | | | | | | | | | | CERTAIN OF OUR KEY STRATEGY AND RISK OVERSIGHT AREAS | | | •Investment Performance and Markets •Technology and Cybersecurity •Insurance Risk | •Regulation, Compliance and Legal Developments •Rating Agency Risk •Model Risk | |
| | | | CYBERSECURITY | | Information security is a key priority. Our information security program is designed to protect our systems and data from ever-evolving cybersecurity threats. The program is led by a group CISO, deputy CISO, security engineers and risk management professionals. We also employ a 24/7 Security Operation Center staffed by security experts to continually monitor our network environment. Our information security program is comprehensive with several layers of redundant defenses. We engage third-parties to evaluate our program for gaps on an annual basis, and regularly test our defenses and incident response via third-party penetration tests and red-team exercises. All employees and contractors must comply with our Information Security and Acceptable Use policies. We provide mandatory cybersecurity training to new hires and continue employee education through annual training and monthly simulated phishing campaigns. We proactively assess cyber risks as part of our vendor management process and regularly perform cyber risk assessments of our key third-party relationships. We comply with all applicable regulatory requirements related to cybersecurity, and our security program and IT-related controls are regularly examined by internal auditors, external auditors, compliance and various regulators. Our Board of Directors, along with the Risk and Capital Management Committee and Audit Committee, oversee our information security program and receive periodic updates from management. |
COMMITTEES OF THE BOARD OF DIRECTORS The Board has established an “independent director”) orAudit Committee, Compensation Committee, Governance and Nominating Committee, Investment Committee, and Risk and Capital Management Committee. Under the presiding director,applicable requirements of the NYSE, each of the Audit, Compensation, and Governance and Nominating Committees consists exclusively of members who qualify as applicable, shall actindependent directors. A description of each Board committee is set forth below. Except as chair at such meetings. As our Chairman for mostnoted below, the members of 2017 was also aeach Board Committee have continued to serve through the date of this proxy statement. | | | | | | | | | | | | | | | AUDIT COMMITTEE | Members •Sharon M. Ludlow, Chair •Franklin (Tad) Montross IV •Jason Robart | 4 Formal Meetings | 5 Informational Sessions | 2 Actions by Unanimous Written Resolution | •Each of the members of the Audit Committee qualifies as an “independent” director as defined under the NYSE rules and Rule 10A-3 of the Exchange Act. •All of the members of the Audit Committee are financially literate and have accounting or related financial management expertise within the meaning of the NYSE rules. •The Board also has determined that Sharon Ludlow qualifies as an “audit committee financial expert” as defined by SEC rules. Please refer to the section entitled “Information Regarding the Class III Director Nominees for Election to the Board” for Sharon Ludlow’s relevant experience. | KEY RESPONSIBILITIES Our Audit Committee has the responsibility for, among other things, assisting the Board in reviewing: •our financial reporting and other internal control processes; •our financial statements; •the independent auditor’s qualifications, independence and performance; •the performance of our internal audit function; and •our compliance with legal and regulatory requirements and our Code of Business Conduct and Ethics. Additionally, the Company’s independent auditor regularly discusses risks and related mitigation measures that may arise during their regular reviews of the Company’s financial statements with the Audit Committee. To ensure candid and complete reporting, the Audit Committee regularly meets in separate executive sessions with management, the Company’s internal auditor and the Company’s independent auditor. REPORT The Report of the Audit Committee is on page 125 of this proxy statement. CHARTER The Audit Committee Charter is available on our website: investors.siriuspt.com/governance/governance-documents. |
| | | | | | | | | | | | | | | COMPENSATION COMMITTEE | Members •Jason Robart, Chair •Mehdi A. Mahmud •Franklin (Tad) Montross IV | 4 Formal Meetings | 3 Informational Sessions | 11 Actions by Unanimous Written Resolution | •Each member of the Compensation Committee qualifies as an “independent” director as defined under the applicable rules and regulations of the SEC and the NYSE. | KEY RESPONSIBILITIES Our Compensation Committee is responsible for: •reviewing and approving the compensation of the Company’s executive officers and directors; •reviewing the Company’s strategies, policies and practices related to human capital management, including with respect to matters such as diversity and inclusion; •authorizing and administering equity awards and other incentive arrangements; •overseeing any compensation adviser retained to assist with the evaluation of compensation of executive officers or any other compensation-related matter; and •reviewing and approving employment and related agreements with our executive officers. The Compensation Committee also periodically reviews management development and succession plans, including establishing policies regarding succession in the event of an emergency or the retirement of the Chief Executive Officer and other senior executive officers. REPORT The Compensation Committee Report is on page 78 of this proxy statement. CHARTER The Compensation Committee Charter is available on our website: investors.siriuspt.com/governance/governance-documents. |
| | | | | | | | | | | | | | | GOVERNANCE AND NOMINATING COMMITTEE | Members •Mehdi A. Mahmud, Chair •Rafe de la Gueronniere •Gretchen A. Hayes •Sharon M. Ludlow | 3 Formal Meetings | 0 Informational Sessions | 3 Actions by Unanimous Written Resolution | •Each of the members of the Governance and Nominating Committee qualifies as an “independent”director as defined under the applicable rules and regulations of the SEC and the NYSE. | KEY RESPONSIBILITIES Our Governance and Nominating Committee is responsible for, among other things: •identifying and recommending candidates for election to our Board; •reviewing the composition of the Board and its Committees; •reviewing and considering the Company’s position, strategy and policies that relate to current and emerging ESG matters; •developing and recommending to the Board corporate governance guidelines that are applicable to us; and •overseeing Board evaluations. CHARTER The Governance and Nominating Committee Charter is available on our website: investors.siriuspt.com/governance/governance-documents. |
| | | | | | | | | | | | | | | INVESTMENT COMMITTEE | Members •Rafe de la Gueronniere, Chair •Mehdi A. Mahmud •Jason Robart •Peter Wei Han Tan | 4 Formal Meetings | 3 Informational Sessions | 3 Actions by Unanimous Written Resolution | KEY RESPONSIBILITIES Our Investment Committee is responsible for: •establishing investment guidelines and policies and monitoring compliance with such policies; and •overseeing the management and performance of the Company’s investment portfolio. CHARTER The Investment Committee Charter is available on our website: investors.siriuspt.com/governance/governance-documents. |
| | | | | | | | | | | | | | | RISK AND CAPITAL MANAGEMENT COMMITTEE | Members •Franklin (Tad) Montross IV, Chair •Sharon M. Ludlow •Peter Wei Han Tan •Gretchen A. Hayes | 4 Formal Meetings | 0 Informational Sessions | 2 Action by Unanimous Written Resolution | KEY RESPONSIBILITIES Our Risk and Capital Management Committee is responsible for: •overseeing our risk appetite and risk management framework; •overseeing our cybersecurity; and •overseeing our financial and capital markets strategies, including existing and proposed strategies. Our Risk and Capital Management Committee is responsible for overseeing the Company-wide risk appetite and enterprise risk management framework. Management regularly reports to the Committee on the Company’s operational processes and controls that are designed to identify, mitigate and monitor the risks and exposures that could materially impact the Company. |
COMMITTEES OF THE BOARD OF DIRECTORS ―
POST-ANNUAL GENERAL MEETING Assuming election of the Board nominees, the following sets out the persons who will constitute the Company’s Board following the Annual General Meeting, including their expected Committee assignments: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | SIRIUSPOINT BOARD COMMITTEES | | NAME | INDEPENDENT | | CLASS | AUDIT | COMPENSATION | GOVERNANCE
& NOMINATING | INVESTMENT | RISK & CAPITAL MANAGEMENT | | Rafe de la Gueronniere | I | | III | | | | | | Sharon M. Ludlow | I | | III | | | | | | | Mehdi A. Mahmud | I | | II | | | | | | | Franklin (Tad) Montross IV | I | | I | | | | | | | Jason Robart | I | | II | | | | | | | Scott Egan | | | III | | | | | | | Peter Wei Han Tan | | | I | | | | | | | Daniel S. Loeb | | | II | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | Committee Chair | | Committee Member | | Interim Chair of the Board | | Audit Committee financial expert |
SUSTAINABILITY RESPONSIBILITY At SiriusPoint, our vision is to grow our business, create value and make positive environmental and social impacts through our business operations. The values of sound risk management, good governance, and environmental and social responsibility are reflected in our Company culture and operations. Our Board has formally designated our Governance and Nominating Committee with the responsibility for oversight of the Company’s policies, practices and disclosures relating to sustainability, including those related to climate change, for purposes of risk management, long-term business strategy and other matters. The Governance and Nominating Committee receives regular updates on sustainability. In addition, our executive management team established a Sustainability Council which is comprised of senior leaders across the Company. The Sustainability Council defines the Company’s approach to sustainability and broader environmental, social and governance concerns. The goal is to integrate the Company’s efforts on sustainability with its long-term business strategy.
Below is a summary of some of the highlights of the Company’s 2022 sustainability strategy efforts.
| | | | | | | | | | | | | | | | | PEOPLE & COMMUNITY | SUSTAINABLE UNDERWRITING | We value being an inclusive employer and are committed to supporting the unique voices, backgrounds, cultures and contributions of our global employee base. We strive to foster an environment where all employees feel included, valued, respected and supported to unleash their full potential. Our Chief Human Resources Officer oversees the implementation of the Company’s human capital management strategy, including its Diversity, Equity, Inclusive & Belonging (DEI&B) initiatives. Our DEI&B efforts are supported by our management team. Highlights include: •Formation of a Diversity, Equity, Inclusive Committee •Inclusion of diversity into talent development goals for executives and implemented diverse hiring practices •Continuation of corporate partnership with the Association of International Black Actuaries and Organization of Latino Actuaries and support for Stand with Asian Americans Our global reach afforded us a unique opportunity to improve the health and prosperity of communities around the world. Our offices work directly with communities to support local causes. These efforts include programs and partnerships that leverage the skills, knowledge and enthusiasm of our employees’ volunteerisms. Recent highlights include:
•Partnering with the Red Cross to provide aid to Ukrainian citizens in the ongoing conflict with Russia and contributions on behalf of our employees globally
•Colleagues in New York ran a clothing drive in support of The Floating Hospital
•A Bermuda colleague completed a challenge to climb more than 30,000 ft in the Lake District in the UK, raising $22,000 to support Bermuda-based charity, WindReach.
| Our group underwriting guidelines: •Incorporate climate risk considerations •Require strict adherence to compliance and regulatory obligations, including global efforts to reduce funding of terrorism, corruption and human rights violations •Require underwriting decisions to be taken with the purpose of improving the overall profit, while using the latest underwriting techniques and tools and balancing with experience and common sense •Structure compensation of underwriting operations to promote prudent risk taking and long-term profitability •Use diversification, strong accumulation controls and reinsurance to adjust risks to acceptable tolerance levels We have recently: •Evaluated our (re)insurance portfolio to reduce climate risk within the portfolio •Co-founded two ventures enabling clients and local communities to manage climate risk, Parameter Climate, a parametric risk transfer and climate focused underwriter, and Vyrd, an insurer established to address the protection gap and coverage challenges of Florida homeowners |
| | | | | | | | | | | | | | INVESTMENTS | We work with a number of asset managers who have implemented procedures to identify, manage and monitor certain sustainability risks related to governance events. Those include: •Lack of diversity on boards •Inadequate external or internal audit •Bribery and corruption •Lack of scrutiny of executive pay •Poor safeguards on personal data and information technology security |
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| | | | | | | | | | COMPLIANCE & ETHICS | ENVIRONMENTAL STEWARDSHIP & SUSTAINABILITY | The Sustainability Council defines the Company’s approach to sustainability and broader environmental, social and governance concerns. We aim to conduct our business in a manner that respects the human rights and dignity of all, and we support international efforts to promote and protect human rights, including an absolute opposition to slavery and human trafficking. We have formalized our positions on human rights in various Company policies and other commitments, including:
•Code of Business Conduct and Ethics •Modern Slavery Statement •Vendor Code of Conduct •Respectful Work Policy •Endorsement of the Business Coalition for Equality Act, which is the U.S. federal legislation to provide the same basic protections to LGBTQ people as are provided to other protected groups under federal law •Development and implementation of proactive investor and proxy advisory engagement strategy •Membership in the Council for Institutional Investors | Our Board adopted a global Environmental Policy Statement that sets forth our commitment to operating a sustainable business, endorsing sustainability initiatives, supporting organizations that foster sustainability in our communities, and proactively setting sustainability goals. For more information about our commitments, please refer to our Environmental Policy Statement located on our website at investors.siriuspt.com/governance/governance-documents.
We joined ClimateWise, a global network of leading insurance industry organizations, working to directly support society as it responds to the risks and opportunities of climate change.
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For more information about our Sustainability initiatives, please refer to our website at: www.siriuspt.com/esg.
STAKEHOLDER ENGAGEMENT | | | | | | | | | | | | | WHY WE ENGAGE Our directors and management recognize the benefits that come from robust dialogue with shareholders and other relevant stakeholders and we have embraced an active engagement strategy. We engage with stakeholders through the year in order to: | | | | Provide visibility and transparency into our business, our performance and our corporate governance and compensation practices; | | | | Discuss with our shareholders the issues that are important to them, hear their expectations for us and share our views; and | | | | Assess emerging issues that may affect our business, inform our decision making, enhance our corporate disclosures and help shape our practices. | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | HOW WE ENGAGE In 2022, we launched a comprehensive and structured program to engage with existing and new investors and other key stakeholders. We strive to increase visibility among the investment community and increase engagement with existing investors. | | | | | | | | | | | | | | | | | | | | | SiriusPoint leaders | | discussed these topics | | with our stakeholders | | through various venues | | | •Executive Leadership Team •Senior Management •Secretary •Head of Investor Relations and Strategy |
| •Our business •Governance •Executive Compensation |
| •Investors •Regulators •Rating Agencies
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| •Investor Meetings •Quarterly Earnings Calls •Investor Conferences •Annual Shareholder Meeting | | | | | | | | | | | | ACTIONS TAKEN BY THE BOARD FOLLOWING STAKEHOLDER ENGAGEMENT | | Stakeholder feedback is delivered to our Board and is considered in connection with the Board’s strategy for the Company’s transformation and turnaround. |
DIRECTOR NOMINATING PROCESS AND DIVERSITY The Board is responsible for nominating candidates for election to the Board determinedand for filling vacancies on the Board that Steven E. Fass wouldmay occur between annual general meetings of shareholders. The Governance and Nominating Committee is responsible for identifying, screening and recommending candidates to the Board for Board membership. When formulating its recommendations, the Governance and Nominating Committee may also consider advice and recommendations from others, including shareholders, as it deems appropriate. The Governance and Nominating Committee will identify and consider candidates suggested by outside directors, management and/or shareholders and evaluate them in accordance with its established criteria. | | | | | | | | | | | | | | | | | | | | | | IDENTIFY DIRECTOR CANDIDATES | | REVIEW CANDIDATE POOL | | CONDUCT IN-DEPTH CANDIDATE REVIEW | | RECOMMEND DIRECTOR NOMINEE SLATE | | Potential candidates for director may be identified by management, our directors, a third-party search firm or shareholders. | | The Governance and Nominating Committee reviews candidates to determine whether candidates warrant further consideration. | | Candidates will meet with members of the Governance and Nominating Committee and management and are evaluated for independence, potential conflicts, skills, and experience and diversity. | | The Governance and Nominating Committee recommends candidates for appointment or election to the Board. |
The Governance and Nominating Committee and the Board believe that diversity along multiple dimensions, including opinions, skills, perspectives, personal and professional experiences, gender, race and cultural diversity, and other differentiating characteristics, is an important element of its nomination recommendations. The Governance and Nominating Committee has not identified any specific minimum qualifications which must be the presiding directormet for a person to act as chair at such meetings. Our independent directors met separately from the other directors in executive session during 2017. For information regarding how to communicate with non-management directorsbe considered as a groupdirector candidate. However, Board candidates are selected based upon various criteria, including: business and one or more individual membersprofessional experience, judgment, diversity, age, skill, background, education, time availability in light of other commitments, and such other relevant factors that the Governance and Nominating Committee considers appropriate in the context of the needs of the Board. The Board see “Communicationsrequires at least two diverse candidates to be included in the pool for all director searches and evaluates a nominee’s experience, gender, race, age, ethnicity, national origin, sexual orientation, skills and other qualities. The graphics below illustrate the diversity of experience represented on our Board:
BOARD SNAPSHOT Director candidates recommended by shareholders will be considered in the same manner as recommendations received from other sources. If a shareholder desires to recommend a director candidate for consideration by the Governance and Nominating Committee, recommendations should be sent in writing to the Secretary at the Company’s principal executive offices, together with appropriate biographical information concerning each proposed director candidate, consistent with the Boardbiographical information requested for director nominees as set forth in the Company’s Bye-laws. For a description of Directors” above.the procedures and requirements for a shareholder to make a director nomination, shareholders should refer to the Company’s Bye-laws and the section entitled “Submitting Proxy Proposals and Director Nominations for the Next Annual General Meeting” below.
Outside Advisors
Our Board of Directors and each of its Committees may retain outside advisors and consultants of their choosing at ourthe Company’s expense. The Board of Directors need not obtain management’s consent to retain outside advisors. In 2017, no outside advisors or consultants were engaged2022 and 2021, the Compensation Committee retained Mercer (US) Inc. (“Mercer”) to provide advice on executive compensation matters, including the Compensation Discussion and Analysis contained in this proxy statement. In connection with Mercer’s retention, the Compensation Committee conducted an assessment of potential conflicts of interest, considering various factors including the six factors mandated by the BoardNYSE rules, and no conflicts of Directors or any Committee thereof.
Attendance at Annual General Meeting
We do not have a formal policy regarding attendance by members of our Board of Directors at our annual general meetings. However, directors are expectedinterest relating to attend all annual general meetings of shareholders. All members of our Board of Directors attended our Annual General Meeting in 2017.
Compensation Committee Interlocks and Insider Participation
The current membersits services were identified. See “Role of the Compensation Consultant” in the Compensation Discussion and Analysis for more information regarding the services provided by Mercer.
COMMITTEE CHARTERS & CODE OF BUSINESS CONDUCT AND ETHICS The committee charters are reviewed at least annually, and each Committee recommends any proposed changes to the Board for approval. The charters of the Audit Committee, Compensation Committee, and Governance and Nominating Committee as well as the Corporate Governance Guidelines, the Code of Business Conduct and Ethics, and our Environmental Policy Statement are Rafe de la Gueronniere, Steven E. Fass (Chairman), Mary R. Hennessyavailable on our website at investors.siriuspt.com/governance/governance-documents and Mark Parkin. Nonemay also be obtained upon request without charge by writing to: | | | | | | | SiriusPoint Ltd. Attention: Secretary Point Building 3 Waterloo Lane Pembroke HM 08, Bermuda |
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION During the fiscal year ended December 31, 2022, there were no compensation committee interlocks or insider participants. During 2022, none of the members of our Compensation Committee arewas an officer or employee of our Company. None of ourCompany, and during fiscal year 2022, no executive officers serve, or in the past year have served as a member of a board of directors or compensation committee of any entity that has one or more executive officers or directors serving on our Board of Directors and/or Compensation Committee.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, requires the Company’s directors, executive officers and persons who own more than 10% of the issued and outstanding shares of the Company’s common shares to file reports of initial ownership of common shares and other equity securities and subsequent changes in that ownership with the SEC and the NYSE. Based solely on a review of such reports and written representations from the directors and executive officers, the Company believes that all such filing requirements were met during 2017.
Report of the Audit Committee
The Audit Committee is responsible for the appointment, compensation, retention, and oversight of the work of Ernst & Young Ltd., our independent auditor, for the purpose of preparing or issuing an audit report. The Audit Committee reviews the Company’s financial reporting process on behalf of the Board of Directors. Each None of the members of the Compensation Committee during fiscal year 2022 had any relationship requiring disclosure under Item 404 of Regulation S-K for the fiscal year ended December 31, 2022.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS POLICIES AND PROCEDURES FOR RELATED PERSON TRANSACTIONS | | | | The Company has adopted a Related Person Transaction Policy pursuant to which our executive officers, directors, director nominees and principal shareholders, including their immediate family members, and any firm, corporation or other entity in which any of the foregoing persons is a general partner, limited partner or 10% beneficial owner are not permitted to enter into a related person transaction with us without the consent of our Audit Committee, another independent Committee of our Board or the full Board. Any request for us to enter into a transaction in which an executive officer, director, principal shareholder or any of such persons’ immediate family members has a direct or indirect material interest is required to be presented to our Audit Committee for review, consideration and approval. |
All of our directors, executive officers and employees are required to report to our Audit Committee qualified asany such related person transaction. In approving or rejecting the proposed transaction, our Audit Committee takes into account, among other factors it deems appropriate, whether the proposed related person transaction is on terms no less favorable than terms generally available to an “independent” director as definedunaffiliated third party under Section 303A.02(a)(ii)the same or similar circumstances, the extent of the NYSE rulesrelated person’s interest in the transaction and, Rule 10A-3if applicable, the impact on a director’s independence. Under the policy, if we should discover related person transactions that have not been approved, our Audit Committee will be notified and will determine the appropriate action, including ratification, rescission or amendment of the Securities Exchange Acttransaction. A copy of 1934. Allour Related Person Transaction Policy is available on our website at: investors.siriuspt.com/governance/governance-documents. RELATED PERSON TRANSACTIONS The following is a description of certain relationships and transactions involving amounts in excess of $120,000 that the Company has entered into or participated in with our directors, officers, major shareholders and certain other related persons since January 1, 2022.
Joint Venture and Investment Management Agreements Daniel S. Loeb, an affiliate of Third Point LLC, has sole voting and dispositive power over approximately 8.72% of the memberscommon shares of the Company (as of March 1, 2023). As long as ownership by Third Point LLC and its affiliates (“Third Point”) persons remains in excess of 5% of the voting securities of the Company, Third Point is a related person. See “Security Ownership of Certain Beneficial Owners and Management.” On July 31, 2018, Third Point Reinsurance Ltd. (as predecessor to the Company), Third Point Re BDA and Third Point Re USA entered into the Amended and Restated Exempted Limited Partnership Agreement (the “2018 LPA”) of Third Point Enhanced LP (“TP Fund”) with Third Point Advisors L.L.C. (“TP GP”) and others, effective August 31, 2018. The 2018 LPA was subsequently amended and restated in 2019 and 2020, and on February 23, 2022, the Company entered into the Fourth Amended and Restated Exempted Limited Partnership Agreement of TP Fund with TP GP and the other parties thereto (the “TP Fund LPA”). Pursuant to an investment management agreement between Third Point LLC and TP Fund, dated July 31, 2018, and as amended and restated on February 28, 2019, Third Point LLC is the investment manager for TP Fund. In addition, on July 31, 2018, Third Point Re BDA and Third Point Re USA (together the “TPRE Limited Partners”) and TP Fund executed a Subscription Agreement pursuant to which the TPRE Limited Partners transferred certain net investment assets and related liabilities from their separate accounts to TP Fund, and TP Fund issued limited partner interests to the TPRE Limited Partners proportionate to and based on the net asset value transferred by each such entity on the applicable transfer date. Certain collateral assets consisting of debt securities and restricted cash were not transferred to TP Fund but are also managed by Third Point LLC under a separate investment management agreement, as discussed below under “—Investment Management Agreement.” For more information regarding the TP Fund LPA and the 2022 IMA (as defined below), please refer to the summary below. LIMITED PARTNERSHIP AGREEMENT OF THIRD POINT ENHANCED LP Term and Termination Rights The TP Fund LPA has a term ending on March 31, 2026, subject to automatic renewal for additional successive two-year terms unless a party notifies the other parties, with one year’s prior notice before the end of a term, that it wishes to terminate the TP Fund LPA at the end of such term. We may terminate the TP Fund LPA in certain circumstances, including (1) at any time upon the written consent of the TPRE Limited Partners and TP GP or (2) upon the death, long-term disability or retirement of Daniel S. Loeb, or the occurrence of other circumstances in which Mr. Loeb is no longer directing the investment program of Third Point LLC or actively involved in the day-to-day management of Third Point LLC. Withdrawal Rights Under the TP Fund LPA, we may withdraw our capital accounts in TP Fund (i) in full on March 31, 2026, and each successive two-year anniversary of such date or (ii) in accordance with the other withdrawal rights set forth in the TP Fund LPA.
Incentive Allocations With respect to each of the TPRE Limited Partners, TP GP receives incentive allocations. An incentive allocation crystallizes as of each December 31, each withdrawal date that a TPRE Limited Partner effects a withdrawal, other than December 31, in respect of the amount withdrawn and if TP Fund is dissolved on a date other than December 31, the termination date (each an “Incentive Allocation Period”). Reallocation of a TPRE Limited Partner’s capital account as of a crystallization date is divided between the TPRE Limited Partner and TP GP as follows: 20% of the result of (x) the Net Increase (as defined in the TP Fund LPA) (if any) of the Capital Account (as defined in the TP Fund LPA) of a TPRE Limited Partner during such Incentive Allocation Period, minus (y) the Management Fee (as defined in the TP Fund LPA) debited from such Capital Account for such Incentive Allocation Period, minus (z) such partner’s Loss Recovery Account (as defined in the TP Fund LPA) balance for such Incentive Allocation Period, shall be reallocated to TP GP (the “Incentive Allocation”). TP GP, in its discretion, may elect to reduce, waive or calculate differently the Incentive Allocation, with respect to any TPRE Limited Partner. Management Fee Pursuant to the TP Fund LPA, Third Point LLC is entitled to receive monthly management fees. Prior to the amendment and restatement of the TP Fund LPA and the 2022 IMA (as defined below), management fees were charged at the TP Fund level and were calculated based on 1.25% of the assets under management in TP Fund and multiplied by an exposure multiplier computed by dividing the average daily investment exposure leverage of the TP Enhanced Fund (as defined below) by the average daily investment exposure leverage of the Third Point Offshore Master Fund L.P. (“Offshore Master Fund”). Third Point LLC also serves as the investment manager for the Offshore Master Fund. Upon the 2020 amendment and restatement of the 2018 LPA, effective February 26, 2021, the adjustment for investment exposure leverage in the management fee calculation was removed, as previously adjusted for under the 2019 LPA. The 2020 LPA did not amend the management fee rate of 1.25% per annum. Following the 2022 amendment and restatement of the TP Fund LPA, Third Point LLC is entitled to a fixed monthly management fee equal to 1.25% of the balance of each Capital Account (determined as of the beginning of the month before the accrual of the performance allocation and not including any exposure leverage of the TP Fund or any Capital Account). INVESTMENT MANAGEMENT AGREEMENT On August 6, 2020, Third Point LLC (d/b/a Third Point Insurance Portfolio Solutions) (“TPIPS”) and the Company entered into an Investment Management Agreement, effective as of February 26, 2021 (the “TPIPS IMA”), pursuant to which TPIPS serves as investment manager to the Company and provides investment advice with respect to the investable assets of the Company, other than assets that the Company may withdraw from time to time as working capital. On February 23, 2022, the Company entered into an Amended and Restated Investment Management Agreement (the “2022 IMA”) with Third Point LLC and the other parties thereto, which amended and restated the TPIPS IMA. Pursuant to the 2022 IMA, Third Point LLC provides discretionary investment management services with respect to a newly established TP Optimized Credit portfolio (the “TPOC Portfolio”), subject to investment and risk management guidelines, and continues to provide certain non-discretionary investment advisory services to the Company. The Company agreed to contribute to the TPOC Portfolio all amounts withdrawn from TP Fund on November 30, 2021, December 31, 2021 and January 31, 2022 that were not invested or committed for investment in other Third Point strategies.
Term and Termination Rights The 2022 IMA will continue with respect to the TPOC Portfolio until the first of the following events to occur: (1) as of any month-end upon at least 120 days’ prior written notice from Third Point LLC, (2) upon the complete withdrawal of all of the assets in the TPOC Portfolio or (3) 45 days’ following the mutual agreement of the Company and Third Point LLC to terminate. The term of the 2022 IMA with respect to the advisory services may be terminated by the Company as of any calendar month-end, with at least 30 days’ prior notice. The Company and Third Point LLC have certain other termination rights as set forth in the 2022 IMA. Withdrawal Rights Under the 2022 IMA, we may withdraw our capital accounts in TPOC Portfolio (i) in full on March 31, 2026 and each successive anniversary of such date or (ii) in accordance with the other withdrawal rights set forth in the 2022 IMA. Incentive Fees Under the 2022 IMA, the Company is obligated to pay Third Point LLC, from the assets of each sub-account, an annual incentive fee equal to 15% of out-performance over a specified benchmark for the investment management services provided in respect of the TPOC Portfolio. On March 31, 2026 or upon the termination of the 2022 IMA if earlier, an incentive fee in respect of each sub-account will be determined and paid as if such date were the last day of a calendar year. In addition, immediately after giving effect to such incentive fee payment, Third Point LLC will calculate a notional incentive fee in respect of each remaining sub-account on a cumulative basis from the establishment of such sub-account through such date as if no incentive fee had been paid in respect of such sub-account on or prior to such date, adjusted to account for withdrawals and management fees, in an amount equal to 20% for the first 2.5% of out-performance in respect of each sub-account, 25% for the next 2.5% of out-performance in respect of each sub-account and 30% of any further out-performance in respect of each sub-account. If such calculated amount exceeds the aggregate incentive fee actually paid with respect to any such sub-account, the Company is obligated to pay Third Point LLC the amount of such excess from each applicable sub-account. Management Fees The Company is obligated to pay Third Point LLC a monthly management fee equal to one twelfth of 0.50% (0.50% per annum) of the TPOC Portfolio, net of any expenses, and a fixed advisory fee for the advisory services equal to 1/4 of $1,500,000 per quarter, which may be reduced by management fees paid on capital other than TPE Withdrawn Amounts (as defined in the 2022 IMA) invested in the TPOC Portfolio.
COMMUNICATIONS WITH THE BOARD OF DIRECTORS Any interested parties desiring to communicate with the Board or any of the independent directors regarding the Company may directly contact such director(s) by delivering such correspondence to such director(s) (or the entire Board) by e-mail to secretary@siriuspt.com or by mail at the following address: | | | | | | | | | | | | | | SiriusPoint Ltd. Attention: Secretary Point Building 3 Waterloo Lane Pembroke HM 08, Bermuda | |
The Secretary will not forward to the Board, any Committee or any director communications of a personal nature or not related to the duties and responsibilities of the Board, including, without limitation, junk mail and mass mailings, business solicitations, routine customer service complaints, new product or service suggestions, opinion survey polls or any other communications deemed by the Chief Legal Officer to be immaterial to the Company.
The Audit Committee of the Board has established procedures, including through the use of a third party hotline, for employees, shareholders and others to submit confidential and anonymous reports regarding accounting, internal accounting controls or auditing matters. Details of the hotline are available on our website atwww.siriuspt.com.
DIRECTOR COMPENSATION COMPENSATION OF DIRECTORS FOR FISCAL YEAR 2022 | | | | | | | ADDITIONAL ANNUAL CASH RETAINERS ($) | | | | Audit Committee Chair | 172,500 | | | | | INITIAL EQUITY GRANT―GRANT DATE VALUE ($) | | One-time grant of restricted common shares | 250,000 | |
Pursuant to our Director Compensation Policy, each independent director receives an annual cash retainer of $137,500 per year. Ms. Sharon M. Ludlow, who serves as Chair of the Audit Committee are financially literate and have accounting or related financial management expertise within the meaningInterim Chair of the SEC and NYSE rules. The Company’s management has the primary responsibilityBoard, received additional cash retainers in 2022 of (i) $172,500 for the financial statements and for the reporting process, including the establishment and maintenanceservice as Chair of the system of internal control over financial reporting. The
independent registered public accounting firm appointed as the Company’s independent auditor is responsible for auditing the financial statements prepared by management and the Company’s internal controls over financial reporting and expressing an opinion on the conformity of the Company’s financial statements with generally accepted accounting principles and on the design and operating effectiveness of the Company’s internal control over financial reporting. In this context, the Audit Committee, has met and held discussions with management and Ernst & Young Ltd.,prorated based upon the independent registered public accounting firm appointed as the Company’s independent auditor, regarding the fair and complete presentationportion of the Company’s financial statements.
The Audit Committee reviewed and discussed with Ernst & Young Ltd. the matters that are required to be discussed by Auditing Standard No. 16, Communications with Audit Committeesyear during which she served as adopted by the Public Company Accounting Oversight Board (“PCAOB”), including their judgments as to the quality, not just the acceptability,Chair of our accounting principles, the reasonableness of significant judgments, all critical accounting policies and practices to be used, material alternative accounting treatments within generally accepted accounting principles discussed with management, the determination of audit tenure, and other material written communications between Ernst & Young Ltd. and management. As part of that review, the Audit Committee has received the written disclosures and the letter required by applicable requirements(ii) a one-time $350,000 payment for service as Interim Chair of the PCAOB regarding Ernst & Young Ltd.’s communications withBoard, prorated for the Audit Committee concerning independence, andportion of the Audit Committee has discussed Ernst & Young Ltd.’s independence fromyear during which she served as Interim Chair of the Company with Ernst & Young Ltd.Board (the “Interim Chair Cash Retainer”). The Audit Committee also has considered whether Ernst & Young Ltd.’s provisionInterim Chair Cash Retainer was awarded to Ms. Ludlow in recognition of non-audit services to the Company is compatible with the auditor’s independence. The Audit Committee has concluded that Ernst & Young Ltd. is independent fromadditional responsibilities Ms. Ludlow took on during a period of significant change at the Company and its management.
is not expected to be an ongoing element of our director compensation program. The Audit Committee annually reviewscash retainers are paid in equal quarterly installments, and are prorated for partial years of Board service based on the performance and independencenumber of Ernst & Young Ltd. in deciding whether to retaindays served by the audit firm or engage a differentapplicable independent registered public accounting firm and whether the independent registered public accounting firm should be rotated. The Audit Committee considers the advisability and potential impact of selecting a different independent registered public accounting firm and has concluded that the choice of Ernst & Young Ltd. asdirector during any such year. In addition, our independent auditordirectors received a one-time $60,000 retainer for additional services rendered from April 2022 through December 2022; the purpose of such services was to evaluate corporate strategic matters. Pursuant to our Director Compensation Policy, each independent director is inalso entitled to receive an annual grant of restricted shares with a grant date value of $137,500. Restricted share grants are typically made on or around the best interestdate of the annual general meeting of shareholders, with the number of shares being calculated based on the fair market value of a common share of the Company and its shareholders. The Audit Committee is involved inon the lead audit partner selection process. The Audit Committee met in 2017date of grant. Restricted share grants are also prorated for partial years of Board service, with the Chief Financial Officer, and representatives of Ernst & Young Ltd., and the Company’s internal auditor, in regular and executive sessions to discuss the results of the applicable examinations, their evaluations of the design and operating effectiveness of the Company’s internal controls over financial reporting and the overall quality of the Company’s financial reporting and compliance programs.
In relianceinitial grant typically being made on the reviewsdate that the director begins his or her Board service. During 2022 and discussions referred to above, the Audit Committee recommendedconsistent with our Director Compensation Policy, in connection with his appointment to the Board, Mr. Robart received an initial grant of Directors,restricted shares with a grant date value of $250,000, which will vest in three equal installments on the first three anniversaries of the grant date, subject to his continued Board service through the applicable vesting date. All restricted share grants are subject to the SiriusPoint Reinsurance Ltd. 2013 Omnibus Incentive Plan (the “2013 Omnibus Incentive Plan”) and applicable award agreements entered into between the Company and the director, including vesting and forfeiture provisions. The restricted share awards (other than initial grants of restricted shares in connection with the director’s appointment to the board) fully vest on April 30th of the calendar year following the year in which the grant is made, subject to the director’s continued Board approved, thatservice through the audited financial statementsvesting date.
Our directors who are not independent (including those who are our employees) do not receive compensation for serving as members of our Board. As a result, Messrs. Egan, Tan, Loeb and Sankaran were not compensated for their services as directors during 2022. However, all directors are reimbursed for reasonable expenses incurred in
attending meetings and carrying out duties as Board and Committee members, including attendance at educational seminars and other expenses directly related to the Company’s business. 2022 DIRECTOR COMPENSATION | | | | | | | | | | | | | | | | | | | | | | | | | NAME | FEES EARNED OR PAID IN CASH ($) | | RESTRICTED SHARE AWARDS(1)(2) ($) | | OPTION AWARDS ($) | ALL OTHER COMPENSATION ($) | TOTAL ($) | | Rafe de la Gueronniere | 216,207 | | 137,500 | | — | — | 353,707 | | Gretchen A. Hayes | 197,500 | | 137,500 | | — | — | 335,000 | | Sharon M. Ludlow | 589,375 | | 487,500 | | — | — | 1,076,875 | | Mehdi A. Mahmud | 197,500 | | 137,500 | | — | — | 335,000 | | Franklin (Tad) Montross IV | 197,500 | | 137,500 | | — | — | 335,000 | | Jason Robart | 174,761 | | 387,500 | | — | — | 562,261 | | Peter Wei Han Tan | — | | — | | — | — | — | | Daniel S. Loeb | — | | — | | — | — | — | | Mark Parkin | 43,125 | (3) | 196,074 | (3) | — | — | 239,199 | | Joshua L. Targoff | — | (4) | — | | — | — | — |
(1)The restricted shares were awarded to the independent directors on May 19, 2022, under our 2013 Omnibus Incentive Plan. Restricted shares awarded on May 19, 2022 will vest on April 30, 2023, subject to the director’s continued service through such date. Ms. Ludlow was awarded additional restricted shares on May 27, 2022, with a grant date fair value of $350,000 in consideration for her service as Interim Chair of the Board, which shares will vest in full on the earlier of (i) the date Ms. Ludlow’s term as Interim Chair of the Board ends and (ii) the second anniversary of the grant date (the “Interim Chair Equity Award”). The Interim Chair Equity Award was granted to Ms. Ludlow in recognition of the additional responsibilities Ms. Ludlow took on during a period of significant change at the Company and is not expected to be an ongoing element of our director compensation program. In addition, Mr. Robart was awarded additional restricted shares on March 1, 2022 with a grant date fair value of $250,000 in connection with his appointment to the Board. As of December 31, 2022, our non-employee directors during 2022 had the following number of outstanding restricted shares: | | | | | | | | | | | | | | | | NAME | NUMBER OF
UNVESTED RESTRICTED SHARES | | NAME | NUMBER OF
UNVESTED RESTRICTED SHARES | | Rafe de la Gueronniere | 39,296 | | Jason Robart | 50,487 | | Gretchen A. Hayes | 39,296 | | Peter Wei Han Tan | — | | Sharon M. Ludlow | 100,807 | | Daniel S. Loeb | — | | Mehdi A. Mahmud | 39,296 | | Mark Parkin | — | | Franklin (Tad) Montross IV | 39,296 | | Joshua L. Targoff | — |
(2)The amounts reported in this column are valued based on the aggregate grant date fair value computed in accordance with FASB ASC Topic 718, modified to exclude the effect of estimated forfeitures. The fair value was determined using the methodology and assumptions set forth in Note 18, “Share-Based Compensation and employee benefit plans,” to the Audited Consolidated Financial Statements included in the Company’sour Annual Report on Form 10-K for the year ended December 31, 2017,2022, which are hereby incorporated herein by reference. (3)Reflects prorated fees earned from January 1, 2022 through April 6, 2022, the date Mr. Parkin resigned from our Board. This amount represents the incremental fair value of certain of Mr. Parkin’s restricted shares, which were modified by the Board to provide for filingaccelerated vesting in connection with the SEC.his resignation. The Audit Committee
Mark Parkin (Chairman)
Steven E. Fass
Mary R. Hennessy
Neil McConachie (1)
(1)(4)Our directors who are not independent do not receive compensation for serving as members of our Board. As a result, Mr. McConachieTargoff was appointed to servenot compensated for his services as a member of the Audit Committee on February 28, 2018.
director in 2022.
Fees Paid to Ernst & Young Ltd.
The following table sets forth information as of April 21, 2023 regarding the aggregate fees chargedindividuals who serve as our executive officers. The ages of our executive officers are as of April 21, 2023. | | | | | | | | | | NAME | AGE | POSITION | Scott Egan(1) | 52 | Chief Executive Officer & Director | | Stephen Yendall | 47 | Chief Financial Officer | | David E. Govrin | 59 | Group President and Chief Underwriting Officer | | Robin Gibbs | 48 | Chief Executive Officer, SiriusPoint International | | Stuart Liddell | 55 | Global President, Accident & Health | (1) For biographical information about Mr. Egan, see “Board of Directors and Corporate Governance—Class III Directors, Serving in Office Until the 2025 Annual General Meeting.” |
| | | | | | | | | | STEPHEN YENDALL | CAREER HIGHLIGHTS •SiriusPoint Ltd. ◦Chief Financial Officer (October 2022 to present) •Guy Carpenter Inc., a company providing global risk and reinsurance solutions and a subsidiary of Marsh & McLennan Companies, Inc. ◦Managing Director (October 2021 to October 2022) •RSA Canada Group, a Canadian general insurer ◦Chief Financial Officer and Chief Operating Officer (August 2018 to October 2021) •Ernst & Young LLP, a public accounting firm ◦Partner (June 2016 to August 2018) |
EDUCATION •BA, University of Waterloo | | Chief Financial Officer since October 2022 Age 47 |
| | | | | | | | | | DAVID E. GOVRIN | CAREER HIGHLIGHTS •SiriusPoint Ltd. ◦Global Chief Underwriting Officer and President, Americas Reinsurance (March 2021 to present) •Third Point Reinsurance (USA) Ltd. ◦President (May 2019 to March 2021) ◦Head of Business Development (February 2019 to 2021) •Berkshire Hathaway’s Reinsurance Group, a reinsurance company ◦Vice President and key member of the underwriting team (2012 to 2019) •Hudson Insurance Capital Partners, a specialty insurance focused private equity fund of approximately $200 million ◦Founder (2007) •Sierra Re Advisors, a boutique reinsurance intermediary ◦Founder (2006) •Ritchie Capital Management, an alternative asset manager ◦Managing Director/ILS Fund Manager (2005 to 2006) | •Citigroup ◦Director, Structured Insurance Products group (2002 to 2004) •Goldman Sachs ◦Vice President, Initial member of the Insurance Products Group developing the ILS market (1997 to 2002) •Guy Carpenter ◦Senior Vice President, property account executive executing and developing traditional, structured, and capital markets products (1989 to 1997) •Dean Witter Reynolds ◦Fixed income operations, sales and trading (1986 to 1989) •Horizon Bank ◦Commercial Credit Analyst (1985 to 1986) EDUCATION •Master of Business Administration in Finance, NYU’s Stern School of Business •Bachelor of Science in Finance and Real Estate, University of Denver | | Global Chief Underwriting Officer and President, Americas Reinsurance since March 2021 Age 59 |
| | | | | | | | | | ROBIN GIBBS | CAREER HIGHLIGHTS •SiriusPoint Ltd. ◦Chief Executive Officer, SiriusPoint International (December 2022 to present) •RSA Insurance Group, a British multinational general insurance company ◦Commercial Managing Director, Commercial Risk Solutions Managing Director, Mobility Insurance Managing Director, Director of Regions, Delegated Business Managing Director, Interim Mid-Market Managing Director, Strategy Director, Head of Underwriting, New Business Manager (September 2001 to December 2022)
| EDUCATION •Bachelor’s Degree, Aston Business School | | Chief Executive Officer, SiriusPoint International since December 2022 Age 48 |
| | | | | | | | | | STUART LIDDELL | CAREER HIGHLIGHTS •SiriusPoint Ltd. ◦Global President, Accident & Health (October 2010 to present) ◦Senior Underwriter, Life Accident & Health (November 2002 to October 2010) •XL Capital ◦Senior Underwriter, Health and Accident Insurance (June 1998 to June 2002) •OWL Managing Agency ◦Deputy Active Underwriter, Syndicate 718 (September 1995 to May 1998) •Sturge Lloyds Syndicate Management ◦Underwriter Accident & Health (June 1993 to September 1995) | •Oxford Agencies ◦Underwriter Accident & Health (November 1990 to June 1993) •Hogg Robinson Gardner & Mountain ◦Broker, Accident & Health Insurance and Reinsurance (March 1989 to November 1990) EDUCATION •BA in Political Science, University of Newcastle Upon Tyne Un | | Global President, Accident & Health since October 2010 Age 55 |
| | | | | | | PROPOSAL 2 | ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION (SAY-ON-PAY) | | TO APPROVE, BY A NON-BINDING ADVISORY VOTE, THE EXECUTIVE COMPENSATION PAYABLE TO THE COMPANY’S NAMED EXECUTIVE OFFICERS AS DESCRIBED IN THIS PROXY STATEMENT |
As a result of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and in accordance with Section 14A of the Exchange Act, the Company’s shareholders are entitled to approve, on an advisory basis, the compensation of our NEOs. This non-binding advisory vote, commonly known as a “Say-on-Pay” vote, gives our shareholders the opportunity to express their views on our NEOs’ compensation. This vote is not intended to address any specific item of compensation but rather the overall compensation of our NEOs and the philosophy, policies and practices described in this proxy statement. As described in detail under “Compensation Discussion and Analysis,” our compensation programs are designed to •attract, motivate and retain executives of outstanding ability to meet and exceed the demands of our business, •focus management on optimizing shareholder value and fostering an ownership culture, •create appropriate rewards for outstanding performance and reduced compensation for underperformance, and •be competitive and foster collaboration by rewarding executives for their contribution to our overall performance and financial success. We believe our compensation program is effective, appropriate and strongly aligned with the long-term interests of our shareholders and that the total compensation packages provided to our NEOs are reasonable and not excessive. For these reasons, the Board is asking shareholders to vote “FOR” the following resolution: “RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed pursuant to the rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, compensation tables and narrative discussion, is hereby APPROVED.” As an advisory vote, this Proposal 2 is not binding on the Board or the Compensation Committee (or any other committee of the Board), will not overrule any decisions made by the Board or the Compensation Committee (or any other committee of the Board) and will not require the Board or the Compensation Committee (or any other committee of the Board) to take any specific action. The outcome of this vote does not create or imply any change to the fiduciary duties of the Company or its Board or any of its committees (or any individual member thereof), or create or imply any additional fiduciary duties. Although the vote is non-binding, the Board and the Compensation Committee value the opinions of our shareholders, and will carefully consider the outcome of the vote when making future compensation decisions for our NEOs.
| | | | LETTER FROM THE CHAIR OF OUR COMPENSATION COMMITTEE |
| | | | | | | | | | | | | | | | | | | | | | | | Jason Robart Chair of the Compensation Committee | | | |
Dear Fellow Shareholders,
I am writing to you as Chair of the Compensation Committee. 2022 proved to be a challenging year for our business and, given recent challenges since the merger, the Compensation Committee and broader Board made significant compensation decisions that I wanted to take this opportunity to provide some broader context to explain. First and foremost, the Compensation Committee believes that these changes were necessary and will help drive future successful results. Our hope is that in understanding this context, shareholders will feel alignment with the decisions that were made and with our belief in the positive path forward. As always, we are available to discuss these items further with our fellow shareholders.
Context
During the first half of 2022, the Board recognized that the Company’s trajectory was not delivering the value promised to and expected by the Board and shareholders and that the Company was at a strategic inflection point. With the Executive Leadership Team (“ELT”) and the Company focused on a turnaround strategy, the Compensation Committee recognized that a different compensation philosophy would be required for 2022 that reflected this important organizational inflection point and aligned with the Company’s strategic transformation and turnaround. As a result, the Compensation Committee determined that a 2022 compensation mix focused on RSUs and options was aligned with shareholder interests at the time and supported our compensation objectives. With this change, the long-term incentives were delivered entirely as equity awards, which remained subject to fluctuations in our stock price and, in the case of options, would have no value unless the Company’s stock price appreciated following the date of grant.
The ELT Transition
As previously disclosed, during 2022, the Company experienced a number of leadership changes within the ELT. The Board moved swiftly to put in place Dan Malloy, as Interim CEO, following Sid Sankaran’s resignation in May. With an Interim CEO in place, the Board then embarked on a thorough search for a new CEO who shared the long-term vision of SiriusPoint’s success with the Board and shareholders. After extensive interviews, this led to the appointment of Scott Egan as CEO in September 2022.
Scott is a highly seasoned executive who has successfully performed several turnarounds, and we believe he has come in with the pace and energy to turnaround our business. Scott has acted swiftly and with the Board’s guidance to secure key people. Scott worked with the Board to help drive the process in bringing in new key ELT members, such as Steve Yendall, a CFO with an impressive track record of delivery, and Karen Caddick, a CHRO with significant relevant experience in the insurance industry and a history of successful performance with Scott. Scott also appointed David Govrin as President and CUO, a key member of the ELT overseeing the realignment of our underwriting platform with our underwriting and risk management appetite. You will note that a significant award was made to David Govrin as part of his promotion and was designed to be aligned with retaining a key individual to support Scott with the ongoing transformation of the business.
To help support the leadership transitions, the Compensation Committee made some necessary decisions about exit packages driven primarily by contractual commitments and previously negotiated severance arrangements. Given the significance of these changes, this was clearly not a usual year and all packages were designed to support a quick transition to a new leadership team to get the business focusing on go-forward success.
Strategic Inflection to Achieve Future Results
We believe that the new and retained members of the ELT have the requisite experience to build a best-in-class multi-line insurance and reinsurance products and services company and to effectively do so in a manner that is aligned with shareholder expectations.
We are delighted with the early progress that Scott and the team are making which has been seen in a myriad of ways, including but not limited to:
•Share price recovery, up ~80% since September 2022; •S&P’s removal of the CreditWatch on the business and Fitch upgraded to stable from negative; and •The de-risking of volatility through the Loss Portfolio Transfer recently announced and the de-risking of our investment portfolio.
Compensation Decisions to Increase Alignment of Outcomes with Shareholders
As noted above, 2022 changes to the incentive plan structure were intended to be one-time-only changes, and we have returned to a more traditional mix of PSUs and RSUs for 2023. We are looking forward to our future collective success with this ELT and, to that end, we have implemented three key incentive elements that took place at grant or in early 2023 to help support alignment with shareholders. Those elements are:
1.Share Price-Based Performance Vesting Sign-On Options: Scott and Steve both received sign-on option grants that vest upon hitting critical share prices representing ~25%, ~65%, and ~105% price increases from the stock price at the time of Scott’s hire.
2.Updated 2023 Annual Incentive Plan Design: Increased the impact of the Continuing Operations COR metric to 70% of the award value (vs. 40% previously) and created more targeted strategic goals for the other 30%. We also removed any CAT collar adjustments to align outcomes more directly for the ELT with shareholders. Consequently, target bonus for management will be paid only if the COR is 95.7% of Continuing Operations COR.
3.Updated 2023 Annual LTI Design:Set PSUs to 75% of the target weighting of the annual LTI grant, which is based on significant growth of the Net Book Value Per Share over the next three-year period. We also removed options from the annual grant mix.
Overall, throughout this period of transition, we sought to keep a clear focus on taking actions that we believed were in the interests of our shareholders. With these actions, we believe that the Compensation Committee’s actions in 2022 will help support SiriusPoint’s success in 2023 and beyond.
| | | | | | | | | | | | | Sincerely, | | | | /s/ JASON ROBART Chair of the Compensation Committee | | |
April 21, 2023
COMPENSATION DISCUSSION AND ANALYSIS I.OVERVIEW This Compensation Discussion and Analysis (“CD&A”) provides an overview of the material components of our executive compensation program, as well as the compensation of our NEOs.
Our NEOs for fiscal year 2022 were the following executive officers who served during fiscal year 2022: •Scott Egan, Chief Executive Officer and Director (beginning as of September 21, 2022) •Stephen Yendall, Chief Financial Officer (beginning as of October 31, 2022) •David E. Govrin, Group President and Chief Underwriting Officer •Monica Cramér Manhem, President, International Reinsurance •Stuart Liddell, Global President, Accident & Health •Siddhartha Sankaran, former Chief Executive Officer (until May 16, 2022) •Daniel V. Malloy, former Interim Chief Executive Officer (from May 17, 2022 to September 20, 2022) •David W. Junius, former Chief Financial Officer (until October 21, 2022) •Prashanth Gangu, former Chief Operating Officer and former President, Insurance and Services (until June 3, 2022) •Vievette Henry, former Chief People Officer (until October 22, 2022)
II.EXECUTIVE SUMMARY
During 2022, the Compensation Committee managed the transition of a new senior leadership team to lead the Company in its continuing transformation. With the goal of attracting and retaining strong talent to lead the organization, the Compensation Committee engaged its independent compensation consultant, Mercer (US) Inc. (“Mercer”), to perform a competitive market analysis and to make recommendations regarding base salary, annual cash incentive, long-term incentive awards and, where applicable, sign-on grants for each executive officer. 2022 Performance Highlights
•Net loss of $403 million, or $2.51 per diluted common share. •Combined ratio of 96.4%, underwriting income of $83 million. •Core loss of $4 million, which includes Core underwriting loss of $35 million, Core combined ratio of 101.6%, and Core net services income of $31 million. Collectively, the sum of the Company’s two segments, Reinsurance and Insurance & Services, constitute “Core” results. Core underwriting income (loss) - calculated by subtracting loss and loss adjustment expenses incurred, net, acquisition costs, net, and other underwriting expenses from net premiums earned.The comparative GAAP measure is GAAP underwriting income, which is the sum of Core underwriting income (loss), eliminations, and Corporate results. See Note 4 “Segment reporting” to our audited consolidated financial statements for additional information. •Net investment loss of $323 million, including (29.0)% return from our investment in the Third Point Reinsurance Ltd.Enhanced LP (“TP Enhanced Fund”). •Tangible book value per diluted common share decreased $2.84, or 21.4%, from December 31, 2021 to $10.43 per share. Tangible book value per diluted common share, as presented, is a non-GAAP financial measure, and the most comparable GAAP measure is book value per common share. Book value per common share is common shareholders’ equity attributable to SiriusPoint common shareholders divided by Ernstcommon shares outstanding. •Return on average common equity of (19.3)%.
Certain of these compensation performance metrics are non-GAAP financial measures. Please see Appendix A for our calculation of these measures and a reconciliation to the most directly comparable GAAP financial measures.
During 2022, we focused on improving our performance by (i) re-underwriting to reduce underwriting volatility and improve underwriting performance, (ii) de-risking our investment portfolio, and (iii) re-balancing the business mix in our underwriting portfolio and growing Insurance & Young Ltd.Services. We also took significant steps to improve the Company’s operational efficiency. We believe that our results do not yet fully reflect the work the executive officers and their teams have undertaken. However, in line with our strategic areas of focus, we believe we have better positioned our portfolio to improve profitability and reduce volatility going forward. We took underwriting actions in numerous lines of business in the portfolio, including global property, U.S. casualty, and structured transactions. Our most notable underwriting action centered on global property reinsurance, which represented SiriusPoint’s primary source of underwriting volatility and under-performance. We rebalanced our property portfolio by decreasing our market share and exposure in the global property catastrophe reinsurance business as well as reducing other property reinsurance with material catastrophe exposure. We also enhanced underwriting governance across the portfolio by updating and re-drafting global underwriting guidelines, implementing and revising underwriting authorities and referral thresholds, enhancing policy wording requirements, and establishing targets and thresholds by line of business as we seek to drive business performance and improve discipline. While we made significant progress in 2022, portfolio review and evaluation is an ongoing process and we will continue
to make necessary adjustments by taking actions to both grow and shrink lines of business based on our risk appetite, market conditions and market opportunity.
In addition to the actions taken to reduce underwriting volatility, we have also taken measures to reduce the volatility of our investment results and decrease the capital intensity of our investment portfolio. Overall, our investment strategy is fixed income focused and aligned with industry norms. We withdrew $581 million from the TP Enhanced Fund in the year ended December 31, 2022, in addition to a $450 million withdrawal made in the last quarter of 2021. As a result, our exposure to TP Enhanced Fund has reduced from $878 million as of December 31, 2021, to $100 million as of December 31, 2022, or from 14% or 2%, respectively, of our total investments, cash, cash equivalents and restricted cash, thereby reducing capital charges and de-risking the entire portfolio. During 2022, we increased our exposure to fixed income investment holdings, including corporate debt and government securities, short-term investments and structured securities.
In addition, during 2022, we built our MGA partnership model further to grow our Insurance & Services business. We believe our global licenses, strong balance sheet, underwriting expertise and creativity, nimble operating structure and minimal conflicts of interest enable us to be a partner of choice for auditMGAs. Insurance & Services revenue allows us to diversify away from our traditional reinsurance portfolio. In addition, service fees from consolidated MGAs and their insurance products are generally not as prone to the volatile underwriting cycle that is common in the reinsurance marketplace. Through the MGA model, we obtain access to insurance businesses at a lower acquisition cost compared to reinsurance, often in unique and specialized classes of business. Our strong ceded reinsurance operation provides us with the flexibility to adjust the volume of business retained as we optimize our capital allocation. Our typically large risk retention is a differentiator as we establish reinsurance partnerships behind the MGAs we support. We have established a strong growth trajectory with the MGA model in our Insurance & Services segment in 2022 and will look to continue building on this success in the coming years, while refining our focus and building out the infrastructure to support the business globally. Distribution relationships are a key element of our strategy, and we will look to grow existing partnerships and selectively develop new partnerships, focusing on opportunities where we act as a material underwriting capacity provider.
Critically, in 2022, the Company, via the Board’s efforts and guidance, made significant and necessary leadership changes to support the Company in its execution of the aforementioned go-forward strategies. We believe that this new leadership team has the requisite experience to build a best-in-class multi-line insurance and reinsurance products and services renderedcompany and to effectively do so in a manner aligned with shareholder expectations. We have this belief given the new leadership team’s extensive expertise in leading businesses through transformation and growth and their successful track record in risk and financial management. Notably, the go-forward compensation for Messrs. Egan and Yendall, which includes premium-priced options (which were made as part of sign-on grants) and 2023 annual LTI grants which were delivered as 75% performance-based restricted stock units and 25% time-based restricted stock units, works to directly establish a clear link between shareholder outcomes and pay.
PAY-FOR-PERFORMANCE ALIGNMENT
Our executive compensation program is designed to link pay and performance, as a majority of compensation is “at risk” and a significant portion of compensation is delivered in share-settled equity awards or options. Our executive compensation program is designed to be aligned with the interests of shareholders by tying executive compensation to metrics that we believe support the creation of long-term shareholder value.
The Compensation Committee reviews and evaluates the performance and compensation of our NEOs annually, assessing performance in relation to the Company’s strategic, operational and financial performance over both the short and long-term. The Compensation Committee sets performance goals at the time of grant for all performance-based compensation that are designed to be challenging in order to create further executive alignment with the long-term interests of the Company’s shareholders.
SiriusPoint’s 2022 Compensation Highlights SiriusPoint’s fiscal 2022 executive compensation program, as summarized below, was designed to be consistent with the Company’s: •executive compensation principles, •pay-for-performance philosophy, and •commitment to sound corporate governance. | | | | | | 1MANAGED SUBSTANTIAL EXECUTIVE TEAM TRANSITION | The Compensation Committee worked with Mercer, Mr. Egan and our Chief Human Resources Officer to identify and approve compensation for new members of the executive team, which compensation has been designed to motivate the execution of the Company’s turnaround and transformation strategy. | 2PROVIDED SIGN-ON GRANTS TO ATTRACT AND RETAIN TALENT | We provided sign-on grants to attract and retain superior executive talent and to compensate such executives for compensation that was forfeited with their prior employer in connection with joining SiriusPoint. The sign-on equity grants vest, depending on the executive, either (i) in full on the first anniversary of the executive’s hire or (ii) in annual increments over a three-year period, in each case, subject to the executive’s continued service. In addition, we awarded Mr. Yendall a one-time $320,000 CAD sign-on bonus upon commencement of his employment with the Company. | 3SIGNIFICANT MAJORITY OF NEOS’ DIRECT COMPENSATION WAS AT-RISK COMPENSATION
| The fiscal 2022 target direct compensation for each NEO was weighted toward at-risk, variable incentive awards (in the form of both short-term cash incentives and longer-term equity incentives). |
SUMMARY OF OUR EXECUTIVE COMPENSATION PRACTICES | | | | | | | | | | | | | | | | WHAT WE DO | | WHAT WE DON’T DO | | We focus on attracting superior and diverse executive talent | | | We do not award stock options with an exercise price below 100% of fair market value | | We require officers and directors to satisfy meaningful share ownership requirements | | | We do not allow our directors, executive officers, employees and their related persons to pledge the Company’s securities as collateral for loans or for any other purpose | | We seek to mitigate undue risk in compensation programs through informed performance goal-setting that considers multiple financial and non-financial factors | | | We do not allow our directors, executive officers, employees and their related persons to hedge the Company’s securities | | Our Compensation Committee retains the services of an independent compensation consultant | | | We do not offer “gross-ups” for golden parachute taxes | | We generally consider market and industry data when setting executive pay, using the median as a reference point to understand the general market | | | We do not reprice stock options unless approved in advance by our shareholders | | We maintain a clawback policy applicable to executive officers in the event of a financial statement restatement | | | | | We offer double-trigger change-in-control benefits | | | |
Results of Say-on-Pay Vote The Compensation Committee considers the outcome of the annual shareholder advisory vote on executive compensation when making decisions relating to the compensation of our NEOs and our executive compensation program generally. At our 2022 annual general meeting of shareholders, our shareholders approved the compensation paid to our NEOs in a non-binding advisory vote. Approximately 95% of the shareholders who voted on the proposal voted in favor of the proposal. The Compensation Committee believes the results conveyed support for the philosophy, strategy and objectives of our executive compensation program, and we did not make any changes in response to the 2022 “say-on-pay” vote. Management Transition Compensation Arrangements As noted above, during 2022, the Company experienced several changes in key management positions. Following Mr. Sankaran’s resignation from the position of Chief Executive Officer effective as of May 16, 2022, Mr. Malloy served as Interim Chief Executive Officer until September 20, 2022, at which point Mr. Egan assumed the role of Chief Executive Officer. The compensation decisions made in connection with the audit of our consolidated financial statements and reports for 2017 and 2016 and for other services rendered during 2017 and 2016 tomanagement transitions were made after considering the Company and its subsidiaries, as well as all out-of-pocket costs incurred in connection with these services: | | | | | | | | | | | INDEPENDENT AUDITOR FEES | | Fee Category | | 2017 | | 2016 | | Audit Fees | | $ | 1,811,863 |
| | $ | 1,831,746 |
| | Audit-Related Fees | | 217,010 |
| | — |
| | Tax Fees | | 78,844 |
| | 29,053 |
| | All Other Fees | | 2,325 |
| | 1,995 |
| | Total Fees | | $ | 2,110,042 |
| | $ | 1,862,794 |
|
Audit Fees: Includes the aggregate fees billed by Ernst & Young Ltd. for professional services and expenses rendered for the auditinput of the Company’s consolidated financial statementsCompensation Committee’s independent compensation consultant, market data and, internal controls over financial reporting.
Audit-Related Fees: Includesin the aggregate fees billedcase of Mr. Egan’s hire, the compensation received by Ernst & Young Ltd. for assurance and related services that are reasonably related to the performancehis predecessor. Details of the auditcompensation arrangements entered into with each of the Company’s financial statementsMessrs. Sankaran, Malloy and are not reported under “Audit Fees”, including aggregate fees billed by Ernst & Young Ltd. for professional services performedEgan in connection with the Company’s filing2022 management transitions are described under “Narrative Disclosure to Summary Compensation Table and Grants of certain documents with the SECPlan-Based Awards for Fiscal Year 2022 Table” and the related issuance of consents“2022 Potential Payments Upon Termination or Change in 2017 and 2016, and advisory services performed relating to accounting and financial reporting consultations on various issues and transactions.Control” below.
Tax Fees: Includes fees billed by Ernst & Young Ltd. for tax-related services in conjunction with our ongoing business operations.
All Other Fees: Includes fees billed by Ernst & Young Ltd. for access to their global online resource tool for accounting and auditing standards.
Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of the Independent Registered Public Accounting Firm AppointedMr. Junius resigned from his position as our Independent Auditor
The Audit Committee has adopted a policy requiring the Audit Committee to pre-approve all audit and, subject to the de minimis exception of Section 10A(i) of the Securities Exchange Act of 1934 and the SEC rules promulgated thereunder, all permitted non-audit services performed by the Company’s independent auditor. The Audit Committee may delegate pre-approval authority to one or more designated members of the Audit Committee, who must then provide a report of such pre-approvals to the Audit Committee at its next scheduled meeting. When pre-approving non-audit services by the independent auditor, the Audit Committee shall consider whether the provision of such services is consistent with maintaining the independent auditor’s independence. All services performed by Ernst & Young Ltd. in 2017 were pre-approved by the Audit Committee pursuant to the foregoing pre-approval policy and procedures.
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
Overview
This compensation discussion and analysis provides information about the material elements of compensation paid or awarded to, or earned by, our “named executive officers”, also referred to as the “NEOs”, who consist of our principal executive officer, principal financial officer, and our three other most highly compensated executive officers, for fiscal year 2017 as follows:
J. Robert Bredahl, who during 2017 served as President and Chief Operating Officer of the Company until February 28, 2017, and as President and Chief Executive Officer of the Company from March 1, 2017; Mr. Bredahl also served as Chief Executive Officer of Third Point Re BDA until August 2, 2017, and as Chief Executive Officer of Third Point Re USA since August 3, 2017.
Nicholas J. D. Campbell, Chief Risk Officer of the Company; Executive Vice President, Underwriting Third Point Re BDA.
Christopher S. Coleman, Chief Financial Officer of the Company.Company effective as of October 21, 2022, and Mr. Yendall subsequently assumed the role of Chief Financial Officer effective as of October 31, 2022. Mr. Junius did not receive any severance benefits in connection with his resignation from employment. Mr. Yendall
entered into an employment agreement with the Company in connection with his appointment to the position of Investor RelationsChief Financial Officer, the terms of which are described under “Narrative Disclosure to Summary Compensation Table and Business DevelopmentGrants of Plan-Based Awards for Fiscal Year 2022 Table” below. Mr. Yendall’s compensation was determined after considering the input of the Company; during 2017Compensation Committee’s independent compensation consultant, market data and the compensation received by his predecessor.
In addition, Mr. Gupta also served as Executive Vice PresidentGangu and Ms. Henry each underwent a separation from employment with the Company or one of Third Point Re BDA USA from March 1, 2017, until August 2, 2017,its subsidiaries in 2022. Each of these individuals entered into a settlement agreement and as Presidentrelease in connection with their termination of Third Point Re USA from August 3, 2017.employment, the terms of which are described under “2022 Potential Payments Upon Termination or Change in Control” below. The terms of these severance arrangements were determined after considering each executive’s existing contractual entitlements, market data and the input of the Compensation Committee’s independent compensation consultant. Daniel V. Malloy, who during 2017 served as Executive Vice President, Underwriting of Third Point Re BDA until and as Chief Executive Officer of Third Point Re BDA from August 3, 2017.
III. COMPENSATION DETERMINATION PROCESS
Our NEOs also include John R. Berger, who during 2017 served as: Chief Executive Officer and Chairman of the Company until February 28, 2017; Chief Executive Officer of Third Point Re USA until August 2, 2017; and Chairman from March 1, 2017, until December 22, 2017. Corporate Governance Highlights
In 2018 our Compensation Committee made several key changesleads a rigorous annual process to evaluate whether we offer compensation in accordance with our compensation program to further ensure our robust corporate governance as it relates to compensation practices:pay-for-performance philosophy.
| | | | | | | EVALUATE | APPROVE | •Market data from independent compensation consultant | •Performance metrics for short- and long-term compensation | •Feedback from annual-say-on-pay vote | •Achievement of strategic objectives for annual cash incentive plan | •Appropriate peer group composition | •Performance goals for CEO and other NEOs | •Alignment of performance measures with overall strategy | •Specific targets, thresholds and maximums for each performance metric | •Ability of compensation program to attract superior talent | •Salary and target annual and long-term incentive compensation for NEOs | | •Target total compensation for each NEO, including the CEO | | DISCUSS | •Executive sessions with the Compensation Committee and CEO to discuss progress against financial and strategic goals | •Risk assessment of executive compensation program | •Market and governance practices |
Adoption of Share Ownership Guidelines. We have established share ownership and retention guidelines that require our executive officers and directors to satisfy meaningful share ownership requirements. These guidelines further align the interests of our executive officers and directors with those of our shareholders, as further described in “Other Compensation Practices and Policies” below.60
Double-Trigger Equity Vesting. Our long-term incentive awards granted in 2018 and future years will not vest or become payable in the event of a change in control unless there is an accompanying qualifying termination of the equity holder’s employment.
IV. COMPENSATION PHILOSOPHY AND OBJECTIVES
Adoption of Clawback Policy. We have adopted a clawback policy that authorizes our Compensation Committee to recover gains from bonuses and performance-based equity awards in certain circumstances as further described in “Other Compensation Practices and Policies” below.
Prohibition on Hedging and Pledging. Our updated Trading Policy prohibits our employees and directors from engaging in hedging and pledging transactions. Exceptions to the pledging prohibition may be made with the approval of the Chief Executive Officer or General Counsel, or in the case of these executives, by the Audit Committee. See “Other Compensation Practices and Policies” below.
Compensation Philosophy and Objectives
In 20172022, the Compensation Committee continuedused itsTotal Rewards Strategy to review, approve and oversee the Company’s executive compensation philosophy adopted in 2014 based on a Total Rewards Strategy.practices. The Company’s Total Rewards Strategy approach to executive compensation is to offer executives compensation, reward and benefit programs that align with the following principles and objectives: Allow•Enable the Company to attract and retain superior talent as, which we believe that quality talent is integralcritical to the Company’s ongoing success.performance;
Deliver pay opportunities through a format•Provide compensation and benefits packages that is comparableare competitive with those used at other peer companies operating in the reinsurance industry; rewards should consist of base salary, an annual incentive plan, a long-term incentive opportunity, perquisites and retirement, health and welfare benefits.insurance industry;
•Support a high-performance environment by linking pay with Company and individual performance to achieve the Company’s objective to grow the business and deliver superior returns to its investors, therefore having most executive pay contingent on the actual results achieved.investors; •Motivate superior performance and strengthen the connection between pay and results by developing compensation programs that reward success both at the Company and on the individual levels;level; and •Focus on long-term performance to create shareholder value and retain executives. V. PEER GROUP During 2020, the degreeCompensation Committee retained an independent consultant, Mercer, to advise on a variety of executive compensation matters, including development of the Company’s compensation philosophy and a review of the Company’s executive compensation structure and design in connection with the merger of Third Point Reinsurance Ltd. and Sirius International Insurance Group, Ltd., which was consummated on February 26, 2021 (the “Merger”). The Compensation Committee worked with Mercer to develop a person’s peer group to be used for benchmarking incentive design following the Merger. In selecting companies for our peer group, the Compensation Committee considered companies that met one or more of the following peer group selection criteria: 1Industry and scope of business, 2Size based on revenue and market capitalization, 3Importance of capital allocation, investments and risk management, and 4Comparable pool of talent and global presence.
The companies in our peer group used to determine 2022 pay for all NEOs except Mr. Egan and Mr. Yendall are listed below. This peer group is the same peer group used for 2021 compensation decisions. | | | | | | | | | | | | | | | •Argo Group International Holdings Ltd. | | •Greenlight Capital Re Ltd. | | •RenaissanceRe Holdings Ltd. | •Axis Capital Holdings Ltd. | | • Hiscox Ltd. | | •RLI Corp. | •Beazley plc | | •James River Group Holdings, Ltd. | | •White Mountain Insurance Group Ltd. | •Enstar Group Limited | | •Lancashire Holdings Limited | | | •Global Indemnity Limited | | • ProAssurance Corporation | | |
In May 2022, the Committee approved an updated peer group to better reflect the Company’s competitive compensation market following the Merger. The peer group approved in May 2022 was used for determining CEO and CFO market compensation for Mr. Egan and Mr. Yendall, respectively, and consisted of the following companies:
| | | | | | | | | | | | | | | •Argo Group International Holdings Ltd. | | • The Hanover Insurance Group, Inc. | | •RenaissanceRe Holdings Ltd. | •Axis Capital Holdings Ltd. | | • Hiscox Ltd. | | •RLI Corp. | •Employers Holdings, Inc. | | •James River Group Holdings, Ltd. | | •Selective Insurance Group, Inc. | •Enstar Group Limited | | •Markel Corporation | | •White Mountain Insurance Group Ltd. | •Global Indemnity Limited | | • ProAssurance Corporation | | •W.R. Berkley Corporation |
For purposes of the 2022 Peer Group analysis: | | | | | | | | | | REVENUES(1) | MARKET CAPITALIZATION(2) | | SiriusPoint | $2.1 billion | $946 million | | Relative Peer Group Position: Peer Group Prior to May 2022 | 67th percentile | 36th percentile | | Relative Peer Group Position: Peer Group Approved in May 2022 | 52nd percentile | 25th percentile |
(1)Represents revenue for the trailing four quarters ended December 31, 2022. Revenues shown in U.S. dollars using Standard & Poor’s Capital IQ. (2)Represents market capitalization as of December 31, 2022.
VI. ELEMENTS OF OUR COMPENSATION PROGRAM During 2022, the compensation packages for our NEOs consisted primarily of: •base salary, •annual cash incentive awardcompensation, •long-term incentive compensation, •certain perquisites, and •retirement, health and welfare benefits. Set forth below is influenceda discussion of each of these elements of total compensation, the reason we provide each element, and how each element fits into our overall compensation philosophy. We have designed each element of the Total Rewards Strategy to offer something of value to executives, and to incentivize the desired behaviors and business results for the Company.
| | | | | | | | | | | | | | ELEMENT | PURPOSE | ◄ FIXED► | Short-Term | BASE SALARY | •To provide base compensation for executives’ ongoing performance of job responsibilities throughout the year •To attract and retain executives with the knowledge, skills and abilities necessary to successfully execute their job responsibilities •To recognize each executive’s position, role, responsibility and experience •To remain competitive in the industry | ◄VARIABLE► | ANNUAL CASH INCENTIVE | •To focus executive officers on achieving the annual goals of the Company by paying rewards to the extent the goals are fulfilled •To recognize how individuals have performed in meeting their established goals for the year •To reward exceptional performance through increased cash incentive payouts (subject to the overall annual cash incentive pool), and lower payouts where individual (versus Company) performance is below expectations | | Long-Term | EQUITY AWARDS | •To align the interests of employees with shareholders through meaningful equity participation and long-term ownership •To promote the long-term retention of our executives | PERQUISITES •For certain expatriate employees working outside of their home country •Typical for the insurance/reinsurance industry and Bermuda-based companies | •To attract and retain key employees in Bermuda •To rationalize the income of expatriate employees, who experience additional taxation as a result of compensation for additional housing and transportation expenses, with the income that such employees would earn as employees within their native countries | | RETIREMENT, HEALTH AND WELFARE BENEFITS | •To provide executives with an opportunity to save for retirement •To help ensure that we have productive and focused executives through reliable and competitive health and other benefits |
VII. BASE SALARY The minimum base salary for each of our active NEOs is set pursuant to their individual employment agreements or offer letters with the Company. Base salaries are reviewed on a periodic basis. Salaries for our NEOs are based on several factors, including the scope of job responsibilities, experience, expertise, performance and competitive market compensation. From time to time, salaries may be adjusted to reflect promotions, increases in responsibilities and competitive considerations.
The Compensation Committee approved a 2022 base salary for Mr. Egan at the time of his hiring based upon a consideration of Mercer’s competitive market analysis of companies within the Peer Group as well as the factors described above. With respect to Mr. Yendall’s starting base salary, after considering Mercer’s competitive market analysis of companies within the Peer Group as well as the compensation paid to Mr. Yendall’s predecessor, the Compensation Committee approved a starting base salary for Mr. Yendall. Mr. Yendall’s base salary was set at a level identical to the Company’s previous Chief Financial Officer, but converted to Canadian dollars at the time of the offer of employment. The Compensation Committee established Ms. Cramér-Manhem’s 2022 base salary, which reflected a decrease in her 2022 base salary from 2021 due to a rebalancing on her total mix of compensation and reflects foreign exchange fluctuations. Following Mercer’s competitive market analysis of companies within the Peer Group, the Compensation Committee recommended a base salary levelfor Mr. Liddell intended to align his direct compensation with the median of our 2022 Peer Group. Following Mr. Govrin’s promotion to Group President and Chief Underwriting Officer of the Company, effective as of November 2022, the Compensation Committee agreed to increase his salary to $650,000 after considering the competitiveanalysis conducted by Mercer. For all other NEOs, their base salaries remained unchanged between 2021 and 2022. The table below sets forth the annualized 2022 base salary for each of our NEOs as compared to the prior year.
| | | | | | | | | | | | | NEO | BASE SALARY 2022
($) | BASE SALARY 2021
($) | % CHANGE | Scott Egan (1) | 1,141,229 | — | N/A | Stephen Yendall (2) | 503,854 | — | N/A | | David E. Govrin | 650,000 | 550,000 | 18.18% | | Monica Cramér Manhem | 480,515 | 551,085 | (12.81)% | | Stuart Liddell | 413,155 | 448,901 | (8)% | Siddhartha Sankaran (3) | 1,000,000 | 1,000,000 | — | Daniel V. Malloy (4) | 850,000 | 850,000 | — | David W. Junius (5) | 500,000 | 500,000 | — | Prashanth Gangu (6) | 600,000 | 600,000 | — | Vievette Henry (7) | 425,000 | 425,000 | — |
(1)Mr. Egan commenced employment with the Company, as Chief Executive Officer and Director, on September 21, 2022. Mr. Egan is paid in British pounds. All amounts reflected for Mr. Egan in this Proxy Statement have been converted to USD using the December 31, 2022 spot rate of 1.207650. (2)Mr. Yendall commenced employment with the Company, as Chief Financial Officer, on October 21, 2022. Mr. Yendall’s base salary is paid in Canadian dollars. The amount reported in this table for Mr. Yendall has been converted to USD using the December 31, 2022 spot rate of 0.738443. (3)Mr. Sankaran resigned as Chief Executive Officer, effective as of the close of business on May 16, 2022. (4)Mr. Malloy was appointed Interim Chief Executive Officer on May 17, 2022, and served in this role until September 21, 2022. (5)Mr. Junius resigned as Chief Financial Officer, effective as of October 21, 2022. (6)Mr. Gangu, the Company’s former Chief Operating Officer and President, Insurance and Services, separated from the Company on June 3, 2022. (7)Ms. Henry, the Company’s former Chief People Officer, resigned from the Company on October 22, 2022.
VIII. ANNUAL CASH INCENTIVE PAY The purpose of annual cash incentive pay is to reward performance during the year based upon the achievement of individual and business goals. Performance metrics are set based on the person’smeasures that the Compensation Committee determines are necessary to achieve operational success. The performance metrics are periodically reviewed and adjusted, where required, in the Compensation Committee’s judgment.
The annual cash incentive plan formula (described below) creates a cash incentive pool but does not determine individual awards. An individual award from the 2022 cash incentive pool was paid to Mr. Egan, our Chief Executive Officer, based upon the Compensation Committee’s evaluation of his performance compared to previously established goals and objectives. For all other NEOs who were eligible to receive an individual award from the 2022 cash incentive pool as of the time of payment, awards were recommended to the Compensation Committee by the Chief Executive Officer based on how each executive performed relative to his or her individual annual goals. Annual Cash Incentive Plan for 2022
Each of Messrs. Egan and Govrin and Ms. Cramér Manhem participated in our 2022 annual cash incentive plan (the “Annual Incentive Plan”). Mr. Yendall received a sign-on bonus to compensate him for compensation that was forfeited with his prior employer in connection with joining SiriusPoint and did not participate in the Annual Incentive Plan in 2022. In addition, Mr. Liddell has his own individual annual cash incentive arrangement with the Company and, accordingly, did not participate in the Annual Incentive Plan. Prior to their departures, each of Messrs. Sankaran, Junius and Gangu and Ms. Henry were eligible to participate in the Annual Incentive Plan but ceased participation upon their separations from the Company. Mr. Malloy’s annual cash incentive arrangement was contractually set pursuant to his employment agreement for service as the Company’s Interim Chief Executive Officer. Under the Annual Incentive Plan for 2022, the total annual cash incentive pool is calculated by applying the actual result of the financial metric weighted at 70% and the actual result of the strategic metrics weighted at 30% (as compared to the Annual Incentive Plan for 2021, under which the Company’s financial metric and strategic metrics were each weighted at 50%). Each NEO’s individual cash incentive was then to be determined by applying a payout factor to each NEO’s target cash incentive opportunity.
The financial and strategic metrics for the Annual Incentive Plan were intended to recognize the focus on execution of profitable growth strategies and management of controllable expenses, as well as the shift in business mix towards Insurance & Services, while balancing the continued importance of the ongoing strategic work needed to fix the core and simplify the business. As illustrated below, the specific factors were: •Company financial goals (70%), which were as follows: ◦Core Combined Ratio (40%) ◦Services Fee Revenue (15%) ◦Net Services Fee Income (15%) •Company strategic objectives (30%).
Each NEO’s individual annual cash incentive is determined by applying a payout factor to each NEO’s target cash incentive opportunity. The Compensation Committee selected Core Combined Ratio as a financial performance metric because the committee believed it effectively measures the profitability of the Company’s business and is a commonly used metric throughout the Property & Casualty industry to measure performance of the value created through underwriting. The Core Combined Ratio goals were designed to be challenging but achievable with strong management performance. The Compensation Committee selected Services Fee Revenue as a financial performance metric to recognize the shift in business mix within our portfolio, towards Insurance & Services revenue. Similarly, the Compensation Committee selected Net Services Fee Income as a financial performance metric to underscore the importance of driving profitability as we grow the Service Fee business.
The Compensation Committee chose to weight the strategic objectives of the Company at a 30% weighting. The NEOs were required to execute profitable growth strategies and focus on management of controllable expenses, as well as the shift in business mix towards Insurance & Services, while balancing the continued importance of the ongoing strategic work needed to fix and simplify the core business. The strategic objectives were deemed critical to establish a strong foundation for the future direction and operation of the Company.
The maximum funding level of the Company’s 2022 annual cash incentive pool was 155% of the aggregate base salaries for participants in the Annual Incentive Plan. The Core Combined Ratio metric has a potential performance range of 0% to 200% for its 40% contribution. The Services Fee Revenue metric has a potential performance range of 0% to 150% for its 15% contribution. The Net Services Fee Income metric has a potential performance range of 0% to 150% for its 15% contribution. The strategic objectives metric has a potential performance range of 0/50% to 100% for its 30% contribution. The individual annual cash incentive payments to the NEOs under the Annual Incentive Plan were determined by the Compensation Committee based on the
amount of the overall annual cash incentive pool, application of a business unit and individual performance modifier (as determined in the discretion of the Compensation Committee and the Chief Executive Officer), the target annual cash incentive opportunity and performance by each NEO relative to the strategic goals established in 2022. Additional description about the determination of annual cash incentive opportunity is provided below.
| | | | | | | | | | | | | | | | | | | | | | | | | 2022 Annual Cash Incentive Metrics | | Annual Cash Incentive Performance Metrics | Threshold | Target | Maximum | Actual Result | Actual Payout as a % of Target | Weight | Bonus Pool Funding | | Core Combined Ratio | >99.9% 0% if greater than 99.9% | 98.9% 100% if at target | <=95.9% 200% if equal to this target or lower | 101.6% | 0% | 40% | 65.0% | | Services Fee Revenue | <$169 million 0% if less than $169 million | $199 million 100% if at target | $214 million 150% if at maximum | $206 million | 124% | 15% | | Net Services Fee Income | <$5 million 0% if less than $5 million | $13 million 100% if at target | $20 million 150% if at maximum | $27 million | 150% | 15% | | Strategic Goals | Not Met/Partial 0/50% Cliff | Satisfactory 100% | Satisfactory | 77% | 30% | |
In February 2023, the Compensation Committee reviewed the Company’s performance for the 2022 fiscal year. Performance against the Core Combined Ratio financial metric was calculated based on actual results. The Company was required to meet the threshold of 99.9% or less Core Combined Ratio established by the Compensation Committee in 2022 to fund the portion of the bonus pool allocated to the Core Combined Ratio. In February 2023, the Compensation Committee determined that the threshold on the financial metric of 99.9% of the Core Combined Ratio was not met, with a Core Combined Ratio of 101.6%, and the payout factor was calculated to be 0% of target. Performance against the Services Fee Revenue financial metric was calculated based on actual results. The Company was required to meet the threshold of $169 million or more Services Fee Revenue established by the Compensation Committee in 2022 to fund the portion of the bonus pool allocated to Services Fee Revenue. In February 2023, the Compensation Committee determined that the target on the financial metric of $199 million of Services Fee Revenue was exceeded, with Services Fee Revenue of $206 million, and the payout factor was calculated to be 124% of target. Performance against the Net Service Fee Income financial metric was calculated based on actual results. The Company was required to meet the threshold of $5 million or more Net Service Fee Income established by the Compensation Committee in 2022 to fund the portion of the bonus pool allocated to Net Service Fee Income. In February 2023, the Compensation Committee determined that the maximum on the financial metric of $20 million of Net Service Fee Income was met, with Net Service Fee Income of $27 million, and the payout factor was calculated to be 150% of target.
The Compensation Committee also reviewed the Company’s performance with respect to the four Company-wide strategic objectives. Within each area, potential actions were identified for management to pursue. In February 2023, the Compensation Committee assessed performance as summarized below. During its assessment, the Compensation Committee also reviewed detailed information provided by management regarding progress on each of the pre-established strategic objectives.
| | | | | | | | | | | | | | | | Strategic Objective | Achievements | | Complete Underwriting Review and Re-Underwriting of the Portfolio, including a Reduction of the Property Catastrophe Portfolio and Closing Out Legacy Float Deals. | •Conducted a full underwriting review and re-underwriting of the Portfolio. •Restructured the Company’s underwriting platform to support the future shape of its business. •Made changes to the structure and composition of the Company’s international branch network, including reducing the locations from which it underwrites property catastrophe reinsurance. •Closed offices in Hamburg, Miami and Singapore, and reduced footprint in Liege and Toronto. | | Execute on the Mosaic Transaction | •Management ultimately decided not to divest the Managing Agency to Mosaic, as it was determined by new leadership that this strategy did not serve the long term interests of the Company in an important market (London).
| | Finalize Strategic Option Analysis and Review Recommendations with the Board, to Optimize the Global Footprint, Rationalize Expenses, Improve Operational Efficiency and Accelerate Rebalancing of the Portfolio | •Renewed commitment towards growing across the majority of the Company’s lines of business, including most specialty lines, Casualty, and Accident and Health – and, selectively, Property Catastrophe. •Significantly reduced Property Catastrophe reinsurance exposures, which resulted in a material reduction in the number of locations from which we underwrite property catastrophe reinsurance.
| | Execute on the 2022 Investment Plan and the Repositioning of the Investment Portfolio | •Withdrew $581 million from the Third Point Enhanced LP (“TP Enhanced Fund”) in the year ended December 31, 2022, in addition to a $450 million withdrawal made in the last quarter of 2021. •The Company’s exposure to TP Enhanced Fund has reduced from $878 million as of December 31, 2021, to $100 million as of December 31, 2022. |
The CEO then provided the Compensation Committee with his recommendations based upon the performance of each of the NEOs. During the discussion, the CEO advised that the executives worked as a team to meet the Company’s strategic objectives and jointly contributed to satisfactorily achieving the strategic objectives (other than the execution of the Mosaic Transaction which, as noted above, was ultimately deemed not to serve the long-term interests of the Company). Based on this discussion, the Compensation Committee determined that the strategic goals metric would receive credit of 77%.
In a meeting with the Compensation Committee in February 2023, Mr. Egan shared his desire not to receive an annual cash incentive payment above the overall group pool, despite being entitled to 100% of his target bonus amount, per his employment agreement. Based on this, the Compensation Committee instead agreed to (i) award Mr. Egan 65% of his target annual cash incentive pay rather than the 100% of his target bonus per his employment agreement, and (ii) pro-rate that annual incentive payment based upon four, rather than three, full months of service. Mr. Yendall received a sign-on bonus to compensate him for income that was forfeited with his prior employer in connection with joining SiriusPoint. As a result, Mr. Yendall did not participate in the annual cash incentive plan in 2022. The Compensation Committee agreed to pay Mr. Govrin out at the maximum level of his annual cash incentive opportunity, or 140% of target, due to a number of factors, including the critical role he played in the CEO succession process and for his continued leadership during the management changes that occurred in 2022. Ms. Cramér Manhem was paid out at 65% of target, consistent with the terms of her employment arrangement, which provides that the actual annual cash incentive paid to Ms. Cramér Manhem as a percentage of her target shall not be less than the overall Company annual cash incentive pool awarded as a percentage of the Company’s total annual target annual cash incentive pool for such fiscal year. Mr. Liddell was paid out at 100% of target, consistent with the terms of his individual bonus plan.
Each currently employed NEO (other than Mr. Yendall, who did not receive an annual cash incentive payment in 2022) had an annual cash incentive target opportunity that was expressed as a percentage of each NEO’s respective base salary for 2022. The annual cash incentives at target were determined by the Compensation Committee based on seniority, role and diminishesresponsibilities within the Company, experience level and past performance. Messrs. Egan and Govrin and Ms. Cramér Manhem’s respective annual cash incentive targets were established following a review of market data provided by Mercer.
Each of Messrs. Sankaran, Gangu and Junius and Ms. Henry were eligible to participate in our Annual Incentive Plan in 2022. Mr. Sankaran’s target was 75% of base salary, which equated to a target annual cash incentive of $750,000. Mr. Gangu’s target was 100% of base salary, which equated to a target annual cash incentive of $600,000. Mr. Junius’s target was 100% of base salary, which equated to a target annual cash incentive of $500,000. Ms. Henry’s target was 65% of base salary, which equated to a target annual cash incentive of $276,250. Messrs. Sankaran, Gangu and Junius and Ms. Henry did not receive an annual cash incentive payment in 2022 as he or she risesa result of their terminations of employment prior to the end of the 2022 fiscal year.
The chart below sets forth our NEOs’ target cash incentive opportunities and the actual cash incentive paid to each NEO who was eligible to participate in the annual cash incentive plan for fiscal year 2022 based upon the following formula:
| | | | | | | | | | | | | 2022 Annual Cash Incentive Metric | Payout Factor | x Target = | Annual Cash Incentive Payout | | Core Combined Ratio, as adjusted, with CAT Collar | 0.0% | | Services Fee Revenue | 124% | | Net Services Fee Income | 150% | | Strategic Performance | 77% | | TOTAL | 65.0% |
| | | | | | | | | | | | | | | | | | | TARGET ANNUAL CASH INCENTIVE OPPORTUNITY | | ACTUAL ANNUAL INCENTIVE PAID | | NEO | % OF BASE SALARY | ($) | | AS A % OF TARGET ANNUAL CASH INCENTIVE | ($) | | Scott Egan | 140% | $1,597,721 | | 65% | $346,173 | | Stephen Yendall | – | – | | – | – | | David E. Govrin | 100% | $650,000 | | 140% | $910,000 | | Monica Cramér Manhem | 65% | $312,335 | | 65% | $312,335 | | Daniel V. Malloy | (1) | (1) | | (1) | $425,000 | (1) In connection with his appointment to the position of Interim Chief Executive Officer, Mr. Malloy was entitled to an annual target cash bonus opportunity of $425,000 for 2022 (with a guaranteed minimum of $425,000) if he served as Interim Chief Executive Officer for up to six months, or $850,000 if he served as Interim Chief Executive Officer for more than six months in duration. |
The annual cash incentives paid to Mr. Govrin and Ms. Cramér Manhem are reflected in the “2022 Summary Compensation Table” under the “Non-Equity Incentive Plan Compensation” column, while the bonuses paid to Messrs. Egan and Malloy are reported in the “Bonus” column of the “2022 Summary Compensation Table” due to the guaranteed payout levels pursuant to the terms of their 2022 employment offers.
Additional Cash Bonus Arrangements
Pursuant to an annual incentive agreement dated as of March 1, 2012 (as amended from time to time), during 2022, Mr. Liddell was entitled to receive an annual cash incentive award equal to five percent (5%) of A&H technical underwriting profits over successive three-year rolling periods, capped at 3.5 times Mr. Liddell’s base salary as of the end of 2022. Based on A&H technical underwriting profits during 2020-2022 period, Mr. Liddell earned the maximum possible cash incentive award payment for 2022, which was $1,446,043. The Company is currently evaluating Mr. Liddell’s bonus structure on a go-forward basis and it is expected that Mr. Liddell will transition to the Company’s Annual Incentive Plan program.
We provide sign-on grants to attract and retain superior executive talent and to compensate such executives for compensation that was forfeited with their prior employer in connection with joining SiriusPoint. In 2022, we awarded Mr. Yendall a one-time $320,000 CAD sign-on bonus upon commencement of his employment with the Company to recognize his loss of income from changing employers.
IX.LONG-TERM INCENTIVES The purpose of long-term incentives is to align the interests of employees with those of shareholders through meaningful equity participation. The program can generate significant value when executives drive the Company.Company to achieve long-term results. The following principles govern our long-term incentive program: Provide•Long-term incentives aim to provide balance to a competitive total compensation opportunity; our total cash compensation (base plus bonus)short-term performance focus. Executives should be focused on achievement of the Company’s long-term strategic objectives. Through long-term incentives, we encourage executives to drive strong Company performance over the long term.
•Long-term incentive awards should reflect marketmarket-competitive compensation levels at the market median and total direct compensation (base, bonus, and long-term incentives) will target above the 50th percentile, assuming that the individuals and the Company perform well and deliver value to shareholders. (“Market” is defined as publicly traded insurance and reinsurance company groups with operations in Bermuda and the Cayman Islands.) Maintain an overall compensation target at market median with only specific individual salaries being above or below this target, as appropriate,levels. Individual grants vary based on experience,individual performance, criticality of the role, etc.
Base eligibility for variable pay (annualwhich reward individual achievement as well as long-term incentives) largely on competitive normscorporate performance.
•The mix of long-term incentives will vary by role and level in the Company to balance retention, the drive for long-term growth in shareholder value and the individual’s ability to contribute to value creation. •The Company may use a variety of incentive awards from year to year to deliver long-term incentives. •Our long-term incentive program provides for annual long-term incentive grants with exceptions beingoverlapping vesting schedules and performance cycles to incentivize and promote retention of employees and executives.
Grant Timing Policy
The Compensation Committee and senior management monitor the Company’s equity grant policies to evaluate whether such policies comply with applicable law and are consistent with good corporate practices. Grants to the executive officers are generally made at the Compensation Committee meeting held in April of each year, after results for the preceding fiscal year become available and after review and evaluation of each executive officer’s performance, which enables the Compensation Committee to consider both the prior year’s performance and expectations for the succeeding year in making grant decisions. However, the Compensation Committee may make grants at any time during the year it deems appropriate. Long-Term Incentives Awarded in 2022 In 2022, the Compensation Committee granted long-term incentives under the 2013 Omnibus Incentive Plan under the program design described below to each of our NEOs. The Compensation Committee temporarily changed the long-term incentive mix from the mix used in 2021, which was delivered in the form of performance-based restricted share units, time-based restricted units and options in order to retain key employees during a time to time in specific circumstances or for high-potential key employees.of significant change at the Company. Support a long-term focus for officers and key contributors
| | | | | | | | | | Element | Key Metrics | Features | | Options | •Stock price appreciation | •3-year cliff vesting period •10-year term | | Time-based Restricted Share Units | •Vest ratably over a 3-year period following the grant date | •Provides alignment with shareholders •Fosters retention |
TIME-VESTING RESTRICTED SHARE UNITS
The Compensation Committee believes that alignstime-based restricted share units align the interests of our NEOs with the interests of shareholders;our shareholders through the Company’s share price performance and also fosters retention of our NEOs as they vest ratably over a three-year period. Time-vesting restricted share units granted to our NEOs in April 2022 will vest in equal annual installments on the first three anniversaries of the grant date, subject to each NEO’s continued employment through each vesting date, with the last one-third of such awards becoming fully vested in April 2025. OPTIONS
The Compensation Committee believes that options align the interests of our NEOs with the interests of our shareholders through share price appreciation following the date of grant, and also foster retention of our NEOs. Options will cliff-vest in April 2025 and expire 10 years from date of grant. Awards under our long-term incentive program which were made to our then-serving NEOs in April 2022, are reflected in the table below.
| | | | | | | | | | | | | | | | | | | | | | NEO | 2021 Total Grant Value ($) | 2022 Total Grant Value ($) | Percentage Change | | Number of Units Granted in April 2022 | | Share Options | Time-based RSUs | | Scott Egan | — | — | N/A | | — | — | | Stephen Yendall | — | — | N/A | | — | — | | David E. Govrin | 791,659 | 783,749 | (1)% | | 71,121 | 88,519 | | Monica Cramér Manhem | 910,519 | 811,469 | (10.9)% | | 73,636 | 91,650 | | Stuart Liddell | 272,178 | 277,419 | 1.9% | | — | 39,688 | | Siddhartha Sankaran | 4,558,077 | 4,750,000 | 4.2% | | 409,483 | 509,657 | | Daniel V. Malloy | 1,427,393 | — | N/A | | — | — | | David W. Junius | 959,587 | 949,999 | (1)% | | 86,207 | 107,296 | | Prashanth Gangu | 1,439,378 | 1,424,998 | (1)% | | 129,310 | 160,944 | | Vievette Henry | 405,351 | 403,751 | (0.4)% | | 36,638 | 45,601 |
The Compensation Committee established a 2022 target long-term award opportunity for each of the NEOs, other than Messrs. Egan, Yendall and Malloy. To set these long-term incentive award targets, the Compensation Committee considered:
•a competitive market analysis of each NEO’s total compensation and the portion of total compensation provided as long-term incentives, relative to similar roles at companies in our Peer Group; • the Company’s and each NEO’s individual performance and his or her expected future contributions; •the NEO’s level of experience in his or her role; and •retention considerations.
The Compensation Committee designed the long-term incentive award providing such focus should appropriately balance retentionfor 2022 to achieve various objectives:
•provide substantial at-risk compensation to our NEOs in order to align their interests with shareholders and alignment needsthe Company’s performance, with the value of the awards fluctuating based on relative levelthe Company’s stock price performance; •incentivize them to grow the Company; and •retain them during the essential turnaround period.
Critically, in February 2023, to create a more direct alignment between pay and performance, the Compensation Committee approved the grant of 2023 annual long-term incentive awards for NEOs and other critical leaders which were delivered 25% in the organization.form of time-based restricted stock units and 75% in the form of performance-based restricted stock units with vesting based upon three-year tangible book value per share performance. Encourage conversationsADDITIONAL EQUITY AWARDS
In addition to the equity awards granted in April 2022 as part of the Company’s annual long-term incentive program and total compensation package, the Compensation Committee also granted certain sign-on equity awards to Messrs. Egan and Yendall in connection with their joining the Company as new members of the executive team. The Compensation Committee granted these awards to Messrs. Egan and Yendall based upon a competitive market analysis provided by Mercer and to foster long-term retention. In December of 2022, Mr. Egan received an additional RSU grant which is subject to vesting in three equal increments on the first three anniversaries of the grant date, the purpose of which was to make Mr. Egan whole for the difference in economic value of his sign-on performance based option award as compared to similarly-situated Company executives. In addition, the Compensation Committee awarded Mr. Govrin an award of restricted share units and options in connection with his promotion to Group President and Chief Underwriting Officer. Mr. Govrin’s restricted share units will vest over a three-year period. Mr. Govrin’s options will vest and become exercisable as of the first date following the grant date when the closing price of the Company’s common shares reaches $8.00. Additionally, in connection with his appointment to the position of Interim Chief Executive Officer, the Compensation Committee awarded Mr. Malloy a grant of restricted shares, which shares vested upon the start date of Mr. Malloy’s successor (or, if earlier, a termination without cause or a resignation for good reason).
| | | | | | | | | | | | | SIGN-ON GRANTS | | NEO | Date of Grant | Value ($) | Type of Award | | Scott Egan | 09/21/2022 | 1,530,000 | Stock Options | | Scott Egan | 09/21/2022 | 1,972,000 | Restricted Share Units | | Scott Egan | 12/12/2022 | 1,500,002 | Restricted Share Units | | Stephen Yendall | 10/31/2022 | 436,000 | Stock Options | | Stephen Yendall | 11/15/2022 | 631,995 | Restricted Share Units | | David E. Govrin | 10/31/2022 | 1,004,500 | Stock Options | | David E. Govrin | 11/30/2022 | 2,550,000 | Restricted Share Units | | Daniel V. Malloy | 5/17/2022 | 1,000,004 | Restricted Shares |
For more information about performancethese sign-on awards please refer to “—Narrative Disclosure to the Summary Compensation Tables—Employment Agreements with our NEOs.”
X.OTHER BENEFITS AND PERQUISITES Other Benefits The Company provides benefit plans, such as medical coverage and development.life and disability insurance, in line with applicable market conditions and Bermuda law. We believe these health and welfare plans help ensure that the Company has a productive and focused workforce through reliable and competitive health and other benefits. The Company also maintains defined contribution benefit plans that provide eligible employees with an opportunity to save for retirement. The Company contributes up to 10% of each employee’s salary, up to statutory contribution limits, to these plans. The NEOs are eligible to participate in the health and welfare and defined contribution plans during employment on the same basis as all other employees, subject to applicable tax and other limits on contributions.
Perquisites The Company provides customary additional benefits to certain expatriate employees working outside of their home country, including each of our expatriate NEOs, to better enable the Company to attract and retain key employees. We believe these benefits are typical for the insurance/reinsurance industry, as well as for Bermuda-based companies, and are specified in our expatriate NEOs’ employment agreements. The purpose of these benefits is to rationalize the income of expatriate employees, who experience additional taxation as a result of compensation for additional housing and reward systemstransportation expenses, with performance managementthe income such employees would earn as employees in their native countries. These additional benefits are as follows: •HOUSING AND TRANSPORTATION EXPENSES.The Company reimbursed the former CEO (Mr. Malloy) for housing expenses in Bermuda and career development programsprovided him with a travel allowance for travel and transportation expenses. •TAX EXPENSES.To the extent the Company’s reimbursement of an expatriate NEO’s housing or travel expenses are deemed to be taxable income to the expatriate NEO, the Company reimburses the expatriate NEO for any home country taxes payable on the additional income. The Company also pays the employee portion of Bermuda payroll taxes and social insurance for our expatriate NEOs. •TAX PREPARATION EXPENSES.Due to the additional complexities associated with the taxation of expatriate NEO benefits, the Company reimburses expatriate executives’ tax preparation expenses, up to $5,000 per executive, per annum. We annually review the level of employee benefits provided to NEOs and believe that the employee benefits provided are reasonable and consistent with market practices in the jurisdictions in which the Company operates. XI.EMPLOYMENT AGREEMENTS AND SEPARATION AGREEMENTS WITH NEOs We have entered into employment agreements or offer letter agreements with each of the NEOs. We believe that it is beneficial to enter into compensation arrangements with our key executives that provide retentive value, subject executives to restrictive covenants and provide us with a competitive advantage in the recruiting process. The terms of the employment agreements, including the pay mix, were based upon a competitive market analysis provided by Mercer. In addition to providing for base salary, annual cash incentive and long term incentive awards in the employment agreements or offer letters, as the case may be, the Compensation Committee provided additional sign-on equity awards as described above to each of Messrs. Egan, Yendall and Govrin to reflect the Compensation Committee’s expectation that each of the executives would lead the transformation of the Company.
The terms of these arrangements are more fully discussed below under “Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards for Fiscal Year 2022 Table—Employment Agreements.”
In 2022, the Company also entered into separation arrangements or transition agreements with a number of the NEOs in connection with their terminations of employment. The terms of these arrangements are more fully described below under “2022 Potential Payments Upon Termination or Change in Control.”
XII.OTHER COMPENSATION PRACTICES AND POLICIES Share Ownership Guidelines The Company has adopted share ownership guidelines pursuant to the Director and Executive Share Ownership Policy to further align the economic interests of our directors and executive officers (“Designated Individuals”) with the interests of our shareholders. To accomplish this, Designated Individuals are expected not only to receive equity-based compensation but also to maintain a significant long-term equity interest in the Company. The table below summarizes the guidelines: | | | | | | | | | | | | | | | | POSITION | SHARE OWNERSHIP REQUIREMENT | SHARES COUNTED
TOWARD GUIDELINES | TIME PERIOD
TO ACHIEVE | RETENTION REQUIREMENTS | | Chief Executive Officer | 5xbase salary | •Shares owned outright •Performance shares, upon vesting •Restricted shares, upon vesting
| Individuals subject to this policy have five years from the date of eligibility to meet the minimum ownership requirements. | Must retain 50% of net shares issued upon exercise of share options or vesting of share awards until guidelines are achieved. | | Other Executive Officers | 3x base salary | | Independent Directors | 3x annual cash retainer |
Clawback Policy We have implemented an Executive Compensation Clawback Policy, applicable to all current and former Section 16 officers (“Covered Executive”), including the CEO. In the event of a restatement of the Company’s financial results, this policy authorizes the Company, through its Compensation Committee, to recover any portion of incentive compensation paid or awarded to such Covered Executive during the three completed fiscal years immediately preceding the date on which the Company is required to prepare an accounting restatement. The amount to be recovered will be the excess of the incentive compensation paid to the Covered Executive based on the erroneous data over the incentive compensation that would have been paid to the Covered Executive had it been based on the restated results, as determined by the Board. The Company continues to monitor this policy to ensure that employees know what it takesis consistent with applicable laws and will review and modify the policy as necessary to be successful atreflect the Company and to help align performance goals at every level. Provide market-competitive benefits and perquisites.
Provide clear information about pay practices; by communicating openly about pay, we can ensure that everyone understands the rewards program and has the tools they needfinal NYSE listing rules adopted to implement it effectively.the compensation recovery requirements under the Dodd-Frank Wall Street Reform and Consumer Protection Act.
Hedging and Pledging
Our Insider Trading Policy prohibits our employees and directors from directly or indirectly engaging in any hedging or monetization transactions (such as prepaid variable forward contracts, equity swaps, collars and exchange funds) with respect to Company shares. No exceptions are allowed for such transactions under the Trading Policy. Pledging of Company shares (such as collateral for a loan, including through the use of traditional margin accounts with a broker) is also prohibited under our policy. No NEO has pledged the Company’s shares.
RoleOther Benefits
The Company provides benefit plans, such as medical coverage and life and disability insurance, in line with applicable market conditions and Bermuda law. We believe these health and welfare plans help ensure that the Company has a productive and focused workforce through reliable and competitive health and other benefits. The Company also maintains defined contribution benefit plans that provide eligible employees with an opportunity to save for retirement. The Company contributes up to 10% of each employee’s salary, up to statutory contribution limits, to these plans. The NEOs are eligible to participate in the health and welfare and defined contribution plans during employment on the same basis as all other employees, subject to applicable tax and other limits on contributions.
Perquisites The Company provides customary additional benefits to certain expatriate employees working outside of their home country, including each of our expatriate NEOs, to better enable the Company to attract and retain key employees. We believe these benefits are typical for the insurance/reinsurance industry, as well as for Bermuda-based companies, and are specified in our expatriate NEOs’ employment agreements. The purpose of these benefits is to rationalize the income of expatriate employees, who experience additional taxation as a result of compensation for additional housing and transportation expenses, with the income such employees would earn as employees in their native countries. These additional benefits are as follows: •HOUSING AND TRANSPORTATION EXPENSES.The Company reimbursed the former CEO (Mr. Malloy) for housing expenses in Bermuda and provided him with a travel allowance for travel and transportation expenses. •TAX EXPENSES.To the extent the Company’s reimbursement of an expatriate NEO’s housing or travel expenses are deemed to be taxable income to the expatriate NEO, the Company reimburses the expatriate NEO for any home country taxes payable on the additional income. The Company also pays the employee portion of Bermuda payroll taxes and social insurance for our expatriate NEOs. •TAX PREPARATION EXPENSES.Due to the additional complexities associated with the taxation of expatriate NEO benefits, the Company reimburses expatriate executives’ tax preparation expenses, up to $5,000 per executive, per annum. We annually review the level of employee benefits provided to NEOs and believe that the employee benefits provided are reasonable and consistent with market practices in the jurisdictions in which the Company operates. XI.EMPLOYMENT AGREEMENTS AND SEPARATION AGREEMENTS WITH NEOs We have entered into employment agreements or offer letter agreements with each of the Compensation Committee
NEOs. We believe that it is beneficial to enter into compensation arrangements with our key executives that provide retentive value, subject executives to restrictive covenants and provide us with a competitive advantage in the recruiting process. The Compensation Committee is responsibleterms of the employment agreements, including the pay mix, were based upon a competitive market analysis provided by Mercer. In addition to providing for reviewingbase salary, annual cash incentive and approvinglong term incentive awards in the compensation and benefits of our employees, directors and compensation consultants, administering our employee benefit plans, authorizing and ratifying share option grants and other incentive arrangements, and authorizing employment and related agreements. In 2017,agreements or offer letters, as in 2016,the case may be, the Compensation Committee determined notprovided additional sign-on equity awards as described above to engage any compensation consultanteach of Messrs. Egan, Yendall and Govrin to advise on executive compensation matters. Management obtains survey data from PwC’s Bermuda International Business Compensation Survey, including survey data on Bermudian insurance and reinsurance companies with 100 or fewer employees. However, we do not use survey data or benchmarking data to determine or set the compensation of our NEOs; rather, we use this data to confirm that our compensation is within a competitive range.
Our Chief Executive Officer meets from time to time withreflect the Compensation Committee and makes compensation recommendations with respect to our NEOs, other than himself, including recommendations for salary adjustments, annual incentives and long-term incentive awards, to the Compensation Committee for review, feedback and approval.
Elements of our Executive Compensation Program
During fiscal 2017 the compensation program for our NEOs consisted primarily of salary, short-term incentive compensation, long-term incentive compensation and certain perquisites and retirement, health and welfare benefits. Set forth below is a discussion ofCommittee’s expectation that each of these elements of total compensation, the reason that we provide each element, and how that element fits into our overall compensation philosophy. Each elementexecutives would lead the transformation of the Total Rewards Strategy offers something uniqueCompany.
The terms of these arrangements are more fully discussed below under “Narrative Disclosure to executivesSummary Compensation Table and incentivizes different desired behaviors and business results for the Company. Base Salary
The primary function of base salary is to provide base compensation for executives’ ongoing performance of job responsibilities throughout the year.
Base pay reflects sustained individual performance, contribution, and relative value, as well as competitive market practice.
Base pay adjustments are neither guaranteed nor automatic. Base pay adjustments are intended to be clear performance messages and make meaningful distinctions for above-average performers.
Below-average performers do not receive increases and are subject to corrective action.
Average performers receive average or even below-average increases with consideration given to the incumbent’s position in the market or the established range.
Above-average performers receive above-average increases with consideration given to the incumbent’s position in the market or established range for the role.
The minimum base salary for each of our active NEOs is set pursuant to their individual employment agreements with the Company. Base salaries are reviewed on a periodic basis. The Compensation Committee did not approve any increases in the base salaries for our NEOs in 2017.
Long-Term Incentives
The purpose of long-term incentives is to align the interests of employees with shareholders through meaningful equity participation and long-term ownership. The program can generate significant payments when executives drive the Company to achieve long-term results.
Long-term incentives should help balance a short-term performance focus. Executives should be focused on fulfilling organizational long-term strategic objectives. By using long-term incentives, we encourage executives to balance their orientation and weight their decision-making given the respective award opportunities under each compensation plan.
Long-term incentive awards should reflect market-competitive levels. Individual grants will vary based on individual performance, so that executives are motivated to not only drive toward superior long-term corporate performance but also demonstrate individual impact as well.
The mix of long-term incentives may vary by role/level in the Company to most appropriately balance retention needs with the need to drive long-term growth in shareholder value, based on the role/level’s ability to influence share price movement.
The Company may use a variety of equity vehicles from year to year to deliver long-term incentives.
In 2017 the Company continued the long-term incentive program first implemented by the Compensation Committee in 2014, providing for annual long-term incentive grants with overlapping vesting schedules and performance cycles to incentivize and promote retention of employees and executives. All awards are in the form of restricted shares subject to the achievement of performance goals tied to underwriting profitability and float generation over rolling three-year calendar year periods. If declared, dividends are accrued on unvested restricted shares and only payable upon vesting. Performance metrics will be determined based on an Underwriting Return Ratio (“URR”) measure. The URR applies to the underwriting results of our Property and Casualty reinsurance segment. It is a combined ratio calculation, modified to include general and administrative costs that are not customarily included in the combined ratio as well as investment income on the float generated by underwriting operations as if that float had been invested in a medium-term, investment grade bond portfolio. A URR of 102% (increased from 100% for pre-2017 grants) will result in 100% target award vesting. A URR of 97% (increased from 95% for pre-2017 grants) or better will result in 150% of target award vesting (100% of maximum award). A URR at or above 112% (increased from 110% for pre-2017 grants) will result in 0% award vesting such that there is no payout at this threshold. URR is defined as (a) net premiums earned by our Property and Casualty segment minus adjusted underwriting expenses, minus a portion of our investment income, divided by (b) such net premiums earned. The Compensation Committee set URR as the performance goal because it believes that this metric will appropriately align the Company’s goal of increasing profitable underwriting premium generation within the Company’s underwriting guidelines without exposing the Company to undue risk as to the quality of those premiums, and provide an incentive which offers an appropriate balance between the increased insurance float and underwriting risk. The URR percentages were increased in 2017 to recalibrate the target URR to reflect current underwriting market conditions which had deteriorated from the original formula.
Awards under our long-term incentive program were made in February 2017 and are reflected in the Grants of Plan-Based Awards for Fiscal Year 2017 table detailed under “All Other Compensation”2022 Table—Employment Agreements. The number of restricted shares granted to each of our NEOs (other than”
In 2022, the Chief Executive Officer) was determined by the Compensation Committee in consultationCompany also entered into separation arrangements or transition agreements with our Chief Executive Officer. Share awards are determined in relation to an individual’s performance and contributions to the Company’s results, and with regard to the individual’s total compensation. Awards are not based on a scheduled allocation of shares. In determining the individual grant levels, the Compensation Committee considered the compensation of eachnumber of the NEOs as comparedin connection with their terminations of employment. The terms of these arrangements are more fully described below under “2022 Potential Payments Upon Termination or Change in Control.”
XII.OTHER COMPENSATION PRACTICES AND POLICIES Share Ownership Guidelines The Company has adopted share ownership guidelines pursuant to comparable positionsthe Director and Executive Share Ownership Policy to further align the economic interests of our directors and executive officers (“Designated Individuals”) with the interests of our shareholders. To accomplish this, Designated Individuals are expected not only to receive equity-based compensation but also to maintain a significant long-term equity interest in the market survey data, individual performance factorsCompany. The table below summarizes the guidelines: | | | | | | | | | | | | | | | | POSITION | SHARE OWNERSHIP REQUIREMENT | SHARES COUNTED
TOWARD GUIDELINES | TIME PERIOD
TO ACHIEVE | RETENTION REQUIREMENTS | | Chief Executive Officer | 5xbase salary | •Shares owned outright •Performance shares, upon vesting •Restricted shares, upon vesting
| Individuals subject to this policy have five years from the date of eligibility to meet the minimum ownership requirements. | Must retain 50% of net shares issued upon exercise of share options or vesting of share awards until guidelines are achieved. | | Other Executive Officers | 3x base salary | | Independent Directors | 3x annual cash retainer |
Clawback Policy We have implemented an Executive Compensation Clawback Policy, applicable to all current and former Section 16 officers (“Covered Executive”), including the recommendationCEO. In the event of a restatement of the ChiefCompany’s financial results, this policy authorizes the Company, through its Compensation Committee, to recover any portion of incentive compensation paid or awarded to such Covered Executive Officer. URR forduring the three-year performance period ending December 31, 2017, was 105.7%. As a result, 43%three completed fiscal years immediately preceding the date on which the Company is required to prepare an accounting restatement. The amount to be recovered will be the excess of the target award performance-based restricted shares granted in 2015 that vest based on URR achieved during such period was earned. As a result, Messrs. Bredahl, Campbell, Coleman, Gupta, Malloy and Berger have earned 24,532, 3,067, 12,266, 9,200, 18,399 and 30,665, respectively, of their restricted shares granted in 2015. The restricted shares earned vested on March 1, 2018.
Prior to our initial public offering, equity awards were granted under the Third Point Reinsurance Limited Share Incentive Plan (the “Share Incentive Plan”). Since that time, equity awards have been granted under our Third Point Reinsurance Ltd. 2013 Omnibus Incentive Plan (the “Omnibus Incentive Plan”).
All grants of equity awards are evidenced by an individual award agreement between the Company and the individual.
Annual Incentive Pay
The purpose of annual incentive pay is to reward performance during the year based upon the achievement of individual and business goals on an annual basis.
Annual incentive pay plans help employees understand how they contribute to business performance and help unite employees behind shared goals. Additionally, annual incentives directly support the Company’s high-performance environment by providing employees with clear opportunities for performance-based rewards.
Annual incentive pay helps focus employees on achieving the annual financial goals of the Company by paying rewardscompensation paid to the extent that goals are fulfilled. Performance metrics are setCovered Executive based on the measureserroneous data over the Compensation Committee determines are necessaryincentive compensation that would have been paid to achieve operational success. The performance metrics are periodically reviewed and adjusted, where required, in the Compensation Committee’s judgment.
The formula (described below) creates a bonus pool but not individual awards. The incentive bonus pool is allocated to individual employees by the Compensation Committee upon the recommendation of the ChiefCovered Executive Officer based on how each employee performed relative to his or her individual annual goals.
Short-term incentives also recognize how individuals have performed in terms of meeting the specific goals established for the year, which are above and beyond their regular job duties. Individual performance below expectations will reduce the calculated payment, whereas exceptional performance will increase the calculated payment.
All of our NEOs participated in our 2017 annual incentive plan (the “Annual Incentive Plan”). Each of our continuing NEOs is party to an employment agreement that provides for an annual discretionary bonus. Pursuant to his Chairman Agreement, Mr. Berger was also entitled to participate in our 2017 Annual Incentive Plan.
Under the Annual Incentive Plan for 2017, the amount of the total incentive bonus pool is calculatedhad it been based on the Company’s return on equity and represents a percentage of total employee salaries. Return on equity is calculated as (i) after-tax net income divided by (ii) average shareholder’s equity (which is the beginning equity plus the ending equity, divided by two, as adjusted for any capital events occurring during the year). At a 12.5% return on equity, the bonus pool is funded 100% of target, which represents 130% of salaries. No bonuses are payable unless the Company generates the minimum 5% return on equity, and the size of the bonus pool increases as the return on equity increases, up to the maximum. At a 5% return on equity, the bonus pool would be funded at 50% (threshold) of target, which represents 65% of salaries, and at a 22.5% or higher return on equity, the bonus pool would be funded at 300% (maximum) of target, which represents 390% of salaries. The incentive bonus pool is allocated to individual employees by the Compensation Committee upon the recommendation of the Chief Executive Officer based on the individual’s position in the organization, seniority level, and how each employee performed relative to his or her individual annual goals, such allocations not to exceed $5 million.
The Company’s return on average equity for 2017 was 18.1%, resulting in a bonus pool funded at the 212% of target level. Each NEO had a target bonus percentage of salary as follows which were determined by the Compensation Committee based on seniority level, role within the Company, experience level and past performance: 200% for Mr. Bredahl; 125% for Mr. Campbell; 150% for Mr. Coleman; 100% for Mr. Gupta; 185% for Mr. Malloy; and 210% for Mr. Berger. In determining the individual bonus payments for 2017 these target percentages were multiplied by 212%, the percentage of the target bonus pool achieved based on average return on equity, and then, for NEOs other than Mr. Berger, adjusted based on performance relative to various factors including individual goals and objectives.
The CEO recommended individual bonus payments for the continuing NEOs other than himself in 2017 based on his assessment of NEO performance. The following is a list of the material goals and objectives for 2017 considered by the Compensation Committee in making 2017 discretionary bonus determinations for our continuing NEOs, none of which were assigned any particular weighting:
Goals and objectives for J. Robert Bredahl:
Oversee all operations and business activities to ensure they produce the desiredrestated results, and are consistent with the overall strategy of the Company;
Lead and motivate subordinates;
Develop a high-quality business strategy that is aligned with short-term and long-term objectives; and
Assume the chief underwriting and key relationship management roles of the previous CEO.
Goals and objectives for Daniel V. Malloy:
Originate and underwrite economically attractive deals;
Develop new reinsurance structures and solutions that can be broadly applied to buyers of reinsurance;
Supervise and mentor more junior staff and help them prioritize their efforts; and
Contribute to all strategic and important tactical decisions.
Goals and objectives for Manoj K. Gupta:
Rationalize the U.S. office’s reinsurance portfolio by renegotiating pricing, terms and conditions, non-renewing poorly performing deals and focusing on new lines of business and segments;
Successfully assume and perform duties and responsibilities as President of Third Point Re USA, overseeing all operations and business activities of U.S. operation; and
Lead and manage the investor relations and business development functions.
Goals and objectives for Christopher S. Coleman:
Manage all aspects of the Company’s finance function;
Support the underwriters by solving accounting, counter-party credit and collateral issues related to reinsurance transactions;
Manage the Company’s relationships with rating agencies and regulators; and
Contribute to all strategic and important tactical decisions.
Goals and objectives for Nicholas J. D. Campbell:
Provide quarterly, annual and ad-hoc risk reporting as required by the various interested constituencies;
Continue to develop, refine and enhance the Company’s risk exposure capabilities with regard to identifying, assessing, monitoring and measuring our individual, specific and aggregate risk exposures;
Source, underwrite and close profitable reinsurance transactions; and
Provide effective oversight of the Company’s IT function and capabilities, with particular focus on stability, redundancy and cyber-security.
The annual incentive bonus paid for each of our NEOs as determined by the Compensation Committee based onBoard.
The Company continues to monitor this policy to ensure that it is consistent with applicable laws and will review and modify the foregoing factors is reflected inpolicy as necessary to reflect the “Summary Compensation Table”final NYSE listing rules adopted to implement the compensation recovery requirements under the “Non-Equity Incentive Plan Compensation” column.Dodd-Frank Wall Street Reform and Consumer Protection Act.
The Compensation Committee approved a revision to the 2018 bonus pool methodology
Hedging and calculation to include combined ratio (as it appearsPledging
Our Insider Trading Policy prohibits our employees and directors from directly or indirectly engaging in the Company’s financial statements, the “Combined Ratio”)any hedging or monetization transactions (such as an additional metric in the determination of the bonus pool.
Under the Annual Incentive Plan for 2018, the total incentive bonus pool will be determined as fifty percent (50%) based on the Company’s Return on Average Equity (“ROAE”)prepaid variable forward contracts, equity swaps, collars and fifty percent (50%) based on the Company’s Combined Ratio. The size of the bonus pool contribution increases as the ROAE increases and as the Combined Ratio decreases. At target, each of the two portions of the pool funds at 65% of salaries (130% in the aggregate), with a maximum funding level of each pool of 195% of salaries (390% in the aggregate). No bonuses are payableexchange funds) with respect to Company shares. No exceptions are allowed for such transactions under the 50% calculated based on ROAE unlessTrading Policy. Pledging of Company shares (such as collateral for a loan, including through the Company generatesuse of traditional margin accounts with a broker) is also prohibited under our policy. No NEO has pledged the threshold level established for ROAE, and no bonuses are payable with respect to the 50% calculated based on Combined Ratio unless the Company generates a Combined Ratio below the threshold level established. The total incentive bonus pool will be allocated to individual employees by the Compensation Committee upon the recommendation of the Chief Executive Officer based on theCompany’s shares.
individual’s position in the organization, seniority level, and how each employee performed relative to his or her individual annual goals.
Other Benefits and Perquisites
Other Benefits
The Company provides benefit plans, such as medical coverage and life and disability insurance, in line with applicable market conditions and Bermuda law. TheseWe believe these health and welfare plans help ensure that the Company has a productive and focused workforce through reliable and competitive health and other benefits. The Company also maintains defined contribution benefit plans that provide eligible employees with an opportunity to save for retirement. The Company contributes up to 10% of all the employees’each employee’s salary, orup to statutory contribution limits, to these plans. The NEOs are eligible to participate in the health and welfare and defined contribution plans during employment on the same basis as all other employees, subject to applicable tax and other limits on contributions.
Perquisites The Company also provides customary additional benefits to certain expatriate employees working outside of their home country, including each of our expatriate NEOs, to better enable the Company to attract and retain key employees. TheseWe believe these benefits are typical for the insurance/reinsurance industry, as well as for Bermuda-based companies, and are specified in our expatriate NEOs’ employment agreements. The purpose of these benefits is to rationalize the income of expatriate employees, who experience additional taxation as a result of compensation for additional housing and transportation expenses, with the income such employees would earn as employees withinin their native countries. These additional benefits are as follows:
Housing and Transportation Expenses. •HOUSING AND TRANSPORTATION EXPENSES.The Company reimburses certain expatriate NEOsreimbursed the former CEO (Mr. Malloy) for housing expenses in Bermuda and provided him with a travel allowance for travel and transportation expenses between the United States and Bermuda. Our Chief Executive Officer is entitled to private air travel to and from Bermuda, and our other NEOs are eligible for private air travel to and from Bermuda when traveling with the Chief Executive Officer or prior to December 22, 2017, the Chairman; otherwise they are entitled to reimbursement for commercial air travel pursuant to the terms of the Company’s policies regarding travel. The Company’s policies also provide that our NEOs may invite family members or other guests from time to time to fly on already scheduled private air trips. In addition, the Company’s Chairman was entitled during his employment to private air travel to and from Bermuda pursuant to the terms of the Chairman Agreement.
expenses.
Tax Expenses. •TAX EXPENSES.To the extent the Company’s reimbursement of an expatriate NEOs’NEO’s housing or travel expenses are deemed to be taxable income to the expatriate NEO, the Company reimburses the expatriate NEO for any home country taxes payable on the additional income. The Company also pays the employee portion of Bermuda payroll taxes and social insurance for our expatriate NEOs.
Tax Preparation Expenses. •TAX PREPARATION EXPENSES.Due to the additional complexities associated with the taxation of expatriate NEO benefits, the Company reimburses expatriate executives’ tax preparation expenses, up to $5,000 per executive, per annum.
Club Membership. The provision of a club membership is common practice in our industry and enables the NEOs to establish social networks with clients and others.
We annually review the level of employee benefits provided to the NEOs and believe that the employee benefits provided are reasonable and consistent with market practices in the jurisdictions in which the Company operates. These benefits are described under “Summary Compensation Table” and “Employment Agreements with NEOs” below.
Employment Agreements withXI.EMPLOYMENT AGREEMENTS AND SEPARATION AGREEMENTS WITH NEOs
We have entered into employment agreements or offer letter agreements with each of our NEOs as a means to attract and retain executive officers. Terms of these agreements are more fully discussed below under “Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards for Fiscal Year 2017 Table - Employment Agreements”.the NEOs. We believe that these agreements provide our executive officers with the assurance that their employmentit is a long-term arrangement and provide us with the assurance that the officers’ services will be availablebeneficial to us for the foreseeable future. We believe that having employment agreementsenter into compensation arrangements with our key executives is beneficial because such agreementsthat provide retentive value, subject executives to restrictive covenants and provide us with a competitive advantage in the recruiting process over a company that does not offer employment agreements.
In 2017 we amendedprocess. The terms of the employment agreements, with certainincluding the pay mix, were based upon a competitive market analysis provided by Mercer. In addition to providing for base salary, annual cash incentive and long term incentive awards in the employment agreements or offer letters, as the case may be, the Compensation Committee provided additional sign-on equity awards as described above to each of our NEOsMessrs. Egan, Yendall and Govrin to reflect changesthe Compensation Committee’s expectation that each of the executives would lead the transformation of the Company.
The terms of these arrangements are more fully discussed below under “Narrative Disclosure to their rolesSummary Compensation Table and responsibilities. Grants of Plan-Based Awards for Fiscal Year 2022 Table—Employment Agreements.”
In 20172022, the Company also entered into separation arrangements or transition agreements with a number of the NEOs in connection with his transition, we entered into a Chairman Agreement with Mr. Berger, which superseded his employment agreement. In addition, we entered into a new employment agreement with Mr. Bredahltheir terminations of employment. The terms of these arrangements are more fully described below under “2022 Potential Payments Upon Termination or Change in relation to his transition to Chief Executive Officer of the Company, which superseded his prior employment agreement. The appointments for Bermuda-based positions are subject to customary Bermuda immigration approval.Control.”
Other Compensation Practices and Policies
XII.OTHER COMPENSATION PRACTICES AND POLICIES Share Ownership Guidelines. We have recentlyGuidelines The Company has adopted share ownership guidelines inpursuant to the form of a Director and Executive Share Ownership Policy to further align the economic interests of our directors and executive officers (“Designated Individuals”) with the interests of our shareholders. To accomplish this, Designated Individuals are expected not only to receive equity-based compensation but also to maintain a significant long-term equity interest in the Company. The table below summarizes the guidelines: | | | | | | | | | | | | | | | Required levelsPOSITION | CEO: 5x base salary
Other Executive Officers: 3x base salary
Directors: 3x annual cash retainer
SHARE OWNERSHIP REQUIREMENT | SHARES COUNTED
TOWARD GUIDELINES | TIME PERIOD
TO ACHIEVE | RETENTION REQUIREMENTS | | Chief Executive Officer | | Shares counted toward guidelines
5xbase salary
| - •Shares owned outright (excluding pledged shares)
- •Performance shares, once earnedupon vesting
- •Restricted shares, upon grant datevesting
- Intrinsic value of vested options (for executive officers)
| | | Time period to achieve
| FiveIndividuals subject to this policy have five years | | | Retention requirements
from the date of eligibility to meet the minimum ownership requirements.
| Must retain 50% of net shares issued upon exercise of share options or vesting of share awards until guidelines achievedare achieved. | | Other Executive Officers | 3x base salary | | Independent Directors | 3x annual cash retainer |
Clawback Policy. We have implemented an Executive Compensation Clawback Policy, applicable to all executivecurrent and former Section 16 officers (“Covered Executive”), including the CEO. In the event of: (i)of a restatement of the Company’s financial results; or (ii) a material change in reserves resulting from adverse development, in either case due to an executive officer being involved in fraud, illegal conduct or other willful misconduct, any of which materially contributed to the need for such restatement (or in the case of (ii) revised reserves),results, this policy authorizes the Company, through its Compensation Committee, to recover any portion of performance-based or incentive compensation paid or awarded to such executive officer that was higher thanCovered Executive during the three completed fiscal years immediately preceding the date on which the Company is required to prepare an accounting restatement. The amount to be recovered will be the excess of the incentive compensation paid to the Covered Executive based on the erroneous data over the incentive compensation that would have been paid or awarded if calculatedto the Covered Executive had it been based uponon the restated financial results, (or inas determined by the case of (ii), revised reserves).Board. We are awaitingThe Company continues to monitor this policy to ensure that it is consistent with applicable laws and will review and modify the policy as necessary to reflect the final regulatory guidance regarding clawbacks ofNYSE listing rules adopted to implement the compensation recovery requirements under the Dodd–FrankDodd-Frank Wall Street Reform and Consumer Protection Act and expect to review and revise our policy as necessary after that final guidance is published and implemented by the NYSE.Act.
Hedging and Pledging. Pledging
Our updatedInsider Trading Policy prohibits our employees and directors from directly or indirectly engaging in any hedging or monetization transactions (such as prepaid variable forward contracts, equity swaps, collars and exchange funds) with respect to Company shares. No exceptions are allowed for such transactions under the Trading Policy. Pledging of Company Sharesshares (such as collateral for a loan, including through the use of traditional margin accounts with a broker) is also prohibited under our policy, although exceptions may be made withpolicy. No NEO has pledged the approvalCompany’s shares.
Role of the Chief Executive Officer or General Counsel, or in the case of these executives, by the Audit Committee.Compensation Committee Tax Considerations. The Compensation Committee considers the income tax consequences of individual compensation elements when analyzing the overall compensation paid to our NEOs. Prior to 2017 our compensation program has not been designed to comply with Section 162(m) of the Internal Revenue Code, which imposes a limit on the amount of compensation that companies may deduct in any one year with respect to certain “covered employees” because, prior to the establishment of our U.S. subsidiary, Third Point Re USA, Third Point Re BDA was not subject to taxation in the U.S.is responsible for reviewing and to the extent any portion of the compensation paid to certain of our NEOs is subject to taxation in the U.S., it has been paid under plans in effect prior to our initial public offering that are entitled to transition relief under Section 162(m) for the period ending on the date of our 2017 Annual General Meeting of shareholders. In 2017 our shareholders approved the material provisions of our Annual Incentive Plan and our Omnibus Incentive Plan so that we could continue to grant performance based awards and pay bonuses to covered employees intended to be exempt from the deduction limits under Section 162(m). Recently enacted legislation makes certain changes to Section 162(m), most notably repealing the exemption for qualified performance-based compensation for taxable years beginning after December 31, 2017, and expanding the scope of persons covered by its limitations on deductibility. Accordingly, compensation paid after 2017 to our covered executive officers in excess of $1 million will not be deductible in the U.S. unless it qualifies for transition relief applicable to certain arrangements in place as of November 2, 2017. In light of these changes, it is expected that our Compensation Committee will authorize compensation deductible under 162(m). With respect to our U.S. taxpayer employees, including certain of our NEOs, we design our compensation arrangements also taking into account Internal Revenue Code Sections 409A and 457A.
Say on Pay. The Compensation Committee considers the outcome of shareholder advisory votes on executive compensation when making decisions relating toapproving the compensation of our NEOsexecutive officers and ourdirectors, hiring compensation consultants, overseeing the Company’s diversity and talent management program, overseeing CEO Succession planning, authorizing and ratifying equity grants and other incentive arrangements, and authorizing employment and related agreements with executive officers.
Our Chief Executive Officer makes compensation programs. At our 2015 annual meeting of shareholders, our shareholders approved the compensation paidrecommendations to our NEOs in a non-binding advisory vote. Approximately 95% of the shareholders who voted on the proposal voted in favor of the proposal. The Compensation Committee believes the results conveyed support for continuing with the philosophy, strategy and objectives of our executive compensation program. At our 2015 annual general meeting, our shareholders voted, on an advisory basis, to hold future advisory votes to approve executive compensation every three years. In accordance with our shareholders’ recommendation, our Board of Directors determined to include an advisory shareholder vote on executive compensation in its proxy materials every three years until the next required advisory vote on the frequency of shareholder votes on executive compensation. The advisory vote to approve executive compensation is being considered at the 2018 Annual General Meeting. The next advisory vote regarding the frequency of say on pay will occur no later than our 2021 annual meeting of shareholders.
Compensation Committee Report
The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis included in this Proxy Statement with members of management, and based on such review and discussions, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement.
The Compensation Committee
Steven E. Fass (Chairman)
Rafe de la Gueronniere
Mary R. Hennessy
Mark Parkin
Summary Compensation Table
| | | | | | | | | | | | | | | | | | Name and Principal Position (3) | | Fiscal Year | | Salary | | Bonus | | Share Awards (2) | | Option Awards | | Non-Equity Incentive Plan Compensation(1) | | All Other Compensation(5) | | Total | | | | | | ($) | | ($) | | ($) | | ($) | | ($) | | ($) | | ($) | | | | | | | | | | | | | | | | | | | J. Robert Bredahl, President and Chief Executive Officer of the Company; Chief Executive Officer of Third Point Reinsurance (USA) Ltd. | | 2017 | | 800,000 | | — | | 749,995 | | — | | 3,360,000 | | 373,354 | | 5,283,349 | | | 2016 | | 787,500 | | — | | 800,006 | | — | | __ | | 573,753 | | 2,161,259 | | | 2015 | | 750,000 | | 375,000 | | 799,992 | | — | | — | | 608,025 | | 2,533,017 | | | | | | | | | | | | | | | | | | | | Nicholas J. D. Campbell, Chief Risk Officer; Executive Vice President, Underwriting, Third Point Reinsurance Company Ltd. | | 2017 | | 480,000 | | — | | 500,005 | | — | | 1,250,000 | | 89,264 | | 2,319,269 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Christopher S. Coleman, Chief Financial Officer | | 2017 | | 500,000 | | — | | 899,994 | | — | | 1,575,000 | | 99,470 | | 3,074,464 | | | 2016 | | 480,000 | | — | | 500,004 | | — | | — | | 116,735 | | 1,096,739 | | | 2015 | | 420,000 | | 210,000 | | 399,996 | | — | | — | | 102,279 | | 1,132,275 | | | | | | | | | | | | | | | | | | | Manoj K. Gupta, Head of Investor Relations and Business Development of the Company; President of Third Point Reinsurance (USA) Ltd. | | 2017 | | 500,000 | | — | | 550,000 | | — | | 1,575,000 | | 54,708 | | 2,679,708 | | | 2016 | | 500,000 | | 100,000 | | 300,002 | | — | | — | | 133,257 | | 1,033,259 | | | 2015 | | 500,000 | | 250,000 | | 299,992 | | — | | — | | 452,652 | | 1,502,644 | | | | | | | | | | | | | | | | | | | Daniel V. Malloy, Chief Executive Officer, Third Point Reinsurance Company Ltd.
| | 2017 | | 700,000 | | — | | 1,600,006 | | — | | 2,725,000 | | 246,495 | | 5,271,501 | | | 2016 | | 700,000 | | — | | 600,005 | | — | | — | | 283,175 | | 1,583,180 | | | 2015 | | 675,000 | | 337,500 | | 599,987 | | — | | — | | 285,881 | | 1,898,368 | | | | | | | | | | | | | | | | | | | John R. Berger, Former Chairman of the Board of the Company; Former Chief Executive Officer of Third Point Reinsurance (USA) Ltd. (4)
| | 2017 | | 831,474 | | — | | 749,995 | | — | | 3,710,000 | | 336,669 | | 5,628,139 | | | 2016 | | 850,000 | | — | | 1,000,008 | | — | | — | | 407,922 | | 2,257,930 | | | 2015 | | 850,000 | | 425,000 | | 999,998 | | — | | — | | 603,745 | | 2,878,743 |
| | (1) | For 2017 the Company achieved an 18.1% return on equity threshold and therefore, bonuses were payable under our Annual Incentive Plan. See “Compensation Discussion and Analysis - Elements of our Executive Compensation Program - Annual Incentive Pay”. |
| | (2) | See “Compensation Discussion and Analysis - Elements of our Executive Compensation Program - Long-Term Incentives”. Messrs. Bredahl, Campbell, Coleman, Gupta, Malloy and Berger were granted a total of 92,213, 61,475, 110,656, 67,623, 196,721 and 92,213 performance-based restricted shares at maximum performance levels in 2017, respectively. Performance-based restricted share awards generally vest based on continued employment and the achievement of certain financial performance measures over a three-year performance period. The number of performance-based restricted shares that may be retained upon vesting will vary based on the level of achievement of the performance goals. The award value included in the table for 2017 corresponds to the grant date fair value of performance-based restricted shares based upon the probable outcome of such performance criteria. Assuming the maximum performance levels are achieved, the grant date fair value of performance-based restricted shares granted in 2017 would equal $1,124,999, $749,995, $1,350,003, $825,001, $2,399,996, and $1,124,999, for Messrs. Bredahl, Campbell, Coleman, Gupta, Malloy, and Berger respectively. The amounts reported in this column are valued based on the aggregate grant date fair value computed in accordance with FASB ASC Topic 718, modified to exclude the effect of estimated forfeitures. The fair value was determined using the methodology and assumptions set forth in Note 16, “Share-Based Compensation,” to the Audited Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2017, which are hereby incorporated herein by reference. |
| | (3) | Reflects current titles. Please see “Compensation Discussion and Analysis - Overview” for principal positions of named executive officers during 2017. |
| | (4) | Mr. Berger’s employment terminated on December 22, 2017. |
| | (5) | The following table sets forth the compensation reflected in the “All Other Compensation” column for the fiscal year ended December 31, 2017. |
All Other Compensation 2017
| | | | | | | | | | | | | | | Name | | Company Contributions to Retirement Plans ($)(a) | | Company-Paid Transportation Expense ($)(b) | | Reimbursed Housing Expenses ($)(c) | | Tax Reimbursements ($)(d) | | Other ($) (e) | | Total Other Compensation ($) | | J. Robert Bredahl | | 54,000 | | 141,130 | | 80,123 | | 93,101 | | 5,000 | | 373,354 | | Nicholas J. D. Campbell | | 48,000 | | — | | — | | 37,664 | | 3,600 | | 89,264 | | Christopher S. Coleman | | 50,000 | | — | | — | | 47,470 | | 2,000 | | 99,470 | | Manoj K. Gupta | | 50,000 | | — | | — | | — | | 4,708 | | 54,708 | | Daniel V. Malloy | | 54,000 | | 27,321 | | 104,024 | | 56,150 | | 5,000 | | 246,495 | | John R. Berger | | 54,000 | | 71,682 | | 103,200 | | 102,787 | | 5,000 | | 336,669 |
| | (a) | Represents Company contributions (employer and employee contributions paid by the Company) to retirement plans. |
| | (b) | During 2017, through December 22, 2017, Mr. Berger was entitled to private air travel to and from Bermuda. As Chief Executive Officer, Mr. Bredahl is entitled to private air travel to and from Bermuda. In 2017 Mr. Malloy received reimbursement for certain commercial air travel to and from Bermuda. NEOs may also invite family members or other guests from time to time to fly on already scheduled private air trips. There is no incremental cost to the Company and therefore, there is no value included in these amounts for family or other guests. This total also includes ground transportation costs paid by the Company. |
| | (c) | Messrs. Bredahl and Malloy are entitled to a housing allowance under the terms of their employment agreements. Mr. Berger was entitled to a housing allowance under his employment agreement and Chairman Agreement through his retirement from the Board on December 22, 2017. This represents cost of housing, utilities, including electricity and cable services, and furnishings paid or reimbursed by the Company. |
| | (d) | Represents payment of the employee portion of Bermuda payroll taxes and social security insurance on behalf of certain Bermuda-based NEOs and reimbursement of all taxes incurred with respect to: (i) the housing allowance and related expenses; (ii) Company-paid transportation benefits; (iii) the Company-paid employee portion of Bermuda social insurance tax; (iv) tax preparation benefits; and (v) the tax reimbursement payments. |
| | (e) | Represents the employee portion of reimbursed personal tax preparation cost for Messrs. Bredahl, Coleman, Gupta, Malloy and Berger and reimbursement of club membership for Mr. Campbell. |
Grants of Plan-Based Awards for Fiscal Year 2017
The following table provides information concerning awards granted to the NEOs in the last fiscal year.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Estimated Future 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) | | Name | | Grant Date | | Threshold | | Target | | Maximum | | Threshold | | Target | | Maximum | | | | | | | | ($) | | ($) | | ($) | | (#) | | (#) | | (#) | | | | J. Robert Bredahl | | | | | | | | | | | | | | | | | | Annual Incentive Plan | | | | — |
| | 1,600,000 |
| | (4) | | | | | | | | | | Omnibus Incentive Plan | | 2/21/2017 | | | | | | | | — |
| | 61,475 |
| | 92,213 |
| | 749,995 |
| | | | | | | | | | | | | | | | | | | | Nicholas J. D. Campbell | | | | | | | | | | | | | | | | | | Annual Incentive Plan | | | | — |
| | 600,000 |
| | (4) | | | | | | | | | | Omnibus Incentive Plan | | 2/21/2017 | | | | | | | | — |
| | 40,984 |
| | 61,475 |
| | 500,005 |
| | | | | | | | | | | | | | | | | | | | Christopher S. Coleman | | | | | | | | | | | | | | | | | | Annual Incentive Plan | | | | — |
| | 750,000 |
| | (4) | | | | | | | | | | Omnibus Incentive Plan | | 2/21/2017 | | | | | | | | — |
| | 73,770 |
| | 110,656 |
| | 899,994 |
| | | | | | | | | | | | | | | | | | | | Manoj K. Gupta | | | | | | | | | | | | | | | | | | Annual Incentive Plan | | | | — |
| | 750,000 |
| | (4) | | | | | | | | | | Omnibus Incentive Plan | | 2/21/2017 | | | | | | | | — |
| | 45,082 |
| | 67,623 |
| | 550,000 |
| | | | | | | | | | | | | | | | | | | | Daniel V. Malloy | | | | | | | | | | | | | | | | | | Annual Incentive Plan | | | | — |
| | 1,295,000 |
| | (4) | | | | | | | | | | Omnibus Incentive Plan | | 2/21/2017 | | | | | | | | — |
| | 131,148 |
| | 196,721 |
| | 1,600,006 |
| | | | | | | | | | | | | | | | | | | | John R. Berger | | | | | | | | | | | | | | | | | | Annual Incentive Plan | | | | — |
| | 1,746,096 |
| | (4) | | | | | | | | | | Omnibus Incentive Plan | | 2/21/2017 | | | | | | | | — |
| | 61,475 |
| | 92,213 |
| | 749,995 |
|
| | (1) | A discussion of the 2017 annual cash incentives, including awards earned for 2017 and paid in March 2018 can be found under “Compensation Discussion and Analysis - Elements of our Executive Compensation Program - Annual Incentive Pay”. |
| | (2) | Performance-based restricted share awards made pursuant to the Omnibus Incentive Plan for the 2017-2020 performance cycle and are scheduled to vest on March 1, 2020. Restricted share awards generally vest based on continued employment and the achievement of certain financial performance measures over a three-year performance period. Pursuant to the terms of the Chairman Agreement entered into with Mr. Berger on March 1, 2017, all of Mr. Berger’s unvested performance-based restricted share awards will continue to vest after his termination of service, subject to achievement of the applicable performance conditions. Performance-based restricted shares that do not vest at the end of the three-year period are forfeited. 0% of the awards vest unless performance exceeds the threshold performance level. Linear interpolation applies to determine the vesting percentage between threshold and target and between target and maximum performance levels. For a more detailed discussion of the 2017 performance-based restricted share awards, see “Compensation Discussion and Analysis - Elements of our Executive Compensation Program - Long-Term Incentives”. |
| | (3) | The amounts reported in this column are valued based on the aggregate grant date fair value computed in accordance with FASB ASC Topic 718 based on the probable outcome of such performance criteria. The fair value was determined using the methodology and assumptions set forth in Note 16, “Share-Based Compensation” to the Audited Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2017, which are hereby incorporated herein by reference. |
| | (4) | None of our NEOs have a stated maximum annual cash incentive in their employment agreements; however, the Annual Incentive Plan contains a maximum bonus pool funding of 390% of salaries and our Annual Incentive Plan has a maximum individual award cash incentive limit of $5 million. The incentive bonus pool is allocated to individual employees by the Compensation Committee upon the recommendation of the Chief Executive Officer based on the individual’s position in the Company, seniority level, and how each employee performed relative to his or her individual annual goals, such allocations not to exceed $5 million. See “Compensation Discussion and Analysis - Elements of our Executive Compensation Program - Annual Incentive Pay”. |
Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards for Fiscal Year 2017 Table
Employment Agreements
The principal terms of the employment agreements with each of our NEOs are discussed below.
J. Robert Bredahl. We have entered into an employment agreement with Mr. Bredahl which we amended in 2017 to reflect his promotion to President and Chief Executive Officer of the Company, effective March 1, 2017, and subject to customary Bermuda immigration approval. As amended, the employment agreement sets Mr. Bredahl’s annual base salary at $800,000. The employment agreement specifies that Mr. Bredahl is eligible for an annual bonus, based on achievement of such individual and corporate performance goals as may be established by the Board. In 2016 Mr. Bredahl consented to a target bonus percentage of 200% for 2016 and subsequent years. Mr. Bredahl’s employment agreement also provides that, during the term of his employment and while his principal place of employment is Bermuda, he is entitled to: (i) air travel to and from Bermuda under the Company’s air travel policies applicable to the most senior executives of the Company; (ii) a housing allowance of $10,000 per month; and (iii) tax reimbursement for the taxes incurred with respect to: (a) the air travel benefit; (b) the housing benefit; and (c) the tax reimbursement payment. Under the terms of his employment agreement, he is entitled to five weeks of paid vacation annually, and is also eligible to participate in all normal Company benefits, including the Company’s 401(k), medical, dental and life and disability insurance plans and programs in accordance with the terms of such arrangements.
Mr. Bredahl’s employment term under his amended and restated employment agreement, is for a three-year term beginning March 1, 2017, and automatically extends for an additional year on the third anniversary of such commencement date and every anniversary thereafter, unless either party gives notice of non-extension at least 90 days
prior to such anniversary.
If Mr. Bredahl’s employment is terminated by the Company without cause or if Mr. Bredahl resigns for good reason,
Mr. Bredahl will be entitled to receive the following benefits: (i) an amount equal to his target annual cash bonus for
the fiscal year in which the termination date occurs, payable in cash in a lump sum after the end of the calendar year in which the termination date occurs, and no later than March 15 of such subsequent calendar year; (ii) payment of 18 months’ base salary, payable over the 18-month period following the termination date; (iii) 18 months of continued participation in medical and life insurance benefits at active employee rates; (iv) Mr. Bredahl’s vested options to purchase Company shares will remain exercisable until their normal expiration date; and (v) Mr. Bredahl’s performance shares will remain outstanding through the scheduled vesting dates and will vest pro rata through the termination date and/or be forfeited based solely on satisfaction of the applicable performance goals without regard to his continued service. The payment of the above shall be contingent on Mr. Bredahl executing a general release of all claims against the Company. If Mr. Bredahl’s employment is terminated due to his death or disability, Mr. Bredahl will be entitled to receive an annual bonus payment, prorated for the period of his service prior to the termination date. Following termination of his employment for any reason, Mr. Bredahl will be entitled to receive: (i) all accrued and unpaid base salary and benefits; and (ii) reimbursement for approved business expenses incurred prior to termination. Mr. Bredahl is subject to confidentiality and non-disparagement covenants and, during the term of his employment and for 18 months following termination of employment, to non-competition and non-solicitation covenants.
Mr. Bredahl is entitled to coverage under a directors and officers insurance policy during his employment and for six years following the termination of his employment. The Company and Mr. Bredahl have entered into an Indemnification Agreement pursuant to which the Company has agreed to indemnify Mr. Bredahl acting in his capacity as an officer or director in relation to any of our affairs for any loss arising or liability attaching to him by virtue of any rule of law in respect of any negligence, default, breach of duty or breach of trust of which he may be guilty in relation to the Company other than in respect of his own fraud or dishonesty.
Nicholas J. D. Campbell. We have entered into an employment agreement with Mr. Campbell dated December 13, 2013, pursuant to which he agreed to serve initially as the Senior Vice President of Underwriting of Third Point Re BDA, and with effect from April 1, 2015, the Chief Risk Officer of the Company. With effect from March 3, 2017, Mr. Campbell was promoted to Executive Vice President of Underwriting of Third Point Re BDA, and retained the role of Chief Risk Officer of the Company. The employment agreement sets Mr. Campbell’s annual base salary at $480,000. The employment agreement specifies that Mr. Campbell is eligible for an annual bonus with a threshold, target and maximum amount of, respectively, 50%, 150% and 300% of base salary, based on achievement of such individual and corporate performance goals as may be established by the Board. Mr. Campbell has consented to a target bonus percentage of 125% for 2016 and subsequent years and the removal of a stated threshold or maximum bonus. Under the terms of his employment agreement, Mr. Campbell is entitled to four weeks of paid vacation annually, and is also eligible to participate in all normal Company benefits, including the Company’s pension plan, medical, dental and life and disability insurance plans and programs in accordance with the terms of such arrangements.
Mr. Campbell’s employment term was for an initial term of two years and three months, effective from December 13, 2013, and automatically extended for an additional year on March 17, 2016, and automatically extends at every anniversary thereafter, unless either party gives notice of non-extension at least 90 days prior to such anniversary.
If Mr. Campbell’s employment is terminated by the Company without cause or if Mr. Campbell resigns for good reason, Mr. Campbell will be entitled to receive: (i) an annual bonus payment, prorated for the period of his service prior to the termination date; (ii) payment of six (6) months’ base salary, payable over the six (6) month period following the termination date; and (iii) six (6) months of continued participation in medical and life insurance benefits at active employee rates. The payment of the above shall be contingent on Mr. Campbell executing a general release of all claims against the Company. If Mr. Campbell’s employment is terminated due to his death or disability, Mr. Campbell will be entitled to receive an annual bonus payment, prorated for the period of his service prior to the termination date. Following termination of his employment for any reason, Mr. Campbell will be entitled to receive: (i) all accrued and unpaid base salary and benefits; and (ii) reimbursement for approved business expenses incurred prior to termination. Mr. Campbell is subject to confidentiality and non-disparagement covenants and, during the term of his employment and for six (6) months following termination of employment, to non-competition and non-solicitation covenants.
Mr. Campbell is entitled to coverage under a directors and officers insurance policy during his employment and for six years following the termination of his employment. The Company and Mr. Campbell have entered into an Indemnification Agreement pursuant to which the Company has agreed to indemnify Mr. Campbell acting in his capacity as an officer or director in relation to any of our affairs for any loss arising or liability attaching to him by virtue of any rule of law in respect of any negligence, default, breach of duty or breach of trust of which he may be guilty in relation to the Company other than in respect of his own fraud or dishonesty.
Christopher S. Coleman. We have entered into an employment agreement with Mr. Coleman pursuant to which he has agreed to serve as our Chief Financial Officer. The employment agreement sets Mr. Coleman’s annual base salary at $420,000; his current base salary is $500,000. The employment agreement specifies that Mr. Coleman is eligible for an annual bonus with a threshold, target and maximum amount of, respectively, 50%, 150% and 300% of base salary, based on achievement of such individual and corporate performance goals as may be established by the Board. Mr. Coleman has consented to a target bonus percentage of 150% for 2016 and subsequent years and the removal of a stated threshold or maximum bonus. Under the terms of his employment agreement, Mr. Coleman is entitled to five weeks of paid vacation annually, and is also eligible to participate in all normal Company benefits, including the Company’s pension plan, medical, dental and life and disability insurance plans and programs in accordance with the terms of such arrangements.
Mr. Coleman’s employment term is for a three year period effective from November 10, 2014, and it automatically extends for an additional year on the third anniversary of the employment agreement commencement date and every
anniversary thereafter, unless either party gives notice of non-extension at least 90 days prior to such anniversary. If Mr. Coleman’s employment is terminated by the Company without cause or if Mr. Coleman resigns for good reason, Mr. Coleman will be entitled to receive: (i) an annual bonus payment, prorated for the period of his service prior to the termination date; (ii) payment of 18 months’ base salary, payable over the 18 month period following the termination
date; and (iii) 18 months of continued participation in medical and life insurance benefits at active employee rates. The payment of the above shall be contingent on Mr. Coleman executing a general release of all claims against the Company. If Mr. Coleman’s employment is terminated due to his death or disability, Mr. Coleman will be entitled to receive an annual bonus payment, prorated for the period of his service prior to the termination date. Following termination of his employment for any reason, Mr. Coleman will be entitled to receive: (i) all accrued and unpaid base salary and benefits; and (ii) reimbursement for approved business expenses incurred prior to termination. Mr. Coleman is subject to confidentiality and non-disparagement covenants and, during the term of his employment and for 18 months following termination of employment, to non-competition and non-solicitation covenants.
Mr. Coleman is entitled to coverage under a directors and officers insurance policy during his employment and for six years following the termination of his employment. The Company and Mr. Coleman have entered into an Indemnification Agreement pursuant to which the Company has agreed to indemnify Mr. Coleman acting in his capacity as an officer or director in relation to any of our affairs for any loss arising or liability attaching to him by virtue of any rule of law in respect of any negligence, default, breach of duty or breach of trust of which he may be guilty in relation to the Company other than in respect of his own fraud or dishonesty.
Manoj K. Gupta. We have entered into an employment agreement with Mr. Gupta pursuant to which he serves as our Head of Investor Relations and Business Development. In 2017 we amended Mr. Gupta’s employment agreement to reflect his promotion to the additional role of Executive Vice President, Underwriting of Third Point Re USA, effective March 1, 2017. Subsequently, we amended his employment agreement to reflect his promotion to the role of President of Third Point Re USA, effective August 3, 2017. The employment agreement sets Mr. Gupta’s annual base salary at $500,000. The employment agreement specifies that Mr. Gupta is eligible for an annual bonus with a threshold, target and maximum amount of, respectively, 50%, 150% and 300% of base salary, based on achievement of such individual and corporate performance goals as may be established by the Board. Mr. Gupta has consented to a new target bonus percentage of 100% for 2016 and subsequent years.
Mr. Gupta’s employment agreement in effect through February 28, 2017 also provided that, during the term of his employment and while his principal place of employment was Bermuda, he was entitled to: (i) air travel to and from Bermuda (private air travel, when traveling with the Chief Executive Officer, or business class air travel otherwise); (ii) a housing allowance of $6,500 per month; and (iii) tax reimbursement for the taxes incurred with respect to: (a) the air travel benefit; (b) the housing benefit; and (c) the tax reimbursement payment. Pursuant to the 2017 amendment to his employment agreement, wherein his principal place of business is the U.S., Mr. Gupta is no longer entitled to the air travel, housing allowance or tax reimbursement benefits, effective March 1, 2017.Under the terms of his employment agreement, he is entitled to four weeks of paid vacation annually, and is also eligible to participate in all normal Company benefits, including the Company’s 401(k), medical, dental and life and disability insurance plans and programs in accordance with the terms of such arrangements.
Mr. Gupta’s employment term was for an initial period of three years ending March 27, 2015, and automatically extended for an additional year on the third anniversary of the employment agreement commencement date. It automatically extends for an additional year every anniversary thereafter, unless either party gives notice of non-extension at least 90 days prior to any such anniversary.
If Mr. Gupta’s employment is terminated by the Company without cause or if Mr. Gupta resigns for good reason, Mr. Gupta will be entitled to receive: (i) an annual bonus payment, prorated for the period of his service prior to the termination date; (ii) payment of 18 months’ base salary, payable over the 18 month period following the termination date; and (iii) 18 months of continued participation in medical and life insurance benefits at active employee rates. The payment of the above shall be contingent on Mr. Gupta executing a general release of all claims against the Company. If Mr. Gupta’s employment is terminated due to his death or disability, Mr. Gupta will be entitled to receive an annual bonus payment, prorated for the period of his service prior to the termination date. Following termination of his employment for any reason, Mr. Gupta will be entitled to receive: (i) all accrued and unpaid base salary and benefits; and (ii) reimbursement for approved business expenses incurred prior to termination. Mr. Gupta is subject to confidentiality and non-disparagement covenants and, during the term of his employment and for 18 months following termination of employment, to non-competition and non-solicitation covenants.
Mr. Gupta is entitled to coverage under a directors and officers insurance policy during his employment and for six
years following the termination of his employment. The Company and Mr. Gupta have entered into an Indemnification Agreement pursuant to which the Company has agreed to indemnify Mr. Gupta acting in his capacity as an officer or director in relation to any of our affairs for any loss arising or liability attaching to him by virtue of any rule of law in respect of any negligence, default, breach of duty or breach of trust of which he may be guilty in relation to the Company other than in respect of his own fraud or dishonesty.
Daniel V. Malloy. We have entered into an employment agreement with Mr. Malloy, pursuant to which he has agreed to serve as our Executive Vice President, Underwriting. The employment agreement sets Mr. Malloy’s annual base salary at $700,000. In 2017 we amended Mr. Malloy’s employment agreement to reflect his promotions to Chief Underwriting Officer of Third Point Re BDA and subsequently to Chief Executive Officer of Third Point Re BDA. The employment agreement specifies that Mr. Malloy is eligible for an annual bonus with a threshold, target and maximum amount of, respectively, 50%, 150% and 300% of base salary, based on achievement of such individual and corporate performance goals as may be established by the Board. Mr. Malloy has consented to a target bonus percentage of 185% for 2016 and subsequent years. Mr. Malloy’s employment agreement also provides that, during the term of his employment and while his principal place of employment is Bermuda, he is entitled to: (i) a housing allowance of $8,150 per month; and (ii) tax reimbursement for the taxes incurred with respect to: (a) the housing benefit; and (b) the tax reimbursement payment. Under the terms of his employment agreement, he is entitled to four weeks of paid vacation annually, and is also eligible to participate in all normal Company benefits, including the Company’s 401(k), medical, dental and life and disability insurance plans and programs in accordance with the terms of such arrangements.
Mr. Malloy’s employment term was for an initial period of three years ending January 23, 2015, at which time his employment agreement was amended to reflect a further three-year term beginning January 23, 2015, and which automatically extends for an additional year on the third anniversary of such commencement date and every anniversary thereafter, unless either party gives notice of non-extension at least 90 days prior to such anniversary.
If Mr. Malloy’s employment is terminated by the Company without cause or if Mr. Malloy resigns for good reason, Mr. Malloy will be entitled to receive: (i) an annual bonus payment, prorated for the period of his service prior to the termination date; (ii) payment of 18 months’ base salary, payable over the 18 month period following the termination date; and (iii) 18 months of continued participation in medical and life insurance benefits at active employee rates. The payment of the above shall be contingent on Mr. Malloy executing a general release of all claims against the Company. If Mr. Malloy’s employment is terminated due to his death or disability, Mr. Malloy will be entitled to receive an annual bonus payment, prorated for the period of his service prior to the termination date. Following termination of his employment for any reason, Mr. Malloy will be entitled to receive: (i) all accrued and unpaid base salary and benefits; and (ii) reimbursement for approved business expenses incurred prior to termination. Mr. Malloy is subject to confidentiality and non-disparagement covenants and, during the term of his employment and for 18 months following termination of employment, to non-competition and non-solicitation covenants.
Mr. Malloy is entitled to coverage under a directors and officers insurance policy during his employment and for six years following the termination of his employment. The Company and Mr. Malloy have entered into an Indemnification Agreement pursuant to which the Company has agreed to indemnify Mr. Malloy acting in his capacity as an officer or director in relation to any of our affairs for any loss arising or liability attaching to him by virtue of any rule of law in respect of any negligence, default, breach of duty or breach of trust of which he may be guilty in relation to the Company other than in respect of his own fraud or dishonesty.
For purposes of each of our active NEO employment agreements, “Cause” is defined in the employment agreements generally as: (i) a willful failure to perform duties or negligent performance of such duties that has caused or can result in material injury to the Company; (ii) willful and serious misconduct that has caused or can result in material injury to the Company; (iii) a willful and material violation of a Company policy that has caused or can result in material injury to the Company; (iv) a willful and material breach of any obligations under the employment agreement; (v) a failure to timely comply with a lawful and reasonable direction or instruction of the Board; or (vi) a conviction of, or plea of guilty or nolo contendre to, a felony. Notice and cure provisions apply.
“Good Reason” is defined in the employment agreements generally as: (i) a substantial diminution of duties; (ii) a reduction in base salary; or (iii) a material breach by the Company of the employment agreement. Notice and cure provisions apply.
John R. Berger.We previously entered into an employment agreement with Mr. Berger pursuant to which he served as our Chairman and Chief Executive Officer, a member of our Board and the Chief Executive Officer of our subsidiary, Third Point Re USA through March 1, 2017. In 2017 we entered into a Chairman Agreement with Mr. Berger pursuant to which he served as Chairman of our Board until December 22, 2017, and Chief Executive Officer of our subsidiary Third Point Re USA until December 22, 2017. The term of the Chairman Agreement did not extend beyond the term of his original employment agreement with the Company. Under the Chairman Agreement, which incorporated rights and benefits under his prior employment agreement, Mr. Berger was entitled to an annual base salary of $850,000 and a target bonus percentage of 210% of his base salary. During the term of his employment and Chairmanship, he was entitled to: (i) private air travel to and from Bermuda, while his principal place of employment was Bermuda; (ii) housing allowance of $10,000 per month; and (iii) tax reimbursement for the taxes incurred with respect to: (a) the air travel benefit; (b) the housing benefit; and (c) the tax reimbursement payment, as well as four weeks of paid vacation annually. He was also eligible to participate in all normal Company benefits in accordance with the terms of such arrangements.
Mr. Berger is entitled to coverage under a directors and officers insurance policy during his employment and for six years following the termination of his employment. The Company and Mr. Berger have entered into a Director and Officer Indemnification Agreement pursuant to which the Company has agreed to indemnify Mr. Berger acting in his capacity as an officer or director in relation to any of our affairs for any loss arising or liability attaching to him by virtue of any rule of law in respect of any negligence, default, breach of duty or breach of trust of which he may be guilty in relation to the Company other than in respect of his own fraud or dishonesty.
Share Incentive Plans
Each grant of share options and restricted shares to our NEOs is governed by our Share Incentive Plan or our Omnibus Incentive Plan and an option agreement or a restricted share agreement, which provide, among other things, the vesting provisions of the options and restricted shares and the option term.
Outstanding Equity Awards at Fiscal Year-End 2017
| | | | | | | | | | | | | Option Awards | | Stock Awards | | Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable(1) | Option Exercise Price ($) | Option Expiration Date | | Number of Shares or Units of Shares that Have Not Vested (#) | Market Value of Shares or Units of Shares that Have Not Vested ($)(2) | Equity Incentive Plan Awards: Number of Unearned Shares, Units, or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units, or Other Rights That Have Not Vested ($)(2) | | | | | | | | | | | | J. Robert Bredahl | 1,325,582 | — | 10.00 | 1/26/2022 | | 24,532 (3) | 359,394 | — | — | | 441,860 | — | 16.00 | 1/26/2022 | | — | — | 70,176(4) | 1,028,078 | | 441,860 | — | 20.00 | 1/26/2022 | | — | — | 61,475 (5) | 900,609 | | | | | | | | | | | | | Nicholas J. D. Campbell | 167,442 | 41,860 | 15.05 | 12/17/2023 | | 3,066 (3) | 44,917 | | | | 55,814 | 13,953 | 21.05 | 12/17/2023 | | | | 8,772(4) | 128,510 | | 55,814 | 13,953 | 25.05 | 12/17/2023 | | | | 40,984 (5) | 600,416 | | | | | | | | | | | | | Christopher S. Coleman | 167,442 | 41,860 | 10.89 | 4/1/2023 | | 12,266 (3) | 179,697 | — | — | | 55,814 | 13,953 | 16.89 | 4/1/2023 | | — | — | 43,860(4) | 642,549 | | 55,814 | 13,953 | 20.89 | 4/1/2023 | | — | — | 73,770(5) | 1,080,731 | | | | | | | | | | | | | Manoj K. Gupta | 348,837 | — | 10.00 | 4/16/2022 | | 9,199 (3) | 134,765 | — | — | | 116,279 | — | 16.00 | 4/16/2022 | | — | — | 26,316 (4) | 385,529 | | 116,279 | — | 20.00 | 4/16/2022 | | — | — | 45,082(5) | 660,451 | | | | | | | | | | | | | Daniel V. Malloy | 976,744 | — | 10.00 | 1/23/2022 | | 18,399 (3) | 269,545 | — | — | | 325,581 | — | 16.00 | 1/23/2022 | | — | — | 52,632(4) | 771,059 | | 325,581 | — | 20.00 | 1/23/2022 | | — | — | 131,148(5) | 1,921,318 | | | | | | | | | | | | | John R. Berger | 2,232,558 | — | 10.00 | 12/22/2021 | | 30,665 (3) | 449,242 | — | — | | 744,186 | — | 16.00 | 12/22/2021 | | — | — | 87,720(4) | 1,285,098 | | 744,186 | — | 20.00 | 12/22/2021 | | — | — | 61,475(5) | 900,609 |
| | | (1) | The vesting of these options is subject to satisfaction of a service condition. The service condition will be on December 17, 2018, for Mr. Campbell and on April 1, 2018, for Mr. Coleman, subject to continued employment through such date. | | | (2) | Market value of the shares that have not vested is based on the $14.65, per share closing price of the common shares on the NYSE on December 31, 2017. | | | (3) | These equity awards vested on March 1, 2018, based on performance achieved as of December 31, 2017. | | | (4) | These performance-based equity awards are not eligible to vest until March 1, 2019. These performance-based awards generally vest based on continued employment through the vesting date (except with respect to Messrs. Berger and Bredahl) and the achievement of certain financial performance measures over a three-year period ending December 31, 2018. Performance-based restricted shares that do not vest at the end of the three-year period are forfeited. Performance-based share amounts reflected in this table are based on achieving the target performance goals. | | | (5) | These performance-based equity awards are not eligible to vest until March 1, 2020. These performance-based awards generally vest based on continued employment through the vesting date (except with respect to Messrs. Berger and Bredahl) and the achievement of certain financial performance measures over a three-year period ending December 31, 2019. Performance-based restricted shares that do not vest at the end of the three-year period are forfeited. Performance-based share amounts reflected in this table are based on achieving the target performance goals. |
Option Exercises and Shares Vested | | | | | | | | | | | | | | | | | Option Awards | | Share Awards | | Name | | Number of Shares Acquired on Exercise (#) | | Value Realized on Exercise ($) | | Number of Shares Acquired on Vesting (#)(1) | | Value Realized on Vesting ($) (2) | | J. Robert Bredahl | | — |
| | — |
| | 29,739 |
| | 370,251 |
| | Nicholas J. D. Campbell | | — |
| | — |
| | 3,718 |
| | 46,289 |
| | Christopher S. Coleman | | — |
| | — |
| | 14,870 |
| | 185,132 |
| | Manoj K. Gupta | | — |
| | — |
| | 11,152 |
| | 138,842 |
| | Daniel V. Malloy | | — |
| | — |
| | 22,304 |
| | 277,685 |
| | John R. Berger | | — |
| | — |
| | 37,174 |
| | 462,816 |
|
| | | (1) | Amounts reflect shares issued under our Omnibus Incentive Plan in connection with the vesting of equity-based awards on March 1, 2017.
| (2) | The values reflected in this column were calculated by multiplying the number of shares that vested on March 1, 2017, by the closing price of $12.45 per Company share on the NYSE on the applicable vesting date.
|
Potential Payments Upon Termination or Change in Control
The information below describes and quantifies certain compensation that would have become payable to each of Messrs. Bredahl, Campbell, Coleman, Gupta and Malloy under their respective employment agreements as if the NEO’s employment had been terminated or if a change in control had occurred on December 31, 2017, given the NEO’s compensation and service levels as of such date and, where applicable, based on the fair market value of our common shares on that date. For Mr. Berger, the information below describes and quantifies the actual benefits received in connection with his resignation on December 22, 2017. These benefits set forth in the table below for our NEOs are in addition to benefits available generally to salaried employees, such as distributions under our 401(k) savings plans, disability benefits and accrued vacation benefits.
Due to the number of factors that affect the nature and amount of any benefits provided upon the events discussed below, any actual amounts paid or distributed may be different. Factors that could affect these amounts include the timing during the year of any such event, our share price and the executive’s age.
| | | | | | | | | | | | | | | | | | Name | | Termination of Employment due to Death/Disability ($) | | Termination of Employment for Cause ($) | | Termination of Employment Without Cause or for Good Reason ($) | | Termination of Employment for Retirement at Retirement Age(1) | | Change in Control ($) | | | | | | | | | | | | | | J. Robert Bredahl | | | | | | | | | | | Cash Payments(2) | | 3,360,000 |
| | — |
| | 4,560,000 |
| | — |
| | — |
| | Acceleration of Vesting of Option Awards | | — |
| | — |
| | — |
| | — |
| | — |
| Acceleration of Vesting of Performance-Based Restricted Share Awards(4) | | — |
| | — |
| | — |
| | — |
| | 1,333,672 |
| Other Benefits(5) | | — |
| | — |
| | 75,456 |
| | — |
| | — |
| | | | | | | | | | | | | | Nicholas J. D. Campbell | | | | | | | | | | | Cash Payments (2) | | 1,250,000 |
| | — |
| | 1,490,000 |
| | — |
| | — |
| | Acceleration of Vesting of Option Awards | | — |
| | — |
| | — |
| | — |
| | — |
| Acceleration of Vesting of Performance-Based Restricted Share Awards(4) | | — |
| | — |
| | — |
| | — |
| | 506,189 |
| Other Benefits (5) | | — |
| | — |
| | 19,571 |
| | — |
| | — |
| | | | | | | | | | | | | | Christopher S. Coleman | | | | | | | | | | | Cash Payments(2) | | 1,575,000 |
| | — |
| | 2,325,000 |
| | — |
| | — |
| Acceleration of Vesting of Option Awards(3) | | 157,394 |
| | — |
| | 157,394 |
| | — |
| | 157,394 |
| Acceleration of Vesting of Performance-Based Restricted Share Awards(4) | | — |
| | — |
| | — |
| | — |
| | 1,148,990 |
| Other Benefits(5) | | — |
| | — |
| | 70,028 |
| | — |
| | — |
| | | | | | | | | | | | | | Manoj K. Gupta | | | | | | | | | | | Cash Payments(2) | | 1,575,000 |
| | — |
| | 2,325,000 |
| | — |
| | — |
| | Acceleration of Vesting of Option Awards | | — |
| | — |
| | — |
| | — |
| | — |
| Acceleration of Vesting of Performance-Based Restricted Share Awards(4) | | — |
| | — |
| | — |
| | — |
| | 724,706 |
| Other Benefits(5) | | — |
| | — |
| | 50,766 |
| | — |
| | — |
| | | | | | | | | | | | | | Daniel V. Malloy | | | | | | | | | | | Cash Payments (2) | | 2,725,000 |
| | — |
| | 3,775,000 |
| | — |
| | — |
| | Acceleration of Vesting of Option Awards | | — |
| | — |
| | — |
| | — |
| | — |
| Acceleration of Vesting of Performance-Based Restricted Share Awards(4) | | — |
| | — |
| | — |
| | — |
| | 1,867,244 |
| Other Benefits (5) | | — |
| | — |
| | 71,828 |
| | — |
| | — |
| | | | | | | | | | | | |
| | (1) | None of the NEOs were eligible for retirement on December 31, 2017. |
| | (2) | Includes base salary continuation for the applicable severance period and prorated annual cash bonus, as applicable, as described below under “Severance Payments”. Because the assumed termination date is December 31, 2017, the full bonus amount is reflected. |
| | (3) | Equals the excess, if any, of $14.65 the closing price of our shares on the NYSE on December 31, 2017, over the exercise price of the accelerated options. Because the assumed termination date is December 31, 2017, in the event of a termination without cause or for good reason, there is no pro-ration and the full amount of options that vest on the second vesting date after termination, if any, are accelerated. See “Accelerated Vesting of Equity Awards on Certain Terminations of Employment or a Change in Control - Options” below. |
| | (4) | No performance-based restricted shares vest upon termination of employment as of December 31, 2017. In the event of a change in control, assumes 43% of the outstanding target number of performance shares granted in 2015, 34% of the outstanding target number of performance shares granted in 2016 and 70% of the outstanding target number of performance shares granted in 2017 would vest, based on URR performance through December 31, 2017. The number of assumed vested shares have been multiplied by $14.65, the closing price on the NYSE of our shares on December 31, 2017. See “Accelerated Vesting of Equity Awards on Certain Terminations of Employment or a Change in Control-Performance-Based Restricted Shares” below. |
| | (5) | Reflects the cost to us of continued participation in medical and life insurance benefits over the severance period. See “Severance Payments” below. |
Mr. Berger’s Separation Benefits
Effective March 1, 2017, Mr. Berger stepped down as our Chief Executive Officer and was appointed to serve as Chairman of our Board pursuant to the Chairman Agreement, and on August 3, 2017, Mr. Berger stepped down as Chief Executive Officer of Third Point Re USA. On December 22, 2017, Mr. Berger stepped down from our Board at the end of the term of his Chairman Agreement. In connection with his separation from service on December 22, 2017, pursuant to the Chairman Agreement, his outstanding vested options to purchase Company shares will remain exercisable until their normal expiration date. In addition, the vesting of his outstanding unvested performance shares will be based solely on satisfaction of the applicable performance goals without regard for his continued service. As of December 31, 2017, the estimated value of his unvested performance shares subject to continued vesting following his separation is $1,510,411, which is calculated as the assumed number of vested shares based on URR performance through December 31, 2017, multiplied by $14.65, the closing price on the NYSE of our shares on December 31, 2017. Mr. Berger was not entitled to cash severance in connection with his separation from employment or the Board, although he did remain eligible to participate in our 2017 bonus program.
Severance Payments
As noted above (see “Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards for Fiscal Year 2017 Table”), the employment agreements for each of our NEOs, other than Mr. Berger, providehimself, including recommendations for severance payments and benefits on specified termination events. Any such severance is subject to the NEO’s execution and non-revocation of a release of claims against us. Each employment agreement includes definitions of “cause” and “good reason”.
Pursuant to the terms of their employment agreements as in effect on December 31, 2017, and subject to their execution of a general release of claims, if an NEO’s employment is terminated by the Company without cause or the NEO resigns for good reason, the NEO will be entitled to receive: (i) an annual bonus payment, prorated for the period of his service prior to the termination date; (ii) payment of 18 months’ base salary payable over the 18 month period following the termination date (and in the case of Mr. Campbell, six months, payable over the six month period following the termination date); and (iii) 18 months of continued participation in medical and life insurance benefits at active employee rates (and in the case of Mr. Campbell, six months of continued participation in medical and life insurance benefits at active employee rates). For the NEOs other than Mr. Bredahl, if the NEO’s employment is terminated due to death or disability, then the NEO will be entitled to receive an annual bonus payment, prorated for the period of his service prior to the termination date. Pursuant to his employment agreement, if Mr. Bredahl is terminated by the Company without cause or if he resigns for good reason, he will not receive a pro-rated bonus. He will, however, receive an additional payment in an amount equal to his targetadjustments, annual cash bonusincentives and long-term incentive awards for the fiscal year in which the termination date occurs. Like other employees generally, following termination of employment for any reason, each NEO is entitled to receive: (i) all accruedreview, feedback and unpaid base salary and benefits; and (ii) reimbursement for approved business expenses incurred prior to termination.approval.
Accelerated Vesting of Equity Awards on Certain Terminations of Employment or a Change in Control - Options
Pursuant to the terms of the active NEOs’ Option Agreements, treatment of options upon a termination of employment is as follows:
Termination due to death or disability: Options that would have become exercisable on the vesting date immediately following the date of termination (measuring achievement of the capital condition as of the date of termination) become vested on termination; all vested options are exercisable until the earlier to occur of: (i) the first anniversary of termination; or (ii) the options’ normal expiration date.
Termination without cause or for good reason: Options that would have become exercisable on: (i) the vesting date immediately following the date of termination become exercisable immediately; and (ii) the options that would have become exercisable on the second vesting date following termination become exercisable on a pro rata basis, with the number of options that vest on termination determined by multiplying the total number of options scheduled to vest on the second vesting date by a ratio, the numerator of which is the number of days in the applicable vesting period
that occur prior to the first anniversary of the date of termination and denominator of which is 365. Any remaining unvested options will be canceled immediately. Vested options are exercisable until the earlier to occur of: (i) the first anniversary of termination (other than for Messrs. Berger and Bredahl); or (ii) the options’ normal expiration date.
Termination for cause: All options vested as of the termination date remain exercisable for three months following the termination date or, if earlier, until the options’ normal expiration date; unvested options terminate and are canceled immediately.
Termination for any other reason: Any unvested options are canceled immediately. Vested options are exercisable until the earlier to occur of: (i) ninety (90) days following termination (except with respect to Mr. Berger); (ii) the options’ normal expiration date; or (iii) by mutual agreement.
In addition, in the event we undergo a change in control, each option for which the performance conditions have been satisfied as of immediately prior to the change in control (regardless of whether the service condition has been met) will be canceled in exchange for a payment equal to the excess, if any, of the consideration received by us for a common share in the transaction over the exercise price of the option, and all other options will be immediately canceled for no consideration.
Accelerated Vesting of Equity Awards on Certain Terminations of Employment or a Change in Control - Performance-Based Restricted Shares
Pursuant to the terms of the NEOs’ Performance-Based Restricted Share Award Agreements, treatment of performance-based restricted shares is as follows:
Termination due to death or disability: Performance-based restricted shares are deemed vested to the extent that the shares would have vested any time prior to the first anniversary following the date of termination, had the NEO continued service through such anniversary, subject to the achievement of the performance goals; any remaining unvested performance-based shares are forfeited and canceled at the time of termination.
Retirement: Performance-based restricted shares are deemed vested to the extent that the performance-based shares would have vested at the normal vesting date had the NEO continued his service until such date, subject to achievement of the performance goals; any remaining unvested performance-based shares are forfeited and canceled at the time of termination.
Termination for cause: All outstanding performance-based restricted shares, whether vested or unvested, are forfeited and canceled at the time of termination.
Termination for any other reason: For NEOs other than Messrs. Berger and Bredahl, all unvested performance-based restricted shares are forfeited and canceled. For Mr. Berger, in connection with his separation from service, his performance-based restricted shares will continue to vest solely on satisfaction of applicable performance goals as if his service has continued through the vesting date. For Mr. Bredahl, upon a termination without cause or by Mr. Bredahl for good reason, his performance shares will remain outstanding through the scheduled vesting dates and will vest pro rata through the termination date and/or be forfeited based solely on satisfaction of the applicable performance goals without regard to his continued service. In addition, in the event we undergo a change in control, then the performance-based restricted shares shall vest immediately prior to the change in control to the extent of the number of performance-based restricted shares that would vest based on achievement of the performance goals determined based on performance achieved through the end of the fiscal quarter ending immediately prior to the change in control, and any remaining unvested performance-based restricted shares shall be forfeited and canceled effective immediately prior to the change in control.
Performance-based restricted shares granted in 2018 are subject to double-trigger vesting. These awards will not vest or become payable upon a change in control unless there is a termination of employment without cause or for good
reason during the period beginning 90 days prior to the change in control and ending 24 months following the change in control.
Compensation of Directors for Fiscal Year 2017
On November 6, 2013, we adopted a Director Compensation Policy that was subsequently amended and restated on May 5, 2015 and May 3, 2017. It provides that each independent director will receive annual compensation under their Director Services Agreements of $200,000 (or $235,000, in the case of the Chairman of the Audit Committee of the Board, Mr. Parkin, and $250,000 in the case of the ChairmanRole of the Compensation Consultant
Mercer, the Compensation Committee’s independent compensation consultant, reports directly to the Committee. Mercer’s advisory services primarily include:
•providing expert input on industry trends, as well as executive compensation developments from a broader perspective; •assessing the extent to which our pay levels and practices are competitively aligned with market practice; and •facilitating objective, data-based compensation decisions in succession and annual pay planning processes.
The Committee Mr. Fass), payable 50% in cashretains sole authority to hire the compensation consultant, approve its compensation, determine the nature and 50% in restricted sharesscope of its services, evaluate its performance, and terminate and replace (or supplement) its engagement with an alternative consultant at any time. The Committee has assessed the independence of the Company. The cash portioncompensation consultant pursuant to the listing standards of the retainer is paid in equal, quarterly installments,NYSE and is pro-rated for partial yearsSEC rules and concluded that no conflict of Board service. Restricted share grants are made on or aroundinterest exists that would prevent the date of the annual meeting of shareholders, with the number of shares being calculated based on the fair market value of a common share of the Company on the date of grant. Restricted share grants are also pro-rated for partial years of Board service, with the grant typically being made on the date that the director begins his or her Board service. All restricted share grants are made under the Omnibus Incentive Plan and the applicable award agreements entered into between the Company and the director, including vesting and forfeiture provisions. The restricted shares vest quarterly, subjectcompensation consultant from serving as an independent consultant to the director’s continued Board service through each vesting date.Committee. Our directors who are not independent (including those who are our employees) do not receive compensation for serving as members of our Board. Because we only pay compensation to independent directors, Messrs. Collins, Berger and Targoff were not compensated for their services as directors and were omitted from the table below. However, all directors are reimbursed for reasonable expenses incurred in attending meetings and carrying out duties as Board and Committee members, including attendance at educational seminars and other expenses directly related to the Company’s business.
| | | | | | | | | | | | | | Name | | Fees earned or paid in cash ($) | | Restricted Share Awards (1) (2) ($) | | Option Awards ($) | | Total ($) | | Steven E. Fass | | 125,000 |
| | 125,000 |
| | — | (3) | 250,000 |
| | Mary R. Hennessy | | 100,000 |
| | 100,000 |
| | — | (4) | 200,000 |
| | Rafe de la Gueronniere | | 100,000 |
| | 100,000 |
| | — | | 200,000 |
| | Neil McConachie | | 5,479 |
| (5) | — |
| | — | | 5,479 |
| | Mark Parkin | | 117,500 |
| | 117,500 |
| | — | | 235,000 |
| | Gary D. Walters (former Director) | | 34,042 |
| (6) | — |
| | — | | 34,042 |
|
| | | (1) | The restricted shares were awarded to the independent directors on May 3, 2017, under our Omnibus Incentive Plan and vested on each of the following dates July 31, 2017, October 31, 2017, January 31, 2018, and April 30, 2018.
.
| | | (2) | The amounts reported in this column are valued based on the aggregate grant date fair value computed in accordance with FASB ASC Topic 718, modified to exclude the effect of estimated forfeitures. The fair value was determined using the methodology and assumptions set forth in Note 16, “Share-Based Compensation,” to the Audited Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2017, which are hereby incorporated herein by reference. | | | (3) | As of December 31, 2017, Mr. Fass held vested and outstanding options to purchase 25,424 shares. Of these options, 15,254 had an exercise price of $10.00, 5,085 had an exercise price of $16.00 and 5,085 had an exercise price of $20.00. | | | (4) | As of December 31, 2017, Ms. Hennessy held vested and outstanding options to purchase 25,424 shares. Of these options, 15,254 had an exercise price of $10.00, 5,085 had an exercise price of $16.00 and 5,085 had an exercise price of $20.00. | | | (5) | Reflects pro-rated fees earned for December 12, 2017, to December 31, 2017. | | | (6) | Reflects pro-rated fees earned for January 1, 2017, to May 3, 2017. |
Compensation Risk Assessment
In fiscal year 2017 theThe Compensation Committee assessed our compensation policies and practices to evaluate whether they create risks that are reasonably likely to have a material adverse effect on the Company. Based on its assessment, the Compensation Committee concluded that the Company’s compensation policies and practices, in conjunction with the Company’s existing processes and controls, do not create incentives to take risks that are reasonably likely to have a material adverse effect on the Company.
| | | | | COMPENSATION COMMITTEE REPORT | | | The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis included in this proxy statement with members of management and, based on such review and discussions, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this proxy statement and incorporated by reference into our Annual Report on Form 10-K for the year ended December 31, 2022. | | THE COMPENSATION COMMITTEE Jason Robart, Chairperson Mehdi A. Mahmud Franklin (Tad) Montross IV |
COMPENSATION TABLES 2022 SUMMARY COMPENSATION TABLE | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | NAME AND PRINCIPAL POSITION | FISCAL YEAR | SALARY ($) | BONUS ($) | | SHARE AWARDS ($)(1) | | OPTION AWARDS ($)(1) | NON EQUITY INCENTIVE PLAN COMPENSATION ($)(2) | ALL OTHER COMPENSATION ($)(3) | TOTAL ($) | | Scott Egan CEO and Director | 2022 | 320,422 | 346,173 | (4) | 3,472,002 | | 1,530,000 | | 149,407 | 5,818,004 | | — | — | — | | — | | — | — | — | — | | — | — | — | | — | | — | — | — | — | Stephen Yendall
Chief Financial Officer | 2022 | 83,976 | 236,302 | (5) | 631,995 | | 436,000 | — | 868 | 1,389,141 | | — | — | — | | — | | — | — | — | — | | — | — | — | | — | | — | — | — | — | David E. Govrin Group President & Chief Underwriting Officer | 2022 | 544,808 | — | | 3,168,749 | | 1,169,501 | 910,000 | 40,500 | 5,833,558 | | 2021 | 550,000 | — | | 1,513,698 | | 168,141 | 437,800 | 58,960 | 2,728,599 | | 2020 | 550,000 | — | | 687,516 | | — | 370,000 | 56,000 | 1,663,515 | Monica Cramér Manhem
President, International Reinsurance(6) | 2022 | 517,833 | — | | 640,634 | | 170,836 | 312,335 | 144,840 | 1,786,478 | | 2021 | 532,141 | 424,107 | | 711,639 | | 193,385 | 438,664 | 173,511 | 2,473,447 | | 2020 | — | — | | — | | — | — | — | — | Stuart Liddell Global President, Accident & Health | 2022 | 411,854 | — | | 277,419 | | — | 1,446,043 | 57,807 | 2,193,123 | | — | — | — | | — | | — | — | — | — | | — | — | — | | — | | — | — | — | — | Siddhartha Sankaran Former CEO | 2022 | 406,209 | — | | 8,253,486 | | 1,334,914 | — | 4,030,500 | 14,025,109 | | 2021 | 837,179 | — | | 9,062,488 | | 1,795,302 | 597,000 | 82,282 | 12,374,251 | | — | — | — | | — | | — | — | — | — | Daniel V. Malloy
Former Interim CEO | 2022 | 748,654 | 549,231 | (7) | 2,928,312 | | 222,831 | — | 1,110,628 | 5,559,656 | | 2021 | 850,000 | — | | 2,069,999 | | 303,161 | 676,600 | 268,505 | 4,168,265 | | 2020 | 818,750 | — | | 1,487,518 | | — | 700,000 | 248,242 | 3,254,510 | David W. Junius Former Chief Financial Officer | 2022 | 425,368 | — | | 749,999 | | 200,000 | — | 30,500 | 1,405,867 | | 2021 | 500,000 | — | | 749,991 | | 203,804 | 298,500 | 50,000 | 1,802,295 | | 2020 | 125,000 | — | | 1,499,998 | | — | 93,750 | 134,125 | 1,852,873 | Prashanth Gangu Former Chief Operating Officer | 2022 | 280,559 | — | | 1,124,999 | | 299,999 | — | 2,228,476 | 3,934,033 | | 2021 | 500,000 | 1,000,000 | | 3,124,978 | | 305,709 | 477,600 | 54,207 | 5,462,494 | | — | — | — | | — | | — | — | — | — | Vievette Henry Former Chief People Officer | 2022 | 344,904 | — | | 948,154 | | 85,000 | — | 1,433,000 | 2,811,058 | | — | — | — | | — | | — | — | — | — | | — | — | — | | — | | — | — | — | — |
(1)See “Compensation Discussion and Analysis―Elements of our Executive Compensation Program―Long-Term Incentives.” The amounts reported in this column for 2022 are valued based on the aggregate grant date fair value computed in accordance with FASB ASC Topic 718, modified to exclude the effect of estimated forfeitures and, with respect to awards subject to performance-based vesting conditions, probable achievement of the performance goals at the time of grant. The fair value was determined using the methodology and assumptions set forth in Note 18, “Share-Based Compensation and Employee Benefit Plans,” to the Audited Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2022, which are hereby incorporated herein by reference. In addition, in the case of Mr. Sankaran, Mr. Malloy, and Ms. Henry, this amount includes the incremental fair value associated with the modification of their outstanding equity awards to provide for accelerated or continued vesting in connection with their terminations of employment as follows: Mr. Sankaran, $6,025,898; Mr. Malloy, $2,151,139; and Ms. Henry, $629,404. (2) The amounts in this column reflect the annual cash incentive paid to each of our NEOs for the 2022 fiscal year as described above. See “Compensation Discussion and Analysis—Elements of our Executive Compensation Program—Annual Cash Incentive Pay.” (3)The following table sets forth the compensation reflected in the “All Other Compensation” column for the fiscal year ended December 31, 2022. ALL OTHER COMPENSATION | | | | | | | | | | | | | | | | | | | NAME | COMPANY CONTRIBUTIONS TO RETIREMENT PLANS(a) ($) | REIMBURSED HOUSING EXPENSES(b) ($) | TAX REIMBURSEMENTS(c) ($) | OTHER(d) ($) | TOTAL OTHER COMPENSATION ($) | | Scott Egan | 34,237 | | | 115,170 | 149,407 | | Stephen Yendall | | | | 868 | 868 | | David E. Govrin | 30,500 | | | 10,000 | 40,500 | | Monica Cramér Manhem | 121,070 | | | 23,770 | 144,840 | | Stuart Liddell | 49,422 | | | 8,385 | 57,807 | | Siddhartha Sankaran | 30,500 | | | 4,000,000 | 4,030,500 | | Daniel V. Malloy | 40,500 | 40,750 | 5,000 | 1,024,378 | 1,110,628 | | David W. Junius | 30,500 | | | — | 30,500 | | Prashanth Gangu | 28,056 | | | 2,200,420 | 2,228,476 | | Vievette Henry | 30,500 | | | 1,402,500 | 1,433,000 |
(a)Represents Company contributions to retirement plans. (b)Mr. Malloy was entitled to a housing allowance under the terms of his employment agreement. This represents amounts paid by the Company for housing and utilities, including electricity and cable services. (c)Represents payment of the employee portion of Bermuda payroll taxes and social insurance on behalf of Bermuda-based NEOs. (d)For Mr. Egan, this amount reflects reimbursed travel benefits, health and life insurance benefits, and reimbursed legal fees incurred in connection with the negotiation and execution of his employment offer. For Messrs. Yendall and Liddell, this amount represents medical and life insurance benefits. For Mr. Govrin, this amount reflects reimbursed legal fees incurred in connection with the negotiation and execution of his employment letter. For Ms. Cramér Manhem, this amount represents car benefit, health insurance benefits and BE Re board income. For Mr. Sankaran, reflects Mr. Sankaran’s lump-sum severance payment of $4,000,000. For Mr. Malloy, this amount represents reimbursed travel benefits, personal tax preparation, medical and life insurance benefits, and a severance payment of $897,869. For Mr. Gangu, this amount represents Mr. Gangu’s lump-sum severance payment of $2,200,000 and reimbursement for parking fees. For Ms. Henry, this amount represents severance payments of $1,374,500 and reimbursement for legal fees of $28,000 incurred in connection with the negotiation and execution of her Settlement Agreement. (4)Represents the guaranteed portion of the annual incentive bonus paid to Mr. Egan pursuant to the terms of his employment agreement.
(5)Represents a one-time sign on bonus awarded to Mr. Yendall upon commencement of employment, which was paid to Mr. Yendall in March 2023. Mr. Yendall is a Canadian resident and is paid in Canadian Dollars. The amounts reflected in this table for Mr. Yendall have been converted to U.S. dollars using the December 31, 2022 spot rate of 0.738. (6)Ms. Cramér Manhem is a Swedish resident and is paid in Swedish Krona. The amounts reflected in this table for Ms. Cramér Manhem have been converted to U.S. dollars using the December 31, 2021 spot rate of 9.07. (7)For Mr. Malloy, includes the bonus paid to Mr. Malloy for his services as Interim Chief Executive Officer of $425,000 and the catch-up payment, as described in the “Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards for Fiscal Year 2022 Table” below.
GRANTS OF PLAN-BASED AWARDS FOR FISCAL YEAR 2022 The following table provides information concerning awards granted to the NEOs in the last fiscal year: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | NAME | PLAN | GRANT DATE | ESTIMATED FUTURE PAYOUTS UNDER NON-EQUITY INCENTIVE PLAN AWARDS(1) | ESTIMATED FUTURE PAYOUTS UNDER EQUITY INCENTIVE PLAN AWARDS(2) | ALL OTHER SHARE AWARDS: NUMBER OF SHARES OR UNITS(3) (#) | ALL OTHER OPTIONS AWARDS: NUMBER OF SECURITIES UNDERLYING OPTIONS (4) (#) | EXERCISE OR BASE PRICE OF OPTION AWARDS ($) | GRANT DATE FAIR VALUE OF STOCK AND OPTION AWARDS(5) ($) | THRESHOLD ($) | TARGET ($) | MAXIMUM(5) ($) | THRESHOLD (#) | TARGET (#) | MAXIMUM (#) | | Scott Egan | Annual Incentive Plan | | | 1,597,721 | 2,476,467 | | | | | | | | | 2013 Omnibus Incentive Plan | 9/21/2022 | | | | | | | 400,000 | | | 1,972,000 | | 2013 Omnibus Incentive Plan | 12/12/2022 | | | | | | | 304,260 | | | 1,500,002 | | 2013 Omnibus Incentive Plan | 9/21/2022 | | | | | 300,000 | | | | 6.00 | 525,000 | | 2013 Omnibus Incentive Plan | 10/28/2022 | | | | | 300,000 | | | | 8.00 | 486,000 | | 2013 Omnibus Incentive Plan | 9/21/2022 | | | | | 300,000 | | | | 10.00 | 519,000 | | Stephen Yendall | Annual Incentive Plan | | | — | — | | | | | | | | | 2013 Omnibus Incentive Plan | 11/15/2022 | | | | | | | 21,854 | | | 131,998 | | 2013 Omnibus Incentive Plan | 11/15/2022 | | | | | | | 82,781 | | | 499,997 | | 2013 Omnibus Incentive Plan | 10/31/2022 | | | | | 100,000 | | | | 6.42 | 241,000 | | 2013 Omnibus Incentive Plan | 10/31/2022 | | | | | 100,000 | | | | 6.42 | 195,000 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | David E. Govrin | Annual Incentive Plan | | | 650,000 | 1,007,500 | | | | | | | | | 2013 Omnibus Incentive Plan | 4/6/2022 | | | | | | | | 71,121 | 6.76 | 165,001 | | 2013 Omnibus Incentive Plan | 10/31/2022 | | | | | 350,000 | | | | 6.42 | 1,004,500 | | 2013 Omnibus Incentive Plan | 4/6/2022 | | | | | | | 88,519 | | | 618,748 | | 2013 Omnibus Incentive Plan | 11/30/2022 | | | | | | | 114,449 | | | 799,999 | | 2013 Omnibus Incentive Plan | 11/30/2022 | | | | | | | 310,284 | | | 1,750,002 | | Monica Cramér Manhem | Annual Incentive Plan | | | 480,515 | 744,798 | | | | | | | | | 2013 Omnibus Incentive Plan | 4/6/2022 | | | | | | | 91,650 | | | 640,634 | | 2013 Omnibus Incentive Plan | 4/6/2022 | | | | | | | | 73,636 | 6.76 | 170,836 | | Stuart Liddell | Bonus Agreement | | | 1,446,043 | | | | | | | | | | 2013 Omnibus Incentive Plan | 4/6/2022 | | | | | | | 39,688 | | | 277,419 | | Siddhartha Sankaran | Annual Incentive Plan | | | 750,000 | 1,162,500 | | | | | | | | | 2013 Omnibus Incentive Plan | 4/6/2022 | | | | | | | 509,657 | | | 3,562,502 | 2013 Omnibus Incentive Plan(6) | 5/16/2022 | | | | | | | 291,616 | | | 1,738,031 | 2013 Omnibus Incentive Plan(6) | 5/16/2022 | | | | | | | 419,047 | | | 2,497,520 | 2013 Omnibus Incentive Plan(6) | 5/16/2022 | | | | | | | 76,797 | | | 455,433 | | 2013 Omnibus Incentive Plan | 4/6/2022 | | | | | | | | 409,483 | 6.76 | 950,000 | 2013 Omnibus Incentive Plan(6) | 5/16/2022 | | | | | | | | 409,483 | 6.76 | 384,914 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Daniel V. Malloy | Annual Incentive Plan | | | | | | | | | | | | | 2013 Omnibus Incentive Plan | 5/17/2022 | | | | | 163,935 | | | | | 1,000,004 | | 2013 Omnibus Incentive Plan | 4/6/2022 | | | | | | | 12,281 | | | 83,020 | | 2013 Omnibus Incentive Plan | 4/6/2022 | | | | | | | 1,017 | | | 6,875 | | 2013 Omnibus Incentive Plan | 4/6/2022 | | | | | | | 151,257 | | | 1,022,497 | | 2013 Omnibus Incentive Plan | 4/6/2022 | | | | | | | | 73,785 | 10.36 | 222,831 | | 2013 Omnibus Incentive Plan | 4/6/2022 | | | | | 65,687 | | | | | 444,044 | | 2013 Omnibus Incentive Plan | 4/6/2022 | | | | | | | 35,895 | | | 371,872 | | David W. Junius | Annual Incentive Plan | | | 500,000 | 775,000 | | | | | | | | | 2013 Omnibus Incentive Plan | 4/6/2022 | | | | | | | 107,296 | | | 749,999 | | 2013 Omnibus Incentive Plan | 4/6/2022 | | | | | | | | 86,207 | 6.76 | 200,000 | | Prashanth Gangu | Annual Incentive Plan | | | 600,000 | 930,000 | | | | | | | | | 2013 Omnibus Incentive Plan | 4/6/2022 | | | | | | | 160,944 | | | 1,124,999 | | 2013 Omnibus Incentive Plan | 4/6/2022 | | | | | | | | 129,310 | 6.76 | 299,999 | | Vievette Henry | Annual Incentive Plan | | | 276,250 | 428,188 | | | | | | | | | 2013 Omnibus Incentive Plan | 4/6/2022 | | | | | | | 45,601 | | | 318,751 | | 2013 Omnibus Incentive Plan | 4/6/2022 | | | | | | | | 36,638 | 6.76 | 85,000 | 2013 Omnibus Incentive Plan(6) | 10/22/2022 | | | | | | | 45,601 | | | 258,102 | | 2013 Omnibus Incentive Plan | 10/22/2022 | | | | | | | 6,836 | | | 38,692 | 2013 Omnibus Incentive Plan(6) | 10/22/2022 | | | | | | | 58,765 | | | 332,610 |
(1)A discussion of the 2022 annual cash incentives, including awards earned for 2022 and paid in March 2023 can be found under “Compensation Discussion and Analysis—Elements of our Executive Compensation Program—Annual Cash Incentive Pay.” (2)Mr. Egan was granted one tranche of options in connection with his commencement of employment and was eligible to receive two additional tranches of options. The first tranche represents a grant of fully vested options to purchase 300,000 common shares of the Company with an exercise price of $6.00 per share. Mr. Egan was granted the second tranche of options to purchase 300,000 shares with an exercise price of $8.00 on October 28, 2022, once the closing price of the Company’s common shares reached $6.00 per share on the NYSE. This second tranche will vest and become exercisable only if and when the Company’s stock price exceeds the stated exercise prices. Mr. Yendall was granted (i) options to purchase 100,000 common shares of the Company with an exercise price of $6.42 USD, which shall vest and become exercisable when the closing price of Company’s common shares reaches $8.00 USD and (ii) options to purchase 100,000 common shares of the Company with an exercise price of $6.42 USD, which shall vest and become exercisable when the closing price of the Company’s common shares reaches $10.00 USD. Mr. Govrin was granted options to purchase 350,000 common shares of the Company with an exercise price of $6.42, which will vest and become exercisable when the closing price of the Company’s common shares reaches $8.00. The restricted shares granted to Mr. Malloy vest upon the start date of Mr. Malloy’s successor (or upon an earlier qualifying termination). (3)Time-based restricted share awards made pursuant to the Omnibus Incentive Plan in April 2022 vest in equal annual installments over three years based on continued employment. Time-based restricted share units granted on September 21, 2022 to Mr. Egan vest in full on September 21, 2023. Time-based restricted share units granted on December 12, 2022 to Mr. Egan vest in equal installments over three years based on continued employment. The 21,854 time-based restricted share units granted on November 15, 2022 to Mr. Yendall vest in three equal installments on November 15, 2022, November 15, 2023, and November 15, 2024, subject to Mr. Yendall’s continued services to the Company through each such vesting date. The 82,791 time-based restricted share units granted on November 15, 2022 to Mr. Yendall vest in equal installments over three years based on continued employment. The 114,449 time-based restricted share units granted on November 30, 2022, vest in equal installments on April 6, 2023, April 6, 2024 and April 6, 2025 based on continued employment. The 310,284 time-based restricted share units granted on to Mr. Govrin on November 30, 2022 vest in equal installments over three years based on continued employment. The 163,935 restricted shares granted to Mr. Malloy on May 17, 2022 were granted subject to vesting upon the start date of Mr. Malloy’s successor to the position of Chief Executive Officer (or, if earlier, a termination without cause or resignation for good reason). For a more detailed discussion of the 2022 restricted share and restricted share unit awards, see “Compensation Discussion and Analysis—Elements of our Executive Compensation Program—Long-Term Incentives.” Other than the entry for Mr. Sankaran in May 2022, options made pursuant to the Omnibus Incentive Plan in April 2022 vest in April 2025. The amount reported for Mr. Sankaran in May 2022 represents the number of options modified by his resignation letter to provide that the award would remain outstanding and continue to vest, with acceleration on the second anniversary of the termination date. (4)The amounts reported in this column are valued based on the aggregate grant date fair value computed in accordance with FASB ASC Topic 718, modified to exclude the effect of estimated forfeitures and, for the performance-based restricted shares and option awards, based on the probable outcome of such performance criteria. In the case of Mr. Sankaran, Mr. Malloy and Ms. Henry, this amount also includes the value associated with the modification of his or her outstanding option awards to provide for continued vesting following his or her termination of employment. The fair value was determined using the methodology and assumptions set forth in Note 18, “Share-Based Compensation and Employee Benefit Plans” to the Audited Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2022, which are hereby incorporated herein by reference.
(5)None of our NEOs have a stated maximum annual cash incentive in their employment agreements; however, the maximum annual cash incentive pool funding for each of our NEOs in 2022 (other than Mr. Liddell) was 155% of base salaries. The annual cash incentive pool under our annual cash incentive plan for 2022 is allocated to individual employees by the Compensation Committee upon the recommendation of the Chief Executive Officer based on the individual’s target annual cash incentive, how each NEO performed relative to their individual annual goals, the Company’s performance-based specified metrics and as compared to comparable positions in the Peer Group data, such allocations not to exceed $5 million. See “Compensation Discussion and Analysis—Elements of our Executive Compensation Program—Annual Cash Incentive Pay” for a description of the 2022 annual cash incentive plan, as well as Mr. Liddell’s cash incentive arrangement. (6)Awards reflected in these rows for Messrs. Sankaran and Malloy and Ms. Henry reflect the incremental fair value associated with modifications to outstanding equity awards in connection with each such NEO’s termination of employment in order to provide either for accelerated or continued vesting of those awards. Further details of these modifications are described in “2022 Potential Payments Upon Termination or Change in Control” below.
NARRATIVE DISCLOSURE TO SUMMARY COMPENSATION TABLE AND GRANTS OF PLAN-BASED AWARDS FOR FISCAL YEAR 2022 TABLE Employment Agreements
Each of the NEOs was party to an employment agreement or offer letter agreement with the Company or one of its subsidiaries during 2022 (the “Employment Agreements”). Generally speaking, these Employment Agreements describe the basic terms of the NEO’s employment, including his or her start date, starting salary, annual incentive target (or in the case of Mr. Liddell, annual bonus arrangement) and long-term incentive award target. For those NEOs who entered into an Employment Agreement during 2022, the principal terms (other than severance) of such Employment Agreements are discussed below. Please see the “Potential Payments Upon a Termination or Change in Control” section of this proxy statement for a summary of the severance terms under the Employment Agreements for our then-serving NEOs as of December 31, 2022, as well as a description of the settlement agreements entered into with Messrs. Sankaran, Junius and Gangu and Ms. Henry during 2022.
SCOTT EGAN. On September 6, 2022, the Company entered into an employment letter agreement with Mr. Egan. Pursuant to this agreement, Mr. Egan is entitled to receive (a) an annual base salary of £945,000, (b) a target annual bonus opportunity of 140% of his base salary, and (c) starting with the 2023 regular award cycle, an annual long-term incentive award having a target grant-date value equal to 350% of his base salary. For 2022 and 2023, Mr. Egan’s annual bonus will be guaranteed at 100% of his target amount, pro-rated with respect to 2022 based on the portion of the year during which Mr. Egan was employed. As an inducement for Mr. Egan to accept his employment with the Company, Mr. Egan was granted an award of 400,000 restricted share units covering Company common shares on September 21, 2022 (the “New Hire RSUs”). The New Hire RSUs will cliff vest on September 21, 2023, subject to Mr. Egan’s continued services to the Company through the vesting date or earlier qualifying termination. In addition, the employment letter agreement provides for the grant of three tranches of options (with 300,000 options in each tranche). The first tranche was granted on Mr. Egan’s start date with an exercise price of $6.00 per share, and would only become exercisable when the closing stock price of the Company’s stock is $6.00, subject to continued employment through such date. The employment letter agreement provides that the second and third tranches of options will have exercise prices of $8.00 and $10.00, respectively, will be granted when the closing trading price of the Company’s stock reaches $6.00 and $8.00, respectively, and become exercisable when the closing trading price of the Company’s stock reaches $8.00 and $10.00, respectively, subject to Mr. Egan’s continued employment through the applicable date or earlier qualifying termination.The employment letter agreement also provides that Mr. Egan will be eligible to participate in the Company’s retirement, health and other benefit plans which are provided to similarly-situated executives of the Company, and that the Company shall reimburse Mr. Egan for legal fees incurred in connection with the negotiation, preparation and execution of the employment letter agreement, up to a maximum of £21,500.
STEPHEN YENDALL. Mr. Yendall began serving as Chief Financial Officer of the Company on October 31, 2022.Mr. Yendall entered into an employment letter with the Company on October 7, 2022, which provides that Mr. Yendall is entitled to receive (a) an annual base salary of $682,320 CAD, (b) a target annual bonus opportunity of 100% of his base salary, and (c) starting with the 2023 regular award cycle, an annual long-term incentive award having a value equal to 200% of his base salary. For 2023, Mr. Yendall’s annual bonus will be guaranteed at 100% of his target amount. The employment letter also provided for the payment of a lump sum sign-on bonus of $320,000 CAD, which was paid in March 2023. As an inducement for Mr. Yendall to accept his employment with the Company, Mr. Yendall was granted (i) an award of restricted share units covering Company common shares with a grant date value of $132,000 USD (the “Make Whole RSUs”) and (ii) an award of restricted share units covering
Company common shares with a grant date value of $500,000 USD (the “New Hire RSUs”). The Make Whole RSUs will vest ratably in three equal installments on November 15, 2022, November 15, 2023, and November 15, 2024, subject to Mr. Yendall’s continued services to the Company through each such vesting date or earlier qualifying termination. The New Hire RSUs will vest ratably on the first, second and third anniversaries of October 31, 2022, subject to Mr. Yendall’s continued services to the Company through each such vesting date or earlier qualifying termination. In addition, on October 31, 2022, Mr. Yendall was granted (i) options to purchase 100,000 common shares of the Company with an exercise price of $8.00 USD, which shall vest and become exercisable when the closing price of Company’s common shares reaches $8.00 USD and (ii) options to purchase 100,000 common shares of the Company with an exercise price of $10.00 USD, which shall vest and become exercisable when the closing price of the Company’s common shares reaches $10.00 USD. The employment letter also provides for tax equalization benefits, as well as eligibility to participate in group benefit plans on the same terms as other similarly-situated employees.
DAVID E. GOVRIN. In connection with Mr. Govrin’s appointment as Group President and Chief Underwriting Officer of the Company, Mr. Govrin and the Company entered into an employment letter dated as of October 31, 2022 setting forth the terms and conditions of his continued employment with the Company. Pursuant to his employment letter, Mr. Govrin is entitled to receive (i) an annual base salary of $650,000, (ii) a target annual bonus opportunity of 100% of his base salary, and (iii) beginning with the 2023 regular award cycle, an annual long-term incentive award having a target grant value equal to 250% of his base salary. The employment letter provides for the grant of (i) a restricted share unit award with a grant date value of $800,000, with the number of restricted share units subject to the award determined based on the Company’s closing share price on April 5, 2022 (the “Make Whole RSUs”), and (ii) a restricted share unit award with a grant date value of $1,750,000 (the “Sign-On RSUs”), with the number of restricted share units subject to the award determined based on a share price of $5.64. The Make Whole RSUs will vest in three equal installments on April 6, 2023, April 6, 2024, and April 6, 2025, subject to Mr. Govrin’s continued service to the Company through each vesting date or earlier qualifying termination. The Sign-On RSUs will vest ratably on the first, second and third anniversaries of the grant date, subject to Mr. Govrin’s continued service to the Company through each vesting date or earlier qualifying termination. In addition, the employment letter provides that Mr. Govrin will be granted a stock option award to purchase 350,000 common shares of the Company with an exercise price equal to fair market value of the Company’s common shares on the date of grant, which will vest and become exercisable when the closing price of the Company’s common shares reaches $8.00. The employment letter also provides for continued eligibility to participate in all retirement, health and other benefit plans which are provided to similarly-situated executives, as well as reimbursement for legal fees incurred by Mr. Govrin in the negotiation, preparation, and execution of the offer letter (up to a maximum reimbursement amount of $10,000).
Daniel V. Malloy. In connection with Mr. Malloy’s appointment to the position of Interim CEO, Mr. Malloy entered into an offer letter agreement with the Company dated as of June 1, 2022. Pursuant to this agreement, Mr. Malloy was entitled to receive (a) a base salary of $850,000 per year, provided that if he earned less than $425,000 in base salary at the time that his service as Interim CEO ended, he would be entitled to a “catch-up” payment at the time of his termination of employment such that the sum of his earned base salary plus the catch-up payment equals $425,000, (b) a target cash bonus opportunity for 2022 of $425,000 (provided that Mr. Malloy was entitled to a minimum bonus payment of $425,000 for the 2022 fiscal year even if he provided services as Interim CEO for six months or less, and if his services extended for more than six months, his target cash annual bonus opportunity would be 100% of his base salary, pro-rated for the actual term of his services as Interim CEO), and (c) an award of 163,935 restricted common shares of the Company, which shares were granted subject to vesting upon the earliest of (i) the start date of a permanent CEO, and (ii) a termination of Mr. Malloy’s employment as Interim CEO without cause or a resignation by Mr. Malloy for good reason (each as defined in the offer letter agreement), and (iii) May 17, 2023. In addition, the offer letter agreement provides for eligibility to participate in employee benefit plans on the same terms as similarly-situated employees, housing or reimbursement for housing in Bermuda through Jun 30, 2023, with a maximum rent of $8,150 per month plus payment or reimbursement of utilities, and an increased medical expense reimbursement benefit.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END 2022
The following table contains information regarding unexercised options, restricted shares and RSUs that were outstanding as of December 31, 2022 and held by the NEOs (other than Messrs. Junius and Gangu each of whom had no unexercised options, restricted shares or RSUs outstanding as of December 31, 2022). Market value of the shares that have not vested is based on the $5.90 per share closing price of the Company’s common shares on the NYSE on December 30, 2022. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | OPTION AWARDS | | STOCK AWARDS | | Grant Date | NUMBER OF SECURITIES UNDERLYING UNEXERCISED OPTIONS (#) EXERCISABLE | | NUMBER OF SECURITIES UNDERLYING UNEXERCISED OPTIONS (#) UNEXERCISABLE | | EQUITY INCENTIVE PLAN AWARDS: NUMBER OF SECURITIES UNDERLYING UNEXERCISED UNEARNED OPTIONS (#)(1) | OPTION EXERCISE PRICE ($) | OPTION EXPIRATION DATE | | NUMBER OF SHARES OR UNITS OF SHARES THAT HAVE NOT VESTED (#) | | MARKET VALUE OF SHARES OR UNITS OF SHARES THAT HAVE NOT VESTED ($) | EQUITY INCENTIVE PLAN AWARDS: NUMBER OF UNEARNED SHARES, UNITS OR OTHER RIGHTS THAT HAVE NOT VESTED (#) | | EQUITY INCENTIVE PLAN AWARDS: MARKET OR PAYOUT VALUE OF UNEARNED SHARES, UNITS OR OTHER RIGHTS THAT HAVE NOT VESTED ($) | | Scott Egan | 9/21/2022 | 300,000 | (2) | — | | — | 6.00 | 9/21/2029 | | | | | | | | | 9/21/2022 | — | | — | | 300,000 | 8.00 | 9/21/2029 | | | | | | | | | 9/21/2022 | | | | | | | | | 400,000 | (3) | 2,360,000 | | | | | 12/12/2022 | | | | | | | | | 304,260 | (4) | 1,795,134 | | | | | Stephen Yendall | 10/31/2022 | — | | — | | 100,000 | 8.00 | 10/31/2029 | | | | | | | | | 10/31/2022 | — | | — | | 100,000 | 10.00 | 10/31/2029 | | | | | | | | | 11/15/2022 | | | | | | | | | 14,569 | (5) | 85,957 | | | | | 11/15/2022 | | | | | | | | | 82,781 | (6) | 488,408 | | | | | David E. Govrin | 4/14/2021 | — | | 40,923 | (7) | — | 10.36 | 4/14/2031 | | | | | | | | | 4/6/2022 | — | | 71,121 | (8) | — | 6.76 | 4/6/2032 | | | | | | | | | 10/31/2022 | — | | | | 350,000 | 6.42 | 10/31/2029 | | | | | | | | | 4/14/2021 | | | | | | | | | 6,570 | (9) | 38,763 | 19,908 | (10) | 117,457 | | 4/19/2021 | | | | | | | | | 32,174 | (11) | 189,827 | | | | | 4/14/2021 | | | | | | | | | 64,647 | (12) | 381,417 | | | | | 4/14/2021 | | | | | | | | | 13,272 | (13) | 78,305 | | | | | 4/6/2022 | | | | | | | | | 88,519 | (14) | 522,262 | | | | | 11/30/2022 | | | | | | | | | 114,449 | (14) | 675,249 | | | | | 11/30/2022 | | | | | | | | | 310,284 | (15) | 1,830,676 | | | | | 2/27/2020 | | | | | | | | | 6,031 | (16) | 35,583 | | | | | Monica Cramér Manhem | 4/14/2021 | — | | 47,067 | (17) | — | 10.36 | 4/14/2031 | | | | | | | | | 4/6/2022 | — | | 73,636 | (18) | — | 6.76 | 4/6/2032 | | | | | | | | | 2/26/2021 | | | | | | | | | 50,144 | (19) | 295,850 | | | | | 4/14/2021 | | | | | | | | | 7,556 | (9) | 44,580 | 22,897 | (10) | 135,092 | | 4/14/2021 | | | | | | | | | 15,265 | (20) | 90,064 | | | | | 4/6/2022 | | | | | | | | | 91,650 | (21) | 540,735 | | | | | 2/26/2021 | | | | | | | | | 61,572 | (22) | 363,275 | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Stuart Liddell | 4/14/2021 | | | | | | | | | 2,167 | (9) | 12,785 | 6,568 | (10) | 38,751 | | 4/14/2021 | | | | | | | | | 8,757 | (23) | 51,666 | | | | | 2/26/2021 | | | | | | | | | 16,749 | (24) | 98,819 | | | | | 4/6/2022 | | | | | | | | | 39,688 | (25) | 234,159 | | | | | Siddhartha Sankaran | 4/6/2022 | — | | 409,483 | (26) | — | 6.76 | 4/6/2032 | | | | | | | | | 8/6/2020 | | | | | | | | | 291,616 | (27) | 1,720,534 | | | | | 2/26/2021 | | | | | | | | | 419,047 | (28) | 2,472,377 | | | | | 4/14/2021 | | | | | | | | | 76,415 | (29) | 450,849 | | | | | Daniel V. Malloy | 4/14/2021 | — | | 73,785 | (30) | — | 10.36 | 4/14/2031 | | | | | | | | | 4/14/2021 | | | | | | | | | 11,846 | (9) | 69,891 | 35,895 | (10) | 211,781 | | 4/14/2021 | | | | | | | | | 151,257 | (31) | 892,416 | | | | | 5/5/2020 | | | | | | | | | 1,017 | (32) | 6,000 | | | | | 2/27/2020 | | | | | | | | | 12,281 | (32) | 72,458 | | | | | Vievette Henry | 3/1/2021 | | | | | | | | | 58,765 | (33) | 346,714 | | | | | 4/14/2021 | | | | | | | | | 6,836 | (34) | 40,332 | | | | | 4/6/2022 | | | | | | | | | 45,601 | (35) | 269,046 | | | |
(1)Represents options to purchase common shares that will vest and become exercisable when the Company’s stock price exceeds the stated exercise price.
(2)Represents fully vested options to purchase common shares.
(3)Represents time-based restricted share units that will vest in full on September 21, 2023, subject to the executive’s continued employment through each such vesting date.
(4)Represents time-based restricted share units that will vest in equal annual installments on December 12, 2023, December 12, 2024 and December 12, 2025, subject to the executive’s continued employment through each such vesting date.
(5)Represents time-based restricted share units that will vest in equal installments on November 15, 2023 and November 15, 2024, subject to the executive’s continued employment through each such vesting date.
(6)Represents time-based restricted share units that will vest in equal installments on November 15, 2023, November 15, 2024, and November 15, 2025, subject to the executive’s continued employment through each such vesting date.
(7)Represents options to purchase common shares that will vest in full on April 14, 2024, subject to the executive’s continued employment through each such vesting date.
(8)Represents options to purchase common shares that will vest in full on April 6, 2025, subject to the executive’s continued employment through each such vesting date.
(9)Represents performance-based restricted share units that have been earned, based on the achievement of a TBVPS performance goal, which the Compensation Committee certified at (i) 66% of target for the first performance year of the 2021-2023 performance period and (ii) 0% of target for the second year of the 2021-2023 performance period, and will vest on April 14, 2024.
(10)Represents unearned performance-based restricted share units that will vest on April 14, 2024, based on the achievement of a TBVPS performance goal. Amounts reported are based on the target performance level for the final year of the 2021-2023 performance period.
(11)Represents time-based restricted share units that will vest in equal installments on March 1, 2023 and March 1, 2024, subject to the executive’s continued employment through each such vesting date.
(12)Represents time-based restricted shares that will vest as follows: 27,139 will vest on March 1, 2023; 10,370 will vest on April 14, 2023; and 27,138 will vest on April 14, 2024, in each case, subject to the executive’s continued employment through each such vesting date.
(13)Represents time-based restricted share units that will vest in equal installments on April 14, 2023 and April 14, 2024, subject to the executive’s continued employment through each such vesting date.
(14)Represents time-based restricted share units that will vest in equal installments on April 6, 2023, April 6, 2024, and April 6, 2025, subject to the executive’s continued employment through each such vesting date.
(15)Represents time-based restricted share units that will vest in equal installments on November 30, 2023, November 30, 2024, and November 30, 2025, subject to the executive’s continued employment through each such vesting date.
(16)Represents time-based restricted shares that will vest in full on February 27, 2023, subject to the executive’s continued employment through such vesting date.
(17)Represents options to purchase common shares that will vest in full on April 14, 2024, subject to the executive’s continued employment through each such vesting date.
(18)Represents options to purchase common shares that will vest in full on April 6, 2025, subject to the executive’s continued employment through each such vesting date.
(19)Represents time-based restricted share units that vested in full on February 27, 2023. (20)Represents time-based restricted share units that will vest in equal installments on April 14, 2022, April 14, 2023 and April 14, 2024, subject to the executive’s continued employment through each such vesting date.
(21)Represents time-based restricted share units that will vest in equal installments on April 6, 2023, April 6, 2024, and April 6, 2025, subject to the executive’s continued employment through each such vesting date.
(22)Represents time-based restricted share units that will vest in full on January 1, 2024, subject to the executive’s continued employment through such vesting date.
(23)Represents time-based restricted share units that will vest in full on April 14, 2024, subject to the executive’s continued employment through such vesting date.
(24)Represents time-based restricted share units that vested in full on February 27, 2023.
(25)Represents time-based restricted share units that will vest in equal installments on April 6, 2023, April 6, 2024, and April 6, 2025, subject to the executive’s continued employment through each such vesting date.
(26)Represents options to purchase common shares that will vest in full on May 16, 2024, subject to the executive’s continued employment through each such vesting date.
(27)Represents time-based restricted shares that will vest as follows: 72,904 will vest on February 26, 2023; 109,356 will vest on May 16, 2023; 72,904 will vest on February 26, 2024; and 36,452 will vest on May 16, 2024, subject to the executive’s continued employment through each such vesting date.
(28)Represents time-based restricted shares that will vest as follows: 104,762 will vest on February 26, 2023; 157,143 will vest on May 16, 2023; 104,762 will vest on February 26, 2024; and 52,380 will vest on May 16, 2024, subject to the executive’s continued employment through each such vesting date.
(29)Represents time-based restricted share units that will vest as follows: 38,208 will vest on April 14, 2023; 19,104 will vest on May 16, 2023, 19,103 will vest on April 14, 2024, subject to the executive’s continued employment through each such vesting date.
(30)Represents options to purchase common shares that will vest in full on April 14, 2024, subject to the executive’s continued employment through each such vesting date.
(31)Represents time-based restricted shares that will vest as follows: 59,841 will vest on March 1, 2023; 31,577 will vest on April 14, 2023; and 59,839 will vest on April 14, 2024.
(32)Represents time-based restricted shares that vested in full on February 27, 2023.
(33)Represents time-based restricted shares that vest in equal installments on the first five anniversaries of March 1, 2021, subject to the executive’s continued employment through each such vesting date.
(34)Represents time-based restricted share units that vest in equal installments on the first three anniversaries of April 14, 2022, subject to the executive’s continued employment through each such vesting date.
(35)Represents time-based restricted share units that vest in equal installments on the first three anniversaries of April 6, 2022, subject to the executive’s continued employment through each such vesting date.
2022 OPTION EXERCISES AND SHARES VESTED | | | | | | | | | | | | | | | | | | | NAME | OPTION AWARDS | | STOCK AWARDS | NUMBER OF SHARES ACQUIRED ON EXERCISE (#) | VALUE REALIZED ON EXERCISE ($) | | NUMBER OF SHARES ACQUIRED ON VESTING(1) (#) | VALUE REALIZED ON VESTING ($) | | Scott Egan | — | — | | — | — | | Stephen Yendall | — | — | | 7,285 | 44,001 | | David E. Govrin | — | — | | 55,554 | 397,088 | | Monica Cramér Manhem | — | — | | 297,388 | 2,134,983 | | Stuart Liddell | — | — | | 57,197 | 389,309 | | Siddhartha Sankaran | — | — | | 215,874 | 1,573,492 | | Daniel V. Malloy | — | — | | 275,867 | 1,600,267 | | David W. Junius | — | — | | 50,962 | 265,052 | | Prashanth Gangu | — | — | | 51,244 | 358,251 | | Vievette Henry | — | — | | 18,111 | 127,114 |
(1)Amounts reflect the aggregate dollar amount realized by the NEO upon the vesting of equity-based awards, computed by multiplying the number of shares of stock units by the market value of the underlying shares on the vesting date. The applicable vesting dates were as follows: •November 15, 2022 for Mr. Yendall •February 26, 2022, February 27, 2022, March 1, 2022 and April 14, 2022 for Mr. Govrin •February 11, 2022, February 27, 2022, April 14, 2022, and December 31, 2022 for Ms. Cramér Manhem and Mr. Liddell. •February 26, 2022 and April 14, 2022 for Mr. Sankaran •February 26, 2022, February 27, 2022, March 1, 2022, April 6, 2022, and September 21, 2022 for Mr. Malloy •April 14, 2022 and October 1, 2022 for Mr. Junius •March 1, 2022 and April 14, 2022 for Mr. Gangu and Ms. Henry.
2022 Pension Benefits
The Company does not provide any qualified or non-qualified defined benefit pension plans to its NEOs.
2022 Non-qualified Deferred Compensation
Except as described below, none of our NEOs participated in a non-qualified deferred compensation arrangement in 2022. The following table provides information regarding a non-qualified deferred compensation plan provided to Ms. Cramér Manhem for the year ended December 31, 2022.
| | | | | | | | | | | | | Name | Registrant Contributions in Last Fiscal Year | Aggregate Earnings in Last Fiscal Year | Aggregate Balance at Last Fiscal Year End | | Monica Cramér Manhem | $121,070(1) | $201,473 | $ 1,320,840(2) |
(1) Reflects amounts reported in the 2022 Summary Compensation Table as “All Other Compensation.”
(2) Ms. Cramér Manhem is a Swedish resident and paid in Swedish Krona. The aggregate balance at last fiscal year end has been converted to U.S. dollars using the December 31, 2022 spot rate of 10.4055024 Swedish Krona for $1 U.S. dollar. Reflects amounts previously reported as compensation to Ms. Cramér Manhem.
Ms. Cramér Manhem participates in a non-qualified deferred compensation plan for select employees in Sweden. Pursuant to the terms of Ms. Cramér Manhem’s employment agreement, SiriusPoint makes an annual contribution to the plan in a minimum amount equal to SEK 1,259,796 (or $121,070), based on a December 31, 2022 conversion rate, but adjusted to reflect cost of living adjustments in Sweden. As noted above, the contribution rate for 2022 was $121,070. Ms. Cramér Manhem does not make any corresponding contributions to the plan. Contributions are invested in a variety of generally available mutual funds and indexes, as selected by Ms. Cramér Manhem. Payments from the plan will occur following Ms. Cramér Manhem’s retirement over a payment period as selected by Ms. Cramér Manhem.
2022 POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
As described under the heading “Executive Compensation—Compensation Discussion & Analysis—Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards for Fiscal Year 2022 Table—Employment Agreements,” during 2022, the NEOs were each subject to either an employment agreement or an offer letter agreement which provided for certain severance benefits upon a qualifying termination of employment. Each NEO was also a participant in the Company’s equity award program, with outstanding equity awards that provided for accelerated vesting upon certain termination events or in connection with a change in control of the Company.
A description of the material terms of each of the employment and separation arrangements that were in effect as of December 30, 2022 and the equity award program, as well as estimates of the payments and benefits each NEO would receive upon a termination of employment, including in connection with a change in control of the Company, are set forth below. The estimates have been calculated assuming a termination date of December 30, 2022, and the closing price of our common shares on December 30, 2022 ($5.90). The amounts reported in the tables below are only estimates, and actual payments and benefits to be paid upon a termination of a NEO’s employment with the Company or a change in control of the Company under these arrangements can only be determined at the time of termination or change in control of the Company. The amounts reflected below are in addition to payment of any accrued or vested but unpaid compensation or benefits that the executive would be entitled to receive in connection with a termination of employment for any reason, any statutory severance benefits are generally available to all salaried employees, as well as any reimbursements for reasonable business expenses which are incurred prior to the executive’s termination of employment.
Employment Agreements
Scott Egan
Pursuant to the terms of Mr. Egan’s employment agreement with SiriusPoint International Insurance Corporation (“SIIC”), dated as of September 6, 2022 (the “Egan Agreement”), upon a termination of employment by SIIC other than for “Cause” (as defined in the Egan Agreement) or a resignation of employment by Mr. Egan for “Good Reason” (as defined in the Egan Agreement), Mr. Egan will be entitled to receive the following severance payments and benefits, subject to his timely execution of a statutory settlement agreement:
1.Any unpaid portion of certain guaranteed annual bonus payments for Mr. Egan with respect to the 2022 and 2023 performance years;
2.An annual bonus for the year of termination based on actual performance for the year in which the termination date occurs, prorated for the period of employment during such year, and paid at the same time as annual bonuses are paid in the ordinary course of business to similarly- situated executives (other than in the case of a termination of employment during 2022 or 2023);
3.A cash severance payment equal to eighteen (18) months of Mr. Egan’s base salary at the rate in
effect as of his termination date, payable in installments; and
4.Continued medical and life insurance benefits for eighteen (18) months following Mr. Egan’s
termination date at the same premium rates that active employees pay for such coverage.
In addition to a termination by SIIC without Cause or a resignation by Mr. Egan for Good Reason, Mr. Egan would also be entitled to receive the guaranteed annual bonus payments described in (1) above in the event of a termination of employment by reason of Mr. Egan’s death or permanent disability (all such terminations, collectively, “Egan Qualifying Termination”).
Pursuant to the Egan Agreement, six (6) months’ advance written notice is required for SIIC to terminate Mr. Egan’s employment other than for Cause or for Mr. Egan to terminate his employment for any reason other than Good Reason. However, in lieu of notice, SIIC has the right to elect to terminate Mr. Egan’s employment immediately and make a payment in lieu of notice equal to (i) the base salary that Mr. Egan would have been paid had he served during the full six (6)-month notice period, plus (ii) to the extent Mr. Egan’s termination would constitute an Egan Qualifying Termination, the unpaid portion of certain guaranteed annual bonus payments described in (1) above. The cash severance payment described in (3) above will be reduced by an amount equal to any base salary paid by SIIC in respect of any worked notice period and/or salary paid in lieu of notice, and will be inclusive of any statutory severance payments due to Mr. Egan in connection with his termination of employment.
Stephen Yendall
Pursuant to the terms of Mr. Yendall’s employment agreement with Sirius America Insurance Company (“SAIC”), dated as of October 7, 2022 (the “Yendall Agreement”), upon a termination of employment by SAIC without “Cause” and without “Just Cause” (each as defined in the Yendall Agreement), or a resignation by Mr. Yendall for “Good Reason” (as defined in the Yendall Agreement), Mr. Yendall will be entitled to receive the following severance payments and benefits, in addition to certain statutory payments to which he is entitled under the Ontario Employment Standards Act, 2000 as amended or any successor legislation (the “ESA”):
1.A lump sum cash severance payment equal to twelve (12)-months of Mr. Yendall’s then-current base salary (which is inclusive of entitlements to ESA pay in lieu of notice and ESA severance pay);
2.An annual cash bonus for the year of termination, paid at target and pro-rated up to the last date of the ESA minimum statutory notice period;
3.Continuation of employer contributions or premiums with respect to coverage for all benefits under any benefit plan for the twelve (12) month period after the termination date (or at the option of SAIC, payment of the applicable employer contribution or premium for any benefit that cannot be continued after the ESA minimum statutory notice period to the end of the 12-month period);
4.With respect to any restricted share units which are outstanding and unvested as of the termination date, such restricted share units will continue to be eligible to vest for a period of twelve (12) months following the termination date; and
5.Any options which are outstanding and unvested as of the termination date will vest as of such date and remain exercisable for three (3) years following such date.
Pursuant to the terms of the Yendall Agreement, in order to receive any entitlements under that agreement which are in excess of Mr. Yendall’s minimum entitlements under the ESA, Mr. Yendall is required to sign a full and final release and indemnity in a form satisfactory to SAIC.
David E. Govrin
In connection with his appointment as Group President and Chief Underwriting Officer of the Company, Mr. Govrin and the Company entered into an Employment Agreement dated as of October 31, 2022 (the “Govrin
Agreement”). Under the terms of the Govrin Agreement, in the event that Mr. Govrin’s employment is terminated by the Company without “Cause” or Mr. Govrin resigns for “Good Reason” (each as defined in the Govrin Agreement), then Mr. Govrin will be entitled to receive the following severance payments and benefits, subject to his execution and non-revocation of a severance and general release agreement on behalf of the Company:
1.An annual cash bonus for the year of termination, calculated by applying the business, but the not the individual, performance modifier and pro-rated based the number of full months that Mr. Govrin worked during the year, which bonus will be paid on the later of (a) the date bonuses are paid to other members of the Company’s management team, or (b) within thirty (30) days of when his separation agreement becomes effective;
2.A cash severance payment equal to twelve (12) months of Mr. Govrin’s base salary at the rate in effect on his termination date, payable in installments;
3.Accelerated vesting of all outstanding restricted share units and stock options which are unvested as of the termination date, with such options remaining outstanding until the three year anniversary of the termination date (or, if earlier, the expiration date of those options); provided that any options subject to performance hurdles that must be satisfied to be exercisable may only be exercised if the relevant performance hurdles have been met; and
4.Subsidized COBRA continuation coverage for twelve (12) months at active employee rates (subject to certain limited exceptions).
Pursuant to the Govrin Agreement, six (6) months’ advance written notice is required for the Company to terminate Mr. Govrin’s employment other than for Cause or for Mr. Govrin to terminate his employment for any reason other than Good Reason. However, in lieu of notice, the Company has the right to elect to (i) terminate Mr. Govrin’s employment immediately and make a payment in lieu of notice equal to the base salary that Mr. Govrin would have been paid had he served during the full six (6) month notice period, or (ii) unilaterally treat all or any portion of the notice period as a period of “Garden Leave” (as defined in the Govrin Agreement). To the extent the Company terminates Mr. Govrin other than for Cause, the total cash severance that Mr. Govrin would be entitled to receive pursuant to item (2) above will be reduced, on a dollar-for-dollar basis, to the extent the Company elects to place Mr. Govrin on Garden Leave or pay him in lieu of notice for any portion of the notice period.
In the event that Mr. Govrin remains continuously employed with the Company until October 31, 2025, and then chooses to voluntarily resign his employment with the Company after such date, then subject to entering into and not revoking a separation agreement and release of claims, Mr. Govrin will receive:
1.Accelerated vesting of all outstanding restricted share units and stock options which are unvested as of the termination date, with such options remaining outstanding until the three year anniversary of the termination date (or, if earlier, the expiration date of those options); provided that any options subject to performance hurdles that must be satisfied to be exercisable may only be exercised if the relevant performance hurdles have been met; and
2.An annual cash bonus for the year of termination, calculated at target and pro-rated based on the number of full months that Mr. Govrin worked during the year, payable in lump sum.
In the event Mr. Govrin provides notice of his intent to voluntarily resign on or after October 31, 2025, then the Company will not exercise its right to pay in lieu of the six (6)-month notice period.
Mr. Govrin’s employment agreement further provides that in the event of a Change in Control, unvested stock options will vest in full and immediately become exercisable regardless of the stock price upon the Change in Control, subject to Mr. Govrin entering into a general release or similar agreement with the Company.
Monica Cramér Manhem
For Ms. Cramér Manhem, pursuant to the terms of her employment agreement (the “Cramér Manhem Agreement”), in the event of her death, she would be entitled to receive a pro-rated portion of the annual bonus to which she would have been entitled had she remained employed through the end of the calendar year on which the termination date occurs, based upon the number of days during such year during which she was employed by the Company (the “Pro-Rated Bonus”), payable in lump sum.
In the event of Ms. Cramér Manhem’s termination of employment by her employer without “cause” (as defined in her Employment Agreement) or (ii) by Ms. Cramér Manhem for “good reason” (as defined in her Employment Agreement), her employment agreement provides she would be entitled to receive:
•A cash severance payment equal to a multiple of one times her base salary at the rate in effect on the termination date, payable in lump sum; and
•The value of her annual bonus for the year in which the termination date occurs, calculated based upon actual performance through the end of such year (except that such annual bonus will not be less than the applicable target annual bonus for such fiscal year), payable in a lump sum.
In addition, the Cramér Manhem Agreement provides that in the event of a termination of employment (i) by her employer without cause or (ii) by her for “good reason” or which constitutes a retirement, she will be entitled to continue her employment in an advisory capacity for an “Advisory Period,” performing periodic advisory and transition services for her employer and its subsidiaries. The Cramér Manhem Agreement provides that Ms. Cramér Manhem will be entitled to retire on the final day of the month before the month in which she reaches 64 years of age, provided that she notifies her employer in writing of this intention nine months in advance. The Advisory Period would commence on the date of Ms. Cramér Manhem’s original qualifying termination event, and continue until the earlier of (i) the second anniversary of such termination of employment, or (ii) the last date on which the Eligible Awards (as defined below) are eligible to vest in accordance with their terms, unless earlier terminated. During the Advisory Period, Ms. Cramér Manhem would be entitled to receive:
•An annual base salary of $30,000;
•Continued company-provided health insurance coverage for Ms. Cramér Manhem and her eligible dependents to the same extent made available to other employees, provided that she is not then eligible for coverage from another employer; provided further that during such time, she will be responsible for an amount equal to all premium costs toward any insurance coverage elected by her and her eligible dependents;
•Continued vesting in any outstanding equity incentive awards held by Ms. Cramér Manhem as of the date of her original termination of employment (“Eligible Awards”) in accordance with their regular schedules for the duration of the Advisory Period; and
•In the event of Ms. Cramér Manhem’s retirement between the ages of 64 and 65, Ms. Cramér Manhem would receive (i) an additional payment equal to 75% of her pensionable salary, as determined under the occupational pension plan provided in Sweden, and (ii) a retirement pension. Ms. Cramér Manhem was not within the applicable age range as of December 30, 2022.
The Cramér Manhem Agreement further provides that, for the six (6) month period following the later of the expiration of the term of the agreement and or the conclusion of the Advisory Period (the “Additional Period”), as compensation for Ms. Cramér Manhem’s compliance with the non-competition provision thereunder, Ms. Cramér Manhem would receive during the Additional Period per month the difference between her annual base salary as of the date of her termination of the employment and the salary (if lower) which Ms. Cramér Manhem earns from any new employment or proceeds of any business activity (the “Noncompetition Benefit”). Notwithstanding the above: (i) the Noncompetition Benefit will not exceed sixty percent (60%) of Ms. Cramér Manhem’s monthly base salary at the time of such termination of employment; (ii) the Noncompetition Benefit will not be paid if Ms. Cramér Manhem breaches the noncompetition covenant under her employment agreement; and (iii) the Noncompetition Benefit will not be paid during any period for which Ms. Cramér Manhem receives severance pay or other corresponding remuneration post-termination from the Company or where employment is terminated due to Ms. Cramér Manhem’s retirement or her material breach of the Cramér Manhem Agreement.
Under the terms of the Cramér Manhem Agreement, payment of the severance benefits described above (including payments to Ms. Cramér Manhem in connection with the Advisory Period, but excluding the Noncompetition Benefit) is subject to her execution of a release of claims.
On October 31, 2022, Ms. Cramér Manhem entered into a Transition Agreement with SiriusPoint International Försäkringsaktiebolag, the purpose of which was to memorialize Ms. Cramér Manhem’s intention to cease to serve as an executive officer of the Company and to retire in 2023, as well as to serve during the Advisory Period (the “Transition Agreement”). Such agreement was intended to memorialize the terms of the Cramér Manhem Agreement regarding retirement described above, and provided that after stepping down from her position as an executive officer of the Company (which Ms. Cramér Manhem did in early 2023), she would remain employed in a non-executive advisory capacity through a transitional period and subsequent Advisory Period, which Advisory Period will commence as of July 1, 2023. Pursuant to the Transition Agreement, the parties agreed that the terms of the Transition Agreement were in full and final settlement of any claim to severance payments that Ms. Cramér Manhem may have had, including any claim under her participation agreement under the Sirius International Insurance Group, Ltd. Severance and Change in Control Plan (the “Sirius Executive Severance Plan”).
In light of Ms. Cramér Manhem’s separation as an executive officer of the Company in 2023, as well as her receipt of benefits pursuant to the terms of the Cramér Manhem Agreement (as memorialized in the Transition Agreement), Ms. Cramér Manhem has been excluded from the termination tables below. The approximate estimated value of her anticipated severance payments and benefits in connection with her separation as an executive officer includes: (i) the value of Ms. Cramér Manhem’s base salary and the company cost of providing continued health insurance benefits for the duration of the transitional period following the date she ceased to be employed as an executive officer of the Company (estimated value $200,754; (ii) an annual base salary for the duration of the Advisory Period (estimated value $60,000); (iii) continued company-provided health insurance coverage for Ms. Cramér Manhem and her eligible dependents to the same extent made available to other employees for the duration of the Advisory Period (estimated value approximately $2,589); (iv) continued vesting of Ms. Cramér Manhem’s equity awards through the expiration of the Advisory Period (estimated value approximately $961,942, based upon the Company’s closing stock price on December 30, 2022, calculated based upon Ms. Cramér Manhem’s outstanding equity awards as of December 30, 2022, and assuming a two year Advisory Period); (v) a pro-rated portion of Ms. Cramér Manhem’s 2023 annual incentive award opportunity, based upon the portion of the year during which she served prior to the date the Advisory Period commences (estimated value $239,755, assuming target performance), (vi) an early retirement benefit during the period from July 1, 2023 until July 1, 2024 with month payments equal to 75% of the pensionable salary as defined in the Transition Agreement (estimated value approximately $160,324), and (vii) continued entitlement to the use of a company car and accessory benefits (parking and insurance coverage) through the expiration of the Advisory Period (estimated value approximately $14,926).
Stuart Liddell
Mr. Liddell is party to an offer letter agreement with SIIC, dated as of March 25, 2021 (the “Liddell Agreement”). Pursuant to the terms of the Liddell Agreement, either Mr. Liddell or SIIC may terminate Mr. Liddell’s employment upon at least six (6) months of prior written notice (provided that, in the event of certain acts or omissions by Mr. Liddell or in certain other limited circumstances such as Mr. Liddell ceasing to be eligible to work in the UK or being absent from work for a period for 180 days or more in any period of 12 consecutive months as a result of ill health or incapacity, then SIIC may terminate Mr. Liddell’s employment immediately upon summary notice in writing). Notwithstanding this notice requirement, SIIC may in its discretion provide payment in lieu of notice equal to the base salary to which Mr. Liddell would have been entitled during the waived notice period. The Liddell Agreement does not provide for any further severance benefits.
Outstanding Equity Awards
Restricted Share Awards
As of December 30, 2022, Mr. Govrin held two restricted share award agreements under the 2013 Omnibus Incentive Plan. These restricted share awards provide that in the event a termination of Mr. Govrin’s employment or services due to death or disability (as such term is defined in the 2013 Omnibus Incentive Plan) during the restricted period applicable to the award, the restricted shares will be deemed vested with respect to the number of restricted shares that would have vested had the executive’s service continued until the next vesting date immediately following such termination, with any remaining unvested restricted shares forfeited and cancelled. In addition, in the event of a “change in control” (as defined in the 2013 Omnibus Incentive Plan), prior to the end of the restricted period applicable to the restricted shares, if Mr. Govrin is terminated by the Company without “cause” (as defined in the 2013 Omnibus Incentive Plan) or resigns employment with the Company for “good reason” (as defined in the restricted share agreements) during the period that begins 90 days prior to the change in control and ends 24 months following the change in control, the restricted shares will be deemed fully vested as of the effective date of Mr. Govrin’s termination of service (or, in the case of termination prior to a change in control, the change in control).
The 2013 Omnibus Incentive Plan further provides that (i) in the event of Mr. Govrin’s termination of employment without cause within three (3) months prior to the occurrence of a change in control, Mr. Govrin will be treated under the 2013 Omnibus Incentive Plan as if he had remained continuously employed until the change in control, and experienced a termination of employment or service immediately thereafter, and (ii) in the event of a change in control, the restriction period applicable to the restricted shares will lapse as of immediately prior to the change in control (but note that where a restricted share agreement provides for accelerated vesting upon a termination in connection with a change in control, such provision supersedes this single-trigger change in control provision set forth in the 2013 Omnibus Incentive Plan).
Time-Based Restricted Share Unit Awards
As of December 30, 2022, each of the continuing NEOs held one or more time-based restricted share unit awards under the 2013 Omnibus Incentive Plan (such units, the “RSUs”). Under the majority of these agreements, in the event of a “change in control” (as defined in the 2013 Omnibus Incentive Plan) prior to the end of the restricted period applicable to the RSUs, if the executive’s services are terminated by the applicable employing entity without “cause” (as defined in the applicable award agreement) or the executive resigns for “good reason” (as defined in the applicable award agreement) during the period that begins 90 days prior to the change in control and ends 24 months following the change in control, the RSUs will be deemed fully vested as of the effective date of the executive’s termination of service (or, in the event of a termination prior to a change in control, the change in control). In addition, in the event that the executive’s services are deemed terminated for death or
“disability”(as defined in the 2013 Omnibus Incentive Plan) during the restricted period, then the RSUs will be deemed vested to the extent of the number of RSUs that would have vested had the participant’s service continued until the next vesting date immediately following such termination for death or disability.
The remaining outstanding RSUs held by Messrs. Govrin and Egan under the 2013 Omnibus Incentive Plan generally provide that in the event of a “qualifying termination” (i.e., termination of employment as a result of death or “disability” as defined in the 2013 Omnibus Incentive Plan) or termination by the Company without cause or resignation by the executive for “good reason” (each as defined in the RSU agreement) at any time, the RSUs thereunder will be deemed fully vested effective as of the termination date. The additional outstanding RSU award held by Mr. Yendall provides that in the event of such a “qualifying termination” (which in the case of Mr. Yendall also includes a termination for “just cause”), all unvested RSUs will remain outstanding and be eligible to vest for twelve (12) months following the date of such termination of employment, or in the case of a qualifying termination during the period that begins 90 days prior to the change in control and ends 24 months following the change in control, the RSUs will be deemed fully vested as of the effective date of his termination of service (or, in the event of a termination prior to a change in control, the change in control).
The 2013 Omnibus Incentive Plan further provides that in the event of the executive’s termination without cause within three (3) months prior to the occurrence of a change in control, such executive will be treated under the 2013 Omnibus Incentive Plan as if they had remained continuously employed until the change in control, and experienced a termination of employment immediately thereafter, and (ii) in the event of a change in control, the restriction period applicable to restricted share units will lapse as of immediately prior to the change in control (but note that where a restricted share unit agreement provides for accelerated vesting upon a termination in connection with a change in control, such provision supersedes this single-trigger change in control provision set forth in the 2013 Omnibus Incentive Plan).
As of December 30, 2022, Ms. Cramér Manhem and Mr. Liddell each also held certain outstanding RSUs issued under the Sirius International Insurance Group, Ltd. 2018 Omnibus Incentive Plan (the “2018 Plan”). The awards each provide that in the event of a “change in control” (as defined in the 2018 Plan), and provided that the executive signed a restrictive covenant agreement at the time of grant, awards which are not effectively substituted, assumed or continued by the surviving or acquiring company will become fully vested as of the date of such change in control. If the awards are effectively substituted, assumed, or continued, then in the event of a termination of employment due to death or disability, by SIIG without “cause,” or by the employee for “good reason” (each as defined in the 2018 Plan or the applicable award agreement, and collectively a “qualifying termination”) within the twenty-four (24) month period following the change in control, then if the holder executes a release of claims, they will be entitled to receive full vesting of their award. Outside of this change in control period, the majority of these RSU agreements provide that in the event of a qualifying termination, and provided that the executive signed a restrictive covenant agreement at the time of grant, an unvested portion of the award will become fully vested, while the remaining agreements provide for pro-rated vesting based on the number of months served during the restriction period plus the number of months in the executive’s “severance period” (if applicable) under the Sirius Executive Severance Plan.
For purposes of the 2018 Plan and the awards thereunder, the Merger constituted a “change in control” in connection with which the outstanding awards thereunder were effectively assumed or substituted.
Performance-Based Restricted Share Unit Awards
As of December 30, 2022, Messrs. Govrin and Liddell and Ms. Cramér Manhem each held an outstanding performance-based restricted share unit award under the 2013 Omnibus Incentive Plan (such units, the “PSUs”). Under each of these agreements, (i) in the event of a termination of the executive’s employment or services due to death or disability (as such term is defined in the 2013 Omnibus Incentive Plan) prior to the third anniversary of
the grant date, the PSUs will be deemed vested to the extent of the number of PSUs that would have vested based on the achievement of the applicable performance goals at any time prior to the first anniversary following the date of such termination had such termination occurred, without any requirement of continued service, with any remaining unvested PSUs forfeited and cancelled, and (ii) in the event of a “change in control” (as defined in the 2013 Omnibus Incentive Plan) prior to the end of the restricted period applicable to the PSUs, if the executive is terminated by the Company without “cause” (as defined in the 2013 Omnibus Incentive Plan) or the executive (other than Mr. Liddell) resigns employment with the Company for “good reason” (as defined in the PSU agreements) during the period that begins 90 days prior to the change in control and ends twenty-four months following the change in control, the PSUs will vest on the effective date of the executive’s termination of service (or, in the event of a termination prior to a change in control, the change in control) at the greater of target levels or levels based on actual performance achieved through the end of the fiscal quarter ending immediately prior to the change in control, and any remaining unvested PSUs will be forfeited.
The 2013 Omnibus Incentive Plan further provides that in the event of the executive’s termination of employment or service without cause within three (3) months prior to the occurrence of a change in control, such executive will be treated under the 2013 Omnibus Incentive Plan as if they had remained continuously employed until the change in control, and experienced a termination of employment or service immediately thereafter.
Option Awards
As of December 30, 2022, each of the continuing NEOs (other than Mr. Liddell) held one or more outstanding, fully or partially unvested Employee Share Option Agreements granted under the 2013 Omnibus Incentive Plan (the “Option Agreements”). With respect to four of these Option Agreements, upon a termination of employment, any unvested options are generally forfeited, provided that in the event of a “change in control” (as defined in the 2013 Omnibus Incentive Plan), prior to the end of the vesting period, if the executive is terminated by the Company without “cause” (as defined in the 2013 Omnibus Incentive Plan) or resigns employment with the Company for “good reason” (as defined in the Option Agreements) during the period that begins 90 days prior to the change in control and ends 24 months following the change in control, the options will be deemed fully vested as of the effective date of such termination of service (or, in the event of a termination prior to a change in control, the change in control).
Pursuant to the terms of Mr. Egan’s Option Agreement, unvested options will generally be forfeited upon a termination of employment; provided that if Mr. Egan’s employment is terminated as a result of his death or disability, a termination by the Company without cause, or a termination by Mr. Egan for good reason, then with respect to unvested tranches, Mr. Egan will be eligible to vest in such tranches if the performance conditions applicable to such trance of the option are satisfied on or before the first anniversary of Mr. Egan’s termination date. Pursuant to the terms of Mr. Yendall’s Option Agreement, in the event of Mr. Yendall’s “qualifying termination” (i.e., termination of employment as a result of death or “disability” as defined in the 2013 Omnibus Incentive Plan), termination by the Company without cause or just cause (each as defined in the Option Agreement), or termination by Mr. Yendall for “good reason” (as defined in the Option Agreement), all outstanding and unvested options thereunder will be deemed fully vested as of the effective date of such qualifying termination.
The 2013 Omnibus Incentive Plan further provides that (i) in the event of the executive’s termination of employment or service due to death or “disability” (as defined in the 2013 Omnibus Incentive Plan), with respect to any awards thereunder which are subject solely to time-based/service-based restrictions, any such awards that would have become vested prior to the first anniversary of the executive’s termination date, had the executive continued to be employed by the Company through such date, will immediately become vested as of the termination date; and (ii) in the event of the executive’s termination of employment without cause within three (3) months prior to the occurrence of a change in control, such executive will be treated under the 2013 Omnibus
Incentive Plan as if they had remained continuously employed or providing services until the change in control, and experienced a termination of employment or services immediately thereafter. The 2013 Omnibus Incentive Plan further provides that in the event of a change in control, all options will become immediately exercisable (provided that such awards may be cashed out or cancelled with appropriate notice, and provided further that where an option agreement provides for accelerated vesting upon a termination in connection with a change in control, such provision supersedes this single-trigger change in control provision set forth in the 2013 Omnibus Incentive Plan).
Sankaran Resignation Agreement
As noted in the “Compensation Discussion & Analysis” section of this Proxy Statement, effective as of May 16, 2022, Mr. Sankaran resigned from his position as the Chief Executive Officer of the Company. From May 16, 2022 until August 16, 2022 (the “Interim Period”), Mr. Sankaran continued to make himself available to the Board and to the Company to assist in transition matters. In connection with his resignation, on May 16, 2022, Mr. Sankaran entered into a Resignation Agreement and Release with the Company (the “Sankaran Agreement”).
Pursuant to the terms of the Sankaran Agreement, during the Interim Period, Mr. Sankaran was entitled to receive a cash fee of $250,000, payable in three equal monthly installments. In addition, in connection with his resignation of employment, Mr. Sankaran was entitled to receive the following severance benefits under the Sankaran Agreement: (i) a cash payment of $4,000,000, to be paid in a lump sum; (ii) continued medical coverage for Mr. Sankaran (and, if covered immediately prior to the date of his termination, his dependents) at the same level in effect as of immediately prior to his termination date for a period of 24 months following the termination date (estimated value, $55,290); and (iii) retention of 787,460 restricted common shares of the Company and 409,483 Company stock options (which will remain exercisable through the end of the three-year period following Mr. Sankaran’s resignation), subject to vesting over the two years following Mr. Sankaran’s resignation (provided that Mr. Sankaran remains in material compliance with the Sankaran Agreement through such vesting dates) (estimated value of $4,693,262, based on the closing share price as of May 16, 2022).
Daniel V. Malloy Severance Benefits
On April 6, 2022, the Company entered into a Settlement Agreement (the “Malloy Settlement Agreement”) with Mr. Malloy, who had been serving as the Company’s President, Global Distribution and Services, providing that Mr. Malloy’s employment with the Company ended by mutual agreement on April 1, 2022. Pursuant to the terms of the Malloy Settlement Agreement, Mr. Malloy was entitled to receive the following severance benefits: (i) 18 months of Mr. Malloy’s then-current base salary, payable in 18 equal installments following his termination date ($1,275,000); (ii) a pro-rated bonus for the fiscal-year ending 2022 earned at target paid in a lump sum ($215,500); (iii) reimbursement for relocation expenses and tax preparation costs in an amount not to exceed $30,000; (iv) an amount representing 18 months of Mr. Malloy’s current contributions for medical and life insurance benefits, payable in 18 equal installments following the termination date (estimated value, $57,650); (v) full accelerated vesting of all outstanding and unvested 35,895 time-based restricted share units held by Mr. Malloy as of the termination date (estimated value, $269,930, based on the closing share price on April 1, 2022); (vi) continued vesting of 13,298 outstanding and unvested restricted shares and 73,785 outstanding and unvested options held by Mr. Malloy as of the termination date in accordance with the vesting schedules applicable to those awards (estimated value, $100,001, based on the closing share price on April 1, 2022); (vii) continued vesting of a certain number (at target performance, 151,257) of outstanding and unvested performance-based restricted shares until held by Mr. Malloy as of the termination date in accordance with the vesting schedules applicable to those awards (estimated value, $1,137,453, based on the closing share price on April 1, 2022 and assuming target performance); and (viii) continued vesting of 71,790 outstanding and unvested performance-vesting restricted share units of the Company (estimated value, $539,861, based on the closing share price on April 1, 2022).
Following such termination of employment on April 1, 2022, Mr. Malloy subsequently entered into a new letter agreement with the Company dated as of June 1, 2022 to reflect the terms and conditions of his service as Interim Chief Executive Officer of the Company (the “Malloy Letter Agreement”). Pursuant to the terms of the Malloy Letter Agreement, Mr. Malloy received the following payments and benefits upon his termination of employment as Interim Chief Executive Officer: (i) full vesting of an award of 163,935 restricted shares (estimated value, $808,200, based on the closing share price on September 21, 2022); (ii) a lump sum cash annual bonus payment of $425,000; (iii) a base salary “catch-up” payment of approximately $124,231; and (iv) four (4) additional months of medical expenses reimbursements (beyond the 18 months set forth in the Malloy Settlement Agreement) (estimated value of $12,813). Following Mr. Egan’s appointment to the position of Chief Executive Officer, Mr. Malloy continued to serve as an employee of the Company in order to assist with transitional matters until December 16, 2022.
David W. Junius Resignation
As noted in the “Compensation Discussion & Analysis” section of this proxy statement, effective as of October 21, 2022, Mr. Junius resigned from his position as Chief Financial Officer of the Company. Mr. Junius was not entitled to receive any severance payments or benefits in connection with his resignation of employment with the Company.
Prashanth Gangu Settlement Agreement and Release
In connection with Mr. Gangu’s separation from employment with the Company, Mr. Gangu and the Company entered into a Confidential Settlement Agreement and Release, dated as of September 30, 2022 (the “Gangu Settlement Agreement”). Pursuant to the Gangu Settlement Agreement, and in connection with Mr. Gangu’s execution of a mutual waiver and release of claims, Mr. Gangu became entitled to receive: (i) a payment of $2,200,000, less required withholdings and deductions, payable in lump sum; (ii) provided Mr. Gangu elects and is eligible for COBRA, payment for the cost of COBRA health coverage for up to eighteen (18) months following the termination date (including certain reimbursements for amounts already paid) (estimated value of $47,830); and (iii) reimbursement of legal fees incurred by Mr. Gangu totaling $60,000.
Vievette Henry Settlement Agreement and General Release
In connection with Ms. Henry’s separation of employment with Sirius Global Services LLC (“SGS”), Ms. Henry and SGS entered into a Settlement Agreement and General Release, executed as of November 14, 2022 (the “Henry Settlement Agreement”). Pursuant to the Henry Settlement Agreement, Ms. Henry became entitled to receive, subject to her compliance with the terms of the agreement, including the release and waiver of claims contained therein: (i) a total cash payment of $1,402,500, which was paid within thirty (30) days after the Henry Settlement Agreement was signed and returned, and (ii) accelerated vesting of certain specified restricted share and restricted share unit awards (estimated value of $653,868, based on the closing share price on November 14, 2022).
Potential Payments Upon a Qualifying Termination of Employment Absent a Change in Control(1) | | | | | | | | | | | | | | | | Name | Cash Severance Payment ($)(2) | Value of Acceleration/ Lapse of Restrictions on Equity Awards ($)(3) | Continuing Welfare Insurance Benefit ($)(4) | Aggregate Payments ($) | | Scott Egan | 3,708,995 | 4,155,134 | 21,451 | 7,885,579 | | Stephen Yendall | 503,854 | 205,774 | 11,470 | 721,098 |
| | | | | | | | | | | | | | | | David E. Govrin | 1,072,500 | 3,531,233 | 17,358 | 4,621,090 | | Stuart Liddell | 206,578 | 237,221 | — | 443,799 |
(1) “Qualifying termination” means, in the case of the continuing NEOs (other than Ms. Cramér Manhem, who is not reflected in this table), a resignation of employment by the NEO for good reason or a termination of employment by the employer without cause (or in the case of benefits under the Yendall Agreement, without cause and without just cause).
(2) Amounts reported in this column represent cash severance payments to each of the continuing NEOs other than Ms. Cramér Manhem in the event of a qualifying termination outside of the change in control period for the 2013 Omnibus Incentive Plan (in the case of awards under the 2013 Omnibus Incentive Plan, beginning ninety (90) days prior to and ending twenty-four (24) months following a change in control (as defined in the 2013 Omnibus Incentive Plan)). As a consequence of the Merger in February 2021, a qualifying termination of employment on December 30, 2022 would be considered a termination “in connection with a change in control” under the 2018 Plan. As previously noted, in the case of Mr. Liddell, Mr. Liddell would only be entitled to this cash payment upon the election of the Company in the event that the Company determines to terminate Mr. Liddell’s employment prior to the end of the termination notice period described above (to the extent Mr. Liddell is entitled to such notice period). Mr. Yendall’s cash severance payment has been calculated disregarding the value of any potential statutory severance entitlements.
(3) Reflects the value of the accelerated vesting or lapse of continuing service requirements with respect to certain outstanding unvested equity awards in connection with a qualifying termination outside of the change in control period for the 2013 Omnibus Incentive Plan as described above. The value of such accelerated vesting or lapse of continuing service restrictions with respect to the equity awards reported in this table is based upon our closing share price of $5.90 on December 30, 2022. As all Option Agreements for our continuing NEOs provided for an exercise price which was in excess of the closing price of the Company’s common shares on December 30, 2022, no value has been reflected for the accelerated vesting of these awards. For purposes of calculating the value of accelerated vesting of Mr. Govrin’s PSU awards pursuant to Mr. Govrin’s employment agreement, the Company has assumed that such PSU awards would become vested at target levels.
(4) Reflects the cost to us of the continued provision of medical and life insurance benefits for eighteen (18) months following Mr. Egan’s termination date, as well as continuation of employer contributions or premiums with respect to coverage for all benefits under any benefit plan for the twelve (12)-month period after the termination date for Mr. Yendall and subsidized COBRA continuation coverage for twelve (12) months at active employee rates for Mr. Govrin.
Potential Payments Upon Death or Disability | | | | | | | | | | | | | Name | Cash Severance Payment($)(1) | Value of Acceleration/ Lapse of Restrictions on Equity Awards ($)(2) | Aggregate Payments ($) | | Scott Egan | 1,997,151 | 4,155,134 | 6,152,285 | | Stephen Yendall | — | 205,774 | 205,774 | | David E. Govrin | — | 3,139,768 | 3,139,768 | | Stuart Liddell | — | 383,990 | 383,990 |
(1) As noted above, in connection with a termination as a result of death or a termination of employment by the Company for disability, Mr. Egan is entitled to receive any unpaid portion of certain guaranteed annual bonus payments for Mr. Egan with respect to the 2022 and 2023 performance years.
(2) Reflects the value of the accelerated vesting or lapse of continuing service requirements with respect to certain outstanding unvested RSU awards, restricted share awards and options in connection with a termination of employment as a result of death or disability as described above. The value of such accelerated vesting or lapse of continuing service restrictions with respect to the equity awards reported in this table is based upon our closing share price of $5.90 on December 30, 2022. As all Option Agreements provided for an exercise price which was in excess of the closing price of the Company’s common shares on December 30, 2022, no value has been reflected for the accelerated vesting of these awards.
Potential Payments Upon a Qualifying Termination of Employment in Connection with a Change in Control(1) | | | | | | | | | | | | | | | | Name | Cash Severance Payment ($)(2) | Value of Accelerated Equity Awards ($)(3) | Continuing Welfare Insurance Benefit ($)(4) | Aggregate Payments ($) | | Scott Egan | 3,708,995 | 4,155,134 | 21,451 | 7,885,579 | | Stephen Yendall | 503,854 | 574,365 | 11,470 | 1,089,689 | | David E. Govrin | 1,072,500 | 3,948,233 | 17,358 | 5,038,090 | | Stuart Liddell | 206,578 | 600,549 | — | 807,127 |
(1) “Qualifying termination” means, in the case of the continuing NEOs (other than other than Ms. Cramér Manhem, who is not reflected in this table), a resignation of employment by the NEO for good reason or a termination of employment by the employer without cause (or in the case of benefits under the Yendall Agreement, without cause and without just cause), during the relevant change in control period (in the case of awards under the 2013 Omnibus Incentive Plan, beginning ninety (90) days prior to and ending twenty-four (24) months following a change in control (as defined in the Omnibus Incentive Plan), and in the case of the 2018 Plan, during the twenty-four (24) months following a change in control (as defined in the 2018 Plan)).
(2) Amounts reported in this column represent: cash severance payments to each of the continuing NEOs (other than Ms. Cramér Manhem) in the event of a qualifying termination during the applicable change in control period. . In the case of Mr. Liddell, Mr. Liddell would only be entitled to this payment upon the election of the Company in the event that the Company determines to terminate Mr. Liddell’s employment prior to the end of the termination notice period described above (to the extent Mr. Liddell is entitled to such notice period). Similarly, Mr. Yendall’s cash severance payment has been calculated disregarding the value of any potential statutory severance entitlements.
(3) Reflects the value of the accelerated vesting of certain outstanding, unvested equity awards in connection with a qualifying termination in connection with a change in control as described above. For all NEOs, these calculations assume that the NEO experiences a qualifying termination of employment immediately following a change in control on December 30, 2022. As all Option Agreements provided for an exercise price which was in excess of the closing price of the Company’s common shares on December 30, 2022, no value has been reflected for the accelerated vesting of these awards. The value of the accelerated vesting of equity awards reported in this table is based upon our closing share price of $5.90 on December 30, 2022. With respect to Mr. Liddell, the value reflected in this column assumes a termination by his employer without cause; however, in the event of his termination of employment for good reason, the value of the accelerated vesting of his outstanding equity awards would instead be $237,221. With respect to the PSU awards held by each of Messrs. Govrin and Liddell, the value reflected in this column assumes that such awards would undergo accelerated vesting at target levels.
(4) Reflects the cost to us of the continued provision of medical and life insurance benefits for eighteen (18) months following Mr. Egan’s termination date, as well as the continuation of employer contributions or premiums with respect to coverage for all benefits under any benefit plan for the twelve (12) month period after the termination date for Mr. Yendall and subsidized COBRA continuation coverage for twelve (12) months at active employee rates for Mr. Govrin.
For purposes of these tables, with respect to treatment of outstanding equity awards in connection with a change in control, we have assumed that all such awards have been effectively substituted, assumed or continued by the surviving or acquiring corporation and that the awards are subject to the double-trigger vesting provisions set forth in the underlying award agreements. As noted above, Mr. Govrin’s employment agreement provides that in the event of a change in control, unvested stock options will vest in full and immediately become exercisable regardless of the stock price upon the change in control, subject to Mr. Govrin entering into a general release or similar agreement with the Company. However, as all of Mr. Govrin’s Option Agreements provide for an exercise price which was in excess of the closing price of the Company’s common shares on December 30, 2022, no value has been reflected here for the accelerated vesting of those options.
CEO Pay Ratio - 9.1 to 1.0
PAY RATIO DISCLOSURE
We believe our executive compensation program must be consistent and internally equitable to motivate our employees to perform in ways that enhance shareholder value. We are committed to internal pay equity, and the Compensation Committee monitors the relationship between the pay of our executive officers and the pay of our non-executive employees. ToIn 2022, we determined to identify our median employee, we calculated an estimate of the annual total compensationusing base salary for fiscal year 20172022 of each of our employees (excluding the CEO) employed as of December 31, 2017, in1, 2022. For administrative reasons, we changed the same manner as the “Total Compensation” shown forcalculation of our NEOs in the “Summary Compensation Table”,median employee from using the following elements: salary received in fiscal year 2017
total cash compensation, including annual incentive payment receivedcompensation, in 2021, to using only base salary in 2022. Similarly, we changed the determination date to identify our median employee from November 1 to December 1 for performance in fiscal year 2017 grant date fair value of long term incentive awards granted in fiscal year 2017
Company-paid contributions to retirement plans made during fiscal year 2017
Company-paid personal tax preparation cost
Company-paid tax reimbursements during fiscal year 2017
Company-paid transportation and housing during fiscal year 2017administrative purposes.
We determined the compensation of our median employee by: (i) calculatingdetermining the annual total compensation described abovebase salary for each of our employees; employees (excluding our CEO); (ii)ranking the annual total compensationbase salary of all employees except for our CEO from lowest to highest (a list of 24over 1,100 employees); and (iii)selecting the median employee basedas described above.
All active employees working on the total compensation elements described above. Because we have an even number of employees, we have two median employees and have calculated the median of the annual total compensationa full-time, part-time, or interim basis were included. To facilitate comparison of all employees of our Company (other than our CEO) based on the average annual totalin U.S. dollars, compensation of the two median employees (“Median Employee”).
During 2017 we had more than one CEO. For purposes of our CEO pay ratio, we have calculated the pay ratio based solely on the annual total compensation of Mr. Bredahl, whopaid in foreign currencies was serving as our CEOconverted to U.S. dollars. We applied a local currency to U.S. dollar exchange rate on December 31, 2017,2022. We annualized the datecompensation for employees who began employment after the start of the fiscal year or who were on an unpaid leave of absence during the fiscal year.
Upon identifying the median employee, total compensation was calculated for this individual using the same methodology we have selected to identifyuse for our Median Employee.NEOs as set forth in the 2022 Summary Compensation Table. For 2017,fiscal year 2022, our last completed fiscal year: | | | | | | | | | | EMPLOYEE | 2022 ANNUAL TOTAL COMPENSATION ($) | ESTIMATED PAY RATIO | Scott Egan, our CEO(1) | 7,433,868 | 86:1 | | Median employee, other than our CEO | 86,850 |
(1)In light of Mr. Egan’s appointment to the thirteenth employee’sposition of CEO in September 2022, Mr. Egan’s 2022 annual total compensation was $580,335;has been annualized to reflect a full year of base salary and retirement plan contributions and, accordingly, differs from the annual total compensation of our CEO, asamount reported in the “Summary2022 Summary Compensation Table” included elsewhere in this Proxy Statement, was $5,283,349.Table. Based on this information, for 20172021 the reasonable estimated ratio of the annual total compensation of Mr. Bredahl, our CEO, to the median of the annual total compensation of all employees, calculated in a manner consistent with Item 402(u) of Regulation S-K, was 9.1 to 1.86:1. BENEFICIAL OWNERSHIP OF THE COMPANY’S COMMON SHARES
The following table indicates information as of the date of this Proxy Statement regarding the beneficial ownership of the Company’s common shares by:
each person, or group of persons, who is known to beneficially own more than 5% of any class of the Company’s common shares based on information contained in Schedules 13G;
each of the Company’s directors;
each of the NEOs; and
all of the Company’s directors and executive officers as a group.
The amounts and percentages owned are reported on the basis of the SEC’s rules governing the determination of beneficial ownership of securities. The SEC’s rules generally attribute beneficial ownership of securities to each person who possesses, either solely or shared with others, the voting power or investment power, which includes the power to dispose of those securities. The rules also treat as issued and outstanding all shares that a person would receive upon exercise of share options or warrants held by that person that are immediately exercisable or exercisable within 60 days. These shares are deemed to be outstanding and to be beneficially owned by the person holding those options for the purpose of computing the number of shares beneficially owned and the percentage ownership of that person, but they are not treated as issued and outstanding for the purpose of computing the percentage ownership of any other person. Under these rules, one or more persons may be a deemed beneficial owner of the same securities and a person may be deemed a beneficial owner of securities to which such person has no economic interest. Unless otherwise indicated, the persons or entities identified in this table have sole voting and investment power with respect to all common shares shown as beneficially owned by them, subject to applicable community property laws.
Information with respect to beneficial ownership has been furnished below for each director, executive officer, or beneficial owner of more than 5% of the Company’s common shares (based solely on filings made under Section 13(d) and Section 13(g) of the Securities Exchange Act of 1934, as of March 2, 2018). Except as otherwise noted below, the address for each person listed on the table is c/o Third Point Reinsurance Ltd., Point House, 3 Waterloo Lane, Pembroke HM 08, Bermuda.
| | | | | | | | Shares Beneficially Owned | | Name and Address | Number of Shares | Percentage of Class(1) | | 5% Shareholders | | | KIA TP Holdings, L.P.(2) | 12,312,368 |
| 11.89 | % | KEP TP Holdings, L.P.(2) | 12,312,368 |
| 11.89 | % | Daniel S. Loeb(3) | 9,681,451 |
| 9.35 | % | BlackRock, Inc.(4)
| 10,935,594 |
| 10.56 | % | Vanguard Group Inc.(4) | 8,481,125 |
| 8.19 | % | | | | | | | | | | Directors and Named Executive Officers | |
| | John R. Berger(5) | 4,612,560 |
| 4.46 | % | Steven E. Fass(6) | 168,627 |
| * |
| | Rafe de la Gueronniere | 37,130 |
| * |
| Mary R. Hennessy(6) | 62,554 |
| * |
| | Neil McConachie | 61,854 |
| * |
| | Mark Parkin | 43,628 |
| * |
| | Joshua L. Targoff | 149,991 |
| * |
| J. Robert Bredahl(7) | 3,308,692 |
| 3.20 | % | Nicholas J. D. Campbell(8) | 392,515 |
| * |
| Christopher S. Coleman(9) | 551,033 |
| * |
| Manoj K. Gupta(10) | 748,271 |
| * |
| Daniel V. Malloy(11) | 2,157,336 |
| 2.08 | % | All executive officers and directors as a group (16 individuals)(12) | 12,528,124 |
| 12.10 | % |
* Represents beneficial ownership of less than 1%.
| | (1) | Based on an aggregate of 103,520,817 common shares (including restricted shares) issued and outstanding as of March 2, 2018. |
| | (2) | The aggregate number of common shares beneficially owned includes 8,466,934 common shares held of record by KIA TP Holdings, L.P. (“KIA TP”) and 1,533,066 common shares held of record by KEP TP Holdings, L.P. (“KEP TP”). KIA TP and KEP TP also own warrants to purchase 1,957,867 and 354,501 common shares, respectively. The warrants are currently fully exercisable, and will expire on December 22, 2021. Kelso GP VIII (Cayman) Ltd. (“GP VIII LTD”) is the general partner of Kelso GP VIII (Cayman), L.P. (“GP VIII LP”, and, together with GP VIII LTD and KIA TP, the “KIA Entities”). GP VIII LP is the general partner of KIA TP. KEP VI (Cayman) GP Ltd. (“KEP VI GP LTD”, and, together with KEP TP, the “KEP Entities”) is the general partner of KEP TP. The KIA Entities and the KEP Entities, due to their common control, could be deemed to beneficially own each of the other’s securities. Each of the KIA Entities and the KEP Entities disclaims such beneficial ownership and this report shall not be deemed an admission of beneficial ownership of such securities for any purpose. Each of the KIA Entities, due to their common control, could be deemed to beneficially own each other’s securities. GP VIII LTD disclaims beneficial ownership of all of the securities owned of record, or deemed beneficially owned, by each of GP VIII LP and KIA TP, except to the extent of its pecuniary interest therein, and the inclusion of these securities in this report shall not be deemed an admission of beneficial ownership of all the reported securities for any purpose. GP VIII LP disclaims beneficial ownership of all of the securities owned of record, or deemed beneficially owned, by each of GP VIII LTD and KIA TP, except, in the case of KIA TP, to the extent of its pecuniary interest therein, and the inclusion of these securities in this report shall not be deemed an admission of beneficial ownership of all the reported securities for any purpose. KIA TP disclaims beneficial ownership of all of the securities owned of record, or deemed beneficially owned, by each of GP VIII LTD and GP VIII LP, and the inclusion of these securities in this report shall not be deemed an admission of beneficial ownership of all the reported securities for any purpose. Each of the KEP Entities, due to their common control, could be deemed to beneficially own each other’s securities. KEP VI GP LTD disclaims beneficial ownership of all of the securities owned of record, or deemed beneficially owned, by KEP TP, except to the extent of its pecuniary interest therein, and the inclusion of these securities in this report shall not be deemed an admission of beneficial ownership of all the reported securities for any purpose. KEP TP disclaims beneficial ownership of all of the securities owned of record, or deemed beneficially owned, by KEP VI GP LTD, and the inclusion of these securities in this report shall not be deemed an admission of beneficial ownership of all the reported securities for any purpose. Frank T. Nickell, Thomas R. Wall, IV, George E.
|
Matelich, Michael B. Goldberg, David I. Wahrhaftig, Frank K. Bynum, Jr., Philip E. Berney, Frank J. Loverro, James J. Connors, II, Church M. Moore, Stanley de J. Osborne, Christopher L. Collins, A. Lynn Alexander, Howard A. Matlin, John K. Kim and Henry Mannix, III (the “Kelso Individuals”) may be deemed to share beneficial ownership of securities owned of record or beneficially owned by GP VIII LTD, GP VIII LP, KIA TP, KEP VI GP LTD, and KEP TP, by virtue of their status as directors of GP VIII LTD and KEP VI GP LTD, but disclaim beneficial ownership of such securities, and this report shall not be deemed an admission that any of the Kelso Individuals are the beneficial owner of these securities for any purpose.
| | (3) | Of these shares, the 2010 Loeb Family Trust owns 300,000 common shares, Third Point Advisors LLC owns 1,000,000 common shares, Third Point Opportunities Master Fund L.P. owns 1,200,000 common shares and the 2011 Loeb Family GST Trust owns 5,916,175 common shares. Mr. Loeb has sole voting and dispositive power over the shares held by the 2010 Loeb Family Trust, Third Point Advisors LLC, the 2011 Loeb Family GST Trust and Third Point Opportunities Master Fund L.P. Mr. Loeb disclaims beneficial ownership of such common shares except to the extent of his pecuniary interest therein, if any. Mr. Loeb’s address is c/o Third Point, LLC, 390 Park Avenue, 18th Floor, New York, NY. |
| | (4) | Amounts indicated are based on Schedule 13G filings; in the case of BlackRock, Inc., made on February 1, 2018, and in the case of Vanguard Group Inc., made on February 9, 2018, in each case as of December 31, 2017. |
| | (5) | Includes options to purchase 3,720,930 common shares and 167,838 common shares. Also includes 500,000 common shares held by JVC52, LLC which is a Delaware limited liability company. Mrs. Nathalie Berger, Mr. Berger’s wife, controls JVC52, LLC. Mr. Berger disclaims any beneficial ownership of these shares except to the extent of his pecuniary interests therein, if any. Includes 223,792 restricted shares granted under the Third Point Reinsurance Ltd. 2013 Omnibus Incentive Plan that vest based on continued employment and the achievement of certain financial performance measures over a three-year performance period. The number of shares that may be retained upon vesting will vary based on the level of achievement of the performance goals. All 223,792 restricted shares would vest if the maximum performance level is achieved (149,195 would vest at target and 0 at threshold). |
| | (6) | Includes options to purchase 25,424 common shares. |
| | (7) | Includes options to purchase 2,209,302 common shares and 194,270 common shares. Includes 357,620 restricted shares granted under the Third Point Reinsurance Ltd. 2013 Omnibus Incentive Plan that vest based on continued employment and the achievement of certain financial performance measures over a three-year performance period. All 357,620 restricted shares would vest if the maximum performance level is achieved (238,414 would vest at target and 0 at threshold). Also includes 547,500 of our common shares which are pledged as security; 200,000 of these common shares are held by the J. Robert Bredahl Irrevocable Insurance Trust. Mrs. Kimberly J. Bredahl, Mr. Bredahl’s wife, is the trustee of the J. Robert Bredahl Irrevocable Insurance Trust. Mr. Bredahl disclaims any beneficial ownership of these shares except to the extent of his pecuniary interest therein, if any. |
| | (8) | Includes options to purchase 279,070 common shares and 6,784 common shares. Includes 106,661 restricted shares granted under the Third Point Reinsurance Ltd. 2013 Omnibus Incentive Plan that vest based on continued employment and the achievement of certain financial performance measures over a three-year performance period. The number of shares that may be retained upon vesting will vary based on the level of achievement of the performance goals. All 106,661 restricted shares would vest if the maximum performance level is achieved (71,108 would vest at target and 0 at threshold). |
| | (9) | Includes options to purchase 279,070 common shares and 42,136 common shares. Includes 229,827 restricted shares granted under the Third Point Reinsurance Ltd. 2013 Omnibus Incentive Plan that vest based on continued employment and the achievement of certain financial performance measures over a three-year performance period. The number of shares that may be retained upon vesting will vary based on the level of achievement of the performance goals. All 229,827 restricted shares would vest if the maximum performance level is achieved (153,218 would vest at target and 0 at threshold). Also includes 9,000 common shares held by Mr. Coleman’s wife. Mr. Coleman disclaims beneficial ownership of the shares held by his wife. |
| | (10) | Includes options to purchase 581,395 common shares and 17,074 common shares. Includes 149,802 restricted shares granted under the Third Point Reinsurance Ltd. 2013 Omnibus Incentive Plan that vest based on continued employment and the achievement of certain financial performance measures over a three-year performance period. The number of shares that may be retained upon vesting will vary based on the level of achievement of the performance goals. All 149,802 restricted shares would vest if the maximum performance level is achieved (99,868 would vest at target and 0 at threshold). |
| | (11) | Includes options to purchase 1,627,906 common shares and 189,703 common shares. Includes 339,727 restricted shares granted under the Third Point Reinsurance Ltd. 2013 Omnibus Incentive Plan that vest based on continued employment and the achievement of certain financial performance measures over a three-year performance period. The number of shares that may be retained upon vesting will vary based on the level of achievement of the performance goals. All 339,727 restricted shares would vest if the maximum performance level is achieved (226,485 would vest at target and 0 at threshold). |
| | (12) | Consists of options to purchase 8,748,521 common shares and 3,779,603 common shares (including 1,629,991 restricted shares subject to vesting) that are held by such executive officers and directors as a group. |
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Policies and Procedures for Related Person Transactions
The Company has adopted a Related Person Transactions Policy pursuant to which our executive officers, directors and principal shareholders, including their immediate family members, are not permitted to enter into a related person transaction with us without the consent of our Audit Committee, another independent Committee of our Board or the full Board. Any request for us to enter into a transaction with an executive officer, director, principal shareholder or any of such persons’ immediate family members, in which the amount involved exceeds $120,000, is required to be presented to our Audit Committee for review, consideration and approval. All of our directors, executive officers and employees are required to report to our Audit Committee any such related person transaction. In approving or rejecting the proposed transaction, our Audit Committee takes into account, among other factors it deems appropriate, whether the proposed related person transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances, the extent of the related person’s interest in the transaction and, if applicable, the impact on a director’s independence. Under the policy, if we should discover related person transactions that have not been approved, our Audit Committee will be notified and will determine the appropriate action, including ratification, rescission or amendment of the transaction. A copy of our Related Person Transactions Policy is available on our website at: www.thirdpointre.com/investors/corporate-governance/governance-documents.
Related Person Transactions
The following is a description of certain relationships and transactions that existed or that we have entered into with our directors, major shareholders and certain other related persons since the beginning of 2015, as well as certain other transactions.
On December 22, 2011, we entered into an investment management agreement with Third Point LLC, Third Point Re BDA, and Third Point Advisors LLC (“TP GP”) (Third Point Re BDA and TP GP, together with any other party admitted in the future as a participant, the “Participants” and each a “Participant”) pursuant to which the parties created a joint venture (as the context requires, the “Joint Venture”) whereby Third Point LLC manages the assets of Third Point Re BDA and TP GP as well as any of our subsidiaries’ assets, if any, in accordance with the terms and subject to the conditions set forth in the investment management agreement, except as described below.
On January 28, 2015, we entered into another investment management agreement with Third Point LLC, Third Point Re USA and TP GP pursuant to which the parties created a separate managed account (as the context requires, the “Joint Venture”) whereby Third Point LLC manages the assets of Third Point Re USA and TP GP under substantially the same terms and conditions as our existing investment management agreement for Third Point Re BDA.
In June 2016, Third Point Re, Third Point Re BDA, TPRUSA and Third Point Re USA entered into amended and restated Joint Venture and Investment Management Agreements (the “Agreements” and each an “Agreement”) with Third Point LLC and TP GP for an additional five-year term, effective on December 22, 2016, the end of the term of the previous agreements.
Term
Each Agreement has a term ending on December 22, 2021, subject to automatic renewal for additional successive three-year terms unless a party notifies the other parties in writing on or before the June 22nd prior to the end of a term that it wishes to terminate such Agreement at the end of such term.
Performance Allocation
Under each Agreement, the Joint Venture has established one or more capital accounts to which capital contributions, withdrawals, net profit and net loss will be allocated in respect of each Participant. At the end of each fiscal year, the performance allocation (equal to 20% of the net profit allocable to the capital account of each Participant) will be
reallocated to the capital account of TP GP from the capital account of each other Participant, provided that a performance allocation will not be made with respect to such capital account until such capital account has recouped the amount of any unrecouped net capital loss in its loss recovery account (as described below). If a Participant withdraws all or a portion of its capital account other than at the end of a fiscal year, the performance allocation accrued and attributable to the portion withdrawn will be debited against such Participant’s capital account and credited to TP GP’s capital account at the time of withdrawal.
Under each Agreement, Third Point LLC is required to maintain a loss recovery account in respect of each Participant. Thereafter, for any fiscal year, the loss recovery account balance shall be the sum of all prior year net loss amounts allocated to the Participant and not subsequently offset by prior year net profit amounts allocated to such Participant, provided that the loss recovery account balance shall be reduced proportionately to reflect any withdrawals made by such Participant. TP GP may waive or reduce the performance allocation, in its sole discretion. Third Point LLC and TP GP may elect, at the beginning of each fiscal year, to restructure the performance allocation as a performance fee to Third Point LLC with the same terms as the performance allocation.
Management Fee
Pursuant to the amended and restated Agreements, Third Point LLC is entitled to receive a monthly payment in advance by each Participant (other than TP GP) that is equal to (i) 0.125% (1.5% annualized) of the capital account of such Participant (before accounting for any accrual of the performance allocation described in such Agreement). Pursuant to initial agreements, up to December 22, 2016, the date the initial agreements expired, Third Point LLC was entitled to receive a monthly payment in advance by each Participant (other than TP GP) that was equal to (i) 0.1667% (2.0% annualized) of the capital account of such Participant (before accounting for any accrual of the performance allocation described in such Agreement) minus (ii) the aggregate amount of Founders payments paid for such month pursuant to the Founders Agreement, in each case pro-rated for intra-month withdrawals or contributions.
Most Favored Nation
In the event that Third Point LLC agrees terms with any existing or future investor wherein the asset-based fee or performance based compensation is equal to or more favorable to such investor, Third Point Re BDA and Third Point Re USA, will have the right to receive the benefit of such terms (provided it agrees to be bound by all the terms and conditions associated with such equal or more favorable terms).
Investment Guidelines
Under each Agreement, Third Point LLC is required to adhere to the following investment guidelines:
Composition of Investments: At least 60% of the investment portfolio will be held in debt or equity securities (including swaps) of publicly traded companies (or their subsidiaries) and governments of the OECD high income countries, asset-backed securities, cash, cash equivalents and gold and other precious metals. Except with the prior written consent of the Investment and Finance Committee, none of the assets in the investment portfolio will be held in illiquid investments traditionally considered “venture capital” or private equity investments. In addition, no investments in third party managed funds or other investment vehicles will be made without the consent of the Investment and Finance Committee.
Concentration of Investments: Other than cash, cash equivalents and United States government obligations, no single investment in the investment portfolio will constitute more than 15% of the portfolio.
Liquidity: Assets will be invested in such fashion that Third Point Re BDA and Third Point Re USA have a reasonable expectation that it can meet any of its liabilities as they become due. We review the liquidity of the portfolio on a periodic basis.
Net Exposure Limits: The net position (long positions less short positions) may not exceed 1.5 times net asset value for more than 10 trading days in any 30-trading day period.
Upon written request of Third Point LLC, our senior management may, in exigent circumstances, permit a variation from these guidelines.
Termination
We may terminate either Agreement upon the death, long-term disability or retirement of Daniel S. Loeb, or the occurrence of other circumstances in which Mr. Loeb is no longer directing the investment program of Third Point LLC or actively involved in the day-to-day management of Third Point LLC.
We may withdraw as participants under the Agreements prior to the expiration of the Agreements’ term at any time following the occurrence of a “Cause Event”, which is defined as:
a material violation of applicable law relating to Third Point LLC’s investment related business;
Third Point LLC’s fraud, gross negligence, willful misconduct or reckless disregard of its obligations under the Agreement;
a material breach by Third Point LLC of our investment guidelines or any other material breach of the Agreement, which, in either case, if such breach is reasonably capable of being cured, is not cured within a 15-day period;
a conviction or, a plea of guilty or nolo contendere to a felony or a crime affecting the investment related business of Third Point LLC by certain senior officers of Third Point LLC;
any act of fraud, material misappropriation, material dishonesty, embezzlement, or similar conduct relating to Third Point LLC’s investment related business; or
a formal administrative or other legal proceeding before the SEC, the CFTC, the FINRA, or any other U.S. or non-U.S. regulatory or self-regulatory organization against Third Point LLC; or certain key personnel which would likely have a material adverse effect on us.
In addition, we may withdraw as a participant under the investment management agreements prior to the expiration of their term if the net investment performance of Third Point LLC has (a) (i) incurred a loss in two successive calendar years and (ii) underperformed the S&P 500 Index by at least 10 percentage points for such two successive calendar years, taken as a whole, or (b) (i) incurred a cumulative loss of 10% or more during any 24-month period and (ii) underperformed the S&P 500 Index by at least 15 percentage points for such 24-month period. We may not withdraw or terminate the Agreements on the basis of performance other than as provided above.
The following table sets forth management feesinformation concerning: (1) the compensation of our Chief Executive Officer, and performance fees incurredDirector (Mr. Egan), our former Chief Executive Officer (Mr. Malloy), our former Chief Executive Officer and Director (Mr. Sankaran) (the Company’s Principal Executive Officers, or “PEOs”), and the average compensation for our other Named Executive Officers, both as reported in the Summary Compensation Table and with certain adjustments to reflect the “compensation actually paid” to such individuals, as defined under SEC rules, for each of the fiscal years ended December 31, 2017, 20162020, 2021 and 2015: 2022 and (2) and our cumulative total shareholder return (“TSR”), the cumulative TSR of our comparator group (“Comparator Group TSR”), Net Income and Adjusted Core Combined Ratio over such years in accordance with SEC rules performance for each such fiscal year: | | | | | | | | | | | | | | | 2017 | | 2016 | | 2015 | | | ($ in thousands) | | Management fees - Third Point LLC | $ | 36,733 |
| | $ | 7,110 |
| | $ | 6,362 |
| Management fees - Founders (1) | — |
| | 35,321 |
| | 36,053 |
| | Performance fees - Third Point Advisors LLC (before loss carryforward) | 93,978 |
| | 17,276 |
| | 7,061 |
| | Performance fees - loss carryforward | — |
| | — |
| | (6,199 | ) | | | $ | 130,711 |
| | $ | 59,707 |
| | $ | 43,277 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (a) | (b) | (b) | (b) | (c) | (c) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | | | | | | | | | | Value of Initial Fixed $100 Investment Based on: | | | | Year | SCT Total for Mr. Egan ($) | SCT Total for Mr. Malloy ($) | SCT Total for Mr. Sankaran
($) | Comp. Actually Paid to Mr. Egan ($)(1) | Comp. Actually Paid to Mr. Malloy
($)(1) | Comp. Actually Paid to Mr. Sankaran ($)(1) | Average SCT Total for Non-PEO NEOs ($)(2) | Average Comp. Actually Paid to Non-PEO NEOs ($)(1)(2) | Total Shareholder Return ($) | Peer Group Total Shareholder Return ($)(3) | Net Income ($MMs) | Core Combined Ratio | | 2022 | 5,818,004 | 3,408,516 | 8,384,125 | 6,972,608 | 2,413,082 | $524,637 | 2,679,145 | 1,444,349 | 56.08 | 144.76 | -387 | 101.5% | | 2021 | — | 4,168,265 | 12,374,251 | — | 4,089,517 | $10,773,157 | 2,794,042 | 2,459,819 | 77.28 | 125.88 | 58 | 99.7% | | 2020 | — | 3,254,510 | — | — | 1,697,106 | — | 1,758,356 | 1,527,848 | 90.49 | 103.11 | 144 | 110.3% |
(1) KEP TP Bermuda Ltd., KIA TP Bermuda Ltd., Pine Brook LVR, L.P., P RE Opportunities Ltd. and Dowling Capital Partners I, L.P., collectively the “Founders”, received a share of the management fees in proportion to their initial investments in Third Point Re until December 22, 2016.The following individuals are our NEOs for each fiscal year:
Founders Agreement
| | | | | | | | | | YEAR |
PEOs | Non-CEO NEOs | | 2022 | Scott Egan, Daniel Malloy, and Siddhartha Sankaran | Monica Cramér Manheim, Stuart Liddell, Prashanth Gangu, David E. Govrin, David W. Junius, Stephen Yendall, and Vievette Henry | | 2021 | Daniel Malloy, and Siddhartha Sankaran | Monica Cramér Manheim, Prashanth Gangu, David E. Govrin, David W. Junius, and Christopher Coleman | | 2020 | Daniel Malloy | David E. Govrin, David W. Junius, Nicholas J.D. Campbell and Christopher Coleman |
Each
(2) Compensation actually paid to our NEOs represents the “Total” compensation reported in the Summary Compensation Table for the applicable fiscal year, adjusted as set forth below. Amounts set forth in this table were computed in accordance with the methodology used for financial reporting purposes and, for performance-based equity awards, calculated based on the probable outcome of such performance-based vesting conditions as of the Lead Investors, Dowlinglast day of the fiscal year.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2020 | 2021 | 2022 | | Adjustments | Mr. Malloy | Average non-PEO NEOs | Mr. Malloy | Mr. Sankaran | Average non-PEO NEOs | Mr. Egan | Mr. Malloy | Mr. Sankaran | Average non-PEO NEOs | | Deduction for Amounts Reported under the “Stock Awards” and “Option Awards” Columns in the SCT for Applicable FY | -1,487,518 | -925,321 | -2,069,999 | -9,062,488 | -1,394,269 | -5,002,002 | -1,000,004 | -3,947,416 | -1,324,840 | | Increase based on ASC 718 Fair Value of Awards Granted during Applicable FY that Remain Unvested as of Applicable FY End, determined as of Applicable FY End | 1,081,235 | 976,441 | 2,685,238 | 7,964,328 | 1,638,868 | 5,493,814 | — | 800,845 | 928,396 | | Increase based on ASC 718 Fair Value of Awards Granted during Applicable FY that Vested during Applicable FY, determined as of Vesting Date | — | — | — | — | 109,851 | 662,791 | 808,200 | — | 6,286 | | Increased/deduction for Awards Granted during Prior FY that were Outstanding and Unvested as of Applicable FY End, determined based on change in ASC 718 Fair Value from Prior FY End to Applicable FY End | -954,558 | -221,696 | -50,078 | -506,683 | -53,662 | — | -636,072 | -1,755,184 | -157,391 | | Increased/deduction for Awards Granted during Prior FY that Vested During Applicable FY End, determined based on change in ASC 718 Fair Value from Prior FY End to Applicable FY End | -91,513 | -28,398 | 57,535 | 3,749 | 35,337 | — | -117,940 | -183,856 | -94,094 | | Deduction of ASC 718 Fair Value of Awards Granted during Prior FY that were Forfeited during Applicable FY, determined as of Prior FY End | -105,050 | -31,535 | -701,444 | — | -670,349 | — | -49,617 | -2,773,876 | -593,153 | | Increase based on Dividends or Other Earnings Paid during Applicable FY prior to Vesting Date | — | — | — | — | — | — | — | — | — | TOTAL
ADJUSTMENTS | -1,557,404 | -230,508 | -78,748 | -1,601,094 | -334,223 | 1,154,604 | -995,433 | -7,859,488 | -1,234,796 |
(3) TSR is cumulative for the measurement periods beginning on December 31, 2019 and PROL (orending on December 31 of each of 2022, 2021 and 2020, respectively, calculated in accordance with Item 201(e) of Regulation S-K. The Dow Jones U.S. Property & Casualty Index is the industry specific index we use in our 10-K.
(4) “Adjusted Core Combined Ratio” is a non-GAAP measure which is calculated by dividing the sum of Core loss and loss adjustment expenses incurred, net, acquisition costs, net and other underwriting expenses by Core net premiums earned. This ratio, which is one of the selected performance metrics under the Company’s annual cash incentive program for 2022, is a key indicator of our underwriting profitability, and the Compensation Committee has determined that this measure represents the most important financial performance measure used by the Company to link compensation actually paid to the Company’s NEOs to Company performance. Appendix A to this Proxy Statement includes a reconciliation of such non-GAAP financial measures to the most directly comparable financial measure prepared in accordance with GAAP.
Narrative Disclosure to Pay Versus Performance Table
Relationship between Financial Performance Measures
The line graphs below compare (i) the compensation actually paid to our PEO(s) and the average of the compensation actually paid to our remaining NEOs, with (ii) our cumulative TSR, (iii) Peer Group TSR, (iv) our Net Income, and (v) our Adjusted Core Combined Ratio, in each case, onefor the fiscal years ended December 31, 2020, 2021 and 2022.
TSR amounts reported in the graph assume an initial fixed investment of their affiliates) entered$100, and that all dividends, if any, were reinvested.
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Pay Versus Performance Tabular List
The following performance measures represent the most important financial and strategic performance measures used by us to link compensation actually paid to our NEOs to performance for the fiscal year ended December 31, 2022:
•Adjust Core Combined Ratio; •Services Fee Revenue; •Net Services Fee Income; •Portfolio underwriting; •Execution of transactions; and •Execution of the 2022 investment plan
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| | | | | | | PROPOSAL 3 | APPROVAL OF 2023 OMNIBUS INCENTIVE PLAN | | TO APPROVE THE SIRIUSPOINT LTD. 2023 OMNIBUS INCENTIVE PLAN |
On April 19, 2023, the Board approved the 2023 Omnibus Incentive Plan, subject to approval by our shareholders. The 2023 Omnibus Incentive Plan will replace the 2013 Omnibus Incentive Plan. If the 2023 Omnibus Incentive Plan is approved, no awards will be granted under the 2013 Omnibus Incentive Plan after the 2023 Omnibus Incentive Plan becomes effective, although the available shares under the 2013 Omnibus Incentive Plan will roll over into the 2023 Omnibus Incentive Plan and will represent the initial share authorization under the 2023 Omnibus Incentive Plan. As of April 13, 2023, there were approximately 17,500,000 common shares of the Company (“Shares”) available for future issuances under the 2013 Omnibus Incentive Plan (assuming outstanding performance awards are vested at the maximum vesting level), and which will transfer to the 2023 Omnibus Incentive Plan to represent the initial share pool under the 2023 Omnibus Incentive Plan.Although we have available Shares under the 2013 Omnibus Incentive Plan, we are seeking shareholder approval of the 2023 Omnibus Incentive Plan in light of the August 2, 2023 expiration date of the 2013 Omnibus Incentive Plan and to make certain other administrative changes.
If the 2023 Omnibus Incentive Plan is approved by shareholders, we will continue to be able to make awards of long-term equity incentives, which we believe are critical for attracting, motivating, rewarding and retaining a founders agreement dated December 22, 2011 with Third Point Re, which was amended and restated on February 26, 2015,talented team that will contribute to add Third Point Re USA as a party (as amended and restated,our success. If the “Founders Agreement”),2023 Omnibus Incentive Plan is not adopted by our shareholders, the Company will continue to operate the 2013 Omnibus Incentive Plan pursuant to its current provisions until its expiration date, and we may be required to increase the cash component of our compensation mix, which Kelso, Pine Brook, PROLwould inhibit our ability to align our executives’ interests with the interests of our shareholders, to recruit and Dowling (or its applicable affiliate)retain new executives, key employees and non-employee directors, and to motivate our current executives and key employees over a long-term horizon.
Equity Grant Practices
As of April 13, 2023, there were approximately 5,348,441 full value awards (that is, awards other than share options and share appreciation rights, and with performance-based awards counted assuming the maximum vesting level) issued and outstanding and approximately 3,169,450 share options outstanding under the 2013 Omnibus Incentive Plan. As of that date, the weighted average exercise price of our outstanding share options was $9.26, and the weighted average remaining contractual term for the outstanding share options was 3.66 years. As noted above, as of April 13, 2023, approximately 17,500,000 Shares remained available for issuance under the 2013 Omnibus Incentive Plan.
Annual dilution from our equity compensation program is measured as the total number of shares subject to equity awards granted in a given year, less cancellations and other shares returned to the reserve that year, divided by total shares outstanding at the end of the year. Annual dilution from our equity compensation program for fiscal year 2022 was 18.4%. Overhang is another measure of the dilutive impact of equity programs. Our overhang is equal to the number of shares subject to outstanding equity compensation awards plus the number of shares available to be granted, divided by the total number of outstanding shares. As of April 13, 2023, our overhang was 16.0%. Overhang percentages are entitledbased on approximately 162,841,133 Shares outstanding as of April 13, 2023.
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Burn rate is a measure of the number of shares subject to receive inequity awards that we grant annually, which helps indicate the life expectancy of our equity plans and is another measure of shareholder dilution. We determine our burn rate by dividing the aggregate directly from eachnumber of Third Point Re and, Third Point LLC and, followingshares subject to awards granted during the amendment and restatementyear by the weighted average number of shares outstanding during the year. The Company’s burn rate for the past three fiscal years has been as follows: | | | | | | | | | | | | | | | | | | | | | | | | | | Full Value Awards
| | | | | Share | Restricted Share Units Granted | Performance Shares Earned | Restricted Shares Granted | Share | Weighted Average | | | Options | Options + Full | Number of Ordinary | | | Fiscal Year | Granted | Value Awards | Shares Outstanding | Burn Rate | | 2022 | 2,905,709 | 4,928,981 | — | 237,118 | 8,071,808 | 160,228,588 | 5.0 | % | | 2021 | 2,722,215 | 6,246,111 | 1,169,204 | 2,123,811 | 12,311,341 | 148,667,770 | 8.3 | % | | 2020 | — | — | 749,322 | 1,029,373 | 1,778,695 | 92,510,090 | 1.9 | % |
Our three-year average burn rate is 5.1%
Certain Features of the Founders Agreement, Third Point Re USA, an annual founders payment (payable in cash monthly in advance) equal to 1.7%2023 Omnibus Incentive Plan
The following features of the value2023 Omnibus Incentive Plan are designed to reinforce alignment between the equity compensation arrangements awarded pursuant to the 2023 Omnibus Incentive Plan and our shareholders’ interests:
a.The number of such participant’s capital account (the “Founders Payment”). The portionShares available under the 2023 Omnibus Incentive Plan will equal the number of Shares that remained available under the Founders Payment payable to each such party is proportionate based on its (or its affiliates’) respective investment in us accruing2013 Omnibus Incentive Plan as of the beginning of each
month, (the portioneffective date of the Founders Payment received by each such party,2023 Omnibus Incentive Plan;
b.Awards will be subject to a one-year minimum vesting period, subject to limited exceptions set forth in the 2023 Omnibus Incentive Plan as applicable,described below and the “Individual Founders Payment”). The rightCommittee’s (as defined below) ability to receiveprovide for accelerated exercisability or vesting of any award, including in the Individual Founders Payment is not transferable by any such partycase of a termination of employment or service or a change in control, in the terms of an award agreement or otherwise; c.No discounting of share options or share appreciation rights (other than with respect to substitute awards, as defined below); d.No repricing or replacement of underwater share options or share appreciation rights without shareholder approval; e.No dividends or dividend equivalents paid on unearned awards; f.Prohibition on the recycling of shares used to pay the purchase price or withholding taxes related to an outstanding award, or which were not issued or delivered upon the net settlement or net exercise of a share option or share appreciation right; g.Annual non-employee director compensation limit, which cannot be amended without shareholder approval; and h.No liberal definition of “change in control.”
Summary of the 2023 Omnibus Incentive Plan
The following summary of the 2023 Omnibus Incentive Plan is qualified in its affiliates). entirety by reference to the complete text of the 2023 Omnibus Incentive Plan, included as Appendix B to this proxy statement. You should read the complete test of the 2023 Omnibus Incentive Plan for more details regarding its operation.
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Purpose
The rightpurpose of the 2023 Omnibus Incentive Plan is to receivepromote the Founders Paymentinterests of the Company and its shareholders by (i) attracting and retaining executive personnel and other key employees and directors of outstanding ability; (ii) motivating executive personnel and other key employees and directors, by means of performance-related incentives, to achieve longer-range performance goals; and (iii) enabling such individuals to participate in our long-term growth and financial success.
Eligibility
Participants in the 2023 Omnibus Incentive Plan will consist of such employees of the Company, its subsidiaries and certain other employers selected by the Committee, natural person consultants and advisors providing certain bona fide services to the Company and its subsidiaries, and non-employee members of the Board as the Committee in its sole discretion may select from time to time.As of April 13, 2023, approximately 431 employees and 7 non-employee directors would be forfeitedeligible to participate in certain circumstances. the 2023 Omnibus Incentive Plan if selected by the Committee.
Administration
The final Founders Payment was made2023 Omnibus Incentive Plan will be administered by the Compensation Committee of the Board, or a subcommittee thereof, or such other committee designated by the Board (the “Committee”), in January 2017.each case consisting of two or more members of the Board. Each member of the Committee is intended to be (i) a “non-employee director” within the meaning of Rule 16b-3 under the Exchange Act and (ii) “independent” within the meaning of the rules of the NYSE. In
Subject to the event that Third Point LLC or an affiliateexpress provisions of Third Point LLC is no longer managing the assets of Third Point Re or Third Point Re USA through2023 Omnibus Incentive Plan, the Accounts or otherwise, then for so long as Daniel S. Loeb still holds interests in Third Point Re or Third Point Re USA, Daniel S. LoebCommittee shall have the rightpower and authority to participate pro-rata withadminister the parties2023 Omnibus Incentive Plan, including the authority to interpret the Founders Agreementterms of the 2023 Omnibus Incentive Plan, select participants, determine types of awards and terms of awards for participants and to adopt, alter and repeal administrative rules, guidelines and practices governing the operation of the 2023 Omnibus Incentive Plan. The Committee may, in proportion to his interests in Third Point Re in any fee arrangement entered into between the parties to the Founders Agreement and any investment manager. Registration Rights Agreement
On December 22, 2011, certain of our shareholders executed and delivered the registration rights agreement (the “Registration Rights Agreement”). Pursuant to the Registration Rights Agreement, we agreed to grant (A) each Founderits sole discretion at any time, after the earlier of a Qualified IPO (as definedtake action such that (i) any outstanding share options and share appreciation rights become exercisable in the Registration Rights Agreement) and the third anniversary of the execution of the Registration Rights Agreement, the right to request that we effect the registration under the Securities Act offull or in part, (ii) all or a portion of the restriction period or performance cycle applicable to any outstanding awards lapses, and (iii) any performance goals applicable to any outstanding awards is deemed to be satisfied at the target, maximum, or any other level.
The Committee may delegate some or all of its power and authority under the 2023 Omnibus Incentive Plan to the Board, a subcommittee of the Board, a member of the Board, the Chief Executive Officer or other executive officer of the Company as the Committee deems appropriate, except that it may not delegate its power and authority to a member of the Board, the Chief Executive Officer or any executive officer with regard to awards to persons subject to Section 16 of the Exchange Act. The Committee may also appoint agents to assist in the administration of the 2023 Omnibus Incentive Plan.
Awards
Awards under the 2023 Omnibus Incentive Plan may be made in the form of performance awards; restricted shares; restricted share units; share options, which may be either incentive share options or non-qualified share options; share appreciation rights; deferred share units; other share-based awards; and dividend equivalents. Awards are generally non-transferable.
Awards under the 2023 Omnibus Incentive Plan may be granted in the form of substitute awards. Substitute awards refer to awards granted under the 2023 Omnibus Incentive Plan upon the assumption of, or in substitution
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for, outstanding equity awards previously granted by a company or other entity in connection with a corporate transaction, including a merger, consolidation, or acquisition of property or shares.
Shares Subject to the Plan
Under the 2023 Omnibus Incentive Plan, the number of Shares initially available for all awards, other than substitute awards, will be the number of Shares that are available for awards under the 2013 Omnibus Incentive Plan as of the effective date of the 2023 Omnibus Incentive Plan, which is estimated to be approximately 17,500,000 Shares. This amount is subject to adjustment in the event of any equity restructuring that causes the per share value of the Shares to change, such Founder’s securitiesas a share dividend, share split, spinoff, rights offering or recapitalization through an extraordinary cash dividend. This amount may also be adjusted in connection with certain other changes in corporate capitalization. The number of available Shares will be reduced by the sum of the aggregate number of Shares which become subject to outstanding awards.The closing stock price of a Share, as reported on the NYSE on April 13, 2023, was $9.40 per Share.
However, to the extent that any Shares subject to an award under the 2023 Omnibus Incentive Plan or the 2013 Omnibus Incentive Plan, other than a substitute award, for any reason expires without having been exercised, is canceled or terminated, settled in cash or otherwise is settled without the issuance of any Shares, then such Shares shall again be available for grant under the 2023 Omnibus Incentive Plan, provided, however, that the following shall not be available for reissuance under the 2023 Omnibus Incentive Plan: (i) Shares repurchased by the Company on the open market with the proceeds of a share option exercise, (ii) Shares otherwise issuable or issued in respect of, or as part of, any 2023 Omnibus Incentive Plan or 2013 Omnibus Incentive Plan award that are delivered to or withheld by the Company to pay the purchase price or the withholding taxes related to the outstanding award, and (B) PROL(iii) Shares that were subject to a share option Share-settled share appreciation right and were not issued or delivered upon the net settlement or net exercise of such share option or share appreciation right.
The number of Shares available for awards under the 2023 Omnibus Incentive Plan will not be reduced by (i) the number of Shares subject to substitute awards, or (ii) available shares under a shareholder approved plan of a company or other entity which was a party to a corporate transaction with the Company (as appropriately adjusted to reflect such corporate transaction) which become subject to awards granted under the 2023 Omnibus Incentive Plan.
No Repricing
The Committee may not, except with the approval of shareholders, pursuant to its adjustment power under the 2023 Omnibus Incentive Plan, or in connection with a change in control, reduce the exercise price of any outstanding share option or the base price of any outstanding share appreciation right, cancel any previously-granted share option or share appreciation right in exchange for another share option or share appreciation right with a lower exercise price or base price, or cancel any previously-granted share option or share appreciation right in exchange for cash or another award if the exercise price of such share option or the base price of such share appreciation right exceeds the fair market value of a share on the date of such cancellation.
Minimum Vesting Conditions
Notwithstanding any other provision of the 2023 Omnibus Incentive Plan to the contrary, awards granted under the 2023 Omnibus Incentive Plan (other than cash-based awards) will vest no earlier than the first anniversary of the date on which the award is granted; provided, that the following awards shall not be subject to the foregoing minimum vesting requirement: any (i) substitute awards granted in connection with awards that are assumed, converted or substituted pursuant to a merger, acquisition or similar transaction entered into by the Company or any of its subsidiaries, (ii) shares delivered in lieu of fully vested cash obligations, (iii) awards to non-employee
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directors that vest on earlier of the one-year anniversary of the date of grant and the next annual meeting of shareholders which is at least 50 weeks after the immediately preceding year’s annual meeting, and (iv) additional awards the Committee may grant, up to a maximum of five percent (5%) of the available share reserve authorized for issuance under the 2023 Omnibus Incentive Plan (subject to adjustment under the corporate capitalization provisions under the 2023 Omnibus Incentive Plan). The foregoing restriction does not apply to the Committee’s discretion to provide for accelerated exercisability or vesting of any timeaward, including in cases of a termination of employment or service or a change in control, in the terms of the award agreement or otherwise.
Non-Employee Director Compensation Limit
Under the terms of the 2023 Omnibus Incentive Plan, the aggregate value of cash compensation and the grant date fair value of Shares that may be awarded or granted during any fiscal year of the Company to an eligible director for his or her services as an eligible director may not exceed $1,000,000. The non-employee director compensation limit under the 2023 Omnibus Incentive Plan will not apply to distributions of previously deferred compensation under a deferred compensation plan maintained by the Company, or compensation received by the director in his or her capacity as an executive officer or employee of the Company.
Terms and Conditions of Performance Awards
A “performance award” is an award of restricted shares, restricted share units, share options, deferred shares, deferred share units, performance units, share appreciation rights, other equity-based awards or cash, the grant, exercise, voting or settlement of which is subject (in whole or in part) to the achievement of specified performance goals. Vested performance awards may be settled in cash, shares or a combination of cash and shares, as determined by the Committee and specified in the applicable award agreement. Performance awards will vest based on the achievement of pre-determined performance goals established by the Committee. Performance goals may be based upon one or more of the following criteria (alone or in combination, whether gross or net, before or after taxes, and/or before or after other adjustments, as determined by the Committee): (a) gross, net or operating income (before or after taxes); (b) earnings before interest and taxes (c) earnings before taxes, interest, depreciation, and/or amortization (“EBITDA”); (d) EBITDA excluding charges for share compensation, management fees, restructurings, impairments and/or other specified items (“Adjusted EBITDA”); (e) EBITDA excluding capital expenditures; (f) basic or diluted earnings per share or improvement in basic or diluted earnings per share; (g) revenues (including, but not limited to, total revenues, net revenues or revenue growth); (h) net operating profit; (i) growth in basic or diluted book value; (j) financial return measures (including, but not limited to, return on assets, capital, invested capital, investments, investment income generated by underwriting or other operations or on the float from such operations, equity, or revenue) including or excluding negative returns, and with or without compounding; (k) cash flow measures (including, but not limited to, operating cash flow, free cash flow, cash flow return on equity, and cash flow return on investment); (l) productivity ratios (including but not limited to measuring liquidity, profitability or leverage); (m) enterprise value; (n) share price (including, but not limited to, growth measures and total shareholder return, inclusive or exclusive of dividends); (o) expense/cost management targets (including but not limited to improvement in or attainment of expense levels, capital expenditure levels, and/or working capital levels); (p) margins (including, but not limited to, operating margin, underwriting margins, net income margin, cash margin, gross, net or operating profit margins, EBITDA margins, Adjusted EBITDA margins); (q) operating efficiency; (r) market share or market penetration; (s) customer targets (including, but not limited to, customer growth or customer satisfaction); (t) working capital targets or improvements; (u) profit measures (including but not limited to gross profit, net profit, operating profit, investment profit and/or underwriting profit), including or excluding charges for share compensation, fee income, underwriting losses incurred in prior periods, changes in IBNR reserves and/or other specified items; (v) economic value added; (w) balance sheet metrics (including, but not limited to, inventory, inventory turns, receivables turnover, net asset turnover, debt reduction, retained earnings, year-end cash, cash conversion cycle, ratio of debt to equity or to EBITDA); (x) workforce targets (including but not limited to diversity goals, employee engagement or satisfaction, employee retention, and workplace health and safety goals); (y) implementation,
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completion or attainment of measurable objectives with respect to risk management, research and development, key products or key projects, lines of business, acquisitions and divestitures and strategic plan development and/or implementation; (z) comparisons with various stock market indices, peer companies or industry groups or classifications with regard to one more of these criteria; or (aa) any other performance goal selected by the Committee, whether or not listed herein.
Performance goals may be established on a Qualified IPO,Company-wide basis or with respect to one or more business units, divisions, subsidiaries, or products and may be expressed in absolute terms, or relative or comparative terms. The Committee may adjust the performance goals for any performance cycle as it deems equitable in recognition of unusual or non-recurring events affecting the Company, changes in applicable tax laws or accounting principles, or such other factors as the Committee may determine.
Performance awards may include rights to dividends or dividend equivalents; provided that (i) a one-timedistribution or dividend with respect to Shares, including a regular cash dividend, shall be deposited with the Company and shall be subject to the same restrictions as the Shares with respect to which such distribution was made, and (ii) any dividend equivalents with respect to the performance awards that are subject to vesting conditions shall be subject to the same vesting conditions as the underlying awards.
Terms and Conditions of Restricted Shares and Restricted Share Units
A “restricted share” award is an award of Shares on which certain restrictions are imposed over specified periods that subject the Shares to a substantial risk of forfeiture. A “restricted share unit” is a unit, equivalent in value to a Share, credited by means of a bookkeeping entry in our books to a participant’s account, which is settled in shares and/or cash upon vesting. Subject to the provisions of the 2023 Omnibus Incentive Plan, the Committee will determine the terms and conditions of each award of restricted shares or restricted share units, including the restriction period for the award, and the restrictions applicable to the award. Restricted shares and restricted share units granted under the plan will vest based on a minimum period of service and/or the occurrence of events specified by the Committee.
Restricted share or restricted share unit awards may include rights to dividends or dividend equivalents; provided that (i) a distribution or dividend with respect to Shares, including a regular cash dividend, shall be deposited with the Company and shall be subject to the same restrictions as the Shares with respect to which such distribution was made, and (ii) any dividend equivalents with respect to the restricted share units that are subject to vesting conditions shall be subject to the same vesting conditions as the underlying awards.
Terms and Conditions of Share Options
An “incentive share option” is a share option that meets the requirements of Section 422 of the Code, and a “non-qualified share option” is a share option that does not meet those requirements. A share option granted under the 2023 Omnibus Incentive Plan will be exercisable only to the extent that it is vested on the date of exercise. No share option may be exercisable more than ten years from the grant date (or five years from the grant date in the case of an award granted to a holder of greater than 10% of the voting power of all shares of capital stock of the Company (a “Ten Percent Holder”)).
Other than with respect to substitute awards, the exercise price per share of each share option granted under the plan may not be less than 100%, or 110% in the case of an incentive share option granted to a Ten Percent Holder, of the fair market value of our Shares on the share option grant date.
The aggregate fair market value of all shares with respect to which incentive share options are first exercisable by an award recipient in any calendar year may not exceed $100,000 or such higher limit as may be permitted under
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Section 422 of the Code. Additionally, the maximum number of Shares that may be issued in respect of incentive share options under the 2023 Omnibus Incentive Plan may not exceed 17,500,000.
Terms and Conditions of Share Appreciation Rights
A “share appreciation right” (or “SAR”) is the right to requestreceive a payment from the Company in cash and/or Shares, as specified in the applicable award agreement, equal to the product of (i) the excess, if any, of the fair market value of one Share on the exercise date over a specified price fixed by the Committee on the grant date (which price, in the case of free-standing share appreciation rights which are not substitute awards, may not be less than the fair market value of a Share on the grant date), multiplied by (ii) a stated number of Shares; provided however, that we effecton the registration undergrant date, the Securities ActCommittee may establish in its sole discretion, a maximum amount per share which will be payable upon exercise. No share appreciation right may be exercisable more than ten years from the grant date. Share appreciation rights may be granted to participants in tandem with share options or on their own. Share appreciation rights that are granted in tandem with share options will generally have terms and conditions that are substantially similar to the share options with which they are granted.
Prior to the exercise of a Share-settled share appreciation right and the issuance of Shares to the holder thereunder, the holder of such share appreciation right shall have no rights as a shareholder of the Company with respect to the Shares subject to such share appreciation right.
Terms and Conditions of Deferred Share Units
A “deferred share unit” is a unit credited to a participant’s account in our books that represents the right to receive a Share (or the equivalent cash value of a Share) on settlement of the account. Deferred share units may be granted by the Committee independent of other awards or compensation, or they may be received at the participant’s election instead of other compensation. Subject to the provisions of the 2023 Omnibus Incentive Plan, our Committee will determine the terms and conditions of each award of deferred share units, including the restriction period for all or a portion of PROL’s securities that constitute “Registrable Securities” (as definedthe award, and the restrictions applicable to the award. Vested deferred share unit awards may be settled in cash, Shares or a combination of cash and Shares, as specified in the Registration Rights Agreement), in eachapplicable award agreement.
Other Share-Based Awards
The Committee may make other equity-based or equity-related awards not otherwise described by the terms of case (A) and (B)the plan. Any distribution, dividend or dividend equivalent with respect to Share-based awards that are subject to limitations on the number and timing of demand registrations and the other restrictions and cutback provisions contained in the Registration Rights Agreement. The Founders of PROL can currently exercise their demand rights at any time. In addition, pursuant to the Registration Rights Agreement, we have granted all shareholders of “Registrable Securities” “piggyback” rights to include securities in a registration statement filed by us with the SEC under the Securities Act,vesting conditions shall be subject to the same vesting conditions as the underlying awards.
Dividend Equivalents
A dividend equivalent is the right to receive payments in cash or in shares, as specified in the applicable award agreement, based on dividends paid with respect to Shares. Dividend equivalents may be granted to participants in tandem with another award (other than share options or SARs) or on their own.
Change in Control
Unless otherwise provided in an award agreement or other agreement with a participant in effect on the date of grant of the applicable award, in the event of a change in control of the Company in which the successor company assumes or substitutes for the applicable award, if the participant’s employment with the successor company (or the Company) or a subsidiary thereof terminates within twenty-four (24) months following such change in control (or other period set forth in the applicable award agreement) without cause or under the circumstances specified in the award agreement, then (i) share options and share appreciation rights outstanding as of the date of such
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termination of employment will immediately vest and become exercisable, and may thereafter be exercised for thirty-six (36) months (or such other period of time set forth in the applicable award agreement, but no later than the regularly scheduled term of such award), or (ii) the restrictions, and cutback provisionslimitations and other customaryconditions applicable to performance awards, restricted shares, restricted share units, deferred share units, dividend equivalents and other Share-based awards outstanding as of the date of such termination of employment shall lapse and such awards shall become free of all restrictions, limitations containedand conditions and become fully vested (with the attainment of the performance goals determined as set forth in the Registration Rights Agreement.award agreement or as otherwise determined by the Committee).
Unless otherwise provided in an award agreement, in the event of a change in control of the Company in which the awards are not effectively assumed or substituted, the Board (as constituted prior to such change in control) may, in its discretion, provide that (i) some or all outstanding share options and share appreciation rights will become exercisable in full or in part, (ii) the restriction period applicable to some or all outstanding awards will lapse in full or in part, (iii) the performance cycle applicable to some or all outstanding awards will lapse in full or in part, and (iv) the performance measures applicable to some or all outstanding awards will be deemed satisfied at the target, maximum, or any other level. In connection withaddition, in the registrationevent of our equity securitiesa change in control, the Board may, in its discretion, require outstanding awards, in whole or in part, to be surrendered to the Company in exchange for a payment of cash, other property, shares of capital stock in the company resulting from the change in control, or the parent thereof, or a combination of cash, other property and shares.
Change in control is defined under the Securities Act,plan generally as the investors partyacquisition by a person or group of more than 50% of the combined voting power of the Company, the sale of all or substantially all of the assets of the Company, or a change in a majority of the directors that is not approved by the incumbent directors, other than share acquisitions or asset sales to the Registration Rights Agreement agree (in the case of Pine Brook, Kelso and Daniel S. Loeb), if requested by the managing underwriter) not to effectCompany or its subsidiaries, any saleemployee benefit plan thereof, or distribution or to request registrationany affiliate of any securities within 7 days priorof the following.
Forfeiture, Cancellation or “Clawback” of Awards
The 2023 Omnibus Incentive Plan provides that participants will forfeit and 90 days following (unless adviseddisgorge to the Company any awards granted or vested and any gains earned or accrued due to the exercise of share options or share appreciation rights or the sale of any Shares or the settlement of any award to the extent required by the managing underwriter that a longer period, not to exceed 180 days, is required,applicable law or for such shorter period as the managing underwriter may agree)regulations in effect on or after the effective date of the registration statement relating to such registration. Lead Investors, and PROL and Dowling Warrants
On December 22, 2011, we issued the Lead Investors, PROL and Dowling (pro rata according2023 Omnibus Incentive Plan. Awards will also be subject to the proportion that their respective contributionsCompany’s generally applicable policies as to forfeiture and recoupment as may be adopted by our initial capitalization representBoard of Directors or the Committee from time to time, which may (at the total sharediscretion of our initial capitalization byBoard or the Lead Investors and PROL) warrants representingCommittee) be applied to all outstanding awards at the right to purchase up to 4,069,768time of our common shares, exercisable at $10.00 per share (the “Warrants”). The number of our common shares that each holderadoption, or on a prospective basis.
Amendment or Termination of the Warrants is entitled to receive corresponds to the aggregate amount of equity we raise in certain equity issuance transactions, including our initial public offering in August 2013. After giving effect to our initial public offering, the maximum number of common shares represented by the Warrants became issuable to the Lead Investors, PROL and Dowling.Plan
The Warrants (subject in certain cases2023 Omnibus Incentive Plan will terminate as of the first annual meeting of the Company’s shareholders to earlier expiration) expireoccur on or after the tenth anniversary of the issuance2023 Omnibus Incentive Plan’s effective date, unless earlier terminated by the Board or the Committee. Our Board of Directors or the Compensation Committee may at any time terminate or suspend the plan. Subject to regulatory approval, the Compensation Committee may also amend or modify the plan, except that no amendment may be made without shareholder approval if (i) shareholder approval is required by applicable law, including any rule of the Warrants. All WarrantsNYSE or any other stock exchange on which the Shares are entitledthen traded, or (ii) such amendment seeks to customary anti-dilution protections (includingmodify the eligible director compensation limit or the prohibition on repricing set forth in respectthe 2023 Omnibus Incentive Plan. Furthermore, neither the Board nor the Committee may, without the consent of dividends).the affected participant, amend, modify, or terminate the 2023 Omnibus Incentive Plan in any manner that would materially adversely affect any award theretofore granted under the 2023 Omnibus Incentive Plan. Trademark License Agreements
Amendment of an Award
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SIRIUSPOINT LTD. 2023 OMNIBUS INCENTIVE PLAN |
On December 22, 2011, Third Point LLC entered into trademark license agreements (each,
The Committee may amend, modify or terminate an award at any time prior to payment or exercise, in any manner not inconsistent with the terms of the plan, including (but not limited to) changing the date or dates of exercisability, nonforfeiture or performance satisfaction, except that no amendment, modification or termination that would adversely affect a “TLA”)participant’s rights under the award in a material manner may be effected without the participant’s consent. The Compensation Committee may also accelerate the exercisability or vesting or lapse of any restriction period with respect to any outstanding award at any time. However, no outstanding share option may be amended or otherwise modified or exchanged in a manner that would have the effect of reducing its original exercise price or otherwise constitute a repricing.
New Plan Benefits
The number of share options or other forms of award that will be granted under the 2023 Omnibus Incentive Plan is not currently determinable. Information regarding awards granted in 2022 under the 2013 Omnibus Incentive Plan to the NEOs is provided in the “2022 Summary Compensation Table” and the “2022 Grants of Plan-Based Awards” table. Information regarding awards granted in 2022 under the 2013 Omnibus Incentive Plan to non-employee directors is provided in the “2022 Director Compensation” table.
Federal Income Tax Consequences
The following is a brief summary of certain United States federal income tax consequences generally arising with respect to awards under the 2023 Omnibus Incentive Plan. This discussion does not address all aspects of the United States federal income tax consequences of participating in the 2023 Omnibus Incentive Plan that may be relevant to participants in light of their personal investment or tax circumstances and does not discuss any state, local or non-United States tax consequences of participating in the 2023 Omnibus Incentive Plan. Each participant is advised to consult his or her particular tax advisor concerning the application of the United States federal income tax laws to such participant’s particular situation, as well as the applicability and effect of any state, local or non-United States tax laws before taking any actions with respect to any awards.
Section 162(m) of the Internal Revenue Code
Section 162(m) of the Internal Revenue Code generally limits to $1 million the amount that a publicly held corporation is allowed each year to deduct for the compensation paid to each of Third Point Re BDAthe corporation’s chief executive officer, the corporation’s chief financial officer and certain other current and former executive officers of the corporation.
Share Options
A participant will not recognize taxable income at the time an option is granted and the Company respectively, pursuant to which Third Point LLC licensed to each of Third Point Re BDA and(or the Company, on a royalty free non-exclusive basis the name “Third Point”, the trade mark “Third
Point” and the “Third Point” logo (collectively, the “Licensed Marks”) to be used in connection with their respective businesses. In addition to customary termination rights for the benefit of Third Point LLC, Third Point LLC has the right to terminate each TLA upon written notice to Third Point Re or the Company, as the case may be, in the event the Investment Management Agreements are terminated. The TLA provides that, for so long as Third Point LLC acts as the investment manager for the Account, Third Point LLC may not license the Licensed Marks to any entity, the principal business of which is reinsurance, without the prior written consent of the licensee.
On February 17, 2016, Third Point Re USA entered into a Joinder Agreement with Third Point LLC, and TPRUSA to extend the rights of the TLA to each of TPRUSA and Third Point Re USA.
Closing Letter Agreement
On December 22, 2011, Third Point LLC, Kelso, Pine Brook, TP GP and the Company entered into a letter agreement (the “Closing Letter Agreement”) setting forth certain covenants of Third Point LLC and the Company and certain indemnification arrangements as further described below.
Pursuant to the Closing Letter Agreement, Third Point LLC agreed not to manage more than a specified percentage of the assets of any offshore reinsurance company (other than Third Point Re BDA), the principal business of which is property and casualty reinsurance, without the prior written consent of each of the Lead Investors (not to be unreasonably withheld), with certain exceptions for investments by any such reinsurance company of its assets in any Managed Account.
In addition, Third Point LLC agreed that it will not raise incremental capital in its existing funds or any newly-created funds or vehicles that pursue the same investment strategy as that of Third Point Re BDA, to the extent that as a result of such incremental capital, the assets of Third Point Re BDA managed by Third Point LLC will be less than a specified percentage of the aggregate assets in Third Point Re and in such previously-described funds or vehicles to be reduced, prior to a Qualified IPO (as defined therein), pro-rata if less than $1 billion of equity capital is raised in the offering.
We have agreed that, from the date of the Closing Letter Agreement and until the Investment Management Agreements are terminated, we shall cause each of our direct and indirect subsidiaries to (i) become a participant for purposes of the Investment Management Agreements or (ii) enter with Third Point LLC into an agreement similar to the Investment Management Agreements pursuant to which Third Point LLC will act as Third Point LLC in respect of a percentage of such subsidiary’s investable assets equal to the percentage of investable assets invested by Third Point Re BDA in the Accounts.
Third Point LLC also agreed that, if at the time of an initial public offering, it was acting as the investment manager for the Accounts, it would cause its hedge funds not to be available for investment during the pendency of such offering.
Indemnification Agreements
We have agreed to indemnify and hold harmless the Founders and each of their respective affiliates, and the respective shareholders, members, managers, directors, officers, partners and employees, and agents of each Founder and/or its affiliates from and against, and shall reimburse each indemnified person for, any and all losses that at any time are imposed on, incurred by, and/or asserted against such indemnified person arising out of, relating to, and/or in connection with, the Agreement Among Members, we and/or our assets, business, and/or affairs; provided that such indemnified Personapplicable employer subsidiary) will not be entitled to indemnification for any lossesa tax deduction at that time. A participant will recognize compensation taxable as ordinary income (and subject to income tax withholding in respect of an employee) upon exercise of a non-qualified share option equal to the extent it is determined by a final and binding judgment of a court of competent jurisdiction that such losses arise out of such indemnified person’s fraud, gross negligence, willful misconduct or a material breachexcess of the Closing Letter Agreement. Any indemnification pursuant to the Closing Letter Agreement will be made only out of our assets and none of our members (including the Founders) or any other indemnified person will have any personal liability on account of such indemnification.
We have entered into agreements to indemnify our directors and executive officers. These agreements provide for indemnification of our directors and executive officers to the fullest extent permitted by applicable Bermuda law against all expenses, including attorneys’ fees, judgments, fines and settlement amounts incurred by any such person in actions
or proceedings, including actions by us or in our right, arising out of such person’s services as our director or executive officer, any of our subsidiaries or any other company or enterprise to which the person provided services at our Company’s request.
Third Point Loan L.L.C. and Third Point Ventures LLC
Third Point Loan L.L.C. (“Loan LLC”) and Third Point Ventures LLC (“Ventures LLC” and, together with Loan LLC, “Nominees”) serve as nominees of the Company and other affiliated investment management clients of Third Point LLC (the “Investment Manager”) for certain investments. The Nominees have appointed the Investment Manager as its true and lawful agent and attorney. As of December 31, 2017, Loan LLC held $99.6 million (December 31, 2016 - $124.1 million) and Ventures LLC held $6.3 million (December 31, 2016 - $22.6 million) of the Company’s investments, which are included in investments in securities and derivative contracts in the consolidated balance sheets. The Company’s pro rata interest in the underlying investments registered in the name of the Nominees and the related income and expense are reflected in the consolidated balance sheets and the consolidated statements of income (loss) . The valuation policy, with respect to investments held by the nominees, is further discussed in Note 4 to the Audited Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2017.
TP Lux Holdco LP
The Company is a limited partner in TP Lux Holdco LP (the “Cayman HoldCo”), which is an affiliate of the Investment Manager. The Cayman HoldCo was formed as a limited partnership under the laws of the Cayman Islands and invests and holds debt and equity interests in TP Lux HoldCo S.a.r.l, a Luxembourg private limited liability company (the “LuxCo”) established under the laws of the Grand-Duchy of Luxembourg, which is also an affiliate of the Investment Manager.
LuxCo’s principal objective is to act as a collective investment vehicle to purchase Euro debt and equity investments. The Company invests in the Cayman HoldCo alongside other investment funds managed by the Investment Manager. As of December 31, 2017, the Company held a 15.6% (December 31, 2016 - 13.8%) interest in the Cayman Holdco. The Company accounts for its investment in the limited partnership under the variable interest model, in which the Company is not the primary beneficiary, at NAV, as a practical expedient for fair value, in the consolidated balance sheets. The Company records changes in the fair value of this investment in the consolidated statements of income (loss).
As of December 31, 2017, the estimated fairmarket value of the investmentshares purchased over their exercise price, and the Company (or the applicable employer subsidiary) will be entitled to a corresponding deduction, subject to the deduction limits under Section 162(m) of the Internal Revenue Code. A participant will not recognize income (except for purposes of the alternative minimum tax) upon exercise of an incentive share option. If the Shares acquired by exercise of an incentive share option are held for the longer of two years from the date the option was granted and one year from the date it was exercised, any gain or loss arising from a subsequent disposition of those Shares will be taxed as long-term capital gain or loss, and the Company (or the applicable employer subsidiary) will not be entitled to any deduction. If, however, those Shares are disposed of within the above-described period, then in the limited partnership was $0.6 million (December 31, 2016 - $37.6 million). The Company received net distributionsyear of $39.6 million fromthat disposition the Cayman HoldCo during the year ended December 31, 2017 due to the disposition of underlying investments (2016 - $35.5 million net contributions). The valuation policy with respect to this investment in a limited partnership is further described in Note 4 of the Audited Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2017. The Company’s maximum exposure to loss as a result of its involvement with this investment is limited to the carrying value of the investment.participant will recognize
Third Point Hellenic Recovery US Feeder Fund, L.P.119 The Company is a limited partner in Third Point Hellenic Recovery US Feeder Fund, L.P. (the “Hellenic Fund”), which is an affiliate of the Investment Manager. The Hellenic Fund was formed as a limited partnership under the laws of the Cayman Islands on April 12, 2013 and invests and holds debt and equity interests.
The Company has committed to invest $10.9 million (December 31, 2016 - $10.6 million) in the Hellenic Fund. Capital distributions of $1.5 million (2016 - $0.2 million) were made during the year ended December 31, 2017.
As of December 31, 2017, the estimated fair value of the Company’s investment in the Hellenic Fund was $4.9 million (December 31, 2016 - $5.5 million), representing a 2.9% interest (December 31, 2016 - 2.8%). The Company accounts for its investment in the limited partnership under the variable interest model, in which the Company is not the primary beneficiary, at NAV, as a practical expedient for fair value, in the consolidated balance sheets. The Company records changes in the fair value of this investment in the consolidated statements of income (loss).
The valuation policy with respect to this investment in a limited partnership is further described in Note 4 of the Audited Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2017. The Company’s maximum exposure to loss as a result of its involvement with this investment is limited to the carrying value of the investment.
The valuation policy with respect to this investment in a limited partnership is further described in Note 4 to the Audited Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2017. The Company’s maximum exposure to loss as a result of its involvement with this investment is limited to the carrying value of the investment.
TP DR Holdings LLC
The Company holds an equity and debt investment in TP DR Holdings LLC (“TP DR”), which is an affiliate of the Investment Manager. In December 2016, TP DR was formed as a limited liability company under the laws of the Cayman Islands to invest and own 100% equity interest in DCA Holdings Six Ltd. and its wholly owned subsidiary group. TP DR’s principal objective is to own, develop and manage properties in the Dominican Republic.
The Company invests in TP DR alongside other investment funds managed by the Investment Manager and third-party investors. As of December 31, 2017, the Company held a 7.0% equity (December 31, 2016 - 7.2%) and 13.1% debt (December 31, 2016 - 13.7%) interest in TP DR. The Company accounts for its equity investment in TP DR under the variable interest model, in which the Company is not the primary beneficiary, at NAV, as a practical expedient for fair value, in the consolidated balance sheets. The Company records changes in the fair value of this investment in the consolidated statements of income (loss).
Cloudbreak II Cayman Ltd and TP Trading II LLC
The Company holds an equity interest in Cloudbreak II Cayman Ltd, Cloudbreak II US LLC (collectively, the “Cloudbreak entities”) and TP Trading II LLC which are affiliates of the Investment Manager. The Company invests in the Cloudbreak entities and TP Trading II LLC alongside other investment funds managed by the Investment Manager. These entities’ are invested in a structure whose primary purpose is to purchase consumer loans for securitization and warrants from a marketplace lending platform.
As of December 31, 2017, the Cloudbreak entities held $4.6 million of the Company’s asset-backed security investments, which are included in investments in securities in the consolidated balance sheets. The Company’s pro rata interest in the underlying investments is registered in the name of Cloudbreak II US LLC and the related income and expense are reflected in the consolidated balance sheets and the consolidated statements of income (loss).
As of December 31, 2017, the Company held a 9.3% interest in TP Trading II LLC. The Company accounts for its equity investment in TP Trading II LLC under the variable interest model, in which the Company is not the primary beneficiary, at NAV, as a practical expedient for fair value, in the consolidated balance sheets. The Company records changes in the fair value of this investment in the consolidated statements of income (loss). As of December 31, 2017, the estimated fair value of the investment was $6.0 million. The valuation policy with respect to this investment is further described in Note 4 to the Audited Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2017. The Company’s maximum exposure to loss as a result of its involvement with these investments are limited to the carrying value of the investments.
Ventures Entities
The Company holds equity interests in Venture One Holdings LLC, Venture Three Holdings LLC, Venture Four Holdings LLC and Venture Five Holdings LLC (collectively, the “Ventures entities”), which are affiliates of the Investment Manager. The Company invests in the Ventures entities alongside other investment funds managed by the Investment Manager. The primary purpose of these entities is to make investments in direct commercial real estate and real estate debt.
The Company accounts for its equity interests in the Ventures entities under the variable interest model, in which the Company is not the primary beneficiary. As of December 31, 2017, the Ventures entities held $7.5 million of the
Company’s real estate and other debt investments, which are included in investments in securities in the consolidated balance sheets. The Company records changes in the fair value of this investment in the consolidated statements of income (loss). The valuation policy with respect to this investment is further described in Note 4 to the Audited Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2017. The Company’s maximum exposure to loss as a result of its involvement with this investment is limited to the carrying value of the investment.
CERTAIN SUBSIDIARIES - DESIGNATED COMPANY DIRECTORS
Under our Bye-law 6.1, the Boards of Directors of any of our subsidiaries that are not a corporation organized under the laws of the U.S. or any state (or limited liability company organized under the laws of the U.S. or any state that is taxable as a corporation for United States Federal income tax purposes) or that is not treated as a pass-through vehicle or disregarded entity for United States federal income tax purposes (together, the “Designated Companies”), must consist of persons who have been elected by our shareholders as designated company directors (“Designated Company Directors”). The Board of Directors must seek authority from the Company’s shareholders for the Company’s corporate representative or proxy to vote in favor of most resolutions proposed by the Designated Company. The Board is required to cause the Company’s corporate representative or proxy to vote the Company’s shares in the Designated Company pro rata to the votes received at the general meeting of the Company, with votes for or against the directing resolution being taken, respectively, as an instruction for the Company’s corporate representative or proxy to vote the appropriate proportion of its shares for and the appropriate proportion of its shares against the resolution proposed by the Designated Company.
The persons named below have been nominated to serve as Designated Company Directors of each Designated Company specified below until the next annual general meeting of the shareholders. Unless authority to vote for a nominee is withheld, the enclosed proxy will be voted for the nominee, except that the persons designated as proxies reserve discretion to cast their votes for other persons in the unanticipated event that the nominee is unable or declines to serve.
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compensation taxable as ordinary income equal to the excess of (1) the lesser of the amount realized upon that disposition and the fair market value of those Shares on the date of exercise over (2) the exercise price, and the Company (or the applicable employer subsidiary) will be entitled to a corresponding deduction, subject to the deduction limits under Section 162(m) of the Internal Revenue Code.
Share Appreciation Rights
A participant will not recognize taxable income at the time share appreciation rights are granted and the Company will not be entitled to a tax deduction at that time. Upon exercise, the participant will recognize compensation taxable as ordinary income (and subject to income tax withholding in respect of an employee) in an amount equal to the fair market value of any Shares delivered and the amount of cash paid by the Company, and the Company (or the applicable employer subsidiary) will be entitled to a corresponding deduction, subject to the deduction limits under Section 162(m) of the Internal Revenue Code.
Restricted Shares, Restricted Share Units, and Deferred Share Units
A participant will not recognize taxable income at the time restricted share is granted and the Company (or the applicable employer subsidiary) will not be entitled to a tax deduction at that time, unless the participant makes an election to be taxed at that time. If such election is made, the participant will recognize compensation taxable as ordinary income (and subject to income tax withholding in respect of an employee) at the time of the grant in an amount equal to the excess of the fair market value for the shares at such time over the amount, if any, paid for those Shares. If such election is not made, the participant will recognize compensation taxable as ordinary income (and subject to income tax withholding in respect of an employee) at the time the restrictions constituting a substantial risk of forfeiture lapse in an amount equal to the excess of the fair market value of the Shares at such time over the amount, if any, paid for those Shares. The amount of ordinary income recognized by making the above-described election or upon the lapse of restrictions constituting a substantial risk of forfeiture is deductible by the Company (or the applicable employer subsidiary) as compensation expense, subject to the deduction limits under Section 162(m) of the Internal Revenue Code. In addition, a participant receiving dividends with respect to restricted share for which the above-described election has not been made and prior to the time the restrictions constituting a substantial risk of forfeiture lapse will recognize compensation taxable as ordinary income (and subject to income tax withholding in respect of an employee), rather than dividend income, in an amount equal to the dividends paid and the Company (or the applicable employer subsidiary) will be entitled to a corresponding deduction, subject to the deduction limits under Section 162(m) of the Internal Revenue Code.
A participant will not recognize taxable income at the time a restricted share unit or deferred share unit is granted and the Company (or the applicable employer subsidiary) will not be entitled to a tax deduction at that time. Upon settlement of restricted share units or deferred share units, the participant will recognize compensation taxable as ordinary income (and subject to income tax withholding in respect of an employee) in an amount equal to the fair market value of any Shares delivered and the amount of any cash paid by the Company, and the Company (or the applicable employer subsidiary) will be entitled to a corresponding deduction, subject to the deduction limits under Section 162(m) of the Internal Revenue Code.
A participant who receives Shares that are not subject to any restrictions under the 2023 Omnibus Incentive Plan will recognize compensation taxable as ordinary income on the date of grant in an amount equal to the fair market value of such Shares on that date, and the Company (or the applicable employer subsidiary) will be entitled to a corresponding deduction, subject to the deduction limits under Section 162(m) of the Internal Revenue Code.
Performance Awards
A participant will not recognize taxable income at the time performance awards are granted and the Company (or the applicable employer subsidiary) will not be entitled to a tax deduction at that time. Upon settlement of performance awards, the participant will recognize compensation taxable as ordinary income (and subject to income tax withholding in respect of an employee) in an amount equal to the fair market value of any Shares delivered and the amount of cash paid by the Company, and the Company (or the applicable employer subsidiary) will be entitled to a corresponding deduction, subject to the deduction limits under Section 162(m) of the Internal Revenue Code.
| | Designated Company Directors | | | | Third Point Reinsurance Company Ltd. | | Christopher S. Coleman Daniel V. Malloy
Janice R. Weidenborner
| Third Point Re Marketing (UK) Limited | | J. Robert Bredahl
Clare Himmer Christopher S. Coleman
| Third Point Re (UK) Holdings Ltd. | | J. Robert Bredahl
Christopher S. ColemanTHE COMPENSATION COMMITTEE AND THE BOARD UNANIMOUSLY RECOMMEND THAT YOU VOTE FOR THE APPROVAL OF THE SIRIUSPOINT LTD. 2023 OMNIBUS INCENTIVE PLAN.
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Clare Himmer, 47. Ms. Himmer is
EQUITY COMPENSATION PLANS The following table presents information concerning the Marketing Director of Third Point Re Marketing (UK) Limited and has served in this position since June 2013. Prior to joining Third Point Re Marketing (UK) Limited in June 2013 Ms. Himmer was the Senior Vice President - International Treaty Reinsurance at Allied World Assurance Company, Ltd., from 2003 to 2011. Prior to joining Allied World Assurance Company, Ltd., Ms. Himmer was Senior Underwriter, Casualty and Miscellaneous Business at Hanover Re., Head Officer, Germany: UK & Ireland Non-Marine Treaty Department from 1999 - 2003 and Underwriter, Casualty and Miscellaneous Business at Hanover Re., Head Officer, Germany: UK & Ireland Non-Marine Treaty Department from 1995 -1999. Prior to joining Hannover Re, Ms. Himmer was Assistant Underwriter and Marketing Officer at Munich Re, London, UK. The biographical informationsecurities authorized for each of J. Robert Bredahl, Christopher S. Coleman, Daniel V. Malloy and Janice R. Weidenborner is included under the heading “Executive Officers” of this Proxy Statement.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
TO ELECT THREE CLASS II DIRECTORS AND ONE CLASS I DIRECTOR TO OUR BOARD OF DIRECTORS TO HOLD OFFICE UNTIL THE ANNUAL GENERAL MEETING OF SHAREHOLDERS TO BE HELD IN 2021 AND 2020, RESPECTIVELY, OR UNTIL THEIR RESPECTIVE OFFICE SHALL OTHERWISE BE VACATED PURSUANT TO OUR BYE-LAWS
Messrs. Bredahl, Targoff and Parkin have been nominated for election as Class II directors and Ms. Hayes has been nominated for election as a Class I director to serve until the annual general meeting of shareholders to be held in 2021 and 2020, respectively, or until their respective offices shall otherwise be vacatedissuance pursuant to our Bye-laws. The proxy will be voted in accordance with the directions thereon or, if no directions are indicated, the proxy will be voted for the electionequity compensation plans as of the four director nominees named above. The Board has proposed and recommended that each nominee be elected to hold office as described above.December 31, 2022:
| | | | | | | | | | | | | NAME | NUMBER OF SECURITIES TO BE ISSUED UPON EXERCISE OF OUTSTANDING OPTIONS, WARRANTS AND RIGHTS(1) (#) | WEIGHTED AVERAGE EXERCISE PRICE OF OUTSTANDING OPTIONS, WARRANTS AND RIGHTS(2) ($) | NUMBER OF SECURITIES AVAILABLE FOR FUTURE ISSUANCE UNDER EQUITY COMPENSATION PLANS (EXCLUDING SECURITIES REFLECTED IN COLUMN 1)(3) (#) | | Equity compensation plans approved by shareholders | 5,342,739 | 9.25 | 17,018,916 | | Equity compensation plans not approved by shareholders | — | n/a | — | | Total | 5,342,739 | 9.25 | 17,018,916 |
If any nominee shall, prior to the Annual General Meeting, become unavailable for election as a director the persons named in the accompanying proxy will vote in their discretion for such nominee, if any, as may be recommended by the Board, or the Board may reduce(1)Represents the number of directors to eliminateshares associated with options outstanding as of December 31, 2022.
(2)Represents the vacancy.weighted average exercise price of options disclosed.
At the Annual General Meeting two or more persons present in person throughout the meeting and representing in person or by proxy in excess of 50% of the total issued voting shares in the Company throughout the meeting shall form a quorum for the transaction of business, provided, however that no shareholder may participate in any general meeting during which that shareholder (or, if any shareholder is an entity, its representative) is physically present in the United States. If a quorum is not present, the Annual General Meeting may be adjourned from time to time until a quorum is obtained. Each director will be elected by a plurality of the votes cast in the election of directors at the Annual General Meeting, either in person or represented by properly authorized proxy. This means that the four nominees who receive the largest number of “FOR” votes cast will be elected as directors. For further information, see the answers to the questions “What is the quorum requirement for the Annual General Meeting?” and “What is the voting requirement to approve each of the proposals?”.
Nominees
The age, business experience and directorships in other companies of the four nominees for election are set forth herein under the heading “Information Regarding the Nominees for Election to the Board of Directors”.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR”
THE ELECTION OF EACH OF THE NOMINEES TO THE BOARD OF DIRECTORS.
PROPOSAL NO. 2
APPROVAL TO ADOPT THE AMENDED AND RESTATED BYE-LAWS OF THE COMPANY
On February 28, 2017, the Board of Directors approved the amended and restated Bye-laws of the Company, subject to shareholder approval pursuant to Bye-law 6.1 of the Company’s Bye-laws. Set out below is a description of the Bye-laws amendments included in this proposal, together with reasons for the amendments. This is not a comprehensive description of each and every proposed change. Shareholders should review Appendix A to inform themselves as to the full text of the amended and restated Bye-laws.
1.Updating the Number of Directors on the Board (Proposed Revised Bye-law 41)
It is proposed that the Bye-law provision relating to(3)Represents the number of Directors on the Board be amendedshares remaining available for issuance with respect to decrease the minimum number of Directors on the Board from the current level of seven (7) to five (5) and to set a maximum number of Directors, up to eleven Directors.future awards under our Omnibus Equity Incentive Plan.
Currently, the provision relating to Board size requires the Board to have not less than seven (7) Directors (or such number in excess as the Board may from time to time determine). Due to the resignation of William L. Spiegel on September 1, 2016 and the decision of Gary Walters to not stand for re-election at the 2017 annual general meeting, there are currently seven members of the Company’s Board of Directors. Therefore, a minimum number of seven (7) Directors on the Board as the existing Company Bye-laws require, is larger than is necessary. The Board recommends, for purposes of flexibility, the reduction of the minimum number of Directors on the Board from seven (7) to five (5) and to include up to a maximum number of eleven (11) Directors.2.General Amendments to Update the Bye-laws (Proposed Revised Bye-law 42.2)
The proposed amendments to Bye-law 42.2 are for readability and comprehension, there are no substantive changes proposed.
Bye-law 42.2 requires that the Directors in each class serve a three year term, with only one class facing election each year. Further, under the proposed amendments, language has been inserted clarifying that any Director of any class elected to fill a vacancy will hold such office only for a term that coincides with the remaining term of the Director of that class who vacated such office, but that any such vacancy will not shorten the term of any Director then in office. Such class Director will hold office until the annual general meeting for the year in which his term expires, subject to his office being vacated, further to Bye-law 45.1.
The proposed amendments do not change the manner in which each class Director is appointed and his or her term.
| | | | | | | PROPOSAL 4 | APPOINTMENT OF INDEPENDENT AUDITOR & TO DETERMINE THE INDEPENDENT AUDITOR’S RENUMERATION | | | 3.
| Permitting the Board of Directors to fill vacancies on the Board as a result of an increase in the size of the Board (Proposed Revised Bye-law 45.2)TO APPOINT PRICEWATERHOUSECOOPERS LLP, AN INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM, AS OUR INDEPENDENT AUDITOR TO SERVE UNTIL THE ANNUAL GENERAL MEETING TO BE HELD IN 2024, AND TO AUTHORIZE OUR BOARD, ACTING BY THE AUDIT COMMITTEE, TO DETERMINE THE INDEPENDENT AUDITOR’S REMUNERATION |
It is proposed that Bye-law 45.2 be amended to give the Board of Directors the power to fill vacancies on the Board as a result of any increase in the size of the Board. This will allow the Board to elect a class Director to fill a vacant class seat (created by any increase in the number of Directors on the Board), without the need to wait for the expiry of such class of Director’s three year term. The existing Bye-laws only permit such seat to be filled by the shareholders at the annual general meeting in the year in which such class of Director is facing election.
The foregoing summary of the proposed amendments to the Company’s existing Bye-laws are qualified in their entirety by reference to the full text of the amended and restated Bye-laws of the Company, a copy of which is attached hereto
as Appendix A. To illustrate the proposed amendments, additions to the text of the amended and restated Bye-laws contained in Appendix A hereto are indicated by underlining, and deletions of the text are indicated by strike-outs.
In accordance with the Company’s Bye-laws, our Board requests your vote on the following resolution at the Annual General Meeting which requires a simple majority vote as described in the Company’s existing Bye-laws:
“RESOLVED, that the amended and restated Bye-laws set forth in Appendix A to this Proxy Statement be and are hereby approved and adopted as the Bye-laws of the Company in substitution for and to the exclusion of all the existing Bye-laws thereof.”
Our Board has approved the amended and restated Bye-laws of the Company set forth in Appendix A to this Proxy Statement, subject to and conditional upon shareholder approval at the Annual General Meeting. If approved, the amended and restated Bye-laws set forth in Appendix A to this Proxy Statement will become effective immediately following the Annual General Meeting.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” THE APPROVAL AND ADOPTION OF THE AMENDED AND RESTATED BYE-LAWS SET FORTH IN APPENDIX A TO THIS PROXY STATEMENT.
PROPOSAL NO. 3
ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION
To approve, by a non-binding advisory vote, the executive compensation payable to the Company’s NEOs as disclosed in this Proxy Statement.
As a result of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), and in accordance with Section 14A of the Securities Exchange Act of 1934, the Company’s shareholders are entitled to approve, on an advisory basis, the compensation of our NEOs. This non-binding advisory vote, commonly known as a “Say on Pay” vote, gives our shareholders the opportunity to express their views on our NEOs’ compensation. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our NEOs and the philosophy, policies and practices described in this Proxy Statement.
As described in detail under “Compensation Discussion and Analysis” our compensation programs are designed to attract, motivate and retain executives of outstanding ability to meet and exceed the demands of our business, focus management on optimizing shareholder value and fostering an ownership culture, create appropriate rewards for outstanding performance and penalties for under-performance, and provide competitive rewards that foster collaboration by rewarding executives for their contribution to our overall performance and financial success while determining and allocating incentives based on our performance. We believe our compensation program is effective, appropriate and strongly aligned with the long-term interest of our shareholders and that the total compensation package provided to our NEOs are reasonable and not excessive.
For these reasons, the Board is asking shareholders to vote “FOR” the following resolution:
“RESOLVED, that the compensation paid to the Company’s Named Executive Officers, as disclosed pursuant to the rules of the United States Securities and Exchange Commission, including the Compensation Discussion and Analysis, compensation tables and narrative discussion, is hereby approved.”
As an advisory vote, this Proposal No. 3 is not binding on the Board or the Compensation Committee (or any other committee of the Board), will not overrule any decisions made by the Board or the Compensation Committee (or any other committee of the Board), and will not require the Board or the Compensation Committee (or any other committee of the Board) to take any specific action. The outcome of this vote does not create or imply any change to the fiduciary duties of Third Point Reinsurance Ltd. or its Board of Directors or any of its committees (or any individual member thereof), or create or imply any additional fiduciary duties. Although the vote is non-binding, the Board and the Compensation Committee value the opinions of our shareholders, and will carefully consider the outcome of the vote when making future compensation decisions for our NEOs.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE APPROVAL OF THE EXECUTIVE COMPENSATION PAYABLE TO THE COMPANY’S NAMED EXECUTIVE OFFICERS AS DISCLOSED IN THIS PROXY STATEMENT.
PROPOSAL NO. 4
ELECTION OF DESIGNATED COMPANY DIRECTORS OF SUBSIDIARIES
TO ELECT CERTAIN INDIVIDUALS AS DESIGNATED COMPANY DIRECTORS OF CERTAIN OF OUR NON-U.S. SUBSIDIARIES, AS REQUIRED BY OUR BYE-LAWS.
The following individuals have been nominated for election as Designated Company Directors (as defined in this Proxy Statement) of the non-U.S. Subsidiaries noted below:
Third Point Reinsurance Company Ltd.
Christopher S. Coleman, Daniel V. Malloy, and Janice R. Weidenborner
Third Point Re Marketing (UK) Limited
J. Robert Bredahl, Clare L. Himmer, and Christopher S. Coleman
Third Point Re (UK) Holdings Ltd.
J. Robert Bredahl and Christopher S. Coleman
Each Designated Company Director will hold office for a one-year term that will expire at the annual general meeting to be held in 2019 or, alternatively, when their respective successors have been duly elected. The proxy will be voted in accordance with the directions thereon or, if no directions are indicated, the proxy will be voted for the election of the Designated Company Director nominees named above.
If any nominee shall, prior to the Annual General Meeting, become unavailable for election as a Designated Company Director, the persons named in the accompanying proxy will vote in their discretion for such nominee, if any, as may be recommended by the Board.
The presence, in person or by proxy, of the holders of 50% of the total issued voting common shares of the Company is required for a quorum for the election of the Designated Company Directors at the Annual General Meeting. If a quorum is not present, the Annual General Meeting may be adjourned from time to time until a quorum is obtained. Election of the Designated Company Directors at the Annual General Meeting will be decided by a simple-majority of votes cast.
Nominees
The age, business experience and directorships in other companies of the nominees for election as Designated Company Directors are set forth in the Proxy Statement under the heading “Certain Subsidiaries - Designated Company Directors”.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” THE ELECTION OF THE DESIGNATED COMPANY DIRECTORS.
PROPOSAL NO. 5
APPOINTMENT OF INDEPENDENT AUDITOR
TO APPOINT ERNST & YOUNG LTD., AN INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM, AS THE COMPANY’S INDEPENDENT AUDITOR TO SERVE UNTIL THE ANNUAL GENERAL MEETING TO BE HELD IN 2019, AND TO AUTHORIZE OUR BOARD OF DIRECTORS, ACTING BY THE AUDIT COMMITTEE, TO DETERMINE THE INDEPENDENT AUDITOR’S REMUNERATION.
The Board proposes and recommends that the shareholders appoint the firm of Ernst & Young Ltd.PricewaterhouseCoopers LLP (“PwC”), an independent registered certified public accounting firm, as our independent auditor to serve until the annual general meeting to be held in 2019. Ernst & Young Ltd.2024. PwC has served as our independent auditor fromsince February 26, 2021, the inceptiondate of Third Point Reinsurance Ltd. in December 2011 to present.the consummation of the Merger. A representative of Ernst & Young Ltd.PwC will attend the Annual General Meeting virtually and will have an opportunity to make a statement, if he or she desires to do so, and to respond to appropriate questions. Shareholders at the Annual General Meeting will also be asked to vote to authorize our Board, of Directors, acting by the Audit Committee, to determine the independent auditor’s remuneration. The presence, in person or by proxy, of the holders of 50% of the total issued voting common shares of the Company is required forIf a quorum for the appointment of Ernst & Young Ltd.is present at the Annual General Meeting. If a quorum is not present,Meeting, the Annual General Meeting may be adjourned from time to time until a quorum is obtained. The appointment of Ernst & Young Ltd.PwC at the Annual General Meeting will be decided by a simple-majoritymajority of votes cast. For further information, see the answers to the questions “What is the quorum requirement for the Annual General Meeting?” and “What is the voting requirement to approve each of the proposals?”
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” THE APPOINTMENT OF ERNST & YOUNG LTD., | | | | | | | | | THE AUDIT COMMITTEE AND THE BOARD UNANIMOUSLY RECOMMEND THAT YOU VOTE FOR THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP, AN INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM, AS OUR INDEPENDENT AUDITOR TO SERVE UNTIL THE ANNUAL GENERAL MEETING TO BE HELD IN 2024, AND TO AUTHORIZE OUR BOARD, ACTING BY THE AUDIT COMMITTEE, TO DETERMINE THE INDEPENDENT AUDITOR’S REMUNERATION. | | |
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM AS THE COMPANY’S FEES The following table sets forth the aggregate fees charged to the Company by PwC in 2022 and 2021 and by Ernst & Young in 2022 and 2021 for audit services rendered in connection with the audit of our consolidated financial statements and reports for 2022 and 2021 and for other services rendered during 2022 and 2021 to the Company and its subsidiaries, as well as all out-of-pocket costs incurred in connection with these services. PwC has served as our independent auditor since February 26, 2021 upon the consummation of the Merger, at which point it was mutually agreed that Ernst & Young would resign after the culmination of a competitive audit proposal process. INDEPENDENT AUDITOR TO SERVE UNTIL THE ANNUAL GENERAL MEETING TO BE HELD IN 2019, AND TO AUTHORIZE THE COMPANY’S BOARD OF DIRECTORS, ACTING BY THEFEES | | | | | | | | | | | | | | | | | | | | | | FEE CATEGORY | PRICEWATERHOUSECOOPERS LLP | | ERNST & YOUNG LTD. | FY 2022
($) | FY 2021
($) | FY 2022
($) | FY 2021
($) | | Audit fees | 5,692,915 | 5,205,024 | | 44,443 | 859,322 | | Audit-related fees | 206,192 | 166,338 | | — | 39,000 | | Tax fees | 121,672 | 117,667 | | — | 20,414 | | All other fees | 9,959 | 54,041 | | — | — | | Total fees | 6,030,739 | 5,543,070 | | 44,443 | 918,736 |
AUDIT FEES:Includes the aggregate fees billed by PwC and Ernst & Young for professional services and expenses rendered for the audit of the Company’s consolidated financial statements and internal control over financial reporting in 2022 and 2021, as well as subsidiary and statutory audits. AUDIT-RELATED FEES:Fees billed by PwC and Ernst & Young include services rendered in connection with other SEC filings (except for Annual Report on Form 10-K and Quarterly Report on 10-Q), as well as proactive assurance related to new accounting pronouncements and information technology implementations. TAX FEES:Includes fees billed by PwC and Ernst & Young for tax-related services in conjunction with our ongoing business operations and transaction tax advisory services. ALL OTHER FEES:Includes fees billed by PwC for access to their global online resource tools for accounting and auditing standards. For 2021, also includes fees billed by PwC in connection with their assistance with the Company’s report to be published under the Task-Force on Climate Related Financial Disclosures framework and establishing Board and management oversight over climate related risks.
POLICY ON AUDIT COMMITTEE TO DETERMINE THE INDEPENDENT AUDITOR’S REMUNERATION.PRE-APPROVAL OF AUDIT AND PERMISSIBLE NON-AUDIT SERVICES
The Audit Committee has adopted a policy requiring the Audit Committee to pre-approve all audit and, subject to the de minimis exception of Section 10A(i) of the Exchange Act and the SEC rules promulgated thereunder, all permitted non-audit services performed by the Company’s independent auditor. The Audit Committee may delegate pre-approval authority to one or more designated members of the Audit Committee, who must then provide a report of such pre-approvals to the Audit Committee at its next scheduled meeting. When pre-approving non-audit services by the independent auditor, the Audit Committee shall consider whether the provision of such services is consistent with maintaining the independent auditor’s independence. All services performed by PwC in 2022 were pre-approved by the Audit Committee pursuant to the foregoing pre-approval policy and procedures.
| | | | | | | REPORT OF THE AUDIT COMMITTEE | The charter of the Audit Committee provides that the Audit Committee is responsible for the recommendation to the shareholders of the appointment, retention, termination and oversight of the work of our independent auditor, for the purpose of preparing or issuing an audit report. The Audit Committee disclosed last year in our report that it had appointed PwC to serve as our independent auditor following a competitive audit proposal process from February 26, 2021, the date of the consummation of the Merger. Prior to that date, Ernst & Young had served as the Company’s independent auditor, and resigned effective on the Merger closing. The Audit Committee oversees the Company’s financial reporting process on behalf of the Board. Each of the members of the Audit Committee qualified as an “independent” director as defined under Section 303A.02(a)(ii) of the NYSE rules and Rule 10A-3 of the Exchange Act. All of the members of the Audit Committee are financially literate and one member of the Audit Committee is an audit committee financial expert, as defined under the SEC rules. All of the members of the Audit Committee have accounting or related financial management expertise within the meaning of the SEC and NYSE rules. The Company’s management has the primary responsibility for the financial statements and for the financial reporting process, including the establishment and maintenance of the system of internal control over financial reporting. The independent registered public accounting firm appointed as the Company’s independent auditor is responsible for auditing the financial statements prepared by management and the Company’s internal controls over financial reporting. The Company’s independent auditor expresses an opinion on the conformity of the Company’s financial statements with generally accepted accounting principles and on the design and operating effectiveness of the Company’s internal control over financial reporting. In this context, the Audit Committee has met and held discussions with management and PwC, the independent registered public accounting firm appointed as the Company’s independent auditor in 2021, regarding the fair and complete presentation of the Company’s audited financial statements. | The Audit Committee reviewed and discussed with PwC the matters that are required to be discussed pursuant to the applicable requirements of the SEC and the Public Company Accounting Oversight Board (“PCAOB”), including: •their judgments as to the quality, not just the acceptability, of our accounting principles, •the reasonableness of significant judgments, •all critical accounting policies and practices to be used, •material alternative accounting treatments within generally accepted accounting principles discussed with management, •the determination of audit tenure, •critical audit matters that arose during the current period audit, and •other material written communications between PwC and management. As part of that review, the Audit Committee has received the written disclosures and the letter required by applicable requirements of the PCAOB regarding PwC’s communications with the Audit Committee concerning independence, and the Audit Committee has discussed PwC’s independence from the Company with PwC. The Audit Committee also has considered whether PwC’s provision of non-audit services to the Company is compatible with the auditor’s independence. The Audit Committee has concluded that PwC is independent from the Company and its management.
In addition to the oversight over the financial reporting process, the Audit Committee also has the sole authority to appoint, retain and oversee the Company’s Chief Actuary. The Audit Committee met in 2022 with the Chief Financial Officer, the Chief Actuary, the Chief Legal Officer, representatives of PwC, and the Company’s Chief Audit Officer, in regular and executive sessions to discuss the results of the applicable examinations, their evaluations of the design and operating effectiveness of the Company’s internal control over financial reporting, and the overall quality of the Company’s financial reporting and compliance programs. |
| | | | | | REPORT OF THE AUDIT COMMITTEE (CONTINUED) | The Audit Committee annually reviews the performance and independence of PwC in deciding whether to retain the audit firm or engage a different independent registered public accounting firm and whether the independent registered public accounting firm should be rotated. In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board, and the Board approved, that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, for filing with the SEC. |
| | | THE AUDIT COMMITTEE Sharon M. Ludlow, Chair Franklin (Tad) Montross IV Jason Robart |
. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table sets forth information regarding the beneficial ownership of SiriusPoint common shares and Series A Preference Shares as of March 1, 2023 (except as otherwise indicated), by: •each person who is the beneficial owner of more than 5% of the Company’s common shares and Series A preference shares; •each person who is an NEO or director; and •all executive officers and directors as a group. Beneficial ownership is determined according to the rules of the SEC, which generally provide that a person has beneficial ownership of a security if he, she or it possesses sole or shared voting or investment power over that security, including RSUs and restricted share awards (“RSAs”) that vest within 60 days and options and warrants that are currently exercisable or exercisable within 60 days. As of March 1, 2023, there were 162,371,457 common shares and 11,720,987 Series A Preference Shares of SiriusPoint issued and outstanding. Unless otherwise indicated below, the address for each person listed on the table is c/o SiriusPoint Ltd., Point Building, 3 Waterloo Lane, Pembroke HM 08, Bermuda.
Percentage of total voting power represents voting power with respect to all shares of SiriusPoint common shares and Series A Preference Shares, voting as a single class. Each holder of common shares is entitled to one vote for each common share held on the record date. Each holder of Series A Preference Shares is entitled to the number of votes equal to the number of common shares into which the Series A Preference Shares are then convertible as of the record date. As of March 1, 2023, each Series A Preference Share was convertible into one common share. As discussed under the heading “Questions and Answers ― Will I Be Entitled to Vote All of My Shares at the Annual General Meeting?”, the voting rights related to “controlled shares” owned by U.S. Persons (as defined in our Bye-laws) will be limited, in the aggregate, to a voting power of less than 9.5%, under a formula specified in our Bye-laws. The formula is applied repeatedly until the voting power of all 9.5% shareholders (as defined in our Bye-laws) has been reduced to less than 9.5%. Other voting power limitations are set forth in the CMB Investor Rights Agreement, as described elsewhere in this proxy statement and noted in the table below.
| | | | | | | | | | | | | | | | | | | | NAME AND ADDRESS | COMMON SHARES | | SERIES A PREFERENCE SHARES | % OF TOTAL VOTING
POWER | NUMBER
OF SHARES | PERCENTAGE OF CLASS | | NUMBER
OF SHARES | PERCENTAGE OF CLASS | | 5% SHAREHOLDERS | | | | | | | CM Bermuda Ltd.(1) CM Bermuda Canon’s Court 22 Victoria Street Hamilton, HM 12, Bermuda CMIG International 3 Temasek Avenue Centennial Tower, #17-10 Singapore 039190 | 75,789,774 | 41.33% | | 11,710,956 | 99.91% | 9.90% | Daniel S. Loeb(2) c/o Third Point LLC 55 Hudson Yards New York, New York 10001 | 15,173,571 | 9.34% | | — | — | 8.72% | BlackRock, Inc.(3) 55 East 52nd Street New York, New York 10055 | 14,508,404 | 8.94% | | — | — | 8.33% | The Vanguard Group Inc.(4) 100 Vanguard Boulevard Malvern, Pennsylvania 19355 | 9,875,614 | 6.08% | | — | — | 5.67% | Capital Research Global Investors (5) 333 South Hope Street, 55th Fl Los Angeles, California 90071 | 8,850,000 | 5.45% | | — | — | 5.08% | DIRECTORS AND NAMED
EXECUTIVE OFFICERS | | | | | | | Scott Egan (6) | 900,000 | * | | — | — | * | Stephen Yendall (7) | 203,278 | * | | — | — | * | David E. Govrin (8)(9) | 566,627 | * | | — | — | * | Monica Cramér Manhem (9) | 230,743 | * | | — | — | * | Stuart Liddell (9) | 56,851 | * | | — | — | * | Siddhartha Sankaran (9) | 287,192 | * | | — | — | * | Daniel V. Malloy (9) | 738,145 | * | | — | — | * | | David W. Junius | — | — | | — | — | — | | Prashanth Gangu | 32,433 | * | | — | — | * | Vievette Henry (9) | 44,333 | * | | — | — | * | Sharon M. Ludlow (9) | 52,430 | * | | — | — | * | Gretchen A. Hayes (9) | 122,615 | * | | — | — | * | Jason Robart (9) | 35,122 | * | | — | — | * | Mehdi A. Mahmud (9) | 52,430 | * | | — | — | * | Franklin (Tad) Montross IV (9) | 52,430 | * | | — | — | * | Rafe de la Gueronniere (9) | 124,185 | * | | — | — | * | Peter Wei Han Tan(1) | 75,789,774 | 41.33% | | 11,710,956 | 99.91% | 9.90% | Daniel S. Loeb(2) | 15,173,571 | 9.34% | | — | — | 8.72% | All executive officers and directors as a group (13 individuals)(10) | 93,243,015 | 50.85% | | 11,710,956 | 99.91% | 17.78% | | | | | | | |
*Represents beneficial ownership of less than 1%.
(1)Based on Schedule 13D filed on March 8, 2021, by China Minsheng Investment Group Corp., Ltd. (“CMIG”), which states that as of February 26, 2021, CMIG has shared voting power and shared dispositive power over 75,789,774 shares. In accordance with the CMB Investor Rights Agreement, the voting power of CM Bermuda, its Affiliates and its Related Persons in SiriusPoint is capped at 9.9% as described elsewhere in this Proxy Statement. The total number of common shares reported in this table includes 20,991,337 common shares issuable upon exercise of warrants. (2)Based on Amendment No. 1 to Schedule 13D filed on May 17, 2022, by Daniel S. Loeb, which states that as of May 17, 2022, the 2010 Loeb Family Trust owns 235,127 common shares, Third Point Advisors LLC owns 1,000,000 common shares, Third Point Opportunities Master Fund L.P. owns 7,493,842 common shares and the 2011 Loeb Family GST Trust owns 4,999,958 common shares, and Mr. Loeb owns the balance of the common shares reported herein. Mr. Loeb has sole voting and dispositive power over the shares held by the 2010 Loeb Family Trust, Third Point Advisors LLC, the 2011 Loeb Family GST Trust and Third Point Opportunities Master Fund L.P. Mr. Loeb disclaims beneficial ownership of such common shares except to the extent of his pecuniary interest therein, if any. (3)Based on Schedule 13G filed on January 25, 2023, by Blackrock, Inc. (“Blackrock”), which states that as of December 31, 2022, Blackrock has sole voting power over 14,317,526 shares and sole dispositive power over 14,508,404 shares. (4)Based on Amendment No. 5 to Schedule 13G filed on February 9, 2023, by The Vanguard Group (“Vanguard”), which states that as of December 30, 2022, Vanguard has shared voting power over 132,818 shares, sole dispositive power over 9,664,942 shares, and shared dispositive power over 210,672 shares. (5)Based on Amendment No. 1 to Schedule 13G filed on February 13, 2023, by Capital Research Global Investors (“Capital Research”), which states that as of December 30, 2022, Capital Research has sole voting and sole dispositive power over 8,850,000 shares. (6)Includes (i) 300,000 vested options to purchase common shares, (ii) 300,000 options to purchase common shares which will vest and become exercisable when the closing price of the Company’s common stock on the NYSE reaches $8.00 and (iii) 300,000 options to purchase common shares which will vest and become exercisable when the closing price of the Company’s common stock on the NYSE reaches $10.00. (7)Includes (i) 100,000 options to purchase common shares which will vest and become exercisable when the closing price of the Company’s common stock on the NYSE reaches $8.00 and (ii) 100,000 options to purchase common shares which will vest and become exercisable when the closing price of the Company’s common stock on the NYSE reaches $10.00. (8)Includes 350,000 options to purchase common shares which will vest and become exercisable when the closing price of the Company’s common stock on the NYSE reaches $8.00. (9)Includes beneficial ownership of shares underlying RSUsand restricted share awards RSAs that vest within 60 days after March 1, 2023. | | | | | | | | | | | | | Shares underlying RSUs and RSAs that vest within 60 days after March 1, 2023 | | RSUs | RSAs | Total | | David E. Govrin | 74,292 | 10,370 | 84,662 | | Monica Cramér Manhem | 38,183 | — | 38,183 | | Stuart Liddell | 17,607 | — | 17,607 | | Siddhartha Sankaran | 38,208 | — | 38,208 | | Daniel V. Malloy | 91,418 | — | 91,418 | | Vievette Henry | 18,618 | 14,691 | 33,309 | | Sharon M. Ludlow | — | 23,424 | 23,424 | | Gretchen A. Hayes | — | 23,424 | 23,424 | | Jason Robart | — | 35,122 | 35,122 | | Mehdi A. Mahmud | — | 23,424 | 23,424 | | Frankin (Tad) Montross IV | — | 23,424 | 23,424 | | Rafe de la Gueronniere | — | 23,424 | 23,424 | | Total: | 278,326 | 177,293 | 455,619 |
(10)The voting power of all executive officers and directors as a group is limited by the 9.9% cap on Mr. Tan’s voting power in accordance with the CMB Investor Rights Agreement.
| | | | INFORMATION ABOUT THE ANNUAL GENERAL MEETING AND VOTING |
DELINQUENT SECTION 16(a) REPORTS Section 16(a) of the Securities Exchange Act of 1934 requires the Company’s directors, officers and persons who own more than 10% of the issued and outstanding shares of the Company’s common shares to file reports of initial ownership of common shares and other equity securities and subsequent changes in that ownership with the SEC and the NYSE. Based solely on a review of such reports and written representations from the directors, executive officers and 10% owners, the Company believes that all such filing requirements were met during 2022, with one exception: one Form 4 for Stephen Yendall reporting one stock option grant was filed late due to an unexpected delay in obtaining his SEC EDGAR filing codes.
| | | | INFORMATION ABOUT THE ANNUAL GENERAL MEETING AND VOTING |
GENERAL INFORMATION This proxy statement is furnished to shareholders of SiriusPoint Ltd. in connection with the solicitation of proxies by our Board of Directors for use at our 2023 Annual General Meeting or at any adjournment or postponement thereof, to be held: | | | | | | | | | | | | | | | | | | | WHEN | | VIRTUAL WEBCAST | | RECORD DATE | Thursday, June 1, 2023 10:00 a.m., Atlantic Daylight Time | Via live audio webcast at www.meetnow.global/MMGN2CA | April 10, 2023 |
| | | | | | | DATE OF DISTRIBUTION | | This proxy statement and the accompanying proxy card are first being sent to shareholders on or about April 21, 2023. |
In order to provide expanded access, improved communication and cost savings for our shareholders and our Company, this year’s annual general meeting will be conducted virtually via live audio webcast. QUESTIONS AND ANSWERS | | | | | | | WHY AM I RECEIVING THESE MATERIALS? | | | | We are providing these proxy materials to you in connection with the solicitation by the Company’s Board of proxies to be voted at the Company’s Annual General Meeting and at any adjournments or postponements thereof. Because you were a shareholder of the Company as of the close of business on the record date, our Board has made this proxy statement and proxy card available to you on the Internet, in addition to delivering printed versions of this proxy statement and proxy card to certain shareholders by mail. This proxy statement provides notice of the Annual General Meeting, describes the proposals presented for shareholder action and includes information required to be disclosed to shareholders. You do not need to attend the virtual Annual General Meeting to vote your shares and may vote your shares in advance of the meeting, described under the heading “How can I vote my shares without attending the Annual General Meeting?” below. |
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| | | | | | | HOW DO I GET ELECTRONIC ACCESS TO THE PROXY MATERIALS? | | | | The Company’s notice of the 2023 Annual General Meeting, proxy statement and Annual Report on Form 10-K for the fiscal year ended December 31, 2023 are available at www.edocumentview.doc/SPNT. To receive documents electronically in the future, if you are a shareholder of record, you may elect to receive future annual reports or proxy statements electronically by visiting www-us.computershare.com/Investor and log in to sign up, or while voting via the Internet click the box to give yourconsent. If you hold your shares in street name, you should contact your broker, bank or other nominee for information regarding electronic delivery of proxy materials. An election to receive proxy materials electronically will remain in effect for all future annual general meetings until revoked. Shareholders requesting electronic delivery may incur costs, such as telephone and Internet access charges, that must be borne by the shareholder. |
| | | | | | | WHAT PROPOSALS WILL BE VOTED ON AT THE ANNUAL GENERAL MEETING AND WHAT ARE THE BOARD’S RECOMMENDATIONS? | | | | There are four proposals scheduled to be voted on at the Annual General Meeting: |
| | | | | | | | | | | | | | | | PROPOSALS | BOARD RECOMMENDATIONS | FOR MORE INFORMATION,
SEE PAGE | 1To elect two Class I directors to serve for a term expiring in 2026, or until their office shall otherwise be vacated pursuant to our Bye-Laws: | | FOReach nominee | | •Franklin (Tad) Montross IV |
| •Peter Wei Han Tan |
| | | | 2To approve, by a non-binding advisory vote, the executive compensation payable to the Company’s NEOs. (Say-on-Pay) | | FOR | | 3Approval of the 2023 Omnibus Incentive Plan | | FOR | | 4To approve: (i)the appointment of PwC, an independent registered public accounting firm, as our independent auditor, to serve until the Annual General Meeting to be held in 2024; and (ii)the ratification of PwC’s remuneration as determined by the Audit Committee of the Board. | | FOR | |
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| | | | | | | | | | HOW DO I ATTEND THE VIRTUAL ANNUAL GENERAL MEETING? | | | | | If you are a registered shareholder (i.e., you hold your shares through our transfer agent, Computershare), you do not need to register to attend the Annual General Meeting virtually on the Internet. Please follow the instructions on the notice or proxy card that you received. You will be able to attend the Annual General Meeting online and submit your questions during the meeting by visiting www.meetnow.global/MMGN2CA. Such questions must be confined to matters properly before the Annual General Meeting and of general Company concern. You will also be able to vote your shares electronically at the Annual General Meeting. To participate, you will need the control number included on your proxy card, or on the instructions that accompanied your proxy materials. If you hold your shares through an intermediary, such as a bank or broker, and want to attend the Annual General Meeting online by webcast (with the ability to ask a question and/or vote, if you choose to do so) you have two options: | | | | | 1 | You can register in advance to attend the Annual General Meeting virtually on the Internet. To register to attend the Annual General Meeting online by webcast you must submit proof of your proxy power (legal proxy) reflecting your SiriusPoint Ltd. holdings along with your name and email address to Computershare. Requests for registration must be labeled as “Legal Proxy” and be received no later than 5:00 p.m., EDT, on May 29, 2023. You will receive a confirmation of your registration by email after we receive your registration materials. Requests for registration should be directed to us at the following: |
| | | | | | | | | | | | | | | | BY EMAIL Forward the email from your broker, and attach an image of your legal proxy, to: legalproxy@computershare.com | | | BY MAIL Computershare SiriusPoint Ltd. Legal Proxy P.O. Box 43001 Providence, Rhode Island 02940-3001 |
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| | | | | | | | | | 2 | You can register at the virtual meeting to be able to fully participate using the control number received with your voting instruction form. Online registration for the Annual General Meeting will enable you to attend, ask questions and vote. We expect that the vast majority of beneficial owners will be able to fully participate using this option. Please note, however, that this option is intended to be provided as a convenience to beneficial owners only, and there is no guarantee this option will be available for every type of beneficial owner voting control number. The inability to provide this option to any or all beneficial owners shall in no way impact the validity of the Annual General Meeting. Beneficial owners may choose to register in advance of the Annual General Meeting using option (1) above, if you prefer to use the traditional, legal proxy option. | | | | | In any event, please go to www.meetnow.global/MMGN2CA for more information on the available options and registration instructions. The meeting will begin promptly at 10:00 a.m., Atlantic Daylight Time (9:00 a.m. EDT). We encourage you to access the meeting prior to the start time. Online access will open at 9:45 a.m., Atlantic Daylight Time (8:45 a.m. EDT), and you should allow ample time to log in to the meeting webcast and test your computer audio system. We recommend that you carefully review the procedures needed to gain admission in advance. The virtual meeting platform is fully supported across browsers (MS Edge, Firefox, Chrome and Safari) and devices (desktops, laptops, tablets and cell phones) running the most up-to-date version of applicable software and plugins. Shareholders should ensure that they have a strong WiFi connection wherever they intend to participate in the meeting. We encourage you to access the meeting prior to the start time. Contact information on the meeting login page will provide further technical assistance during the meeting, should you need it, or you may call 1-888-724-2416. |
| | | | | | | WHO IS ENTITLED TO VOTE? | | | | All shares, including any Series A Preference Shares, par value $0.10 per share (the “Series A Preference Shares”), which vote together with the common shares as a single class with respect to all matters, owned by you as of the record date, may be voted by you, subject to certain restrictions on “controlled shares” described under the heading, “Will I be entitled to vote all of my shares at the Annual General Meeting?” below. You may cast one vote per common share that you held on the record date and one vote per common share underlying each Series A Preference Share that you held on the record date. These shares include shares that are: •held directly in your name as the shareholder of record; and •held for you as the beneficial owner through a broker, bank or other nominee. Holders of warrants are not entitled to vote at the Annual General Meeting unless those warrants have been exercised and converted into shares as of the record date. On the record date, the Company had approximately 162,379,178 common shares outstanding, including 1,134,474 restricted shares, and 11,720,987 Series A Preference Shares outstanding, which are convertible into approximately 11,720,987 common shares. |
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| | | | | | | WILL I BE ENTITLED TO VOTE ALL OF MY SHARES AT THE ANNUAL GENERAL MEETING? | | | | If your shares are treated as “controlled shares” (as determined pursuant to sections 957 and 958 of the Internal Revenue Code of 1986, as amended (the “Code”)) of any United States (“U.S.”) person (that owns shares directly or indirectly through non-U.S. entities) and such controlled shares constitute 9.5% or more of the votes conferred by our issued shares, the voting rights related to the controlled shares owned by such U.S. Person (as defined in our Bye-laws) will be limited, in the aggregate, to a voting power of less than 9.5%, under a formula specified in our Bye-laws. The formula is applied repeatedly until the voting power of all 9.5% shareholders (as defined in our Bye-laws) has been reduced to less than 9.5%. In addition, our Board may limit a shareholder’s voting rights when it deems it appropriate to do so to: (i) avoid the existence of any 9.5% shareholder; and (ii) avoid certain material adverse tax, legal or regulatory consequences to us, any of our subsidiaries or any direct or indirect shareholder or its affiliates. “Controlled shares” include, among other things, all shares that a U.S. person is deemed to own directly, indirectly or constructively (within the meaning of section 958 of the Code). The amount of any reduction of votes that occurs by operation of the above limitations will generally be reallocated proportionately among our other shareholders whose shares were not “controlled shares” of the 9.5% shareholder so long as such reallocation does not cause any person to become a 9.5% shareholder. The applicability of the voting power reduction provisions to any particular shareholder depends on facts and circumstances that may be known only to the shareholder or related persons. Accordingly, we request that any holder of shares with reason to believe that they are a 9.5% shareholder, contact us promptly so that we may determine whether the voting power of such holder’s shares should be reduced. By submitting a proxy, a holder of shares will be deemed to have confirmed that, to their knowledge, they are not, and are not acting on behalf of, a 9.5% shareholder. The Board is empowered to require any shareholder to provide information as to that shareholder’s beneficial ownership of shares, the names of persons having beneficial ownership of the shareholder’s shares, relationships with other shareholders or any other facts the Board may consider relevant to the determination of the number of shares attributable to any person. The Board may disregard the votes attached to shares of any holder who fails to respond to such a request or who, in their judgment, submits incomplete or inaccurate information. The Board retain certain discretion to make such final adjustments that they consider fair and reasonable in all the circumstances as to the aggregate number of votes attaching to the shares of any shareholder to ensure that no person shall be a 9.5% shareholder at any time. If the investor affiliated group beneficially own common shares or any other authorized shares which would cause the investor affiliated group to be treated as the beneficial owner of votes in excess of 9.5% of the votes conferred by all of the issued and outstanding shares of the Company with respect to any matter at a general shareholder meeting, then such votes will be reduced by whatever amount is necessary so that after such reduction and giving effect to the reallocation of voting power to other holders of common shares, the votes conferred by the common shares or any other authorized shares that are beneficially owned by the investor affiliated group are equal to, and not less than, 9.5% of the total outstanding vote of such shares with respect to such matter. |
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| | | | | | | WHAT IS THE DIFFERENCE BETWEEN HOLDING SHARES AS A SHAREHOLDER OF RECORD AND AS A BENEFICIAL OWNER? | | | | Many of our shareholders hold their shares through a broker, bank or other nominee rather than directly in their own name. As summarized below, there are some differences between shares held of record and those owned beneficially.
SHAREHOLDER OF RECORD. If your shares are registered directly in your name with the Company’s transfer agent, Computershare, you are considered, with respect to those shares, the shareholder of record, and these proxy materials are being made available to you by the Company. As the shareholder of record, you have the right to grant your voting proxy directly to certain officers of the Company or to vote virtually at the Annual General Meeting. You may vote on the Internet or by telephone, or by mail if you received a proxy card by mail, as described below under the heading “How can I vote my shares without attending the Annual General Meeting?”
BENEFICIAL OWNER. If your shares are held in an account at a broker, bank or other nominee, like many of our shareholders, you are considered the beneficial owner of shares held in street name, and these proxy materials were forwarded to you by that organization. As the beneficial owner, you have the right to direct your broker, bank or other nominee on how to vote your shares, and you are also invited to attend the Annual General Meeting and vote virtually.
If you do not wish to vote during the Annual General Meeting or you will not be attending the Annual General Meeting, you may vote by proxy. This is done by completing, signing and returning your voting instruction card or voting over the Internet or by telephone, as described below under the heading “How can I vote my shares without attending the Annual General Meeting?” |
| | | | | | | HOW CAN I VOTE MY SHARES AND ASK QUESTIONS VIRTUALLY AT THE ANNUAL GENERAL MEETING? | | | | SHAREHOLDER OF RECORD.Shares held directly in your name as the shareholder of record may be voted virtually at the Annual General Meeting. Shareholders may vote or ask questions during the virtual Annual General Meeting by visiting www.meetnow.global/MMGN2CA and logging in using the 15-digit control number on the proxy card or on the instructions that accompanied your proxy materials. To vote your shares, click on the Vote tab or to ask questions click on the Q&A tab located on the meeting site. We encourage you to vote in advance of the Annual General Meeting to ensure your shares are represented and counted. BENEFICIAL OWNER.Pursuant to the instructions described above under the heading “How do I attend the virtual Annual General Meeting?”, if you are a beneficial owner and want to attend the Annual General Meeting online by webcast (with the ability to ask a question and/or vote, if you choose to do so) you have two options: (a) you can register in advance by submitting your legal proxy to Computershare or (b) you can register at the virtual Annual General Meeting by going to www.meetnow.global/MMGN2CA and logging in using the control number on your voting instruction form or on the instructions that accompanied your proxy materials. To vote your shares, click on the Vote tab or to ask questions click on the Q&A tab located on the meeting site. |
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| | | | | | | HOW CAN I VOTE MY SHARES WITHOUT ATTENDING THE ANNUAL GENERAL MEETING? | | | | Whether you hold your shares directly as the shareholder of record or beneficially own your shares in street name, you may direct your vote without attending the virtual Annual General Meeting by voting in one of the following manners: |
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| INTERNET | TELEPHONE | MOBILE DEVICE | MAIL | REGISTERED HOLDERS (your shares are held directly with our transfer agent, Computershare) | envisionreports.com/ SPNT 24/7 | Within the United States and Canada,
1-800-652-VOTE (8683) (toll-free, 24/7) | Scan the QR code | Complete and sign your proxy card or voting instruction card and mail it using the enclosed, prepaid envelope. | BENEFICIAL OWNERS
(holders in street name) | www.proxyvote.com 24/7 | Within the United States and Canada,
1-800-454-8683
(toll-free, 24/7) | Scan the QR code | Return a properly executed voting instruction form by mail, depending upon the method(s) your broker, bank or other nominee makes available |
If you hold shares beneficially in street name, you may direct your vote in the manner prescribed by your broker, bank or other nominee or you may vote during the virtual Annual General Meeting. Please refer to the registration instructions provided above for beneficial owners. If you vote over the Internet or by telephone, you do not need to return your proxy card or voting instruction card. Internet and telephone voting for shareholders will be available 24 hours a day, until the voting polls close at the virtual Annual General Meeting. If you do not attend the meeting but your vote is submitted by telephone or Internet after 10:00 a.m., Atlantic Daylight Time (9:00 a.m. EDT), on May 19, 2023, your vote will be cast as if you were personally present at the meeting. | | | | | | | WHAT IS THE QUORUM REQUIREMENT FOR THE ANNUAL GENERAL MEETING? | | | | A quorum is necessary to hold a valid annual general meeting. At the Annual General Meeting, two or more persons present virtually throughout the meeting and representing virtually or by proxy in excess of 50% of the total issued voting shares in the Company throughout the meeting shall form a quorum for the transaction of business. Abstentions and broker non-votes are counted as present for determining whether a quorum exists. A broker non-vote occurs when an intermediary holding shares for a beneficial owner does not vote on a particular proposal because the intermediary does not have discretionary voting power for that particular proposal and has not received instructions from the beneficial owner. |
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| | | | | | | WHAT HAPPENS IF I DO NOT GIVE SPECIFIC VOTING INSTRUCTIONS? | | | | SHAREHOLDER OF RECORD. If you are a shareholder of record and you submit a signed proxy card or submit your proxy by telephone or the Internet but do not specify how you want to vote your shares on a particular proposal, then the proxy holders will vote your shares in accordance with the recommendation of the Board on all matters presented in this proxy statement. With respect to any other matters properly presented for a vote at the Annual General Meeting, the proxy holders will vote your shares in accordance with their best judgment. BENEFICIAL OWNER.If you are a beneficial owner of shares held in street name and do not provide the broker, bank or other nominee that holds your shares with specific voting instructions, under the rules of the NYSE, the broker, bank or other nominee that holds your shares may generally vote on routine matters but cannot vote on non-routine matters such as the election of directors. If the broker, bank or other nominee that holds your shares does not receive instructions from you on how to vote your shares on a non-routine matter, the broker, bank or other nominee that holds your shares will inform the inspector of election that it does not have the authority to vote on this matter with respect to your shares. This is generally referred to as a “broker non-vote.” Therefore, we urge you to give voting instructions to your broker. Shares represented by such broker non-votes will be counted in determining whether there is a quorum. Because broker non-votes are not considered entitled to vote, they will have no effect on the outcome other than reducing the number of shares present in person or by proxy and entitled to vote from which a majority is calculated. |
| | | | | | | WHAT PROPOSALS ARE CONSIDERED “ROUTINE” OR “NON-ROUTINE”? | | | | The approval of the appointment of PwC as the Company’s independent registered certified public accounting firm, to serve until the annual general meeting to be held in 2024 and the authorization of the Board, acting by the Audit Committee, to determine the independent auditor’s remuneration (Proposal 4) is a matter considered routine under applicable rules. A broker or other nominee may generally vote on routine matters, and therefore no broker non-votes are expected to exist in connection with Proposal 4. The election of directors, the advisory vote on compensation of the Company’s NEOs and the approval of the Company’s 2023 Omnibus Incentive Plan (Proposals 1, 2 and 3) are matters considered non-routine under applicable rules. A broker, bank or other nominee cannot vote without instructions on non-routine matters, and therefore there may be broker non-votes on Proposals 1, 2 and 3, which will have no effect on such proposals. |
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| | | | | | | WHAT IS THE VOTING REQUIREMENT TO APPROVE EACH OF THE PROPOSALS? | | | | Two Class I directors have been nominated for election at the Annual General Meeting to hold office until the 2026 annual general meeting or until their office shall otherwise be vacated pursuant to our Bye-laws (Proposal 1). Each director will be elected by a plurality of the votes cast in the election of directors at the Annual General Meeting, either in person or represented by properly authorized proxy. This means that the two nominees who receive the largest number of “FOR” votes cast will be elected as directors. Votes that are “withheld” will have no impact on the voting results of the election of directors, because directors are elected by plurality voting. Shareholders cannot cumulate votes in the election of directors. Broker non-votes will have no effect on Proposal 1 as this is considered a non-routine matter. In accordance with Bermuda law, only votes cast “FOR” a matter constitute affirmative votes. A properly executed proxy marked “abstain” with respect to Proposals 2, 3 and 4, will not be voted, although it will be counted for purposes of determining whether there is a quorum. Because abstentions will not be votes cast “FOR” Proposals 2, 3, and 4, they will have the same effect as negative votes or votes against that matter. Broker non-votes will have no effect on Proposals 2 and 3 as each is considered a non-routine matter. There will not be any broker non-votes on Proposal 4 because it is considered a routine matter and brokers will be able to vote pursuant to their discretionary authority. |
| | | | | | | | | | | | | | | | PROPOSALS | TYPE OF VOTE | VOTING REQUIREMENT | EFFECT OF ABSTENTIONS AND BROKER NON-VOTES | | | | | | | 1 | Election of two Class I director nominees for election to a 3-year term, expiring in 2026, or until their office shall otherwise be vacated pursuant to our Bye-Laws. | Non-routine | Plurality of the votes cast | Voting options will be “for” or “withhold” with regard to each director. Broker non-votes will have no effect. | | | | | | | 2 | Approval, by a non-binding advisory vote, of the executive compensation payable to the Company’s named executive officers.
(Say-on-Pay) | Non-routine | Majority of the votes cast | Abstentions have the same effect as negative votes. Broker non-votes will have no effect. | | | | | | | 3 | Approval of the 2023 Omnibus Incentive Plan | Non-routine | Majority of the votes cast | Abstentions have the same effect as negative votes. Broker non-votes will have no effect. | | | | | | | 4 | Approval of: (i)the appointment of PwC as our independent auditor, to serve until the Annual General Meeting to be held in 2024; and (ii)the authorization of our Board of Directors, acting by the Audit Committee, to determine PwC’s remuneration. | Routine | Majority of the votes cast | Abstentions have the same effect as negative votes. Because brokers will have discretionary authority to vote on this proposal, there will not be any broker non-votes. |
| | | | | | | WHAT DOES IT MEAN IF I RECEIVE MORE THAN ONE PROXY OR VOTING INSTRUCTION CARD? | | | | It means your shares are registered differently or are in more than one account. Please provide voting instructions for all proxy and voting instruction cards you receive. |
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| | | | | | | WHO WILL COUNT THE VOTES? | | | | A representative of Computershare will tabulate the votes and act as the inspector of election. |
| | | | | | | CAN I REVOKE MY PROXY OR CHANGE MY VOTE? | | | | Yes. You may revoke your proxy or change your voting instructions at any time prior to the vote at the Annual General Meeting by: •providing written notice to the Secretary of the Company; •delivering a valid, later-dated proxy or a later-dated vote on the Internet or by telephone; or •attending the virtual Annual General Meeting and voting during the meeting. Please note that your attendance at the virtual Annual General Meeting will not cause your previously granted proxy to be revoked unless you specifically so request. If your shares are held in street name you may change your vote by submitting new voting instructions to your broker or voting during the Annual General Meeting. |
| | | | | | | WHO WILL BEAR THE COST OF SOLICITING VOTES FOR THE ANNUAL GENERAL MEETING? | | | | The Company will pay the entire cost of preparing, assembling, printing, mailing and distributing these proxy materials. In addition to the mailing of these proxy materials, the solicitation of proxies or votes may be made in person, by telephone or by electronic transmission by our directors, officers and employees, who will not receive any additional compensation for such solicitation activities. In addition, the Company may reimburse its transfer agent, brokerage firms and other persons representing beneficial owners of its common shares and Series A Preference Shares for their expenses in forwarding solicitation material to such beneficial owners. The Company has retained Georgeson LLC to assist in the solicitation of proxies for $11,000 plus reasonable expenses. To contact Georgeson LLC, please see below: |
| | | | | | | | | | | | | | | | | | | ADDRESS Georgeson LLC 1290 Avenue of the Americas 9th Floor New York, New York 10104 | | SHAREHOLDERS, BANKS AND BROKERS | | | Call toll-free | 866-295-4321 | | Outside the United States | 1(781)-575-2137 | | | siriuspoint@georgeson.com |
| | | | | | | IS MY VOTE CONFIDENTIAL? | | | | Yes. The Company encourages shareholder participation in corporate governance by ensuring the confidentiality of shareholder votes. The Company has designated Computershare, the Company’s independent transfer agent and registrar, to receive and tabulate shareholder votes. Your vote on any particular proposal will be kept confidential and will not be disclosed to the Company or any of its officers or employees except: (i)where disclosure is required by applicable law; (ii)where disclosure of your vote is expressly requested by you; or (iii)where the Company concludes in good faith that a bona fide dispute exists as to the authenticity of one or more proxies, ballots or votes, or as to the accuracy of any tabulation of such proxies, ballots or votes. However, aggregate vote totals will be disclosed to the Company from time to time and publicly announced at the Annual General Meeting. |
| | | | | | | HOW CAN I OBTAIN A COPY OF THE COMPANY’S ANNUAL REPORT ON
FORM 10-K? | | | | The Company’s Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the SEC, is available to shareholders free of charge on the Company’s website at www.siriuspt.com or by writing to: |
| | | | | | | | | | | | | | | | BY MAIL. SiriusPoint Ltd. Attention: Investor Relations Point Building 3 Waterloo Lane Pembroke HM 08, Bermuda | | | BY EMAIL. investor.relations@siriuspt.com |
The Company’s 2022 Annual Report to Shareholders, which includes such Form 10-K, accompanies this proxy statement. | | | | | | | WHERE CAN I FIND THE VOTING RESULTS OF THE ANNUAL GENERAL MEETING? | | | | The Company will announce preliminary voting results at the Annual General Meeting and publish preliminary results, or final results if available, in a Current Report on Form 8-K within four business days of the Annual General Meeting. |
HOUSEHOLDING OF PROXY MATERIALS
The SEC has adopted rules that permit companies and intermediaries (e.g., brokers) to satisfy the delivery requirements for annual general meeting materials with respect to two or more shareholders sharing the same address by delivering a single set of annual general meeting materials or Notice of Internet Availability of Proxy Materials to those shareholders. This process, which is commonly referred to as “householding,” potentially means extra convenience for shareholders and cost savings for companies. This year, a number of brokers with account holders who are Third Point Reinsurance Ltd.SiriusPoint shareholders will be “householding” the Company’s proxy materials. A single set of annual general meeting materials will be delivered to multiple shareholders sharing an address unless contrary instructions have been received from the affected shareholders. Once you have received notice from your broker that they will be “householding” communications to your address, “householding” will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in “householding” and would prefer to receive a separate set of annual general meeting materials, please notify your broker or Third Point ReinsuranceSiriusPoint Ltd. Direct your written request to Company Secretary, Third Point Reinsurance Ltd., Point House, 3 Waterloo Lane, Pembroke HM 08, Bermuda and your telephonic request to +1 (441) 542-3300. to: | | | | | | | SiriusPoint Ltd. Attention: Secretary Point Building 3 Waterloo Lane Pembroke HM 08, Bermuda | | 1 (441) 542-3300 |
Shareholders who currently receive multiple copies of the annual general meeting materials at their addresses and would like to request “householding” of their communications should contact their brokers. OTHER MATTERS
Neither the Board of Directors nor management intend to bring before the Annual General Meeting any business other than the matters referred to in the Notice of Annual General Meeting of Shareholders and this Proxy Statement. If any other business should come properly before the Annual General Meeting, or any adjournment thereof, the proxy holders will vote on such matters at their discretion.
REQUIREMENTS, INCLUDING DEADLINES, FOR SUBMISSION OFSUBMITTING PROXY PROPOSALS AND DIRECTOR NOMINATIONS FOR THE NEXT ANNUAL GENERAL MEETING
NOMINATION OF DIRECTORS AND OTHER BUSINESS OF SHAREHOLDERS
In order to submit shareholder proposals for the 20192023 annual general meeting of shareholders for inclusion in the Company’s proxy statement pursuant to SEC Rule 14a-8, materials must be received by the Company Secretary at the Company’s principal office at that time, currently at Point House,Building, 3 Waterloo Lane, Pembroke HM 08, Bermuda, no laterlater than November 27, 2018.December 23, 2023. The proposals must comply with all of the requirements of SEC Rule 14a-8.
Proposals should be addressed to: Company Secretary, Third Point Reinsurance Ltd., Point House, 3 Waterloo Lane, Pembroke HM 08, Bermuda. As the rules of the SEC make clear, simply submitting a proposal does not guarantee its inclusion. | | | | | | | SiriusPoint Ltd. Attention: Secretary Point Building 3 Waterloo Lane Pembroke HM 08, Bermuda |
The Company’s Bye-laws establish an advance notice procedure for shareholders to make nominations of candidates for election as directors or to bring other business before an annual general meeting of shareholders. The Bye-laws provide that any shareholder wishing to nominate persons for election as directors at, or bring other business before, an annual general meeting must deliver to the Company’s Secretary a written notice of the shareholder’s intention to do so. To be timely, the shareholder’s notice for the nomination of persons for election to the Board must be delivered to, or mailed and received by, usthe Secretary not less than 70 days nor more than 120 days before the anniversary date of the preceding annual general meeting, except that if the annual general meeting is set for a date that is not within 30 days before or after such anniversary date, the Company must receive the notice not later than the close of business on the tenth (10th) day following the day on which such notice of the date of the annual general meeting was mailed or such public disclosure of the date of the annual general meeting was made, whichever first occurs. To be timely, the shareholder’s notice bringing other business must be delivered to, or mailed and received by, the Secretary not less than 90 days nor more than 120 days before the anniversary date of the preceding annual general meeting, except that if the annual general meeting is set for a date that is not within 30 days before or after such anniversary date, the Company must receive the notice no earlier than 120 days prior to an annual general meeting and noreceived not later than 7010 days prior tofollowing the dateearlier of such annual general meeting or the tenth day following the date on which notice of the annual general meeting was posted to shareholders or the date on which initial public announcementdisclosure of the date of the annual general meeting was made. As a result, any notice given by or on behalf of a shareholder for the nomination of persons for election to the Board pursuant to these provisions of the Company’s Bye-laws (and not pursuant to Securities Exchange Act of 1934SEC Rule 14a-8) must be received no earlier than January 3, 2019February 2, 2024, and no later than March 23, 2024. Any notice given by or on behalf of a shareholder bringing other business pursuant to these provisions of the Company’s Bye-laws (and not pursuant to SEC Rule 14a-8) must be received no earlier than February 2, 2019.2024, and no later than March 3, 2024. All director nominations and shareholder proposals must comply with the requirements of the Company’s Bye-laws, a copy of which can be obtained at no cost from the Company Secretary.
In addition to satisfying the foregoing requirements under the Company’s Bye-laws, to comply with the universal proxy rules, shareholders who intend to solicit proxies in support of director nominees other than the Company’s nominees must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act no later than April 2, 2024.
Other than the five proposals described in this Proxy Statement,proxy statement, the Company does not expect any matters to be presented for a vote at the Annual General Meeting. If you grant a proxy, the persons named as proxy holders on the Proxy Cardproxy card will have the discretion to vote your shares on any additional matters properly presented for a vote at the Annual General Meeting. If for any unforeseen reason, any one or more of the Company’s nominees are not available as a candidate for director, the persons named as proxy holders will vote your proxy for such other candidate or candidates as may be nominated by the Board of Directors.Board. The ChairmanChair of the meeting may refuse to allow the transaction of any business not presented beforehand, or to acknowledge the nomination of any person(s) not made in compliance with the foregoing procedures.
Website References
This proxy statement includes several website addresses and references to additional materials found on those websites. These websites and materials are provided for convenience only, and the content on the referenced websites is not incorporated by reference herein and does not constitute a part of this proxy statement or any of the Company’s other SEC filings.
OTHER MATTERS Neither the Board nor management intend to bring before the Annual General Meeting any business other than the matters referred to in the Notice of Annual General Meeting of Shareholders and this proxy statement. If any other business should come properly before the Annual General Meeting, or any adjournment thereof, the proxy holders will vote on such matters at their discretion. By Order of the Board of Directors,
/s/ JIMMY YANG Interim General Counsel & Secretary April 21, 2023 Pembroke, Bermuda
APPENDIX A NON-GAAP MEASURES
Non-GAAP Financial Measures and Other Financial Metrics
In presenting SiriusPoint’s results, management has included financial measures that are not calculated under standards or rules that comprise accounting principles generally accepted in the United States (“GAAP”). SiriusPoint’s management uses this information in its internal analysis of results and believes that this information may be informative to investors in gauging the quality of SiriusPoint’s financial performance, identifying trends in our results and providing meaningful period-to-period comparisons. Core income (loss) and Core combined ratio are non-GAAP financial measures. Management believes it is important to review Core results as it better reflects how management views the business and reflects the Company’s decision to exit the runoff business. Tangible diluted book value per share is also a non-GAAP financial measure. SiriusPoint’s management believes that long-term growth in book value per share is an important measure of the Company’s financial performance because it allows management and investors to track over time the value created by the retention of earnings. In addition, SiriusPoint’s management believes this metric is useful to investors because it provides a basis for comparison with other companies in the industry that also report a similar measure. These non-GAAP financial measures may be defined or calculated differently by other companies. These measures are used by management to monitor our results and should not be viewed as a substitute for those determined in accordance with GAAP. Reconciliations of such measures to the most comparable GAAP figures are included below.
Core Results
Collectively, the sum of the Company’s two segments, Reinsurance and Insurance & Services, constitute “Core” results. Core underwriting income, Core net services income, Core income and Core combined ratio are non-GAAP financial measures. We believe it is useful to review Core results as it better reflects how management views the business and reflects our decision to exit the runoff business. The sum of Core results and Corporate results are equal to the consolidated results of operations.
Core underwriting income - calculated by subtracting loss and loss adjustment expenses incurred, net, acquisition costs, net, and other underwriting expenses from net premiums earned.
Core net services income - consists of services revenues which include commissions, brokerage and fee income related to consolidated managing general agents (“MGAs”), and other revenues, services expenses which include direct expenses related to consolidated MGAs, services noncontrolling income which represent minority ownership interests in consolidated MGAs, and net investment gains from Strategic Investments which are net investment gains/losses from investment in our strategic partners. Net services income is a key indicator of the profitability of the Company’s services provided, including investment returns on non-consolidated investment positions held.
Core income - consists of two components, core underwriting income and core net services income. Core income is a key measure of our segment performance.
AMENDED AND RESTATED BYE-LAWS
OFCore combined ratio - calculated by dividing the sum of Core loss and loss adjustment expenses incurred, net, acquisition costs, net and other underwriting expenses by Core net premiums earned. Accident year loss ratio and accident year combined ratio are calculated by excluding prior year loss reserve development to present the impact of current accident year net loss and loss adjustment expenses on the Core loss ratio and Core combined ratio, respectively. These ratios are useful indicators of our underwriting profitability.
THIRD POINT REINSURANCE LTD.
The following is a summary of the Company’s operating segment results for the year ended December 31, 2022: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2022 | | Reinsurance | | Insurance & Services | | Core | | Eliminations (2) | | Corporate | | Segment Measure Reclass | | Total | Gross premiums written | $ | 1,521.4 | | | $ | 1,884.2 | | | $ | 3,405.6 | | | $ | — | | | $ | 4.1 | | | $ | — | | | $ | 3,409.7 | | | Net premiums written | 1,199.6 | | | 1,346.0 | | | 2,545.6 | | | — | | | 3.6 | | | — | | | 2,549.2 | | | Net premiums earned | 1,213.1 | | | 1,086.8 | | | 2,299.9 | | | — | | | 18.2 | | | — | | | 2,318.1 | | | Loss and loss adjustment expenses incurred, net | 855.9 | | | 718.7 | | | 1,574.6 | | | (5.2) | | | 19.0 | | | — | | | 1,588.4 | | | Acquisition costs, net | 310.3 | | | 273.2 | | | 583.5 | | | (118.6) | | | (3.0) | | | — | | | 461.9 | | | Other underwriting expenses | 113.8 | | | 62.8 | | | 176.6 | | | — | | | 7.9 | | | — | | | 184.5 | | | Underwriting income (loss) | (66.9) | | | 32.1 | | | (34.8) | | | 123.8 | | | (5.7) | | | — | | | 83.3 | | | Services revenue | (0.2) | | | 215.7 | | | 215.5 | | | (133.4) | | | — | | | (82.1) | | | — | | | Services expenses | — | | | 179.2 | | | 179.2 | | | — | | | — | | | (179.2) | | | — | | | Net services fee income (loss) | (0.2) | | | 36.5 | | | 36.3 | | | (133.4) | | | — | | | 97.1 | | | — | | | Services noncontrolling loss | — | | | 1.1 | | | 1.1 | | | — | | | — | | | (1.1) | | | — | | | Net investment losses from Strategic Investments | (3.9) | | | (2.2) | | | (6.1) | | | — | | | — | | | 6.1 | | | — | | | Net services income (loss) | (4.1) | | | 35.4 | | | 31.3 | | | (133.4) | | | — | | | 102.1 | | | — | | | Segment income (loss) | (71.0) | | | 67.5 | | | (3.5) | | | (9.6) | | | (5.7) | | | 102.1 | | | 83.3 | | | Net realized and unrealized investment losses | | (219.4) | | | (6.1) | | | (225.5) | | | Net realized and unrealized investment losses from related party investment funds | | (210.5) | | | — | | | (210.5) | | | Net investment income | | | | | | | | | 113.3 | | | — | | | 113.3 | | | Other revenues | | | | | | | | | 28.1 | | | 82.1 | | | 110.2 | | | Net corporate and other expenses | | | | | | | | | (133.6) | | | (179.2) | | | (312.8) | | | Intangible asset amortization | | | | | | | | | (8.1) | | | — | | | (8.1) | | | Interest expense | | | | | | | | | (38.6) | | | — | | | (38.6) | | | Foreign exchange gains | | | | | | | | | 66.0 | | | — | | | 66.0 | | | Income (loss) before income tax benefit | $ | (71.0) | | | $ | 67.5 | | | (3.5) | | | (9.6) | | | (408.5) | | | (1.1) | | | (422.7) | | | Income tax benefit | | | | | — | | | — | | | 36.7 | | | — | | | 36.7 | | | Net loss | | | | | (3.5) | | | (9.6) | | | (371.8) | | | (1.1) | | | (386.0) | | | Net income attributable to noncontrolling interests | | — | | | — | | | (1.9) | | | 1.1 | | | (0.8) | | | Net loss attributable to SiriusPoint | | $ | (3.5) | | | $ | (9.6) | | | $ | (373.7) | | | $ | — | | | $ | (386.8) | | | | | | | | | | | | | | | | Underwriting Ratios: (1) | | | | | | | | | | | | | | | Loss ratio | 70.6 | % | | 66.1 | % | | 68.5 | % | | | | | | | | 68.5 | % | | Acquisition cost ratio | 25.6 | % | | 25.1 | % | | 25.4 | % | | | | | | | | 19.9 | % | | Other underwriting expenses ratio | 9.4 | % | | 5.8 | % | | 7.7 | % | | | | | | | | 8.0 | % | Combined ratio | 105.6 | % | | 97.0 | % | | 101.6 | % | | | | | | | | 96.4 | % | | | | | | | | | | | | | | |
(1)Underwriting ratios are calculated by dividing the related expense by net premiums earned.
(2)Insurance and Services MGAs recognize fees for service using revenue from contracts with customers accounting standards, whereas insurance companies recognize acquisition expenses using insurance contract accounting standards. While ultimate revenues and expenses recognized will match, there will be recognition timing differences based on the different accounting standards.
Tangible Book Value Per Diluted Common Share
Tangible book value per diluted common share, as presented, is a non-GAAP financial measure and the most comparable GAAP measure is book value per common share. Tangible book value per diluted common share excludes the total number of unvested restricted shares, at period end, and intangible assets. While restricted shares are outstanding, they are excluded because they are unvested. Further, management believes that effects of intangible assets are not indicative of underlying underwriting results or trends and make book value comparisons to less acquisitive peer companies less meaningful. The tangible book value per diluted common share is also useful because it provides a more accurate measure of the realizable value of shareholder returns, excluding intangible assets.
INTERPRETATION
| | 1.1 | In these Bye-laws, the following words and expressions shall, where not inconsistent with the context, have the following meanings, respectively: |
| | 9.5% Shareholder | a U.S. Person that (a) owns (within the meaning of Section 958(a) of the Code) any shares and (b) owns, is deemed to own, or constructively owns Controlled Shares which confer votes in excess of 9.5% of the votes conferred by all of the issued and outstanding shares; |
| | Act | the Companies Act 1981 as amended from time to time; |
| | Affiliate | with respect to any Person, any other Person directly or indirectly controlling, controlled by or under common control with such Person. |
| | Alternate Director | an alternate director appointed in accordance with these Bye-laws; |
| | Auditor | includes an individual or partnership; |
| | Board | the board of directors appointed or elected pursuant to these Bye-laws and acting by resolution in accordance with the Act and these Bye-laws or the directors present at a meeting of directors at which there is a quorum; |
| | Book Value | as of any date of determination, the fully diluted tangible The following table sets forth the computation of book value per common share, book value per diluted common share of the Company, as reflected on the then most recent quarterly consolidated balance sheet of the Company and its consolidated subsidiaries, prepared in accordance with U.S. generally accepted accounting principles; provided that the Board shall have the authority to determine Book Value with reference to a then more recent balance sheet of the Company prepared in accordance with U.S. generally accepted accounting principles; |
| | Code | The Internal Revenue Code of 1986, as amended, of the United States of America; |
| | Company | Third Point Reinsurance Ltd., the company for which these Bye-laws are approved and confirmed; |
| | Company Sale | the sale of all or substantially all of the issued and outstanding Shares of the Company and/or TP Re. |
| | Controlled Group | with respect to any person, all shares directly owned by such person and all shares directly owned by each other Member any of whose shares are included in the Controlled Shares of such person; |
| | Controlled Shares | in reference to any person, all shares that such person is deemed to own directly, indirectly (within the meaning of Section 958(a) of the Code) or, in the case of any U.S. Person, constructively (within the meaning of Section 958(b) of the Code); |
| | Daily Share Price | with respect to the shares of the Company as of any Trading Day, the closing price of the shares of the Company on the New York Stock Exchange (or such other principal stock exchange or automated quotation system on which the shares of the Company are then traded) on such Trading Day; |
| | Director | a director of the Company and shall include an Alternate Director; |
| | Disinterested Board Members | Directors, other than Daniel S. Loeb or any other Director affiliated with or employed by the Sponsor or its Affiliates; |
| | Effective Date | the first date on which Kelso (as defined in Bye-law 7.1) and their affiliates, Pine Brook (as defined in Bye-law 7.1) and their affiliates, and Daniel S. Loeb and his affiliates (collectively, “Daniel S. Loeb”), taken together, no longer beneficially own more than 35% of the voting power of the Company; |
| | Fair Market Value | with respect to a repurchase of any shares of the Company in accordance with these Bye-laws, (i) if such shares are listed on a securities exchange (or quoted in a securities quotation system), the average closing sale price of such shares on such exchange (or in such quotation system), or, if such shares are listed on (or quoted in) more than one exchange (or quotation system), the average closing sale price of the shares on the principal securities exchange (or quotation system) on which such shares are then traded, or, if such shares are not then listed on a securities exchange (or quotation system) but are traded in the over-the-counter market, the average of the latest bid and asked quotations for such shares in such market, in each case for the last five trading days immediately preceding the day on which notice of the repurchase of such shares is sent pursuant to these Bye-laws or (ii) if no such closing sales prices or quotations are available because such shares are not publicly traded or otherwise, the fair value of such shares as determined by one independent nationally recognised investment banking firm chosen by the Board and reasonably satisfactory to the Member whose shares are to be so repurchased by the Company, provided, that the calculation of the Fair Market Value of the shares made by such appointed investment banking firm (i) shall not include any discount relating to the absence of a public trading market for, or any transfer restrictions on, such shares, and (ii) such calculation shall be final and the fees and expenses stemming from such calculation shall be borne by the Company or its assignee, as the case may be;
|
| | Initial Public Offering | the first registered public offering of any class of common shares of the Company or TP Re under the United States securities laws or any amalgamation, scheme of arrangement or consolidation as a result of which the Members receive, as the consideration in such amalgamation, scheme of arrangement or consolidation, equity securities of a class that (i) has been registered as part of a public offering under the United States securities laws and (ii) is publicly traded on the New York Stock Exchange (or such other principal stock exchange or automated quotation system on which the shares of the Company or TP Re are then traded); |
| | Investment Manager | the Person appointed to manage the assets of TP Re pursuant to an investment management agreement; |
Joint Venture and Investment the Joint Venture and Investment Management Agreement Management Agreement by and among TP Re, the Company, Sponsor and Third Point Advisors LLC, datedtangible book value per diluted common share as of December 22, 201131, 2022 and December 31, 2021:
| | Member | a person registered in the Register of Members as the holder of shares in the Company and, when two or more persons are so registered as joint holders of shares, means the person whose name stands first in the Register of Members as one of such joint holders or all of such persons, as the context so requires; |
| | Notice | written notice as further provided in these Bye-laws unless otherwise specifically stated; |
| | Officer | any person appointed | | | | | | | | | | | | | December 31,
2022 | | December 31, 2021 | | ($ in millions, except share and per share amounts) | | | | | | | | | | Common shareholders’ equity attributable to SiriusPoint common shareholders | $ | 1,874.7 | | | $ | 2,303.7 | | | Carrying value of Series A preference shares issued in merger | — | | | 20.4 | | | Diluted common shareholders’ equity attributable to SiriusPoint common shareholders | 1,874.7 | | | 2,324.1 | | | Intangible assets | (163.8) | | | (171.9) | | | Tangible diluted common shareholders' equity attributable to SiriusPoint common shareholders | $ | 1,710.9 | | | $ | 2,152.2 | | | | | | | Common shares outstanding | 162,177,653 | | 161,929,777 | | Effect of dilutive stock options, restricted shares, restricted share units, warrants and Series A preference shares | 3,492,795 | | 2,898,237 | | Book value per diluted common share denominator | 165,670,448 | | 164,828,014 | | Unvested restricted shares | (1,708,608) | | (2,590,194) | | Tangible book value per diluted common share denominator | 163,961,840 | | 162,237,820 | | | | | | Book value per common share | $ | 11.56 | | | $ | 14.23 | | | Book value per diluted common share | $ | 11.32 | | | $ | 14.10 | | | Tangible book value per diluted common share | $ | 10.43 | | | $ | 13.27 | |
APPENDIX B SIRIUSPOINT LTD. 2023 OMNIBUS INCENTIVE PLAN SECTION 1. PURPOSE
The purposes of the SiriusPoint Ltd. 2023 Omnibus Incentive Plan (the “Plan”) are topromote the interests of SiriusPoint Ltd. and its shareholders by (i) attracting and retainingexecutive personnel and other key employees and directors of outstanding ability; (ii) motivatingexecutive personnel and other key employees and directors by means of performance-relatedincentives, to achieve longer-range performance goals; and (iii) enabling such individuals toparticipatein thelong-term growthand financialsuccess ofSiriusPointLtd.
SECTION 2. DEFINITIONS
(a) Certain Definitions. Capitalized terms used herein without definition shall have the respective meanings set forth below:
i. “Affiliate” means, (i) for purposes of Incentive Share Options, any corporation that is a “parent corporation” (as defined in Section 424(e) of the Code) or a “subsidiary corporation” (as defined in Section 424(e) of the Code) of the Company, and (ii) for all other purposes, with respect to any person, any other person that (directly or indirectly) is controlled by, controlling or under common control with such person.
ii. Applicable Law” means the requirements related to or implicated by the administration of the Plan under Bermuda law, United States federal and state laws, the Code, applicable securities laws, any stock exchange or quotation system on which the Shares are listed or quoted, and the applicable laws of any other foreign country or jurisdiction where Awards are granted under the Plan, including, in each case, the applicable rules, regulations and guidance promulgated thereunder.
iii. “Award” means any Performance Award, Restricted Share, Restricted Share Unit, Option, Share Appreciation Right, Deferred Share Unit, Dividend Equivalent or other Share- Based Award granted to a Participant pursuant to the Plan, including an Award combining two or more types in a single grant.
iv. “Award Agreement” means any written or electronic agreement, contract or other instrument or document evidencing an Award granted under the Plan.
v. “Board” means the Board of Directors of the Company.
vi “Cause” with respect to a Participant shall mean (i) the refusal or neglect of the Participant to perform substantially his or her employment-related duties; (ii) the Participant’s personal dishonesty, incompetence, willful misconduct, or breach of fiduciary duty; (iii) the Participant’s conviction of or entering a plea of guilty or nolo contendere (or any applicable equivalent thereof) to a crime constituting a felony (or a crime or offense of equivalent magnitude in any jurisdiction) or his or her willful violation of any other law, rule, or regulation (other than a traffic violation or other offense
or violation outside of the course of employment that in no way adversely affects the Company or any Affiliate or its reputation or the ability of the Participant to perform his or her employment-related duties or to represent the Company or any Affiliate); (iv) the Participant’s material violation of the Company’s policies or standards or of any statutory or common law duty of loyalty or good faith to the Company; (v) the material breach by the Participant of any covenant or agreement with the Company or any Affiliate, or any written policy of the Company or any Affiliate, not to disclose any information pertaining to the Company or any Affiliate or not to compete or interfere with the Company or any Affiliate; or (vi) the termination of a Participant's employment for serious misconduct, repeated misconduct or repeated unsatisfactory performance; provided that with respect to any Participant who is party to an employment agreement or other applicable agreement with the Company or any Subsidiary or other Employer in effect on the grant date of the Award and that contains a definition of “Cause”, “Cause” shall have the meaning specified in such Participant’s employment agreement or such other applicable agreement.
vii. “Change in Control” shall mean the first to occur of the following:
a.the acquisition (whether by purchase, merger, amalgamation, consolidation, or other similar transaction) by any person, entity, or “group” (as defined in Section 13(d) of the Exchange Act) of beneficial ownership of more than 50% of the combined Voting Power of the Company’s then outstanding voting securities, other than any such acquisition by the Company, any of its Subsidiaries, any employee benefit plan of the Company or any of its Subsidiaries, or any Affiliates of any of the foregoing;
b.the sale, transfer, or other disposition of all or substantially all of the assets of the Company and the Subsidiaries, taken as a whole, to one or more persons or entities that are not, immediately prior to such sale, transfer, or other disposition, Affiliates of the Company; or
c.within any 24-month period, the persons who were directors of the Company at the beginning of such period (the “Incumbent Directors”) shall cease to constitute at least a majority of the Board, provided that any director nominated for election to the Board by a majority of the Incumbent Directors still in office shall be deemed to be an Incumbent Director for purpose of this clause (C); provided, however, that no individual initially elected or nominated as a director of the Company as a result of an actual or threatened election contest with respect to directors or as a result of any other actual or threatened solicitation of proxies by or on behalf of any person other than the Board shall be deemed to be an Incumbent Director;
in each case, with respect to any Award that constitutes “deferred compensation” subject to Section 409A of the Code and that is payable on account of a Change in Control (including any installments or stream of payments that are accelerated on account of a Change in Control), a Change in Control shall only occur if such event also constitutes a “change in the ownership,” “change in effective control,” and/or “change in the ownership of a substantial potential of the assets” of the Company as those terms are defined under Treasury Regulation §1.409A-3(i)(5), but only to the extent necessary to establish a time or form of payment that complies with Section 409A of the Code, without altering the definition of Change in Control for purposes of determining whether a participant’s rights to such Award become vested or otherwise unconditional upon the Change in Control.
viii. “Change in Control Price” means the price per Share offered in conjunction with any transaction resulting in a Change in Control. If any part of the offered price is payable other than in cash, or if more than one price per Share is paid in conjunction with such transaction, the Change in Control Price shall be determined in good faith by the Committee as constituted immediately prior to the Change in Control.
ix. “Code” means the U.S. Internal Revenue Code of 1986, as amended from time to time.
x. “Committee” means the Compensation Committee of the Board, or a subcommittee thereof, or such other committee of the Board as the Board shall designate from time to time, in each case, consisting of two or more members of the Board, each of whom is intended to be (i) a “Non-Employee Director” within the meaning of Rule 16b-3 under the Exchange Act and (ii) “independent” within the meaning of the rules of the New York Stock Exchange or, if the Shares are not listed on the New York Stock Exchange, within the meaning of the rules of the principal stock exchange on which the Shares are then traded. Notwithstanding the foregoing, the Board may serve as the Committee under the Plan with respect to any or all matters under the Plan.
xi. “Company” means SiriusPoint Ltd., a Bermuda exempted company (registered in Bermuda under the Companies Act 1981 (Bermuda) with registered number 45834), and any successor thereto.
xii. “Consultant” means consultants and advisors who are natural persons who provide bona fide services to the Company and its Subsidiaries (other than services in connection with the offer or sale of securities in a capital raising transaction or that promote or maintain a market for the Company’s securities).
xiii. “Deferred Annual Amount” shall have the meaning set forth in Section 9(a).
xiv. “Deferred Award” shall have the meaning set forth in Section 9(a).
xv. “Deferred Share Unit” means a unit credited to a Participant’s account on the books of the Company under Section 9 that represents the right to receive Shares or cash with a value equal to the Fair Market Value of one Share on settlement of the account.
xvi. “Designated Beneficiary” means the beneficiary designated by the Participant, in a manner determined by the Committee, to receive amounts due the Participant in the event of the Participant’s death. In the absence of an effective designation by the Participant, Designated Beneficiary shall mean the Participant’s estate.
xvii. “Disability” means, unless another definition is incorporated into the applicable Award Agreement or another applicable agreement with the Company or a Subsidiary or other Employer in effect on the grant date, Disability as specified under the Company’s long-term disability insurance policy and any other Termination of Service under such circumstances that the Committee determines to qualify as a Disability for purposes of this Plan; provided, that if a Participant is a party to an employment or individual severance agreement with an Employer that defines the term “Disability” then, with respect to any Award made to such Participant, “Disability” shall have the meaning set forth
in such agreement; provided, further, that in the case of any Award subject to Section 409A of the Code, Disability shall have the meaning set forth in Section 409A of the Code.
xviii. “Dividend Equivalent” means the right, granted under Section 11 of the Plan, to receive payments in cash or in Shares, based on dividends paid with respect to Shares.
xix. “Effective Date” means the date on which this Plan was approved by the shareholders of the Company at the 2023 Annual Meeting of Shareholders.
xx. “Elective Deferred Share Unit” shall have the meaning set forth in Section 9(a). “Eligible Director” means a member of the Board who is not an Employee.
xxi. “Employee” means any officer or employee of the Company, any Subsidiary or any other Employer (as determined by the Committee in its sole discretion).
xxii. “Employer” means the Company and any Subsidiary, and, in the discretion of the Committee, may also mean any business organization designated as an Employer; provided that the Company directly or indirectly owns at least 20% of the combined voting power of all classes of voting securities of such entity.
xxiii. “Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.
xxiv. “Fair Market Value” means a price that is based on the opening, closing, actual, high, low, or average selling prices of a Share reported on the New York Stock Exchange or such other established stock exchange on which the Shares are principally traded on the applicable date, the preceding trading day, the next succeeding trading day, or an average of trading days, as determined by the Committee in its discretion. Unless the Committee determines otherwise, Fair Market Value shall be deemed to be equal to the reported closing price of a Share on the date as of which such value is being determined or, if there shall be no reported transactions for such date, on the preceding date for which transactions were reported; provided, however, that if the Shares are not publicly traded at the time a determination of their value is required to be made hereunder, the determination of their Fair Market Value shall be made by the Committee in such manner as it deems appropriate and in accordance with Section 409A of the Code.
xxv. “Freestanding SAR” means a Share Appreciation Right which is not granted in tandem with, or by reference to, an Option, which entitles the holder thereof to receive, upon exercise, Shares (which may be Restricted Shares) or, to the extent set forth in the applicable Award Agreement, cash or a combination thereof, with an aggregate value equal to the excess of the Fair Market Value of one Share on the date of exercise over the base price of such Share Appreciation Right, multiplied by the Board to hold an office in the Company; |
| | Person | any individual, corporation, association, partnership, limited liability company, joint venture, joint stock or other company, business trust, trust, organization, governmental authority or other entity of any kind; |
| | Qualified Initial Public Offering | (i) a registered public offering or registered public offerings on a national securities exchange of any class of common shares of the Company or TP Re under the United States securities laws, or (ii) any amalgamation, scheme of arrangement or consolidation as a result of which the Members receive, as the consideration in such amalgamation, scheme of arrangement or consolidation, equity securities of a class that (a) has been registered as part of a public offering under the United States securities laws and (b) is publicly traded on a national securities exchange, in either of case (i) or (ii), immediately following which the Company and TP Re together shall have received no less than U.S. $150,000,000; |
| | Register of Directors and Officers | the register of directors and officers referred to in these Bye-laws; |
| | Register of Members | the register of members referred to in these Bye-laws; |
| | Regulatory Authority | any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative functions of or pertaining to government, any securities exchange and any self-regulatory organization; |
| | Resident Representative | any person appointed to act as resident representative and includes any deputy or assistant resident representative; |
| | Secretary | the person appointed to perform any or all of the duties of secretary of the Company and includes any deputy or assistant secretary and any person appointed by the Board to perform any of the duties of the Secretary; |
| | Shares | shall be deemed to include the authorized shares of the Company, and other common shares of the Company and any options, warrants or securities exercisable for, or convertible or redeemable into, common shares of the Company; |
| | Subsidiary | with respect to any Person, means a company, more than fifty percent (50%) (or, in the case of a wholly owned subsidiary, one hundred percent (100%)) of the outstanding voting shares of which are owned, directly or indirectly, by such Person or by one or more other Subsidiaries of such Person, or any such Person and one or more other Subsidiaries; |
| | TP Re | Third Point Reinsurance Company Ltd.; |
| | Trading Day | any day on which the New York Stock Exchange (or such other principal stock exchange or automated quotation system on which the shares of the Company are then traded) is open for trading in securities listed thereon; |
| | Treasury Share | a share of the Company that was or is treated as having been acquired and held by the Company and has been held continuously by the Company since it was so acquired and has not been cancelled; |
| | United States | the United States of America and its dependent territories or any part thereof; |
| | U.S. Person | a “United States person” as defined in Section 957(c) of the Code; and |
| | 1.2 | In these Bye-laws, where not inconsistent with the context: |
| | (a) | words denoting the plural number include the singular number and vice versa; |
| | (b) | words denoting the masculine gender include the feminine and neuter genders; |
| | (c) | words importing persons include companies, associations or bodies of persons whether corporate or not; |
| | (i) | "may" shall be construed as permissive; and |
| | (ii) | "shall" shall be construed as imperative; and |
| | (e) | a reference to statutory provision shall be deemed to include any amendment or re-enactment thereof; |
| | (f) | the word “corporation” means a corporation whether or not a company within the meaning of the Act; |
| | (g) | unless otherwise provided herein, words or expressions defined in the Act shall bear the same meaning in these Bye-laws. |
| | 1.3 | In these Bye-laws expressions referring to writing or its cognates shall, unless the contrary intention appears, include facsimile, printing, lithography, photography, electronic mail and other modes of representing words in visible form. |
| | 1.4 | Headings used in these Bye-laws are for convenience only and are not to be used or relied upon in the construction hereof. |
SHARES
| | 2.1 | Subject to these Bye-laws and to any resolution of the Members to the contrary, and without prejudice to any special rights previously conferred on the holders of any existing shares or class of shares, the Board shall have the power to issue any unissued shares on such terms and conditions as it may determine and any shares or class of shares may be issued with such preferred, deferred or other special rights or such restrictions, whether in regard to dividend, voting, return of capital, or otherwise as the Company may by resolution of the Members prescribe. |
| | 2.2 | Subject to the Act, any preference shares may be issued or converted into shares that (at a determinable date or at the option of the Company or the holder) are liable to be redeemed on such terms and in such manner as may be determined by the Board (before the issue or conversion). |
| | 3. | Power and Obligation of the Company to Purchase its Shares |
| | 3.1 | The Company may purchase its own shares for cancellation or acquire them as Treasury Shares in accordance with the Act on such terms as the Board shall think fit. |
| | 3.2 | The Board may exercise all the powers of the Company to purchase or acquire all or any part of its own shares in accordance with the Act. |
| | 3.3 | If at any time following the first anniversary of an Initial Public Offering, the average of the Daily Share Price for each Trading Day in the then most recent 12 month period is 90% or less of the Book Value, then the |
Company shall make an offer to repurchase a number of such Share Appreciation Rights which are exercised.
xxvi. “Incentive Share Option” means an Option to purchase Shares granted under Section 7 of the Plan that is designated as an Incentive Share Option and that meets the requirements of Section 422 of the Code or any successor provision.
xxvii. “New Employer” means, after a Change in Control, a Participant’s employer, or any direct or indirect parent or any direct or indirect majority-owned subsidiary of such employer.
xxviii. “Non-Statutory Share Option” means an Option to purchase Shares granted under Section 7 of the Plan that is not an Incentive Share Option.
xxix. “Non-US Award(s)” has the meaning given in Section 3(f).
xxx. “Option” means an Incentive Share Option or a Non-Statutory Share Option.
xxxi. “Participant” means an Employee, Eligible Director or Consultant who is selected by the Committee to receive an Award under the Plan.
xxxii. “Performance Award” means an Award of Restricted Shares, Restricted Share Units, Options, Performance Shares, Deferred Shares, Deferred Share Units, Performance Units, SARs, other equity-based Awards or other Awards, the grant, exercise, voting or settlement of which is subject (in whole or in part) to the achievement of specified Performance Goals.
xxxiii. “Performance Cycle” means the period of time selected by the Committee during which performance is measured for the purpose of determining the extent to which a Performance Award has been earned or vested.
xxxiv. “Performance Goals” means the objectives established by the Committee for a Performance Cycle pursuant to Section 5(c) for the purpose of determining the extent to which a Performance Award has been earned or vested.
xxxv. “Performance Share” means a Performance Award that is a contractual right to receive a Share (or the cash equivalent thereof) granted pursuant to Section 5 of the Plan.
xxxvi. “Performance Unit” means a Performance Award that is a dollar denominated unit (or a unit denominated in the Participant’s local currency) granted pursuant to Section 5 of the Plan.
xxxvii. “Permitted Transferees” has the meaning given it in Section 15(b).
xxxviii. “Plan” has the meaning given it in the preamble to this Plan.
xxxix. “Prior Plan” means the Third Point Reinsurance Ltd. Share Incentive Plan, the SiriusPoint Ltd. 2013 Omnibus Incentive Plan, and each other equity plan maintained by the Company under which awards are outstanding as of the Effective Date.
xl. “Restriction Period” means the period of time selected by the Committee during which a grant of Restricted Shares, Restricted Share Units or Deferred Share Units, as the case may be, is subject to forfeiture and/or restrictions on transfer pursuant to the terms of the Plan.
xli. “Restricted Shares” means Shares contingently granted to a Participant under Section 6 of the Plan.
xlii. “Restricted Share Unit” means a Share denominated unit contingently awarded under Section 6 of the Plan.
xliii. “Retirement” means, as determined by the Committee and unless otherwise provided in an Award Agreement or an applicable agreement with the Company or a Subsidiary or other Employer in effect on the grant date, a Termination of Service, other than for Cause, on or after the Participant’s attainment of age 65.
xliv. “Section 409A of the Code” means Section 409A of the Code and the applicable rules, regulations and guidance promulgated thereunder.
xlv. “Service” means, with respect to Employees and Consultants, continued employment with or continued engagement by the Company and its Subsidiaries and Affiliates or, with respect to Eligible Directors, service on the Board of Directors.
xlvi. “Service Award” means an Award that vests solely based on the passage of time or continued Service over a fixed period of time.
xlvii. “Share Appreciation Right” or “SAR” means the right to receive a payment from the Company in cash and/or Shares, as specified in the Award Agreement, equal to the product of (i) the excess, if any, of the Fair Market Value of one Share on the exercise date over a specified price fixed by the Committee on the grant date, multiplied by (ii) a stated number of Shares.
xlviii. “Share-Based Awards” has the meaning given in Section 10(a).
xlix. “Shares” means the common shares of the Company, par value US $0.10 per share.
l. “Specified Award” means an Award of non-qualified deferred compensation within the meaning of and that when combined with all prior repurchasesis subject to Section 409A of the Code, and which may include other Awards granted pursuant to the Plan (including, but not limited to, Restricted Share Units and Deferred Awards) that do not otherwise qualify for an exemption from Section 409A of the Code.
li. “Subplan” has the meaning given in Section 3(f).
lii. “Subsidiary” means any business entity in which the Company owns, directly or indirectly, fifty percent (50%) or more of the total combined voting power of all classes of shares entitled to vote, and any other business organization, regardless of form, in which the Company possesses, directly or indirectly, 50% or more of the total combined equity interests in such organization.
liii. “Substitute Award” shall mean an Award granted under this Bye-Law 3.3, doesPlan upon the assumption of, or in substitution for, outstanding equity awards previously granted by a company or other entity in connection with a corporate transaction, including a merger, combination, consolidation or acquisition of property or shares; provided, however, that in no event shall the term “Substitute Award” be construed to refer to an Award made in connection with the cancellation and repricing of an Option or Share Appreciation Right.
liv. “Ten Percent Holder” has the meaning given in Section 7(b).
lv. “Termination of Service” means with respect to an Eligible Director, the date upon which such Eligible Director ceases to be a member of the Board, with respect to an Employee, the date the Participant ceases to be an Employee and, with respect to a Consultant, the date the Consultant ceases to provide services to the Company or any Employer, in each case as determined by the Committee; provided, that, for the avoidance of doubt, a change in position between Eligible Director, Employee or Consultant (with no break in service) will not constitute a Termination of Service; provided, further, with respect to any Specified Award that is payable upon a Termination of Service, Termination of Service shall mean “separation from service”, as defined in Section 409A of the Code and the rules, regulations and guidance promulgated thereunder.
lvi. “Voting Power” when used in the definition of Change in Control shall mean such specified number of the Voting Securities as shall enable the holders thereof to cast such percentage of all the votes which could be cast in an annual election of directors and “Voting Securities” shall mean all securities of a company entitling the holders thereof to vote in an annual election of directors.
(b) Gender and Number. Except when otherwise indicated by the context, words in the masculine gender used in the Plan shall include the feminine gender, the singular shall include the plural, and the plural shall include the singular.
SECTION 3.
POWERS OF THE COMMITTEE
a. Eligibility. Participants in the Plan shall consist of such Employees (including any officer of the Company), Consultants and Eligible Directors as the Committee in its sole discretion may select from time to time. Except as provided otherwise in an Award Agreement, for purposes of this Plan, references to employment by the Company shall also mean employment by a Subsidiary or Affiliate, and references to employment shall include service as an Eligible Director or Consultant. The Committee shall determine, in its sole discretion, the extent to which a participant shall be considered employed during any periods during which such participant is on a leave of absence. The aggregate value of cash compensation and the grant date fair value of Shares that may be awarded or granted during any fiscal year of the Company to any Eligible Director, for his or her services as an Eligible Director, shall not exceed 15%$1,000,000; provided further that this limit shall not apply to distributions of previously deferred compensation under a deferred compensation plan maintained by the Company or compensation received by the director in his or her capacity as an executive officer or employee of the sumCompany.
b. Power to Grant and Establish Terms of (a)Awards. The Committee shall have the discretionary authority, subject to the terms of the Plan, to determine the Participants, if any, to whom Awards shall be granted, the type or types of Awards to be granted, and the terms and conditions of any and all Awards including, without limitation, the number of sharesShares subject to an Award, the time or times at which Awards shall be granted, and the terms and conditions of the Company outstanding afterAwards and the applicable Award Agreements. The Committee may establish different terms and conditions for different types of Awards, for different Participants receiving the same type of Award, and for the same Participant for each type of Award such repurchase and (b)Participant may receive, whether or not granted at the aggregate number of shares repurchased, provided that the majority of the Disinterested Board Memberssame or different times. The Committee may, in its sole discretion determine notand for any reason at any time, take action such that (i) any or all outstanding Options and Share Appreciation Rights shall become exercisable in part or in full, (ii) all or a portion of the Restriction Period applicable to offerany outstanding Awards shall lapse, (iii) all or a
portion of the Performance Cycle applicable to any outstanding Awards shall lapse and (iv) the Performance Goals (if any) applicable to any outstanding Awards shall be deemed to be satisfied at the target, maximum or any other level.
c. Administration. The Plan shall be administered by the Committee. The Committee shall have sole and complete authority and discretion to adopt, alter and repeal such administrative rules, guidelines and practices governing the operation of the Plan as it shall from time to time deem advisable, and to interpret the terms and provisions of the Plan. The Committee’s decisions (including any failure to make such a repurchase. Any offer to repurchase the Repurchase Offer Shares pursuant to Bye-law 3.3decisions) shall be for a price per share determinedbinding upon all persons, including but not limited to the Company, shareholders, Employers and each Employee, Director, Consultant, Participant, Designated Beneficiary and such person’s heirs, successors or assigns, and shall be given deference in any proceeding with respect thereto.
d. Delegation by the Committee. The Committee may delegate its authority under the Plan to the Board, but in no event greater than Book Value. | | 3.4 | No repurchase offer pursuant to Bye-law 3.3 shall be required if such repurchase does not comply with the Act or would result in (i) an adverse ratings action against the Company or TP Re by A.M. Best & Company, or (ii) any adverse action against the Company or TP Re by any Regulatory Authority. |
| | 3.5 | Subject to the Act, if the Board in its sole discretion determines that ownership of shares of the Company by any Person may result in adverse tax consequences or materially adverse legal or regulatory treatment to the Company, any Subsidiary of the Company or any other Person (including if such consequence arises as a result of any U.S. Person owning Controlled Shares of 9.5% or more of the value of the Company or the voting shares of the Company after giving effect to any adjustment to voting power required by Bye-law 5), the Company will have the option, but not the obligation, to purchase all or part of the shares of the Company held by such Person to the extent the Board, in the reasonable exercise of its discretion, determines it is necessary to avoid or cure such adverse consequences) for immediately available funds in an amount equal to the Fair Market Value of such shares on the business day immediately prior to the date the Company sends the Repurchase Notice referred to below (the “Repurchase Price”); provided, that the Board will use reasonable efforts to exercise this option equally among similarly situated Persons (to the extent possible under the circumstances). In the event that the Company determines to purchase any such shares, the Company will be entitled to assign its purchase right to a third party or parties, including one or more of the other Persons, with the consent of such assignee. Each Person shall be bound by the determination by the Company to purchase or assign its right to purchase such Person’s shares and, if so required by the Company, shall sell the number of shares of the Company that the Company requires it to sell.
|
| | 3.6 | In the event that the Company or its assignee(s) determines to purchase any such shares, the Company shall provide each Member concerned with written notice of such determination (a “Repurchase Notice”) at least seven (7) calendar days prior to such purchase or such shorter period as each such Member may authorise, specifying the date on which any such shares are to be purchased and the Repurchase Price. The Company may revoke the Repurchase Notice at any time before it (or its assignee(s)) pays for the shares. Neither the Company nor its assignee(s) shall be obligated to give general notice to any Person of any intention to purchase or the conclusion of any purchase of shares of the Company. The closing of any such purchase of shares of the Company shall be no less than seven (7) calendar days after receipt of the Repurchase Notice by the Member, unless such Member agrees to a shorter period, and payment of the Repurchase Price by the Company or its assignee(s) shall be by wire transfer or certified check. |
| | 3.7 | If the Company purchases any shares pursuant to Bye-laws 3.5 and 3.6, it shall do so only in a manner that the Board believes would not result, upon consummation of such transaction, in any U.S. Person owning Controlled Shares of 9.5% or more of the value of the Company or the voting shares of the Company (after giving effect to any adjustment to voting power required by Bye-law 5). Notwithstanding the foregoing, the Board, in its sole discretion and by unanimous consent of all of the Directors then in office, may waive the provisions of Bye-laws 3.5 and 3.6. |
| | 4. | Rights Attaching to Shares |
| | 4.1 | At the date these Bye-laws are adopted, the share capital of the Company is divided into two classes: (i) common shares (the “Common Shares”) and (ii) preference shares (the “Preference Shares”). |
| | 4.2 | The holders of the Common Shares shall, subject to these Bye-laws (including, without limitation, the rights attaching to Preference Shares): |
| | (a) | be entitled to one vote per share; |
| | (b) | be entitled to such dividends as the Board may from time to time declare; |
| | (c) | in the event of a winding-up or dissolution of the Company, whether voluntary or involuntary or for the purpose of a reorganisation or otherwise or upon any distribution of capital, be entitled to the surplus assets of the Company; and |
| | (d) | generally be entitled to enjoy all of the rights attaching to shares. |
| | 4.3 | The Board is authorised to provide for the issuance of the Preference Shares in one or more series, and to establish from time to time the number of shares to be included in each such series, and to establish from time to time the number of shares to be included in each series, and to fix the terms, including designation, powers, preferences, rights, qualifications, limitations and restrictions of the shares of each such series (and, for the avoidance of doubt, such matters and the issuance of such Preference Shares shall not be deemed to vary the rights attached to the Common Shares or, subject to the terms of any other series of Preference Shares, to vary the rights attached to any other series of Preference Shares). The authority of the Board with respect to each series shall include, but not be limited to, determination of the following: |
| | (a) | the number of shares constituting that series and the distinctive designation of that series; |
| | (b) | the dividend rate on the shares of that series, whether dividends shall be cumulative and, if so, from which date or dates, and the relative rights of priority, if any, of the payment of dividends on shares of that series; |
| | (c) | whether the series shall have voting rights, in addition to the voting rights provided by law and, if so, the terms of such voting rights; |
| | (d) | whether the series shall have conversion or exchange privileges (including, without limitation, conversion into Common Shares) and, if so, the terms and conditions of such conversion or exchange, including provision for adjustment of the conversion or exchange rate in such events as the Board shall determine; |
| | (e) | whether or not the shares of that series shall be redeemable or repurchaseable and, if so, the terms and conditions of such redemption or repurchase, including the manner of selecting shares for redemption or repurchase if less than all shares are to be redeemed or repurchased, the date or dates upon or after which they shall be redeemable or repurchaseable, and the amount per share payable in case of redemption or repurchase, which amount may vary under different conditions and at different redemption or repurchase dates; |
| | (f) | whether that series shall have a sinking fund for the redemption or repurchase of shares of that series and, if so, the terms and amount of such sinking fund; |
| | (g) | the right of the shares of that series to the benefit of conditions and restrictions upon the creation of indebtedness of the Company or any Subsidiary, upon the issue of any additional shares (including additional shares of such series or any other series) and upon the payment of dividends or the making of other distributions on, and the purchase, redemption or other acquisition by the Company or any Subsidiary of any issued shares of the Company; |
| | (h) | the rights of the shares of that series in the event of voluntary or involuntary liquidation, dissolution or winding up of the Company, and the relative rights of priority, if any, of payment in respect of shares of that series; and |
| | (i) | any other relative participating, optional or other special rights, qualifications, limitations or restrictions of that series. |
| | 4.4 | Any Preference Shares of any series which have been redeemed (whether through the operation of a sinking fund or otherwise) or which, if convertible or exchangeable, have been converted into or exchanged for shares of any other class or classes shall have the status of authorised and unissued Preference Shares of the same series and may be reissued as a part of the series of which they were originally a part or may be reclassified and reissued as part of a new series of Preference Shares to be created by resolution or resolutions of the Board or as part of any other series of Preference Shares, all subject to the conditions and the restrictions on issuance set forth in the resolution or resolutions adopted by the Board providing for the issue of any series of Preference Shares. |
| | 4.5 | At the discretion of the Board, whether or not in connection with the issuance and sale of any shares or other securities of the Company, the Company may issue securities, contracts, warrants or other instruments evidencing any shares, option rights, securities having conversion or option rights, or obligations on such terms, conditions and other provisions as are fixed by the Board including, without limiting the generality of this authority, conditions that preclude or limit any person or persons owning or offering to acquire a specified number or percentage of the issued Common Shares, other shares, option rights, securities having conversion or option rights, or obligations of the Company or transferee of the person or persons from exercising, converting, transferring or receiving the shares, option rights, securities having conversion or option rights, or obligations. |
| | 4.6 | All the rights attaching to a Treasury Share shall be suspended and shall not be exercised by the Company while it holds such Treasury Share and, except where required by the Act, all Treasury Shares shall be excluded from the calculation of any percentage or fraction of the share capital, or shares, of the Company. |
| | 5. | Adjustment to Voting Power |
| | 5.1 | If the votes conferred by the Controlled Shares of any Person would otherwise cause such Person or any other Person to be treated as a 9.5% Shareholder with respect to any matter (including, without limitation, election of directors), the votes with respect to such matter conferred by the shares of such Person’s Controlled Group are hereby reduced (and shall be automatically reduced in the future) by whatever amount is necessary so that, after any such reduction, the votes conferred by the Controlled Shares of such Person shall not result in such Person or any other Person being treated as a 9.5% Shareholder with respect to the vote on such matter. |
| | 5.2 | The reduction in votes pursuant to the preceding Bye-law shall be determined as follows: |
| | (a) | Beginning with the Controlled Group of the Person whose Controlled Shares have the largest number of votes and continuing, as required, with the Controlled Group of each Person whose Controlled Shares successively have a smaller number of votes (after giving effect to prior reductions), the reduction in votes conferred by the shares of a Controlled Group shall be effected proportionately among all the shares of such Controlled Group in accordance with the relative voting power of such shares. Generally, the Board will effectuate the reduction |
of votes in the manner and order described in the preceding sentence. If varying the order in which votes are reduced would result in a more equitable allocationsubcommittee of the reductionBoard, a member of votes as determined by the Board, the Board shall have the discretion to vary the order in which votes are reduced.
| | (b) | If there is a Person whose activities have been determined by the Board to have caused the application of subparagraph (a), after all required reductions in votes conferred on shares of Controlled Groups are effected pursuant to subparagraph (a), (i) the amount of any reduction in the votes of the shares of each Controlled Group effected by application of subparagraph (a) above shall be reallocated within such Controlled Group and conferred on the shares held directly by the Person whose actions have been determined by the Board to have caused the application of such subparagraph and (ii) the voting power of the shares held by each other Person holding shares in such Controlled Group shall be increased by such Person’s proportionate share of such reduction, in each case, to the extent that so doing does not cause any Person to be treated as a 9.5% Shareholder. |
| | 5.3 | The Board shall implement the foregoing in the manner set forth in this Bye-law 5. In addition to any other provision of this Bye-law 5, any shares shall not carry rights to voteChief Executive Officer or shall have reduced voting rights to the extent that the Board reasonably determines, by the affirmative vote of a majority of the Directors, that it is reasonably necessary that such shares should not carry the right to vote or shall have reduced voting rights in order to avoid adverse tax consequences or materially adverse legal or regulatory treatment to the Company, any Subsidiary of the Company or any Person or its Affiliates; provided that the Board will use reasonable efforts to ensure equal treatment to similarly situated Persons to the extent possible under the circumstances and; provided further that the Board shall reallocate the amount of any reduction in vote in the manner described in Bye-law 5.2(b). |
| | 5.4 | The Board shall have the authority to request from any Member such information as the Board may reasonably request for the purpose of determining whether any Member’s voting rights are to be adjusted. If any Member fails to respond to such a request, or submits incomplete or inaccurate information in response to such a request, the Board may in its sole discretion determine that such Member’s shares shall carry no voting rights, in which case such shares shall not carry any voting rights until otherwise determined by the Board in its absolute discretion. |
Any Member shall give notice to the Company within ten days following the date that such Member acquires actual knowledge that it or, to the extent practicable, any Person who is a deemed or constructive owner of such Member’s Controlled Shares, is the actual, deemed or constructive owner of Controlled Shares of 9.5% or more of the Company.
The determination by the Board, taking into account any written advice of outside legal counsel which the Board determines to obtain, as to any adjustments to voting power of any share made pursuant to this Bye-law 5 shall be final and binding on all Persons.
| | 6.1 | Notwithstanding any other provision of these Bye-laws to the contrary, if the Company is required or entitled to vote at a general meeting of any subsidiary of the Company that is not a corporation organized under the laws of the United States or any state (or limited liability company organized under the laws of the United States or any state that is taxable as a corporation for United States Federal income tax purposes) or that is not treated as a pass-through vehicle or disregarded entity for United States federal income tax purposes (unless such disregarded entity owns, directly or indirectly, any subsidiary organized under the laws of a jurisdiction outside the United States that is treated as a corporation for United States federal income tax purposes) (together, the “Designated Companies”), the Board shall refer the subject matter of the vote (other than the removal and remuneration of auditors, the approval of financial statements and reports thereon, and the remuneration of |
Directors) to the Membersother executive officer of the Company onas the Committee deems appropriate; provided, however, that the Committee may not delegate its power and authority to a poll (subject to Bye-law 5) and seek authority from the Members for the Company's corporate representative or proxy to vote in favourmember of the resolution proposed byBoard or the Designated Company. The Board shall cause the Company's corporate representativeChief Executive Officer or proxy to vote the Company's shares in the Designated Company pro rata to the votes received at the general meetingother executive officer of the Company with votesregard to the selection for participation in the Plan of an officer, director or againstother person subject to Section 16 of the directing resolution being taken, respectively, asExchange Act or decisions concerning the timing, pricing or amount of an instructionaward to such an officer, director or other person. The Committee may also appoint agents (who may be officers or employees of the Company) to assist in the administration of the Plan and may grant authority to such persons to execute agreements, including Award Agreements, or other documents on its behalf. All expenses incurred in the administration of the Plan, including, without limitation, for the Company's corporate representativeengagement of any counsel, consultant or proxy to vote the appropriate proportion of its shares for and the appropriate proportion of its shares against the resolution proposedagent, shall be paid by the Designated Company. The Board shall have authority to resolve any ambiguity.
| | 6.2 | The Board in its discretion shall require that the Bye-laws or Articles of Association or similar organizational documents of each Designated Company shall contain provisions substantially similar to this Bye-law 6. The Company shall enter into agreements, as and when determined by the Board, with each such Designated Company, only if and to the extent reasonably necessary and permitted under applicable law, to effectuate or implement this Bye-law 6. |
| | 7.1 | Notwithstanding anything to the contrary in these Bye-laws, the Company shall not and shall cause TP Re not to subject to Bye-Law 7.2 without the prior and express written consent of each of Daniel S. Loeb, KEP TP Holdings, L.P. and KIA TP Holdings, L.P. (collectively, “Kelso”) and Pine Brook LVR, L.P. (“Pine Brook” and together with Kelso (the “Lead Investors”) and together with Daniel S. Loeb, the “Founders”) enter into any transaction with any (i) Affiliate of the Company, (ii) Member and/or director, officer, employee, and/or Affiliate of any Member, and/or (iii) director, officer, employee, and/or Affiliate of any of the foregoing. |
| | 7.2 | Notwithstanding anything to the contrary in these Bye-Laws, the consent right of each Founder set forth in Bye-Law 7.1 shall survive an Initial Public Offering until such time as such Founder holds shares representing less than 25% of the shares held by such Founder on December 22, 2011. |
| | 8.1 | The Board may make such calls as it thinks fit upon the Members in respect of any moneys (whether in respect of nominal value or premium) unpaid on the shares allotted to or held by such Members (and not made payable at fixed times by the terms and conditions of issue) and, if a call is not paid on or before the day appointed for payment thereof, the Member may at the discretion of the Board be liable to pay the Company interest on the amount of such call at such rate as the Board may determine, from the date when such call was payable up to the actual date of payment. The Board may differentiate between the holders as to the amount of calls to be paid and the times of payment of such calls. |
| | 8.2 | Any amount which, by the terms of allotment of a share, becomes payable upon issue or at any fixed date, whether on account of the nominal value of the share or by way of premium, shall for the purposes of these Bye-laws be deemed to be an amount on which a call has been duly made and payable on the date on which, by the terms of issue, the same becomes payable, and in case of non-payment all the relevant provisions of these Bye-laws as to payment of interest, costs and expenses, forfeiture or otherwise shall apply as if such amount had become payable by virtue of a duly made and notified call. |
| | 8.3 | The joint holders of a share shall be jointly and severally liable to pay all calls and any interest, costs and expenses in respect thereof. |
| | 8.4 | The Company may accept from any Member the whole or a part of the amount remaining unpaid on any shares held by him, although no part of that amount has been called up or become payable. |
| | 9.1 | If any Member fails to pay, on the day appointed for payment thereof, any call pursuant to Bye-law 8 in respect of any share allotted to or held by such Member, the Board may, at any time thereafter during such time as the call remains unpaid, direct the Secretary to forward such Member a notice in writing in the form, or as near thereto as circumstances admit, of the following: |
Notice of Liability to Forfeiture for Non-Payment of Call
Third Point Reinsurance Ltd. (the "Company")
You have failed to pay the call of [amount of call] made on the [date], in respect of the [number] share(s) [number in figures] standing in your name in the Register of Members of the Company, on the [date], the day appointed for payment of such call. You are hereby notified that unless you pay such call together with interest thereon at the rate of [●] per annum computed from the said [date] at the registered office of the Company the share(s) will be liable to be forfeited.
Dated this [date]
[Signature of Secretary] By Order of the Board
| | 9.2 | If the requirements of such notice are not complied with, any such share may at any time thereafter before the payment of such call and the interest due in respect thereof be forfeited by a resolution of the Board to that effect, and such share shall thereupon become the property of the Company and may be disposed of as the Board shall determine.e. Restrictive Covenants and Other Conditions. Without limiting the generality of the foregoing, the disposal may take place by sale, repurchase, redemption or any other method of disposal permitted by and consistent with these Bye-laws and the Act. |
| | 9.3 | A Member whose share or shares have been so forfeited shall, notwithstanding such forfeiture, be liable to pay to the Company all calls owing on such share or shares at the time of the forfeiture, together with all interest due thereon and any costs and expenses incurred by the Company in connection therewith. |
| | 9.4 | The Board may accept the surrender of any shares which it is in a position to forfeit on such terms and conditions as may be agreed. Subject to those terms and conditions, a surrendered share shall be treated as if it had been forfeited. |
| | 10.1 | Every Member shall be entitled to a certificate under the common seal (or a facsimile thereof) of the Company or bearing the signature (or a facsimile thereof) of a Director or the Secretary or a person expressly authorised to sign specifying the number and, where appropriate, the class of shares held by such Member and whether the same are fully paid up and, if not, specifying the amount paid on such shares. The Board may by resolution determine, either generally or in a particular case, that any or all signatures on certificates may be printed thereon or affixed by mechanical means. |
| | 10.2 | The Company shall be under no obligation to complete and deliver a share certificate unless specifically called upon to do so by the person to whom the shares have been allotted. |
| | 10.3 | If any share certificate shall be proved to the satisfaction of the Board to have been worn out, lost, mislaid, or destroyed the Board may cause a new certificate to be issued and request an indemnity for the lost certificate if it sees fit. |
| | 10.4 | Notwithstanding any provisions of these Bye-laws: |
| | (a) | the Board shall, subject always to the Act and any other applicable laws and regulations and the facilities and requirements of any relevant system concerned, have power to implement any arrangements it may, in its absolute discretion, think fit in relation to the evidencing of title to and transfer of uncertificated shares and to the extent such arrangements are so implemented, no provision of these Bye-laws shall apply or have effect to the extent that it is in any respect inconsistent with the holding or transfer of shares in uncertificated form; and |
| | (b) | unless otherwise determined by the Board and as permitted by the Act and any other applicable laws and regulations including applicable rules of the New York Stock Exchange, no person shall be entitled to receive a certificate in respect of any share for so long as the title to that share is evidenced otherwise than by a certificate and for so long as transfers of that share may be made otherwise than by a written instrument. |
The Company may issue its shares in fractional denominations and deal with such fractions to the same extent as its whole shares and shares in fractional denominations shall have in proportion to the respective fractions represented thereby all of the rights of whole shares including (but without limiting the generality of the foregoing)foregoing, the right to vote, to receive dividends and distributions and to participate in a winding-up.
REGISTRATION OF SHARES
| | 12.1 | The Board shall cause to be kept in one or more books a Register of Members and shall enter therein the particulars required by the Act. |
| | 12.2 | The Register of Members shall be open to inspection without charge at the registered office of the Company on every business day, subject to such reasonable restrictions as the Board may impose, so that not less than two hours in each business day be allowed for inspection. The Register of Members may, after notice has been given in accordance with the Act, be closed for any time or times not exceeding in the whole thirty days in each year. |
| | 13. | Registered Holder Absolute Owner |
The Company shall be entitled to treatCommittee may condition the registered holdergrant of any shareAward under the Plan upon the Participant to whom such Award would be granted agreeing in writing to certain conditions (such as the absolute owner thereof and accordingly shall not be bound to recognise any equitable claim or other claim to, or interest in, such sharerestrictions on the part of any other person.
| | 14. | Transfer of Registered Shares |
| | 14.1 | An instrument of transfer shall be in writing in the form of the following, or as near thereto as circumstances admit, or in such other form as the Board may accept: |
Transfer of a Shareability to transfer the underlying Shares) or Shares
Third Point Reinsurance Ltd. (the "Company")
FOR VALUE RECEIVED……………….. [amount], I, [name of transferor] hereby sell, assign and transfer unto [transferee] of [address], [number] shares of the Company.
DATED this [date]
Signed by: In the presence of:
____________________ __________________
Transferor Witness
Signed by: In the presence of:
____________________ ________________
Transferee Witness
| | 14.2 | Such instrument of transfer shall be signed by (or in the case of a party that is a corporation, on behalf of) the transferor and transferee, provided that, in the case of a fully paid share, the Board may accept the instrument signed by or on behalf of the transferor alone. The transferor shall be deemed to remain the holder of such share until the same has been registered as having been transferred to the transferee in the Register of Members. |
| | 14.3 | The Board may refuse to recognise any instrument of transfer unless it is accompanied by the certificate in respect of the shares to which it relates and by such other evidence as the Board may reasonably require showing the right of the transferor to make the transfer. |
| | 14.4 | The joint holders of any share may transfer such share to one or more of such joint holders, and the surviving holder or holders of any share previously held by them jointly with a deceased Member may transfer any such share to the executors or administrators of such deceased Member. |
| | 14.5 | The Board may in its absolute discretion and without assigning any reason therefore refuse to register the transfer of a share which is not fully paid up. The Board shall refuse to register a transfer unless all applicable consents, authorisations and permissions of any governmental body or agency in Bermuda have been obtained. If the Board refuses to register a transfer of any share the Secretary shall, within three months after the date on which the transfer was lodged with the Company, send to the transferor and transferee notice of the refusal. |
| | 14.6 | Shares may be transferred without a written instrument if transferred by an appointed agent or otherwise in accordance with the Act. |
| | 15. | Transmission of Registered Shares |
| | 15.1 | In the case of the death of a Member, the survivor or survivors where the deceased Member was a joint holder, and the legal personal representatives of the deceased Member where the deceased Member was a sole holder, shall be the only persons recognised by the Company as having any title to the deceased Member's interest in the shares. Nothing herein contained shall release the estate of a deceased joint holder from any liability in respect of any share which had been jointly held by such deceased Member with other persons. Subject to the Act, for the purpose of this Bye-law, legal personal representative means the executor or administrator of a deceased Member or such other person as the Board may, in its absolute discretion, decide as being properly authorised to deal with the shares of a deceased Member. |
| | 15.2 | Any person becoming entitled to a share in consequence of the death or bankruptcy of any Member may be registered as a Member upon such evidence as the Board may deem sufficient or may elect to nominate some |
person to be registered as a transferee of such share, andcovenants in such case the person becoming entitled shall execute in favour of such nominee an instrument of transfer in writing in the form, or as near thereto as circumstances admit, of the following:
Transfer by a Person Becoming Entitled on Death/Bankruptcy of a Member
Third Point Reinsurance Ltd. (the "Company")
I/We, having become entitled in consequence of the [death/bankruptcy] of [name and address of deceased/bankrupt Member] to [number] share(s) standing in the Register of Membersfavor of the Company inand/or one or more Affiliates thereof (including, without limitation, covenants not to compete, not to solicit employees and customers and not to disclose confidential information, that may have effect following the nameTermination of Service and after the said [name of deceased/bankrupt Member] instead of being registered myself/ourselves, elect to have [name of transferee] (the "Transferee") registered as a transferee of such share(s) and I/we do hereby accordingly transfer the said share(s) to the Transferee to hold the same unto the Transferee, his or her executors, administrators and assigns,Shares subject to the conditions on which the same were held at the time of the execution hereof; and the Transferee does hereby agree to take the said share(s) subjectAward have been transferred to the same conditions.
DATED this [date]
Signed by: InParticipant), including, without limitation, the presence of:
____________________ __________________
Transferor Witness
Signed by: Inrequirement that the presence of:
____________________ ________________
Transferee Witness
| | 15.3 | On the presentation of the foregoing materials to the Board, accompanied by such evidence as the Board may require to prove the title of the transferor, the transferee shall be registered as a Member. Notwithstanding the foregoing, the Board shall, in any case, have the same right to decline or suspend registration as it would have had in the case of a transfer of the share by that Member before such Member's death or bankruptcy, as the case may be. |
| | 15.4 | Where two or more persons are registered as joint holders of a share or shares, then in the event of the death of any joint holder or holders the remaining joint holder or holders shall be absolutely entitled to such share or shares and the Company shall recognise no claim in respect of the estate of any joint holder except in the case of the last survivor of such joint holders. |
ALTERATION OF SHARE CAPITAL
| | 16. | Power to Alter Capital |
| | 16.1 | The Company may if authorised by resolution of the Members increase, divide, consolidate, subdivide, change the currency denomination of, diminish or otherwise alter or reduce its share capital in any manner permitted by the Act.
|
| | 16.2 | Where, on any alteration or reduction of share capital, fractions of shares or some other difficulty would arise, the Board may deal with or resolve the same in such manner as it thinks fit. |
| | 17. | Variation of Rights Attaching to Shares |
If, atParticipant disgorge any time, the share capital is divided into different classes of shares, the rights attached to any class (unless otherwise provided by the terms of issue of the shares of that class) may, whether or not the Company is being wound-up, be varied with the consent in writing of the holders of three-fourths of the issued shares of that class or with the sanction of a resolution passed by a majority of the votes cast at a separate general meeting of the holders of the shares of the class at which meeting the necessary quorum shall be two persons at least holding or representing by proxy one-third of the issued shares of the class. The rights conferred upon the holders of the shares of any class or series issued with preferredprofit, gain or other rights shall not, unless otherwise expressly provided by the terms of issue of the shares of that class or series, be deemed to be varied by the creation or issue of further shares ranking pari passu therewith.
DIVIDENDS AND CAPITALISATION
| | 18.1 | The Board may, subject to these Bye-laws and in accordance with the Act, declare a dividend to be paid to the Members, in proportion to the number of shares held by them, and such dividend may be paid in cash or wholly or partly in specie in which case the Board may fix the value for distribution in specie of any assets. No unpaid dividend shall bear interest as against the Company. |
| | 18.2 | The Board may fix any date as the record date for determining the Members entitled to receive any dividend. |
| | 18.3 | The Company may pay dividends in proportion to the amount paid up on each share where a larger amount is paid up on some shares than on others. |
| | 18.4 | The Board may declare and make such other distributions (in cash or in specie) to the Members as may be lawfully made out of the assets of the Company. No unpaid distribution shall bear interest as against the Company. |
| | 19. | Power to Set Aside Profits |
The Board may, before declaring a dividend, set aside out of the surplus or profits of the Company, such amount as it thinks proper as a reserve to be used to meet contingencies or for equalising dividends or for any other purpose.
| | 20.1 | Any dividend, interest, or other moneys payable in cash in respect of the shares may be paid by cheque or draft sent through the post directed to the Member at such Member's address in the Register of Members, or to such person and to such address as the holder may in writing direct. |
| | 20.2 | In the case of joint holders of shares, any dividend, interest or other moneys payable in cash in respect of shares may be paid by cheque or draft sent through the post directed to the address of the holder first named in the Register of Members, or to such person and to such address as the joint holders may in writing direct. If two or more persons are registered as joint holders of any shares any one can give an effectual receipt for any dividend paid in respect of such shares. |
| | 20.3 | The Board may deduct from the dividends or distributions payable to any Member all moneys due from such Member to the Company on account of calls or otherwise. |
| | 20.4 | The Company shall be entitled to cease sending dividend cheques and warrants by post or otherwise to a Member if those instruments have been returned undelivered to, or left uncashed by, that Member on at least two consecutive occasions or, following one such occasion, reasonable enquiries have failed to establish the |
Member’s new address. The entitlement conferred on the Company by this Bye-lawbenefit received in respect of the Award prior to any Member shall cease ifbreach of any such covenant. Nothing contained in this Plan or an Award Agreement is intended to limit the Member claims a dividendparticipant’s ability to (i) report possible violations of law or cashes a dividend cheque or warrant.
| | 21.1 | The Board may capitalise any amount for the time being standing to the credit of any of the Company's share premium or other reserve accounts or to the credit of the profit and loss account or otherwise available for distribution by applying such amount in paying up unissued shares to be allotted as fully paid bonus shares pro rata (except in connection with the conversion of shares of one class to shares of another class) to the Members.
|
| | 21.2 | The Board may capitalise any amount for the time being standing to the credit of a reserve account or amounts otherwise available for dividend or distribution by applying such amounts in paying up in full, partly or nil paid shares of those Members who would have been entitled to such amounts if they were distributed by way of dividend or distribution. |
MEETINGS OF MEMBERS
| | 22. | Annual General Meetings |
Notwithstanding the provisions of the Act entitling the Members of the Company to elect to dispense with the holding of an annual general meeting, an annual general meeting shall be held in each year (other than the year of incorporation) at such time and place, which shall not be in the United States, as the Chairman (if any) or any two Directors or any Director and the Secretary or the Board shall appoint.
| | 23. | Special General Meetings |
The Chairman (if any) or any two Directors or any Director and the Secretary or the Board may convene a special general meeting which shall not be in the United States whenever in their judgment such a meeting is necessary.
| | 24. | Requisitioned General Meetings |
The Board shall, on the requisition of Members holding at the date of the deposit of the requisition not less than one-tenth of such of the paid-up share capital of the Company as at the date of the deposit carries the right to vote at general meetings, forthwith proceed to convene a special general meeting and the provisions of the Act shall apply.
| | 25.1 | At least 21 days' notice of an annual general meeting shall be given to each Member entitled to attend and vote thereat, stating the date, place and time which shall not be in the United States at which the meeting is to be held, that the election of Directors will take place thereat, and as far as practicable, the other business to be conducted at the meeting. |
| | 25.2 | At least 21 days' notice of a special general meeting shall be given to each Member entitled to attend and vote thereat, stating the date, time, place which shall not be in the United States and the general nature of the business to be considered at the meeting. |
| | 25.3 | The Board may fix any date as the record date for determining the Members entitled to receive notice of and to vote at any general meeting. |
| | 25.4 | A general meeting shall, notwithstanding that it is called on shorter notice than that specified in these Bye-laws, be deemed to have been properly called if it is so agreed by (i) all the Members entitled to attend and |
vote thereat in the case of an annual general meeting; and (ii) by a majority in number of the Members having the right to attend and vote at the meeting, being a majority together holding not less than 95% in nominal value of the shares giving a right to attend and vote thereat in the case of a special general meeting.
| | 25.5 | The accidental omission to give notice of a general meeting to, or the non-receipt of a notice of a general meeting by, any person entitled to receive notice shall not invalidate the proceedings at that meeting. |
| | 26. | Giving Notice and Access |
| | 26.1 | A notice may be given by the Company to a Member: |
| | (a) | by delivering it to such Member in person, in which case the notice shall be deemed to have been served upon such delivery; or |
| | (b) | by sending it by letter mail or courier to such Member's address in the Register of Members, in which case the notice shall be deemed to have been served seven days after the date on which it is deposited, with postage prepaid, in the mail; or |
| | (c) | by sending it by courier to such Member’s address in the Register of Members, in which case the notice shall be deemed to have been served two days after the date on which it is deposited, with courier fees paid, with the courier service; or |
| | (d) | by transmitting it by electronic means (including facsimile and electronic mail, but not telephone) in accordance with such directions as may be given by such Member to the Company for such purpose in which case the notice shall be deemed to have been served at the time that it would in the ordinary course be transmitted; or |
| | (e) | by delivering it in accordance with the provisions of the Act pertaining to delivery of electronic records by publication on a website, in which case the notice shall be deemed to have been served at the time when the requirements of the Act in that regard have been met. |
| | 26.2 | Any notice required to be given to a Member shall, with respect to any shares held jointly by two or more persons, be given to whichever of such persons is named first in the Register of Members and notice so given shall be sufficient notice to all the holders of such shares. |
| | 26.3 | In proving service under paragraphs 26.1 (b), (c) and (d), it shall be sufficient to prove that the notice was properly addressed and prepaid, if posted or sent by courier, and the time when it was posted, deposited with the courier, or transmitted by electronic means. |
| | 27. | Notice of Nominations and Member Business |
| | 27.1 | Annual General Meetings |
| | (a) | Nominations of persons for election to the Board or the proposal of other business to be transacted by the Members may be made at an annual general meeting only (A) pursuant to the Company’s notice of meeting (or any supplement thereto), (B) by or at the direction of the Board or (C) subject to any applicable law, by Members of record at the time of giving of notice as provided for in this Bye-law 27.1 and who comply with the notice procedures set forth in this Bye-law 27.1; |
| | (b) | For nominations or other business to be properly brought before an annual general meeting by a Member pursuant to clause (C) of Bye-law 27.1(a), the Member must have given timely notice thereof in writing to the Secretary and any such proposed business must constitute a |
proper matter for Member action. To be timely, a Member’s notice shall be deliveredregulation to, or mailed and received by the Secretary at the registered office of the Company not less than 90 days nor more than 120 days prior to the first anniversary of the preceding year’s annual general meeting; provided, that in the event that the date of the annual general meeting is advanced more than 30 days prior to such anniversary datefile a charge or delayed more than 30 days after such anniversary date then to be timely such notice must be received at the registered office of the Company no earlier than 120 days prior to such annual general meeting and no later than the later of 70 days prior to the date of the general meeting or the 10th day following the day on which public announcement of the date of the general meeting was first made by the Company. In no event shall the public announcement of an adjournment or postponement of an annual general meeting commence a new time period (or extend any time period) for the giving of a Member’s notice as described above. For purposes of Bye-laws 27.1(b) and 27.2, “public announcement” shall mean disclosure in a press release reported by the Dow Jones News Service, the Associated Press, PR Newswire, Businesswire, Bloomberg or any comparable news service in the United States or in a document publicly filed by the Companycomplaint with, the Securities and Exchange Commission, the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, the Department of Justice, Congress, any Inspector General, or any other federal, state or local governmental agency or commission (“Government Agencies”) or as otherwise protected under applicable law, (ii) communicate with any Government Agencies or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including providing documents or other information, without notice to the Company or (iii) under applicable United States federal law to (A) disclose in confidence trade secrets to federal, state, and local government officials, or to an attorney, for the sole purpose of reporting or investigating a suspected violation of law or (B) disclose trade secrets in a document filed in a lawsuit or other proceeding, but only if the filing is made under seal and protected from public disclosure.
f. Participants Based Outside the United States. To conform with the provisions of local laws and regulations, or with local compensation practices and policies, in foreign countries in which the Company or any of its Subsidiaries or Affiliates operate, but subject to the limitations set forth herein regarding the maximum number of shares issuable hereunder, the Committee may (i) modify the terms and conditions of Awards granted to Participants employed outside the United States (“Non-USAwards”), (ii) establish subplans with modified exercise procedures and such other modifications as may be necessary or advisable under the circumstances (“Subplans”), and (iii) take any action which it deems advisable to obtain, comply with or otherwise reflect any necessary governmental regulatory procedures, exemptions or approvals with respect to the Plan. The Committee’s decision to grant Non-US Awards or to establish Subplans is entirely voluntary, and at the complete discretion of the Committee. The Committee may amend, modify or terminate any Subplans at any time, and such amendment, modification or termination may be made without prior notice to the Participants. The Company, Subsidiaries, Affiliates and members of the Committee shall not incur any liability of any kind to any Participant as a result of any change, amendment or termination of any Subplan at any time. The benefits and rights provided under any Subplan or by any Non-US Award (i) are wholly discretionary and, although provided by either the Company, a Subsidiary or Affiliate, do not constitute regular or periodic payments and are not to be considered part of the Participant’s salary or compensation under the Participant’s employment with the Participant’s local employer for purposes of calculating any severance, resignation, redundancy or other end of service payments, vacation, bonuses, long- term service awards, indemnification, pension or retirement benefits, or any other payments, benefits or rights of any kind. If a Subplan is terminated, the Committee may direct the payment of Non-US Awards (or direct the deferral of payments whose amount shall be determined) prior to the dates on which payments would otherwise have been made, and, in the Committee’s discretion, such payments may be made in a lump sum or in installments.
SECTION 4.
MAXIMUM AMOUNT AVAILABLE FOR AWARDS
a. Number. Subject in all cases to the provisions of this Section 4 and except with respect to Substitute Awards, the maximum number of Shares that are available for issuance under the Plan shall be the number of Shares that are available for Awards under the Prior Plan as of the Effective Date. Notwithstanding the provisions of Section 4(b), the maximum number of Shares that may be issued in respect of Incentive Share Options shall not exceed 17,500,000 Shares. Shares may be made available from Shares held in treasury or authorized but unissued shares of the Company not reserved for any other purpose.
b. Canceled, Terminated, or Forfeited Awards, etc. Any Shares subject to an Award (or Prior Plan Award), other than a Substitute Award, which for any reason expires without having been exercised, is canceled or terminated, settled in case or otherwise is settled without the issuance of any Shares shall again be available for grant under the Plan; provided, however, that (i) shares repurchased by the Company on the open market with the proceeds of an Option exercise, (ii) Shares otherwise issuable or issued in respect of, or as part of, any Award (or Prior Plan Award) that are delivered to or withheld by the Company to pay the purchase price or the withholding taxes related to the outstanding Award, and (iii) Shares that were subject to an Option or Share-settled Share Appreciation Right and were not issued or delivered upon the net settlement or net exercise of such Option or Share Appreciation Rights shall not be available for future issuance under the Plan. If a Share Appreciation
Right is granted in tandem with an Option so that only one may be exercised with the other being surrendered in such exercise in accordance with Section 8(b), the number of Shares subject to the tandem Option and Share Appreciation Right shall only be taken into account once (and not as to both Awards). Shares subject to Awards that are assumed, converted or substituted pursuant to an Adjustment Event will not further reduce the maximum limitation set forth in Section 4(a). The number of Shares available for Awards under this Plan shall not be reduced by (i) the number of Shares subject to Substitute Awards or (ii) available shares under a shareholder approved plan of a company or other entity which was a party to a corporate transaction with the Company (as appropriately adjusted to reflect such corporate transaction) which become subjects to Awards granted under this Plan (subject to applicable stock exchange requirements).
c. Adjustment in Capitalization. In the event of any equity restructuring (within the meaning of Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation—Stock Compensation, or any successor or replacement accounting standard) that causes the per share value of the Shares to change, such as a share dividend, share split, spinoff, rights offering or recapitalization through an extraordinary cash dividend, the number and class of securities available under the Plan, the terms of each outstanding Option and Share Appreciation Right (including the number and class of securities subject to each outstanding Option or Share Appreciation Right and the purchase price or base price per share) and the terms of each other outstanding Award (including the number and class of securities subject thereto and the applicable performance goals) shall be appropriately adjusted by the Committee, such adjustments to be made in the case of outstanding Options and Share Appreciation Rights without an increase in the aggregate purchase price or base price and in accordance with Section 409A of the Code. In the event of any other change in corporate capitalization, including a merger, consolidation, reorganization, or partial or complete liquidation of the Company, such equitable adjustments described in the foregoing sentence may be made as determined to be appropriate and equitable by the Committee to prevent dilution or enlargement of rights of participants. In either case, the decision of the Committee regarding any such adjustment shall be final, binding and conclusive
d. Prohibition Against Repricing. Except to the extent approved in advance by holders of a majority of the shares of the Company entitled to vote generally in the election of directors or (ii) pursuant to Section 13, 144(c) above or 15(d)in connection with a Change in Control, the Committee shall not have the power or authority to reduce, whether through amendment or otherwise, the exercise price of the Securities Exchange Actany outstanding Option or base price of 1934; | | (c) | A Member’s notice to the Secretary shall set forth (A) as to each person whom the Member proposes to nominate for election or reelection as a director all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors, or is otherwise required, in each case pursuant to Section 14(a) of the Securities Exchange Act of 1934 (including such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected), (B) as to any other business that the Member proposes to bring before the general meeting, a brief description of the business desired to be brought before the general meeting, the text of the proposal or business, the reasons for conducting such business at the general meeting and any material interest in such business of such Member and the beneficial owner, if any, on whose behalf the proposal is made, and (C) as to the Member giving the notice and the beneficial owner, if any, on whose behalf the proposal is made: |
| | (i) | the name and address of such Member (as they appear in the Register of Members) and any such beneficial owner; |
| | (ii) | the class or series and number of shares of the Company which are held of record or are beneficially owned by such Member and by any such beneficial owner; |
| | (iii) | a description of any agreement, arrangement or understanding between or among such Member and any such beneficial owner, any of their respective affiliates or associates, and any other person or persons (including their names) in connection with the proposal of such nomination or other business; |
| | (iv) | a description of any agreement, arrangement or understanding (including, regardless of the form of settlement, any derivative, long or short positions, profit interests, forwards, futures, swaps, options, warrants, convertible securities, share appreciation or similar rights, hedging transactions and borrowed or loaned shares) that has been entered into by or on behalf of, or any other agreement, arrangement or understanding that has been made, the effect or intent of which is to create or mitigate loss to, manage risk or benefit of shareany outstanding Share Appreciation, cancel any previously granted Option or Share Appreciation Right in exchange for another Option or Share Appreciation Right with a lower exercise price or base price, changes for, or increase or decrease the voting power of, such Member or any such beneficial owner or any such nominee with respect to the Company’s securities (a “Derivative Instrument”); |
| | (v) | to the extent not disclosed pursuant to clause (iv) above, the principal amount of any indebtedness of the Company or any of its subsidiaries beneficially owned by such Member or by any such beneficial owner, together with the title of the instrument under which such indebtedness was issued and a description of any Derivative Instrument entered into by or on behalf of such Member or such beneficial owner relating to the value or payment of any indebtedness of the Company or any such Subsidiary; |
| | (vi) | a representation that the Member is a holder of record of shares of the Company entitled to vote at such general meeting and intends to appear in person or by proxy at the general meeting to bring such nomination or other business before the general meeting; and |
| | (vii) | a representation as to whether such Member or any such beneficial owner intends or is part of a group that intends to (i) deliver a proxy statement and/or form of proxy to holders of at least the percentage of the voting power of the Company’s outstanding shares required to approve or adopt the proposal or to elect each such nominee and/or (ii) otherwise to solicit proxies from Members in support of such proposal or nomination; |
| | (d) | If requested by the Company, the information required under clauses (ii), (iii), (iv) and (v) of Bye-law 27.1(c) shall be supplemented by such Member and any such beneficial owner not later than 10 days after the record date for notice of the general meeting to disclose such information as of such record date; |
| | (e) | Notwithstanding anything to the contrary, the notice requirements set forth herein with respect to the proposal of any business pursuant to this Bye-law 27.1 other than a nomination shall be deemed satisfied by a Member if such Member has submitted a proposal to the Company in compliance with Rule 14a-8 promulgated under the Securities and Exchange Act of 1934 and such Member’s proposal has been included in a proxy statement that has been prepared by the Company to solicit proxies for the general meeting. |
| | 27.2 | Special General Meetings |
| | (a) | Only such business shall be conducted at a special general meeting as shall have been brought before the general meeting in accordance with the Company’s notice of meeting pursuant to Bye-laws 25 and 26. |
| | (b) | Nominations of persons for election to the Board at a special general meeting may be made (i) by or at the direction of the Board or (ii) provided that the Board has determined that Members may nominate persons for election to the Board at such general meeting, by any Member of the Company who is a Member of record at the time of giving of notice provided for in this Bye-law 27.2(b), who shall be entitled to vote at the general meeting and who complies with the notice procedures set forth in this Bye-law 27. |
| | (c) | For nominations to be properly brought before a special general meeting by a Member pursuant to this Bye-law 27.2(b)(ii), the Member must have given timely notice thereof in writing to the Secretary. To be timely, a Member’s notice shall be delivered to or mailed and received at the registered office of the Company (A) not earlier than 120 days prior to the date of the special general meeting nor (B) later than the later of 90 days prior to the date of the special general meeting or the 10th day following the day on which public announcement of the date of the special general meeting was first made. |
| | (d) | A Member’s notice to the Secretary, including any notice of requisition pursuant to Bye-law 24, shall comply with the notice requirements of Bye-law 27.1(c) and (d). |
| | (a) | At the request of the Board, any person nominated by the Board for election as a director shall furnish to the Secretary the information that is required to be set forth in a Member’s notice of nomination pursuant to Bye-law 27.1(c). |
| | (b) | No person shall be eligible to be nominated by a Member to serve as a director of the Company unless nominated in accordance with the procedures set forth in this Bye-law 27. |
| | (c) | The chairman of the general meeting shall, if the facts warrant, determine and declare to the general meeting that a nomination was not made in accordance with the procedures prescribed by these Bye-laws or that business was not properly brought before the general meeting, and if he should so determine and declare, the defective nomination shall be disregarded or such business shall not be transacted, as the case may be. |
| | (d) | Notwithstanding the foregoing provisions of this Bye-law 27, unless otherwise required by the Act, if the Member (or a qualified representative of the Member) does not appear at the annual or special general meeting to present a nomination or other proposed business, such nomination shall be disregarded or such proposed business shall not be transacted, as the case may be, notwithstanding that proxies in respect of such vote may have been received by the Company. For purposes of this Bye-law 27.3, to be considered a qualified representative of the Member, a person must be a duly authorized officer, manager or partner of such Member or must be authorized by a writing executed by such Member or an electronic transmission delivered by such Member to act for such Member as proxy at the general meeting and such person must produce such writing or electronic transmission, or a reliable reproduction of the writing or electronic transmission, at the general meeting. |
| | 27.4 | Without limiting the foregoing provisions of this Bye-law 27, a Member shall also comply with all applicable requirements of the Securities Exchange Act of 1934 and the rules and regulations thereunder with respect to the matters set forth in this Bye-law 27; provided, that any references in these Bye-laws to the Securities Exchange Act of 1934 or the rules and regulations promulgated thereunder are not intended to and shall not limit any requirements applicable to nominations or proposals as to any other business to be considered pursuant to this Bye-law, and compliance with Bye-law 27.1 or 27.2 shall be the exclusive means for a Member to make nominations or submit other business (other than as provided in Bye-law 27.1(e)).
|
| | 28. | Postponement or Cancellation of General Meeting |
The Secretary may, and on instruction of the Chairman or president the Secretary shall, postpone or cancel any general meeting calledpreviously granted Option or Share Appreciation Right in accordance with these Bye-lawsexchange for cash or another Award if the exercise price of such Option or the base price of such Share Appreciation Right exceeds the Fair Market Value of a Share on the date of such cancellation.
e. Minimum Vesting Requirements. Notwithstanding any other provision of the Plan to the contrary, awards granted under the Plan (other than a meeting requisitioned under these Bye-laws) provided that notice of postponement or cancellation is given tocash-based Awards) shall vest no earlier than the Members before the time for such meeting. Fresh noticefirst anniversary of the date on which the Award is granted; provided, that the following awards shall not be subject to the foregoing minimum vesting requirement: any (i) Substitute Awards granted in connection with awards that are assumed, converted or substituted pursuant to a merger, acquisition or similar transaction entered into by the Company or any of its Subsidiaries, (ii) Shares delivered in lieu of fully vested cash obligations, (iii) Awards to Eligible Directors that vest on earlier of the one-year anniversary of the date of grant and the next annual meeting of shareholders which is at least 50 weeks
after the immediately preceding year’s annual meeting, and (iv) any additional awards the Committee may grant, up to a maximum of five percent (5%) of the available share reserve authorized for issuance under the Plan pursuant to Section 4(a) (subject to adjustment under Section 4(c)); and, provided, further, that the foregoing restriction does not apply to the Committee’s discretion to provide for accelerated exercisability or vesting of any award, including in cases of Termination of Service or a Change in Control, in the terms of the Award Agreement or otherwise.
SECTION 5. PERFORMANCE AWARDS
a. Generally. The Committee shall have the authority to determine the Participants who shall receive Performance Awards, the number and type of Performance Awards and the number of Shares and/or value of Performance Units or other cash-based Performance Award each Participant receives for each or any Performance Cycle, and the Performance Goals applicable in respect of such Performance Awards. Any adjustments to such Performance Goals shall be approved by the Committee. The Committee shall determine the duration of each Performance Cycle (the duration of Performance Cycles may differ from each other), and there may be more than one Performance Cycle in existence at any one time. Performance Awards shall be evidenced by an Award Agreement that shall specify the kind of Award, the number of Shares and/or value of Awards awarded to the Participant, the Performance Goals applicable thereto, and such other terms and conditions not inconsistent with the Plan as the Committee shall determine; provided, however, that (i) a distribution or dividend with respect to Shares, including a regular cash dividend, shall be deposited with the Company and shall be subject to the same restrictions as the Shares with respect to which such distribution was made and (ii) any Dividend Equivalents with respect to Performance Awards that are subject to vesting conditions shall be subject to the same vesting conditions as the underlying Awards. No Shares will be issued at the time an Award of Performance Shares is made, and placethe Company shall not be required to set aside a fund for the postponedpayment of Performance Shares, Performance Units or cancelled meetingother Performance Awards.
b. Earned Performance Awards. Performance Awards shall become earned, in whole or in part, based upon the attainment of specified Performance Goals or the occurrence of any event or events, including a Change in Control, as the Committee shall determine, either before, at or after the grant date. In addition to the achievement of the specified Performance Goals, the Committee may, at the grant date, condition payment of Performance Awards on such conditions as the Committee shall specify.
c. Performance Goals. The Committee shall in its discretion establish the Performance Goals that must be satisfied in order for a Participant to receive a Performance Award for a Performance Cycle or for a Performance Award to be earned or vested. At the discretion of the Committee, the Performance Goals for a Performance Cycle may be based upon one or more of the following criteria (alone or in combination, whether gross or net, before or after taxes, and/or before or after other adjustments, as determined by the Committee): (a) gross, net or operating income (before or after taxes); (b) earnings before interest and taxes; (c) earnings before taxes, interest, depreciation, and/or amortization (“EBITDA”); (d) EBITDA excluding charges for share compensation, management fees, restructurings, impairments and/or other specified items (“Adjusted EBITDA”); (e) EBITDA excluding capital expenditures; f) basic or diluted earnings per share or improvement in basic or diluted earnings per share; (g) revenues (including, but not limited to, total revenues, net revenues or revenue growth); (h) net operating profit; (i) growth in basic or diluted book value; (j) financial return measures
(including, but not limited to, return on assets, capital, invested capital, investments, investment income generated by underwriting or other operations or on the float from such operations, equity, or revenue) including or excluding negative returns, and with or without compounding; (k) cash flow measures (including, but not limited to, operating cash flow, free cash flow, cash flow return on equity, and cash flow return on investment); (1) productivity ratios (including but not limited to measuring liquidity, profitability or leverage); (m) enterprise value; (n) share price (including, but not limited to, growth measures and total shareholder return, inclusive or exclusive of dividends); (o) expense/cost management targets (including but not limited to improvement in or attainment of expense levels, capital expenditure levels, and/or working capital levels); (p) margins (including, but not limited to, operating margin, underwriting margins, net income margin, cash margin, gross, net or operating profit margins, EBITDA margins, Adjusted EBITDA margins); (q) operating efficiency; (r) market share or market penetration; (s) customer targets (including, but not limited to, customer growth or customer satisfaction); (t) working capital targets or improvements; (u) profit measures (including but not limited to gross profit, net profit, operating profit, investment profit and/or underwriting profit), including or excluding charges for share compensation, fee income, underwriting losses incurred in prior periods, changes in IBNR reserves and/or other specified items; (v) economic value added; (w) balance sheet metrics (including, but not limited to, inventory, inventory turns, receivables turnover, net asset turnover, debt reduction, retained earnings, year-end cash, cash conversion cycle, ratio of debt to equity or to EBITDA); (x) workforce targets (including but not limited to diversity goals, employee engagement or satisfaction, employee retention, and workplace health and safety goals); (y) implementation, completion or attainment of measurable objectives with respect to risk management, research and development, key products or key projects, lines of business, acquisitions and divestitures and strategic plan development and/or implementation; (z) comparisons with various stock market indices, peer companies or industry groups or classifications with regard to one more of these criteria or (aa) any other performance goal selected by the Committee whether or not listed herein. Performance Goals may be established on a Company-wide basis or with respect to one or more business units, divisions, Subsidiaries, or products and may be expressed in absolute terms, or relative or comparative to (i) current internal targets or budgets, (ii) the past performance of the Company (including the performance of one or more Subsidiaries, divisions, or operating units), (iii) the performance of one or more similarly situated companies, (iv) the performance of an index covering multiple companies, or (v) other external measures of the selected performance criteria. Any performance objective may measure performance on an individual basis, as appropriate. The Committee may provide for a threshold level of performance below which no Shares or compensation will be granted or paid in respect of Performance Awards, and a maximum level of performance above which no additional Shares or compensation will be granted or paid in respect of Performance Awards, and it may provide for differing amounts of Shares or compensation to be granted or paid in respect of Performance Awards for different levels of performance. Unless otherwise determined by the Committee at the time Performance Goals for a Performance Cycle are established, to the maximum extent possible, performance criteria shall be givendetermined excluding any or all “unusual or infrequently occurring items” as determined under U.S. generally accepted accounting principles and as identified in the financial statements, notes to the financial statements or management’s discussion and analysis in the annual report, including, without limitation, the charges or costs associated with restructurings of the Company, any Subsidiary or any other Affiliate, discontinued operations, unusual or infrequently occurring items, capital gains and losses, dividends, Share repurchase, other unusual, infrequently occurring or non-recurring items, and the cumulative effects of accounting changes. The Committee may also adjust the Performance Goals for any Performance Cycle as it deems equitable in recognition of unusual or non-recurring events affecting the Company, changes in applicable tax laws or accounting principles, or such other factors as
the Committee may determine. The Committee may also adjust the Performance Goals for any Performance Cycle as it deems equitable in recognition of unusual or non-recurring events affecting the Company, changes in applicable tax laws or accounting principles, or such other factors as the Committee may determine.
d. Negative Discretion. Notwithstanding anything in this Section 5 to the contrary, the Committee shall have the right to establish rules or procedures that have the effect of limiting the amount payable to each MemberParticipant to an amount that is less than the maximum amount otherwise authorized.
e. Affirmative Discretion. Notwithstanding any other provision in accordance with these Bye-laws. | | 29. | Electronic Participation and Security in Meetings |
| | 29.1 | Members may participate in any general meeting by such telephonic, electronic or other communication facilities or means as permit all persons participating in the meeting to communicate with each other simultaneously and instantaneously, and participation in such a meeting shall constitute presence in person at such meeting. |
| | 29.2 | The Board may, and at any general meeting, the Chairman of such meeting may, make any arrangement and impose any requirement or restriction it or he considers appropriate to ensure the security of the general meeting including, without limitation, requirements for evidence of identity to be produced by those attending the |
the Plan to the contrary, subject to the maximum number of shares available for issuance under Section 4(a) of the Plan, the Committee shall have the right, in its discretion, to grant an Award in cash, in Shares or other Awards or in any combination thereof, to any Participant, in a greater amount than would apply under the applicable Performance Codes, based on individual performance or any other criteria that the Committee deems appropriate.
meeting,f. Certification of Attainment of Performance Goals. As soon as practicable after the searchingend of their personal propertya Performance Cycle and prior to any payment or vesting in respect of such Performance Cycle, the Committee shall certify in writing the number of Performance Shares or other Performance Awards and the restrictionnumber and value of itemsPerformance Units which have been earned or vested on the basis of performance in relation to the established Performance Goals.
g. Payment of Awards. Except as provided otherwise in an Award Agreement, payment or delivery of Shares with respect to earned Performance Awards shall be distributed to the Participant or, if the Participant has died, to the Participant’s Designated Beneficiary, as soon as practicable after the expiration of the Performance Cycle and the Committee’s certification under Section 5(f) above (and in any event within 2 ½ months after the end of the Performance Cycle or such other date as specified in the Award Agreement), provided that payment or delivery of Shares with respect to earned Performance Awards shall not be distributed to a Participant until any other conditions on payment of such Awards established by the Committee have been satisfied. The Committee shall determine and specify in the Award Agreement whether earned Performance Awards are distributed in the form of cash, Shares or in a combination thereof. The Committee shall have the right to impose whatever conditions it deems appropriate with respect to the Award or delivery of Shares, including conditioning the vesting of such Shares on the performance of additional service.
h. Newly Eligible Participants. Notwithstanding anything in this Section 5 to the contrary, the Committee shall be entitled to make such rules, determinations and adjustments as it deems appropriate with respect to any Participant who becomes eligible to receive Performance Awards after the commencement of a Performance Cycle.
SECTION 6. RESTRICTED SHARES AND RESTRICTED SHARE UNITS
a. Grant. Restricted Shares and Restricted Share Units may be taken into the meeting place. The Board and,granted to Participants at any general meeting, the chairman of such meeting are entitled to refuse entry to a person who refuses to comply with any such arrangements, requirementstime or restrictions. | | 30. | Quorum at General Meetings |
| | 30.1 | At any general meeting two or more persons present in person throughout the meeting and representing in person or by proxy in excess of 50% of the total issued voting shares in the Company throughout the meeting shall form a quorum for the transaction of business, provided, however that no Member may participate in any general meeting during which that Member (or, if any Member is an entity, its representative) is physically present in the United States. |
| | 30.2 | If within half an hour from the time appointed for the meeting a quorum is not present, then, in the case of a meeting convened on a requisition, the meeting shall be deemed cancelled and, in any other case, the meeting shall stand adjourned to the same day one week later, at the same time and place (which shall not be in the United States) or to such other day, time or place (which shall not be in the United States)times as the Secretary may determine. Unless the meeting is adjourned to a specific date, time and place (which shall not be in the United States) announced at the meeting being adjourned, fresh notice of the resumption of the meeting shall be given to each Member entitled to attend and vote thereat in accordance with these Bye-laws. |
| | 31. | Chairman to Preside at General Meetings |
Unless otherwise agreed by a majority of those attending and entitled to vote thereat, the Chairman, if there be one, shall act as chairman of the meeting at all general meetings at which such person is present. In their absence a chairman of the meeting shall be appointed or elected by those present at the meeting and entitled to vote.
| | 32.1 | Subject to the Act and these Bye-laws, any question proposed for the consideration of the Members at any general meeting shall be decided by the affirmative votes of a majority of the votes cast in accordance with these Bye-laws and in the case of an equality of votes the resolution shall fail. |
| | 32.2 | No Member shall be entitled to vote at a general meeting unless such Member has paid all the calls on all shares held by such Member. |
| | 32.3 | At any general meeting a resolution put to the vote of the meeting shall, in the first instance, be voted upon by a show of hands and, subject to any rights or restrictions for the time being lawfully attached to any class of shares and subject to these Bye-laws, every Member present in person and every person holding a valid proxy at such meeting shall be entitled to one vote and shall cast such vote by raising his hand. |
| | 32.4 | In the event that a Member participates in a general meeting by telephone, electronic or other communication facilities or means, the chairman of the meeting shall direct the manner in which such Member may cast his vote on a show of hands. |
| | 32.5 | At any general meeting if an amendment is proposed to any resolution under consideration and the chairman of the meeting rules on whether or not the proposed amendment is out of order, the proceedings on the substantive resolution shall not be invalidated by any error in such ruling. |
| | 32.6 | At any general meeting a declaration by the chairman of the meeting that a question proposed for consideration has, on a show of hands, been carried, or carried unanimously, or by a particular majority, or lost, and an entry to that effect in a book containing the minutes of the proceedings of the Company shall, subject to these Bye-laws, be conclusive evidence of that fact. |
| | 33. | Power to Demand a Vote on a Poll |
| | 33.1 | Notwithstanding the foregoing, a poll may be demanded by any of the following persons: |
| | (a) | the chairman of such meeting; or |
| | (b) | at least three Members present in person or represented by proxy; or |
| | (c) | any Member or Members present in person or represented by proxy and holding between them not less than one-tenth of the total voting rights of all the Members having the right to vote at such meeting; or |
| | (d) | any Member or Members present in person or represented by proxy holding shares in the Company conferring the right to vote at such meeting, being shares on which an aggregate sum has been paid up equal to not less than one-tenth of the total amount paid up on all such shares conferring such right. |
| | 33.2 | Where a poll is demanded, subject to any rights or restrictions for the time being lawfully attached to any class of shares, every person present at such meeting shall have one vote for each share of which such person is the holder or for which such person holds a proxy and such vote shall be counted by ballot as described herein, or in the case of a general meeting at which one or more Members are present by telephone, electronic or other communication facilities or means, in such manner as the chairman of the meeting may direct and the result of such poll shall be deemed to be the resolution of the meeting at which the poll was demanded and shall replace any previous resolution upon the same matter which has been the subject of a show of hands. A person entitled to more than one vote need not use all his votes or cast all the votes he uses in the same way. |
| | 33.3 | A poll demanded for the purpose of electing a chairman of the meeting or on a question of adjournment shall be taken forthwith. A poll demanded on any other question shall be taken at such time and in such manner during such meeting as the chairman (or acting chairman) of the meeting may direct. Any business other than that upon which a poll has been demanded may be conducted pending the taking of the poll. |
| | 33.4 | Where a vote is taken by poll, each person physically present and entitled to vote shall be furnished with a ballot paper on which such person shall record his vote in such manner as shall be determined at the meeting having regard to the nature of the question on which the vote is taken, and each ballot paper shall be signed or initialled or otherwise marked so as to identify the voter and the registered holder in the case of a proxy. Each person present by telephone, electronic or other communication facilities or means shall cast his vote in such manner as the chairman of the meeting shall direct. At the conclusion of the poll, the ballot papers and votes cast in accordance with such directions shall be examined and counted by a committee of not less than two Members or proxy holders appointed by the chairman of the meeting for the purpose and the result of the poll shall be declared by the chairman of the meeting. |
| | 34. | Voting by Joint Holders of Shares |
In the case of joint holders, the vote of the senior who tenders a vote (whether in person or by proxy) shall be accepted to the exclusion of the votes of the other joint holders, and for this purpose seniority shall be determined by the order inCommittee. The grant date of any Restricted Shares or Restricted Share Units under the Plan will be the date on which such Restricted Shares or Restricted
Share Units are awarded by the names standCommittee, or on such other date as the Committee shall determine. Restricted Shares and Restricted Share Units shall be evidenced by an Award Agreement that shall specify (i) the number of shares of Restricted Shares and/or the number of Restricted Share Units to be granted to each Participant, (ii) the Restriction Period(s) and (iii) such other terms and conditions, including rights to dividends or Dividend Equivalents, not inconsistent with the Plan as the Committee shall determine, including customary representations, warranties and covenants with respect to securities law matters; provided, however, that (i) a distribution or dividend with respect to Shares, including a regular cash dividend, shall be deposited with the Company and shall be subject to the same restrictions as the Shares with respect to which such distribution was made and (ii) any Dividend Equivalents with respect to the Restricted Share Units that are subject to vesting conditions shall be subject to the same vesting conditions as the underlying Awards. Grants of Restricted Shares shall be evidenced by issuance of certificates representing the shares registered in the Registername of Members. | | 35.1 | An instrument appointing a proxy shall be in writing in substantially the following form or such other form as the chairman of the meeting shall accept: |
the Participant or a bookkeeping entry in the Company’s records (or by such other reasonable method as the Company shall determine from time to time). No Shares will be issued at the time an Award of Restricted Share Units is made and the Company shall not be required to set aside a fund for the payment of any such Awards.
Proxy
Third Point Reinsurance Ltd.(b. Vesting. Restricted Shares and Restricted Share Units granted to Participants under the "Company")Plan shall be subject to a Restriction Period. Except as otherwise determined by the Committee at or after grant, and subject to the Participant’s continued Service and the Participant not being under notice of termination (for any reason) on such date, the Restriction Period shall lapse in accordance with the schedule provided in the Participant’s Award Agreement. In its discretion, the Committee may also establish performance-based vesting conditions with respect to Awards of Restricted Shares and Restricted Share Units (in lieu of, or in addition to, time-based vesting) based on one or more of the Performance Goals listed in Section 5(c) or other performance goals.
I/We, [insert names here], being
c. Settlement of Restricted Shares and Restricted Share Units. At the expiration of the Restriction Period for any Restricted Share Awards, the Company shall remove the restrictions applicable to share certificates or the entry in the Company’s register of members evidencing the Restricted Share Awards, and shall, upon request, deliver the share certificates evidencing such Restricted Share Awards to the Participant or the Participant’s legal representative (or otherwise evidence the issuance of such shares free of any restrictions imposed under the Plan). At the expiration of the Restriction Period for any Restricted Share Units, for each such Restricted Share Unit, the Participant shall receive, as set forth in the Award Agreement, (i) a Membercash payment equal to the Fair Market Value of one Share as of such date specified in the Award Agreement, (ii) one Share or (iii) any combination of cash and Shares.
SECTION 7. SHARE OPTIONS
a. Grant. The Committee may, in its discretion, grant Options to purchase Shares to such eligible persons as may be selected by the Committee. Each Option, or portion thereof, that is not an Incentive Share Option shall be a Non-Statutory Share Option. An Incentive Share Option may not be granted to any person who is not an employee of the Company or any parent or subsidiary (as defined in Section 424 of the Code). Each Incentive Share Option shall be granted within ten years of the date this Plan is adopted by the Board. The aggregate Fair Market Value of the Shares with [number]respect to which Incentive Share Options are exercisable for the first time by a Participant during any calendar year shall
not exceed $100,000 or such higher limit as may be permitted under Section 422 of the Code. To the extent that the aggregate Fair Market Value (determined as of the date of grant) of Shares with respect to which Options designated as Incentive Share Options are exercisable for the first time by a participant during any calendar year (under this Plan or any other plan of the Company or any parent or subsidiary as defined in Section 424 of the Code) exceeds $100,000 or such higher limit established by the Code, such Options shall constitute Non-Statutory Share Options. Each Option shall be evidenced by an Award Agreement that shall specify the number of Shares subject to such Option, the exercise price associated with the Option, the time and conditions of exercise of the Option and all other terms and conditions of the Option.
b. Number of Shares and Purchase Price. The number of Shares subject to an Option and the purchase price per Share purchasable upon exercise of the Option shall be determined by the Committee; provided, however, that the purchase price per Share purchasable upon exercise of an Option shall not be less than 100% of the Fair Market Value of a Share on the date of grant of such Option; providedfurther, that if an Incentive Share Option shall be granted to any person who, at the time such Option is granted, owns capital shares HEREBY APPOINT [name]possessing more than ten percent of [address]the total combined voting power of all classes of capital shares of the Company (or of any parent or failing him, [name]subsidiary as defined in Section 424 of [address]the Code) (a “Ten Percent Holder”), the purchase price per Share shall be the price (currently 110% of Fair Market Value) required by the Code in order to constitute an Incentive Share Option. Notwithstanding the foregoing, in the case of an Option that is a Substitute Award, the purchase price per share of the shares subject to such Option may be less than 100% of the Fair Market Value per share on the date of grant, provided, that the excess of: (a) the aggregate Fair Market Value (as of the date such Substitute Award is granted) of the shares subject to the Substitute Award, over (b) the aggregate purchase price thereof does not exceed the excess of: (x) the aggregate fair market value (as of the time immediately preceding the transaction giving rise to the Substitute Award, such fair market value to be my/our proxydetermined by the Committee) of the shares of the predecessor company or other entity that were subject to votethe grant assumed or substituted for me/usby the Company, over (y) the aggregate purchase price of such shares.
c. Exercise Period and Exercisability. The period during which an Option may be exercised shall be determined by the Committee; provided, however, that no Option shall be exercised later than ten years after its date of grant; and provided further, that if an Incentive Share Option shall be granted to a Ten Percent Holder, such Option shall not be exercised later than five years after its date of grant. The Committee shall determine whether a Share Option shall become exercisable in cumulative or non-cumulative installments and in part or in full at any time. The Committee may require that an exercisable Option, or portion thereof, be exercised only with respect to whole Shares.
d. Method of Exercise . An Option may be exercised (i) by giving written notice to the Company specifying the number of Shares to be purchased and by accompanying such notice with a payment therefor in full (or by arranging for such payment to the Company’s satisfaction) and (ii) by executing such documents as the Company may reasonably request. If the Company’s Shares are not listed on an established stock exchange or national market system at the meetingtime an Option is exercised, then the option-holder shall pay the exercise price of such Option in cash. If the Company’s Shares are listed on an established stock exchange or national market system at the time an Option is exercised, then the option-holder may pay the exercise price of such Option either (A) in cash, (B) by delivery (either actual delivery or by attestation procedures established by the Company) of Shares having an aggregate Fair Market Value, determined as of the Membersdate of exercise, equal to the aggregate purchase
price payable by reason of such exercise, (C) authorizing the Company to withhold whole Shares which would otherwise be delivered having an aggregate Fair Market Value, determined as of the date of exercise, equal to the amount necessary to satisfy such obligation, and withhold the proceeds thereof, provided that the Committee determines that such withholding of Shares does not cause the Company to recognize an increased compensation expense under applicable accounting principles, (D) in cash by a broker-dealer acceptable to the Company to whom the optionee has submitted an irrevocable notice of exercise or (E) a combination of (A), (B), (C) and (D), in each case to the extent set forth in the Award Agreement relating to the Option. The Company shall have sole discretion to disapprove of an election pursuant to any of clauses (B) through (E). Any fraction of a Share which would be required to pay such purchase price shall be disregarded and the remaining amount due shall be paid in cash by the optionee. No certificate representing Shares shall be delivered until the full purchase price therefor and any withholding taxes (as determined, pursuant to Section 15(a)), have been paid (or arrangement made for such payment to the Company’s satisfaction).
SECTION 8. SHARE APPRECIATION RIGHTS
a. Grant. Share Appreciation Rights may be granted to Participants at such time or times as shall be determined by the Committee. Share Appreciation Rights may be granted in tandem with Options which, unless otherwise determined by the Committee at or after the grant date, shall have substantially similar terms and conditions to such Options to the extent applicable, or may be granted in the form of Freestanding SARs. The grant date of any Share Appreciation Right under the Plan will be the date on which the Share Appreciation Right is awarded by the Committee or such other future date as the Committee shall determine in its sole discretion. No Share Appreciation Right shall be exercisable on or after the tenth anniversary of its grant date. Share Appreciation Rights shall be evidenced by an Award Agreement, whether as part of the Award Agreement governing the terms of the Options, if any, to which such Share Appreciation Right relates 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 determine, including customary representations, warranties and covenants with respect to securities law matters.
b. Base Price. The base price of an SAR granted in tandem with an Option shall be the purchase price per Share of the related Option. The base price of a Freestanding SAR shall be determined by the Committee; provided, however, that such base price shall not be less than 100% of the Fair Market Value of a Share on the date of grant of such SAR (or, if earlier, the date of grant of the Option for which the SAR is exchanged or substituted). Notwithstanding the foregoing, in the case of an SAR that is a Substitute Award, the base price per share of the shares subject to such SAR may be less than 100% of the Fair Market Value per share on the date of grant, provided, that the excess of: (a) the aggregate Fair Market Value (as of the date such Substitute Award is granted) of the shares subject to the Substitute Award, over (b) the aggregate base price thereof does not exceed the excess of: (x) the aggregate fair market value (as of the time immediately preceding the transaction giving rise to the Substitute Award, such fair market value to be helddetermined by the Committee) of the shares of the predecessor company or other entity that were subject to the grant assumed or substituted for by the Company, over (y) the aggregate base price of such shares.
c. Exercise Period and Exercisability. The period during which a Share Appreciation Right may be exercised shall be determined by the Committee; provided, however, that no Freestanding SAR
shall be exercised later than ten years after its date of grant. The Committee shall determine whether a Share Appreciation Right shall become exercisable in cumulative or non-cumulative installments and in part or in full at any time. Share Appreciation Rights granted in tandem with an Option shall become exercisable on the [date]same date or dates as the Options with which such Share Appreciation Rights are associated become exercisable. Share Appreciation Rights 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 at any adjournment thereof. [Any restrictions on votingmay be exercised only with respect to be inserted here.]the Shares for which the related Option is then exercisable. Signed this [date]
Member(s)
| | 35.2 | The instrument appointing a proxy must be received by the Company at the registered office or at such other place or in such manner as is specified in the notice convening the meeting or in any instrument of proxy sent out by the Company in relation to the meeting at which the person named in the instrument appointing a proxy proposes to vote, and an instrument appointing a proxy which is not received in the manner so prescribed shall be invalid. |
| | 35.3 | A Member who is the holder of two or more shares may appoint more than one proxy to represent him and vote on his behalf in respect of different shares. |
| | 35.4 | Subject to Bye-law 34.5, the decision of the chairman of any general meeting as to the validity of any appointment of a proxy shall be final. |
| | 35.5 | Any Member may irrevocably appoint a proxy and in such case: (i) such appointment shall be irrevocable in accordance with the terms of the instrument of appointment; (ii) the Company shall be given notice of the appointment, such notice to include the name, address, telephone number and electronic mail address of the proxy, and the Company shall give to such proxy notice of all meetings of shareholders of the Company; (iii) such proxy shall be the only person entitled to vote the relevant Shares at any meeting at which such proxy is present; and (iv) the Company shall be obliged to recognise the proxy until such time as such proxy shall notify the Company in writing that the appointment of such proxy is no longer in force. |
| | 36. | Representation of Corporate Member |
| | 36.1 | A corporation which is a Member may, by written instrument, authorise such person or persons as it thinks fit to act as its representative at any meeting and any person so authorised shall be entitled to exercise the same powers on behalf of the corporation which such person represents as that corporation could exercise if it were an individual Member, and that Member shall be deemed to be present in person at any such meeting attended by its authorised representative or representatives. |
| | 36.2 | Notwithstanding the foregoing, the chairman of the meeting may accept such assurances as he thinks fit as to the right of any person to attend and vote at general meetings on behalf of a corporation which is a Member. |
| | 37. | Adjournment of General Meeting |
| | 37.1 | The chairman of a general meeting at which quorum is present may, with the consent of the Members holding a majority of the voting rights of those Members present in person or by proxy (and shall if so directed by Members holding a majority of the voting rights of those Members present in person or by proxy) adjourn the meeting. |
| | 37.2 | The chairman of a general meeting may may adjourn a meeting to another time and place without the consent or direction of the Members if it appears to him that: |
| | (a) | it is likely to be impractical to hold or continue that meeting because of the number of Members wishing to attend who are not present; or |
| | (b) | The unruly conduct of persons attending the meeting prevents, or is likely to prevent, the orderly continuation of the business of the meeting; or |
| | (c) | An adjournment is otherwise necessary so that the business of the meeting may be properly conducted. |
| | 37.3 | Unless the meeting is adjourned to a specific date, place and time announced at the meeting being adjourned, fresh notice of the date, place and time for the resumption of the adjourned meeting shall be given to each Member entitled to attend and vote thereat in accordance with these Bye-laws. |
| | 38.1 | Subject to these Bye-laws, anything which may be done by resolution of the Company in general meeting or by resolution of a meeting of any class of the Members may be done without a meeting by written resolution signed by or, in the case of a Member that is a corporation whether or not a company within the meaning of the Act, on behalf of all the Members who at the date of the resolution would be entitled to attend the meeting and vote on the resolution. |
| | 38.2 | Notice of a written resolution shall be given, and a copy of the resolution shall be circulated, to all Members who would be entitled to attend a meeting and vote thereon. The accidental omission to give notice to, or the non-receipt of a notice by, any Member does not invalidate the passing of a resolution. |
| | 38.3 | A written resolution is passed when it is signed by, or in the case of a Member that is a corporation, on behalf of, the Members who at the date that the notice is given represent such majority of votes as would be required if the resolution was voted on at a meeting of Members at which all Members entitled to attend and vote thereat were present and voting. |
| | 38.4 | A resolution in writing may be signed in any number of counterparts. |
| | 38.5 | A resolution in writing made in accordance with this Bye-law is as valid as if it had been passed by the Company in general meeting or by a meeting of the relevant class of Members, as the case may be, and any reference in any Bye-law to a meeting at which a resolution is passed or to Members voting in favour of a resolution shall be construed accordingly. |
| | 38.6 | A resolution in writing made in accordance with this Bye-law shall constitute minutes for the purposes of the Act. |
| | 38.7 | This Bye-law shall not apply to: |
| | (a) | (a) a resolution passed to remove an Auditor from office before the expiration of his term of office; or |
| | (b) | (b) a resolution passed for the purpose of removing a Director before the expiration of his term of office. |
| | 38.8 | For the purposes of this Bye-law, the effective date of the resolution is the date when the resolution is signed by, or in the case of a Member that is a corporation, on behalf of, the last Member whose signature results in the necessary voting majority being achieved and any reference in any Bye-law to the date of passing of a resolution is, in relation to a resolution made in accordance with this Bye-law, a reference to such date. |
| | 38.9 | This Bye-law 38 shall no longer apply or have effect from and after the Effective Date, and, from and after the Effective Date, no resolution of the Company may be adopted by written resolution. |
| | 39. | Directors Attendance at General Meetings |
The Directorsd. Settlement. Subject to Section 13, upon exercise of a Share Appreciation Right, the Participant shall be entitled to receive noticepayment in the form, determined by the Committee and set forth in the Award Agreement, of attendcash or Shares having a Fair Market Value equal to such cash amount, or a combination of Shares and be heard atcash having an aggregate value equal to such amount, determined by multiplying: any general meeting.
DIRECTORS AND OFFICERS
| | 40.1 | Only persons who are proposed or nominated in accordance with Bye-law 27 shall be eligible for election as Directors. |
| | 40.2 | Where persons are validly proposed for re-election or election as a Director, the persons receiving the most votes (up to the number of Directors to be elected) shall be elected as Directors, and an absolute majority of the votes cast shall not be a prerequisite to the election of such Directors. |
| | 40.3 | For so long as a Lead Investor holds Shares representing at least 25% of the total number of Shares held by such Lead Investor on December 22, 2011, such Lead Investor shall have the right to appoint one Class III director to the Board of Directors of the Company at each annual general meeting at which the term of such Lead Investor’s appointee expires. |
| | 40.4 | At any general meeting the Members may authorise the Board to fill any vacancy in their number left unfilled at a general meeting. |
The Board shall consistincrease in the Fair Market Value of not less than seven Directors or such number in excess thereof asone Share on the Board may from time to time determine.The Board shall consistexercise date over the base price fixed by the Committee on the grant date of such Share Appreciation Right, by the number of Directors, not fewer than five Directors, asShares with respect to which the BoardShare Appreciation Right is exercised; provided, however, that on the grant date, the Committee may from time to time determineestablish, in its sole discretion, up to a maximum amount per share which will be payable upon exercise of eleven Directors.
| | 42. | Term of Office of Directors |
| | 42.1 | The Directors shall be classified with respect to the time for which they severally hold office, into three classes, as nearly equal in number as possible, one class (“Class I”) whose initial term expires at the 2014 annual general meeting of the Members will be elected for a three year term, another class (“Class II”) whose initial term expires at the 2015 annual general meeting of the Members will be elected for a three year term, and another class (“Class III”) whose initial term expires at the 2016 annual general meeting of the Members will be elected for a three year term, with each class to hold office until its successors are elected and qualified. |
| | 42.2 | At each succeedingannual general meetingof the Members, the, successors ofto the class of dDirectors whose term expires at suchthat annual general meeting shall be elected to hold office for a term expiring at the annual meeting of Members held in (i) with respect to the Class I directors, the third year following the year of their appointment, (ii) with respect to the Class II directors, the third year following the year of their appointment and (iii) with respect to the Class III directors, the third year following the year of their appointmentfor a three year term. If the number of Directors is changed, any increase or decrease shall be apportioned among the classes so as to maintain the number of Directors in each class as nearly equal as possible, and any Director of any class elected to fill a vacancy shall hold office for a term that shall coincide with the remaining term of the other Directors of that class, but in no case shall a decrease in the number of Directors shorten the term of any Director then in office. A Director shall hold office until the annual general meeting for the year in which his term expires, subject to his office being vacated pursuant to Bye-law 45.1.
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| | 43. | Alternate Directors; Board Observers |
| | 43.1 | At any general meeting, the Members may elect a person or persons to act as a Director in the alternative to any one or more Directors or may authorise the Board to appoint such Alternate Directors. |
| | 43.2 | Unless the Members otherwise resolve, any Director may appoint a person or persons to act as a Director in the alternative to himself by notice deposited with the Secretary. Any person so elected or appointed shall have all the rights and powers of the Director or Directors for whom such person is elected or appointed in the alternative provided that such person shall not be counted more than once in determining whether or not a quorum is present. |
| | 43.3 | An Alternate Director shall be entitled to receive notice of all Board meetings and to attend and vote at any such meeting at which a Director for whom such Alternate Director was appointed in the alternative is not personally present and generally to perform at such meeting all the functions of such Director for whom such Alternate Director was appointed. |
| | 43.4 | An Alternate Director shall cease to be such if the Director for whom he was appointed to act as a Director in the alternative ceases for any reason to be a Director, but he may be re-appointed by the Board as an alternate to the person appointed to fill the vacancy in accordance with these Bye-laws. |
| | 43.5 | The Company shall permit one representative of each of Daniel S. Loeb, Kelso, Pine Brook and P RE Opportunities Ltd. (“PROL”) (but only for so long as Daniel S. Loeb, Kelso, Pine Brook or PROL, as applicable, hold Shares) to attend all meetings of the Board of Directors as observers, and shall provide such person with such notice and other information with respect to such meetings as are delivered to the directors of the Company. Notwithstanding the foregoing, the Company (i) may condition the right of any such person to attend meetings of the Board of Directors and receive notice and other information with respect to such meetings on the execution of a confidentiality agreement reasonably satisfactory to the Company, and (ii) may prevent such person from attending a meeting of the Board of Directors (or portion thereof) or receiving certain information with respect thereto if the Company believes, after consultation with counsel, that it is necessary to do so to ensure preservation of the attorney-client privilege. |
| | 44.1 | From the date of the adoption of these Bye-laws until the Effective Date, subject to any provision to the contrary in these Bye-laws, the Members holding a majority of the voting shares of the Company may, at any special general meeting convened and held in accordance with these Bye-laws, by the affirmative vote of all such Members, remove a Director, provided that the notice of any such meeting convened for the purpose of removing a Director shall contain a statement of the intention so to do and be served on such Director not less than 14 days before the meeting and at such meeting the Director shall be entitled to be heard on the motion for such Director's removal. |
| | 44.2 | From the Effective Date, subject to any provision to the contrary in these Bye-laws, the Members holding a majority of the voting shares of the Company may, at any special general meeting convened and held in accordance with these Bye-laws, by the affirmative vote of all such Members, remove a Director only with cause, provided that the notice of any such meeting convened for the purpose of removing a Director shall contain a statement of the intention so to do and be served on such Director not less than 14 days before the meeting and at such meeting the Director shall be entitled to be heard on the motion for such Director's removal. |
| | 44.3 | If a Director is removed from the Board under this Bye-law the Members may fill the vacancy at the meeting at which such Director is removed. In the absence of such election or appointment, the Board may fill the vacancy. |
| | 44.4 | For the purposes of this Bye-law, “cause” shall mean a conviction for a criminal offence involving dishonesty or engaging in conduct which brings the Director or the Company into disrepute and which results in material financial detriment to the Company. |
| | 45. | Vacancy in the Office of Director |
| | 45.1 | The office of Director shall be vacated if the Director: |
| | (a) | is removed from office pursuant to these Bye-laws or is prohibited from being a Director by law; |
| | (b) | is or becomes bankrupt, or makes any arrangement or composition with his creditors generally; |
| | (c) | is or becomes of unsound mind or dies; or |
| | (d) | resigns his office by notice to the Company. |
| | 45.2 | The Members in general meeting or the Board shall have the power to appoint any person as a Director to fill a vacancy on the Board occurring as a result of the death, disability, disqualification or resignation of any Directoror as a result of an increase in the size of the Board and to appoint an Alternate Director to any Director so appointed, provided that in the event the vacancy to be filled is for a Lead Investor’s appointee and such Lead Investor meets the qualifications set forth in Bye-Law 40.3 for its entitlement to appoint a Director, then such Lead Investor shall appoint the Director to fill such vacancy.
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| | 46. | Remuneration of Directors |
The remuneration (if any)a Share Appreciation Right. Prior to the exercise of a Share-settled Share Appreciation Right and the issuance of Shares to the holder thereunder, the holder of such Share Appreciation Right shall have no rights as a shareholder of the DirectorsCompany with respect to the Shares subject to such Share Appreciation Right.
SECTION 9. DEFERRED SHARE UNITS
a. Grant. Freestanding Deferred Share Units may be granted to Participants at suchtime or times as shall be determined by the BoardCommittee without regard to any election by theParticipant to defer receipt of Directorsany compensation or bonus amount payable to him. The grant dateof any freestanding Deferred Share Unit under the Plan will be the date on which suchfreestandingDeferredShareUnitisawardedby theCommitteeoronsuchotherfuturedateasthe Committee shall determine in its sole discretion. In addition, on fixed dates established by theCommittee and subject to such terms and conditions as the Committee shall determine, theCommittee may permit a Participant to elect to defer receipt of all or a committee portion of his or herannual compensation and/or annual incentive bonus (“Deferred Annual Amount”) payable by the Company,aSubsidiary or any other Employer andanyotherAward(“Deferred Award”)andreceiveinlieuthereofanAwardofelectiveDeferredShareUnits (“Elective Deferred Share Units”)equalto,in thecase of a Deferred Annual Amount, the greatest whole number which may be obtained bydividing (i) the amount of the Deferred Annual Amount, by (ii) the Fair Market Value of oneShare on the date of payment of such compensation and/or annual bonus or, in the case of aDeferred Award under the Plan, the number of Shares subject to the Deferred Award. EachAwardofDeferredShare UnitsshallbeevidencedbyanAwardAgreementthatshallspecify (x) the number of Shares to which the Deferred Share Units pertain, (y) the time and form ofpayment of the Deferred Share Units and (z) such terms and conditions not inconsistent with thePlan as the Committee shall determine, including customary representations, warranties andcovenants with respect to securities law matters and such provisions as may be required pursuantto Section 409A of the Code. Upon the grant of Deferred Share Units pursuant to the Plan, theCompany shall establish a notional account for the Participant and will record in such accountthe number of Deferred Share Units awarded to the Participant. No Shares will be issued to theParticipant at the time an award of Deferred Share Units is granted. Deferred Share Units maybecome payable on a Change in Control,
Termination of Service or on a specified date or dates, in each case,setforth in theAwardAgreement evidencingsuch DeferredShareUnits.
b. Rights as a Shareholder. The Committee shall determine whether and to what extent Dividend Equivalents will be credited to the account of, or paid currently to, a Participant receiving an Award of Deferred Share Units. Unless otherwise provided by the Committee at or after the grant date, (i) any cash dividends or distributions credited to the Participant’s account shall be deemed to accrue from dayhave been invested in additional Deferred Share Units on the record date established for the related dividend or distribution. Any dividends, distributions or additional Deferred Share Units credited due to day.a dividend shall be subject to the same vesting, performance and other restrictions as apply to the Deferred Share Unit with respect to which they were paid. A Participant shall not have any rights as a shareholder in respect of Deferred Share Units awarded pursuant to the Plan (including, without limitation, the right to vote on any matter submitted to the Company’s shareholders) until such time as the Shares attributable to such Deferred Share Units have been issued to such Participant or his beneficiary.
c. Vesting. Unless the Committee provides otherwise at or after the grant date, the portion of each Award of Deferred Share Units that consists of freestanding Deferred Share Units, together with any Dividend Equivalents credited with respect thereto, will be subject to a Restriction Period. Except as otherwise determined by the Committee at the time of grant, and subject to the Participant’s continued Service with his or her Employer and the Participant not being under notice of termination (for any reason) on such date, the Restriction Period with respect to Deferred Share Units shall lapse as provided in the Participant’s Award Agreement. In its discretion, the Committee may establish performance- based vesting conditions with respect to Awards of Deferred Share Units (in lieu of, or in addition to, time-based vesting) based on one more of the Performance Goals listed in Section 5(c) or other performance goals. The Directorsportion of each Award of Deferred Share Units that consists of Elective Deferred Share Units, together with any Dividend Equivalents credited with respect thereto, need not be subject to any Restriction Period and may be non-forfeitable.
d. Further Deferral Elections. A Participant may elect to further defer receipt of Shares issuable in respect of Deferred Share Units or other Award (or an installment of an Award) for a specified period or until a specified event, subject in each case to the Committee’s approval and to such terms as are determined by the Committee, all in its sole discretion. Subject to any exceptions adopted by the Committee, such election must generally be made at least 12 months before the prior settlement date of such Deferred Share Units (or any such installment thereof) whether pursuant to this Section 9 or Section 13 and must defer settlement for at least five years. A further deferral opportunity is not required to be made available to all Participants, and different terms and conditions may apply with respect to the further deferral opportunities made available to different Participants
e. Settlement. Subject to this Section 9 and Section 13, upon the dates or events specified in the Award Agreement evidencing the Deferred Share Units for each such Deferred Share Unit the Participant shall receive, as specified in the Award Agreement, (i) a cash payment equal to the Fair Market Value of one Share as of such payment date, (ii) one Share or (iii) any combination of cash and Shares.
SECTION 10. OTHER SHARE-BASED AWARDS
The Committee is authorized to make Awards of other types of equity-based or equity-related awards (“Share-Based Awards”) not otherwise described by the terms ofthe Plan in such amounts and subject to such terms and conditions as the Committee shalldetermine. All Share -Based Awards shall be evidenced by an Award Agreement. Such Share -Based Awards may be granted as an inducement to enter the employ of the Company, anySubsidiary or any other Employer or in satisfaction of any obligation of the Company, any Subsidiary or any other Employer to an officer orother key employee, whether pursuant to this Plan or otherwise, that would otherwise have beenpayable in cash or in respect of any other obligation of the Company. Such Share-Based Awardsmay entail the transfer of actual Shares, or payment in cash or otherwise of amounts based on thevalue of Shares and may include, without limitation, Awards designed to comply with or takeadvantage of the applicable local laws of jurisdictions other than the United States. The terms ofany other Share-Based Award need not be uniform in application to all (or any class of)Participants, and each other Share -Based award granted to any Participant (whether or not at thesame time)mayhavedifferent terms. Any distribution, dividend or Dividend Equivalents with respect to Share-Based Awards that are subject to vesting conditions shall be subject to the same vesting conditions as the underlying awards.
SECTION 11. DIVIDEND EQUIVALENTS
Dividend Equivalents may be granted to Participants at such time or times as shall be determined by the Committee. Dividend Equivalents may be granted in tandem with other Awards (other than any Options or SARs), in addition to other Awards, or freestanding and unrelated to other Awards. The grant date of any Dividend Equivalents under the Plan will be the date on which the Dividend Equivalent is awarded by the Committee, or such other date as the Committee shall determine in its sole discretion. Dividend Equivalents may be paid in cash or in Shares or any compensation thereof as specified in the Award Agreement. Dividend Equivalents shall be evidenced in writing, whether as part of the Award Agreement governing the terms of the Award, if any, to which such Dividend Equivalent relates, or pursuant to a separate Award Agreement with respect to freestanding Dividend Equivalents, in each case, containing such provisions not inconsistent with the Plan as the Committee shall determine, including customary representations, warranties and covenants with respect to securities law matters.
SECTION 12. TERMINATION OF SERVICE AND FORFEITURE
a. Termination of Service. All of the terms relating to the exercise, vesting, cancellation or other disposition of an Award (i) upon a Termination of Service of the holder of such Award, as the case may be, whether by reason of disability, retirement, death or any other reason, or (ii) during a paid or unpaid leave of absence, shall be determined by the Committee and set forth in the applicable Award Agreement.
b. Forfeiture, Cancellation and “Clawback” of Awards. The Participant shall forfeit and disgorge to the Company any Awards granted or vested and any board observers appointedgains earned or accrued due to the exercise of Options or SARs or the sale of any Shares or the settlement of any Award to the extent required by Applicable Law or regulations in effect on or after the Effective Date, including Section 304
of the U.S. Sarbanes-Oxley Act of 2002 and Section 10D-1 of the Exchange Act. For the avoidance of doubt, the Committee shall have full authority to implement any policies and procedures necessary to comply with Section 10D-1 of the Exchange Act and any rules promulgated thereunder. The implementation of policies and procedures pursuant to Bye-law 43.5 will alsothis Section 12(b) and any modification of the same shall not be paid all travel, hotel and other expenses properly incurred by them in attending and returning from the Board meetings,subject to any committee appointed by the Board, general meetings,restrictions on amendment or modification of Awards. Awards granted under this Plan (and gains earned or accrued in connection with Awards) shall also be subject to such generally applicable policies as to forfeiture and recoupment (including, without limitation, upon the businessoccurrence of the Companymaterial financial or their dutiesaccounting errors, financial or other misconduct or competitive activity) as Directors generally. All acts done in good faithmay be adopted by the Board, any Director, a member of a committee appointed by the Board, any person to whom the Board may have delegated any of its powers,Administrator or any person acting as a Director shall, notwithstanding that it be afterwards discovered that there was some defect in the appointment of any Director or person acting as aforesaid, or that he was, or any of them were, disqualified, be as valid as if every such person had been duly appointed and was qualified to be a Director or act in the relevant capacity.
| | 48. | Directors to Manage Business |
The business of the Company shall be managed and conducted by the Board. In managing the business of the Company, the Board may exercise all such powers of the Company as are not, by the Act or by these Bye-laws, required to be exercised by the Company in general meeting.
| | 49. | Powers of the Board of Directors |
The Board may:
| | (a) | appoint, suspend, or remove any manager, secretary, clerk, agent or employee of the Company and may fix their remuneration and determine their duties; |
| | (b) | exercise all the powers of the Company to borrow money and to mortgage or charge or otherwise grant a security interest in its undertaking, property and uncalled capital, or any part thereof, and may issue debentures, debenture stock and other securities whether outright or as security for any debt, liability or obligation of the Company or any third party; |
| | (c) | appoint one or more Directors to the office of managing director or chief executive office of the Company, who shall, subject to the control of the Board, supervise and administer all of the general business and affairs of the Company; |
| | (d) | appoint a person to act as manager of the Company's day-to-day business and may entrust to and confer upon such manager such powers and duties as it deems appropriate for the transaction or conduct of such business; |
| | (e) | by power of attorney, appoint any company, firm, person or body of persons, whether nominated directly or indirectly by the Board, to be an attorney of the Company for such purposes and with such powers, authorities and discretions (not exceeding those vested in or exercisable by the Board) and for such period and subject to such conditions as it may think fit and any such power of attorney may contain such provisions for the protection and convenience of persons dealing with any such attorney as the Board may think fit and may also authorise any such attorney to sub-delegate all or any of the powers, authorities and discretions so vested in the attorney; |
| | (f) | procure that the Company pays all expenses incurred in promoting and incorporating the Company; |
| | (g) | delegate any of its powers (including the power to sub-delegate) to a committee of one or more persons appointed by the Board which may consist partly or entirely of non-Directors, provided that every such committee shall conform to such directions as the Board shall impose on them and provided further that the meetings and proceedings of any such committee shall be governed by the provisions of these Bye-laws regulating the meetings and proceedings of the Board, so far as the same are applicable and are not superseded by directions imposed by the Board; |
| | (h) | delegate any of its powers (including the power to sub-delegate) to any person on such terms and in such manner as the Board may see fit; |
| | (i) | present any petition and make any application in connection with the liquidation or reorganisation of the Company; |
| | (j) | in connection with the issue of any share, pay such commission and brokerage as may be permitted by law; and |
| | (k) | authorise any company, firm, person or body of persons to act on behalf of the Company for any specific purpose and in connection therewith to execute any deed, agreement, document or instrument on behalf of the Company. |
| | 50. | [Intentionally Omitted]
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| | 51. | Register of Directors and Officers |
The Board shall cause to be kept in one or more books at the registered office of the Company a Register of Directors and Officers and shall enter therein the particulars required by the Act.
| | 52. | Appointment of Officers |
The Board may appoint such Officers (who may or may not be Directors) as the Board may determine for such terms as the Board deems fit.
| | 53. | Appointment of Secretary |
The Secretary shall be appointed by the Board from time to time forand communicated to Participants. Any such term aspolicies may (in the Board deems fit.
| | 54. | Dutiesdiscretion of the Administrator or the Board) be applied to outstanding Awards at the time of adoption of Officers |
The Officers shall have such powers and perform such dutiespolicies, or on a prospective basis only.
SECTION 13. CHANGE IN CONTROL
a. Assumption or Substitution of Certain Awards. Unless otherwise provided in an Award Agreement or a Participant's effective employment, change in control, severance or other similar agreement in effect on the date of grant of the appliable award, in the management, business and affairsevent of a Change in Control of the Company in which the successor company assumes or substitutes for the applicable award, if a Participant's employment with such successor company (or the Company) or a subsidiary thereof terminates within 24 months following such Change in Control (or such other period set forth in the Award Agreement, including prior thereto if applicable) without Cause or under the circumstances specified in the Award Agreement: (i) Options and Share Appreciation Rights outstanding as of the date of such termination of employment will immediately vest, become fully exercisable, and may thereafter be exercised for 36 months (or the period of time set forth in the Award Agreement, but in no event beyond the end of the regularly scheduled term of such Options or Stock Appreciation Rights) and (ii) the restrictions, limitations and other conditions applicable to Performance Awards, Restricted Shares, Restricted Share Units, Deferred Share Units, Dividend Equivalents or other Share- Based Awards outstanding as of the date of such termination of employment shall lapse and such Awards shall become free of all restrictions, limitations and conditions and become fully vested (with the attainment of the performance goals determined as set forth in the Award Agreement or as otherwise determined by the Committee). For the purposes of this Section, an Award shall be considered assumed or substituted for, if following the Change in Control the Award confers the right to purchase or receive, for each Share subject to the Award immediately prior to the Change in Control, the consideration (whether stock, cash or other securities or property) received in the transaction constituting a Change in Control by holders of Shares for each Share held on the effective date of such transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares); provided, however, that if such consideration received in the transaction constituting a Change in Control is not solely common stock of the successor company, the Committee may, with the consent of the successor company, provide that the consideration to be received upon the exercise or vesting of an Award, for each Share subject thereto, will be solely common stock of the successor company substantially equal in fair market value to the per Share consideration received by holders of Shares in the transaction constituting a Change in Control. The determination of such substantial equality of value of consideration shall be made by the Committee in its sole discretion and its determination shall be conclusive and binding.
b. Awards Not Assumed or Substituted. Subject to the terms of the applicable Award Agreements, in the event of a “Change in Control” in which the Awards are not effectively assumed or substituted in accordance with Section 13(a), the Board, as constituted prior to the Change in Control, may, in its discretion:
i. require that (i) some or all outstanding Options and SARs shall become exercisable in full or in part, (ii) the Restriction Period applicable to some or all outstanding Awards shall lapse, (iii) the Performance Cycle applicable to some or all outstanding Awards shall lapse in full or in part, and (iv) the Performance Goals applicable to some or all outstanding Awards shall be deemed to be satisfied at the target, maximum or any other level; and/or
ii. require outstanding Awards, in whole or in part, to be surrendered to the Company by the holder, and to be immediately cancelled by the Company, and to provide for the holder to receive (i) a cash payment or other property in an amount equal to (A) in the case of an Option or an SAR, the aggregate number of Shares then subject to the portion of such Option or SAR surrendered, whether or not vested or exercisable, multiplied by the excess, if any, of the Fair Market Value of a Share as of the date of the Change in Control, over the purchase price or base price per Share subject to such Option or SAR, (B) in the case of other Awards denominated in Shares, the number of Shares then subject to the portion of such Award surrendered to the extent the Performance Goals applicable to such award have been satisfied or are deemed satisfied pursuant to Section 13(a)(i), whether or not vested, multiplied by the Fair Market Value of a Share as of the date of the Change in Control, and (C) in the case of an Award denominated in cash, the value of the Award then subject to the portion of such award surrendered to the extent the Performance Goals applicable to such Award have been satisfied or are deemed satisfied pursuant to Section 13(a)(i); (ii) shares of capital stock of the corporation resulting from or succeeding to the business of the Company pursuant to such Change in Control, or a parent corporation thereof, having a fair market value not less than the amount determined under clause (i) above; or (iii) a combination of the payment of cash or other property pursuant to clause (i) above and the issuance of shares pursuant to clause (ii) above.
c. Waiver of Benefits. Notwithstanding anything contained in this Plan or any Award Agreement to the contrary, to the extent that any of the payments and benefits provided for under this Plan, any Award Agreement, or any other agreement or arrangement between the Company, any Subsidiary or any Affiliate and a Participant (collectively, the “Payments”) would constitute an “excess parachute payment” within the meaning of Section 280G of the Code, such Participant shall be entitled to waive any or all of such Payments to the extent necessary to avoid the application of the excise tax under Section 4999 of the Code.
SECTION 14. EFFECTIVE DATE, AMENDMENT, MODIFICATION, AND TERMINATION OF THE PLAN
This Plan shall be submitted to the shareholders of the Company for approval at the Company’s 2023 annual meeting of shareholders and, if approved, shall become effective as of the date on which the Plan was approved by shareholders. No awards shall be granted under the Prior Plans after this Plan becomes effective. This Plan shall terminate as of the first annual meeting of the Company’s shareholders to occur on or after the tenth anniversary of the Effective Date, unless terminated earlier by the Board or the Committee. The Board or the Committee may at any time in its sole discretion, for any reason whatsoever,terminate or suspend the Plan, and from time to time, subject to obtaining any regulatoryapproval, including that of a stock exchange on which
the Shares are then listed, if applicable,may amend or modify the Plan; provided that no amendment to the Plan shall be effective without the approval of the Company’s shareholders if (i) shareholder approval is required by Applicable Law, including any rule of the New York Stock Exchange or any other stock exchange on which the Shares are then traded, or (ii) such amendment seeks to modify the Eligible Director compensation limit set forth in Section 3(a) or the prohibition on repricing set forth in Section 4(d) hereof. Notwithstanding any provisions of the Plan to the contrary, neither theBoard nor the Committee may, without the consent of the affected Participant, amend, modify or terminate the Plan in any manner that would materially adversely affect any Award theretofore grantedunder the Plan.
SECTION 15. GENERAL PROVISIONS
a. Withholding. The Employer shall have the right to deduct from all amounts paid to a Participant in cash (whether under this Plan or otherwise) any amount of taxes required by law to be withheld in respect of Awards under this Plan as may be delegatednecessary in the opinion of the Employer to themsatisfy tax withholding required or which the Employer is permitted to deduct under the laws of any country, state, province, city or other jurisdiction, including but not limited to payroll taxes, income taxes, capital gains taxes, transfer taxes, and social security contributions that are required by law to be withheld or for which the Employer would be required to account for to any relevant authority and is permitted to deduct from remuneration payable to the Employee under the applicable law. In the case of payments of Awards in the form of Shares, at the Committee’s discretion, the Participant shall be required to either pay to the Employer the amount of any taxes required to be withheld (or otherwise permitted to be deducted by the BoardEmployer) with respect to such Shares or, in lieu thereof, the Employer shall have the right to withhold or retain and repurchase from timethe Participant (or the Participant may be offered the opportunity to time. | | 55. | Remuneration of Officers |
elect to tender for repurchase by the Company) the number of Shares whose Fair Market Value equals such amount required to be withheld (or otherwise permitted to be deducted by the Employer) and withhold the proceeds of such sale; and provided, further, that with respect to any Specified Award, in no event shall Shares or other amounts receivable under a Specified Award be withheld or repurchased pursuant to this Section 15(a) (other than upon or immediately prior to settlement in accordance with the Plan and the applicable Award Agreement) other than to pay taxes imposed under the U.S. Federal Insurance Contributions Act (FICA) and any associated U.S. federal withholding tax imposed under Section 3401 of the Code and in no event shall the value of such Shares or other amounts receivable under a Specified Award (other than upon or immediately prior to settlement) exceed the amount of the tax imposed under FICA and an associated U.S. federal withholding tax imposed under Section 3401 of the Code. The OfficersParticipant shall receivebe responsible for all withholding taxes and other tax consequences of any Award granted under this Plan save with respect to the employee portion of any Bermuda payroll taxes due on any Award which the Employer shall be accountable for but shall be permitted to deduct from any remuneration due to the Participant. Shares to be delivered, withheld or repurchased may not have an aggregate Fair Market Value in excess of the amount determined by applying the minimum statutory withholding rate (or, if permitted by the Company, such remunerationother rate as will not cause adverse accounting consequences under the Boardaccounting rules then in effect). Any fraction of a Share which would be required to satisfy such an obligation shall be disregarded and the remaining amount due shall be paid in cash by the holder.
b. Nontransferability of Awards. Except as provided herein or in an Award Agreement, no Award may be sold, assigned, transferred, pledged, charged or otherwise encumbered except by will or the laws of descent and distribution; provided that the Committee may permit (on such terms and
conditions as it shall establish) a committee thereof may determine. | | 56.1 | Any Director, or any Director's firm, partner or any company with whom any Director is associated, may act in any capacity for, be employed by or render services to the Company on such terms, including with respect to remuneration, as may be agreed between the parties. Nothing herein contained shall authorise a Director or Director's firm, partner or company to act as Auditor to the Company. |
| | 56.2 | A Director who is directly or indirectly interested in a contract or proposed contract or arrangement with the Company shall declare the nature of suchParticipant to transfer an Award for no consideration to the Participant’s child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in- law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships, any person sharing the Participant’s household (other than a tenant or employee), a trust in which these persons have more than fifty percent of the beneficial interest as required by the Act and such Director shall be required to recuse himself from any board meeting at which such contract or arrangement is to be considered. |
| | 56.3 | Following a declaration being made pursuant to this Bye-law, a Director shall not vote in respect of any contract or proposed contract or arrangement in which such Director is interested, shall not be counted in the quorum for such meeting and shall be required to recuse himself from any discussion, provided that such restrictions shall not apply to the investment management agreement, dated December 22, 2011, by and between the Company, TP Re or any of their respective affiliates (including, without limitation, the Joint Venture and Investment Management Agreement but except as expressly set forth in such Joint Venture and Investment Management Agreement), and the Sponsor, or any of its affiliates, or any amendment, modifications or waivers thereof or any successor agreement thereto. For the avoidance of doubt, no Director shall be considered "interested" with respect to any transactions in which all the Members participate or are offered to participate. |
| | 57. | Indemnification and Exculpation of Directors and Officers |
| | 57.1 | The Directors, Resident Representative, Secretary and other Officers (such term to include any person appointed to any committee by the Board) for the time being acting in relation to any of the affairs of the Company or any Subsidiary thereof and the liquidator or trustees (if any) for the time being acting in relation to any of the affairs of the Company or any Subsidiary thereof and every one of them, and their heirs, executors and administrators, shall be indemnified and secured harmless out of the assets of the Company from and against all actions, costs, charges, losses, damages and expenses which they or any of them, their heirs, executors or administrators, shall or may incur or sustain by or by reason of any act done, concurred in or omitted in or about the execution of their duty, or supposed duty, or in their respective offices or trusts, and none of them shall be answerable for the acts, receipts, neglects or defaults of the others of them or for joining in any receipts for the sake of conformity, or for any bankers or other persons with whom any moneys or effects belonging to the Company shall or may be lodged or deposited for safe custody, or for insufficiency or deficiency of any security upon which any moneys of or belonging to the Company shall be placed out on or invested, or for |
any other loss, misfortuneentity in which these persons (or the Participant) own more than fifty percent of the voting interests (“PermittedTransferees”). Any attempt by the Participant to sell, assign, transfer, pledge, charge, hedge or damageencumber an Award without complying with the provisions of the Plan shall be void and of no effect. A Participant may not enter into any transaction which may happenhedges or otherwise transfers the risk of price movements with regard to the Shares subject to any unvested or unearned Award. No amendment to the Plan or to any Award shall permit transfers other than in accordance with the preceding sentence. Any attempt by a Participant to sell, assign, transfer, pledge, charge, hedge or encumber an Award without complying with the provisions of the Plan shall be void and of no effect. Except to the extent required by law, no right or interest of any Participant shall be subject to any lien, obligation or liability of the Participant. All rights with respect to Awards granted to a Participant under the Plan shall be exercisable during the Participant’s lifetime only by such Participant or, if applicable, his or her Permitted Transferee(s). The rights of a Permitted Transferee shall be limited to the rights conveyed to such Permitted Transferee, who shall be subject to and bound by the terms of the agreement or agreements between the Participant and the Company.
c. No Limitation on Compensation. Nothing in the execution of their respective offices or trusts, or in relation thereto, PROVIDED THAT this indemnityPlan shall not extendbe construed to any matter in respect of any fraud, gross negligence or wilful misconduct which may attach to any of the said persons. Each Member agrees to waive any claim or right of action such Member might have, whether individually or by or inlimit the right of the Company to establish other plans or to pay compensation to its Employees, in cash or property, in a manner which is not expressly authorized under the Plan.
d. No Right to Employment. No person shall have any claim or right to be granted an Award, and the grant of an Award shall not be construed as giving a Participant the right to be retained in the employ of the Employer. The grant of an Award hereunder, and any future grant of Awards under the Plan is entirely voluntary, and at the complete discretion of the Company. Neither the grant of an Award nor any future grant of Awards by the Company shall be deemed to create any obligation to grant any further Awards, whether or not such a reservation is explicitly stated at the time of such a grant. The Plan shall not be deemed to constitute, and shall not be construed by the Participant to constitute, part of the terms and conditions of Service and participation in the Plan shall not be deemed to constitute, and shall not be deemed by the Participant to constitute, an employment, service or labor relationship of any kind with the Company. The Employer expressly reserves the right at any time to dismiss a Participant free from any liability, or any claim under the Plan, except as provided herein and in any agreement entered into with respect to an Award. The Company expressly reserves the right to require, as a condition of participation in the Plan, that Award recipients agree and acknowledge the above in writing. Further, the Company expressly reserves the right to require Award recipients, as a condition of participation, to consent in writing to the collection, transfer from the Employer to the Company and third parties, storage and use of personal data for purposes of administering the Plan.
e. No Rights as Shareholder. Subject to the provisions of the applicable Award contained in the Plan and in the Award Agreement, no Participant, Permitted Transferee or Designated Beneficiary shall have any rights as a shareholder with respect to any Shares to be distributed under the Plan until he or she has become the holder thereof.
f. Construction of the Plan. The validity, construction, interpretation, administration and effect of the Plan and of its rules and regulations, and rights relating to the Plan, shall be determined solely in accordance with the laws of Bermuda (without reference to the principles of conflicts of law or choice of law that might otherwise refer the construction or interpretation of this Plan to the substantive laws of another jurisdiction).
g. Rules of Construction. Whenever the context so requires, the use of the masculine gender shall be deemed to include the feminine and vice versa, and the use of the singular shall be deemed to include the plural and vice versa. That this plan was drafted by the Company shall not be taken into account in interpreting or construing any provision of this Plan.
h. Compliance with Legal and Exchange Requirements. The Plan, the granting and exercising of Awards thereunder, and any obligations of the Company under the Plan, shall be subject to all applicable federal, state, and foreign country laws, rules, and regulations, and to such approvals by any regulatory or governmental agency as may be required, and to any rules or regulations of any exchange on which the Shares are listed. The Company, in its discretion, may postpone the granting and exercising of Awards, the issuance or delivery of Shares under any Award or any other action permitted under the Plan to permit the Company, with reasonable diligence, to complete such stock exchange listing or registration or qualification of such Shares or other required action under any federal, state or foreign country law, rule, or regulation and may require any Participant to make such representations and furnish such information as it may consider appropriate in connection with the issuance or delivery of Shares in compliance with Applicable Laws. The Company shall not be obligated by virtue of any provision of the Plan to recognize the exercise of any Award or to otherwise sell or issue Shares in violation of any such laws, rules, or regulations, and any postponement of the exercise or settlement of any Award under this provision shall not extend the term of such Awards. Neither the Company nor its directors or officers shall have any obligation or liability to a Participant with respect to any Award (or Shares issuable thereunder) that shall lapse because of such postponement.
i. Deferrals. Subject to the requirements of Section 409A of the Code, the Committee may postpone the exercising of Awards, the issuance or delivery of Shares under, or the payment of cash in respect of, any Award or any action permitted under the Plan, upon such terms and conditions as the Committee may establish from time to time. Subject to the requirements of Section 409A of the Code, a Participant may electively defer receipt of the Shares or cash otherwise payable in respect of any Award (including, without limitation, any Shares issuable upon the exercise of an Option other than an Incentive Share Option) upon such terms and conditions as the Committee may establish from time to time.
j. Limitation on Liability; Indemnification. No member of the Board or Committee, and none of the chief executive officer or any other delegate or agent of the Committee shall be liable for any act, omission, interpretation, construction or determination made in connection with the Plan in good faith, and each person who is or shall have been a member of the Board or Committee, the chief executive officer and each delegate or agent of the Committee shall be indemnified and held harmless by the Company against and from any Directorloss, cost, liability, or Officer on accountexpense (including attorneys’ fees) that may be imposed upon or reasonably incurred by him or her in connection with or resulting from any claim, action, suit, or proceeding to which he or she may be made a party or in which he or she may be involved in by reason of any action taken or failure to act under the Plan to the full extent permitted by such Director or Officer, or the failure of such Director or Officer to take any actionlaw, except as otherwise provided in the performanceCompany’s Memorandum of his duties withAssociation and Bye-laws, and
under any directors’ and officers’ liability insurance that may be in effect from time to time. The foregoing right of indemnification shall not be exclusive and shall be independent of any other rights of indemnification to which such persons may be entitled under the Company’s Memorandum of Association or forBye-laws, by contract, as a matter of law, or otherwise.
k. Amendment of Award. In the event that the Committee shall determine that such action would, taking into account such factors as it deems relevant, be beneficial to the Company, the Committee may affirmatively act to amend, modify or terminate any outstanding Award at any time prior to payment or exercise in any manner not inconsistent with the terms of the Plan, including without limitation, change the date or dates as of which (A) an Option or Share Appreciation Right becomes exercisable, (B) a Performance Share or Performance Unit is deemed earned, or (C) Restricted Share, Restricted Share Units, Deferred Share Units and other Share -Based Awards becomes nonforfeitable, except that no outstanding Option may be amended or otherwise modified or exchanged (other than in connection with a transaction described in Section 4(c)) in a manner that would have the effect of reducing its original exercise price or otherwise constitute repricing. Any such action by the Committee shall be subject to the Participant’s consent if the Committee determines that such action would adversely affect the Participant’s rights under such Award in a material manner, whether in whole or in part. The Committee may, in its sole discretion, accelerate the exercisability or vesting or lapse of any Restriction Period with respect to all or any Subsidiary thereof, PROVIDED THAT such waiver shall not extend to any matter in respectportion of any fraud, gross negligence or wilful misconduct which may attachoutstanding Award at any time.
l. 409A Compliance. The Plan is intended to such Director or Officer. | | 57.2 | The Company may purchase and maintain insurance for the benefit of any Director or Officer against any liability incurred by him under the Act in his capacity as a Director or Officer or indemnifying such Director or Officer in respect of any loss arising or liability attaching to him by virtue of any rule of law in respect of any negligence, default, breach of duty or breach of trust of which the Director or Officer may be guilty in relation to the Company or any Subsidiary thereof. |
| | 57.3 | The Company may advance moneys to a Director or Officer for the costs, charges and expenses incurred by the Director or Officer in defending any civil or criminal proceedings against him, on condition that the Director or Officer shall repay the advance if any allegation of fraud or dishonesty is proved against him. |
MEETINGS OF THE BOARD OF DIRECTORS
The Board may meet forbe administered in a manner consistent with the transactionrequirements, where applicable, of business, adjourn and otherwise regulate its meetings as it sees fit provided, however, that no Director may participate in any meetingSection 409A of the Board or committee thereof while physically present inCode. Where reasonably possible and practicable, the United States. A resolution put to the vote at a Board meetingPlan shall be carried byadministered in a manner to avoid the affirmative votesimposition on Participants of a majorityimmediate tax recognition and additional taxes pursuant to Section 409A of the votes cast and inCode. In the case of an equalityany Specified Award that may be treated as payable in the form of votes“a series of installment payments,” as defined in U.S. Treasury Regulation Section 1.409A-2(b)(2)(iii), a Participant’s or Designated Beneficiary’s right to receive such payments shall be treated as a right to receive a series of separate payments for purposes of such Treasury Regulation. Notwithstanding the resolution shall fail.
| | 59. | Notice of Board Meetings |
A Director may, andforegoing, neither the Secretary onCompany nor the requisition of a Director shall, atCommittee, nor any time summon a Board meeting or a meeting of a committee of the Board. NoticeCompany’s directors, officers or employees shall have any liability to any person in the event Section 409A of a Board meeting shall be deemedthe Code applies to be duly given to a Director if it is given toany such Director verbally (including in person or by telephone) or otherwise communicated or sent to such Director by post, electronic means or other mode of representing wordsAward in a visible form at such Director's last known addressmanner that results in adverse tax consequences for the Participant or in accordance with any other instructions given by such Directorof his beneficiaries or transferees. Notwithstanding any provision of this Plan or any Award Agreement to the Company for this purpose at least 48 hours prior to such Board meeting, unless each Director attends or gives his prior written consent to the meeting being held on such shorter notice.
| | 60. | Electronic Participation in Meetings |
Directors may participate in any meeting by such telephonic, electronic or other communication facilities or means as permit all persons participating in the meeting to communicate with each other simultaneously and instantaneously, and participation in such a meeting shall constitute presence in person at such meeting provided, however, that no Director may participate in any meeting of the Board or a committee thereof while physically present in the United States.
| | 61. | Quorum at Board Meetings |
The quorum necessary for the transaction of business at a Board meeting shall be a majority of the Directors then in office.
| | 62. | Board to Continue in the Event of Vacancy |
The Board may act notwithstanding any vacancy in its number but, if and so long as its number is reduced below the number fixed by these Bye-laws as the quorum necessary for the transaction of business at Board meetings, the continuing Directors or Director may act for the purpose of (i) summoning a general meeting; or (ii) preserving the assets of the Company.
Unless otherwise agreed by a majority of the Directors attending, the Chairman, if there be one, shall act as chairman at all Board meetings at which such person is present. In his absence a chairman shall be appointed or elected by the Directors present at the meeting.
A resolution signed by all the Directors, which may be in counterparts, shall be as valid as if it had been passed at a Board meeting or the applicable committee thereof, duly called and constituted, such resolution to be effective on the date on which the last Director signs the resolution, provided that no such resolution shall be valid unless the last signature of a Director is affixed outside the United States (but, notwithstanding Bye-laws 58 and 60 hereof, a Director who is not the last Director to sign may sign a resolution in writing even though he is in the United States). Such resolution shall be deemed to be adopted as an act ofcontrary, the Board or the applicable committee thereof, atCommittee may unilaterally amend, modify or terminate the place where, and atPlan or any outstanding Award, including but not limited to changing the time when,form of Award or the last signatureexercise price of a Director is affixed thereto. For the purposes of this Bye-law only, "the Directors" shall not include an Alternate Director.
| | 65. | Validity of Prior Acts of the Board |
No regulationany Option or alteration to these Bye-laws made by the Company in general meeting shall invalidate any prior act ofSAR, if the Board which would have been valid ifor Committee determines, in its sole discretion, that regulationsuch amendment, modification or alteration had not been made.
CORPORATE RECORDS
The Board shall cause minutestermination is necessary or advisable to be duly entered in books provided for the purpose:
| | (a) | of all elections and appointments of Officers; |
| | (b) | of the names of the Directors present at each Board meeting and of any committee appointed by the Board; and |
| | (c) | of all resolutions and proceedings of general meetings of the Members, Board meetings, meetings of managers and meetings of committees appointed by the Board. |
| | 67. | Place Where Corporate Records Kept |
Minutes prepared in accordancecomply with the Act and these Bye-laws shall be kept by the Secretary at the registered office of the Company.
| | 68.1 | The Company may adopt a seal in such form as the Board may determine. The Board may adopt one or more duplicate seals for use in or outside Bermuda. |
| | 68.2 | A seal may, but need not, be affixed to any deed, instrument or document, and if the seal is to be affixed thereto, it shall be attested by the signature of (i) any Director, or (ii) any Officer, or (iii) the Secretary, or (iv) any person authorised by the Board for that purpose. |
| | 68.3 | A Resident Representative may, but need not, affix the seal of the Company to certify the authenticity of any copies of documents. |
ACCOUNTS
| | 69.1 | The Board shall cause to be kept proper records of account with respect to all transactions of the Company and in particular with respect to: |
| | (a) | all amounts of money received and expended by the Company and the matters in respect of which the receipt and expenditure relates; |
| | (b) | all sales and purchases of goods by the Company; and |
| | (c) | all assets and liabilities of the Company. |
| | 69.2 | Such records of account shall be kept at the registered office of the Company, or subject to the Act, at such other place as the Board thinks fit and shall be available for inspection by the Directors during normal business hours. |
| | 69.3 | Such records of account shall be retained for a minimum period of five years from the date on which they are prepared. |
The financial year end of the Company may be determined by resolution of the Board and failing such resolution shall be 31st December in each year.
AUDITS
Subject to any rights to waive laying of accounts or appointment of an Auditor pursuant to the Act, the accounts of the Company shall be audited at least once in every year.
| | 72. | Appointment of Auditor |
| | 72.1 | Subject to the Act, at the annual general meeting or at a subsequent special general meeting in each year, an independent representative of the Members shall be appointed by them as Auditor of the accounts of the Company. |
| | 72.2 | The Auditor may be a Member but no Director, Officer or employee of the Company shall, during his continuance in office, be eligible to act as an Auditor of the Company. |
| | 73. | Remuneration of Auditor |
| | 73.1 | The remuneration of an Auditor appointed by the Members shall be fixed by the Company in general meeting or in such manner as the Members may determine. |
| | 73.2 | The remuneration of an Auditor appointed by the Board to fill a casual vacancy in accordance with these Bye-laws shall be fixed by the Board. |
| | 74.1 | The financial statements provided for by these Bye-laws shall be audited by the Auditor in accordance with generally accepted auditing standards. The Auditor shall make a written report thereon in accordance with generally accepted auditing standards. |
| | 74.2 | The generally accepted auditing standards referred to in this Bye-law may be those of a country or jurisdiction other than Bermuda or such other generally accepted auditing standards as may be provided for in the Act. If so, the financial statements and the report of the Auditor shall identify the generally accepted auditing standards used. |
The Auditor shall at all reasonable times have access to all books kept by the Company and to all accounts and vouchers relating thereto, and the Auditor may call on the Directors or Officers for any information in their possession relating to the books or affairs of the Company.
| | 76.1 | Subject to any rights to waive laying of accounts pursuant to the Act, financial statements, as required by the Act, shall be laid before the Members in a general meeting annually. A resolution in writing made in accordance with Bye-law 37 receiving, accepting, adopting, approving or otherwise acknowledging financial statements shall be deemed to be the laying of such statements before the Members in general meeting. |
| | 77. | Distribution of Auditor’s Report |
The report of the Auditor shall be submitted to the Members in general meeting.
| | 78. | Vacancy in the Office of Auditor |
The Board may fill any casual vacancy in the office of the auditor.
BUSINESS COMBINATIONS
| | 79.1 | Any Business Combination with any Interested Shareholder within a period of three years following the time of the transaction in which the person became an Interested Shareholder must be approved by the Board and authorised at an annual or special general meeting, by the affirmative vote of at least 66.67% of the issued and outstanding voting shares of the Company that are not owned by the Interested Shareholder, unless: |
| | (a) | prior to the time that the person became an Interested Shareholder, the Board approved either the Business Combination or the transaction which resulted in the person becoming an Interested Shareholder; or |
| | (b) | upon consummation of the transaction which resulted in the person becoming an Interested Shareholder, the Interested Shareholder owned at least 85% of the number of issued and outstanding voting shares of the Company at the time the transaction commenced, excluding for the purposes of determining the number of shares issued and outstanding those shares |
owned (i) by persons who are directors and also officers and (ii) employee share plans in which employee participants do not have the right to determine whether shares held subject to the plan will be tendered in a tender or exchange offer.
| | 79.2 | The restrictions contained in this Bye-law 79 shall not apply if: |
| | (a) | a Member becomes an Interested Shareholder inadvertently and (i) as soon as practicable divests itself of ownership of sufficient shares so that the Member ceases to be an Interested Shareholder; and (ii) would not, at any time within the three-year period immediately prior to a Business Combination between the Company and such Member, have been an Interested Shareholder but for the inadvertent acquisition of ownership; or |
| | (b) | the Business Combination is proposed prior to the consummation or abandonment of, and subsequent to the earlier of the public announcement or the notice required hereunder of, a proposed transaction which (i) constitutes one of the transactions described in the following sentence; (ii) is with or by a person who either was not an Interested Shareholder during the previous three years or who became an Interested Shareholder with the approval of the Board; and (iii) is approved or not opposed by a majority of the members of the Board then in office who were Directors prior to any person becoming an Interested Shareholder during the previous three years or were recommended for election or elected to succeed such Directors by resolution of the Board approved by a majority of such Directors. The proposed transactions referred to in the preceding sentence are limited to: |
| | (i) | a merger, amalgamation or consolidation of the Company (except an amalgamation in respect of which, pursuant to the Act, no vote of the shareholders of the Company is required); |
| | (ii) | a sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), whether as part of a dissolution or otherwise, of assets of the Company or of any entity directly or indirectly wholly-owned or majority-owned by the Company (other than to the Company or any entity directly or indirectly wholly-owned by the Company) having an aggregate market value equal to 50% or more of either the aggregate market value of all of the assets of the Company determined on a consolidated basis or the aggregate market value of all the issued and outstanding shares of the Company; or |
| | (iii) | a proposed tender or exchange offer for 50% or more of the issued and outstanding voting shares of the Company. |
| | (c) | For the purposes of this Bye-law 79.2 only, the term: |
| | (i) | "affiliate" means a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, another person; |
| | (ii) | “associate," when used to indicate a relationship with any person, means: (i) any company, partnership, unincorporated association or other entity of which such person is a director, officer or partner or is, directly or indirectly, the owner of 20% or more |
of any class of voting shares; (ii) any trust or other estate in which such person has at least a 20% beneficial interest or as to which such person serves as trustee or in a similar fiduciary capacity; and (iii) any relative or spouse of such person, or any relative of such spouse, who has the same residence as such person;
| | (iii) | "Business Combination," when used in reference to the Company and any Interested Shareholder of the Company, means: |
| | (a) | any merger, amalgamation or consolidation of the Company or any entity directly or indirectly wholly-owned or majority-owned by the Company, wherever incorporated, with (A) the Interested Shareholder or any of its affiliates, or (B) with any other company, partnership, unincorporated association or other entity if the merger, amalgamation or consolidation is caused by the Interested Shareholder; |
| | (b) | any sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), except proportionately as a shareholder of the Company, to or with the Interested Shareholder, whether as part of a dissolution or otherwise, of assets of the Company or of any entity directly or indirectly wholly-owned or majority-owned by the Company which assets have an aggregate market value equal to 10% or more of either the aggregate market value of all the assets of the Company determined on a consolidated basis or the aggregate market value of all the issued and outstanding shares of the Company; |
| | (c) | any transaction which results in the issuance or transfer by the Company or by any entity directly or indirectly wholly-owned or majority-owned by the Company of any shares of the Company, or any share of such entity, to the Interested Shareholder, except: (A) pursuant to the exercise, exchange or conversion of securities exercisable for, exchangeable for or convertible into shares of the Company, or shares of any such entity, which securities were issued and outstanding prior to the time that the Interested Shareholder became such; (B) pursuant to a dividend or distribution paid or made, or the exercise, exchange or conversion of securities exercisable for, exchangeable for or convertible into shares of the Company, or shares of any such entity, which security is distributed, pro rata to all holders of a class or series of shares subsequent to the time the Interested Shareholder became such; (C) pursuant to an exchange offer by the Company to purchase shares made on the same terms to all holders of such shares; or (D) any issuance or transfer of shares by the Company; provided however, that in no case under items (B)-(D) of this subparagraph shall there be an increase in the Interested Shareholder's proportionate share of the any class or series of shares; |
| | (d) | any transaction involving the Company or any entity directly or indirectly wholly-owned or majority-owned by the Company which has the effect, directly or indirectly, of increasing the proportionate share of any class or series of shares, or securities convertible into any class or series of shares of |
the Company, or shares of any such entity, or securities convertible into such shares, which is owned by the Interested Shareholder, exceptapplicable U.S. law, as a result of immaterial changes duein law or regulation or to fractional share adjustmentsavoid the imposition of an additional tax, interest or penalty under Section 409A of the Code.
m. Certain Provisions Applicable to Specified Employees. Notwithstanding the terms of this Plan or any Award Agreement to the contrary, if at the time of Participant’s Termination of Service he or she is a “specified employee” within the meaning of Section 409A of the Code, any payment of any “nonqualified deferred compensation” amounts (within the meaning of Section 409A of the Code and after taking into account all exclusions applicable to such payments under Section 409A of the Code) required to be made to the Participant upon or as a result of the Termination of Service (as defined in Section 409A) shall be delayed until after the six-month anniversary of the Termination of Service to the extent necessary to comply with and avoid the imposition of taxes, interest and penalties under Section
409A of the Code. Any such payments to which he or she would otherwise be entitled during the first six months following his or her Termination of Service will be accumulated and paid without interest on the first payroll date after the six-month anniversary of the Termination of Service (unless another Section 409A-compliant payment date applies) or within thirty days thereafter. These provisions will only apply if and to the extent required to avoid the imposition of taxes, interest and penalties under Section 409A of the Code.
n. 457A Compliance. The Plan is intended to comply with the requirements of Section 457A of the Code or an exemption or exclusion therefrom and, with respect to amounts that are subject to Section 457A of the Code, it is intended that the Plan be administered in all respects in accordance with Section 457A of the Code.
o. No Impact on Benefits. Except as may otherwise be specifically stated under any repurchaseemployee benefit plan, policy or redemptionprogram, no amount payable in respect of any shares not caused, directly or indirectly, by the Interested Shareholder; or | | (e) | any receipt by the Interested Shareholder of the benefit, directly or indirectly (except proportionately as a shareholder of the Company), of any loans, advances, guarantees, pledges or other financial benefits (other than those expressly permitted in subparagraphs (a)-(d) of this paragraph) provided by or through the Company or any entity directly or indirectly wholly-owned or majority-owned by the Company; |
| | (iv) | “control”, including the terms "controlling," "controlled by" and "under common control with," means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting shares, by contract or otherwise. A person who is the owner of 20% or more of the issued and outstanding voting shares of any company, partnership, unincorporated association or other entity shall be presumed to have control of such entity, in the absence of proof by a preponderance of the evidence to the contrary; provided that notwithstanding the foregoing, such presumption of control shall not apply where such person holds voting shares, in good faith and not for the purpose of circumventing this provision, as an agent, bank, broker, nominee, custodian or trustee for one or more owners who do not individually or as a group have control of such entity; |
| | (v) | "Interested Shareholder" means any person (other than the Company and any entity directly or indirectly wholly-owned or majority-owned by the Company) that (i) is the owner of 15% or more of the issued and outstanding voting shares of the Company, (ii) is an affiliate or associate of the Company and was the owner of 15% or more of the issued and outstanding voting shares of the Company at any time within the three-year period immediately prior to the date on which it is sought to be determined whether such person is an Interested Shareholder or (iii) is an affiliate or associate of any person listed in (i) or (ii) above; provided, however, that the term "Interested Shareholder" shall not include any person whose ownership of shares in excess of the 15% limitation set forth herein is the result of action taken solely by the Company unless such person referred to in this proviso acquires additional voting shares of the Company otherwise than as a result of further corporate action not caused, directly or indirectly, by such person. For the purpose of determining whether a person is an Interested Shareholder, the voting shares of the Company deemed to be issued and outstanding shall include voting shares deemed to be owned by the person through application of paragraph (viii) below, but shall not include any other unissued shares which may be issuable pursuant to any agreement, arrangement or understanding, or upon exercise of conversion rights, warrants or options, or otherwise; |
| | (vi) | "person" means any individual, company, partnership, unincorporated association or other entity; |
| | (vii) | "voting shares" means, with respect to any company, shares of any class or series entitled to vote generally in the election of directors and, with respect to any entity that is not a company, any equity interest entitled to vote generally in the election of the governing body of such entity; |
| | (viii) | "owner," including the terms "own" and "owned," when used with respect to any shares, means a person that individually or with or through any of its affiliates or associates: |
| | (a) | beneficially owns such shares, directly or indirectly; or |
| | (b) | has (A) the right to acquire such shares (whether such right is exercisable immediately or only after the passage of time) pursuant to any agreement, arrangement or understanding, or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise; provided, however, that a person shall not be deemed the owner of shares tendered pursuant to a tender or exchange offer made by such person or any of such person's affiliates or associates until such tendered shares are accepted for purchase or exchange; or (B) the right to vote such shares pursuant to any agreement, arrangement or understanding; provided, however, that a person shall not be deemed the owner of any shares because of such person's right to vote such shares if the agreement, arrangement or understanding to vote such shares arises solely from a revocable proxy or consent given in response to a proxy or consent solicitation made to 10 or more persons; or |
| | (c) | has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting (except voting pursuant to a revocable proxy or consent as described in item (B) of subparagraph (b) of this paragraph), or disposing of such shares with any other person that beneficially owns, or whose affiliates or associates beneficially own, directly or indirectly, such shares. |
| | 79.3 | In respect of any Business Combination to which the restrictions contained in Bye-law 79.1 do not apply but which the Act requires to be approved by the Members, the necessary general meeting quorum and Members’ approval shall be as set out in Bye-laws 30 and 32 respectively. |
| | 79.4 | The Board shall ensure that the bye-laws or other constitutional documents of each entity wholly-owned or majority-owned by the Company shall contain any provisions necessary to ensure that the intent of Bye-law 79.1, as it relates to the actions of such entities, is achieved. |
VOLUNTARY WINDING-UP AND DISSOLUTION
If the CompanyAward shall be wound uptreated as compensation for purposes of calculating a Participant’s right under any such plan, policy or program.
p. No Constraint on Corporate Action. Nothing in this Plan shall be construed (a) to limit, impair or otherwise affect the liquidator may, with the sanctionCompany’s right or power to make adjustments, reclassifications, reorganizations or changes of a resolution of the Members, divide amongst the Members in specieits capital or in kind the wholebusiness structure, or to merge, amalgamate or consolidate, or dissolve, liquidate, sell, or transfer all or any part of its business or assets or (b) to limit the assetsright or power of the Company, (whether they shall consist of property of the same kindany Subsidiary or not) and may, forany Affiliate, to take any action which such purpose, set such value as heentity deems fair upon any property to be divided as aforesaidnecessary or appropriate granted to a Ten Percent Holder, such Option shall not be exercised later than five years after its date of grant. The Committee shall determine whether a Share Option shall become exercisable in cumulative or non-cumulative installments and in part or in full at any time. The Committee may determine how such divisionrequire that an exercisable Option, or portion thereof, be exercised only with respect to whole Shares.
q. Headings and Captions. The headings and captions herein are provided for reference and convenience only, shall not be carried out as between the Members or different classes of Members. The liquidator may, with the like sanction, vest the
whole or anyconsidered part of such assetsthis Plan, and shall not be employed in the trustees upon such trusts for the benefitconstructions of the Members as the liquidator shall think fit, but so that no Member shall be compelled to accept any shares or other securities or assets whereon there is any liability.this Plan promulgated thereunder.
CHANGES TO CONSTITUTION
| | 81.1 | No Bye-law may be rescinded, altered or amended and no new Bye-law may be made save in accordance with the Act and until the same has been approved by a resolution of the Board and by a resolution of the Members. In addition, no amendment to these Bye-laws which would have a material adverse effect on the rights of Kelso, Pine Brook or Daniel S. Loeb may be made without such party’s consent but only for so long as such party holds a number of Shares equal to at least 25% of the total number of Shares held by such party on December 22, 2011.
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| | 81.2 | Bye-laws 32, 40, 42.1, 44 and 81 may not be rescinded, altered or amended and no new Bye-law may be made which would have the effect of rescinding, altering or amending the provisions of such Bye-laws, until the same has been approved by a resolution of the Board including the affirmative vote of not less than 66.67% of the Directors then in office and by a resolution of the Members including the affirmative vote of not less than 66.67% of the votes attaching to all shares in issue. |
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