EXHIBIT 10.23
ASPEN INSURANCE HOLDINGS LIMITED
PERFORMANCE SHARE AWARD AGREEMENT
THIS AGREEMENT (the "Agreement"), is made effective as of the
22nd day of December, 2004, between Aspen Insurance Holdings Limited, a Bermuda
corporation (hereinafter called the "Company"), and (hereinafter
called the "Participant"):
R E C I T A L S:
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WHEREAS, the Company has adopted the Aspen Insurance Holdings
2003 Share Incentive Plan (the "Plan"), which Plan is incorporated herein by
reference and made a part of this Agreement. Capitalized terms not otherwise
defined herein shall have the same meanings as in the Plan; and
WHEREAS, the Committee has determined that it would be in the
best interests of the Company and its shareholders to grant the performance
shares provided for herein to the Participant pursuant to the Plan and the terms
set forth herein.
NOW THEREFORE, in consideration of the mutual covenants
hereinafter set forth, the parties agree as follows:
1. Grant of Performance Shares. The Company hereby awards to the Participant
Shares, payment of which is dependent upon the achievement of certain
performance goals more fully described in Section 2 of this Agreement (the
"Performance Shares").
2. Vesting. The Performance Shares shall vest only to the extent that the
Return on Equity (calculated as described in Section 2(a) below, the "ROE")
targets described below are achieved.
(a) For purposes of this Agreement, "ROE" shall be equal to net income
determined under United States Generally Accepted Accounting Principles
("US GAAP") after deduction of the cost of all Awards granted under the
Plan as a percentage of weighted average shareholders' equity, which
shall be determined by the Board based on the Company's audited
financials under US GAAP.
(b) For purposes of this Agreement, "2004 ROE Percentage" shall be equal to
the Company's actual ROE for the fiscal year ended December 31, 2004
(the "2004 Fiscal Year"), expressed as a percentage of the ROE target
for the 2004 Fiscal Year. The ROE target with respect to the 2004 Fiscal
Year is set forth on Exhibit A, a copy of which is attached hereto and
incorporated herein by reference.
(c) For purposes of this Agreement, "2004-2006 ROE Percentage" shall be
equal to the Company's simple average annual ROE for the fiscal years
ending December 31, 2004, December 31, 2005 and December 31, 2006 (the
"2004-2006 Fiscal Years"), expressed as a percentage of the average
annual ROE target for the 2004-2006 Fiscal Years. The average annual ROE
target for the 2004-2006 Fiscal Years is set forth on Exhibit A, a copy
of which is attached hereto and incorporated herein by reference.
(d) Subject to the Participant's continued Employment with the Company
(which Employment shall not include the performance of services under a
notice of termination or resignation), a maximum of one-third (?) of the
Performance Shares awarded hereunder (the "2004 ROE Award") shall become
vested upon the later of (i) the date the Company's outside auditors
complete the audit of the Company's financial statements containing the
information necessary to compute the Company's ROE for the 2004 Fiscal
Year or (ii) the date such ROE is approved by the Board of Directors or
an authorized committee thereof, but only to the extent provided below:
2004 ROE Percentage Vested Percentage of
------------------- --------------------
2004 ROE Award
--------------
< 66.67% 0%
66.67% 10%
75% 32.50%
83.33% 55%
91.67% 77.50%
greater than or equal to 100% 100%
Interim percentages to be interpolated linearly.
Notwithstanding the foregoing, if the Company's actual ROE for the 2004
Fiscal Year is less than 10%, then none of the Performance Shares
subject to the 2004 ROE Award shall vest.
(e) Subject to the Participant's continued Employment with the Company
(which Employment shall not include the performance of services under a
notice of termination or resignation), a maximum of two-thirds (2/3) of
the Performance Shares awarded hereunder (the "2004-2006 ROE Award")
shall become vested upon the later of (i) the date the Company's outside
auditors complete the audit of the Company's financial statements
containing the information necessary to compute the Company's ROE for
the 2006 Fiscal Year or (ii) the date such ROE is approved by the Board
of Directors or an authorized committee thereof, but only to the extent
provided below:
Vested Percentage of
--------------------
2004-2006 ROE Percentage 2004-2006 ROE Award
------------------------ -------------------
< 66.67% 0%
66.67% 10%
2
75% 32.50%
83.33% 55%
91.67% 77.50%
greater than or equal to 100% 100%
Interim percentages to be interpolated linearly.
Notwithstanding the foregoing, if the Company's simple average annual
ROE for the 2004-2006 Fiscal Years is less than 10%, then none of the
Performance Shares subject to the 2004-2006 ROE Award shall vest.
(f) In connection with any event described in Section 10(a) of the Plan or
in the event of a change in applicable accounting rules, the Committee
shall make such adjustments in the terms of the Performance Shares,
including but not limited to the ROE targets, if any, as it shall
determine shall be necessary to equitably reflect such event in order to
prevent dilution or enlargement of the potential benefits of the
Performance Shares. The Committee's determination as to any such
adjustment shall be final.
3. Payment.
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(a) The Company shall deliver to the Participant one Share for each vested
Performance Share, less any Shares withheld in accordance with the
provisions of Section 7. Any fractional share will be rounded down to
the nearest whole Share and the remainder forfeited.
(b) Except as otherwise provided in the Plan, vested Performance Shares
shall be paid to the Participant as soon as practicable after the date
such Performance Shares become vested; provided, however, that
Performance Shares subject to the 2004 ROE Award shall be paid at the
same time as the Performance Shares subject to the 2004-2006 ROE Award
are paid (or would have been paid had all or a portion of such 2004-2006
ROE Award vested); provided, further, that payment of vested Performance
Shares shall be subject to the Participant's continued Employment (which
Employment shall not include the performance of services under a notice
of termination or resignation) until the date of payment.
(c) When Performance Shares are paid, the Company shall issue certificates
in the Participant's name for such. However, the Company shall not be
liable to the Participant for damages relating to any delays in issuing
the certificates to him, any loss of the certificates, or any mistakes
or errors in the issuance of the certificates or in the certificates
themselves.
4. No Right to Continued Employment. The granting of the Performance Shares
evidenced hereby and this Agreement shall impose no obligation on the
Company or any Affiliate to
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continue the Employment of the Participant and shall not lessen or affect
the Company's or its Affiliate's right to terminate the Employment of such
Participant.
5. Legend on Certificates. The certificates representing the Shares paid in
settlement of Performance Shares shall be subject to such stop transfer
orders and other restrictions as the Committee may deem advisable under the
Plan or the rules, regulations, and other requirements of the Securities and
Exchange Commission, any stock exchange upon which such Shares are listed,
and any applicable laws, and the Committee may cause a legend or legends to
be put on any such certificates to make appropriate reference to such
restrictions.
6. Transferability. The Performance Shares may not be assigned, alienated,
pledged, attached, sold or otherwise transferred or encumbered by the
Participant otherwise than by will or by the laws of descent and
distribution, and any such purported assignment, alienation, pledge,
attachment, sale, transfer or encumbrance shall be void and unenforceable
against the Company or any Affiliate; provided that the designation of a
beneficiary shall not constitute an assignment, alienation, pledge,
attachment, sale, transfer or encumbrance. For avoidance of doubt, Shares
issued to the Participant in payment of vested Performance Shares pursuant
to Section 3 hereof shall not be subject to any of the foregoing
transferability restrictions.
7. Withholding. The Participant may be required to pay to the Company or any
Affiliate and the Company shall have the right and is hereby authorized to
withhold, any applicable withholding taxes in respect of Performance Shares
and to take such other action as may be necessary in the opinion of the
Committee to satisfy all obligations for the payment of such withholding
taxes.
8. Securities Laws. Upon the acquisition of any Shares pursuant to settlement
of Performance Shares, the Participant will make or enter into such written
representations, warranties and agreements as the Committee may reasonably
request in order to comply with applicable securities laws or with this
Agreement.
9. Bermuda Government Regulations. No Shares shall be issued pursuant to this
Agreement unless and until all relevant licenses, permissions and
authorizations required to be granted by the Government of Bermuda, or by
any authority or agency thereof, shall have been duly received.
10. Notices. Any notice necessary under this Agreement shall be addressed to the
Company in care of its Secretary at the principal executive office of the
Company and to the Participant at the address appearing in the personnel
records of the Company for the Participant or to either party at such other
address as either party hereto may hereafter designate in writing to the
other. Any such notice shall be deemed effective upon receipt thereof by the
addressee.
11. Choice of Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF BERMUDA, WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES.
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12. Performance Shares Subject to Plan. By entering into this Agreement the
Participant agrees and acknowledges that the Participant has received and
read a copy of the Plan. The Performance Shares are subject to the Plan
(including without limitation the arbitration provision), and the terms and
provisions of the Plan, as it may be amended from time to time, are hereby
incorporated herein by reference. In the event of a conflict between any
term or provision contained herein and a term or provision of the Plan, the
applicable terms and provisions of the Plan will govern and prevail.
13. Rights as a Shareholder. The Participant shall have no rights as a
shareholder, and shall not receive dividends, with respect to any
Performance Shares until the Performance Shares have been paid out and Share
certificates have been issued to the Participant.
14. Fiscal Year. If the Company's fiscal year is changed to other than a
calendar year, the references to calendar year in this Agreement shall be
adjusted to appropriately reflect the change.
15. Signature in Counterparts. This Agreement may be signed in counterparts,
each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement.
ASPEN INSURANCE HOLDINGS LIMITED
By:
--------------------------------
AGREED AND ACKNOWLEDGED AS
OF THE DATE FIRST ABOVE WRITTEN:
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Participant
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EXHIBIT A
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ROE TARGETS
2004 Fiscal Year ROE Target =
Average Annual ROE Target for 2004-2006 Fiscal Years = To be provided by the
Company after establishment of 2006 ROE targets by Compensation Committee
