Exhibit 10.1
PLATINUM UNDERWRITERS HOLDINGS, LTD.
SHARE UNIT PLAN
FOR NONEMPLOYEE DIRECTORS
(as amended through February 19, 2003)
1. Introduction
This Platinum Underwriters Holdings, Ltd. Share Unit Plan for
Nonemployee Directors (the "Plan") is intended to promote the interests of the
Company and its shareholders by paying part or all of the compensation of the
Company's nonemployee directors in the form of an economic equivalent of an
equity interest in the Company. The Plan provides for the conversion of at least
50 percent and up to 100 percent of the Director Fees for each calendar year
into units of measurement relating to the value of the Company's common shares,
and for payment to the director of the value of such units after five calendar
years (or upon termination from service on the Board, if earlier), so that a
director will normally receive payment under the Plan each successive year in
respect of the fees originally converted into units in the year preceding the
fifth calendar year prior to the year of payment. The Plan shall become
effective with respect to Director Fees earned in 2003. The Plan has been
amended by the Board as set forth herein through February 19, 2003.
2. Definitions
(a) "Board" means the Board of Directors of the Company.
(b) "Common Shares" means the common shares of the Company,
par value $0.01.
(c) "Company" means Platinum Underwriters Holdings, Ltd., a
Bermuda corporation.
(d) "Director Fees" means the annual retainer fee, meeting
fees and committee fees earned by the Participant for his service on the Board.
(e) "Fair Market Value" of Common Shares as of a given date
means the closing sales price of Common Shares on the New York Stock Exchange or
other exchange or securities market as reflected on the composite index on the
trading day immediately preceding the date as of which Fair Market Value is to
be determined, or in the absence of any reported sales of Common Shares on such
date, on the first preceding date on which any such sale shall have been
reported. If the Common Shares are not listed on the New York Stock Exchange or
other exchange or securities market on the date as of which Fair Market Value is
to be determined, the Board shall determine in good faith the Fair Market Value
in whatever manner it considers appropriate.
(f) "Mandatory Conversion" means the required conversion of 50
percent of a Participant's Director Fees into a Share Unit Award pursuant to
Section 5 hereof.
(g) "Participant" means a member of the Board who is not an
employee of the Company or any of its affiliates.
(h) "Realization Date" means, with respect to each Share Unit
allocated to a Participant's Share Unit Account, the first business day
following the earlier of (i) the date that is five years following the end of
the calendar year that includes the calendar quarter for which such Share Unit
is awarded to the Participant, or (ii) the date the Participant ceases to be a
member of the Board.
(i) "Share Unit" means a non-voting unit of measurement based
on the value of a Common Share, which entitles a participant to receive payment
in accordance with the terms of the Plan.
(j) "Share Unit Account" means a book account maintained by
the Company reflecting the Share Units allocated to a Participant pursuant to
Section 5 hereof as a result of the Participant's Mandatory Conversions and
Voluntary Conversions and such additional Share Units as shall be credited
thereto in respect of dividends paid on the Common Shares.
(k) "Share Unit Award" means an Award under Section 5 hereof
of Share Units.
(l) "Voluntary Conversion" means the conversion based on the
election of the Participant of all or part of a Participant's Director Fees
otherwise payable to the Participant in cash into a Share Unit Award pursuant to
Section 5 hereof.
3. Common Shares Subject to the Plan
(a) Number of Shares
Subject to the following provisions of this Section 3, the
aggregate number of Common Shares that may be issued under the Plan is 150,000
Common Shares. The Common Shares to be delivered under the Plan will be made
available from authorized but unissued Common Shares or from reacquired shares.
To the extent that any Share Unit Award is forfeited or terminated for any
reason or is not paid in Common Shares, the number of Common Shares covered
thereby shall not be charged against the foregoing maximum share limitation.
(b) Adjustments
If there shall occur any recapitalization, reclassification,
share dividend, share split, reverse share split, or other distribution with
respect to the Common Shares, or other change in corporate structure affecting
the Common Shares, the Board may, in the manner and to the extent that it deems
appropriate and equitable and consistent with the terms of this Plan, cause an
adjustment to be made in (i) the maximum number and kind of shares provided in
Section 3(a) hereof and (ii) the Share Units allocated to Participants' Share
Unit Accounts in accordance with Section 5(e) hereof.
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4. Administration
The Plan shall be administered by the Board. The Board shall
have full authority to administer the Plan, including the discretionary
authority to interpret and construe all provisions of the Plan, to resolve all
questions of fact arising under the Plan, and to adopt such rules and
regulations for administering the Plan as it may deem necessary or appropriate.
Decisions of the Board shall be final and binding on all parties. The Board may
delegate administrative responsibilities under the Plan to appropriate officers
or employees of the Company. All expenses of the Plan shall be borne by the
Company.
5. Crediting of Share Units
(a) Mandatory Conversions
For each calendar quarter in which the Plan is in effect, 50
percent of the aggregate dollar amount of a Participant's Director Fees payable
for such quarter shall be converted into a Share Unit Award pursuant to Section
5(c) hereof.
(b) Voluntary Conversions
For each calendar quarter in which the Plan is in effect, a
Participant may elect to convert all or any portion of his Director Fees payable
for such quarter (in addition to those required to be converted under Section
5(a) hereof) into a Share Unit Award pursuant to Section 5(c) hereof. Each
Voluntary Conversion shall be made on the basis of a Participant's written
election stating the amount by which such Director Fees shall be converted to a
Share Unit Award. Each such election shall be made in the form required by the
Board, shall be delivered to the Company no later than December 31 of the
calendar year immediately preceding the calendar year for which the election is
made, and shall be effective for each calendar quarter of such calendar year. In
the case of a member of the Board who first becomes a Participant in middle of a
calendar year, such election for such year must be made within 30 days following
such member becoming a Participant, and shall apply only to calendar quarters
that begin following the date such election is made.
(c) Share Unit Awards
A Participant shall receive a Share Unit Award for each
calendar quarter in respect of his Mandatory Conversion and any Voluntary
Conversion applicable to such quarter. Such Share Unit Award shall equal the
number of the Share Units determined by dividing (A) the aggregate dollar amount
of the Participant's Director Fees that are to be converted into a Share Unit
Award for the quarter, including the Mandatory Conversion and any Voluntary
Conversion, by (B) the Fair Market Value of the Common Shares on the last
business day of such calendar quarter. Each Share Unit Award shall be credited
to the Participant's Share Unit Account as of the first day following the end of
the calendar quarter for which such Share Unit Award is granted.
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(d) Dividend Equivalents
As of any date that cash dividends are paid with respect to
the Common Shares from time to time, each Participant's Share Unit Account shall
be credited with an additional number of Share Units determined by dividing (A)
the aggregate dollar amount of the dividends that would have been paid on the
Share Units credited to the Participant's Share Unit Account as of the record
date for such dividend had such Share Units been actual Common Shares by (B) the
Fair Market Value of the Common Shares on the dividend payment date.
(e) Certain Adjustment
If there shall occur any recapitalization, reclassification,
share dividend, share split, reverse share split, or other distribution with
respect to the Common Shares, or other change in corporate structure affecting
the Common Shares, the Board may, in the manner and to the extent that it deems
appropriate and equitable to the Participants and consistent with the terms of
this Plan, cause an adjustment to be made in the Participants' Share Unit
Accounts. It is intended that in making such adjustments, the Board will seek to
treat each Participant as if he were a shareholder of the Common Shares of the
number of Share Units credited to his Share Unit Account (but without
duplication of any benefits that may be provided under Section 4(d) hereof).
Except as is expressly provided in this Section, Participants shall have no
rights as a result of any such change in the Common Shares or other event.
6. Distributions of Benefits
(a) Valuation and Payment of Units
Subject to Section 7 hereof, a Participant shall be entitled
to a benefit under the Plan with respect to each Share Unit Award upon the
Realization Date for such Share Unit Award. Such benefit shall be equal to the
amount determined by multiplying (A) the number of Share Units credited to the
Participant's Share Unit Account in respect of the Share Unit Award for which
the Realization Date has occurred by (B) the Fair Market Value of the Common
Shares on the Realization Date. Each such amount shall be paid within 30 days
after the applicable Realization Date, at the discretion of the Board, in cash
or in Common Shares, or in some combination thereof.
(b) Payment of Additional Dividends
Subject to Section 7 hereof, if, pursuant to Section 5(d)
hereof, additional Share Units are required to be credited to a Participant's
Share Unit Account in respect of Share Units that were held in the Participant's
Share Unit Account as of the record date for dividends paid on the Common Shares
that are paid after the payment to the Participant of a benefit in respect of
such Share Units, the Company shall pay to the Participant a cash amount in
respect of such dividends equal to the dollar amount of such dividends. Such
amount shall be paid to the Participant within 30 days after the dividend
payment date.
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(c) Payment of Nonconverted Fees
Subject to Section 7 hereof, in the event that a Participant
ceases to be a member of the Board prior to the time that Share Units are
credited to his Share Unit Account pursuant to Section 5(c) hereof in respect of
his Mandatory Conversion or Voluntary Conversion for a calendar quarter, the
amount of all Director Fees earned by the Participant during such quarter shall
be paid to the Participant in cash within 30 days after his termination of
service as a director.
7. Forfeiture of Benefits
Each Participant's benefits hereunder shall be nonforfeitable,
except that a Participant shall forfeit all rights to all benefits hereunder in
respect of Mandatory Conversions, Voluntary Conversions and Share Units credited
to the Participant's Share Unit Account if the Participant's status as a
director of the Company is terminated for "Cause," as determined by the Board in
its sole discretion.
8. Beneficiaries
Any payment required to be made to a Participant hereunder
that cannot be made to the Participant because of his death shall be made to the
Participant's beneficiary or beneficiaries, subject to applicable law. Each
Participant shall have the right to designate in writing from time to time a
beneficiary or beneficiaries by filing a written notice of such designation with
the Board. In the event a beneficiary designated by the Participant does not
survive the Participant and no successor beneficiary is selected, or in the
event no valid designation has been made, such Participant's beneficiary shall
be such Participant's estate.
9. Unfunded Status
The Plan shall be unfunded, and Mandatory Conversions,
Voluntary Conversions, Share Units credited to each Participant's Share Unit
Account and all benefits payable to Participants under the Plan represent merely
unfunded, unsecured promises of the Company to pay a sum of money to the
Participant in the future.
10. Transfers Prohibited
No transfer (other than pursuant to Section 8 hereof) by a
Participant of any right to any payment hereunder, whether voluntary or
involuntary, by operation of law or otherwise, and whether by means of
alienation by anticipation, sale, transfer, assignment, bankruptcy, pledge,
attachment, charge, or encumbrance of any kind, shall vest the transferee with
any interest or right, and any attempt to so alienate, sell, transfer, assign,
pledge, attach, charge, or otherwise encumber any such amount, whether presently
or thereafter payable, shall be void and of no force or effect.
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11. Limitation of Rights
Nothing contained in the Plan shall confer upon any
Participant any right (i) as a shareholder of the Company or (ii) with respect
to the continuation of the Participant's status as a director of the Company.
12. Termination and Amendment
The Plan may be terminated at any time by the Board. The Plan
may be amended by the Board from time to time in any respect; provided, however,
that no such termination or amendment may reduce the number or the value of
Share Units theretofore credited or creditable to a Participant's Share Unit
Account without the affected Participant's prior written consent.
13. Choice of Law
The Plan and all rights hereunder shall be subject to and
interpreted in accordance with the laws of the State of New York, without
reference to the principles of conflicts of laws, and to applicable federal
securities laws.
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