Director Compensation
Non-employee directors receive an annual retainer of $35,000 for service on the
Board of Directors plus $3,000 for each board meeting and presentation attended.
The chairman of the Audit Committee receives annually a fee of $10,000 and the
chairmen of each other board committee and the presiding director of the
non-management directors receive a fee of $5,000. Non-employee directors also
receive $1,500 for each committee meeting attended. Prior to the commencement of
each calendar year, directors are entitled to elect to receive common shares in
lieu of the cash compensation that would otherwise be payable to them during
such year. In addition to the annual retainer, chairmen fees and meeting fees,
each non-employee director receives annually a grant of $35,000 worth of common
shares pursuant to a restricted stock grant at the fair market value of the
common shares at the time of grant. Prior to the commencement of each calendar
year, directors may elect to receive cash in lieu of the equity compensation
that would otherwise be payable to them during such year with the approval of
the Compensation Committee. The restricted stock vests six months after the date
of grant. Directors who are also employees do not receive compensation for their
service as directors.
In addition to compensation received for service on the Company's board,
Mr. Keane receives an annual retainer of $35,000 for services as Chairman of the
Board of AXIS Specialty Holdings Ireland Limited and a director of AXIS
Specialty Europe Limited plus $1,000 for each meeting attended, and Mr. Grupe
receives an annual retainer of $25,000 for services as a director of AXIS
Specialty Europe Limited and AXIS Re Limited. Prior to the commencement of each
calendar year, these directors are
6
entitled to elect to receive common shares in lieu of the cash compensation that
would otherwise be payable to them during such year.
Shares issued to our directors in lieu of fees and stock options and restricted
stock grants made to our directors are made pursuant to the AXIS Capital
Holdings Limited 2003 Directors Long-Term Equity Compensation Plan (the
"Directors Plan"). The Directors Plan has been adopted by our Board of Directors
and approved by our shareholders. The maximum number of common shares with
respect to which awards may be granted under the Directors Plan is 1,200,000. As
of February 28, 2006, non-qualified stock options exercisable for 120,000 common
shares and 18,229 restricted shares have been granted under the Directors Plan.
The board has broad authority to administer the plan, including the authority to
determine when awards will be made, the type and amount of awards, the exercise
price of options, any limitations, restrictions or conditions applicable to each
award, if any, and the terms of any instrument that evidences an award.
Options awarded under the Directors Plan are generally granted for a ten-year
term, but may terminate earlier if the participant's service terminates prior to
the end of the term. The exercise price of an option must be at least equal to
the fair market value of the shares on the date such option is granted. The
exercise price of options may be paid (1) in cash, (2) by delivery of
previously-acquired common shares, (3) by any combination of (1) and (2),
(4) pursuant to a cashless exercise program or (5) by any other means that our
Board of Directors approves in its discretion. Holders of restricted stock may
generally exercise full voting rights and may be credited with regular dividends
paid with respect to the underlying shares while they are so held. The shares
generally become freely transferable after the last day of the applicable period
of restriction. Upon a change in control of the Company, all outstanding stock
options will become immediately exercisable and remain exercisable throughout
their entire term and all restrictions with respect to outstanding restricted
stock awards will lapse.
Each non-employee director may elect to participate in an unfunded nonqualified
deferred compensation plan (the "Directors Deferred Plan"), which has also been
adopted by our Board of Directors and approved by our shareholders. The
Directors Deferred Plan allows participating directors to elect (1) the amount,
if any, of cash or stock received as fees for services to be deferred (expressed
as a dollar amount, number of shares or percentage) and (2) the form in which
payment is to be made (lump sum or three annual installments). Directors who
choose to defer fees otherwise payable in shares are credited a number of
phantom stock units equal in amount to the number of shares of stock deferred.
As of February 28, 2006, 45,668 shares of phantom stock have been issued under
the Directors Deferred Plan. When a cash dividend is paid on the stock, the
portion of the participant's deferral account denominated in phantom share units
is credited with additional phantom share units (or portions thereof). Directors
who choose to defer fees otherwise payable in cash are credited with interest on
their cash deferral at a rate for the year of deferral that is 100 basis points
above the 12-month LIBOR rate for deposits of U.S. dollars. Amounts deferred are
100% vested at all times. Generally, benefits are paid upon termination of
service as a director. The plan is administered by our Board of Directors.
7
Executive Officers
The table below sets forth certain information concerning our executive
officers:
Name Age Positions
Michael A. Butt(1) 63 Chairman of the Board
John R. Charman(1) 53 Chief Executive Officer and President
Andrew Cook 43 Chief Financial Officer
Dennis B. Reding 57 Chairman, AXIS Insurance
William A. Fischer 45 Chief Executive Officer and President, AXIS Global
Reinsurance
John Gressier 38 Deputy Chairman, AXIS Insurance and Chief Executive
Officer and
President of AXIS Global Insurance
Karl Mayr 56 Chief Executive Officer and President, AXIS Re Europe
Michael E. Morrill 46 Chief Executive Officer and President, AXIS U.S.
Reinsurance
F. Marshall Turner, II 48 Chief Executive Officer and President, AXIS U.S.
Insurance
Brian W. Goshen 44 Chief Human Resources Officer
John J. Murray 45 Chief Operations Officer
Richard Strachan 38 Chief Claims Officer
|
(1) Biography available under "-Directors."
Andrew Cook has been Chief Financial Officer of the Company since our inception.
He is also a director and Executive Vice President of our subsidiary, AXIS
Specialty Limited. Mr. Cook, a chartered accountant, has 18 years of industry
experience. From 1993 to 1999, he served as Senior Vice President and Chief
Financial Officer of LaSalle Re Holdings Limited. Mr. Cook worked as an
independent consultant assisting clients in raising private equity capital from
1999 to 2000. He then served as Senior Vice President and Chief Financial
Officer of Mutual Risk Management Limited from 2001 until joining us in late
2001. Mr. Cook has resigned as an officer of the Company effective April 1,
2006.
Dennis B. Reding has been Chairman of AXIS Insurance since January 2005. From
January 2003 until December 2004, he was Chief Executive Officer of AXIS U.S.
Insurance. He is also Chief Executive Officer and President of our subsidiaries,
AXIS Specialty U.S. Holdings, Inc. and AXIS Specialty U.S. Services, Inc., and
an Executive Vice President of our subsidiaries, AXIS Specialty Insurance
Company, AXIS Reinsurance Company, AXIS Surplus Insurance Company and AXIS
Insurance Company. Mr. Reding has 35 years of industry experience. Mr. Reding
was President and Chief Executive Officer of Westchester Specialty Group from
1992 to 1998. He then served as President and Chief Executive Officer of ACE
USA, Inc. from 1998 to 2001 and President of ACE INA Holdings, Inc. from 2001 to
2002. Mr. Reding was Chairman and Chief Executive Officer of Combined Specialty
Group, Inc., an Aon subsidiary, in 2002.
William A. Fischer has been Chief Executive Officer and President of AXIS Global
Reinsurance since our inception. He is also Executive Vice President of our
subsidiary, AXIS Specialty Limited. Mr. Fischer has 19 years of industry
experience. Mr. Fischer began his career at Skandia America Reinsurance in 1987
as a treaty underwriter, where he served until November 1991. From November 1991
to October 1994, he served as Vice President of Treaty Property Underwriting at
Transatlantic Reinsurance Company. Mr. Fischer then served as Executive Vice
President with responsibilities for property, accident and health, and financial
products at Everest Re Group, Ltd. from October 1994 to May 2001. He then served
as a Senior Vice President of the Brokered Group of American Re, where he was
responsible for all property business, until joining us in late 2001.
John Gressier has been Chief Executive Officer and President of AXIS Global
Insurance since April 2002. He is also Chairman of the Board of our subsidiary,
AXIS Specialty Europe Limited, a director of our subsidiary, AXIS Specialty
Holdings Ireland Limited and Executive Vice President of our
8
subsidiary, AXIS Specialty Limited. Mr. Gressier has over 19 years of experience
in the insurance industry. Mr. Gressier served as an underwriter at Charman
Underwriting Agencies from 1989 until ACE Limited acquired Charman in 1998.
Mr. Gressier then served as Deputy Underwriter of Syndicates 488/2488, Director
of ACE Global Markets Underwriting Limited and Director of Marine and Specialty
Lines for Syndicate 2488. He was also a member of ACE Global Markets Executive
Underwriting Committee. In February 2001, Mr. Gressier was appointed Joint
Active Underwriter of Syndicate 2488 and director of the ACE Agency Board, where
he served until joining us in 2002.
Dr. Karl Mayr has been Chief Executive Officer and President of AXIS Re Europe
since August 2003. He is also Chairman of the Board of our subsidiary, AXIS Re
Limited, and a director of our subsidiary, AXIS Specialty Holdings Ireland
Limited. Mr. Mayr has 26 years of reinsurance experience. He joined Frankona
Ruckversicherungs-AG in 1980, where he was appointed a member of the Board of
Management in 1992. From 1988 to 1992, he held senior officer positions at the
U.S. branch of Frankona in Kansas City, Missouri, which he headed up from 1990.
After the acquisition of Frankona by ERC, he served on various boards of
management in the German companies as well as a director on the boards of
several European affiliates. From 2002 until July 2003, Mr. Mayr was Chief
Executive Officer of GE Frankona Re.
Michael E. Morrill has been Chief Executive Officer and President of AXIS U.S.
Reinsurance since August 2002. He is also a director and an Executive Vice
President of our subsidiaries AXIS Specialty U.S. Holdings, Inc. and AXIS
Specialty U.S. Services, Inc., Chairman, Chief Executive Officer and President
of our subsidiary, AXIS Reinsurance Company, and an Executive Vice President of
AXIS Specialty Insurance Company, AXIS Surplus Insurance Company and AXIS
Insurance Company. Mr. Morrill has over 20 years of experience in the insurance
and reinsurance industry. From 2001 to 2002, Mr. Morrill was the President and
Chief Executive Officer of Gerling Global Reinsurance Corporation of America.
From 1996 to 2001, he served as Chief Underwriting Officer for North America and
Senior Vice President at Transatlantic Reinsurance Company. He has also held
senior management and underwriting positions at Munich American Reinsurance
Company, Cologne Reinsurance Company of America and Christiania General
Insurance Company.
F. Marshall Turner, II has been the Chief Executive Officer of AXIS U.S.
Insurance since January 2005 and the President of AXIS U.S. Insurance since
January 2004. He is also a director and an Executive Vice President of our
subsidiaries, AXIS Specialty U.S. Holdings, Inc. and AXIS Specialty U.S.
Services, Inc., Chairman, Chief Executive Officer and President of our
subsidiaries, AXIS Specialty Insurance Company and AXIS Insurance Company,
Chairman and Executive Vice President of our subsidiary, AXIS Surplus Insurance
Company, and a director and an Executive Vice President of our subsidiary, AXIS
Reinsurance Company. He joined the Company in November 2002 as Executive Vice
President and Chief Operating Officer of AXIS U.S. Insurance. Prior to that,
Mr. Turner was President of the Specialty Property & Casualty Group of Aon
Corporation's Combined Specialty Group from February 2002. From 1996 to 2002, he
served in various senior positions, including President, with the Westchester
Specialty Group/ACE USA. Mr. Turner also served as Vice President, Specialty
Property Director for Zurich American Insurance Group after holding several
property/package underwriting and managerial positions with the Hartford
Insurance Group, where he began his insurance career in 1980.
Brian Goshen has been the Chief Human Resources Officer since January 2006.
Mr. Goshen has over 20 years of professional human resources experience. From
March 2004 to January 2006, he served as a Vice President of Human Resources at
Fifth Third Bank. From May 1996 to March 2004, he was a Managing Director with
Marsh, Inc., a global insurance and brokerage and risk management company. While
at Marsh, he served in various senior human resource positions, including the
Head of Human Resources for North America and the Head Human of Resources for
their Asia and Pacific operations. From February 1994 to May 1996, he was Vice
President of Human Resources with the Hong Kong and
9
Shanghai Banking Corporation. Mr. Goshen started his corporate career with
Goldman Sachs following a period of service as a Personnel Officer with the
United States Army.
John J. Murray has been Chief Operations Officer since November 2001. He is also
an Executive Vice President of Operations of our subsidiary, AXIS Specialty
Limited. Mr. Murray, a chartered accountant, has 15 years of industry
experience. From 1995 to 2000, he was the Head of Operations for ACE Global
Markets Limited. He then served as a Finance Director of Newmarket Underwriting
Limited during 2000 and 2001.
Richard Strachan has been Chief Claims Officer since April 2002. He is also a
director of our subsidiaries, AXIS Re Limited and AXIS Specialty Europe Limited.
Mr. Strachan has 20 years of experience in the insurance and reinsurance
industry. From 1985 to 1997, he managed claims for Syndicates 488 and 2488 at
both Charman Underwriting Agencies and Tarquin plc. From 1997 to 1999,
Mr. Strachan served as a claims adjuster at ACE Global Markets. From 1999 to
2001, he served as claims team leader for ACE Global Markets.
Management Compensation
The following table sets forth compensation earned by our Chief Executive
Officer and each of our four other most highly compensated executive officers
for the year ended December 31, 2005. These individuals are referred to as the
"named executive officers."
Summary Compensation Table
Long Term Compensation
Annual Compensation Awards
Restricted Securities
Name and Other Annual Stock Underlying All Other
Principal Position Year Salary Bonus Compensation(1) Awards(2) Options/SARs(3) Compensation(4)
John R. Charman 2005 $ 1,250,000 $ 1,406,250 $ 319,348 $ 4,620,000 0 $ 146,164
CEO and President 2004 1,250,000 3,000,000 245,419 2,521,800 130,000 153,749
2003 1,000,000 2,250,000 130,978 2,369,600 130,000 125,080
Michael A. Butt 2005 750,000 762,500 341,294 2,310,000 0 75,742
Chairman of the 2004 750,000 1,325,000 233,177 1,050,750 55,000 75,336
Board 2003 500,000 1,125,000 196,052 888,600 55,000 50,360
Dennis B. Reding 2005 605,755 452,813 73,141 1,540,000 0 61,347
Chairman, AXIS 2004 575,000 700,000 50,297 1,050,750 55,000 58,473
Insurance 2003 500,000 625,000 36,759 592,400 40,000 58,513
William A. Fischer 2005 750,000 562,500 309,053 1,540,000 0 77,822
CEO and President, 2004 575,000 1,000,000 266,743 840,600 40,000 60,197
Global Reinsurance 2003 475,000 950,000 256,101 592,400 40,000 50,313
John Gressier(5) 2005 914,991 663,250 6,556 1,540,000 0 144,039
CEO and President, 2004 665,078 1,140,000 4,555 840,600 40,000 104,167
Global Insurance 2003 490,598 950,000 1,676 592,400 40,000 105,661
|
(1) Other Annual Compensation includes (i) housing allowance paid to
Mr. Charman for 2005 in the amount of $180,000, for 2004 in the amount of
$185,782 and for 2003 in the amount of $83,761; (ii) housing allowance paid to
Mr. Butt for 2005 in the amount of $180,000, for 2004 in the amount of $180,000
and for 2003 in the amount of $144,000; (iii) car allowance paid to Mr. Reding
for each of 2005 and 2004 in the amount of $12,000 and for 2003 in the amount of
$11,000; and (iv) housing allowance paid to Mr. Fischer for each of 2005, 2004
and 2003 in the amount of $204,000. The reported amount also includes the amount
we paid for health and long term disability insurance, social insurance and
taxes, club membership fees, car allowances, home leave reimbursement, tax
preparation fees and relocation expenses on behalf of the named executive
officers. Other Annual Compensation also includes the incremental cost to the
Company of personal use of an aircraft leased by the Company by Mr. Charman for
2005 in the amount of $46,114 and by Mr. Butt for 2005 in the amount of $73,185.
The incremental cost to the Company is based on the variable operating costs to
the Company, including fuel costs, hourly costs, landing fees, and other
miscellaneous variable costs. Fixed costs that do not change based on useage,
such as the lease costs for
10
the aircraft, are not included. On certain occasions, an executive's family
member or other guest may accompany the executive on a flight. No additional
direct operation cost is incurred in these situations.
(2) Includes restricted stock that was granted with respect to the 2005,
2004 and 2003 fiscal years on January 17, 2006, January 13, 2005 and January 2,
2004, respectively, and reflects the fair value per share on the date of grant
for shares granted for the years ended December 31, 2005, 2004 and 2003,
respectively. The number and aggregate value of all restricted stock holdings at
December 31, 2005 based on the closing market price of our common shares at such
date of $31.28 for each of the named executive officers was as follows:
Mr. Charman had 320,000 shares with a value of $10,009,600; Mr. Butt had 142,500
shares with a value of $4,457,400; Mr. Reding had 107,500 shares with a value of
$3,362,600; Mr. Fischer had 100,000 shares with a value of $3,128,000; and
Mr. Gressier had 100,000 shares with a value of $3,128,000. Dividends are paid
on the restricted stock but are held by the Company until the restrictions
lapse.
(3) Includes stock options that were granted with respect to the 2004 and
2003 fiscal years on January 13, 2005 and January 2, 2004, respectively.
(4) Includes amounts paid in 2005, 2004 and 2003 under our defined
contribution retirement plans, under arrangements to compensate employees whose
contributions under those plans exceed statutory maximum limits and for term
life insurance.
(5) Mr. Gressier's annual salary in 2005, 2004 and 2003 was £500,000,
£364,210 and £301,000, respectively. The amounts shown for 2005, 2004 and 2003
are converted at the rate of exchange in force at the date of payment.
Options/SAR Grants in 2005
The Company did not grant any stock options to the named executive officers for
the year ended December 31, 2005.
Aggregated Options/SAR Exercises in 2005
And Fiscal Year-End Option/SAR Values
The following table presents information concerning stock options exercised by
the named executive officers during the year ended December 31, 2005 and the
number and value of unexercised options held by them at December 31, 2005.
Number of Securities Value of Unexercised
Number of Underlying In-the-Money
Shares Unexercised Options/SARs Options/SARs
Acquired Value at Fiscal Year End At Fiscal Year End
Name On Exercise Realized Exercisable/Unexercisable Exercisable/Unexercisable
John R.
Charman - - 2,268,445/216,667 $ 41,459,537/567,667
Michael A.
Butt - - 130,000/75,000 2,178,200/212,500
Dennis B.
Reding - - 73,333/81,667 1,091,933/223,567
William A.
Fischer - - 166,667/53,333 2,855,867/152,533
John Gressier - - 146,666/53,334 2,480,266/152,534
|
Retirement Plans
We provide retirement benefits to eligible employees through various plans
sponsored by the Company in Bermuda, Ireland, the United Kingdom, the United
States and Switzerland. For 2005, in Bermuda, we contributed 10% of base salary
to a registered plan for Bermudians and 10% of base salary to an unregistered
plan for non-Bermudians. In Ireland and the United Kingdom, we contributed 15%
of base salary to defined contribution plans, subject to certain statutory
maximum limits. In the United States, we contributed 10% of eligible
compensation to a 401(k) profit sharing plan, subject to certain statutory
maximum limits, and, for certain highly compensated employees for which the
statutory limits were met, contributed 10% of base salary (less amounts
contributed to the 401(k) plan) to a supplemental retirement plan. In
Switzerland, we contributed 15% of base salary to a defined contribution plan.
Under the plans in Ireland, the United Kingdom, the United States and
Switzerland, some employees are entitled to contribute to the plans on a
tax-deferred basis. Under the Swiss plan, contributions are invested by an
insurance company with a minimum guaranteed return on statutorily mandated
amounts. Under all of the other plans, contributions are invested at the
discretion of the participants in a variety of investment
11
options selected by the Company. Benefits under the plans generally vest upon
one to four years of service with the Company (other than the Swiss plan, which
vest immediately) and generally are distributable upon termination or
retirement.
In January 2004, we implemented supplemental retirement plans for
Messrs. Charman and Butt. The plan for Mr. Charman requires us to make annual
payments to Mr. Charman upon his retirement for a period of 20 years. The
benefits vest over a period of two years commencing in 2006. Commencing at age
56, Mr. Charman is entitled to an annual payment of $750,000 compounded by 3%
annually for each year commencing from inception. The plan for Mr. Butt requires
us to make annual payments to Mr. Butt upon his retirement for a period of
10 years. The benefits vest over a period of two years commencing in 2006.
Commencing at age 66, Mr. Butt is entitled to an annual payment of $250,000
compounded by 3% annually for each year commencing from inception. If either
Mr. Charman or Mr. Butt dies, is permanently disabled or a change of control of
the Company occurs, the remaining benefits under his plan are payable by the
Company in a lump sum. The benefits received under these plans will be offset by
the benefits received by Messrs. Charman and Butt under the Bermuda retirement
plan.
2003 Long-Term Equity Compensation Plan
Our Board of Directors has adopted and our shareholders have approved a
long-term incentive plan (the "Employees Plan"). The plan provides for the
granting of non-qualified stock options, incentive stock options (within the
meaning of Section 422 of the U.S. Internal Revenue Code of 1986 (the "Code")),
stock appreciation rights ("SARs"), restricted stock awards, performance share
and performance unit awards and share purchase rights to employees, directors
and consultants. To date, the Company has issued only non-qualified stock
options, restricted stock and share purchase rights under the Employees Plan.
The maximum number of common shares with respect to which awards may be granted
under the plan is 14,855,192, of which 1,200,000 are available for issuance
pursuant to share purchase rights and of which 13,655,192 are available for
issuance under all other awards. As of February 28, 2006, 11,947,035 shares have
been issued or are subject to issuance upon the exercise or payment of
outstanding awards under the Employees Plan. The Compensation Committee has
broad authority to administer the plan, including the authority to determine
when awards will be made, determine the type and amount of awards, determine the
exercise price of options and SARs, determine any limitations, restrictions or
conditions applicable to each award, determine the terms of any instrument that
evidences an award and select plan participants.
Stock Options. Options awarded under the Employees Plan are generally granted
for a ten-year term, but may terminate earlier if the participant's employment
or service terminates prior to the end of the term. The exercise price of an
option must be at least equal to the fair market value of the shares on the date
such option is granted. The exercise price of options may be paid (1) in cash,
(2) by delivery of previously-acquired common shares, (3) by any combination of
(1) and (2), (4) pursuant to a cashless exercise program or (5) by any other
means the Compensation Committee approves, in its discretion. The outstanding
stock options generally vest in three equal installments on the first, second
and third anniversaries of the date of grant or earlier upon the retirement,
death or permanent disability of the participant or a change of control of the
Company. As of February 28, 2006, non-qualified stock options exercisable for
6,414,675 common shares had been granted under the Employees Plan.
12
Restricted Stock. Holders of restricted stock may generally exercise full
voting rights and may be credited with regular dividends paid with respect to
the underlying shares while they are so held. The shares generally become freely
transferable after the last day of the applicable period of restriction. The
period of restriction with respect to outstanding stock awards generally expires
on the third anniversary of the date of grant or earlier upon the retirement,
death or permanent disability of the participant or a change of control of the
Company. As of February 28, 2006, 4,610,800 restricted shares have been granted
under the Employees Plan.
Share Purchase Rights. Share purchase rights may only be granted to employees
according to terms determined by the Compensation Committee. To assist employees
in purchasing shares pursuant to a grant of share purchase rights, we may offer
employees who are not executive officers of the Company full recourse loans
secured by the shares purchased with the loan proceeds. As of February 28, 2006,
share purchase rights exercisable for 921,560 common shares had been granted and
exercised under the Employees Plan.
Equity Compensation Plan Information
The following table presents information concerning our equity compensation
plans as of December 31, 2005.
Number of securities remaining
Number of securities to be Weighted-average available for future issuance
issued upon exercise of exercise price of under equity compensation
outstanding options, outstanding options, plans (excluding securities
Plan category warrants and rights warrants and rights reflected in the first column)
Equity
compensation
plans
approved by
security
holders (1) 6,054,464 $ 19.05 4,765,081 (3)
Equity
compensation
plans not
approved by
security
holders (2) 120,000 $ 14.50 -
Total 6,174,464 $ 18.96 4,765,081 (3)
(1) Includes stock options granted under the Employees Plan and the
Directors Plan.
(2) Includes a grant of stock options made to Robert J. Newhouse, a
director of the Company until May 2005, pursuant to a non-qualified option
agreement dated as of December 31, 2002. The grant was for 120,000 shares at an
exercise price of $14.50 per share with a termination date of November 12, 2012.
The options were fully vested upon grant.
(3) Includes common shares available for issuance (i) under the Employees
Plan pursuant to awards of stock options, stock appreciation rights, restricted
stock, performance units and performance shares and share purchase rights and
(ii) under the Directors Plan pursuant to awards of unrestricted stock, stock
options and restricted stock.
Employment Agreements
John R. Charman. Under Mr. Charman's employment agreement, dated as of
December 15, 2003, Mr. Charman has agreed to serve as our Chief Executive
Officer and President, a member of our Board of Directors and a member of the
Executive Committee of our Board of Directors. Mr. Charman's term of service
under this agreement continues until December 31, 2008, at which time he will
retire. Mr. Charman receives an annual base salary of $1,250,000 as of
January 1, 2004 and an annual target incentive bonus opportunity, to be
determined by the board, of no less than 150% of his base salary. Mr. Charman's
salary can be subject to review for increase at the discretion of the board,
however, it cannot be decreased.
13
Mr. Charman also was granted stock options and restricted shares as an
inducement to accept such position and as a performance incentive. Mr. Charman
is entitled to participate in all incentive plans and all employee benefit plans
in which senior executives of the Company are eligible to participate and also
is entitled to a supplemental executive retirement benefit upon terms and
conditions determined by the board.
If Mr. Charman's employment terminates as a result of death, Mr. Charman's
employment agreement automatically terminates, and his designated beneficiary or
legal representatives are entitled to (1) base salary through the end of the
month in which he dies, (2) a lump sum payment of one year's base salary, (3) a
separation bonus no less than the greater of (A) $1,250,000 and (B) the highest
amount awarded to Mr. Charman as an annual bonus for any of the three years
immediately preceding his death, (4) immediate vesting of his previously
unvested stock options and restricted shares as if his employment continued
until the end of the 12-month period following his death, with the stock options
to remain exercisable for no longer than one year, (5) vesting and
exercisability of all other equity awards in accordance with their terms and
(6) any accrued benefits under the Company's plans, programs or agreements.
Either Mr. Charman or we may terminate his employment agreement if Mr. Charman
becomes disabled by providing 15 days prior written notice to the other party.
If Mr. Charman's employment ceases because of disability, then in addition to
the entitlements discussed immediately above in the case of death, Mr. Charman
is also entitled to (1) disability benefits and (2) continued coverage for one
year under all benefit programs he was participating in immediately prior to the
date of his termination.
If we terminate Mr. Charman's employment agreement for cause, which includes
conviction of a felony involving moral turpitude, gross negligence or gross
misconduct, or if Mr. Charman voluntarily terminates his employment agreement
with us, all of our obligations cease, and Mr. Charman will only be entitled to
receive (1) accrued base salary through the date of termination, (2) continued
eligibility for one year under all medical benefit programs he was participating
in immediately prior to the date of his termination at Mr. Charman's expense for
the full cost of premiums for such coverage and (3) other benefits under the
Company's plans, programs and agreements.
If we terminate Mr. Charman's employment without cause or if Mr. Charman
terminates his employment with good reason as defined in the agreement, then
Mr. Charman is subject to the same terms as if he ceased employment as a result
of disability, except that Mr. Charman is entitled to receive payment of two
year's base salary instead of one and two times the amount of the separation
bonus and he is not entitled to disability benefits. If we terminate
Mr. Charman's employment agreement without cause, or if Mr. Charman terminates
his employment with good reason, in anticipation of, or within the 12-month
period following, a change in control as defined in the agreement, Mr. Charman
is also entitled to receive the foregoing benefits, excluding disability
benefits, except that he is also entitled to (1) three times the amount of the
separation bonus instead of two, (2) immediate vesting of his previously
unvested stock options and restricted shares as if his employment continued
until the third anniversary of the date of his termination, with the stock
options to remain exercisable for no longer than one year, and (3) continued
coverage for two years under all benefit programs.
Any amount payable to Mr. Charman pursuant to his employment agreement upon his
termination of employment for any reason must be paid in a lump sum with respect
to 50% promptly following his termination, and with respect to the remaining
50%, with accrued interest, on the first anniversary of his termination date.
Mr. Charman is also subject to non-competition and non-solicitation provisions
for a period of one year after termination of the agreement along with ongoing
confidentiality and non-disparagement requirements.
14
Michael A. Butt. Under Mr. Butt's service agreement, dated as of December 15,
2003, Mr. Butt has agreed to serve as Chairman of our Board of Directors.
Mr. Butt's term of service under this agreement continues until December 31,
2008. Mr. Butt receives an annual base salary of $750,000 as of January 1, 2004
and an annual target incentive bonus opportunity of no less than 100% of his
base salary. Mr. Butt's salary can be subject to review for increase at the
discretion of the board, however, it cannot be decreased. Mr. Butt also was
granted stock options and restricted shares as an inducement to accept such
position and as a performance incentive. Mr. Butt is entitled to participate in
all incentive plans and all employee benefit plans in which senior executives of
the Company are eligible to participate and also is entitled to a supplemental
executive retirement benefit upon terms and conditions determined by the board.
If Mr. Butt's employment terminates as a result of death, Mr. Butt's agreement
automatically terminates, and his spouse, other beneficiary or legal
representatives are entitled to (1) any accrued base salary through the end of
the month in which he dies, (2) a separation bonus no less than the greater of
(A) $750,000 and (B) the highest amount awarded to Mr. Butt as an annual bonus
for any of the three years immediately preceding his death, (3) immediate
vesting of his previously unvested stock options and restricted shares as if his
employment continued until the end of the 12-month period following his death,
with the stock options to remain exercisable for no longer than one year,
(4) vesting and excercisability of all other equity awards in accordance with
their terms and (5) any accrued benefits under the Company's plans, programs or
agreements.
Either Mr. Butt or we may terminate his service agreement if Mr. Butt becomes
disabled by providing 15 days prior written notice to the other party. If
Mr. Butt's employment ceases because of disability, then in addition to the
entitlements discussed immediately above in the case of death, Mr. Butt is also
entitled to (1) payment of one year's base salary, (2) disability benefits and
(3) continued coverage for one year under all benefit programs he was
participating in immediately prior to the date of his termination.
If we terminate Mr. Butt's service agreement for cause, which includes
conviction of a felony involving moral turpitude, gross negligence or gross
misconduct, or if Mr. Butt voluntarily terminates his service agreement with us,
all of our obligations cease, and Mr. Butt will only be entitled to receive
accrued base salary through the date of termination and any accrued benefits
under the Company's plans, programs or agreements.
If we terminate Mr. Butt's employment without cause or if Mr. Butt terminates
his employment with good reason as defined in the agreement, then Mr. Butt is
subject to the same terms as if he ceased employment as a result of disability,
except that Mr. Butt is entitled to receive payment of two year's base salary
instead of one and is not entitled to disability benefits. If we terminate
Mr. Butt's agreement without cause or if Mr. Butt terminates his employment with
good reason in anticipation of, or within the 12-month period following, a
change in control as defined in the agreement, Mr. Butt is also entitled to
receive the foregoing benefits, excluding disability benefits, except that he is
also entitled to (1) two times the amount of the separation bonus, (2) immediate
vesting of his previously unvested stock options and restricted shares as if his
employment continued until the three-year anniversary of the date of his
termination, with the stock options to remain exercisable for no longer than one
year, and (3) continued coverage for two years under all benefit programs.
Any amount payable to Mr. Butt pursuant to his service agreement upon his
termination of employment for any reason must be paid in a lump sum with respect
to 50% promptly following his termination, and with respect to the remaining
50%, with accrued interest, on the first anniversary of his termination date.
Mr. Butt is also subject to non-competition and non-solicitation provisions for
a period of one year after termination of the service agreement along with
ongoing confidentiality and non-disparagement requirements.
15
Dennis Reding. Under Mr. Reding's employment agreement, dated as of January 1,
2004, Mr. Reding has agreed to serve as Chief Executive Officer of AXIS U.S.
Insurance or in such other position as is mutually agreeable to Mr. Reding and
the Company. Mr. Reding's term of service under this agreement continues until
December 31, 2005 followed by automatic one-year renewals unless notice of
termination of his employment is provided by us or Mr. Reding at least six
months prior to the end of the term. Mr. Reding receives an annual base salary
of $575,000 as of January 1, 2004 and an annual bonus payable at the discretion
of the Company. We have also granted Mr. Reding options and restricted shares.
Mr. Reding's employment will automatically terminate upon his death. The Company
may terminate Mr. Reding's employment as a result of his disability, for cause
(which includes willful misconduct or gross negligence in the performance of
duties, willful engagement of conduct that is demonstrably injurious to the
Company, material breach of the agreement or conviction of a felony or a crime
involving moral turpitude) or without cause at any time. Mr. Reding may
terminate his employment upon at least six months notice to the Company.
In the event of termination of employment for any reason, Mr. Reding will be
entitled to any accrued base salary though the date of termination and all
employee benefits to which he is entitled under all employee benefit plans in
which he participates. If we terminate Mr. Reding's employment without cause, he
is entitled to continuation of his base salary and employee benefits for a
period of 12 months after the date of termination. If Mr. Reding terminates his
employment with good reason as defined in the agreement within the 12-month
period following a change in control as defined in the agreement, Mr. Reding is
entitled to continuation of his base salary and employee benefits for a period
of 12 months after the date of termination and the bonus to which he would have
been entitled as if all performance targets were met.
If either the Company or Mr. Reding gives notice of non-renewal of Mr. Reding's
employment or we terminate Mr. Reding's employment without cause and give him
notice or Mr. Reding terminates his employment and gives us notice, we may until
the termination date (1) require Mr. Reding to perform only those duties as we
may choose, (2) require him not to perform any of his duties, (3) require him to
not have any contact with customers, clients or employees, (4) exclude him from
our premises and/or (5) require him to resign from all positions with the
Company. If we elect to take any such action, Mr. Reding will continue to be an
employee and we will continue to pay him his base salary and afford him all
employee benefits to which he is entitled until the date of termination.
Mr. Reding is also subject to non-competition and non-solicitation provisions
for a period of six months after termination of employment and ongoing
confidentiality requirements.
William A. Fischer. Under Mr. Fischer's employment agreement, dated as of
January 1, 2004, Mr. Fischer has agreed to serve as Chief Executive Officer and
President of AXIS Global Reinsurance or in such other position as is mutually
agreeable to Mr. Fischer and the Company. Mr. Fischer's term of service under
this agreement continues until December 31, 2005 followed by automatic one-year
renewals unless notice of termination of his employment is provided by us or
Mr. Fischer at least six months prior to the end of the term. Mr. Fischer
receives an annual base salary of $575,000 as of January 1, 2004 and an annual
bonus payable at the discretion of the Company. We have also granted Mr. Fischer
options and restricted shares.
Mr. Fischer's employment will automatically terminate upon his death. The
Company may terminate Mr. Fischer's employment as a result of his disability,
for cause (which includes willful misconduct or gross negligence in the
performance of duties, willful engagement of conduct that is demonstrably
injurious to the Company, material breach of the agreement or conviction of a
felony or a crime involving moral turpitude) or without cause upon 30 days
notice. Mr. Fischer may terminate his employment upon at least six months notice
to the Company.
16
In the event of termination of employment for any reason, Mr. Fischer will be
entitled to any accrued base salary through the date of termination and all
employee benefits to which he is entitled under all employee benefit plans in
which he participates. If we terminate Mr. Fischer's employment without cause,
he is entitled to continuation of his base salary and employee benefits for a
period of 12 months after the date of termination. If Mr. Fischer terminates his
employment with good reason as defined in the agreement within the 12-month
period following a change in control as defined in the agreement, Mr. Fischer is
entitled to continuation of his base salary and employee benefits for a period
of 12 months after the date of termination and the bonus to which he would have
been entitled as if all performance targets were met. If Mr. Fischer's
employment is terminated for any reason, other than for cause or by Mr. Fischer
without the required notice, the Company will pay the costs of repatriating him
and his family to the United States.
If either the Company or Mr. Fischer gives notice of non-renewal of
Mr. Fischer's employment or we terminate Mr. Fischer's employment without cause
and give him notice or Mr. Fischer terminates his employment and gives us
notice, we may until the termination date (1) require Mr. Fischer to perform
only those duties as we may choose, (2) require him not to perform any of his
duties, (3) require him to not have any contact with customers, clients or
employees, (4) exclude him from our premises and/or (5) require him to resign
from all positions with the Company. If we elect to take any such action,
Mr. Fischer will continue to be an employee and we will continue to pay him his
base salary and afford him all employee benefits to which he is entitled until
the date of termination.
Mr. Fischer is also subject to non-competition and non-solicitation provisions
for a period of six months after termination of employment and ongoing
confidentiality requirements.
John Gressier. Under Mr. Gressier's employment agreement, dated as of
December 20, 2002, Mr. Gressier has agreed to serve as Chief Executive Officer
and President of AXIS Global Insurance. Mr. Gressier receives an annual base
salary of £364,210 as of January 1, 2004 and an annual bonus payable at the
discretion of the Company. The Company has also granted Mr. Gressier options and
restricted shares.
We may terminate Mr. Gressier's employment without cause upon at least six
months notice, for cause (which includes material breach of the agreement, grave
misconduct, gross default or willful neglect in the discharge of his duties,
commission of any serious act of dishonesty or conviction of any indictable
offence that affects his position with the Company), as a result of his
disability or upon reaching age 60. Mr. Gressier may terminate his employment
upon at least six months notice to the Company.
If we terminate Mr. Gressier's employment, we may pay him in lieu of providing
the required notice his base salary for the notice period. In addition, we may
upon notice to Mr. Gressier during some or all of the notice period require
Mr. Gressier to (1) cease performing some or all of the powers, authorities and
discretions delegated to him, (2) cease attending our offices and the offices of
our brokers, clients and potential clients and/or (3) complete specifically
assigned projects.
Mr. Gressier is also subject to non-competition provisions and non-solicitation
provisions for a period of six months after termination of employment and
ongoing confidentiality requirements.
|