The 2023 peer group is comprised of the following companies: | | | | | | | | | | | | | | | | | | | | | | | | | | Arch Capital Group, Ltd. | | | Everest Group, Ltd. | | | | Proassurance Corporation | | AXIS Capital Holdings Limited | | | •Everest Re Group,Hiscox Ltd.•
| | | RenaissanceRe Holdings Ltd. | •W.R. Berkley Corporation•Axis CapitalConduit Holdings Limited
•SiriusPoint Ltd.
•Proassurance Corporation
•
| | | James River Group Holdings, Ltd. | | | •SiriusPoint Ltd. | Protective Insurance CorporationEmployers Holdings, Inc. | | | •HCIKinsale Capital Group, Inc. | | | United Fire Group, Inc. | | •Alleghany Corporation
•Assured Guaranty Ltd.
•Enstar Group Limited
•Argo Group International Holdings, Ltd.
•
| | | Lancashire Holdings Limited •Employers Holdings, Inc.
•Global Indemnity Group, LLC
•Prosight Global, Inc.
•Heritage Insurance Holdings, Inc.
| | | | | | | | | | |
We are positioned marginally below the peer group’s 25th percentile relative to book value based on the fact that many of our market comparators are larger.
The Compensation Committee strives to target total pay at levels that are within reasonable range of market based on various criteria, including, but not limited to, experience, time in role, performance, and scope of responsibility in comparison to benchmarks.
Base Salary
We use base salary to recognize the experience, skills, knowledge, roles and responsibilities of our employees and executive officers. When establishing the base salaries of our NEOs, our Compensation Committee considers a number of factors, including:
•the individual’s years of experience; •the functional role of the individual’s position; •the level of the individual’s responsibility; •our ability to replace the individual; and •to the extent applicable, the limited number of well-qualified candidates available in or willing to relocate to the Cayman Islands.
Base salaries are reviewed and considered by the Compensation Committee on an annual basis or as otherwise deemed appropriate by the Compensation Committee. Mr. Burton’s base salary was increased pursuant to an Amended and Restated Employment Agreement, effective as of January 1, 2022, or the 2022 Burton Employment Agreement, and based on the Compensation Committee’s review, Mr. Romer’s base salary was also increased. The Compensation Committee did not change the base salaries of Messrs. Greenspan, O’Brien, Curnock for 2022. For more detail on the 2022 Burton Employment Agreement, see “Grants of Plan Based Awards in Fiscal Year 2022 — Employment Agreements” and “Potential Payments upon Termination or Change in Control — Employment Agreements”below.
2022,2023, including their percentage increase over their salaries in effect on December 31, 20212022 were as follows:
| | | | | | | | | | | | | | | | | | | | | | Name | | 2023 Base Salary ($) | | 2022 Base Salary ($) | | % Increase | | Simon Burton | | 800,000 | | 800,000 | | —% | Faramarz Romer(1) | | 465,000 | | 367,500 | | 27% | Neil Greenspan(2) | | 500,000 | | 500,000 | | —% | Patrick O'Brien(3) | | 437,400 | | 405,000 | | 8% | | Thomas Curnock | | 450,000 | | 420,000 | | 7% | David Sigmon(4) | | 390,000 | | — | | N/A |
| | | | | | | | | | | | | | | | | | | | | | Name | | 2022 Base Salary ($) | | 2021 Base Salary ($) | | % Increase | | Simon Burton | | 800,000 | | 725,000 | | 10.3% | | Neil Greenspan | | 500,000 | | 500,000 | | 0% | Patrick O'Brien(1) | | 393,750 | | 393,750 | | 0% | | Faramarz Romer | | 367,500 | | 350,000 | | 5% | | Thomas Curnock | | 420,000 | | 420,000 | | 0% |
(1)(3) Because he is based in Ireland, Mr. O’Brien’s cash compensation is generally paid to him in Euros rather than United States dollars. Amounts reported as “2022“2023 Base Salary” and “2021“2022 Base Salary” are based on an average conversion rate for 2022,2023, which was $1.05$1.08 United States dollars for each Euro.
Bonuses
Short TermShort-Term Incentive Plan
We use bonuses to reward individual and company performance. We expect our bonuses to be variable from year to year. Our Compensation Committee determines each NEO’s target bonus, expressed as a percentage of base salary. The target bonuses of the NEOs were set by the Compensation Committee based on the scope and significance of each NEO’s role, with the CEO receiving the highest target due to his greater responsibilities.
In 2021,, following following Mercer’s review of our compensation practices, the Compensation Committee recommended to our Board, and the Board approved, a new annual bonus program, which we refer to as the Short TermShort-Term Incentive Plan, which will beis administered by the Compensation Committee. No incentive cycles prior to 2021 under our previously-disclosed prior bonus program, which we refer to as the Prior Bonus Program, are impacted other than as previously disclosed. The Short TermShort-Term Incentive Plan replaces the prior bonus program, which we refer to as the Prior Bonus Program with a more market-based short-term incentive plan. The guiding principles related to our new short termshort-term incentive plan were to make the plan easy to understand, transparent and reward controllable results, rewardincentivize management decisions that would support long-term growth and profitability, and promote retention through real near-term earnings potential.
Eligible employees, which includesinclude all of our and our subsidiaries’ full-time salaried employees, who become participants in the Short TermShort-Term Incentive Plan for a specific plan year will be eligible to receive a target bonus opportunity expressed as a percentage of base salary. Actual participation in the Short TermShort-Term Incentive Plan will be determined with respect to each plan year and will be based on the recommendations of our Chief Executive Officer, or the CEO, and will be subject to the discretion of the Compensation Committee. All of the NEOs were eligible to participate in the Short TermShort-Term Incentive Plan for the 20212023 plan year. Target bonus opportunities will vary by individual participant and may vary among employees in the same salary grade level or same internal reporting relationship.
Awards under the Short TermShort-Term Incentive Plan may be earned based upon achievement of certain performance metrics, financial or otherwise, as determined by the Compensation Committee. The aggregate target bonus opportunity may be broken down into two parts: (1) the company performance target bonus and/orand (2) the individual performance target bonus. The weightings of each metric, to the extent applicable, which may vary by participant, are recommended by the CEO (other than with respect to the CEO whose weightings are determined by the Compensation Committee) and determined by the Compensation Committee. The metrics and the associated weightings may be changed from plan year to plan year.
The Compensation Committee will select one or more of the following as the company performance criteria related to the company performance target bonus for each plan year: (1) adjusted operating profit; (2) growth in book value per share; (3) total shareholder return; (4) underwriting loss ratio; (5) underwriting combined ratio; (6) expense ratio; (7) net income; or (8) any other performance criteria that the Compensation Committee may select in its discretion. Each selected company performance criteria will be assigned a threshold, target and maximum level of achievement as determined by the Compensation Committee in isits sole discretion. The company performance criteria and requisite level of performance corresponding to threshold and maximum levels of performance (including the corresponding percentage of the company performance target bonus that can be earned) may be changed from plan year to plan year, but in no event may the maximum level of performance result in a payment in excess of 200% of the company performance target bonus.
Performance and bonus achievement are measured following the end of the single year performance period and bonuses are generally paid in cash following the Board’s approval of audited fiscal year results and the determination by the CEO or the Compensation Committee, as applicable, of individual performance levels, but in no event later than March 15 of
the year following the year to which the bonus relates, subject generally to continued employment through the last day of the performance period (and not having given or received notice of termination); provided, however, that if a participant’s employment terminates due to death or disability prior to the last day of the performance period, the participant will be entitled to a pro-rata bonus based on actual performance for the year in which the termination occurs, subject to compliance with the terms of the participant’s employment agreement or offer letter, as applicable. If a participant commences participation in the Short TermShort-Term Incentive Plan after the first day of the applicable plan year, any such bonus payable in respect of such plan year will be pro-rated based on the portion of the year employed.
All payments under the Short TermShort-Term Incentive Plan may (or, to the extent required by law or listing standards of any securities exchange on which our securities are listed, will) be subject to recoupment, cancellation, reduction or forfeiture (1) in accordance with any clawback or similar policy adopted by the Board or the Compensation Committee, (2) in accordance with any clawback or similar policy that we are required to adopt pursuant to any applicable listing standards or applicable law or (3) in the event of fraud or any financial restatements or irregularities. In March 2023, the Board adopted a clawback policy designed to comply with Section 10D of the Securities Exchange Act of 1934 and with the Nasdaq Stock Market LLC Rule 5608, that provides for the recoupment of certain incentive compensation.
2023 Short-Term Incentive Plan Awards
For 2022,2023, the target annual bonus opportunity, expressed as a percentage of annual base salary, for the NEOs were as follows:
| | | | | | | | | | Name | | 20222023 Target Bonus Opportunity (% of Base Salary)
| | Simon Burton | | 100 | %100% | | Faramarz Romer | | 50% | Neil Greenspan (1) | | 50 | %N/A | | Patrick O'Brien | | 60 | % | Faramarz Romer | | 50 | %60% | | Thomas Curnock | | 50 50% | | David Sigmon | | %50% |
In respect of 2022,2023, the Compensation Committee determined that awards under the Short TermShort-Term Incentive Plan would be based upon achievement of company performance and individual performance. The weightings between company and individual performance for the annual incentive compensation opportunities vary among our named executive officers.NEOs. For 2022,2023, the weightings of the NEOs were set by the Compensation Committee based on the scope of each NEO’s role, as follows:
| | | | | | | | | | | | | | | | Name | | Company Performance | | Individual Performance | | Simon Burton | | 75% | | 25% | | Faramarz Romer | | 50% | | 50% | Neil Greenspan (1) | | 50% | | 50% | | Patrick O'Brien | | 75% | | 25% | | Thomas Curnock | | 75% | | 25% | | David Sigmon | | 50% | | 50% |
| | | | | | | | | | | | | | | | Name | | Company Performance | | Individual Performance | | Simon Burton | | 75% | | 25% | | Neil Greenspan | | 75% | | 25% | | Patrick O'Brien | | 75% | | 25% | | Faramarz Romer | | 40% | | 60% | | Thomas Curnock | | 75% | | 25% |
In respect of 2022,2023, the Compensation Committee determined that company performance would be measured based upon achievement of adjusted operating profit, or 20222023 AOP Metric, as this metric reflects management’s contribution to long term profitability and operational efficiency. With respect to the 20222023 fiscal year, the AOP Metric means the sum of (i) the 20222023 underwriting income and (ii) the 20222023 strategic investments income (net of tax), less (iii) 20222023 corporate innovations-related expense, as a percentage of book value measured as of January 1, 2022.
Under the Short TermShort-Term Incentive Plan, participants will be eligible to receive a bonus related to the company performance criteria, to the extent applicable, if we achieve at least the threshold level of performance for the applicable performance period. If the threshold level of performance related to the 20222023 AOP Metric was not attained, no portion of the award allocated to that metric would have been earned, and if the maximum level of performance related to the 20222023 AOP Metric was attained, participants would have been eligible to receive 200% of the target award related to such metric. In 2022,2023, the actual 20222023 AOP Metric was (0.8%)6.3%, which resulted in no93.8% payout. Adjusted operating profit is a non-GAAP financial measure. Please refer to Annex 1 for definition of non-GAAP financial measures and reconciliations of GAAP to non-GAAP financial measures.
| | | | | | | | | | | | | | | | | | | Performance Measure | Threshold (50%) | Target (100%) | Maximum (200%) | Actual | Payout | | 2022 AOP | 3.0 | % | 6.8 | % | 12.0 | % | (0.8) | % | — | % |
| | | | | | | | | | | | | | | | | | | Performance Measure | Threshold (50%) | Target (100%) | Maximum (200%) | Actual | Payout | | 2023 AOP | 3.0% | 6.8% | 12.0% | 6.3% | 93.8% |
Linear interpolation is used to calibrate payouts between the threshold, target and maximum levels.
The individual performance metric ranges from 0% of the target award related to that metric to 100% of the target award related to that metric. The Compensation Committee determines the percentage of the individual performance target bonus, if any, that each named executive officer is eligible to earn. In determining the individual performance payout percentages for each of our named executive officers,NEOs, the Compensation Committee considers, among other things, the contributions by each individual based upon his or her area of responsibility to:
•The transformation, diversification and performance of our underwriting platform and long-term growth strategy; •The strength and improvement of our A.M. Best financial ratings and maintenance of regulatory compliance; and •The judicious deployment of capital that is not contractually allocated to our alternative investment strategy.
The Compensation Committee, in its sole discretion, may consider subjective criteria relating to performance and accomplishments on an individual and comparative basis. These criteria include, but are not limited to:
•The strength and development of each individual’s contributions to our strategic partnershipgoals and our client, broker, shareholder and other stakeholder relationships; •Thethe quality and professionalism of the individual in support for the work forof the Board, the management team and our employees, including individual contributions to team development, engagement and motivation, and succession planning; and •Thethe Company’s desire to retain the executive and align his or her interestinterests with those of our shareholders.
In connection with its review of 20222023 individual performance, the Compensation Committee approved individual performance for the NEOs as follows:
| | | | | | | | | | Name | | Actual | Simon Burton(1) | | 100% | Neil Greenspan | | 100% | Patrick O'Brien | | 100% | | Faramarz Romer | | 100% | Neil Greenspan(2) | | —% | | Patrick O'Brien | | 100% | | Thomas Curnock | | 100% | David Sigmon(3) | | 100% |
(2) Pursuant to the terms of the Greenspan Separation Agreement, Mr. Greenspan was not entitled to a 2023 annual bonus. (3) Mr. Sigmon’s individual performance was based on a pro-rated calendar year in 2023 because he joined the Company in April 2023. Incentive compensation earned under the Short TermShort-Term Incentive Plan for the 20222023 fiscal year was paid in March 2023,2024, and for each applicable NEO disclosed in the “Non-Equity Incentive Plan Compensation” column for such year in the Summary Compensation Table below.
Prior Bonus Program
In March 2023,2024, the Compensation Committee approved the updated 2018 underwriting year calculations for the quantitative bonus pool with respect to the 2017 underwriting year with respect to the Prior Bonus Program based on performance through December 31, 20222023 and declared the 20172018 underwriting year closed. For the 20172018 underwriting year, the updated calculations reflect below-threshold performance and, as such, no quantitative bonus will be awarded. The only underwriting yearsyear that remainremains open under the Prior Bonus Program are 2018 andis 2019.
Sign-On Bonuses
From time to time, the Compensation Committee may award sign-on bonuses in connection with the commencement of an NEO’s employment with us. Sign-on bonuses are used only when necessary to attract highly skilled officers to the Company. Generally they are used to incentivize candidates to leave their current employers or may be used to offset the loss of unvested compensation or future income that they may forfeit as a result of leaving their current employer or business.
Retention Bonuses
From time to time, the Compensation Committee, based upon a review of competitive conditions and/or the role and skill set of the individual, may approve retention arrangements for certain NEOs and other senior executives.
Other Bonuses
From time to time, the Compensation Committee may award other bonus opportunities and/or adopt additional bonus plans in order to incentivize employees and foster and support the success of the Company.
Stock Incentive Plan Awards
In 2004,2023, we adopted a stock incentive plan,the 2023 Omnibus Incentive Plan, or the 2004 stock incentive plan, which was amended2023 Incentive Plan, to promote the interests of the Company and restated effective as of August 15, 2005, February 14, 2007, May 4, 2007, April 28, 2010, April 26, 2017 and October 29, 2020.its shareholders by:
•enabling such individuals to participate in the long-term growth and financial success of the Company; and •directly linking compensation with Company performance.
The 2023 Incentive Plan became effective on July 25, 2023. The 2023 Incentive Plan replaces the Greenlight Capital Re, Ltd. Amended and Restated 2004 Stock Incentive Plan, as amended from time to time, or the Prior Incentive Plan. The 2023 Incentive Plan shall not terminate amend or modify any provision of the Prior Incentive Plan nor adversely affect any awards granted under the Prior Incentive Plan or rights outstanding under the Prior Incentive Plan, provided, however, that no further awards will be granted under the Prior Incentive Plan. Our Compensation Committee has decided that, with certain exceptions noted above, restricted shares or restricted share units,RSUs, as applicable, generally are the preferred form of equity compensation as the Compensation Committee believes that restricted shares or restricted share units,RSUs, as applicable, better align management with long-term shareholder value creation. Our Compensation Committee determines the value of restricted share or restricted share unit grants for certain of our NEO after taking into account, among other things, our desire to retain the executive and the executive’s role within the Company. Those executives who are most critical to our future growth generally receive larger awards. Currently, we expect long-term compensation (i.e., 2004 stock incentive plan2023 Incentive Plan awards), to continue to represent the majority of each NEO’s compensation.
In order to prevent the backdating of equity awards and to ensure that the timing of awards or the release of material information will not be accelerated or delayed to allow an award recipient to benefit from a more favorable stock price, on February 27, 2008, our Board of Directors and Compensation Committee adopted a policy with respect to our equity grant practices that delineates specific procedures that must be followed when granting equity awards. We believe this policy helps the integrity of our equity award grant practices.
Our current practice is to grant equity awards in March of each fiscal year, shortly after the filing of our Form 10-K for the preceding year.
In February 2022,February 2023, our Compensation Committee approved, and, on March 15, 2022, we2023, we granted awards of 391,789 Class A271,269 ordinary restricted shares to Mr. Burton, 85,704 Class A47,634 ordinary restricted shares to Mr. Greenspan, 84,922 Class A ordinary restricted share unitsRSUs to Mr. O’Brien, 58,504 Class A33,081 ordinary restricted shares to Mr. Romer and 71,991 Class A49,846 ordinary restricted shares to Mr. Curnock under our 2004 stock incentive plan.the Prior Incentive Plan. Each of Messrs. Burton, Greenspan,Romer, O’Brien and Curnock’s 20222023 awards under the 2004 stock incentive planPrior Incentive Plan consist of a mix of performance-vesting restricted stock or restricted stock units (67%)RSUs (33% for Mr. Romer and 67% for the other executives), as applicable, and time-vesting restricted stock or restricted stock units (33%)RSUs (67% for Mr. Romer and 33% for the other executives), as applicable. Mr. Romer’s 2022 award under the 2004 incentive plan consists of a mix of performance restricted stock (33%) and time-vesting restricted stock (67%).
Time-based awards will vest ratably over a three-year period, generally subject to continued employment through and including each vesting date. Performance-vesting awards will cliff vest, if at all, based on the actual level of achievement against the performance metrics following the end of the three year performance period, generally subject to continued employment through and including the last day of the three year performance period. Performance will be determined by the Board or the Compensation Committee after the completion of the three year performance period pursuant to the terms of the award.
The performance-vesting awards granted in 20222023 will be earned, if at all, based on performance against the following metrics: fully diluted book value per share growth (65% weight) and combined ratio (35% weight). Performance metrics and weightings may change from year to year for future awards and the Board and the Compensation Committee reserve the right to modify the metrics and performance measurement based on changes in accounting rules/regulations, and unforeseen event and circumstances. The performance-vesting awards granted in 20222023 vest as follows based on achievement of the weighted performance metrics: below threshold, 0% vesting; threshold, 25%50% vesting; target, 50%100% vesting; and maximum, 100%200% vesting. Linear interpolation is used to calibrate payouts between threshold, target and maximum award levels. With respect to each performance metric, the Compensation Committee determined that 22.5% fully diluted book value per share growth and 97% average combined rationratio were the appropriate challenging targets for payout at target for the 2022-20242023-2025 (inclusive) performance cycle. Combined ratio of more than 99% would result in no payout, 99% would result in 25%50% payout and 94% or less would result in 100%200% payout with respect to the combined ratio performance metric. Fully diluted book value per share growth of less than 12.5% would result in no payout, 12.5% would result in 25%50% payout, and 40.5% would result in 100%200% payout with respect to the fully diluted book value per share growth performance metric.
These stock awards reflect our Compensation Committee’s desire to retain these executives and align their interests with those of our shareholders.
For more details on these awards, see “Potential“Potential Payments upon Termination or Change in Control — Control—Stock Incentive Plan and Awards Granted ThereunderThereunder.” 2024 PROXY STATEMENT.” 37
Retirement Benefits
As with every employer in the Cayman Islands, we are required by the National Pensions Law to provide a pension plan for our employees in the Cayman Islands. We belong to the Coralisle Pension Services Ltd. Pension Plan, which is administered by British Caymanian Insurance Agencies Ltd. Under the Cayman Islands National Pensions Law, all employees between the ages of 18 and 60 must contribute a minimum of 5% of their earnings to a pension plan. An employee also has the option of contributing more than the prescribed minimum. We are required to match the contribution of the first 5% of each participating employee’s salary to a maximum salary amount of $106,098. The Company currently pays both the employee and employer portions of the plan. The pension plan is a defined contribution plan and, as such, the amount that an employee receives upon retirement is directly related to the amount contributed to the plan by, or on behalf of, the employee while working. Once an employee retires (employees become eligible for retirement at age 60 in the Cayman Islands), an employee has the following options for receiving benefits: (i) receive a cash payout if the employee’s retirement savings are less than $6,098; (ii) transfer the retirement savings to a life annuity for investment by a life insurance company and payment of a regular income stream to the employee for the remainder of the employee’s life (and the employee’s spouse’s life if the employee is married at the time of retirement); or (iii) transfer the retirement savings to a Retirement Savings Arrangement account with an approved provider or bank and receive regular income payments until the account is depleted. Each of Messrs. Burton, Greenspan, Romer, Curnock, and CurnockSigmon were eligible to participate in the Coralisle Pension Services Ltd. Pension Plan in 2022.
GRIL established a defined contribution Retirement Solutions plan with Irish Life. In August 2022, GRIL commenced participation in the Irish Life Empower Master Trust with all funds in the Retirement Solution plan being transferred to the Irish Life Empower Master Trust which is a defined contribution retirement benefits scheme operated by Irish Life. All employees of GRIL are eligible to participate in the GRIL section of the master trust, which has been approved by the Irish Revenue Commissioners. GRIL generally makes a contribution to the master trust for all GRIL employees, with the contribution dependent upon the contractual commitment in each employee’s employment contract. Currently, contributions vary from 7.5% of base salary to 20% of base salary. Employees may also make personal contributions to the master trust in accordance with Revenue Commissioner limits which are linked to the age of the employee. The master trust is established under an irrevocable trust, with Law Debenture Master Trust Trustees (Ireland) Designated Activity Company acting as trustee. On May 27, 2020, the GRIL Board approved the replacement of Mr. O’Brien’s pension contribution to the Retirement Solutions plan with Irish Life with a pension allowance, which pension allowance will not result in additional consideration to be paid by GRIL.
Welfare Benefits/Perquisites
We offer certain limited welfare benefits and perquisites to our executives, including tax preparation and medical insurance. We intend to continue to maintain our current welfare benefits and perquisites for our executive officers. However, our Compensation Committee may revise, amend or add to these benefit programs at its discretion.
Tax and Accounting Implications
The Compensation Committee considers the income tax consequences of individual compensation elements when analyzing the overall compensation paid to our NEOs. Because we are not a U.S. taxpayer, our compensation program has not been designed to comply with U.S. Internal Revenue Code Section 162(m). However, with respect to our U.S. taxpayer employees, including certain of our NEOs, we design our compensation arrangements taking into account U.S. Internal Revenue Code Sections 409A and 457A.
We are accounting for stock-based payments in accordance with and to the extent required by FASB ASC Topic 718.
Risk Assessment
The Compensation Committee and management have reviewed our compensation policies as generally applicable to our employees and believe that our policies do not encourage excessive and unnecessary risk-taking, and that the level of risk that they do encourage is not reasonably likely to have a material adverse effect on us.
Our compensation philosophy and culture support the use of salary, short-term incentive cash awards and long-term incentive equity throughout our organization and with all levels of employees. In addition, the following specific factors, in particular, reduce the likelihood of excessive risk-taking:
1.Our overall compensation levels are competitive with the market; and 2.Our compensation mix is balanced among (i) fixed components such as salary and benefits, (ii) short-term incentive cash awards and (iii) long-term incentive equity that reward our employees based on long-term overall Company financial performance and operational measures.
We believe our historical compensation programs did not, and our current compensations programs do not, encourage excessive and unnecessary risk taking by NEOs (or other employees) because of its focus on the Company’s performance with only some consideration given to individual performance. The Compensation Committee will continue to monitor the compensation program to discourage excessive and unnecessary risk-taking.
Additionally, the Compensation Committee manages risk by establishing equity ownership guidelines, prohibiting hedging our stock or using it as collateral for any purpose, and implementing clawback policies.
Hedging and Pledging Policies
The Company has adopted policies related to the prohibition of hedging and pledging transactions. For more details on these policies, see “Corporate“Corporate Governance and Board of Directors and Committees — Hedging and Pledging Policies.”
Clawback Policies
In March 2023, the Company adopted a clawback policy, or the Clawback Policy, with respect to incentive compensation paid to our current and former executive officers, and such other senior executives who may from time to time be deemed subject to the policy by the Compensation Committee or the Board. We have also implemented clawbacks in connection with our short-term incentive compensation awards starting from 2022, and commencing 2022, our restricted stock agreements and restricted stock unitequity award agreements, as applicable, also now include clawback and recoupment provisions. See “Corporate“Corporate Governance and Board of Directors and Committees — Clawback Policies.Policies.”
Ordinary Share Ownership Guidelines
NEO Ordinary Share Ownership Guidelines
We believe that broad-based share ownership by our employees, including our NEOs, is the most effective method to deliver superior shareholder returns by increasing the alignment between the interests of our employees and our shareholders. In July 2021, in connection with a review of our corporate governance practices following our most recent “say on pay”“Say-on-Pay” vote and based on input from Mercer in connection with its review of our compensation practices, our Board of Directors adopted the Greenlight Capital Re, Ltd. Share Ownership and Retention Policy for Executives and Non-Employee Directors, effective July 29, 2021, or the Share Ownership Guidelines. The Share Ownership Guidelines require that all named executive officers own a significant ownership interest in our ordinary shares, subject to a phase-in period, in order to align their interestinterests with those of our shareholders and in furtherance of the Board of Directors’ intention to follow sound corporate governance practices.
The Share Ownership Guidelines include the following minimum share ownership requirements for our named executive officers:
| | | | | | | Position | Multiple | | | | | | Chief Executive Officer | 5x annual base salary | | All Other Named Executive Officers | 2x annual base salary |
For purposes of the Share Ownership Guidelines, ownership includes: our Class A ordinary shares owned through a wholly-owned entity, individually and/or by immediate family members residing in the same household, in each case, that are not hedged, pledged or otherwise encumbered, and restricted shares/share unitsRSUs not yet vested that vest based solely on time/service. Ownership does not include unexercised stock options (whether vested or unvested), unexercised share appreciation rights (whether vested or unvested), performance shares/share units, and/or any equity-based awards that may be settled in cash.
The value of our Class A ordinary shares owned by each named executive officer is calculated on an annual basis on each December 31 based upon the Nasdaq Global Select Market’s average closing price for our Class A ordinary shares for the immediately preceding six month period.
Named executive officersNEOs as of July 29, 2021, or the initial effective date of the Share Ownership Guidelines, have until July 29, 2026, or five years from the initial effective date of the Share Ownership Guidelines, to achieve the foregoing share ownership requirements. Persons who became or become named executive officersNEOs after July 29, 2021 have up to five years from the date of his or her hire or appointment or the date he or she is deemed to be an NEO, as applicable, to achieve the foregoing share ownership requirements. If any named executive officerNEO is not in compliance with the Share Ownership
Guidelines within the applicable five-year period, then 50% of any short-term incentive plan award for a given year will be paid in Class A ordinary shares until such time as compliance is achieved.
As of December 31, 2022,2023, all NEOs were in compliance with our Share Ownership Guidelines, subject to transition periods.
See ““Principal ShareholdersShareholders”” below for each NEO’s shareholding.
Change in Control and Severance Mr. Burton The Burton Separation Agreement provides that in connection with Mr. Burton’s termination of employment with the Company and Greenlight Re without cause effective December 31, 2023, Mr. Burton will receive benefits consisting of (i) a cash severance amount equal to $2,400,000, less applicable taxes and deductions and any applicable statutory severance payable to Mr. Burton, payable over eighteen (18) months in substantially equal monthly installments commencing on the sixtieth (60th) day after December 31, 2023, (ii) payment equivalent to statutory severance in the amount of $92,307 payable within two and one half months of December 31, 2023, (iii) eligibility for a 2023 annual bonus under the Short-Term Incentive Plan based on actual performance with individual performance deemed to be achieved at target, (iv) full vesting of time vesting restricted shares, (v) continued eligibility to vest in performance vesting restricted shares based on performance achievement, (vi) continued payment of base salary and provision of health coverage through April 30, 2024, which corresponds to the 180-day notice period required under his employment agreement and (vii) a grant of performance vesting restricted shares with a grant date value of $1.6 million to be made at such time as grants are generally made to other executives in or about March 2024. Mr. Burton also agreed to serve as an advisor and provide transitional services through April 2024.
Mr. Greenspan The Greenspan separation agreement provides that in connection with Mr. Greenspan’s termination of employment with the Company and Greenlight Re without cause effective March 31, 2023, Mr. Greenspan will receive benefits consisting of (i) a cash severance amount equal to $811,644, less applicable taxes and deductions, of which $61,644 is payable within two and one half months of March 31, 2023, and $750,000 is payable over twelve months in substantially equal installments commencing on the sixtieth day after March 31, 2023, (ii) payment equivalent to statutory severance in the amount of $38,462, less applicable taxes and deductions, payable within two and one half months of March 31, 2023, and (iii) payment of $95,000 for relocation expenses, payable within fifteen days following March 31, 2023. In addition, the Company, Greenlight Re, and Mr. Greenspan entered into a consulting agreement, dated March 6, 2023, pursuant to which Mr. Greenspan provided non-employee consulting and advisory services to the Employer, on a non-exclusive basis, from April 1, 2023 until July 31, 2023 for a consulting fee of $25,000 per month. Other NEOs Upon termination of employment or a change in control, in addition to certain bonuses referenced above, our NEOs may receive accelerated vesting of awards granted under our 2004 stock incentive planIncentive Plan, 2023 Incentive Plan and severance payments under their employment agreements.
Under our 2004 stock incentive plan,Incentive Plan and 2023 Incentive Plan, our Compensation Committee generally has the discretion to vest unvested awards upon a change in control as described below under “Potential“Potential Payments Upon Termination or Change in Control — The Stock Incentive Plan and Awards Granted Thereunder.” This discretion allows the Compensation Committee to determine at the time of the change in control whether, and the extent to which, additional vesting is warranted. Mr. Burton’s ’s 2022 Burton Employment Agreement provides that upon a termination of employment under certain circumstances, any outstanding unvested time-based equity awards, if any, shall fully vest and any outstanding performance-based equity awards, if any, shall remain outstanding and eligible to vest in accordance with the applicable performance criteria. For more details on these termination provisions, see “Potential Payments upon Termination or Change in Control.”
Upon termination of employment without cause or for good reason (or, with respect to Mr. O’Brien, in the event prior notice (or pay in lieu of notice) is required by GRIL and other than in the case of death), our NEOs are eligible for severance payments. For more details on these payments, see “Potential“Potential Payments upon Termination or Change in Control — Employment Agreements.Agreements.”
The amount of our severance obligations to our NEOs is designed to be competitive with the amounts payable to executives in similar positions at other global reinsurance companies with which we compete for talent. Severance payments are generally made in substantially equal monthly installments and are generally contingent upon the NEO’s continued compliance with the restrictive covenants in his or her employment agreement.
Actions Taken in 2023
Base Salaries
In March 2023,February 2024, our Compensation Committee reviewed the annual base salaries of the NEOs, other than Mr. Burton, our former CEO, and increased Messrs. O’BrienMr. Greenspan, our former CFO, and Curnock’s base salaries from €375,000 to €405,000 and $420,00 to $450,000, respectively.took the following actions: increased Mr. Romer’s base salary wasfrom $465,000 to $500,000; increased pursuantMr. O’Brien’s base salary from €405,000 to €450,000; increased Mr. Curnock’s base salary from $450,000 to $500,000; and increased Mr. Sigmon’s base salary from $390,000 to $420,000. Further, in light of the extraordinary contributions in 2023 of Messrs. Romer, O’Brien, and Curnock to the 2023 Romer Employment Agreement as described below. TheCompany in light of the CEO transition, the Compensation Committee did not make any adjustments toalso approved one-time discretionary bonus awards in the annual base salaries for Messrs. Burton or Greenspan.amounts of $6,094, $96,390, and $13,790, respectively.
20042023 Stock Incentive Plan Awards
In March 2023,February 2024, under our 2004 stock incentive plan,2023 Incentive Plan, our Compensation Committee approved and, on March 15, 2023,2024, we granted the following Class A ordinary restricted shares or restricted share units, as applicable,RSUs to the NEOs.
| | | | | | | | | | | | | | | | | # of Restricted Shares or Restricted Share Units | | Name | | Target (1) | | Maximum (2) | | Simon Burton | | 162,437 | | | 271,269 | | Neil Greenspan | | — | | | — | | Patrick O'Brien | | 28,524 | | | 47,634 | | Faramarz Romer | | 24,873 | | | 33,081 | | Thomas Curnock | | 29,848 | | | 49,846 |
| | | | | | | | | | Name | | # of RSUs (1) | | Simon Burton | | 135,021 | | Faramarz Romer | | 26,291 | | Patrick O'Brien | | 25,725 | | Thomas Curnock | | 26,582 | | David Sigmon | | 13,165 |
(1) Represents the achievement of the performance conditions at the target level of performance conditions. (2) Represents the achievement of the performance conditions at the highest level of performance conditions.
Mr. Greenspan was not granted an equity award in 2023 given his impending departure. The stock awards for Messrs. Burton,Romer, O’Brien, RomerCurnock, and CurnockSigmon reflect our desire to retain these executives and align their interests with those of our
shareholders. The terms and conditions shareholders, while Mr. Burton’s stock award was negotiated as part of each of Messrs. Burton, O’Brien, Romer and Curnock’s 2023 awards under our 2004 stock incentive plan are consistent with the terms and conditions of their applicable 2022 time-based and performance based awards.
2023 Romer Employment Agreement
As previously disclosed, on March 6, 2023, the Company, Greenlight ReMr. Burton’s severance and Mr. Romer entered into an AmendedBurton agreeing to provide certain transition and Restated Employment Agreement, which became effectiveadvisor services as of April 1, 2023, or the 2023 Romer Employment Agreement, to reflect Mr. Romer’s new role in connection with his appointment as Chief Financial Officer, effective April 1, 2023. Pursuant to the 2023 Romer Employment Agreement, Mr. Romer’s (i) base salary was increased from $367,500 to $465,000, and (ii) severance package, which provides for severance in connection with a termination of employment without cause or for good reason, was enhanced.noted above.
For more details on the 2023 Romer Employment Agreement, see “Grants of Plan Based Awards in Fiscal Year 2022 — Employment Agreements” and “Potential Payments upon Termination or Change in Control — Employment Agreements.”
2023 Greenspan Separation Agreement and Consulting Agreement
As previously disclosed, on March 6, 2023, the Company, Greenlight Re, and Mr. Greenspan executed a Deed of Settlement and Release, or the Separation Agreement, effective as of March 31, 2023, or the Separation Date. The Separation Agreement provides that in connection with Mr. Greenspan’s termination of employment by the Company without cause, Mr. Greenspan will receive benefits, in addition to accrued benefits (including unused vacation) consisting of (i) a cash severance amount equal to $811,644, of which $61,644 is payable within two and one half months of the Separation Date, and $750,000 is payable over twelve months in substantially equal installments commencing on the sixtieth day after the Separation Date, (ii) payment equivalent to statutory severance in the amount of $38,462, payable within two and one half months of the Separation Date, and (iii) payment of $95,000 for relocation expenses, payable within fifteen days following the Separation Date. As consideration for the foregoing, Mr. Greenspan has agreed to a general release of all claims against the Company and Greenlight Re and their affiliates. The Separation Agreement confirms that certain provisions contained in Mr. Greenspan’s employment agreement with the Company and Greenlight Re, dated December 3, 2018, as amended, including confidentiality, non-competition, certain restrictions relating to the disclosure of proprietary information, and ownership of the Company and Greenlight Re work product, shall remain in full force and effect and also contains customary terms applicable to the departure of an executive.
In addition, the Company, Greenlight Re, and Mr. Greenspan entered into a consulting agreement, dated March 6, 2023, or the Consulting Agreement, pursuant to which Mr. Greenspan will provide non-employee consulting and advisory services to the Company and Greenlight Re on a non-exclusive basis, from April 1, 2023 until July 31, 2023. The Consulting Agreement provides that in consideration of the services to be provided, Mr. Greenspan will receive consulting fees of $25,000 per month. Either party may terminate the Consulting Agreement for any reason upon 45 days’ written notice and the Company and Greenlight Re may terminate the Consulting Agreement without notice at any time for cause.
Compensation Committee Report
In March 2023, ourOur Compensation Committee reviewed and discussed the compensation discussion and analysis required by Regulation S-K, Item 402(b) promulgated under the Exchange Act, with management. Based on the review and discussions referred to in the preceding sentence, our Compensation Committee recommended to our Board of Directors that this compensation discussion and analysis disclosure be included in this Proxy Statement.
The foregoing report is provided by the following directors, who constitute the Compensation Committee:
The Compensation Committee
Ursuline Foley (Chair) Ian Isaacs Joseph Platt
The foregoing Compensation Committee Report (this “Report”) shall not be incorporated by reference in any previous or future documents filed by the Company with the SEC under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the Company specifically incorporates the Report by reference in any filed document.
Compensation Risk Assessment
Our Compensation Committee, together with management, conducted a risk assessment of our compensation programs. Our Compensation Committee concluded that our compensation programs are designed with the appropriate balance
of risk and reward in relation to our overall business strategy and thus discourage excessive risk-taking. Our Compensation Committee therefore determined that the risks arising from our compensation policies and practices for employees are not reasonably likely to have a material adverse effect on our company. The Company’s current compensation structure contains various features that mitigate risks. For example:
•We have an entrepreneurial culture which encourages employees to think like owners;
•We offer a balance of compensation elements with the majority of compensation related to long-term performance;
•We set reasonable bonus targets for executives and employees and require that certain performance metrics are achieved before bonuses will be paid;
•Our Compensation Committee has the discretion to make adjustments to the quantitative bonus pool under the Prior Bonus Plan due to significant deficiencies; and
•All of the equity awards granted to employees under the Company’s 2004 stock incentive plan are generally subject to multi-year time vesting, which requires an employee to commit to a longer period of employment for such awards to be valuable.
We will continue to evaluate our compensation programs with respect to risk going forward and will consider changes necessary to prevent incentives to take excessive risk.
SUMMARY COMPENSATION TABLE The following Summary Compensation Table sets forth the compensation earned by the NEOs for services rendered in all capacities to the Company and its subsidiaries in 2023, 2022 2021 and 2020,2021, as applicable. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name and Principal Position | | Year | | Salary ($) (1) | | Bonus
($)(2) | | Stock Awards
($)(3) | | Option Awards ($) | | Non-Equity Incentive Plan Compensation
($)(4) | | All Other Compensation
($)(5) | | Total
($) | Simon Burton,
Chief Executive Officer and Chief Underwriting Officer | | 2022 | | 800,000 | | | — | | | 1,600,000 | | | — | | | 200,000 | | | 10,610 | | | 2,610,610 | | | | 2021 | | 725,000 | | | 500,000 | | | 1,200,000 | | | — | | | 678,600 | | | 10,610 | | | 3,114,210 | | | | 2020 | | 650,000 | | | 499,200 | | | 487,500 | | | — | | | 280,800 | | | 10,610 | | | 1,928,110 | | | Neil Greenspan, Chief Financial Officer | | 2022 | | 500,000 | | | — | | | 350,000 | | | — | | | 62,500 | | | 10,610 | | | 923,110 | | | | 2021 | | 500,000 | | | 200,000 | | | 350,000 | | | — | | | 201,250 | | | 10,610 | | | 1,261,860 | | | | 2020 | | 396,023 | | | 164,358 | | | 245,000 | | | — | | | 35,642 | | | 10,610 | | | 851,633 | | Patrick O’Brien,
Chief Executive Officer, GRIL(6) | | 2022 | | 393,750 | | | — | | | 346,809 | | | — | | | 59,063 | | | 78,750 | | | 878,372 | | | | 2021 | | 442,500 | | | 200,000 | | | 280,000 | | | — | | | 208,189 | | | 88,500 | | | 1,219,189 | | | | 2020 | | 365,408 | | | 185,939 | | | 295,000 | | | — | | | 58,061 | | | 73,082 | | | 977,490 | | Faramarz Romer,
Chief Accounting Officer, Treasurer and Interim Compliance Officer | | 2022 | | 367,500 | | | — | | | 300,000 | | | — | | | 110,250 | | | 10,610 | | | 788,360 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Thomas Curnock, Chief Risk Officer | | 2022 | | 420,000 | | | — | | | 294,000 | | | — | | | 52,500 | | | 10,610 | | | 777,110 | | | | 2021 | | 420,000 | | | 200,000 | | | 250,000 | | | — | | | 174,827 | | | 10,610 | | | 1,055,437 | | | | 2020 | | 330,000 | | | 184,905 | | | 125,000 | | | — | | | 40,095 | | | 10,610 | | | 690,610 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name and Principal Position | | Year | | Salary
($) | | Bonus
($)(1) | | Stock Awards
($)(2) | | Option Awards ($) | | Non-Equity Incentive Plan Compensation
($)(3) | | All Other Compensation
($)(4) | | Total
($) | Simon Burton,
Chief Executive Officer | | 2023 | | 800,000 | | | — | | 1,600,000 | | | — | | 762,800 | | 2,748,046 | | 5,910,846 | | | 2022 | | 800,000 | | | — | | 1,600,000 | | | — | | 200,000 | | 144,811 | | 2,744,811 | | | 2021 | | 725,000 | | | 500,000 | | 1,200,000 | | | — | | 678,600 | | 10,610 | | 3,114,210 | Faramarz Romer, Chief Financial Officer (5) | | 2023 | | 440,625 | | | 6,094 | | 245,000 | | | — | | 213,483 | | 12,220 | | 917,422 | | | 2022 | | 367,500 | | | — | | 300,000 | | | — | | 110,250 | | 10,610 | | 788,360 | | | | | | | | | | | | | | | | | | Neil Greenspan, Former Chief Financial Officer (6) | | 2023 | | 125,000 | | | — | | — | | | — | | — | | 954,489 | | 1,079,489 | | | 2022 | | 500,000 | | | — | | 350,000 | | | — | | 62,500 | | 10,610 | | 923,110 | | | 2021 | | 500,000 | | | 200,000 | | 350,000 | | | — | | 201,250 | | 10,610 | | 1,261,860 | Patrick O’Brien,
Chief Executive Officer, GRIL(7) | | 2023 | | 437,400 | | | 96,390 | | 280,954 | | | — | | 250,237 | | 89,100 | | 1,154,081 | | | 2022 | | 393,750 | | | — | | 346,809 | | | — | | 59,063 | | 78,750 | | 878,372 | | | 2021 | | 442,500 | | | 200,000 | | 280,000 | | | — | | 208,189 | | 88,500 | | 1,219,189 | | Thomas Curnock, Chief Risk Officer | | 2023 | | 450,000 | | | 13,750 | | 294,000 | | | — | | 214,538 | | 12,220 | | 984,508 | | | 2022 | | 420,000 | | | — | | 294,000 | | | — | | 52,500 | | 10,610 | | 777,110 | | | 2021 | | 420,000 | | | 200,000 | | 250,000 | | | — | | 174,827 | | 10,610 | | 1,055,437 | David Sigmon, General Counsel, Corporate Secretary & Chief Compliance Officer (8) | | 2023 | | 263,250 | | | — | | 250,000 | | | — | | 125,970 | | 191,583 | | 830,803 |
(1)As noted above, Mr. Burton’s base salary was increased from $725,000Bonus payments in this column for 2023 represent discretionary payments approved by the Compensation Committee in February 2024 to $800,000Messrs. Romer, O’Brien and Curnock for extraordinary contributions to the Company in 2023 in connection with effect from January 1, 2022. (2)The amounts shownthe CEO transition process. Bonus payments in this column for 2021 represent the retention bonusbonuses paid to the NEOsMessrs. Burton, Greenspan, O’Brien and Curnock on July 1, 2021.
(3)(2)All stock awards were granted under our 2004 stock incentive plan.Prior Incentive Plan. The value reported above in the “Stock Awards” column is the aggregate grant date fair value for each NEO’s award determined in accordance with FASB ASC Topic 718, “Compensation—Stock Compensation.” Assumptions used in the calculation of these amounts are included in Note 112 of the Notes to Consolidated Financial Statements in our Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022. The grant date fair value for Mr. Burton’s restricted share award in 2020 was computed in accordance with FASB ASC Topic 718 based upon the probable outcome that the performance conditions were not expected to be met as of the grant date. Assuming the highest level of performance achievement as of the grant date, the aggregate grant date value of the award would have been $975,000. On July 30, 2020, we accelerated the vesting, which we refer to as the Acceleration, of part of this award. As a result of the Acceleration, 72,545 Class A ordinary shares vested on July 30, 2020. The remainder of the award is still subject to performance-based vesting criteria. The value reported above includes the incremental fair value of the award, computed as of July 30, 2020, in accordance with FASB ASC Topic 718.2023. The values reported for Messrs. Burton, Greenspan,Romer, O’Brien, RomerCurnock, and CurnockSigmon represent restricted share or restricted share unit awards, as applicable. The 2020 and 20212023 restricted shares and restricted share units for each of the NEOs (excluding Mr. Burton’s 2020 restricted share award), vest on the third anniversary of the grant date generally subject to the NEO’s continued employment on such date. The 2022 restricted shares and restricted share unitsRSUs are discussed under “Compensation“Compensation Discussion and Analysis — Stock Incentive Plan Awards”Awards” above. For the stock awards granted in 2022,2023, other than Mr. Sigmon, the values represent the achievement of the performance conditions at the target level of performance conditions. Assuming the highest level of performance achievement as of the grant date, the aggregate grant date value of the awards for Messrs. Burton, Greenspan,Romer, O’Brien, Romer and Curnock, would have been $2,672,000, $584,500, $579,171, $399,000, $490,980,$325,850, $469,193, and 490,980, respectively. As a result, they do not necessarily represent the actual value that the recipient will receive from the award. For Mr. Sigmon, his award reflects a one-time restricted share grant, with a grant value of $250,000, that cliff vests three years after the grant date generally subject to Mr. Sigmon’s continued employment.
(4)(3)For the 20222023 year, the value reported above in the “Non-Equity Incentive Plan Compensation” column is the amount paid to the applicable NEOs in March 20232024 and relates to the bonus in respect of the 20222023 plan year. The amount in 2021 with respect to Mr. Curnock, included the final installment of the 2016 underwriting year in
(4)See All Other Compensation Table below. For 2022, the amount of $5,777. Forshown for Mr. Burton includes reimbursement for legal fees and application fees incurred in connection with his application for Cayman permanent residency, per Mr. Burton’s employment agreement. (5)Mr. Romer was not a Named Executive Officer prior to 2022. Accordingly, only information for the 2020 year,2022 and 2023 years are provided herein. (6)Mr. Greenspan departed the value reported aboveCompany in the “Non-Equity Incentive Plan Compensation” column is the amount that our Compensation Committee determined that bonuses in respect of this underwriting year should be paid out at (i.e., 45% of the target amount (for any individual whose baseMarch 2023. Accordingly, his salary was increased during 2020 (other than effective as of January 1, 2020)), such target bonusfor 2023 is based on a weighted-average basis of the old base salary and the increased base salary) and such amount waspro-rated portion paid in March 2021, subject to the participant agreeing to forego any future bonus payments connection with the 2020 underwriting year. Such 45%-of-target payout represented our estimate of the amount of the quantitative portion of the bonus that would have been paid out had the underwriting year remained open indefinitely.2023. (5)The amounts shown in this column include amounts contributed to the defined contribution plans in which our employees participate on behalf of each of Messrs. Burton, Greenspan, Romer and Curnock and the pension allowance paid to Mr. O’Brien.
(6)(7)Because he is based in Ireland, Mr. O’Brien’s cash compensation is generally paid to him in Euros rather than United States dollars. Amounts reported as “Salary,” and “All Other Compensation” are based on an average conversion rate for 2022,2023, which was $1.05$1.08 United States dollars for each Euro. As noted above, amounts reported as “Bonus” and “Non-Equity Incentive Plan Compensation” were denominated in United States dollars, but will be paid to Mr. O’Brien in Euros rather than United States dollars because he is based in Ireland.
(8)Mr. Sigmon joined the Company in April 2023. Accordingly, his salary for 2023 is based on the pro-rated portion paid in 2023
For the Named Executive Officers, the 2023 amounts in the All Other Compensation column include: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Burton | | Romer | | Greenspan | | O’Brien | | Curnock | | Sigmon | | Defined Contribution Plan | | $ | 10,610 | | | $ | 10,610 | | | $ | 2,652 | | | $ | — | | | $ | 10,610 | | | $ | 7,073 | | | Pension Allowance | | — | | | — | | | — | | | 87,480 | | | — | | | — | | | Cash Severance | | 2,666,667 | | | — | | | 850,106 | | | — | | | — | | | — | | | Vacation pay | | 70,769 | | | — | | | 6,731 | | | — | | | — | | | — | | Relocation Costs(1) | | — | | | — | | | 95,000 | | | — | | | — | | | 150,000 | | Tuition Reimbursement(2) | | — | | | — | | | — | | | — | | | — | | | 32,900 | | Wellness Stipend(3) | | — | | | 1,000 | | | — | | | 1,080 | | | 1,000 | | | 1,000 | | Holiday Gift Voucher(4) | | — | | | 610 | | | — | | | 540 | | | 610 | | | 610 | | | Total | | $ | 2,748,046 | | | $ | 12,220 | | | $ | 954,489 | | | $ | 89,100 | | | $ | 12,220 | | | $ | 191,583 | |
(2)This amount represents tuition reimbursement related costs under the Company’s employee training and development policy toward completion of Mr. Sigmon’s LL.M. degree in Securities and Financial Regulation from Georgetown University Law Center—a program directly related to Mr. Sigmon’s job responsibilities as the chief legal and compliance officer of a Nasdaq-listed company. Mr. Sigmon started the program prior to joining the Company and is scheduled to complete the program in Spring or Summer 2024. No reimbursement was made for courses that commenced prior to Mr. Sigmon joining the Company. (3)This amount represents the Company’s wellness stipend offered to employees in the Grand Cayman, Dublin and London offices in 2023 as part of the Company’s employee well-being initiatives. (4)This amount represents a year-end holiday gift voucher offered to employees in the Grand Cayman, Dublin and London offices in 2023.
GRANTS OF PLAN BASED AWARDS IN FISCAL YEAR 2022
Our Compensation Committee and/or Board granted restricted share awards and restricted share unit awards and established target bonuses for our NEOs in 2022.2023. Set forth in the following table is information regarding restricted share awards and restricted share unit awards granted in 20222023 as well as 20222023 bonus opportunities.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Grant Date | Approval Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | Estimated Future Payouts Under Equity Incentive Plan Awards (4) | All Other Stock Awards: Number of Shares of Stock or Units (#) (2) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards
($)(3) | | | | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | | | Simon Burton | 3/15/2022 | 2/22/2022 | — | | — | | — | | 78,593 | | 157,185 | | 314,370 | | 77,419 | | — | | — | | 1,600,000 | | | N/A | | 600,001 | | 800,000 | | 1,400,000 | | — | | — | | — | | — | | — | | — | | — | | | Neil Greenspan | 3/15/2022 | 2/22/2022 | — | | — | | — | | 17,192 | | 34,384 | | 68,768 | | 16,936 | | — | | — | | 350,000 | | | N/A | | 187,501 | | 250,000 | | 437,500 | | — | | — | | — | | — | | — | | — | | — | | | Patrick O’Brien | 3/15/2022 | 2/22/2022 | — | | — | | — | | 17,035 | | 34,071 | | 68,141 | | 16,781 | | — | | — | | 346,809 | | | N/A | | 168,751 | | 225,000 | | 393,750 | | — | | — | | — | | — | | — | | — | | — | | | Faramarz Romer | 3/15/2022 | 2/22/2022 | — | | — | | — | | 7,258 | | 14,516 | | 29,032 | | 29,472 | | — | | — | | 300,000 | | | N/A | | 73,501 | | 183,750 | | 257,250 | | — | | — | | — | | — | | — | | — | | — | | | Thomas Curnock | 3/15/2022 | 2/22/2022 | — | | — | | — | | 14,441 | | 28,883 | | 57,765 | | 14,226 | | — | | — | | 294,000 | | | N/A | | 157,501 | | 210,000 | | 367,500 | | — | | — | | — | | — | | — | | — | | — | |
___________
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Grant Date | Approval Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | Estimated Future Payouts Under Equity Incentive Plan Awards (4) | All Other Stock Awards: Number of Shares of Stock or Units (#) (2) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards
($)(3) | | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | Simon Burton | 3/15/2023 | 3/2/2023 | — | | — | | — | | 54,416 | | 108,833 | | 217,665 | | 53,604 | | — | | — | | 1,600,000 | | | N/A | | 600,001 | | 800,000 | | 1,400,000 | | — | | — | | — | | — | | — | | — | | — | | | Faramarz Romer | 3/15/2023 | 3/2/2023 | — | | — | | — | | 4,104 | | 8,208 | | 16,416 | | 16,665 | | — | | — | | 245,000 | | | N/A | | 116,251 | | 232,500 | | 348,750 | | — | | — | | — | | — | | — | | — | | — | | | Patrick O’Brien | 3/15/2023 | 3/2/2023 | — | | — | | — | | 9,555 | | 19,111 | | 38,221 | | 9,413 | | — | | — | | 280,954 | | | N/A | | 182,251 | | 243,000 | | 425,250 | | — | | — | | — | | — | | — | | — | | — | | | Thomas Curnock | 3/15/2023 | 3/2/2023 | — | | — | | — | | 9,999 | | 19,998 | | 39,996 | | 9,850 | | — | | — | | 294,000 | | | N/A | | 168,751 | | 225,000 | | 393,750 | | — | | — | | — | | — | | — | | — | | — | | | David Sigmon | 5/12/2023 | 3/2/2023 | — | | — | | — | | — | | — | | — | | 25,562 | | — | | — | | 250,000 | | | N/A | | 66,496 | | 132,990 | | 199,485 | | — | | — | | — | | — | | — | | — | | — | |
(1)The amounts reflect the NEO’s threshold, target and maximum amount of payouts under the Short TermShort-Term Incentive Plan as of the grant date of such awards. The actual amounts paid to our NEOs pursuant to the plan are set forth in the Summary Compensation Table above. For more information about the terms of the Short TermShort-Term Incentive Plan, please see the section of this Proxy Statement entitled “Compensation“Compensation Discussion and Analysis — Bonuses.Bonuses.” Mr. Sigmon’s threshold, target and maximum amounts are pro-rated based upon length of service in 2023, given he joined in April 2023. (2)The amounts reflect the restricted shares or restricted share units, as applicable, made pursuant to our 2004 stock incentive plan to each of Messrs. Burton, Greenspan,Romer, O’Brien, Romer and Curnock, vesting in substantially equal installments over three years on each January 1, 2023,2024, January 1, 2024,2025, and January 1, 2025. 2026. In the case of Mr. Sigmon, this amount reflects the restricted shares Mr. Sigmon received in his sign-on grant, that cliff vest three years following the grant date generally subject to his continued employment. (3)The amounts reflect the aggregate grant date fair value for each NEO’s restricted share or restricted share unit awards granted in 2022,2023, determined in accordance with FASB ASC Topic 718, “Compensation—Stock Compensation.” The values represent the achievement of the performance conditions at the target level of performance conditions. Assuming the highest level of performance achievement as of the grant date, the aggregate grant date value of the awards for Messrs. Burton, Greenspan,Romer, O’Brien, Romer and Curnock, would have been $2,672,000, $584,500, $579,171, $399,000,$325,850, $469,193, and $490,980, respectively. (4)The amounts reflect the threshold, target and maximum number of share that will vest with respect to restricted shares or be issuable with respect to restricted share units, made pursuant to our 2004 stock incentive planPrior Incentive Plan to each Messrs. Burton, Greenspan,Romer, O’Brien, Romer and Curnock. The performance shares vest, and the performance share units are settled in ordinary shares, of common stock, in an amount from 0% to 100% of the shares or units awarded, respectively, based on fully diluted book value per share growth (65% weight) and combined ratio (35% weight) for the three year performance period commencing on January 1, 20222023 and ending on December 31, 2024.2025.
Employment Agreements Employment agreements are entered into by the Company when it is determined that an employment agreement assists in obtaining assurance as to the executive’s continued employment in light of the prevailing market competition for the particular position, or where the Compensation Committee believes that an employment agreement is appropriate to attract an executive in light of market conditions and the prior experience of the executive. Employment agreements with key executive officers further provide the Company protection against the potential loss of business that could result from the departure of a key executive by including restrictive covenants such as non-disclosure, non-compete and non-solicitation provisions in such agreements. The terms of the agreement take into consideration the executive’s prior background, experience, compensation, competitive conditions and negotiations with the executive.
The following paragraphs summarize the material terms of the employment agreements of our NEOs. The severance provisions of these agreements are summarized in the section entitled “Potential Payments Upon Termination or Change in Control” below. Simon Burton. In connectionFebruary 2022, the Company entered into an amended and restated employment agreement with his appointment asour former Chief Executive Officer, we entered into an employment agreement, effective July 1, 2017, with Mr.Simon Burton or the(the “2022 Burton Employment Agreement, which was amended and superseded in FebruaryAgreement”). The 2022 as described below. The Burton Employment Agreement provided that Mr. Burton would be employed by us as Chief Executive Officer for a fixed three year term, with an automatic three year renewal (which occurred in July 2020), unless the Company or Mr. Burton gave written notice of non-renewal at least 180 days in advance of the expiry of the fixed term. The Burton Employment Agreement provided that Mr. Burton will be entitledwas to receive an annual base salary of not less than $650,000, subject to increase as determined by the Board (which, as discussed above, was increased to $725,000, effective as of January 1, 2021), and would be eligible to be considered for an annual discretionary bonus with pre-established performance metrics with a target equal to 120% of base salary. The Burton Employment Agreement also provided that Mr.
Burton would be eligible to participate in our employee benefit plans and insurance programs and will also be reimbursed for certain tax preparation expenses.
Pursuant to the Burton Employment Agreement, as soon as practicable following his employment commencement date, Mr. Burton was entitled to a grant of a stock option to acquire 480,000 Class A ordinary shares with a per share exercise price equal to the fair market value per share on the date of grant, with such options exercisable over a ten year period following the date of grant and vesting as to 80,000 shares on June 30 of each of the first six anniversaries of June 30, 2017 contingent on Mr. Burton’s continued employment with us. The Burton Employment Agreement also provided that Mr. Burton would be eligible to receive a discretionary award under our long-term incentive plan following the end of each calendar year of employment with a target of $975,000 of restricted Class A ordinary shares (or, in respect of the period July 1, 2017-December 31, 2017 only, $487,500), subject to performance vesting conditions generally measured for the six year period beginning with the year immediately preceding the grant date.
Pursuant to the Burton Employment Agreement, following Mr. Burton’s employment with us, Mr. Burton agreed to comply with perpetual confidentiality and non-disparagement restrictive covenants, a six-month post-termination non-competition restriction, a twelve-month post-termination non-solicitation restriction with respect to employees and a twelve-month post-termination non-solicitation restriction with respect to customers and clients.
As previously disclosed, the 2022 Burton Employment Agreement, effective January 1, 2022, amends and restates the Burton Employment Agreement. The 2022 Burton Employment Agreement provides that Mr. Burton continuescontinue in his role as Chief Executive Officer and iswas entitled to receive an annual base salary of $800,000 (pro-rated for partial years), subject to review periodically for increases, andincreases. Mr. Burton is eligible for certain employee benefits. Mr. Burton iswas also eligible for reimbursement of an aggregate amount of 115,000 KYD for legal fees and application fees incurred in connection with his application for Cayman permanent residency; provided that if Mr. Burton’s employment is terminated on or before December 31, 2025, by Mr. Burton without Good Reason or by the Company or Greenlight Re for Cause (as each such term is defined in the 2022 Burton Employment Agreement), Mr. Burton willwould be required to repay any such amounts previously paid to Mr. Burton.
Pursuant to the 2022 Burton Employment Agreement, Mr. Burton iswas eligible to earn an annual bonus with a target bonus opportunity of 100% of his base salary, based on certain performance metrics, as determined by the Board or Compensation Committee thereof, in accordance with and subject to the terms and conditions of the Company’s short-term incentive plan, as in effect from time to time. Commencing in 2022, Mr. Burton iswas also eligible to receive equity-based awards with a target grant date fair value equal to 200% of his base salary.
The 2022 Burton Employment Agreement contains customary restrictive covenants, including restrictions related to non-competition, non-solicitation of customers, confidentiality, non-disparagement, non-disclosure of propriety information, and ownership of the Company’s or Greenlight Re’s work product and information.
Neil Greenspan. GreenspanIn connection with his appointment as Chief Accounting Officer, we. We entered into an employment agreement with Mr. Greenspan, dated as of December 3, 2018 (as amended as of September 2, 2019). Mr. Greenspan currently servesformerly served as our Chief Financial Officer. The employment agreement doesdid not have a fixed term. Mr. Greenspan iswas entitled to receive an annual base salary of $500,000 (effective as of September 10, 2020), subject to increase as determined by the Chief Executive Officer, and iswas eligible to be considered for an annual discretionary bonus with pre-established performance metrics with a target equal to 50% of base salary. Faramarz Romer. In connection with Mr. GreenspanRomer’s announced appointment as Chief Financial Officer effective April 1, 2023, we entered into the 2023 Romer Employment Agreement. The employment agreement does not have a fixed term. The agreement provides that Mr. Romer serves as Chief Financial Officer and is entitled to receive an annual base salary of $465,000, subject to review periodically. Mr. Romer is eligible for certain employee benefits and is eligible to earn an annual bonus with a target bonus opportunity of 50% of his base salary, based on certain performance metrics, as determined by the Board or Compensation Committee thereof, in accordance with and subject to the terms and conditions of the Company’s short-term incentive plan, as in effect from time to time. Mr. Romer is also eligible to participate in our employee benefit plansreceive equity-based awards under the Company’s long-term incentive plan, as determined by the Board and insurance programs.
Following Mr. Greenspan’s employment with us, in addition to perpetual confidentiality and non-disparagement restrictive covenants, Mr. Greenspan is subject to a six-month post-termination non-competition restriction and a one year post-termination non-solicitation restriction with respect to employees, customers and clients.
Patrick O’Brien.O’Brien. GRIL entered into an employment agreement with Mr. O’Brien, dated as of February 16, 2018 (as amended as of September 2, 2019) under which he serves as Chief Executive Officer of GRIL. The employment agreement does not have a fixed term. Mr. O’Brien receives an annual base salary of €320,000,€405,000, subject to increase as determined by our Chief Executive Officer in accordance with the terms of the agreement (which was increased to €405,000, effective as of January 1, 2023),review periodically, and is eligible to be considered for an annual discretionary bonus based on pre-established performance metrics with a target equal to 60% of base salary. In addition, Mr. O’Brien is eligible to receive equity awards subject to the terms of our long term incentive plan. Mr. O’Brien is also entitled to participate in our employee benefit plans and insurance programs. In lieu of an annual contribution into the defined contribution occupational pension scheme equal to 20% of his base salary, Mr. O’Brien is entitled to receive an amount in cash equal to the amount such annual contribution would have been.
Mr. O’Brien is also subject to a six month post-termination non-competition restriction and a six month post-termination non-solicitation restriction, in addition to perpetual confidentiality and non-disparagement requirements.
Faramarz Romer. We entered into an employment agreement with Mr. Romer, dated as of March 22, 2007 (as amended as of September 17, 2019, May 21, 2020 and April 8, 2021), or the Romer Employment Letter, pursuant to which Mr. Romer served as our Chief Accounting Officer and Treasurer. The Romer Employment Letter did not have a fixed term. Mr. Romer was entitled to receive an annual base salary of $350,000 (which was increased to $367,500 effective as of January 1, 2022), subject to review at a minimum every two years, and was eligible to be considered for an annual discretionary bonus with a target equal to 50% of base salary. In addition, Mr. Romer was eligible to participate in our employee benefit plans and insurance programs.
Pursuant to the Romer Employment Letter, following Ms. Romer’s employment with us, in addition to perpetual confidentiality and non-disparagement restrictive covenants, Mr. Romer is subject to a six-month post-termination non-solicitation restriction with respect to employees, customers and clients.
As previously disclosed, in connection with Mr. Romer’s announced appointment as Chief Financial Officer effective April 1, 2023, we entered into the 2023 Romer Employment Agreement, which amended and restated the Romer Employment Letter effective April 1, 2023. The 2023 Romer Employment Agreement provides that Mr. Romer serves as Chief Financial Officer and is entitled to receive an annual base salary of $465,000 (pro-rated for partial years), subject to review periodically. Mr. Romer is eligible for certain employee benefits and is eligible to earn an annual bonus with a target bonus opportunity of 50% of his base salary, based on certain performance metrics, as determined by the Board or Compensation Committee thereof, in accordance with and subject to the terms and conditions of the Company’s short-term incentive plan, as in effect from time to time. Mr. Romer is also eligible to receive equity-based awards under the Company’s long-term incentive plan, as determined by the Board and Compensation Committee.
The 2023 Romer Employment Letter contains customary restrictive covenants, including restrictions related to non-competition, non-solicitation of customers, confidentiality, non-disparagement, non-disclosure of propriety information, and ownership of the Company’s or Greenlight Re’s work product and information.
Thomas Curnock. We entered into an employment agreement with Mr. Curnock, dated March 23, 2009 (as amended October 31, 2018 and as further amended September 10, 2019), pursuant to which Mr. Curnock serves as our Chief Risk Officer. The employment agreement does not have a fixed term. Mr. Curnock is entitled to receive an annual base salary of $330,000 (which was increased$450,000 subject to $450,000, effective as of January 1, 2023)review periodically and is eligible to be considered for an annual discretionary bonus with a target equal to 45% of base salary (which was increased to 50% of base salary). In addition, Mr. Curnock is eligible to receive equity awards in accordance with the terms of our long term incentive plan. Mr. Curnock is also eligible to participate in our employee benefit plans and insurance programs.
Following. We entered into an employment agreement with Mr. Curnock’sSigmon, dated March 6, 2023, pursuant to which Mr. Sigmon serves as our General Counsel. The employment with us, in additionagreement does not have a fixed term. Mr. Sigmon is entitled to perpetual confidentiality and non-disparagement restrictive covenants, Mr. Curnock isreceive an annual base salary of $390,000 subject to review periodically and is eligible to be considered for an annual discretionary bonus with a six-month post-termination non-competition restrictiontarget equal to 50% of base salary. In addition, Mr. Sigmon is eligible to receive equity awards in accordance with the terms of our long term incentive plan. Mr. Sigmon is also eligible to participate in our employee benefit plans and a one year post-termination non-solicitation restriction with respect to employees, customers and clients.insurance programs.
The 2004 Stock2023 Incentive Plan General On August 12, 2004, we adopted theThe Greenlight Capital Re, Ltd. 2004 stock incentive plan, which2023 Omnibus Incentive Plan, or the 2023 Incentive Plan, was amended and restated on August 15, 2005, February 14, 2007, May 4, 2007, April 28, 2010, April 26, 2017 and October 29, 2020. The general purposeestablished by the Company to promote the interests of the 2004 stock incentive plan is to enable usCompany and our affiliates to retain the services of eligibleits shareholders by:
•attracting, retaining, motivating, and rewarding exceptional employees, officers, directors and consultants through(including prospective employees, officers, directors and consultants) of the grantCompany and its affiliates; •enabling such individuals to participate in the long-term growth and financial success of stock options, stock bonusesthe Company; and rights to acquire restricted shares (collectively referred to as the awards).
OnThe 2023 Incentive Plan became effective on July 30, 2020, our Board25, 2023. The 2023 Incentive Plan is intended to replace the Prior Incentive Plan. The 2023 Incentive Plan shall not terminate, amend or modify any provision of Directors adopted, subject to shareholder approval, which was obtained on October 29, 2020, an amended and restated 2004 stock incentive plan, which increased the number of Class A ordinary shares authorized for issuancePrior Incentive Plan nor adversely affect any awards granted under the 2004 stock incentive plan by 3.0 million Class A ordinary shares to 8.0 million Class A ordinary shares.
Prior Incentive Plan or rights outstanding under the Prior Incentive Plan; provided, however, that no further awards will be granted under the Prior Incentive Plan. Subject to adjustment in accordance with the terms of the 2004 stock incentive plan, 8,000,000 Class A2023 Incentive Plan, the aggregate number of ordinary shares that are available forto be delivered pursuant to awards granted under the grant2023 Incentive Plan is equal to the sum of (i) 2,000,000 shares and (ii) any shares that remain or otherwise become available under the Prior Incentive Plan (including as a result of forfeiture, expiration, termination, cancellation or settlement other than by the delivery of shares of awards outstanding under the 2004 stock incentive plan. Prior Incentive Plan) as of July 25, 2023 which was the date of approval of the 2023 Incentive Plan by the Company’s shareholders. As of December 31, 2022, 1,914,6272023, no options and 4,073,94765,394 restricted shares or restricted share units,RSUs, net of forfeitures, have been granted under the 2004 stock incentive plan.
As described in “Proposal Eleven — ApprovalAdministration
The 2023 Incentive Plan will be administered by the Compensation Committee. The Compensation Committee will have the authority to construe and Adoptioninterpret the 2023 Incentive Plan, grant awards and make all other determinations necessary or advisable for the administration of the 2023 OmnibusIncentive Plan. To the extent permitted by applicable law, the Compensation Committee may delegate to officers or employees of the Company or any of its affiliates, or committees thereof, the authority, subject to such terms as the Compensation Committee shall determine, to perform such functions under the 2023 Incentive Plan” we are seeking shareholder approval as the Compensation Committee determines appropriate. Employees, officers, directors, and consultants of the Company and its affiliates, and individuals who have been offered employment and actually commence employment with the Company and its affiliates, will be eligible to receive awards under the 2023 Omnibus Incentive Plan at this Meeting.
Administration
OurPlan. The Compensation Committee administers the 2004 stock incentive planwill determine who will receive awards and has broad discretion, subject to the terms of the 2004 stock incentive plan, to determine which eligible participants will be granted awards, prescribe the terms and conditions associated with such awards. An employee on an approved leave of awards, establish rulesabsence may be considered as employed by the Company or its affiliates for purposes of eligibility to participate in the 2023 Incentive Plan.
The 2023 Incentive Plan authorizes the award of non-qualified and regulationsincentive stock options, restricted stock, RSUs, stock appreciation rights, and other stock-based awards.
Options Options may be granted to participants in such form and having such terms and conditions as the Compensation Committee deems appropriate. Stock options provide for the interpretationpurchase of ordinary shares at an exercise price set on the grant date. The exercise price of each option to purchase shares will be set by the Compensation Committee at the time of grant and administrationmust generally be at least equal to the fair market value of Company shares on the 2004 stock incentive plan and adopt any modifications, procedures or sub-plans that may be necessary or desirable to comply with the lawsdate of foreign countries in which we or our affiliates operate to assure the viability of awardsgrant. Options granted under the 2004 stock incentive plan. Options
Options are2023 Incentive Plan may be exercisable at such times and subject to such terms and conditions as ourthe Compensation Committee determines. The maximum term of options granted under the 2023 Incentive Plan is generally 10 years, at which time the option is no longer exercisable and expires. No dividend or dividend equivalent rights shall be paid out on options.
Restricted Stock The Compensation Committee may grant awards consisting of ordinary shares, the restrictions of which will lapse upon the terms that the Compensation Committee determines at the time of grant. The Compensation Committee will determine the requirements for the lapse of the restrictions for the restricted stock awards, which may be based on the service of the participant for a specified time period or the attainment of one or more performance goals. Participants may not sell, transfer, pledge, or otherwise encumber the restricted stock award prior to the time the restricted stock award has vested. Participants holding restricted stock awards will have the rights and privileges of shareholders, including to receive all dividends and other distributions with respect thereto, unless the Compensation Committee determines otherwise to the extent permitted under applicable law. If a participant has the right to receive dividends paid with respect to a restricted stock award, such dividends shall not be paid to the participant until the underlying award vests. Any shares granted under a restricted stock award are nontransferable, except in limited circumstances. Restricted Stock Units An RSU is a notional unit representing the right to receive one ordinary share (or the cash value of one ordinary share) on a specified settlement date. The Compensation Committee may grant awards consisting of RSUs subject to such terms and conditions the Compensation Committee deems appropriate. OurThe Compensation Committee determinesmay condition the per share exercise pricegrant or vesting of options whichRSUs on the achievement of performance conditions and/or the satisfaction of a time-based vesting schedule. RSUs will be settled in shares, cash, or property, or a combination thereof, as determined by the Compensation Committee, in its sole discretion, on the date or dates determined by the Compensation Committee and set forth in an Award Agreement a participant shall not be less than 100% ofentitled to dividends or dividend equivalents with respect to RSUs prior to settlement. Stock Appreciation Rights SARs provide for a payment, or payments, in cash, ordinary shares or property, as specified in the applicable award, to the holder based upon the difference between the fair market value of the Class A ordinary shares on the date of grant. Options generally expire ten years fromexercise and the stated exercise price of the stock appreciation right. The exercise price must be at least equal to the fair market value of an ordinary share on the date the stock appreciation right is granted. The maximum term of grant and vest and become exercisable as determined by our Compensation Committee. Unless otherwise provided in an individual option agreement and subject to the 2004 stock incentive plan’s adjustment provision, a change of control will not affect any optionsSARs granted under the 2004 stock incentive plan.2023 Incentive Plan is 10 years, at which time the SAR is no longer exercisable and expires. No dividends or dividend equivalents shall be paid on SARs.
Restricted Shares and Restricted Share Units
Restricted shares and restricted share units areThe Compensation Committee is authorized, subject to such terms and conditions as our Compensation Committee deems appropriate as set forth in individual award agreements. Participantslimitations under applicable law, to grant participants other awards under the 2023 Incentive Plan that may be entitleddenominated or payable in, valued in whole or in part by reference to, voteor otherwise based upon or related to the restricted shares while held in our custody. Participants are not entitled to vote the restricted share units while held. Our Compensation Committee determines the purchase price, if any, of restricted Class A ordinary shares.
Stock Bonus Awards
OurThe Compensation Committee may also grant stockordinary shares as a bonus and grant awards in lieu of obligations of the Company or its affiliates to pay cash or deliver property under the 2004 stock incentive plan subject to such terms and conditions as our Compensation Committee deems appropriate. The 2004 stock incentive plan provides that stock bonus awards can be awarded for past service and/2023 Incentive Plan or conditioned on continued future services. other plans or compensatory arrangements.
Adjustments In the event of changes in the outstanding ordinary shares or in the capital structure of the Company by reason of stock dividends, extraordinary cash dividends, share splits, reverse share splits, recapitalizations, reorganizations, mergers, amalgamations, consolidations, combinations, exchanges, or other relevant changes in capitalization, in connection with any extraordinary dividend declared and paid in respect of ordinary shares, in the event of any change in applicable laws or circumstances or as otherwise set forth in the 2023 Incentive Plan, in each case, that stock bonus awards are subject to continued service conditions,results in or could result in, in either case, as determined by the 2004 stock incentive plan provides that a stock bonus award may (but need not) be subject to repurchase by us at par value if the participant does not fully satisfy any continued service conditions established for such stock bonus awards. Adjustments
Our Compensation Committee will determine the appropriate adjustments to be made in order to preventits sole discretion, any substantial dilution or enlargement of the benefits or potential benefitsrights intended to be madegranted to, or available with respectfor, participants in the 2023 Incentive Plan, awards shall be equitably and proportionally adjusted or substituted, as determined by the Compensation Committee, in its sole discretion, as to an award upon the occurrencenumber, price, or kind of certain events affecting our capitalization such as a dividendshare, other securities or other distribution, recapitalization, reclassification, stock split, reverse stock split, reorganization, merger, consolidation, spin-offconsideration subject to such awards.
Amendment/Termination The Board or sale, transfer or disposition of all or substantially all of our assets or stock. For example, our Compensation Committee may adjust the number of Class A ordinary shares subject to outstanding awards and the exercise price of outstanding options.
Amendment/Termination
Our Board of Directors may amend the 2004 stock incentive plan2023 Incentive Plan and awards granted thereunder at any time. Except as provided in the 2004 stock incentive plan,time and from time to time, but no amendment willto the 2023 Incentive Plan or any award (i) shall be effective unless approved by our shareholderswithout shareholder approval to the extent shareholderthat such approval is necessary to satisfy any applicable lawrequired, or any national securities exchange listing requirement, and no amendment(ii) will be made that would adversely affectmaterially impair a participant’s rights under anany award previously grantedwithout the participant’s written consent, except to bring the terms of the 2023 Incentive Plan or awards into compliance with applicable law. No action taken by the Board or the Compensation Committee that is expressly permitted under the 2004 stock incentive plan without2023 Incentive Plan will constitute an amendment.
The Board or the consent of the affected participants. Our Compensation Committee may also suspend or terminate the 2004 stock incentive plan2023 Incentive Plan at any time. Unless sooner terminated, the 2004 stock incentive plan will2023 Incentive Plan shall terminate on April 27, 2024.
642024 PROXY STATEMENT 49
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END 20222023 | | Option Awards | Option Awards | | Stock Awards | Option Awards | | Stock Awards | | Name | Name | Grant Date | Number of Securities Underlying Unexercised Options Exercisable (#) (4) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options
(#) | Option Exercise Price
($) | Option Expiration Date | | Number of Shares or Units of Stock That Have Not Vested
(#) (1) | Market Value of Shares or Units of Stock That Have Not Vested
($) (3) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested
(#) (2) | | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested
($) (3) | Name | Grant Date | Number of Securities Underlying Unexercised Options Exercisable (#) (4) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options
(#) | Option Exercise Price
($) | Option Expiration Date | | Number of Shares or Units of Stock That Have Not Vested
(#) (1) | Market Value of Shares or Units of Stock That Have Not Vested
($) (3) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested
(#) (2) | | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested
($) (3) | | Simon Burton | Simon Burton | 7/6/2017 | 400,000 | | 80,000 | | — | | 21.20 | | 7/6/2027 | | — | | — | | — | | | — | | | 3/15/2023 | | | 3/15/2022 | | | 3/16/2020 | | | 3/15/2019 | | | Faramarz Romer | | | 3/15/2023 | | | 3/15/2022 | | | 3/15/2022 | | | 3/15/2021 | | | Patrick O’Brien | | | 3/15/2023 | | | 3/15/2022 | | | 3/15/2022 | | | 3/15/2021 | | | Thomas Curnock | | | 3/15/2023 | | | 3/15/2022 | | | 3/15/2022 | | | 3/15/2021 | | | David Sigmon | | | | 3/15/2022 | — | | — | | — | | — | | — | | | 77,419 | | 630,965 | | — | | | — | | | | — | | — | | — | | — | | — | | | — | | — | | 78,593 | | | 640,533 | | | | 3/15/2021 | — | | — | | — | | — | | — | | | 130,719 | | 1,065,360 | | — | | | — | | | | 3/16/2020 | — | | — | | — | | — | | — | | | — | | — | | 145,089 | | (5) | 1,182,475 | | | 3/15/2019 | — | | — | | — | | — | | — | | | — | | — | | 89,945 | | (6) | 733,052 | | | 3/15/2018 | — | | — | | — | | — | | — | | | — | | — | | 30,660 | | (7) | 249,879 | | | Neil Greenspan | 3/15/2022 | — | | — | | — | | — | | — | | | 16,936 | | 138,028 | | — | | | — | | | — | | — | | — | | — | | — | | | — | | — | | 17,192 | | | 140,115 | | | 3/15/2021 | — | | — | | — | | — | | — | | | 38,126 | | 310,727 | | — | | | — | | | 3/15/2020 | — | | — | | — | | — | | — | | | 36,458 | | 297,133 | | — | | | — | | | Patrick O’Brien | 3/15/2022 | — | | — | | — | | — | | — | | | 16,781 | | 136,765 | | — | | | — | | | — | | — | | — | | — | | — | | | — | | — | | 17,035 | | | 138,835 | | | 3/15/2021 | — | | — | | — | | — | | — | | | 30,501 | | 248,583 | | — | | | — | | | 3/16/2020 | — | | — | | — | | — | | — | | | 41,295 | | 336,554 | | — | | | — | | | Faramarz Romer | 3/15/2022 | — | | — | | — | | — | | — | | | 29,472 | | 240,197 | | — | | | — | | | — | | — | | — | | — | | — | | | — | | — | | 7,258 | | | 59,153 | | | 3/15/2021 | — | | — | | — | | — | | — | | | 26,688 | | 217,507 | | — | | | — | | | 3/16/2020 | — | | — | | — | | — | | — | | | 17,857 | | 145,535 | | — | | | — | | | Thomas Curnock | 3/15/2022 | — | | — | | — | | — | | — | | | 14,226 | | 115,942 | | — | | | — | | | — | | — | | — | | — | | — | | | — | | — | | 14,441 | | | 117,694 | | | 3/15/2021 | — | | — | | — | | — | | — | | | 27,233 | | 221,949 | | — | | | — | | | 3/16/2020 | — | | — | | — | | — | | — | | | 18,601 | | 151,598 | | — | | | — | |
(1)Reflects grants Grants of restricted shares and restricted share unitsRSUs made pursuant to our 2004 stock incentive plan.Prior Incentive Plan. All restricted shares and restricted share unitsRSUs granted in 2020 and 2021 are subject to three-year cliff vesting and will vest on the third anniversary of the grant date, generally subject to continued employment through the applicable vesting date. All restricted shares and restricted share unitsRSUs granted in 2022 and 2023 will vest ratably over a three-year period, generally subject to continued employment through and including each vesting date. (2)Reflects grants of restricted shares and restricted share unitsRSUs made pursuant to our 2004 stock incentive plan.Prior Incentive Plan. All restricted shares and restricted share unitsRSUs granted in 2022 and 2023 are subject to performance conditions and will cliff vest, if at all, based on the actual level of achievement against the performance metrics following the end of the three year performance period, generally subject to continued employment through and including the last day of the three year performance period. The number of shares or units reported are based on achieving threshold performance conditions. (3)Assumes a stock price of $8.15$11.42 the closing price of the Class A ordinary shares on December 31, 2022,2023, the last business day of the year. (4)The option became exercisable with respect to 80,000 shares on each of June 30, 2018, June 30, 2019, June 30, 2020, June 30, 2021, June 30, 2022 and June 30, 2022. The remaining portion of the option will become exercisable with respect to 80,000 shares on June 30, 2023, generally subject to his continued employment on each applicable vesting date.2023. Mr. Burton
was granted an option to purchase 480,000 Class A ordinary shares on in accordance with the terms of the Burton Employment Agreement. (5)Mr. Burton was granted 145,089 Class A ordinary restricted shares on March 16, 2020 subject (i) to performance vesting conditions (i.e., theincluding Combined Ratio)Ratio measured over the six year period from January 1, 2019 until December 31, 2024 and (ii) generally to continued employment through and including the applicable vesting date (i.e., the fifth anniversary of the date of grant).2024. The Combined Ratio will be determined after the end of the performance prior but prior to March 16, 2025. Accordingly, the actual number of shares earned will be determined following the end of the performance period. The numbers reflected with respect to this award assume achievement of the performance goals at the full target level and also reflect the impact of the Accelerationacceleration on July 30, 2020, when 72,545 Class A ordinary shares vested. The remainder of the award is still subject to performance-based vesting criteria. (6)Mr. Burton was granted 89,945 Class A ordinary restricted shares on March 15, 2019 subject (i) to performance vesting conditions (i.e., theincluding Combined Ratio)Ratio measured over measured over the six year period from January 1, 2018 until December 31, 2023 and (ii) generally to continued employment through and including the applicable vesting date (i.e., the fifth anniversary of the date of grant). The Combined Ratio will be determined after the end of the performance prior but prior to March 15, 2024. Accordingly, the actual number of shares earned will be determined following the end of the performance period. The numbers reflected with respect to this award assume achievement of the performance goals at the full target level. (7)Mr. Burton was granted 30,660 Class A ordinary2023. These restricted shares onwere forfeited in March 15, 2018 subject (i) to2024 as the performance vesting conditions (i.e., the Combined Ratio) measured over the five and one-half year period from July 1, 2017 until December 31, 2022 and (ii) generally to continued employment through and including the applicable vesting date (i.e., the fifth anniversary of the date of grant). The Combined Ratio will be determined after the end of the performance prior but prior to March 15, 2023. Subsequently, following the end of the fiscal year the Company determined that the performance vesting condition waswere not satisfied and these shares were forfeited. The numbers reflected with respect to this award assume achievement of the performance goals at the full target level.met.
Stock Option Exercises and Stock Award Vesting in Fiscal 2022 2023 The following table provides information regarding the exercise of stock options and stock awards vesting during fiscal year 20222023 on an aggregated basis with respect to each of our NEOs. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Option Awards | | Stock Awards | | Name | | Number of Shares Acquired on Exercise (#) | | Value Realized on Exercise ($) | | Number of Shares Acquired On Vesting (#) (1) | | Value Realized on Vesting ($) | | Simon Burton | | — | | — | | — | | — | | Neil Greenspan | | — | | — | | — | | — | | Patrick O’Brien | | — | | — | | 26,292 | | 184,044 | | Faramarz Romer | | — | | — | | 11,070 | | 77,490 | | Thomas Curnock | | — | | — | | 13,838 | | 96,866 |
__________ | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Option Awards | | Stock Awards | | Name | | Number of Shares Acquired on Exercise (#) | | Value Realized on Exercise ($) | | Number of Shares Acquired On Vesting (#) (1) | | Value Realized on Vesting ($) | | Simon Burton | | — | | — | | 131,023 | | 1,411,897 | | Faramarz Romer | | — | | — | | 27,681 | | 254,886 | | Neil Greenspan | | — | | — | | 42,103 | | 402,931 | | Patrick O’Brien | | — | | — | | 46,888 | | 449,861 | | Thomas Curnock | | — | | — | | 23,343 | | 220,751 | | David Sigmon | | — | | — | | — | | — |
(1)Stock Awards Value Realized on Vesting is based upon the closing share price ($7.00)8.15, $9.79 and $11.42) on the business day immediately prior to the date upon which the shares or restricted stock units,RSUs, as applicable, fully vested (March(January 1, 2023, March 15, 2022)2023 and December 31, 2023).
Pension Benefits None of our NEOs participates in a qualified or non-qualified defined benefit pension plan sponsored by us. Non-qualified Deferred Compensation in Fiscal Year 2022
None of our NEOs participates in a non-qualified defined contribution or other non-qualified deferred compensation plan.
POTENTIAL PAYMENTS UPON
TERMINATION OR CHANGE IN CONTROL
Potential Payments upon Termination or Change in Control This section describes the potential payments that would be made to the named executive officers under various employment termination scenarios as if they occurred at the end of fiscal year 2022.2023. Burton Separation Agreement
Employment AgreementsGreenspan Separation Agreement
2022 BurtonRomer Employment Agreement
In the event Mr. Burton’sRomer’s employment is terminated by the Company without cause or by Mr. Burton for good reason, in addition to any accrued but unpaid base salary and vacation through the date of termination, any unpaid annual bonus for the year proceeding the year of termination and any statutory severance, if any, or the Burton Accrued Obligations, subject to the execution of a release and certain other conditions, Mr. Burton will be entitled to receive: (i) a prorated annual bonus for the year of termination based on actual performance, or the Burton Pro-Rated Bonus, (ii) an amount equal to one and one-half (1.5) times the sum of Mr. Burton’s annual base salary and target bonus opportunity, which shall be payable over 18 months; provided, that, if such termination occurs during the period commencing on the date of a Change of Control (as defined in the 2022 Burton Employment Agreement) or 18 months following a Change of Control, the amount shall be equal to two (2) times the sum of Mr. Burton’s annual base salary and target bonus opportunity, which shall be payable over 24 months, which we refer to as the Severance Payments, and (iii) any outstanding unvested time-based equity awards, if any, shall fully vest and any outstanding performance-based equity awards, if any, shall remain outstanding through the applicable performance period and shall be eligible to vest in accordance with the applicable performance criteria, which we refer to as the Equity Award Treatment. Any Severance Payments shall be reduced by the amount of any statutory severance paid or payable to Mr. Burton.
In the event that Mr. Burton’s employment is terminated due to death or by the Company due to disability, in addition to the Burton Accrued Obligations, subject to the execution of a release and certain other conditions, Mr. Burton’s beneficiary, legal representatives or estate, as applicable, will be entitled to receive the Burton Pro-Rated Bonus and the Equity Award Treatment. In the event that Mr. Burton’s employment is terminated by Mr. Burton without good reason, he shall only be entitled to receive the Burton Accrued Obligations and all unvested equity awards will be cancelled and immediately forfeited. Further, in the event that Mr. Burton’s employment is terminated by the Company for cause, he shall only be entitled to receive the Burton Accrued Obligations and all unvested equity awards, unexercised equity awards, and all unsettled equity awards, as applicable, shall be cancelled and immediately forfeited.
For purposes of the 2022 Burton Employment Agreement, “cause” shall mean:
•serious misconduct within the meaning of section 51(l) of the Cayman Labour Act (as amended), or the Labour Act;
•further misconduct following the issue of a written warning within the meaning of sections 52(2) and 52(3) of the Labour Act; or
•a failure by Mr. Burton to perform his duties in a satisfactory manner within one (1) month of the issue of a formal written warning in respect thereof within the meaning of section 53 of the Labour Act.
Examples of serious misconduct include (but are not limited to):
•habitual drug or alcohol use which impairs the ability of Mr. Burton to perform his duties hereunder (other than where such drug is prescribed and administered in accordance with the instructions of a qualified physician);
•commission of a criminal offense relevant to the employment (other than a minor traffic offense);
•willful violation of the any restrictive covenants in the 2022 Burton Employment Agreement;
•willful failure or refusal to perform duties hereunder after a written demand for performance is delivered to Mr. Burton by the Board that specifically identifies the manner in which the Board believes that Mr. Burton has failed or refused to perform his duties;
•breach of any material provision of the 2022 Burton Employment Agreement or any material policies of the the Company or any of its affiliates, which have been provided or made available to him in writing and relate to conduct which is not cured, if curable, within ten (10) days after written notice thereof; or
•fraud, dishonesty, embezzlement or misuse of funds or property belonging to the Company or any of its affiliates.
For purposes of the 2022 Burton Employment Agreement, “good reason” means:
•any material and adverse change to Mr. Burton’s title or duties which is inconsistent with his duties set forth in the employment agreement;
•a reduction of his base salary; or
•a failure by us to comply with any other material provisions of the employment agreement.
For purposes of the 2022 Burton Employment Agreement, “disability” means if, as a result of incapacity due to physical or mental illness, he is substantially unable to perform his or her duties for an entire period of at least 90 consecutive days or 180 non-consecutive days within any 365-day period.
Greenspan Employment Agreement
In the event Mr. Greenspan’s employment is terminated by the Company without cause or by Mr. GreenspanRomer for good reason, we will pay him accrued but unpaid base salary, any bonus earned under the terms of the compensation plan for years prior to the year in which the termination occurs, payable in accordance with the terms of such plan, and any accrued but unused vacation pay and statutory severance, or collectively the GreenspanRomer Accrued Obligations, as soon as practicable following termination. In addition, subject to Mr. Romer’s execution of a release and certain other conditions, we will pay Mr. Romer a pro-rated portion of the targetannual bonus that would have been paid for the year in which his or her employment terminated assuming applicable targets had been achieved,terminates based on actual performance, paid in accordance with the Short Term Incentive Plan, or the Actual Pro-Rated Bonus as soon as practicable following termination. In addition, subject to Mr. Greenspan’s execution of a release, if requested, and certain other conditions, we will pay Mr. Greenspancash severance in twelve substantially equal monthly installmentsan amount equal to the sum of hisMr. Romer’s annual base salary and target annual bonus assuming targets had been achieved.
opportunity, payable in substantially equal installments over the twelve month period following the date of termination, the Actual Pro-Rated Bonus. If Mr. Greenspan’sRomer’s employment terminates as a result of his death or due to disability, by the Company for cause or by Mr. Romer without good reason, he or his beneficiary, legal representatives or estate, as applicable, will become entitled to the GreenspanRomer Accrued Obligations and Pro-Rated Bonus, as soon as practicable following termination. For purposes of Mr. Greenspan’s employment agreement, “cause” shall mean:
•misconduct on the part of Mr. Greenspan so serious that we cannot reasonably be expected to take any action other than termination;
•further misconduct on the part of Mr. Greenspan within 12 months of the issue of a formal written warning in respect of misconduct so serious that we cannot reasonably be expected to tolerate any repetition thereof; and
•a failure by the Mr. Greenspan to commence performance of his or her duties in a satisfactory manner within one month of the issue of a formal written warning in respect thereof.
For these purposes, misconduct includes (but is not limited to):
•habitual drug or alcohol use which impairs the ability of Mr. Greenspan to perform his or her duties (other than where such drug is prescribed by and administered in accordance with the instructions of a qualified physician);
•commission of a criminal offense in the course of employment (other than a minor traffic offense);
•willful violation of the restrictive covenants set forth in the employment agreement;
•willful failure or refusal to perform duties after a written demand for performance is delivered to Mr. Greenspan by our Board of Directors that specifically identifies the manner in which our Board of Directors believes that the Mr. Greenspan has failed or refused to perform his or her duties; and
•breach of any material provision of the employment agreement or any policies of the employer entities or any of their affiliates related to conduct which is not cured, if curable, within ten days after written notice.
For purposes of Mr. Greenspan’s employment agreement, “good reason” means:
•any material and adverse change to Mr. Greenspan’s title or duties which is inconsistent with his duties set forth in the employment agreement;
•a material reduction of his base salary; or
•a failure by us to comply with any other material provisions of the employment agreement.
For purposes of Mr. Greenspan’s employment agreement, “disability” means if, as a result of incapacity due to physical or mental illness, he is substantially unable to perform his or her duties for an entire period of at least 90 consecutive days or 180 non-consecutive days within any 365-day period.
O’Brien Employment Agreement
Pursuant to the terms of his employment agreement, except in the case where prior notice (or pay in lieu of notice) is not required (as described below, which includes ill health or other incapacity), Mr. O’Brien’s employment will continue until terminated by not less than six months’ notice in writing given by either party to the other (or such longer period as may be required by law). In the event that we terminate Mr. O’Brien’s employment in circumstances where notice (or pay in lieu of notice) is required and other than in the case of Mr. O’Brien’s death, we will pay him accrued but unpaid base salary, any bonus earned under the terms of the compensation plan for years prior to the year in which the termination occurs, payable in accordance with the terms of such plan, and any accrued but unused vacation pay, and, subject to executing a release of claims against us and GRIL, a Pro-Rated Bonus, as soon as practicable following termination.or collectively the O’Brien Accrued Obligations. In addition, subject to executing a release of claims against us and GRIL and certain other conditions, GRIL will pay Mr. O’Brien a pro-rated portion of the target bonus that would have been paid for the year in which his employed terminates assuming applicable targets had been achieved, or the Target Pro-Rated Bonus, and cash severance in twelve substantially equal monthly installmentsan amount equal to the sum of hisMr. O’Brien’s annual base salary and target bonus assuming targets had been achieved, provided that he does not willfully breach any of the restrictive covenants in his employment agreement (described above).opportunity. If Mr. O’Brien’s employment terminates as a result of his death, his beneficiary, legal representatives or estate will become entitled to accrued but unpaid base salary, any bonus earned under the terms of the compensation plan for years prior to the year in which the termination occurs, payable in accordance with the terms of such plan, any accrued but unused vacation pay and the Pro-Rata Bonus.
For purposes of Mr. O’Brien’s employment agreement, we are permitted to terminate his employment without notice (or pay in lieu of notice) if he at any time:
•is guilty of dishonesty or other gross misconduct or gross incompetence or willful neglect of duty or commits any other serious breach of his employment agreement;
•acts in any manner (whether in the course of his duties or otherwise) which is likely to bring him, GRIL or us into disrepute or prejudice our or GRIL’s interests;
•becomes bankrupt, the subject of a debt resolution notice, applies for or have made against him a receiving order, or has any order made against him resulting in a voluntary arrangement or personal insolvency;
•is or becomes of unsound mind;
•for an aggregate period of 120 days or more in any period of 12 consecutive months is incapable of performing his duties under his employment agreement by reason of ill health or other incapacity (whether accidental or otherwise);
•is guilty of continuing unsatisfactory conduct or poor performance of his duties after warning from us relating to the same;
•is arrested for, charged with or convicted of any offense other than an offense which in the reasonable opinion of the Board of Directors of GRIL does not affect his position with GRIL;
•resigns as a director of the Company or GRIL without our or GRIL’s consent;
•isO’Brien Accrued Obligations and subject to a restriction or is disqualified or prohibited by law from being a director of GRIL;
•breaches any material provision in his employment agreement or any of our policies or the policies of GRIL;
•uses drugs or alcohol which impairs his ability to perform his duties under the employment agreement; or
•the Central Bank of Ireland issues a notice to him either suspending him or prohibiting him from acting in his position with the Company.
Romer Letter Agreement
Pursuant to the Romer Letter Agreement, in the event Mr. Romer’s employment is terminated by the Company or Greenlight Re without cause or by Mr. Romer for good reason, in addition to any accrued but unpaid base salary and vacation through the date of termination and any statutory severance, if any, subject to the execution ofexecuting a release of claims against us and certain other conditions, Mr. Romer will be entitled to receive an amount equal to Mr. Romer’s annual base salary, which shall be payable over 12 months.
InGRIL, the event that Mr. Romer’s employment is terminated by the Company for cause, due to death or disability, or by Mr. Romer without good reason, he shall only be entitled to his accrued benefits.Target Pro-Rated Bonus.
For purposes of the Romer Letter Agreement “cause” shall include, without limitation, Mr. Romer’s violation of the Company’s code of conduct, the tax operation guidelines, or any other operation guidelines or the revocation of Mr. Romer’s Cayman work permit as a result of any action taken by Mr. Romer.
For purposes of the Romer Letter Agreement, “good reason” means a reduction in his base salary.
Curnock Employment Agreement
Pursuant to Mr. Curnock’s employment agreement, in addition to any accrued but unpaid base salary and unused vacation time through the date of termination and any statutory severance, if any, subject to the execution of a release and certain other conditions, Mr. Curnock will be entitled to receive his pro-rated target bonus,the Target Pro-Rated Bonus,, which shall be payable within two and one half (2.5) months following the date of termination and cash severance in an amount equal to Mr. Curnock’s annual base salary plus target bonus opportunity, which shall be payable over 12 months. In the event that Mr. Curnock’s employment is terminated by the Company for cause, due to death or disability, or by Mr. Curnock without good reason, he shall only be entitled to his accrued benefits.
For purposesSigmon Employment Agreement
In the event Mr. Sigmon’s employment is terminated by the Company without cause or by Mr. Sigmon for good reason, we will pay him accrued but unpaid base salary, any bonus earned under the terms of the compensation plan for years prior to the year in which the termination occurs, payable in accordance with the terms of such plan, and any accrued but unused vacation pay, or collectively the Sigmon Accrued Obligations, as soon as practicable following termination. In addition, subject to Mr. Sigmon’s execution of a release and certain other conditions, we will pay Mr. Sigmon the Actual Pro-Rated Bonus and cash severance in an amount equal to Mr. Sigmon’s annual base salary, payable in substantially equal monthly installments over the twelve month period following the date of termination and provide for immediate vesting of Mr. Curnock’sSigmon’s sign-on restricted equity grant described above. If Mr. Sigmon’s employment agreement, “cause” means any termination within the scope of sections 52 or 53 of the Labor Law (2011 Revision).
For purposes of Mr. Curnock’s employment agreement, “good reason” means:
•any material and adverse change to Mr. Curnock’s title or duties which is inconsistent with his duties set forth in the employment agreement;
•terminates as a reductionresult of his base salary;death or due to disability, by the Company for cause or by Mr. Sigmon without good reason, he or his beneficiary, legal representatives or estate, as applicable, will become entitled to the Sigmon Accrued Obligations.
•a failure by us to comply with any other material provisions of the employment agreement.
2004 Stock Incentive Plan and Awards Granted Thereunder
Under the terms of the 2004 stock incentive plan,2023 Incentive Plan, as well as the Prior Incentive Plan, unless an option award provides otherwise, upon termination other than for cause, (as defined below), death or disability, (as defined below), all unvested options terminate and the participant may exercise his or her vested options within the period ending upon the earlier of three months following termination or ten years from the grant date of the option (i.e., the option’s expiration date). Unless an option award provides otherwise, upon termination for cause, all vested and unvested options will terminate. Unless an option award provides otherwise, upon termination for death or disability, all unvested options will terminate, and the vested portion of the option may be exercised for the period ending upon the earlier of twelve months following termination or the option’s expiration date. Under the terms of the option grant which Mr. Burton received in 2017, upon Mr. Burton’s termination due to his death or disability (as defined in his employment agreement, see description above), any unvested portion of the options will terminate and any vested portion of the option will remain exercisable until the expiration date. If Mr. Burton’s permanently retires from the reinsurance industry, is willing to continue to serve as a member of our Board of Directors and does not resign from our Board of Directors as a result of a conflict of interest (collectively referred to as the “retirement conditions”), the vested portion of the option will remain exercisable until expiration. If after retirement, Mr. Burton subsequently fails to satisfy the retirement conditions, such options will revert to remain exercisable for 90 days after such failure. If we terminate Mr. Burton’s employment for cause all vested and unvested portions of the option will terminate. Upon a change of control (as defined below), and pursuant to the 2022 Burton Employment Agreement a termination by the Company without cause or by Mr. Burton for good reason, any unvested portion of the option will vest immediately.
Under the terms of the restricted share awards granted to Mr. Burton in March of each of 2018, 2019, and 2020, in the event Mr. Burton’s satisfies the retirement conditions throughout the performance period, in each case, prior to the vesting date, the restricted shares will remain outstanding and subject to the performance vesting conditions, provided that the number of earned restricted shares, if any, will be subject to the Adjusted Measurement. In addition, pursuant to the 2022 Burton Employment Agreement, if his employment is terminated by the Company without cause or by him for good reason, the restricted share awards shall remain outstanding through the applicable performance period and shall be eligible to vest in accordance with the applicable performance criteria. If Mr. Burton’s employment terminates for any other reason on or prior to the vesting date, the unvested restricted shares will be automatically repurchased by the Company for par value and cancelled.
Under the terms of the restricted share awards granted to each of our NEOs (other than Mr. Burton for awards granted prior to 2021), the awards will generally automatically vest upon the executive’s termination of employment due to death or disability or upon the occurrence of a change in control (as defined below)(for the 2022 and 2023 awards, service based restricted share awards vest while performance based restricted share awards continue to vest proportionally). If the executive’s employment terminates for any other reason, the unvested restricted shares will be automatically repurchased by the Company for par value and cancelled. In addition, in the case of Mr. Burton, pursuant to the 2022 Burton Employment Agreement, any outstanding unvested time-based restricted share awards, if any, shall fully vest and any outstanding performance-based restricted share awards, if any, shall remain outstanding through the applicable performance period and shall be eligible to vest in accordance with the applicable performance criteria.
702024 PROXY STATEMENT 53
For purposes of the 2004 stock incentive plan, “cause” generally means: if the participant is a party to an employment agreement or other agreement with us or an affiliate and such agreement provides for a definition of cause, the definition contained in the agreement, or, if no such agreement or definition exists, cause means a participant’s:
•material breach of his or her employment agreement or other agreement;
•continued failure to satisfactorily perform assigned job responsibilities or to follow the reasonable instructions of his or her superiors, including, without limitation, our Board of Directors;
•commission of a crime constituting a criminal offense or felony (or its equivalent) or other crime involving moral turpitude; or
•material violation of any material law or regulation or any policy or code of conduct adopted by us or engaging in any other form of misconduct which, if it were made public, could reasonably be expected to adversely affect our or an affiliate’s business reputation or affairs.
For purposes of the 2004 stock incentive plan, “disability” generally means, if the participant is a party to an employment agreement or other agreement with us or an affiliate and the agreement provides for a definition of disability, the definition contained in the agreement, or, if no such agreement or definition exists, disability will mean the failure of the participant to perform his duties due to physical or mental incapacity as determined by our Compensation Committee.
For purposes of our 2004 stock incentive plan, “change in control” generally means the occurrence of one of the following events: (i) any person or group becomes the beneficial owner, directly or indirectly, of 51% or more of our common stock (measured by voting power rather than number of shares); or (ii) we consolidate or merge with or into any other person or group or sell, assign, convey, transfer, lease or otherwise dispose of all or substantially all of our assets and the assets of our direct and indirect subsidiaries to any other person or group, in either one transaction or a series of related transactions that occur within six months, other than a consolidation or merger or disposition of assets.
For purposes of the stock option to acquire 480,000 Class A ordinary shares granted to Mr. Burton, “change of control” generally means the occurrence of any of the following events during the period in which the employment agreement remains in effect: (i) the acquisition by any person, entity or group, other than the Company, any of its subsidiaries or other entities controlled by the Company, or any employee benefit plan maintained by the Company or by any of its subsidiaries or other entities controlled by the Company, of beneficial ownership of 55% or more of the total voting power of the Company; or (ii) the Company is merged, combined, consolidated or reorganized with or into another corporation or other legal person (an “acquiring person”), or the Company sells or otherwise transfers all or substantially all of its assets to an acquiring person.
Short TermShort-Term Incentive Plan
Under the terms of the Short TermShort-Term Incentive Plan, except as otherwise provided in an employment agreement or offer letter or otherwise determined by the Compensation Committee, a participant must be employed on the last day of the applicable plan year and not have given notice of termination for any reason or received notice of termination by a member of the Greenlight Group for any reason, in any such case, on or prior to the last day of the applicable plan year; provided, however in the event of a termination of the participant’s employment due to death or “disability” on or prior to the last day of the applicable plan year, the participant will be generally be entitled to receive a pro-rata bonus hereunder based on actual performance for the applicable plan year.
For purposes of the Short TermShort-Term Incentive Plan, the term “disability” generally means, if the participant is a party to any employment agreement or other agreement for services with us and such agreement provides for a definition of disability, the definition therein contained, or, if no such agreement or definition exists, it means the failure of any participant to perform his or her duties due to physical or mental incapacity as determined by the Compensation Committee.
AssumingPursuant to the Burton Separation Agreement, Mr. Burton’sBurton is entitled to the following payments in connection with his termination of employment terminated under each of the circumstances described below or a change of control occurred onwithout cause, effective December 31, 2022, such payments and benefits have an estimated value of:2023:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Event | | Pro-Rated Bonus (6)
$ | | Total Cash Severance
$ | | | | Value of Accelerated Equity
$ | | Total
$ | Termination without Cause (1) | | 800,000 | | | 2,400,000 | | | | | 1,696,325 | | | 4,896,325 | | Termination for Good Reason (1) | | 800,000 | | | 2,400,000 | | | | | 1,696,325 | | | 4,896,325 | | Termination without Cause/for Good Reason in Connection with a Change of Control (2) | | 800,000 | | | 3,200,000 | | | | | 1,696,325 | | | 5,696,325 | | Death (3) | | 800,000 | | | N/A | | | | 1,696,325 | | | 2,496,325 | | Disability (3) | | 800,000 | | | 76,923 | | | | | 1,696,325 | | | 2,573,248 | | Change of Control (4) | | N/A | | N/A | | | | 2,977,383 | | | 2,977,383 | | Satisfaction of Retirement Conditions throughout the Performance Period (5) | | N/A | | N/A | | | | N/A | | N/A |
__________
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Event | | Total Cash Severance
$ | | Benefits ($) | | | | Value of Accelerated Equity
$ | | Total $ (1) | | Without Cause | | 3,500,236 | | 19,794 | | | | 876,490 | | 4,396,520 |
(1)As discussed above, under the Burton Separation Agreement and for agreeing to serve as an advisor and provide transitional services through April 2024, Mr. Burton also received a restricted equity grant with a grant date value of $1.6 million in March 2024. See “Change in Control and Severance.” The Total Cash Severance is calculated as one and one-half times the sum of base salary ($800,000) and target bonus ($800,000). No amounts areamount reported in respect“Total Cash Severance” portion of the 30,660, 89,945, 72,544above table includes the Non-Equity Incentive Plan compensation reported for Mr. Burton in the Summary Compensation Table as well as the “Cash Severance” and 314,370 restricted shares granted on March 15, 2018, March 15, 2019, March 16, 2020, and March 15, 2022, respectively, which would remain outstanding and eligible to vest subject“Vacation Pay” figures from the 2023 All Other Compensation table above. Pursuant to the performance vesting provisionsGreenspan Separation Agreement, Mr. Greenspan is entitled to the following payments in connection with ahis termination by the Companyof employment without cause, or by Mr. Burton for good reason, in each case, prior to the vesting date, as the performance period has not concluded and, therefore, it cannot be determined as to whether the shares will vest. The Value of Accelerated Equity is calculated as the fair market value of the 130,719 restricted shares, grantedeffective March 15, 2021, and 77,419 restricted shares, granted March 15, 2022, subject to accelerated vesting using a share price of $8.15, the closing share price on December 31, 2022, the last business day of the year.2023: | | | | | | | | | | | | | | | | Event | | Total Cash Severance
$ | | Total
$ | | Without Cause | | 954,489 | | 954,489 |
(2)The Total Cash Severance is calculated as two times the sum of base salary ($800,000) and target bonus ($800,000). No amounts are reported in respect of the 30,660, 89,945, 72,544 and 314,370 restricted shares granted on March 15, 2018, March 15, 2019, March 16, 2020, and March 15, 2022, respectively, which would remain outstanding and eligible to vest subject to the performance vesting provisions in connection with a termination by the Company without cause or by Mr. Burton for good reason, in each case in connection with a change in control, prior to the vesting date, as the performance period has not concluded and, therefore, it cannot be determined as to whether the shares will vest. The Value of Accelerated Equity is calculated as the fair market value of the 130,719 restricted shares, granted March 15, 2021, and 77,419 restricted shares, granted March 15, 2022, subject to accelerated vesting using a share price of $8.15, the closing share price on December 31, 2022, the last business day of the year.
(3)The Total Cash Severance for Disability is calculated as one week’s salary, at the employee’s latest basic salary, for each completed twelve month period of employment, which represents Cayman statutory severance. No amounts are reported in respect of the 30,660, 89,945, 72,544, and 314,370 restricted shares granted on March 15, 2018, March 15, 2019, March 16, 2020, and March 15, 2022, respectively, would remain outstanding and eligible to vest subject to the performance vesting provisions in connection with a termination due to death or disability prior to the vesting date, as the performance period has not concluded and, therefore, it cannot be determined as to whether the shares will vest. The Value of Accelerated Equity is calculated as the fair market value of the 130,719 restricted shares, granted March 15, 2021, and 77,419 restricted shares, granted March 15, 2022, subject to accelerated vesting if a termination due to death or disability occurred, in each case, on December 31, 2022 and using a share price of $8.15, the closing share price on December 31, 2022, the last business day of the year.
(4)No amounts are reported in respect of the vesting in connection with a Change of Control of the options granted on July 1, 2017 as there was no “spread” value with respect to such options (i.e., the exercise price exceeded the fair market value on December 31, 2022, the last business day of the year). The Value of Accelerated Equity is calculated as the fair market value of the 130,719 restricted shares, granted March 15, 2021, and 157,185 restricted shares, granted March 15, 2022, subject to accelerated vesting if a termination due to a change in control occurred on December 31, 2022 and using a share price of $8.15, the closing share price on December 31, 2022, the last business day of the year.
(5)No amounts are reported in respect of the 30,660, 89,945, 72,544 restricted shares granted on March 15, 2018, March 15, 2019, and March 16, 2020, respectively, which would remain outstanding and eligible to vest subject to the performance vesting provisions as a result of the satisfaction of the retirement conditions throughout the performance period, as the performance period has not concluded and, therefore, it cannot be determined as to whether the shares will vest.
(6)The Pro-Rated Bonus is calculated as 100% of base salary.
7254 2024 PROXY STATEMENT
Assuming Mr. Greenspan’sRomer’s employment terminated under each of the circumstances described below or a change in control occurred on December 31, 2022,2023, such payments and benefits have an estimated value of: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Event | | Pro-Rated Bonus (4)
$ | | Total Cash Severance
$ | | | | Value of Accelerated Equity (5) (6)
$ | | Total
$ | Termination without Cause (1) | | 250,000 | | | 788,462 | | | | | N/A | | 1,038,462 | | Termination for Good Reason (2) | | 250,000 | | | 750,000 | | | | | N/A | | 1,000,000 | | | Death | | 250,000 | | | N/A | | | | 839,298 | | | 1,089,298 | | Disability (3) | | 250,000 | | | 38,462 | | | | | 839,298 | | | 1,127,760 | | | Change in Control | | N/A | | N/A | | | | 1,026,118 | | | 1,026,118 | |
__________ | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Event | | Pro-Rated Bonus
$ (2) | | Total Cash Severance
$ | | | | Value of Accelerated Equity (3)(4)
$ | | Total
$ | Termination without Cause(1) | | 231,483 | | | 840,577 | | | | | — | | | 1,072,060 | | Termination for Good Reason (1) | | 231,483 | | | 697,500 | | | | | — | | | 928,983 | | | Death | | 231,483 | | | N/A | | | | 861,228 | | | 1,092,711 | | | Disability | | 231,483 | | | N/A | | | | 861,228 | | | 1,092,711 | | | Change in Control | | N/A | | N/A | | | | 978,980 | | | 978,980 | |
(1)The Total Cash Severance is calculated as the sum100% of base salary ($500,000) and target bonus, ($250,000), plus Cayman statutory severance for Termination without Cause, which is equal to one week’s salary, at the employee’s latest basic salary, for each completed twelve month period of employment. (2)The Total Cash Severance is calculated asPro-Rated Bonus upon a termination of employment without cause, for good reason, due to death or disability reflects the sumamount earned in respect of base salary ($500,000) and target bonus ($250,000).the 2023 plan year. (3)The Total Cash Severance for Disability is calculated as one week’s salary, at the employee’s latest basic salary, for each completed twelve month period of employment, which represents Cayman statutory severance. (4)The Pro-Rated Bonus is calculated as 50% of base salary.
(5)The Value of Accelerated Equity for Death and Disability is calculated as the fair market value of the 102,98175,414 restricted shares subject to the accelerated vesting if a termination due to death or disability occurred, in each case, on December 31, 20222023 and using a share price of $8.15,$11.42, the closing share price on December 31, 2022,2023, the last business day of the year.
(6)(4)The Value of Accelerated Equity for Change in Control is calculated as the fair market value of the 125,90485,725 restricted shares subject to the accelerated vesting if a termination due to a change in control occurred on December 31, 20222023 and using a share price of $8.15,$11.42, the closing share price on December 31, 2022,2023, the last business day of the year.
Assuming Mr. O’Brien’s employment terminated under each of the circumstances described below or a change in control occurred on December 31, 2022,2023, such payments and benefits have an estimated value of: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Event (2) | | Pro-Rated Bonus (3)
$ | | Total Cash Severance
$ | | | | Value of Accelerated Equity (4)(5)
$ | | Total
$ | Termination with prior notice (1) | | 255,150 | | | 680,400 | | | | | N/A | | 935,550 | | | Death | | 255,150 | | | N/A | | | | 814,461 | | | 1,069,611 | | | Disability | | 59,063 | | | N/A | | | | 814,461 | | | 873,524 | | | Change in Control | | N/A | | N/A | | | | 999,578 | | | 999,578 | |
__________
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Event (2) | | Pro-Rated Bonus (3)
$ | | Total Cash Severance
$ | | | | Value of Accelerated Equity (4)(5)
$ | | Total
$ | Termination with prior notice (1) | | 262,440 | | | 699,840 | | | | | N/A | | 962,280 | | | Death | | 262,440 | | | N/A | | | | 915,724 | | | 1,178,164 | | | Disability | | 250,237 | | | N/A | | | | 915,724 | | | 1,165,961 | | | Change in Control | | N/A | | N/A | | | | 1,190,912 | | | 1,190,912 | |
(1)The Total Cash Severance is calculated as the sum of base salary ($425,250)437,400) and target bonus ($255,150)262,440). (2)As Mr. O’Brien is based in Ireland, his cash compensation is generally paid to him in Euros rather than United States dollars. The Total Cash Severance is based on an average conversion rate for 2022,2023, which was $1.05$1.08 United States dollars per Euro. (3)The Pro-Rated Bonus upon a termination without prior notice or due to death is calculated as 60% of base salary pursuant to Mr. O’Brien’s employment agreement. The Pro-Rated Bonus upon a termination of employment due to disability reflects the amount earned in respect of the 20222023 plan year. (4)The Value of Accelerated Equity for Death and Disability is calculated as the fair market value of the 99,934 restricted share units80,186 RSUs subject to accelerated vesting if a termination due to death or disability occurred, in each case, on December 31, 20222023 and using a share price of $8.15,$11.42, the closing share price on December 31, 2022,2023, the last business day of the year. (5)The Value of Accelerated Equity for Change in Control is calculated as the fair market value of the 122,648 restricted share units104,283 RSUs subject to accelerated vesting if a termination due to a change in control occurred on December 31, 20222023 and using a share price of $8.15,$11.42, the closing share price on December 31, 2022,2023, the last business day of the year.
732024 PROXY STATEMENT 55
Assuming Mr. Romer’s employment terminated under each of the circumstances described below or a change in control occurred on December 31, 2022, such payments and benefits have an estimated value of:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Event | | Pro-Rated Bonus
$ | | Total Cash Severance
$ | | | | Value of Accelerated Equity (3)(4)
$ | | Total
$ | Termination without Cause(1) | | N/A | | 473,510 | | | | | — | | | 473,510 | | Termination for Good Reason (1) | | N/A | | 367,500 | | | | | — | | | 367,500 | | | Death | | N/A | | N/A | | | | 642,674 | | | 642,674 | | Disability (2) | | N/A | | 106,010 | | | | | 642,674 | | | 748,684 | | | Change in Control | | N/A | | N/A | | | | 721,545 | | | 721,545 | |
__________
(1)The Total Cash Severance is 100% of base salary, plus Cayman statutory severance for Termination without Cause, which is equal to one week’s salary, at the employee’s latest basic salary, for each completed twelve month period of employment.
(2)The Total Cash Severance for Disability is calculated as one week’s salary, at the employee’s latest basic salary, for each completed twelve month period of employment, which represents Cayman statutory severance.
(3)The Value of Accelerated Equity for Death and Disability is calculated as the fair market value of the 78,856 restricted shares subject to the accelerated vesting if a termination due to death or disability occurred, in each case, on December 31, 2022 and using a share price of $8.15, the closing share price on December 31, 2022, the last business day of the year.
(4)The Value of Accelerated Equity for Change in Control is calculated as the fair market value of the 88,533 restricted shares subject to the accelerated vesting if a termination due to a change in control occurred on December 31, 2022 and using a share price of $8.15, the closing share price on December 31, 2022, the last business day of the year.
Assuming Mr. Curnock’s employment terminated under each of the circumstances described below or a change in control occurred on December 31, 2022,2023, such payments and benefits have an estimated value of: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Event | | Pro-Rated Bonus (4)
$ | | Total Cash Severance
$ | | | | Value of Accelerated Equity (5)(6)
$ | | Total
$ | Termination without Cause (1) | | 225,000 | | | 787,500 | | | | | N/A | | 1,012,500 | | Termination for Good Reason (2) | | 225,000 | | | 675,000 | | | | | N/A | | 900,000 | | | Death | | 52,500 | | | N/A | | | | 567,953 | | | 620,453 | | Disability (3) | | 52,500 | | | 112,500 | | | | | 567,953 | | | 732,953 | | | Change in Control | | N/A | | N/A | | | | 724,882 | | | 724,882 | |
__________
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Event | | Pro-Rated Bonus (4)
$ | | Total Cash Severance
$ | | | | Value of Accelerated Equity (5)(6)
$ | | Total
$ | Termination without Cause (1) | | 225,000 | | | 796,154 | | | | | N/A | | 1,021,154 | | Termination for Good Reason (2) | | 225,000 | | | 675,000 | | | | | N/A | | 900,000 | | | Death | | 214,538 | | | N/A | | | | 827,813 | | | 1,042,351 | | Disability (3) | | 214,538 | | | 121,154 | | | | | 827,813 | | | 1,163,505 | | | Change in Control | | N/A | | N/A | | | | 1,090,016 | | | 1,090,016 | |
(1)The Total Cash Severance is calculated as the sum of base salary ($450,000) and target bonus ($225,000), plus Cayman statutory severance, which is equal to one week’s salary, at the employee’s latest basic salary, for each completed twelve month period of employment. (2)The Total Cash Severance is calculated as the sum of base salary ($450,000) and target bonus ($225,000). (3)heThe Total Cash Severance for Disability is calculated as one week’s salary, at the employee’s latest basic salary, for each completed twelve month period of employment, which represents Cayman statutory severance. (4)The Pro-Rated Bonus upon a termination of employment without cause or for good reason is calculated as 50% of base salary pursuant to Mr. Curnock’s employment agreement. The Pro-Rated Bonus upon a termination of employment due to death or disability reflects the amount earned in respect of the 20222023 plan year. (5)The Value of Accelerated Equity for Death and Disability is calculated as the fair market value of the 69,68872,488 restricted shares subject to accelerated vesting if a termination due to death or disability occurred, in each case, on December 31, 20222023 and using a share price of $8.15,$11.42, the closing share price on December 31, 2022,2023, the last business day of the year. (6)The Value of Accelerated Equity for Change in Control is calculated as the fair market value of the 88,942.595,448 restricted shares subject to accelerated vesting if a termination due to a change in control occurred on December 31, 20222023 and using a share price of $8.15,$11.42, the closing share price on December 31, 2022,2023, the last business day of the year. Assuming Mr. Sigmon’s employment terminated under each of the circumstances described below or a change in control occurred on December 31, 2023, such payments and benefits have an estimated value of: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Event | | Pro-Rated Bonus (4)
$ | | Total Cash Severance
$ | | | | Value of Accelerated Equity (5)
$ | | Total
$ | Termination without Cause (1) | | 125,970 | | | 390,000 | | | | | 291,918 | | | 807,888 | | Termination for Good Reason (2) | | 125,970 | | | 390,000 | | | | | 291,918 | | | 807,888 | | | Death | | 125,970 | | | N/A | | | | 291,918 | | | 417,888 | | Disability (3) | | 125,970 | | | N/A | | | | 291,918 | | | 417,888 | | | Change in Control | | N/A | | N/A | | | | 291,918 | | | 291,918 | |
(2)The Total Cash Severance is calculated as the sum of base salary ($390,000). (3)The Total Cash Severance for Disability is calculated as one week’s salary, at the employee’s latest basic salary, for each completed twelve month period of employment, which represents Cayman statutory severance. (4)The Pro-Rated Bonus upon a termination of employment without cause, for good reason, due to death or disability reflects the amount earned in respect of the 2023 plan year. (5)Calculated as the fair market value of the 25,562 restricted shares subject to accelerated vesting on December 31, 2023 and using a share price of $11.42, the closing share price on December 31, 2023, the last business day of the year. Change of control payment calculations to former executives Simon Burton and Neil Greenspan are not set forth herein due to both their departures from the Company in 2023. As described above, in connection with their departures, both executives entered into deeds of settlement with the Company and Greenlight Re. Payment details to both former executives in connection with the settlement and release agreements were previously described above. 7456 2024 PROXY STATEMENT
2022PAY RATIO AND PAY VERSUS PERFORMANCE
2023 Pay Ratio
As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K, we are providing the following information about the relationship of the annual total compensation of our employees and the annual total compensation of Mr. Burton, our former Chief Executive Officer (our “CEO”(“CEO”, or as sometimes referred to below in this section, our Principal Executive Officer or “PEO”).
For 2022,2023, our last completed fiscal year: a) the median of the annual total compensation of all our employees (other than our CEO) was $182,981;$163,310; and b) the total annualized compensation of our CEO was $2,610,610.$5,910,846. Based on this information, for 2022,2023, the ratio of the total annualized compensation of Mr. Burton, our CEO, to the median of the annual total compensation of all employees was 14.336.2 to 1.0.
To identify the median employee in 2022,2023, we took the following steps:
i.We selected December 31, 2022,2023, which we refer to as the determination date, which is within the last three months of 2022,2023, as the date upon which we would identify the “median employee.” ii.We identified the median employee by examining the annual total compensation for 2022,2023, calculated in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K, of each of our employees employed as of December 31, 2022.2023. For those employees who joined the Company during 20222023 the total compensation was annualized as if they had been employed for the entire year. We calculated the total compensation for each employee in the same manner as the “Total Compensation” shown for our NEOs in the “Summary“Summary Compensation Table”Table”, including converting currencies of our employees in Ireland into United States dollars based on an average conversion rate for 20222023 which was $1.05,$1.08, where applicable and including converting currencies of our employeeemployees in the United Kingdom into United States dollars based on an average conversion rate for 20222023 which was $1.23,$1.25, where applicable. We determined the compensation of our median employee by ranking the annual total compensation of all employees, except for our CEO, and selecting the median employee based on their total compensation.
Pay Versus Performance As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(v) of Regulation S-K, we are providing the following information about the relationship of executive compensation actually paid and certain financial performance of our company. The following table shows the total compensation for our NEOs for the past threefour fiscal years as set forth in the Summary Compensation Table, or the compensation actually paid or CAP, to our CEO or our PEO, and, on an average basis, our non-PEO NEOs (in each case, as determined under SEC rules), our total shareholder return, or TSR, the TSR of the S&P 500 Property & Casualty Insurance Index, or our Peer Group TSR, over the same period, our net income, and our company-selected measure for 2022,2023, Growth in Fully Diluted Book Value Per Share.
Pay Versus Performance Table
| | Year | Year | Summary Compensation Table Total for PEO(1) | Compensation Actually Paid to PEO(1)(2) | Average Summary Compensation Table Total for Non-PEO NEOs(3) | Average Compensation Actually Paid to Non-PEO NEOs(2)(3) | Value of Initial Fixed td00 Investment Based On: | Net Income | Growth in Fully Diluted Book Value per Share(5) | Year | Summary Compensation Table Total for PEO(1) | Compensation Actually Paid to PEO(1)(2) | Average Summary Compensation Table Total for Non-PEO NEOs(3) | Average Compensation Actually Paid to Non-PEO NEOs(2)(3) | Value of Initial Fixed td00 Investment Based On: | Net Income (in ‘000s) | Growth in Fully Diluted Book Value per Share(5) | | Total Shareholder Return | Peer Group Total Shareholder Return(4) | Total Shareholder Return | Peer Group Total Shareholder Return(4) | | | (a) | (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | | (a) | | | (a) | | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | | 2023 | | 2023 | $5,910,846 | $7,286,491 | $993,261 | $999,047 | $112.96 | $166.31 | $86,830 | 16.8 | % | | 2022 | 2022 | $2,610,610 | $2,916,755 | $841,738 | $912,266 | $80.61 | $150.34 | $25,342 | 4.3% | 2022 | $2,744,811 | $3,050,956 | $841,738 | $912,266 | $80.61 | $150.34 | $25,342 | 2.4 | % | | 2021 | 2021 | $3,114,210 | $2,974,247 | $1,173,382 | $1,175,567 | $77.55 | $126.38 | $17,578 | 4.2% | 2021 | $3,114,210 | $2,974,247 | $1,173,382 | $1,175,567 | $77.55 | $126.38 | $17,578 | 4.2 | % | | 2020 | 2020 | $1,928,110 | $1,751,462 | $898,007 | $625,415 | $72.30 | $106.61 | $3,866 | 4.2% | 2020 | $1,928,110 | $1,751,462 | $898,007 | $625,415 | $72.30 | $106.61 | $3,866 | 4.2 | % |
1)Mr.Simon Burton was ouris the PEO for eachin 2020, 2021, 2022, 2021, and 2020.2023. 2)The dollar amounts reported representSee the amountchart on the next page for the reconciliation of CAP to the applicable NEO, as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual amount of compensation earned by or paid
during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made total compensation, as reported in the Summary Compensation Table for each yearcompensation to determine the compensation actually paid:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Year | Executive(s) | Summary Compensation Table Total($) | Subtract Stock Awards($) | Add Year-End Fair Value of Equity Awards Granted in the Year that are Outstanding and Unvested ($) | Add Amount Equal to Change as of the End of Fiscal Year from End of Prior Fiscal Year in Fair Value of Awards Granted in any Prior Fiscal Year that are Outstanding and Unvested Equity Awards($ | Add Amount Equal to Change as of the Vesting Date from the End of Prior Fiscal Year in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year($) | Subtract Fair Value as of the End of the Prior Year of any Equity Awards Granted in a Prior Year that Failed to Meet Vesting Conditions in the Year($) | Total Equity Award Adjustments ($) | CAP($) | | 2022 | PEO | 2,610,610 | (1,600,000) | 1,912,023 | 6,123 | (12,000) | — | | 306,145 | 2,916,755 | | Other NEOs | 841,738 | (322,702) | 385,634 | 18,349 | (10,752) | — | | 70,528 | 912,266 | | 2021 | PEO | 3,114,210 | (1,200,000) | 1,024,837 | (9,600) | 44,800 | — | | (139,963) | 2,974,247 | | Other NEOs | 1,173,382 | (270,000) | 230,586 | 26,759 | 14,839 | — | | 2,185 | 1,175,567 | | 2020 | PEO | 1,928,110 | (487,500) | — | | (112,800) |
423,652 | — | (176,649) | 1,751,462 | | Other NEOs | 898,007 | (230,000) | 202,874 | (52,176) | — | | 193,291 | (272,592) | 625,415 |
3)For 2020, the non-PEO NEOs wereare Laura Accurso, Tim Courtis, and Messrs.Tom Curnock, Neil Greenspan, and Patrick O’Brien. For 2021, the non-PEO NEOs were Ms.are Laura Accurso, and Messrs.Tom Curnock, Neil Greenspan, and Patrick O’Brien. For 2022, the non-PEO NEOs were Messrs.are Tom Curnock, Neil Greenspan, Romer,Patrick O’Brien, and O’Brien.Faramarz Romer. For 2023, the non-PEO NEOs are David Sigmon, Tom Curnock, Neil Greenspan, Patrick O’Brien, and Faramarz Romer. 4)Our Peer GroupThe peer group shown is the S&P 500 Property and& Casualty Insurance Index, which is included in the performance graph in the Company’s Annual Report on Formof our 10-K for the year ended December 31, 2022.filing.
5)The Company has identified Growth in Fully Diluted Book Value per Share as the company-selected measure for the pay-versus-performance disclosure, as it represents the most important financial performance measure used to link compensation actually paid to the CEO and Other NEOs in 20222023 to the Company's performance. Fully Diluted Book Value per Share is a non-GAAP measure. Please refer to Annex 1 for definitiondefinitions of non-GAAP measures.
Narrative to Pay Versus Performance Table | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Year | Executive(s) | Summary Compensation Table Total ($) | Subtract Stock Awards ($) | Add Year-End Fair Value of Equity Awards Granted in the Year that are Outstanding and Unvested ($) | Add Vest Date Fair Value of Equity Awards Granted in the Year that Vest in the Same Year ($) | Add Amount Equal to Change as of the End of Fiscal Year from End of Prior Fiscal Year in Fair Value of Awards Granted in any Prior Fiscal Year that are Outstanding and Unvested Equity Awards ($) | Add Amount Equal to Change as of the Vesting Date from the End of Prior Fiscal Year in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year ($) | Subtract Fair Value as of the End of the Prior Year of any Equity Awards Granted in a Prior Year that Failed to Meet Vesting Conditions in the Year ($) | Total Equity Award Adjustments ($) | CAP ($) | | | | | | | | | | | | | 2023 | PEO | 5,910,846 | | (1,600,000) | | 1,855,025 | | — | | 1,110,221 | | 10,400 | | — | | 1,375,645 | | 7,286,491 | | | Other NEOs | 993,261 | | (213,991) | | 217,364 | | — | | 132,246 | | 38,146 | | (167,980) | | 5,786 | | 999,047 | | | 2022 | PEO | 2,744,811 | | (1,600,000) | | 1,912,023 | | — | | 6,123 | | (12,000) | | — | | 306,145 | | 3,050,956 | | | Other NEOs | 841,738 | | (322,702) | | 385,634 | | — | | 18,349 | | (10,752) | | — | | 70,528 | | 912,266 | | | 2021 | PEO | 3,114,210 | | (1,200,000) | | 1,024,837 | | — | | (9,600) | | 44,800 | | — | | (139,963) | | 2,974,247 | | | Other NEOs | 1,173,382 | | (270,000) | | 230,586 | | — | | 26,759 | | 14,839 | | — | | 2,185 | | 1,175,567 | | | 2020 | PEO | 1,928,110 | | (487,500) | | — | | 486,052 | | (112,800) | | (62,400) | | — | | (176,649) | | 1,751,462 | | | Other NEOs | 898,007 | | (230,000) | | 202,874 | | — | | (52,176) | | (193,291) | | — | | (272,592) | | 625,415 | |
This section should be read in conjunction with the CD&A, on page 48, which includes additional discussion of our objectives of executive compensation and benefits program and how they are aligned with the company’s financial and operational performance. The Compensation Committee does not use CAP as a basis for making compensation decisions, nor do we use the performance measure of Net Income, as defined by the SEC for purposes of the pay vs performance table above, to measure performance for compensation.
7658 2024 PROXY STATEMENT
The charts below show, for the past threefour years, the relationship of TSR relative to the Peer Group TSR, as well as the relationships between PEO and non-PEO NEO average CAP and (i) TSR and (ii) net income.income, and (iii) our company-selected measure, Fully Diluted Book Value Per Share.
*For the 2023 CAP reported in these graphs of $7,286,491 to our former CEO, Mr. Burton, this figure includes Mr. Burton’s one-time cash severance payment. This contributed to the 2023 CEO CAP being far higher than the 2020 through 2022 reported amounts.
772024 PROXY STATEMENT 59
2022 Performance Metrics
2023 Performance Metrics We consider the performance measures listed in the table below as the most important performance measures used by us to link NEO compensation for 20222023 to Company performance. Each of these measures is described in more detail below.
| | | | Most Important Performance Measures | •Growth in Fully Diluted Book Value Per Share •Underwriting Combined Ratio •Adjusted Operating Profit |
Growth in Fully Diluted Book Value Per Share.
Our primary financial goal is to increase fully diluted book value per share over the long term. We use growth in fully diluted book value per share as one of the performance conditionconditions in our long-term incentive compensation. We believe that long-term growth in fully diluted book value per share is the most relevant measure of our financial performance because it provides management and investors a yardstick to monitor the shareholder value generated. Fully diluted book value per share may also help our investors, shareholders, and other interested parties form a basis of comparison with other companies within the property and casualty reinsurance industry.
Fully diluted book value per share represents basic book value per share combined with any dilutive impact of in-the-money stock options unvested service-based RSUs, and the earned portion of unvested performance-based RSUs granted. Fully diluted book value per share also includes the dilutive effect, if any, of ordinary shares expected to be issued upon settlement of our convertible notes.all outstanding RSUs. Fully diluted book value per share is a non-GAAP financial measure. Please refer to Annex 1 for definitions of non-GAAP financial measures and reconciliations of GAAP to non-GAAP financial measures.
Underwriting Combined Ratio.
We evaluate our underwriting performance based on the underwriting combined ratio. We use achievement of underwriting combined ratio as aone of the performance conditionconditions in our long-term incentive compensation. Underwriting combined ratio is calculated as 1 minus (the net underwriting income (loss) divided by the net earned premium). We do not use premiums written as a measure of performance. We use net underwriting income (loss) as a performance measure to evaluate the fundamentals underlying the Company’s underwriting operations. We believe that the use of net underwriting income (loss) enables investors and other users of the Company’s financial information to analyze our performance in a manner similar to how management analyzes performance. We believes this measure follows industry practice and allows the users of financial information to compare the Company’s performance with that of our industry peer group.
We calculate net underwriting income (loss) as net premiums earned, plus other income relating to reinsurance and deposit-accounted contracts, less deposit interest expense, less net loss and loss adjustment expenses, acquisition costs, and underwriting expenses. Net underwriting income (loss) is a non-GAAP measure. Please refer to Annex 1 for definitions of non-GAAP financial measures and reconciliations of GAAP to non-GAAP financial measures.
Adjusted Operating Profit.
We also measure our performance based on adjusted operating profit, or AOP, as this measure reflects management’s contribution to long term profitability and operational efficiency. AOP for purposes of 2023 compensation is calculated as the sum of (i) the underwriting income and (ii) the strategic investments income (net of tax), less (iii) corporate innovations-related expense, as a percentage of book value. We use AOP as a performance measure in our short-term incentive compensation. AOP is a non-GAAP performance measure. Please refer to Annex 1 for definitions of non-GAAP financial measures and reconciliations of GAAP to non-GAAP financial measures.
Equity Compensation Plan Information The following table provides information as of December 31, 20222023 with respect to the Company’s Class A ordinary shares that may be issued upon the exercise of options, warrants and restricted share unitsRSUs granted to employees, consultants or members of our Board of Directors under all of our existing compensation plans, including the 2004 and 2023 stock incentive plan,plans, each as amended.
| | | | | | | | | | | | | | | | | | | | | | | | | Plan category | | Number of securities to be issued upon exercise of outstanding options, warrants and rights | | Weighted-average exercise price of outstanding options, warrants and rights | | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | | | | | (a) | | (b) | | (c) | | | Equity compensation plans approved by security holders | | 968,297 | | (1) | $ | 17.95 | | | 2,011,426 | | (2) | | Equity compensation plans not approved by security holders | | — | | | — | | | — | | | | Total | | 968,297 | | (1) | $ | 17.95 | | | 2,011,426 | | (2) |
__________
| | | | | | | | | | | | | | | | | | | | | | | | | Plan category | | Number of securities to be issued upon exercise of outstanding options, warrants and rights | | Weighted-average exercise price of outstanding options, warrants and rights | | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | | | | | (a) | | (b) | | (c) | | | Equity compensation plans approved by security holders | | 917,010 | | (1) | $ | 15.65 | | | 3,296,771 | | (2) | | Equity compensation plans not approved by security holders | | — | | | — | | | — | | | | Total | | 917,010 | | (1) | $ | 15.65 | | | 3,296,771 | | (2) |
(1)Includes 968,297 Class A917,010 ordinary shares issuable upon the exercise of options and restricted share unitsRSUs that were outstanding under the 2004 stock incentive plan2023 Incentive Plan as of December 31, 2022.2023. (2)Represents the difference between the number of securities issuable under the 2004 stock incentive plan (8,000,000)2023 Incentive Plan (10,000,000) and the number of securities issued under the 2004 stock incentive plan as of December 31, 2022 (5,988,574)2023 (6,703,229). The number of securities issued under the 2004 stock incentive plan consists of options to acquire 1,914,627 Class A ordinary shares and 4,073,9474,788,602 issued shares or share units.
Compensation Committee Interlocks and Insider Participation The individuals who served as members of the Compensation Committee during the year ended December 31, 20222023 were Ms. Foley and Messrs. Isaacs and Platt, each of whom the Board of Directors deemed to be independent in accordance with the director independence standards of the Nasdaq stock market rules.No member of the Compensation Committee was, during 2022,2023, or had previously been, an executive officer or employee of the Company or had any relationships requiring disclosure by the Company under the SEC’s rules requiring disclosure of certain relationships and related-party transactions. During fiscal year 2022,2023, none of our executive officers served on the compensation committee (or its equivalent) or board of directors of another entity whose executive officer served on our Board or Compensation Committee.
AUDIT COMMITTEE REPORT Management has the primary responsibility for establishing and maintaining adequate internal control over financial reporting, preparing the financial statements and the public reporting process. The Audit Committee’s primary purpose is to assist the Board of Directors in fulfilling its responsibilities to oversee the participation of management in the financial reporting process and the role and responsibilities of the independent auditors. In performing its oversight role in connection with the audit of the Company’s consolidated financial statements for the year ended December 31, 2022,2023, the Audit Committee has: 1.reviewed and discussed the audited consolidated financial statements with management; 2. discussed with the independent auditors the matters required to be discussed by rules adopted by the Public Company Accounting Oversight Board; and 3. received the written disclosures and the letter from the independent auditors required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent auditors’ communications with the Audit Committee concerning independence and has discussed with the independent auditors the independent auditors’ independence.
Based on the review and discussions referred to above, and in reliance on the information, opinions, reports or statements presented to the Audit Committee by management and the independent auditors, the Audit Committee recommended to the Board of Directors that the December 31, 20222023 audited consolidated financial statements be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.2023. The Audit Committee Johnny Ferrari (Chair) Ursuline Foley Victoria Guest Bryan Murphy
Independent Public Accountant Fees and Services Audit Fees The aggregate amount of fees billed by Deloitte Ltd. and its international affiliates, or Deloitte, were $873,195 and $668,195 for the fiscal years ended December 31, 2023, and 2022, respectively. The audit fees were for the following professional services rendered forrendered: (1) the audit of our annual consolidated financial statements during the fiscal year ended December 31, 2022;statements; (2) the review of theour quarterly consolidated financial statements included in our Quarterly Reports on Form 10-Q in 2022;statements; and (3) the 2022 auditaudits of the Company’s internal control over financial reporting with the objective of obtaining reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects; and (4) services that are normally provided by the auditor in connection withour reinsurance statutory and regulatory filings or engagements, were, for Deloitte, approximately $668,195 for the fiscal year ended December 31, 2022.in Cayman Islands and Ireland. The aggregate amount of fees billed by BDO USA, LLP and its international affiliates, or BDO, for professional services rendered for (1)(“BDO”) had previously served as the audit of our financial statements during the fiscal year ended December 31, 2021; (2) the reviewindependent auditors of the financial statements included in our Quarterly Reports on Form 10-Q in 2021; (3)Company from 2006 through the 2021 audits of the Company’s internal control over financial reporting with the objective of obtaining reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects; and (4) services that are normally provided by the auditor in connection with statutory and regulatory filings or engagements, were $505,872 for BDO for the fiscal year ended December 31, 2021.year. For the fiscal year ended December 31, 2022, we paid BDO $108,817 for assistance with successor auditor work paper review and its consent to the incorporation by reference of BDO’s reports in our Registration Statements.applicable year-end filings. For the fiscal year ended December 31, 2023, we paid BDO $75,000 in connection with applicable year-end filing consents.
Audit-Related Fees The Company did not incur anyincurred $8,000 and $nil for audit-related fees billed by Deloitte or BDO during the fiscal years ended December 31, 2023 and 2022, and 2021. respectively. Tax Fees The Company did not incur any tax fees billed by Deloitte or BDO during the fiscal years ended December 31, 20222023 and 2021.2022. All Other Fees The Company did not incur any other fees billed by Deloitte or BDO during the fiscal years ended December 31, 20222023 and 2021.2022.
Audit Committee’s Pre-Approval Policies and Procedures Our Audit Committee charter includes our policy regarding the approval of audit and non-audit services performed by our independent auditors. The Audit Committee is responsible for retaining and evaluating the independent auditors’ qualifications, performance and independence. The Audit Committee pre-approves all auditing services, internal control-related services and permitted non-audit services (including the fees and terms thereof) to be performed for us by our independent auditors, subject to such exceptions for non-audit services as permitted by applicable laws and regulations. The Audit Committee may delegate this authority to a subcommittee consisting of one or more Audit Committee members, including the authority to grant pre-approvals of audit and permitted non-audit services, provided that decisions of such subcommittee to grant pre-approvals are presented to the full Audit Committee at its next meeting. TheFor the years ended December 31, 2023, and 2022, the Audit Committee approved all professional services provided to us by Deloitte during 2022.
8164 2024 PROXY STATEMENT
PRINCIPAL SHAREHOLDERS
COMMON SHARE OWNERSHIP BY DIRECTORS AND EXECUTIVE OFFICERS The following tabletables shows information known to us with respect to the beneficial ownership of both classes of our ordinary shares as of April 20, 2023 for: •each person or group who beneficially owns more than 5%19, 2024 for the directors of each class of our ordinary shares;
•each of our NEOs, Messrs. Burton, Greenspan, O’Brien, Romerthe Company, the executive officers listed in the Summary Compensation Table currently employed by the Company and Curnock;
•each of our directors and director nominees; and
•by all of our current directors director nominees and executive officersNamed Executive Officers as a group.
Information in this table was in part furnished to the Company by the respective directors and Named Executive Officers. Beneficial ownership of shares is determined under the rules of the SEC and generally includes any shares over which a person exercises sole or shared voting or investment power. Except as indicated by footnote, and subject to applicable community property laws, each person identified in the table possesses sole voting and investment power with respect to all ordinary shares held by them. Class A ordinaryOrdinary shares subject to options currently exercisable or exercisable within 60 days of April 20, 2023,19, 2024, and not subject to repurchase as of that date, are deemed to be outstanding for calculating the percentage of outstanding shares of the person holding these options, but are not deemed to be outstanding for calculating the percentage of any other person. Applicable percentage ownership in the following table is based on 29,007,963 Class A ordinary shares and 6,254,715Class B35,321,144 ordinary shares outstanding as of April 20, 2023. Unless otherwise indicated, the address of each of the named individuals is c/o Greenlight Capital Re, Ltd., 65 Market Street, Suite 1207, Jasmine Court, Camana Bay, P.O. Box 31110, Grand Cayman, KY1-1205, Cayman Islands.19, 2024.
| | Name and address of beneficial owner | | Beneficial ownership of principal shareholders | | Name of beneficial owner | | Name of beneficial owner | | Beneficial ownership of principal shareholders | | | | | Number of Class A Ordinary Shares | | % | | Number of Class B Ordinary Shares | | % | | | Number of Ordinary Shares | | % | | David Einhorn | David Einhorn | (1) | — | | | — | % | | 6,254,715 | | | 100.00 | % | David Einhorn | (1) | 6,254,715 | | | 17.71 | | 17.71 | % | | Blackrock, Inc. | (2) | 1,896,076 | | | 6.54 | % | | | | | | Dimensional Fund Advisors LP | (3) | 1,581,848 | | | 5.45 | % | | | | | | Orchard Capital Management, LLC | (4) | 1,573,614 | | | 5.42 | % | | | Simon Burton | (5) | 1,428,811 | | | 4.86 | % | | | Neil Greenspan | (6) | 42,103 | | | * | | | Daniel Roitman | | Daniel Roitman | (2) | 380,000 | | | 1.08 | % | | Leonard Goldberg | | Leonard Goldberg | (3) | 315,286 | | | * | | Joseph Platt | | Joseph Platt | (4) | 208,180 | | | * | | Thomas Curnock | | Thomas Curnock | (5) | 206,729 | | | * | | Faramarz Romer | | Faramarz Romer | (6) | 154,275 | | | * | | Bryan Murphy | | Bryan Murphy | (7) | 149,131 | | | * | | Ian Isaacs | | Ian Isaacs | (8) | 137,591 | | | * | | Patrick O'Brien | Patrick O'Brien | (7) | 92,168 | | | * | | Patrick O'Brien | (9) | 131,399 | | | * | | * | | Faramarz Romer | (8) | 154,275 | | | * | | | Thomas Curnock | (9) | 206,729 | | | * | | | Johnny Ferrari | Johnny Ferrari | (10) | 23,319 | | | * | | Johnny Ferrari | (10) | 32,661 | | | * | | * | | Ursuline Foley | Ursuline Foley | (11) | 23,319 | | | * | | Ursuline Foley | (11) | 32,661 | | | * | | * | | Leonard Goldberg | (12) | 305,944 | | | 1.05 | % | | | | | | Victoria Guest | Victoria Guest | (13) | 23,319 | | | * | | Victoria Guest | (12) | 32,661 | | | * | | * | | Ian Isaacs | (14) | 149,013 | | | * | | | | | | Bryan Murphy | (15) | 139,789 | | | * | | | | | | Joseph Platt | (16) | 198,838 | | | * | | | | | | Daniel Roitman | (17) | 380,000 | | | 1.31 | % | | | David Sigmon | | David Sigmon | (13) | 25,562 | | | * | | | All directors, director nominees and executive officers as a group (15 persons) | | 3,301,169 | | | 11.21 | % | | 6,254,715 | | | 100.00 | % | | All directors, director nominees and executive officers as a group (14 persons) | | | All directors, director nominees and executive officers as a group (14 persons) | | | All directors, director nominees and executive officers as a group (14 persons) | | | 8,060,851 | | | 22.79 | % |
| | | | | | | * | Represents less than 1% of the outstanding ordinary shares. |
(1)Mr. Einhorn together with his affiliates, is limited to voting the number of Class B ordinary shares equal to 9.5% of the total voting power of the total issued and outstanding ordinary shares. Mr. Einhornhas beneficial ownership of 4,864,227 Class B ordinary shares held by DME 2022 Holdings LLC. Mr. Einhorn also has beneficial ownership of 1,390,488 Class B ordinary shares held by the David M. Einhorn 2021-07 Family Trust. (2)Mr. Roitman owns 340,117 ordinary shares directly and also retains beneficial ownership of 39,883 ordinary shares held by the Daniel E. Roitman 2007 Family Trust. (3)Includes 9,342 restricted shares. Includes 42,250 ordinary shares subject to options that are exercisable. Mr. Goldberg owns 226,166 ordinary shares directly and also retains beneficial ownership of 22,870 ordinary shares held by the Leonard R. Goldberg 2007 Family Trust and 24,000 ordinary shares held in a spousal revocable trust. (4)Includes 9,342 restricted shares. Includes 55,000 ordinary shares held by a partnership of which Mr. Platt is the general partner. (5)Includes 109,070 restricted shares. Mr. Curnock also owns 26,582 RSUs. Since these RSUs do not have any voting or disposition rights until they vest and none vest within 60 days of April 19, 2024, these shareholdings are not reported. (6)Includes 66,382 restricted shares. Mr. Romer also owns 26,291 RSUs. Since these RSUs do not have any voting or disposition rights until they vest and none vest within 60 days of April 19, 2024, these shareholdings are not reported. (7)Includes 9,342 restricted shares. (8)Includes 9,342 restricted shares. Also includes 25,000 ordinary shares held by a living trust and 25,000 ordinary shares held in an IRA. Mr. Isaacs has pledged 16,000 ordinary shares of his unrestricted shares. (9)Mr. O’Brien also owns 143,958 RSUs. Since these RSUs do not have any voting or disposition rights until they vest and none vest within 60 days of April 19, 2024, these shareholdings are not reported. (10)Includes 9,342 restricted shares. (11)Includes 9,342 restricted shares. (12)Includes 9,342 restricted shares. (13)Includes 25,562 restricted shares. Mr. Sigmon also owns 13,165RSUs. Since these RSUs do not have any voting or disposition rights until they vest and none vest within 60 days of April 19, 2024, these shareholdings are not reported.
PRINCIPAL BENEFICIAL OWNERS OF COMMON SHARES
To the best of the Company’s knowledge, the only beneficial owners of 5% or more of the outstanding common shares of the Company as of January 31, 2024 are set forth below. This table is based where applicable on information provided in Schedule 13G Information Statements filed with the SEC.
| | | | | | | | | | | | | | | | Name and address of beneficial owner | | Beneficial ownership of principal shareholders | | | | | Number of Ordinary Shares | % | | David Einhorn c/o Greenlight Capital Re, Ltd. 65 Market Street, Camana Bay, Grand Cayman, KY1-1205, Cayman Islands | (1) | 6,254,715 | 17.71% | | BlackRock, Inc. 50 Hudson Yards, New York, NY 10001 | (2) | 1,989,086 | 5.63% | | Dimensional Fund Advisors LP Building One, 6300 Bee Cave Road, Austin, Texas, 78746 | (3) | 1,902,489 | 5.39% | |
(1)Mr. Einhorn has beneficial ownership of 4,864,227 ordinary shares held by DME 2022 Holdings LLC. Mr. Einhorn also has beneficial ownership of 1,390,488 ordinary shares held by the David M. Einhorn 2021-07 Family Trust. (2)BlackRock, Inc.’s beneficial ownership is based on a Schedule 13G/A filed on February 1, 2023. The business address for BlackRock Inc. is 55 East 52nd Street, New York, NY 10055.2, 2024. (3)Dimensional Fund Advisors LP’s beneficial ownership is based on a Schedule 13G/A filed on February 10, 2023. The business address for Dimensional Fund Advisors LP is Building One, 6300 Bee Cave Road, Austin, Texas, 78746. (4)Orchard Capital Management, LLC’s beneficial ownership is based on a Schedule 13G filed on February 13, 2023. The business address for Orchard Capital Management, LLC is 400 N. Michigan Avenue, Suite 560, Chicago, IL 60611.
(5)Includes 694,524 restricted shares subject to performance conditions and forfeiture, and 235,936 restricted shares subject to forfeiture. In addition, includes options to purchase 400,000 Class A ordinary shares subject to options that are exercisable.
(6)Mr. Greenspan entered into a separation agreement with the Company as of March 31, 2023 and left the Company on March 31, 2023.
(7)Mr. O’Brien also owns 157,464 restricted share units. Since these restricted share units do not have any voting or disposition rights until they vest and none vest within 60 days of April 20, 2023, these shareholdings are not reported.
(8)Includes 45,448 restricted shares subject to performance conditions and forfeiture.
(9)Includes 97,761 restricted shares subject to performance conditions and forfeiture.
(10)Includes 14,056 restricted shares subject to forfeiture.
(11)Includes 14,056 restricted shares subject to forfeiture.
(12)Includes 14,056 restricted shares subject to forfeiture. Includes 42,250 Class A ordinary shares subject to options that are exercisable. Mr. Goldberg owns 216,824 Class A ordinary shares directly and also retains beneficial ownership of 22,870 Class A ordinary shares held by the Leonard R. Goldberg 2007 Family Trust and 24,000 Class A ordinary shares held in a spousal revocable trust.
(13)Includes 14,056 restricted shares subject to forfeiture.
(14)Includes 14,056 restricted shares subject to forfeiture. Includes 25,000 Class A ordinary shares held by a living trust and 25,000 Class A ordinary shares held in an IRA. Mr. Isaacs has pledged 16,000 Class A ordinary shares of his unrestricted shares.
(15)Includes 14,056 restricted shares subject to forfeiture.
(16)Includes 23,427 restricted shares subject to forfeiture. Includes 55,000 Class A ordinary shares held by a partnership of which Mr. Platt is the general partner.
(17)Mr. Roitman owns 340,117 Class A ordinary shares directly and also retains beneficial ownership of 39,883 Class A ordinary shares held by the Daniel E. Roitman 2007 Family Trust.9, 2024.
DELINQUENT SECTION 16(A) REPORTS Section 16(a) of the Exchange Act requires that our directors, executive officers and the persons who beneficially own more than 10% of our ordinary shares file reports of ownership and changes of ownership on Forms 3, 4 and 5 with the SEC. Executive officers, directors and greater than 10% shareholders are required by regulations promulgated by the SEC to furnish us with copies of all Forms 3, 4 and 5 they file. Based solely on the reports received by us and on the written representations of the reporting persons, we believe that no director, executive officer or greater than 10% shareholder failed to file on a timely basis the reports required by Section 16(a) of the Exchange Act during, or with respect to, fiscal year 2022.2023.
CERTAIN RELATIONSHIPS AND RELATED-PARTY TRANSACTIONS Related-Party Transaction Policy and Audit Committee Charter We have established a written related-party transaction policy which provides procedures for the review of transactions in excess of $120,000 in any year between us and any covered person having a direct or indirect material interest, subject to certain exceptions. Covered persons include any director, executive officer, director nominee, 5% shareholder or any immediate family members of the foregoing. All relevant factors with respect to a proposed related-party transaction are considered, and such a transaction will only be approved if it is in our and our shareholders’ best interests or, if an alternate standard of review is imposed by applicable laws, statutes, governing documents or listing standards, if such alternate standard of review is satisfied. Any such related-party transactions shall require advance approval by a majority of our independent directors or a majority of the members of a committee constituted solely of our independent directors. In addition, our Audit Committee charter provides that the Audit Committee will review and approve all related-party transactions.
Limited Partnership Agreement Agreemen
On September 1, 2018, the Company entered into a Limited Partnership Agreement, or the LPA, with Solasglas Investments, LP, which we refer to as SILP, with DME Advisors II, LLC, which we refer to as DME II, as General Partner. DME II and DME Advisors, LP, which we refer to as DME Advisors, are related parties and are controlled by David Einhorn, the Chair of the Board, the President and Portfolio Manager of Greenlight Capital, Inc., and the beneficial owner of allcertain number of the issued and outstanding Class B ordinary shares. During the year ended December 31, 2018, the Company transferred rights to $366.3 million of net investments from Greenlight Re and GRIL’s joint venture, or the Joint Venture, investment accounts to SILP in exchange for limited partnership interests of the same amount, resulting in no net gain or loss.
DME II receives a performance allocation equal to (with capitalized terms having the meaning provided under the LPA) (a) 10% of the portion of the Positive Performance Change for each limited partner’s capital account that is less than or equal to the positive balance in such limited partner’s Carryforward Account, plus (b) 20% of the portion of the Positive Performance Change for each limited partner’s capital account that exceeds the positive balance in such limited partner’s Carryforward Account. The Carryforward Account for Greenlight Re and GRIL include the amount of losses that were to be recouped under the Joint Venture as well as any loss generated on the assets invested in SILP, subject to adjustments for redemptions. The loss carry forward provision contained in the LPA allows DME II to earn reduced performance allocation of 10% of profits in any year subsequent to any years in which SILP has incurred a loss, until all losses are recouped and an additional amount equal to 150% of the loss is earned. For the year ended December 31, 2022,2023, the Company’s investment income from SILP included performance allocation to DME II of $3.2 million (2022: $6.1 million (2021: $2.0 million).
On September 1, 2018, SILP entered into an investment advisory agreement, or the IAA, with DME Advisors which entitles DME Advisors to a monthly management fee equal to 0.125% (1.5% on an annual basis) of each limited partner’s Investment Portfolio, as provided in the LPA. The IAA hashad an initial term ending on August 31, 2023 subject to automatic extension for successive three-year terms.terms which renewal did occur. For the year ended December 31, 2022,2023, the Company’s investment income from SILP included management fees paid by SILP to DME Advisors of $4.8 million (2022: $3.6 million (2021: $3.5 million).
On February 26, 2019, effective as of September 1, 2018, the Company entered into Amendment No. 1 to the LPA. The amendment was intended to revise the mechanics for calculating the Carryforward Account and Performance Allocation (as defined in the LPA) to take into account withdrawals from and subsequent recontributions of capital to SILP, consistent with the treatment under the Joint Venture.
On August 5, 2020, in connection with the investments by Greenlight Re and GRIL in SILP, pursuant to the LPA, the Company entered into an amended and restated letter agreement, or the Letter Agreement, with DME Advisors and DME II whereby from July 1, 2020 until such date on which neither Greenlight Re nor GRIL is a limited partner in the Partnership, or as further modified by agreement of the parties: (a) the Deployed GLRE Investment Portfolio (as defined in the Letter Agreement) shall not exceed an amount equal to 50% of the GLRE Surplus (as defined in the Letter Agreement); (b) in the event that the Deployed GLRE Investment Portfolio exceeds 50% of the GLRE Surplus, which we refer to as Excess Assets, DME II and the DME Advisors will use their respective commercially reasonable efforts to promptly liquidate positions in Excess Assets to Non-Risk Assets (as defined in the Letter Agreement) as may be necessary to comply with the preceding paragraph (a); and (c) until June 30, 2021, Non-Risk Assets were not subject to any Management Fee (as defined in the LPA) or Performance Allocation (as defined in the LPA).
On January 7, 2021, the Company, Greenlight Re, GRIL and DME II entered into the Second Amended and Restated Exempted Limited Partnership Agreement, effective as of January 1, 2021, or the Second Restated LPA. The Second Restated LPA amended, restated, superseded and incorporated all material terms of the Letter Agreement and was intended to amend certain definitions in the LPA, including “Additional Investment Ratio”,Ratio,” “Greenlight Re Surplus” and the “GRIL Surplus”.Surplus.” In addition, the Second Restated LPA amended Section 4.1(c) to incorporate the requirement to limit the size of any Partner’s Investment Portfolio (as defined in the Second Restated LPA) and amended each of Schedule 4.1(c)-1 (the Greenlight Re Guidelines) and Schedule 4.1(c)-2 (the GRIL Guidelines) to reflect the amended investment guidelines adopted by the board of directors of Greenlight Re and GRIL, respectively, effective as of January 1, 2021.
Pursuant to the Second Restated LPA and the IAA, the Company has agreed to indemnify DME II and DME Advisors for any expense, loss, liability or damage arising out of any claim asserted or threatened in connection with DME Advisors serving as SILP’s investment advisor. The Company will reimburse DME, DME II and DME Advisors for reasonable costs and expenses of investigating and/or defending such claims, provided such claims were not caused due to gross negligence, breach of contract or misrepresentation by DME II or DME Advisors. For the year ended December 31, 2022,2023, there were no indemnification payments payable or paid by the Company.
In accordance with the Second Restated LPA, either of Greenlight Re or GRIL may voluntarily withdraw all or part of its Capital Account for its operating needs by giving DME II at least 3 business days notice. In addition, either of Greenlight Re or GRIL may withdraw as a partner and fully withdraw all of its Capital Account from SILP on 3 business days notice if the Board of Greenlight Re or GRIL, as applicable, declares that a cause for withdrawal exists as per the LPA.
Service AgreementAdjusted Operating Profit
We also measure our performance based on adjusted operating profit, or AOP, as this measure reflects management’s contribution to long term profitability and operational efficiency. AOP for purposes of 2023 compensation is calculated as the sum of (i) the underwriting income and (ii) the strategic investments income (net of tax), less (iii) corporate innovations-related expense, as a percentage of book value. We use AOP as a performance measure in our short-term incentive compensation. AOP is a non-GAAP performance measure. Please refer to Annex 1 for definitions of non-GAAP financial measures and reconciliations of GAAP to non-GAAP financial measures.
Equity Compensation Plan Information The Company has entered into a service agreementfollowing table provides information as of December 31, 2023 with DME Advisors, which was amended in August 2007 and October 2007, pursuant to which DME Advisors provides investor relations servicesrespect to the Company forCompany’s ordinary shares that may be issued upon the exercise of options, warrants and RSUs granted to employees, consultants or members of our Board of Directors under all of our existing compensation plans, including the 2004 and 2023 stock incentive plans, each as amended. | | | | | | | | | | | | | | | | | | | | | | | | | Plan category | | Number of securities to be issued upon exercise of outstanding options, warrants and rights | | Weighted-average exercise price of outstanding options, warrants and rights | | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | | | | | (a) | | (b) | | (c) | | | Equity compensation plans approved by security holders | | 917,010 | | (1) | $ | 15.65 | | | 3,296,771 | | (2) | | Equity compensation plans not approved by security holders | | — | | | — | | | — | | | | Total | | 917,010 | | (1) | $ | 15.65 | | | 3,296,771 | | (2) |
(1)Includes 917,010 ordinary shares issuable upon the exercise of $5,000 per month (plus expenses)options and RSUs that were outstanding under the 2023 Incentive Plan as of December 31, 2023. (2)Represents the difference between the number of securities issuable under the 2023 Incentive Plan (10,000,000) and the number of securities issued as of December 31, 2023 (6,703,229). The service agreement had an initial termnumber of one yearsecurities issued consists of options to acquire 1,914,627 ordinary shares and continues for sequential one-year periods until terminated by either4,788,602 issued shares or share units. Compensation Committee Interlocks and Insider Participation The individuals who served as members of the Company or DME Advisors. Either party may terminate the service agreement for any reason with 30 days prior written notice to the other party. ForCompensation Committee during the year ended December 31, 2022, the Company incurred expenses2023 were Ms. Foley and Messrs. Isaacs and Platt, each of $60,000 to DME Advisors for investor relations services.
Shareholders’ Agreement
Pursuant to the Company’s Shareholders’ Agreement, Greenlight Capital Investors, LLC, which we refer to as GCI, had the right to unlimited demand registration rights once we are eligible to use Form S-3 (or similar short form registration statements). GCI assigned its demand registration rights under the Shareholders’ Agreement, with our consent, to David Einhorn on January 3, 2007. Mr. Einhorn has registration rights for all of his Class B ordinary shares, including those acquired in a private placement in May 2007, as contemplated under the Shareholders’ Agreement. On June 30, 2021, the Company entered in Amendment No. 2 to the Shareholders’ Agreement to extend the expiration date of the Shareholders’ Agreement to June 30, 2024.
Collateral Assets Investment Management Agreement
Effective January 1, 2019, the Company (and certain subsidiaries) entered into a collateral assets investment management agreement, or the CMA, with DME Advisors, pursuant to which DME Advisors manages certain assets of the Company that are not subject to the SILP LPA and are held by the Company to provide collateral required by the cedents in the form of trust accounts and letters of credit. In accordance with the CMA, DME Advisors receives no fees and is required to comply with the collateral investment guidelines. The CMA can be terminated by any of the parties upon 30 days’ prior written notice to the other parties.
Green Brick Partners, Inc.
David Einhorn also serves as the Chair ofwhom the Board of Directors of Green Brick Partners, Inc., or GRBK, a publicly traded company. As of December 31, 2022, SILP, alongdeemed to be independent in accordance with certain affiliates of DME Advisors, collectively owned 37.2%the director independence standards of the issuedNasdaq stock market rules. No member of the Compensation Committee was, during 2023, or had previously been, an executive officer or employee of the Company or had any relationships requiring disclosure by the Company under the SEC’s rules requiring disclosure of certain relationships and outstanding common sharesrelated-party transactions. During fiscal year 2023, none of GRBK. Under applicable securities laws, DME Advisors may be limited at times inour executive officers served on the compensation committee (or its ability to trade GRBK sharesequivalent) or board of directors of another entity whose executive officer served on behalf of SILP.our Board or Compensation Committee.
OTHER MATTERS
AUDIT COMMITTEE REPORT NeitherManagement has the primary responsibility for establishing and maintaining adequate internal control over financial reporting, preparing the financial statements and the public reporting process. The Audit Committee’s primary purpose is to assist the Board of Directors norin fulfilling its responsibilities to oversee the participation of management intends to bring before the Meeting any business other than the matters referred to in the Notice of Annual General Meeting of Shareholdersfinancial reporting process and this Proxy Statement. If any other business should come properly before the Meeting, or any adjournment or postponement thereof, the proxy holders will vote on such matters at their discretion.
ADDITIONAL INFORMATION
Other Action at the Meeting
Asrole and responsibilities of the date of this Proxy Statement, the Company has no knowledge of any business, other than described herein and customary procedural matters, which will be presented for consideration at the Meeting.independent auditors.
In the event any other business is properly presented at the Meeting, the persons named in the accompanying proxy may, but will not be obligated to, vote such proxy in accordance with their judgment on such business.
Shareholder Proposals for the Annual General Meeting of Shareholders in 2024
Shareholder Proposals for Inclusion in Proxy Statement
Pursuant to Rule 14a-8 of the Exchange Act, shareholder proposals must be received in writing by the Secretary of the Company no later than 120 days prior to the date of the Company’s proxy statement released to shareholdersperforming its oversight role in connection with the audit of the Company’s previous year’s annual meeting of shareholdersconsolidated financial statements for the year ended December 31, 2023, the Audit Committee has:
1.reviewed and must complydiscussed the audited consolidated financial statements with management; 2. discussed with the independent auditors the matters required to be discussed by rules adopted by the Public Company Accounting Oversight Board; and 3. received the written disclosures and the letter from the independent auditors required by applicable requirements of Rule 14a-8the Public Company Accounting Oversight Board regarding the independent auditors’ communications with the Audit Committee concerning independence and has discussed with the independent auditors the independent auditors’ independence. Based on the review and discussions referred to above, and in order to be considered for inclusion inreliance on the Company’s Proxy Statement and form of proxy relatinginformation, opinions, reports or statements presented to the Annual General Meeting of Shareholders in 2024. The Company believes that shareholder proposals receivedAudit Committee by January 12, 2024 would be considered timely for inclusion in management and the Company’s Proxy Statement forindependent auditors, the Annual General Meeting of Shareholders in 2024, or the 2024 Proxy Statement. Such proposals should be directedAudit Committee recommended to the attentionBoard of Directors that the Secretary, Greenlight Capital Re, Ltd. Shareholder Proposals for Presentation at Meeting
Pursuant to the Company’s Articles, any shareholder proposal for the Annual General Meeting of Shareholders in 2024, or the 2024 Meeting, other than with respect to a nominee for election as a director, which is submitted outside the processes of Rule 14a-8 and is therefore not submitted for inclusion in next year’s proxy statement, shallDecember 31, 2023 audited consolidated financial statements be considered untimely unless received by the Secretary in writing no later than the close of business on the 90th day nor earlier than the opening of business on the 120th day before the anniversary date of the immediately preceding annual general meeting. As a result, such shareholder proposals must be received no earlier than March 27, 2024 and no later than April 26, 2024 to be considered timely. Such proposals should be directed to the attention of the Secretary, Greenlight Capital Re, Ltd. If a shareholder proposal is introduced at the 2024 Meeting without any discussion of the proposal in the 2024 Proxy Statement and the shareholder does not notify the Company on a timely basis, in accordance with Cayman Islands corporate law, of the intent to raise such proposal at the 2024 Meeting, then proxies received by the Company for the 2024 Meeting will be voted by the persons named as such proxies in their discretion with respect to such proposal.
Shareholder Proposals regarding Director Nominees
Pursuant to the Company’s Articles, any shareholders’ proposal with respect to the nomination of a person for election as a director at the 2024 Meeting must be received no later than 120 days prior to the date of such annual general meeting to be considered timely. Such proposal must otherwise comply with the advance notice procedures and other provisions set forth in the Articles in order for such nominations to be properly brought before the 2024 Meeting.
Costs of Solicitation
The entire cost of this proxy solicitation will be borne by the Company, including expenses in connection with preparing, assembly, printing and mailing proxy solicitation materials. In addition to solicitation by mail, officers, directors and employees of the Company may solicit proxies by telephone, facsimile, electronic communication, in person or via the Internet, although no compensation will be paid for such solicitation. We will also reimburse brokerage firms and other custodians, nominees and fiduciaries, upon request, for their reasonable expenses incurred in sending proxies and proxy materials to beneficial owners of our common stock. Additionally, we have retained MacKenzie Partners, Inc. as an outside proxy solicitation firm to assist us with the solicitation of proxies. The Company will pay the proxy solicitor $15,000 and a potential success fee of $7,500, plus reimbursement for reasonable out-of-pocket expenses.
| | | | | | | By Order of the Board of Directors, | | /s/ Simon Burton | | Simon Burton | | Chief Executive Officer | | April 26, 2023 | | Grand Cayman, Cayman Islands |
QUESTIONS AND ANSWERS ABOUT THE MEETING AND VOTING
| | | | | | | | | Q:What is the purpose of the Meeting?
A: At the Annual Meeting, our stockholders will act upon the proposals described in this proxy statement.
Q: What is the difference between holding shares as a shareholder of record, a registered shareholder and as a beneficial owner of shares?
A: Shareholder of Record or Registered Shareholder. If your ordinary shares are registered directly in your name with our transfer agent, Computershare, you are considered a “shareholder of record” or a “registered shareholder” of those shares.
Beneficial Owner of Shares. If your shares are held in an account at a bank, brokerage firm or other similar organization, then you are a beneficial owner of shares held in “street name.” In that case, you will have received these proxy materials from the bank, brokerage firms or other similar organization holding your account and, as a beneficial owner, you have the right to direct your bank, brokerage firm or similar organization how to vote the shares held in your account.
Q: Who is paying for this proxy solicitation?
A: The Company is paying the costs of the solicitation of proxies. Proxies may be solicited on behalf of the Company by our directors, officers, employees or agents in person or by telephone, facsimile or other electronic means. We will also reimburse brokerage firms and other custodians, nominees and fiduciaries, upon request, for their reasonable expenses incurred in sending proxies and proxy materials to beneficial owners of our common stock. Additionally, we have retained MacKenzie Partners, Inc. as an outside proxy solicitation firm to assist us with the solicitation of proxies. The Company will pay the proxy solicitor approximately $15,000 and a potential success fee of $7,500, plus reimbursement for reasonable out-of-pocket expenses. Solicitation will be primarily through the use of the U.S. Postal Service and the Internet and by telephone.
| | Q:How do I revoke my proxy?
A: A shareholder giving a proxy has the power to revoke it at any time before it is voted up until one hour before the meeting by providing written notice to the Secretary of the Company, by delivering a later-dated proxy or by voting in person at the Annual Meeting.
Q: Who can vote at the Meeting?
A: All shareholders as of the Record Date, are entitled to vote at the Annual Meeting.
Q:Who all may attend the Meeting?
A: If you are a shareholder of record, you may:
•Vote in person- you may come to the Annual Meeting and cast your vote in person;
•Vote by mail- mark, sign and date your proxy card and return it in the postage-paid envelope;
•Vote via the Internet- at www.proxyvote.com; or
•Vote via telephone- at 1-800-690-6903.
If you are not a shareholder of record, please refer to the voting instructions provided by your nominee to direct it how to vote your shares.
Q: What is the quorum requirement for the Annual Meeting?
A: The attendance of two or more persons representing, in person or by proxy, more than 50% of the issued and outstanding ordinary shares as of the Record Date is necessary to constitute a quorum at the Meeting.
Q: When will the Company announce the voting results?
A: We will announce the preliminary voting results at the Meeting. The Company will report the final results on our website and in a Current Report on Form 8-K filed with the SEC within four business days of the Meeting.
|
ANNEX 1 - NON-GAAP FINANCIAL MEASURES
In presenting our results for purposes of compensation determinations, we use certain key financial measures, some of which are not prescribed under U.S. GAAP rules and standards (“non-GAAP financial measures”). Generally, a non-GAAP financial measure, as defined in SEC Regulation G, is a numerical measure of a company’s historical or future financial performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented under U.S. GAAP. We believe that these measures, which may be calculated or defined differently by other companies, provide consistent and comparable metrics of our business performance to help shareholders understand performance trends and facilitate a more thorough understanding of the Company’s business. Non-GAAP financial measures should not be viewed as substitutes for those determined under U.S. GAAP.
The key non-GAAP financial measures used in this report are:
•Fully diluted book value per share
•Net underwriting income (loss)
•Adjusted Operating Profit (AOP)
Fully Diluted Book Value Per Share
We believe that long-term growth in fully diluted book value per share is the most relevant measure of our financial performance because it provides management and investors a yardstick to monitor the shareholder value generated. Fully diluted book value per share may also help our investors, shareholders, and other interested parties form a basis of comparison with other companies within the property and casualty reinsurance industry. Basic book value per share and fully diluted book value per share should not be viewed as substitutes for the comparable U.S. GAAP measures.
We calculate basic book value per share as (a) ending shareholders' equity, divided by (b) aggregate of Class A and Class B Ordinary shares issued and outstanding, including all unvested service-based restricted shares, and the earned portion of performance-based restricted shares granted after December 31, 2021. We exclude shares potentially issuable in connection with convertible notes if the conversion price exceeds the share price.
Fully diluted book value per share represents basic book value per share combined with any dilutive impact of in-the-money stock options, unvested service-based RSUs, and the earned portion of unvested performance-based RSUs granted. Fully diluted book value per share also includes the dilutive effect, if any, of ordinary shares expected to be issued upon settlement of the convertible notes.
Our primary financial goal is to increase fully diluted book value per share over the long term. We use fully diluted book value per share as a financial measure in our annual incentive compensation.
For a reconciliation of Diluted book value per share, for the fiscal years ended December 31, 2022, 2021 and 2020, please see page 58 of our Annual Report on Form 10-K for the year ended December 31, 2022.2023.
The Audit Committee Johnny Ferrari (Chair) Ursuline Foley Victoria Guest Bryan Murphy
Net Underwriting Income (Loss)
One of the ways that we evaluate the Company’s underwriting performance is by measuring net underwriting income (loss). We do not use premiums written as a measure of performance. Net underwriting income (loss) is a performance measure used by management to evaluate the fundamentals underlying the Company’s underwriting operations. We believe that the use of net underwriting income (loss) enables investors and other users of the Company’s financial information to analyze our performance in a manner similar to how management analyzes performance. Management also believes this measure follows industry practice and allows the users of financial information to compare the Company’s performance with that of our industry peer group.
Net underwriting income (loss) is considered a non-GAAP financial measure because it excludes items used to calculate net income before taxes under U.S. GAAP. We calculate net underwriting income (loss) as net premiums earned, plus other income relating to reinsurance and deposit-accounted contracts, less deposit interest expense, less net loss and loss adjustment expenses, acquisition costs, and underwriting expenses. The measure excludes, on a recurring basis: (1) investment income
(loss); (2) other income (expense) not related to underwriting, including foreign exchange gainsIndependent Public Accountant Fees and Services
Audit Fees The aggregate amount of fees billed by Deloitte Ltd. and its international affiliates, or losses, Lloyd’s interest incomeDeloitte, were $873,195 and expense, and adjustments to the allowance for expected credit losses; (3) corporate general and administrative expenses; and (4) interest expense. We exclude total investment income or loss, foreign exchange gains or losses, Lloyd’s interest income or expense and expected credit losses as we believe these items are influenced by market conditions and other factors unrelated to underwriting decisions. We exclude corporate and interest expenses because these costs are generally fixed and not incremental to or directly related to our underwriting operations. We believe all of these amounts are largely independent of our underwriting process, and including them could hinder the analysis of trends in our underwriting operations. Net underwriting income (loss) should not be viewed as a substitute for U.S. GAAP net income before income taxes.
For a reconciliation of net underwriting income (loss),$668,195 for the fiscal years ended December 31, 2023, and 2022, 2021 and 2020, please see page 59respectively. The audit fees were for the following professional services rendered: (1) the audit of our Annual Reportannual consolidated financial statements; (2) the review of our quarterly consolidated financial statements; and (3) the audits of our reinsurance statutory and regulatory filings in Cayman Islands and Ireland.
BDO USA, LLP (“BDO”) had previously served as the independent auditors of the Company from 2006 through the 2021 fiscal year. For the fiscal year ended December 31, 2022, we paid BDO $108,817 for assistance with successor auditor work paper review and its consent to the incorporation by reference of BDO’s reports in our applicable year-end filings. For the fiscal year ended December 31, 2023, we paid BDO $75,000 in connection with applicable year-end filing consents. Audit-Related Fees The Company incurred $8,000 and $nil for audit-related fees billed by Deloitte during the fiscal years ended December 31, 2023 and 2022, respectively. Tax Fees The Company did not incur any tax fees billed by Deloitte during the fiscal years ended December 31, 2023 and 2022. All Other Fees The Company did not incur any other fees billed by Deloitte during the fiscal years ended December 31, 2023 and 2022. Audit Committee’s Pre-Approval Policies and Procedures Our Audit Committee charter includes our policy regarding the approval of audit and non-audit services performed by our independent auditors. The Audit Committee is responsible for retaining and evaluating the independent auditors’ qualifications, performance and independence. The Audit Committee pre-approves all auditing services, internal control-related services and permitted non-audit services (including the fees and terms thereof) to be performed for us by our independent auditors, subject to such exceptions for non-audit services as permitted by applicable laws and regulations. The Audit Committee may delegate this authority to a subcommittee consisting of one or more Audit Committee members, including the authority to grant pre-approvals of audit and permitted non-audit services, provided that decisions of such subcommittee to grant pre-approvals are presented to the full Audit Committee at its next meeting. For the years ended December 31, 2023, and 2022, the Audit Committee pre-approved Deloitte’s audit fee.
COMMON SHARE OWNERSHIP BY DIRECTORS AND EXECUTIVE OFFICERS The following tables shows information known to us with respect to the beneficial ownership of our ordinary shares as of April 19, 2024 for the directors of the Company, the executive officers listed in the Summary Compensation Table currently employed by the Company and by all of our current directors and Named Executive Officers as a group. Information in this table was in part furnished to the Company by the respective directors and Named Executive Officers. Beneficial ownership of shares is determined under the rules of the SEC and generally includes any shares over which a person exercises sole or shared voting or investment power. Except as indicated by footnote, and subject to applicable community property laws, each person identified in the table possesses sole voting and investment power with respect to all ordinary shares held by them. Ordinary shares subject to options currently exercisable or exercisable within 60 days of April 19, 2024, and not subject to repurchase as of that date, are deemed to be outstanding for calculating the percentage of outstanding shares of the person holding these options, but are not deemed to be outstanding for calculating the percentage of any other person. Applicable percentage ownership in the following table is based on Form 10-K35,321,144 ordinary shares outstanding as of April 19, 2024. | | | | | | | | | | | | | | | | Name of beneficial owner | | Beneficial ownership of principal shareholders | | | | Number of Ordinary Shares | | % | | David Einhorn | (1) | 6,254,715 | | | 17.71 | % | | Daniel Roitman | (2) | 380,000 | | | 1.08 | % | | Leonard Goldberg | (3) | 315,286 | | | * | | Joseph Platt | (4) | 208,180 | | | * | | Thomas Curnock | (5) | 206,729 | | | * | | Faramarz Romer | (6) | 154,275 | | | * | | Bryan Murphy | (7) | 149,131 | | | * | | Ian Isaacs | (8) | 137,591 | | | * | | Patrick O'Brien | (9) | 131,399 | | | * | | Johnny Ferrari | (10) | 32,661 | | | * | | Ursuline Foley | (11) | 32,661 | | | * | | Victoria Guest | (12) | 32,661 | | | * | | David Sigmon | (13) | 25,562 | | | * | | | | | | | All directors, director nominees and executive officers as a group (14 persons) | | 8,060,851 | | | 22.79 | % |
| | | | | | | * | Represents less than 1% of the outstanding ordinary shares. |
(1)Mr. Einhorn has beneficial ownership of 4,864,227 ordinary shares held by DME 2022 Holdings LLC. Mr. Einhorn also has beneficial ownership of 1,390,488 ordinary shares held by the David M. Einhorn 2021-07 Family Trust. (2)Mr. Roitman owns 340,117 ordinary shares directly and also retains beneficial ownership of 39,883 ordinary shares held by the Daniel E. Roitman 2007 Family Trust. (3)Includes 9,342 restricted shares. Includes 42,250 ordinary shares subject to options that are exercisable. Mr. Goldberg owns 226,166 ordinary shares directly and also retains beneficial ownership of 22,870 ordinary shares held by the Leonard R. Goldberg 2007 Family Trust and 24,000 ordinary shares held in a spousal revocable trust. (4)Includes 9,342 restricted shares. Includes 55,000 ordinary shares held by a partnership of which Mr. Platt is the general partner. (5)Includes 109,070 restricted shares. Mr. Curnock also owns 26,582 RSUs. Since these RSUs do not have any voting or disposition rights until they vest and none vest within 60 days of April 19, 2024, these shareholdings are not reported. (6)Includes 66,382 restricted shares. Mr. Romer also owns 26,291 RSUs. Since these RSUs do not have any voting or disposition rights until they vest and none vest within 60 days of April 19, 2024, these shareholdings are not reported. (7)Includes 9,342 restricted shares. (8)Includes 9,342 restricted shares. Also includes 25,000 ordinary shares held by a living trust and 25,000 ordinary shares held in an IRA. Mr. Isaacs has pledged 16,000 ordinary shares of his unrestricted shares. (9)Mr. O’Brien also owns 143,958 RSUs. Since these RSUs do not have any voting or disposition rights until they vest and none vest within 60 days of April 19, 2024, these shareholdings are not reported. (10)Includes 9,342 restricted shares. (11)Includes 9,342 restricted shares. (12)Includes 9,342 restricted shares. (13)Includes 25,562 restricted shares. Mr. Sigmon also owns 13,165RSUs. Since these RSUs do not have any voting or disposition rights until they vest and none vest within 60 days of April 19, 2024, these shareholdings are not reported.
PRINCIPAL BENEFICIAL OWNERS OF COMMON SHARES
To the best of the Company’s knowledge, the only beneficial owners of 5% or more of the outstanding common shares of the Company as of January 31, 2024 are set forth below. This table is based where applicable on information provided in Schedule 13G Information Statements filed with the SEC.
| | | | | | | | | | | | | | | | Name and address of beneficial owner | | Beneficial ownership of principal shareholders | | | | | Number of Ordinary Shares | % | | David Einhorn c/o Greenlight Capital Re, Ltd. 65 Market Street, Camana Bay, Grand Cayman, KY1-1205, Cayman Islands | (1) | 6,254,715 | 17.71% | | BlackRock, Inc. 50 Hudson Yards, New York, NY 10001 | (2) | 1,989,086 | 5.63% | | Dimensional Fund Advisors LP Building One, 6300 Bee Cave Road, Austin, Texas, 78746 | (3) | 1,902,489 | 5.39% | |
(1)Mr. Einhorn has beneficial ownership of 4,864,227 ordinary shares held by DME 2022 Holdings LLC. Mr. Einhorn also has beneficial ownership of 1,390,488 ordinary shares held by the David M. Einhorn 2021-07 Family Trust. (2)BlackRock, Inc.’s beneficial ownership is based on a Schedule 13G/A filed on February 2, 2024. (3)Dimensional Fund Advisors LP’s beneficial ownership is based on a Schedule 13G/A filed on February 9, 2024.
DELINQUENT SECTION 16(A) REPORTS Section 16(a) of the Exchange Act requires that our directors, executive officers and the persons who beneficially own more than 10% of our ordinary shares file reports of ownership and changes of ownership on Forms 3, 4 and 5 with the SEC. Executive officers, directors and greater than 10% shareholders are required by regulations promulgated by the SEC to furnish us with copies of all Forms 3, 4 and 5 they file. Based solely on the reports received by us and on the written representations of the reporting persons, we believe that no director, executive officer or greater than 10% shareholder failed to file on a timely basis the reports required by Section 16(a) of the Exchange Act during, or with respect to, fiscal year 2023.
CERTAIN RELATIONSHIPS AND RELATED-PARTY TRANSACTIONS Related-Party Transaction Policy and Audit Committee Charter We have established a written related-party transaction policy which provides procedures for the review of transactions in excess of $120,000 in any year between us and any covered person having a direct or indirect material interest, subject to certain exceptions. Covered persons include any director, executive officer, director nominee, 5% shareholder or any immediate family members of the foregoing. All relevant factors with respect to a proposed related-party transaction are considered, and such a transaction will only be approved if it is in our and our shareholders’ best interests or, if an alternate standard of review is imposed by applicable laws, statutes, governing documents or listing standards, if such alternate standard of review is satisfied. Any such related-party transactions shall require advance approval by a majority of our independent directors or a majority of the members of a committee constituted solely of our independent directors. In addition, our Audit Committee charter provides that the Audit Committee will review and approve all related-party transactions. Limited Partnership Agreement On September 1, 2018, the Company entered into a Limited Partnership Agreement, or the LPA, with Solasglas Investments, LP, which we refer to as SILP, with DME Advisors II, LLC, which we refer to as DME II, as General Partner. DME II and DME Advisors, LP, which we refer to as DME Advisors, are related parties and are controlled by David Einhorn, the Chair of the Board, the President and Portfolio Manager of Greenlight Capital, Inc., and the beneficial owner of certain number of the issued and outstanding ordinary shares. During the year ended December 31, 2022.2018, the Company transferred rights to $366.3 million of net investments from Greenlight Re and GRIL’s joint venture, or the Joint Venture, investment accounts to SILP in exchange for limited partnership interests of the same amount, resulting in no net gain or loss. DME II receives a performance allocation equal to (with capitalized terms having the meaning provided under the LPA) (a) 10% of the portion of the Positive Performance Change for each limited partner’s capital account that is less than or equal to the positive balance in such limited partner’s Carryforward Account, plus (b) 20% of the portion of the Positive Performance Change for each limited partner’s capital account that exceeds the positive balance in such limited partner’s Carryforward Account. The Carryforward Account for Greenlight Re and GRIL include the amount of losses that were to be recouped under the Joint Venture as well as any loss generated on the assets invested in SILP, subject to adjustments for redemptions. The loss carry forward provision contained in the LPA allows DME II to earn reduced performance allocation of 10% of profits in any year subsequent to any years in which SILP has incurred a loss, until all losses are recouped and an additional amount equal to 150% of the loss is earned. For the year ended December 31, 2023, the Company’s investment income from SILP included performance allocation to DME II of $3.2 million (2022: $6.1 million). On September 1, 2018, SILP entered into an investment advisory agreement, or the IAA, with DME Advisors which entitles DME Advisors to a monthly management fee equal to 0.125% (1.5% on an annual basis) of each limited partner’s Investment Portfolio, as provided in the LPA. The IAA had an initial term ending on August 31, 2023 subject to automatic extension for successive three-year terms which renewal did occur. For the year ended December 31, 2023, the Company’s investment income from SILP included management fees paid by SILP to DME Advisors of $4.8 million (2022: $3.6 million). On February 26, 2019, effective as of September 1, 2018, the Company entered into Amendment No. 1 to the LPA. The amendment was intended to revise the mechanics for calculating the Carryforward Account and Performance Allocation (as defined in the LPA) to take into account withdrawals from and subsequent recontributions of capital to SILP, consistent with the treatment under the Joint Venture.
On August 5, 2020, in connection with the investments by Greenlight Re and GRIL in SILP, pursuant to the LPA, the Company entered into an amended and restated letter agreement, or the Letter Agreement, with DME Advisors and DME II whereby from July 1, 2020 until such date on which neither Greenlight Re nor GRIL is a limited partner in the Partnership, or as further modified by agreement of the parties: (a) the Deployed GLRE Investment Portfolio (as defined in the Letter Agreement) shall not exceed an amount equal to 50% of the GLRE Surplus (as defined in the Letter Agreement); (b) in the event that the Deployed GLRE Investment Portfolio exceeds 50% of the GLRE Surplus, which we refer to as Excess Assets, DME II and the DME Advisors will use their respective commercially reasonable efforts to promptly liquidate positions in Excess Assets to Non-Risk Assets (as defined in the Letter Agreement) as may be necessary to comply with the preceding paragraph (a); and (c) until June 30, 2021, Non-Risk Assets were not subject to any Management Fee (as defined in the LPA) or Performance Allocation (as defined in the LPA). On January 7, 2021, the Company, Greenlight Re, GRIL and DME II entered into the Second Amended and Restated Exempted Limited Partnership Agreement, effective as of January 1, 2021, or the Second Restated LPA. The Second Restated LPA amended, restated, superseded and incorporated all material terms of the Letter Agreement and was intended to amend certain definitions in the LPA, including “Additional Investment Ratio,” “Greenlight Re Surplus” and the “GRIL Surplus.” In addition, the Second Restated LPA amended Section 4.1(c) to incorporate the requirement to limit the size of any Partner’s Investment Portfolio (as defined in the Second Restated LPA) and amended each of Schedule 4.1(c)-1 (the Greenlight Re Guidelines) and Schedule 4.1(c)-2 (the GRIL Guidelines) to reflect the amended investment guidelines adopted by the board of directors of Greenlight Re and GRIL, respectively, effective as of January 1, 2021. Effective January 1, 2023, the parties increased the maximum Investment Portfolio, as defined in the Second Amended and Restated LPA, to 60% from 50% of GLRE Surplus (as that term is also defined in the Second Amended and Restated LPA). Pursuant to the Second Restated LPA and the IAA, the Company has agreed to indemnify DME II and DME Advisors for any expense, loss, liability or damage arising out of any claim asserted or threatened in connection with DME Advisors serving as SILP’s investment advisor. The Company will reimburse DME, DME II and DME Advisors for reasonable costs and expenses of investigating and/or defending such claims, provided such claims were not caused due to gross negligence, breach of contract or misrepresentation by DME II or DME Advisors. For the year ended December 31, 2023, there were no indemnification payments payable or paid by the Company. In accordance with the Second Restated LPA, either of Greenlight Re or GRIL may voluntarily withdraw all or part of its Capital Account for its operating needs by giving DME II at least 3 business days notice. In addition, either of Greenlight Re or GRIL may withdraw as a partner and fully withdraw all of its Capital Account from SILP on 3 business days notice if the Board of Greenlight Re or GRIL, as applicable, declares that a cause for withdrawal exists as per the LPA. Adjusted Operating Profit We also measure our performance based on adjusted operating profit, or AOP, as this measure reflects management’s contribution to long term profitability and operational efficiency. AOP for purposes of 2023 compensation is calculated as the sum of (i) the underwriting income and (ii) the strategic investments income (net of tax), less (iii) corporate innovations-related expense, as a percentage of book value. We use AOP as a performance measure in our short-term incentive compensation. AOP is a non-GAAP performance measure. Please refer to Annex 1 for definitions of non-GAAP financial measures and reconciliations of GAAP to non-GAAP financial measures.
Equity Compensation Plan Information The following table provides information as of December 31, 2023 with respect to the Company’s ordinary shares that may be issued upon the exercise of options, warrants and RSUs granted to employees, consultants or members of our Board of Directors under all of our existing compensation plans, including the 2004 and 2023 stock incentive plans, each as amended. | | | | | | | | | | | | | | | | | | | | | | | | | Plan category | | Number of securities to be issued upon exercise of outstanding options, warrants and rights | | Weighted-average exercise price of outstanding options, warrants and rights | | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | | | | | (a) | | (b) | | (c) | | | Equity compensation plans approved by security holders | | 917,010 | | (1) | $ | 15.65 | | | 3,296,771 | | (2) | | Equity compensation plans not approved by security holders | | — | | | — | | | — | | | | Total | | 917,010 | | (1) | $ | 15.65 | | | 3,296,771 | | (2) |
(1)Includes 917,010 ordinary shares issuable upon the exercise of options and RSUs that were outstanding under the 2023 Incentive Plan as of December 31, 2023. (2)Represents the difference between the number of securities issuable under the 2023 Incentive Plan (10,000,000) and the number of securities issued as of December 31, 2023 (6,703,229). The number of securities issued consists of options to acquire 1,914,627 ordinary shares and 4,788,602 issued shares or share units. Compensation Committee Interlocks and Insider Participation The individuals who served as members of the Compensation Committee during the year ended December 31, 2023 were Ms. Foley and Messrs. Isaacs and Platt, each of whom the Board of Directors deemed to be independent in accordance with the director independence standards of the Nasdaq stock market rules. No member of the Compensation Committee was, during 2023, or had previously been, an executive officer or employee of the Company or had any relationships requiring disclosure by the Company under the SEC’s rules requiring disclosure of certain relationships and related-party transactions. During fiscal year 2023, none of our executive officers served on the compensation committee (or its equivalent) or board of directors of another entity whose executive officer served on our Board or Compensation Committee.
AUDIT COMMITTEE REPORT Management has the primary responsibility for establishing and maintaining adequate internal control over financial reporting, preparing the financial statements and the public reporting process. The Audit Committee’s primary purpose is to assist the Board of Directors in fulfilling its responsibilities to oversee the participation of management in the financial reporting process and the role and responsibilities of the independent auditors. In performing its oversight role in connection with the audit of the Company’s consolidated financial statements for the year ended December 31, 2023, the Audit Committee has: 1.reviewed and discussed the audited consolidated financial statements with management; 2. discussed with the independent auditors the matters required to be discussed by rules adopted by the Public Company Accounting Oversight Board; and 3. received the written disclosures and the letter from the independent auditors required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent auditors’ communications with the Audit Committee concerning independence and has discussed with the independent auditors the independent auditors’ independence. Based on the review and discussions referred to above, and in reliance on the information, opinions, reports or statements presented to the Audit Committee by management and the independent auditors, the Audit Committee recommended to the Board of Directors that the December 31, 2023 audited consolidated financial statements be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. The Audit Committee Johnny Ferrari (Chair) Ursuline Foley Victoria Guest Bryan Murphy
Independent Public Accountant Fees and Services Audit Fees The aggregate amount of fees billed by Deloitte Ltd. and its international affiliates, or Deloitte, were $873,195 and $668,195 for the fiscal years ended December 31, 2023, and 2022, respectively. The audit fees were for the following professional services rendered: (1) the audit of our annual consolidated financial statements; (2) the review of our quarterly consolidated financial statements; and (3) the audits of our reinsurance statutory and regulatory filings in Cayman Islands and Ireland. BDO USA, LLP (“BDO”) had previously served as the independent auditors of the Company from 2006 through the 2021 fiscal year. For the fiscal year ended December 31, 2022, we paid BDO $108,817 for assistance with successor auditor work paper review and its consent to the incorporation by reference of BDO’s reports in our applicable year-end filings. For the fiscal year ended December 31, 2023, we paid BDO $75,000 in connection with applicable year-end filing consents. Audit-Related Fees The Company incurred $8,000 and $nil for audit-related fees billed by Deloitte during the fiscal years ended December 31, 2023 and 2022, respectively. Tax Fees The Company did not incur any tax fees billed by Deloitte during the fiscal years ended December 31, 2023 and 2022. All Other Fees The Company did not incur any other fees billed by Deloitte during the fiscal years ended December 31, 2023 and 2022. Audit Committee’s Pre-Approval Policies and Procedures Our Audit Committee charter includes our policy regarding the approval of audit and non-audit services performed by our independent auditors. The Audit Committee is responsible for retaining and evaluating the independent auditors’ qualifications, performance and independence. The Audit Committee pre-approves all auditing services, internal control-related services and permitted non-audit services (including the fees and terms thereof) to be performed for us by our independent auditors, subject to such exceptions for non-audit services as permitted by applicable laws and regulations. The Audit Committee may delegate this authority to a subcommittee consisting of one or more Audit Committee members, including the authority to grant pre-approvals of audit and permitted non-audit services, provided that decisions of such subcommittee to grant pre-approvals are presented to the full Audit Committee at its next meeting. For the years ended December 31, 2023, and 2022, the Audit Committee pre-approved Deloitte’s audit fee.
COMMON SHARE OWNERSHIP BY DIRECTORS AND EXECUTIVE OFFICERS The following tables shows information known to us with respect to the beneficial ownership of our ordinary shares as of April 19, 2024 for the directors of the Company, the executive officers listed in the Summary Compensation Table currently employed by the Company and by all of our current directors and Named Executive Officers as a group. Information in this table was in part furnished to the Company by the respective directors and Named Executive Officers. Beneficial ownership of shares is determined under the rules of the SEC and generally includes any shares over which a person exercises sole or shared voting or investment power. Except as indicated by footnote, and subject to applicable community property laws, each person identified in the table possesses sole voting and investment power with respect to all ordinary shares held by them. Ordinary shares subject to options currently exercisable or exercisable within 60 days of April 19, 2024, and not subject to repurchase as of that date, are deemed to be outstanding for calculating the percentage of outstanding shares of the person holding these options, but are not deemed to be outstanding for calculating the percentage of any other person. Applicable percentage ownership in the following table is based on 35,321,144 ordinary shares outstanding as of April 19, 2024. | | | | | | | | | | | | | | | | Name of beneficial owner | | Beneficial ownership of principal shareholders | | | | Number of Ordinary Shares | | % | | David Einhorn | (1) | 6,254,715 | | | 17.71 | % | | Daniel Roitman | (2) | 380,000 | | | 1.08 | % | | Leonard Goldberg | (3) | 315,286 | | | * | | Joseph Platt | (4) | 208,180 | | | * | | Thomas Curnock | (5) | 206,729 | | | * | | Faramarz Romer | (6) | 154,275 | | | * | | Bryan Murphy | (7) | 149,131 | | | * | | Ian Isaacs | (8) | 137,591 | | | * | | Patrick O'Brien | (9) | 131,399 | | | * | | Johnny Ferrari | (10) | 32,661 | | | * | | Ursuline Foley | (11) | 32,661 | | | * | | Victoria Guest | (12) | 32,661 | | | * | | David Sigmon | (13) | 25,562 | | | * | | | | | | | All directors, director nominees and executive officers as a group (14 persons) | | 8,060,851 | | | 22.79 | % |
| | | | | | | * | Represents less than 1% of the outstanding ordinary shares. |
(1)Mr. Einhorn has beneficial ownership of 4,864,227 ordinary shares held by DME 2022 Holdings LLC. Mr. Einhorn also has beneficial ownership of 1,390,488 ordinary shares held by the David M. Einhorn 2021-07 Family Trust. (2)Mr. Roitman owns 340,117 ordinary shares directly and also retains beneficial ownership of 39,883 ordinary shares held by the Daniel E. Roitman 2007 Family Trust. (3)Includes 9,342 restricted shares. Includes 42,250 ordinary shares subject to options that are exercisable. Mr. Goldberg owns 226,166 ordinary shares directly and also retains beneficial ownership of 22,870 ordinary shares held by the Leonard R. Goldberg 2007 Family Trust and 24,000 ordinary shares held in a spousal revocable trust. (4)Includes 9,342 restricted shares. Includes 55,000 ordinary shares held by a partnership of which Mr. Platt is the general partner. (5)Includes 109,070 restricted shares. Mr. Curnock also owns 26,582 RSUs. Since these RSUs do not have any voting or disposition rights until they vest and none vest within 60 days of April 19, 2024, these shareholdings are not reported. (6)Includes 66,382 restricted shares. Mr. Romer also owns 26,291 RSUs. Since these RSUs do not have any voting or disposition rights until they vest and none vest within 60 days of April 19, 2024, these shareholdings are not reported. (7)Includes 9,342 restricted shares. (8)Includes 9,342 restricted shares. Also includes 25,000 ordinary shares held by a living trust and 25,000 ordinary shares held in an IRA. Mr. Isaacs has pledged 16,000 ordinary shares of his unrestricted shares. (9)Mr. O’Brien also owns 143,958 RSUs. Since these RSUs do not have any voting or disposition rights until they vest and none vest within 60 days of April 19, 2024, these shareholdings are not reported. (10)Includes 9,342 restricted shares. (11)Includes 9,342 restricted shares. (12)Includes 9,342 restricted shares. (13)Includes 25,562 restricted shares. Mr. Sigmon also owns 13,165RSUs. Since these RSUs do not have any voting or disposition rights until they vest and none vest within 60 days of April 19, 2024, these shareholdings are not reported.
PRINCIPAL BENEFICIAL OWNERS OF COMMON SHARES
To the best of the Company’s knowledge, the only beneficial owners of 5% or more of the outstanding common shares of the Company as of January 31, 2024 are set forth below. This table is based where applicable on information provided in Schedule 13G Information Statements filed with the SEC.
| | | | | | | | | | | | | | | | Name and address of beneficial owner | | Beneficial ownership of principal shareholders | | | | | Number of Ordinary Shares | % | | David Einhorn c/o Greenlight Capital Re, Ltd. 65 Market Street, Camana Bay, Grand Cayman, KY1-1205, Cayman Islands | (1) | 6,254,715 | 17.71% | | BlackRock, Inc. 50 Hudson Yards, New York, NY 10001 | (2) | 1,989,086 | 5.63% | | Dimensional Fund Advisors LP Building One, 6300 Bee Cave Road, Austin, Texas, 78746 | (3) | 1,902,489 | 5.39% | |
(1)Mr. Einhorn has beneficial ownership of 4,864,227 ordinary shares held by DME 2022 Holdings LLC. Mr. Einhorn also has beneficial ownership of 1,390,488 ordinary shares held by the David M. Einhorn 2021-07 Family Trust. (2)BlackRock, Inc.’s beneficial ownership is based on a Schedule 13G/A filed on February 2, 2024. (3)Dimensional Fund Advisors LP’s beneficial ownership is based on a Schedule 13G/A filed on February 9, 2024.
DELINQUENT SECTION 16(A) REPORTS Section 16(a) of the Exchange Act requires that our directors, executive officers and the persons who beneficially own more than 10% of our ordinary shares file reports of ownership and changes of ownership on Forms 3, 4 and 5 with the SEC. Executive officers, directors and greater than 10% shareholders are required by regulations promulgated by the SEC to furnish us with copies of all Forms 3, 4 and 5 they file. Based solely on the reports received by us and on the written representations of the reporting persons, we believe that no director, executive officer or greater than 10% shareholder failed to file on a timely basis the reports required by Section 16(a) of the Exchange Act during, or with respect to, fiscal year 2023.
CERTAIN RELATIONSHIPS AND RELATED-PARTY TRANSACTIONS Related-Party Transaction Policy and Audit Committee Charter We have established a written related-party transaction policy which provides procedures for the review of transactions in excess of $120,000 in any year between us and any covered person having a direct or indirect material interest, subject to certain exceptions. Covered persons include any director, executive officer, director nominee, 5% shareholder or any immediate family members of the foregoing. All relevant factors with respect to a proposed related-party transaction are considered, and such a transaction will only be approved if it is in our and our shareholders’ best interests or, if an alternate standard of review is imposed by applicable laws, statutes, governing documents or listing standards, if such alternate standard of review is satisfied. Any such related-party transactions shall require advance approval by a majority of our independent directors or a majority of the members of a committee constituted solely of our independent directors. In addition, our Audit Committee charter provides that the Audit Committee will review and approve all related-party transactions. Limited Partnership Agreement On September 1, 2018, the Company entered into a Limited Partnership Agreement, or the LPA, with Solasglas Investments, LP, which we refer to as SILP, with DME Advisors II, LLC, which we refer to as DME II, as General Partner. DME II and DME Advisors, LP, which we refer to as DME Advisors, are related parties and are controlled by David Einhorn, the Chair of the Board, the President and Portfolio Manager of Greenlight Capital, Inc., and the beneficial owner of certain number of the issued and outstanding ordinary shares. During the year ended December 31, 2018, the Company transferred rights to $366.3 million of net investments from Greenlight Re and GRIL’s joint venture, or the Joint Venture, investment accounts to SILP in exchange for limited partnership interests of the same amount, resulting in no net gain or loss. DME II receives a performance allocation equal to (with capitalized terms having the meaning provided under the LPA) (a) 10% of the portion of the Positive Performance Change for each limited partner’s capital account that is less than or equal to the positive balance in such limited partner’s Carryforward Account, plus (b) 20% of the portion of the Positive Performance Change for each limited partner’s capital account that exceeds the positive balance in such limited partner’s Carryforward Account. The Carryforward Account for Greenlight Re and GRIL include the amount of losses that were to be recouped under the Joint Venture as well as any loss generated on the assets invested in SILP, subject to adjustments for redemptions. The loss carry forward provision contained in the LPA allows DME II to earn reduced performance allocation of 10% of profits in any year subsequent to any years in which SILP has incurred a loss, until all losses are recouped and an additional amount equal to 150% of the loss is earned. For the year ended December 31, 2023, the Company’s investment income from SILP included performance allocation to DME II of $3.2 million (2022: $6.1 million). On September 1, 2018, SILP entered into an investment advisory agreement, or the IAA, with DME Advisors which entitles DME Advisors to a monthly management fee equal to 0.125% (1.5% on an annual basis) of each limited partner’s Investment Portfolio, as provided in the LPA. The IAA had an initial term ending on August 31, 2023 subject to automatic extension for successive three-year terms which renewal did occur. For the year ended December 31, 2023, the Company’s investment income from SILP included management fees paid by SILP to DME Advisors of $4.8 million (2022: $3.6 million). On February 26, 2019, effective as of September 1, 2018, the Company entered into Amendment No. 1 to the LPA. The amendment was intended to revise the mechanics for calculating the Carryforward Account and Performance Allocation (as defined in the LPA) to take into account withdrawals from and subsequent recontributions of capital to SILP, consistent with the treatment under the Joint Venture.
On August 5, 2020, in connection with the investments by Greenlight Re and GRIL in SILP, pursuant to the LPA, the Company entered into an amended and restated letter agreement, or the Letter Agreement, with DME Advisors and DME II whereby from July 1, 2020 until such date on which neither Greenlight Re nor GRIL is a limited partner in the Partnership, or as further modified by agreement of the parties: (a) the Deployed GLRE Investment Portfolio (as defined in the Letter Agreement) shall not exceed an amount equal to 50% of the GLRE Surplus (as defined in the Letter Agreement); (b) in the event that the Deployed GLRE Investment Portfolio exceeds 50% of the GLRE Surplus, which we refer to as Excess Assets, DME II and the DME Advisors will use their respective commercially reasonable efforts to promptly liquidate positions in Excess Assets to Non-Risk Assets (as defined in the Letter Agreement) as may be necessary to comply with the preceding paragraph (a); and (c) until June 30, 2021, Non-Risk Assets were not subject to any Management Fee (as defined in the LPA) or Performance Allocation (as defined in the LPA). On January 7, 2021, the Company, Greenlight Re, GRIL and DME II entered into the Second Amended and Restated Exempted Limited Partnership Agreement, effective as of January 1, 2021, or the Second Restated LPA. The Second Restated LPA amended, restated, superseded and incorporated all material terms of the Letter Agreement and was intended to amend certain definitions in the LPA, including “Additional Investment Ratio,” “Greenlight Re Surplus” and the “GRIL Surplus.” In addition, the Second Restated LPA amended Section 4.1(c) to incorporate the requirement to limit the size of any Partner’s Investment Portfolio (as defined in the Second Restated LPA) and amended each of Schedule 4.1(c)-1 (the Greenlight Re Guidelines) and Schedule 4.1(c)-2 (the GRIL Guidelines) to reflect the amended investment guidelines adopted by the board of directors of Greenlight Re and GRIL, respectively, effective as of January 1, 2021. Effective January 1, 2023, the parties increased the maximum Investment Portfolio, as defined in the Second Amended and Restated LPA, to 60% from 50% of GLRE Surplus (as that term is also defined in the Second Amended and Restated LPA). Pursuant to the Second Restated LPA and the IAA, the Company has agreed to indemnify DME II and DME Advisors for any expense, loss, liability or damage arising out of any claim asserted or threatened in connection with DME Advisors serving as SILP’s investment advisor. The Company will reimburse DME, DME II and DME Advisors for reasonable costs and expenses of investigating and/or defending such claims, provided such claims were not caused due to gross negligence, breach of contract or misrepresentation by DME II or DME Advisors. For the year ended December 31, 2023, there were no indemnification payments payable or paid by the Company. In accordance with the Second Restated LPA, either of Greenlight Re or GRIL may voluntarily withdraw all or part of its Capital Account for its operating needs by giving DME II at least 3 business days notice. In addition, either of Greenlight Re or GRIL may withdraw as a partner and fully withdraw all of its Capital Account from SILP on 3 business days notice if the Board of Greenlight Re or GRIL, as applicable, declares that a cause for withdrawal exists as per the LPA. Service Agreement The Company has entered into a service agreement with DME Advisors, which was amended in August 2007 and October 2007, pursuant to which DME Advisors provides investor relations services to the Company for compensation of $5,000 per month (plus expenses). The service agreement had an initial term of one year and continues for sequential one-year periods until terminated by either the Company or DME Advisors. Either party may terminate the service agreement for any reason with 30 days prior written notice to the other party. For the year ended December 31, 2023, the Company incurred expenses of $60,000 to DME Advisors for investor relations services.
Shareholders’ Agreement Pursuant to the Company’s Shareholders’ Agreement, Greenlight Capital Investors, LLC, which we refer to as GCI, had the right to unlimited demand registration rights once we are eligible to use Form S-3 (or similar short form registration statements). GCI assigned its demand registration rights under the Shareholders’ Agreement, with our consent, to David Einhorn on January 3, 2007. Mr. Einhorn has registration rights for all of his ordinary shares, including those acquired in a private placement in May 2007, as contemplated under the Shareholders’ Agreement. On June 30, 2021, the Company entered in Amendment No. 2 to the Shareholders’ Agreement to extend the expiration date of the Shareholders’ Agreement to June 30, 2024. Collateral Assets Investment Management Agreement Effective January 1, 2019, the Company (and certain subsidiaries) entered into a collateral assets investment management agreement, or the CMA, with DME Advisors, pursuant to which DME Advisors manages certain assets of the Company that are not subject to the SILP LPA and are held by the Company to provide collateral required by the cedents in the form of trust accounts and letters of credit. In accordance with the CMA, DME Advisors receives no fees and is required to comply with the collateral investment guidelines. The CMA can be terminated by any of the parties upon 30 days’ prior written notice to the other parties. Green Brick Partners, Inc. David Einhorn also serves as the Chair of the Board of Directors of Green Brick Partners, Inc., or GRBK, a publicly traded company. As of December 31, 2023, SILP, along with certain affiliates of DME Advisors, collectively owned 27.1% of the issued and outstanding common shares of GRBK. Under applicable securities laws, DME Advisors may be limited at times in its ability to trade GRBK shares on behalf of SILP.
OTHER MATTERS Neither the Board of Directors nor management intends to bring before the 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 Meeting, or any adjournment or postponement thereof, the proxy holders will vote on such matters at their discretion.
ADDITIONAL INFORMATION Other Action at the Meeting As of the date of this Proxy Statement, the Company has no knowledge of any business, other than described herein and customary procedural matters, which will be presented for consideration at the Meeting. In the event any other business is properly presented at the Meeting, the persons named in the accompanying proxy may, but will not be obligated to, vote such proxy in accordance with their judgment on such business. Shareholder Proposals for the Annual General Meeting of Shareholders in 2025 Shareholder Proposals for Inclusion in Proxy Statement Pursuant to Rule 14a-8 of the Exchange Act, shareholder proposals must be received in writing by the Secretary of the Company no later than 120 days prior to the date of the Company’s proxy statement released to shareholders in connection with the Company’s previous year’s annual meeting of shareholders and must comply with the requirements of Rule 14a-8 in order to be considered for inclusion in the Company’s Proxy Statement and form of proxy relating to the Annual General Meeting of Shareholders in 2025. The Company believes that shareholder proposals received by January 12, 2025 would be considered timely for inclusion in the Company’s Proxy Statement for the Annual General Meeting of Shareholders in 2025, or the 2025 Proxy Statement. Such proposals should be directed to the attention of the Secretary, Greenlight Capital Re, Ltd. Shareholder Proposals for Presentation at Meeting Pursuant to the Company’s Articles, any shareholder proposal for the Annual General Meeting of Shareholders in 2025, or the 2025 Meeting, other than with respect to a nominee for election as a director, which is submitted outside the processes of Rule 14a-8 and is therefore not submitted for inclusion in next year’s proxy statement, shall be considered untimely unless received by the Secretary in writing no later than the close of business on the 90th day nor earlier than the opening of business on the 120th day before the anniversary date of the immediately preceding annual general meeting. As a result, such shareholder proposals must be received no earlier than March 27, 2025 and no later than April 26, 2025 to be considered timely. Such proposals should be directed to the attention of the Secretary, Greenlight Capital Re, Ltd. If a shareholder proposal is introduced at the 2025 Meeting without any discussion of the proposal in the 2025 Proxy Statement and the shareholder does not notify the Company on a timely basis, in accordance with Cayman Islands corporate law, of the intent to raise such proposal at the 2025 Meeting, then proxies received by the Company for the 2025 Meeting will be voted by the persons named as such proxies in their discretion with respect to such proposal. Shareholder Proposals regarding Director Nominees Pursuant to the Company’s Articles, any shareholders’ proposal with respect to the nomination of a person for election as a director at the 2025 Meeting must be received no later than 120 days prior to the date of such annual general meeting to be considered timely. Such proposal must otherwise comply with the advance notice procedures and other provisions set forth in the Articles in order for such nominations to be properly brought before the 2025 Meeting.
Costs of Solicitation The entire cost of this proxy solicitation will be borne by the Company, including expenses in connection with preparing, assembly, printing and mailing proxy solicitation materials. In addition to solicitation by mail, officers, directors and employees of the Company may solicit proxies by telephone, facsimile, electronic communication, in person or via the Internet, although no compensation will be paid for such solicitation. We will also reimburse brokerage firms and other custodians, nominees and fiduciaries, upon request, for their reasonable expenses incurred in sending proxies and proxy materials to beneficial owners of our common stock. Additionally, we have retained Georgeson LLC as an outside proxy solicitation firm to assist us with the solicitation of proxies. The Company will pay the proxy solicitor $9,000 plus out of pocket expenses.
| | | | | | | By Order of the Board of Directors, | | /s/ David Sigmon | | David Sigmon | | General Counsel, Chief Compliance Officer & Corporate Secretary | | April 26, 2024 | | Grand Cayman, Cayman Islands |
QUESTIONS AND ANSWERS ABOUT THE MEETING AND VOTING | | | | | | | | | Q:What is the purpose of the Meeting? A: At the Annual Meeting, our stockholders will act upon the proposals described in this proxy statement. ____________________________________ Q: What is the difference between holding shares as a shareholder of record, a registered shareholder and as a beneficial owner of shares? A: Shareholder of Record or Registered Shareholder. If your ordinary shares are registered directly in your name with our transfer agent, Computershare, you are considered a “shareholder of record” or a “registered shareholder” of those shares. Beneficial Owner of Shares. If your shares are held in an account at a bank, brokerage firm or other similar organization, then you are a beneficial owner of shares held in “street name.” In that case, you will have received these proxy materials from the bank, brokerage firms or other similar organization holding your account and, as a beneficial owner, you have the right to direct your bank, brokerage firm or similar organization how to vote the shares held in your account. ____________________________________ Q: Who is paying for this proxy solicitation? A: The Company is paying the costs of the solicitation of proxies. Proxies may be solicited on behalf of the Company by our directors, officers, employees or agents in person or by telephone, facsimile or other electronic means. We will also reimburse brokerage firms and other custodians, nominees and fiduciaries, upon request, for their reasonable expenses incurred in sending proxies and proxy materials to beneficial owners of our common stock. Additionally, we have retained Georgeson LLC as an outside proxy solicitation firm to assist us with the solicitation of proxies. The Company will pay the proxy solicitor approximately $9,000, plus reimbursement for reasonable out-of-pocket expenses. Solicitation will be primarily through the use of the U.S. Postal Service and the Internet and by telephone. ____________________________________ | | Q:How do I revoke my proxy? A: A shareholder giving a proxy has the power to revoke it at any time before it is voted up until one hour before the meeting by providing written notice to the Secretary of the Company, by delivering a later-dated proxy or by voting in person at the Annual Meeting. ____________________________________ Q: Who can vote at the Meeting? A: All shareholders as of the Record Date, are entitled to vote at the Annual Meeting. ____________________________________ Q:Who all may attend the Meeting? A: If you are a shareholder of record, you may: •Vote in person—you may come to the Annual Meeting and cast your vote in person; •Vote by mail—mark, sign and date your proxy card and return it in the postage-paid envelope; •Vote via the Internet—at www.proxyvote.com; or •Vote via telephone—at 1-800-690-6903. If you are not a shareholder of record, please refer to the voting instructions provided by your nominee to direct it how to vote your shares. ____________________________________ Q: What is the quorum requirement for the Annual Meeting? A: The attendance of two or more persons representing, in person or by proxy, more than 50% of the issued and outstanding ordinary shares as of the Record Date is necessary to constitute a quorum at the Meeting. ____________________________________ Q: When will the Company announce the voting results? A: We will announce the preliminary voting results at the Meeting. The Company will report the final results on our website and in a Current Report on Form 8-K filed with the SEC within four business days of the Meeting. ____________________________________ |
ANNEX 1 - NON-GAAP FINANCIAL MEASURES In presenting our results for purposes of compensation determinations, we use certain key financial measures, some of which are not prescribed under U.S. GAAP rules and standards (“non-GAAP financial measures”). Generally, a non-GAAP financial measure, as defined in SEC Regulation G, is a numerical measure of a company’s historical or future financial performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented under U.S. GAAP. We believe that these measures, which may be calculated or defined differently by other companies, provide consistent and comparable metrics of our business performance to help shareholders understand performance trends and facilitate a more thorough understanding of the Company’s business. Non-GAAP financial measures should not be viewed as substitutes for those determined under U.S. GAAP. The key non-GAAP financial measures used in this report are: •Fully diluted book value per share •Net underwriting income (loss) •Adjusted Operating Profit (AOP) Fully Diluted Book Value Per Share We believe that long-term growth in fully diluted book value per share is the most relevant measure of our financial performance because it provides management and investors a yardstick to monitor the shareholder value generated. Fully diluted book value per share may also help our investors, shareholders, and other interested parties form a basis of comparison with other companies within the property and casualty reinsurance industry. Fully diluted book value per share should not be viewed as substitutes for the comparable U.S. GAAP measures. Fully diluted book value per share represents basic book value per share combined with any dilutive impact of in-the-money stock options and all outstanding RSUs. Basic book value per share is calculated as follows: (a) ending shareholders' equity, divided by (b) the Ordinary shares issued and outstanding, as reported in the consolidated financial statements. Our primary financial goal is to increase fully diluted book value per share over the long term. We use fully diluted book value per share as a financial measure in our annual incentive compensation. For a reconciliation of diluted book value per share, for the fiscal years ended December 31, 2023, and 2022, please see page 53 of our Annual Report on Form 10-K for the year ended December 31, 2023. Net Underwriting Income (Loss) One of the ways that we evaluate the Company’s underwriting performance is by measuring net underwriting income (loss). We do not use premiums written as a measure of performance. Net underwriting income (loss) is a performance measure used by management to evaluate the fundamentals underlying the Company’s underwriting operations. We believe that the use of net underwriting income (loss) enables investors and other users of the Company’s financial information to analyze our performance in a manner similar to how management analyzes performance. Management also believes this measure follows industry practice and allows the users of financial information to compare the Company’s performance with that of our industry peer group. Net underwriting income (loss) is considered a non-GAAP financial measure because it excludes items used to calculate net income before taxes under U.S. GAAP. We calculate net underwriting income (loss) as net premiums earned less net loss and loss adjustment expenses, acquisition costs, underwriting expenses (including related G&A expenses), and deposit interest expense. The measure excludes, on a recurring basis: (1) investment income (loss); (2) other income (expense) not related to underwriting, including foreign exchange gains or losses, and Lloyd’s interest income and expense; (3) corporate G&A expenses; and (4) interest expense. We exclude total investment income or loss, foreign exchange gains or losses, and Lloyd’s interest income or expense as we believe these items are influenced by market conditions and other factors unrelated to underwriting decisions. Additionally, we exclude corporate G&A and interest expenses because these costs are generally fixed and not incremental to or directly related to our underwriting operations. We believe all of these amounts are largely independent of our underwriting process, and including them could hinder the analysis of trends in our underwriting operations. Net underwriting income (loss) should not be viewed as a substitute for U.S. GAAP net income before income taxes. For a reconciliation of net underwriting income (loss), for the fiscal years ended December 31, 2023, and 2022, please see page 54 of our Annual Report on Form 10-K for the year ended December 31, 2023.
Adjusted Operating Profit Effective January 1, 2023, one of the ways that we measure our performance is based on adjusted operating profit, or AOP, as this measure reflects management’s contribution to long term profitability and operational efficiency. AOP is a non-GAAP financial measure and should not be viewed as a substitute for the comparable U.S. GAAP measure - measure—net income before taxes. AOP is considered a non-GAAP financial measure because it excludes items used to calculate net income before taxes under U.S. GAAP. AOP is calculated as the sum of (i) the underwriting income and (ii) the strategic investments income (net of tax), less (iii) corporate innovations-related expense, as a percentage of book value. We use AOP as a performance measure in our short-term incentive compensation.
The following table presents a reconciliation of net income before taxes (GAAP) to the AOP for the year ended December 31, 2022.
| | | | | | | | | | | Year ended December 31, 20222023 | | | | | | ($ in thousands) | Income (loss) before income tax | $ | 24,52686,930 | | | | | | | Add (subtract): | | | | | | | Total investment (income) loss | (68,983)(66,063) | | | | | | | Other non-underwriting (income) expense | 11,777 (17,872) | | | | | | | Corporate expenses | 17,79323,653 | | | | | | | Interest expense | 4,2015,344 | | | | | | Net underwriting income (loss) | $ | (10,686)31,992 | | | | | | | Add (subtract): | | | | | | | Strategic investment income (net of tax) | 9,8582,549 | | | | | | | Corporate innovations-related expense | (2,895)(2,706) | | | | | | Adjusted operating profit (loss) | $ | (3,723)31,835 | | | | | | | | | | | | | Total equity (U.S. GAAP), opening balance | $ | 475,663503,120 | | | | | | | AOP as percentage of book value | (0.8)6.3 | % | | | | |
APPENDIX A
PROPOSED AMENDMENT TO THE ARTICLES TO ELIMINATE DUAL CLASS STRUCTURE
(with deletions indicated by strike-outs and additions indicated by underlining)
BE IT RESOLVED, as a Special Resolution, that the following articles of the Third Amended and Restated Memorandum and Articles of Association of the Company and Schedule A thereto be amended as set forth below:
Memorandum of Association
5 The authorized share capital of the Company is US$17,500,000, divided into 125,000,000 Ordinary Shares, par value US$0.10 per share, divided into 100,000,000 Class A Ordinary Shares and 25,000,000 Class B Ordinary Shares and 50,000,000 Preferred Shares, par value of US$0.10 each per share.
Articles of Association
1. Interpretation
(k) “Class A Ordinary Shares” means the Class A Ordinary Shares of the Company, initially having a par value of $0.10 per Share, and includes a fraction of a Class A Ordinary Share;[Reserved]
(l) “Class B Ordinary Shares” means the Class B Ordinary Shares of the Company, initially having a par value of $0.10 per Share, and includes a fraction of a Class B Ordinary Share;[Reserved]
(ff) “Ordinary Shares” means collectively, the Class A Ordinary Shares and the Class B Ordinary Sharesordinary Shares of the Company, par value of $0.10 per share, and includes a fraction of an Ordinary Share;
11. Exercise of power to purchase Shares or securities that may be exchanged for or converted to Shares
(b) Notwithstanding (a) above, if the Board in its absolute and unfettered discretion, on behalf of the Company, determines that ownership of Class A Ordinary Shares (or any securities that may be exchanged for or converted to Class A Ordinary Shares) of the Company by any Member (1) would violate the ownership limitations described in Article 11(1)(c) or (2) would result in an increased risk of adverse tax, regulatory or legal consequences to the Company, any of its Subsidiaries or any of the Members;, the Company will have the option, but not the obligation, subject to Statute to purchase all or part of the Class A Ordinary Shares (or any securities that may be exchanged for or converted to Shares) of the Company held by such Member (to the extent the Board, in the reasonable exercise of its discretion, determines it is necessary to avoid or cure such adverse consequences) with funds available therefor in an amount equal to the Fair Market Value of such Shares on 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 that event, the Company will also 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 Member shall be bound by the determination by the Company to purchase or assign its right to purchase such Member’s Shares (or securities that may be exchanged for or converted to Shares) and, if so required by the Company, shall sell the number of Shares (or securities that may be exchanged for or converted to Shares) of the Company that the Company requires it to sell.
(c) The ownership limitations described in this Article 11(1)(c) are as follows: except upon unanimous consent by the Board (i) no Person shall be allowed to acquire Class A Ordinary Shares (or securities that may be exchanged for or converted to Shares) if such acquisition would cause any Person to own (directly, indirectly or constructively under applicable U.S. tax attribution and constructive ownership rules) 9.9% or more of the issued and outstanding Ordinary Shares; and (ii) no Person shall be allowed to acquire Class A Ordinary Shares if such acquisition would cause such Person to own directly 9.9% or more of the issued and outstanding Ordinary Shares.
43. Voting at meetings
(2) Subject to the adjustments provided in Article 53, each holder of Class A Ordinary Shares generally is entitled to one (1) vote per Class A Ordinary Share. However, except upon unanimous consent of the Board, in the event that a holder of Class A Ordinary Shares is a Tentative 9.9% Member, then the aggregate votes conferred by the Ordinary Shares held by such holder shall be reduced in accordance with Article 54(2).
(3) Generally, each holder of Class B Ordinary Shares is entitled to ten (10) votes per Class B Ordinary Share. However, in the event that the aggregate number of votes conferred by all of the issued and outstanding Class B Ordinary Shares, voting as a class, exceeds 9.5% of the Total Voting Power, then the Total Voting Power of the class shall be reduced to 9.5% of the Total Voting Power. The voting power of any Class A Ordinary Shares held by any holder of Class B Ordinary Shares (whether directly, or indirectly or constructively under applicable attribution and constructive ownership rules contained in the Code) shall be included for purposes of measuring Total Voting Power in the immediately preceding sentence, except, and only to the extent, the right to vote such Class A Ordinary Shares has been limited pursuant to the Articles.[Reserved]
48. Demand for a poll
(2) Where, in accordance with the provisions of subparagraph (1) of this Article, a poll is demanded, subject to the provisions of Articles 12(3), 43(2), 43(3) and 54(1)-(4) (as well as the additional restrictions and rights of the Class B Ordinary Shares set forth in Schedule A hereto), every person present at such meeting shall have the number of votes corresponding each for such Share of which such person is the holder or for which such person holds a proxy and such vote shall be counted in the manner set out in subparagraph (4) of this Article or in the case of a general meeting at which one or more Members are present by telephone 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.
53. Rights of Shares
(1) Upon adoption of these Articles, tThe authorized share capital of the Company shall be US$17,500,000 divided into consist of 125,000,000 Ordinary Shares, par value US$0.10 per share,divided into 100,000,000 Class A Ordinary Shares and 25,000,000 Class B Ordinary Shares and 50,000,000 Preferred Shares, par value of US$0.10 per shareeach.
(2) Subject to the provisions of Articles 12(3), 43(2), 43(3) and 54(1)-(4) (as well as the additional restrictions and rights of the Class B Ordinary Shares set forth in Schedule A hereto), each Class A Ordinary Share shall be entitled to one vote per Class A Ordinary Share. The Class B Ordinary Shares rights and restrictions are set forth in Schedule A to these Articles, but otherwise the holders of all Ordinary Shares shall:
54. Limitation on voting rights of Controlled Shares.
(1) General. Subject to the provisions of Articles 12(3), 43(2), 43(3), and 54(1)-(4) (as well as the additional restrictions and rights of the Class B Ordinary Shares set forth in Schedule A hereto), and subject to any rights and restrictions for the time being attached to any class or classes ofShares, every Member and every Person representing a Member by proxy shall have one vote for each Class A Ordinary Share carrying the right to vote on the matter in question of which such Member or such Person representing a Member by proxy is the holder. Notwithstanding any other provisions of these Articles, all determinations in these Articles that are made by or subject to a vote or approval of Members shall be based upon the voting power of such Members’ Shares as determined pursuant to Articles 12(3), 43(3), and 54(1)-(4) (as well as the additional restrictions and rights of the Class B Ordinary Shares set forth in Schedule A hereto).
(2) Adjustment of voting power. Except upon unanimous consent of the Board, the voting power of each Class A Ordinary Share and each Class B Ordinary Share is hereby adjusted (and shall be automatically adjusted in the future) to the extent necessary so that no Person is a 9.9% Member (as defined below). This Article 54 shall be applied prior to the application of Article 12(3). The Board shall implement the foregoing in the manner provided herein.
The Board shall from time to time, including prior to any time at which a vote of Members is taken, take all reasonable steps necessary to ascertain through communications with Members or otherwise, whether there exists, or will exist at the time any vote of Members is taken, a Tentative 9.9% Member (as defined below).
In the event that a Tentative 9.9% Member exists, the aggregate votes conferred by the Class A Ordinary Shares and/or Class B Ordinary Shares held by a Member and treated as Controlled Shares of that Tentative 9.9% Member shall be reduced to the extent necessary such that the Controlled Shares of the Tentative 9.9% Member will constitute less than 9.9% of the Total Voting Power. In applying the previous sentence where Class A Ordinary Shares and/or Class B Ordinary Shares held by more than one Member are treated as Controlled Shares of a Tentative 9.9% Member, the reduction in votes shall apply to such Members holding Class A Ordinary Shares in descending order according to their respective Attribution Percentages (as defined below) and then to such Members
holding Class B Ordinary Shares, provided that, in the event of a tie, the reduction shall apply first to the Member whose Shares are Controlled Shares of the Tentative 9.9% Member by virtue of the Tentative 9.9% Member’s economic interest in (as opposed to voting control with respect to) such Ordinary Shares. The votes attributable to Class A Ordinary Shares and/or Class B Ordinary Shares of Members owning no Class A Ordinary Shares and/or Class B Ordinary Shares treated as Controlled Shares of any Tentative 9.9% Member shall, in the aggregate, be increased by the same number of votes subject to reduction as described above. Such increase shall apply to all such Members in proportion to their voting power at that time, provided that such increase shall be limited to the extent necessary to avoid causing any person to be a 9.9% Member. The adjustments of voting power described in this Article shall apply repeatedly until there would be no 9.9% Member. The Board may deviate from any of the principles described in this Article and determine that Class A Ordinary Shares and/or Class B Ordinary Shares held by a Member shall carry different voting rights as it determines appropriate (1) to avoid the existence of any 9.9% Member or (2) to avoid adverse tax, legal or regulatory consequences to the Company, any Subsidiary of the Company, or any other Member or its Affiliates. For the avoidance of doubt, in applying the provisions of Articles 12(3), 43(2), 43(3), and 54(1)-(4), a Class A Ordinary Share and/or Class B Ordinary Share may carry a fraction of a vote.
(3) Other adjustments of voting power. In addition to the provisions of Article 54(1), any Class A Ordinary Shares and Class B Ordinary Shares shall not carry any right to vote to the extent that the Board determines, in its sole discretion, that it is necessary that such Class A Ordinary Shares or Class B Ordinary Shares should not carry the right to vote in order to avoid adverse tax, legal or regulatory consequences to the Company, any Subsidiary of the Company, or any Member, provided that no adjustment pursuant to this sentence shall cause any person to become a 9.9% Member.
(4) Requirement to provide information and Notice.
(a) The Board shall have the authority to request from any Member holding, directly or indirectly, Class A Ordinary Shares, and such Member shall provide, such information as the Board may request for the purpose of determining whether any Member’s voting rights are to be adjusted. If such 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 and absolute discretion determine that such Member’s Class A Ordinary Shares shall carry no voting rights in which case such Class A Ordinary Shares shall not carry any voting rights until otherwise determined by the Board in its sole and absolute discretion.
(b) Any Member shall give notice to the Company within ten days following the date that such Member acquires actual knowledge that it is a Tentative 9.9% Member or that its Class A Ordinary Shares or Class B Ordinary Shares are Controlled Shares of a Tentative 9.9% Member.
(e) The Company may, but shall have no obligation to provide notice to any Member of any adjustment to its voting power that may result from the application of Article 43(3), Article 12(3), and/or this Article 54.
65. Restrictions on transfer
(2) In the event the Board determines that an ownership limitation described in Article 11(1)(c) has been violated as a result of such transfer, the Company shall have the option, but not the obligation, to purchase all or any part of the Class A Ordinary Shares, to the extent the Company determines it is necessary or advisable to avoid or cure any adverse or potentially adverse consequences resulting from such transfer. If the Company exercises an option to purchase all or part of the Class A Ordinary Shares held by such Member, the Company shall repurchase the shares at an amount equal to the Fair Market Value of such Class A Ordinary Shares on the date the Company sends the Repurchase Notice.
96. Voting of subsidiary shares
Notwithstanding any other provision of these Articles to the contrary, if the Company is required or entitled to vote at general meetings of (i) Greenlight Reinsurance or (ii) any Designated Subsidiary (as defined in Article 97), the Directors shall refer the subject matter of the vote to the Members on a poll and seek authority from the Members to have the Company’s corporate representative or proxy vote in favour of the resolution proposed by Greenlight Reinsurance and/or such Designated Subsidiary. The Directors shall cause the Company’s corporate representative or proxy to vote the Company’s shares in Greenlight Reinsurance and/or such Designated Subsidiary 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 Greenlight Reinsurance and/or such Designated Subsidiary. All votes referred to the Company’s Members pursuant to this
Article 96 shall be subject to the voting power restrictions of Articles 12(3), 43(3), and 54 (and the additional restrictions and rights of the Class B Ordinary Shares set forth in Schedule A hereto).
SCHEDULE A TO ARTICLES
DESIGNATIONS, NUMBER, VOTING POWERS;
PREFERENCES AND RIGHTS OF CLASS B ORDINARY SHARES
1. Designation and Amount.
(a) The Shares of this series shall be designated the Class B Ordinary Shares, par value $0.10 per Share (the “Class B Ordinary Shares”).
(b) The Class B Ordinary Shares shall only be held by David Einhorn and his Permitted Transferees.
2. General.
Except as provided in items 3 and 4 below, each Class B Ordinary Share shall be entitled to the same rights, and be subject to the same restrictions, as the Class A Ordinary Shares as set forth in these Articles.
3. Voting.
(a) Generally, each holder of Class B Ordinary Share is entitled to ten (10) votes per Class B Ordinary Share. However, in the event that the aggregate number of votes conferred by all of the issued and outstanding Class B Ordinary Shares, voting as a class, exceeds 9.5% of the Total Voting Power, then the Total Voting Power of the class shall be reduced to 9.5% of the Total Voting Power. The voting power of any Class A Ordinary Shares held by any holder of Class B Ordinary Shares (whether directly, or indirectly or constructively under applicable attribution and constructive ownership rules contained in the Code) shall be included for purposes of measuring Total Voting Power in the immediately preceding sentence, except, and only to the extent, the right to vote such Class A Ordinary Shares has been limited pursuant to the Articles.
In addition to the limitation in the immediately preceding sentence, the restrictions on the voting power of Class B Ordinary Shares contained in Articles 12(3) and 54 shall apply to holders of Class B Ordinary Shares.
(b) the voting rights attached to any Class B Ordinary Shares which are determined by the Board to represent in excess of 9.5% of the Total Voting Power, whether pursuant to Schedule A Section 3(a) or Article 12(3), shall be allocated for voting purposes to all the other Members of the Company pro rata according to their percentage interest in the Company; provided however, that no other Member shall be allocated voting rights pursuant to this sentence if doing so would (i) render such other Member a 9.9% Member or (ii) cause the holders of Class B Ordinary Shares, as a class, to hold more than 9.5% of the Total Voting Power as a result of applicable attribution and constructive ownership rules contained in the Code.
4. Requirement to Provide Information and Notice.
(a) The Board shall have the authority to request from any Member holding Class B Ordinary Shares, and such Member shall provide, such information as the Board may request for the purpose of determining whether any Member’s voting rights are to be adjusted. If such 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 and absolute discretion determine that such Member’s Class B Ordinary Shares shall carry no voting rights in which case such Class B Ordinary Shares shall not carry any voting rights until otherwise determined by the Board in its sole and absolute discretion.
(b) Notwithstanding the foregoing, no Member shall be liable to any other Member or the Company for any losses or damages resulting from such Member’s failure to respond to, or submission of incomplete or inaccurate information in response to, a request under paragraph (4)(a).
(c) The Company may, but shall have no obligation to provide notice to any Member of any adjustment to its voting power.
(d) One of the purposes of the voting limitation set forth in this Schedule A is to seek to reduce the likelihood that there would be adverse tax consequences to U.S. Persons if the Company were to be characterized as a controlled foreign corporation as defined in the Code. Nevertheless, the Board will not be liable to the Company, its Members or any other Person whatsoever for any errors in judgment made by its interpreting or enforcing this paragraph or in
granting any waiver or waivers to the foregoing restrictions in any case so long as the Board shall have acted in good faith.
5. Conversion.
(a) Following a sale, transfer, exchange or other disposition of any Class B Ordinary Shares by a holder thereof to a purchaser or other transferee, the Class B Ordinary Shares shall immediately and automatically convert into an equal number of Class A Ordinary Shares on a one-for-one basis, by way of redemption and reissue, except for those transfers to a Permitted Transferee, or unless such transfer is unanimously approved by the Board of Directors. Any Class B Ordinary Shares converted to Class A Ordinary Shares pursuant to the immediately preceding sentence shall be subject to the restrictions on voting contained in Articles 12(3) and 54.
(b) The Company shall at all times reserve and keep available out of its authorized but unissued Class A Ordinary Shares, solely for the purpose of effecting the conversion of the Class B Ordinary Shares, such number of its shares as shall from time to time be sufficient to effect the conversion of all the outstanding Class B Ordinary Shares.
(c) If any Class B Ordinary Shares shall be converted pursuant to this item 5, the Shares so converted shall be retired and returned to the authorized but unissued Class B Ordinary Shares.
APPENDIX B
PROPOSED AMENDMENT TO THE ARTICLES TO ELIMINATE CUT-BACK PROVISIONS
(with deletions indicated by strike-outs and additions indicated by underlining, in each case to be read in conjunction with the amendments under proposal 7, which have not yet been incorporated herein)
BE IT RESOLVED, as a Special Resolution, that the following articles of the Third Amended and Restated Memorandum and Articles of Association of the Company and Schedule A thereto be amended as set forth below:
1. Interpretation
(a) “9.9% Member” shall have the meaning as set forth in Article 54;[Reserved]
(d) “Attribution Percentages” shall have the meaning as set forth in Article 54;[Reserved]
(p) “Controlled Shares” shall have the meaning as set forth in Article 54;[Reserved]
(uu) “Tentative 9.9% Member” shall have the meaning as set forth in Article 54;[Reserved]
11. Exercise of power to purchase Shares or securities that may be exchanged for or converted to Shares
(1) Purchase of Shares
(a) Subject to the provisions set forth below and the provision of the Statute, the Company shall have (i) the authority to request information with respect to the holdings, directly or indirectly, of Ordinary Shares from any Member, and such Member shall provide such information as the Company may have requested and (ii) the power to purchase its Ordinary Shares, including any securities that may be exchanged for or converted to Shares and redeemable Shares in such manner and on such terms as the Directors may determine and agree with the relevant Member, which shall include, without limitation, the purchase of Shares (or securities that may be exchanged for or converted to Shares) through private negotiations or at market prices through any stock exchange on which such Shares are listed. In addition, each Member shall give notice to the Company within ten (10) days following the date that such Member acquires actual knowledge that it is a beneficial holder of more than 9.9% of the Ordinary Shares. Notwithstanding the foregoing, no Member shall be liable to any other Member of the Company for any losses or damages resulting from such Member’s failure to respond to, or submission of incomplete or inaccurate information in response to, a request pursuant to clause (i) of the first sentence of this paragraph or from such Member’s failure to give notice pursuant to the preceding sentence.
12. Election of Directors
(3) For the avoidance of doubt, any Member participating in the election of directors shall be subject to the limitations on voting rights described in Article 54 and all votes referred to the Company’s Members pursuant to Article 96 shall be subject to this Article 12(3).
43. Voting at meetings
(2) Subject to the adjustments provided in Article 53, eEach holder of Class A Ordinary Shares generally is entitled to one (1) vote per Class A Ordinary Share. However, except upon unanimous consent of the Board, in the event that a holder of Class A Ordinary Shares is a Tentative 9.9% Member, then the aggregate votes conferred by the Ordinary Shares held by such holder shall be reduced in accordance with Article 54(2).
48. Demand for a poll
(2) Where, in accordance with the provisions of subparagraph (1) of this Article, a poll is demanded, subject to the provisions of Articles 12(3), 43(2), 43(3) and 54(1)-(4) (as well as the additional restrictions and rights of the Class B Ordinary Shares set forth in Schedule A hereto), every person present at such meeting shall have the number of votes corresponding each for such Share of which such person is the holder or for which such person holds a proxy and such vote shall be counted in the manner set out in subparagraph (4) of this Article or in the case of a general meeting at which one or more Members are present by telephone 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.
53. Rights of Shares
(2) Subject to the provisions of Articles 12(3), 43(2), and 43(3) and 54(1)-(4) (as well as the additional restrictions and rights of the Class B Ordinary Shares set forth in Schedule A hereto), eEach Class A Ordinary Share shall be entitled to one vote per Class A Ordinary Share. The Class B Ordinary Shares rights and restrictions are set forth in Schedule A to these Articles, but otherwise the holders of all Ordinary Shares shall:
54. Limitation on voting rights of Controlled Shares.[Reserved]
(1) General. Subject to the provisions of Articles 12(3), 43(2), 43(3), and 54(1)-(4) (as well as the additional restrictions and rights of the Class B Ordinary Shares set forth in Schedule A hereto), and subject to any rights and restrictions for the time being attached to any class or classes of Shares, every Member and every Person representing a Member by proxy shall have one vote for each Class A Ordinary Share carrying the right to vote on the matter in question of which such Member or such Person representing a Member by proxy is the holder. Notwithstanding any other provisions of these Articles, all determinations in these Articles that are made by or subject to a vote or approval of Members shall be based upon the voting power of such Members’ Shares as determined pursuant to Articles 12(3), 43(3), and 54(1)-(4) (as well as the additional restrictions and rights of the Class B Ordinary Shares set forth in Schedule A hereto).
(2) Adjustment of voting power. Except upon unanimous consent of the Board, the voting power of each Class A Ordinary Share and each Class B Ordinary Share is hereby adjusted (and shall be automatically adjusted in the future) to the extent necessary so that no Person is a 9.9% Member (as defined below). This Article 54 shall be applied prior to the application of Article 12(3). The Board shall implement the foregoing in the manner provided herein.
The Board shall from time to time, including prior to any time at which a vote of Members is taken, take all reasonable steps necessary to ascertain through communications with Members or otherwise, whether there exists, or will exist at the time any vote of Members is taken, a Tentative 9.9% Member (as defined below).
In the event that a Tentative 9.9% Member exists, the aggregate votes conferred by the Class A Ordinary Shares and/or Class B Ordinary Shares held by a Member and treated as Controlled Shares of that Tentative 9.9% Member shall be reduced to the extent necessary such that the Controlled Shares of the Tentative 9.9% Member will constitute less than 9.9% of the Total Voting Power. In applying the previous sentence where Class A Ordinary Shares and/or Class B Ordinary Shares held by more than one Member are treated as Controlled Shares of a Tentative 9.9% Member, the reduction in votes shall apply to such Members holding Class A Ordinary Shares in descending order according to their respective Attribution Percentages (as defined below) and then to such Members holding Class B Ordinary Shares, provided that, in the event of a tie, the reduction shall apply first to the Member whose Shares are Controlled Shares of the Tentative 9.9% Member by virtue of the Tentative 9.9% Member’s economic interest in (as opposed to voting control with respect to) such Ordinary Shares. The votes attributable to Class A Ordinary Shares and/or Class B Ordinary Shares of Members owning no Class A Ordinary Shares and/or Class B Ordinary Shares treated as Controlled Shares of any Tentative 9.9% Member shall, in the aggregate, be increased by the same number of votes subject to reduction as described above. Such increase shall apply to all such Members in proportion to their voting power at that time, provided that such increase shall be limited to the extent necessary to avoid causing any person to be a 9.9% Member. The adjustments of voting power described in this Article shall apply repeatedly until there would be no 9.9% Member. The Board may deviate from any of the principles described in this Article and determine that Class A Ordinary Shares and/or Class B Ordinary Shares held by a Member shall carry different voting rights as it determines appropriate (1) to avoid the existence of any 9.9% Member or (2) to avoid adverse tax, legal or regulatory consequences to the Company, any Subsidiary of the Company, or any other Member or its Affiliates. For the avoidance of doubt, in applying the provisions of Articles 12(3), 43(2), 43(3), and 54(1)-(4), a Class A Ordinary Share and/or Class B Ordinary Share may carry a fraction of a vote.
“Attribution Percentage” shall mean, with respect to a Member and a Tentative 9.9% Member, the percentage of the Member’s Shares that are treated as Controlled Shares of such Tentative 9.9% Member.
“Controlled Shares” in reference to any Person or Member means all Ordinary Shares of the Company owned by such Person or Member either (i) directly, (ii) by application of the attribution and constructive ownership rules under Section 958 of the Code, or (iii) beneficially within the meaning of Section 13(d)(3) of the Exchange Act, and the rules and regulations promulgated thereunder.
“9.9% Member” means a Person whose Controlled Shares constitute nine and nine-tenths percent (9.9%) or more of the voting power of all Ordinary Shares of the Company and who would be generally required to recognize income with respect to the Company under Section 951(a)(1) of the Code if the Company were a controlled foreign corporation as defined in Section 957 of the Code and if the ownership threshold under Section 951(b) of the Code were 9.9%.
“Tentative 9.9% Member” means a Person that, but for adjustments to the voting rights of Shares pursuant to Article 54(1)-(4), would be a 9.9% Member.
(3) Other adjustments of voting power. In addition to the provisions of Article 54(1), any Class A Ordinary Shares and Class B Ordinary Shares shall not carry any right to vote to the extent that the Board determines, in its sole discretion, that it is necessary that such Class A Ordinary Shares or Class B Ordinary Shares should not carry the right to vote in order to avoid adverse tax, legal or regulatory consequences to the Company, any Subsidiary of the Company, or any Member, provided that no adjustment pursuant to this sentence shall cause any person to become a 9.9% Member.
(4) Requirement to provide information and Notice.
(a) The Board shall have the authority to request from any Member holding, directly or indirectly, Class A Ordinary Shares, and such Member shall provide, such information as the Board may request for the purpose of determining whether any Member’s voting rights are to be adjusted. If such 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 and absolute discretion determine that such Member’s Class A Ordinary Shares shall carry no voting rights in which case such Class A Ordinary Shares shall not carry any voting rights until otherwise determined by the Board in its sole and absolute discretion.
(b) Any Member shall give notice to the Company within ten days following the date that such Member acquires actual knowledge that it is a Tentative 9.9% Member or that its Class A Ordinary Shares or Class B Ordinary Shares are Controlled Shares of a Tentative 9.9% Member.
(c) Notwithstanding the foregoing, no Member shall be liable to any other Member or the Company for any losses or damages resulting from such Member’s failure to respond to, or submission of incomplete or inaccurate information in response to, a request under paragraph (4)(a) or from such Member’s failure to give notice under paragraph (4)(b) of this Article.
(d) The Board may rely on the information provided by a Member under this Article 54(4) in the satisfaction of its obligations under Article 12(3) and this Article 54.
(e) The Company may, but shall have no obligation to provide notice to any Member of any adjustment to its voting power that may result from the application of Article 43(3), Article 12(3), and/or this Article 54.
(f) One of the purposes of the voting limitation set forth in this Article is to seek to reduce the likelihood that there would be adverse tax consequences to U.S. Persons if the Company were to be characterized as a controlled foreign corporation as defined in the Code. Nevertheless, the Board will not be liable to the Company, its Members or any other Person whatsoever for any errors in judgment made by its interpreting or enforcing this Article or in granting any waiver or waivers to the foregoing restrictions in any case so long as the Board shall have acted in good faith.
96. Voting of subsidiary shares
Notwithstanding any other provision of these Articles to the contrary, if the Company is required or entitled to vote at general meetings of (i) Greenlight Reinsurance or (ii) any Designated Subsidiary (as defined in Article 97), the Directors shall refer the subject matter of the vote to the Members on a poll and seek authority from the Members to have the Company’s corporate representative or proxy vote in favour of the resolution proposed by Greenlight Reinsurance and/or such Designated Subsidiary. The Directors shall cause the Company’s corporate representative or proxy to vote the Company’s shares in Greenlight Reinsurance and/or such Designated Subsidiary 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 Greenlight Reinsurance and/or such Designated Subsidiary. All votes referred to the Company’s Members pursuant to this Article 96 shall be subject to the voting power restrictions of Articles 12(3), 43(3), and 54 (and the additional restrictions and rights of the Class B Ordinary Shares set forth in Schedule A hereto).
SCHEDULE A TO ARTICLES
DESIGNATIONS, NUMBER, VOTING POWERS;
PREFERENCES AND RIGHTS OF CLASS B ORDINARY SHARES
3. Voting.
(a) Generally, each holder of Class B Ordinary Share is entitled to ten (10) votes per Class B Ordinary Share. However, in the event that the aggregate number of votes conferred by all of the issued and outstanding Class B Ordinary Shares, voting as a class, exceeds 9.5% of the Total Voting Power, then the Total Voting Power of the class shall be reduced to 9.5% of the Total Voting Power. The voting power of any Class A Ordinary Shares held by any holder of Class B Ordinary Shares (whether directly, or indirectly or constructively under applicable attribution and constructive ownership rules contained in the Code) shall be included for purposes of measuring Total Voting Power in the immediately preceding sentence, except, and only to the extent, the right to vote such Class A Ordinary Shares has been limited pursuant to the Articles.
In addition to the limitation in the immediately preceding sentence, the restrictions on the voting power of Class B Ordinary Shares contained in Articles 12(3) and 54 shall apply to holders of Class B Ordinary Shares.
5. Conversion
(a) Following a sale, transfer, exchange or other disposition of any Class B Ordinary Shares by a holder thereof to a purchaser or other transferee, the Class B Ordinary Shares shall immediately and automatically convert into an equal number of Class A Ordinary Shares on a one-for-one basis, by way of redemption and reissue, except for those transfers to a Permitted Transferee, or unless such transfer is unanimously approved by the Board of Directors. Any Class B Ordinary Shares converted to Class A Ordinary Shares pursuant to the immediately preceding sentence shall be subject to the restrictions on voting contained in Articles 12(3) and 54.
APPENDIX C
PROPOSED AMENDMENT TO THE ARTICLES TO ELIMINATE PUSH-UP PROVISIONS
(with deletions indicated by strike-outs and additions indicated by underlining, in each case to be read in conjunction with the amendments under proposal 7 and 8 as though they have been approved and therefore incorporated herein)
BE IT RESOLVED, as a Special Resolution, that the following articles of the Third Amended and Restated Memorandum and Articles of Association of the Company be amended as set forth below:
1. Interpretation
(q) “Designated Subsidiary” shall have the meaning as set forth in Article 97;[Reserved]
(y) “Greenlight Reinsurance” means Greenlight Reinsurance, Ltd., a Cayman Islands insurance company and wholly-owned subsidiary of the Company;[Reserved]
12. Election of Directors
(3) For the avoidance of doubt, any Member participating in the election of directors shall be subject to the limitations on voting rights described in Article 54 and all votes referred to the Company’s Members pursuant to Article 96 shall be subject to this Article 12(3).
43. Voting at meetings
(5) Notwithstanding any other provisions of these Articles to the contrary, with respect to any matter required to be submitted to a vote of the shareholders of Greenlight Reinsurance, the Company shall be required to submit a proposal relating to such matters to the Members of the Company and shall vote all the shares of Greenlight Reinsurance owned by the Company in accordance with and proportional to such vote of the Company’s Members; provided, however, that the Board shall not be required to submit such a proposal contemplated by this Article 43(5) to the Members of the Company at such time as Greenlight Reinsurance shall no longer be a Subsidiary of the Company.[Reserved]
96. Voting of subsidiary shares[Reserved]
Notwithstanding any other provision of these Articles to the contrary, if the Company is required or entitled to vote at general meetings of (i) Greenlight Reinsurance or (ii) any Designated Subsidiary (as defined in Article 97), the Directors shall refer the subject matter of the vote to the Members on a poll and seek authority from the Members to have the Company’s corporate representative or proxy vote in favour of the resolution proposed by Greenlight Reinsurance and/or such Designated Subsidiary. The Directors shall cause the Company’s corporate representative or proxy to vote the Company’s shares in Greenlight Reinsurance and/or such Designated Subsidiary 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 Greenlight Reinsurance and/or such Designated Subsidiary. All votes referred to the Company’s Members pursuant to this Article 96 shall be subject to the voting power restrictions of Articles 12(3), 43(3), and 54 (and the additional restrictions and rights of the Class B Ordinary Shares set forth in Schedule A hereto).
97. Articles or Articles of Association of certain subsidiaries[Reserved]
The Board shall require that the Articles of Association of Greenlight Reinsurance and may require that the Articles or Articles of Association of each other direct or indirect Subsidiary of the Company organized under the laws of a jurisdiction outside the United States that is treated as a corporation for U.S. federal tax purposes and designated by the Board, contain provisions substantially similar to Article 96, herein (any such Subsidiary so designated by the
Board is referred to herein as a “Designated Subsidiary”). If the Board designates any indirect Subsidiary of the Company as a Designated Subsidiary, the Board shall also designate each intermediate Subsidiary between such Designated Subsidiary and the Company (other than Greenlight Reinsurance) as a Designated Subsidiary hereunder. The Company in its discretion may enter into agreements with each Designated Subsidiary, as reasonably necessary, to effect or implement this Article.
APPENDIX E
2023 OMNIBUS INCENTIVE PLAN
Greenlight Capital Re, Ltd.
2023 Omnibus Incentive Plan
1. Purpose.
The purpose of the Plan is to assist the Company in attracting, retaining, motivating, and rewarding certain employees, officers, directors, and consultants of the Company and its Affiliates and promoting the creation of long-term value for shareholders of the Company by closely aligning the interests of such individuals with those of such shareholders. The Plan authorizes the award of Share-based and cash-based incentives to Eligible Persons to encourage such Eligible Persons to expend maximum effort in the creation of shareholder value. The Plan shall not terminate, amend or modify any provision of the Prior Plan (defined below) or adversely affect any awards granted under the Prior Plan or rights outstanding under the Prior Plan; provided, however, that, following approval of the Plan by the Company’s shareholders, no further awards will be granted under the Prior Plan.
2. Definitions.
For purposes of the Plan, the following terms shall be defined as set forth below:
(1)“Affiliate” means, with respect to a Person, any other Person that, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such Person. The term “control” (including, with correlative meaning, the terms “controlled by” and “under common control with”), as applied to any Person or entity, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such person or entity, whether through the ownership of voting or other securities, by contract or otherwise.
(2)“Award” means any Option, Restricted Stock, Restricted Stock Unit, Stock Appreciation Right, or other Stock-based or cash-based award granted under the Plan.
(3)“Award Agreement” means an Option Agreement, a Restricted Stock Agreement, an RSU Agreement, a SAR Agreement, or a written agreement governing the grant of any other Award granted under the Plan.
(4)“Board” means the Board of Directors of the Company.
(5)“Cause” means, with respect to a Participant and in the absence of an Award Agreement or Participant Agreement otherwise defining Cause, (1) Serious Misconduct on the part of the Participant, (2) further misconduct on the part of the Participant at any time following the issue of a formal written warning in respect of misconduct; (3) any act or omission that constitutes a material breach of any provision of the Plan, Award Agreement or Participant Agreement which is not cured, if curable, within ten (10) days after written notice thereof; (4) impeding or failing to materially cooperate with any investigation by the Company or any of its Affiliates; (5) a material breach of fiduciary duty by the Participant; (6) the failure, refusal or neglect by the Participant to perform the Participant’s duties hereunder or the failure, refusal or neglect to follow any lawful and reasonable direction in a satisfactory manner within ten (10) days of the issue of a formal written warning in respect thereof.; or (7) where the Committee determines there is any other substantial reason to terminate the Participant’s employment or service for Cause in light of which it is reasonable to do so in accordance with Section 51(1)(f) of the Cayman Labour Act (as amended). The Committee, in good faith, shall determine all matters and questions relating to whether Cause exists any determination shall be conclusive and binding. If, subsequent to the Termination of a Participant for any or no reason (other than a Termination by the Service Recipient for Cause), it is discovered that grounds to terminate the Participant’s employment or service for Cause existed, such Participant’s employment or service shall, at the discretion of the Committee, be deemed to have been terminated by the Service Recipient for Cause for all purposes under the Plan, and the Participant shall be required to repay or return to the Company all amounts and benefits received by him or her in respect of any Award in connection with or following such Termination that would have been forfeited under the Plan had such Termination been by the Service Recipient for Cause. In the event that there is an Award Agreement or Participant Agreement defining Cause, “Cause” shall have the meaning provided in such agreement, and a Termination by the Service Recipient for Cause hereunder shall not be deemed
to have occurred unless all applicable notice and cure periods in such Award Agreement or Participant Agreement are complied with.
(6)“Change in Control” means:
(1) any “person” or “group” becomes the “beneficial owner” (as such terms are used in Rule 13d-3 promulgated under the Exchange Act, except that a person or group shall be deemed to have “beneficial ownership” of all securities that such person or group has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of 51% or more of the Shares (measured by voting power rather than number of shares); provided, however, that an event described in this paragraph (i) shall not be deemed to be a Change in Control if any of following becomes such a beneficial owner: (A) any tax-qualified, broad-based employee benefit plan sponsored or maintained by the Company or any majority-owned subsidiary, (B) any Company underwriter temporarily holding securities pursuant to an offering of such securities, or (C) any person or group pursuant to a Non-Qualifying Transaction (as defined in paragraph (2)); or
(2) the Company consolidates or merges with or into any other person or group or sells, assigns, conveys, transfers, leases or otherwise disposes of all or substantially all of its assets and the assets of the Company’s direct and indirect subsidiaries (on a consolidated basis) to any other person or group, in either one transaction or a series of related transactions which occur within six months, other than a consolidation or merger or disposition of assets: (A) of or by the Company into or to a 100% owned subsidiary of the Company, or (B) pursuant to a transaction in which the outstanding Shares are changed into or exchanged for securities or other property with the effect that the beneficial owners of the outstanding Shares immediately prior to such transaction, beneficially own, directly or indirectly, at least a majority of the Shares (measured by voting power rather than number of shares) of the surviving corporation or the person or group to whom the Company’s assets are transferred immediately following such transaction (any transaction which satisfies the criteria specified in (A) or (B) above shall be deemed to be a “Non-Qualifying Transaction”).
Notwithstanding the foregoing, with respect to the payment of any amount that constitutes a “deferral of compensation” subject to Section 409A of the Code payable upon a Change in Control, a Change in Control shall not be deemed to have occurred, unless the Change in Control constitutes a change in the ownership or effective control of the Company or in the ownership of a substantial portion of the assets of the Company under Section 409A(a)(2)(A)(v) of the Code.
(7)“Code” means the U.S. Internal Revenue Code of 1986, as amended from time to time, including the rules and regulations thereunder and any successor provisions, rules, and regulations thereto.
(8)“Committee” means the Board, the Compensation Committee of the Board, or such other committee consisting of two or more individuals appointed by the Board to administer the Plan and each other individual or committee of individuals designated to exercise authority under the Plan.
(9)“Company” means Greenlight Capital Re, Ltd. or its permitted successors and assigns.
(10)“Corporate Event” has the meaning set forth in Section 10(b) hereof.
(11)“Data” has the meaning set forth in Section 20(f) hereof.
(12)“Disability” means, in the absence of an Award Agreement or Participant Agreement otherwise defining Disability, the permanent and total disability of such Participant within the meaning of Section 22(e)(3) of the Code. In the event that there is an Award Agreement or Participant Agreement defining Disability, “Disability” shall have the meaning provided in such Award Agreement or Participant Agreement. The determination of whether a Participant has a Disability shall be determined by the Committee, and the Committee may rely on any determination made for purposes of benefits under any long-term disability plan in which a Participant participates that is maintained by the Company or one of its Affiliates.
(13)“Disqualifying Disposition” means any disposition (including any sale) of Share acquired upon the exercise of an Incentive Stock Option made within the period that ends either (1) two years
after the date on which the Participant was granted the Incentive Stock Option or (2) one year after the date upon which the Participant acquired the Share.
(14)“Effective Date” means March 3, 2023, which is the date on which the Plan was approved by the Board, subject to the approval of the Plan by the shareholders of the Company.
(15)“Eligible Person” means (1) each employee and officer of the Company or any of its Affiliates; (2) each non-employee director of the Company or any of its Affiliates; (3) each other natural Person who provides substantial services to the Company or any of its Affiliates as a consultant or advisor (or a wholly owned alter ego entity of the natural Person providing such services of which such Person is an employee, stockholder, or partner) and who is designated as eligible by the Committee; and (4) each natural Person who has been offered employment by the Company or any of its Affiliates; provided that such prospective employee may not receive any payment or exercise any right relating to an Award until such Person has commenced employment or service with the Company or its Affiliates; provided, further, however, that (i) with respect to any Award that is intended to qualify as a “stock right” that does not provide for a “deferral of compensation” within the meaning of Section 409A of the Code, the term “Affiliate” as used in this Section 2(o) shall include only those corporations or other entities in the unbroken chain of corporations or other entities beginning with the Company where each of the corporations or other entities in the unbroken chain, other than the last corporation or other entity, owns stock possessing at least 50% or more of the total combined voting power of all classes of stock in one of the other corporations or other entities in the chain, and (ii) with respect to any Award that is intended to be an Incentive Stock Option, the term “Affiliate” as used in this Section 2(o) shall include only those entities that qualify as a “subsidiary corporation” with respect to the Company within the meaning of Section 424(f) of the Code. An employee on an approved leave of absence may be considered as still in the employ of the Company or any of its Affiliates for purposes of eligibility for participation in the Plan.
(16)“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended from time to time, including the rules and regulations thereunder and any successor provisions, rules, and regulations thereto.
(17)“Expiration Date” means, with respect to an Option or Stock Appreciation Right, the date on which the term of such Option or Stock Appreciation Right expires, as determined under Sections 5(b) or 8(b) hereof, as applicable.
(18)“Fair Market Value” means, as of any date, the value of the Shares determined as follows: (i) if the Shares are listed on any established stock exchange or a national market system, including, without limitation, the Nasdaq Global Select Market, the Nasdaq Global Market or the Nasdaq Capital Market of the Nasdaq Stock Market, the Fair Market Value of the Shares will be the closing sales price for such Shares (or the closing bid, if no sales were reported) as quoted on such exchange or system on the day of determination, as reported in the Wall Street Journal or such other source as the Committee deems reliable; (ii) if the Shares are regularly quoted by a recognized securities dealer but selling prices are not reported, the Fair Market Value of the Shares will be the mean between the high bid and low asked prices for the Shares on the day of determination, as reported in the Wall Street Journal or such other source as the Committee deems reliable; or (iii) in the absence of a public market for the Shares, the Fair Market Value of the Shares will be as determined in good faith by the Committee, and in a manner consistent with Section 409A of the Code, and such determination shall be conclusive and binding on all persons..
(19)“GAAP” means the U.S. Generally Accepted Accounting Principles, as in effect from time to time.
(20)“Incentive Stock Option” means an Option intended to qualify as an “incentive stock option” within the meaning of Section 422 of the Code.
(21)“Nonqualified Stock Option” means an Option not intended to be an Incentive Stock Option.
(22)“Option” means a conditional right, granted to a Participant under Section 5 hereof, to purchase Shares at a specified price during a specified time period.
(23)“Option Agreement” means a written agreement between the Company and a Participant evidencing the terms and conditions of an individual Option Award.
(24)“Participant” means an Eligible Person who has been granted an Award under the Plan or, if applicable, such other Person who holds an Award.
(25)“Participant Agreement” means an employment, consulting, change in control, severance or any other services agreement between a Participant and the Service Recipient that describes the terms and conditions of such Participant’s employment or service with the Service Recipient and is effective as of the date of determination.
(26)“Person” means any individual, corporation, partnership, firm, joint venture, association, joint-stock company, trust, unincorporated organization, or other entity.
(27)“Plan” means this Greenlight Capital Re., Ltd. 2023 Omnibus Incentive Plan, as amended from time to time.
(28)“Prior Plan” means the Greenlight Capital Re, Ltd. Amended and Restated 2004 Stock Incentive Plan.
(29)“Qualified Member” means a member of the Committee who is a “Non-Employee Director” within the meaning of Rule 16b-3 under the Exchange Act and an “independent director” as defined under, as applicable, the NASDAQ Listing Rules, the NYSE Listed Company Manual, or other applicable stock exchange rules.
(30)“Qualifying Committee” has the meaning set forth in Section 3(b) hereof.
(31)“Restricted Stock” means Share granted to a Participant under Section 6 hereof that is subject to certain restrictions and to a risk of forfeiture.
(32)“Restricted Stock Agreement” means a written agreement between the Company and a Participant evidencing the terms and conditions of an individual Restricted Stock Award.
(33)“Restricted Stock Unit” means a notional unit representing the right to receive one Share (or the cash value of one Share, if so determined by the Committee) on a specified settlement date.
(34)“RSU Agreement” means a written agreement between the Company and a Participant evidencing the terms and conditions of an individual Award of Restricted Stock Units.
(35)“SAR Agreement” means a written agreement between the Company and a Participant evidencing the terms and conditions of an individual Award of Stock Appreciation Rights.
(36)“Securities Act” means the U.S. Securities Act of 1933, as amended from time to time, including the rules and regulations thereunder and any successor provisions, rules, and regulations thereto.
(37)“Serious Misconduct” means, but is not limited to, (1) habitual drug or alcohol use which impairs the ability of the Participant to perform the Participant’s duties hereunder (other than where such drug is prescribed and administered in accordance with the instructions of a qualified physician); (2) commission of a criminal offence relevant to the Participants employment or service (other than a minor traffic offence); (3) violation of any restrictive covenants by which the Participant may be bound; (4) fraud, dishonesty, embezzlement or misuse of funds or property belonging to the Company or any of its Affiliates; (5) violation by the Participant of the policies or code of conduct of the Company or any of its Affiliates that could reasonably be expected to result in harm (financial, reputational or otherwise) to the Company of its Affiliates; or (6) any acts, omissions or statements by the Participant that would reasonably be expected to be materially detrimental or damaging to the reputation, operations, or business relations of any member of the Company or its Affiliates.
(38)“Service Recipient” means, with respect to a Participant holding an Award, either the Company or an Affiliate of the Company by which the original recipient of such Award is, or following a Termination was most recently, principally employed or to which such original recipient provides, or following a Termination was most recently providing, services, as applicable.
(39)“Share Pool” has the meaning set forth in Section 4(a) hereof.
(40)“Shares” means the Class A ordinary shares of the Company, par value $0.10 per share, as may be redesignated or renamed from time to time, of the Company, and such other securities as may be substituted for such shares pursuant to Section 10 hereof.
(41)“Stock Appreciation Right” means a conditional right, granted to a Participant under Section 8 hereof, to receive an amount equal to the value of the appreciation in the Shares over a specified period. Except in the event of extraordinary circumstances, as determined in the sole discretion of the Committee, or pursuant to Section 10(b) hereof, Stock Appreciation Rights shall be settled in Shares.
(42)“Substitute Award” has the meaning set forth in Section 4(a) hereof.
(43)“Termination” means the termination of a Participant’s employment or service, as applicable, with the Service Recipient; provided, however, that, if so determined by the Committee at the time of any change in status in relation to the Service Recipient (e.g., a Participant ceases to be an employee and begins providing services as a consultant, or vice versa), such change in status will not be deemed a Termination hereunder. Unless otherwise determined by the Committee, in the event that the Service Recipient ceases to be an Affiliate of the Company (by reason of sale, divestiture, spin-off, or other similar transaction), unless a Participant’s employment or service is transferred to another entity that would constitute the Service Recipient immediately following such transaction, such Participant shall be deemed to have suffered a Termination hereunder as of the date of the consummation of such transaction. Notwithstanding anything herein to the contrary, a Participant’s change in status in relation to the Service Recipient (for example, a change from employee to consultant) shall not be deemed a Termination hereunder with respect to any Awards constituting “nonqualified deferred compensation” subject to Section 409A of the Code that are payable upon a Termination, unless such change in status constitutes a “separation from service” within the meaning of Section 409A of the Code. Any payments in respect of an Award constituting nonqualified deferred compensation subject to Section 409A of the Code that are payable upon a Termination shall be delayed for such period as may be necessary to meet the requirements of Section 409A(a)(2)(B)(i) of the Code. On the first business day following the expiration of such period, the Participant shall be paid, in a single lump sum without interest, an amount equal to the aggregate amount of all payments delayed pursuant to the preceding sentence, and any remaining payments not so delayed shall continue to be paid pursuant to the payment schedule applicable to such Award.
3. Administration.
1.Authority of the Committee. Except as otherwise provided below, the Plan shall be administered by the Committee. The Committee shall have full and final authority, in each case, subject to and consistent with the provisions of the Plan, to (1) select Eligible Persons to become Participants; (2) grant Awards; (3) determine the type, number, and type of Shares subject to, other terms and conditions of, and all other matters relating to, Awards; (4) prescribe Award Agreements (which need not be identical for each Participant) and rules and regulations for the administration of the Plan; (5) determine the method by which an Award may be settled, exercised, canceled, forfeited, suspended, or repurchased by the Company; (6) determine the circumstances under which the delivery of cash, property, or other amounts payable with respect to an Award may be deferred, either automatically or at the Participant’s or Committee’s election; (7) accelerate the vesting, delivery or exercisability of, or payment for or lapse of restrictions on, or waive any condition in respect of, Awards; (8) construe, administer, and interpret the Plan and Award Agreements and correct defects, supply omissions, and reconcile inconsistencies therein; (9) suspend the right to exercise Awards during any period that the Committee deems appropriate to comply with applicable securities laws, and thereafter extend the exercise period of an Award by an equivalent period of time or such shorter period required by, or necessary to comply with, applicable law; and (10) make all other decisions and determinations as the Committee may deem necessary or advisable for the administration of the Plan. Any action of the Committee shall be final, conclusive, and binding on all Persons, including, without limitation, the Company, its shareholders and Affiliates, Eligible Persons, Participants, and beneficiaries of Participants. Notwithstanding anything in the Plan to the contrary, the Committee shall have the ability to accelerate the vesting of any outstanding Award at any time and for any reason, including but not limited to upon a Corporate Event, subject to Section 10(b), or in the event of a Participant’s Termination by the Service Recipient other than for Cause, or due to the Participant’s death, Disability, or retirement (as such term may be defined in an applicable Award Agreement or Participant Agreement or, if no such definition exists, in accordance with the Company’s then-current employment policies and guidelines). For the avoidance of doubt, the Board shall have the authority to take all actions under the Plan that the Committee is permitted to take.
2.Manner of Exercise of Committee Authority. At any time that a member of the Committee is not a Qualified Member, any action of the Committee relating to an Award granted or to be granted to a Participant who is
then subject to Section 16 of the Exchange Act in respect of the Company must be taken by the remaining members of the Committee or a subcommittee, designated by the Committee or the Board, composed solely of two or more Qualified Members (a “Qualifying Committee”). Any action authorized by such a Qualifying Committee shall be deemed the action of the Committee for purposes of the Plan. The express grant of any specific power to a Qualifying Committee, and the taking of any action by such a Qualifying Committee, shall not be construed as limiting any power or authority of the Committee.
3.Delegation. To the extent permitted by applicable law, the Committee may delegate to officers or employees of the Company or any of its Affiliates, or committees thereof, the authority, subject to such terms as the Committee shall determine, to perform such functions under the Plan, including, but not limited to, administrative functions, as the Committee may determine appropriate. The Committee may appoint agents to assist it in administering the Plan. Any actions taken by an officer or employee delegated authority pursuant to this Section 3(c) within the scope of such delegation shall, for all purposes under the Plan, be deemed to be an action taken by the Committee. Notwithstanding the foregoing or any other provision of the Plan to the contrary, any Award granted under the Plan to any Eligible Person who is not an employee of the Company or any of its Affiliates (including any non-employee director of the Company or any Affiliate) or to any Eligible Person who is subject to Section 16 of the Exchange Act must be expressly approved by the Committee or Qualifying Committee in accordance with Section 3(b) above.
4. Sections 409A and 457A. The Committee shall take into account compliance with Sections 409A and 457A of the Code in connection with any grant of an Award under the Plan, to the extent applicable. The Plan and Awards are intended to comply with or be exempt from the applicable requirements of Section 409A of the Code and shall be limited, construed, and interpreted in accordance with such intent. To the extent that any Award is subject to Section 409A of the Code, it shall be paid in a manner that will comply with Section 409A of the Code, including proposed, temporary, or final regulations or any other guidance issued by the Secretary of the Treasury and the Internal Revenue Service with respect thereto. Notwithstanding anything herein to the contrary, any provision in the Plan that is inconsistent with Section 409A of the Code shall be deemed to be amended to comply with or be exempt from Section 409A of the Code and, to the extent such provision cannot be amended to comply therewith or be exempt therefrom, such provision shall be null and void. Notwithstanding any contrary provision in the Plan or Award Agreement, any payment(s) of “nonqualified deferred compensation” (within the meaning of Section 409A of the Code) that are otherwise required to be made under the Plan to a “specified employee” (as defined under Section 409A of the Code) as a result of such employee’s separation from service (other than a payment that is not subject to Section 409A of the Code) shall be delayed for the first six (6) months following such separation from service (or, if earlier, until the date of death of the specified employee) and shall instead be paid (in a manner set forth in the Award Agreement) upon expiration of such delay period. While the Awards granted hereunder are intended to be structured in a manner to avoid the imposition of any penalty taxes under Sections 409A and 457A of the Code, in no event whatsoever shall the Company or any of its Affiliates be liable for any additional tax, interest, or penalties that may be imposed on a Participant as a result of Section 409A or Section 457A of the Code or any damages for failing to comply with Section 409A or Section 457A of the Code or any similar state or local laws (other than for withholding obligations or other obligations applicable to employers, if any, under Section 409A or Section 457A of the Code).
4. Shares Available Under the Plan; Other Limitations.
(1)Number of Shares Available for Delivery. Subject to adjustment as provided in Section 10 hereof, the maximum aggregate number of Shares that may be reserved for issuance and delivered in the aggregate pursuant to Awards under the Plan shall equal: (i) 2,000,000 plus (ii) any Shares that remain or otherwise become available under the terms of the Prior Plan (including as a result of forfeiture, expiration, termination, cancelation or settlement other than by delivery of Shares of awards outstanding under the Prior Plan) (the “Share Pool”). Shares delivered under the Plan shall consist of authorized and unissued shares, shares held in the treasury of the Company, or previously issued Shares reacquired by the Company on the open market or by private purchase, or a combination of the foregoing. Notwithstanding the foregoing, except as may be required by reason of Section 422 of the Code, the Share Pool shall not be reduced by shares issued pursuant to Awards issued or assumed in connection with a merger or acquisition as contemplated by, as applicable, NYSE Listed Company Manual Section 303A.08, NASDAQ Listing Rule 5635(c) and IM-5635-1, AMEX Company Guide Section 711, or other applicable stock exchange rules, and their respective successor rules and listing exchange promulgations (each such Award, a “Substitute Award”).
(2)Share Counting Rules. The Share Pool shall be reduced, on the date of grant, by the relevant number of Shares for each Award granted under the Plan that is valued by reference to a Share. If, after the Effective Date, any Award granted under the Plan or the Prior Plan (A) is forfeited or otherwise expires, terminates or is canceled without the delivery of all Shares subject thereto or (B) is settled other than wholly by the delivery of Shares (including cash settlement), then, in the case of clauses (A) and (B), the number of Shares subject to such Award that were not issued with respect to such Award shall again become available to be delivered pursuant to
Awards under the Plan. The following Shares may not again be made available for issuance as Awards and may not be added back to the Share Pool: (i) Shares not issued or delivered as a result of the net settlement of an outstanding Stock Appreciation Right or Option, (ii) Shares withheld or used to satisfy the grant price, exercise price or tax withholding obligation pursuant to any Award, including Shares used to pay the exercise price related to an outstanding Option or Stock Appreciation Right or (iii) Shares repurchased on the open market with the proceeds of an Option exercise price. For the avoidance of doubt, neither any Award (or portion thereof) that is settled in cash, nor any dividend payment (as defined in Section 4(h) hereof) made in conjunction with any Award that is settled in cash, shall count against the Share Pool.
(3)Incentive Stock Options. No more than 1,500,000 Shares hereunder may be issued or transferred upon exercise or settlement of Incentive Stock Options.
(4)Shares Available Under Acquired Plans. To the extent permitted by NYSE Listed Company Manual Section 303A.08, NASDAQ Listing Rule 5635(c), or other applicable stock exchange rules, subject to applicable law, in the event that a company acquired by the Company, or with which the Company combines, has shares available under a pre-existing plan approved by shareholders and not adopted in contemplation of such acquisition or combination, the shares available for grant pursuant to the terms of such pre-existing plan (as adjusted, to the extent appropriate, using the exchange ratio or other adjustment or valuation ratio of formula used in such acquisition or combination to determine the consideration payable to the holders of common shares of the entities party to such acquisition or combination) may be used for Awards under the Plan and shall not be counted against the Share Pool; provided, that, Awards using such available shares shall not be made after the date awards could have been made under the terms of such pre-existing plan, absent the acquisition or combination, and shall only be made to individuals who were not employed by the Company or any subsidiary of the Company immediately prior to such acquisition or combination.
(5)Limitation on Awards to Non-Employee Directors. Notwithstanding anything herein to the contrary, the maximum value of any Awards granted to a non-employee director of the Company in any one calendar year, taken together with any cash fees paid to such non-employee director during such calendar year in respect of the non-employee director’s services as a member of the Board during such year, shall not exceed $750,000 (calculating the value of any such Awards based on the grant date fair value of such Awards for financial reporting purposes); provided, that, the independent members of the Board or the Committee may make exceptions to this limit, except that the non-employee director receiving such additional compensation may not participate in the decision to award such compensation.
5. Options.
(1)General. Certain Options granted under the Plan may be intended to be Incentive Stock Options; however, no Incentive Stock Options may be granted hereunder following the tenth anniversary of the earlier of (i) the date the Plan is adopted by the Board, and (ii) the date the shareholders of the Company approve the Plan. Options may be granted to Eligible Persons in such form and having such terms and conditions as the Committee shall deem appropriate; provided, however, that Incentive Stock Options may be granted only to Eligible Persons who are employees of the Company or an Affiliate (as such definition is limited pursuant to Section 2(o) hereof) of the Company. The provisions of separate Options shall be set forth in separate Option Agreements, which agreements need not be identical. No dividends or dividend equivalents shall be paid on Options.
(2)Term. The term of each Option shall be set by the Committee at the time of grant; provided, however, that no Option granted hereunder shall be exercisable after, and each Option shall expire, ten years from the date it was granted.
(3)Exercise Price. The exercise price per Share for each Option shall be set by the Committee at the time of grant and shall not be less than the Fair Market Value on the date of grant, subject to Section 5(g) hereof in the case of any Incentive Stock Option. Notwithstanding the foregoing, in the case of an Option that is a Substitute Award, the exercise price per Share for such Option may be less than the Fair Market Value on the date of grant; provided, that, such exercise price is determined in a manner consistent with the provisions of Section 409A of the Code and, if applicable, Section 424(a) of the Code.
(4)Payment for Shares. Payment for Shares acquired pursuant to an Option granted hereunder shall be made in full upon exercise of the Option in a manner approved by the Committee, which may include any of the following payment methods: (1) in immediately available funds in U.S. dollars, or by certified or bank cashier’s check; (2) by delivery of Shares having a value equal to the exercise price; (3) by a broker-assisted cashless exercise in accordance with procedures approved by the Committee, whereby payment of the Option exercise price or tax withholding obligations may be satisfied, in whole or in part, with Shares subject to the Option by delivery of an irrevocable direction to a securities broker (on a form prescribed by the Committee) to sell Shares and to deliver all or part of the sale proceeds to the Company in payment of the aggregate exercise price and, if applicable, the amount
necessary to satisfy the Company’s withholding obligations; or (4) by any other means approved by the Committee (including, by delivery of a notice of “net exercise” to the Company, pursuant to which the Participant shall receive (i) the number of Shares underlying the Option so exercised, reduced by (ii) the number of Shares equal to (A) the aggregate exercise price of the Option divided by (B) the Fair Market Value on the date of exercise). Notwithstanding anything herein to the contrary, if the Committee determines that any form of payment available hereunder would be in violation of Section 402 of the Sarbanes-Oxley Act of 2002, such form of payment shall not be available.
(5)Vesting. Options shall vest and become exercisable in such manner, on such date or dates, or upon the achievement of performance or other conditions, in each case, as may be determined by the Committee and set forth in an Option Agreement. Unless otherwise specifically determined by the Committee, the vesting of an Option shall occur only while the Participant is employed by or rendering services to the Service Recipient, and all vesting shall cease upon a Participant’s Termination for any or no reason. To the extent permitted by applicable law and unless otherwise determined by the Committee, vesting shall be suspended during the period of any approved unpaid leave of absence by a Participant following which the Participant has a right to reinstatement and shall resume upon such Participant’s return to active employment. If an Option is exercisable in installments, such installments or portions thereof that become exercisable shall remain exercisable until the Option expires, is canceled, or otherwise terminates.
(6)Termination of Employment or Service. Except as provided by the Committee in an Option Agreement, Participant Agreement, or otherwise:
(1) In the event of a Participant’s Termination prior to the applicable Expiration Date for any reason other than (i) by the Service Recipient for Cause, or (ii) by reason of the Participant’s death or Disability, (A) all vesting with respect to such Participant’s Options outstanding shall cease; (B) all of such Participant’s unvested Options outstanding shall terminate and be forfeited for no consideration as of the date of such Termination; and (C) all of such Participant’s vested Options outstanding shall terminate and be forfeited for no consideration on the earlier of (x) the applicable Expiration Date, and (y) the date that is 90 days after the date of such Termination.
(2) In the event of a Participant’s Termination prior to the applicable Expiration Date by reason of such Participant’s death or Disability, (i) all vesting with respect to such Participant’s Options outstanding shall cease; (ii) all of such Participant’s unvested Options outstanding shall terminate and be forfeited for no consideration as of the date of such Termination; and (iii) all of such Participant’s vested Options outstanding shall terminate and be forfeited for no consideration on the earlier of (x) the applicable Expiration Date, and (y) the date that is 12 months after the date of such Termination.
(3) In the event of a Participant’s Termination prior to the applicable Expiration Date by the Service Recipient for Cause, all of such Participant’s Options outstanding (whether or not vested) shall immediately terminate and be forfeited for no consideration as of the date of such Termination.
(g) Special Provisions Applicable to Incentive Stock Options.
(1) No Incentive Stock Option may be granted to any Eligible Person who, at the time the Option is granted, owns directly, or indirectly within the meaning of Section 424(d) of the Code, Stock possessing more than ten percent (10%) of the total combined voting power of all classes of shares of the Company or of any parent or subsidiary thereof, unless such Incentive Stock Option (i) has an exercise price of at least 110% of the Fair Market Value on the date of the grant of such Option, and (ii) cannot be exercised more than five years after the date it is granted.
(2) To the extent that the aggregate Fair Market Value (determined as of the date of grant) of Shares for which Incentive Stock Options are exercisable for the first time by any Participant during any calendar year (under all plans of the Company and its Affiliates) exceeds $100,000, such excess Incentive Stock Options shall be treated as Nonqualified Stock Options.
(3) Each Participant who receives an Incentive Stock Option must agree to notify the Company in writing immediately after the Participant makes a Disqualifying Disposition of any Shares acquired pursuant to the exercise of an Incentive Stock Option.
6. Restricted Stock.
(a) General. Restricted Stock may be granted to Eligible Persons in such form and having such terms and conditions as the Committee shall deem appropriate. The provisions of separate Awards of Restricted Stock shall be set forth in separate Restricted Stock Agreements, which Restricted Stock Agreements need not be identical. Subject to the restrictions set forth in Section 6(b) hereof, and except as otherwise set forth in the applicable Restricted Stock Agreement, the Participant shall generally have the rights and privileges of a shareholders as to such Restricted Stock, including the right to vote such Restricted Stock. Cash dividends and stock dividends, if any, with respect to the Restricted Stock shall be withheld by the Company for the Participant’s account, and shall be subject to forfeiture to the same degree as the shares of Restricted Stock to which such dividends relate. Except as otherwise determined by the Committee, no interest will accrue or be paid on the amount of any cash dividends withheld.
(b) Vesting and Restrictions on Transfer. Restricted Stock shall vest in such manner, on such date or dates, or upon the achievement of performance or other conditions, in each case, as may be determined by the Committee and set forth in a Restricted Stock Agreement. Unless otherwise specifically determined by the Committee, the vesting of an Award of Restricted Stock shall occur only while the Participant is employed by or rendering services to the Service Recipient, and all vesting shall cease upon a Participant’s Termination for any or no reason. To the extent permitted by applicable law and unless otherwise determined by the Committee, vesting shall be suspended during the period of any approved unpaid leave of absence by a Participant following which the Participant has a right to reinstatement and shall resume upon such Participant’s return to active employment. In addition to any other restrictions set forth in a Participant’s Restricted Stock Agreement, the Participant shall not be permitted to sell, transfer, pledge, or otherwise encumber the Restricted Stock prior to the time the Restricted Stock has vested pursuant to the terms of the Restricted Stock Agreement.
(c) Termination of Employment or Service. Except as provided by the Committee in a Restricted Stock Agreement, Participant Agreement, or otherwise, in the event of a Participant’s Termination for any or no reason prior to the time that such Participant’s Restricted Stock has vested, (1) all vesting with respect to such Participant’s Restricted Stock outstanding shall cease; and (2) as soon as practicable following such Termination, the Company shall repurchase from the Participant, and the Participant shall sell, all of such Participant’s unvested shares of Restricted Stock at a purchase price equal to the lesser of (A) the original purchase price paid for the Restricted Stock (as adjusted for any subsequent changes in the outstanding Shares or in the capital structure of the Company), less any dividends or other distributions or bonus received (or to be received) by the Participant (or any transferee) in respect of such Restricted Stock prior to the date of repurchase, and (B) the Fair Market Value of the Shares on the date of such repurchase; provided that, if the original purchase price paid for the Restricted Stock is equal to zero dollars ($0), such unvested shares of Restricted Stock shall be forfeited to the Company by the Participant for no consideration as of the date of such Termination.
7. Restricted Stock Units.
(a) General. Restricted Stock Units may be granted to Eligible Persons in such form and having such terms and conditions as the Committee shall deem appropriate. The provisions of separate Restricted Stock Units shall be set forth in separate RSU Agreements, which RSU Agreements need not be identical.
(b) Vesting. Restricted Stock Units shall vest in such manner, on such date or dates, or upon the achievement of performance or other conditions, in each case, as may be determined by the Committee and set forth in an RSU Agreement. Unless otherwise specifically determined by the Committee, the vesting of a Restricted Stock Unit shall occur only while the Participant is employed by or rendering services to the Service Recipient, and all vesting shall cease upon a Participant’s Termination for any or no reason. To the extent permitted by applicable law and unless otherwise determined by the Committee, vesting shall be suspended during the period of any approved unpaid leave of absence by a Participant following which the Participant has a right to reinstatement and shall resume upon such Participant’s return to active employment.
(c) Settlement. Restricted Stock Units shall be settled in Shares, cash, or property, or a combination thereof, as determined by the Committee, in its sole discretion, on the date or dates determined by the Committee and set forth in an RSU Agreement. A Participant shall not be entitled to dividends, if any, or dividend equivalents with respect to Restricted Stock Units prior to settlement.
(d) Termination of Employment or Service. Except as provided by the Committee in an RSU Agreement, Participant Agreement, or otherwise, in the event of a Participant’s Termination for any or no reason prior to the time that such Participant’s Restricted Stock Units have been settled, (1) all vesting with respect to such Participant’s Restricted Stock Units outstanding shall cease; (2) all of such Participant’s unvested Restricted Stock Units outstanding shall be forfeited for no consideration as of the date of such Termination; and (3) any Shares remaining undelivered with respect to vested Restricted Stock Units then held by such Participant shall be delivered on the delivery date or dates specified in the RSU Agreement.
8. Stock Appreciation Rights.
(a) General. Stock Appreciation Rights may be granted to Eligible Persons in such form and having such terms and conditions as the Committee shall deem appropriate. The provisions of separate Stock Appreciation Rights shall be set forth in separate SAR Agreements, which SAR Agreements need not be identical. No dividends or dividend equivalents shall be paid on Stock Appreciation Rights.
(b) Term. The term of each Stock Appreciation Right shall be set by the Committee at the time of grant; provided, however, that no Stock Appreciation Right granted hereunder shall be exercisable after, and each Stock Appreciation Right shall expire, ten years from the date it was granted.
(c) Base Price. The base price per Share for each Stock Appreciation Right shall be set by the Committee at the time of grant and shall not be less than the Fair Market Value on the date of grant. Notwithstanding the foregoing, in the case of a Stock Appreciation Right that is a Substitute Award, the base price per Share for such Stock Appreciation Right may be less than the Fair Market Value on the date of grant; provided, that, such base price is determined in a manner consistent with the provisions of Section 409A of the Code.
(d) Vesting. Stock Appreciation Rights shall vest and become exercisable in such manner, on such date or dates, or upon the achievement of performance or other conditions, in each case, as may be determined by the Committee and set forth in a SAR Agreement. Unless otherwise specifically determined by the Committee, the vesting of a Stock Appreciation Right shall occur only while the Participant is employed by or rendering services to the Service Recipient, and all vesting shall cease upon a Participant’s Termination for any or no reason. To the extent permitted by applicable law and unless otherwise determined by the Committee, vesting shall be suspended during the period of any approved unpaid leave of absence by a Participant following which the Participant has a right to reinstatement and shall resume upon such Participant’s return to active employment. If a Stock Appreciation Right is exercisable in installments, such installments, or portions thereof that become exercisable shall remain exercisable until the Stock Appreciation Right expires, is canceled, or otherwise terminates.
(e) Payment upon Exercise. Payment upon exercise of a Stock Appreciation Right may be made in cash, Shares, or property, as specified in the SAR Agreement or determined by the Committee, in each case, having a value in respect of each Share underlying the portion of the Stock Appreciation Right so exercised, equal to the difference between the base price of such Stock Appreciation Right and the Fair Market Value of one share of Stock on the exercise date. For purposes of clarity, each Share to be issued in settlement of a Stock Appreciation Right is deemed to have a value equal to the Fair Market Value of one Share on the exercise date. In no event shall fractional shares be issuable upon the exercise of a Stock Appreciation Right, and in the event that fractional shares would otherwise be issuable, the number of shares issuable will be rounded down to the next lower whole number of shares, and the Participant will be entitled to receive a cash payment equal to the value of such fractional share.
(f) Termination of Employment or Service. Except as provided by the Committee in a SAR Agreement, Participant Agreement, or otherwise:
(1) In the event of a Participant’s Termination prior to the applicable Expiration Date for any reason other than (i) by the Service Recipient for Cause, or (ii) by reason of the Participant’s death or Disability, (A) all vesting with respect to such Participant’s Stock Appreciation Rights outstanding shall cease; (B) all of such Participant’s unvested Stock Appreciation Rights outstanding shall terminate and be forfeited for no consideration as of the date of such Termination; and (C) all of such Participant’s vested Stock Appreciation Rights outstanding shall terminate and be forfeited for no consideration on the earlier of (x) the applicable Expiration Date, and (y) the date that is 90 days after the date of such Termination.
(2) In the event of a Participant’s Termination prior to the applicable Expiration Date by reason of such Participant’s death or Disability, (i) all vesting with respect to such Participant’s Stock Appreciation Rights outstanding shall cease; (ii) all of such Participant’s unvested Stock Appreciation Rights outstanding shall terminate and be forfeited for no consideration as of the date of such Termination; and (iii) all of such Participant’s vested Stock Appreciation Rights outstanding shall terminate and be forfeited for no consideration on the earlier of (x) the applicable Expiration Date, and (y) the date that is 12 months after the date of such Termination. In the event of a Participant’s death, such Participant’s Stock Appreciation Rights shall remain exercisable by the Person or Persons to whom such Participant’s rights under the Stock Appreciation Rights pass by will or by the applicable laws of descent and distribution until the applicable Expiration Date, but only to the extent that the Stock Appreciation Rights were vested at the time of such Termination.
(3) In the event of a Participant’s Termination prior to the applicable Expiration Date by the Service Recipient for Cause, all of such Participant’s Stock Appreciation Rights outstanding (whether or not vested) shall immediately terminate and be forfeited for no consideration as of the date of such Termination.
9. Other Stock-Based Awards.
The Committee is authorized, subject to limitations under applicable law, to grant to Participants such other Awards that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based upon or related to Shares, as deemed by the Committee to be consistent with the purposes of the Plan. The Committee may also grant Shares as a bonus (whether or not subject to any vesting requirements or other restrictions on transfer), and may grant other Awards in lieu of obligations of the Company or an Affiliate to pay cash or deliver other property under the Plan or under other plans or compensatory arrangements, subject to such terms as shall be determined by the Committee. The terms and conditions applicable to such Awards shall be determined by the Committee and evidenced by Award Agreements, which agreements need not be identical.
10. Adjustment for Recapitalization, Merger, etc.
(a) Capitalization Adjustments. The aggregate number and class of Shares or other securities that may be delivered in connection with Awards (as set forth in Section 4 hereof), the numerical share limits in Section 4(a) hereof, the number and class of Shares or other securities covered by each outstanding Award, and the price per Share underlying each such Award shall be equitably and proportionally adjusted or substituted, as determined by the Committee, in its sole discretion, as to the number, price, or kind of Share, other securities or other consideration subject to such Awards, (1) in the event of changes in the outstanding Shares or in the capital structure of the Company by reason of share dividends, extraordinary cash dividends, share splits, reverse share splits, recapitalizations, reorganizations, mergers, amalgamations, consolidations, combinations, exchanges, or other relevant changes in capitalization occurring after the date of grant of any such Award (including any Corporate Event); (2) in connection with any extraordinary dividend declared and paid in respect of Shares, whether payable in the form of cash, shares, or any other form of consideration; or (3) in the event of any change in applicable laws or circumstances that results in or could result in, in either case, as determined by the Committee in its sole discretion, any substantial dilution or enlargement of the rights intended to be granted to, or available for, Participants in the Plan. In lieu of or in addition to any adjustment pursuant to this Section 10, if deemed appropriate, the Committee may provide that an adjustment take the form of a cash payment to the holder of an outstanding Award with respect to all or part of an outstanding Award, which payment shall be subject to such terms and conditions (including timing of payment(s), vesting, and forfeiture conditions) as the Committee may determine in its sole discretion. The Committee will make such adjustments, substitutions, or payment, and its determination will be final, binding, and conclusive. The Committee need not take the same action or actions with respect to all Awards or portions thereof or with respect to all Participants. The Committee may take different actions with respect to the vested and unvested portions of an Award.
(b) Corporate Events. Notwithstanding the foregoing, except as provided by the Committee in an Award Agreement, Participant Agreement, or otherwise, in connection with (i) a merger, amalgamation, or consolidation involving the Company in which the Company is not the surviving corporation; (ii) a merger, amalgamation, or consolidation involving the Company in which the Company is the surviving corporation but the holders of Shares receive securities of another corporation or other property or cash; (iii) a Change in Control; or (iv) the reorganization, dissolution, or liquidation of the Company (each, a “Corporate Event”), the Committee may provide for any one or more of the following:
(1) The assumption or substitution of any or all Awards in connection with such Corporate Event, in which case the Awards shall be subject to the adjustment set forth in Section 10(a) hereof, and to the extent that such Awards vest subject to the achievement of performance criteria, such performance criteria shall be deemed earned at target level (or if no target is specified, the maximum level) and will be converted into solely service based vesting awards that will vest during the performance period, if any, during which the original performance criteria would have been measured;
(2) The acceleration of vesting of any or all Awards not assumed or substituted in connection with such Corporate Event, subject to the consummation of such Corporate Event; provided that unless otherwise set forth in an Award Agreement, any Awards that vest subject to the achievement of performance criteria will be deemed earned at target level (or if no target is specified, the maximum level), provided, further, that a Participant has not experienced a Termination prior to such Corporate Event;
(3) The cancellation of any or all Awards not assumed or substituted in connection with such Corporate Event (whether vested or unvested) as of the consummation of such Corporate Event, together with the payment to the Participants holding vested Awards (including any Awards that would vest upon the Corporate Event but for such cancellation) so canceled of an amount in respect of cancellation equal to an amount based upon the per-share consideration being paid for the Shares in connection with such Corporate Event, less, in the case of Options, Stock Appreciation Rights, and other Awards subject to exercise, the applicable exercise or base price; provided, however, that holders of Options, Stock Appreciation Rights, and other Awards subject to exercise shall be entitled to consideration in respect of cancellation of such Awards only if the per-share consideration less the applicable exercise or base price is greater than zero dollars ($0), and to the extent that the per-share consideration is less than or equal to the applicable exercise or base price, such Awards shall be canceled for no consideration;
(4) The cancellation of any or all Options, Stock Appreciation Rights, and other Awards subject to exercise not assumed or substituted in connection with such Corporate Event (whether vested or unvested) as of the consummation of such Corporate Event; provided, that, all Options, Stock Appreciation Rights, and other Awards to be so canceled pursuant to this paragraph (4) shall first become exercisable for a period of at least ten days prior to such Corporate Event, with any exercise during such period of any unvested Options, Stock Appreciation Rights, or other Awards to be (A) contingent upon and subject to the occurrence of the Corporate Event, and (B) effectuated by such means as are approved by the Committee; and
(5) The replacement of any or all Awards (other than Awards that are intended to qualify as “stock rights” that do not provide for a “deferral of compensation” within the meaning of Section 409A of the Code) with a cash incentive program that preserves the value of the Awards so replaced (determined as of the consummation of the Corporate Event), with subsequent payment of cash incentives subject to the same vesting conditions as applicable to the Awards so replaced and payment to be made within 30 days of the applicable vesting date.
Payments to holders pursuant to paragraph (3) above shall be made in cash or, in the sole discretion of the Committee, and to the extent applicable, in the form of such other consideration necessary for a Participant to receive property, cash, or securities (or a combination thereof) as such Participant would have been entitled to receive upon the occurrence of the transaction if the Participant had been, immediately prior to such transaction, the holder of the number of Shares covered by the Award at such time (less any applicable exercise or base price). In addition, in connection with any Corporate Event, prior to any payment or adjustment contemplated under this Section 10(b), the Committee may require a Participant to (A) represent and warrant as to the unencumbered title to his or her Awards; (B) bear such Participant’s pro-rata share of any post-closing indemnity obligations, and be subject to the same post-closing purchase price adjustments, escrow terms, offset rights, holdback terms, and similar conditions as the other holders of Shares; and (C) deliver customary transfer documentation as reasonably determined by the Committee. The Committee need not take the same action or actions with respect to all Awards or portions thereof or with respect to all Participants. The Committee may take different actions with respect to the vested and unvested portions of an Award.
(c) Fractional Shares. Any adjustment provided under this Section 10 may, in the Committee’s discretion, provide for the elimination of any fractional share that might otherwise become subject to an Award. No cash settlements shall be made with respect to fractional shares so eliminated.
11. Use of Proceeds.
The proceeds received from the sale of Shares pursuant to the Plan shall be used for general corporate purposes.
12. Rights and Privileges as a Shareholder.
Except as otherwise specifically provided in the Plan, no Person shall be entitled to the rights and privileges of Share ownership in respect of Shares that are subject to Awards hereunder until such shares have been issued to that Person.
13. Transferability of Awards.
Awards may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the applicable laws of descent and distribution, and to the extent subject to exercise, Awards may not be exercised during the lifetime of the grantee other than by the grantee. Notwithstanding the foregoing, except with
respect to Incentive Stock Options, Awards and a Participant’s rights under the Plan shall be transferable for no value to the extent provided in an Award Agreement or otherwise determined at any time by the Committee.
14. Employment or Service Rights.
No individual shall have any claim or right to be granted an Award under the Plan or, having been selected for the grant of an Award, to be selected for the grant of any other Award. Neither the Plan nor any action taken hereunder shall be construed as giving any Participant or other individual any right to be retained in the employ or service of the Company or an Affiliate of the Company.
15. Compliance with Laws.
The obligation of the Company to deliver Shares upon issuance, vesting, exercise, or settlement of any Award shall be subject to all applicable laws, rules, and regulations, and to such approvals by governmental agencies as may be required. Notwithstanding any terms or conditions of any Award to the contrary, the Company shall be under no obligation to offer to sell or to sell, and shall be prohibited from offering to sell or selling, any Shares pursuant to an Award, unless such shares have been properly registered for sale with the U.S. Securities and Exchange Commission pursuant to the Securities Act (or with a similar non-U.S. regulatory agency pursuant to a similar law or regulation), or unless the Company has received an opinion of counsel, satisfactory to the Company, that such shares may be offered or sold without such registration pursuant to an available exemption therefrom and the terms and conditions of such exemption have been fully complied with. The Company shall be under no obligation to register for sale or resale under the Securities Act any of the Shares to be offered or sold under the Plan or any Shares to be issued upon exercise or settlement of Awards. If the Shares offered for sale or sold under the Plan are offered or sold pursuant to an exemption from registration under the Securities Act, the Company may restrict the transfer of such shares and may legend the Share certificates representing such shares in such manner as it deems advisable to ensure the availability of any such exemption.
16. Withholding Obligations.
As a condition to the issuance, vesting, exercise, or settlement of any Award (or upon the making of an election under Section 83(b) of the Code), the Committee may require that a Participant satisfy, through deduction or withholding from any payment of any kind otherwise due to the Participant, or through such other arrangements as are satisfactory to the Committee, the amount of all federal, state, local and foreign income and other taxes of any kind required or permitted to be withheld in connection with such issuance, vesting, exercise, or settlement (or election). The Committee, in its discretion, may (but is not obligated to) permit or require Shares (which are not subject to any pledge or other security interest) to be used to satisfy all or any portion of applicable tax withholding requirements with respect to any Award, and such shares shall be valued at their Fair Market Value as of the issuance, vesting, exercise, or settlement date of the Award, as applicable. The Shares so delivered or withheld must have an aggregate Fair Market Value equal to the tax obligation (or portion thereof).
17. Amendment of the Plan or Awards.
(1)Amendment of Plan. The Board or the Committee may amend the Plan at any time and from time to time.
(2)Amendment of Awards. The Board or the Committee may amend the terms of any one or more Awards at any time and from time to time.
(3)Shareholder Approval; No Material Impairment. Notwithstanding anything herein to the contrary, no amendment to the Plan or any Award shall be effective without shareholder approval to the extent that such approval is required pursuant to applicable law or the applicable rules of each national securities exchange on which the Shares are listed. Additionally, no amendment to the Plan or any Award shall materially impair a Participant’s rights under any Award unless the Participant consents in writing (it being understood that no action taken by the Board or the Committee that is expressly permitted under the Plan, including, without limitation, any actions described in Section 10 hereof, shall constitute an amendment to the Plan or an Award for such purpose). Notwithstanding the foregoing, subject to the limitations of applicable law, if any, and without an affected Participant’s consent, the Board or the Committee may amend the terms of the Plan or any one or more Awards from time to time as necessary to bring such Awards into compliance with applicable law, including, without limitation, Section 409A of the Code.
(4)No Repricing of Awards Without Shareholder Approval. Notwithstanding Sections 17(a) or 17(b) above, or any other provision of the Plan, reducing the exercise price of Options or Stock Appreciation Rights issued and outstanding under the Plan, including through amendment, cancellation in exchange for the grant of a substitute Award, repurchase for cash or other consideration (in each case that has the effect of
reducing the exercise price), or any other action that would be treated as a “repricing” of such Options or such Stock Appreciation Rights under GAAP, will require approval of the Company’s shareholders, unless the cancellation, exchange, repurchase or other action occurs in connection with an event set forth in Section 10 hereof.
18. Termination or Suspension of the Plan.
The Board or the Committee may suspend or terminate the Plan at any time. Unless sooner terminated, the Plan shall terminate on the day before the tenth anniversary of the date the shareholders of the Company approve the Plan. No Awards may be granted under the Plan while the Plan is suspended or after it is terminated; provided, however, that following any suspension or termination of the Plan, the Plan shall remain in effect for the purpose of governing all Awards then outstanding hereunder until such time as all Awards under the Plan have been terminated, forfeited, or otherwise canceled, or earned, exercised, settled, or otherwise paid out, in accordance with their terms.
19. Effective Date of the Plan.
The Plan is effective as of the Effective Date.
20. Miscellaneous.
(a) Treatment of Dividends and Dividend Equivalents on Unvested Awards. Notwithstanding any other provision of the Plan to the contrary, with respect to any Award that provides for or includes a right to dividends or dividend equivalents, if dividends are declared during the period that an equity Award is outstanding, such dividends (or dividend equivalents) shall either (i) not be paid or credited with respect to such Award, or (ii) be accumulated but remain subject to vesting requirement(s) to the same extent as the applicable Award and shall only be paid at the time or times such vesting requirement(s) are satisfied. Except as otherwise determined by the Committee, no interest will accrue or be paid on the amount of any cash dividends withheld. No dividends or dividend equivalents shall be paid on Options or Stock Appreciation Rights.
(2)Certificates. Shares acquired pursuant to Awards granted under the Plan may be evidenced in such a manner as the Committee shall determine. If certificates representing Shares are registered in the name of the Participant, the Committee may require that (1) such certificates bear an appropriate legend referring to the terms, conditions, and restrictions applicable to such Shares; (2) the Company retain physical possession of the certificates; and (3) the Participant deliver a stock power to the Company, endorsed in blank, relating to the Shares. Notwithstanding the foregoing, the Committee may determine, in its sole discretion, that the Shares shall be held in book-entry form rather than delivered to the Participant pending the release of any applicable restrictions.
(c) Other Benefits. No Award granted or paid out under the Plan shall be deemed compensation for purposes of computing benefits under any retirement plan of the Company or its Affiliates nor affect any benefits under any other benefit plan now or subsequently in effect under which the availability or amount of benefits is related to the level of compensation.
(d) Corporate Action Constituting Grant of Awards. Corporate action constituting a grant by the Company of an Award to any Participant will be deemed completed as of the date of such corporate action, unless otherwise determined by the Committee, regardless of when the instrument, certificate, or letter evidencing the Award is communicated to, or actually received or accepted by, the Participant. In the event that the corporate records (e.g., Committee consents, resolutions, or minutes) documenting the corporate action constituting the grant contain terms (e.g., exercise price, vesting schedule, or number of Shares) that are inconsistent with those in the Award Agreement as a result of a clerical error in connection with the preparation of the Award Agreement, the corporate records will control, and the Participant will have no legally binding right to the incorrect term in the Award Agreement.
(e) Clawback/Recoupment Policy. Notwithstanding anything contained herein to the contrary, all Awards granted under the Plan shall be and remain subject to any incentive compensation clawback or recoupment policy currently in effect or as may be adopted by the Board (or a committee or subcommittee of the Board) and, in each case, as may be amended from time to time. No such policy adoption or amendment shall in any event require the prior consent of any Participant. No recovery of compensation under such a clawback policy will be an event giving rise to a right to resign for “good reason” or “constructive termination” (or similar term) under any agreement with the Company or any of its Affiliates. In the event that an Award is subject to more than one such policy, the policy with the most restrictive clawback or recoupment provisions shall govern such Award, subject to applicable law.
(f) Data Privacy. As a condition of receipt of any Award, each Participant explicitly and unambiguously consents to the collection, use, and transfer, in electronic or other form, of personal data as described in this Section 20(f) by and among, as applicable, the Company and its Affiliates, for the exclusive purpose of
implementing, administering, and managing the Plan and Awards and the Participant’s participation in the Plan. In furtherance of such implementation, administration, and management, the Company and its Affiliates may hold certain personal information about a Participant, including, but not limited to, the Participant’s name, home address, telephone number, date of birth, social security or insurance number or other identification number, salary, nationality, job title(s), information regarding any securities of the Company or any of its Affiliates, and details of all Awards (the “Data”). In addition to transferring the Data amongst themselves as necessary for the purpose of implementation, administration, and management of the Plan and Awards and the Participant’s participation in the Plan, the Company and its Affiliates may each transfer the Data to any third parties assisting the Company in the implementation, administration, and management of the Plan and Awards and the Participant’s participation in the Plan. Recipients of the Data may be located in the Participant’s country or elsewhere, and the Participant’s country and any given recipient’s country may have different data privacy laws and protections. By accepting an Award, each Participant authorizes such recipients to receive, possess, use, retain, and transfer the Data, in electronic or other form, for the purposes of assisting the Company in the implementation, administration, and management of the Plan and Awards and the Participant’s participation in the Plan, including any requisite transfer of such Data as may be required to a broker or other third party with whom the Company or the Participant may elect to deposit any Shares. The Data related to a Participant will be held only as long as is necessary to implement, administer, and manage the Plan and Awards and the Participant’s participation in the Plan. A Participant may, at any time, view the Data held by the Company with respect to such Participant, request additional information about the storage and processing of the Data with respect to such Participant, recommend any necessary corrections to the Data with respect to the Participant, or refuse or withdraw the consents herein in writing, in any case without cost, by contacting his or her local human resources representative. The Company may cancel the Participant’s eligibility to participate in the Plan, and in the Committee’s discretion, the Participant may forfeit any outstanding Awards if the Participant refuses or withdraws the consents described herein. For more information on the consequences of refusal to consent or withdrawal of consent, Participants may contact their local human resources representative.
(g) No Liability of Committee Members. Neither any member of the Committee nor any of the Committee’s permitted delegates shall be liable personally by reason of any contract or other instrument executed by such member or on his or her behalf in his or her capacity as a member of the Committee or for any mistake of judgment made in good faith, and the Company shall indemnify and hold harmless each member of the Committee and each other employee, officer, or director of the Company to whom any duty or power relating to the administration or interpretation of the Plan may be allocated or delegated, against all costs and expenses (including counsel fees) and liabilities (including sums paid in settlement of a claim) arising out of any act or omission to act in connection with the Plan, unless arising out of such Person’s own fraud or willful misconduct; provided, however, that approval of the Board shall be required for the payment of any amount in settlement of a claim against any such Person. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such Persons may be entitled under the Company’s certificate or articles of incorporation or by-laws, each as may be amended from time to time, as a matter of law, or otherwise, or any power that the Company may have to indemnify them or hold them harmless.
(h) Payments Following Accidents or Illness. If the Committee shall find that any Person to whom any amount is payable under the Plan is unable to care for his or her affairs because of illness or accident, or is a minor, or has died, then any payment due to such Person or his or her estate (unless a prior claim therefor has been made by a duly appointed legal representative) may, if the Committee so directs the Company, be paid to his or her spouse, child, relative, an institution maintaining or having custody of such Person, or any other Person deemed by the Committee to be a proper recipient on behalf of such Person otherwise entitled to payment. Any such payment shall be a complete discharge of the liability of the Committee and the Company therefor.
(i) Governing Law. The Plan shall be governed by and construed in accordance with the laws of the Cayman Islands, without reference to the principles of conflicts of laws thereof.
(j) Electronic Delivery. Any reference herein to a “written” agreement or document or “writing” will include any agreement or document delivered electronically or posted on the Company’s intranet (or other shared electronic medium controlled or authorized by the Company to which the Participant has access) to the extent permitted by applicable law.
(k) Arbitration. All disputes and claims of any nature that a Participant (or such Participant’s transferee or estate) may have against the Company arising out of or in any way related to the Plan or any Award Agreement shall be submitted to and resolved exclusively by binding arbitration conducted in the State of New York (or such other location as the parties thereto may agree) before the American Arbitration Association (“AAA”). Such arbitration shall be conducted in accordance with AAA’s Employment Arbitration Rules and Procedures, as modified herein, and shall be conducted by a single arbitrator. The arbitrator will apply the law of the Cayman Islands. Except as otherwise set forth below, the arbitrator, and not any federal, state, or local court or adjudicatory authority, shall have exclusive authority to resolve any dispute relating to the interpretation, applicability, enforceability, and/or formation of the Plan or any Award Agreement, including but not limited to any dispute as to
whether (i) a particular claim is subject to arbitration hereunder, and/or (ii) any part of this Section 20(k) is void or voidable. The arbitral award shall be in writing, state the reasons for the award, and be final and binding on the parties. Except as otherwise provided herein, a Participant (or such Participant’s transferee or estate) shall treat any arbitration as strictly confidential, and shall not disclose the existence or nature of any claim or defense; any documents, correspondence, pleadings, briefing, exhibits, or information exchanged or presented in connection with any claim or defense; or any rulings, decisions, or results of any claim, defense, or argument to any third party, with the exception of legal counsel. The arbitrator shall not have authority to award attorneys’ fees or costs, punitive damages, compensatory damages, damages for emotional distress, penalties, or any other damages not measured by the prevailing party’s actual losses, except to the extent such relief is explicitly available under a statute, ordinance, or regulation pursuant to which a claim is brought. The arbitrator also shall not have authority to entertain claims for class or collective relief. The parties hereto agree that judgment upon any award rendered by the arbitration panel may be entered in the United States District Court for the Southern District of New York or any New York state court sitting in the State of New York. To the maximum extent permitted by law, the parties hereby irrevocably waive any right of appeal from any judgment rendered upon any such arbitration award in any such court. Notwithstanding the foregoing, any party may seek injunctive relief in any such court.
(l) Statute of Limitations. A Participant or any other person filing a claim for benefits under the Plan must file the claim within one year of the date the Participant or other person knew or should have known of the facts giving rise to the claim. This one-year statute of limitations will apply in any forum where a Participant or any other person may file a claim and, unless the Company waives the time limits set forth above in its sole discretion, any claim not brought within the time periods specified shall be waived and forever barred.
(m) Funding. No provision of the Plan shall require the Company, for the purpose of satisfying any obligations under the Plan, to purchase assets or place any assets in a trust or other entity to which contributions are made or otherwise to segregate any assets, nor shall the Company be required to maintain separate bank accounts, books, records, or other evidence of the existence of a segregated or separately maintained or administered fund for such purposes. Participants shall have no rights under the Plan other than as unsecured general creditors of the Company, except that insofar as they may have become entitled to payment of additional compensation by performance of services, they shall have the same rights as other employees and service providers under general law.
(n) Reliance on Reports. Each member of the Committee and each member of the Board shall be fully justified in relying, acting, or failing to act, and shall not be liable for having so relied, acted, or failed to act in good faith, upon any report made by the independent public accountant of the Company and its Affiliates and upon any other information furnished in connection with the Plan by any Person or Persons other than such member.
(o) Titles and Headings. The titles and headings of the sections in the Plan are for convenience of reference only, and in the event of any conflict, the text of the Plan, rather than such titles or headings, shall control.
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Adopted by the Board of Directors: _______, 2023
Approved by the Shareholders: _______, 2023
Termination Date: _______, 2033
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