PART III Item 10.
Directors and Executive Officers of the Registrant.
The information required by this item is incorporated by reference to the sections entitled “Election of Directors” and “Executive Officers” in our Definitive Proxy Statement for our annual meeting of stockholders to be filed with the Securities and Exchange Commission within 120 days after the close of our fiscal year.
Item 11.
Executive Compensation.
The information required by this item is incorporated by reference to the sections entitled “Executive Compensation” in our Definitive Proxy Statement for our annual meeting of stockholders to be filed with the Securities and Exchange Commission within 120 days after the close of our fiscal year.
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
We maintain a number of equity compensation plans for employees, officers, directors and others whose efforts contribute to our success.
The table below sets forth certain information as our fiscal year ended September 27, 2003 regarding the shares of our common stock available for grant or granted under stock option plans that (i) were approved by our stockholders, and (ii) were not approved by our stockholders.
Equity Compensation Plan Information
## Table 0 ##
(1) Includes the following plans: 1986 Combination Stock Option Plan; Amended and Restated 1990 Nonemployee Director Stock Option Plan; 1995 Combination Stock Option Plan; Amended and Restated 1999 Equity Incentive Plan; and 2000 Employee Stock Purchase Plan.
Also includes the following plans which we assumed in connection with our acquisition of Fluoroscan Imaging Systems in 1996: FluoroScan Imaging Systems, Inc.  1994 Amended and Restated Stock Incentive Plan and FluoroScan Imaging Systems, Inc.  1995 Stock Incentive Plan.
For a description of these plans, please refer to Footnote 6 contained in our consolidated financial statements.
(2) Includes the following plans: 1997 Employee Equity Incentive Plan and 2000 Acquisition Equity Incentive Plan.
A description of each of these plans is as follows: 1997 Employee Equity Incentive Plan.
The purposes of the 1997 Employee Equity Incentive Plan (the “1997 Plan”), adopted by the Board of Directors in May 1997, are to attract and retain key employees, consultants and advisors, to provide an incentive for them to assist us in achieving long-range performance goals, and to enable such person to participate in our long-term growth.
In general, under the 1997 Plan, all employees, consultants, and advisors who are not executive officers or directors are eligible to participate in the 1997 Plan.
The 1997 Plan is administered by a committee consisting of at least three members of the Board appointed by the Board of Directors.
Participants in the 1997 Plan are eligible to receive non-qualified stock options, stock
Fiscal Year Ended September 25, 2004 Compared to Fiscal Year Ended September 27, 2003 Product Sales.
## Table 1 ##
In fiscal 2004 our product sales increased 14% compared to fiscal 2003 primarily due to the continued growth in the number of our Selenia full field digital mammography systems sold and to a lesser extent, our increase in digital detector sales.
Partially offsetting these increases was the decrease in sales attributable to our continued phasing out of our general radiography systems business, which is included in our other segment.
We continue to service the installed base of such equipment.
Mammography product sales increased 36% compared to fiscal 2003 primarily due to a $32.9 million increase in worldwide digital mammography system sales and a $2.8 million increase in Multicare stereotactic tables sold in the United States.
The increase in our digital mammography product sales was primarily attributable to an increase in the number of Selenia systems sold and, to a lesser extent, a modest increase in the average selling price for those systems.
In fiscal 2004 we sold 143 digital mammography systems compared to 57 systems in fiscal 2003.
The increase in the average selling price of the Selenia contributed $7.0 million to our digital mammography product sales during fiscal 2004.
We attribute the increase in digital mammography system sales primarily to the growing acceptance of our Selenia mammography system and of digital mammography in general.
The increase in sales of our Multicare stereotactic tables, in the United States, was primarily attributable to an increase in the number of tables sold in the first two quarters of fiscal 2004 as compared to the corresponding quarters of the prior year.
The increases in digital mammography and table sales were partially offset by a $14.4 million decrease in analog mammography systems sales in the United States, primarily as a result of reduced unit sales of those systems related to the increased market acceptance of digital mammography.
Osteoporosis assessment product sales decreased 1% in fiscal 2004 compared to fiscal 2003.
This decrease was primarily attributable to a $3.0 million decrease in sales of our dual-energy x-ray bone densitometry systems in the United States and a decrease of $417,000 due to a reduction in the number of Sahara ultrasound systems sold in the United States.
The decrease in United States sales of dual-energy x-ray bone densitometry systems was primarily attributable to a decrease in the number of systems sold and a shift to our lower priced systems sold into the primary care market.
These reductions were partially offset by a $2.7 million increase in sales in international markets, primarily attributable to an increase in the number of our lower priced Explorer systems sold, and a $427,000 increase in upgrade sales.
Digital detector product sales increased 81% in fiscal 2004 compared to fiscal 2003.
This increase was primarily due to an increase in the number of digital detectors sold in the United States and Europe, partially offset by a decrease in the number of detectors sold in Asia.
Product sales of digital detectors in fiscal 2004 increased $3.8 million in the United States, $3.2 million in Europe and decreased $1.4 million in Asia compared to fiscal 2003.
The increase in the United States primarily reflects the increase in the number of digital detectors sold for general radiography systems, while the increase for Europe primarily reflects the increase in the number of digital detectors sold for mammography systems.
The decrease in Asia is primarily due to a reduction in the number of digital general radiography detectors sold.
Table of Contents The Company had gross unrecognized tax benefits, including interest, of $30.6 million as of September 24, 2011 and $33.5 million as of September 25, 2010.
At September 24, 2011, $30.6 million represents the amount of unrecognized tax benefits that, if recognized, would result in a reduction of the Company’s effective tax rate.
In the next twelve months it is reasonably possible that the Company will reduce the balance of its unrecognized tax benefits by $2.6 million due to the expiration of statute of limitations and settlements with taxing authorities, all of which would reduce the Company’s effective tax rate.
Activity of the Company’s unrecognized income tax benefits for fiscal 2011 and 2010 are as follows:
## Table 2 ##
The Company’s policy is to recognize accrued interest and penalties related to unrecognized tax benefits and income tax liabilities, when applicable, as part of income tax expense in its Consolidated Statements of Operations.
As of September 24, 2011 and September 25, 2010, accrued interest was $1.4 million and $1.7 million, respectively, net of federal benefit.
As of September 24, 2011, no penalties have been accrued.
The Company and its subsidiaries are subject to United States federal income tax, as well as income tax in multiple state and foreign jurisdictions.
The current tax returns are open for audit through fiscal 2015.
The Company had been under audit by the IRS for fiscal years 2007, 2008 and 2009.
The IRS concluded its audit and issued its final report for these fiscal years resulting in a $7.6 million payment, substantially all of which had been previously recorded within deferred tax liabilities, to settle the issues raised by the IRS.
The Company has a tax holiday in Costa Rica that currently does not materially impact its effective tax rate and is scheduled to expire in 2015.
The Company intends to reinvest, indefinitely, approximately $29.5 million of unremitted foreign earnings.
It is not practical to estimate the amount of additional taxes that might be payable upon repatriation of foreign earnings.9.
Stockholders’ Equity and Stock-Based Compensation Common Shares Authorization At the Company’s March 11, 2008 Annual Meeting of Stockholders, an increase in the number of authorized shares of common stock from 600 million to 750 million was approved.
Rights Agreement On April 2, 2008, the Company entered into an Amended and Restated Rights Agreement (the “Amended and Restated Rights Agreement”) between the Company and American Stock Transfer & Trust Company as Rights Agent (the “Rights Agent”).
The Amended and Restated Rights Agreement amends and restates the Company’s rights agreement, dated as of September 17, 2002, as amended on May 21, 2007, between the Company and the Rights Agent.
18.
SHARE-BASED COMPENSATION PLANS The Company has a 2010 Stock Incentive Plan (“2010 Employee Plan”), a 2009 Non-Employee Director Stock Option and Restricted Stock Plan (“2009 Director Plan”) and a 2003 Non-Employee Director Equity Compensation Plan (“2003 Director Plan”).
Under the 2010 Employee Plan, 4,000,000 common shares have been authorized to be granted as nonqualified share options, incentive share options, share appreciation rights or restricted share and share awards to officers and key employees of the Company.
At December 31, 2014, there were 2,751,801 remaining shares available to be granted under the 2010 Employee Plan.
The 2010 Employee Plan replaced a 2002 Employee Plan, which replaced a 1995 Employee Plan; therefore, no further awards will be granted under the 2002 Employee Plan or the 1995 Employee Plan.
Through December 31, 2014, only nonqualified share options and restricted share awards had been granted under the employee plans.
Under the 2009 Director Plan, 37,439 common shares have been authorized to be granted as share options or restricted share awards to non-employee directors of the Company.
At December 31, 2014, there were 35,215 remaining shares available to be granted under the 2009 Director Plan.
The 2009 Director Plan replaced a 1995 Director Plan, which expired.
Under the 2003 Director Plan, 500,000 common shares have been authorized to be granted as share options or share awards to non-employee directors of the Company.
At December 31, 2014 there were 391,487 remaining shares available to be granted under the 2003 Director Plan.
Options and restricted shares granted under the 2010 Employee Plan and the 2002 Employee Plan vest at the earliest of 20% per year over five years or in accordance with any applicable employment agreement.
Options granted under the 1995 Director Plan vested at 50% per year over two years.
Options and restricted shares granted under the 2003 Director Plan generally vest at 33% per year over three years, unless an alternate vesting period is authorized by the Board.
Options and restricted shares granted under the 2009 Director Plan will vest as provided in the award agreement.
All options are exercisable at fair market value of the stock at the date of grant and expire ten years after the date of grant.
For share options and restricted shares granted under the 2010 Employee Plan, the 2002 Employee Plan, the 2009 Director Plan, the 2003 Director Plan and the 1995 Director Plan, share-based compensation expense recognized in the consolidated statements of operations and comprehensive income (loss) was $21,196 thousand, $31,844 thousand and $31,984 thousand for the years ended December 31, 2014, 2013 and 2012, respectively.
The corresponding income tax benefit recorded in the consolidated statements of operations and comprehensive income (loss) for share-based compensation was $5,819 thousand, $5,458 thousand and $2,792 thousand for the years ended December 31, 2014, 2013 and 2012, respectively.
For the year ended December 31, 2014, share-based compensation awards granted were 176,159 restricted shares, granted on February 26, 2014, May 14, 2014 and November 19, 2014, with a fair value of $147.035, $157.940 and $170.435 per share, respectively.
No share options were granted during the years ended December 31, 2014 and 2013.
For share options granted during previous years, the fair value per option was calculated on the date of the grant using the Black-Scholes option valuation model.
The following assumptions were used in calculating the fair value of the options granted:
## Table 3 ##
Available Information.
The Company’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8- K, proxy statements and amendments to those reports are available free of charge through the Company’s internet website at http://www.
everestregroup.
com as soon as reasonably practicable after such reports are electronically filed with the Securities and Exchange Commission (the “SEC”).
ITEM 1A.
RISK FACTORS In addition to the other information provided in this report, the following risk factors should be considered when evaluating an investment in our securities.
If the circumstances contemplated by the individual risk factors materialize, our business, financial condition and results of operations could be materially and adversely affected and the trading price of our common shares could decline significantly.
RISKS RELATING TO OUR BUSINESS Fluctuations in the financial markets could result in investment losses.
Prolonged and severe disruptions in the overall public debt and equity markets, such as occurred during 2008, could result in significant realized and unrealized losses in our investment portfolio.
Although financial markets have significantly improved since 2008, they could deteriorate in the future.
There could also be disruption in individual market sectors, such as occurred in the energy sector during the fourth quarter of 2014.
Such declines in the financial markets could result in significant realized and unrealized losses on investments and could have a material adverse impact on our results of operations, equity, business and insurer financial strength and debt ratings.
Our results could be adversely affected by catastrophic events.
We are exposed to unpredictable catastrophic events, including weather-related and other natural catastrophes, as well as acts of terrorism.
Any material reduction in our operating results caused by the occurrence of one or more catastrophes could inhibit our ability to pay dividends or to meet our interest and principal payment obligations.
Subsequent to April 1, 2010, we define a catastrophe as an event that causes a loss on property exposures before reinsurance of at least $10.0 million, before corporate level reinsurance and taxes.
Prior to April 1, 2010, we used a threshold of $5.0 million.
By way of illustration, during the past five calendar years, pre-tax catastrophe losses, net of contract specific reinsurance but before cessions under corporate reinsurance programs, were as follows:
## Table 4 ##
Our losses from future catastrophic events could exceed our projections.
We use projections of possible losses from future catastrophic events of varying types and magnitudes as a strategic underwriting tool.
We use these loss projections to estimate our potential catastrophe losses in certain geographic areas and decide on the placement of retrocessional coverage or other actions to limit the extent of potential losses in a given geographic area.
These loss projections are approximations, reliant on a mix of quantitative and qualitative processes, and actual losses may exceed the projections by a material amount, resulting in a material adverse effect on our financial condition and results of operations.
Gross written premiums increased by 5.4% to $774.3 million in 2013 compared to $734.4 million in 2012, primarily due to continued growth of new business and increased premium on existing business written in our Bermuda and Ireland offices.
Net written premiums increased by 4.3% to $765.7 million in 2013 compared to $733.8 million in 2012, which is consistent with the change in gross written premiums.
Premiums earned increased 8.4% to $738.0 million in 2013 compared to $680.9 million in 2012.
The change in premiums earned relative to net written premiums is the result of timing; premiums are earned ratably over the coverage period whereas written premiums are recorded at the initiation of the coverage period.
Incurred Losses and LAE.
The following table presents the incurred losses and LAE for the Bermuda segment for the periods indicated.
## Table 5 ##
Incurred losses and LAE decreased by 3.4% to $361.8 million in 2014 compared to $374.4 million in 2013 primarily due to a $35.2 million decrease in current year catastrophe losses, partially offset by $14.9 million of less favorable prior years’ attritional losses and $13.3 million of less favorable prior year catastrophe development in 2014 compared to 2013, which mainly related to the 2011 Japan earthquake.
The $0.3 million of current year catastrophe losses in 2014 primarily related to Hurricane Odile.
The $35.5 million of current year catastrophe losses in 2013 were due to the German hailstorms ($20.5 million) and the European floods ($15.0 million).
Incurred losses and LAE decreased by 8.3% to $374.4 million in 2013 compared to $408.2 million in 2012 primarily due to favorable prior year development in 2013 compared to 2012 for both attritional and catastrophe losses, partially offset by increases in current year catastrophe losses (outlined above) and current year attritional losses.
The favorable prior year development on attritional losses was primarily related to the outcome of reserve studies on property business.
The $14.1 million of current year catastrophe losses for 2012 related primarily to Superstorm Sandy ($14.0 million).
The current year attritional losses increased by $5.1 million due to the impact of higher premiums earned, but the current year attritional loss ratio declined by 3.9 points.
This is primarily due to a shift in the mix of business to excess of loss contracts which generally results in lower loss ratios.

<table><tr><td>Plan Category</td><td>Number Of Securities To Be Issued Upon ExerciseOf Outstanding Options, Warrants And Rights (a)</td><td>Weighted-Average Exercise Price Of Outstanding Options, WarrantsAnd Rights (b)</td><td>Number Of Securities Remaining Available For Future Issuance UnderEquity Compensation Plans (excluding securities reflected in column (a)) (c)</td></tr><tr><td>Equity compensation plans approved by security holders<sup>-1</sup></td><td>2,111,138</td><td>$9.25</td><td>826,200</td></tr><tr><td>Equity compensation plans not approved by security holders<sup>-2</sup></td><td>1,116,615</td><td>$8.12</td><td>535,257</td></tr><tr><td>Total</td><td>3,227,753</td><td>$8.86</td><td>1,361,457</td></tr></table>
<table><tr><td></td><td colspan="6"> Years Ended </td></tr><tr><td></td><td colspan="2">September 25, 2004</td><td colspan="2">September 27, 2003</td><td colspan="2"> Change </td></tr><tr><td></td><td> Amount </td><td>% of Total Revenue</td><td> Amount </td><td>% of Total Revenue</td><td>Amount</td><td> % </td></tr><tr><td><i>Product Sales</i></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Mammography</td><td>$93,536</td><td>41%</td><td>$68,739</td><td>34%</td><td>$24,797</td><td>36%</td></tr><tr><td>Osteoporosis Assessment</td><td>$51,376</td><td>23%</td><td>$51,900</td><td>26%</td><td>-$524</td><td>-1%</td></tr><tr><td>Digital Detectors</td><td>$12,370</td><td>5%</td><td>$6,843</td><td>3%</td><td>$5,527</td><td>81%</td></tr><tr><td>Other</td><td>$20,654</td><td>9%</td><td>$29,252</td><td>14%</td><td>-$8,598</td><td>-29%</td></tr><tr><td></td><td>$177,936</td><td>78%</td><td>$156,734</td><td>77%</td><td>$21,202</td><td>14%</td></tr></table>
<table><tr><td></td><td>2011</td><td>2010</td></tr><tr><td>Balance at beginning of fiscal year</td><td>$31,790</td><td>$28,073</td></tr><tr><td>Tax positions related to current year:</td><td></td><td></td></tr><tr><td>Additions</td><td>2,014</td><td>2,364</td></tr><tr><td>Reductions</td><td>—</td><td>—</td></tr><tr><td>Tax positions related to prior years:</td><td></td><td></td></tr><tr><td>Additions related to change in estimate</td><td>5,934</td><td>3,682</td></tr><tr><td>Reductions</td><td>-700</td><td>-675</td></tr><tr><td>Payments</td><td>-1,182</td><td>-193</td></tr><tr><td>Lapses in statutes of limitations and settlements</td><td>-9,162</td><td>-1,461</td></tr><tr><td>Acquired tax positions:</td><td></td><td></td></tr><tr><td>Additions related to reserves acquired from acquisitions</td><td>565</td><td>—</td></tr><tr><td>Balance as of the end of the fiscal year</td><td>$29,259</td><td>$31,790</td></tr></table>
<table><tr><td></td><td colspan="3">Years Ended December 31,</td></tr><tr><td></td><td>2014</td><td>2013</td><td>2012</td></tr><tr><td>Weighted-average volatility</td><td>-</td><td>-</td><td>26.16%</td></tr><tr><td>Weighted-average dividend yield</td><td>-</td><td>-</td><td>2.00%</td></tr><tr><td>Weighted-average expected term</td><td>-</td><td>-</td><td>6.69 years</td></tr><tr><td>Weighted-average risk-free rate</td><td>-</td><td>-</td><td>1.33%</td></tr></table>
<table><tr><td>Calendar year:</td><td>Pre-tax catastrophe losses</td></tr><tr><td>(Dollars in millions)</td><td></td></tr><tr><td>2014</td><td>$62.2</td></tr><tr><td>2013</td><td>195.0</td></tr><tr><td>2012</td><td>410.0</td></tr><tr><td>2011</td><td>1,300.4</td></tr><tr><td>2010</td><td>571.1</td></tr></table>
<table><tr><td></td><td colspan="9">Years Ended December 31,</td></tr><tr><td>(Dollars in millions)</td><td>Current Year</td><td colspan="2">Ratio %/ Pt Change</td><td>Prior Years</td><td colspan="2">Ratio %/ Pt Change</td><td>Total Incurred</td><td colspan="2">Ratio %/ Pt Change</td></tr><tr><td>2014</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Attritional</td><td>$402.4</td><td>56.3%</td><td></td><td>$-41.2</td><td>-5.8%</td><td></td><td>$361.3</td><td>50.5%</td><td></td></tr><tr><td>Catastrophes</td><td>0.3</td><td>0.0%</td><td></td><td>0.2</td><td>0.0%</td><td></td><td>0.5</td><td>0.0%</td><td></td></tr><tr><td>Total segment</td><td>$402.7</td><td>56.3%</td><td></td><td>$-41.0</td><td>-5.8%</td><td></td><td>$361.8</td><td>50.5%</td><td></td></tr><tr><td>2013</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Attritional</td><td>$408.1</td><td>55.3%</td><td></td><td>$-56.1</td><td>-7.6%</td><td></td><td>$352.0</td><td>47.7%</td><td></td></tr><tr><td>Catastrophes</td><td>35.5</td><td>4.8%</td><td></td><td>-13.1</td><td>-1.8%</td><td></td><td>22.4</td><td>3.0%</td><td></td></tr><tr><td>Total segment</td><td>$443.6</td><td>60.1%</td><td></td><td>$-69.2</td><td>-9.4%</td><td></td><td>$374.4</td><td>50.7%</td><td></td></tr><tr><td>2012</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Attritional</td><td>$403.0</td><td>59.2%</td><td></td><td>$-17.8</td><td>-2.6%</td><td></td><td>$385.2</td><td>56.6%</td><td></td></tr><tr><td>Catastrophes</td><td>14.1</td><td>2.1%</td><td></td><td>8.9</td><td>1.3%</td><td></td><td>23.0</td><td>3.4%</td><td></td></tr><tr><td>Total segment</td><td>$417.1</td><td>61.3%</td><td></td><td>$-8.9</td><td>-1.3%</td><td></td><td>$408.2</td><td>60.0%</td><td></td></tr><tr><td>Variance 2014/2013</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Attritional</td><td>$-5.7</td><td>1.0</td><td>pts</td><td>$14.9</td><td>1.8</td><td>pts</td><td>$9.3</td><td>2.8</td><td>pts</td></tr><tr><td>Catastrophes</td><td>-35.2</td><td>-4.8</td><td>pts</td><td>13.3</td><td>1.8</td><td>pts</td><td>-21.9</td><td>-3.0</td><td>pts</td></tr><tr><td>Total segment</td><td>$-40.9</td><td>-3.8</td><td>pts</td><td>$28.2</td><td>3.6</td><td>pts</td><td>$-12.6</td><td>-0.2</td><td>pts</td></tr><tr><td>Variance 2013/2012</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Attritional</td><td>$5.1</td><td>-3.9</td><td>pts</td><td>$-38.3</td><td>-5.0</td><td>pts</td><td>$-33.2</td><td>-8.9</td><td>pts</td></tr><tr><td>Catastrophes</td><td>21.4</td><td>2.7</td><td>pts</td><td>-22.0</td><td>-3.1</td><td>pts</td><td>-0.6</td><td>-0.4</td><td>pts</td></tr><tr><td>Total segment</td><td>$26.5</td><td>-1.2</td><td>pts</td><td>$-60.3</td><td>-8.1</td><td>pts</td><td>$-33.9</td><td>-9.3</td><td>pts</td></tr><tr><td colspan="2">(Some amounts may not reconcile due to rounding.)</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr></table>

Question: What is the growing rate of Osteoporosis Assessment in the years with the least Mammography ？
Answer: -0.0101