Unassociated Document


    
      

    

     

    
 

    


    BRISTOL
      WEST HOLDINGS, INC.

    


    NON-EMPLOYEE
      DIRECTORS’ DEFERRED COMPENSATION AND STOCK 

    AWARD
      PLAN

     

     


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    PURPOSE

    


    The
      purpose of this Bristol West Holdings, Inc. Non-Employee Directors’ Deferred
      Compensation and Stock Award Plan is to provide individuals who are not
      employees of Bristol West Holdings, Inc. or its subsidiaries who serve as
      members of the Board (as defined below) an opportunity to defer payment of
      all
      or a portion of their Fees (as defined below) and to receive current payment
      of
      all or a portion of their Fees in Shares (as defined below) in accordance with
      the terms and conditions set forth herein. 

    


    ARTICLE
      I

    


    DEFINITIONS

    


    
      	 	
              1.1

            	
              “Affiliate”
                means any entity directly or indirectly controlling, controlled by,
                or
                under common control with, the Company or any other entity designated
                by
                the Board in which the Company or a shareholder of the Company has
                an
                interest.

            


    

    


    
      	 	
              1.2

            	
              “Board”
                means the Board of Directors of the
                Company.

            


    

    


    
      	 	
              1.3

            	
              “Beneficial
                Owner” means a “beneficial owner,” as such term is defined in Rule 13d-3
                and 13d-5 under the Securities Exchange Act of 1934, as amended (or
                any
                successor rule thereto), which shall in any event include having
                the power
                to vote (or cause to be voted) pursuant to contract, irrevocable
                proxy or
                otherwise, and which, for purposes of the calculation under clause
                (y) of
                the definition of Change in Control, shall be deemed to include shares
                that any such Person or Group has a right to acquire, whether such
                right
                is exercisable immediately or only after the passage of
                time.

            


    

    


    
      	 	
              1.4

            	
              “Change
                in Control” means the occurrence of any of the following
                events:

            


    

    


    (i)
      a
      sale of all or substantially all of the assets of the Company to a Person or
      Group that is not Kohlberg Kravis Roberts & Co. or an Affiliate thereof
      (collectively, the "KKR Partnerships");

    


    (ii)
      a
      sale by any member of the KKR Partnerships resulting in more than 50% of the
      voting stock of the Company being held by a Person or Group that is not a member
      of the KKR Partnerships; or

    


    (iii)
      a
      merger, consolidation, recapitalization or reorganization of the Company with
      or
      into another Person which is not a member of the KKR Partnerships; 

    


    and
      following any of the foregoing events in clause (ii)-(iii), (x) the KKR
      Partnerships no longer have the ability, without the approval of a Person or
      Group or an Affiliate of the Company that is not a member of the KKR
      Partnerships, to elect a majority of the Board (or the resulting entity in
      the
      transaction) and
      (y) any
      Person or Group who is not a member of the KKR Partnerships is or becomes the
      Beneficial Owner, directly or indirectly, in the aggregate, of a greater
      percentage of the total voting power of the Company than that held, directly
      or
      indirectly, in the aggregate, by the KKR Partnerships. 


    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    


    
      	 	
              1.5

            	
              “Committee”
                means the Compensation Committee of the Board or such other committee
                as
                may be appointed by the Board.

            


    

    


    
      	 	
              1.6

            	
              “Company”
                means Bristol West Holdings, Inc., a Delaware
                corporation.

            


    

    


    
      	 	
              1.7

            	
              “Director”
                means a member of the Board who is not an employee of the Company
                or any
                of its subsidiaries.

            


    

    


    
      	 	
              1.8

            	
              “Fair
                Market Value” means, if the Shares are traded on NASDAQ, the Fair Market
                Value of the Shares as of any date of determination shall be the
                closing
                sale price on that date of a Share as reported in the NASDAQ National
                Market Issues quotations of the New York City Edition of the Wall
                Street
                Journal. If the Shares are traded on the New York Stock Exchange,
                the Fair
                Market Value of the Shares as of any date of determination shall
                be the
                closing sale price on that date of a Share as reported on the New
                York
                Stock Exchange Composite Tape (or, if the Shares are not traded on
                NASDAQ
                or the New York Stock Exchange, as applicable, on such date, on the
                next
                preceding date on which it was so traded); and if there should not be
                a public market for the Shares on such date, the Fair Market Value
                shall
                be the value established by the Committee in good
                faith.

            


    

    


    
      	 	
              1.9

            	
              “Fees”
                means amounts (including any annual retainer, which is generally
                payable
                in quarterly installments in cash, or upon the election of a Director,
                in
                Shares) earned for serving as a member of the Board or any Committee.
                

            


    

    


    
      	 	
              1.10

            	
              “Group”
                means a “group” as such term is used in Sections 13(d) and 14(d) of the
                Act, acting in concert.

            


    

    


    
      	 	
              1.11

            	
              “Shares”
                means the common shares of the Company, par value $0.01 per
                share.

            


    

    


    
      	 	
              1.12

            	
              “Person”
                means a “person,” as such term is used for purposes of Section 13(d) or
                14(d) of the Act (or any successor section
                thereto).

            


    

    


    
      	 	
              1.13

            	
              “Plan”
                means this Bristol West Holdings, Inc. Non-Employee Directors’ Deferred
                Compensation and Stock Award Plan, as it may be amended from time
                to
                time.

            


    

    


    
      	 	
              1.14

            	
              “Share
                Account” means the account created by the Company pursuant to Article III
                of this Plan in accordance with an election by a Director to defer
                Fees
                and receive share-related compensation under Article II
                hereof.

            


    

    


    
      	 	
              1.15

            	
              “Year”
                shall mean calendar year.

            


    


    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    


    
      	 	
              1.16

            	
              “He”,
                “Him” or “His” shall apply equally to male and female members of the
                Board.

            


    

    


    ARTICLE
      II

    


    ELECTION
      TO DEFER

    


    
      	 	
              2.1

            	
              A
                Director may elect, on or before December 31 of any Year, to irrevocably
                defer payment of all or a specified part of all Fees earned during
                the
                Year following such election and succeeding Years (until the Director
                ceases to be a Director or elects (in writing) to change such election);
                provided, however, that with respect to Year 2004 a Director
                may elect, before the first day of the fiscal quarter following the
                fiscal
                quarter in which this Plan becomes effective, to defer all or a specified
                part of all Fees earned on or after the date of adoption of this
                Plan (and
                which have not been paid to him). Any person who shall become a Director
                during any Year, and who was not a Director of the Company on the
                preceding December 31, may elect, before the Director’s term begins, to
                defer payment of all or a specified part of such Fees earned during
                the
                remainder of such Year and for succeeding Years. Any Fees deferred
                pursuant to this Section 2.1 shall be paid to the Director at the
                time(s)
                and in the manner specified in Article IV
                hereof.

            


    

    


    
      	 	
              2.2

            	
              The
                election to participate in the deferred compensation portion of the
                Plan
                shall be designated by submitting a letter in the form attached hereto
                as
                Appendix A (the “Election Form”) to the Secretary or Assistant
                Secretary of the Company. 

            


    

    


    
      	 	
              2.3

            	
              The
                deferral election shall continue from Year to Year unless the Director
                changes such election by written request delivered to the Secretary
                or
                Assistant Secretary of the Company at least one (1) month prior to
                the
                commencement of the Year for which such changed election shall be
                effective. If the Director amends his existing election to defer
                Fees in
                order to receive Fees in cash or in Shares following each fiscal
                quarter,
                such Director may not subsequently re-elect to defer payment of Fees
                for
                at least one (1) Year.

            


    

    


    ARTICLE
      III

    


    DEFERRED
      COMPENSATION ACCOUNTS

    


    
      	 	
              3.1

            	
              The
                Company shall maintain separate accounts on its books and records
                for the
                Fees deferred by each Director, based on the elections each Director
                has
                made. 

            


    

    


    
      	 	
              3.2

            	
              If
                a Director has elected to defer a portion of his Fees, the Company
                shall
                credit, on the tenth day after the Company announces its quarterly
                results, an account (the “Share Account”) established for each
                Director with the number of hypothetical Shares equal to (x) the
                deferred
                Fees otherwise payable to the Director in such fiscal quarter as
                to which
                an election to receive share-related deferred compensation has been
                made,
                divided by (y) the average Fair Market Value of the Shares over the
                applicable fiscal quarter. 

            


    


    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    


    
      	 	
              3.3

            	
              The
                Company shall credit, on the date that any dividends are paid with
                respect
                to the hypothetical Shares, the Share Account of each Director who
                has
                elected to defer Fees with the number of hypothetical Shares equivalent
                to
                (x) the product of (a) the amount of any dividend paid, multiplied
                by (b)
                the number of hypothetical Shares represented in the relevant Director’s
                Share Account, divided by (y) the Fair Market Value on the dividend
                payment date. 

            


    

    


    
      	 	
              3.4

            	
              If
                adjustments are made to the authorized or issued share capital of
                the
                Company as a result of split-ups, recapitalizations, mergers,
                consolidations and the like, an appropriate adjustment shall also
                be made
                in the number of hypothetical Shares credited to the Directors’ Share
                Account.

            


    

    


    
      	 	
              3.5

            	
              The
                value of such Shares shall be computed to two decimal
                places.

            


    

    


    
      	 	
              3.6

            	
              This
                Plan is intended to be a non-qualified, unfunded deferred compensation
                arrangement. Nothing contained herein shall be deemed to give a Director,
                a Director’s beneficiary or any other Person any interest in the assets of
                the Company or create any kind of fiduciary relationship between
                the
                Company and any such Person. Notwithstanding the foregoing, following
                the
                effective date of the Plan, the Company may establish a “rabbi trust” or
                any other arrangement it wishes in order to provide for the payment
                of
                obligations arising under the Plan, so long as it does not constitute
                funding for purposes of the Employee Retirement Income Security Act
                of
                1974, as amended, or the Internal Revenue Code of 1986, as amended.
                To the
                extent that any Person acquires a right to receive payments from
                the
                Company under the Plan, such right shall be no greater than the right
                of
                any unsecured general creditor of the
                Company.

            


    

    


    ARTICLE
      IV

    


    PAYMENT
      OF DEFERRED COMPENSATION

    


    
      	 	
              4.1

            	
              Amounts
                contained in a Director’s Share Account shall be distributed beginning
                upon the earliest of the (i) first day of the Year following any
                removal
                or separation from the Board; (ii) termination of this Plan; and
                (iii)
                date that a Director designates on the Election Form as the date
                of
                distribution. The total amounts credited to a Director’s Share Account
                shall be paid in Shares (equal to the number of hypothetical Shares
                that
                have accumulated in the Director’s Share Account pursuant to Article III),
                unless the Company elects to pay total amounts credited to a Director’s
                Share Account in cash.

            


    

    


    
      	 	
              4.2

            	
              Each
                Director shall have the right to designate a beneficiary who is to
                succeed
                to his right to receive payments hereunder in the event of his death.
                Any
                designated beneficiary shall receive payments in the same manner
                as the
                Director would have received payments if he had lived. In case of
                a
                failure of designation or the death of a designated beneficiary without
                a
                designated successor, the balance of the amounts contained in the
                Director’s Share Account shall be payable in accordance with Section 4.1
                to the Director’s or former Director’s estate in full on the first day of
                the Year following the Year in which he dies. No designation of
                beneficiary or change in beneficiary shall be valid unless in writing
                signed by the Director and filed with the Secretary or Assistant
                Secretary
                of the Company. 

            


    


    
      
        
        

      

      
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    ARTICLE
      V

    


    STOCK
      AWARDS

    


    
      	 	
              5.1

            	
              A
                Director may elect, on or before December 31 of any Year, to irrevocably
                receive currently in Shares payment of all or a specified part of
                all Fees
                earned during the Year following such election and succeeding Years
                (until
                the Director ceases to be a Director or elects (in writing) to change
                such
                election); provided, however, that with respect to Year 2004
                a Director may elect, before the first day of the fiscal quarter
                following
                the fiscal quarter in which this Plan becomes effective, to receive
                currently in Shares all or a specified part of all Fees earned on
                or after
                the date of adoption of this Plan (and which have not been paid to
                him).
                Any person who shall become a Director during any Year, and who was
                not a
                Director of the Company on the preceding December 31, may elect,
                before
                the Director’s term begins, to receive current payment in Shares of all or
                a specified part of such Fees earned during the remainder of such
                Year and
                for succeeding Years. Any Fees paid currently in Shares pursuant
                to this
                Section 5.1 shall be paid to the Director in the manner specified
                in
                Section 5.3 hereof.

            


    

    


    
      	 	
              5.2

            	
              The
                election to participate in the stock award portion of the Plan shall
                be
                designated on the Election Form.

            


    

    


    
      	 	
              5.3

            	
              The
                election of a Director to receive all or a portion of his Fees currently
                in Shares shall continue from Year to Year unless the Director changes
                such election by written request delivered to the Secretary or Assistant
                Secretary of the Company at least one (1) month prior to the commencement
                of the Year for which such changed election shall be
                effective.

            


    

    


    
      	 	
              5.4

            	
              If
                a Director has elected to receive a portion of his Fees currently
                in
                Shares, the Company shall issue to the Director or purchase in the
                open
                market on behalf of the Director, on the tenth day after the Company
                announces its quarterly results, Shares equal to (x) the Fees otherwise
                payable to the Director in such fiscal quarter as to which an election
                to
                receive Shares currently has been made, divided by (y) the average
                Fair
                Market Value of the Shares over the applicable fiscal quarter.
                

            


    

    


    ARTICLE
      VI 

    


    ADMINISTRATION;
      INTERPRETATION; SHARES 

    AVAILABLE
      FOR DISTRIBUTION

    


    
      	 	
              6.1

            	
              The
                Committee shall administer and interpret the Plan in its sole discretion,
                and the Company shall maintain the Plan at its expense. All decisions
                made
                by the Committee with respect to issues hereunder shall be final
                and
                binding on all parties.

            


    


    
      
        
        

      

      
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              6.2

            	
              Except
                to the extent required by law, the right of any Director or any
                beneficiary to any benefit or to any payment hereunder shall not
                be
                subject in any manner to attachment or other legal process for the
                debts
                of such Director or beneficiary, and any such benefit or payment
                shall not
                be subject to alienation, sale, transfer assignment or
                encumbrance.

            


    

    


    
      	 	
              6.3

            	
              The
                number of Shares available for distribution in respect of the payment
                of
                Share Accounts shall be 125,000 authorized Shares as of the effective
                date
                of this Plan. The Company may, but shall not be obligated to, reserve
                Shares, purchase Shares in the open market, and issue Shares for
                the
                purpose of providing for the payment of obligations arising under
                this
                Plan.

            


    

    


    ARTICLE
      VII 

    


    AMENDMENT
      OF PLAN; GOVERNING LAW; CHANGE IN CONTROL

    


    
      	 	
              7.1

            	
              The
                Plan may be amended, suspended or terminated in whole or in part
                from time
                to time by the Board except that no amendment, suspension, or termination
                shall apply to the payment to any Director or beneficiary of a deceased
                Director of any amounts previously credited to a Director’s Share
                Account.

            


    

    


    
      	 	
              7.2

            	
              This
                Plan shall be governed by and construed and enforced in accordance
                with
                the laws of Delaware.

            


    

    


    
      	 	
              7.3

            	
              In
                the event of a Change in Control, all amounts contained in each Director’s
                Share Account shall be distributed (in a lump sum, cash payment or
                in
                Shares, as the Director shall elect on the Election Form) within
                thirty
                (30) days after the occurrence of a Change in
                Control.

            


    

    


    Effective
      the 15th day of April, 2004.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    


    BRISTOL
      WEST HOLDINGS, INC.

    DIRECTOR
      ANNUAL RETAINER ELECTION NOTICE

    


    Date_____________

    


    


    I
      hereby
      elect to defer receipt of all or a portion of my Director’s Fees (as defined in
      the Bristol West Holdings, Inc. Non-Employee Directors’ Deferred Compensation
      and Stock Award Plan) (the “Plan”), commencing on ____________ and for all
      succeeding calendar years (“Years”), in accordance with my elections indicated
      below.

    


    I
      elect
      to have my Director’s Fees (including Committee Fees, if any) deferred as
      follows (fill in appropriate percentage below):

    


    (a)  
         _______%
      of the aggregate Director’s Fees shall be deferred to my Share Account (as
      defined in the Plan), to which Bristol West Holdings, Inc. (the “Company”) shall
      credit hypothetical Shares (as defined in the Plan) in the manner set forth
      in
      the Plan. 

    


    I
      understand that my election above to defer all or a portion of my Director’s
      Fees shall continue from one Year to the next, unless I change my election
      in
      writing at least one (1) month prior to the commencement of the Year in which
      I
      would like my changed election to be effective. I also understand that my Share
      Account generally shall become payable on the earlier to occur of (i) the first
      day of January following my separation from the Board or (ii) the date on which
      I elect to receive payment of my deferred Fees (the "Election Date") (my
      Election Date, if any, shall be _______________), and in any event within thirty
      (30) days after the occurrence of a Change in Control (as defined in the Plan).
      I elect to receive the payments due to me pursuant to the Plan in the event
      of a
      Change in Control as follows (check the method desired below):

    


    _______
      in a cash, lump sum payment 

    


    _______
      in Shares

    


    


    The
      remainder of my Director’s Fees shall not be deferred into hypothetical Shares,
      and shall be payable to me currently as follows (fill in the appropriate
      percentage below):

    


    (b)  
         _______%
      of my Director’s Fees that I have elected not to defer shall be paid to me in
      arrears directly in cash as they accrue;

    


    (c)  
         _______%
      of my Director’s Fees that I have elected not to defer shall be paid to me in
      arrears directly in Shares as they accrue, in accordance with the
      Plan.


    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    


    I
      understand that (i) to the extent I make no election under this election notice
      or do not designate the manner in which any portion of my Director’s Fees that I
      elect to receive currently shall be payable to me, I will receive such
      portion(s) of my Director’s Fees in cash; (ii) all elections I have made above
      with respect to current receipt of my Fees applicable to a particular Year
      may
      not be amended or revoked with respect to such Year, but may be amended for
      subsequent Years to the extent I change my election at least one (1) month
      prior
      to the commencement of the Year in which I would like my changed election to
      be
      effective, and (iii) if I amend my existing election to defer Fees in order
      to
      receive Fees in cash and/or in Shares following each fiscal quarter, I may
      not
      subsequently re-elect to defer payment of Fees for at least one
      Year.

    


    In
      the
      event of my death prior to receipt of all or any balance of such Fees and
      dividends, if any, thereon so accumulated, I designate ______________________
      as
      my beneficiary to receive Shares (or, if applicable, the funds) payable.


    


    Acknowledged
      and Agreed this ____ day of __________.

    


    


    ____________________________

    Director

     

    9