with Section
8.1 hereof.
2.15
"Equity" has the meaning specified on Schedule I
hereto.
2.16
"Formula Approach" has the meaning specified in
Section 4.1 hereof.
2.17
"Formula Approach Pool" has the meaning specified
in Section 4.3(a) hereof.
2.18
"Hurdle ROE" has the meaning specified in Section
4.3(b) hereof.
2.19
"INSURANCE SEGMENT" MEANS THE BUSINESS SEGMENT OF
THE COMPANY CONSISTING OF ITS CORE INSURANCE SUBSIDIARIES, INCLUDING ARCH
INSURANCE GROUP INC. AND ITS SUBSIDIARIES, AND ANY OTHER INSURANCE SUBSIDIARY OF
THE COMPANY THAT BECOMES AN EMPLOYER IN ACCORDANCE WITH SECTION 8.1 HEREOF.
2.20
"Investment Income" has the meaning specified on
Schedule I hereto.
2.21
"Maximum Carryforward Amount" has the meaning
specified in Section 4.3(c) hereof.
2.22
"Maximum Formula Approach Pool" has the meaning
specified in Section 4.3(c) hereof
2.23
"OPERATING EXPENSES" HAS THE MEANING SPECIFIED ON
SCHEDULE I HERETO.
2.24
"PERMANENT DISABILITY" MEANS, WITH RESPECT TO AN
ELIGIBLE EMPLOYEE, THOSE CIRCUMSTANCES WHERE THE ELIGIBLE EMPLOYEE IS UNABLE TO
CONTINUE TO PERFORM THE USUAL CUSTOMARY DUTIES OF HIS OR HER ASSIGNED JOB FOR A
PERIOD OF SIX (6) MONTHS IN ANY TWELVE (12) MONTH PERIOD BECAUSE OF PHYSICAL,
MENTAL OR EMOTIONAL INCAPACITY RESULTING FROM INJURY, SICKNESS OR DISEASE.
ANY
QUESTIONS AS TO THE EXISTENCE OF A PERMANENT DISABILITY SHALL BE DETERMINED BY A
QUALIFIED, INDEPENDENT PHYSICIAN SELECTED BY THE COMPANY AND APPROVED BY THE
ELIGIBLE EMPLOYEE (WHICH
2
APPROVAL SHALL NOT BE UNREASONABLY WITHHELD).
THE DETERMINATION OF ANY SUCH
PHYSICIAN SHALL BE FINAL AND CONCLUSIVE FOR ALL PURPOSES OF THIS PLAN.
2.25
"Plan" has the meaning specified in Section 1
hereof.
2.26
"PLAN YEAR" MEANS (I) WITH RESPECT TO THE TARGET
BONUS APPROACH, A CALENDAR YEAR AND (II) WITH RESPECT TO THE FORMULA APPROACH,
AN UNDERWRITING (OR POLICY) YEAR COMMENCING ON JANUARY 1 AND ENDING ON DECEMBER
31 DURING WHICH AN ACCOUNTING SHALL BE MADE FOR ALL UNDERWRITING PROFIT (LOSS)
ATTRIBUTABLE TO POLICIES HAVING AN INCEPTION OR RENEWAL DATE DURING SUCH
12-MONTH PERIOD.
2.27
"POLICIES" MEANS POLICIES, BINDERS, CONTRACTS OR
AGREEMENTS OF INSURANCE OR REINSURANCE.
2.28
"REINSURANCE SEGMENT" MEANS THE BUSINESS SEGMENT
OF THE COMPANY CONSISTING OF ITS CORE REINSURANCE SUBSIDIARIES, INCLUDING ARCH
REINSURANCE LTD. AND ARCH REINSURANCE COMPANY, AND ANY OTHER REINSURANCE
SUBSIDIARY OF THE COMPANY THAT BECOMES AN EMPLOYER IN ACCORDANCE WITH SECTION
8.1 HEREOF.
2.29
"ROE" has the meaning specified on Schedule I
hereto.
2.30
"SENIOR EXECUTIVES" HAS THE MEANING SET FORTH IN
SECTION 4.1 HEREOF.
2.31
"SUBSIDIARY" MEANS ANY CORPORATION (OTHER THAN
THE COMPANY) IN AN UNBROKEN CHAIN OF CORPORATIONS BEGINNING WITH THE COMPANY IF
EACH OF THE CORPORATIONS (OTHER THAN THE LAST CORPORATION IN THE UNBROKEN CHAIN)
OWNS SHARES POSSESSING 50% OR MORE OF THE TOTAL COMBINED VOTING POWER OF ALL
CLASSES OF STOCK IN ONE OF THE OTHER CORPORATIONS IN THE CHAIN.
2.32
"Target Bonus Approach" has the meaning specified
in Section 4.1 hereof.
2.33
"Target Bonus Approach Pool" has the meaning
specified in Section 4.2(a) hereof.
2.34
"Target Bonus Opportunity" means, with respect to
each Eligible Employee, a target bonus expressed as a percentage of