Document:

ex10-2.htm

Exhibit 10.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AMENDED AND RESTATED

 

FLAGSTONE REINSURANCE HOLDINGS, S.A.

 

PERFORMANCE SHARE UNIT PLAN

 

17th May 2010

 

 

 

 

 

 

 

 

 

  

  

  

 

Schedule of Amendments

 

DOCUMENT  REVISION HISTORY

	
Version

 

	
Date

	
Summary of Changes

	
Section

	
Approved by

	
Amendment 1

 

	
7/4/06

	
Conforming Amendments

	
Various

	
Board of Directors

	
Amendment 2

 

	
16/6/06

	
Various technical changes

	
Various

	
Board of Directors

	
Amendment 3

 

	
16/11/06

	
Amended & Restated

	
Various

	
Shareholders

	
Amendment 4

 

	
20/07/07

	
Amended & Restated

	
Various

	
Board of Directors

	
Amendment 5

 

	
16/05/08

	
Amended & Restated

	
Various

	
Board of Directors and Shareholders

	
Amendment 6

 

	
11/12/09

	
Additional Language

	
Section 6

	  
	
Amendment 7

	
25/2/10

	
Additional language on retirement provisions, modification of total PSU’s available and inclusion of a clawback provision in the event of restatement

	
Sections 4, 6 and 16

	
Board of Directors and Shareholders

	
Amendment 8

	
17/5/10

	
Changes to reflect the Company’s move from Bermuda to Luxembourg

	
Various

	
Board of Directors

 

 

 

 

 

 

 

 

 

 

 

  

Page 2 of 13

  

 

 

Flagstone Reinsurance Holdings, S.A.

Performance Share Unit Plan

 

 

 

	1.	 
PURPOSE

	 	 
	The purpose of this Plan is to advance the interests of the Company and its shareholders by providing PSUs as incentive compensation to certain key Employees of the Company and its subsidiaries, as well as, at the discretion of the Compensation Committee, employees of companies that provide operational support or other services to the Company.

 

	
2.  

	
DEFINITIONS

 

	
2.1.  

	
“Adverse Change in the Plan” is defined in paragraph 12.

 

	
2.2.  

	
“Affiliates” includes any company 50% or more owned, directly or indirectly, by the Company.

 

	
2.3.  

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

 

	
2.4.  

	
“Change in Control” is defined in paragraph 9.

 

	
2.5.  

	
“Common Shares” shall mean common shares of the Company.

 

	
2.6.  

	
“Company” means Flagstone Reinsurance Holdings, S.A..

 

	
2.7.  

	
“Compensation Committee” means the Compensation Committee of the Board.

 

	
2.8.  

	
“Constructive Termination” is defined in paragraph 11.

 

	
2.9.  

	
“Employee” means any person, including officers, employed by the Company or any Subsidiary of the Company. Such term shall also include directors of the Company or any Subsidiary of the Company.  Such term shall also include, at the discretion of the Compensation Committee, employees of companies that provide operational support or other services to the Company.  A person shall not cease to be an Employee in the case of (i) any leave of absence approved by the Company or (ii) transfers between locations of the Company or between the Company, any Subsidiary or any successor.

 

	
2.10.  

	
“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.

 

	
2.11.  

	
“Hostile Takeover Termination” is defined in paragraph 13.

 

	
2.12.  

	
“Inter Vivos Designee” means any person or body of persons corporate or unincorporate, association, trust, partnership or similar entity or arrangement designated by an Employee to hold such PSUs granted to the Employee under the Plan and receive payments under the Plan during the life of the Employee.

 

 

  

Page 3 of 13

  

 

 

	
2.13.  

	
“Maximum Award” shall mean the maximum number of Common Shares that an Employee would be entitled to receive if all of the performance goals set forth in a particular PSU were satisfied over the Performance Period(s) set forth in such PSU.

 

	
2.14.  

	
“Performance Period(s)” means the period(s) during which an employee must perform pursuant to the grant of a PSU; provided, however, that any such period must end on December 31 of the relevant fiscal year.

 

	
2.15.  

	
“Plan” means this Flagstone Reinsurance Holdings, S.A. Performance Share Unit Plan.

 

	
2.16.  

	
“PSU” means a Performance Share Unit.

 

	
2.17.  

	
“Retire” means to resign from the Company to be Retired.

 

	
2.18.  

	
“Retired “ means not acting as an Employee, Officer, Director, or consultant to any insurance or reinsurance firm. The Committee may waive this provision at its sole discretion with respect to Clause 6.3.2, if it determines in its sole discretion that the Employee is not competing in any way with the Company or Affiliates.

 

	
2.19.  

	
“Subsidiary”, as used herein, has the meaning assigned to the term “subsidiary company” in the Companies Act, 1981 of Bermuda.

 

	
2.20.  

	
“Termination Without Cause” is defined in paragraph 10.

 

	
2.21.  

	
“Term of Service” means the time between

 

	
2.21.1.  

	
the date the Employee’s continuous employment with the Company or one or more Affiliates commenced,  with the term of service of each employee of an Affiliate deemed to commence at the latest of December 20, 2005, or the date of acquisition of 50% or more by the Company of the ownership interest, or the date of the Employee’s actual commencement of service

 

 and

 

	
2.21.2.  

	
any date of separation from service, including for resignation,  termination for Cause or not for Cause, or retirement.

 

	
3.  

	
ADMINISTRATION OF THE PLAN

 

	
3.1.  

	
Administration. The Plan shall be administered by the Compensation Committee.   No member of the Compensation Committee shall be an Employee of the Company eligible to receive PSUs under the Plan or shall have been eligible within one year prior to his appointment to receive PSUs under the Plan or to receive awards under any other plan of the Company or any of its subsidiaries under which participants are entitled to acquire shares, share options or share appreciation rights of the Company or any of its subsidiaries.

 

 

  

Page 4 of 13

  

 

 

	
3.2.  

	
Powers of the Administrator.  The Compensation Committee shall have exclusive authority to select the Employees to be granted PSUs, to determine the number of PSUs to be granted and the terms (including the performance goals and Performance Period(s)) of such PSUs and to prescribe the form of the instruments embodying such PSUs.  The Compensation Committee shall be authorized to interpret the Plan and the PSUs granted under the Plan, to establish, amend and rescind any rules and regulations relating to the Plan and to make any other determinations which it believes necessary or advisable for the administration of the Plan.  The Compensation Committee may correct any defect or supply any omission or reconcile any inconsistency in the Plan or in any PSU grant instrument in the manner and to the extent the Compensation Committee deems desirable to carry it into effect.  Any decision of the Compensation Committee in the administration of the Plan, as described herein, shall be final and conclusive.  The Compensation Committee may act only by a majority of its members in office, except that the members thereof may authorize any one or more of their number or any officer of the Company to execute and deliver documents on behalf of the Compensation Committee.  No member of the Company shall be liable for anything done, or for any failure to act, by him or by any other member of the Compensation Committee in connection with the Plan, except for his own willful misconduct or as expressly provided by statute.

 

	
4.  

	
AWARDS

 

	
4.1.  

	
Type of Awards Under the Plan. Awards under the Plan shall be limited to PSUs.

 

	
4.2.  

	
Maximum Number of PSUs and Maximum Number of Common Shares that may be Issued Pursuant to PSUs Under the Plan. The maximum number of PSUs that may be granted under the Plan shall not exceed 5,600,000 PSUs.  The maximum number of PSUs that may be granted under the Plan to any one Employee shall be half the maximum number of PSUs that may be granted under the Plan to all Employees.  The aggregate Maximum Awards that shall be issuable under the Plan shall not exceed 11,200,000 Common Shares.  If a PSU is forfeited or otherwise cancelled, or if an Employee does not achieve the Maximum Award pursuant to a PSU, the Common Shares underlying such PSU shall become available for future grant under PSUs pursuant the Plan (unless the Plan has terminated).

 

 

	
5.  

	
RIGHTS WITH RESPECT TO PSUs

 

	
5.1.  

	
A

	 	An Employee to whom PSUs are granted (and any person succeeding to such employee’s rights pursuant to the Plan) shall have no rights as a shareholder with respect to any Common Shares issuable pursuant thereto until such Employee’s name is entered into the Register of Members of the Company.  Except as provided in paragraph 14, no adjustment shall be made for dividends, distributions or other rights (whether ordinary or extraordinary, and whether in cash, securities or other property) the record date for which is prior to the date such share certificate is issued.

 

 

  

Page 5 of 13

  

 

 

6.  PSUs

 

The grant of PSUs to an Employee will entitle him to receive, without payment to the Company, all or a portion of the Maximum Award, as determined by the Compensation Committee, if the terms and conditions specified herein and in the PSU are satisfied.  Payment in respect of a PSU shall be made as provided in subparagraph 6.6.  Each grant of PSUs shall be subject to the following terms and conditions:

 

	
6.1.  

	
The Compensation Committee shall determine the number of PSUs to be granted to each Employee.  PSUs may be issued in different classes or series having different terms and conditions.

 

	
6.2.  

	
Subject to subparagraph 6.6, at the end of the Performance Period(s) specified in the grant of a PSU, an Employee shall be entitled to receive the Maximum Award if the performance objectives set forth in the grant of such PSU are attained in full.  If the performance objectives specified in the grant are attained in part but not in full, the Compensation Committee, in its sole discretion, shall determine the percentage of the Maximum Award, if any, to which the Employee is entitled under the PSU.

 

	
6.3.  

	
PSUs shall be cancelled if the Employee’s continuous employment with the Company or any of its subsidiaries or with any company that provides operational support or other services to the Company shall terminate for any reason prior to the end of the Performance Period(s), unless such termination results in Related Employment (as defined in paragraph 8), and except as otherwise specified in this subparagraph 6.3 or in subparagraphs 6.4 or 6.5.  Notwithstanding the foregoing and without regard to subparagraph 6.2:

 

	
6.3.1.  

	
if an Employee shall, while employed by the Company or any of its subsidiaries or by any company that provides operational support or other services to the Company or while engaged in Related Employment, die or become disabled (within the meaning of paragraph 7) prior to the end of the Performance Period(s), the PSUs granted to such Employee shall be cancelled at the end of the next ending Performance Period and he, or his legal representative, as the case may be, shall become entitled to receive a cash payment (determined in accordance with subparagraph 6.6) in respect of the Common Shares he would have received had he been in continuous employment with the Company through the end of such Performance Period and had the performance objectives, if any, that were imposed been achieved; or

 

	
6.3.2.  

	
if an Employee shall retire then:

 

	
6.3.2.1.  

	
If at the time of their retirement the Employee is 65 years old or older, the PSUs shall not be cancelled on the Employee’s official retirement date, but they shall continue to vest and the Employee shall receive payments in cash or stock at the discretion of the Compensation Committee on schedule as described in subparagraph 6.6 or

 

 

  

Page 6 of 13

  

 

 

	
6.3.2.2.  

	
If at the time of their early retirement, the sum of the Employee’s age plus years of service for the Company or any of its affiliates is greater than or equal to 65 (sixty-five), the PSUs shall not be cancelled on the Employee’s official retirement date,  but shall continue to vest and the Employee shall receive payments in cash or stock at the discretion of the Compensation Committee on schedule as described in subparagraph 6.4, as they would have received had they been in continuous employment with the Company on that date, provided only that the Employee remains Retired on each vesting date.  This early retirement provision will not apply where any conflicting provisions exist in an individual’s employment contract;

 

	
6.3.2.3.  

	
if at the time of their retirement the Employee does not meet the criteria under section 6.3.2.2 and is less than 65 years old and their retirement occurs before 24 months have elapsed since the grant of the PSUs, the PSUs shall be cancelled and the Employee shall become entitled to receive a cash payment (determined in accordance with subparagraph 6.6) in respect of one-ninth of the Common Shares they would have received had they been in continuous employment with the Company through the end of the next Performance Period and had the performance objectives, if any, that were imposed been achieved, or

 

	
6.3.2.4.  

	
if at the time of their retirement the Employee does not meet the criteria under section 6.3.2.2 and is less than 65 years old and their retirement occurs after 24 months or more have elapsed since the grant of the PSUs, the PSUs shall be cancelled and the Employee shall become entitled to receive a cash payment (determined in accordance with subparagraph 6.6) in respect of two-ninths of the Common Shares they would have received had they been in continuous employment with the Company through the end of the next Performance Period and had the performance objectives, if any, that were imposed been achieved.

 

	
6.4.  

	
If within 24 months after a Change in Control of the Company as defined in paragraph 9 and prior to the end of a Performance Period:

 

	
6.4.1.  

	
there is a Termination Without Cause, as defined in paragraph 10, of the employment of an Employee;

 

	
6.4.2.  

	
there is a Constructive Termination, as defined in paragraph 11, of the employment of an Employee; or

 

 

  

Page 7 of 13

  

 

 

	
6.4.3.  

	
there occurs an Adverse Change in the Plan, as defined in paragraph 12, in respect of an Employee, then:

 

	
6.4.3.1.  

	
the Employee shall become entitled to receive:

 

	
6.4.3.1.1.  

	
The Maximum Award multiplied by a fraction the numerator of which is the number of full months which have elapsed since the date of the PSU grant to the end of the first month in which occurs one of the events described in clauses 6.4.1, 6.4.2 or 6.4.3 and the denominator of which is the total number of months in the Performance Period(s), plus

 

	
6.4.3.1.2.  

	
If the number of Common Shares determined pursuant to subclause (1) above is less than the Maximum Award (such difference being referred to herein as the “Deficiency”), the Employee shall receive Common Shares equal to all or a portion of such Deficiency as follows:

 

	
6.4.3.1.2.1.  

	
if the Compensation Committee shall have determined, prior to the Change in Control and based on the most recent performance status reports, that the performance objectives for the particular grant were being met at the date of the determination, the Employee shall receive Common Shares equal to the full Deficiency, and

 

	
6.4.3.1.2.2.  

	
if the determination of the Compensation Committee was that the performance objectives for the particular grant were not being met at the date of such determination, the Compensation Committee shall at the time of such determination have also made a determination as to the percentage of the Deficiency as to which the Employee is entitled to receive Common Shares, but in no event shall such percentage be less than fifty percent (50%).

 

	
6.4.3.2.  

	
Payment of any amount in respect of PSUs as described above in this subparagraph 6.4 shall be made as promptly as possible after the occurrence of one of the events described in clauses 6.4.1 through 6.4.3.

 

	
6.5.  

	
Notwithstanding any other provision in the Plan, in the event of a Hostile Takeover Termination, the Employee shall immediately become entitled to the Maximum Award with respect to all PSUs granted to such Employee.  Such Maximum Award shall be payable, in the sole discretion of the Compensation Committee, either by issuance of Common Shares or in cash based on the market price per Common Share as of the close of trading on the date of a Hostile Takeover Termination.

 

 

  

Page 8 of 13

  

 

 

	
6.6.  

	
Payment of any amount due to an Employee in respect of the PSUs shall be made by the Company as promptly as practicable or shall be deferred to such other time or times as the Compensation Committee shall determine, and may be made in cash, by issuance of Common Shares, or partly in cash and partly by issuance of Common Shares as determined by the Compensation Committee.  The amount of cash, if any, to be paid in lieu of issuance of Common Shares shall be determined based on the market price per Common Share as of the close of trading on the date on which an Employee becomes entitled to payment, whether or not such payment is deferred.  Such deferred payments may be made by undertaking to pay cash in the future, together with such additional amounts as may accrue thereon until the date or dates of payment, as determined by the Compensation Committee in its sole discretion.  In the case of issuance of Common Shares to an Employee, such Employee’s services rendered to the Company shall be deemed to constitute full payment to the Company of the par value of such Common Shares.

 

	7.   	

 

DISABILITY

 

	For the purposes of this Plan, an Employee shall be deemed to be disabled if the Compensation Committee shall determine that the physical or mental condition of the Employee is such as would entitle him to payment of monthly disability benefits under any disability plan of the Company or a Subsidiary in which he is a participant.

 

	8.	 RELATED EMPLOYMENT
	 	 
	For the purposes of this Plan, Related Employment shall mean the employment of an Employee by an employer which is neither the Company nor a Subsidiary provided: (i) such employment is undertaken by the individual and continued at the request of the Company or a Subsidiary; (ii) immediately prior to undertaking such employment, the individual was an officer or employee of the Company or a Subsidiary, or was engaged in Related Employment as herein defined; and (iii) such employment is recognized by the Compensation Committee, in its sole discretion, as Related Employment for the purposes of this paragraph 8.  The death or disability of an individual during a period of Related Employment as herein defined shall be treated, for purposes of this Plan, as if the death or onset of disability had occurred while the individual was an officer or employee of the Company.

 

	9.	

 

	 	 
	For purposes of this Plan, a “Change in Control of the Company” shall occur if:

 

	
9.1.  

	
Any person or group (within the meaning of Section 13(d) and 14(d)(2) of the Exchange Act), excluding the initial subscribers to the Company, becomes the beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act) of fifty percent (50%) or more of the Company’s then outstanding shares; or

 

	
9.2.  

	
the business of the Company for which the participant’s services are principally performed is disposed of by the Company pursuant to a sale or other disposition of all or substantially all of the business or business related assets of the Company (including shares of a Subsidiary of the Company).

 

 

  

Page 9 of 13

  

 

 

	
10.  

	
TERMINATION WITHOUT CAUSE

 

For purposes of this Plan, “Termination Without Cause” shall mean a termination of the Employee’s employment with the Company or a Subsidiary by the Company or the Subsidiary other than for (i) disability as described in paragraph 7 or (ii) Cause.  “Cause” shall mean (a) a material breach by the Employee of any contract between the Employee and the Company or a Subsidiary; (b) the willful and continued failure or refusal by the Employee to perform any duties reasonably required by the Company or a Subsidiary, after notification by the Company or the Subsidiary of such failure or refusal, and failing to correct such behaviour within 20 days of such notification; (c) commission by the Employee of a criminal offence or other offence of moral turpitude; (d) perpetration by the Employee of a dishonest act or common law fraud against the Company or a Subsidiary or a client of either; or (e) the Employee willfully engaging in misconduct which is materially injurious to the Company or a Subsidiary, including without limitation, the disclosure of any trade secrets, financial models, or computer software to persons outside the Company or a Subsidiary without the consent of the Company or a Subsidiary.  Notwithstanding anything herein to the contrary, if the Employee’s employment with the Company or a Subsidiary shall terminate due to a Change in Control of the Company as described in paragraph 9, where the purchaser, as described in such paragraph, formally assumes the Company’s obligations under this Plan or places the Employee in a similar or like plan with no diminution of the value of the grants, such termination shall not be deemed to be a “Termination Without Cause.”

 

	
11.  

	
CONSTRUCTIVE TERMINATION

 

For purposes of this plan, a “Constructive Termination” shall mean a termination of employment with the Company or a Subsidiary at the initiative of the Employee that the Employee declares by prior written notice delivered to the Secretary of the Company to be a Constructive Termination by the Company or a Subsidiary and which follows (a) a material decrease in his salary or (b) a material diminution in the authority, duties or responsibilities of his position with the result that the Employee makes a determination in good faith that he cannot continue to carry out his job in substantially the same manner as it was intended to be carried out immediately before such diminution.  Notwithstanding anything herein to the contrary, Constructive Termination shall not occur within the meaning of this paragraph 11 until and unless 30 days have elapsed from the date the Company receives such written notice without the Company curing or causing to be cured the circumstance or circumstances described in this paragraph 11 on the basis of which the declaration of Constructive Termination is given.

 

	
12.  

	
ADVERSE CHANGE IN THE PLAN

 

For purposes of this plan, an “Adverse Change in the Plan” shall mean:

 

	
12.1.  

	
termination of the Plan pursuant to subparagraph 18(a);

 

	
12.2.  

	
amendment of the Plan pursuant to paragraph 17 that materially diminishes the value of PSU grants, either to individual Employees or in the aggregate, unless there is substituted concurrently authority to grant PSUs of comparable value to individual Employees in the Plan or in the aggregate, as the case may be; or,

 

 

  

Page 10 of 13

  

 

 

	
12.3.  

	
in respect of any holder of a PSU a material diminution in his rights held under such PSU (except as may occur under the terms of the PSU as originally granted) unless there is substituted concurrently a PSU grant with a value at least comparable to the loss in value attributable to such diminution in rights.

 

	
13.  

	
HOSTILE TAKEOVER TERMINATION

 

For purposes of this plan, a “Hostile Takeover Termination” shall mean an Adverse Change in the Plan as described in paragraph 12 or any termination (including, but not limited to, a Termination Without Cause as described in paragraph 10 or a Constructive Termination as described in paragraph 11) of an Employee’s employment with the Company or a Subsidiary of the Company at any time following a Change in Control of the Company, as described in paragraph 9, that was opposed by the two Board members nominated by Haverford (Bermuda) Ltd.

 

	
14.  

	
DILUTION AND OTHER ADJUSTMENTS

 

	
14.1.  

	
In the event of any change in the issued and outstanding Common Shares of the Company by reason of any share split, share dividend, recapitalization, merger, consolidation, reorganization, amalgamation, combination or exchange of Common Shares or other similar event, and if the Compensation Committee shall determine, in its sole discretion, that such change equitably requires an adjustment in the number or kind of Common Shares that may be issued pursuant to PSUs under the Plan pursuant to paragraph 6 or in any measure of performance, then such adjustment shall be made by the Compensation Committee and shall be conclusive and binding for all purposes of the Plan.

 

	
14.2.  

	
Upon the declaration by the Board of Directors of the Company of a dividend in specie or in kind in favor of the holders of Common Shares in the Company, the Compensation Committee shall determine, in its sole discretion, if such dividend equitably requires an adjustment in the number or kind of PSUs that may be issued to an Employee under the Plan in lieu of a dividend payment.

 

	
15.  

	
DESIGNATION OF BENEFICIARY/INTER VIVOS DESIGNEE BY EMPLOYEE

 

	
15.1.  

	
An Employee may name in writing to the Compensation Committee, or such other person as the Compensation Committee may designate from time to time to receive such instructions, a beneficiary to receive any payment to which he may be entitled in respect of PSUs under the Plan in the event of his death.  An Employee may change his beneficiary from time to time in the same manner.  If no designated beneficiary is living on the date on which any amount becomes payable to an Employee’s executors or administrators, the term “beneficiary” as used in the Plan shall include such person or persons.

 

	
15.2.  

	
An Employee may name in writing to the Compensation Committee, or such other person as the Compensation Committee may designate from time to time such instructions, one or more Inter Vivos Designees and successor Inter Vivos Designees who shall be given the rights to all past, present and future grants or series of PSUs or to one or more specific grants or series of PSUs.  An Employee may change the designation of any Inter Vivos Designee in the same manner and such designation shall revoke and supersede all earlier designations.  In the event an Employee does not notify the Compensation Committee designating one or more Inter Vivos Designees, or no Inter Vivos Designee survives the Employee, the PSUs and any payment of shares in place of cash shall be given to the Employee.

 

 

  

Page 11 of 13

  

 

 

	
16.  

	
MISCELLANEOUS PROVISIONS

 

	
16.1.  

	
No employee or other person shall have any claim or right to receive a grant of PSUs under the Plan.  Neither the Plan nor any action taken hereunder shall be construed as giving an employee any right to be retained in the employ of the Company or any Subsidiary.

 

	
16.2.  

	
An Employee’s rights and interest under the Plan may not be assigned or transferred in whole or in part either directly or by operation of law or otherwise (except in the event of an Employee’s death), including but not limited to, execution, levy, garnishment, attachment, pledge, bankruptcy or in any other manner and no such right or interest of any Employee in the Plan shall be subject to any obligation or liability or such Employee.

 

	
16.3.  

	
No Common Shares shall be issued hereunder unless counsel for the Company shall be satisfied that such issuance will be in compliance with applicable laws and Luxembourg law.

 

	
16.4.  

	
In the event the Company is required to make a financial restatement due to a material misstatement, any grant based upon the erroneous financial statement shall be void.

 

	
16.5.  

	
The Company and its subsidiaries shall have the right to deduct from any payment made under the Plan any taxes required by law to be withheld with respect to such payment.  It shall be a condition to the obligation of the Company to issue Common Shares upon payment of a PSU that the Employee pay to the Company, upon its demand, such amount as may be required by the Company for the purpose of satisfying any liability to withhold taxes.  If the amount requested is not paid, the Company may refuse to issue Common Shares.

 

	
16.6.  

	
The Company reserves the right to withhold shares or deduct from the Employee payroll any taxes or social benefit costs to the Employee or the Company associated with the vesting or fulfillment of the PSUs.

 

	
16.7.  

	
The expenses of the Plan shall be borne by the Company.  However, if a grant of PSUs is made to an employee of a Subsidiary:

 

	
16.7.1.  

	
if such grant results in payment of cash to the Employee, such Subsidiary shall pay to the Company an amount equal to such cash payment; and

 

	
16.7.2.  

	
if the grant results in the issuance to the Employee of Common Shares, such Subsidiary shall pay to the Company an amount equal to fair market value thereof, as determined by the Compensation Committee, on the date such Common Shares are issued.

 

 

  

Page 12 of 13

  

 

 

	
16.8.  

	
The Plan shall be unfunded.  The Company shall not be required to establish any special or separate fund or to make any other segregation of assets to assure any payment under the Plan.

 

	
16.9.  

	
By accepting any grant or other benefit under the Plan, each Employee and each person claiming under or through him shall be conclusively deemed to have indicated his acceptance and ratification of, and consent to, any action taken under the Plan by the Company, the Board or the Compensation Committee.

 

	
17.  

	
AMENDMENT

 

The Plan may be amended at any time and from time to time by the Board, but no amendment which increases the aggregate number of Common Shares which may be issued pursuant to the Plan or the class of employees eligible to participate shall be effective unless and until the same is approved by the shareholders of the Company.  For the avoidance of doubt, any action taken by the Compensation Committee pursuant to paragraph 14 does not require shareholder approval.  No amendment of the Plan shall adversely affect any right of any Employee with respect to any previous grant without such Employee’s written consent.

 

	
18.  

	
TERMINATION

 

This Plan shall terminate upon the earlier of the following dates or events to occur:

 

	
18.1.  

	
the adoption of a resolution of the Board terminating the Plan; or

 

	
18.2.  

	
ten years from the date the Plan is initially or subsequently approved and adopted by the shareholders of the Company in accordance with paragraph 18 hereof.

 

No termination of the Plan shall alter or impair any of the rights or obligations of any person, without his consent, under any previous grant under the Plan.

 

	
19.  

	
SHAREHOLDER ADOPTION

 

Material amendments to the Plan shall be submitted to the shareholders of the Company for their approval or adoption to the extent required by the New York Stock Exchange.  Such amendments to the Plan shall not be effective unless and until such amendments have been so approved and adopted by the shareholders in the manner required by the laws of Luxembourg.

 

	
20.  

	
GOVERNING LAW

 

The Plan shall be governed by and construed and interpreted in accordance with the laws of Luxembourg.

 

 

Page 13 of 13ex10-3.htm

Exhibit 10.3

 

Amended and Restated Flagstone Reinsurance Holdings, S.A.

Employee Restricted Share Unit Plan

 

Section 1 – Purpose of the Plan

	
1.01

	
Flagstone Reinsurance Holdings, S.A. (the “Company”) adopted this Amended and Restated Flagstone Reinsurance Holdings, S.A. Employee Restricted Share Unit Plan (the “Plan”), effective as of May 17th 2010 for the benefit of the Directors, officers, and Employees of the Company.  The purpose of the Plan is to promote a proprietary interest in the Company and its Subsidiaries among its Directors, officers, and employees; encourage the Directors, officers, and Employees of the Company to further the development of the Company; and to attract and retain the key employees necessary for the Company’s long-term success.  This Plan amends and restates in its entirety the Flagstone Reinsurance Holdings Limited Employee Restricted Share Unit Plan originally adopted on July 1, 2006, as previously amended.

Section 2 – Definitions

	
2.01

	
General – Whenever the following terms are used in the Plan with the first letter capitalized, they shall have the meanings specified below unless the context clearly indicates to the contrary or as provided under Section 7 of the Plan.

	  	  
	
2.02

	
“Account” of a Participant means his or her individual account, if any, or the account of a Director’s employer, as established in accordance with Section 6.

	  	  
	
2.03

	
“Beneficiary” means the person or persons designated by a Participant, on a form provided by the Plan Administrator, to receive payments under the Plan in the event of the Participant’s death.

	  	  
	
2.04

	
“Board” means Board of Directors of the Company.

	  	  
	
2.05

	
“Cause” shall mean (a) a material breach by a Participant of any contract between the Participant and the Company or a Subsidiary; (b) the willful and continued failure or refusal by the Participant to perform any duties reasonably required by the Company or a Subsidiary, after notification by the Company or the Subsidiary of such failure or refusal, and failure to correct such behaviour within 20 days of such notification; (c) commission by the Participant of a criminal offence or other offence of moral turpitude; (d) perpetration by the Participant of a dishonest act or common law fraud against the Company or a Subsidiary or a client of either; or (e) the Participant willfully engaging in misconduct which is materially injurious to the Company or a Subsidiary, including without limitation, the disclosure of any trade secrets, financial models, or computer software to persons outside the Company or a Subsidiary without the consent of the Company or a Subsidiary.

 

 

  

  

  

FLAGSTONE REINSURANCE HOLDINGS, S.A.

EMPLOYEE RESTRICTED SHARE UNIT PLAN

 

 

	
2.06

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

	  	  
	
2.07

	
“Common Stock” means shares of the Company.

	  	  
	
2.08

	
“Company” means Flagstone Reinsurance Holdings, S.A.

	  	  
	
2.09

	
“Director” means a member of the board of directors of the Company or its Subsidiaries.

	  	  
	
2.10

	
“Disability” means a condition by which the Compensation Committee has determined that the physical or mental condition of the Participant is such as would entitle him to receive payment of monthly benefits under any disability plan of the Company or a Subsidiary in which the individual participates.

	  	  
	
2.11

	
“Employee” means an employee of the Company or its Subsidiaries.

	  	  
	
2.12

	
“Grant Certificate” means a certificate evidencing the credit of or grant to a Participant of a Restricted Share Unit under the Plan (sample attached as Appendix 5).

	  	  
	
2.13

	
“Inter Vivos Designee” means any person or body of persons corporate or unincorporate, association, trust, partnership or similar entity or arrangement designated by a Participant, on a form provided by the Plan Administrator, to hold such RSUs granted to the Participant under the Plan and receive payments under the Plan during the life of the Participant.

	  	  
	
2.14

	
“Participant” means any Employee, officer, or Director, except for Management Directors, of the Company or its Subsidiaries who (1) are eligible for RSU credits or grants under the Plan and (2) the Compensation Committee decides pursuant to its authority under Section 3.01 of the Plan to grant or credit an RSU award.

	  	  
	
2.15

	
“Plan” means the Flagstone Reinsurance Holdings, S.A. Employee Restricted Share Unit Plan, as it may be amended from time to time.

	  	  
	
2.16

	
“Plan Administrator” means the Compensation Committee, or the person or persons appointed by the Compensation Committee to serve under Section 4 of the Plan.

	  	  
	
2.17

	
“Restricted Share Unit” (or “RSU”) means a right to receive a payment, in cash or in actual Common Stock of the Company, of the value of Common Stock of the Company, subject to the terms of this Plan and the respective Grant Certificate.

	  	  
	
2.18

	
“Subsidiary” means a subsidiary of the Company.

Section 3 – Awards Subject to the Plan

	
3.01

	
Under the Plan, the Compensation Committee, in its sole discretion, may grant RSUs to Participants or credit RSUs to Directors’ Accounts.  The total stock credits or grants under the Plan shall not exceed (a) that amount required to satisfy the Director requests for fees to be paid in shares, plus (b) 0.2 percent of the total issued and outstanding share capital of the Company per annum or as decided by the Compensation Committee.  To the extent that any RSU granted or credited under the Plan expires, terminates, or is cancelled, such unissued stock credits or grants shall again be available for grant or credit under the Plan.

 

 

  

Page 2 of 16

  

FLAGSTONE REINSURANCE HOLDINGS, S.A.

EMPLOYEE RESTRICTED SHARE UNIT PLAN

 

 

	
3.02

	
The RSUs will normally be settled by delivery of Common Stock, but can be settled to the Participant on distribution in cash, by issuance of shares of Common Stock, or partly in cash and partly by issuance of shares of Common Stock as determined by the Compensation Committee; provided that Participants who are UK domiciled for tax purposes may only receive distributions by issuance of shares of Common Stock.

	  	  
	
3.03

	
The amount of cash, if any, to be paid in lieu of issuance of shares of Common Stock under the Plan shall be determined based on the net book value per share of Common Stock (or market value, if the Company’s shares are freely tradable on an exchange) as of the date on which a Participant becomes entitled to payment, whether or not such payment is deferred.

Section 4 – Administration

	
4.01

	
The Plan shall be administered by the Compensation Committee, and the Compensation Committee shall have the sole authority to interpret the Plan, to establish and revise rules and regulations relating to the Plan (including this Plan document), and to make any other determinations that it believes necessary or advisable for the administration of the Plan.  All of the powers and responsibilities of the Compensation Committee under the Plan may be delegated by the Compensation Committee, in writing, to any Compensation Subcommittee or appropriate Company personnel thereof.  The Board of Directors or the Shareholders of the Company can overrule the Compensation Committee.

Section 5 – Participation

	
5.01

	
The Management Committee of the Company will recommend, and the Compensation Committee will approve, the Participants in the Plan.  Participation in the Plan will be limited to officers, Employees, and Directors (excluding Management Directors) of the Company or its Subsidiaries.  Participants in the Plan may also participate in the Flagstone Reinsurance Holdings, S.A. Performance Share Unit Plan (the “PSU Plan”) sponsored by the Company, however such persons shall not be eligible to receive grants of RSUs and Performance Share Units in the same calendar year.  In addition, participation in the Plan shall be limited only to those individuals who are approved by the Compensation Committee and whose participation in the Plan is evidenced by a Grant Certificate executed by the Company.

Section 6 – Terms of the Grant or Credit of RSUs

	
6.01

	
The Compensation Committee may grant RSUs to a Participant pursuant to the Plan.  In addition, a Director of the Company may elect to substitute all or a percentage of his/her compensation for services performed for the Company with RSUs issued under the Plan, such amount to be credited to his/her Account as RSUs. A Director who serves on the Board on behalf of his/her employer may stipulate that amounts be credited to such employer’s Account as RSUs.  Grants or credits of RSUs shall be evidenced by a Grant Certificate in such form as the Compensation Committee shall from time to time approve.

 

 

  

Page 3 of 16

  

FLAGSTONE REINSURANCE HOLDINGS, S.A.

EMPLOYEE RESTRICTED SHARE UNIT PLAN

 

 

	
6.02

	
A Director who is a Participant in the Plan shall elect no later than December 31 of the year prior to the year with respect to which the compensation is earned (or for the first year of the Plan, no later than the last day of the month prior to the Plan’s effective date), the dollar amount or percentage of compensation for such year to be converted into RSUs and credited to his/her Account pursuant to the written terms of the Plan and the Grant Certificate.

	  	  
	
6.03

	
Upon a grant or credit of an award of RSUs under the Plan, as applicable, a Participant’s Account shall be credited with the amount of such grant or credit.

	  	  
	
6.04

	
Actual shares of Company Common Stock or cash (as determined by the Committee), equal in amount to the number of RSUs that have vested, will be distributed to the Participant upon the earlier of the following: (a) separation from service other than for cause, (b) satisfaction of the applicable vesting period(s), (c) a specific date, or (d) such other time as the Committee may in its sole discretion determine (collectively, the “Distribution Dates”).  The Company shall deliver the shares of Common Stock of the Company and/or cash to the Participant as soon as administratively feasible after the identified date of distribution.

	  	  
	
6.05

	
Grants of RSUs under the Plan will normally fully vest on the date that is specified in the applicable Grant Certificate, subject to the following:

	  	
6.05.1

	
Upon a Participant’s death or Disability, he/she shall become fully vested in all RSUs that have been credited or granted under the Plan.

	  	  	  
	  	
6.05.2

	
Except as otherwise provided herein, the unvested RSU’s of Participants who are Employees or Officers shall be canceled upon notice of termination from the Employer to the Employee or the notice of resignation of the Employee.

	  	  	  
	  	
6.05.3

	
Notwithstanding 6.06.2, at the discretion of the Compensation Committee, vesting of RSUs that are granted under the Plan may continue for Employees who separate from service with the Company after at least five years’ service.

	  	  	  
	  	
6.05.4

	
If an Employee is terminated for Cause all of his RSU’s will be automatically canceled.

	  	  	  
	  	
6.05.5

	
The RSU’s of a Director shall normally vest on the date noted on the Grant Certificate, unless accelerated under 6.04.1, and regardless of whether that Director continues to serve. The Compensation Committee can cancel the RSU’s of a Director, whether vested or not, if that director engages in action deemed to be materially hostile to the interests of the Company, as judged by the Board of Directors.

 

 

  

Page 4 of 16

  

FLAGSTONE REINSURANCE HOLDINGS, S.A.

EMPLOYEE RESTRICTED SHARE UNIT PLAN

 

 

	  	
6.05.6

	
The Compensation Committee may, in its sole discretion, accelerate the vesting of any RSUs credited or granted under the Plan at any time.

	
6.06

	
RSUs and the rights and privileges conferred therewith shall not be sold, transferred, encumbered, hypothecated, or otherwise anticipated by the Participant, except as provided for under the terms of the Plan.  This Award is not liable for or subject to, in whole or in part, the debts, contracts, liabilities, or torts of the Participant, nor shall it be subject to garnishment, attachment, execution, levy, or other legal or equitable process.

Section 7 – Special Provisions

	
7.01

	
The Plan has special provisions which apply variously to citizens, residents, domiciliaries, of certain countries, or employees of Company subsidiaries located in certain countries. These provisions form part of this Plan and are attached as Appendix 4.

	  	  
	
7.02

	
The Company may extend or amend Appendix 4 from time to time in order to accommodate the development of the Company in new countries, to maintain the most tax-favorable status available in various countries under the applicable laws and further modifications/amendments carried out from time to time. Such technical amendments require the approval of the Management Compensation Committee of the Company, and the Chairman of the Compensation Committee.

Section 8 – Taxation

	
8.01

	
Participants shall be responsible for all individual tax consequences of the RSU grants under the Plan.  Where feasible, the Plan will be interpreted and administered to provide favorable tax treatment to the Participant, subject to the compliance with the applicable laws of their respective jurisdiction.

	 	 
	
8.02

	
The Company reserves the right to withhold shares or deduct from the Participant payroll any taxes or social benefit costs to the Participant or the Company associated with the vesting or fulfillment of the RSUs.

Section 9 – Designation of Beneficiary

	
9.01

	
A Participant, by filing the prescribed form (the “Beneficiary Designation Form”, sample attached as Appendix 2) with the Plan Administrator, or such other person as the Plan Administrator may designate from time to time, may designate one or more Beneficiaries and successor Beneficiaries who shall be given the rights to the RSUs in accordance with the terms of the Plan in the event of the Participant’s death.  A Participant may change the designation of a Beneficiary at any time by completing a new Beneficiary Designation Form that shall revoke and supersede all earlier forms.  In the event a Participant does not file a Beneficiary Designation Form designating one or more Beneficiaries, or no designated Beneficiary survives the Participant, the RSUs shall be given to the individual to whom such right passes by will or the laws of descent and distribution and/or succession.

 

 

  

Page 5 of 16

  

FLAGSTONE REINSURANCE HOLDINGS, S.A.

EMPLOYEE RESTRICTED SHARE UNIT PLAN

 

 

	
9.02

	
A Participant, by filing the prescribed form (the “Inter Vivos Designee Form”, sample attached as Appendix 1) with the Plan Administrator, or such other person as the Plan Administrator may designate from time to time, may designate one or more Inter Vivos Designees and successor Inter Vivos Designees who shall be given the rights to all past, present and future grants or series of RSUs, or to one or more specific grants or series of RSUs, designated within the Inter Vivos Designee Form during the life of the Participant and in accordance with the terms of the Plan.  A Participant may change the designation of any Inter Vivos Designee by completing a new Inter Vivos Designation Form that shall revoke and supersede all earlier forms. In the event a Participant does not file an Inter Vivos Designation Form designating one or more Inter Vivos Designees, or no Inter Vivos Designee survives the Participant, the RSUs and any payment of shares in place of cash shall be given to the Participant.

Section 10 – Expenses of the Plan

	
10.01

	
Costs of administration of the Plan will be paid by the Company.

Section 11 – Claims Procedure

	
11.01

	
In general, any claim for benefits under the Plan shall be filed by the Participant or beneficiary (“claimant”) on the form prescribed for such purpose with the Plan Administrator.  If a claim for benefits under the Plan is wholly or partially denied, notice of the decision shall be furnished to the claimant by the Plan Administrator within a reasonable period of time after receipt of the claim by the Plan Administrator.  A Participant who is denied a claim for benefits may appeal to the Compensation Committee for a review of the Plan Administrator’s decision.  The decision of the Compensation Committee shall be furnished to the Participant within a reasonable period of receipt of the request for review and the decision of the Compensation Committee shall be final and binding to the Participant.

Section 12 – Termination or Amendment of the Plan

	
12.01

	
The Plan may be amended in whole or in part from time to time, or may be terminated, by the Board, provided that in event of such amendment or termination, the rights of the Participants related to an RSU that have been granted under the Plan shall be preserved and maintained and no amendment may confer additional benefits upon Participants without prior approval by the Board.  Notice of any amendment or termination of the Plan shall be given in writing to the Participant.

Section 13 – Term of the Plan

	
13.01

	
The Plan shall become effective on the date it is adopted by the Company and shall continue in effect as amended from time to time until terminated pursuant to Section 12.

 

 

  

Page 6 of 16

  

FLAGSTONE REINSURANCE HOLDINGS, S.A.

EMPLOYEE RESTRICTED SHARE UNIT PLAN

 

Section 14 – Rights as a Stockholder

	
14.01

	
No Participant shall have any rights (including voting or dividend rights) as a shareholder of the Company with respect to any Common Stock covered by, or related to, any RSU granted or credited pursuant to the Plan until registered as a shareholder in the Company’s shareholders register.

Section 15 – Anti-Dilution and Other Adjustments

	
15.01

	
In the event of any change in the issued and outstanding shares of Common Stock of the Company by reason of any share split, share dividend, recapitalization, merger, consolidation, reorganization, amalgamation, combination or exchange of shares of Common Stock or other similar event, and if the Compensation Committee shall determine, in its sole discretion, that such change equitably requires an adjustment in the number or kind of shares of Common Stock of the Company that may be issued pursuant to RSUs under the Plan pursuant to paragraph 6, then such adjustment shall be made by the Compensation Committee and shall be conclusive and binding for all purposes of the Plan.

	 	 
	
15.02

	
Upon the declaration by the Board of Directors of the Company of a dividend in specie or in kind in favor of the holders of Common Shares in the Company, the Compensation Committee shall determine, in its sole discretion, if such dividend equitably requires an adjustment in the number or kind of RSUs that may be issued to a Participant under the Plan in lieu of a dividend payment.

Section 16 – Miscellaneous

	
16.01

	
If any provision of this Plan shall be held invalid or unenforceable, such invalidity or unenforceability shall not affect any other provisions hereof, and this Plan shall be construed and enforced as if such provisions had not been included.

	  	  
	
16.02

	
Except by will or the laws of descent and distribution and/or succession, a Participant’s rights and interest under the Plan may not be assigned or transferred in whole or in part either directly or by operation of law or otherwise (except in the event of Participant’s  death), including but not limited to, execution, levy, garnishment, attachment, pledge, bankruptcy or in any other manner and no such right or interest of any Participant in the Plan shall be subject to any obligation or liability or such Participant; provided that Directors shall be permitted to assign their rights under the Plan to their employer or an affiliate of their employer, as approved by the Compensation Committee.

	  	  
	
16.03

	
Except to the extent specifically set forth in the Grant Certificate, the Participant’s rights under the Plan shall be governed in all aspects by the terms of the Plan, including the provisions that authorize the Plan Administrator to administer and interpret the Plan and that provide that the Plan Administrator’s decisions, determinations, and interpretations with respect to the Plan are final and conclusive on all persons affected hereby.  Additionally, this Plan shall be construed in accordance with, and governed by the laws of Luxembourg.

 

 

  

Page 7 of 16

  

FLAGSTONE REINSURANCE HOLDINGS, S.A.

EMPLOYEE RESTRICTED SHARE UNIT PLAN

 

 

	
16.04

	
Nothing in this Plan, nor any action taken pursuant to this Plan, shall be deemed to give any Participant any right to remain in the employ of the Company or affect the right of the Company to terminate a Participant’s employment at any time, with or without Cause.

*   *   *   *   *

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

Page 8 of 16

  

FLAGSTONE REINSURANCE HOLDINGS, S.A.

EMPLOYEE RESTRICTED SHARE UNIT PLAN

 

 

As evidence of its adoption of the Plan, Flagstone Reinsurance Holdings, S.A. has caused this instrument to be signed by its officer of representative duly authorized on this 17th day of May, 2010.

 

 

	
FLAGSTONE REINSURANCE HOLDINGS, S.A.,

	 
	
By:

	
/s/ David Brown

	  	  
	
Title:

	
Chief Executive Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

Page 9 of 16

  

FLAGSTONE REINSURANCE HOLDINGS, S.A.

EMPLOYEE RESTRICTED SHARE UNIT PLAN

 

APPENDIX 1

 

Inter Vivos Designee Form

 

	
To:

	
The Plan Administrator of the Flagstone Reinsurance Holdings, S.A. Employee Restricted Share Unit Plan

 

	
From:

	  	  

*   *   *   *   *

 

Pursuant to Section 9 of the Flagstone Reinsurance Holdings, S.A. Employee Restricted Share Unit Plan (the “Plan”), I hereby designate the following person(s) as inter vivos designee(ies) who during my life shall be entitled to receive amounts under the Plan and respective Grant Certificate:

 

	  	
Primary Inter Vivos Designee Name:

	  
	  	  	  
	  	
Secondary Inter Vivos Designee Name:

	  

 

Grant Certificates to which this designation applies:

	  	
(i)

	
Series/Year(s)

	  	  

or,

	  	
(ii)

	
All Grants after:

	
/

	
/

	  	 	  
	  	  	  	
Day

	
Month

	
Year

	  

In making the above designation, I reserve the right to revoke this designation or change the inter vivos designee(ies) designated at any time or times and without the consent of any other person.

This designation cancels and supersedes any inter vivos designation previously made with respect to this Plan and respective Grant Certificate.

 

 

	
Signed:

 

 

	
Participant

 

 

	
Date

 

 

 

 

 

  

Page 10 of 16

  

FLAGSTONE REINSURANCE HOLDINGS, S.A.

EMPLOYEE RESTRICTED SHARE UNIT PLAN

APPENDIX 2

 

Beneficiary Designation Form

 

 

	
To:

	
The Plan Administrator of the Flagstone Reinsurance Holdings, S.A. Employee Restricted Share Unit Plan

 

	
From:

	  	  

 

*   *   *   *   *

 

Pursuant to Section 9 of the Flagstone Reinsurance Holdings, S.A. Employee Restricted Share Unit Plan (the “Plan”), I hereby designate the following person(s) as 

beneficiar(ies) who on my death shall be entitled to receive amounts under the Plan and respective Grant Certificate:

 

	  	

Primary Beneficiary Name:

	  
	  	  	  
	  	

Secondary Beneficiary Name:

	  

 

In making the above designation, I reserve the right to revoke this beneficiary designation or change the beneficiar(ies) designated at any time or times and without the consent of any beneficiary.

This beneficiary designation cancels and supersedes any beneficiary designation previously made with respect to this Plan and respective Grant Certificate.

 

 

	
Signed:

 

 

	
Participant

 

 

	
Date

 

 

 

 

 

  

Page 11 of 16

  

FLAGSTONE REINSURANCE HOLDINGS, S.A.

EMPLOYEE RESTRICTED SHARE UNIT PLAN

 

APPENDIX 3

 

Director Participant Election and Account Designation Form

 

 

	
To:

	
The Plan Administrator of the Flagstone Reinsurance Holdings, S.A. Employee Restricted Share Unit Plan

 

	
From:

	  	  

 

*   *   *   *   *

 

Amount of Compensation Deferred

I hereby elect to have the following amounts of compensation for services performed for the Company for the 20___ year converted into RSUs.

________% or $________

Distribution Date(s)

	  	  	 	
Separation from service

	  	  	 	
A date certain (please specify date:

	  	
)

Employer Account Designation (for Directors providing services on behalf of their Employer)

Pursuant to Section 6.01 of the Flagstone Reinsurance Holdings, S.A. Employee Restricted Share Unit Plan (the “Plan”), I hereby designate the following as my employer on whose behalf I provide services to the Board of Directors, and to whose account RSUs shall be credited:

	  	
Employer Account Name:

	  

 

 

	
Signed:

 

 

	
Director Participant

 

 

	
Date

 

 

 

 

  

Page 12 of 16

  

FLAGSTONE REINSURANCE HOLDINGS, S.A.

EMPLOYEE RESTRICTED SHARE UNIT PLAN

 

APPENDIX 4

 

Special Provisions for citizens or residents of certain countries

United States Provisions

Coverage: These provisions apply to Participants to whom Section 409A of the United States Internal Revenue Code of 1986 (as amended from time to time)(“the Code”) applies.

Provisions:

	
1.

	
Each grant and credit of RSUs shall comply with the minimum requirements of Code Section 409A,

	  	  
	
2.

	
Any action that may be taken (and, to the extent possible, any action actually taken) by the Company or the Participant shall not be taken (or shall be void and without effect), if such action violates the requirements of Section 409A.

	  	  
	
3.

	
The definitions contained within this Plan and the respective Grant Certificate shall be interpreted and construed to comply with the minimum requirements of Section 409A.

Canada Provisions

Coverage: These provisions apply to Participants who are tax resident in Canada.

Provisions: Distributions to Participants to whom this section applies shall be made only upon the respective Participant’s separation from service or retirement from the Company or its Subsidiary, and shall me made within one year of such separation or retirement..

India Provisions

Coverage: These provisions apply to Participants who are employees of West End Capital Management BPO Services (India) Pvt. Ltd., or any other Subsidiary of the Company incorporated and existing under the laws of India (“Indian Subsidiary) (collectively, “Indian Participants”)

Provisions: the following provisions shall apply with respect to any RSUs granted prior to a public offering of the capital stock of the Company/Indian Subsidiary, and only to the extent required by applicable law:

	
1.

	
The aggregate number of RSUs which may be granted to Indian Participants under this Plan shall not exceed 300,000 or as decided by the Compensation Committee, and subject to the provisions of Section 3.01 hereof. RSU credits or grants subject to increase in accordance with the terms of the plan pursuant to the approval received from the Board of Directors/Shareholders of the Company

	  	  
	
2.

	
The RSUs will be actually paid to the Indian Participants in accordance with the Section 3.02 and 3.03 of the Plan.

 

 

  

Page 13 of 16

  

FLAGSTONE REINSURANCE HOLDINGS, S.A.

EMPLOYEE RESTRICTED SHARE UNIT PLAN

 

 

	
3.

	
The approval of the Board of the Company to the Plan was accorded on 16 June 2006. The assent of the Board of the Company, approving the adoption of the Plan including this Appendix, for the Indian Subsidiary was accorded on 16 June 2006.  The assent of the board of directors of the Indian Subsidiary approving the adoption of the Plan including this Appendix, for the Indian Subsidiary was accorded on [___].

	  	  
	
4.

	
Participation in the Plan and the grant of Awards shall be awarded to such Indian Participant providing bona fide services to or for, one or more Indian Subsidiary as may be selected by the Board or such Compensation Committee as designated by the Board, in consultation with the board of directors of the Indian Subsidiary, from time to time.  The Board may also grant RSUs to individuals in connection with hiring, retention or otherwise, prior to the date the individual first performs services for an Indian Subsidiary, provided that such RSUs shall not become vested or exercisable prior to the date the individual first commences performance of such services.  Provided, however, that an Employee who is a Promoter or belongs to the Promoter Group or a director who either by himself or through his relative or through any body corporate, directly or indirectly holds more than 10% of the outstanding shall not be eligible to participate in the Plan

	  	  
	
5.

	
For purposes of the above paragraph (4)

	  	
a.

	
“Promoter” means –

 

	  	  	
i.

	
 

	
the person or persons who are in over-all control of the Indian Subsidiary;

	  	  	
ii.

 	
 

	
the person or persons who are instrumental in the formation of the Indian Subsidiary or programme pursuant to which shares of the Indian Subsidiary may be offered to the public;

	  	  	
iii.

 	
 

	
the person or persons who are named in the offer document (inviting subscription from the public to the shares of the Indian Subsidiary) as promoter(s), in the event the Indian Subsidiary decided to offer shares to the public.

Provided that a director or officer of the Indian Subsidiary, if he is acting as such only in his professional capacity, will not be deemed to be a Promoter, and that where a Promoter of the Indian Subsidiary is a body corporate, the promoter of that body corporate shall also be deemed to be a Promoter of the Indian Subsidiary.

	  	
b.

	
“Promoter Group” means:

	  	  	
i.

	
 

	
an immediate relative of the Promoter (i.e. spouse of that person, or any parent, brother, sister or child of the person or of the spouse); and,

	  	  	 	  	  
	  	  	
ii.

 	
 

	
persons whose shareholding is aggregated for the purpose of disclosing in the offer document (inviting subscription from the public to the shares of the Indian Subsidiary) “shareholding of the promoter group”

	  	
c.

	
“Relative” means immediate relative namely spouse, parent, brother, sister or child of the person or the spouse.

	
6.

	
All defined terms that are not otherwise defined under this Appendix shall have the meaning attributed to them under the provisions of the Plan.

	  	  
	
7.

	
Except to the extent as set forth in this Appendix and where not contrary to the meaning or intention herein, the provisions of the Plan shall apply to the Indian Participants granted the RSU.

UK Provisions

Distributions to Participants who are UK [resident domiciled for tax purposes]  shall be made only in shares, notwithstanding the provisions Section 3.02, above.

 

 

 

  

Page 14 of 16

  

FLAGSTONE REINSURANCE HOLDINGS, S.A.

EMPLOYEE RESTRICTED SHARE UNIT PLAN

 

APPENDIX 5

 

Sample RSU Grant Certificate

 

This CERTIFICATE, effective as of the ____________ day of ____________, 20___ (the “Award Date”), certifies that Flagstone Reinsurance Holdings, S.A. (the “Company”) has awarded to ________________________ (the “Participant”) Restricted Share Units (“RSUs”) in the amounts and on the terms set forth below, subject to and in accordance with the Flagstone Reinsurance Holdings, S.A. Restricted Share Unit Plan, dated [●] (“the RSU Plan”).

 

The Company awards to the Participant on the Award Date an amount of RSUs as follows:

 

	 	
RSU Holder

	
«Column1»

	 	 	 
	 	
Restricted Share Units

	
«Column2»

	 	 	 
	 	
RSU Series

	
[●]

	 	 	 
	 	
Grant Date

	
[●]

	 	 	 
	 	
Vesting Date

	
[Normal Vesting: Grants of these RSUs under the Plan will fully vest on the date that is two years after the Grant Date immediately above, except as may be modified by section by the terms of the RSU Plan, and in particular section [6.05].

-or-

[The Participant is a Director and is fully and immediately vested in RSUs that are credited to his/her Account under the Plan.]

 

Upon occurrence of a Distribution Date, the shares of Company Common Stock or cash (as determined solely by the Compensation Committee of the Board of Directors of the Company) shall be payable to the Participant and shall be delivered to the Participant as soon as administratively feasible.

 

This RSU grant is subject to the terms and conditions described in the RSU Plan, as such plan may be properly amended from time to time.  The terms of the RSU Plan are incorporated herein, and capitalized words, if not defined herein, shall be given the same meaning as under the terms of the Plan, unless the context requires a different meaning.

 

This RSU grant is not transferable, and will lapse upon the occasion of an assignment, charge, disposal or other dealing with the rights conveyed by it in any other circumstances.

 

 

	
 

 

	
Signed

Mark Byrne, Chairman

 

 

  

Page 15 of 16

  

FLAGSTONE REINSURANCE HOLDINGS, S.A.

EMPLOYEE RESTRICTED SHARE UNIT PLAN

 

DOCUMENT  REVISION HISTORY

 

	
Amendment

	
Date

	
Summary of Changes

	
Section

	
Approved by

 

	
Amendment 1

	
1/7/06

	
Amended and Restated

	
Various

	
Board of Directors

	
Amendment 2

	
11/9/06

	
Section 5 clarified

	
5.01

	
Board of Directors

	
Amendment 3

	
16/11/06

	
Amended & Restated

	
Various

	
Shareholders

	
Amendment 4

	
20/7/07

	
Amended & Restated

	
Various

	
Board of Directors

	
Amendment 5

	
15/5/08

	
Language added regarding notification procedure of beneficiary or Designee and ability for such Designations to retroactively effect prior RSU grants

	
9

	
Board of Directors

	
Amendment 6

	
17/5/10

	
Changes made to reflect the Company’s move from Bermuda to Luxembourg

	
Various

	
Board of Directors

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Page 16 of 16

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