Document:

EXHIBIT 10.2

 

Exhibit 10.2

Montpelier Re Holdings Ltd.

2005 Annual Bonus Plan

Purpose

The purpose of this Plan is to increase the intrinsic business value of Montpelier Re Holdings Ltd.
and its operating subsidiaries (the “Company”) by aligning employee performance with the interests
of the Company’s owners. All full-time employees of the Company shall be eligible to participate
in the Plan.

Performance Targets

The Plan shall be tied to a calendar year performance cycle consistent with the Company’s fiscal
year. Annual bonus pool targets for categories of employees and an overall Company performance
target under the Plan shall be set by the Company’s Compensation and Nominating Committee (the
“Committee”). At the conclusion of the calendar year, the Committee shall judge Company
performance against the bonus pool targets when determining the final size of the bonus pools and
the level of payout for each employee. The Company’s Chief Executive Officer, in consultation with
the Committee, shall then recommend the distribution of the pool to individual Plan participants
who are non-executive officers of the Company. The Committee shall
approve any payments to the Company’s executive officers.

Bonus Pool Targets

For the 2005 calendar year, the bonus pool targets for the Company’s officers and all remaining
Company staff shall be as follows:

	 	 	 
	Officers Pool:

	 	50% of eligible salaries
	Staff Pool:

	 	25% of eligible salaries

Eligible salaries for all officers and staff shall be equivalent to the 2005 base salaries of Plan
participants, pro-rated in the case of any officer or staff member employed by the Company for less
than the entire 2005 calendar year.EXHIBIT 10.3

 

Exhibit 10.3

Montpelier Re Holdings Ltd.

Directors Share Plan

     1. Purpose of this Plan.

     The purpose of this Montpelier Re Holdings Ltd. Directors Share Plan (as amended from time to
time, the “Plan”) is to provide Non-Employee Directors of Montpelier Re Holdings Ltd. (the
“Company”) with the opportunity to receive equity-based compensation for their services to the
Company.

     2. Definitions.

     “Annual Meeting” means the Company’s annual general meeting of shareholders.

     “Annual Retainer” means the annual amount payable by the Company to a Non-Employee Director
for Board service as a Non-Employee Director.

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

     “Director” means an individual who is a member of the Board.

     “Non-Employee Director” means an individual who is a Director and who does not receive
compensation for service as an employee of the Company or any of its subsidiaries, including an
individual who is a Director and who previously did receive compensation for service as an employee
of the Company or any of its subsidiaries.

     “Participant” means a Non-Employee Director who elects to participate in this Plan.

     “Plan Year” means (i) the period beginning on the date of the 2005 Annual Meeting and ending
on the date immediately preceding the date of the 2006 Annual Meeting and (ii) for each year
beginning on and after the date of the 2006 Annual Meeting, the period beginning on the date of the
Annual Meeting and ending on the date immediately preceding the date of the next Annual Meeting,
for so long as this Plan shall remain in effect.

     “Share” means a common share of Montpelier Re Holdings Ltd, par value 1/6 cent per share.

     “Share Unit” means an award granted under Section 4(b) of this Plan, each of which units
represents the right to receive a Share in accordance with the terms of the Plan or any award
agreement evidencing such award.

 

 

     3. Effective Date; Eligibility.

     (a) This Plan shall become effective from and including the date of the 2005 Annual
Meeting.

     (b) Only Non-Employee Directors shall be eligible to participate in this Plan.

     (c) In order to participate in this Plan, a Non-Employee Director shall complete a
notice of election, in such form as the Board or its designee may prescribe. Such form
shall be submitted on or before the date of each Annual Meeting beginning with the 2005
Annual Meeting with respect to the Plan Year beginning on such date. Such election shall
be deemed effective upon the election of the Non-Employee Director to serve as a member of
the Board at the Annual Meeting. Once made, an election shall remain in effect with
respect to that Plan Year and any subsequent Plan Year, unless an election to revoke
participation is filed with respect to a Plan Year on or prior to the beginning of such
Plan Year.

     4. Awards.

     (a) Each Non-Employee Director who elects to participate in this Plan will have his
or her Annual Retainer reduced by an aggregate amount of $30,000, such reduction to be
made on a quarterly basis during the Plan Year in the amount of $7,500 per quarter.

     (b) Upon each quarterly reduction, the Participant shall be credited with an award of
Share Units having a Fair Market Value of $7,500 on the date of issuance. For purposes of
this Plan, “Fair Market Value” means the average closing per share price of a Share for
the five days prior to the date of issuance of the Share Units, as quoted on the New York
Stock Exchange or, if the Shares are no longer quoted on the New York Stock Exchange, as
quoted on another nationally recognized stock exchange.

     5. Terms and Conditions of Awards.

     (a) Each Share Unit granted under Section 4(b) shall represent a Participant’s right
to be issued one fully paid Share upon the termination of his or her service as a Director
for any reason. Each Share issued under this Plan shall be issued in consideration of the
Director’s services to the Company.

     (b) The Shares underlying a Participant’s Share Units shall be delivered to him or
her as soon as reasonably practicable following his or her termination of service as a
Director (the “Share Unit Delivery Date”).

 

 

     (c) Share Units shall carry no voting rights.

     (d) During the period the Share Units are outstanding, they shall be credited with
additional Share Units having a value equal to dividends declared on the number of Shares
to which the Share Units then relate. Such additional Share Units shall be paid out at
the same time and in the same form as the Share Units issued pursuant to Section 4(b)
above.

     (e) Share Units, and the Shares underlying such Share Units, may not be sold,
transferred, pledged, assigned or otherwise alienated or hypothecated by a Participant
until the Shares underlying such units have been delivered on the Share Unit Delivery
Date.

     6. Bermuda Government Regulations.

     The Company shall not issue any Shares hereunder unless and until all licenses, permissions
and authorizations required to be granted by the Government of Bermuda, or by any authority or
agency thereof, shall have been duly received.

     7. Amendment, Suspension and Termination.

     This Plan may be amended or terminated by the Board at any time. No amendment shall adversely
affect any right of any Participant with respect to any Share Units previously granted without such
Participant’s written consent.

     8. Miscellaneous.

     (a) No Right to Nomination. Nothing contained in this Plan shall confer upon any
Director the right to be nominated for re-election to the Board.

     (b) Withholding. The Company shall have the right to deduct from any award under
this Plan any federal, state or local income or other taxes required by law to be withheld
with respect to such award, as it may deem necessary or appropriate, in its sole
discretion.

     (c) Other Tax Considerations. Any Participant who is a taxpayer in a jurisdiction in
which Share Units would be taxable upon issuance will receive an award of Shares under
this Plan in lieu of Share Units.

     (d) Governing Law. This Plan shall be governed by and construed in accordance with
the laws of Bermuda, without regard to conflicts of laws principles.<PAGE>

                                                                    EXHIBIT 10.1

                           HAMPSHIRE EQUITY PARTNERS

                                                              Tracey L. Rudd
                                                              Managing Partner

Mr. R. Edward Anderson
1920 Hunting Ridge Road
Raleigh, NC 27615

November 16, 2001

Dear Ed,

      I am pleased to offer you the position of Chief Executive Officer ("CEO")
of Citi Trends, Inc. ("Citi Trends" or the "Company"). 'this letter will outline
the terms of your employment:

POSITION:

Chief Executive Officer
Member of the Board of Directors

BASE SALARY:

$300,000 annually

START DATE:

December 10, 2001 (or sooner if practical)

PERFORMANCE BONUS:

Target is a bonus of 50% of base Salary ($150,000) contingent on achieving
budgeted EBIT, as approved by the Board of Directors. The percentage bonus
earned will be determined according to the following table:

<TABLE>
<CAPTION>
       % Range                        % Range of                Bonus
       of Budget                     Target Bonus              Dollars
---------------------              ----------------      -------------------
<S>               <C>              <C>        <C>        <C>        <C>
       80%         85%              20%        25%       $ 30,000   $ 37,500
       86%         90%              27%        37%       $ 40,500   $ 55,500
       91%         99%              40%        67%       $ 60,000   $100,500
      100%        110%             100%       120%       $150,000   $180,000
      110%        120%             120%       150%       $180,000   $225,000
      120%        130%             150%       200%       $225,000   $300,000
Above 130%                         200%                  $300,000
</TABLE>

Note: EBIT budget would be adjusted to reflect any acquisition or capital
investment.

HIRING BONUS:

$75,000 paid January 1, 2002 (50%), and June 1, 2002 (50%).

BENEFITS:

Benefits consistent with the company's existing plans.

AUTOMOBILE:

Lease car - Lincoln Town Car or Buick Park Avenue.

RELOCATION:

Company will pay out of pocket moving expenses from Raleigh, NC to Savannah, GA
capped at $25,000. Company will pay for temporary lodging in Savannah for up to
90 days (Capped at $7,500).

                     520 Madison Avenue, New York, NY 10022
                       (212) 453-1706 - Fax (212) 750-2970
                             Email: trudd@hampep.com

<PAGE>

PURCHASED EQUITY:

You will have the right until December 31, 2001 to purchase 3,500 common shares
at $10 per share as well as 35 shares of preferred stock at $1,000 per share. if
terminated, the purchased common and the purchased preferred will not be subject
to any par right by the holder or call right by the Company if terminated for
any reason but cause. If terminated for cause the Company will have the right to
purchase both the common and preferred for cost plus accrued dividends.

GRANTED OPTIONS:

You will be granted 16,800 (approximately 4% of the fully diluted ownership of
the Company) options that vest in equal amounts over four years on an annual
basis at an exercise price of $10.00 per share. However if the Company achieves
an EBITDA of $13 million or greater for any trailing twelve month period within
the next four years, 4,200 options of the remaining unvested options would
immediately vest at a strike price of $10.00 per share. Upon termination for a
reason besides cause, the vested options will be subject to the current
repurchase provisions which include a call at the Company's option at fair
market value (as determined by the Board of Directors). If you are terminated
for cause all vested options will be cancelled.

All unvested options will vest upon change of control but not an initial public
offering.

SEVERENCE:

Upon termination by the Company for a reason besides cause, you will receive
$150,000 to be paid over 6 months in arrears.

Would you please indicate your acceptance of this offer by November 19, 2001 by
returning a signed copy.

                           Sincerely,

                           /s/ Tracey L. Rudd
                           ---------------------------------
                           Tracey L. Rudd
                           Managing Partner, Hampshire Equity Partners
                           On behalf of Greg Flynn
                           Chairman of the Board of Directors, Citi Trends, Inc.
                           November 16, 2001

                           /s/ R. Edward Anderson
                           ----------------------------
                           As Agreed
                           R. Edward Anderson
                           November 16, 2001

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