Document:

Board of Directors Compensation Program for Non Executive Directors

 Exhibit 10.1 

 

 

 Board of Directors 
 Compensation Program 
 For 

Non Executive Directors 
  

 
  
  

 
  
  

 
 February, 2010 

 PartnerRe Ltd. Board of Directors Compensation Policy 

 
 PartnerRe Ltd. (the “Company”) has
developed a Board of Directors Compensation Policy for Non-Executive Directors to address specific objectives: 
  

	 	•	 	 Establish competitive levels of remuneration, benchmarked against an appropriate peer group. 

 

	 	•	 	 Align the interests of Directors and shareholders by using equity as a major component of the total compensation package. 

 

	 	•	 	 Establish one approach to Director compensation in recognition of the Company’s strategy to rotate Directors’ committee assignments
periodically. 

  

	 	•	 	 Demonstrate good governance and corporate responsibility. 

 As part of the Compensation Policy for the members of the Board of Directors and as approved by the Nominating and Governance Committee, PartnerRe offers a competitive mix of cash and equity compensation
for each Non-Executive and for the Chairman. 
 The total compensation package for Director service consists of three components: 

 

	 	•	 	 Cash compensation 

  

	 	•	 	 Share Options 

  

	 	•	 	 Restricted Share Units (“RSU’s”) 

 Cash Compensation 
  
 Members of the Board of Directors are entitled to receive cash compensation on an annual basis for their services. Cash is paid once a year on June 15 or the nearest business day thereafter.

  

					
	 	  	Annually	 
	 Chairman
	  	$	180,000	  
	 Director
	  	$	50,000	  

 Elective Equity Incentive

  
 Deferred Cash Compensation

 Members of the Board may elect to defer part or all of their cash compensation into RSU’s. Election options are limited to deferral
of 0%, 50% or 100% of cash compensation. 
 Deferred cash compensation is converted into RSU’s (see RSU description). 

Company Match 
 Should a Board member
elect to defer his or her cash compensation into RSU’s, deferred amounts will receive an additional matching award equal to 25% of the deferred dollar amount. The matching award will be granted in RSU’s (see RSU description). 

  
 2 

 Share Options 

 
 Non-Executive members of the Board are entitled
to receive share options annually on June 15 or the nearest business day thereafter. 
  

					
	 	  	Annually	 
	 Chairman
	  	$	100,000	  
	 Director
	  	$	80,000	  

 The number of options granted is
determined using a Black Scholes valuation. Director share option awards are immediately vested and the grant price of the Director share option awards is the “Fair Market Value”, as defined by the shareholder-approved plan. 

The Company may consider an automatic option exercise provision taking into account such considerations as whether the equity plan administrator is able
to provide this benefit in its system automatically. 
 RSU’s 

 
 Non–Executive members of the Board of
Directors are entitled to receive RSU’s for their services based on the value below. The RSU’s are granted once a year on June 15 or the nearest business day thereafter. The number of RSU’s awarded is determined by the dollar
value of the award divided by the Fair Market Value of PartnerRe Ltd. Common Shares on the grant date. RSU’s will cliff vest after 5 years from the grant date and automatic delivery will also occur at this time. 

 

					
	 	  	Annually	 
	 Chairman
	  	$	120,000	  
	 Director
	  	$	100,000	  

 Dividend Equivalents

 All RSU awards will accrue dividend equivalents on the same basis as the shares underlying the RSU’s, with such dividend equivalents
payable annually on June 15, with no accrued interest on the dividend equivalents. 
 Delivery of RSU’s 

Prior to the RSU grant, Directors will have the ability to elect to receive 60% of the value of the RSU’s in shares of the Company and 40% in cash.

 Accelerated vesting and delivery of RSUs will occur if the director leaves and any of the following events occur: 

Change in Control of PartnerRe Ltd. as defined in the shareholder approved plan 
 Death 
 Permanent Disability 
 Mandatory retirement from the Board 

  
 3 

 Voluntary termination due to the acceptance of a public service position that would either preclude
continued Board service or make such continued service impractical Failure to be re-elected to the Board by shareholders 
 All the above
reasons for departure will be regarded as “Permissible reasons” for departure. 
 Board Member Retirement or Membership Timing

 To the extent a Board Member leaves the Board for any of the “Permissible reasons” or joins the Board not on June 15 of any
year, then cash payment and RSU grants and Option grants may be made on the date of departure or arrival on a pro rated basis. 

Clawbacks and vesting will occur in accordance with Appendix A 
 Board of Directors Ownership Guidelines 
 Directors are asked to own a minimum number of
shares equal to 4 times his or her annual cash compensation entitlement (“Ownership Target”) For the purpose of determining levels of ownership, both shares owned by the Director as well as RSU’s are included in the Director’s
holdings. Directors who do not meet the Ownership Target are required to receive at least 50% of their cash compensation in RSU’s until the target is met. 
 Maximum Annual Equity Awards 
 All option and RSU awards made to Directors shall not exceed
the maximum annual limits as stated in the PartnerRe Ltd. 2003 Non-Employee Directors Share Plan. 
 Travel 

 
 The Company agrees to reimburse all business
expenses related to services rendered, including attendance at educational sessions, as a Director of the Company. 
 Partner program

 Every two years the company invites the partners of Board members to attend events at the Board meeting. The cost of providing the program
on the ground is covered. The Board have decided that travel costs for partners to attend these programs shall be born by the Director and shall not be reimbursed by the Company. 

  
 4 

 Appendix A 
 PartnerRe Ltd. 
 Director Compensation Schedule - 2010 / 2011 

Permissible Termination = Change in control, death, permanent disability, mandatory retirement, and (at the Board’s discretion) termination due to
acceptance of a public service position that would either preclude Board service or make such continued service impractical 
  

											
	 	  	 	  	 Termination Before June 15th
	  	 Termination After June
15th

	 Pay Element
	  	 Payment / Grant Date
	  	 Permissible
	  	 Non-Permissible
	  	 Permissible
	  	 Non-Permissible

	Cash Retainer	  	Retainer is paid on June 15th for the calendar year	  	Pay pro rata retainer	  	Pay pro rata retainer	  	Clawback unearned retainer	  	Clawback unearned retainer
						
	Restricted Share Units	  	Unvested RSU’s are granted on June 15th for the calendar year	  	Not granted for current year Accelerated vesting of prior unvested awards	  	 Not granted for current year
  

Forfeiture of unvested awards
	  	 Accelerated vesting of prior years’ unvested awards and pro rata portion of current year’s award

 
 Forfeiture of unvested portion of current year’s award
	  	Forfeiture of unvested awards
						
	Share Options	  	Vested share options are granted retrospectively on June 15th (starting in 2010)	  	Not granted for current year Continued exercisability of outstanding options for remainder of the term	  	Not granted for current year Continued exercisability of outstanding options for remainder of the term	  	Continued exercisability of outstanding options for remainder of the term	  	Continued exercisability of outstanding options for remainder of the term

  
 5Form of PartnerRe Ltd. Non-Employee Director Share Option Agreement

 Exhibit 10.2 

 

 

 PartnerRe Ltd. 
 Director Share Option Agreement 
 <Name>

 <Date> 
 This Option Agreement (the “Agreement”) commences and is made effective as of <Date>, by and between PartnerRe Ltd. (the “Company”), and <Name> (the
“Optionee”), a non-employee Director of the Company. 
 WHEREAS, the Company desires to afford the Optionee the
opportunity to purchase common shares, $1.00 par value, of the Company (“Shares”). 
 NOW, THEREFORE, in connection
with the mutual covenants hereinafter set forth and for other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the parties hereto agree as follows: 

1. Definitions; Conflicts. Capitalized terms used and not otherwise defined herein shall have the meanings ascribed thereto in the
PartnerRe Ltd. 2003 Non-Employee Directors Stock Plan (the “Plan”). The terms and provisions of the Plan are incorporated herein by reference. In the event of a conflict or inconsistency between the terms and provisions of the Plan
and the terms and provisions of this Agreement, the terms and provisions of the Plan shall govern and control. 
 2. Grant of
Options. The Company hereby grants to the Optionee the right and option (the “Option”) to purchase up to, but not exceeding in the aggregate, the number of Shares as set forth in the attachment to this Agreement, for each Option award
on each date of grant as so indicated, on the terms and conditions herein set forth. 
 3. Purchase Price. The purchase
price per Share of the Options shall be the Grant Price provided in the Notice of Grant. 
 4. Term of Options. The term
of the Options shall be ten (10) years from the date of grant of such award as so indicated in the attachment to this Agreement, subject to earlier termination as provided in Section 6 hereof. 

5. Vesting of Options. The Options set forth in the attachment to this Agreement, subject to the terms, conditions and limitations
contained herein, shall be fully vested and exercisable as of the date hereof. 
 6. Termination of Directorship. In the
event the Optionee ceases to be a member of the Board of Directors of the Company, any unexercised portion of the Option may be exercised until the expiration of the Option. 
 7. Shareholder Rights. The Optionee shall have no rights as a shareholder with respect to any Shares issuable upon the exercise of any Option award until the date of issuance of said Shares by the
Company’s Share Registrar. No adjustments, other than as provided in Section 6(d) of the Plan, shall be made for dividends (ordinary or extraordinary, 

 

 

  

 
whether in cash, securities or other property) or distributions for which the record date is prior to the date the Shares are issued. 

8. Method of Exercising Options. Subject to the terms and conditions of this Agreement, the Optionee will need to request
pre-clearance from Group Legal in compliance with PartnerRe Ltd.’s Trading Policy. The Committee may, in its sole discretion, provide for automatic exercise of the Options granted hereto, allowing the automatic exercise of
“in-the-money” Options (i.e., Options for which the Fair Market Value of the underlying Shares exceeds their purchase price), if any, if they remain unexercised within a specified time prior to their expiration. 

9. Payment of Purchase Price for Shares. Payment for shares acquired pursuant to Options granted hereunder shall be made in
accordance with Section 7 of the Plan. 
 The Shares acquired upon exercise of Options shall be in the name of the person
or persons so exercising the Options. All Shares purchased upon the exercise of Options as provided herein shall be fully paid and non-assessable. 
 10. Non-Qualified Shares Options. Options granted hereunder are not intended to be an “incentive shares option” within the meaning of Section 422 of the U.S. Internal Revenue Code of
1986 as amended. 
 11. Binding Effect. This Agreement shall be binding upon the heirs, executors, administrators and
successors of the parties hereto. 
 12. Governing Law. This Agreement shall be construed and interpreted in accordance
with the laws of Bermuda without reference to the principles of conflicts of laws thereof. 
 13. Headings. Headings are
for the convenience of the parties and are not deemed to be part of this Agreement. 
 14. Transferability. These Options
shall not be transferable except in accordance with the provisions of Section 11(e) of the Plan. 
 IN WITNESS WHEREOF, the
parties hereto have executed this Agreement as of the date and year first written above. 
  

			
	PARTNERRE LTD.
		
	By:	 	/s/ Phil Martin
	Name:	 	Phil Martin
	Title:	 	Director of Group Compensation & Benefits

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