Document:

Exhibit 10.4

EXHIBIT 10.4

GLOBAL INDEMNITY PLC

ANNUAL INCENTIVE AWARDS PROGRAM

(As Amended and Restated July 2, 2010)

	I.	 	Purpose: The purposes of this Annual Incentive Awards Program (the “Program”) are:

	 	1.	 	To encourage increased efficiency and profitability of Global Indemnity plc
(the “Company” or “GI plc”).

	 	2.	 	To reward Participants’ contributions to corporate success.

	II.	 	Compensation Philosophy.

GI plc wishes to provide a comprehensive, competitive compensation program for its officers
and certain other employees. The Program is intended to be an integral part of the total
compensation opportunity offered by the organization to such employees. This incentive program is
an adjunct to other forms of compensation provided by GI plc and its subsidiaries.

	III.	 	Definition of Terms.

For purposes of the Program, terms have meanings as follows:

	 	A.	 	“Award” means the amount earned by a Participant pursuant to
the provisions of the Program.

	 	B.	 	“Base Salary” means a Participant’s W-2 wages for a calendar
year excluding any extraordinary compensation such as bonuses, stock options,
deferred compensation or benefits which are taxable for federal income tax
purposes. For purposes of the Program, Base Salary shall also include, however,
any salary deferrals which represent the employee’s portion of contributions to
a qualified benefit plan or deferred compensation plan offered by GI plc and
subsidiaries.

	 	C.	 	“Beneficiary” or “Beneficiaries” means the person or persons
designated by the Participant to receive any payments due from the Program in
the event of the Participant’s death. Such a designation may, without notice to
the Beneficiary, be changed or revoked by the Participant at any time and from
time to time. The designation of the Beneficiary, and any change or revocation
thereof, shall be made in writing and shall not be effective unless and until
filed with and acknowledged by the Committee.

If a Participant fails to designate a Beneficiary, or if no designated Beneficiary
survives the Participant, the amount payable from the Program shall be paid to the
Participant’s estate.

 

 

 

If a person designated as a Beneficiary shall be a minor or a person who has been
judged legally incompetent, GI plc shall make payment on behalf of such Beneficiary
to the Beneficiary’s guardian or conservator, but only if such guardian or
conservator has provided to the Committee documentary evidence satisfactory to it as
to the legal, valid and continuing authority of such guardian or conservator to act
on behalf of such Beneficiary. Upon payment to such guardian or conservator, neither
the Board of Directors (the “Board”), GI plc, the Committee or any other agent,
employee or officer of any of them shall have any further liability for such
payment.

	 	D.	 	“Code” means the Internal Revenue Code of 1986, as amended, and
any successor thereto.

	 	E.	 	“Code Section 162(m)” means the exception for performance-based
compensation under Section 162(m) of the Code or any successor section and the
Treasury regulations promulgated thereunder.

	 	F.	 	“Committee” means the Compensation Committee of GI plc, as
designated from time to time by the Board, or its designee. When pertaining to
Covered Participants and as otherwise necessary to comply with Code Section
162(m), “Committee” shall mean a subcommittee thereof consisting solely of
“outside” directors, as such term is defined by Code Section 162(m).

	 	G.	 	“Covered Participant” means a Participant who, on the last day
of GI plc’s taxable year, is the chief executive officer of GI plc or is among
the four highest compensated officers (other than the chief executive officer)
of GI plc as determined under Code Section 162(m).

	 	H.	 	“Disability” means (i) “disability” as defined by long-term
disability plan maintained by GI plc or by the subsidiary or division thereof
by which the Participant is employed and under which the Participant is covered
or (ii) as determined by the Committee in its reasonable judgment.

	 	I.	 	“Participant” means any employee of GI plc or subsidiary who
has been designated by the Committee as eligible to participate in the Program.

	 	J.	 	“Performance Goals” means the objective performance goals
established by the Committee, and if desirable for purposes of Code Section
162(m), based on one or more Performance Criteria (as defined in Annex A).

	 	K.	 	“Program Year” means a twelve-month consecutive period
commencing on each January 1 and ending on each December 31.

	 	L.	 	“Retirement” means the Participant’s voluntary resignation in
circumstances acceptable to the Committee.

 

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	IV.	 	Designation of Participants.

A. The Participants shall be those employees (or class of employees) of GI plc and
subsidiaries who are designated by the Committee as being eligible to participate in the Program.
The Committee shall create different sets of Award opportunities (“Tiers”) and shall assign
Participants to such Tiers. With respect to non-Covered Participants, the Committee may designate,
should it so choose, certain employees who would determine eligibility, Award opportunities and/or
Award amounts from a bonus pool designated by the Committee for such non-Covered Participants (or
Tiers thereof).

B. In order to be eligible to be a Participant for any Program Year, an individual must meet
the criteria set forth in the Program both at the beginning and the end of the Program Year, except
in those cases where a Participant’s employment with GI plc and its subsidiaries has terminated due
to Retirement, death or Disability, as provided in Section VI. Any deviation from this clause
requires the prior written approval of the Committee.

	V.	 	Awards for Participants:

A. Basis for Earning Awards: Unless otherwise provided herein, Participants will earn an Award
on the basis of achievement of the Performance Goals, as such goals are selected and determined by
the Committee. If the Committee so elects, certain Participants who are not Covered Participants
may be eligible for discretionary bonuses based on their individual performance.

B. Award Opportunities:

A Participant’s Award opportunity shall be determined by the Committee, or its designate, as
provided in Section IV, and may provide for different levels of Awards depending on varying
achievement of the Performance Goals.

Award opportunities under the Program may be expressed as a percentage of the Base Salary, and
may range from 5% to 200%, or may be expressed as specific dollar amounts; provided that in no
event shall an Award under the Program exceed $1,000,000.

C. Determination of Awards Earned:

The Committee will establish the specific Performance Goals which must be attained in order to
receive Awards hereunder. With respect to Covered Participants, such goals shall be established in
writing prior to the beginning of a Program Year or at such later date as permitted under Code
Section 162(m) and while the outcome of the Performance Goals is substantially uncertain.

Upon receipt of the audited financials for the Company, the Committee (or with respect to
Committee-designated non-Covered Participants, such Participants’ supervisors) shall determine
whether and to what extent the Performance Goals for the Program Year were achieved. The Committee
may, in its sole discretion, disregard (or adjust for) changes in accounting methods, corporate
transactions (including, without limitation, dispositions and acquisitions) and other similar type
events or circumstances; provided however that, to the extent
such discretion would be impermissible under Code Section 162(m) or otherwise violate Code
Section 162(m), the Committee shall not exercise such discretion with respect to any Covered
Participant’s Award.

 

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Notwithstanding the foregoing, the Committee may, in its sole discretion, elect to pay a
Participant an amount that is less than or more than what the Participant’s Award would otherwise
be hereunder; provided that in no instance shall the Committee increase the amounts otherwise
payable to a Covered Participant.

	VI.	 	Payment of Awards.

A Participant shall be entitled to receive payment in an amount equal to his/her Award no
later than March 15 of the year following the Program Year to which payment relates.
Notwithstanding the foregoing, in order to be eligible for payment of an Award for any Program
Year, a Participant must be continuously employed by GI plc or its subsidiaries through the close
of the Program Year, except in the case of a Participant whose employment terminates on account of
Retirement, death, or Disability. In the case of a Participant whose employment has terminated
during the Program Year due to Retirement, death or Disability, that Participant or his/her
Beneficiary will qualify for a pro-rated portion of the Participant’s Award, based on (i) the
number of complete calendar months of service which the Participant completed during that Program
Year and (ii) the actual achievement of the Performance Goals for such Program Year, to be paid on
or about the same time Awards are paid to active Participants under the Program. Any deviation from
this clause requires the prior authorization of the Committee.

Any payments due to Beneficiaries under the Program will be paid at the time payment would
otherwise have been made to the Participant, provided the identity and validity of such Beneficiary
has been legally established.

Notwithstanding any other provision herein, (A) if an individual’s employment with GI plc and
subsidiaries is terminated on account of conduct detrimental to GI plc’s best interests, then the
Committee, in its sole discretion (and not subject to challenge by the Participant in any way), may
cancel payment of any Award that has been earned under the Program but has not yet been paid and
(B) if a Participant resigns for any reason prior to the payment of an Award, the Participant shall
not be entitled to any payment under the Program.

No Award shall be paid to any Covered Participant before the Committee certifies in writing
that the relevant Performance Goals (except to the extent permitted under Code Section 162(m) and
provided above with regard to Retirement, death or Disability) were in fact satisfied.

	VII.	 	Program Administration.

The Program shall be administered by the Committee. The Committee shall have the authority to
(i) interpret the Program in its sole and absolute discretion based upon the Program’s provisions,
(ii) certify attainment of Performance Goals, and (iii) make all other determinations necessary or
desirable for the Program’s administration; and such decisions of the Committee shall be final,
conclusive and binding on all parties. The Program is intended to comply with Code Section 162(m)
with respect to Covered Participants, and all provisions contained herein shall be limited,
construed and interpreted in a manner to so comply.

 

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The designation of an individual as a Participant for a particular Program Year shall not
confer upon such individual the right to be designated as a Participant in a subsequent Program
Year.

An individual who has been designated by the Committee as a Participant for a Program Year
shall be notified in writing no later than April 30 of the Program Year of such designation,
provided that Covered Participants shall be notified in writing prior to the beginning of such
Program Year or at such later date as permitted under Code Section 162(m).

GI plc shall deduct from any distributions made to Participants or Beneficiaries under the
Program any applicable federal, state or local taxes which GI plc may be required to deduct under
the law and all amounts distributed under the Program are stated herein before any such deductions.

No Participant or other person shall have an interest in any fund or any specific assets of GI
plc and subsidiaries by reason of being a Participant in the Program or any right to receive any
distribution under the Program except and to the extent expressly provided in the Program.

The designation of an individual as a Participant under the Program shall not be construed as
conferring upon such individual any right to remain in the employ of GI plc and subsidiaries. With
respect to any Participant, GI plc and subsidiaries’ right to discipline, promote, demote, reassign
or terminate for any reason they deem fit shall not be affected in any manner by reason of such
individual’s designation as a Participant in the Program.

All questions or controversies arising in any manner between the parties or persons in
connection with the Program or its operation, whether as to any claim for benefits, or as to the
construction of language or meaning of the Program, or rules and regulations adopted by the
Committee, or as to any writing, decision, instrument or account in connection with the operation
of the Program or otherwise, shall be submitted to the Committee for decision.

	VIII.	 	No Assignment or Alienation.

Except as otherwise required by law, no right or interest (which right shall simply be a
contractual right) of any Participant hereunder shall be assigned, transferred or pledged
voluntarily or involuntarily and any attempt to do so shall be void, nor shall such rights or
interests be subject to attachment or other claims of creditors.

	IX.	 	General.

All actions taken or determinations made by the Committee shall be final and binding and all
concerned and nothing in the Program shall be deemed to give any Participant, Beneficiary, legal
representatives or assigns any right to participate in the Program except as determined by the
Committee pursuant to the provisions in the Program.

 

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	X.	 	Program Amendment and Termination.

The Company reserves the right in the Board (or a duly authorized committee thereof) to amend,
suspend or terminate the Program or to adopt a new plan in place of the Program at any
time; provided, that no such amendment shall, without the prior approval of the Company’s
shareholders in accordance with applicable law to the extent required for the Program to continue
to comply with the requirements of Code Section 162(m): (i) materially alter the Performance
Criteria (as defined in Annex A) set forth in Annex A; (ii) change the class of eligible employees
set forth in Article IV; (iii) increase the maximum amount set forth in Article V; or (iv)
implement any other change to a provision of the Program. Furthermore, no amendment, suspension or
termination shall, without the consent of the Participant, alter or impair a Participant’s right to
receive payment of an Award for a Program Year otherwise payable hereunder.

	XI.	 	Governing Law.

The Program and any amendments thereto shall be construed, administered, and governing in all
respects in accordance with the laws of the Commonwealth of Pennsylvania (regardless of the law
that might otherwise govern under applicable principles of conflict of laws).

 

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ANNEX A

UNITED AMERICA INDEMNITY, LTD.

PERFORMANCE CRITERIA

Performance Goals intended to comply with Code Section 162(m) shall be based on one or more of
the following performance criteria (“Performance Criteria”): (i) the attainment of certain target
levels of, or a specified percentage increase in, revenues, income before taxes and extraordinary
items, net income, operating income, earnings before income tax, earnings before interest, taxes,
depreciation and amortization or a combination of any or all of the foregoing; (ii) the attainment
of certain target levels of, or a percentage increase in, after-tax or pre-tax profits including,
without limitation, that attributable to continuing and/or other operations; (iii) the attainment
of certain target levels of, or a specified increase in, operational cash flow; (iv) the
achievement of a certain level of, reduction of, or other specified objectives with regard to
limiting the level of increase in, all or a portion of, the Company’s bank debt or other long-term
or short-term public or private debt or other similar financial obligations of the Company, which
may be calculated net of such cash balances and/or other offsets and adjustments as may be
established by the Committee; (v) earnings per share or the attainment of a specified percentage
increase in earnings per share or earnings per share from continuing operations; (vi) the
attainment of certain target levels of, or a specified increase in return on capital employed or
return on invested capital; (vii) the attainment of certain target levels of, or a percentage
increase in, after-tax or pre-tax return on stockholders’ equity; (viii) the attainment of certain
target levels of, or a specified increase in, economic value added targets based on a cash flow
return on investment formula; (ix) the attainment of certain target levels in the fair market value
of the shares of the Company’s common stock; (x) the growth in the value of an investment in the
Company’s common stock assuming the reinvestment of dividends; (xi) the attainment of certain GAAP
insurance operating ratios; (xii) the attainment of a certain level of, reduction of, or other
specified objectives with regard to limiting the level in or increase in, all or a portion of
controllable expenses or costs or other expenses or costs; or (xiii) achievement of certain targets
with respect to the Company’s book value, assets or liabilities. For purposes of item (i) above,
“extraordinary items” shall mean all items of gain, loss or expense for the fiscal year determined
to be extraordinary or unusual in nature or infrequent in occurrence or related to a corporate
transaction (including, without limitation, a disposition or acquisition) or related to a change in
accounting principle, all as determined in accordance with standards established by Opinion No. 30
of the Accounting Principles Board.

In addition, such Performance Criteria may be based upon the attainment of specified levels of
Company (or subsidiary, division or other operational unit of the Company) performance under one or
more of the measures described above relative to the performance of other corporations. To the
extent permitted under Section 162(m) of the Code, but only to the extent permitted under Section
162(m) of the Code (including, without limitation, compliance with any requirements for stockholder
approval), the Committee may: (i) designate additional business criteria on which the Performance
Criteria may be based or (ii) adjust, modify or amend the aforementioned business criteria.

 

7Exhibit 10.5

EXHIBIT 10.5

DATED
JULY 2,  2010

GLOBAL INDEMNITY PUBLIC LIMITED COMPANY

 

DEED POLL OF ASSUMPTION

relating to

Amended and Restated United America Indemnity, Ltd.

Annual Incentive Awards Program

 

 

 

 

DEED POLL OF ASSUMPTION

OF

GLOBAL INDEMNITY PUBLIC LIMITED COMPANY

This Deed Poll relating to the Amended and Restated United America Indemnity, Ltd. Annual Incentive
Awards Program (to be renamed the Global Indemnity plc Annual Incentive Awards Program as of the
time that the Transaction (as defined below) becomes effective) (the “Awards Program”) is made on
 July 2,  2010 by GLOBAL INDEMNITY PUBLIC LIMITED COMPANY, a company established in Ireland with
registered number 481805 having its registered office at Arthur Cox Building, Earlsfort Terrace,
Dublin 2 (“GI plc”).

WHEREAS on 11 June 2010, United America Indemnity, Ltd. (“UAI-Cayman”), a company incorporated in
the Cayman Islands, received approval from the Grand Court of the Cayman Islands for a scheme of
arrangement pursuant to section 86 of the Companies Law (2009 Revision) of the Cayman Islands (the
“Scheme of Arrangement”) that effected a transaction that resulted in the Class A common
shareholders or Class B common shareholders of UAI-Cayman becoming Class A ordinary shareholders or
Class B ordinary shareholders respectively of GI plc and UAI Cayman becoming a wholly-owned
subsidiary of GI plc (the “Transaction”), such Transaction becoming effective as of close of
business on July 2,  2010 upon the filing of the court order sanctioning the Scheme of Arrangement with
the Cayman Registrar of Companies;

WHEREAS in connection with and contingent upon the consummation of the Transaction, GI plc proposed
to assume the Awards Program and any outstanding awards issued thereunder (the “Assumption”);

WHEREAS in connection with and contingent upon the consummation of the Transaction and the
Assumption, GI plc adopted the Awards Program amended as necessary or appropriate to give effect to
the Transaction and the Assumption, such amendments principally providing for the appropriate
substitution of GI plc for UAI-Cayman in the Awards Program; and

WHEREAS as a result of the Transaction becoming effective, GI plc desires to assume sponsorship of
the Awards Program, the terms of which are contained in Schedule 1 and all outstanding awards
issued thereunder.

NOW THIS DEED POLL WITNESSES AS FOLLOWS:

GI plc hereby declares, undertakes and agrees for the benefit of each participant in the Awards
Program that, with effect from July 2,  2010, it shall:

	1.	 	undertake and discharge all of the rights and obligations of the Company (as defined in the
Awards Program) under the Awards Program;

	2.	 	exercise all of the powers of the Company as provided for in the Awards Program;

	3.	 	be bound by the terms of the Awards Program so that GI plc will be bound by the requirements,
without limitation, that any outstanding Awards (as defined in the Awards Program) shall be
subject to the same terms and conditions of the Awards Program as in effect immediately prior
to the effective date of this Deed Poll, save for such changes as are necessary to effectuate
and reflect the assumption by GI plc of the Awards Program and the rights and obligations of
UAI-Cayman thereunder.

 

 

 

	4.	 	GI plc hereby assumes and adopts, for the time being, the form of Award Agreement adopted by
UAI-Cayman for the issuance of Awards on and after July 2, 2010, with such amendments and
modifications thereto as may be necessary or appropriate to effectuate and reflect the
assumption by GI plc of the Awards Program and the form of Award Agreement and the rights and
obligations of UAI-Cayman thereunder.

This Deed Poll may be executed in any number of counterparts each of which when executed and
delivered shall be an original, but all the counterparts together shall constitute one and the same
instrument.

This Deed Poll shall be governed and construed in accordance with the laws of Ireland.

IN WITNESS WHEREOF this Deed Poll has been executed by GI plc on the date first above written.

	 	 	 
	GIVEN under the common seal of
	 	 
	GLOBAL INDEMNITY PUBLIC LIMITED COMPANY
	 	 
	 
	 	 
	/s/
Larry A. Frakes 

Director

	 	 
	 
	 	 
	/s/
Linda Hohn 

Director/Secretary

	 	 

 

 

 

SCHEDULE 1

UNITED
AMERICA INDEMNITY, LTD. ANNUAL INCENTIVE AWARDS PROGRAM (as amended
and restated effective July 2, 2010)

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