EXHIBIT 10.25
ASPEN INSURANCE HOLDINGS LIMITED
PERFORMANCE SHARE AWARD AGREEMENT
THIS AGREEMENT (the "Agreement"), is made effective as of the day of
, 2005, between Aspen Insurance Holdings Limited, a Bermuda
corporation (hereinafter called the "Company"), and (hereinafter
called the "Participant"):
R E C I T A L S:
- - - - - - - -
WHEREAS, the Company has adopted the Aspen Insurance Holdings 2003 Share
Incentive Plan (the "Plan"), which Plan is incorporated herein by reference and
made a part of this Agreement. Capitalized terms not otherwise defined herein
shall have the same meanings as in the Plan; and
WHEREAS, the Committee has determined that it would be in the best
interests of the Company and its shareholders to grant the performance shares
provided for herein to the Participant pursuant to the Plan and the terms set
forth herein.
NOW THEREFORE, in consideration of the mutual covenants hereinafter set
forth, the parties agree as follows:
1. Grant of Performance Shares. The Company hereby awards to the Participant
Shares, payment of which is dependent upon the achievement of
certain performance goals more fully described in Section 2 of this
Agreement (the "Performance Shares").
2. Vesting. The Performance Shares shall vest only to the extent that the
Return on Equity (calculated as described in Section 2(a) below, the "XXX")
targets described below are achieved.
(a) For purposes of this Agreement, "XXX" shall be equal to net income
determined under United States Generally Accepted Accounting
Principles ("US GAAP") after deduction of the cost of all Awards
granted under the Plan as a percentage of weighted average
shareholders' equity, which shall be determined by the Board based on
the Company's audited financials under US GAAP.
(b) For purposes of this Agreement, "2005 XXX Percentage" shall be equal
to the Company's actual XXX for the fiscal year ended December 31,
2005 (the "2005 Fiscal Year"), expressed as a percentage of the XXX
target for the 2005 Fiscal Year. The XXX target with respect to the
2005 Fiscal Year is set forth on Exhibit A, a copy of which is
attached hereto and incorporated herein by reference.
(c) For purposes of this Agreement, "2005-2007 XXX Percentage" shall be
equal to the Company's simple average annual XXX for the fiscal years
ending December 31, 2005, December 31, 2006 and December 31, 2007 (the
"2005-2007 Fiscal Years"), expressed as a percentage of the average
annual XXX target for the 2005-2007 Fiscal Years. The average annual
XXX target for the 2005-2007 Fiscal Years is set forth on Exhibit A, a
copy of which is attached hereto and incorporated herein by reference.
(d) Subject to the Participant's continued Employment with the Company
(which Employment shall not include the performance of services under
a notice of termination or resignation), a maximum of one-third (?) of
the Performance Shares awarded hereunder (the "2005 XXX Award") shall
become vested upon the later of (i) the date the Company's outside
auditors complete the audit of the Company's financial statements
containing the information necessary to compute the Company's XXX for
the 2005 Fiscal Year or (ii) the date such XXX is approved by the
Board of Directors or an authorized committee thereof, but only to the
extent provided below:
2005 XXX Percentage Vested Percentage of
------------------- --------------------
2005 XXX Award
--------------
< 66.67% 0%
66.67% 10%
75% 32.50%
83.33% 55%
91.67% 77.50%
> = 100% 100%
Interim percentages to be interpolated linearly.
Notwithstanding the foregoing, if the Company's actual XXX for the
2005 Fiscal Year is less than 10%, then none of the Performance Shares
subject to the 2005 XXX Award shall vest.
(e) Subject to the Participant's continued Employment with the Company
(which Employment shall not include the performance of services under
a notice of termination or resignation), a maximum of two-thirds (?)
of the Performance Shares awarded hereunder (the "2005-2007 XXX
Award") shall become vested upon the later of (i) the date the
Company's outside auditors complete the audit of the Company's
financial statements containing the information necessary to compute
the Company's XXX for the 2007 Fiscal Year or (ii) the date such XXX
is approved by the Board of Directors or an authorized committee
thereof, but only to the extent provided below:
Vested Percentage of
--------------------
2005-2007 XXX Percentage 2005-2007 XXX Award
------------------------ -------------------
< 66.67% 0%
66.67% 10%
2
75% 32.50%
83.33% 55%
91.67% 77.50%
= 100% 100%
Interim percentages to be interpolated linearly.
Notwithstanding the foregoing, if the Company's simple average annual
XXX for the 2005-2007 Fiscal Years is less than 10%, then none of the
Performance Shares subject to the 2005-2007 XXX Award shall vest.
(f) In connection with any event described in Section 10(a) of the Plan or
in the event of a change in applicable accounting rules, the Committee
shall make such adjustments in the terms of the Performance Shares,
including but not limited to the XXX targets, if any, as it shall
determine shall be necessary to equitably reflect such event in order
to prevent dilution or enlargement of the potential benefits of the
Performance Shares. The Committee's determination as to any such
adjustment shall be final.
3. Payment.
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(a) The Company shall deliver to the Participant one Share for each vested
Performance Share, less any Shares withheld in accordance with the
provisions of Section 7. Any fractional share will be rounded down to
the nearest whole Share and the remainder forfeited.
(b) Except as otherwise provided in the Plan, vested Performance Shares
shall be paid to the Participant as soon as practicable after the date
such Performance Shares become vested; provided, however, that
Performance Shares subject to the 2005 XXX Award shall be paid at the
same time as the Performance Shares subject to the 2005-2007 XXX Award
are paid (or would have been paid had all or a portion of such
2005-2007 XXX Award vested); provided, further, that payment of vested
Performance Shares shall be subject to the Participant's continued
Employment (which Employment shall not include the performance of
services under a notice of termination or resignation) until the date
of payment.
(c) When Performance Shares are paid, the Company shall issue certificates
in the Participant's name for such. However, the Company shall not be
liable to the Participant for damages relating to any delays in
issuing the certificates to him, any loss of the certificates, or any
mistakes or errors in the issuance of the certificates or in the
certificates themselves.
4. No Right to Continued Employment. The granting of the Performance Shares
evidenced hereby and this Agreement shall impose no obligation on the
Company or any Affiliate to
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continue the Employment of the Participant and shall not lessen or affect
the Company's or its Affiliate's right to terminate the Employment of such
Participant.
5. Legend on Certificates. The certificates representing the Shares paid in
settlement of Performance Shares shall be subject to such stop transfer
orders and other restrictions as the Committee may deem advisable under the
Plan or the rules, regulations, and other requirements of the Securities
and Exchange Commission, any stock exchange upon which such Shares are
listed, and any applicable laws, and the Committee may cause a legend or
legends to be put on any such certificates to make appropriate reference to
such restrictions.
6. Transferability. The Performance Shares may not be assigned, alienated,
pledged, attached, sold or otherwise transferred or encumbered by the
Participant otherwise than by will or by the laws of descent and
distribution, and any such purported assignment, alienation, pledge,
attachment, sale, transfer or encumbrance shall be void and unenforceable
against the Company or any Affiliate; provided that the designation of a
beneficiary shall not constitute an assignment, alienation, pledge,
attachment, sale, transfer or encumbrance. For avoidance of doubt, Shares
issued to the Participant in payment of vested Performance Shares pursuant
to Section 3 hereof shall not be subject to any of the foregoing
transferability restrictions.
7. Withholding. The Participant may be required to pay to the Company or any
Affiliate and the Company shall have the right and is hereby authorized to
withhold, any applicable withholding taxes in respect of Performance Shares
and to take such other action as may be necessary in the opinion of the
Committee to satisfy all obligations for the payment of such withholding
taxes.
8. Securities Laws. Upon the acquisition of any Shares pursuant to settlement
of Performance Shares, the Participant will make or enter into such written
representations, warranties and agreements as the Committee may reasonably
request in order to comply with applicable securities laws or with this
Agreement.
9. Bermuda Government Regulations. No Shares shall be issued pursuant to this
Agreement unless and until all relevant 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.
10. Notices. Any notice necessary under this Agreement shall be addressed to
the Company in care of its Secretary at the principal executive office of
the Company and to the Participant at the address appearing in the
personnel records of the Company for the Participant or to either party at
such other address as either party hereto may hereafter designate in
writing to the other. Any such notice shall be deemed effective upon
receipt thereof by the addressee.
11. Choice of Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF BERMUDA, WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES.
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12. Performance Shares Subject to Plan. By entering into this Agreement the
Participant agrees and acknowledges that the Participant has received and
read a copy of the Plan. The Performance Shares are subject to the Plan
(including without limitation the arbitration provision), and the terms and
provisions of the Plan, as it may be amended from time to time, are hereby
incorporated herein by reference. In the event of a conflict between any
term or provision contained herein and a term or provision of the Plan, the
applicable terms and provisions of the Plan will govern and prevail.
13. Rights as a Shareholder. The Participant shall have no rights as a
shareholder, and shall not receive dividends, with respect to any
Performance Shares until the Performance Shares have been paid out and
Share certificates have been issued to the Participant.
14. Fiscal Year. If the Company's fiscal year is changed to other than a
calendar year, the references to calendar year in this Agreement shall be
adjusted to appropriately reflect the change.
15. Signature in Counterparts. This Agreement may be signed in counterparts,
each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement.
ASPEN INSURANCE HOLDINGS LIMITED
By:
--------------------------------
AGREED AND ACKNOWLEDGED AS
OF THE DATE FIRST ABOVE WRITTEN:
---------------------------------
Participant
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EXHIBIT A
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XXX TARGETS
2005 Fiscal Year XXX Target =
Average Annual XXX Target for 2005-2007 Fiscal Years = To be provided by the
Company after establishment of 2007 XXX targets by Compensation Committee
