UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A
Proxy
Statement Pursuant to Section 14(a) of the
Securities
Exchange Act of 1934
Filed by
the Registrant x
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a Party other than the Registrant ¨
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Preliminary
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CONFIDENTIAL,
FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE
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Definitive
Proxy Statement. |
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Definitive
Additional Materials. |
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Soliciting
Material Pursuant to Section
240.14a-11(c)
or Section 240.14a-12 |
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Bristol
West Holdings, Inc.
(Name
of Registrant as Specified In Its Charter)
(Name
of Person(s) Filing Proxy Statement if other than the Registrant)
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Bristol
West Holdings, Inc.
5701
Stirling Road
Davie,
Florida 33314
April 18,
2005
Dear
Stockholder,
You are
invited to attend our Annual Meeting of
Stockholders on Thursday, May 12, 2005, at our headquarters in Davie,
Florida.
In
addition to the matters described in the attached proxy statement, I will report
on our current activities and operations. You also will have an opportunity to
ask questions of and to meet with your directors and executive
officers.
Your
representation and vote are important, and your shares should be voted whether
or not you plan to attend the meeting. To ensure that your shares are
represented at the meeting, please complete, sign, date and return the enclosed
proxy card promptly.
I look
forward to seeing you at the meeting.
Yours
sincerely,
/s/ James
R. Fisher
James R. Fisher
James R. Fisher
Chairman
and Chief Executive Officer
1
BRISTOL
WEST HOLDINGS, INC.
AND
PROXY
STATEMENT
Time: 9:00 a.m.
Eastern Standard Time
Date: May 12,
2005
Place: Bristol
West Holdings, Inc. Headquarters
5701
Stirling Road
Davie,
Florida 33314
Purpose:
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Election
of Directors for the ensuing year; and |
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Ratification
of the selection of Deloitte & Touche LLP as the independent auditor
for 2005. |
The
directors will present during the meeting the Company’s audited consolidated
financial statements for the financial year ended December 31,
2004.
Only
stockholders of record as of the close of business April 4, 2005 may vote at the
meeting. This proxy statement is being mailed to stockholders on or about April
18, 2005 with a copy of the Company’s 2004 Annual Report, which includes
financial statements for the year ended December 31, 2004.
Your
vote is important. Please follow the instructions on the proxy card you receive.
The proxy card should be returned in accordance with the instructions thereon to
ensure that your shares are represented at the meeting.
By
Order of the Board of Directors.
George G.
O’Brien
Chief
Legal Officer & Corporate Secretary
April 18,
2005
2
|
Who
may vote
Holders
of Bristol West Holdings, Inc. (the “Company”) common shares, as recorded
in the Company’s share register on April 4, 2005, may vote at the meeting.
As of that date, there were 31,598,451 shares of common stock outstanding
and entitled to one vote per share. A list of stockholders will be
available for inspection for at least ten days prior to the meeting at the
Company’s offices at 5701 Stirling Road, Davie, Florida
33314.
How
to vote
You
may vote in person at the meeting or by proxy. We recommend that you vote
by proxy even if you expect to attend the meeting. You will be able to
change your vote at the meeting.
Please
refer to your proxy card or the information forwarded by your bank, broker
or other holder of record to see how you should complete your proxy card
and deliver it to the Company.
How
proxies work
The
Board of Directors (the “Board”) of the Company is asking for your proxy.
Giving us your proxy means you authorize us to vote your shares at the
meeting, or at any adjournment thereof, in the manner you direct. You may
vote for or against the proposals or abstain from voting. You may also
vote for all, some or none of the directors seeking election.
If
you sign and return the enclosed proxy card but do not specify how to
vote, we will vote your shares in favor of all items herein to be voted
on.
As
of the date hereof, we do not know of any other business that will be
presented at the meeting. If other business shall properly come before the
meeting or any adjournment or postponement thereof, the person or persons
named in the proxy will vote according to their best
judgment.
Solicitation
In
addition to this mailing, the Company’s employees may solicit proxies
personally, electronically or by telephone. We pay the costs of soliciting
this proxy. We also reimburse brokers and other nominees for their
expenses in sending these materials to you and getting your voting
instructions. |
Revoking
a proxy
You
may revoke your proxy before it is voted by submitting a new proxy with a
later date, by voting in person at the meeting or by notifying the
Company’s Corporate Secretary.
Quorum
In
order to transact business at the meeting, we must have a quorum. Under
the Company’s by-laws, stockholders representing a majority of the
Company’s issued and outstanding common stock, present in person or by
proxy and entitled to vote, constitute a quorum.
Only
stockholders, their proxy holders and the Company’s guests may attend the
meeting. Verification of ownership may be required at the admissions desk.
If your shares are held in the name of your broker, bank or other nominee,
you must bring with you to the meeting an account statement or letter from
the nominee indicating that you are the beneficial owner of the shares on
April 4, 2005, the record date for voting.
Votes
needed
All
proposals to be acted on at the meeting require the affirmative vote of a
majority of the votes cast at a meeting at which a quorum is present.
Accordingly, abstentions and broker non-votes, though counted for the
purposes of determining the quorum present for the transaction of
business, will have the effect of not voting in favor of a proposal. A
broker non-vote is a proxy submitted by a broker in which the broker fails
to vote on behalf of a client on a particular matter for lack of
instructions when such instruction is required by the New York Stock
Exchange. |
3
ITEM
1
Under the
Company’s by-laws, directors hold office only until the next following Annual
Meeting of Stockholders unless they are earlier removed or resign.
The
Board recommends you vote FOR each of the following directors proposed for
reelection:
Mr.
James R. Fisher
Mr.
Fisher, age 49, has been Chief Executive Officer and Chairman of the Board of
the Company since September 2000 and has been a director of the Company since
July 1998. Mr. Fisher has been the Managing Member and majority owner of Fisher
Capital Corp. L.L.C. since March 1997. From 1986 through March 1997, Mr. Fisher
held various executive positions at American Re Corporation. Currently, Mr.
Fisher is a director of Willis Group Holdings Limited and Alea Group Holdings
(Bermuda) Ltd. and a trustee of Lafayette College in Easton,
Pennsylvania.
Mr.
R. Cary Blair
Mr.
Blair, age 65, has been a director of the Company since March 2004. Mr. Blair
retired as Chairman and Chief Executive Officer of the Westfield Group in August
2003. He served his entire career at the Westfield Group from 1961 through
August 2003. Currently, Mr. Blair is a director of First Merit Corporation and
Davey Tree Expert Co., the Chairman of the Westfield Foundation, and a member of
the advisory board of Benfield LTD of London, England.
Mr.
Richard T. Delaney
Mr.
Delaney, age 66, has been a director of the Company since March 2004. Currently,
Mr. Delaney is an independent consultant and a member of the CPCU Society. From
1994 through January 2000, Mr. Delaney held the positions of President and Chief
Operating Officer of Am-Re Consultants, Inc. and Vice Chairman of Am-Re Global
Services, Inc. From January 2002 through November 2003, Mr. Delaney was a
director of Alea Group Holdings Ltd. From January 2002 through June 2004, Mr.
Delaney was a director of Associated Industries Insurance Services,
Inc.
Mr.
Todd A. Fisher
Mr.
Fisher, age 39, has been a director of the Company since February 1998. Mr.
Fisher has been a member of KKR & Co. L.L.C. since January 1, 2001. Mr.
Fisher was an executive of KKR from June 1993 to December 31, 2000. Mr. Fisher
was an associate at Goldman Sachs & Co. from July 1992 to June 1993.
Currently, Mr. Fisher is a director of Accuride Corporation, Alea Group Holdings
(Bermuda) Ltd., Rockwood Specialties, Inc., Duales System Deutschland AG, and
the Vice Chairman of Vendex KBB.
Mr.
Perry Golkin
Mr.
Golkin, age 51, has been a director of the Company since February 1998. Mr.
Golkin has been a member of KKR & Co. L.L.C. since January 1, 1996. Mr.
Golkin was a general partner of KKR from 1995 to January 1996. Prior to 1995, he
was an executive of KKR. Currently, Mr. Golkin is a director of Alea Group
Holdings (Bermuda) Ltd., PRIMEDIA, Inc., Rockwood Specialties, Inc., Walter
Industries, Inc. and Willis Group Holdings Limited.
Mr.
Inder-Jeet S. Gujral
Mr.
Gujral, age 46, has been a director of the Company since March 2004. In
January 2000, Mr. Gujral founded and became Chairman of OneShield, Inc. and also
founded Firemark Partners, LLC. Mr. Gujral is currently an Executive Vice
President of WebMD Corp., Chairman of Newton Sensors, Inc. and a
director of Quosa, Inc. and SSI Corp.
Ms.
Mary R. Hennessy
Ms.
Hennessy, age 52, has been a director of Bristol West since March 2004. Ms.
Hennessy is currently a consultant with Webb Associates of Haddonfield, New
Jersey. From January 2000 through May 2002, Ms. Hennessy was the Chief Executive
Officer and President of Overseas Partners, Ltd. From November 1996 through
April 1999, Ms. Hennessy was President and Chief Operating Officer of TIG
Holdings. Prior to
4
serving
at TIG, Ms. Hennessy held various executive positions at American Re Corporation
from 1988 to 1996. Ms. Hennessy has been a Fellow of the Casualty Actuarial
Society since 1981.
Dr.
Eileen Hilton
Dr.
Hilton, age 58, has been a director of the Company since March 2004. Dr. Hilton
has been the Chief Executive Officer and President of Biomedical Research
Alliance of New York since 1998. Dr. Hilton has been an attending physician at
Long Island Jewish Medical Center since 1985. Dr. Hilton is currently a Fellow
with the American College of Physicians and the Infectious Disease Society of
America and a member of the American Society of Microbiology, the Long Island
Infectious Disease Society and the New York Society of Infectious
Disease.
Mr.
James N. Meehan
Mr.
Meehan, age 59, has been a director of the Company since March 2004. Mr. Meehan
was a Managing Director of Bank of America in Chicago, Illinois from June 1987
through May 2002. Prior to serving at Bank of America, Mr. Meehan was Vice
President of First National Bank of Chicago. Currently, Mr. Meehan is an
independent consultant and a director of the Delphi Financial Group and American
Fuji Fire and Marine Insurance Company.
Mr.
Scott C. Nuttall
Mr.
Nuttall, age 32, has been a director of the Company since August 2000. Mr.
Nuttall has been an executive of KKR since November 1996. Mr. Nuttall was an
executive at The Blackstone Group from January 1995 to November 1996. Currently,
Mr. Nuttall is a director of Alea Group Holdings (Bermuda) Ltd., Willis Group
Holdings Limited and KKR Financial Corporation.
Mr.
Arthur J. Rothkopf
Mr.
Rothkopf, age 69, has been a director of the Company since March 2004. Mr.
Rothkopf has been the President of Lafayette College in Easton, Pennsylvania
since 1993. Prior to serving as President of Lafayette College, Mr. Rothkopf
served as the Deputy Secretary and General Counsel of the United States
Department of Transportation and was a partner in the law firm of Hogan &
Hartson in Washington, D.C. Currently, Mr. Rothkopf is a director of Insurance
Services Office, Inc.
Pursuant
to the requirements of the New York Stock Exchange (the “NYSE”), the Board has
adopted Corporate Governance Guidelines that meet the independence standards of
the NYSE. The Board amended these Guidelines on March 8, 2005 to meet recent
changes to the NYSE listing standards. The Corporate Governance Guidelines are
attached to this proxy statement as Appendix A and also can be found on the
Company’s website at www.bristolwest.com. As part
of the Company’s Corporate Governance Guidelines, the Board has adopted
categorical standards to assist it in evaluating the independence of each of its
directors. The categorical standards, which are included in Appendix A to this
proxy statement, are intended to assist the Board of Directors in determining
whether or not certain relationships between the Company’s directors and the
Company (either directly or as a partner, stockholder or officer of an
organization that has a relationship with the Company) constitute “material
relationships”. The categorical standards establish thresholds at which such
relationships are deemed to be not material. The Board has affirmatively
determined that the following Board members are independent and have no material
relationship with the Company: R. Cary Blair, Richard T. Delaney, Mary R.
Hennessy, Eileen Hilton, James N. Meehan and Arthur J. Rothkopf.
Prior to
March 24, 2004, the Board consisted of James R. Fisher, Todd A. Fisher, Perry
Golkin and Scott C. Nuttall. On March 24, 2004, the Board was expanded to
include seven additional directors. R. Cary Blair, Richard T. Delaney,
Inder-Jeet S. Gujral, Mary R. Hennessy, James N. Meehan and Arthur J. Rothkopf
were added to the Board at the recommendation of James R. Fisher. Eileen Hilton
was added to the Board at the recommendation of Perry Golkin. The Board held six
meetings during 2004. It is expected that the Board will hold at least five
meetings during 2005.
5
All the
directors who held office in 2004, other than Todd A. Fisher, Perry Golkin and
Scott C. Nuttall, attended at least 75% of the meetings of the Board and any
committee on which they served during their period of office. The non-management
directors meet in separate executive sessions without senior management for a
portion of each meeting. At least once per year, the independent directors meet
in a separate executive session without senior management and non-independent
directors for a portion of the meeting. The Chairman of each executive session
is determined by the directors at each executive session. All directors are
expected to make every effort to attend all annual stockholder
meetings.
The Audit
Committee is composed of three directors: James N. Meehan (Chairman), Richard T.
Delaney and Mary R. Hennessy, each of whom was determined by the Board to be
“independent” as defined by the NYSE rules and the Company’s independence
standards and in compliance with the Audit Committee requirements promulgated by
the Securities and Exchange Commission (the “SEC”). The Board has determined
that James N. Meehan is the “audit committee financial expert” as such term is
defined under the SEC rules. The Audit Committee assists
the Board in fulfilling its oversight responsibilities with respect to (a) the
integrity of the Company’s financial statements; (b) the selection and oversight
of the independent auditors; (c) the Company’s compliance with legal and
regulatory requirements; (d) the independent auditors’ qualifications and
independence; (e) the performance of the independent auditors and the Company’s
internal audit function; and (f) the establishment and maintenance of proper
internal accounting controls and procedures. The Audit Committee operates
pursuant to a Charter adopted by the Board, a copy of which is attached to this
proxy statement as Appendix B and can also be found on the Company’s website at
www.bristolwest.com. The
Audit Committee held four meetings during 2004. The report of the Audit
Committee can be found below.
The
Compensation Committee is composed of three directors: R. Cary Blair (Chairman),
Richard T. Delaney and Eileen Hilton, each of whom was determined by the Board
to be “independent” as defined by the NYSE rules and the Company’s independence
standards. The Compensation Committee determines the compensation of the
Company’s Chairman and Chief Executive Officer and other senior executives. In
addition, the Compensation Committee administers the Company’s stock-based award
plans, establishes the Company’s general compensation philosophy and oversees
the development and implementation of the Company’s compensation programs. The
Compensation Committee operates pursuant to a Charter adopted by the Board, a
copy of which is attached to this proxy statement as Appendix C and can also be
found on the Company’s website at www.bristolwest.com. The
Compensation Committee held five meetings during 2004. The report of the
Compensation Committee can be found below.
The
Corporate Governance and Nominating Committee is composed of four directors:
Arthur J. Rothkopf (Chairman), R. Cary Blair, Mary R. Hennessy and James N.
Meehan, each of whom was determined by the Board to be “independent” as defined
by the NYSE rules and the Company’s independence standards. The Corporate
Governance and Nominating Committee identifies and recommends individuals to the
Board to be nominated for election to the Board. The Committee selects and
evaluates director nominees using a process that is described in general terms
in the Corporate Governance Guidelines, which are attached hereto as Appendix A.
In addition, this Committee develops and recommends to the Board corporate
governance principles applicable to the Company. The Corporate Governance and
Nominating Committee operates pursuant to a Charter adopted by the Board, a copy
of which is attached to this proxy statement as Appendix D and can also be found
on the Company’s website at www.bristolwest.com. The
Corporate Governance and Nominating Committee held two meetings during
2004.
The
Corporate Governance and Nominating Committee will consider all stockholder
recommendations for candidates for the Board, which should be sent to the
Committee, c/o George G. O’Brien, Chief Legal Officer and Secretary, Bristol
West Holdings, Inc., 5701 Stirling Road, Davie, FL 33314. In addition to
considering candidates suggested by stockholders, the Committee considers
candidates recommended by current directors, company officers, employees and
others. The Committee screens all candidates in the same manner regardless of
the source of the recommendation. The Committee reviews all written materials
provided with respect to the candidate. The Committee determines whether the
candidate meets the Company's qualifications for directors and whether
requesting additional information or an
6
interview
is appropriate. Among the factors considered by the Committee in evaluating
candidates for director are their integrity and reputation, business experience
and judgment, and ability to work effectively with other
directors.
The Board
adopted a Code of Conduct and Business Ethics Policy for all directors and
Company employees. The Board also adopted a Code of Conduct and Business Ethics
Policy for the Chief Executive Officer and Senior Financial Officers. Copies of
both policies can be found on the Company’s website at www.bristolwest.com.
The
Chairman and Chief Executive Officer is responsible for establishing effective
communications with the Company’s stakeholder groups, including stockholders,
the press, clients, suppliers, governments and representatives of the
communities in which it operates. It is the policy of the Company to appoint
individuals to communicate and interact fully with these stakeholders and the
Board will look to senior management to speak for the Company. This policy does
not preclude outside directors from communicating directly with stockholders or
other constituencies about Company matters, but any such communications will
generally be held at the request of the Board or senior management with senior
management present. A stockholder may communicate with the independent directors
or propose an individual to the Corporate Governance and Nominating Committee
for its consideration as a nominee for election to the Board by writing to the
Corporate Secretary at Bristol West Holdings, Inc., 5701 Stirling Road, Davie,
Florida 33314.
In 2004,
the directors, other than Mr. James R. Fisher, received annual directors’ fees
of $40,000. Mr. James N. Meehan received an additional fee of $15,000 in 2004
for his duties as Chairman of the Audit Committee. Mr. Richard T. Delaney and
Ms. Mary R. Hennessy each received an additional fee of $7,500 in 2004 for their
duties as members of the Audit Committee. The annual fees paid to those
directors who joined the Board on March 24, 2004 were pro-rated based on the
term of their service in 2004. The directors are entitled to defer receipt of
all or some of their fees under the Company’s Non-Employee Directors’ Deferred
Compensation Plan, and some of the directors have made such an election. Mr.
James R. Fisher receives no specific compensation for his services as a
director.
In
addition to the fees described above, each director joining the Board on March
24, 2004 was granted $40,000 in restricted shares of the Company’s common stock.
The restricted stock vests in two years from the grant date of May 14, 2004 so
long as the director continues to serve as a director of the Company until the
vesting date. Accordingly, R. Cary Blair, Richard T. Delaney, Inder-Jeet Gujral,
Mary R. Hennessy, Eileen Hilton, James N. Meehan and Arthur J. Rothkopf each
have been granted such restrictive stock.
7
Set forth
below are the names, ages and current positions of the Company’s
officers.
|
Name
|
Age |
Position
|
|
James R.
Fisher |
49 |
Chief
Executive Officer and Chairman of the Board |
|
Jeffrey J.
Dailey |
48 |
President
and Chief Operating Officer |
|
Anne M.
Bandi |
48 |
Senior
Vice President—Operations |
|
George
N. Christensen |
59 |
Senior
Vice President—Business Integration |
|
Brian
J. Dwyer |
48 |
Senior
Vice President—Product Research and Development |
|
Craig E.
Eisenacher |
57 |
Senior
Vice President—Chief Financial Officer |
|
Nila J.
Harrison |
41 |
Senior
Vice President—Human Resources |
|
Simon J.
Noonan |
41 |
Senior
Vice President—Actuarial/Product |
|
Ronald
E. Latva |
40 |
Senior
Vice President—Product Management |
|
George
G. O’Brien |
49 |
Senior
Vice President—Chief Legal Officer |
|
John
L. Ondeck |
45 |
Senior
Vice President—Chief Information Officer |
|
Alexis
S. Oster |
36 |
Senior
Vice President—General Counsel |
|
Robert D.
Sadler |
41 |
Senior
Vice President—Marketing |
|
James J.
Sclafani, Jr. |
45 |
Senior
Vice President—Claims |
|
Audrey
E. Sylvan |
41 |
Senior
Vice President—Product Management |
James
R. Fisher.
Mr. Fisher has been Chief Executive Officer and Chairman of the Board of the
Company since September 2000 and has been a director of the Company since July
1998. Mr. Fisher has been the Managing Member and majority owner of Fisher
Capital Corp. L.L.C. since March 1997. From 1986 through March 1997, Mr. Fisher
held various executive positions at American Re Corporation. Currently, Mr.
Fisher is a director of Willis Group Holdings Limited and Alea Group Holdings
(Bermuda) Ltd. and a trustee of Lafayette College in Easton,
Pennsylvania.
Jeffrey J.
Dailey. Mr. Dailey
has been President of the Company since December 2003 and Chief Operating
Officer since April 2001. Mr. Dailey has 25 years of experience in the
insurance industry. Prior to joining the Company in 2001, Mr. Dailey was
the Chief Executive Officer of Reliant Insurance. Prior to joining Reliant in
1996, Mr. Dailey spent 14 years with The Progressive Corporation,
holding numerous executive positions culminating as President of Progressive's
Northeast Division.
Anne M.
Bandi. Ms. Bandi
has been the Company’s Senior Vice President—Operations since April 2001.
Ms. Bandi has 25 years of insurance operations experience. Prior to
joining the Company, Ms. Bandi had been the Senior Vice President of
Operations at Reliant Insurance since February 1996. Prior to joining Reliant,
Ms. Bandi spent 16 years with The Progressive Corporation in a variety
of operations management positions.
George
N. Christensen. Mr. Christensen
has been Senior Vice President—Business Integration of the Company since April
2001. Mr. Christensen joined the Company in 1978 and has served in various
roles since that time, including Chief Information Officer.
Brian
J. Dwyer. Mr. Dwyer
has been Senior Vice President—Product Research and Development of the Company
since August 2003. Mr. Dwyer has 15 years of insurance industry experience.
Prior to joining the Company, Mr. Dwyer served in various management roles
for The Progressive Corporation from 1989 through 2002, including Regional
Marketing Manager and General Manager. Prior to joining The Progressive
Corporation, Mr. Dwyer served as a senior manager with Ernst &
Whinney.
8
Craig E.
Eisenacher. Mr. Eisenacher
has been Chief Financial Officer of the Company since June 1, 2004. From
December 2003 until June 1, 2004, he was the Company’s Senior Vice President—
Corporate Finance. Prior to joining the Company in December 2003,
Mr. Eisenacher was a Managing Director with Century Capital
Management, Inc., an investment management firm engaged in private equity
investing with a focus on companies engaged in insurance and financial services.
From 1996 through 1999, Mr. Eisenacher was Vice President of General
Reinsurance Corp. Prior to 1996, Mr. Eisenacher held several senior
management positions at insurance and reinsurance companies, including Treasurer
and Controller of the CIGNA Property and Casualty Group, Vice President—Finance
of American Re-Insurance Company and Senior Vice President and Chief Financial
Officer of Prudential Reinsurance Company.
Nila J.
Harrison. Ms. Harrison
has been Senior Vice President—Human Resources of the Company since April 2001.
Ms. Harrison has 20 years of human resources experience. Prior to joining
the Company, Ms. Harrison was the Senior Vice President, Human Resources
for Reliant. Prior to joining Reliant in April 1996, Ms. Harrison was in
the retail industry, where she spent 12 years in human resources management
positions with Fabri-Centers of America Inc. and Limited Brands Inc.
Simon J.
Noonan, FIA, MAAA. Mr. Noonan
has been Senior Vice President—Actuarial/Product of the Company since April
2002. Prior to joining the Company in 2002, Mr. Noonan was the Chief
Executive Officer of Metis Financial LLC, a consulting firm specializing in the
property and casualty insurance market, since November of 1997. Prior to joining
Metis, Mr. Noonan served as a Senior Manager and Director in the insurance
practice of KPMG from 1991 through 1997.
Ronald
E. Latva. Mr. Latva
has been Senior Vice President—Product
Management of the Company since May 2004. From August 2000 until May 2004,
he was a Vice President and National Product Manager for the Company.
Mr. Latva has over 18 years of insurance product management experience.
Prior to joining the Company, he served as an Assistant Vice President at
Allmerica Financial from 1997 to 2000. From 1986 through 1997, he
held various pricing and product management positions at Great American
Insurance.
George
G. O'Brien. Mr.
O'Brien has been Senior Vice President—Chief Legal Officer and Corporate
Secretary of the Company since March 2004. Prior to joining the Company, Mr.
O'Brien had his own litigation practice since 1994. He began consulting with the
Company in March 2003. From 1980 until 1994, Mr. O'Brien was a partner with the
law firm of Dechert Price & Rhoads, and from 1980 until 1988 he was an
associate with that firm.
John
L. Ondeck. Mr. Ondeck
has been Senior Vice President—Chief Information Officer of the Company since
May 2002. Mr. Ondeck has over 13 years of information technology
experience. Prior to joining the Company in 2002, Mr. Ondeck was President
of Armstrong and Lures, Inc., a software consulting firm from 2001 to 2002 and
1998 to 2000. Mr. Ondeck was a Vice President of Sales and Operations for
Digital Day, a software development firm, from 2000 to 2001. From 1990 through
1997, Mr. Ondeck held management positions at Oracle Corporation and Kraft
General Foods.
Alexis
S. Oster. Ms. Oster
has been Senior Vice President—General Counsel of the Company since April 2001.
Ms. Oster has 12 years of experience in the insurance industry. Prior
to joining the Company in 2001, Ms. Oster served as General Counsel for
Reliant. Prior to joining Reliant in 1996, Ms. Oster was corporate counsel
of USF&G Insurance, with a primary focus on regulatory matters, company
licensing and general corporate legal matters.
Robert D.
Sadler. Mr. Sadler
has been Senior Vice President—Marketing of the Company since April 2001. Prior
to joining the Company in 2001, Mr. Sadler was the Chief Financial Officer
for Reliant Insurance. Mr. Sadler was with Reliant Insurance from May 1996
through March 2001. Prior to joining Reliant, Mr. Sadler served as the
Chief Financial Officer of Agency Insurance Company and as a manager for
Ernst & Young in their insurance practice.
James J.
Sclafani, Jr. Mr. Sclafani
has been Senior Vice President—Claims of the Company since January 2003. Prior
to joining the Company, Mr. Sclafani was Vice President and world-wide
manager of
9
liability
claims
for Enterprise Rent-A-Car. Prior to joining Enterprise in 1994,
Mr. Sclafani was with The Progressive Corporation for 10 years holding
various claim management positions.
Audrey
E. Sylvan. Ms.
Sylvan has been Senior Vice President - Product Management of the Company since
May 2004. From April 2001 through May 2004, Ms. Sylvan was Vice President -
Product Management of the Company. Ms. Sylvan has 17 years of insurance
experience in Product Management. Prior to joining the Company, Ms. Sylvan was
Senior Vice President of Product Management for Reliant Insurance. Prior to
joining Reliant in 1996, Ms. Sylvan was a Product Manager at The Progressive
Corporation for eight years, where she managed both Specialty and Auto
Products.
The
following table reflects the number of shares of common stock beneficially owned
by persons known to the Company to own more than 5% of its outstanding
shares:
Number
of Shares
Beneficially
Owned |
Percentage
of Shares
at
April
4, 2005 | ||
Name
and Address |
|||
|
Bristol
West Associates LLC1 |
12,434,3182 . |
39.4% | |
|
C/O
KKR & Co |
|||
|
9
West 57th St 41st Floor |
|||
|
New
York, NY 10019 |
|||
|
T.
Rowe Price Associates Inc.3
|
1,676,900 |
5.3% | |
|
100
East Pratt St. |
|||
|
Baltimore,
MD 21202 |
|||
|
Stadium
Capital Management LLC4 |
1,963,600 |
6.2% | |
|
2483
East Bayshore Road Ste 202 |
|||
|
Palo
Alto, CA 94303 |
1 KKR 1996
GP, L.L.C. is the general partner of KKR Associates 1996 L.P., which is the
general partner of KKR 1996 Fund L.P., which is the managing member of Bristol
West Associates LLC, which owns approximately 38.8% of the Company’s common
stock (including options that are currently exercisable or exercisable within 60
days). Messrs. Henry R. Kravis, George R. Roberts, Paul E.
Raether, Michael W. Michelson, James H. Greene, Jr., Edward A.
Gilhuly, Perry Golkin, Scott M. Stuart, Johannes P. Huth, Alex Navab
and Todd A. Fisher, as members of KKR 1996 GP, L.L.C., may be deemed to
share beneficial ownership of any shares beneficially owned by KKR 1996 GP,
L.L.C., but disclaim such beneficial ownership. The address of Bristol West
Associates LLC and the address of each individual listed in this footnote is
c/o Kohlberg Kravis Roberts & Co. L.P., 9 West 57th
Street,
Suite 4200, New York, New York, 10019.
2 This
amount includes 176,950 shares owned by Aurora Investments II LLC, an affiliate
of Bristol West Associates LLC.
3 Number
of shares are as of December 31, 2004, as stated in the Schedule 13G filed by T.
Rowe Price Associates Inc. with the SEC on February 9, 2005.
4 Number
of shares are as of December 31, 2004, as stated in the Schedule 13G filed by
Stadium Capital Management LLC with the SEC on February 14, 2005.
10
The
amounts and percentages of the Company’s shares beneficially owned are reported
on the basis of regulations of the SEC governing the determination of beneficial
ownership of securities. Under the rules of the SEC, a person is deemed to be a
beneficial owner of a security if that person has or shares voting power, which
includes the power to vote or to direct the voting of that security, or
investment power, which includes the power to dispose of or to direct the
disposition of that security. A person is also deemed to be a beneficial owner
of any securities of which that person has a right to acquire beneficial
ownership within 60 days. Under these rules, more than one person may be deemed
to be a beneficial owner of the same securities and a person may be deemed to be
a beneficial owner of securities as to which that person has no economic
interest. In computing the number of shares beneficially owned by a person and
the percentage of ownership of that person, shares of common stock subject to
options or restricted shares held by that person that are currently exercisable
or exercisable within 60 days of the date of this document are deemed issued and
outstanding. These shares, however, are not deemed outstanding for purposes of
computing percentage beneficial ownership of any other person. The percentage of
the Company’s share capital is based on 31,598,451 shares of common stock
outstanding on April 4, 2005. The following table shows the interests of
directors and officers of the Company.
|
Number of Shares |
Percentage
of Shares | ||
Name |
Beneficially
Owned |
Beneficially
Owned | |
|
James
R. Fisher (1) |
1,053,485 |
3.2% | |
|
R.
Cary Blair |
4,174 |
* | |
|
Richard
T. Delaney (2) |
8,468 |
* | |
|
Todd
A. Fisher (3) |
12,435,989 |
39.4% | |
|
Perry
Golkin (4) |
12,435,989 |
39.4% | |
|
Inder-Jeet
S. Gujral (5) |
134,225 |
* | |
|
Mary
R. Hennessy (6) |
4,158 |
* | |
|
Eileen
Hilton |
2,174 |
* | |
|
James
N. Meehan (7) |
23,322 |
* | |
|
Scott
C. Nuttall (8) |
1,671 |
* | |
|
Arthur
J. Rothkopf (9) |
3,009 |
* | |
|
Jeffrey
J. Dailey (10) |
360,321 |
1.1% | |
|
Craig
E. Eisenacher (11) |
56,523 |
* | |
|
Simon
J. Noonan (12) |
151,497 |
* | |
|
James
J. Sclafani, Jr. (13) |
77,479 |
* | |
|
All
directors and executive |
|||
|
officers
as a group (25 persons) |
15,070,569 |
45.1% |
* Less
than 1% of the outstanding Common Shares of the Company
(1) This
amount includes 14,749 shares of restricted stock issued under the Company’s
2004 Stock Incentive Plan. Mr. Fisher has sole voting power and no investment
power with respect to these restricted shares during the restriction period.
Also, Mr. Fisher is the managing member and majority owner of Fisher Capital
Corp. LLC. As such, Mr. Fisher may be deemed to be the beneficial owner of
65,190 shares and 873,546 currently exercisable options to purchase shares of
the Company’s common stock that are held by Fisher Capital, but disclaims
beneficial ownership of these securities, except to the extent of his pecuniary
interest therein. Mr. Fisher also has an interest in, but does not beneficially
own, 26,076 shares of the Company’s common stock as an investor through a KKR
affiliate.
(2) This
amount includes 5,000 shares owned indirectly by Mr. Delaney. This amount also
includes 2,174 shares of restricted stock issued under the Company’s 2004 Stock
Incentive Plan. Mr. Delaney has sole voting power and no investment power with
respect to these restricted shares during the restriction period.
11
(3) KKR
1996 GP, L.L.C. is the general partner of KKR Associates 1996 L.P., which is the
general partner of KKR 1996 Fund L.P., which is the managing member of Bristol
West Associates LLC, which owns approximately 38.8% of the Company’s common
stock. Messrs. Henry R. Kravis, George R. Roberts, Paul E.
Raether, Michael W. Michelson, James H. Greene, Jr., Edward A.
Gilhuly, Perry Golkin, Scott M. Stuart, Johannes P. Huth, Alex Navab
and Todd A. Fisher, as members of KKR 1996 GP, L.L.C., may be deemed to
share beneficial ownership of any shares beneficially owned by KKR 1996 GP,
L.L.C., but disclaim such beneficial ownership. The address of Bristol West
Associates LLC and the address of each individual listed in this footnote is
c/o Kohlberg Kravis Roberts & Co. L.P., 9 West 57th
Street,
Suite 4200, New York, New York, 10019. This amount also includes
176,950 shares owned by Aurora Investments II LLC, an affiliate of Bristol West
Associates LLC and 1,671 phantom shares held by Mr. Todd A. Fisher under the
Bristol West Holdings, Inc. Non-Employee Directors’ Deferred Compensation Plan.
(4) KKR
1996 GP, L.L.C. is the general partner of KKR Associates 1996 L.P., which is the
general partner of KKR 1996 Fund L.P., which is the managing member of Bristol
West Associates LLC, which owns approximately 38.8% of the Company’s common
stock. Messrs. Henry R. Kravis, George R. Roberts, Paul E.
Raether, Michael W. Michelson, James H. Greene, Jr., Edward A.
Gilhuly, Perry Golkin, Scott M. Stuart, Johannes P. Huth, Alex Navab
and Todd A. Fisher, as members of KKR 1996 GP, L.L.C., may be deemed to
share beneficial ownership of any shares beneficially owned by KKR 1996 GP,
L.L.C., but disclaim such beneficial ownership. The address of Bristol West
Associates LLC and the address of each individual listed in this footnote is
c/o Kohlberg Kravis Roberts & Co. L.P., 9 West 57th
Street,
Suite 4200, New York, New York, 10019. This amount also includes
176,950 shares owned by Aurora Investments II LLC, an affiliate of Bristol West
Associates LLC and 1,671 phantom shares held by Mr. Perry Golkin under the
Bristol West Holdings, Inc. Non-Employee Directors’ Deferred Compensation
Plan.
(5) This
amount includes 1,671 phantom shares held by Mr. Gujral under the Bristol West
Holdings, Inc. Non-Employee Directors’ Deferred Compensation Plan and 2,174
shares of restricted stock issued under the Company’s 2004 Stock Incentive Plan.
Mr. Gujral has sole voting power and no investment power with respect to these
restricted shares during the restriction period. This amount also includes
130,380 options to purchase shares held by Firemark Partners LLC. Mr. Gujral is
the founder and a partner of Firemark Partners LLC, a service company that
provides development and implementation assistance to the Company with respect
to the Company’s OneStep’ system
pursuant to a services agreement dated July 24, 2002 between Firemark Partners
LLC and the Company. The 130,380 options to purchase shares became exercisable
in 12 equal monthly installments beginning on August 23, 2002. Mr. Gujral as a
member and partner of Firemark Partners LLC may be deemed to share beneficial
ownership of any shares beneficially owned by Firemark Partners LLC but
disclaims such beneficial ownership except to the extent of his pecuniary
interest therein.
(6) This
amount includes 1,984 phantom shares held by Ms. Hennessy under the Bristol West
Holdings, Inc. Non-Employee Directors’ Deferred Compensation Plan and 2,174
shares of restricted stock issued under the Company’s 2004 Stock Incentive Plan.
Ms. Hennessy has sole voting power and no investment power with respect to these
restricted shares during the restriction period.
(7) This
amount includes 1,148 phantom shares held by Mr. Meehan under the Bristol West
Holdings, Inc. Non-Employee Directors’ Deferred Compensation Plan and 2,174
shares of restricted stock issued under the Company’s 2004 Stock Incentive Plan.
Mr. Meehan has sole voting power and no investment power with respect to these
restricted shares during the restriction period.
(8) This
amount includes 1,671 phantom shares held by Mr. Nuttall under the Bristol West
Holdings, Inc. Non-Employee Directors’ Deferred Compensation Plan.
(9) This
amount includes 836 phantom shares held by Mr. Rothkopf under the Bristol West
Holdings, Inc. Non-Employee Directors’ Deferred Compensation Plan and 2,174
shares of restricted stock issued under the Company’s 2004 Stock Incentive Plan.
Mr. Rothkopf has sole voting power and no investment power with respect to these
restricted shares during the restriction period.
(10) This
amount includes 238,167 options to purchase shares that are currently
exercisable or become exercisable within 60 days. This amount also includes
67,402 shares of restricted stock issued under the
12
Company’s
2004 Stock Incentive Plan. Mr. Dailey has sole voting power and no investment
power with respect to these restricted shares during the restriction
period.
(11) This
amount includes 9,779 options to purchase shares that are currently exercisable
or become exercisable within 60 days and 2,500 shares held indirectly by Mr.
Eisenacher. This amount also includes 34,844 shares of restricted stock issued
under the Company’s 2004 Stock Incentive Plan. Mr. Eisenacher has sole voting
power and no investment power with respect to these restricted shares during the
restriction period.
(12) This
amount includes 96,727 options to purchase shares that are currently exercisable
or become exercisable within 60 days. This amount also includes 35,213 shares of
restricted stock issued under the Company’s 2004 Stock Incentive Plan. Mr.
Noonan has sole voting power and no investment power with respect to these
restricted shares during the restriction period.
(13) This
amount includes 34,526 options that are currently exercisable or become
exercisable within 60 days. This amount also includes 25,104 shares of
restricted stock issued under the Company’s 2004 Stock Incentive Plan. Mr.
Sclafani has sole voting power and no investment power with respect to these
restricted shares during the restriction period.
ITEM
2
AS
INDEPENDENT AUDITOR FOR 2005
The Audit
Committee has selected Deloitte & Touche LLP as the independent auditor to
perform the audit of the financial statements of the Company for the fiscal year
ending December 31, 2005. This selection has been ratified by the Board.
Deloitte & Touche LLP acted as the Company’s independent auditor for the
fiscal year ended December 31, 2004. Representatives of Deloitte & Touche
LLP will attend the meeting, will have an opportunity to make a statement if
they desire to do so and will be available to answer any pertinent
questions.
Your
Board recommends you vote FOR this proposal.
Fees
to Deloitte & Touche LLP
The Board
delegates the determination of the audit fees of Deloitte & Touche LLP to
the Audit Committee.
The
following fees have been, or will be, billed by Deloitte & Touche LLP and
their respective affiliates (collectively “Deloitte”) for professional services
rendered to the Company for the fiscal years ended December 31, 2004 and
December 31, 2003.
2004 |
2003 | |
|
|
||
| Audit fees............................................................................................................. |
$
1,344,420 |
$
933,100 |
|
Audit-related
fees (1)………………………………………….......................... |
37,700
|
36,830
|
|
Tax
fees (2)………………………………………………….….......................... |
98,737
|
100,762
|
|
All
other fees…………………………….…………………….......................... |
0 |
0 |
|
Total
fees…………………………………...………………….......................... |
$
1,480,857 |
$
1,070,692 |
|
(1) |
Audit-related
fees represent fees for employee benefit plan
audits. |
|
(2) |
Tax
fees represent fees for tax compliance, tax consulting and tax planning
services. |
Deloitte’s
services and fees for 2003 were not subject to audit committee approval as the
Company was privately held until its initial public offering on February 12,
2004. The Audit Committee approved all of Deloitte’s services and fees for
2004.
13
The Audit
Committee Charter requires the Audit Committee to approve in advance any
significant audit or non-audit engagement or relationship between the Company
and the independent auditor, other than prohibited non-auditing services.
Notwithstanding the foregoing, pre-approval is not necessary for minor audit
services if: (i) the aggregate amount of all such non-audit services provided to
the Company constitutes not more than five percent of the total amount of
revenues paid by the Company to its auditor during the fiscal year in which the
non-audit services are provided; (ii) such services were not recognized by the
Company at the time of the engagement to be non-audit services; and (iii) such
services are promptly brought to the attention of the Committee and approved
prior to the completion of the audit by the Committee or by one or more members
of the Committee to whom authority to grant such approvals has been delegated by
the Committee. The Committee also adopted procedures for the approval of audit
and non-audit services between regularly scheduled Audit Committee meetings. The
Chief Financial Officer is required to contact the Audit Committee Chairperson
to request such approval. The Audit Committee Chairperson or another member of
the Committee designated by the Chairperson is empowered to approve in writing
such services that in the aggregate will not exceed $100,000. The entire Audit
Committee at the next regularly scheduled meeting is required to review and
affirm this retention. This procedure relates only to payments made to an
external auditor that has previously been approved by the Audit Committee to
perform audit services for the Company. Retention of other external audit firms
or consultants can only be approved by the full Audit Committee.
The Audit
Committee of the Board of Directors (the “Committee”) is composed of three
directors, each of whom is “independent” as defined by the New York Stock
Exchange Rules and the Company’s independence standards. The Committee operates
pursuant to a charter, a copy of which is attached to this proxy statement as
Exhibit B and is available on the Company’s website at www.bristolwest.com. The
Committee met four times in 2004, and Committee members engaged in other
discussions with management, the independent auditors and each other during the
year.
The
primary function of the Audit Committee is to assist the Board of Directors in
its oversight with respect to (a) the integrity of the Company’s financial
statements; (b) the selection of the independent auditors; (c) the Company’s
compliance with legal and regulatory requirements; (d) the performance of the
independent auditors and the Company’s internal audit function; and (f) the
establishment and maintenance of proper internal accounting controls and
procedures. Executive management is responsible for the Company’s financial
statements and overall reporting process, including the system of internal
controls. The independent auditors are responsible for conducting annual audits
and quarterly reviews of the Company’s financial statements and expressing an
opinion as to the conformity of the annual financial statements with generally
accepted accounting principles.
In the
performance of its oversight function, the Committee reviewed and discussed the
audited financial statements as of and for the year ended December 31, 2004 with
management and the independent auditors. The Committee also received from the
independent auditors the required communications, including written disclosures
and the letter from the independent auditors required by Independence Standards
Board Standard No. 1, Independence
Discussions with Audit Committees, as
amended. The Committee also discussed with the auditors the auditors’
independence and the matters required to be discussed by the Statement on
Auditing Standards No. 61, Communication
with Audit Committees, as
amended.
It is not
the duty or responsibility of the Committee to conduct auditing or accounting
reviews or procedures. In performing their oversight responsibility, members of
the Committee rely without independent verification on the information provided
to them and on the representations made by management and the independent
auditors. Accordingly, the Committee’s review, discussions and recommendations
do not assure that the audit of the Company’s financial statements has been
carried out in accordance with generally accepted auditing standards or that the
financial statements are presented in accordance with generally accepted
accounting principles.
14
Based on the
review and discussions described in this report, and subject to the limitations
on the role and responsibilities of the Committee referred to above and in the
Audit Committee Charter, the Committee recommended to the Board that the audited
financial statements be included in the Company’s Annual Report on Form 10-K for
the year ended December 31, 2004 for filing with the SEC, and selected Deloitte
& Touche LLP to serve as the Company’s independent registered public
accounting firm for 2005.
James N.
Meehan (Chairperson)
Richard
T. Delaney
Mary R.
Hennessy
EXECUTIVE
COMPENSATION
Summary
Compensation Table
The
following table sets forth cash and other compensation paid or accrued for
services rendered in 2004, 2003 and 2002 to the Chairman and Chief Executive
Officer and each of the other four most highly compensated executive officers of
the Company.
|
Name |
Year |
Salary
($) |
Bonus
($) |
Other
Annual
Compensation ($) |
Restricted
Stock
Awards ($) |
Securities
Underlying
Options
(#) |
LTIP
Payouts
($) |
All
Other
Compensation |
|
James
R. Fisher (1) |
2004 |
700,000 |
175,000(2) |
- |
250,000
(3) |
(1) |
- |
- |
|
2003 |
- |
- |
25,000 |
- |
(1) |
- |
- | |
|
2002 |
- |
- |
25,000 |
- |
(1) |
- |
- | |
|
Jeffrey
J. Dailey (4) |
2004 |
390,000 |
213,750
|
58,478
(5) |
1,071,250(6) |
- |
- |
- |
|
2003 |
385,385 |
232,500 |
- |
- |
3,706 |
- |
- | |
|
2002 |
375,000 |
187,500 |
- |
- |
8,149 |
- |
- | |
|
Craig
E. Eisenacher |
2004 |
275,000 |
90,000
(7) |
- |
530,000(10) |
- |
- |
- |
|
2003 |
10,577 |
150,000(8) |
202,580
(9) |
- |
- |
- |
- | |
|
2002 |
- |
- |
- |
- |
- |
- |
- | |
|
Simon
J. Noonan (11) |
2004 |
282,692 |
108,750 |
- |
536,250(12) |
- |
- |
- |
|
2003 |
260,096 |
112,500 |
- |
- |
1,793 |
- |
- | |
|
2002 |
163,461 |
145,000 |
- |
- |
3,260 |
- |
- | |
|
James
J. Sclafani, Jr. (13) |
2004 |
283,077 |
56,250 |
- |
351,750(14) |
- |
- |
- |
|
2003 |
266,538 |
284,353 |
- |
- |
1,255 |
- |
- | |
|
2002 |
- |
- |
- |
- |
- |
- |
- |
|
(1) |
For
the years ended December 31, 2003 and December 31, 2002, James
R. Fisher was not a direct employee of the Company. All compensation due
to Mr. Fisher, in his role as Chief Executive Officer, was paid to
Fisher Capital Corp., LLC. Mr. Fisher is the managing member and
majority owner of Fisher Capital, and received 86.5% of all compensation
paid by the Company to Fisher Capital for his services as Chief Executive
Officer and the additional services Fisher Capital provides. For the years
ended December 31, 2003 and December 31, 2002, the fee paid to
Fisher Capital as compensation for Mr. Fisher's serving as Chief
Executive Officer was $700,000. In addition, for the years ended
December 31, 2003 and December 31, 2002, Fisher Capital was
granted 221,646 options and 130,380 options, respectively, at an exercise
price of $3.83 per option share, which options Mr. Fisher may be
deemed to beneficially own. Mr. Fisher also received, directly, a $25,000
annual fee for serving on the Board. Effective January 1, 2004,
Mr. Fisher entered into an employment agreement with the Company.
This employment agreement made him a direct employee of the Company and
his compensation is paid directly to him. Mr. Fisher is no longer
eligible to receive the $25,000 annual fee for serving on the Board.
|
15
|
(2) |
Mr.
Fisher was paid a one-time signing bonus of $175,000 for entering into his
employment agreement effective as of January 1, 2004. Mr. Fisher also
received $250,000 in a grant of restricted stock as a bonus for 2004
performance. This restricted stock grant is included in the Restricted
Stock Awards column of this
table. |
|
(3) |
Mr.
Fisher received $250,000 in a grant of restricted stock as a bonus for
2004 performance. This restricted stock cliff vests two years from the
date of the grant, so long as Mr. Fisher continues to serve as an employee
of the Company until the vesting
date. |
|
(4) |
In
addition to the cash amounts set forth in the Bonus column of this table,
Mr. Dailey also received a grant of restricted stock as part of his annual
bonus for 2004 performance and grants of options to purchase shares of the
Company’s stock as part of his annual bonuses for 2003 and 2002
performance. These grants are included in the Restricted Stock Awards
column and the Securities Underlying Options column of this
table. |
|
(5) |
This
amount includes $22,388 of expenses paid by the Company in connection with
an automobile provided to Mr. Dailey for personal use, $33,750 in expenses
paid by the Company to Mr. Dailey for unused paid time off, and $2,340 in
matching contributions made by the Company to Mr. Dailey’s 401(k) account,
pursuant to the Company’s Retirement Security Program.
|
|
(6) |
This
amount consists of a restricted stock award of $1,000,000 that cliff vests
five years after the grant date of May 14, 2004 and a restricted stock
award of $71,250 that cliff vests two years after the grant date of
February 22, 2005, so long as Mr. Dailey continues to serve as an employee
of the Company until the respective vesting dates.
|
|
(7) |
In
addition to this cash amount of his bonus for 2004 performance, Mr.
Eisenacher also received a grant of restricted stock as part of his annual
bonus for 2004 performance. This restricted stock grant is included in the
Restricted Stock Awards column of this
table. |
|
(8) |
Mr.
Eisenacher began his employment with the Company on December 8, 2003 and
received a one-time signing bonus of $150,000.
|
|
(9) |
This
amount consists of expenses paid by the Company in connection with the
relocation of Mr. Eisenacher. |
|
(10) |
This
amount consists of a restricted stock award of $500,000 that cliff vests
five years after the grant date of May 14, 2004, and a restricted stock
award of $30,000 that cliff vests two years after the grant date of
February 22, 2005, so long as Mr. Eisenacher continues to serve as an
employee of the Company until the respective vesting
dates. |
|
(11) |
In
addition to the cash amounts set forth in the Bonus column of this table,
which include a one-time signing bonus of $70,000 in 2002, Mr. Noonan also
received a grant of restricted stock as part of his annual bonus for 2004
performance and grants of options to purchase shares of the Company’s
stock as part of his annual bonuses for 2003 and 2002 performance. These
grants are included in the Restricted Stock Awards column and the
Securities Underlying Options column of this
table. |
|
(12) |
This
amount consists of a restricted stock award of $500,000 that cliff vests
five years after the grant date of May 14, 2004, and a restricted stock
award of $36,250 that cliff vests two years after the grant date of
February 22, 2005, so long as Mr. Noonan continues to serve as an employee
of the Company until the respective vesting
dates. |
|
(13) |
In
addition to the cash amounts set forth in the Bonus column of this table,
which include a one-time signing bonus of $205,603 in 2003, Mr. Sclafani
also received a grant of restricted stock as part of his annual bonus for
2004 performance and a grant of options to purchase shares of the
|
16
|
|
Company’s
stock as part of his annual bonus for 2003 performance. These grants are
included in the Restricted Stock Awards column and the Securities
Underlying Options column of this
table. |
|
(14) |
This
amount consists of a restricted stock award of $333,000 that cliff vests
five years after the grant date of May 14, 2004, and a restricted stock
award of $18,750 that cliff vests two years after the grant date of
February 22, 2005, so long as Mr. Sclafani continues to serve as an
employee of the Company until the respective vesting
dates. |
Chairman
and Chief Executive Officer’s Employment Agreement
Effective as
of January 1, 2004, James R. Fisher entered into an employment agreement
with the Company. Under this agreement, Mr. Fisher will serve as the
Company’s Chief Executive Officer for an initial term expiring on June 30,
2005. This term will be automatically extended for additional one-year periods
beginning thereafter unless terminated by either party pursuant to the
agreement. In connection with entering into this agreement, Mr. Fisher
received a one-time signing bonus of $175,000. While employed under this
agreement, Mr. Fisher will receive an annual base salary of $700,000 and
will be eligible to receive an annual bonus in an amount determined by the
Compensation Committee of the Board. If the Company terminates Mr. Fisher's
employment without cause (as defined in the agreement), Mr. Fisher will be
entitled to receive, for the remainder of the applicable term of his employment,
his base salary.
While
Mr. Fisher is subject to a non-competition provision under this agreement,
which requires him to fulfill his duties and responsibilities to the Company, he
is permitted to provide services to KKR and its affiliates and to manage and
direct his personal investments without limitation. KKR and its affiliates are
not subject to any non-competition agreements with the Company. In addition,
Mr. Fisher is permitted to engage in certain investment and advisory
activities related to his position with Fisher Capital.
Other
Named Executive Officers’ Employment Agreements
Each of the
other named executive officers, Messrs. Dailey, Noonan, Eisenacher and Sclafani,
have entered into Employee Stockholder Agreements with the Company. Each
agreement provides for the grant of shares of the Company’s common stock and
options to purchase the Company’s common stock under the Company’s 1998 Stock
Option Plan and 2004 Stock Incentive Plan. These agreements impose restrictions
on the executives’ ability to transfer shares of the Company’s common stock
prior to the fifth anniversary of the date on which the shares were originally
acquired. These transfer restrictions were waived with respect to each executive
on a pro rata basis relative to the percentage of shares Bristol West Associates
LLC sold in the Company’s initial public offering on February 12, 2004.
Under the
Employee Stockholder Agreements with Messrs. Dailey, Noonan and Eisenacher, in
the case of termination of the executive officers and in exchange for a promise
not to compete with the Company for 12 months or disclose Company confidential
information, each will receive payments and benefits in an amount equal to 12
months’ salary and benefits due him. Under the Employee Stockholder Agreement
with Mr. Sclafani, in the case of termination and in exchange for a promise not
to compete with the Company for 12 months or disclose Company confidential
information, he will receive payments and benefits in an amount equal to 36
months’ salary and benefits due him.
In addition,
under the Employee Stockholder Agreements with Messrs. Dailey and Sclafani,
other than options granted in connection with annual bonus awards, options
granted under the Company’s 1998 Stock Option Plan become exercisable by the
executives in installments over a five-year period: 20% of the stock subject to
the option becomes exercisable on each of the first five anniversaries of the
grant date of the particular option. Under the Employee Stockholder Agreement
with Mr. Noonan, options granted under the Company’s 1998 Stock Option Plan
become exercisable by Mr. Noonan in installments over a two-year period: 50% of
the stock subject to the options becomes exercisable on each of the first two
anniversaries of the grant of the particular option.
17
In
addition, Messrs. Dailey, Noonan, Eisenacher and Sclafani have entered into a
sale participation agreement with Bristol West Associates LLC and its
affiliates, which provide that if Bristol West Associates LLC sells shares of
the Company’s common stock other than in a qualified public offering, they have
a right to participate in that sale.
Name |
Number
of Shares Awarded in 2004
(Time-Based) |
Dividends
Paid
in
2004
on Restricted
Holdings
($) (1) |
Value
of
Aggregate
Restricted Stock Holdings at
12/31/04
($) (2) | |||
|
James
R. Fisher |
--- |
--- |
--- | |||
|
Jeffrey
J. Dailey |
54,348 |
8,152
|
1,086,960 | |||
|
Craig
E. Eisenacher |
27,174 |
4,076
|
543,480 | |||
|
Simon
J. Noonan |
27,174 |
4,076
|
543,480 | |||
|
James
J. Sclafani, Jr. |
18,098 |
2,715
|
361,960 |
|
(1) |
This
column represents dividends accrued for but not received by the executives
for the Restricted Stock Awards. Dividends are paid to the executives upon
the vesting of the restricted stock. |
|
(2) |
These
values are based on the December 31, 2004 closing price for the Company’s
stock of $20.00 per share. |
The
following table sets forth certain information concerning share options granted
during 2004 to the five most highly compensated executive officers of the
Company.
Name |
Number
of Securities Underlying Options Granted |
%
of Total
Options
Granted
to
Employees
in
Fiscal Year |
Exercise
or
Base
Price ($) |
Expiration
Date |
Grant
Date
Present
Value ($) | ||||
|
James
R. Fisher |
--- |
--- |
--- |
|
--- |
--- | |||
|
Jeffrey
J. Dailey |
3,706 |
.147 |
20.91(1) |
|
04.05.14 |
18,422
(2) | |||
|
Craig
E. Eisenacher |
--- |
--- |
--- |
--- |
--- | ||||
|
Simon
J. Noonan |
1,793 |
.071 |
20.91(1) |
|
04.05.14 |
8,913
(2) | |||
|
James
J. Sclafani |
1,255 |
.050 |
20.91(1) |
|
04.05.14 |
6,238
(2) |
|
(1) |
These
options were granted under the Company’s 2004 Stock Incentive Plan. The
option exercise price is $20.91, the market value of the Company’s stock
on the date of the grant. |
|
(2) |
These
values were determined based on the Black-Scholes option pricing model.
Calculation of the Grant Date Present Value was based on the following
assumptions: price volatility of 25.87%; a dividend yield of 0.96%; a
risk-free rate of return of 2.07%; and exercise of the options ten years
after their grant. |
18
|
Plan
Category |
Number
of Securities to be Issued Upon Exercise of Outstanding
Options |
Weighted-Average
Exercise Price of Outstanding Options |
Cumulative
Number of Securities Awarded as
Restricted Stock |
Number
of Securities Remaining Available For Future Issuance
Under
Equity Compensation
Plans
|
Equity
compensation plans
approved
by security holders |
||||
|
None
(1) |
- |
- |
- |
- |
|
Equity
compensation plans not approved
by security holders: |
||||
|
1998
Stock Option Plan: |
3,235,586 |
$4.11 |
- |
96,732 |
|
2004
Stock Incentive Plan: |
24,199 |
$20.91 |
312,157 |
2,681,742 |
|
Total: |
3,259,785 |
$4.23 |
312,157 |
2,778,474 |
|
(1) |
The
1998 Stock Option Plan and the 2004 Stock Incentive Plan were not subject
to stockholder approval as the Company was privately held until its
initial public offering on February 12,
2004. |
The
following table shows the share options exercised during 2004 by the five most
highly compensated executive officers of the Company and the number and value of
specified unexercised options at December 31, 2004. The value of unexercised
in-the-money share options at December 31, 2004 shown below is presented
pursuant to SEC rules and, with respect to the Company’s shares, is based on the
December 31, 2004 closing price on the New York Stock Exchange of $20.00 per
share. The actual amount, if any, realized upon exercise of share options will
depend upon the market price of the shares relative to the exercise price per
share at the time the stock option is exercised. There is no assurance that the
values of unexercised in-the-money share options reflected in this table will be
realized.
|
Number
of Securities Underlying Unexercised Options at
December
31, 2004 |
Value
of Unexercised in-the- Money Options at
December
31, 2004 ($) | ||||||||
Name |
Shares
Acquired On Exercise |
Value
Realized
($) |
Exercisable |
Unexercisable |
Exercisable |
Unexercisable | |||
|
James
R. Fisher |
--- |
--- |
873,546 |
--- |
14,125,238 |
--- | |||
|
Jeffrey
J. Dailey |
--- |
--- |
180,087 |
112,085 |
2,896,362 |
1,736,840 | |||
|
Craig
E. Eisenacher |
--- |
--- |
9,778 |
39,115 |
45,565 |
182,275 | |||
|
Simon
J. Noonan |
--- |
--- |
94,200 |
3,423 |
1,516,954 |
20,098 | |||
|
James
J. Sclafani, Jr. |
--- |
--- |
16,949 |
69,053 |
274,065 |
1,096,294 | |||
19
The
Compensation Committee of the Board of Directors (the "Compensation Committee"),
which consists entirely of independent directors as defined in Section 162(m) of
the Internal Revenue Code, oversees a management compensation program designed
to further the attainment of the Company’s strategic goals of growth and
profitability and thus increase shareholder value. For each executive officer
(Senior Vice Presidents and above), the Committee is responsible for the
establishment of base salary, as well as the award level for the annual
Incentive Compensation Program. The Committee is also responsible for the award
level and administration of the stock programs for executive officers, as well
as recommendations regarding other executive benefits and plans, subject to the
approval of the Board.
Compensation Philosophy
The Company’s
vision is to be the insurer of choice for its distribution force and
policyholders. To achieve this vision, the Company must align all of its
business processes to create value for policyholders and producers. It must
continually refine its sales practices making it easier for its producers and
policyholders to do business with the Company. It must strive to provide
insureds with faster, higher quality and more flexible service when interacting
with the Company. To accomplish these goals, it must recruit and retain highly
competent insurance industry executives.
Within
this context, the three major objectives for the Company’s executive
compensation program are:
|
§ |
Alignment:
Link
executive compensation rewards with growth in earnings and strategic
operational performance that ultimately results in sustainable increases
in shareholder value. |
|
§ |
Motivation:
Motivate
executives to be accountable for and accomplish the Company’s financial
and strategic operational objectives. |
|
§ |
Retention
and Attraction: Retain
and attract key executives to drive increases in shareholder
value. |
The
Company’s total compensation philosophy encompasses the following:
|
§ |
Salary
levels and salary increases
that reflect position responsibilities, competitive market rates,
strategic importance of the position, and individual performance and
contributions. |
|
§ |
Annual
incentive payments, based
on the
Company’s performance relative to its earnings goals and other strategic
objectives and individual performance. |
|
§ |
Long-term
incentives, provided through
restricted stock and stock option grants, that reward
key executives for performance related to increasing shareholder value,
that vest over time, and encourage executive stock ownership.
|
|
§ |
Benefit programs provided to all employees in which the Company’s executives are eligible to participate. |
Compensation
Methodology
The
compensation program of the Company is designed to enable the Company to
appropriately compete for talented and experienced executives with companies of
similar size within the property and casualty insurance industry. Data from
insurance companies are primarily employed to determine competitive compensation
levels for comparable positions within an organization the size of the
Company.
Total
compensation is comprised of fixed compensation (annual base salary), variable
compensation (annual incentive compensation program), and long-term incentive in
the form of restricted stock. In general, the total cash compensation objective
(base salary plus the cash portion of incentive compensation awards) is to pay
senior executives in the third quartile (50% to 75%) of the property and
casualty insurance industry market based on company size, subject to the needs
of the Company and the experience and performance of
20
its
executives. This is designed to enable the Company to attract and retain high
performing executives and reward them for above average performance. An
independent compensation consultant provides data to the Compensation Committee
regarding market rates for compensation and compensation plan structures. The
data is derived from analysis of publicly available information and proprietary
survey sources.
The
specific components of the compensation program and how they function are
described below:
Base
Salary
Consistent
with this compensation philosophy, annual base salaries for the Company’s
executives are designed to be competitive within the property and casualty
insurance industry for companies of similar size. Salaries and any increases for
executives are determined after the close of the fiscal year and are based on a
combination of individual performance and competitive compensation data.
Annual
Incentive Compensation Program
The Board
each year adopts a Business Plan with earnings goals and other strategic
objectives. The annual Incentive Compensation Program (ICP) is designed to pay
the Company’s executives a maximum award at levels from 20% to 100% of their
annual salary based upon the executive’s position and responsibilities, and
depending upon the Company’s performance relative to its earnings goals and
other strategic objectives and the executive’s individual performance. The ICP
awards are paid 75% in cash and 25% in restricted stock, pursuant to the
Company’s 2004 Stock Incentive Plan. In assessing the Company’s performance in
2004 for the purpose of making ICP awards to the Company’s named executive
officers and other executives, the Committee considered the Company’s return on
equity, growth in net income, gross written premium and combined ratio relative
to its Business Plan objectives and in light of an increasingly competitive
market. Significant weight was given to the views of the Chief Executive Officer
regarding the individual performances of the Company’s executives. The
restricted stock awards that were paid as part of the 2004 ICP awards cliff vest
in February 2007, and are forfeited if the executive’s employment with the
Company terminates prior to the vesting date, except for death or disability.
Vesting is accelerated for merger, sale or other business combination and for
death or disability.
Restricted
Stock
The
Company’s success is dependent upon its senior management team. In 2004,
restricted stock was granted to 14 key executives, including all named executive
officers except James R. Fisher, the Chief Executive Officer, pursuant to the
Company’s 2004 Stock Incentive Plan. The total value of these grants was $5
million. The restricted stock awards cliff vest in May, 2009 and are forfeited
if the executive’s employment with the Company terminates prior to the vesting
date, except for death or disability. Vesting is accelerated for merger, sale or
other business combination and for death or disability. The Committee made these
awards of restricted stock for the purpose of retaining key employees over a
long-term period, providing them direct ownership in Company stock with a view
toward preserving shareholder value and encouraging decisions related to
increased shareholder value in the future.
Determination
of the Chief Executive Officer’s Compensation
James R.
Fisher has served as the Chief Executive Officer of the Company since September
2000. Mr. Fisher’s compensation package is detailed in this proxy statement
under the tables and descriptive paragraphs of the section entitled “Executive
Compensation”.
Beginning
January 1, 2004, Mr. Fisher entered into an employment agreement with the
Company under which his base salary was set at $700,000 per annum. Mr. Fisher
was granted a one-time signing bonus of $175,000 at the time of the employment
agreement. Mr. Fisher informed the Committee that he did not want to be
considered for an ICP award for his performance in 2004. Mr. Fisher felt quite
strongly that despite the Company’s growth in net income and superior return on
equity, and his successful management of the Company through an increasingly
competitive environment, the Company’s common stock price had
21
not
appreciated from its price at the Company’s initial public offering, and
therefore he did not want to be paid a bonus. After several discussions with Mr.
Fisher, the Committee, while disagreeing with Mr. Fisher and noting their
satisfaction with his excellent performance, decided not to award him a cash
bonus. However, the Committee decided to award Mr. Fisher restricted stock in
the amount of $250,000. This restricted stock award cliff vests in February
2007, and is forfeited if Mr. Fisher’s employment with the Company terminates
prior to the vesting date, except for death or disability. Vesting is
accelerated for merger, sale or other business combination and for death or
disability.
In making
its decision to award Mr. Fisher an ICP award of restricted stock in the amount
of $250,000, the Committee applied a 70% weight on the Company’s financial
performance and 30% weight on individual performance. With respect to the
Company’s financial performance, the Committee considered the Company’s return
on equity, growth in net income, gross written premium and combined ratio
relative to its Business Plan objectives and in light of an increasingly
competitive market. With respect to Mr. Fisher’s individual performance, the
Committee considered criteria within the three categories of Strategic Planning
and Execution, Leadership and Resource Management, as well as the extent to
which the Company’s strategic non-financial goals for 2004 were
achieved.
Deductibility
of Executive Compensation
Internal
Revenue Code Section 162(m) imposes conditions on the full deductibility of
compensation in excess of $1 million. The Compensation Committee has reviewed,
and continues to review, the potential consequences to the Company of section
162(m). Section 162(m) had no impact on the Company in 2004.
Compensation
Committee Interlocks
No member
of the Compensation Committee is an employee of an entity on whose board an
executive officer of the Company sits.
The
foregoing report has been respectfully furnished by the members of the
Compensation Committee, being: R. Cary Blair (Chair), Richard T. Delaney and
Eileen Hilton.
22
The
Company’s common stock has been traded on the NYSE under the ticker symbol "BRW"
since the Company’s initial public offering on February 12, 2004. The initial
public offering price of the Company’s common stock was $20.00 per share. The
following chart compares the total return on the Company’s common stock based on
the initial public offering price ($20.00) from February 12, 2004 through
December 31, 2004 with the total return on the S&P 500 Property and Casualty
Insurance Index and the S&P 500 Index during the same period.
|
Total
Return Analysis *
(Assumes a $100 investment at the close of trading
on February 12, 2004)
02/12/2004 12/31/2004 | |||||
|
Bristol
West Holdings, Inc $100.00 $100.82
| |||||
|
S&P
500 Property & Casualty Insurance Index (1)
$100.00 $103.32
| |||||
|
S&P
500 Index (1)
$100.00
$106.29
|
(1)
Source: Index Services, Standard & Poors Company
* S&P
reinvestment methodology assumes dividend reinvestment on X-dividend date as
does BRW's total return calculation.
23
Effective
July 9, 1998, the Company entered into a contract with Fisher Capital
Corp., LLC (“Fisher Capital”) to provide management, consulting and certain
other services to the Company in exchange for an annual fee of $250,000 plus
reimbursement for all reasonable expenses incurred. In September 2000,
James R. Fisher, who is the managing member of Fisher Capital, was appointed
Chairman of the Board and Chief Executive Officer of the Company. In
consideration for the amount of time and effort required to officially assume
his role as Chief Executive Officer of the Company, Fisher Capital’s annual fee
was increased from $250,000 to $600,000 for the year 2000. Effective January 1,
2002, the annual fee paid to Fisher Capital was increased to $700,000. In
further consideration for Mr. Fisher’s serving as Chief Executive Officer, in
September 2000, the Company granted Fisher Capital 130,380 options to purchase
common shares in the Company at a cost of $3.83 per option share. For the period
from January 1, 2001 through December 31, 2003, Fisher Capital was also granted
32,595 options on a quarterly basis at a cost of $3.83 per option share for
consideration of Mr. Fisher’s role as the Company’s Chief Executive Officer.
Effective October 1, 2003, the quarterly program of granting Fisher Capital
options was terminated and the Company granted Fisher Capital a final option
grant of 123,861 options at a cost of $3.83 per option share, which included
Fisher Capital’s regular 32,595 quarterly option grant plus an additional 91,266
options at a cost of $3.83 per option share. Prior to January 1, 2004,
Mr. Fisher was not a direct employee of the Company and his sole direct
compensation from the Company was an annual fee of $25,000 for serving on the
Board. However, Mr. Fisher received 86.5% of all amounts paid by the
Company to Fisher Capital. Effective January 1, 2004, Mr. Fisher
entered into an employment agreement with the Company, whereby Mr. Fisher
became a direct employee of the Company. At that time, the annual fee paid to
Fisher Capital was reduced to $95,000 for continued consulting services, but
Mr. Fisher will not receive any portion of those fees. The Company
reimbursed Fisher Capital for expenses incurred on its behalf in 2004 in the
amount of $55,003. Included in this amount were expenses in the amount of
$19,574 incurred in connection with the Company’s initial public offering on
February 12, 2004.
In
consideration for consulting and certain other services provided to KKR is paid
an annual fee of $500,000 plus reimbursement for all reasonable expenses
incurred pursuant to a consulting agreement dated July 10, 1998 between the
Company and KKR. The Company reimbursed KKR for expenses in the amount of
$69,619 in 2004.
The
Company entered into a services agreement, dated July 24, 2002, with
Firemark Partners LLC, (“the services agreement”), a service company created by
Inder-Jeet Gujral, one of the founders of OneShield Inc., the developer of
the Company’s OneStepTM’
software. Mr. Gujral became a director of the Company on March 24, 2004 and has
been the Chairman of the Board of Directors of OneShield, Inc. and a controlling
partner of Firemark Partners, LLC since January 2000. As of December 31, 2004,
Mr. Gujral owned 0.55% of OneShield’s outstanding shares on a fully diluted
basis. Pursuant to the services agreement, in exchange for providing development
and implementation assistance to the Company with respect to OneStep, Firemark
Partners was granted options to purchase 521,520 shares of the Company’s common
stock at a price of $3.83 per share. Twenty-five percent of these options vested
in the first year of the services agreement and the remaining 75% of these
options vest based upon delivery of the system and future specified improvements
in the Company’s underwriting expense ratio, as measured against the Company’s
underwriting expense ratio for the four quarters prior to the effective date of
the services agreement. As consideration for OneShield being chosen as the
subcontractor for the services agreement, the Company was granted warrants to
purchase OneShield common stock equal to 2% of the then fully diluted capital
stock of OneShield. In addition, the Company purchased 8.0 million shares
of preferred stock of OneShield, bringing the Company’s total ownership,
including the warrants, to 6.8% on a fully diluted basis as of December 31,
2004. Certain members and employees of KKR, Fisher Capital and James R.
Fisher also have interests in OneShield, through Aurora Investments LLC. As of
December 31, 2004, Aurora Investments LLC’s interest in OneShield was 13.0% on a
fully diluted basis. In addition, Mr. Fisher has been granted vested rights
to purchase common stock equal to 0.02% of the fully diluted capital of
OneShield in
24
connection
with his role on its strategic advisory board. Jeffrey J. Dailey, the Company’s
President and Chief Operating Officer, became a director of OneShield on
November 25, 2003. The Company paid Firemark Partners, LLC $1,611,514 for
services and license fees under the services agreement in 2004. As of December
31, 2004, the Company had a loan receivable from OneShield of $454,000.
KKR owns
approximately 39.4% of Alea Group Holdings (Bermuda) Ltd., which is a public
company traded on the London Stock Exchange. James R. Fisher, the Company’s
Chief Executive Officer and Chairman of the Board, and Perry Golkin, Todd
A. Fisher and Scott C. Nuttall are also directors of Alea
Group Holdings (Bermuda) Ltd., the parent company of Alea. Alea Group
Holdings, (Bermuda) Ltd. provided the Company with reinsurance via a three-year
Discretionary Quota Share Reinsurance Agreement for 2002, 2003 and 2004. This
agreement was terminated and commuted on a cut-off basis effective January 1,
2005. The terms and conditions of this reinsurance contract with Alea were
established on an arm's length basis by an unrelated lead reinsurer, National
Union Fire Insurance Company of Pittsburgh, PA. The other two reinsurers under
this Discretionary Quota Share Reinsurance Agreement were unrelated to the
Company, Alea, KKR or Mr. Fisher. Total payments made to Alea in 2004 by
the Company were $4,408,000.
KKR owns
approximately 5.6% on a fully diluted basis of Willis Group Holdings Limited,
which is a public company traded on the New York Stock Exchange. James R.
Fisher, the Company’s Chief Executive Officer and Chairman of the Board, Perry
Golkin and Scott C. Nuttall are also directors of Willis. Todd A. Fisher was a
director of Willis until he resigned as a director in April 2004. Willis acts as
a broker in placing the Company’s health insurance and general corporate
insurance coverages. The Company’s arrangement with Willis is in the ordinary
course of its business and is on an arm's length basis. Willis earns
compensation in the form of brokerage fees from the insurance carriers who
provide the Company’s insurance coverage. Total payments made to Willis in 2004
by the Company were $1,162,000.
Section
16(a) of the Securities Exchange Act of 1934 requires the Company’s officers and
directors and persons who own more than ten percent of the Company’s common
stock to file reports of ownership and changes in ownership (Forms 3, 4 and 5)
with the SEC and the NYSE, and to furnish the Company with copies of all such
forms which they file. To the Company’s knowledge, based on representations to
the Company by such persons and a review of the copies of reports furnished to
the Company, all of the Company’s directors and officers made all required
filings on time during 2004, with the exception of one late Form 3 report filed
by Aurora Investments II LLC, an affiliate of Bristol West Associates LLC, and
related individuals, and one late Form 3 report filed by George G. O’Brien that
was incomplete when initially timely filed and was late when subsequently
corrected. In addition, Todd A. Fisher, Perry Golkin, Inder-Jeet Gujral, Mary R.
Hennessy, James N. Meehan, Scott C. Nuttall and Arthur J. Rothkopf each received
phantom stock units quarterly, beginning with the third quarter of 2004, as
compensation for their service on the Board under the Company’s Non-Employee
Directors’ Deferred Compensation Plan. Pursuant to the Plan, the phantom shares
were calculated and these directors’ accounts were credited with phantom shares
within three days after the Company announced its third quarter earnings, and
Form 4s were filed within two days thereafter. However, because the phantom
shares were calculable at the end of the third quarter, before the Company
announced earnings, each of these directors may be deemed to have filed late
Form 4s for the third quarter 2004 phantom shares.
The Board
hereby solicits proxies for use at the 2005 Annual Meeting and at any
adjournment thereof. Stockholders who execute a proxy may still attend the
meeting and vote in person. A proxy may be revoked at any time before it is
voted by giving to the Secretary of the Company, Bristol West Holdings, Inc.
5701 Stirling Road, Davie, Florida 33314, written notice bearing a later date
than the proxy, by submission of a later dated proxy or by voting in person at
the meeting. Executors, administrators, trustees, guardians,
25
attorneys
and other representatives should indicate the capacity in which they are signing
and corporations should sign by an authorized officer whose title should be
indicated. Attendance alone at the meeting will not revoke a proxy which was
previously submitted to the Company.
The cost
of this proxy solicitation is borne directly by the Company. Georgeson
Shareholder Communications Inc. has been retained to assist in the proxy
solicitation for a fee of approximately $6,000 plus expenses. In addition to
solicitation of proxies by mail, proxies may be solicited personally, by
telephone, by e-mail and by facsimile by the Company’s directors, officers and
other employees. Such persons will receive no additional compensation for such
services. The Company also will request brokers and other nominees to forward
soliciting material to the beneficial owners of shares that are held of record
by them, and will pay the necessary expenses.
Any
stockholder who intends to present a proposal at the 2006 Annual Meeting of
Stockholders for inclusion in the proxy statement and form of proxy relating to
that meeting, including nominations for the election of directors, may do so in
accordance with SEC Rule 14a-8 and is advised that the proposal must be received
by the Secretary at the Company’s principal offices located at 5701 Stirling
Road, Davie, Florida 33314, not later than December 20, 2005.
For any
proposal that is not submitted for inclusion in the Company’s proxy materials to
be distributed in connection with its 2006 Annual Meeting of Stockholders, but
is instead sought to be presented directly at the 2006 Annual Meeting of
Stockholders, SEC rules permit management to vote proxies in its discretion if
we: (1) receive notice of the proposal before the close of business on March 4,
2006 and advise stockowners in the 2006 proxy statement about the nature of the
matter and how management intends to vote on such matter; or (2) do not receive
notice of the proposal prior to the close of business on March 4, 2006. Notices
of intention to present proposals at the 2006 Annual Meeting should be addressed
to George G. O’Brien, Chief Legal Officer and Corporate Secretary, Bristol West
Holdings, Inc., 5701 Stirling Road, Davie, FL 33314.
A
stockholder may also propose an individual to the Corporate Governance and
Nominating Committee for its consideration as a nominee for election to the
Board by writing to George G. O’Brien, Chief
Legal Officer and Corporate Secretary, Bristol
West Holdings, Inc. 5701 Stirling Road, Davie, Florida 33314. The Corporate
Governance and Nominating Committee will consider the stockholders’ nominee
proposal in accordance with the selection process and specific qualification
standards set forth in the Company’s Corporate Governance Guidelines, which are
attached as Appendix A to this proxy statement and can also be found on the
Company’s website at www.bristolwest.com.
SEC rules
permit a single set of annual reports and proxy statements to be sent to any
household at which two or more stockholders reside if they appear to be members
of the same family. Each stockholder continues to receive a separate proxy card.
This procedure is referred to as “householding.” While the Company does not
participate in householding for mailings to its stockholders of record, a number
of brokerage firms with account holders who are Company stockholders have
instituted householding. In these cases, a single proxy statement and annual
report will be delivered to multiple stockholders sharing an address unless
contrary instructions have been received from the affected stockholders. Once a
stockholder has received notice from his or her broker that the broker will be
householding communications to the stockholder’s address, householding will
continue until the stockholder is notified otherwise or until the stockholder
revokes his or her consent. If at any time a stockholder no longer wishes to
participate in householding and would prefer to receive a separate proxy
statement and annual report he or she should notify his or her broker. Any
stockholder can receive a copy of the Company’s proxy statement and annual
report by contacting the Company at Bristol West Holdings, Inc., 5701 Stirling
Road, Davie, FL 33314, Attention: Craig E. Eisenacher, or by calling Craig E.
Eisenacher at (954) 316-5192. Similarly, if a stockholder shares an address with
another stockholder and has received multiple copies of the Company’s
26
proxy
statement or annual report, he or she may write or call the Company at the above
address and phone number to request a single copy of these
materials.
Appendices
Appendix
A Corporate
Governance Guidelines
Appendix
B Audit
Committee Charter
Appendix
C Compensation
Committee Charter
Appendix
D Corporate
Governance and Nominating Committee Charter
27
BRISTOL
WEST HOLDINGS, INC.
I Introduction
The Board
of Directors of Bristol West Holdings, Inc. (the “Company”), acting on the
recommendation of its Corporate Governance and Nominating Committee, has
developed and adopted a set of corporate governance guidelines (the
“Guidelines”) to promote the functioning of the Board and its committees and to
set forth a common set of expectations as to how the Board should perform its
functions. In recognition of the continuing development of corporate governance
best practices these guidelines will be periodically reviewed by the Corporate
Governance and Nominating Committee and, if appropriate, recommendations for
revision will be made to the Board.
II Responsibilities
and role of the Board
The
primary responsibility of the Board is to oversee the affairs of the Company in
accordance with applicable laws, rules and regulations, including the
requirements of the New York Stock Exchange, Inc. (“NYSE”). The role of the
Board is to monitor the effectiveness of management’s policies and decisions,
including the execution of its strategies towards maximizing the Company’s
long-term value for the benefit of shareholders.
All
directors owe a duty of loyalty to the Company to ensure that the best interests
of the Company take precedence over any interests possessed by the directors.
The directors, in discharging their duties, are required to exercise the skill
and care which may be reasonably expected of a person with that director’s
skills and experience.
III Board
Composition
The Board
has determined not to have a fixed number of directors, but in accordance with
the Company’s current by-laws the maximum number of directors will be no more
than 15. A majority of the Board will consist of directors who the Board has
determined have no material relationship with the Company and who will qualify
as “independent” under the listing standards of the NYSE. The Corporate
Governance and Nominating Committee and the Board will use the Director
Independence Standards set out in Appendix I to these guidelines in determining
the independence of a director.
The
Board, with assistance from its Corporate Governance and Nominating Committee,
will undertake an annual review to evaluate the independence of its non-employee
directors and the independence standards to be applied. In advance of the
meeting at which this review occurs, each non-employee director will be asked to
provide the Board with full information regarding the director’s business and
other relationships with the Company and its affiliates and senior management
and their affiliates to enable the Board to evaluate the director’s
independence.
IV Selection
of Chairman of the Board and Chief Executive Officer
The Board
is free to select its Chairman and the Company’s Chief Executive Officer in the
manner it considers in the best interests of the Company at any given point in
time. The positions may be filled by one individual.
V Selection
of Directors
Nominations.
The Board
is responsible for nominating individuals for election to the Board and for
filling vacancies on the Board that may occur between annual meetings of
shareholders. The
28
Company’s
shareholders may nominate a person for election to the Company’s Board of
Directors in accordance with the provisions of the Company’s by-laws or may
propose an individual to the Corporate Governance and Nominating Committee for
its consideration as a nominee for election to the Board. The Corporate
Governance and Nominating Committee is responsible for identifying, considering
and recommending candidates to the Board for Board membership, including
shareholder nominations or proposals received, subject to the majority of the
Board remaining independent.
The
Corporate Governance and Nominating Committee will use the Director Selection
Process set out in Appendix II to these guidelines in performing its selection
function.
Criteria.
The
Board, based on the recommendation of the Corporate Governance and Nominating
Committee, will select new nominees for the position of director by reference to
its Director Qualification Standards set out in Appendix III to these
guidelines.
Orientation
and Continuing Education. Senior
management, working with the Board, will provide an orientation process for new
directors, including background material on the Company, its business and its
risk profile, and meetings with senior management. Periodically senior
management will prepare additional internal educational sessions for directors
and directors will be encouraged to participate in external educational programs
sourced for directors on matters relevant to the Company and to the exercise of
the duties of a director.
VI Election
Term
The Board
has not established term limits. However, the directors will generally be
expected to serve for a term of office of not less than three
years.
VII Retirement
of Directors
The
Company’s by-laws prescribe that each director will be subject to annual
re-election at the Company’s Annual General Meeting and to the provisions of the
Company’s by-laws regarding removal. The by-laws do not establish a mandatory
retirement age for directors.
VIII
Other
Directorships
The
Company values the experience directors bring from other boards on which they
serve, but recognizes that those boards may also present demands on a director's
time and availability and may present conflicts or legal issues. Directors
should advise the Chairman of the Corporate Governance and Nominating Committee
and the Chairman and Chief Executive Officer before accepting membership on
other boards of directors or other significant commitments involving affiliation
with other businesses or governmental units.
IX Board
Meetings
The Board
anticipates holding at least four meetings annually with further meetings to
occur at the discretion of the Board. The Chairman and Chief Executive Officer
establishes the agenda for each Board Meeting and distributes the agenda in
advance of the meeting. Directors may suggest additional agenda items and may
raise at any meeting subjects that are not on the agenda.
Management
is responsible for assuring that information and data that are important to the
Board’s understanding of the Company’s business and to all matters expected to
be considered and acted upon by the Board be distributed in writing to the Board
sufficiently in advance of each Board meeting and each action to be taken by
written consent to provide the directors a reasonable time to review and
evaluate such information and data. Management will make every attempt to see
that this material is as concise as possible while still providing the desired
information. In the event of a pressing need for the Board to meet on short
notice or if such materials would otherwise contain highly confidential or
sensitive information, it is recognized that written material may not be
available in advance. To prepare for meetings, directors should review these
materials in advance.
29
Directors
will preserve the confidentiality of all materials given and information
provided to the Board.
X Attendance
and Participation in Meetings
All
directors should make every effort to attend meetings of the Board and its
committees of which they are members, as well as meetings of shareholders.
Members may attend by telephone or video conference.
Each
director should be sufficiently familiar with the business of the Company,
including its financial statements and capital structure, and the risks and
competition it faces, to facilitate active and effective participation in the
deliberations of the Board and of its committees on which he or she serves. Upon
request, senior management will make appropriate personnel available to answer
any questions a director may have about any aspect of the Company’s
business.
XI Confidentiality
The
proceedings and deliberations of the Board and its committees are confidential.
Each director is expected to maintain the confidentiality of information
received in connection with his or her service as a director.
XII Executive
Sessions of Independent Directors
Independent
directors will meet in executive session without senior management for a portion
of each meeting. Any non-management directors who are not independent under the
NYSE regulations may participate in such executive sessions provided that the
independent directors meet in executive session without them not less than once
a year. The Chairman of each session will be determined by the directors at that
time.
XIII The
Committees of the Board
The
Company will have the Board committees required by the rules of the NYSE.
Currently, these are the Audit Committee, the Compensation Committee and
Corporate Governance and Nominating Committee. Each of these three committees
has a written charter satisfying the rules of the NYSE. These charters can be
found on the Company’s website at www.bristolwest.com. The Audit Committee also
satisfies the requirements of SEC Rule 10A-3.
All
directors, whether members of a committee or not, are invited to make
suggestions to a committee chairman for additions to the agenda of his or her
committee or to request that an item from a committee agenda be considered by
the Board. Each committee chairman will give to the Board a report of the
committee’s activities since the preceding Board meeting.
Each of
the Corporate Governance and Nominating Committee, the Audit Committee and the
Compensation Committee shall be composed of at least three directors who the
Board has determined have no material relationship with the Company and who are
otherwise “independent” under the rules of the NYSE and the SEC, as applicable.
The required qualifications for the members of each committee shall be set out
in the respective committees’ charters. A director may serve on more than one
committee for which he or she qualifies.
Committee
meetings are generally scheduled to coincide with regular Board meetings. The
Chairman of each committee may call additional meetings, as
required.
The
Company also has an Executive Committee. This Committee has all the powers of
the Board, when it is not in session, in the management of the business and
affairs of the Company in accordance with the Executive Committee Charter and
except as may otherwise be provided in the resolutions of the Board or and under
applicable law.
30
The
Company also has a Finance and Investments Committee. This Committee, through
regular meetings with management, shall assist the Board in monitoring whether
the Company has adopted and adheres to a rational and prudent investment and
capital management policy and such other matters as the Board or Committee deems
appropriate.
XIV
Other
Audit Committee Memberships
No member
of the Audit Committee may serve simultaneously on the audit committees of more
than three other public company boards, unless the Board determines that such
simultaneous service would not impair such director’s ability to effectively
serve on the Audit Committee and such determination is disclosed in the
Company’s annual proxy statement. Directors will advise both the Chief Executive
Officer and the Chairman of Board and the Chairman of the Corporate Governance
and Nominating Committee prior to accepting an invitation to serve on the Audit
Committee of any other public company board.
XV
Evaluating
Board and Board Committee Performance
The
Board, acting through the Corporate Governance and Nominating Committee, will
conduct a self-evaluation at least annually to determine whether it is
functioning effectively. The Corporate Governance and Nominating Committee
periodically considers the mix of skills and experience that directors bring to
the Board to assess whether the Board has the necessary tools to perform its
oversight function effectively.
Each
committee of the Board, with the exception of the Executive Committee, will
conduct a self-evaluation at least annually and report the results to the Board,
acting through the Corporate Governance and Nominating Committee. Each
committee’s evaluation must compare the performance of the committee with the
requirements of its charter.
XVI
Management
Succession
From time
to time, the Board will review and consider a succession plan. To assist the
Board, the Chairman and Chief Executive Officer will present to the Corporate
Governance and Nominating Committee a report on succession planning for all
senior management with an assessment of senior management and their potential to
succeed the Chairman and Chief Executive Officer and other senior management
positions. The Chairman and Chief Executive Officer and the Chairman of the
Corporate Governance and Nominating Committee shall review the report with the
Board. As a matter of policy, the Chairman and Chief Executive Officer provides
the Board, on an ongoing basis, his or her recommendation as to a successor in
the event he or she is no longer able to serve as Chairman and Chief Executive
Officer.
XVII
Executive
Compensation
Evaluating
and Approving Salary for the Chairman and Chief Executive
Officer. The
Board, acting through the Compensation Committee, evaluates the performance of
the Chairman and Chief Executive Officer and the Company against the Company’s
goals and objectives and approves the compensation level of the Chairman and
Chief Executive Officer.
Evaluating
and Approving the Compensation of Senior Management. The
Board, acting through the Compensation Committee, evaluates and approves the
proposals for overall compensation policies applicable to senior management of
the Company.
XVIII
Board
Compensation
The Board
periodically reviews the components and amount of Board compensation in relation
to other similarly situated companies. Board compensation should be consistent
with market practices but should not be set at a level that would call into
question the Board’s objectivity.
31
XIX
Contact
with Senior Management
All
directors are encouraged to contact the Chairman and Chief Executive Officer at
any time to discuss any aspect of the Company’s business. Directors also have
complete access to other members of senior management and are encouraged to
speak to any member of senior management. The directors will co-ordinate all
such access, as far as possible, through the Chairman and Chief Executive
Officer and will use their judgment to assure that this access is not unduly
distracting to the business operations of the Company. The Board expects that
there will be frequent opportunities for directors to meet with the Chairman and
Chief Executive Officer and other members of senior management in Board and
committee meetings and in other formal or informal settings.
Further,
the Board encourages senior management, from time to time, to bring employees
into Board meetings who, (a) can provide additional insight into the items being
discussed because of personal involvement and substantial knowledge in those
areas, or (b) should be given exposure to the Board.
XX Communications
with Shareholders and Other Constituencies
The
Chairman and Chief Executive Officer is responsible for establishing effective
communications with the Company’s stakeholder groups, including shareholders,
the press, analysts, clients, suppliers, governments and representatives of the
communities in which it operates. It is the policy of the Company to communicate
and interact fully with these stakeholders and the Board will look to senior
management to speak for the Company. This policy does not preclude outside
directors from communicating directly with shareholders or other constituencies
about Company matters, but any such communications will generally be held at the
request of the Board or senior management with senior management
present.
A
shareholder may either communicate with the independent directors or propose an
individual to the Corporate Governance and Nominating Committee for its
consideration as a nominee for election to the Board by writing to the Corporate
Secretary at Bristol West Holdings, Inc., 5701 Stirling Road, Davie, Florida
33314.
XXI Code
of Conduct and Business Ethics
The
Company has adopted a Code of Conduct and Business Ethics. Certain portions of
the Code deal with activities of directors, including with respect to
transactions in the securities of the Company, potential conflicts of interest,
the taking of corporate opportunities for personal use, and competing with the
Company. Directors should be familiar with the Code’s provisions in these areas
and should consult with the Company’s Legal Department in the event of any
issues.
XXII Reliance
on Senior Management and Outside Advice
In
performing its functions, the Board and its committees are entitled to rely on
the advice, reports and opinions of senior management as well as outside
counsel, accountants, auditors and other expert advisors. The Board and its
committees shall have the authority to retain and approve the fees and retention
terms of its outside advisors.
March 8,
2005
32
The Board
and the Corporate Governance and Nominating Committee will broadly consider all
relevant facts and circumstances and will apply the following
standards.
|
a) |
A
director will not be considered independent if,
|
|
· |
the
director is, or has been within the last three years, an employee of the
Company, or an immediate family member is or has been within the last
three years, an executive officer, of the Company;
or |
|
· |
the
director or an immediate family member of the director, has received,
during any twelve-month period within the last three years, more than
$100,000 in direct compensation from the Company, other than director and
committee fees and pension or other forms of deferred compensation for
prior service (provided that such compensation is not contingent in any
way on continued service with the Company); except that compensation
received by an immediate family member of the director for services as an
non-executive employee of the Company need not be considered in
determining independence under this test;
or |
|
· |
the
director or an immediate family member is a current partner of a firm that
is the Company’s internal or external auditor; or the director is a
current employee of such a firm; or the director has an immediate family
member who is a current employee of such a firm and who participates in
the firm’s audit, assurance or tax compliance (but not tax planning)
practice; or the director or an immediate family member was within the
last three years (but is no longer) a partner or employee of such a firm
and personally worked on the Company’s audit within that time frame; or
the director, or an immediate family member of the director, is or has
been within the last three years, employed as an executive officer of
another company where any of the Company’s present executives at the same
time serves or served on that company’s compensation committee;
or |
|
· |
the
director is a current employee, or an immediate family member is a current
executive officer, of a company (other than a charitable organization)
that has made payments to, or received payments from, the Company for
property or services in an amount which, in any of the last three fiscal
years, exceeds the greater of $1 million or 2% of such other company’s
consolidated gross revenues; provided, however, that in applying this
test, both the payments and the consolidated gross revenues to be measured
will be those reported in the last completed fiscal year; and provided,
further, that this test applies solely to the financial relationship
between the Company and the director’s (or immediate family member’s)
current employer - the former employment of the director or immediate
family member need not be considered. |
|
b) |
A
director will only be appointed as a member of the Board Audit Committee
if he or she also satisfies the independence criteria laid down in SEC
Rule 10A-3. |
|
c) |
The
following relationships will not be considered to be material
relationships that would impair a director’s
independence: |
|
· |
Commercial
Relationship: If
a director of the Company is an executive officer or an employee, or whose
immediate family member is an executive officer, of another company that
makes payments to, or receives payments from, the Company for property or
services in an amount which, in any single fiscal year, does not exceed
the greater of (a) $1,000,000 or (b) 2% of such other company’s
consolidated gross revenues: |
|
· |
Indebtedness
Relationship: If
a director of the Company is an executive officer of another company which
is indebted to the Company, or to which the Company is indebted, and
the |
33
|
|
total
amount of either company’s indebtedness is less than 2% of the
consolidated assets of the company wherein the director serves as an
executive officer; |
|
· |
Equity
Relationship: If
the director is an executive officer of another company in which the
Company owns a common stock interest, and the amount of the common stock
interest is less than 10% of the total shareholders’ equity of the company
where the director serves as an executive officer;
or |
|
· |
Charitable
Relationship: If
a director of the Company, or the spouse of a director of the Company,
serves as a director, officer or trustee of a charitable organization, and
the Company’s contributions to the organization in any single fiscal year
are less than the greater of (a) $1,000,000 or (b) 2% of that
organization’s gross
revenues. |
|
d) |
For
relationships that do not meet the categorical standards of immateriality
set forth in section (c) above, or for relationships that are covered, but
as to which the Board believes a director may nevertheless be considered
independent, the determination of whether the relationship is material or
not, and therefore whether the director would be independent, will be made
by the directors who satisfy the independence guidelines set forth in
Sections (a) to (c) above. The Company will explain in its proxy statement
any Board determination that a relationship was immaterial in the event
that it did not meet the categorical standards of immateriality set forth
in Section (c) above. |
|
e) |
For
the purposes of these standards, an “immediate family member” includes a
person’s spouse, parents, children, siblings, mothers-in-law,
fathers-in-law, sons-in-law, daughters-in law, brothers-in-law,
sisters-in-law and anyone (other than domestic employees) who shares such
person’s home; except that when applying the independence tests described
above, the Company need not consider individuals who are no longer
immediate family members as a result of legal separation or divorce or
those who have died or have become
incapacitated. |
34
The
entire Board of Directors is responsible for nominating members for election to
the Board and for filling vacancies on the Board that may occur between Annual
Meetings of Shareholders. The Corporate Governance and Nominating Committee
(“the Committee”) is responsible for identifying, considering and recommending
candidates to the Board for Board membership. The Chair of the Committee will
oversee this process.
The
Committee will generally use the following process when recruiting, evaluating
and selecting new director candidates and considering shareholder nominations.
The various steps outlined in the process may be performed simultaneously and in
an order other than that presented below. Throughout the process, the Committee
will keep the full Board informed of its process.
The
Company is committed to maintaining its policy of inclusion and diversity within
the Board.
|
1 |
The
Committee will review periodically the Board’s current and projected
strengths and needs by, among other things, reviewing the Board’s current
profile, its Director Qualification Standards and the Company’s current
and future needs. |
|
2 |
Using
the results of the review, the Committee will prepare a target candidate
profile. |
|
3 |
The
Committee will develop an initial list of director candidates by utilizing
the personal network of the Board and senior management of the Company,
and considering any nominees previously recommended including those
received from shareholders. The Committee may retain a search firm to
assist with this process. |
|
4 |
The
Committee will consider the director candidates to identify those
individuals who best fit the target candidate profile and the Board’s
Director Qualification Standards. From this review, the Committee will
prepare a list of preferred candidates and present it to the full Board
for input. |
|
5 |
The
Committee will determine if any director has a business or personal
relationship with any of the preferred candidates that will enable the
director to initiate contact with the candidate to determine his or her
interest in being considered for membership to the Board. If necessary,
the search firm assisting with the process will be used to initiate this
contact. |
|
6 |
Whenever
possible, the Chairman of the Committee, at least one other independent
member of the Board and the Chairman and Chief Executive Officer will
interview each interested preferred
candidate. |
|
7 |
Based
on input received from the candidate interviews, the Committee will
determine whether to extend an invitation to a candidate to join the
Board. |
|
8 |
A
reference check will be performed on the
candidate. |
|
9 |
Depending
on the results of the reference check, the Committee will extend the
candidate an invitation to join the Board, subject to election by the
Board. |
|
10 |
The
Board will vote on whether to elect the candidate to the
Board. |
35
The Board
should at a minimum consider the following factors in the nomination or
appointment of members of the Board:
|
1 |
Integrity.
Directors should have proven integrity and be of the highest ethical
character and share the Company’s values. |
|
2 |
Reputation.
Directors should have reputations, both personal and professional,
consistent with the Company’s image and
reputation. |
|
3 |
Judgment.
Directors should have to ability to exercise sound business judgment on a
broad range of issues. |
|
4 |
Knowledge.
Directors should be financially literate and have a sound understanding of
business strategy, business environment, corporate governance and board
operations. |
|
5 |
Experience.
In selecting directors, the Board should generally seek those with
practical experience of large and complex divisions of publicly held
companies, and leaders of major complex organizations, including
scientific, accounting, government, educational and other non-profit
institutions. |
|
6 |
Maturity.
Directors should value Board and team performance over individual
performance, possess respect for others and facilitate superior Board
performance. |
|
7 |
Skills
and Personality.
In selecting directors the Board should consider the interplay of the
individual’s experience, skills and personality with those of other
directors and potential directors in building a Board that is effective,
collegial and responsive to the needs of the
Company. |
|
8 |
Commitment.
Directors should be able and willing to devote the required amount of time
to the Company’s affairs, including preparing for and attending meetings
of the Board and its committees. Directors should be actively involved in
the Board and its decision-making. |
|
9 |
Independence.
Directors should be independent in their thought and judgment
and be committed to represent the long-term interests of all of the
Company’s
shareowners. |
36
BRISTOL
WEST HOLDINGS, INC.
THE
BOARD OF DIRECTORS CHARTER
I. PURPOSE
The Audit
Committee’s (the “Committee”) purpose shall be to have direct responsibility for
those duties and responsibilities set forth in Section IV of this Charter, as
well as any other duties and responsibilities delegated to the Committee by the
Board of Directors from time to time.
II. STRUCTURE
AND OPERATIONS
Composition
and Qualifications
The
Committee shall be comprised of three or more members of the Board of Directors,
each of whom is determined by the Board of Directors to be “independent” under
the rules of the New York Stock Exchange, Inc. and the Sarbanes-Oxley Act. No
member of the Committee may serve on the audit committee of more than three
public companies, including the corporation, unless the Board of Directors (i)
determines that such simultaneous service would not impair the ability of such
member to effectively serve on the Committee and (ii) discloses such
determination in the annual proxy statement.
All
members of the Committee shall have a working familiarity with basic finance and
accounting practices (or acquire such familiarity within a reasonable period
after his or her appointment) and at least one member must be a “financial
expert” under the requirements of the Sarbanes-Oxley Act. Committee members may
enhance their familiarity with finance and accounting by participating in
educational programs conducted by the corporation or by an outside
consultant.
No member
of the Committee shall receive compensation other than (i) director’s fees for
service as a director of the corporation, including reasonable compensation for
serving on the Committee and regular benefits that other directors receive and
(ii) a pension or similar compensation for past performance, provided that such
compensation is not conditioned on continued or future service to the
corporation.
Appointment
and Removal
The
members of the Committee shall be appointed by the Board of Directors and shall
serve until such member’s successor is duly elected and qualified or until such
member’s earlier resignation or removal. The members of the Committee may be
removed, with or without cause, by a majority vote of the Board of
Directors.
Chairman
Unless a
Chairman is elected by the full Board of Directors, the members of the Committee
shall designate a Chairman by the majority vote of the full Committee
membership. The Chairman shall be entitled to cast a vote to resolve any ties.
The Chairman will chair all regular sessions of the Committee and set the
agendas for Committee meetings.
III. MEETINGS
The
Committee shall meet at least quarterly, or more frequently as circumstances
dictate. As part of its goal to foster open communication, the Committee shall
periodically meet separately with each of management, the director of the
internal auditing department and the independent auditors to discuss any matters
that the Committee or each of these groups believe would be appropriate to
discuss privately. In
37
addition, the
Committee should meet with the independent auditors and management quarterly to
review the corporation’s financial statements in a manner consistent with that
outlined in Section IV of this Charter. The Chairman of the Board or any member
of the Committee may call meetings of the Committee. All meetings of the
Committee may be held telephonically.
All
non-management directors that are not members of the Committee may attend
meetings of the Committee but may not vote. Additionally, the Committee may
invite to its meetings any director, management of the corporation and such
other persons as it deems appropriate in order to carry out its
responsibilities. The Committee may also exclude from its meetings any persons
it deems appropriate in order to carry out its responsibilities.
IV. RESPONSIBILITIES
AND DUTIES
The
following functions shall be the common recurring activities of the Committee.
These functions should serve as a guide with the understanding that the
Committee may carry out additional functions and adopt additional policies and
procedures as may be appropriate in light of changing business, legislative,
regulatory, legal or other conditions. The Committee shall also carry out any
other responsibilities and duties delegated to it by the Board of Directors from
time to time related to the purposes of the Committee outlined in Section I of
this Charter.
The
Committee, in discharging its oversight role, is empowered to study or
investigate any matter of interest or concern that the Committee deems
appropriate. In this regard, the Committee shall have the authority to retain
outside legal, accounting or other advisors for this purpose, including the
authority to approve the fees payable to such advisors and any other terms of
retention.
The
Committee shall be given full access to the corporation’s internal audit group,
Board of Directors, corporate executives and independent accountants as
necessary to carry out these responsibilities. While acting within the scope of
its stated purpose, the Committee shall have all the authority of the Board of
Directors.
Notwithstanding
the foregoing, the Committee is not responsible for certifying the corporation’s
financial statements or guaranteeing the auditor’s report. The fundamental
responsibility for the corporation’s financial statements and disclosures rests
with management and the independent auditors.
Documents/Reports
Review
|
1. |
Review
with management and the independent auditors prior to public dissemination
the corporation’s annual audited financial statements and quarterly
financial statements, including the corporation’s disclosures under
“Management’s Discussion and Analysis of Financial Condition and Results
of Operations” and a discussion with the independent auditors of the
matters required to be discussed by Statement of Auditing Standards No.
61. |
|
2. |
Review
and discuss with management and the independent auditors the corporation’s
earnings press releases (paying particular attention to the use of any
“pro forma” or “adjusted” non-GAAP information), as well as financial
information and earnings guidance provided to analysts and rating
agencies. The Committee’s discussion in this regard may be general in
nature (i.e., discussion of the types of information to be disclosed and
the type of presentation to be made) and need not take place in advance of
each earnings release or each instance in which the corporation may
provide earnings guidance. |
|
3. |
Perform
any functions required to be performed by it or otherwise appropriate
under applicable law, rules or regulations, the corporation’s by-laws and
the resolutions or other directives of the Board, including review of any
certification required to be reviewed in accordance with applicable law or
regulations of the SEC. |
38
Independent
Auditors
|
4. |
Retain
and terminate independent auditors and approve all audit engagement fees
and terms. |
|
5. |
Inform
each registered public accounting firm performing work for the corporation
that such firm shall report directly to the
Committee. |
|
6. |
Oversee
the work of any registered public accounting firm employed by the
corporation, including the resolution of any disagreement between
management and the auditor regarding financial reporting, for the purpose
of preparing or issuing an audit report or related
work. |
|
7. |
Approve
in advance any significant audit or non-audit engagement or relationship
between the corporation and the independent auditors, other than
“prohibited non-auditing services”. |
The
following shall be “prohibited non-auditing services”: (i) bookkeeping or other
services related to the accounting records or financial statements of the audit
client; (ii) financial information systems design and implementation; (iii)
appraisal or valuation services, providing fairness opinions or preparing
contribution-in-kind reports; (iv) actuarial services; (v) internal audit
outsourcing services; (vi) management functions or human resources; (vii) broker
or dealer, investment adviser or investment banking services; (viii) legal
services and expert services unrelated to the audit; and (ix) any other service
that the Public Company Accounting Oversight Board prohibits through
regulation.
Notwithstanding
the foregoing, pre-approval is not necessary for minor audit services if: (i)
the aggregate amount of all such non-audit services provided to the corporation
constitutes not more than five percent of the total amount of revenues paid by
the corporation to its auditor during the fiscal year in which the non-audit
services are provided; (ii) such services were not recognized by the corporation
at the time of the engagement to be non-audit services; and (iii) such services
are promptly brought to the attention of the Committee and approved prior to the
completion of the audit by the Committee or by one or more members of the
Committee who are members of the Board to whom authority to grant such approvals
has been delegated by the Committee. The Committee may delegate to one or more
of its members the authority to approve in advance all significant audit or
non-audit services to be provided by the independent auditors so long as it is
presented to the full Committee at a later time.
|
8. |
Review,
at least annually, the qualifications, performance and independence of the
independent auditors. In conducting its review and evaluation, the
Committee should: |
(a)
Obtain and review a report by the corporation’s independent auditor describing:
(i) the auditing firm’s internal quality-control procedures; (ii) any material
issues raised by the most recent internal quality-control review, or peer
review, of the auditing firm, or by any inquiry or investigation by governmental
or professional authorities, within the preceding five years, respecting one or
more independent audits carried out by the auditing firm, and any steps taken to
deal with any such issues; and (iii) to assess the auditor’s independence, all
relationships between the independent auditor and the corporation;
|
(b) |
Ensure
the rotation of the lead audit partner at least every five years, and
consider whether there should be regular rotation of the audit firm
itself. |
|
(c) |
Confirm
with any independent auditor retained to provide audit services for any
fiscal year that the lead (or coordinating) audit partner (having primary
responsibility for the audit), or the audit partner responsible for
reviewing the audit, has not performed audit services for the corporation
in each of the five previous fiscal years of that
corporation. |
|
(d) |
Take
into account the opinions of management and the corporation’s internal
auditors (or other personnel responsible for the internal audit
function). |
39
Financial
Reporting Process
|
9. |
In
consultation with the independent auditors, management and the internal
auditors, review the integrity of the corporation’s financial reporting
processes, both internal and external. In that connection, the Committee
should obtain and discuss with management and the independent auditor
reports from management and the independent auditor regarding: (i) all
critical accounting policies and practices to be used by the corporation;
(ii) analyses prepared by management and/or the independent auditor
setting forth significant financial reporting issues and judgments made in
connection with the preparation of the financial statements, including all
alternative treatments of financial information within generally accepted
accounting principles that have been discussed with the corporation’s
management, the ramifications of the use of the alternative disclosures
and treatments, and the treatment preferred by the independent auditor;
(iii) major issues regarding accounting principles and financial statement
presentations, including any significant changes in the corporation’s
selection or application of accounting principles; (iv) major issues as to
the adequacy of the corporation’s internal controls and any specific audit
steps adopted in light of material control deficiencies; and (v) any other
material written communications between the independent auditor and the
corporation’s management. |
|
10. |
Review
periodically the effect of regulatory and accounting initiatives, as well
as off-balance sheet structures, on the financial statements of the
corporation. |
|
11. |
Review
with the independent auditor (i) any audit problems or other difficulties
encountered by the auditor in the course of the audit process, including
any restrictions on the scope of the independent auditor’s activities or
on access to requested information, and any significant disagreements with
management and (ii) management’s responses to such matters. Without
excluding other possibilities, the Committee may wish to review with the
independent auditor (i) any accounting adjustments that were noted or
proposed by the auditor but were “passed” (as immaterial or otherwise),
(ii) any communications between the audit team and the audit firm’s
national office respecting auditing or accounting issues presented by the
engagement and (iii) any “management” or “internal control” letter issued,
or proposed to be issued, by the independent auditor to the
corporation. |
|
12. |
Review
and discuss with the independent auditor the responsibilities, budget and
staffing of the corporation’s internal audit
function. |
Legal
Compliance / General
|
13. |
Review
periodically, with the corporation’s counsel, any legal matter that could
have a significant impact on the corporation’s financial statements.
|
|
14. |
Discuss
with management and the independent auditors the corporation’s guidelines
and policies with respect to risk assessment and risk management. The
Committee should discuss the corporation’s major financial risk exposures
and the steps management has taken to monitor and control such
exposures. |
|
15. |
Set
clear hiring policies for employees or former employees of the independent
auditors. At a minimum, these policies should provide that any registered
public accounting firm may not provided audit services to the corporation
if the CEO, controller, CFO, chief accounting officer or any person
serving in an equivalent capacity for the corporation was employed by the
registered public accounting firm and participated in the audit of the
corporation within one year of the initiation of the current audit.
|
|
16. |
Establish
procedures for: (i) the receipt, retention and treatment of complaints
received by the corporation regarding accounting, internal accounting
controls, or auditing matters; and (ii) the confidential, anonymous
submission by employees of the corporation of concerns regarding
questionable accounting or auditing
matters. |
40
Reports
|
17. |
Prepare
all reports required to be included in the corporation’s proxy statement,
pursuant to and in accordance with applicable rules and regulations of the
SEC. |
|
18. |
Report
regularly to the full Board of Directors
including: |
|
(i) |
with
respect to any issues that arise with respect to the quality or integrity
of the corporation’s financial statements, the corporation’s compliance
with legal or regulatory requirements, the performance and independence of
the corporation’s independent auditors or the performance of the internal
audit function; |
|
(ii) |
following
all meetings of the Committee; and |
|
(iii) |
with
respect to such other matters as are relevant to the Committee’s discharge
of its responsibilities. |
The
Committee shall provide such recommendations as the Committee may deem
appropriate. The report to the Board of Directors may take the form of an oral
report by the Chairman or any other member of the Committee designated by the
Committee to make such report.
|
19. |
Maintain
minutes or other records of meetings and activities of the Committee.
|
V. ANNUAL
PERFORMANCE EVALUATION
The
Committee shall perform a review and evaluation, at least annually, of the
performance of the Committee and its members, including by reviewing the
compliance of the Committee with this Charter. In addition, the Committee shall
review and reassess, at least annually, the adequacy of this Charter and
recommend to the Board of Directors any improvements to this Charter that the
Committee considers necessary or valuable. The Committee shall conduct such
evaluations and reviews in such manner as it deems appropriate.
41
BRISTOL
WEST HOLDINGS, INC.
THE
BOARD OF DIRECTORS CHARTER
I. PURPOSE
The
Compensation Committee’s (the “Committee”) purpose shall be to have direct
responsibility for those duties and responsibilities set forth in Section IV of
this Charter, as well as any other duties and responsibilities delegated to the
Committee by the Board of Directors from time to time.
II. STRUCTURE
AND OPERATIONS
Composition
and Qualifications
The
Committee shall be comprised of three or more members of the Board of Directors,
each of whom is determined by the Board of Directors to be “independent” under
the rules of the NYSE. Additionally, no director may serve unless he or she (i)
is a “Non-employee Director” for purposes of Rule 16b-3 under the Securities
Exchange Act of 1934, as amended, and (ii) satisfies the requirements of an
“outside director” for purposes of Section 162(m) of the Internal Revenue
Code.
Appointment
and Removal
The
members of the Committee shall be appointed by the Board of Directors and shall
serve until such member’s successor is duly elected and qualified or until such
member’s earlier resignation or removal. The members of the Committee may be
removed, with or without cause, by a majority vote of the Board of
Directors.
Chairman
Unless a
Chairman is elected by the full Board of Directors, the members of the Committee
shall designate a Chairman by majority vote of the full Committee membership.
The Chairman shall be entitled to cast a vote to resolve any ties. The Chairman
will chair all regular sessions of the Committee and set the agendas for
Committee meetings.
Delegation
to Subcommittees
In
fulfilling its responsibilities, the Committee shall be entitled to delegate any
or all of its responsibilities to a subcommittee of the Committee.
III. MEETINGS
The
Committee shall meet at least two times annually, or more frequently as
circumstances dictate. The Chairman of the Board or any member of the Committee
may call meetings of the Committee.
As part
of its review and establishment of the performance criteria and compensation of
designated key executives, the Committee should meet separately at least on an
annual basis with the CEO, Bristol West’s principal human resources executive,
and any other corporate officers, as it deems appropriate. However, the
Committee should meet regularly without such officers present, and in all cases
such officers shall not be present at meetings at which their performance and
compensation are being discussed and determined. All meetings of the Committee
may be held telephonically.
All
non-management directors that are not members of the Committee may attend
meetings of the Committee but may not vote. Additionally, the Committee may
invite to its meetings any director, management of Bristol West or such other
persons as it deems appropriate in order to carry out its
42
responsibilities.
The Committee may also exclude from its meetings any persons it deems
appropriate in order to carry out its responsibilities.
IV. RESPONSIBILITIES
AND DUTIES
The
following functions shall be the common recurring activities of the Committee.
These functions should serve as a guide with the understanding that the
Committee may carry out additional functions and adopt additional policies and
procedures as may be appropriate in light of changing business, legislative,
regulatory, legal or other conditions. The Committee shall also carry out any
other responsibilities and duties delegated to it by the Board of Directors from
time to time related to the purposes of the Committee.
The
Committee, in discharging its duties and responsibilities, is empowered to study
or investigate any matter of interest or concern that the Committee deems
appropriate and shall have the sole authority to retain outside counsel or other
experts for this purpose, including the authority to approve the fees payable to
such counsel or experts and any other terms of retention.
Setting
Compensation for Executive Officers and Directors
|
1. |
Establish
and review the overall compensation philosophy of the
corporation. |
|
2. |
Review
and approve corporate goals and objectives relevant to the CEO and other
executive officers compensation, including annual performance objectives.
|
|
3. |
Evaluate
the performance of the CEO and other executive officers in light of these
goals and objectives and, based on such evaluation, determine and approve,
either as a committee or together with the other independent directors (as
directed by the Board of Directors) the annual salary, bonus, stock
options and other benefits, direct and indirect, of the CEO and other
executive officers. In determining the long-term incentive component of
compensation for the CEO and other executive officers, the Committee
should consider Bristol West’s performance and relative shareholder
return, the value of similar incentive awards to CEOs and other executive
officers at comparable companies, and the awards given to Bristol West’s
CEO and other executive officers in past
years. |
|
4. |
In
connection with executive compensation
programs: |
|
(i) |
Review
and recommend to the full Board of Directors, or approve, new executive
compensation programs; |
|
(ii) |
Review
on a periodic basis the operations of Bristol West’s executive
compensation programs to determine whether they are properly coordinated
and achieving their intended purpose(s); |
|
(iii) |
Establish
and periodically review policies for the administration of executive
compensation programs; and |
|
(iv) |
Take
steps to modify any executive compensation program that yields payments
and benefits that are not reasonably related to executive and corporate
performance. |
|
5. |
Establish
and periodically review policies in the area of senior management
perquisites. |
|
6. |
Consider
policies and procedures pertaining to expense accounts of senior
executives. |
|
7. |
Review
and recommend to the full Board of Directors compensation of directors as
well as director’s and officer’s indemnification and insurance
matters. |
|
8. |
Review
and make recommendations to the full Board of Directors, or approve, any
contracts or other transactions with current or former executive officers
of Bristol West, including consulting arrangements, employment contracts,
severance or termination arrangements and loans to employees made or
guaranteed by Bristol West. |
43
|
|
arrangements,
employment contracts, severance or termination arrangements and loans to
employees made or guaranteed by Bristol
West. |
Monitoring
Incentive and Equity-Based Compensation Plans
|
9. |
Review
and make recommendations to the Board of Directors with respect to Bristol
West’s incentive-compensation plans and equity-based plans, and oversee
the activities of the individuals responsible for administering those
plans. |
|
10. |
Review
and approve all equity compensation plans of Bristol West that are not
otherwise subject to the approval of Bristol West’s
shareholders. |
|
11. |
Review
and make recommendations to the full Board of Directors, or approve, all
awards of shares or share options pursuant to Bristol West’s equity-based
plans. |
|
12. |
Monitor
compliance by executives with the rules and guidelines of Bristol West’s
equity-based plans. |
|
13. |
Review
and monitor employee pension, profit sharing and benefit
plans. |
|
14. |
Select,
retain and/or replace, as needed, compensation and benefits consultants
and other outside consultants to provide independent advice to the
Committee. In that connection, in the event the Committee retains a
compensation consultant, the Committee shall have the sole authority to
approve such consultant’s fees and other retention
terms. |
Reports
|
15. |
Prepare
an annual report on executive compensation for inclusion in Bristol West’s
proxy statement, in accordance with applicable rules and regulations of
the NYSE, SEC and other applicable regulatory
bodies. |
|
16. |
Report
regularly to the Board of Directors (i)
following meetings of the Committee, (ii) with respect to such other
matters as are relevant to the Committee’s discharge of its
responsibilities and (iii) with respect to such recommendations as the
Committee may deem appropriate. The report to the Board of Directors may
take the form of an oral report by the Chairman or any other member of the
Committee designated by the Committee to make such
report. |
|
17. |
Maintain
minutes or other records of meetings and activities of the Committee.
|
V. ANNUAL
PERFORMANCE EVALUATION
The
Committee shall perform a review and evaluation, at least annually, of the
performance of the Committee and its members, including by reviewing the
compliance of the Committee with this Charter. In addition, the Committee shall
review and reassess, at least annually, the adequacy of this Charter and
recommend to the Board of Directors any improvements to this Charter that the
Committee considers necessary or valuable. The Committee shall conduct such
evaluations and reviews in such manner as it deems appropriate.
44
BRISTOL
WEST HOLDINGS, INC.
THE
BOARD OF DIRECTORS CHARTER
I. PURPOSE
The
Corporate Governance and Nominating Committee’s (the “Committee”) purpose shall
be to have direct responsibility for those duties and responsibilities set forth
in Section IV of this Charter, as well as any other duties and responsibilities
delegated to the Committee by the Board of Directors from time to
time.
II. STRUCTURE
AND OPERATIONS
Composition
and Qualifications
The
Committee shall be comprised of three or more members of the Board of Directors,
each of whom is determined by the Board of Directors to be “independent” in
accordance with the rules of the New York Stock Exchange, Inc.
Appointment
and Removal
The
members of the Committee shall be appointed by the Board of Directors and shall
serve until such member’s successor is duly elected and qualified or until such
member’s earlier resignation or removal. The members of the Committee may be
removed, with or without cause, by a majority vote of the Board of Directors.
Chairman
Unless a
Chairman is elected by the full Board of Directors, the members of the Committee
shall designate a Chairman by majority vote of the full Committee membership.
The Chairman shall be entitled to cast a vote to resolve any ties. The Chairman
will chair all regular sessions of the Committee and set the agendas for
Committee meetings.
Delegation
to Subcommittees
In
fulfilling its responsibilities, the Committee shall be entitled to delegate any
or all of its responsibilities to a subcommittee of the Committee.
III. MEETINGS
The
Committee shall meet at least two times annually, or more frequently as
circumstances dictate. The Chairman of the Board of Directors or any member of
the Committee may call meetings of the Committee. All meetings of the Committee
may be held telephonically.
All
non-management directors that are not members of the Committee may attend
meetings of the Committee but may not vote. Additionally, the Committee may
invite to its meetings any director, management of the corporation and such
other persons as it deems appropriate in order to carry out its
responsibilities. The Committee may also exclude from its meetings any persons
it deems appropriate in order to carry out its responsibilities.
IV. RESPONSIBILITIES
AND DUTIES
The
following functions shall be the common recurring activities of the Committee.
These functions should serve as a guide with the understanding that the
Committee may carry out additional
45
functions
and adopt additional policies and procedures as may be appropriate in light of
changing business, legislative, regulatory, legal or other conditions. The
Committee shall also carry out any other responsibilities and duties delegated
to it by the Board of Directors from time to time related to the purposes of the
Committee outlined in Section I of this Charter.
The
Committee, in discharging its oversight role, is empowered to study or
investigate any matter of interest or concern that the Committee deems
appropriate and shall have the sole authority to retain and terminate outside
counsel or other experts for this purpose, including the authority to approve
the fees payable to such counsel or experts and any other terms of retention.
The Committee also shall have sole authority to retain and to terminate any
search firm to be used to assist it in identifying candidates to serve as
directors of the corporation, including sole authority to approve the fees
payable to such search firm and any other terms of retention.
Board
Selection, Composition and Evaluation
|
1. |
Establish
criteria for the selection of new directors to serve on the Board of
Directors. |
|
2. |
Identify
individuals believed to be qualified as candidates to serve on the Board
of Directors and select, or recommend that the Board of Directors select,
the candidates for all directorships to be filled by the Board of
Directors or by the shareholders at an annual or special meeting. In
identifying candidates for membership on the Board of Directors, the
Committee shall take into account all factors it considers appropriate,
which may include (a) ensuring that the Board of Directors, as a
whole, is diverse and consists of individuals with various and relevant
career experience, relevant technical skills, industry knowledge and
experience, financial expertise (including expertise that could qualify a
director as a “financial expert,” as that term is defined by the rules of
the SEC), local or community ties and (b) minimum individual
qualifications, including strength of character, mature judgment,
familiarity with the company's business and industry, independence of
thought and an ability to work collegially. The Committee also may
consider the extent to which the candidate would fill a present need on
the Board of Directors.
Review
and make recommendations to the full Board of Directors, or determine,
whether members of the Board of Directors should stand for re-election.
Consider matters relating to the retirement of members of the Board of
Directors, including term limits or age limits.
|
|
3. |
Evaluate
candidates for nomination to the Board of Directors, including those
recommended by shareholders. In that connection, the Committee shall adopt
procedures for the submission of recommendations by shareholders as it
deems appropriate. |
|
4. |
Conduct
all necessary and appropriate inquiries into the backgrounds and
qualifications of possible candidates. |
|
5. |
Consider
questions of independence and possible conflicts of interest of members of
the Board of Directors and executive officers, and whether a candidate has
special interests or a specific agenda that would impair his or her
ability to effectively represent the interests of all
shareholders. |
|
6. |
Review
and make recommendations, as the Committee deems appropriate, regarding
the composition and size of the Board of Directors in order to ensure the
Board of Directors has the requisite expertise and its membership consists
of persons with sufficiently diverse and independent backgrounds.
|
|
7. |
Oversee
evaluation of, at least annually, and as circumstances otherwise dictate,
the Board of Directors and management. |
Committee
Selection, Composition and Evaluation
|
8. |
Recommend
members of the Board of Directors to serve on the committees of the Board
of Directors, giving consideration to the criteria for service on each
committee as set forth in the charter for such
|
46
|
|
committee,
as well as to any other factors the Committee deems relevant, and where
appropriate, make recommendations regarding the removal of any member of
any committee. |
|
9. |
Recommend
members of the Board of Directors to serve as the Chair of the committees
of the Board of Directors. |
|
10. |
Establish,
monitor and recommend the purpose, structure and operations of the various
committees of the Board of Directors, the qualifications and criteria for
membership on each committee of the Board of Directors and, as
circumstances dictate, make any recommendations regarding periodic
rotation of directors among the committees and impose any term limitations
of service on any committee of the Board of
Directors. |
|
11. |
Periodically
review the charter, composition and performance of each committee of the
Board of Directors and make recommendations to the Board of Directors for
the creation of additional committees or the elimination of committees of
the Board of Directors. |
Corporate
Governance
|
12. |
Review
the adequacy of the certificate of incorporation and by-laws of the
corporation and recommend to the Board of Directors, as conditions
dictate, that it propose amendments to the certificate of incorporation
and by-laws for consideration by the shareholders.
|
|
13. |
Develop
and recommend to the Board of Directors a set of corporate governance
principles and keep abreast of developments with regard to corporate
governance to enable the Committee to make recommendations to the Board of
Directors in light of such developments as may be appropriate.
|
|
14. |
Review
policies relating to meetings of the Board of Directors. This may include
meeting schedules and locations, meeting agendas and procedures for
delivery of materials in advance of meetings.
|
Continuity
/ Succession Planning Process
|
15. |
Oversee
and approve the management continuity planning process. Review and
evaluate the succession plans relating to the CEO and other executive
officer positions and make recommendations to the Board of Directors with
respect to the selection of individuals to occupy these
positions. |
Reports
|
16. |
Report
regularly to the Board of Directors (i) following meetings of the
Committee, (ii) with respect to such other matters as are relevant to the
Committee’s discharge of its responsibilities and (iii) with respect to
such recommendations as the Committee may deem appropriate. The report to
the Board of Directors may take the form of an oral report by the Chairman
or any other member of the Committee designated by the Committee to make
such report. |
|
17. |
Maintain
minutes or other records of meetings and activities of the Committee.
|
V. ANNUAL
PERFORMANCE EVALUATION
The
Committee shall perform a review and evaluation, at least annually, of the
performance of the Committee and its members, including by reviewing the
compliance of the Committee with this Charter. In addition, the Committee shall
review and reassess, at least annually, the adequacy of this Charter and
recommend to the Board of Directors any improvements to this Charter that the
Committee considers necessary or valuable. The Committee shall conduct such
evaluations and reviews in such manner as it deems appropriate.
47
BRISTOL
WEST HOLDINGS, INC.
PROXY FOR
ANNUAL MEETING OF STOCKHOLDERS MAY 12, 2005
SOLICITED
BY THE BOARD OF DIRECTORS
The
stockholder(s) whose signature(s) appear(s) on the reverse side of this Proxy
Card hereby appoints James R. Fisher, Chief Executive Officer
and
Chairman of the Board, Jeffrey J. Dailey, President and Chief Operating Officer
and Craig E. Eisenacher, Chief Financial Officer, the proxies,
and each
of them (with power to act without the others and with power of substitution)
the proxy of the stockholder(s), for and in the name of the
stockholder(s),
to vote at the Annual Meeting of Stockholders of Bristol West Holdings, Inc.,
(the “Meeting”) to be held at Bristol West Holdings, Inc.,
5701
Stirling Road, Davie, Florida 33314, on the 12th day of
May, 2005 at 9:00 a.m., and at any adjournment thereof, the shares of stock
which
the
stockholder(s) would be entitled to vote if personally present.
The
stockholder(s) hereby ratifies all actions of said proxies, or any of them, or
their or his substitutes or substitute by virtue hereof; and hereby
revokes
any authorization to vote such shares heretofore given by the stockholder(s) to
anyone. The undersigned hereby acknowledges receipt of the
Notice of
Annual Meeting of Stockholders dated April 18, 2005, and the Proxy Statement
furnished therewith.
If the
stockholder(s) fails to specify herein how such shares are to be voted on said
proposals (1) and (2), they shall be voted “FOR” proposals
(1) and
(2).
(over)
BRISTOL
WEST HOLDINGS, INC.
P.O. BOX
11147
NEW YORK,
NY 10203-0147
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
▼DETACH
PROXY CARD HERE▼
Sign,
Date and Return the
Proxy
Card Promptly Using x
the Enclosed Envelope.
the Enclosed Envelope.
Votes MUST be indicated
(x) in Black or
Blue ink.
BOARD
OF DIRECTORS RECOMMENDS VOTES FOR
PROPOSALS (1) and (2).
| 1. |
SELECTION
OF DIRECTORS: |
|
FOR o WITHHOLD o EXCEPTIONS o
FOR
ALL
Nominees:
01-
James R. Fisher, 02-R. Cary Blair, 03-Richard T. Delaney, 04-Todd
A.
Fisher,
05-Perry Golkin, 06-Inder-Jeet S. Gujral, 07-Mary R.
Hennessy,
08-Eileen
Hilton, 09-James N. Meehan, 10-Scott C. Nuttall, 11-Arthur J.
Rothkopf
INSTRUCTIONS:
To withhold authority to vote for any individual
nominee,
mark the “Exceptions” box and write that nominee’s name
in
the
space provided below.
Exceptions
___________________________________________________
|
FOR AGAINST
ABSTAIN
o o o
2.
THE RATIFICATION OF THE SELECTION OF
DELOITTE & TOUCHE LLP as independent
auditor
for 2005.
To
change your address, please mark this box.
o
Attend
Annual Meeting mark here.
o
In
their discretion, the Proxies are authorized to vote upon all other
business that may
properly
come before the Meeting with all the powers the undersigned would possess
if
personally
present. |
|
|
________________________ __________________
Date
Stockholder sign name Co-owner sign
here
