Table of Contents
UNITED
STATES
SECURITIES AND EXCHANGE
COMMISSION
Washington, DC
20549
FORM
8-K
Current Report
Pursuant to
Section 13 OR 15(d) of the Securities Exchange Act of
1934
Date of Report (Date of
earliest event reported): August 4,
2006
ASPEN INSURANCE HOLDINGS
LIMITED
(Exact name of registrant as specified in
its
charter)
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| Bermuda |
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001-31909 |
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Not
Applicable |
(State
or other jurisdiction
of
incorporation) |
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(Commission
File
Number) |
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(I.R.S.
Employer
Identification No.) |
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Maxwell
Roberts Building
1 Church Street
Hamilton HM
11
Bermuda
(Address of principal executive
offices)
(Zip Code)
Registrant’s
telephone number, including area code: (441) 295-8201
Not
Applicable
(Former name or former address, if changed since last
report)
Check the appropriate box below if
the Form 8-K filing is intended to simultaneously satisfy the filing
obligation of the registrant under any of the following
provisions:
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425) |
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12) |
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b)) |
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c)) |
Table of Contents
Section 1 —
Registrant's Business and Operations
Item 1.01 Entry into
a Material Definitive Agreement
On Monday, August
7, 2006, Aspen Insurance Holdings Limited
(‘‘Aspen’’) announced the appointment of
Mr. Stuart Sinclair as President and Chief Operating
Officer of Aspen, pursuant to which Mr. Sinclair has entered
into a service agreement with Aspen. The agreements described below are
attached to this Report as Exhibits 10.1 and 10.2.
The service
agreement provides as
follows:
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an annual salary of
£375,00, subject to annual salary
review; |
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eligibility for a
cash bonus based on a bonus potential of 125% (this percentage
is not a cap or a limit and can be exceeded) during Mr.
Sinclair’s employment of such amounts (if any) at such times and
subject to such conditions as the Compensation Committee of the Board
of Directors of Aspen may in its absolute discretion decide; |
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employment terminates
automatically when Mr. Sinclair reaches 65 years of
age; |
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employment may be
terminated for cause
if: |
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the employee becomes
bankrupt, is convicted of a criminal offence, commits serious
misconduct or other conduct bringing the employee or Aspen or any of
its subsidiaries into
disrepute; |
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the employee
materially breaches any provisions of the service agreement or conducts
himself in a manner prejudicial to the business;
or |
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the employee breaches
any code of conduct or ceases to be registered by any regulatory
body; |
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employment may be
terminated by the employee without notice for good reason
if: |
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the employee's
annual salary or bonus opportunity is
reduced; |
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there is a
material diminution in the employee's duties, authority,
responsibilities or title, or the employee is assigned duties
materially inconsistent with his
position; |
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the employee is
removed from any of his
positions;or |
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the employee
is required to relocate more than 50 miles from the employee's
current office; |
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provided
that, in each case, the default has not been cured within 30 days of
receipt of a written notice from the
employee; |
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if the employee is
terminated without cause or resigns with good reason (as defined in the
agreement), the employee is entitled to (a) salary at his salary rate
through the date in which his termination occurs; (b) the lesser of (x)
the target annual incentive award for the year in which the
employee's termination occurs, and (y) the average of the annual
incentive awards received by the employee in the prior three years (or,
number of years employed if fewer), multiplied by a fraction, the
numerator of which is the number of days that the employee was employed
during the applicable year and the denominator of which is 365; (c) a
severance payment of the sum of (x) the employee's highest salary
rate during the term of the agreement and (y) the average bonus under
Aspen’s annual incentive plan actually earned by the employee
during the three years (or number of complete years employed, if fewer)
immediately prior to the year of termination, and (d) the unpaid
balance of all previously earned cash bonus and other incentive awards
with respect to performance periods which have been completed, but
which have not yet been paid, all of which amounts shall be payable in
a lump sum in cash within 30 days after termination. In the event that
the employee is paid in lieu of notice under the agreement (including
if Aspen exercises its right to enforce garden leave under the
agreement) the severance payment will be inclusive of that
payment; |
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if
the employee is terminated without cause or resigns for good reason in
the six months prior to a change of control or the two-year period
following a change of control, in addition to the benefits discussed
above, all share options and other equity-based awards granted to the
executive during the course of the agreement shall immediately vest and
remain exercisable in accordance with their terms. In addition, the
employee may be entitled to excise tax gross-up
payments; |
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certain
provisions relating to reimbursement of expenses, confidentiality,
non-competition and non-solicitation for a twelve-month period
following termination or resignation; |
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life cover for the benefit of
the employee’s beneficiaries of four times basic salary which is
fully insured by Aspen; and |
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participation in all management
incentive plans and other employee benefits and fringe benefit plans
made available to other senior executives or employees generally,
including continued membership in Aspen's pension scheme, medical
insurance, permanent health insurance, personal accident insurance and
life insurance. |
In addition to his service agreement described
above, Mr. Sinclair was awarded the following incentives and
awards:
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a guaranteed bonus
of £210,000, payable in March 2007 subject to Mr.
Sinclair being an employee at that time and subject to his commencement
date with Aspen occurring by the end of September
2006; |
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98,958 options and
1,042 performance shares granted under Aspen’s Share Incentive
Plan and subject to the performance criteria provided in the 2006
option and performance share award agreements (the form of 2006 option
and award agreements have been previously filed with Aspen’s
Annual Report on Form 10-K for fiscal year ended December
31, 2005). The exercise price for the options is $23.19 per
share based on the average of the high and low of the share price on
August 4, 2006, the day that Mr. Sinclair entered
the service agreement; |
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an
additional 43,200 options, subject to the performance criteria provided
in the 2006 option agreement (the form of 2006 option agreement has
been previously filed with Aspen’s Annual Report on Form 10-K
for fiscal year ended December 31, 2005), to compensate
Mr. Sinclair’s loss of options from his previous
employer. The exercise price for the options is $23.19 per share based
on the average of the high and low of the share price on August
4, 2006, the day that Mr. Sinclair entered the service
agreement; |
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a grant of 23,903
Restricted Stock Units (equivalent to $550,000), based on
Aspen’s closing share price on August 4, 2006, to
compensate Mr. Sinclair’s loss of Restricted Stock Units
from his previous
employer; |
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a payment of
£31,428 ($55,000) to buy out the option value from Mr.
Sinclair’s previous employer;
and |
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a payment of
£30,000 in relocation costs to the United Kingdom, repayable to
Aspen if Mr. Sinclair gives notice of resignation within one
year of his official start date. |
Section 5 — Corporate
Governance and Management
Item 5.02 Departure of
Directors or Principal Officers; Election of Directors; Appointment of
Principal Officers.
Pursuant to the agreements described in
Item 1.01 above, Mr. Sinclair will assume the position of
President and Chief Operating Officer of Aspen. It is anticipated that
Mr. Sinclair will begin his employment in September
2006.
The terms of employment described in Item 1.01 above are
incorporated by reference into this Item 5.02.
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Table of Contents
Section 9. Financial Statements and
Exhibits
Item 9.01- Financial Statements and
Exhibits
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The following
exhibits are filed under Items 1.01 and 5.02 as part of this
report: |
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10.1 |
Service Agreement
between Aspen Insurance UK Services Limited and Stuart Sinclair, dated
August 4,
2006. |
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10.2 |
Letter from Aspen
Insurance UK Limited to Stuart Sinclair dated August 3,
2006 regarding the awards and
incentives. |
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly
authorized.
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ASPEN
INSURANCE HOLDINGS
LIMITED |
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(Registrant) |
| Dated:
August 10, 2006 |
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By: /s/
Christopher
O'Kane |
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Name: |
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Christopher
O'Kane |
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Title: |
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Chief Executive
Officer |
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Table of Contents
INDEX TO
EXHIBITS
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| Exhibit
No. |
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Description |
| 10.1 |
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Service
Agreement between Aspen Insurance UK Services Limited and Stuart
Sinclair, dated August 4,
2006. |
| 10.2 |
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Letter from Aspen Insurance UK
Limited to Stuart Sinclair dated August 3, 2006 regarding
the awards and
incentives. |
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