<PAGE>
As filed with the Securities and Exchange Commission on October 20, 1999
Registration No. 333-_____
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
WHITE MOUNTAINS INSURANCE GROUP, INC.
(formerly "Fund American Enterprises Holdings, Inc.")
(Exact name of registrant as specified in its charter)
Delaware 94-2708455
(State or other jurisdiction of (I.R.S. employer identification no.)
incorporation or organization)
80 South Main Street
Hanover, New Hampshire 03755-2053
(603) 643-1567
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
VOLUNTARY DEFERRED COMPENSATION PLAN
(Full title of the plan)
Michael S. Paquette
Senior Vice President and Controller
White Mountains Insurance Group, Inc.
80 South Main Street
Hanover, New Hampshire 03755-2053
(603) 643-1567
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of each class of Amount to be Proposed maximum Proposed maximum Amount of
securities to be registered registered offering price per share(1) aggregate offering price(1) registration fee
- --------------------------- ---------- --------------------------- --------------------------- ----------------
<S> <C> <C> <C> <C>
Common Stock, 150,000 shares $120.75 $18,112,500.00 $5,035.28
$1.00 par value
</TABLE>
- ----------
(1) Pursuant to Rule 457(h)(1) under the Securities Act, the offering
price is based upon the average high and low sales prices of the Common Stock as
reported on the New York Stock Exchange on October 19, 1999.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION
STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents heretofore filed by White Mountains Insurance
Group, Inc. (formerly "Fund American Enterprises Holdings, Inc.") (the
"Registrant") (Commission file no. 1-8993) pursuant to the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), hereby are incorporated in this
Registration Statement by reference: (a) the Registrant's Annual Report on Form
10-K for the year ended December 31, 1998 (the "1998 Form 10-K"); (b) the
Registrant's Quarterly Reports on Form 10-Q for the quarters ended March 31,
1999 and June 30, 1999; (c) the Registrant's Current Reports on Form 8-K dated
March 10, 1999, May 27, 1999, June 1, 1999, June 8, 1999, June 17, 1999 (as
amended by a Current Report on Form 8-K/A (Amendment No. 1) filed August 17,
1999), June 29, 1999, August 5, 1999 and October 18, 1999; and (d) the
Registrant's definitive proxy materials on Schedule 14A filed March 31, 1999 and
September 27, 1999. All documents subsequently filed by Registrant pursuant to
Sections 13(a), 14, and 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold, shall be deemed
to be incorporated by reference in this Registration Statement and to be part
hereof from the date of filing such documents.
Item 4. Description of Securities.
The authorized capital stock of the Registrant consists of 15,000,000
shares of Common Stock and 1,000,000 shares of Preferred Stock, each par value
$1.00 per share. Pursuant to the Registrant's Amended Certificate of
Incorporation, a vote of at least two-thirds of the entire Board of Directors is
required to authorize the issuance of any shares of Common Stock or Preferred
Stock. Shareholders have no cumulative voting rights.
All outstanding shares of Common Stock participate equally in
distributions when and as declared by the Registrant and upon liquidation. Each
holder of outstanding shares of Common Stock is entitled to one vote per share
of Common Stock held. The shares of Common Stock do not entitle holders thereof
to any preemptive rights, conversion rights, redemption rights or sinking fund.
The Common Stock is listed on the New York Stock Exchange, Inc.
There is currently no Preferred Stock of the Company outstanding. Pursuant
to the Company's Amended Certificate of Incorporation, the Board of Directors is
authorized to establish and designate series of Preferred Stock and to fix the
number of shares and the relative rights, powers, preferences and
qualifications, limitations and restrictions of such respective series. Since
the Board of Directors has the power to establish the preferences and rights of
each series, it may afford the holders of any Preferred Stock preferences,
powers and rights (including voting rights) senior to the rights of the holders
of Common Stock. The Registrant has no
<PAGE>
present intention to issue additional shares of Preferred Stock. It is possible
that a new series of the Preferred Stock could be used to discourage an
unsolicited acquisition proposal if one were made. However, the Registrant may
create and issue a new series of Preferred Stock from the authorized Preferred
Stock should the Registrant conclude that doing so is advisable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
The General Corporation Law ("GCL") of the State of Delaware provides that
a Delaware corporation, such as the registrant, may indemnify a director or
officer against his or her expenses and judgments, fines and amounts paid in
settlement actually and reasonably incurred in connection with any action, suit
or proceeding (other than an action by or in the right of the corporation)
involving such person by reason of the fact that such person is or was a
director or officer, concerning actions taken in good faith and in a manner
reasonably believed to be in or not opposed to the best interest of the
corporation and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his or her conduct was unlawful. The GCL also
provides that in a derivative action, a Delaware corporation may indemnify its
directors and officers against expenses actually and reasonably incurred to the
extent that such director or officer acted in good faith and in a manner such
director or officer reasonably believed to be in or not opposed to the best
interests of the corporation, except that no indemnification may be made with
respect to any claim, issue or matter as to which such director or officer is
adjudged to be liable to the corporation unless and only to the extent that the
court determines upon application that, despite the adjudication of liability
but in view of all the circumstances of the case, such director or officer is
fairly and reasonably entitled to indemnity for such expenses which the court
deems proper. The GCL also generally permits the advancement of a director's or
officer's expenses, including by means of a mandatory charter or bylaw provision
to that effect, in lieu of requiring the authorization of such advancement by
the Board of Directors in specific cases.
Article XI of Registrant's Amended and Restated By-Laws contains the
indemnification provisions that follow:
ARTICLE XI
Indemnification
54. Indemnification of Directors, Officers, Agents and Employees.
Section 1. Right to Indemnification. The Corporation shall to
the fullest extent permitted by applicable law as then in effect,
indemnify any person (the "Indemnitee") unless otherwise agreed to by
Indemnitee, who was or is involved in any manner (including, without
limitation, as a party or a witness) or is threatened to be made so
involved in any threatened, pending or completed investigation, claim,
action, suit or proceeding, whether civil, criminal,
<PAGE>
administrative or investigative (including without limitation, any action,
suit or proceeding by or in the right of the Corporation to procure a
judgment in its favor) (a "Proceeding") by reason of the fact that he is
or was a director, officer, employee or agent of the Corporation, or is or
was serving at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture,
trust or other enterprise (including, without limitation, any employee
benefit plan) against all expenses (including attorney's fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by
him in connection with such Proceeding. Such indemnification shall be a
contract right and shall include the right to receive payment in advance
of any expenses incurred by the Indemnitee in connection with such
Proceeding, consistent with the provisions of applicable law as then in
effect.
Section 2. Insurance, Contracts and Funding. The Corporation
may purchase and maintain insurance to protect itself and any Indemnitee
against any expenses, judgments, fines and amounts paid in settlement as
specified in Section 1 of this Article or incurred by any Indemnitee in
connection with any Proceeding referred to in Section 1 of this Article,
to the fullest extent permitted by applicable law as then in effect. The
Corporation may enter into contracts with any director, officer, employee
or agent of the Corporation in furtherance of the provisions of this
Article and may create a trust fund, grant a security interest or use
other means (including without limitation, a letter of credit) to ensure
the payment of such amounts as may be necessary to effect indemnification
as provided in this Article.
Section 3. Indemnification; Not Exclusive Right. The right of
indemnification provided in this Article shall not be exclusive of any
other rights to which those seeking indemnification may otherwise be
entitled, and the provisions of this Article shall inure to the benefit of
the heirs and legal representatives of any person entitled to indemnity
under this Article and shall be applicable to Proceedings commenced or
continuing after the adoption of this Article, whether arising from acts
or omissions occurring before or after such adoption.
Section 4. Advancement of Expenses, Procedures; Presumptions
and Effect of Certain Proceedings; Remedies. In furtherance, but not in
limitation of the foregoing provisions, the following procedures,
presumptions and remedies shall apply with respect to advancement of
expenses and the right to indemnification under this Article:
(a) Advancement of Expenses. All reasonable expenses
incurred by or on behalf of the indemnitee in connection with any
Proceeding shall be advanced to the Indemnitee by the Corporation
within twenty (20) business days after the receipt by the
Corporation of a statement or statements from the Indemnitee
requesting such advance or advances from time to time, whether prior
to or after final disposition of such Proceeding. Such statement or
statements shall reasonably evidence
<PAGE>
the expenses incurred by the Indemnitee and, if required by law or
requested by the Corporation at the time of such advance, shall
include or be accompanied by an undertaking by or on behalf of the
Indemnitee to repay the amounts advanced if it should ultimately be
determined that the Indemnitee is not entitled to be indemnified
against such expenses pursuant to this Article.
(b) Procedure for Determination of Entitlement to
Indemnification.
(i) To obtain indemnification under this Article,
an Indemnitee shall submit to the Secretary of the Corporation
a written request, including such documentation and
information as is reasonably available to the Indemnitee and
reasonably necessary to determine whether and to what extent
the Indemnitee is entitled to indemnification (the "Supporting
Documentation"). The determination of the Indemnitee's
entitlement to indemnification shall be made not later than
120 days after receipt by the Corporation of the written
request for indemnification together with the Supporting
Documentation. The Secretary of the Corporation shall,
promptly upon receipt of such a request for indemnification,
advise the Board of Directors or its designee in writing that
the Indemnitee has requested indemnification.
(ii) The Indemnitee's entitlement to
indemnification under this Article shall be determined in one
of the following ways: (A) by a majority vote of the
Disinterested Directors (as hereinafter defined), if they
constitute a quorum of the Board of Directors; (B) by a
written opinion of Independent Counsel (as hereinafter
defined) if (x) a Change of Control (as hereinafter defined)
shall have occurred and the Indemnitee so requests or (y) a
quorum of the Board of Directors consisting of Disinterested
Directors is not obtainable or, even if obtainable, a majority
of such Disinterested Directors so directs; (C) by the
stockholders of the Corporation (but only if a majority of the
Disinterested Directors, if they constitute a quorum of the
Board of Directors, presents the issue of entitlement or
indemnification to the stockholders for their determination);
or (D) as provided in Section 4(c), below.
(iii) In the event the determination of
entitlement to indemnification is to be made by Independent
Counsel pursuant to Section 4(b)(ii), a majority of the
Disinterested Directors shall select the Independent Counsel,
but only an Independent Counsel to which the Indemnitee does
not reasonably object; provided, however, that if a Change of
Control shall have occurred, the Indemnitee shall select such
Independent Counsel, but only an
<PAGE>
Independent Counsel to which the Board of Directors does not
reasonably object.
(c) Presumption and Effect of Certain Proceedings.
Except as otherwise expressly provided in this Article, if a Change
of Control shall have occurred the Indemnitee shall be presumed to
be entitled to indemnification under this Article upon submission of
a request for indemnification together with the Supporting
Documentation in accordance with Section 4(b)(i), thereafter the
Corporation shall have the burden of proof to overcome that
presumption in reaching a contrary determination. In any event, if
the person or persons empowered under Section 4(b) to determine
entitlement to indemnification shall not have been appointed or
shall not have made a determination within one hundred twenty (120)
days after receipt by the Corporation of the request, therefore
together with the Supporting Documentation, the Indemnitee shall be
deemed to be entitled to indemnification and the Indemnitee shall be
entitled to such indemnification unless (A) the Indemnitee
misrepresented or failed to disclose a material fact in making the
request for indemnification or in the Supporting Documentation or
(B) such indemnification is prohibited by law. The termination of
any Proceeding described in Section 1, or of any claim, issue or
matter therein, by judgement, order, settlement or conviction, or
upon a plea of nolo contendere or its equivalent, shall not, of
itself, adversely affect the right of the Indemnitee to
indemnification or create a presumption that the Indemnitee did not
act in good faith and in a manner which he reasonably believed to be
in or not opposed to the best interests of the Corporation or, with
respect to any criminal Proceeding, that the Indemnitee had
reasonable cause to believe that his conduct was unlawful.
(d) Remedies of Indemnitee.
(i) In the event that a determination is made
pursuant to Section 4(b) that the Indemnitee is not entitled
to indemnification under this Article, (A) the Indemnitee
shall be entitled to seek an adjudication of his entitlement
to such indemnification either, at the Indemnitee's sole
option, in (x) an appropriate court of the State of Delaware
or any other court of competent jurisdiction or (y) an
arbitration to be conducted by a single arbitrator pursuant to
the rules of the American Arbitration Association; (B) any
such judicial proceeding or arbitration shall be de novo and
the Indemnitee shall not be prejudiced by reason of such
adverse determination; and (C) if a Change of Control shall
have occurred, in any such judicial proceeding or arbitration
the Corporation shall have the burden of proving that the
Indemnitee is not entitled to indemnification under this
Article.
<PAGE>
(ii) If a determination shall have been made or
deemed to have been made, pursuant to Section 4(b) or (c),
that the Indemnitee is entitled to indemnification, the
Corporation shall be obligated to pay the amounts constituting
such indemnification within fifteen (15) business days after
such determination has been made or deemed to have been made
and shall be conclusively bound by such determination unless
(A) the indemnitee misrepresented or failed to disclose a
material fact in making the request for indemnification or in
the Supporting Documentation or (B) such indemnification is
prohibited by law. (Subparagraph (A) and (B) are each referred
to hereafter as a "Disqualifying Event"). In the event that
(C) advancement of expenses is not timely made pursuant to
Section 4(a) or (D) payment of indemnification is not made
within fifteen (15) business days after a determination of
entitlement to indemnification has been made or deemed to have
been made pursuant to Section 4(b) or (c), the Indemnitee
shall be entitled to seek judicial enforcement of the
Corporation's obligation to pay to the Indemnitee such
advancement of expenses or indemnification. Notwithstanding
the foregoing, the Corporation may bring an action, in an
appropriate court in the State of Delaware or any other court
of competent jurisdiction, contesting the right of the
Indemnitee to receive indemnification hereunder due to the
occurrence of Disqualifying Event; provided, however, that in
any such action the Corporation shall have the burden of
proving the occurrence of such Disqualifying Event.
(iii) The Corporation shall be precluded from
asserting in any judicial proceeding or arbitration commenced
pursuant to this Section 4(d) that the procedures and
presumptions of this Article are not valid, binding and
enforceable and shall stipulate in any such court or before
any such arbitrator that the Corporation is bound by all the
provisions of this Article.
(iv) In the event that the Indemnitee, pursuant to
this Section 4(d), seeks a judicial adjudication of an award
in arbitration to enforce his rights under, or to recover
damages for breach of, this Article, the Indemnitee shall be
entitled to recover from the Corporation, and shall be
indemnified by the Corporation against, any expenses actually
and reasonably incurred by him if the Indemnitee prevails in
such judicial adjudication or arbitration. If it shall be
determined in such judicial adjudication or arbitration that
the Indemnitee is entitled to receive part but not all of the
indemnification or advancement of expenses sought, the
expenses incurred by the indemnitee in connection with such
judicial adjudication or arbitration shall be prorated
accordingly.
(e) Definitions. For purposes of this Section 4:
<PAGE>
(i) "Change in Control" means a change in control
of the Corporation of a nature that would be required to be
reported in response to Item 5(f) of Schedule 14A of
Regulation 14A promulgated under the Securities Exchange Act
of 1934 (the "Act"), whether or not the Corporation is then
subject to such reporting requirement; provided that, without
limitation, such change in control shall be deemed to have
occurred if (A) any "person" (as such term is used in Section
13(d) and 14(d) of the Act) is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Act), directly or
indirectly, of securities of the Corporation representing 30%
or more of the combined voting power of the Corporation's then
outstanding securities without the prior approval of at least
two-thirds (2/3) of the members of the Board of Directors in
office immediately prior to such acquisition; (b) the
Corporation is a party to a merger, consolidation, sale of
assets or other reorganization, or proxy contest, as a
consequence of which members of the Board of Directors in
office immediately prior to such transaction or event
constitute less than a majority of the Board of Directors
thereafter; or (C) during any period of two (2) consecutive
years, individuals who at the beginning of such period
constituted the Board of Directors (including for this purpose
any new director whose election or nomination for election by
the Corporation's stockholders was approved by a vote of at
least a majority of the directors then still in office who
were directors at the beginning of such period) cease for any
reason to constitute at least a majority of the Board of
Directors.
(ii) "Disinterested Director" means a director of
the Corporation who is not or was not a party to the
Proceeding in respect of which indemnification is sought by
the Indemnitee.
(iii) "Independent Counsel" means a law firm or a
member of a law firm that neither presently is, nor in the
past five (5) years has been, retained to represent: (i) the
Corporation or the Indemnitee in any matter material to either
such party or (ii) any other party to the Proceeding giving
rise to a claim for indemnification under this Article.
Notwithstanding the foregoing, the term "Independent Counsel"
shall not include any person who, under the applicable
standards of professional conduct then prevailing under the
law of the State of Delaware, would have a conflict of
interest in representing either the Corporation or the
Indemnitee in an action to determine the Indemnitee's rights
under this Article.
Section 5. Severability. If any provision or provisions of
this Article shall be held to be invalid, illegal or unenforceable for any
reason whatsoever: (a) the validity, legality and enforceability of the
remaining
<PAGE>
provisions of this Article (including, without limitation, all portions of
any paragraph of this Article containing any such provision held to be
invalid, illegal or unenforceable, that are not themselves invalid,
illegal or unenforceable) shall not in any way be affected or impaired
thereby; and (b) to the fullest extent possible, the provisions of this
Article (including, without limitation, all portions of any paragraph of
this Article containing any such provision held to be invalid, illegal or
unenforceable) shall be construed so as to give effect to the intent
manifested by the provision held invalid, illegal or unenforceable.
Section 102(b)(7) of the GCL provides that a certificate of incorporation
may contain a provision eliminating or limiting the personal liability of a
director to the corporation or its stockholders for monetary damages for breach
of fiduciary duty as a director, provided that such provision may not eliminate
or limit the liability of a director (i) for any breach of the director's duty
of loyalty to the corporation or its stockholders; (ii) for acts or omissions
not in good faith or which involve intentional misconduct or a knowing violation
of law; (iii) under Section 174 of the GCL (relating to liability for
unauthorized acquisitions or redemptions of, or dividends on, capital stock) or
(iv) for any transaction from which the director derived an improper personal
benefit.
Article Eleventh of Registrant's Restated Certificate of Incorporation, as
amended, implements the foregoing provision and provides as follows:
Eleventh: (a) To the fullest extent that the General Corporation Law of
the State of Delaware (as it exists on the date hereof [March 11, 1994] or
as it may hereafter be amended) permits the limitation or elimination of
the liability of directors, no director of the Corporation shall be liable
to the Corporation or its shareholders for monetary damages for breach of
fiduciary duty as a director. No amendment to or repeal of this Article
shall apply to or have any effect on the liability or alleged liability of
any director of the Corporation for or with respect to any acts or
omissions of such director occurring prior to such amendment or repeal.
(b) In addition to any requirements of law and any other
provisions herein or in the terms of any class or series of capital stock
having preference over the common stock of the Corporation as to dividends
or upon liquidation (and notwithstanding that a lesser percentage may be
specified by law), the affirmative vote of the holders of seventy-five
percent (75%) or more of the voting power of the then outstanding voting
stock of the Corporation, voting together as a single class, shall be
required to amend, alter or repeal any provision of this Article.
Insurance is maintained on a regular basis (and not specifically in
connection with this offering) against liabilities arising on the part of
directors and officers out of their performance in such capacities or arising on
the part of the registrant out of its foregoing indemnification provisions,
subject to certain exclusions and to the policy limits.
<PAGE>
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
The following exhibits are furnished with this Registration Statement:
Exhibit No. Description
----------- -----------
(4)(a) Amended and Restated Certificate of Incorporation
of Registrant (incorporated by reference to
Exhibit (4)(a) of the Registrant's registration
statement on Form S-8 filed July 9, 1999
(registration no. 333-82563)).*
(4)(b) Amended and Restated By-Laws of Registrant as
amended to date (filed as Exhibit 3(b) to
Registrant's Annual Report on Form 10-K for the
fiscal year ended October 31, 1993 (Commission
file number 1-8993) and incorporated herein by
reference).
(4)(c) Voluntary Deferred Compensation Plan.*
(4)(d) Form of Voluntary Deferred Compensation Plan
Termination Amendment.*
(5)(a) Opinion and consent of Miller, Canfield, Paddock
and Stone, P.L.C.*
(23)(a) Consent of Miller, Canfield, Paddock and Stone,
P.L.C. (contained in Exhibit (5)(a)).
(23)(b) Consent of KPMG LLP.*
(23)(c) Consent of Ernst & Young LLP.*
(23)(d) Consent of PricewaterhouseCoopers LLP.*
(24) Powers of attorney (contained in the signature
pages hereto).*
- -----------------------------
* Filed herewith.
<PAGE>
Item 9. Undertakings.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set
forth in the registration statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply
if the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the
registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference into the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling
<PAGE>
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
<PAGE>
SIGNATURES
The Registrant. Pursuant to the requirements of the Securities Act of
1933, Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the Town of Hanover, State of New Hampshire, on October 19,
1999.
WHITE MOUNTAINS INSURANCE
GROUP, INC.
By /s/
------------------------------------
Name: K. Thomas Kemp
Title: Director, President and
Chief Executive Officer
<PAGE>
The Plan. Pursuant to the requirements of the Securities Act of 1933, the
Voluntary Deferred Compensation Plan has duly caused this Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized, in the
Town of Hanover, State of New Hampshire, on October 19, 1999.
Voluntary Deferred Compensation Plan
By /s/
------------------------------------
Name: Gordon S. Macklin
Title: Member & Chairman -
Compensation Sub-Committee
And: /s/
-----------------------------------
Name: Patrick M. Byrne
Title: Member - Compensation
Sub-Committee
And: /s/
-----------------------------------
Name: Robert P. Cochran
Title: Member - Compensation
Sub-Committee
And: /s/
-----------------------------------
Name: Frank A. Olson
Title: Member - Compensation
Sub-Committee
And: /s/
-----------------------------------
Name: Arthur Zankel
Title: Member - Compensation
Sub-Committee
<PAGE>
Directors and Officers of the Registrant. Pursuant to the requirements of
the Securities Act of 1933, this Registration Statement has been signed below by
the following persons in the capacities indicated and on the dates indicated
below. By so signing, each of the undersigned, in his capacity as a director or
officer, or both, as the case may be, of the registrant, does hereby appoint
John J. Byrne, K. Thomas Kemp, Raymond Barrette and Michael S. Paquette, and
each of them severally, his true and lawful attorney to execute in his name,
place and stead, in his capacity as a director or officer, or both, as the case
may be, of the registrant, any and all amendments to this Registration Statement
including post-effective amendments thereto and all instruments necessary or
incidental in connection therewith, and to file the same with the Securities and
Exchange Commission. Each of said attorneys shall have full power and authority
to do and perform in the name and on behalf of each of the undersigned, in any
and all capacities, every act whatsoever requisite or necessary to be done in
the premises as fully, and for all intents and purposes, as each of the
undersigned might or could do in person, the undersigned hereby ratifying and
approving the acts of said attorneys and each of them.
Signatures Title Date
---------- ----- ----
Principal Executive Officer:
President and Chief
/s/ Executive Officer October 19, 1999
- -------------------------------
K. Thomas Kemp
Principal Financial Officer:
Executive Vice President and
/s/ Chief Financial Officer October 19, 1999
- -------------------------------
Raymond Barrette
Principal Accounting Officer:
Senior Vice President and
/s/ Controller October 19, 1999
- -------------------------------
Michael S. Paquette
<PAGE>
Directors and Officers of the Registrant. Pursuant to the requirements of
the Securities Act of 1933, this Registration Statement has been signed below by
the following persons in the capacities indicated and on the dates indicated
below. By so signing, each of the undersigned, in his capacity as a director or
officer, or both, as the case may be, of the registrant, does hereby appoint
John J. Byrne, K. Thomas Kemp, Raymond Barrette and Michael S. Paquette, and
each of them severally, his true and lawful attorney to execute in his name,
place and stead, in his capacity as a director or officer, or both, as the case
may be, of the registrant, any and all amendments to this Registration Statement
including post-effective amendments thereto and all instruments necessary or
incidental in connection therewith, and to file the same with the Securities and
Exchange Commission. Each of said attorneys shall have full power and authority
to do and perform in the name and on behalf of each of the undersigned, in any
and all capacities, every act whatsoever requisite or necessary to be done in
the premises as fully, and for all intents and purposes, as each of the
undersigned might or could do in person, the undersigned hereby ratifying and
approving the acts of said attorneys and each of them.
Signatures Title Date
---------- ----- ----
Directors:
/s/ Director October 19, 1999
- --------------------------------------
Terry L. Baxter
/s/ Chairman, Director October 19, 1999
- --------------------------------------
John J. Byrne
/s/ Director October 19, 1999
- --------------------------------------
Patrick M. Byrne
/s/ Director October 19, 1999
- --------------------------------------
Howard L. Clark, Jr.
/s/ Director October 19, 1999
- --------------------------------------
Robert P. Cochran
/s/ Director October 19, 1999
- --------------------------------------
George J. Gillespie III
/s/ Director October 19, 1999
- --------------------------------------
John D. Gillespie
/s/ Director October 19, 1999
- --------------------------------------
K. Thomas Kemp
/s/ Director October 19, 1999
- --------------------------------------
Gordon S. Macklin
<PAGE>
/s/ Director October 19, 1999
- --------------------------------------
Frank A. Olson
/s/ Director October 19, 1999
- --------------------------------------
Arthur Zankel
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
----------- -----------
(4)(c) Voluntary Deferred Compensation Plan.*
(4)(d) Form of Voluntary Deferred Compensation Plan Termination
Amendment.*
(5)(a) Opinion and consent of Miller, Canfield, Paddock and Stone,
P.L.C.*
(23)(a) Consent of Miller, Canfield, Paddock and Stone, P.L.C.
(contained in Exhibit (5)(a)).
(23)(b) Consent of KPMG LLP.*
(23)(c) Consent of Ernst & Young LLP.*
(23)(d) Consent of PricewaterhouseCoopers LLP.*
(24) Powers of attorney (contained in the signature pages hereto).*
- -----------------------------
* Filed herewith.
<PAGE>
Exhibit (4)(c)
FUND AMERICAN
VOLUNTARY DEFERRED COMPENSATION PLAN
(Adopted April 9, 1992)
(Revised November 15, 1996)
ARTICLE 1
PURPOSE OF PLAN
1.1 The purpose of this Plan is to provide eligible Directors, Officers and Key
Employees of Fund American with the opportunity to defer compensation. The Plan
is also intended to establish a method of attracting and retaining persons whose
abilities, experience and judgement can contribute to the long-term strategic
objectives of Fund American.
1.2 The Committee intends that the Plan be an unfunded non-qualified deferred
compensation plan maintained primarily for the purpose of providing deferred
compensation for a select group of management or highly compensated employees of
Fund American, and that contributions to the Plan shall be deductible by Fund
American pursuant to Section 404 (a)(5)of the Internal Revenue Code of 1986, as
amended (the "IRC").
ARTICLE 2
DEFINITIONS
As used in this Plan, the following terms shall have the meanings
hereinafter set forth:
2.1 "Base Salary" means the annual salary paid to Fund American Officers and Key
Employees which is paid bi-weekly (or other regular interval) during the
calendar year.
2.2 "Beneficiary" means any person(s)or legal entity(ies) designated by the
Participant or otherwise determined in accordance with ARTICLE 5.
2.3 "Board of Directors" means the Board of Directors of the Company.
2.4 "Committee" means the Compensation Sub-Committee, a subcommittee of the
Human Resources Committee as initially appointed by the Board of Directors and
as appointed from time to time by written action of the Board of Directors.
2.5 "Company" means Fund American Enterprises Holdings, Inc. (formerly The Fund
American Companies, Inc.), a Delaware corporation, and its successors and
assigns.
2.6 "Compensation" means, by type, Base Salary, cash bonuses, performance units,
stock appreciation rights, performance shares, restricted stock, Director's
Fees, warrants, stock options and other qualifying remuneration paid or
otherwise payable by Fund American, as determined by the Committee.
<PAGE>
2.7 "Deferral Period" means the Plan Year(s) in which the Participant would
otherwise receive Compensation but for the election made to defer such
Compensation pursuant to ARTICLE 4.
2.8 "Deferred Compensation" means Compensation deferred pursuant to this Plan.
2.9 "Deferred Compensation Account" means the individual account maintained
under the Plan for a Participant.
2.10 "Deferred Compensation Election Form" means the standardized election form
that each Participant must execute in accordance with ARTICLE 4 in order to
participate in the Plan, an example of which is attached hereto as EXHIBIT #1.
2.11 "Director" means a director of the Company who is not an employee of Fund
American.
2.12 "Director's Fees" means any annual retainer amount plus all fees for
meetings attended of the Company.
2.13 "Eligible Participant" means Directors, Officers and Key Employees of Fund
American designated by the Committee as eligible to participate in the Plan.
2.14 "FFC Share(s)" means a share(s) of Fund American Enterprises Holdings,
Inc., common stock ($1.00 par value) as listed on the New York Stock Exchange
(symbol FFC).
2.15 "Fund American" means the Company and certain of its wholly-owned
affiliates as designated by the Committee or the Board of Directors from time to
time.
2.16 "Investment Option" means an option made available to Participants under
ARTICLE 6.
2.17 "Investment Option Election" means a Participant election made under
ARTICLE 6.
2.18 "Key Employee" means any executive employee or other overtime-exempt
employee of Fund American that the Committee in its sole discretion decides is
important to the ongoing business objectives of Fund American.
2.19 "Market Price of FFC Share(s)" means the closing price per share of FFC
listed on the NYSE composite tape or, if the NYSE is closed for a particular
day, the closing NYSE price of FFC on the previous day.
2.20 "Officer" means an officer of Fund American as defined in the Corporate
By-Laws.
2.21 "Participant" for any Plan Year means an Eligible Participant who elects to
participate in the Plan in accordance with the procedures set forth in ARTICLE
6.
2.22 "Plan" means the Fund American Voluntary Deferred Compensation Plan as
embodied herein and as amended from time to time.
2.23 "Plan Year" means the twelve (12) month calendar year beginning January 1
and ending December 31, or shorter period as the case may be in the year the
Plan is adopted or terminated.
<PAGE>
2.24 "Valuation Date" means the last business day of either a calendar year or
calendar quarter, as the Committee will determine from time to time.
2.25 "Construction" The masculine pronoun shall be deemed to include the
feminine, and the singular number shall be deemed to include the plural unless a
different meaning is plainly required by the context.
ARTICLE 3
ELIGIBILITY
Each Director who receives Director 's Fees, and each Officer and Key
Employee who receives Compensation as an employee of Fund American, shall be
eligible to participate in the Plan if selected by the Committee. The Committee
has total discretion to determine who is eligible to defer Compensation on a
Plan Year by Plan Year basis.
ARTICLE 4
PARTICIPATION
4.1 Election To Participate. Subject to Sections 4.2, in order to participate in
the Plan for a particular Plan Year, an eligible Director, Officer, or Key
Employee must make a valid election by executing and filing with the Committee,
before the commencement of such Plan Year, a Deferred Compensation Election
Form, an example of which is attached hereto as EXHIBIT #1.
4.2 (i) New Participant. Notwithstanding Section 4.1, but subject to Section
4.2(ii), a newly appointed Director, or newly hired Officer or Key Employee, who
becomes an Eligible Participant after the first day of the Plan Year, may elect
to participate in the Plan for such Plan Year with respect to future
Compensation by filing a Deferred Compensation Election Form within fifteen (15)
days after his initial date of appointment or employment.
(ii) 365 Day Existing Option Timing Election. Notwithstanding Section 4.1,
and solely for purposes of the transition rule for converting Existing Options
(see Section 6.9 herein), an election to convert Existing Options must be made
on a Deferred Compensation Election Form at least 365 calendar days prior to the
date (the "Trigger Date") on which such Existing Option(s)either:
1) becomes no longer subject to a risk of forfeiture (e. g. restricted
stock);
2) lapses or is no longer exercisable (e. g. options, warrants, SARs);
or
3) is deemed earned and payable by the Board of Directors (e.g.
performance shares/units).
4.3 Election Not Revocable. Except as provided in Section 8.5, a Deferred
Compensation Election Form, once executed and filed with the Committee, cannot
be revoked for such Compensation elected to be deferred pursuant to such form.
<PAGE>
4.4 Vesting. A Participant will be vested in his entire Deferred Compensation
Account balance at all times and will not be subject to forfeiture for any
reason.
4.5 New Elections Permitted for Each Year. A Participant is not required to
defer future Compensation by reason of making an election to defer Compensation
for current or prior Plan Years. Future Compensation can only be deferred by
filing a Deferred Compensation Election Form for the appropriate Plan Year.
4.6 Minimum Amounts. The minimum amount of Compensation which may be deferred by
an Eligible Participant for any Plan Year is $5,000 for each particular type of
Compensation. The maximum amount of Compensation which may be deferred for any
Plan Year is 100%of an Eligible Participant 's Compensation for such Plan Year.
4.7 Rounding. Subject to the minimum deferral requirement (Section 4.6), if a
Participant elects to defer less than 100%of a particular type of Compensation
for such Plan Year, such deferral will be limited to even dollar amounts rounded
to the closest $5,000 increment. In situations where the dollar amount of such
particular type of Compensation is not yet fixed or determinable, Participants
can elect to defer a stated percentage (%) of such Compensation in
10%increments, subject to rounding to the closest $5,000 increment.
ARTICLE 5
GENERAL PROVISIONS
5.1 No Right to Payment Except as Provided in Plan. No Participant, or other
Eligible Participant or Beneficiary, shall have any right to any payment or
benefit hereunder except to the extent provided in the Plan.
5.2 Employment Rights. The employment rights of any Participant or other
Eligible Participant shall not be enlarged, guaranteed or affected by reason of
the provisions of the Plan.
5.3 Recipient Under a Disability. If the Committee determines that any person to
whom a payment is due hereunder is a minor, or is adjudicated incompetent by
reason of physical or mental disability, the Committee shall have the power to
cause the payments becoming due to such person to be made to the legal guardian
for the benefit of the minor or incompetent, without responsibility of Fund
American or the Committee to see to the application of such payment, unless
prior to such payment claim is made therefor by a duly appointed legal
representative. Payments made pursuant to such power shall operate as a complete
discharge of Fund American and the Committee.
5.4 Designation of Beneficiary. Each Participant may designate any person(s)or
legal entity(ies), including his estate, as his Beneficiary under the Plan in
writing to the Committee. A Participant may at any time revoke or change his
designation of Beneficiary by writing to the Committee. If no person or legal
entity shall be designated by a Participant as his Beneficiary, or if no
designated Beneficiary survives him, his estate shall be his Beneficiary.
5.5 Elections. Any election made or notice given by a Participant pursuant to
the Plan shall be in writing to the Committee, or to such representative as may
be designated by the Committee
<PAGE>
for such purpose. Notice shall be deemed to have been made or given on the date
received by the Committee or its designated representative.
5.6 Effect on Other Plans. No amount of Compensation withheld under the terms of
this Plan shall be included as compensation under any tax-qualified plan
sponsored by Fund American.
5.7 Controlling Law. The validity of the Plan or any of its provisions shall be
determined under, and it shall be construed and administered according to, the
laws of the State of Vermont.
ARTICLE 6
DEFERRED COMPENSATION ACCOUNTS
6.1 Accounts. Amounts invested in any Investment Option may be transferred
annually among any available Investment Option (including a transfer to/from the
Phantom Share Investment Option) in accordance with procedures established by
the Committee. Such transfer election may be made only within the 10-business
day period commencing on the third business day following release of the Company
's third quarter financial information.
An Investment Option election shall remain in effect for future Deferred
Compensation (including amounts deferred in subsequent Plan Years) unless and
until a new Investment Option Election is filed with the Committee.
6.2 Adjustments To Accounts. The balance in a Participant's Deferred
Compensation Account at any will be calculated on a daily basis by: i)
aggregating all current or prior Plan Years Deferred Compensation elected
pursuant to ARTICLE 4; ii) adding (subtracting) thereto the cumulative interest
equivalent, whether positive or negative, earned on such Deferred Compensation
computed in accordance with the rules of Sections 6.3,6.4 and 6.5; and iii) from
such total obtained, subtracting the aggregate payments made to the Participant
in current or prior Plan Years in accordance with ARTICLE 8 and ARTICLE 10.
6.3 Investment of Deferred Compensation. Deferred Compensation shall be
"theoretically invested " under any Investment Options described below as
elected by the Participant.
6.4 Prime Rate Investment Option. Interest equivalents, equal to the product of:
i) Daily Prime Rate; multiplied by ii)the Deferred Compensation balance existing
as of the end of the previous day in the Prime Rate Investment Option, shall be
credited each day to a Participant 's Deferred Compensation Account.
6.4(a) Daily Prime Rate. Expressed as a percentage, the "Daily Prime Rate"
as described in Section 6.4 will be calculated by dividing the "base rate" of
interest announced publicly by Citibank, N. A. in New York, N. Y. (or prime or
base rate of another large commercial bank selected by the Committee), as in
effect on the last business day of each month, by 360.
6.5 Phantom Share Investment Option. Interest equivalents shall be credited to
(subtracted from) amounts in the Phantom Share Investment Option on a daily
basis. Such daily interest equivalents shall be calculated as follows: i) take
the aggregate number of Phantom Shares in a Participant's Phantom Share
Investment Option at the close of business on the preceding calendar
<PAGE>
day; multiplied by ii) the difference between the FFC Share closing Market Price
on the current calendar day, plus dividends paid or payable, as defined in
Section 6.5(c), with respect to a single FFC Share, and the FFC Share closing
Market Price on the preceding calendar day. For purposes of comparability, the
above calculation shall be adjusted for any stock splits or stock dividends
occurring during the current calendar day which affects the number of Phantom
Shares a Participant held on the preceding calendar day.
6.5(a) Phantom Shares Granted to Participant. Unless the transition rule
for exchanging existing stock rights applies (pursuant to Section 6.9), and
subject to the Phantom Share Cumulative Dollar Limitation contained at Section
6.10(b), the number of Phantom Shares granted to a Participant will be
determined by dividing the dollar amount of Deferred Compensation allocated to
the Phantom Share Investment Option by the Conversion Price. Such total amount
of Phantom Shares determined will then be rounded to the next one-tenth (1/10)
Phantom Share.
6.5(b) Conversion Price. Other than Compensation being deferred pursuant
to Section 6.9, the Conversion Price of FFC Shares used to calculate the number
of Phantom Shares to be added to a Participant 's Deferred Compensation Account
will be the closing Market Price of FFC Shares at the end of the business day
within the Plan Year where such Deferred Compensation would otherwise have been
paid to the Participant if he had not elected to participate in the Plan.
6.5(c) Dividends Reinvested in Phantom Share Investment Option. For
purposes of Section 6.5, dividends "paid or payable" shall mean either in cash
or property, but shall exclude stock dividends or stock splits, as the case may
be. Further, dividends paid or declared payable on the preceding day will be
treated as automatically reinvested in FFC Shares as of the end of such day at
the closing Market Price of FFC Shares; provided the Participant 's account held
Phantom Shares on the last day the Company declares as the date stockholders of
record are entitled to receive such dividend on FFC Shares (i. e. the
"exdividend" date).
6.5(d)Other Dilutive and Anti-Dilutive Transactions Affecting Phantom
Shares. In addition to Section 6.5(c), and subject to other provisions in the
Plan, the Committee has the discretion to make appropriate adjustments to a
Participant's account invested in the Phantom Share Investment Option where a
"capital transaction" or "corporate reorganization" has the affect of changing
the economic equivalent number of Phantom Shares that a Participant has been
credited under this Plan.
The Committee shall make an adjustment to each Participant 's account so
affected (if any), either positive or negative as the case may be, to ensure
that neither unintended economic benefits nor detriments are conferred on a
Participant solely by reason of such capital transaction or corporate
reorganization.
6.5(e) Capital Transaction or Corporate Reorganization. Solely for
purposes of Section 6.5(d), a "capital transaction" or "corporate reorganization
" shall not be limited to its ordinary meaning if in fact a Participant would be
conferred an economic benefit or detriment by some other corporate transaction
which is not literally considered a capital transaction or corporate
reorganization under common business usage of said terms.
<PAGE>
6.6 Equity Fund Investment Option. Interest equivalents, equal to the product
of: i) the daily published total return for the Oakmark Fund; multiplied by ii)
the Deferred Compensation balance existing as of the end of the previous day in
the Equity Fund Investment Option, shall be credited each day to a Participant's
Deferred Compensation Account.
6.7 Fixed-Income Fund Investment Option. Interest equivalents, equal to the
product of: i) the daily published total return for the PIMCo Total Return Fund;
multiplied by ii) the Deferred Compensation balance existing as of the end of
the previous day in the Fixed-Income Fund Investment Option, shall be credited
each day to a Participant 's Deferred Compensation Account.
6.8 Other Investment Options. The Committee may make other Investment Options
available under the Plan from time to time. Earnings (loss) shall be credited to
(subtracted from) amounts invested in such other Investment Options on a daily
basis as determined by the Committee.
6.9 Transition Rule for Converting Existing Rights (or Derivative Rights) to FFC
Shares. For purposes of establishing a Participant's Deferred Compensation
Account, a transition rule shall apply for Participants electing to exchange and
convert stock options, SARs, warrants and other rights to FFC Shares (or
derivative rights) granted pursuant to the Fund American Long-Term Incentive
Plan or other contractual agreement between Fund American and the Participant
(collectively "Existing Options ").
6.9(a) Election to Exchange and Convert Existing Options. Eligible
Participants can, upon written election, choose to exchange and convert their
Existing Options either for Phantom Shares granted pursuant to this Plan and
calculated as set forth in the "Phantom Share Conversion Formula" contained in
Section 6.9(c) or alternatively, or in combination with the Phantom Share
Conversion Option, elect to exchange and convert Existing Options into the Prime
Rate Investment Option, calculated as set forth in the "Prime Rate Dollar
Equivalent Conversion Formula" contained in Section 6.9(d). Such conversion
privilege is still subject to all other provisions of this Plan, including the
minimum deferral rules of Article 4 and Article 8, the 365 day advance notice
requirement in Section 4.2(ii) and the Phantom Share Cumulative Dollar
Limitation in Section 6.10(b).
6.9(b) Conversion Price for Exchanging Existing Options. Solely for
purposes of Section 6.9, and in addition to the irrevocable election to
exchange and convert Existing Options pursuant to Section 6.9(a), the
Conversion Price of FFC Shares used to calculate the number of Phantom Shares
to be added to a Participant's Deferred Compensation Account will be the
closing Market Price of FFC Shares at the end of the business day elected by
the Participant and stated in the Deferred Compensation Election Form filed
with the Committee. Each Participant must select one of two allowable dates to
calculate the amount of Compensation being converted into this Plan:
1) the same date the election to irrevocably convert Existing Options
is made pursuant to Section 6.9(a); or
<PAGE>
2) Depending on the type of Compensation being converted, the
appropriate "Trigger Date " as the term is defined in Section
4.2(ii).
6.9(c) Phantom Share Conversion Formula.
([$A-$B]/$A) x C = D
Where A = Conversion Price of FFC Shares as defined in Section 6.5(b) or
6.9(b)
Where B = Weighted average exercise price for FFC Shares under Existing
Options
Where C = Total FFC Shares Participant could have purchased using Existing
Options
Where D =Total Phantom Shares issued to Participant in exchange for
Existing Options
6.9(d) Prime Rate Dollar Equivalent Conversion Formula.
[$A-$B] x C = D
Where A = Conversion Price of FFC Shares as defined in Section 6.5(b) or
6.9(b)
Where B = Weighted average exercise price for FFC Shares under Existing
Options
Where C = Total FFC Shares Participant could have purchased using Existing
Options
Where D = Total Dollar Equivalent credited to Prime Rate Investment Option
6.9(e)Legal Rights after Exchanging Existing Options. Notwithstanding
anything to the contrary, a Participant who makes an irrevocable election to
convert Existing Options pursuant to Section 6.9 herein understands that they
are forfeiting all legal rights to such Existing Options that they held
immediately prior to making the election to convert such Existing Options into
this Plan.
6.10 Investment Option Election. Amounts invested in any Investment Option may
be transferred annually among any available Investment Option (including a
transfer to/from the Phantom Share Investment Option) in accordance with
procedures established by the Committee. Such transfer election may be made only
within the 10-business day period commencing on the third business day following
release of the Company 's third quarter financial information.
An Investment Option election shall remain in effect for future Deferred
Compensation (including amounts deferred in subsequent Plan Years) unless and
until a new Investment Option Election is filed with the Committee.
6. 10(a) Investment Option Allocation. Subject to the Phantom Share
Cumulative Dollar Limitation contained at Section 6.10(b), each Participant can
elect to allocate each type of Deferred Compensation for a particular Plan Year
among the available Investment Options as described in Sections 6.4,6.5,6.6,6.7
and 6.8. However, if more than one Investment Option is
<PAGE>
selected for a type of Deferred Compensation such allocation cannot be less than
$5,000 with respect to any one Investment Option so elected.
6.10(b) Phantom Share Cumulative Dollar Limitation. Notwithstanding a
Participant 's ability to allocate Deferred Compensation among the available
Investment Options, a Participant 's election to invest Deferred Compensation in
the Phantom Share Investment Option may be limited (either in whole or in part)
as described herein:
(i) Without requiring authorization from the Board of Directors, but
subject to all other provisions in this Plan, a Participant may
continue to invest Deferred Compensation in the Phantom Share
Investment Option to the extent the portion of a Participant 's
Deferred Compensation Account balance invested in the Phantom Share
Investment Option does not have a fair market value which exceeds
twenty million dollars ($20 million).
(ii) Unless authorized by the Board of Directors, a Participant is
precluded from investing additional Deferred Compensation in the
Phantom Share Investment Option if the portion of a Participant's
Deferred Compensation Account balance previously invested in the
Phantom Share Investment Option has a fair market value which
exceeds twenty million dollars ($20 million).
6.11 Deletion of Investment Options. Except as provided in Section 15.2, the
Committee cannot delete or alter the terms of an available Investment Option
without the written permission of those Participants affected by such proposed
amendment whose Deferred Compensation is invested in such Investment Option.
6.12 Effect On Other Plans. If, because of a Participant's deferral of
Compensation under this Plan, a Participant's benefits in any other Fund
American plan (either qualified or nonqualified) are reduced, Fund American
shall provide a supplemental credit. Such supplemental credit however, shall not
be provided through this Plan but through some other plan, agreement or other
mechanism as the Committee deems appropriate.
ARTICLE 7
PARTICIPANTS' RIGHTS UNSECURED
7.1 Unsecured Creditors. Amounts credited to Deferred Compensation Accounts
shall be dealt with in all respects as working capital of Fund American,
therefore the right of a Participant to receive any distribution hereunder shall
be an unsecured claim against the general assets of Fund American.
7.2 No Actual Investment Required. Subject to ARTICLE XVI, no assets of Fund
American shall in any way be held in trust for, or be subject to, any prior
claim by a Director, an Officer, or a Key Employee, or his Beneficiary under the
Plan. Further, neither Fund American nor the Committee shall have any duty
whatsoever to invest any amounts credited to any Deferred Compensation Accounts
established under the Plan.
<PAGE>
ARTICLE 8
PAYMENT OF DEFERRED COMPENSATION
8.1 Commencement of Benefits. Subject to Section 8.1(a), when, and at the same
time, an Eligible Participant elects to defer Compensation for any particular
Plan Year, he shall also elect on the "Deferred Compensation Election Form" to
have the portion of his Deferred Compensation Account balance attributable to
such current Plan Year deferral commence to be paid on the first day of the Plan
Year following the Plan Year in which the earlier event occurs:
(i) upon separation from service due to either termination, normal
retirement, death or disability; or
(ii) upon the date such Participant attains a selected age.
8.1(a) 365 Day Minimum Deferral Period. Notwithstanding the time elected
for the commencement of benefits pursuant to Section 8.1, commencement of
benefits will not occur prior to the expiration of a 365 day period beginning
the day after the date on which an election to defer compensation became
effective as provided in this Plan.
8.2 Payment Method Election. At the time the deferral election is filed pursuant
to ARTICLE 4, Participants must also elect the method of receiving payment of
their Deferred Compensation Account balance upon the first day of the Plan Year
following the expiration of the elected deferral period. Each Participant shall
elect to receive payment of their account either in:
(i) one lump sum on the benefit commencement date;
(ii) annual installments, with interest, over a specified period
(determined in accordance with Section 8.3), beginning on the
commencement date; or
(iii) an annual installment/lump-sum combination where 25%, 50% or 75%of
the Deferred Compensation Account balance is paid in annual
installments over a specified period (determined in accordance with
Section 8.3), beginning on the commencement date, and the remaining
balance paid in lump-sum, with accrued interest, at the end of the
elected payment period.
8.2(a) Installment Payout Formula. If a Participant selects payment option
(ii) or (iii) of Section 8.2, the annual installment amount for a particular
Plan Year will be computed as follows:
$W = ($X/[Y-Z])
Where W =Installment amount received by Participant in a particular Plan
Year.
Where X =Participant 's Deferred Compensation Account balance at end of
prior Plan Year.
<PAGE>
Where Y =Number of years originally elected by Participant for the payment
period.
Where Z =Number of years in the elected payment period already elapsed.
8.2(b) Deferral Election Override. Notwithstanding anything contained
herein to the contrary, with respect to any deferral election effective for
Compensation earned after 1996, in the event that any amounts payable to a
Participant hereunder (when aggregated with any other remuneration) would not be
deductible by Fund American as a result of Code Section 162(m), such amounts
shall not be paid until the first Plan Year in which the amount would be
deductible under Code Section 162(m).
8.3 Payment Period Election. At the time an Eligible Participant elects to be a
Participant for any Plan Year, he shall concurrently elect the number of years,
up to a maximum of fifteen (15), over which his Deferred Compensation Account
shall be paid out upon the expiration of the Deferral Period.
8.3(a) Automatic Payment Period Override. Notwithstanding the
Participant's payment period election pursuant to Section 8.3, in the case of
termination for cause (Section 8.6) or death of Participant (ARTICLE 10), such
payment period election will be automatically changed to the lump-sum option
contained at Section 8.2(i).
8.4 Payment Denomination. All payments made to Participants shall be paid solely
in cash.
8.5 Change of Prior Elections. Subject to the consent of the Committee, an
Eligible Participant may file a request to change his prior election with
respect to the timing of commencement of benefits (Section 8.l), payment method
(Section 8.2) and/or payment period (Section 8.3). Such new election must be
filed with the Committee at least 365 days prior to the date on which payment of
benefits would commence under either the original or the revised election. Only
one such request will be approved with respect to any Participant.
8.6 Termination for Cause. Notwithstanding the payment period election made
under Section 8.3, if a Participant is terminated for cause as determined by the
Committee, payment of the entire amount remaining in his Deferred Compensation
Account for all Plan Years shall be made in one lump sum on the first day after
the end of the Plan Year in which termination occurred. Termination for cause
shall include gross negligence, willful misconduct and fraud against the Company
or any of its subsidiaries.
8.7 Hardship Withdrawal. Upon application of any Participant and approval
thereof by the Committee, the Participant may withdraw, by reason of hardship,
part or all of his Deferred Compensation Account. "Hardship" shall mean an
unanticipated emergency situation in the Participant 's financial affairs beyond
the Participant 's control, including illness or an accident involving the
Participant, his dependents or other members of his family, or other significant
financial emergency, as determined by the Committee in its sole discretion.
8.8 Accrued Interest Period. For purposes of determining the benefits to be paid
to Participants under ARTICLES 8 and 10, interest on such Deferred Compensation
Account balance will continue to accrue through the end of November in the Plan
Year prior to the Plan
<PAGE>
Year in which payment of benefits will be made. Interest for the month of
December in the Plan Year prior to the Plan Year in which payment of benefits
will be made is calculated by using the following formula:
[ $X x Y%]x 30 = $Z
Where X = Participant 's Deferred Compensation Account balance at November
30th
Where Y = Daily Prime Rate (see Section 6.4(a)) in effect on November 30th
Where Z =Additional accrued interest due Participant for the month of
December
ARTICLE 9
VALUATION DATE
9.1 Valuation. As of each Valuation Date, the Deferred Compensation Account of
each Participant shall be valued by the Committee. The current value, and the
change in value from the prior valuation (whether positive or negative), shall
be communicated in writing to each Participant within forty-five (45) days after
such Valuation Date.
9.2 Valuation Dates. A Valuation Date shall, at a minimum, be four times during
a Plan Year ending on each of the quarterly periods March 31, June 30, September
30 and December 31.
ARTICLE 10
DEATH OF PARTICIPANT
Notwithstanding the payment period election made under Section 8.3, a
Participant's estate or designated Beneficiary shall be paid the value of his
Deferred Compensation Account in one lump sum as of the first day after the end
of the Plan Year in which his death occurred. Interest on such balance shall be
determined in accordance with the rules contained in Section 8.8.
ARTICLE 11
ALIENATION
Anticipation, alienation, sale, transfer, assignment, pledge or other
encumbrance of any payments or benefits under the Plan shall not be permitted or
recognized, and to the extent permitted by law, no such payments or benefits
shall be subject to legal process or attachment for the payment of any claim of
any person entitled to receive the same.
<PAGE>
ARTICLE 12
TAX WITHHOLDING
12.1 Withholding. Subject to Sections 12.2 and 12.3, Fund American shall deduct
from all payments under this Plan the Participant 's share of any taxes required
to be withheld by any Federal, state or local government. The Participants and
their Beneficiaries, distributees and personal representatives will bear any and
all Federal, foreign, state, local income taxes or any other taxes imposed on
Participants on amounts under this Plan.
12.2 FICA Taxes. Pursuant to IRC Section 3121(v), Compensation deferred pursuant
to this Plan is subject to FICA at the time of deferral rather than at the time
of distribution to the Participant. Accordingly, all Participants who have not
yet reached the maximum compensation levels subject to FICA at the time
Compensation is deferred herein will be required to pay (by payroll deduction or
check) to Fund American the Participant's share of FICA taxes due and payable.
12.3 Taxes Due at Deferral Date Other than FICA Taxes. If any of the taxes
referred to in Section 12.1 are due at the time of deferral, instead of at the
time of payout, the Participant will be required to pay (by payroll deduction or
check) to Fund American the Participant's share of any such taxes due and
payable.
ARTICLE 13
CONSENT
By electing to become a Participant, each Director, Officer and Key
Employee shall be deemed conclusively to have accepted and consented to all
terms of the Plan and all actions or decisions made by the Company, the Board or
the Committee with regard to the Plan. Such terms and consent shall also apply
to, and be binding upon, the Beneficiaries, distributees and personal
representatives and other successors in interest of each Participant.
ARTICLE 14
SEVERABILITY
In the event any provision of this Plan would serve to invalidate the
Plan, that provision shall be deemed to be null and void, and the Plan shall be
construed as if it did not contain the particular provision that would make it
invalid.
ARTICLE 15
AMENDMENT AND TERMINATION
15.1 Board May Amend or Terminate. Subject to Sections 15.2 and 15.3, the Board
of Directors, may at any time modify or amend any or all of the provisions of
the Plan or may at any time terminate the Plan.
<PAGE>
15.2 (i) Investment Options. Notwithstanding Section 15.1, the Board of
Directors cannot delete or alter the terms of the Investment Options, contained
herein at Sections 6.4,6.5,6.6 and 6.7, without the written permission of those
Participants, whose Deferred Compensation Account is invested in such Investment
Option(s), who would be affected by such proposed amendment. However, nothing
contained herein shall prevent the Board of Directors from substituting a new
investment option for the Phantom Share Investment Option if the common stock of
the Company (currently FFC Shares) is no longer publicly traded on a nationally
recognized stock exchange. In the event of such an occurrence, the Board of
Directors shall have the sole authority to substitute a new Investment Option
and allow only those Participants affected to transfer their Phantom Share
account balance to an existing Investment Option if the substituted Investment
Option is not acceptable to the particular Participant.
(ii) Fiduciary Guidelines. Notwithstanding Section 15.1 and Section
15.2(i), the Board of Directors will not make amendments or terminate the Plan
if such amendments or termination would reduce a Participant's balance in his
Deferred Compensation Account. Further, the Board of Directors will not make
amendments which would in any way eliminate the express requirement in Section
16.1 requiring the establishment of a Rabbi Trust in the event of a Change of
Control if one has not previously been established.
15.3 Termination. In the event of termination of the Plan, the Committee shall
give written notice to each Participant that the entire balance in his Deferred
Compensation Account will be distributed in the manner initially elected by each
Participant pursuant to ARTICLE VIII. Further, pursuant to the responsibility
vested with the Committee as stated in Section 17.1, the Committee will evaluate
the advisability of establishing a Rabbi Trust--if one does not already
exist--in light of the circumstances that caused the Board of Directors to
terminate the Plan.
ARTICLE 16
CHANGE OF CONTROL
16.1 Funding of Trust. Notwithstanding ARTICLE VII, upon a "Change of Control"
as defined in Section 16.2, the Board of Directors is required to cause the
immediate contribution of funds to a trust--if not previously established--(i.e.
"Rabbi Trust" established in accordance with Rev. Proc. 92-64 (or any
successor)or other funding mechanism approved by the Internal Revenue Service
which would not result in Plan Participants being in constructive receipt of
income) for the benefit of each Plan Participant, as beneficiary. The assets of
such trust shall at all times be subject to the claims of general creditors of
Fund American. Such contribution will be equal to the balance in each
Participant's Deferred Compensation Account as of the Change of Control date.
Further, if the Plan is not terminated upon such Change of Control, Fund
American will continue to contribute to the trust, on a monthly basis, the
amount of Compensation being deferred by each Participant after the Change of
Control.
16.2 Change of Control. For purposes of this Plan, a "Change of Control" shall
occur if:
i) any person or group (within the meaning of Sections 13(d) and
14(d)(2) of the Securities Exchange Act of 1934), other than
American Express Company or the Company, becomes the beneficial
owner (within the meaning of Rule 13d-3 under
<PAGE>
such Exchange Act) of thirty-five percent (35%) or more of the
Company 's then outstanding FFC Shares;
ii) As defined in Section 16.3, the "Incumbent Board of Directors",
cease to constitute a majority of the Board of Directors of the
Company; or
iii) the business of the Company for which the Participant's services are
principally performed is disposed of by the Company pursuant to a
sale or other disposition of all or substantially all of the
business or business related assets of the Company (including stock
of a subsidiary of the Company).
16.3 Incumbent Board of Directors. Incumbent Board of Directors shall mean those
individuals who, as of April 9, 1992, constituted the Board of Directors or,
alternatively, those members elected or nominated after April 9, 1992 who were
approved for such election or nomination by a vote of at least a majority of the
directors then comprising the Incumbent Board of Directors. Further, individuals
shall be excluded whose initial assumption of office is or was in connection
with an actual or threatened election contest relating to the election of the
directors of the Company (as used in rule 14a-11 under the Securities Exchange
Act of 1934).
ARTICLE 17
PLAN ADMINISTRATION
17.1 Committee. The general administration of the Plan, the decision to
establish a trust and the responsibility for carrying out its provisions shall
be placed in the Committee.
17.2 Determinations of the Committee. Subject to the limitations of the Plan,
the Committee shall from time to time establish rules for the administration and
interpretation of the Plan and the transaction of its business. The
determination of the Committee as to any disputed question shall be conclusive.
17.3 Majority Vote. Any act which the Plan authorizes or requires the Committee
to do may be done by a majority (expressed from time to time by a vote at a
meeting or in writing without a meeting) and shall constitute the action of the
Committee, and shall have the same effect for all purposes as if assented to by
all members of the Committee.
17.4 Authorization of Committee Members. The members of the Committee may
authorize one or more of their number to execute or deliver any instrument, make
any payment, or perform any other act which the Plan authorizes or requires the
Committee to do.
17.5 Agents. The Committee may employ or retain agents to perform such clerical,
accounting, and other services as they may require in carrying out the
provisions of the Plan.
17.6 Costs. Any and all such costs in administering this Plan will be paid and
incurred by Fund American.
17.7 Notices. All written notices or elections as required herein shall be sent
either by U. S. mail, overnight carrier service or personal delivery to the
address below:
<PAGE>
Fund American Enterprises Holdings, Inc.
80 South Main Street
Hanover NH 03755
Attention: Michael S. Paquette
<PAGE>
Exhibit (4)(d)
WHITE MOUNTAINS INSURANCE GROUP, INC.
VOLUNTARY DEFERRED COMPENSATION PLAN
TERMINATION AMENDMENT
Amendment, adopted by WHITE MOUNTAINS INSURANCE GROUP, INC. (formerly
known as Fund American Enterprises Holdings, Inc.), a Delaware corporation (the
"Company"). This Amendment shall take effect as of the business day which
immediately precedes the date on which the Company concludes its
re-domestication as a Bermuda corporation.
BACKGROUND --
Pursuant to Article 15 of the WHITE MOUNTAINS INSURANCE GROUP, INC. VOLUNTARY
DEFERRED COMPENSATION PLAN - formerly known as the Fund American Voluntary
Deferred Compensation Plan - (the "Plan"), the Company desires to amend the Plan
in certain respects appropriate to termination of the Plan.
THEREFORE, the Plan is amended as follows:
1. Sections 8.1 and 8.1(a) of the Plan are amended to read:
8.1 Commencement of Benefits; Termination Benefits. Subject to Section 8.1(a),
when, and at the same time, an Eligible Participant elects to defer
Compensation for any particular Plan Year, he shall also elect on the
"Deferred Compensation Election Form" to have the portion of his Deferred
Compensation Account balance attributable to such current Plan Year
deferral commence to be paid on the first day of the Plan Year following
the Plan Year in which the earlier event occurs:
(i) upon separation from service due to either termination, normal
retirement, death or disability; or
(ii) upon the date such Participant attains a selected age.
However, upon termination of the Plan, notwithstanding any prior elections
in regard to commencement or timing of benefit payments -
(A) Benefits accrued prior to the termination date by Participants who
are then active with the Company shall be paid as soon as
practicable following the effective date of such termination. Such
accrued benefits shall be paid in one lump sum, in cash, as soon as
practicable following the Plan termination date (unless otherwise
determined by the Compensation Sub-Committee of the Board of
Directors), provided that (notwithstanding Section 8.4) each such
active Participant shall be given an opportunity to elect to have
all or a portion of such benefit paid in shares of the Company's
common stock, valued at the closing price on the last trading day
prior to the date of payment. Payment of such lump sum benefit shall
be in full settlement of all claims of an active Participant for
benefits under the Plan, and the Company may require the Participant
to execute a written
<PAGE>
acknowledgment and release confirming that he/she has no further
claim for benefits under the Plan.
(B) Participants who are not active with the Company on the Plan
termination date shall receive a single lump sum payment in lieu of
their remaining accrued Plan benefits (i.e. to the extent such
benefits have not been paid to them prior to the Plan termination
date). Such payments shall be made as soon as practicable following
the termination date. The amount of the lump sum payment to a
Participant shall be based upon the actuarial value of his/her
remaining accrued Plan benefits (but shall not be less than 100% of
such value), as determined by the Committee in its sole discretion,
taking into account the amount and timing of income taxes payable
with respect to such benefits. Such lump sum payment shall be in
full settlement of all claims of the inactive Participant for
benefits under the Plan, and the Company may require the Participant
to execute a written acknowledgment and release confirming that
he/she has no further claim for benefits under the Plan.
8.1(a) 365 Day Minimum Deferral Period. Notwithstanding the time elected for the
commencement of benefits pursuant to Section 8.1, commencement of
benefits will not occur prior to the expiration of a 365 day period
beginning the day after the date on which an election to defer
compensation became effective as provided in this Plan. However, this
minimum period shall not apply to that portion of any lump sum payment
under Section 8.1, resulting from termination of the Plan by the Company,
and attributable to a deferral election which became effective less than
365 days prior to the date of the lump sum payment.
2. Sections 8.2(b) and 15.3 of the Plan are deleted.
This Termination Amendment was approved by the Company's Compensation
Sub-Committee on August 27, 1999 and ratified by its Board of Directors on
September 23, 1999.
ATTEST
/s/
-----------------------------------
Gordon S. Macklin - Chairman of the
Compensation Sub-Committee
<PAGE>
Exhibit (5)(a)
[Miller, Canfield, Paddock and Stone, P.L.C. Letterhead]
October 19, 1999
White Mountains Insurance Group, Inc.
80 South Main Street
Hanover, New Hampshire 03755-2053
Gentlemen:
With respect to the registration statement on Form S-8 (the "Registration
Statement") being filed with the Securities and Exchange Commission (the
"Commission") by White Mountains Insurance Group, Inc. (formerly "Fund American
Enterprises Holdings, Inc."), a Delaware corporation (the "Company"), for the
purpose of registering under the Securities Act of 1933, as amended (the "Act"),
150,000 shares of the common stock, $1.00 par value, of the Company (the
"Registered Shares"), to be issued upon the termination of the Company's
Voluntary Deferred Compensation Plan (the "Plan") we, as your counsel, have
examined such certificates, instruments, and documents and have reviewed such
questions of law as we have considered necessary or appropriate for the purposes
of this opinion. On the basis of such examination and review, we advise you
that, in our opinion:
1. The Registered Shares have been legally authorized.
2. When the Registration Statement has become effective and any Registered
Shares have been acquired by a Plan participant in accordance with the Plan,
said Registered Shares will be validly issued, fully paid, and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving this consent, we do not thereby admit that we
are within the category of persons whose consent is required under Section 7 of
the Act or the rules and regulations of the Commission.
Very truly yours,
MILLER, CANFIELD, PADDOCK AND STONE, P.L.C.
<PAGE>
Exhibit 23(b)
Consent of Independent Auditors
The Board of Directors
White Mountains Insurance Group, Inc.:
We consent to the incorporation by reference in the Registration Statement on
Form S-8 of White Mountains Insurance Group, Inc. (formerly "Fund American
Enterprises Holdings, Inc."), pertaining to the Voluntary Deferred Compensation
Plan, of our report dated February 12, 1999, except for note 20, which is as of
March 25, 1999, relating to the consolidated balance sheets of White Mountains
Insurance Group, Inc. and subsidiaries as of December 31, 1998, and 1997, and
the related consolidated income statements, statements of shareholders' equity,
and cash flows for each of the years in the two-year period ended December 31,
1998, and all related schedules, which report is included in the December 31,
1998 annual report on Form 10-K of White Mountains Insurance Group, Inc.
KPMG LLP
Providence, Rhode Island
October 19, 1999
<PAGE>
Exhibit 23(c)
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement on
Form S-8 of White Mountains Insurance Group, Inc. (formerly "Fund American
Enterprises Holdings, Inc."), pertaining to the Voluntary Deferred Compensation
Plan, of our report dated March 21, 1997, with respect to the consolidated
financial statements and schedule of White Mountains Insurance Group, Inc.,
included in its Annual Report (Form 10-K) for the year ended December 31, 1996
filed with the Securities and Exchange Commission.
Ernst & Young LLP
New York, New York
October 19, 1999
<PAGE>
Exhibit 23(d)
Consent of Independent Accountants
We consent to the incorporation by reference in the Registration Statement on
Form S-8 of White Mountains Insurance Group, Inc. (formerly "Fund American
Enterprises Holdings, Inc."), pertaining to the Voluntary Deferred Compensation
Plan of our report dated January 26, 1999, except for the restatements and
reclassifications section in Note 2 as to which the date is August 4, 1999 with
respect to the consolidated financial statements of Financial Security Assurance
Holdings, Ltd. and Subsidiaries as of December 31, 1998 and 1997 and for each of
the three years in the period ended December 31, 1998, our report dated February
2, 1999, except for Note 17 as to which the date is February 24, 1999 with
respect to the consolidated financial statements of Folksamerica Holding
Company, Inc. and its subsidiaries as of and for the year ended December 31,
1998 and our report dated February 14, 1997 with respect to the consolidated
statements of operations, changes in stockholder's equity and cash flows of
Valley Group Inc. and Subsidiaries for the year ended December 31, 1996.
PricewaterhouseCoopers LLP
New York, New York
October 19, 1999
