<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)
DEFERRED BENEFIT 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, 14,000 shares $120.75 $1,690,500.00 $469.96
$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 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.
<PAGE>
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, 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
<PAGE>
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 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
<PAGE>
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 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
<PAGE>
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.
(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
<PAGE>
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:
(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
<PAGE>
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 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
<PAGE>
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.
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) Deferred Benefit Plan.*
(4)(d) Form of Deferred Benefit 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.*
<PAGE>
(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.
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.
<PAGE>
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 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
Deferred Benefit Plan (the "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.
Deferred Benefit 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
---------- ----- ----
/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
/s/ Director October 19, 1999
- ----------------------------------
Frank A. Olson
/s/ Director October 19, 1999
- ----------------------------------
Arthur Zankel
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
----------- -----------
(4)(c) Deferred Benefit Plan.*
(4)(d) Form of Deferred Benefit 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
DEFERRED BENEFIT PLAN
(December 31, 1992)
(Revised November 15, 1996)
ARTICLE I
PURPOSE OF PLAN
1.1 The purpose of this Plan is to provide eligible Officers and Key Employees
of Fund American with deferred retirement benefits. 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 retirement benefits 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 II
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 V.
2.3 "Board of Directors" means the Board of Directors of the Company.
2.4 "Cash Incentive Bonus" means the Participant's portion (if any) of Fund
American's annual cash bonus pool normally awarded by the Board of
Directors to Fund American employees shortly after the close of the
calendar year, which is the relevant time frame used to judge such
performance.
2.5 "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.
2.6 "Company" means Fund American Enterprises Holdings, Inc. (formerly The
Fund American Companies, Inc.), a Delaware corporation, and its successors
and assigns.
2.7 "Compensation" has the same meaning, with one exception, as the definition
contained in The Fund American Companies, Inc. Retirement Plan (terminated
10/3l/92), e.g. Base
<PAGE>
Salary and Cash Incentive Bonuses (also overtime pay and military pay if
applicable). Compensation specifically excludes performance units, stock
appreciation rights, performance shares, restricted stock, warrants, stock
options and other qualifying remuneration paid or otherwise payable by
Fund American. The one difference in the definition of Compensation for
this Plan is that all annual cash bonuses will be includible in
Compensation in the year earned rather than paid.
2.8 "Deferral Period" means the total aggregate period of time, expressed in
Plan Years, for which Deferred Retirement Benefits awarded for a
particular Plan Year are to be invested in the Plan and not yet deemed
payable to the Participant or his Beneficiary.
2.9 "Deferred Retirement Benefit" means the retirement benefit, expressed in
U.S. dollars, deferred pursuant to ARTICLE VI of this Plan.
2.10 "Deferred Benefit Account" means the individual account maintained under
the Plan for a Participant as determined under ARTICLE VI.
2.11 "Deferred Benefit Election Form" means the standardized election form that
each Participant must execute in accordance with ARTICLE IV, a copy which
is attached hereto as EXHIBIT #1.
2.12 "Director" means a director of the Company who is not an employee of Fund
American.
2.13 "FFC Share(s) " means a share(s) of Fund American Enterprises Holdings,
Inc. Common Stock ($1.OO par value) as listed on the New York Stock
Exchange (symbol FFC).
2.14 "Final Average Pay" has the same meaning as the definition contained in
The Fund American Companies, Inc. Retirement Plan (terminated 10/31/92),
i.e. the highest average Compensation of an employee for any five (5)
consecutive years falling within the ten (10) year period ending on the
employee's service separation date, but subject to an overall maximum cap
of 135% of the average Base Salary for the same applicable five year
averaging period.
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
pursuant to ARTICLE VI.
2.17 "Investment Option Election" means a Participant election made pursuant to
ARTICLE VI.
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.
<PAGE>
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
Bylaws.
2.21 "Participant" for any Plan Year means an Officer or Key Employee of Fund
American designated by the Committee as eligible to participate in the
Plan.
2.22 "Plan" means the Fund American Deferred Benefit 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.
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 III
ELIGIBILITY
Each Officer and Key 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 participate on a Plan
Year by Plan Year basis.
ARTICLE IV
PARTICIPATION
4.1 Election Form. Subject to Sections 4.2 and 4.3, an eligible Officer or Key
Employee should make a valid election by executing and filing with the
Committee, before the commencement of such Plan Year, a Deferred Benefit
Election Form, a copy of which is attached hereto as EXHIBIT #1.
4.2 New Employees. Notwithstanding Section 4.1, a newly hired Officer or Key
Employee who becomes a Participant after the first day of the current Plan
Year, may file a Deferred Benefit Election Form within fifteen (15) days
after his initial date of employment with respect to the Deferred
Retirement Benefit calculated on Compensation not yet earned for the
remaining portion of the Plan Year.
4.3 Default Elections. If a Participant fails to file a timely Deferred
Benefit Election Form in accordance with either Section 4.1 or 4.2, such
Participant will forego all opportunity to make an Investment Option
Election (Section 6.1l), a Payment Method Election (Section 8.2) and a
Payment Period Election (Section 8.3). Accordingly, failure to file a
<PAGE>
timely Deferred Benefit Election Form for a particular Plan Year will
result in default elections being automatically triggered, which provide
that:
(i) the current Plan Year's calculated Deferred Retirement Benefit will
be invested solely in the Prime Rate Investment Option.
(ii) commencement of benefits will occur upon the first day of the Plan
Year following the Plan Year in which termination of employment (for
any reason) occurs.
(iii) the sole method of benefit payment to Participant will be a lump
sum.
4.4 Election Not Revocable. Except as provided in Section 8.5, a Deferred
Benefit Election Form, once executed and filed with the Committee, cannot
be revoked for such current Plan Year's calculated Deferred Retirement
Benefit.
4.5 Vesting. A Participant will be vested in his entire Deferred Benefit
Account balance at all times and will not be subject to forfeiture for any
reason.
4.6 Participation in Deferred Compensation Plan Not Required. A Participant
need not also participate in the Fund American Voluntary Deferred
Compensation Plan in order to participate in this Plan for a particular
Plan Year.
4.7 New Elections Permitted for each year. All elections made on a Deferred
Benefit Election Form for a particular Plan Year have no effect on, nor
are affected by, elections made for future or past Plan Years. Each Plan
Year elections stand on their own.
ARTICLE V
GENERAL PROVISIONS
5.1 No Right To Payment Except as Provided in Plan. No 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 shall not be
enlarged, guaranteed or affected by reason of the provisions of the Plan.
5.3 Initial Participating Companies. Initially, no subsidiary other than Fund
American Enterprises, Inc. is currently permitted to participate in the
Plan. However, the Committee can decide at a future date to allow
inclusion of a new or previously excluded subsidiary(ies).
5.4 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
<PAGE>
by a duly appointed legal representative. Payments made pursuant to such
power shall operate as a complete discharge of Fund American and the
Committee.
5.5 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.
5.6 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 for such purpose. Notice shall be
deemed to have been made or given on the date received by the Committee or
its designated representative.
5.7 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 VI
DEFERRED BENEFIT ACCOUNTS
6.1 Accounts. Upon receipt of a Participant's valid Deferred Benefit Election
Form, the Committee shall establish, as a bookkeeping entry only, a
Deferred Benefit Account for such Participant. The Committee shall
thereafter record to each Participant's Deferred Benefit Account, as of
the last day of the previous Plan Year, the Deferred Retirement Benefit
amount calculated pursuant to Section 6.3.
6.2 Adjustments To Accounts. The balance in a Participant's Deferred Benefit
Account at any time will be calculated on a daily basis by: i) aggregating
all current or prior Plan Year Deferred Retirement Benefit amounts
calculated pursuant to Section 6.3; ii) adding (subtracting) thereto the
cumulative interest equivalent, whether positive or negative, earned on
such Deferred Retirement Benefit amounts computed in accordance with the
rules of Sections 6.4, 6.5 and 6.6, 6.7 and 6.8; and iii) from such total
obtained, subtracting the aggregate payments made to the Participant in
current or prior Plan Years in accordance with ARTICLE VIII and ARTICLE X.
6.3 Deferred Retirement Benefit. A Participant's total Deferred Retirement
Benefit amount for the current Plan Year shall be the sum of the following
components, each of which is considered a separate Deferred Retirement
Benefit solely for purposes of a Participant making an Investment Option
Election pursuant to Section 6.11:
(i) for Plan Years through 1996 only, five percent (5%) of a
Participant's Base Salary determined as of the beginning of a Plan
Year, subject to an inflation adjusted, maximum annual dollar amount
($9,240 for 1995) as published by the Internal Revenue Service for a
tax qualified plan commonly referred to as a 401(k) plan; and,
<PAGE>
(ii) the excess of: a) the lump sum present value equivalent of the
normal retirement benefit (i.e. a monthly annuity starting at age
65) computed as of the end of the current Plan Year, over b) the
lump sum present value equivalent of the normal retirement benefit
computed as of the end of the prior Plan Year.
Solely for purposes of this Section 6.3(ii), the calculation of each
Plan Year's normal retirement benefit shall employ recognized
actuarial principles and such other reasonable assumptions deemed
necessary by the Committee to achieve the stated objective of
providing each Participant with a retirement benefit which
approximates the benefit that a Participant would have been entitled
under The Fund American Companies, Inc. Retirement Plan, but
assuming that the mandatory "Top Heavy" rules and maximum
compensation limits imposed on all qualified plans did not exist.
Further, the removal of compensation limits does not change the
definition of Compensation as it is used in calculating Final
Average Pay as such term is defined in The Fund American Companies,
Inc. Retirement Plan except that the limitation of 135% of Base
Salary shall be eliminated. Notwithstanding any provision to the
contrary, for the purpose of determining any benefit under this Plan
the bonus for 1990 for John J. Byrne shall be limited to 135% of Mr.
Byrne's 1990 Base Salary.
6.3(a) Prospective Catch-up Adjustment. In recognition of the fact that the
calculation of the Deferred Retirement Benefit for a particular Plan Year
is based on estimates made as of the beginning of a Plan Year as to what
a Participant's Compensation will be for an entire Plan Year, a
prospective catch-up adjustment, either positive or negative, shall be
made if a Participant's actual Compensation differs from estimated
Compensation. Accordingly, such difference will be considered an
additional Deferred Retirement Benefit or Detriment, as the case may be,
but will be taken into account solely in determining the Deferred
Retirement Benefit amount for the Plan Year following the Plan Year to
which the adjustment relates.
6.4 Investment of Deferred Retirement Benefits. Deferred Retirement Benefit
amounts shall be "theoretically invested" under any of the Investment
Options described below, as elected by the Participant.
6.5 Prime Rate Investment Option. Interest equivalents, equal to the product
of: i) Daily Prime Rate; multiplied by ii) the portion of the Deferred
Benefit Account 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 Benefit Account.
6.5(a) Daily Prime Rate. Expressed as a percentage, the "Daily Prime Rate" as
described in Section 6.5 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.
6.6 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
<PAGE>
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 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 6.6(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.
6.6(a) Phantom Shares Granted to Participant. Subject to the Phantom Share
Cumulative Dollar Limitation contained at Section 6.11(b), the number of
Phantom Shares granted to a Participant will be determined by dividing
the dollar amount of Deferred Retirement Benefit 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
(l/10) Phantom Share.
6.6(b) Conversion Price. The Conversion Price of FFC Shares used to calculate
the number of Phantom Shares to be added to a Participant's Deferred
Benefit Account as of the beginning of a Plan Year will be the closing
Market Price of FFC Shares at the end of the last business day of the
immediately preceding Plan Year.
6.6(c) Dividends Reinvested in Phantom Share Investment Option. For purposes of
Section 6.6, 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 "ex-dividend" date).
6.6(d) Other Dilutive and Anti-dilutive Transactions Affecting Phantom Shares.
In addition to Section 6.6(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 the portion of each Participant's Deferred Benefit
Account invested in the Phantom Share Investment Option 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.
6.6(e) Capital Transaction or Corporate Reorganization. Solely for purposes of
Section 6.6(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
<PAGE>
some other corporate transaction which is not literally considered a
capital transaction or corporate reorganization under common business
usage of said terms.
6.7 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.
6.8 Fixed-Income Fund Investment Option. Interest equivalents, equal to the
product of: i) the daily published total return for the PIMCo;
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.
6.9 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.
6.10 Converting Accrued & Vested Benefits From Other Fund American
Non-Qualified Plans. For purposes of establishing a Participant's
Deferred Benefit Account, benefits accrued as of December 31, 1992 on
behalf of Plan Participants who were also participating in one or more
of the terminated Fund American non-qualified plans (i.e. The Fund
American Companies, Inc. Retiree Medical Plan, Supplemental Pension Plan
and Survivor Benefit Plan), shall be transferred as of January 1, 1993
to this Plan and invested in accordance with Section 6.11 and the
elections made by such Participants as indicated on the Deferred Benefit
Election Form. Such transferred balances shall be considered an
additional Deferred Retirement Benefit amount for the 1993 Plan Year in
addition to the Deferred Retirement Benefit calculated pursuant to
Section 6.3.
6.11 Investment Option Election. Amounts invested in any Investment Option
may be transferred annually among any available Investment Options
(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.
6.1l(a) Investment Option Allocation. Subject to the Phantom Share Cumulative
Dollar Limitation contained at Section 6.1l(b), each Participant can
elect to allocate each component of a Plan Year's total Deferred
Retirement Benefit among the available Investment Options as described
in Sections 6.5, 6.6, 6.7, 6.8 and 6.9.
<PAGE>
6.11(b) Phantom Share Cumulative Dollar Limitation. Notwithstanding a
Participant's ability to allocate Deferred Retirement Benefits for a
Plan Year among the available Investment Options, a Participant's
election to invest Deferred Retirement Benefits 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 Retirement Benefits in the Phantom
Share Investment Option to the extent the portion of a
Participant's Deferred Benefit 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 Retirement Benefits
in the Phantom Share Investment Option if the portion of a
Participant's Deferred Benefit Account balance previously
invested in the Phantom Share Investment Option has a fair
market value which exceeds twenty million dollars ($20 million).
6.12 Deletion of Investment Options. Except as provided in Section 15.2, the
Committee cannot delete or alter the terms of an existing Investment
Option without the written permission of those Participants affected by
such proposed amendment whose Deferred Retirement Benefits is invested
in such Investment Option.
ARTICLE VII
PARTICIPANTS' RIGHTS UNSECURED
7.1 Unsecured Creditors. Amounts credited to Deferred Benefit 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 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 Benefit
Accounts established under the Plan.
ARTICLE VIII
PAYMENT OF DEFERRED RETIREMENT BENEFITS
8.1 Commencement of Benefits. Subject to Sections 4.3 and 8.1(a), when, and
at the same time, an eligible Participant elects to invest Deferred
Retirement Benefits for any particular Plan Year, he shall also elect on
the Deferred Retirement Benefits Election Form to have the portion of
his Deferred Benefit Account balance attributable to such current Plan
Year commence to be paid on the first day of the Plan Year following the
Plan Year in which the earlier event occurs:
<PAGE>
(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 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 a Deferred Retirement Benefit
is awarded as provided in this Plan.
8.2 Payment Method Election. At the time the Deferred Benefit Election Form
is filed pursuant to ARTICLE IV, Participants must also elect the method
of receiving payment of their Deferred Benefit 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 his
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 Benefit 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 Benefit Account balance at end of the
prior Plan Year.
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).
<PAGE>
8.3 Payment Period Election. At the time an Eligible Participant elects to be
a Participant for any Plan Year, he shall concurrently elect on the
Deferred Benefit Election Form the number of years, up to a maximum of
fifteen (15), over which his Deferred Benefit 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 the Participant (ARTICLE
X), 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, a
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
Benefit 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 Benefit 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 VIII and X, interest on such Deferred
Benefit Account balance will continue to accrue through the end of
November in the Plan Year prior to the Plan 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 Benefit Account balance at November 30th
Where Y = Daily Prime Rate (see Section 6.5(a)) in effect on November
30th
Where Z = Additional accrued interest due Participant for the month of
December
<PAGE>
ARTICLE IX
VALUATION DATE
9.1 Valuation. Valuation Date, the Deferred Benefit Account balance of each
Participant shall be valued by the Committee. The current value, and the
change in value from the prior Valuation Date (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 X
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 Benefit Account in one lump sum on 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 XI
ALIENATION
Other than as provided in ARTICLE X, 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.
ARTICLE XII
TAX WITHHOLDING
12.1 Withholding. Subject to Sections 12.2 and 12.3, Fund American shall deduct
from all payments under this Plan each 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, each
Participant who has 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 his share
of FICA taxes due and payable.
<PAGE>
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 XIII
CONSENT
By electing to become a Participant, each 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 XIV
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 XV
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.
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 6.5 and 6.6, without the
written permission of those Participants, whose Deferred Benefit
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 Benefit Account. Further, the
Board of Directors will not make amendments which would in any way
eliminate the express requirement in Section 16.1
<PAGE>
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 Benefit 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 XVI
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
Benefit 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 an annual basis, an amount of cash equal to
the Deferred Retirement Benefit awarded to 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 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
<PAGE>
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 XVII
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 it may require in carrying out
the provisions of the Plan.
17.6 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:
Fund American Enterprises Holdings, Inc.
80 South Main Street
Hanover, NH 03755
Attention: Mr. Michael S. Paquette
<PAGE>
Exhibit (4)(d)
WHITE MOUNTAINS INSURANCE GROUP, INC.
DEFERRED BENEFIT 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 XV of the WHITE MOUNTAINS INSURANCE GROUP, INC. DEFERRED
BENEFIT PLAN - formerly known as the Fund American Deferred Benefit 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 Sections 4.3
and 8.1(a), when, and at the same time, an eligible Participant elects to
invest Deferred Retirement Benefits for any particular Plan Year, he shall
also elect on the Deferred Retirement Benefits Election Form to have the
portion of his Deferred Benefit Account balance attributable to such
current Plan Year 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. Each
active Participant's Deferred Benefit Account balance 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 the
Account value 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
<PAGE>
Participant to execute a written 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 Deferred Benefits under the Plan (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 Deferred Benefits under the
Plan (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 a Deferred Retirement Benefit
is awarded 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 Deferred Retirement Benefit awarded 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"),
14,000 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
Deferred Benefit 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 Deferred Benefit 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 Deferred Benefit 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 Deferred Benefit 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
