8-KLeadership ChangesMaterial AgreementsShareholder Matters+2

ARCH CAPITAL GROUP LTD. 8-K Report, Material Agreement (May 15, 2018)

Filed May 15, 2018For Securities:ACGLACGLNACGLO

Summary

Arch Capital Group Ltd. (ACGL) filed an 8-K on May 15, 2018, detailing significant corporate actions. A key event was the entry into a second supplemental indenture for its senior notes, which amends the terms related to optional redemption. This amendment, effective May 10, 2018, restricts Arch Finance's ability to redeem the notes before December 8, 2021, except under specific circumstances. The primary purpose of this change is to allow the notes to qualify as Tier 3 ancillary capital under Bermuda Monetary Authority requirements, which is a strategic move to bolster regulatory capital. Furthermore, the report announced a change in executive leadership. Mark D. Lyons resigned as Chief Financial Officer and Treasurer, effective May 25, 2018, with Francois Morin appointed as his successor. The company also provided updates on its annual shareholder meeting held on May 9, 2018, including overwhelmingly positive voting results for director elections, executive compensation advisory votes, ratification of auditors, an incentive plan, and a three-for-one common share split. Additionally, dividends were declared for Series E and Series F Preferred Shares, payable in June and September 2018.

Key Highlights

  • 1Amendment to senior notes indenture to facilitate Tier 3 ancillary capital under Bermuda Monetary Authority regulations, restricting optional redemption until December 8, 2021.
  • 2Resignation of Mark D. Lyons as CFO and Treasurer, effective May 25, 2018.
  • 3Appointment of Francois Morin as the new CFO and Treasurer, effective May 25, 2018.
  • 4Shareholder approval for a three-for-one common share split, effective June 18, 2018 (record date).
  • 5Overwhelming shareholder approval for director re-elections at the May 9, 2018 annual meeting.
  • 6Shareholder approval for an advisory vote on executive compensation (say-on-pay).
  • 7Declaration of dividends for Series E and Series F Preferred Shares, payable in June and September 2018.

Frequently Asked Questions

The primary reason for amending the senior notes indenture is to allow the senior notes to qualify as Tier 3 ancillary capital under the eligible capital requirements of the Bermuda Monetary Authority. This amendment restricts the company's option to redeem the notes before December 8, 2021, which is a key condition for this capital treatment.

Francois Morin has been appointed as the new Chief Financial Officer and Treasurer, effective May 25, 2018. He previously served as Senior Vice President, Chief Risk Officer, and Chief Actuary for ACGL.

Shareholders overwhelmingly approved an amendment to the company's Memorandum of Association to effect a three-for-one common share split. The amendment is set to become effective on June 18, 2018, with additional shares to be distributed around June 20, 2018.

At the annual shareholder meeting on May 9, 2018, the four Class II directors standing for election were overwhelmingly re-elected by shareholders, indicating continued confidence in their leadership.