OXBRIDGE RE HOLDINGS LTD
10-Ks and 10-Qs
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
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Filed
by the Registrant ☒
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Filed
by a Party other than the Registrant ⬜
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Check
the appropriate box:
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⬜
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Preliminary
Proxy Statement
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⬜
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Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
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☒
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Definitive
Proxy Statement
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⬜
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Definitive
Additional Materials
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⬜
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Soliciting
Material under §240.14a-12
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OXBRIDGE RE HOLDINGS LIMITED
(Name
of Registrant As Specified in its Charter)
(Name
of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment
of Filing Fee (Check the appropriate box):
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Per
unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
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OXBRIDGE RE HOLDINGS LIMITED
Strathvale House, 2
nd
Floor
90 North Church Street
P.O. Box 469
Grand Cayman, KY1-9006
Cayman Islands
NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 12, 2017
Notice
is hereby given that the Annual General Meeting of Shareholders
(the “Meeting”) of Oxbridge Re Holdings Limited (the
“Company”) will be held at the Company’s office,
Strathvale House, 2
nd
Floor, 90 North
Church Street, George Town, Cayman Islands on Friday, May 12, 2017,
at 3:00 p.m. (local time), for the following purposes:
1.
To consider and
vote upon a proposal to elect six directors to serve on the Board
of Directors of the Company until the Annual General Meeting of
Shareholders of the Company in 2018; and
2.
To consider and
vote upon a proposal to ratify the appointment of Hacker,
Johnson & Smith, P.A., as the independent auditors of the
Company for the fiscal year ending December 31,
2017.
Information
concerning the matters to be acted upon at the Meeting is set forth
in the accompanying Proxy Statement.
Only
shareholders of record, as shown by the transfer books of the
Company, at the close of business on April 3, 2017, will be
entitled to notice of, and to vote at, the Meeting or any
adjournments or postponements thereof. Whether or not you plan to
attend the Meeting, we hope you will vote as soon as possible.
Voting your proxy will ensure your representation at the Meeting.
We urge you to carefully review the proxy materials and to vote FOR
the election of each director nominee named in Proposal 1 and FOR
Proposal 2.
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By
Order of the Board of Directors,
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Jay
Madhu
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Chief
Executive Officer
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April
24, 2017
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Grand
Cayman, Cayman Islands
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IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR
THE
SHAREHOLDER MEETING TO BE HELD ON MAY 12, 2017:
To access our Proxy Statement and our Annual Report to
Shareholders,
please visit www.oxbridgere.com/2017AGM
TABLE OF CONTENTS
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GENERAL
INFORMATION
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1
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VOTING
SECURITIES AND VOTE REQUIRED
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2
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SOLICITATION
AND REVOCATION
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3
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PROPOSAL
ONE ELECTION OF DIRECTORS OF THE COMPANY
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3
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PROPOSAL
TWO RATIFICATION OF THE COMPANY’S AUDITORS
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6
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CORPORATE
GOVERNANCE AND BOARD OF DIRECTORS
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7
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EXECUTIVE
OFFICERS
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10
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DIRECTOR
COMPENSATION
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10
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SHAREHOLDER
COMMUNICATION
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11
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EXECUTIVE
COMPENSATION
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11
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AUDIT
COMMITTEE REPORT
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16
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INDEPENDENT
PUBLIC ACCOUNTANT FEES AND SERVICES
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17
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| PRINCIPAL SHAREHOLDERS |
18
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SECTION
16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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20
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CERTAIN
RELATIONSHIPS AND RELATED-PARTY TRANSACTIONS
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20
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OTHER
MATTERS
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20
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ADDITIONAL
INFORMATION
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20
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OXBRIDGE RE HOLDINGS LIMITED
Strathvale House, 2
nd
Floor
90 North Church Street
P.O. Box 469
Grand Cayman, KY1-9006
Cayman Islands
PROXY STATEMENT
ANNUAL GENERAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 12, 2017
GENERAL INFORMATION
This
Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Oxbridge Re Holdings Limited (the
“Company”) of proxies for use at the Annual General
Meeting of Shareholders of the Company (the “Meeting”)
to be held at the Company’s office, Strathvale House,
2
nd
Floor,
90 North Church Street, George Town, Cayman Islands on Friday, May
12, 2017 at 3:00 p.m. (local time), and at any and all adjournments
or postponements thereof, for the purposes set forth in the
accompanying Notice of Annual General Meeting of Shareholders. The
Company’s Annual Report to Shareholders is included with this
Proxy Statement for informational purposes and not as a means of
soliciting your proxy.
This
Proxy Statement and the accompanying proxy card and Notice of
Annual General Meeting of Shareholders are expected to be provided
to shareholders on or about April 14, 2017.
Matters to be Voted Upon at the Meeting
You are
being asked to consider and vote upon the following
proposals:
1.
To elect six
directors to serve on the Board of Directors of the Company until
the Annual General Meeting of Shareholders of the Company in 2018
(“Proposal One”); and
2.
To ratify the
appointment of Hacker, Johnson & Smith, P.A., as the
independent auditors of the Company for the fiscal year ending
December 31, 2017 (“Proposal Two”).
Voting Procedures
As a
shareholder of the Company, you have a right to vote on certain
matters affecting the Company. The proposals that will be presented
at the Meeting and upon which you are being asked to vote are
discussed above. Each ordinary share of the Company you owned as of
the record date, April 3, 2017, entitles you to one vote on each
proposal presented at the Meeting, subject to certain provisions of
our Third Amended and Restated Memorandum and Articles of
Association (our “Articles”), as described below under
“Voting Securities and Vote Required.”
Methods of Voting
You may
vote by mail, by telephone, over the Internet, or in person at the
Meeting.
Voting by Mail
. You may vote
by signing the proxy card and returning it in the prepaid and
addressed envelope enclosed with the proxy materials. If you vote
by mail, we encourage you to sign and return the proxy card even if
you plan to attend the Meeting so that your shares will be voted if
you are unable to attend the Meeting.
Voting by Telephone
. To vote
by telephone, please follow the instructions included on your proxy
card. If you vote by telephone, you do not need to complete and
mail a proxy card. Telephone voting is available through 11:59 p.m.
(local time) on May 11, 2017, the day prior to the Meeting
day.
1
Voting over the Internet
. To vote over
the Internet, please follow the instructions included on your proxy
card. If you vote over the Internet, you do not need to complete
and mail a proxy card. Internet voting is available through 11:59
p.m. (local time) on May 11, 2017, the day prior to the Meeting
day.
Voting in Person at the Meeting
.
If you attend the Meeting and plan to vote in person,
we will provide you with a ballot at the Meeting. If your shares
are registered directly in your name, you are considered the
shareholder of record and you have the right to vote in person at
the Meeting. If your shares are held in the name of your broker or
other nominee, you are considered the beneficial owner of shares
held in street name. As a beneficial owner, if you wish to vote at
the Meeting, you will need to bring to the Meeting a legal proxy
from your broker or other nominee authorizing you to vote those
shares.
VOTING SECURITIES AND VOTE REQUIRED
As of
April 3, 2017, the record date for the determination of persons
entitled to receive notice of, and to vote at, the Meeting (the
“Record Date”), 5,861,872 ordinary shares were issued
and outstanding. The ordinary shares are our only class of equity
securities outstanding and entitled to vote at the
Meeting.
Subject
to the provisions of the Articles, each ordinary share is entitled
to one vote per share. However, under the Articles, the Board of
Directors of the Company (our “Board”) shall reduce the
voting power of any holder that holds 9.9% or more of the total
issued and outstanding ordinary shares (such person, a “9.9%
Shareholder”) to the extent necessary such that the holder
ceases to be a 9.9% Shareholder. In connection with this reduction,
the voting power of the other shareholders of the Company may be
adjusted pursuant to the terms of the Articles. Accordingly,
certain holders of ordinary shares may be entitled to more than one
vote per share subject to the 9.9% restriction in the event that
our Board is required to make an adjustment on the voting power of
any 9.9% Shareholder.
Voting Reduction
The
applicability of the voting power reduction provisions to any
particular shareholder depends on facts and circumstances that may
be known only to the shareholder or related persons. Accordingly,
we request that any holder of ordinary shares with reason to
believe that it is a 9.9% Shareholder, contact us promptly so that
we may determine whether the voting power of such holder’s
ordinary shares should be reduced. By submitting a proxy, a holder
of ordinary shares will be deemed to have confirmed that, to its
knowledge, it is not, and is not acting on behalf of, a 9.9%
Shareholder. The directors of the Company are empowered to require
any shareholder to provide information as to that
shareholder’s beneficial ownership of ordinary shares, the
names of persons having beneficial ownership of the
shareholder’s ordinary shares, relationships with other
shareholders or any other facts the directors may consider relevant
to the determination of the number of ordinary shares attributable
to any person. The directors may disregard the votes attached to
ordinary shares of any holder who fails to respond to such a
request or who, in their judgment, submits incomplete or inaccurate
information. The directors retain certain discretion to make such
final adjustments that they consider fair and reasonable in all the
circumstances as to the aggregate number of votes attaching to the
ordinary shares of any shareholder to ensure that no person shall
be a 9.9% Shareholder at any time.
Quorum; Vote Required
The
attendance of two or more persons representing, in person or by
proxy, more than 50% in par value of the issued and outstanding
ordinary shares as of the Record Date, is necessary to constitute a
quorum at the Meeting.
Proposal One and Proposal Two:
Assuming that a quorum is present, the affirmative vote
of the holders of a simple majority of the issued and outstanding
ordinary shares voted at the Meeting is required for approval of
each of Proposal One and Proposal Two.
With
regard to any proposal or director nominee, votes may be cast in
favor of or against such proposal or director nominee or a
shareholder may abstain from voting on such proposal or director
nominee. Abstentions and “brokernon-votes” will be
excluded entirely from the vote (i.e. will not be treated as a
vote) and will have no effect, except that abstentions and
“broker non-votes” will be counted toward determining
the presence of a quorum for the transaction of business.
Generally, broker non-votes occur when ordinary shares held by a
broker for a beneficial owner are not voted on a particular
proposal because the broker has not received voting instructions
from the beneficial owner, and the broker does not have
discretionary authority to vote on a particular
proposal.
2
Recommendation
Our
Board recommends that the shareholders take the following actions
at the Meeting:
1.
Proposal One
: to vote FOR the election
of each of the six director nominees to serve on the Board of the
Company until the Annual General Meeting of Shareholders of the
Company in 2018; and
2.
Proposal Two
: to vote FOR the
ratification of the appointment of Hacker, Johnson &
Smith, P.A., as the independent auditors of the Company for the
fiscal year ending December 31, 2017.
SOLICITATION AND REVOCATION
Proxies
must be received by us by 11:59 p.m. (local time) on May 11, 2017,
the day prior to the Meeting day. A shareholder may revoke his or
her proxy at any time up to one hour prior to the commencement of
the Meeting.
To do
this, you must:
●
enter a new vote by
telephone, over the Internet or by signing and returning another
proxy card at a later date;
●
file a written
revocation with the Secretary of the Company at our address set
forth above;
●
file a duly executed
proxy bearing a later date; or
●
appear in person at
the Meeting and vote in person.
A
shareholder of record may revoke a proxy by any of these methods,
regardless of the method used to deliver the shareholder’s
previous proxy. If your ordinary shares are held in street name,
you must contact your broker, dealer, commercial bank, trust
company or other nominee to revoke your proxy.
The
individuals designated as proxies in the proxy card are officers of
the Company.
All
ordinary shares represented by properly executed proxies that are
returned, and not revoked, will be voted in accordance with the
instructions, if any, given thereon. If no instructions are
provided in an executed proxy, it will be voted FOR the election of
each director nominee named in Proposal One and FOR Proposal Two,
and in accordance with the proxy holder’s best judgment as to
any other business that may properly come before the Meeting. If a
shareholder appoints a person other than the persons named in the
enclosed form of proxy to represent him or her, such person should
vote the shares in respect of which he or she is appointed proxy
holder in accordance with the directions of the shareholder
appointing him or her.
PROPOSAL ONE
ELECTION OF DIRECTORS OF THE COMPANY
Our
Articles currently provide that our Board shall consist of six
directors (exclusive of alternate directors). We currently have six
directors serving on our Board, and our Board has nominated those
six directors – Paresh Patel, Jay Madhu, Krishna Persaud, Ray
Cabillot, Allan Martin, and Mayur Patel – for re-election as
directors to serve until the Annual General Meeting of Shareholders
of the Company in 2018.
Our
Board has no reason to believe that any of these director nominees
will not continue to be a candidate or will not be able to serve as
a director of the Company if elected. In the event that any nominee
is unable to serve as a director, the proxy holders named in the
accompanying proxy have advised that they will vote for the
election of such substitute or additional nominee(s) as our Board
may propose. Our Board unanimously recommends that you vote FOR the
election of each of the nominees.
3
Director Nominees
Each of
the director nominees is currently serving as a director of the
Company and is standing for re-election. Unless otherwise directed,
the persons named in the proxy intend to vote all proxies FOR the
election of each of the following director nominees:
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Name
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Age
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Position
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Director Since
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Paresh
Patel
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54*
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Chairman
of the Board of Directors
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2013
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Jay Madhu
(1)
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50*
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Chief
Executive Officer, President and Director
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2013
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Krishna Persaud
(2)(3)
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55*
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Director
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2013
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Ray Cabillot
(1)(3)(4)
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54*
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Director
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2013
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Allan Martin
(2)(3)(4)
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51*
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Director
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2013
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Mayur Patel, M.D.
(1)(2)(4)
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61*
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Director
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2013
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*As of
April 24, 2017.
(1)
Member of Underwriting Committee.
(2)
Member of Compensation Committee.
(3)
Member of Nominating and Corporate Governance
Committee.
(4)
Member of Audit Committee
The
nominees have consented to serve as directors of the Company if
elected.
Set
forth below is biographical information concerning each nominee for
election as a director of the Company, including a discussion of
such nominee’s particular experience, qualifications,
attributes or skills that led our Nominating and Corporate
Governance Committee and our Board to conclude that the nominee
should serve as a director of our Company.
Paresh Patel.
Mr. Patel has been
the Chairman of the Board of our Company during most of the period
since April 2013. Mr. Patel is also the Chief Executive
Officer (since 2011) and a founder of HCI Group, Inc., a publicly
traded holding company owning subsidiaries primarily engaged in the
property and casualty insurance business. He has been a director of
HCI Group, Inc. since its inception and has served as the Chairman
of the board of directors of HCI Group, Inc. since May 2007. From
2011 to 2012, Mr. Patel also served as President of HCI Group,
Inc.’s insurance subsidiary, Homeowners Choice
Property & Casualty Insurance Company, Inc., which
provides property and casualty homeowners’ insurance,
condominium-owners’ insurance, and tenants’ insurance
to individuals owning property in Florida. Since 2011,
Mr. Patel has served as Chairman of the board of First Home
Bancorp, Inc., a bank holding company in Seminole, Florida. He is a
founder of NorthStar Bank, a community bank in Tampa, Florida, and
from 2006 to 2010, served on the board of directors of the bank and
its parent company, NorthStar Holding Company.
Mr. Patel’s analytical and technology skills were
developed through experience with international financial,
telecommunications and consulting positions. As a private investor
from 2000 to 2006, Mr. Patel used statistical and probability
techniques to develop and implement a system for managing money as
a business to generate cash flow. Prior to that, Mr. Patel was
director of customer care and billing with Global Crossing from
1998 to 2000. In that position, Mr. Patel defined business
processes and systems, hired and trained department staff and led
the merger of the customer care and billing systems with those of
the company’s acquisitions. Mr. Patel received his
bachelor’s and master’s degrees in Electronic
Engineering from Cambridge University, England.
Mr. Patel
brings considerable experience in business, management, systems and
technology to our Board.
4
Jay Madhu.
Mr. Madhu
has served as our Chief Executive Officer and President, and as a
director of our Company, since April 2013. Mr. Madhu has also
served, since April 2013, as a director and the Chief Executive
Officer and President of our reinsurance subsidiary, Oxbridge
Reinsurance Limited. Mr. Madhu has also been a director of HCI
Group, Inc., a publicly traded holding company owning subsidiaries
primarily engaged in the property and casualty insurance business,
since May 2007. He also served as the President of Greenleaf
Capital, the real estate division of HCI Group, Inc., from June
2011 through June 2013 and as Vice President of Investor Relations
for HCI Group, Inc. from February 2008 through June 2013.
Mr. Madhu also served as Vice President of Marketing for HCI
Group, Inc. from 2008 to 2011. In his various positions at HCI
Group, Inc., Mr. Madhu’s responsibilities included
marketing, investor relations and management and oversight of HCI
Group’s real estate division. He has also been a director of
HCI Group’s wholly owned subsidiary, Claddaugh Casualty
Insurance Company Ltd (“Claddaugh”), since July 2010.
From August 2013 to April 2014, Mr. Madhu has served on the
board of directors of First Home Bancorp, Inc., a bank holding
company in Seminole, Florida. Mr. Madhu also served on the
board of directors of Wheeler Real Estate Investment Trust, Inc., a
publicly held real estate investment trust, from 2012 to June 2014.
As an owner and manager of commercial properties, Mr. Madhu
has been President of 5th Avenue Group LC, a real estate management
company, since 2002 and was President of Forrest Terrace LC, a real
estate management company, from 1999 until 2010. In addition,
Mr. Madhu is an investor in banking and health maintenance
organizations. He was also President of The Mortgage Corporation
Network (correspondent lenders) from 1996 to 2011. Prior to that,
Mr. Madhu was Vice President, mortgage division, at First
Trust Mortgage & Finance, from 1994 to 1996; Vice
President, residential first mortgage division, at Continental
Management Associates Limited, Inc., from 1993 to 1994; and
President, S&S Development, Inc. from 1991 to 1993. He attended
Northwest Missouri State University, where he studied marketing and
management.
Mr. Madhu
brings considerable business and marketing experience to our
Board.
Krishna Persaud.
Mr. Persaud has been a director of our Company
since April 2013. He has also been, since April 2013, a director of
our reinsurance subsidiary, Oxbridge Reinsurance Limited.
Mr. Persaud is a founder and the President, since June 2002,
of KPC Properties, LLC, a real estate investment firm, where he
leverages his knowledge and experience to identify opportunities to
add value to real properties in the state of Florida. He implements
a strategy of acquiring, adding value, and relinquishing or holding
the improved asset. He has demonstrated consistent success in
implementing his strategy in real estate investments. Since June
2002, Mr. Persaud has been an asset manager, demonstrating the
ability to consistently exceed average market returns. From May
2007 to May 2011, Mr. Persaud was a director of HCI Group,
Inc., a publicly traded holding company owning subsidiaries
primarily engaged in the property and casualty insurance business.
Mr. Persaud received an award from the Tampa Bay INDOUS
Chamber of Commerce as one of the most successful businessmen of
the year in Tampa. Previously, he spent ten years working with
several consulting firms and municipalities providing design and
construction management services for a wide variety of building
systems and public works projects. Mr. Persaud earned his
Bachelor of Science degree in Mechanical Engineering and a
Master’s Degree in Civil Engineering from City College of
City University of New York. He holds licenses as a Professional
Engineer in the States of Florida, New York and
California.
Mr. Persaud
brings considerable investment experience to our
Board.
Ray Cabillot.
Mr. Cabillot has been a director of our Company
since April 2013. He has also been, since April 2013, a director of
our reinsurance subsidiary, Oxbridge Reinsurance Limited. Since
1998, Mr. Cabillot has served as Chief Executive Officer and
director of Farnam Street Capital, Inc., the General Partner of
Farnam Street Partners L.P., a private investment partnership.
Prior to his service at Farnam Street Capital, Mr. Cabillot
was a Senior Research Analyst at Piper Jaffrey, Inc., an investment
bank and asset management firm, from 1989 to 1997. Early in his
career, Mr. Cabillot worked for Prudential Capital Corporation
as an Associate Investment Manager and as an Investment Manager.
Mr. Cabillot is currently a director for Pro-Dex, Inc. (PDEX)
and several private companies and, from 2006 to 2010, served as
director and Chairman of the board for O.I. Corporation (OICO).
Mr. Cabillot earned his BA in economics from St. Olaf College
and an MBA from the University of Minnesota. He is a Chartered
Financial analyst (CFA).
Mr. Cabillot
brings considerable investment expertise to our Board.
5
Allan Martin.
Mr. Martin has been a director of our Company
since April 2013. From October 2009 to present, Mr. Martin has
been CEO of Atlantic Merchant Capital Investors
(“Atlantic”), a private equity firm based in Tampa,
Florida. Prior to that, from June 2005 to September 2009,
Mr. Martin was CEO of Mortgage Contracting Services of Tampa,
Florida, a national mortgage field services company. From January
2010 to present, Mr. Martin has been a director of Florida
Capital Group and its subsidiary, Florida Capital Bank. He also
serves as the bank’s audit chair. Mr. Martin has been a
director of Moffitt Medical Group since March 2013 and is currently
Vice Chairman. He also serves as an officer and director of several
additional portfolio companies of Atlantic. Mr. Martin is
currently a trustee of Jesuit High School of Tampa, a director of
the Raphael Foundation, and chairman of the Martin Family
Foundation.
Mr. Martin
brings substantial operating, investment and corporate governance
experience to our Board.
Mayur Patel, M.D.
Dr. Mayur Patel has been a director of our Company
since October 2013. Since 1997, he has been a founding partner and
a practicing physician with American Radiology Services
(“ARS”) based in Baltimore, Maryland. In addition to
practicing Radiology at three hospitals and several free standing
imaging centers, Dr. Patel plays an active role in the
administrative and financial functions of the group. He is an
elected member of the board of directors of American Radiology
Associates and in addition serves as the chairman of the finance
committee. He is also a member of the retirement, quality assurance
and operations committees. He has published many peer reviewed
articles and also co-authored a book chapter in the field of
Radiology. He has also lectured extensively both as an invited
guest speaker and also at national meetings in the field of
Radiology and Molecular Imaging. He has held academic appointments
as an Assistant Professor of Radiology at University of Vermont,
School of Medicine (1989-1992) and at University of Maryland,
School of Medicine (1989-2000). As a principal of ARS, he
participated in the group’s corporate affiliation in the
capital markets with Advent International (a global private equity
group) and with CML Healthcare (a Canadian based medical
diagnostics service provider). Dr. Patel is a double board
certified physician and a diplomat of the American Board of
Radiology and American Board of Nuclear Medicine. Outside of
medicine, Dr. Patel has 20 years of experience in investing in
the public markets as well as in private equity offerings.
Dr. Patel is the brother-in-law of Paresh Patel.
Dr. Patel
brings considerable investment experience to our
Board.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT
SHAREHOLDERS
VOTE “FOR” THE ELECTION OF EACH OF THE DIRECTOR
NOMINEES NAMED ABOVE.
PROPOSAL TWO
RATIFICATION OF THE COMPANY’S AUDITORS
Upon
recommendation of the Audit Committee of the Company, our Board
proposes that the shareholders ratify the appointment of Hacker,
Johnson & Smith, P.A. (“Hacker Johnson”) to
serve as the independent auditors of the Company for the fiscal
year ending December 31, 2017. Hacker Johnson served as the
independent auditors of the Company for the fiscal years ended
December 31, 2016, 2015, 2014 and 2013.
Although
ratification is not required by law, our Board believes that
shareholders should be given the opportunity to express their views
on the subject. In the event of a negative vote on such
ratification, the Audit Committee will reconsider its selection.
Even if this appointment is ratified, the Audit Committee, in its
discretion, may direct the appointment of a different independent
registered public accounting firm at any time during the year if
the Audit Committee determines that such a change would be in the
best interest of the Company and its shareholders.
Although Hacker
Johnson will not be attending the Meeting in person, a
representative of Hacker Johnson will attend the Meeting
telephonically and will be available to respond to questions and
may make a statement if he or she so desires.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT
SHAREHOLDERS VOTE “FOR” THE RATIFICATION OF THE
APPOINTMENT OF HACKER
JOHNSON AS THE COMPANY’S AUDITOR.
6
CORPORATE GOVERNANCE AND BOARD OF DIRECTORS
Board Leadership Structure and Risk Oversight
Since
the Company’s formation in 2013, the Company has bifurcated
the positions of Chairman of the Board and Chief Executive Officer.
Paresh Patel has served as Chairman of the Board since April 2013,
and Jay Madhu has served as Chief Executive Officer of the Company
since April 2013.
We
believe it is the Chairman of the Board’s responsibility to
run the Board, and the Chief Executive Officer’s
responsibility to run the Company. We believe at this stage in the
Company’s development that it is beneficial to have a
Chairman of the Board who can concentrate on leading the Board and
not have to be involved in the day-to-day operations of the
Company. Likewise, by having two different individuals serve as
Chairman of the Board and Chief Executive Officer, our Chief
Executive Officer is able to focus the vast amount of his time and
energy in running the Company and furthering its operational
business strategy.
We have
four independent directors and two non-independent directors. We
believe that the number of independent, experienced directors on
our Board provides the necessary and appropriate oversight for our
Company.
Management is
primarily responsible for assessing and managing the
Company’s exposure to risk. While risk assessment is
management’s duty, the Audit Committee is responsible for
discussing certain guidelines and policies with management that
govern the process by which risk assessment and control is handled.
The Audit Committee also reviews steps that management has taken to
monitor the Company’s risk exposure. In addition, the
Underwriting Committee approves and reviews our underwriting
policies and guidelines, oversees our underwriting process and
procedures, monitors our underwriting performance and oversees our
underwriting risk management exposure. Management focuses on the
risks facing the Company, while the Audit Committee and the
Underwriting Committee focus on the Company’s general risk
management strategies and oversee risks undertaken by the Company.
We believe this division of responsibilities is the most effective
approach for addressing the risks facing our Company and that our
Board leadership structure supports this approach.
Board Committees and Meetings
Our
Board of Directors has five committees: an Audit Committee, a
Compensation Committee, a Nominating and Corporate Governance
Committee, an Underwriting Committee and an Investment Committee.
Each committee, except for the Investment Committee, has a written
charter. The table below provides current membership information
for each of the committees.
|
|
Audit
|
|
Compensation
|
|
Nominating and
Corporate Governance
|
|
Underwriting
|
|
Investment
|
|
|
Committee
|
|
Committee
|
|
Committee
|
|
Committee
|
|
Committee
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jay Madhu
|
|
|
|
|
|
|
X
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
Krishna Persaud
|
|
|
X*
|
|
X
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
Ray Cabillot
|
X*
|
|
|
|
X
|
|
X
|
|
X*
|
|
|
|
|
|
|
|
|
|
|
|
|
Allan Martin
|
X
|
|
X
|
|
X*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mayur Patel, M.D.
|
X
|
|
X
|
|
|
|
X*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
# of meetings held in 2016
|
4
|
|
2
|
|
2
|
|
5
|
|
4
|
*
Committee
Chairperson
7
Our
Board of Directors held five meetings in 2016. During 2016, each of
our directors attended at least 75% of the aggregate number of
meetings of the Board of Directors and 75% of the aggregate number
of meetings of the committee on which the director served in
2016.
It is
our policy that directors are expected to attend the Annual General
Meeting of Shareholders in the absence of a scheduling conflict or
other valid reason.
All of our
directors attended our 2016 Annual General Meeting of
Shareholders.
The
Company’s Nominating and Corporate Governance Committee and
the Board have reviewed the responses of director nominees and
directors to a questionnaire asking about their relationships (and
those of immediate family members) with the Company and other
potential conflicts of interest, and have considered the
relationships described in the section of this Proxy Statement
entitled “Certain Relationships and Related-Party
Transactions” in determining their independence.
The
Board has determined that (1) Paresh Patel and Jay Madhu do
not qualify as independent directors under the applicable rules of
The Nasdaq Stock Market and the Securities and Exchange Commission
(“SEC”) and (2) Krishna Persaud, Ray Cabillot,
Allan Martin, and Mayur Patel qualify as independent directors
under the applicable rules of The Nasdaq Stock Market and the
SEC.
The
Board has also determined that all of the current members of the
Audit Committee, the Compensation Committee, and the Nominating and
Corporate Governance Committee qualify as independent directors
under the applicable rules of The Nasdaq Stock Market.
Below
is a description of each committee of our Board of
Directors.
Audit Committee
Our
Audit Committee consists of three members – Ray Cabillot,
Allan Martin and Mayur Patel. Each of these individuals meets all
independence requirements for Audit Committee members set forth in
applicable SEC rules and regulations and the applicable rules of
The Nasdaq Stock Market. Ray Cabillot serves as Chairman of our
Audit Committee. Ray Cabillot and Allan Martin each qualify as an
“audit committee financial expert” as that term is
defined in the rules and regulations established by the
SEC.
The
Audit Committee has general responsibility for the oversight of our
accounting, reporting and financial control practices. The Audit
Committee is governed by a written charter approved by our Board,
which outlines its primary duties and responsibilities and which
can be found on our website at
www.oxbridgere.com
.
Compensation Committee
Our
Compensation Committee currently consists of three members –
Krishna Persaud, Mayur Patel and Allan Martin. Krishna Persaud
serves as Chairman of our Compensation Committee.
All of the current members of our
Compensation Committee qualify as independent directors under the
applicable rules of The Nasdaq Stock Market.
The
purpose of our Compensation Committee is to discharge the
responsibilities of our Board relating to compensation of our Chief
Executive Officer and to make recommendations to our Board relating
to the compensation of our other executive officers. Our
Compensation Committee, among other things, assists our Board in
ensuring that a proper system of compensation is in place to
provide performance-oriented incentives to management. Our
Compensation Committee has the authority to delegate its
responsibilities to a subcommittee or to officers of the Company to
the extent permitted by applicable law and the compensation plans
of the Company if it determines that such delegation would be in
the best interest of the Company. Our executive officers were not
involved in determining or recommending the amount or form of
executive or director compensation for 2016. Our Compensation
Committee may engage a compensation consultant, however, it did not
engage a compensation consultant with respect to executive or
director compensation for 2016.
8
The
Compensation Committee is governed by a written charter approved by
our Board, which outlines its primary duties and responsibilities
and which can be found on our website at
www.oxbridgere.com
.
Nominating and Corporate Governance Committee
Our
Nominating and Corporate Governance Committee is composed of three
members – Ray Cabillot, Allan Martin, and Krishna Persaud.
Allan Martin serves as the Chairman of our Nominating and Corporate
Governance Committee. All of the members of our Nominating and
Corporate Governance Committee qualify as independent directors
under the applicable rules of The Nasdaq Stock Market.
The
Nominating and Corporate Governance Committee makes recommendations
to our Board as to nominations for our Board and committee members,
as well as with respect to structural, governance and procedural
matters. The Nominating and Corporate Governance Committee also
reviews the performance of our Board and the Company’s
succession planning. The Nominating and Corporate Governance
Committee is governed by a written charter approved by our Board,
which outlines its primary duties and responsibilities and which
can be found on our website at
www.oxbridgere.com
.
The
Nominating and Corporate Governance Committee is responsible for
reviewing the criteria for the selection of new directors to serve
on the Board and reviewing and making recommendations regarding the
composition and size of the Board. When our Board decides to seek a
new member, whether to fill a vacancy or otherwise, the Nominating
and Corporate Governance Committee will consider recommendations
from other directors, management and others, including
shareholders. In general, the Nominating and Corporate Governance
Committee looks for directors possessing superior business judgment
and integrity who have distinguished themselves in their chosen
fields and who have knowledge or experience in the areas of
insurance, reinsurance, financial services or other aspects of the
Company’s business, operations or activities. In selecting
director candidates, the Nominating and Corporate Governance
Committee also considers the interplay of the candidate’s
experience with the experience of the other Board
members.
The
Nominating and Corporate Governance Committee will consider, for
director nominees, persons recommended by shareholders, who may
submit recommendations to the Nominating and Corporate Governance
Committee in care of the Company’s Secretary, at Strathvale
House, 2
nd
Floor, 90 North Church Street, P.O. Box 469, Grand Cayman,
KY1-9006, Cayman Islands. To be considered by the Nominating and
Corporate Governance Committee, such recommendations must be
accompanied by a description of the qualifications of the proposed
candidate and a written statement from the proposed candidate that
he or she is willing to be nominated and desires to serve if
elected. Nominees for director who are recommended by shareholders
to the Nominating and Corporate Governance Committee will be
evaluated in the same manner as any other nominee for
director.
Underwriting Committee
The
Underwriting Committee consists of three members – Mayur
Patel, Jay Madhu and Ray Cabillot. Mayur Patel serves as Chairman
of our Underwriting Committee. The Underwriting Committee’s
responsibilities include approving and reviewing our underwriting
policies and guidelines, overseeing our underwriting process and
procedures, monitoring our underwriting performance and overseeing
our underwriting risk management exposure. The Underwriting
Committee is governed by a written charter approved by our Board,
which outlines its primary duties and responsibilities and which
can be found on our website at
www.oxbridgere.com
.
Investment Committee
The
Investment Committee consists of three members – Krishna
Persaud, Jay Madhu and Ray Cabillot. Ray Cabillot serves as
Chairman of the Investment Committee. The Investment
Committee’s responsibilities include approving and reviewing
any changes to our investment guidelines, and monitoring investment
performance and market, credit and interest rate exposure as a
result of opportunistic investment decisions undertaken by
management. The Investment Committee is governed by investment
guidelines that have been approved by our Board. There is no
written charter for the Investment Committee.
9
EXECUTIVE OFFICERS
|
Name
|
Age
|
Position
|
Position Since
|
|
Jay
Madhu*
|
50
|
Chief
Executive Officer, President, and Director (Principal Executive
Officer)
|
2013
|
|
|
|
|
|
|
Wrendon
Timothy
|
36**
|
Chief
Financial Officer and Secretary (Principal Financial and Accounting
Officer)
|
2013
|
*
See biography above
under “—Director Nominees.”
** As
of April 24, 2017
Wrendon Timothy.
Wrendon Timothy has
served as our Financial Controller and Secretary since
August 2013, and in that capacity he served as our principal
financial and accounting officer. In 2016, Mr. Timothy’s
title was changed to Chief Financial Officer and Secretary,
provided that such title change did not result in any change in
duties. Mr. Timothy has over twelve years of professional
experience in audit and assurance service both in Trinidad and the
Cayman Islands. From September 2007 through July 2013,
Mr. Timothy worked as an Audit Senior and Audit Manager at
PricewaterhouseCoopers Chartered Accountants in the Cayman Islands,
specializing in insurance and reinsurance clients. From September
2005 through August 2007, Mr. Timothy served as a Senior
Accountant at KPMG Chartered Accountants in Trinidad and Tobago.
Mr. Timothy is a Fellow of the Association of Chartered
Certified Accountants and holds a Postgraduate Diploma in Business
Administration and a Masters of Business Administration, with
Distinction (with Specialism in Finance – with Distinction),
from Heriot Watt University. Mr. Timothy is also a member of
the Cayman Islands Society of Professional Accountants (CISPA) and
a Graduate of the Institute of Chartered Secretaries and
Administrators.
Mr. Timothy
brings considerable finance, accounting and management experience
to our Company.
DIRECTOR COMPENSATION
All directors, other than Mr. Madhu, receive
compensation from us for their services as directors. Under the
Articles, our directors may receive compensation for their services
as may be determined by our Board. During 2016,
each of our
non-employee directors received an annual director fee of $30,000,
payable in quarterly installments of $7,500, for service as a
director.
The
following table summarizes the compensation of our non-employee
directors for 2016. There were no equity compensation awarded to
our non-employee directors during 2016.
|
Name
|
|
Fees Earned or
Paid in Cash
|
Total
|
|
Paresh
Patel
|
|
$
30,000
|
$
30,000
|
|
|
|
|
|
|
Krishna
Persaud
|
|
$
30,000
|
$
30,000
|
|
Ray
Cabillot
|
$
30,000
|
$
30,000
|
|
|
|
|
|
Allan
Martin
|
$
30,000
|
$
30,000
|
|
|
|
|
|
Mayur Patel, M.D.
|
$
30,000
|
$
30,000
|
10
SHAREHOLDER COMMUNICATION
Our
Board has adopted a policy for handling shareholder communications
to directors. Shareholders may send written communications to our
Board or any one or more of the individual directors by mail, c/o
Secretary, Oxbridge Re Holdings Limited, Strathvale House,
2
nd
Floor,
90 North Church Street, P.O. Box 469, Grand Cayman, KY1-9006,
Cayman Islands. There is no screening process, other than to
confirm that the sender is a shareholder and to filter
inappropriate materials and unsolicited materials of a marketing or
publication nature. All shareholder communications that are
received by the Secretary of the Company for the attention of a
director or directors are forwarded to such director or
directors.
EXECUTIVE COMPENSATION
The
following table summarizes the compensation of our Named Executive
Officers or “NEOs” in 2016 and 2015.
SUMMARY
COMPENSATION TABLE
|
Name
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonqualified
|
|
|
|
|
|
|
|
and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity
|
|
|
Deferred
|
|
|
|
|
|
|
|
Principal
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
Option
|
|
|
Incentive Plan
|
|
|
Compensation
|
|
|
All Other
|
|
|
|
|
Position
|
|
Year
|
|
Salary
|
|
|
Bonus
|
|
|
Awards
(1)
|
|
|
Awards
(2)
|
|
|
Compensation
|
|
|
Earnings
|
|
|
Compensation
(3)
|
|
|
Total
|
|
Jay Madhu
|
|
2016
|
$
|
220,000
|
|
$
|
50,000
|
|
|
-
|
|
|
8,504
|
|
|
-
|
|
|
-
|
|
$
|
15,000
|
|
$
|
293,504
|
|
President and Chief Executive
Officer
|
2015
|
$
|
220,000
|
|
$
|
-
|
|
|
234,400
|
|
|
77,290
|
|
|
-
|
|
|
-
|
|
$
|
19,800
|
|
$
|
551,490
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wrendon Timothy
|
|
2016
|
$
|
120,000
|
|
$
|
30,000
|
|
|
-
|
|
|
3,401
|
|
|
-
|
|
|
-
|
|
$
|
9,300
|
|
$
|
162,701
|
|
Chief Financial Officer and Corporate
Secretary
|
2015
|
$
|
110,000
|
|
$
|
-
|
|
|
117,200
|
|
|
38,645
|
|
|
-
|
|
|
-
|
|
$
|
11,700
|
|
$
|
277,545
|
|
(1)
All stock awards were granted under our 2014
Omnibus Incentive Plan. The value reported above in the
“Stock Awards” column is the aggregate grant date fair
value for each NEO’s restricted share award granted in 2015
determined in accordance with FASB ASC Topic 718,
"Compensation—Stock Compensation”.
The grant date fair
value for each restricted stock award with service-only or
performance-based conditions is based on the value of the
Company’s stock on the grant date.
(2)
All
option awards were granted under our 2014 Omnibus Incentive Plan.
The value reported above in the "Option Awards" column is the
aggregate grant date fair value for the NEO's option awards granted
in 2016 and 2015, determined in accordance with FASB ASC Topic 718,
"Compensation—Stock Compensation". Assumptions used in the
calculation of these amounts are included in Note 8 of the Notes to
Consolidated Financial Statements in our Company’s Annual
Report on Form 10-K for the fiscal year ended December 31,
2016.
(3)
I
n 2016, Mr. Madhu received $11,400 in cash
dividends on unvested restricted stock and $3,600 in Company
contributions to our defined contribution pension plan and Mr.
Timothy received $5,700 in cash dividends on unvested restricted
stock and $3,600 in Company contributions to our defined
contribution pension plan.
I
n
2015, Mr. Madhu received $16,200 in cash dividends on unvested
restricted stock and $3,600 in Company contributions to our defined
contribution pension plan and Mr. Timothy received $8,100 in cash
dividends on unvested restricted stock and $3,600 in Company
contributions to our defined contribution pension
plan.
11
GRANTS OF PLAN BASED AWARDS IN FISCAL YEAR 2016
Our
Compensation Committee, or our Board of Directors acting as our
Compensation Committee, granted stock option and restricted stock
awards under our 2014 Omnibus Stock Incentive Plan. Set forth in
the following table is information regarding option awards granted
in 2016. No restricted stock awards were granted during
2016.
|
|
Grant Date
|
|
Approval Date
|
Estimated Future Payouts Under Non-Equity Incentive Plan
Awards(1)
|
Estimated Future Payouts Under Equity Incentive Plan
Awards
|
All other Stock Awards: Number of Shares of Stock or
Units (#)
(1)
|
All other Option Awards: Number
of Securities Underlying
Options (#)
(2)
|
Exercise or Base Price of Option Awards ($/Sh)
|
Grant Date Fair Value of Stock
and Option Awards ($)
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
Jay
Madhu
|
1/16/2016
|
|
1/16/2016
|
-
|
-
|
-
|
25,000
|
$
6.00
|
8,504
|
|
|
|
|
|
|
|
|
|
||
|
Wrendon
Timothy
|
1/16/2016
|
|
1/16/2016
|
-
|
-
|
-
|
10,000
|
$
6.00
|
3,401
|
(1)
The amount represents a grant of restricted shares
made pursuant to our 2014 Omnibus Incentive Plan. The shares
are subject
to forfeiture upon termination of employment and restriction of
transfer, and will vest in increments of 6.25% on a quarterly basis
over a four-year period. The shares were granted conditioned on
service to the Company and carry all the rights of a
shareholder, including the right to receive dividends at the same
rate applicable to all common shareholders.
(2)
The amount represents a grant of stock options
made pursuant to our 2014 Omnibus Incentive Plan. The options were
granted conditioned on service to the Company, and
are subject
to forfeiture upon termination of employment and restriction of
transfer. The options will vest in increments of 6.25% on a
quarterly basis over a four-year period and will expire on the
10
th
anniversary
of the date of grant unless earlier exercised or earlier terminated
due to termination of employment.
(3)
The amounts reflect
the aggregate grant date fair value for each NEO’s restricted
share and option awards granted in 2016, determined in accordance
with FASB ASC Topic 718, “Compensation—Stock
Compensation”.
12
Employment Agreements
Jay Madhu
On
July 18, 2013, we entered into an executive employment
agreement with Jay Madhu, our Chief Executive Officer and
President. Under the terms of this agreement, as amended,
Mr. Madhu’s employment commenced on July 18, 2013 and
will continue for three years unless terminated earlier. Following
this initial three-year term, we extended Mr. Madhu’s
employment for an additional three-year term, after which the
agreement will automatically renew for additional one year terms
unless either party chooses not to renew.
The
executive employment agreement entitles Mr. Madhu to receive:
(1) an annual base salary of $232,000, (2) additional
compensation granted by our Board of Directors (or a committee
thereof), and (3) medical, dental, life, disability and
retirement benefits.
If
Mr. Madhu’s employment is terminated by us for good
cause or if Mr. Madhu terminates his employment with us, he
will be entitled to: (1) his accrued base salary and accrued
vacation pay and other paid time off, in each case through his date
of termination, and (2) reimbursement for expenses accrued
through his date of termination.
If
Mr. Madhu’s employment is terminated by us without good
cause, he will be entitled to: (1) his accrued base salary and
accrued vacation pay and other paid time off, in each case through
the date of termination, (2) reimbursement for expenses
accrued through his date of termination, and (3) the amount of
base salary that would have been payable through the term of the
agreement (excluding future automatic renewals) if his employment
had not been terminated. If such termination is within three years
following a change of control, Mr. Madhu will be entitled to
receive, in lieu of the amount described in clause
(3) directly above, an amount equal to 2.9 times the total
amount of his annual base salary. If Mr. Madhu’s
employment is terminated due to his death or incapacity, it will be
deemed to be a termination without good cause.
Mr. Madhu’s
executive employment agreement also contains non-compete and
non-solicitation provisions.
Wrendon Timothy
Wrendon
Timothy is our Chief Financial Officer and Secretary, and his
employment with us commenced on August 1, 2013. The terms of
his employment, as provided in an employment letter agreement
between us and Mr. Timothy, as amended, will continue until
July 31, 2019, and thereafter, automatically renew for additional
one-year terms unless either party choses now to
renew.
Under
the agreed upon terms of employment, Mr. Timothy is entitled
to receive a basic gross salary of $132,000 per year, payable
monthly. His salary will be reviewed annually and may be adjusted
at our discretion. We will also pay the monthly premiums for
Mr. Timothy’s medical, dental and vision insurance, and
match Mr. Timothy’s contributions to his pension plan.
Finally, Mr. Timothy will be eligible to receive a
discretionary bonus and any other compensation approved by our
Board of Directors (or a committee thereof), which will be based on
our financial performance and Mr. Timothy’s personal
performance.
We may
terminate Mr. Timothy’s employment without notice in the
event of serious or persistent misconduct or breach of the agreed
upon terms of Mr. Timothy’s employment or for cause. In
other circumstances, the party that wishes to terminate
Mr. Timothy’s employment must provide 60 days’
prior written notice.
13
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END 2016
The following table sets forth information regarding outstanding
stock option and restricted stock awards held by our NEOs at
December 31, 2016, including the number of shares underlying both
exercisable and unexercisable portions of each option as well as
the exercise price and expiration date of each outstanding
option;
|
|
Number of Securities Underlying Unexercised Options
Exercisable
(#)
|
Number of Securities Underlying Unexercised Options Unexercisable
(#)
|
Equity Incentive Plan Awards: Number of Securities Underlying
Unexercised Unearned Options
(#)
|
Option Exercise Price
($)
|
Option Expiration Date |
Number of Shares or Units of Stock That Have Not
Vested
(#)
|
Market Value of Shares or Units of Stock That Have Not
Vested
($)
(5)
|
Equity Incentive Plan Awards: Number of Unearned Shares, Units or
Other Rights That Have Not Vested
(#)
|
Equity Incentive Plan Awards: Market or Payout Value of Unearned
Shares, Units or Other Rights That Have Not Vested
($)
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jay
Madhu
|
60,000
|
(1
)
|
60,000
|
-
|
$
6.00
|
1/23/2025
|
20,000
|
(3
)
|
$
120,000
|
-
|
-
|
|
|
6,250
|
|
18,750
|
-
|
$
6.00
|
1/16/2026
|
-
|
|
-
|
-
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wrendon
Timothy
|
30,000
|
(2
)
|
30,000
|
-
|
$
6.00
|
1/23/2025
|
10,000
|
(4
)
|
$
60,000
|
-
|
-
|
|
|
2,500
|
|
7,500
|
-
|
$
6.00
|
1/16/2026
|
-
|
|
-
|
-
|
-
|
(1)
Mr. Madhu was awarded 120,000 stock options on January 23, 2015.
The options vested quarterly in increments of 7,500. The remaining
60,000 unvested options will become exercisable in quarterly
increments of 7,500 over the next 8 quarters, provided that Mr.
Madhu remains employed by the Company. Mr. Madhu was also awarded
25,000 stock options on January 16, 2016. The options vested
quarterly in increments of 1,562.50. The remaining 18,750 unvested
options will vest over the next 12 quarters, provided that Mr.
Madhu remains employed by the Company.
(2)
Mr. Timothy was awarded 60,000 stock options on January 23, 2015.
The options vested quarterly in increments of 3,750 commencing
January 23, 2015. The remaining 30,000 unvested option will become
exercisable in quarterly increments of 3,750 over the next 8
quarters, provided that Mr. Timothy remains employed by the
Company. Mr. Timothy was also awarded 10,000 stock options on
January 16, 2016. The options vested quarterly in increments of
625. The remaining 7,500 unvested options will vest over the next
12 quarters, provided that Mr. Timothy remains employed by the
Company.
(3)
Mr. Madhu was awarded 40,000 restricted shares on
January 23, 2015.
The restricted shares
vested quarterly in increments of 2,500 commencing January 23,
2015. Unvested restricted shares of 20,000 will vest in quarterly
increments of 2,500 over the next 8 quarters, provided that Mr.
Madhu remains employed by the Company.
(4)
Mr. Timothy was awarded 20,000 restricted
shares on January 23, 2015.
The restricted shares
vested quarterly in increments of 2,500 commencing January 23,
2015. Unvested restricted shares of 10,000 will vest in quarterly
increments of 1,250 over the next 8 quarters, provided that Mr.
Timothy remains employed by the Company.
(5)
Assumes
a stock price of $6.00, the closing price of the Company’s
ordinary shares on December 31, 2016.
14
OPTION EXERCISES AND STOCK VESTED IN FISCAL 2016
The following table sets forth information regarding stock vested
by our NEOs during the year ended December 31, 2016. There
were no options exercised by our NEOs in 2016.
|
OPTION EXERCISES AND STOCK VESTED IN FISCAL 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
Stock Awards
|
||
|
Name
|
Number of Shares Acquired on Exercise (#)
|
Value Realized on Exercise ($)
|
Number of Shares Acquired On Vesting (#)
|
Value Realized on Vesting ($)
(1)
|
|
|
|
|
|
|
|
Jay
Madhu
|
-
|
-
|
10,000
|
$
52,850
|
|
|
|
|
|
|
|
Wrendon
Timothy
|
-
|
-
|
5,000
|
$
26,425
|
(1)
Based
upon the closing share price on the dates upon which the shares
vested.
15
AUDIT COMMITTEE REPORT
The
primary purpose of the Audit Committee is to assist the Board in
fulfilling its responsibilities relating to the general oversight
of the Company’s financial reporting process. The Audit
Committee conducts its oversight activities for the Company in
accordance with the duties and responsibilities outlined in the
Audit Committee charter.
The
Company’s management is responsible for the preparation,
consistency, integrity and fair presentation of the financial
statements, accounting and financial reporting principles, systems
of internal control and procedures designed to ensure compliance
with accounting standards, applicable laws and regulations. The
Company’s independent registered public accounting firm,
Hacker Johnson, is responsible for performing an independent audit
of the Company’s financial statements.
The Audit Committee hereby reports as follows:
1.
The Audit Committee has reviewed and
discussed the audited financial statements of the Company as of and
for the year ended December 31, 2016 with management.
2. The
Audit Committee has discussed with Hacker Johnson, the
Company’s independent auditors for the year
ended
December 31, 2016,
the matters required to be discussed by Public Company Accounting
Oversight Board (“PCAOB”) Auditing Standard No. 16,
Communications with Audit Committees.
3. The
Audit Committee has received the written disclosures and the letter
from Hacker Johnson required by applicable
requirements of the
PCAOB regarding Hacker Johnson’s communications with the
Audit Committee concerning independence, and has discussed with
Hacker Johnson its independence.
4.
Based upon the review and discussion referred to in paragraphs (1)
through (3) above, the Audit Committee recommended to the Board,
and the Board has approved, that the audited financial statements
be included in the Company’s Annual Report on Form 10-K for
the year ended December 31, 2016, for filing with the
SEC.
THE AUDIT COMMITTEE
|
Raymond Cabillot, Chairman
|
|
|
|
|
|
Mayur Patel
|
|
|
|
|
|
Allan Martin
|
|
16
INDEPENDENT PUBLIC ACCOUNTANT FEES AND SERVICES
The
following table sets forth the aggregate fees for services related
to the years ended December 31, 2016 and 2015 as provided by
Hacker, Johnson & Smith PA, our principal
accountant:
|
|
2016
|
2015
|
|
Audit
Fees (a)
|
$
53,000
|
$
51,500
|
|
All
Other Fees (b)
|
-
|
23,500
|
|
Total
|
$
53,000
|
$
75,000
|
|
|
(a)
|
Audit
Fees represent fees billed for professional services rendered for
the audit of our annual financial statements and review of our
quarterly financial statements included in our quarterly reports on
Form 10-Q. The above fees for 2016 and 2015 are exclusive of audit
fees of $17,000 and $15,000, respectively, paid / payable to
EisnerAmper Cayman Ltd. for the statutory audit of the
Company’s reinsurance subsidiary, Oxbridge Reinsurance
Limited.
|
|
|
(b)
|
All
Other Fees represent fees billed for services provided to us not
otherwise included in the categories above, primarily fees related
to the review of our registration statement in connection with our
initial public offering.
|
Audit Committee’s Pre-Approval Policies and
Procedures
Our
Audit Committee charter includes our policy regarding the approval
of audit and non-audit services performed by our independent
auditors. The Audit Committee is responsible for retaining and
evaluating the independent auditors’ qualifications,
performance and independence. The Audit Committee pre-approves all
auditing services, internal control-related services and permitted
non-audit services (including the fees and terms thereof) to be
performed for us by our independent auditors, subject to such
exceptions for non-audit services as permitted by applicable laws
and regulations. The Audit Committee may delegate this authority to
a subcommittee consisting of one or more Audit Committee members,
including the authority to grant pre-approvals of audit and
permitted non-audit services, provided that decisions of such
subcommittee to grant pre-approvals are presented to the full Audit
Committee at its next meeting. Our Audit Committee approved all
professional services provided to us by Hacker, Johnson
& Smith PA
and EisnerAmper
Cayman Ltd. during 2016 and 2015.
17
PRINCIPAL SHAREHOLDERS
The
following table sets forth information regarding the beneficial
ownership of our ordinary shares as of April 3, 2017
by:
●
each person who is known by us to beneficially own more than 5% of
our outstanding ordinary shares,
●
each of our directors and NEOs, and
●
all directors and executive officers as a group.
The
percentages of ordinary shares beneficially owned are based on the
5,861,872 ordinary shares outstanding as of April 3, 2017.
Information with respect to beneficial ownership has been furnished
by each director, executive officer and beneficial owner of more
than 5% of our ordinary shares. Beneficial ownership is determined
in accordance with the rules of the SEC and generally requires that
such person have voting or investment power with respect to the
securities. In computing the number of ordinary shares beneficially
owned by a person listed below and the percentage ownership of such
person, ordinary shares underlying options, warrants or convertible
securities held by each such person that are exercisable or
convertible within 60 days of April 3, 2017 are deemed outstanding,
but are not deemed outstanding for computing the percentage
ownership of any other person. Except as otherwise indicated in the
footnotes to this table, or as required by applicable community
property laws, all persons listed have sole voting and investment
power for all ordinary shares shown as beneficially owned by them.
Unless otherwise indicated in the footnotes, the address for each
5% Shareholder is in care of Oxbridge Re Holdings Limited, at
Strathvale House, 2
nd
Floor, 90 North
Church Street, George Town, Cayman Islands.
|
|
Beneficially Owned At
April 3,
2017
|
|
|
Name
of Beneficial Owners
|
Number of
Ordinary Shares
|
Percent
|
|
5%
Shareholders:
|
|
|
|
|
|
|
|
Blake
Casper
|
635,236
(1)
|
10.31
%
|
|
|
|
|
|
Named
Executive Officers and Directors:
|
|
|
|
|
|
|
|
Paresh
Patel
|
864,000
(2)
|
13.41
%
|
|
|
|
|
|
Jay
Madhu
|
328,999
(3)
|
5.42
%
|
|
|
|
|
|
Krishna
Persaud
|
495,715
(4)
|
7.99
%
|
|
|
|
|
|
Mayur
Patel
|
367,000
(5)
|
6.01
%
|
|
|
|
|
|
Allan
Martin
|
828,998
(6)
|
12.52
%
|
|
|
|
|
|
Ray
Cabillot
|
1,187,850
(7)
|
16.93
%
|
|
|
|
|
|
Wrendon
Timothy
|
32,550
(8)
|
*
|
|
|
|
|
|
All
Executive Officers and Directors as a Group (7
persons)
|
4,105,112
|
49.00
%
|
18
*
Represents less
than 1% of the outstanding ordinary shares.
(1)
Includes 336,236
ordinary shares held by Moksha Capital Partners Re (C) Ltd.,
and 299,000 ordinary shares issuable upon the exercise of warrants
held by Moksha Capital Partners Re (C) Ltd. that are currently
exercisable. As of the date of this table, Blake Casper, an
individual, has sole voting and investment power over these shares
by virtue of being the majority member of Moksha Partners
Reinsurance Entity, Inc., a Florida member-managed limited
liability company that is the sole owner of Moksha Capital Partners
Re (C) Ltd.
(2)
Includes 530,000
ordinary shares issuable upon the exercise of warrants held by
Paresh Patel, individually, that are currently exercisable; 266,000
ordinary shares held by Paresh Patel, individually; 17,000 ordinary
shares held by Mr. Patel’s wife, Neha Patel; and
51,000 ordinary shares issuable upon the exercise of warrants
held by Mr. Patel’s wife, Neha Patel, that are currently
exercisable.
(3)
Includes 83,231
ordinary shares held by Universal Finance & Investments,
L.C.; and 203,768 ordinary shares issuable upon the exercise of
warrants held by Universal Finance & Investments, L.C.
that are currently exercisable, and 42,000 ordinary shares held in
Mr. Madhu’s name. As the sole owner and manager of Universal
Finance & Investments, L.C., Mr. Madhu has voting and
investment power over the ordinary shares and warrants held by that
entity.
(4)
Includes 153,572
ordinary shares held by Krishna Persaud and his wife, Sumentra
Persaud, jointly and 342,143 ordinary shares issuable upon the
exercise of warrants held by Krishna Persaud and his wife, Sumentra
Persaud, jointly, that are currently exercisable. Mr. Persaud
and his wife share voting and investment power over the shares and
warrants held jointly in their names.
(5)
Includes 118,000
ordinary shares held by Mayur Patel and his wife, Ulupi M. Patel,
jointly; 249,000 ordinary shares issuable upon the exercise of
warrants held by Mayur Patel and his wife, Ulupi M. Patel, jointly,
that are currently exercisable.
(6)
Includes 165,000
ordinary shares held by Allan Martin and his wife, Marie Martin,
jointly; 175,998 ordinary shares issuable upon the exercise of
warrants held by Allan Martin and his wife, Marie Martin, jointly,
that are currently exercisable; 34,666 ordinary shares issuable
upon the exercise of warrants held by A. S. Martin Children Trust
that are currently exercisable; 34,666 ordinary shares held by A.
S. Martin Children Trust; 4,334 ordinary shares issuable upon the
exercise of warrants held by Benjamin A Martin, Allan’s son;
4,334 ordinary shares held by Benjamin A. Martin; 39,000 ordinary
shares issuable upon the exercise of warrants held by Martin Family
Foundation that are currently exercisable; 39,000 ordinary shares
held Martin Family Foundation; 83,000 ordinary shares held by Fleur
de Lis Partners, LLLP, and 249,000 ordinary shares issuable upon
the exercise of warrants held by Fleur de Lis Partners, LLLP that
are currently exercisable. As the general partner of Fleur de Lis
Partners, LLLP, Mr. Martin has voting and investment power
over the ordinary shares and warrants held by that
entity.
(7)
Includes 105,000
ordinary shares issuable upon the exercise of warrants held by Ray
Cabillot, individually, that are currently exercisable; 35,000
ordinary shares held by Ray Cabillot, individually; 446,625
ordinary shares and 77,300 ordinary shares held by Farnam Street
Capital for the benefit of and as the General Partner of Farnam
Street Partners and FS Special Opportunities I Fund, respectively;
and 446,625 ordinary shares and 77,300 ordinary shares issuable
upon the exercise of warrants held by Farnam Street Capital for the
benefit of and as the General Partner of Farnam Street Partners and
FS Special Opportunities I Fund, respectively, that are currently
exercisable; As the general partner of Farnam Street Capital,
Mr. Cabillot has voting and investment power over the ordinary
shares and warrants held by that entity.
(8)
Includes 7,500
ordinary shares issuable upon the exercise of warrants held by
Mr. Timothy, individually, that are currently exercisable; and
25,050 ordinary shares held by Mr. Timothy,
individually.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING
COMPLIANCE
Based solely upon a review of Forms 3, 4, and 5 filed for the year
ended December 31, 2016, we believe that all of our directors,
officers, and 10% beneficial owners complied with all
Section 16(a) filing requirements applicable to them. In
addition, we believe that all such forms were timely filed except
that forms for the following transactions were filed
late:
●
Transactions
reported in a Form 5/A filed by Jay Madhu on June 13,
2016.
●
Transactions
reported on a Form 5/A filed by Paresh Patel on February 17,
2016.
19
CERTAIN RELATIONSHIPS AND RELATED-PARTY TRANSACTIONS
Reinsurance Contracts with Related Parties
During
2016, we were party to a reinsurance contract with Claddaugh, a
subsidiary of HCI Group. During 2016, on this reinsurance
contracts, we earned net premiums of $854,998.
During
2015, we were party to reinsurance contracts with Homeowners Choice
Property & Casualty Insurance Company
(“HCPCI”), and Claddaugh, both subsidiaries of HCI
Group. During 2015, on these reinsurance contracts, we earned
premiums of $562,500 and $3,498,333, respectively.
Mr. Madhu is a
director of HCI Group and previously served as the President of its
real estate division and as its Vice President of Investor
Relations. Paresh Patel, the non-executive Chairman of our Board of
Directors and a beneficial owner of more than 5% of our ordinary
shares, is a founder of HCI Group and currently serves as its Chief
Executive Officer and as the Chairman of its Board of Directors.
Both Mr. Madhu and Mr. Patel are also shareholders of HCI
Group. However, neither of Mr. Madhu nor Mr. Patel have
any interest in the reinsurance contracts between Claddaugh and our
Company or between HCPCI and our Company other than in their
capacity as equity holders of both of HCI Group and our
Company.
Policies for Approval or Ratification of Transactions with Related
Persons
Our
policy for approval or ratification of transactions with related
persons is for those transactions to be reviewed and approved by
the Audit Committee. That policy is set forth in the Audit
Committee Charter. Our practice is that such transactions are
approved by a majority of disinterested directors. The policy sets
forth no standards for approval. Directors apply their own
individual judgment and discretion in deciding such
matters.
OTHER MATTERS
Neither
the Board nor management intends to bring before the Meeting any
business other than the matters referred to in the Notice of Annual
General Meeting of Shareholders and this Proxy Statement. If any
other business should come properly before the Meeting, or any
adjournment or postponement thereof, the proxy holders will vote on
such matters at their discretion.
ADDITIONAL INFORMATION
Other Action at the Meeting
As of
the date of this Proxy Statement, the Company has no knowledge of
any business, other than as described herein and customary
procedural matters, which will be presented for consideration at
the Meeting. In the event any other business is properly presented
at the Meeting, the persons named in the accompanying proxy may,
but will not be obligated to, vote such proxy in accordance with
their judgment on such business.
Shareholder Proposals for the Annual General Meeting of
Shareholders in 2018
Pursuant to Rule
14a-8 of the Exchange Act, shareholder proposals must be received
in writing by the Secretary of the Company no later than 120 days
prior to the date of the Company’s proxy statement released
to shareholders in connection with the Company’s previous
year’s annual general meeting of shareholders and must comply
with the requirements of Cayman Islands corporate law and the
Articles in order to be considered for inclusion in the
Company’s proxy statement and form of proxy relating to the
annual general meeting of shareholders in 2018. Shareholder
proposals received by December 15, 2017 would be considered timely
for inclusion in the proxy statement relating to the 2018 annual
general meeting of shareholders.
20
Any
shareholder proposal for the annual general meeting of shareholders
in 2018, which is submitted outside the processes of Rule 14a-8,
shall be considered untimely unless received by the Secretary in
writing no later than January 2, 2018.
Under
our Articles, the Board shall call an extraordinary general meeting
upon receipt of signed “Members’ requisition” by
shareholders holding more than 66.66% in par value of the issued
shares which as of that date carry the right to vote at an
extraordinary general meeting of the Company. Such Members’
requisition must also contain the proposal to be considered at
(i.e. objects of) the meeting and must be signed by the
requisitionists and deposited at the registered office of the
Company. If the Board does not, within twenty-one days from the
date of the deposit of the Members’ requisition, duly proceed
to convene an extraordinary general meeting to be held within a
further twenty-one days, the requisitionists, or any of them
representing more than one-half of the total voting rights of all
the requisitionists, may themselves convene an extraordinary
general meeting, but any meeting so convened shall be held no later
than the day which falls three months after the expiration of the
said twenty-one day period. Any extraordinary general meeting
convened by the requisitionists shall be convened in the same
manner as nearly possible as that in which extraordinary general
meetings are convened by the Board.
Delivery of Documents to Shareholders Sharing an
Address
Some
companies, brokers, banks, and other holders of record may employ
procedures, approved by the SEC, known as
“householding.” Householding, which reduces costs
associated with duplicate printings and mailings, means that we
will send only one copy of our proxy materials to shareholders who
share the same address. Shareholders sharing the same address will
continue to receive separate proxy cards.
If you
own ordinary shares and would like to receive additional copies of
our proxy materials, you may submit a request to us by:
(i) mailing a request in writing to our Secretary at
Strathvale House, 2
nd
Floor, 90 North
Church Street, P.O. Box 469, Grand Cayman, KY1-9006, Cayman
Islands, or (ii) calling us at 1-345-749-7570, and we will
promptly mail the requested copies to you. If you own ordinary
shares in your own name and you want to receive separate copies of
the proxy materials in the future, or if you receive multiple
copies and want to receive only one copy, contact Broadridge
Corporate Issuer Solutions at 1-877-830-4936. If you beneficially
own ordinary shares and you want to receive separate copies of the
proxy materials in the future, or if you receive multiple copies
and want to receive only one copy, contact your bank, broker, or
other holder of record.
Costs of Solicitation
The
entire cost of this proxy solicitation will be borne by the
Company, including expenses in connection with preparing,
assembling, printing and mailing proxy solicitation materials. In
addition to solicitation by mail, officers, directors and employees
of the Company may solicit proxies by telephone, facsimile,
electronic communication, in person or via the Internet, although
no compensation will be paid for such solicitation.
|
|
|
|
|
By
Order of the Board of Directors,
|
|
|
|
|
|
Jay
Madhu
Chief
Executive Officer
April
24, 2017
|
|
|
Grand
Cayman, Cayman Islands
|
21
TABLE OF CONTENTS