PART III

Item 10. Directors, Executive Officers and Corporate Governance

Board of Directors 

The following information is set forth below regarding our directors: their names, their ages as of March 31, 2007, their current position(s) with Bristol West, the committees of our Board of Directors (which we refer to as our “Board”) of which they are a member, and certain biographical information.

Name		Age		Position		Director Since
James R. Fisher		51		Executive Chairman of the Board and Director		2000
R. Cary Blair (1)(2)		67		Director		2004
Jeffrey J. Dailey		49		Chief Executive Officer, President and Director		2006
Richard T. Delaney (1)(3)		68		Director		2004
Allan W. Ditchfield (2)		69		Director		2006
Todd A. Fisher		41		Director		1998
Perry Golkin		53		Director		1998
Mary R. Hennessy (2)(3)		54		Director		2004
Eileen Hilton (1)		60		Director		2004
James N. Meehan (2)(3)		61		Director		2004
Arthur J. Rothkopf (2)		71		Director		2004

 

(1)		Member of the Compensation Committee
(2)		Member of the Corporate Governance and Nominating Committee
(3)		Member of the Audit Committee

Mr. James R. Fisher

 

Mr. Fisher has been our Executive Chairman of the Board since July 2006. He has served as Chairman of the Board and as a Bristol West director since September 2000. He was our Chief Executive Officer from September 2000 through June 2006. Mr. Fisher has been the managing member of Fisher Capital Corp. L.L.C. since March 1997. From 1986 through March 1997, Mr. Fisher held various executive positions at American Re Corporation. Currently, Mr. Fisher is a director of Alea Group Holdings (Bermuda) Ltd. and a trustee of Lafayette College in Easton, Pennsylvania.

Mr. R. Cary Blair

 

Mr. Blair has been a Bristol West director since March 2004. Mr. Blair retired as Chairman and Chief Executive Officer of the Westfield Group in August 2003. He served his entire career at the Westfield Group from 1961 through August 2003. Currently, Mr. Blair is a director of First Merit Corporation and Davey Tree Expert Co., and the Chairman of the Westfield Group Foundation.

Mr. Jeffrey J. Dailey

 

Mr. Dailey has been a Bristol West director since May 2006. Mr. Dailey has been our Chief Executive Officer since July 2006 and our President since December 2003. He was our Chief Operating Officer from April 2001 through June 2006. Mr. Dailey has 27 years of experience in the insurance industry. Prior to joining Bristol West in 2001, Mr. Dailey was the Chief Executive Officer of Reliant Insurance. Prior to joining Reliant Insurance in 1996, Mr. Dailey spent 14 years with The Progressive Corporation, holding numerous executive positions culminating as President of Progressive's Northeast Division.

Mr. Richard T. Delaney

 

Mr. Delaney has been a Bristol West director since March 2004. Mr. Delaney has worked as an independent consultant since January 2000. From 1994 through January 2000, Mr. Delaney held the positions of President and Chief Operating Officer of Am-Re Consultants, Inc. and Vice Chairman of Am-Re Global Services, Inc. From January 2002 through November 2003, Mr. Delaney was a director of Alea Group Holdings Ltd. From January 2002 through June 2004, Mr. Delaney was a director of Associated Industries Insurance Services, Inc. Mr. Delaney is a member of the CPCU Society.

 

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Mr. Allan W. Ditchfield

 

Mr. Ditchfield has been a Bristol West director since November 2006. He has been an independent systems consultant since 1999. Prior to his consulting work, Mr. Ditchfield held key corporate positions as chief information officer in the insurance, communications, and process control industries. He currently serves as Director of the National Council at Northeastern University and a member of the board of directors of Atlantic Public Media.

Mr. Todd A. Fisher

 

Mr. Fisher has been a Bristol West director since February 1998. Mr. Fisher has been a member of KKR & Co. L.L.C. since January 1, 2001. Mr. Fisher was an executive of KKR & Co. L.L.C. from June 1993 to December 31, 2000. Mr. Fisher was an associate at Goldman Sachs & Co. from July 1992 to June 1993. Currently, Mr. Fisher is a director of Alea Group Holdings (Bermuda) Ltd., Rockwood Holdings, Inc., Maxeda B.V., and Duales System Deutschland GmbH.

Mr. Perry Golkin

 

Mr. Golkin has been a Bristol West director since February 1998. Mr. Golkin has been a member of KKR & Co. L.L.C. since January 1, 1996. Mr. Golkin was a general partner of KKR & Co. L.L.C. from 1995 to January 1996. Prior to 1995, he was an executive of KKR & Co. L.L.C. Currently, Mr. Golkin is a director of Alea Group Holdings (Bermuda) Ltd., PRIMEDIA, Inc., Rockwood Holdings, Inc., and Willis Group Holdings Limited.

Ms. Mary R. Hennessy

 

Ms. Hennessy has been a Bristol West director since March 2004. Since January 2006, Ms. Hennessy has been an independent consultant to the insurance and reinsurance industries. From May 2002 through December 2005, Ms. Hennessy was employed as a consultant with Webb Associates of Haddonfield, New Jersey. From January 2000 through May 2002, Ms. Hennessy was the Chief Executive Officer and President of Overseas Partners, Ltd. From November 1996 through April 1999, Ms. Hennessy was President and Chief Operating Officer of TIG Holdings. Prior to serving at TIG, Ms. Hennessy held various executive positions at American Re Corporation from 1988 to 1996. Ms. Hennessy has been a Fellow of the Casualty Actuarial Society since 1981. Currently, Ms. Hennessy is a director of Security Capital Assurance, Ltd. and GeoVera Holdings, Ltd.

Dr. Eileen Hilton

 

Dr. Hilton has been a Bristol West director since March 2004. Dr. Hilton has been the Chief Executive Officer and President of Biomedical Research Alliance of New York since 1998. Dr. Hilton has been an attending physician at Long Island Jewish Medical Center since 1985. Dr. Hilton is currently a Fellow with the American College of Physicians and the Infectious Disease Society of America and a member of the American Society of Microbiology, the Long Island Infectious Disease Society and the New York Society of Infectious Disease.

Mr. James N. Meehan

 

Mr. Meehan has been a Bristol West director since March 2004. Mr. Meehan was a Managing Director of Bank of America in Chicago, Illinois, from June 1987 through May 2002. Since his retirement in May 2002, he has worked as an independent consultant. Prior to serving at Bank of America, Mr. Meehan was Vice President of First National Bank of Chicago. Currently, Mr. Meehan is a director of the Delphi Financial Group, American Fuji Fire and Marine Insurance Company, and Reassure America Life Insurance Company, a subsidiary of Swiss Re.

Mr. Arthur J. Rothkopf

 

Mr. Rothkopf has been a Bristol West director since March 2004. Mr. Rothkopf has been Senior Vice President of the U.S. Chamber of Commerce since July 2005. Prior to serving at the U.S. Chamber of Commerce, Mr. Rothkopf served as President of Lafayette College in Easton, Pennsylvania, from 1993 until 2005. He also has served as the Deputy Secretary and General Counsel of the United States Department of Transportation and was a partner in the law firm of Hogan & Hartson in Washington, D.C. Currently, Mr. Rothkopf is a director of Insurance Services Office, Inc.

 

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Executive Officers

 

The following information is set forth below regarding our executive officers: their names, their ages as of March 31, 2007, their current position(s) with Bristol West, and certain biographical information.

Name		Age		Position
James R. Fisher		51		Executive Chairman of the Board
Jeffrey J. Dailey		49		Chief Executive Officer and President
Simon J. Noonan		43		Executive Vice President and Chief Operating Officer
Anne M. Bandi		50		Senior Vice President—Operations
Douglas R. Burtch		47		Senior Vice President—Marketing
George N. Christensen		61		Senior Vice President—Business Integration
Brian J. Dwyer		50		Senior Vice President—Product Research and Development
Nila J. Harrison		43		Senior Vice President—Human Resources
Ronald E. Latva		42		Senior Vice President—Product Management
George G. O’Brien		51		Senior Vice President—Chief Legal Officer and Corporate Secretary
John L. Ondeck		47		Senior Vice President—Chief Information Officer
Alexis S. Oster		38		Senior Vice President—General Counsel
Robert D. Sadler		43		Senior Vice President—Chief Financial Officer
James J. Sclafani, Jr.		47		Senior Vice President—Claims
Audrey E. Sylvan		43		Senior Vice President—Product Management

James R. Fisher

 

Mr. Fisher has been our Executive Chairman of the Board since July 2006. He has served as Chairman of the Board and as a Bristol West director since September 2000. He was our Chief Executive Officer from September 2000 through June 2006. Mr. Fisher has been the managing member of Fisher Capital Corp. L.L.C. since March 1997. From 1986 through March 1997, Mr. Fisher held various executive positions at American Re Corporation. Currently, Mr. Fisher is a director of Alea Group Holdings (Bermuda) Ltd. and a trustee of Lafayette College in Easton, Pennsylvania.

Jeffrey J. Dailey

 

Mr. Dailey has been our Chief Executive Officer since July 2006 and our President since December 2003. He has also been a Bristol West director since May 2006. He was our Chief Operating Officer from April 2001 through June 2006. Mr. Dailey has 27 years of experience in the insurance industry. Prior to joining Bristol West in 2001, Mr. Dailey was the Chief Executive Officer of Reliant Insurance. Prior to joining Reliant Insurance in 1996, Mr. Dailey spent 14 years with The Progressive Corporation, holding numerous executive positions culminating as President of Progressive's Northeast Division.

Simon J. Noonan, FIA, MAAA

 

Mr. Noonan has been our Executive Vice President and Chief Operating Officer since July 2006. He was our Executive Vice President—Actuarial/Product from May 2005 through June 2006. He served as our Senior Vice President—Actuarial/Product from April 2002 to May 2005. Prior to joining Bristol West in 2002, Mr. Noonan was the Chief Executive Officer of Metis Financial LLC, a consulting firm specializing in the property and casualty insurance market, since November 1997. Prior to joining Metis, Mr. Noonan served as a Senior Manager and Director in the insurance practice of KPMG from 1991 through 1997.

Anne M. Bandi

 

Ms. Bandi has been our Senior Vice President—Operations since April 2001. Ms. Bandi has 27 years of insurance operations experience. Prior to joining Bristol West, Ms. Bandi had been the Senior Vice President of Operations at Reliant Insurance since February 1996. Prior to joining Reliant Insurance, Ms. Bandi spent 16 years with The Progressive Corporation in a variety of operations management positions.

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Douglas R. Burtch

 

Mr. Burtch has been our Senior Vice President—Marketing since February 2007. Mr. Burtch has 29 years of insurance industry experience. From August 1999 until February 2007, he was our Vice President—Marketing. Prior to joining Bristol West, Mr. Burtch served as Senior Vice President of Sun States Insurance from 1998 to August 1999. Prior to joining Sun States, Mr. Burtch held management positions with regional insurance carriers specializing in marketing personal and commercial products from 1984 to 1997.

George N. Christensen

 

Mr. Christensen has been our Senior Vice President—Business Integration since April 2001. Mr. Christensen joined Bristol West in 1978 and has served in various roles since that time, including Chief Information Officer.

Brian J. Dwyer

 

Mr. Dwyer has been our Senior Vice President—Product Research and Development since August 2003. Mr. Dwyer has 17 years of insurance industry experience. Prior to joining Bristol West, Mr. Dwyer served in various management roles for The Progressive Corporation from 1989 through 2002, including Regional Marketing Manager and General Manager. Prior to joining The Progressive Corporation, Mr. Dwyer served as a senior manager with Ernst & Whinney, a major accounting firm.

Nila J. Harrison

 

Ms. Harrison has been our Senior Vice President—Human Resources since April 2001. Ms. Harrison has 23 years of human resources experience. Prior to joining Bristol West, Ms. Harrison was the Senior Vice President, Human Resources for Reliant Insurance. Prior to joining Reliant Insurance in April 1996, Ms. Harrison was in the retail industry, where she spent 12 years in human resources management positions with Fabri-Centers of America Inc. and Limited Brands Inc.

Ronald E. Latva

 

Mr. Latva has been our Senior Vice President—Product Management since May 2004.  From August 2000 until May 2004, he was a Vice President and National Product Manager for Bristol West.  Mr. Latva has over 20 years of insurance experience in pricing, product management, claims and operations.  Prior to joining Bristol West, he served as an Assistant Vice President at Allmerica Financial from 1997 to 2000.  From 1986 through 1997, he held various pricing and product management positions at Great American Insurance.

George G. O’Brien

 

Mr. O'Brien has been our Senior Vice President—Chief Legal Officer and Corporate Secretary since March 2004. Prior to joining Bristol West, Mr. O'Brien had his own litigation practice since 1994. He began consulting with Bristol West in March 2003. From 1980 until 1994, Mr. O’Brien was a partner with the law firm of Dechert Price & Rhoads, and from 1980 until 1988 he was an associate with that firm.

John L. Ondeck

 

Mr. Ondeck has been our Senior Vice President—Chief Information Officer since May 2002. Mr. Ondeck has over 15 years of information technology experience. Prior to joining Bristol West in 2002, Mr. Ondeck was President of Armstrong and Lures, Inc., a software consulting firm from 2001 to 2002 and 1998 to 2000. Mr. Ondeck was a Vice President of Sales and Operations for Digital Day, a software development firm, from 2000 to 2001. From 1990 through 1997, Mr. Ondeck held management positions at Oracle Corporation and Kraft General Foods.

Alexis S. Oster

 

Ms. Oster has been our Senior Vice President—General Counsel since April 2001. Ms. Oster has 14 years of experience in the insurance industry. Prior to joining Bristol West in 2001, Ms. Oster served as General Counsel for Reliant Insurance. Prior to joining Reliant Insurance in 1996, Ms. Oster was corporate counsel of USF&G Insurance, with a primary focus on regulatory matters, company licensing and general corporate legal matters.

 

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Robert D. Sadler

 

Mr. Sadler has been our Senior Vice President—Chief Financial Officer since December 2006. From April 2001 until December 2006, he was our Senior Vice President—Marketing. Prior to joining Bristol West in 2001, Mr. Sadler was the Chief Financial Officer for Reliant Insurance from 1996 to 2001. Prior to joining Reliant Insurance, Mr. Sadler served as the Chief Financial Officer of Agency Insurance Company of Maryland, Inc. from 1992 to 1996. Mr. Sadler was also a manager in the insurance practice of Ernst & Young, where he worked from 1985 to 1992. 

James J. Sclafani, Jr.

 

No material changes have been made to the procedures by which our stockholders may recommend nominees to our Board since we last described these procedures in our definitive proxy statement issued in connection with our 2006 annual meeting of stockholders and filed with the SEC on March 7, 2007.

 

AUDIT COMMITTEE

 

The Board has established a separately-designated audit committee in accordance with section 3(a)(58)(A) of the Exchange Act (which we refer to as the “Audit Committee”). The Audit Committee is composed of three directors: James N. Meehan (Chairman), Richard T. Delaney and Mary R. Hennessy. The Board has determined that James N. Meehan qualifies as an “audit committee financial expert” as that term is defined in Item 407(d)(5) of Regulation S-K under the Securities Act of 1933, as amended (which we refer to as the “Securities Act”). The Board also affirmatively determined that the “audit committee financial expert” was independent in accordance with the independence definition and procedures set forth in the Corporate Governance Guidelines adopted by our Board (which we refer to as our “Corporate Governance Guidelines”), the corporate governance standards of the NYSE, and applicable rules and regulations of the SEC. For a description of our Board’s annual assessment of director independence regarding the directors who are members of this committee, see the disclosure below under the heading “Item 13. Certain Relationships and Related Transactions, and Director Independence - Director Independence.” The principal duties and responsibilities of the Audit Committee are set forth in its charter. See the disclosure below in this section under the heading “Corporate Governance - Corporate Governance Documents - Copies of Corporate Governance Documents.”

In accordance with the NYSE’s corporate governance standards, our Corporate Governance Guidelines provide that no member of the Audit Committee may serve simultaneously on the audit committees of more than three public company boards, unless the Board determines that such simultaneous service would not impair such director’s ability to effectively serve on the Audit Committee and that determination is disclosed in our annual proxy materials distributed in connection with an Annual Meeting of Stockholders. Directors are required to advise the Chief Executive Officer and the Chairman of the Board and the Chairman of the Corporate Governance and Nominating Committee before they accept an invitation to serve on the audit committee of any public company board. Currently, no member of the Audit Committee serves simultaneously on the audit committees of more than three public company boards.

 

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CORPORATE GOVERNANCE

Corporate Governance Documents

Board Committee Charters. Our Board has adopted charters for the Audit Committee, the Compensation Committee, and the Corporate Governance and Nominating Committee each of which meets the corporate governance standards of the NYSE.

 

Corporate Governance Guidelines. The Corporate Governance Guidelines adopted by our Board meet the corporate governance standards of the NYSE.

Code of Conduct and Business Ethics. The Board adopted the Code of Conduct and Business Ethics that applies to all of our directors, officers and employees (which we refer to as the “Code of Conduct”). Failure to comply with the Code of Conduct is a serious offense and will result in appropriate disciplinary action. We will disclose, to the extent and in the manner required by any applicable law or NYSE corporate governance standard, any waiver of any provision of the Code of Conduct.

Code of Conduct and Business Ethics Policy for CEO and Senior Financial Officers. The Board also adopted the Code of Conduct and Business Ethics Policy for Chief Executive Officer and Senior Financial Officers (which we refer to as the “Senior Financial Officer Code of Conduct”), which applies to our principal executive officer (our Chief Executive Officer and President) and our principal financial and principal accounting officer (our Chief Financial Officer) as well as our Corporate Controller and other senior financial officers. These officers are expected to adhere at all times to the Senior Financial Officer Code of Conduct. Failure to comply with the Senior Financial Officer Code of Conduct is a serious offense and will result in appropriate disciplinary action. Our Board has the authority to independently approve, in their sole discretion, any such disciplinary action as well as any amendment to and any waiver or material departure from a provision of the Senior Financial Officer Code of Conduct. We will disclose at www.bristolwest.com/Bristolwest/Investor/Governance.aspx, our investor relations website, to the extent and in the manner permitted by Item 5.05 of Form 8-K under the Exchange Act, the nature of any amendment to the Senior Financial Officer Code of Conduct (other than technical, administrative, or other non-substantive amendments), our approval of any material departure from a provision of the Senior Financial Officer Code of Conduct, and our failure to take action within a reasonable period of time regarding any material departure from a provision of the Senior Financial Officer Code of Conduct that has been made known to any of our executive officers.

Copies of Corporate Governance Documents. Copies of each of the following corporate governance documents are available, without charge, at www.bristolwest.com/Bristolwest/Investor/Governance.aspx, our investor relations website:

 

·	the Audit Committee charter

 

·	the Compensation Committee charter

 

·	the Corporate Governance and Nominating Committee charter

 

·	the Corporate Governance Guidelines

 

·	the Code of Conduct

 

·	the Senior Financial Officer Code of Conduct

 

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Printed copies of each of the corporate governance documents listed above are also available, without charge, at the written request of any stockholder of record. Printed copies of the Senior Financial Officer Code of Conduct are also available, without charge, at the written request of any other person. Requests for printed copies should be mailed to: Bristol West Holdings, Inc., 5701 Stirling Road, Davie, Florida 33314, Attention: Corporate Secretary.

Meetings of Non-Management and Independent Directors

Our non-management directors meet in separate executive sessions without senior management for a portion of each meeting. At least once per year, the independent directors meet in a separate executive session without senior management and non-independent directors for a portion of the meeting. The NYSE corporate governance standards define non-management directors to include any directors who are not executive officers of our Company, including any directors who are not independent by virtue of a material relationship, former status or family relationship, or for any other reason.

Presiding Director

 

The directors at each executive session of non-management or independent directors determine the Chairman for the executive session.

Communicating with Our Directors

 

So that our stockholders and other interested parties may make their concerns known, we have established a method for communicating with our directors, including non-management directors. A stockholder may communicate with our directors, including non-management directors, either (1) by writing to the Chief Legal Officer and Corporate Secretary at Bristol West Holdings, Inc., 5701 Stirling Road, Davie, Florida 33314, Attention: Corporate Governance Hotline, or (2) by calling our Corporate Governance Hotline at (800) 819-9714. Communications intended specifically for our non-management directors should be marked “Attention: Non-Management Director Communications.” Communications intended specifically for our Audit Committee should be marked “Attention: Audit Committee.” All other director communications should be marked “Attention: Director Communications.” Our Corporate Governance Hotline will forward to the Audit Committee all communications specifically directed to that committee and will forward all other Hotline communications to our Chief Legal Officer and Corporate Secretary. Our Chief Legal Officer and Corporate Secretary will facilitate all such communications. We have posted a summary of this method of communicating with our directors on our investor relations website at www.bristolwest.com/Bristolwest/Investor/Governance.aspx under the tabs entitled “Contact the Board” and “Corporate Governance Hotline.”

Item 11. Executive Compensation

 

COMPENSATION COMMITTEE

The Compensation Committee is composed of three directors: R. Cary Blair (Chairman), Richard T. Delaney and Eileen Hilton. For a description of our Board’s annual assessment of director independence regarding the directors who are members of this committee, see the disclosure below under the heading “Item 13. Certain Relationships and Related Transactions, and Director Independence - Director Independence.” The principal duties and responsibilities of the Compensation Committee are set forth in its charter. See the disclosure above under the heading “Item 10. Directors, Executive Officers and Corporate Governance - Corporate Governance - Corporate Governance Documents.” The report of the Compensation Committee is included below in this section under the heading “Compensation Committee Report.”

Processes and Procedures for the Determination of Executive Compensation

A substantial portion of the Compensation Committee’s annual efforts relates to the determination of executive compensation. In the first quarter of each year, the Compensation Committee typically determines annual base salary, establishes the criteria for variable annual incentive compensation awards and grants any long-term incentive compensation awards for executive officers. After the end of each year, the Compensation Committee determines the amount of the variable annual incentive compensation awards by taking into account the financial results for the completed year and individual performance. The Compensation Committee’s annual process also includes a review of our executive compensation programs and practices.

 

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For each executive officer, the Compensation Committee is responsible for the establishment of annual base salary, granting any long-term incentive compensation awards under the 2004 Stock Incentive Plan for Bristol West Holdings, Inc. and Subsidiaries (which we refer to as the “2004 Stock Incentive Plan”), and setting applicable award levels under the Bristol West Holdings, Inc. Executive Officer Incentive Plan (which we refer to as the “EIP”) and the Bristol West Holdings, Inc. Management Incentive Plan (which we refer to as the “MIP”). Additional disclosure regarding the Compensation Committee’s executive compensation procedures is included below in this section under the heading “Narrative Disclosure to 2006 Summary Compensation Table and 2006 Grants of Plan Based Awards Table.”

Within certain limits, the Compensation Committee may delegate its duties and powers under the 2004 Stock Incentive Plan in whole or in part as it determines, including to a Board committee or to Bristol West officers. The Compensation Committee has delegated the right, under specified circumstances, to grant restricted stock awards under the 2004 Stock Incentive Plan to key employees who are not executive officers. The Compensation Committee has delegated this right to a committee of the Board (which we refer to as the “CEO Committee”) the sole member of which is a member of the Board who is also Bristol West’s Chief Executive Officer. The Compensation Committee authorizes a pool, in dollars, to be utilized by the CEO Committee in making such awards of restricted stock for recruiting and retention purposes to key employees who are not executive officers. The CEO Committee approves such grants on an individual basis and regularly reports such grants to the Compensation Committee.

The Compensation Committee evaluates the individual performances of the Chief Executive Officer, Chief Operating Officer, and Executive Chairman of the Board. The Compensation Committee also works closely with the Chief Executive Officer and the Executive Chairman of the Board in evaluating the individual performances of the other executive officers for purposes of establishing annual base salaries, approving variable annual incentive compensation awards under the EIP and the MIP, and granting any stock-based, long-term incentive compensation awards under the 2004 Stock Incentive Plan. The Compensation Committee (1) administers EIP awards and MIP awards for participants who are executive officers, including the establishment and achievement of performance goals and the amount of awards; and (2) designates as an EIP participant or an MIP participant any executive officer whom they deem to be a key employee. Our Chief Executive Officer, with assistance from our Chief Operating Officer, performs such functions for MIP participants who are not executive officers. Additional disclosure regarding the EIP and the MIP is included below in this section under the heading “Compensation Discussion and Analysis - Variable Annual Incentive Compensation.”

Compensation Advisors. The Compensation Committee has the authority under its charter to engage the services of outside advisors, experts and others to assist the Compensation Committee. In accordance with this authority, since 2004, the Compensation Committee has engaged Gough Management Company (which we refer to as the “Compensation Consultant”) as an independent outside compensation consultant to assist the committee in evaluating compensation practices and to advise the committee on other matters related to compensation for the CEO and other executive officers. During 2006, the Compensation Committee periodically consulted with the Compensation Consultant regarding its processes and procedures and for purposes of considering certain compensation component alternatives.

In addition, during 2006, Bristol West management and our Human Resources Department provided to the Compensation Committee market pay data for various executive positions supplied to the Human Resources Department by Mercer Human Resource Consulting, a compensation consultant. The survey data targeted companies of similar size (based on total assets) and included information regarding various compensation components, including base salaries, total cash compensation, and long-term incentive compensation. Bristol West management also provided to the Compensation Committee additional publicly available data regarding various compensation components for executive officers at other property and casualty insurance companies.

 

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COMPENSATION DISCUSSION AND ANALYSIS

 

Overview

The Compensation Committee oversees a compensation program designed to further the attainment of our strategic goals of growth and profitability and thus increase stockholder value. While our compensation program applies to all key employees, including our executive officers, this section focuses primarily on compensation of our executive officers and, in particular, the executive officers named in the “2006 Summary Compensation Table” below (who we refer to as the “named executive officers”). Currently, we have 15 officers that the Board has designated as our executive officers. Our executive officers have the broadest job responsibilities and policy making authority at Bristol West.

To achieve the objectives of our compensation program in 2006, the Compensation Committee and management concluded that it was important to recruit and retain highly competent executives and reward them for superior performance. Accordingly, the Compensation Committee’s general objective in 2006 was to structure total cash compensation earned by each executive officer to be within the third quartile (50% to 75%) of total cash compensation paid to similarly situated executive officers employed by peer companies and other companies of similar size within the insurance industry, subject to certain adjustments based on specific needs, our financial performance, and the experience and individual performance of each executive officer. In addition, the Committee made certain long-term incentive compensation awards to our executive officers during 2006 in the form of restricted stock for the purpose of retaining these key employees over a long-term period, providing them direct ownership in our Common Stock with a view toward preserving stockholder value, and encouraging decisions related to increased stockholder value in the future.

Compensation Program Objectives

Our executive compensation program was designed to further the attainment of our strategic goals of growth and profitability and thus increase stockholder value. Our strategic vision is to be the insurer of choice for our distribution force and policyholders. To achieve this vision, we seek to align all of our business processes to create value for our policyholders and producers. We aim to continually refine our sales practices and technology to make it easier for our producers and policyholders to do business with us. We also strive to provide insureds with faster, higher quality and more flexible service when interacting with our representatives. Our success in achieving this vision is dependent upon our senior management team. To succeed, we must recruit and retain highly competent executives and reward them for superior performance.

The Compensation Committee structured our executive compensation program to enable us to continue to appropriately compete for talented and experienced executives with companies of similar size within the property and casualty insurance industry. Within this context, the principal objectives for our executive compensation program are:

 

·	Alignment: Link executive compensation rewards with growth in earnings and strategic operational performance that ultimately results in sustainable increases in stockholder value

 

·	Motivation: Motivate executive officers to be accountable for and accomplish our financial and strategic operational objectives

 

·	Retention and Attraction: Retain and attract key executive officers to drive increases in stockholder value

 

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		3.	Exhibits
			Part IV of the Original Report is hereby amended to add the exhibits listed below that are required to be filed in connection with this Amended Report. See the separate Exhibit Index attached hereto and incorporated herein.

 

 

Exhibit Number		Description of Document
31.1		Rule 13a-14(a)/15d-14(a) Certification executed by Jeffrey J. Dailey, Chief Executive Officer and President of Bristol West Holdings, Inc. (pursuant to Section 302 of the Sarbanes-Oxley Act of 2002) (exhibit 31.1 to this Amendment No. 1 to Annual Report on Form 10-K)
31.2		Rule 13a-14(a)/15d-14(a) Certification executed by Robert D. Sadler, Senior Vice President-Chief Financial Officer of Bristol West Holdings, Inc. (pursuant to Section 302 of the Sarbanes-Oxley Act of 2002) (exhibit 31.2 to this Amendment No. 1 to Annual Report on Form 10-K)
Additional Exhibits.       In accordance with Item 601(32)(ii) of Regulation S-K, Exhibit 32.1 is to be treated as “furnished” rather than “filed” as part of the report.
32.1		Section 1350 Certification executed by Jeffrey J. Dailey, Chief Executive Officer and President of Bristol West Holdings, Inc., and by Robert D. Sadler, Senior Vice President-Chief Financial Officer of Bristol West Holdings, Inc. (exhibit 32.1 to this Amendment No. 1 to Annual Report on Form 10-K)

 

	(b)	See Item 15(a)(3) and the separate Exhibit Index attached hereto and incorporated herein.
	(c)	See item 15(a)(2).

 

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	BRISTOL WEST HOLDINGS, INC.
	By:	/s/ Jeffrey J. Dailey
		Jeffrey J. Dailey Chief Executive Officer and President Date: April 27, 2007

 

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature		Title		Date
/s/ Jeffrey J. Dailey		Director, Chief Executive Officer and President		April 27, 2007
Jeffrey J. Dailey		(Principal Executive Officer)
/s/ Robert D. Sadler		Senior Vice President-Chief Financial Officer		April 27, 2007
Robert D. Sadler		(Principal Financial Officer and Principal Accounting Officer)
R. Cary Blair*		Director
Richard T. Delaney*		Director
Allan W. Ditchfield*		Director
James R. Fisher*		Director
Todd A. Fisher*		Director
Perry Golkin*		Director
Mary R. Hennessy*		Director
Eileen Hilton*		Director
James N. Meehan*		Director
Arthur J. Rothkopf*		Director

 

*By: /s/ Robert D. Sadler 

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Robert D. Sadler

Attorney-in-fact by power of attorney

Date: April 27, 2007

 

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EXHIBIT INDEX

Exhibit Number		Description of Document
2.1		Agreement and Plan of Merger, dated as of March 1, 2007, among the Registrant, Farmers Group, Inc. and BWH Acquisition Company (incorporated by reference to Exhibit 2.1 of Form 8-K filed on March 7, 2007)
3.1		Amended and Restated Certificate of Incorporation of the Registrant (incorporated by reference to Exhibit 3.1 of Registrant’s Registration Statement (File No. 333-111259) on Form S-1)
3.2		Amended and Restated Bylaws of the Registrant (incorporated by reference to Exhibit 3.2 of Registrant’s Registration Statement (File No. 333-111259) on Form S-1)
4.1		Form of Certificate of Common Stock (incorporated by reference to Exhibit 4.1 of Registrant’s Registration Statement (File No. 333-111259) on Form S-1)
4.2		Registration Rights Agreement, dated as of July 10, 1998, between the Registrant and Bristol West Associates LLC (incorporated by reference to Exhibit 4.2 of Registrant’s Registration Statement (File No. 333-111259) on Form S-1)
4.3		Subscription Agreement, dated as of July 9, 1998, between the Registrant and Fisher Capital Corp. LLC (incorporated by reference to Exhibit 4.3 of Registrant’s Registration Statement (File No. 333-111259) on Form S-1)
4.4		Sale Participation Agreement, dated as of July 9, 1998, among KKR Partners II, L.P., KKR 1996 Fund L.P., Bristol West Associates LLC and Fisher Capital Corp. LLC (incorporated by reference to Exhibit 4.4 of Registrant’s Registration Statement (File No. 333-111259) on Form S-1)
4.5		Equity Contribution Agreement, dated as of July 10, 1998, between the Registrant, Bristol West Associates LLC, Fisher Capital Corp. LLC, Jeanne Rosner, Jeffrey Rosner, Sylvia Rosner, Wendy Schlesinger, and Donald Simon (exhibit 4.5 to Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006)
4.6		Form of Employee Stockholder’s Agreement for Senior Management (incorporated by reference to Exhibit 4.5 of Registrant’s Registration Statement (File No. 333-111259) on Form S-1), as amended by form of Amendment to Employee Stockholder’s Agreement effective as of December 29, 2005, between Bristol West Holdings, Inc. and the stockholder (form of amendment is incorporated by reference to Exhibit 4.5 of Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2005)
4.7		Form of Employee Stockholder’s Agreement for Employees (incorporated by reference to Exhibit 4.6 of Registrant’s Registration Statement (File No. 333-111259) on Form S-1), as amended by form of Amendment to Employee Stockholder’s Agreement effective as of December 29, 2005, between Bristol West Holdings, Inc. and the stockholder (form of amendment is incorporated by reference to Exhibit 4.5 of Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2005)
4.8		Form of Sale Participation Agreement (incorporated by reference to Exhibit 4.7 of Registrant’s Registration Statement (File No. 333-111259) on Form S-1)

4.9

Employee Stockholder’s Agreement between the Registrant and Simon Noonan dated as of July 25, 2002 (incorporated by reference to Exhibit 10.32 of Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2004), as amended by Amendment to Employee Stockholder’s Agreement effective as of December 29, 2005, between Bristol West Holdings, Inc. and Simon Noonan (form of amendment is incorporated by reference to Exhibit 4.5 of Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2005)

 

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4.10		Employee Stockholder’s Agreement between the Registrant and James J. Sclafani, Jr. dated as of March 20, 2003 (incorporated by reference to Exhibit 10.33 of Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2004), as amended by Amendment to Employee Stockholder’s Agreement effective as of December 29, 2005, between Bristol West Holdings, Inc. and James J. Sclafani, Jr. (form of amendment is incorporated by reference to Exhibit 4.5 of Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2005)
10.1		Credit Agreement dated as of July 31, 2006, among the Registrant, the Lenders (ING Capital LLC, JPMorgan Chase Bank, N.A., LaSalle Bank National Association, Regions Bank, General Electric Capital Corporation, and Bank of Communications Co., Ltd., New York Branch), the Administrative Agent (ING Capital LLC), the Joint Bookrunners and Joint Lead Arrangers (ING Capital LLC and JP Morgan Securities, Inc.), and the Documentation agent (LaSalle Bank National Association) (incorporated by reference to Exhibit 10.10 of Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2006)
10.2		Form of California Brokerage Agreement effective January 1, 2005 (incorporated by reference to Exhibit 10.18 of Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2004)
10.3		Letter Agreement, dated as of July 9, 1998, between the Registrant and Fisher Capital Corp. LLC (incorporated by reference to Exhibit 10.13 of Registrant’s Registration Statement (File No. 333-111259) on Form S-1); as amended by an Amendatory Agreement between the Registrant and Fisher Capital Corp. LLC, dated as of December 18, 2000 (incorporated by reference to Exhibit 10.14 of Registrant’s Registration Statement (File No. 333-111259) on Form S-1); and as further amended by Amendatory Agreement to Letter Agreement between the Registrant and Fisher Capital Corp. LLC, dated as of January 1, 2002 (incorporated by reference to Exhibit 10.15 of Registrant’s Registration Statement (File No. 333-111259) on Form S-1); as further amended by an Amendatory Agreement between the Registrant and Fisher Capital Corp. LLC, dated as of January 1, 2004 (exhibit 10.3 to Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006); and as further amended by a Termination Agreement between the Registrant and Fisher Capital Corp. LLC, effective as of December 31, 2006 (exhibit 10.3 to Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006)
10.4		Letter Agreement, dated as of July 10, 1998, between the Registrant and Kohlberg Kravis Roberts & Co. L.P. (exhibit 10.4 to Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006)
*10.5		1998 Stock Option Plan for the Management and Key Employees of the Registrant and Subsidiaries (incorporated by reference to Exhibit 10.16 of Registrant’s Registration Statement (File No. 333-111259) on Form S-1)
*10.6		Employment Agreement, dated as of May 25, 2006, between James R. Fisher and the Registrant (incorporated by reference to Exhibit 10.1 of Form 8-K filed on May 25, 2006)
*10.7		Amended and Restated 2004 Stock Incentive Plan for the Registrant and Subsidiaries (incorporated by reference to Exhibit 10.1 of Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2006)
*10.8		Form of Restricted Stock Award Agreement for Executives with two-year vesting schedule (incorporated by reference to Exhibit 10.1 of Form 8-K filed on February 27, 2006)
*10.9		Form of Restricted Stock Award Agreement for Executives with a five-year vesting schedule (incorporated by reference to Exhibit 10.2 of Form 8-K filed on February 27, 2006)
*10.10		Form of Restricted Stock Award Agreement for Directors with a two-year vesting schedule (incorporated by reference to Exhibit 10.6 of Form 8-K filed on February 27, 2006)

 

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*10.11		Non-Employee Directors’ Deferred Compensation and Stock Award Plan (incorporated by reference to Exhibit 10.5 of Form 8-K filed on February 27, 2006)
*10.12		Form of Restricted Stock Award Agreement for Employees with two-year vesting schedule (incorporated by reference to Exhibit 10.14 of Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2005)
*10.13		Form of Restricted Stock Award Agreement for Employees with five-year vesting schedule (incorporated by reference to Exhibit 10.15 of Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2005)
*10.14		Form of Restricted Stock Award Agreement for Employees with Equity Investment (incorporated by reference to Exhibit 10.16 of Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2005)
*10.15		Executive Officer Incentive Plan (incorporated by reference to Exhibit 10.3 of Form 8-K filed on February 27, 2006)
*10.16		Management Incentive Plan (incorporated by reference to Exhibit 10.4 of Form 8-K filed on February 27, 2006)
10.17		Services Agreement by and among BRW Acquisition, Inc. and Firemark Partners, LLC, dated July 24, 2002 (incorporated by reference to Exhibit 10.2 of Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2005); as amended by Correction and Amendment of the July 24, 2002 Services Agreement between BRW Acquisition, Inc. and Firemark Partners, LLC, dated November 8, 2005 (incorporated by reference to Exhibit 10.3 of Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2005); and as further amended by Amendment No. 2 dated as of October 1, 2006 (exhibit 10.17 to Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006)
10.18		Voting Agreement, dated as of March 1, 2007, by and among the Registrant, Farmers Group, Inc., BWH Acquisition Company, Bristol West Associates LLC and Aurora Investments II LLC (incorporated by reference to Exhibit 99.1 of Form 8-K filed on March 7, 2007)
21.1		List of Subsidiaries of the Registrant (exhibit 21.1 to Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006)
23.1		Consent of Independent Registered Public Accounting Firm (exhibit 23.1 to Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006)
24.1		Powers of Attorney (exhibit 24.1 to Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006)
31.1		Rule 13a-14(a)/15d-14(a) Certification executed by Jeffrey J. Dailey, Chief Executive Officer and President of Bristol West Holdings, Inc. (pursuant to Section 302 of the Sarbanes-Oxley Act of 2002) (exhibit 31.1 to this Amendment No. 1 to Annual Report on Form 10-K)

 

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31.2		Rule 13a-14(a)/15d-14(a) Certification executed by Robert D. Sadler, Senior Vice President-Chief Financial Officer of Bristol West Holdings, Inc. (pursuant to Section 302 of the Sarbanes-Oxley Act of 2002) (exhibit 31.2 to this Amendment No. 1 to Annual Report on Form 10-K)
*		Management contract or compensatory plan or arrangement.
Additional Exhibits.         In accordance with Item 601(32)(ii) of Regulation S-K, Exhibit 32.1 is to be treated as “furnished” rather than “filed” as part of the report.
32.1		Section 1350 Certification executed by Jeffrey J. Dailey, Chief Executive Officer and President of Bristol West Holdings, Inc., and by Robert D. Sadler, Senior Vice President-Chief Financial Officer of Bristol West Holdings, Inc. (exhibit 32.1 to this Amendment No. 1 to Annual Report on Form 10-K for the fiscal year ended December 31, 2006)

 

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