UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549
 
FORM 8-K
 
Current Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
 
May 9, 2018
Date of Report (Date of earliest event reported)
 
Arch Capital Group Ltd.
(Exact name of registrant as specified in its charter)
 
Bermuda
 
001-16209
 
N/A
(State or other
jurisdiction of
incorporation or
organization)
 
(Commission File Number)
 
(I.R.S. Employer
Identification No.)
 
Waterloo House, Ground Floor, 100 Pitts Bay Road, Pembroke HM 08, Bermuda
(Address of principal executive offices) (Zip Code)
 
Registrant’s telephone number, including area code:
(441) 278-9250
 
N/A
(Former name or former address, if changed since last report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
o      Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o      Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o      Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o        Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company      o
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange
Act.   o



ITEM 1.01     Entry Into a Material Definitive Agreement .     
On May 10, 2018, Arch Capital Group Ltd. (“ACGL” or the "Company") and Arch Capital Finance LLC (“Arch Finance”), a wholly-owned subsidiary of ACGL, entered into a second supplemental indenture (the “Second Supplemental Indenture”) by and among ACGL, Arch Finance and The Bank of New York Mellon, as trustee (the “Trustee”), to the indenture, dated as of December 8, 2016 (the “Base Indenture”), as supplemented by a first supplemental indenture, dated as of December 8, 2016 (the “First Supplemental Indenture” and, together with the Base Indenture, the “Indenture”) relating to $500,000,000 aggregate principal amount of 4.011% senior notes due 2026 (the “2026 Notes”) and $450,000,000 aggregate principal amount of 5.031% senior notes due 2046 (the “2046 Notes” and, together with the 2026 Notes, the “Senior Notes”) issued by Arch Finance and fully and unconditionally guaranteed by ACGL.
The Indenture originally provided that the Notes are redeemable at any time at the option of Arch Finance at a redemption price equal to a make-whole premium or, following the par call date (September 15, 2026 in the case of the 2026 Notes, and June 15, 2046, in the case of the 2046 Notes), at par, plus in each case, accrued and unpaid interest. The Second Supplemental Indenture limits this optional redemption right to provide that the Notes are not redeemable at the option of Arch Finance on or before December 8, 2021, except in the limited circumstances set forth in the Second Supplemental Indenture. This change is intended to permit the Notes to qualify as Tier 3 ancillary capital under eligible capital requirements of the Bermuda Monetary Authority. Since this amendment does not materially adversely affect the interests of the holders of Notes, the Second Supplemental Indenture was entered into without consent of any holders of Notes.
This description of the Second Supplemental Indenture and related matters is not complete and is qualified in its entirety by the actual terms of the Second Supplemental Indenture, a copy of which is incorporated herein by reference and attached hereto as Exhibit 4.1.
ITEM 5.02.      Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers .

On May 10, 2018, Mark D. Lyons tendered his resignation as the Chief Financial Officer and Treasurer of ACGL, such resignation to be effective on May 25, 2018. Mr. Lyons will assist in the transition of the Chief Financial Officer and Treasurer role until his departure from the Company.  

On May 14, 2018 Mr. Lyons’ employment agreement with the Company was amended to provide that his employment will terminate on May 25, 2018 as a result of his resignation without good reason and the Company waived Mr. Lyons’ noncompetition covenant in the employment agreement.  Mr. Lyons’ covenants relating to nonsolicitation and confidentiality were not waived. A copy of the amendment is attached to this Current Report on Form 8-K as Exhibit 10.1.

On May 14, 2018, the Company announced the appointment of Francois Morin as the Company’s Chief Financial Officer and Treasurer effective May 25, 2018.  As of that date, Mr. Morin will assume the duties of the Company’s principal financial officer and principal accounting officer until the earlier of his resignation or removal.  There are no reportable family relationships or related person transactions involving the Company and Mr. Morin.

Mr. Morin, age 50, most recently served as Senior Vice President, Chief Risk Officer and Chief Actuary of the Company, a position he has held since May 2015. He joined the Company in October 2011 as Chief Actuary and Deputy Chief Risk Officer. From January 1990 through September 2011, Mr. Morin served in various roles for Towers Watson & Co. and its predecessor firm Towers Perrin Forster & Crosby, including its actuarial division, Tillinghast. He holds a B.Sc. in Actuarial Science from Université Laval in Canada. He is a Fellow of the Casualty Actuarial Society, a Chartered Financial Analyst and a Member of the American Academy of Actuaries.

As certain information called for by Item 5.02(c)(3) regarding Mr. Morin’s employment agreement is not yet determined or is unavailable at this time, the Company will provide such information in an amendment to this Form 8-K within four (4) business days after the information is determined or becomes available.

A copy of the press release announcing Mr. Lyons’ departure and Mr. Morin’s appointment is attached to this Current Report on Form 8-K as Exhibit 99.1.



ITEM 5.07     Submission of Matters to a Vote of Security Holders .
ACGL’s annual meeting of shareholders was held on May 9, 2018. At the meeting, the holders of 123,520,476 common shares, which represents approximately 90 percent of the outstanding shares entitled to vote as of the record date of March 14, 2018, were represented in person or by proxy. Matters submitted to shareholders at the meeting and the voting results thereof were as follows:
Item 1. The vote on the election of the four Class II directors to hold office until the 2021 annual meeting of shareholders or until their successors are elected and qualified. The voting results were as follows:

NOMINEE
FOR
AGAINST
WITHHELD
BROKER NON-VOTES
Eric W. Doppstadt
113,084,859
1,719,951
49,992
8,665,674
Laurie S. Goodman
114,607,599
201,254
45,949
8,665,674
Constantine Iordanou
113,738,815
1,093,381
22,606
8,665,674
John M. Pasquesi
111,333,550
3,492,366
28,886
8,665,674

Item 2 . The vote on a proposal on advisory vote on executive compensation (say-on-pay). The voting results were as follows:

FOR
AGAINST
ABSTAIN
BROKER NON-VOTES
105,020,452
9,787,156
47,194
8,665,674

Item 3 . The vote on the ratification of the selection of PricewaterhouseCoopers LLP as ACGL’s independent registered public accounting firm for the year ending December 31, 2018. The voting results were as follows:

FOR
AGAINST
ABSTAIN
BROKER NON-VOTES
122,277,110
1,218,771
24,595
0

Item 4 . The vote on the approval of the 2018 Long-Term Incentive and Share Award Plan. The voting results were as follows:

FOR
AGAINST
ABSTAIN
BROKER NON-VOTES
105,565,507
9,246,506
42,789
8,665,674

Item 5 . The vote on the approval of an amendment to the Memorandum of Association to effect a three-for-one common share split. The voting results were as follows:
FOR
AGAINST
ABSTAIN
BROKER NON-VOTES
123,365,986
79,715
74,775
0

Item 6 . The vote on the election of certain individuals as Designated Company Directors of certain of ACGL’s non-U.S. subsidiaries. The voting results were as follows:



DIRECTOR
FOR
AGAINST
WITHHOLD
BROKER NON-VOTES
Robert Appleby
114,754,655
44,288
55,859
8,665,674
Anthony Asquith
114,746,948
51,632
56,222
8,665,674
Stephen Bashford
114,760,045
44,358
50,399
8,665,674
Dennis R. Brand
114,708,466
107,126
39,210
8,665,674
Ian Britchfield
114,734,736
50,481
69,585
8,665,674
Pierre-Andre Camps
114,727,783
57,474
69,545
8,665,674
Chung Foo Choy
114,740,986
45,110
68,706
8,665,674
Paul Cole
114,739,537
44,658
70,607
8,665,674
Graham B.R. Collis
110,825,451
325,033
3,704,318
8,665,674
Michael Constantinides
114,734,041
58,107
62,654
8,665,674
Stephen J. Curley
114,746,466
44,641
63,695
8,665,674
Nick Denniston
114,746,996
45,448
62,358
8,665,674
Christopher A. Edwards
114,746,489
44,658
63,655
8,665,674
Seamus Fearon
114,739,538
57,685
57,579
8,665,674
Michael Feetham
114,745,415
45,692
63,695
8,665,674
Beau H. Franklin
114,742,558
58,555
53,689
8,665,674
Giuliano Giovannetti
114,710,401
82,796
61,605
8,665,674
Michael Hammer
114,747,215
45,448
62,139
8,665,674
W. Preston Hutchings
114,752,281
60,895
41,626
8,665,674
Constantine Iordanou
114,771,661
55,800
27,341
8,665,674
Jason Kittinger
114,733,656
58,845
62,301
8,665,674
Gerald Konig
114,739,604
52,561
62,637
8,665,674
Jean-Philippe Latour
114,734,715
57,514
62,573
8,665,674
Lino Leoni
114,747,217
64,145
43,440
8,665,674
Mark D. Lyons
111,045,642
144,164
3,664,996
8,665,674
Patrick Mailloux
114,733,421
73,435
47,946
8,665,674
Paul Martin
114,740,786
45,448
68,568
8,665,674



Robert McDowell
114,744,955
46,192
63,655
8,665,674
David H. McElroy
114,727,330
87,269
40,203
8,665,674
Francois Morin
114,750,339
56,724
47,739
8,665,674
David J. Mulholland
114,756,462
44,658
53,682
8,665,674
Mark Nolan
111,032,399
127,380
3,695,023
8,665,674
Nicolas Papadopoulo
114,772,361
48,756
33,685
8,665,674
Michael Price
114,749,350
66,543
38,909
8,665,674
Elisabeth Quinn
114,752,986
43,609
58,207
8,665,674
Maamoun Rajeh
114,761,313
57,824
35,665
8,665,674
Andrew T. Rippert
114,733,061
67,850
53,891
8,665,674
Arthur Scace
114,734,132
50,581
70,089
8,665,674
Soren Scheuer
114,751,773
45,654
57,375
8,665,674
Matthew Shulman
114,766,417
46,330
42,055
8,665,674
William A. Soares
114,741,621
60,427
52,754
8,665,674
Patrick Storey
114,744,333
46,774
63,695
8,665,674
Hugh Sturgess
114,765,484
47,295
42,023
8,665,674
Ross Totten
114,744,267
47,018
63,517
8,665,674
Gerald Wolfe
114,717,516
63,387
73,899
8,665,674

ITEM 8.01     Other Events .

Preferred Share Dividends.   On May 9, 2018, the Board of Directors (the “Board”) of ACGL declared dividends with respect to the outstanding 18,000,000 depositary shares, each representing a 1/1000th interest in a share of 5.25% Non-Cumulative Preferred Shares, Series E, $0.01 per share (“Series E Shares”), with a $25,000 liquidation preference per share (equivalent to a $25.00 liquidation preference per depositary share), as outlined below.  All such dividends will be payable out of lawfully available funds for the payment of dividends under Bermuda law on June 30, 2018 to holders of record of the Series E Shares, as of June 15, 2018, unless determined otherwise by the Board or the Executive Committee of the Board on or prior to the effective date. In addition, the Board declared dividends with respect to the Series E Shares, to be payable out of lawfully available funds for the payment of dividends under Bermuda law on September 30, 2018 to holders of record of the Series E Shares, as of September 15, 2018, unless determined otherwise by the Board or the Executive Committee of the Board on or prior to th e effective date.
Series
Effective Date for Declaration
Dividend Period
Dividend Amount
Rate Per Share
Series E
6/30/18
3/31/18-6/29/18

$5,906,250

$0.328125
Series E
9/30/18
6/30/18-9/29/18

$5,906,250

$0.328125

In addition, on May 9, 2018, the Board of ACGL declared dividends with respect to the outstanding 13,200,000 depositary shares, each representing a 1/1000th interest in a share of 5.45% Non-Cumulative Preferred Shares, Series F, $0.01 per share (“Series F Shares”), with a $25,000 liquidation preference per share (equivalent to a $25.00 liquidation preference per depositary share), as outlined below.  All such dividends will be payable out of lawfully available funds for the payment of dividends under Bermuda law on June 30, 2018 to holders of record of the Series F Shares, as of June 15, 2018, unless determined otherwise by the Board or the Executive Committee of the Board on or prior to the effective date. In addition, the Board declared dividends with respect to the Series F Shares, to be payable out of lawfully available funds for the payment of dividends under Bermuda law on September 30, 2018 to holders of record of the Series F Shares, as of September 15, 2018, unless determined otherwise by the Board or the Executive Committee of the Board on or prior to the effective date.
Series
Effective Date for Declaration
Dividend Period
Dividend Amount
Rate Per Share
Series F
6/30/18
3/31/18-6/29/18

$4,496,250


$0.340625

Series F
9/30/18
6/30/18-9/29/18

$4,496,250


$0.340625






Common Share Split.   As reported above in ITEM 5.07, at ACGL’s Annual Meeting on May 9, 2018, ACGL’s shareholders voted to amend the company’s Memorandum of Association to effect a three-for-one split of the company’s common shares. The amendment will become effective on June 18, 2018, which will become the record date for the determination of the owners of common shares entitled to additional common shares. The distribution date for such additional common shares will be on or about June 20, 2018. At that time, each record date shareholder will become the record owner of, and entitled to receive two additional common shares for each common share then owned of record by such shareholder. Shareholders will receive information about the additional common shares to which they are entitled on or about the distribution date. The Board reserves the right, notwithstanding shareholder approval of the proposed amendment to the Memorandum of Association, and without further action by the shareholders, to elect not to proceed with the amendment.

ITEM 9.01     Financial Statements and Exhibits .

(d):    The following exhibits are being filed herewith.



SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
ARCH CAPITAL GROUP LTD.
 
 
 
 
 
 
Date: May 15, 2018
By:
/s/ W. Preston Hutchings
 
 
Name:
W. Preston Hutchings
 
 
Title:
Senior Vice President and Chief Investment Officer





Exhibit 4.1
SECOND SUPPLEMENTAL INDENTURE (this “ Second Supplemental Indenture ”) dated May 10, 2018, between Arch Capital Finance LLC, a Delaware limited liability company (herein called the “ Company ”), Arch Capital Group Ltd., a Bermuda company (herein called the “ Guarantor ”), and The Bank of New York Mellon, a New York banking corporation, as trustee hereunder (herein called the “ Trustee ”).
RECITALS OF THE COMPANY
The Company, the Guarantor and the Trustee entered into an Indenture dated as of December 8, 2016 (the “ Original Indenture ”), pursuant to which senior unsecured debentures, notes or other evidences of indebtedness of the Company (the “ Securities ”) may be issued in one or more series from time to time.
The Company, the Guarantor and the Trustee entered into a First Supplemental Indenture dated as of December 8, 2016 (the “ First Supplemental Indenture ”), pursuant to which the Company issued (x) the Company’s “4.011% Senior Notes due 2026” (the “ 2026 Notes ”) and (y) “5.031% Senior Notes due 2046” (the “ 2046 Notes ” and, together with the 2026 Notes, the “ Notes ”), in each case fully and unconditionally guaranteed by the Guarantor.
Section 9.01 of the Original Indenture provides that the Company and the Guarantor, when authorized by a Board Resolution, and the Trustee, at any time and from time to time, may amend or supplement the Original Indenture or the Securities or the Guarantees without the consent of any Holder to make any modifications or amendments that do not, in the good faith opinion of the Company’s Board of Directors materially adversely affect the interests of the Holders.
The Company and the Guarantor have delivered to the Trustee copies of Board Resolutions duly adopted by their respective Board of Directors authorizing the execution of this Second Supplemental Indenture.
All things necessary to make this Second Supplemental Indenture a valid agreement of the Company, the Guarantor and the Trustee and a valid supplement to the Original Indenture and the First Supplemental Indenture have been done.
NOW, THEREFORE, the Company, the Guarantor and the Trustee mutually covenant and agree, for the equal and proportionate benefit of the respective Holders from time to time of the Notes, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 1.1.
Definitions .
The Original Indenture together with the First Supplemental Indenture and this Second Supplemental Indenture are hereinafter sometimes collectively referred to as the “ Indenture .” For the avoidance of doubt, references to any “Section” of the “Indenture” refer to such Section of the Original Indenture as supplemented and amended by the First Supplemental Indenture and as further supplemented


and amended by this Second Supplemental Indenture. All capitalized terms which are used herein and not otherwise defined herein are defined in the Original Indenture and are used herein with the same meanings as in the Original Indenture. If a capitalized term is defined in the Original Indenture or in the First Supplemental Indenture and in this Second Supplemental Indenture, the definition in this Second Supplemental Indenture shall apply to the Notes.
For all purposes of this Second Supplemental Indenture, except as otherwise expressly provided or unless the context otherwise requires:
(1)    the terms defined in this article have the meanings assigned to them in this article and include the plural as well as the singular;
(2)    all other terms used herein which are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them therein;
(3)    all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles in the United States, and, except as otherwise herein expressly provided, the term “generally accepted accounting principles” with respect to any computation required or permitted hereunder shall mean such accounting principles as are generally accepted at the date of such computation;
(4)    the words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Indenture as a whole and not to any particular article, section or other subdivision; and
(5)    all references used herein to the male gender shall include the female gender.
ARTICLE TWO
OPTIONAL REDEMPTION

Article Five of the First Supplemental Indenture is hereby amended as follows:
(a)    Section 5.1 of the First Supplemental Indenture is amended to add the following after the last sentence thereof:
“Notwithstanding anything to the contrary, the 2026 Notes and the 2046 Notes are not redeemable at the Company’s option on or before December 8, 2021, except that the Company may, redeem the 2026 Notes, in whole and not in part, or the 2046 Notes, in whole and not in part, following the occurrence of a Rating Methodology Event or any other Specified Event at the Redemption Price determined in accordance with this Section 5.1 (a “ Specified Event Redemption ”); provided, that notice of a Specified Event Redemption shall be given within 90 days of the occurrence of the applicable Specified Event; provided, further, that, at the time of such notice and assuming that payment for such redemption had been made, the applicable Conditions to Redemption (including receipt from the BMA of its consent to the redemption as specified in clause (iii) of the definition of “Conditions to Redemption”) are satisfied and, if not so satisfied, the period for giving of such notice shall be extended until such time as the Conditions to Redemption are satisfied.”

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(b)    Paragraph 8 of each Note is amended to add the following after the last sentence thereof:
“Notwithstanding anything to the contrary, the 2026 Notes and the 2046 Notes are not redeemable at the Company’s option on or before December 8, 2021, except that the Company may, redeem the 2026 Notes, in whole and not in part, or the 2046 Notes, in whole and not in part, following the occurrence of a Specified Event at the Redemption Price determined in accordance with Section 5.1 (a “ Specified Event Redemption ”); provided, that notice of a Specified Event Redemption shall be given within 90 days of the occurrence of the applicable Specified Event; provided, further, that, at the time of such notice and assuming that payment for such redemption had been made, the applicable Conditions to Redemption are satisfied and, if not so satisfied, the period for giving of such notice shall be extended until such time as the Conditions to Redemption are satisfied.”
(c)    Section 5.2 of the First Supplemental Indenture is amended to insert the following defined terms in alphabetical order:
“ Applicable Supervisory Regulations ” means such insurance supervisory laws, rules and regulations relating to group supervision or the supervision of single insurance entities, as applicable, which are applicable to the Guarantor or the Insurance Group, and which shall initially mean the Group Rules until such time when the BMA no longer has jurisdiction or responsibility to regulate the Guarantor, the Company or the Insurance Group.
“ BMA ” means the Bermuda Monetary Authority, or, should the Bermuda Monetary Authority no longer have jurisdiction or responsibility to regulate the Guarantor or the Insurance Group, as the context requires, a regulator which is otherwise subject to Applicable Supervisory Regulations.
“ Conditions to Redemption ”, are satisfied on any day with respect to a scheduled redemption or a planned purchase of any series of Notes, if:
(i)    the redemption or purchase of such series of Notes would not result in, or accelerate the occurrence of, an Insolvency Event; and
(ii)    the Solvency Capital Requirement is complied with after the repayment or purchase of such series of Notes; and
(iii)    the BMA has given, and not withdrawn by such date, its prior consent to the redemption of such series of Notes and the payment of accrued and unpaid interest or to the purchase of such series of Notes; provided, that if under the Applicable Supervisory Regulations no such consent is required at the time in order for the series of Notes to qualify or continue to qualify, as applicable, as Tier 3 Capital of the Guarantor or the Insurance Group, this clause (iii) shall not apply.
“ ECR ” means the enhanced capital and surplus requirement applicable to the Insurance Group and as defined in the Insurance Act or, should the Insurance Act or the Group Rules no longer apply to the Insurance Group, any and all other solvency capital requirements defined in the Applicable Supervisory Regulations.

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“ Group Rules ” means the Group Solvency Standards, together with the Group Supervision Rules, as those rules and regulations may be amended or replaced from time to time.
“ Group Solvency Standards ” means the Bermuda Insurance (Prudential Standards) (Insurance Group Solvency Requirement) Rules 2011, as those rules and regulations may be amended or replaced from time to time.
“ Group Supervision Rules ” means the Bermuda Insurance (Group Supervision) Rules 2011, as those rules and regulations may be amended or replaced from time to time.
“ Insolvency Event ” means, as of the relevant date, the Company or the Guarantor, as applicable, is not, or after making an applicable payment on any series of Notes or any Guarantee would not be, solvent. An Officers’ Certificate relating to each series of Notes as to the solvency of the Company or the Guarantor, as applicable, shall, in the absence of manifest error, be treated and accepted by the Guarantor, the Trustee, the Holders of such series of Notes and all other interested parties as correct and sufficient evidence thereof, shall be final and binding on such parties, and the Trustee shall be entitled to rely on such Officers’ Certificate with respect to such series of Notes without any liability to any Person.
“ Insurance Act ” means the Bermuda Insurance Act 1978, as amended from time to time.
“ Insurance Group ” means all subsidiaries of the Guarantor that are regulated insurance or reinsurance companies (or part of such regulatory group) pursuant to the Applicable Supervisory Regulations.
“ Issue Date ” means December 8, 2016.
“ Rating Methodology Event ” means, with respect to any series of Notes, if, as a consequence of a change in, or clarification to, the rating methodology (or the interpretation thereof) of Moody’s Investor Service, Standard & Poor’s Rating Services or Fitch Ratings Inc. or any respective successor, which change or clarification becomes effective on or after the Issue Date, the capital treatment of such series of Notes for the Company or the Guarantor or their respective groups or the Insurance Group is amended in a way that is reasonably determined by the Company or the Guarantor to be materially unfavorable to the Company or the Guarantor or their respective subsidiaries or the Insurance Group and provided such determination by the Company has been notified to the BMA in advance and the BMA has given notice of its approval (or non-disapproval) of such determination.
“ Regulatory Event ” means, with respect to any series of Notes, if, as a consequence of a change in, or clarification to, the Applicable Supervisory Regulations by the BMA such series of Notes (in whole or in part) will not or will no longer qualify as Tier 3 Capital under the Group Supervision Rules or the Applicable Supervisory Regulations then applicable to the Guarantor or the Insurance Group, as the context requires (and if the Applicable Supervisory Regulations do not refer to such term, the nearest corresponding concept (if any) under the Applicable Supervisory Regulations), as reasonably determined by the Company or the Guarantor.
“ Specified Event ” means, with respect to any series of Notes, the occurrence of any of a Tax Event, a Rating Methodology Event or a Regulatory Event with respect thereto.
“ Specified Event Redemption ” has the meaning forth in Section 5.1.

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“ Solvency Capital Requirement ” means the ECR or any other requirement to maintain assets applicable to the Company or the Guarantor or in respect of the Insurance Group, as applicable, pursuant to the Applicable Supervisory Regulations.
“ Tax Event ” means, with respect to any series of Notes, if an opinion of a recognized independent tax counsel has been delivered to the Trustee stating that, as a result of any change in or amendment to the laws (or any rules or regulations thereunder) of any Taxing Jurisdiction, or as a result of any change in or amendment to an official interpretation or application of any such laws, rules or regulations by any legislative body, court, governmental agency or regulatory authority (including the enactment of any legislation and the publication of any judicial decisions or regulatory determination), which change or amendment becomes effective on or after the Issue Date, interest payable by the Company or the Guarantor, as applicable, in respect of such series of Notes is no longer, or within 90 days of the date of the opinion will no longer be, fully deductible by the Company or the Guarantor, as applicable, for income tax purposes in the applicable jurisdiction (to the extent that such interest was so deductible as of the time of such Tax Event), and that non-deductibility cannot be avoided by the Company or the Guarantor, as applicable, taking such reasonable measures it (acting in good faith) deems appropriate.
“ Taxing Jurisdiction ” means Bermuda, or any political subdivision thereof, or any authority or agency therein having the power to tax, or any other jurisdiction from or through which the Company or the Guarantor makes a payment on any series of Notes or any Guarantee or in which the Company or the Guarantor generally becomes subject to taxation, or any jurisdiction in which a successor of the Company or the Guarantor is incorporated.
“ Tier 3 Capital ” means “Tier 3 Ancillary Capital” as set out in the Group Supervision Rules (or, if the Group Supervision Rules are amended so as to no longer refer to Tier 3 Ancillary Capital in this respect, the nearest corresponding concept (if any) under the Group Supervision Rules, as amended).”
(d)    Section 5.3 of the First Supplemental Indenture is amended to insert the following after Section 5.3(b):
(c)    Notice of any Specified Event Redemption shall state the specified Redemption Date, the facts establishing the right of the Company or the Guarantor to redeem such series of Notes, and that all Outstanding Notes of such series of Notes shall be redeemed at the applicable Redemption Price on the Redemption Date automatically and without any further action by the Holders of such series of Notes. An Officers’ Certificate relating to each series of Notes in connection with any Specified Event Redemption certifying that, as of the date notice of such Specified Event Redemption is given and assuming payment of the Redemption Price had been made on such date, the applicable Conditions to Redemption are satisfied shall, in the absence of manifest error, be treated and accepted by the Guarantor, the Trustee, the Holders of the applicable series of Notes and all other interested parties as correct and sufficient evidence thereof, shall be final and binding on such parties, and the Trustee shall be entitled to rely on such Officers’ Certificate without liability to any Person.”

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ARTICLE THREE

MISCELLANEOUS
SECTION 3.1.         Effect of this Second Supplemental Indenture .
(a)    This Second Supplemental Indenture is a supplemental indenture within the meaning of Article Nine of the Original Indenture, and the Original Indenture shall be read together with the First Supplemental Indenture and this Second Supplemental Indenture and shall have the same effect over the Notes, in the same manner as if the provisions of the Original Indenture, the First Supplemental Indenture and this Second Supplemental Indenture were contained in the same instrument.
(b)    In all other respects, the Original Indenture and the First Supplemental Indenture are confirmed by the parties hereto.
SECTION 3.2.         Effect of Headings .
The Article and Section headings herein are for convenience only and shall not affect the construction hereof.
SECTION 3.3.         Successors and Assigns .
All covenants and agreements in this Second Supplemental Indenture by the Company, the Guarantor, the Trustee and the Holders shall bind their successors and assigns, whether so expressed or not.
SECTION 3.4.         Severability Clause .
In case any provision in this Second Supplemental Indenture, in the Notes or in the Guarantees shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 3.5.         Benefits of Second Supplemental Indenture .
Nothing in this Second Supplemental Indenture, in the Notes or in the Guarantees, express or implied, shall give to any Person, other than the parties hereto, any benefit or any legal or equitable right, remedy or claim under this Second Supplemental Indenture.
SECTION 3.6.         Conflict .
In the event that there is a conflict or inconsistency between the Original Indenture, the First Supplemental Indenture and this Second Supplemental Indenture, the provisions of this Second Supplemental Indenture shall control; provided , however , if any provision hereof limits, qualifies or conflicts with another provision herein or in the Original Indenture, in either case, which is required or deemed to be included in this Indenture by any of the provisions of the Trust Indenture Act, such required or deemed provision shall control.

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SECTION 3.7.         Governing Law .
THIS SECOND SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 3.8.         Trustee .
The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Second Supplemental Indenture or for or in respect of the recitals contained herein, all of which are made solely by the Company or the Guarantor, as the case may be.
SECTION 3.9.         Counterparts .
This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.


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IN WITNESS WHEREOF, the parties hereto have caused this Second Supplemental Indenture to be duly executed on the date and year first written above.
 
ARCH CAPITAL FINANCE LLC,
 
as Issuer
 
 
 
 
By:
/s/ Sara Millard
 
 
Name:
Sara Millard
 
 
Title:
EVP & Secretary
 
ARCH CAPITAL GROUP LTD.,
 
as Guarantor
 
 
 
 
By:
/s/ Mark D. Lyons
 
 
Name:
Mark D. Lyons
 
 
Title:
EVP and CFO
 
THE BANK OF NEW YORK MELLON,
 
as Trustee
 
 
 
 
By:
/s/ Laurence J. O'Brien
 
 
Name:
Laurence J. O'Brien
 
 
Title:
Vice President


[ Second Supplemental Indenture Signature Page ]





Exhibit 10.1
AMENDMENT TO
EMPLOYMENT AGREEMENT

AMENDMENT (“Amendment”) dated as of May 14, 2018, to the Employment Agreement, dated as of July 25, 2012 (the “Agreement”), between Arch Capital Group Ltd., a Bermuda corporation (the “Company”), and Mark D. Lyons (the “Executive”), as amended.
WHEREAS, the Company and the Executive wish to amend the Agreement as set forth herein; and
NOW, THEREFORE, in consideration of the mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company and the Executive hereby agree as follows:
Executive’s employment with the Company will terminate on May 25, 2018 as a result of his resignation without Good Reason, and the Employment Period will end on that date. The restrictions on the Executive in Section 9.01 of the Agreement (relating to noncompetition) are hereby waived by the Company. For the avoidance of doubt, the Executive’s covenants in Section 9.02 (relating to nonsolicitation), Section 6.01 (relating to confidentiality), Section 7.01 (relating to ownership of intellectual property) and Section 8.01 (relating to delivery of materials upon termination of employment) will continue in full force and effect in accordance with their terms.
Except as set forth herein, the Agreement shall continue in full force and effect in accordance with its terms, and all questions concerning the construction, validity and interpretation of this Amendment and the Agreement shall be construed and governed in accordance with the laws of New York, without reference to the principles of conflict of laws thereof.
This Amendment may be executed simultaneously in two or more counterparts, any one of which need not contain the signatures of more than one party, but all of which counterparts taken together will constitute one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first above written.

 
ARCH CAPITAL GROUP LTD.
 
By:
/s/ Marc Grandisson
 
Printed Name:
Marc Grandisson
 
Title:
President and CEO





 
 
/s/ Mark D. Lyons
 
 
Mark D. Lyons





Exhibit 99.1
ARCH CAPITAL GROUP LTD. NAMES FRANÇOIS MORIN EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER


HAMILTON, BERMUDA, May 14, 2018 –– Arch Capital Group Ltd. [NASDAQ: ACGL] today announced François Morin will assume the role of Executive Vice President and Chief Financial Officer of the Company effective May 25, 2018. He will report to Marc Grandisson, President and Chief Executive Officer of ACGL. Mr. Morin will replace outgoing Chief Financial Officer Mark Lyons, who is leaving Arch to become Senior Vice President and Chief Actuary, General Insurance at AIG in New York.
Mr. Morin joined the Company in 2011 and currently serves as Senior Vice President, Chief Risk Officer and Chief Actuary of ACGL. Prior to joining Arch, Mr. Morin served in various roles for Towers Watson & Co. and its predecessor firm Towers, Perrin, Forster & Crosby, including its actuarial division, Tillinghast, where he led the firm’s engagement with ACGL.
Mr. Grandisson said, “Anyone who has followed our Company knows one of Arch’s strengths is its deep pool of talent. François’ extensive experience leading Arch’s actuarial and enterprise risk management practices gives him valuable perspective into all financial and capital aspects of our Company.”
Mr. Morin said, “Arch has consistently delivered on its core strategy of being a leader in specialty lines. I look forward to working with Marc and the executive leadership team as we strive to continue to deliver superior returns over the long term, consistent with the record of financial performance we have demonstrated since our founding.”
Grandisson continued, “Mark and I have worked together since the early days of Arch in 2002. In addition to the significant contributions he has made to our performance over the years, he has been a great colleague and friend. We wish him all the best.”
Mr. Morin has nearly 30 years of experience in the insurance industry. He holds a bachelor’s degree in Actuarial Science from Université Laval in Canada and is a fellow of the Casualty Actuarial Society, a Chartered Financial Analyst and a member of the American Academy of Actuaries. Mr. Morin’s promotion is subject to applicable local regulatory approvals.
About Arch Capital Group Ltd.
Arch Capital Group Ltd., a Bermuda-based company with approximately $11.26 billion in capital at March 31, 2018, provides insurance, reinsurance and mortgage insurance on a worldwide basis through its wholly owned subsidiaries.
Cautionary Note Regarding Forward-Looking Statements
The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward−looking statements. This release or any other written or oral statements made by or on behalf of Arch Capital Group Ltd. and its subsidiaries may include forward−looking statements, which reflect our current views with respect to future events and financial performance. All statements other than statements of historical fact included in or incorporated by reference in this release are forward−looking statements.
Forward−looking statements can generally be identified by the use of forward−looking terminology such as "may," "will," "expect," "intend," "estimate," "anticipate," "believe" or "continue" or their negative or variations or similar terminology. Forward−looking statements involve our current assessment of risks and uncertainties. Actual events and results may differ materially from those expressed or implied in these statements. A non-exclusive list of the important factors that could cause actual results to differ materially from those in such forward-looking statements includes the following: adverse general economic and market conditions; increased competition; pricing and policy term trends; fluctuations in the actions of rating agencies and our ability to maintain and improve our ratings; investment performance; the loss of key personnel; the adequacy of our loss reserves, severity and/or frequency of losses, greater than expected loss ratios and adverse development on claim and/or claim expense






liabilities; greater frequency or severity of unpredictable natural and man-made catastrophic events; the impact of acts of terrorism and acts of war; changes in regulations and/or tax laws in the United States or elsewhere; our ability to successfully integrate, establish and maintain operating procedures as well as integrate the businesses we have acquired or may acquire into the existing operations; changes in accounting principles or policies; material differences between actual and expected assessments for guaranty funds and mandatory pooling arrangements; availability and cost to us of reinsurance to manage our gross and net exposures; the failure of others to meet their obligations to us; and other factors identified in our filings with the U.S. Securities and Exchange Commission.
The foregoing review of important factors should not be construed as exhaustive and should be read in conjunction with other cautionary statements that are included herein or elsewhere. All subsequent written and oral forward−looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. We undertake no obligation to publicly update or revise any forward−looking statement, whether as a result of new information, future events or otherwise.

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Contact:    Arch Capital Group Ltd.
Don Watson
(914) 872-3616


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