EXHIBIT 10.4
The Belvedere Building
69 Xxxxx Bay Road, Pembroke HM 08
P.O. Box HM 3012
Xxxxxxxx XX MX, Bermuda
Tel: (000) 000-0000
Fax: (000) 000-0000
June 24, 2004
Xx. Xxxxxx X. Xxxxxx
0000 Xxxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Dear Xxx:
I am writing this letter (the "Letter Agreement") to confirm the terms and
conditions of your employment with Platinum Underwriters Holdings, Ltd., a
Bermuda corporation ("Platinum").
1. Term of Employment.
Your employment will commence on July 6, 2004 (the "Effective Date") and,
subject to termination as provided in Section 12, shall end on the third
anniversary of the Effective Date; provided that on the third anniversary of the
Effective Date and each anniversary thereafter, the term of your employment
shall automatically be extended by an additional year unless Platinum or you
give the other party written notice, at least 30 days prior to the applicable
anniversary of the Effective Date, that you or it does not want the term to be
so extended. Such employment period, as extended, shall hereinafter be referred
to as the "Term."
2. Title and Duties.
During the Term, you will serve as Executive Vice President and Chief
Financial Officer of Platinum and will have such duties and responsibilities and
power and authority as those normally associated with such position in public
companies of a similar stature, plus any additional duties, responsibilities
and/or power and authority assigned to you by the Chief Executive Officer of
Platinum.
3. Base Salary.
During the Term, Platinum will pay you a minimum base salary at an annual
rate of US$400,000 (the "Base Salary") payable in accordance with Platinum's
payroll practices as in effect from time to time.
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4. Bonus.
(a) Sign-on Bonus. On the Effective Date, Platinum will pay you a
one-time cash sign-on bonus of US$50,000.
(b) Annual Bonus. During the Term, you will be eligible for an annual
performance bonus pursuant to the terms of Platinum's Annual
Incentive Plan (the "Annual Bonus"). Your Annual Bonus will have an
incentive target equal to 75% of Base Salary (the "Target Bonus")
with the range of bonus payout to be from 0% to 150% of Base Salary,
depending upon the achievement of performance criteria established
under Platinum's Annual Incentive Plan; provided, however, that you
will be entitled to receive a minimum Annual Bonus for the calendar
year 2004 in an amount equal to a pro rata portion of your Target
Bonus adjusted for the period beginning with the Effective Date and
ending at December 31, 2004. The Annual Bonus will generally be paid
following the end of the applicable fiscal year, part in cash and
part in restricted share units or other equity incentives, as
determined by the Compensation Committee of the Board.
(c) Long-Term Incentive. The Board has approved a long-term incentive
plan for Platinum's key employees, including the Chief Financial
Officer. If certain performance criteria are achieved by Platinum,
this plan will provide you with an annual award opportunity of not
less than 37.5% of your annual base salary, payable in the form of
Platinum common shares, par value $0.01 per share (the "Common
Shares") on the fifth anniversary of the award date. The first award
under this plan will be made in March 2005.
5. Share Option Grant.
On the Effective Date, you will be granted an option to purchase 100,000
Common Shares under the terms of Platinum's 2002 Share Incentive Plan (the
"Option Grant"). The Option Grant will (i) have a term of ten years from the
date of grant; (ii) have an exercise price equal to the closing sales price of
the Common Shares on the New York Stock Exchange on the trading day immediately
preceding the Effective Date and (iii) vest in equal annual installments on each
of the first four anniversaries of the date of grant, based on your continued
employment with Platinum. The specific terms of your Option Grant will be
provided for in an option agreement between you and Platinum that has been
approved by the Compensation Committee under the 2002 Share Incentive Plan.
6. Share Ownership.
You acknowledge that in accordance with Platinum's share ownership
guidelines, you are required to accumulate 30,000 Common Shares before selling
Common Shares received under any of Platinum's compensation plans, subject to
certain plan provisions.
7. Employee Benefits.
During the Term, you and your eligible dependents will receive benefits
substantially similar to the employee benefit plans that are generally available
to senior executives of
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Platinum, subject to the terms and conditions of such plans. The Board reserves
the right to amend or terminate any employee benefit plan at any time and to
adopt any new plan.
8. Relocation.
You will be entitled to reimbursement for up to US$50,000 of your actual
and reasonable expenses incurred within the first twelve (12) months after the
Effective Date relating to your relocation to Bermuda, including temporary
housing expenses until your permanent residence in Bermuda is established and
periodic travel for you and your family between your current residence and
Bermuda.
9. Housing and Car Allowance.
Upon your establishment of a residence in Bermuda, you will be entitled to
a housing and living allowance of US$15,000 per month. In addition, you will be
entitled to a car allowance of US$700 per month.
10. Perquisites.
Platinum will reimburse you for reasonable dues and fees for a golf and a
health club membership during the Term, as well as such other perquisites and
fringe benefits as may be approved by the Compensation Committee of the Board
from time to time.
11. Business Expenses.
During the Term, Platinum will reimburse you for all reasonable expenses
and disbursements in carrying out your duties and responsibilities under this
Letter Agreement in accordance with Platinum's policy for senior executives as
in effect from time to time.
12. Termination of Employment.
(a) Termination for Good Reason or Without Cause. If you terminate your
employment during the Term for "Good Reason" (as defined below) or
if your employment is terminated during the Term by Platinum without
"Cause," (as defined below) you will receive, immediately upon the
effectiveness of any such termination, a lump sum cash payment equal
to the sum of (i) one year's Base Salary and Target Bonus, and (ii)
any earned but unpaid Base Salary or other amounts (including
reimbursable expenses and any vested amounts or benefits under
Platinum's otherwise applicable employee benefit plans or programs)
accrued owing through the date of termination. The foregoing payment
will be conditioned upon you executing and honoring a standard
waiver and release of claims in favor of Platinum in a form
determined by Platinum.
(b) Termination Other than for Good Reason. If you terminate your
employment during the Term other than for Good Reason, you will
receive no further payments, compensation or benefits under this
Letter Agreement, except you will be eligible to receive, upon the
effectiveness of such termination, amounts (including reimbursable
expenses and any vested amounts or benefits under
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Platinum's employee benefit plans or programs) accrued or owing
prior to the effectiveness of such termination.
(c) Termination for Cause. If your employment is terminated by Platinum
during the Term for Cause, you will receive no further payments,
compensation or benefits under this Letter Agreement, except you
will be eligible to receive, upon the effectiveness of such
termination, amounts (including reimbursable expenses and any vested
amounts or benefits under Platinum's employee benefit plans or
programs) accrued or owing prior to the effectiveness of your
termination.
(d) Death or Disability. Upon the termination of your employment during
the Term on account of your death or Disability, you or your
beneficiaries will receive (i) any unpaid Base Salary through the
date of termination plus a pro-rata portion through the date of
termination of your Target Bonus for the year of termination, (ii)
all other unpaid amounts (including reimbursable expenses and any
vested amounts or benefits under Platinum's employee benefit plans
or programs) accrued or owing prior to the effectiveness of such
termination.
(e) Definitions.
(i) Cause. For purposes of this Letter Agreement, "Cause" means
(i) your willful and continued failure to substantially
perform your duties hereunder; (ii) your conviction of, or
plea of guilty or nolo contendere to, a felony or other crime
involving moral turpitude; or (iii) your engagement in any
malfeasance or fraud or dishonesty of a substantial nature in
connection with your position with Platinum or its
subsidiaries, or other willful act that materially damages the
reputation of Platinum or its subsidiaries.
(ii) Good Reason. For purposes of this Letter Agreement, "Good
Reason" means (i) Platinum reduces your Base Salary or your
Target Bonus without your express written consent; (ii)
Platinum reduces the scope of your duties, responsibilities or
authority without your express written consent; (iii) Platinum
requires you to report to anyone other than the Chief
Executive Officer; (iv) Platinum requires you to be
principally based other than in Platinum's offices in Bermuda;
(v) Platinum breaches any other material provision of this
Letter Agreement; or (vi) Platinum elects not to extend the
term of this Letter Agreement; provided, however, that if you
voluntarily consent to any reduction or change described above
in lieu of exercising your right to resign for Good Reason and
deliver such consent to Platinum in writing, then such
reduction, transfer or change shall not constitute "Good
Reason" hereunder, but you shall have the right to resign for
Good Reason under this Letter Agreement as a result of any
subsequent reduction described above.
(iii) Disability. For purposes of this Letter Agreement,
"Disability" means a termination of your employment by
Platinum if you have been rendered incapable of performing
your duties to Platinum by reason of any medically determined
physical or mental impairment that can be expected
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to result in death or that can be expected to last for a
period of either (i) six or more consecutive months from the
first date of your absence due to the disability or (ii) nine
or more months during any twelve-month period.
13. Covenants.
In exchange for the remuneration outlined above, in addition to providing
service to Platinum as set forth in this Letter Agreement, you agree to the
following covenants:
(a) Confidentiality. During the period of your employment and following
any termination of your employment for any reason, you will keep
confidential any trade secrets and confidential or proprietary
information of Platinum (and its subsidiaries and affiliates) which
are now known to you or which hereafter may become known to you as a
result of your employment or association with Platinum and will not
at any time, directly or indirectly disclose any such information to
any person, firm or corporation, or use the same in any way other
than in connection with the business of Platinum (or its
subsidiaries or affiliates) during, and at all times after, the
termination of your employment. For purposes of this Letter
Agreement, "trade secrets and confidential or proprietary
information" means information unique to Platinum (or its
subsidiaries or affiliates) which has a significant business purpose
and is not known or generally available from sources outside
Platinum (or its subsidiaries or affiliates) or typical of industry
practice, but shall not include any of the foregoing (i) information
that becomes a matter of public record or is published in a
newspaper, magazine or other periodical available to the general
public, other than as a result of any act or omission of you or (ii)
information that is required to be disclosed by any law, regulation
or order of any court or regulatory commission, department or
agency, provided that you give prompt notice of such requirement to
Platinum (or its subsidiaries or affiliates), as appropriate, to
enable Platinum (or its subsidiaries or affiliates), as appropriate,
to seek an appropriate protective order or confidential treatment.
(b) Non-Solicitation. You further covenant that during the term of your
employment with Platinum and during the fifteen month period
following termination of your employment for any reason, you will
not, directly or indirectly, hire, or cause to be hired by an
employer with whom you may ultimately become associated, any senior
executive of Platinum (or its subsidiaries or affiliates) at the
time of termination of your employment with Platinum (defined for
such purposes to include executives that report directly to you or
that report directly to such executives that report directly to
you).
(c) Enforcement. You acknowledge that if you breach any provision of
this Section 13, Platinum (or its subsidiaries or affiliates) will
suffer irreparable injury. It is therefore agreed that Platinum (or
its subsidiaries or affiliates) shall have the right to enjoin any
such breach, without posting any bond, if permitted by a court of
the applicable jurisdiction. You hereby waive the adequacy of a
remedy at law as a defense to such relief. The existence of this
right to injunctive, or other equitable relief, shall not limit any
other rights or remedies which Platinum (or its subsidiaries or
affiliates) may have at law or in equity including, without
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limitation, the right to monetary, compensatory and punitive
damages. You acknowledge and agree that the provisions of this
Section 13 are reasonable and necessary for the successful operation
of Platinum. In the event an arbitrator or a court of competent
jurisdiction determines that you have breached your obligations in
any material respect under this Section 13, Platinum, in addition to
pursuing all available remedies under this Letter Agreement, at law
or otherwise, and without limiting its right to pursue the same
shall cease all payments to you under this Letter Agreement. If any
provision of this Section 13 is determined by a court of competent
jurisdiction to be not enforceable in the manner set forth in this
Letter Agreement, you and Platinum agree that it is the intention of
the parties that such provision should be enforceable to the maximum
extent possible under applicable law. If any provisions of this
Section 13 are held to be invalid or unenforceable, such
invalidation or unenforceability shall not affect the validity or
enforceability of any other provision of this Letter Agreement (or
any portion thereof).
14. Representations.
By signing this Letter Agreement where indicated below, you represent that
you are not subject to any employment agreement or noncompetition agreement that
would prevent you from performing your obligations under this Letter Agreement
nor that could subject Platinum to any present or future liability or obligation
to any third party as a result of the execution of this Letter Agreement and
your appointment to the positions with Platinum described above.
15. Miscellaneous Provisions.
(a) This Letter Agreement may not be amended or terminated without the
prior written consent of you and Platinum.
(b) This Letter Agreement may be executed in any number of counterparts
which together will constitute but one agreement.
(c) This Letter Agreement will be binding on and inure to the benefit of
our respective successors and, in your case, your heirs and other
legal representatives. Other than as provided herein, the rights and
obligations described in this Letter Agreement may not be assigned
by either party without the prior written consent of the other
party.
(d) All disputes arising under or related to this Letter Agreement will
be settled by arbitration under the Commercial Arbitration Rules of
the American Arbitration Association then in effect as the sole and
exclusive remedy of either party. Such arbitration shall be held in
New York City. Any judgment on the award rendered by such
arbitration may be entered in any court having jurisdiction over
such matters. Each party's costs and expenses of such arbitration,
including reasonable attorney fees and expenses, shall be borne by
such party, unless you are the prevailing party in the award entered
in such arbitration, in which case, all such costs and expenses
shall be borne by Platinum.
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(e) All notices under this Letter Agreement will be in writing and will
be deemed effective when delivered in person, or five (5) days after
deposit thereof in the mails, postage prepaid, for delivery as
registered or certified mail, addressed to the respective party at
the address set forth below or to such other address as may
hereafter be designated by like notice. Unless otherwise notified as
set forth above, notice will be sent to each party as follows:
You, to:
The address maintained in Platinum's records
Platinum, to:
Platinum Underwriters Holdings, Ltd.
The Belvedere Building
69 Xxxxx Bay Road
Pembroke HM 08, Bermuda
P.O. Box HM 3012
Xxxxxxxx XX MX, Bermuda
Attention: General Counsel
In lieu of personal notice or notice by deposit in the mail, a party may
give notice by confirmed telegram, telex or fax, which will be effective upon
receipt.
(f) This Letter Agreement will be governed by and construed and
enforced in accordance with the laws of the State of New York
without reference to rules relating to conflict of laws.
(g) This Letter Agreement supercedes any inconsistent provisions
of any plan or arrangement that would otherwise be applicable
to you to the extent such provisions would limit any rights
granted to you hereunder or expand any restrictions imposed on
you hereby.
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This Letter Agreement is intended to be a binding obligation upon Platinum
and yourself. If this Letter Agreement correctly reflects your understanding,
please sign and return one copy to me for Platinum's records.
PLATINUM UNDERWRITERS HOLDINGS, LTD.
By: /s/ Xxxxxxx X.X. Xxxxxxxx
-----------------------------------
Name: Xxxxxxx X.X. Xxxxxxxx
Title: President and Chief Executive
Officer
The above Letter Agreement correctly reflects our understanding, and I hereby
confirm my agreement to the same.
/s/ Xxxxxx X. Xxxxxx
-------------------------
Xxxxxx X. Xxxxxx
Dated as of June 24, 2004
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