Xxxxxxx 00 (xxx)
DATED December 20, 2001
OVERSEAS PARTNERS LTD.,
OVERSEAS PARTNERS US REINSURANCE COMPANY
- and -
XXXXXXX XXXXXX
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EMPLOYMENT AGREEMENT
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THIS AGREEMENT is made the 20th day of December 2001
BY AND AMONG :
OVERSEAS PARTNERS LTD. whose registered office is situated at Xxxxxxxxxx Xxxxx,
0 Xxx-Xx-Xxxxx Xxxx, Xxxxxxxx XX 00, Xxxxxxx (xxx "Company");
OVERSEAS PARTNERS US REINSURANCE COMPANY, whose registered office is situated at
0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, XX ("OPUS Re") and
XXXXXXX XXXXXX of 0000 Xxxxxxxxxx Xxx., Xxxxxxx, XX 00000 (the "Executive").
WHEREBY IT IS AGREED as follows:
1. Definitions and Interpretations
In addition to the words and expressions hereinbefore defined the
following words and expressions shall have the meanings hereinafter
ascribed to them;
"Associated Company" means any company which is from time to
time a subsidiary or a holding company (as those
expressions are defined by Section 86 of the
Companies Act 1981) of the Company.
the "Board" means the Board of Directors from time to time
of the Company.
"Commencement Date" means the 1/st/ day of January 2000.
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"Employment" means the employment of the Executive with the
Company pursuant to this Agreement.
"Common Share Capital" means all the Common Shares of the
Company in issue from time to time.
"Termination Date" means the date on which the Employment with
the Company ceases either for reason of the
conclusion of the fixed term of the Employment or
for reason of the termination of the Employment
in accordance with the provisions of this
Agreement.
2. Term of Appointment
a. The Company and OPUS Re hereby appoint the Executive and the Executive
hereby agrees to employment pursuant to the terms of this Agreement
for an initial Term of Appointment of a period of three (3) years
unless this Agreement is: (i) sooner terminated in accordance with
paragraph 5 below, or (ii) extended as provided in paragraph 2(b)
below.
b. Commencing on the third anniversary of the Commencement Date and on
each annual anniversary of such date, (each a "Renewal Date"), this
Agreement, and the Term of Appointment herein granted, shall be
automatically extended so as to terminate on the first annual
anniversary of each Renewal Date, unless either the Company or the
Executive shall give the other written notice, not less than 60 days
prior to any Renewal Date, of the election not to so extend this
Agreement, in which case this Agreement shall terminate on such
Renewal Date.
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3. Powers and Duties
During the period of Employment under this Agreement the Executive:
(a) shall serve as Executive Vice President and Chief Underwriting Officer
of the Company from January 1, 2000 to January 31, 2001, and as
President and Chief Executive Officer of OPUS Re from February 1, 2001
until the Termination Date. From and after February 1, 2001, OPUS Re
shall provide the Executive's compensation and benefits (including
severance payments and benefits pursuant to Section 5 hereof), and
references to the provision by the "Company" of such payments and
benefits shall, from and after February 1, 2001, be read as referring
to OPUS Re.
(b) shall report to the Chief Executive Officer of the Company or designee
thereof (the "CEO") and shall exercise such powers and perform such
duties (not being duties inappropriate to his status) consistent with
his positions as may from time to time be vested in or assigned to him
by the CEO and shall comply with all reasonable directions from time
to time given to him by the CEO and with all rules and regulations
from time to time laid down by the Company concerning its employees as
the CEO or the Board of Directors of the Company (the "Board") may
from time to time determine.
(c) shall devote his full attention and business time to the business and
affairs of the Company and OPUS Re, provided, however, that nothing in
this Agreement shall preclude the Executive from engaging in
activities involving professional, educational, charitable, religious
and community organizations, managing his personal investments, and
serving on the board of directors of such companies and organizations
as agreed to from time to time by the Board, to the extent that the
foregoing do not materially inhibit the performance of the Executive's
duties under this Agreement or conflict
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in any material way with the business and affairs of the Company or
OPUS Re.
(d) use his best efforts to perform faithfully and efficiently, and to
discharge the dealings and responsibilities assumed by him under this
Agreement.
4. Remuneration and Benefits
The Executive shall be paid by way of remuneration a salary and bonus
and such other benefits (if any) as the CEO and the Compensation
Committee of the Board (the "Compensation Committee") may from time to
time determine as follows:
a) The Executive shall be paid by way of remuneration for his services
during the Employment hereunder: (i) a base salary at the rate of
$23,333.33 per month through January 31, 2001 and at the rate of
$35,000.00 per month thereafter and (ii) such bonuses or additional
remuneration (if any) as the CEO, with ratification by the
Compensation Committee, may from time to time determine in accordance
with the "Overseas Partners Ltd. Incentive Plan" (in development at
the Commencement Date) based upon a target award of 100% of annual
base salary, a minimum award of 50% of annual base salary, and a
maximum award of 150% of annual base salary (using the Executive's
annual base salary in effect at the end of the calendar year to which
the bonus relates), in each case determined by the performance of the
Company and the Executive as adjudged by the CEO and ratified by the
Compensation Committee. The CEO and Compensation Committee shall
review the Executive's base salary and potential bonus award, on an
annual basis to determine, in its sole discretion, if and to what
extent an increase in base salary and/or the awarding of a bonus or
additional remuneration is warranted. The annual review will be
completed by March 1 of each year.
For the period ending January 31, 2001, such salary shall be paid by
equal monthly installments in arrears on the last day of every month
and shall
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accrue from day to day. After January 31, 2001, such salary shall
be paid semimonthly in arrears and shall accrue from day to day.
b) The Executive shall be entitled to receive grants of restricted
stock, stock options and/or stock appreciation rights on an
annual basis under the Company's Incentive Compensation Plan for
the time being in force, subject to the rules applicable to the
Plan as established, amended or varied from time to time by the
Board or such other Plan as is in force from time to time, and as
amended from time to time, as the case may be. The grants
referred to in the preceding sentence shall be based on a target
future value of 125% of annual base salary then in effect.
In connection with the commencement of the Executive's employment
hereunder, the Executive received 49,079 shares of restricted
stock, which shares were granted effective August 15, 2001 and
will vest on December 31, 2002, subject to the terms and
conditions of the Restricted Stock Agreement and the Overseas
Partners Ltd. Incentive Compensation Plan, pursuant to which such
award was granted.
c) In addition to public holidays the Executive will be entitled to
thirty (30) days vacation in every calendar year. Unless and
until his Employment under this Agreement terminates under any
provision herein, salary will continue to be payable during
vacations. Vacation days not taken in any calendar year may be
carried forward at the sole discretion of the Compensation
Committee.
d) Subject to production, if requested, of medical certificates
satisfactory to the Company, salary will not cease to be payable
by reason only of the Executive's incapacity to work due to
sickness or accident (unless and until his Employment under the
Agreement shall be terminated under any provision herein) but the
Company may reduce salary during incapacity by an amount equal to
the benefit (excluding any lump sum benefit) which
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the Executive would be entitled to claim during such incapacity
under any sickness or accident insurance policy paid for entirely
by the Company (whether or not such benefit is claimed by the
Executive).
e) The Executive shall be entitled to participate in the Overseas
Partners Ltd And Subsidiaries Retirement Plan (401(k)).
f) The Executive is entitled to all other benefits outlined in the
Overseas Partners Ltd./Overseas Partners Re Ltd. Company
Handbook, which are not specifically identified in this
Agreement.
g) The Company shall, during the Executive's Employment in Bermuda,
pay a housing allowance of $10,000 per month to defray the
Executive's housing cost here in Bermuda. The first such payment
shall be made on the 25/th/ day of January 2000, representing the
housing allowance for January in arrears. All subsequent payments
shall be on the 25/th/ day of each month, in arrears for the month
in question.
5. Termination of Employment
a) The Employment may be terminated prior to the scheduled
expiration of the initial Term of Appointment: (i) by the Company
with or without "cause" (as defined below), (ii) by the Executive
with or without "good reason" (as defined below) or (iii) due to
the death or total and permanent disability of the Executive in
accordance with the applicable long-term policies of the Company
in which the Executive participates.
b) In the event that the Executive wishes to resign from the Company
without "good reason" prior to the scheduled expiration of the
initial Term of Appointment, the Executive shall provide the
Company with three (3) months' advance written notice and, in
such case, the Company may terminate the Executive's employment
prior to the end of such three (3) month period provided that the
Company makes the payments to the
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Executive described in paragraph (e) below. A termination of the
Employment by the Company as provided in the preceding sentence
shall not be deemed a termination without "cause" or give the
Executive grounds to terminate his employment for "good reason"
for purposes of paragraph (c) below.
c) In the event that the Employment is terminated pursuant to
paragraph (a) above (i) by the Company without "cause" or (ii) by
the Executive with "good reason", the Executive shall be entitled
to receive, in addition to accrued salary and benefits (including
a pro-rata calculation of earned vacation days) payable to the
Executive through the Termination Date, (i) a lump sum payment,
payable within 14 business days from the Termination Date, equal
to: (A) the Executive's base salary (as determined in paragraph
4(a)) x 24, plus, (B) the Executive's bonus entitlement (as
determined in paragraph 4(a)), based upon target levels set by
the Company for the year in which the Executive's termination
occurs and pro-rated for the period from January 1 of the year in
which the termination occurs to the Termination Date, and (ii)
payment of actual expenses (up to a maximum of a sum of $30,000)
towards the cost incurred during the course of relocating to
Bermuda, provided such relocation occurs within 6 months
following termination of Employment.
The Company's obligation to make the payments in this paragraph
5(c) shall be conditioned on the Executive's execution of a
General Release Agreement in accordance with the Company's
customary practice.
d) In the event of the termination of the Employment for one of the
reasons described in paragraph (c) above, all outstanding grants
of restricted stock, stock options and stock appreciation rights
previously granted to the Executive by the Company will
automatically become fully vested as of the date of such
termination, notwithstanding anything to the contrary
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contained in the terms or provisions of the Company's Incentive
Compensation Plan.
e) In the event that the Employment is terminated pursuant to
paragraph (a) above: (i) by the Company for "cause", (ii) by the
Executive without "good reason" or (iii) due to the death or
disability of the Executive; the Executive shall be entitled to
receive only his accrued salary and benefits (including a
pro-rata calculation of earned vacation days) payable through the
Termination Date or otherwise payable under plans maintained by
the Company in accordance with their terms and nothing else. In
addition, in the event that the Executive terminates his
Employment with the Company without "good reason" in accordance
with paragraph 5(b) of this Agreement, the Company shall be
required (even if the Company subsequently elects to terminate
the Employment of the Executive prior to the effective date of
his termination in accordance with paragraph 5(b) of this
Agreement) to continue to provide the Executive with his salary
and benefits until the earlier of the effective date of his
termination and the end of the Term of Appointment.
f) In the event the Company does not extend this Agreement in
accordance with paragraph 2(b), and the Executive's employment
has not terminated for any other reason then, notwithstanding any
other provision of this paragraph 5, the Executive shall be
entitled to receive, in addition to accrued salary and benefits
(including a pro-rata calculation of earned vacation days)
payable to the Executive through the Termination Date, a lump sum
payment, payable within 14 business days from the Termination
Date, equal to: (i) the Executive's monthly base salary (as
determined in paragraph 4(a)) x 12, plus, (ii) the Executive's
target bonus (as determined in paragraph 4(a)) set by the Company
for the year in which the Executive's termination occurs. The
Executive shall also be entitled to receive a payment of the
bonus earned by the Executive for the year in
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which the Executive's termination occurs (as determined in
paragraph 4(a)) based on performance during such year. Such bonus
payment shall be paid within 60 days of the end of such year and
shall be pro-rated for the period from January 1 of the year in
which the termination occurs to the Termination Date. In
addition, the Executive shall be entitled to payment of actual
expenses (up to a maximum of a sum of $30,000) towards the cost
incurred during the course of relocating to Bermuda, provided
such relocation occurs within 6 months following termination of
Employment.
g) For purposes of this Agreement:
(i) "cause" means (a) an act or acts of personal dishonesty
taken by the Executive and intended to result in the material
personal enrichment of the Executive at the expense of the
Company and its Associated Companies, excluding for this purpose
any isolated, insubstantial or inadvertent action not taken in
bad faith which is remedied by the Executive in a reasonable
period of time after receipt of reasonably prompt written notice
thereof from the Company, (b) repeated violations by the
Executive of his obligations under this Agreement which are
demonstrably willful and deliberate and which are not remedied in
a reasonable period of time by the Executive after receipt of
reasonably prompt written notice thereof from the Company, or,
(c) the Executive's conviction of a felony involving moral
turpitude; and
(ii) "good reason" means (a) the sale or other disposition by
the Company of all or substantially all of its reinsurance
operations, (b) the change in control of the Company
through the acquisition (whether by purchase, transfer,
merger, renunciation or otherwise) of any interest in any
shares, if, upon completion of such acquisition the third
party, together with persons acting in concert with the
third party, would hold more than fifty percent of the
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Common Share Capital of the Company, (c) repeated violations by
the Company of its obligations under this Agreement which are
demonstrably willful and deliberate and which are not remedied in
a reasonable period of time by the Company after receipt of
reasonably prompt written notice thereof from the Executive, (d)
without the Executive's consent, the Company reduces the
Executive's current base salary, reduces the Executive's then
current target total annual compensation, reduces the Executive's
housing allowance, or reduces any of the benefits provided to the
Executive under paragraphs 4(e) or (f) of this Agreement, or (e)
a diminution in the Executive's duties or responsibilities or the
assignment of the Executive of any duties inconsistent in any
adverse respect with the Executive's then current duties and
responsibilities.
h) (i) The Employment, following the initial Term of Appointment and
during any extended Term of Appointment, may be terminated prior
to the scheduled expiration of the extended Term of Appointment:
(i) by the Company with or without "cause" (as defined in
paragraph 5(g)(i) above, (ii) by the Executive with or without
"good reason" (as defined in paragraph 5(g)(ii) above), or (iii)
due to the death or disability of the Executive in accordance
with the applicable programs and policies of the Company.
(ii) In the event that the Executive wishes to resign from the Company
without "good reason" prior to the scheduled expiration of any
extended Term of Appointment, the Executive shall comply with the
provisions of paragraph 5(b) above.
(iii) In the event that Employment is terminated pursuant to paragraph
5h(i) above: (i) by the Company without "cause", or (ii) by the
Executive with "good reason", the Executive shall be entitled to
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receive, in addition to accrued salary and benefits (including a
pro-rata calculation of earned vacation days) payable to the
Executive through the Termination Date(i) a lump sum payment,
payable within 14 business days from the Termination Date, equal
to: (A) the Executive's base salary (as determined in paragraph
4(a)) x 24, plus, (B) the Executive's bonus entitlement (as
determined in paragraph 4(a)), based upon target levels set by
the Company for the year in which the Executive's termination
occurs and pro-rated for the period from January 1 of the year in
which the termination occurs to the Termination Date, and (ii)
payment of actual expenses (up to a maximum of a sum of $30,000)
towards the cost incurred during the course of relocating to
Bermuda, provided such relocation occurs within 6 months
following termination of Employment.
(iv) In the event that the Employment is terminated during any
additional Term of Appointment, pursuant to paragraph 5h(i)
above: (i) by the Company for "cause", (ii) by the Executive
without "good reason", or (iii) due to the death or disability of
the Executive, the Executive shall be entitled to receive only
his accrued salary and benefits (including a pro-rata calculation
of earned vacation days) payable to the Termination Date or
otherwise payable under plans maintained by the Company in
accordance with their terms and nothing else. In all other
respects, the Executive's termination under the provisions of
this paragraph shall be in accordance with provisions of
paragraph 5(e) and (g) above.
6. Non-Competition
The Executive shall not during the continuance of the Employment
(unless otherwise agreed in writing by the Company) undertake any other
business or
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profession or be or become an executive or agent of any other company,
firm or person or assist or have any financial interest in any other
business or profession, if such business or profession is in
competition with the business of the Company or any Associated Company
but nothing in this paragraph shall preclude the Executive from
holding or acquiring less than 5% of the voting shares or other equity
securities of any other company which are listed or dealt in on any
recognized stock exchange by way of bona fide investment.
7. Non-Solicitation
The Executive covenants with the Company that he shall not during the
continuance of the Employment or for a period of two (2) years after
the Termination Date on his own behalf or on the behalf of any other
person, firm or company directly or indirectly endeavor to entice away
from the Company any person who is then employed by the Company and was
so employed by the Company during the continuance of the Employment.
8. Confidential Information
The Executive shall not, either during the continuance of his
Employment hereunder and up to two years after the termination of the
Agreement, use to the detriment or prejudice of the Company, except in
the proper course of his duties, divulge to any person any trade secret
or any other information of a confidential nature concerning the
business or affairs of the Company which may have come to his knowledge
during the Employment.
9. Board Information
The Executive shall at all times promptly give to the Board (in
writing if so requested) all such information and explanations as they
may require in connection with matters relating to his Employment
hereunder or with the business of the Company.
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10. Return of Papers etc.
The Executive shall promptly upon the request of the Board following
his termination of Employment deliver up to the Company all lists of
clients or customers, correspondence and all other documents, papers
and records which may have been prepared by him or have come into his
possession in the course of his Employment, and the Executive shall not
be entitled to and shall not retain any copies thereof. Title and
copyright therein shall vest in the Company.
11. Misrepresentation
The Executive shall not at any time after the termination of his
Employment hereunder wrongfully represent himself as being employed by
or connected with the Company or any Associated Company.
12. Notices
Any notice in writing to be served hereunder shall be given personally
to the Executive or to the Secretary of the Company (as the case may
be) or shall be couriered or posted by registered mail to the Company
(for the attention of its Secretary) at its registered office for the
time being or to the Executive either at his address given above or at
his last known address. Any such notice sent by post shall be deemed
served three days after it is posted and in proving such service it
shall be sufficient to prove that the notice was properly addressed and
put in the post or couriered.
13. Indemnity and Insurance
The Company hereby agrees to indemnify and hold the Executive harmless
for any acts or omissions arising out of the course and scope of his
Employment with the Company to the fullest extent permitted by
applicable law.
14. Other Agreements
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The Executive acknowledges and warrants that there are no agreements or
arrangements whether written, oral or implied between the Company and
the Executive relating to the Employment of the Executive other than
those expressly set out in the Agreement and that he is not entering
into the Agreement in reliance on any representation not expressly set
out herein.
15. Successor and Assigns
The Company shall require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially
all of its business or assets to expressly assume this Agreement and
agree to perform under this Agreement in the same manner and to the
same extent that the Company would be required to perform if no such
succession had taken place. In addition, with the Executive's consent,
the Company, by action of the CEO or the Board, may assign this
Agreement (and any or all of its rights and obligations hereunder) to
any of its wholly-owned subsidiaries.
16. Governing Law
The Agreement shall be governed by and construed under Bermuda law and
each of the parties hereto submits to the jurisdiction of the Bermuda
Courts as regards any claim or matter arising under the Agreement.
17. Expenses
The Company will reimburse the Executive for legal fees and expenses
incurred in connection with the negotiation, execution and delivery of
this Employment Agreement for an amount up to $5,000.
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IN WITNESS WHEREOF the parties hereto have set their hands and seals the date
first above written.
SIGNED by ) /s/ Xxxx X. Xxxxxxxx
on behalf of the Company ) /s/ X. Xxxxxxxx Leader
in the presence of:- )
SIGNED by ) /s/ Xxxx X. Xxxxxxxx
on behalf of the Opus Re ) /s/ X. Xxxxxxxx Leader
in the presence of:- )
SIGNED by the Executive ) /s/ X.X. Xxxxxx
in the presence of:- ) /s/ Xxxxxxx Xxxx
