[PRIMUS ASSET MANAGEMENT LETTERHEAD]
August 16, 2004
Xxxxxx X. Xxxxxx
00 Xxxxxxxxx Xxxxxx
Xxx, XX 00000
Dear Xxx:
This letter agreement (the "Letter Agreement") sets forth the terms and
conditions of your continued employment with Primus Asset Management, Inc., a
Delaware corporation (the "Company").
1. Term. This Letter Agreement will govern the terms and conditions of
your employment from the date of the completion of the underwritten,
registered initial public offering (the "IPO") of the common shares,
par value $.01 per share (the "Shares") of the Company's parent, Primus
Guaranty, Ltd. ("Primus Guaranty") until the anniversary date thereof
with respect to which you provide the Company, or the Company provides
you, with at least 6 months advance written notice that this Letter
Agreement shall terminate, provided that any such notice shall not be
effective before the third anniversary of the IPO. The period from the
IPO until such anniversary date with respect to which notice is
provided is referred to below as the "Term", and the portion of the
Term during which you are actually employed by the Company is referred
to below as the "Employment Period". Should the IPO not occur for any
reason, then this Letter Agreement shall be null and void and of no
force and effect.
2. Position; Duties. You will be employed by the Company as it Chief
Executive Officer. You will report to the Board of Directors of the
Company (the "Board"), and will perform such duties as may be specified
by the Board from time to time not inconsistent with your position as
Chief Executive Officer. You agree to use your best efforts to perform
such duties faithfully, to devote all of your working time to the
business of the Company and its subsidiaries and affiliates
(collectively, the "Company Group"), and while you remain employed by
the Company, you will not engage in any other business activity that is
in conflict with your duties and obligations to any member of the
Company Group. You will be permitted to serve as a director of any
not-for-profit organization, or, with the consent of the Board, any
other organization, so long as such service does not interfere with
your ability to perform your duties for the Company. During the
Employment Period, the Company agrees to cause Xxxxxx Xxxxxxxx to
appoint you as its Chief Executive Officer and to nominate you to serve
as a member of its Board of Directors, provided that following a Change
in Control (as defined in
paragraph 7(i) below), the Company shall have no further obligation to
cause Primus Guaranty to appoint you to its Board of Directors.
3. Base Salary. During the Employment Period you will be paid a base
salary at an annual rate of $500,000, payable in accordance with the
normal payroll practices established by the Company ("Base Salary").
Your Base Salary will be reviewed at least once in each calendar year
and may be subject to upward (but not downward) adjustment.
4. Annual Bonus. With respect to each fiscal year of the Company that
ends during the Employment Period, you will have an opportunity to earn
a target bonus of 150% of your Base Salary based on achievement of a
targeted level of performance (the "Annual Bonus"). Your actual Annual
Bonus will primarily be based on the achievement of certain performance
objectives that are established pursuant to the Primus Guaranty Annual
Performance Bonus Plan, or such other plan as may be in effect from
time to time, and a portion of the Annual Bonus may be paid in the form
of a forfeitable Stock Award (as defined in paragraph 7(b) below),
provided that at least 50% of the Annual Bonus must be paid in the form
of cash. The cash portion of the Annual Bonus will be earned and
payable as soon as practicable following the release of financial
statements for the relevant fiscal year, and except as provided in
paragraph 7 below, no portion of the Annual Bonus will be paid to you
unless you remain employed by the Company through the date of payment.
5. Stock Awards. Effective as of the date of the IPO, you shall be
granted awards relating to 1,260,000 Shares (subject to adjustment for
the reverse stock split expected to be effected prior to the IPO, with
the resulting shares rounded down to the nearest whole multiple of
100), 50% of which shall be in the form of an option to purchase Shares
(the "Option") and 50% shall be in the form of performance shares (the
"Performance Shares"). The Option shall carry an exercise price equal
to the IPO price, and shall vest in four equal installments on the
first, second, third and fourth anniversaries of the date of the IPO.
The Performance Shares shall vest as of December 31, 2006 if targeted
level of performance is achieved for the period commencing January 1,
2004 and ending December 31, 2006. The Option and Performance Shares
shall be granted pursuant to the Primus Guaranty 2004 Stock Incentive
Plan, and shall be subject to the terms thereof, as well as award
agreements to be issued thereunder. Upon a Change in Control, if no
provision is made for the continuance, assumption or comparable
substitution of the Option, the Performance Shares, or any other Stock
Award (as defined in paragraph 7(b) below), then such Option,
Performance Shares or other Stock Award, to the extent not vested,
shall become fully vested immediately prior to the Change in Control.
6. Benefits. During the Employment Period, the Company will provide you
with such vacation, fringe benefits and insurance coverages that it
will establish for senior executives of any member of the Company
Group, including coverages for medical, dental, prescription drugs,
vision, death and disability. You will also be entitled to participate
in any future executive compensation plans established by any member of
the Company Group at a level commensurate with your position with the
Company, other than the Primus Guaranty Senior Management Severance Pay
Plan.
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7. Termination.
(a) Generally. Notwithstanding the Term of this Letter Agreement, your
employment with the Company will be at-will, meaning that you will
be free to resign from the Company and the Company will be free to
terminate your employment at any time. Upon any such termination
or resignation during or upon expiration of the Term, you will be
entitled to any Base Salary earned but not yet paid, any
reimbursable business expenses incurred but not yet reimbursed,
and any benefit to which you (or members of your family) may be
entitled to under the Company Group's benefit plans as of the date
of termination. In addition, except as provided below, any Stock
Award that is a share option and that is or becomes vested upon
your termination of employment shall remain exercisable for the 90
day period following such termination of employment, subject to
the provisions of the applicable plan pursuant to which such share
option was granted governing the rights of the committee under
such plan to take actions in connection with corporate
transactions, reorganizations and other similar events; provided,
however, that if such termination is initiated by the Company for
Cause, all share options shall immediately terminate.
(b) Death/Disability. In addition to the entitlements set forth in
subparagraph (a) above, in the event that, prior to expiration of
the Term, your employment terminates on account of your death or
is terminated by the Company on account of your Disability, you
shall be entitled to (i) the portion of the Annual Bonus, if any,
payable in cash for the fiscal year immediately prior to such
termination, to the extent such Annual Bonus has not already been
paid, payable at the time such Annual Bonus would otherwise be
paid (the "Prior Year Cash Bonus"), and (ii) the portion of the
Annual Bonus, if any, that would have been paid to you in cash for
the fiscal year in which such termination occurs on the assumption
that target level of performance for such year was achieved,
payable at such time that such Annual Bonus would have been paid
had your employment not so terminated, but prorated for the
portion of the fiscal year that you were actually employed (the
"Prorated Cash Bonus"). In addition, any share option, restricted
stock unit or other award relating to the Shares, or any
securities or other consideration into which such Shares are
converted in connection with a Change in Control, whether granted
pursuant to the Primus Guaranty 2004 Stock Incentive Plan or
otherwise (a "Stock Award") outstanding at the time of your
termination of employment that would have become nonforfeitable
solely by reason of your having remained employed by the Company
(a "Service-Based Stock Award") shall become fully vested. Any
Stock Award that would have become nonforfeitable by reason of
both your having remained employed by the Company through the end
of a specified performance period, and the Company or Primus
Guaranty achieving a pre-established level of performance during
such performance period (a "Performance-Based Stock Award"), shall
vest on the assumption that targeted level of performance would
have been achieved, and such vesting shall be prorated to reflect
the portion of the performance period that you were actually
employed. Any Stock Award that is a share option and that is or
becomes vested upon your termination of employment by reason of
your death or Disability shall
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remain exercisable for the one year period following such
termination of employment, subject to the provisions of the
applicable plan pursuant to which such share option was granted
governing the rights of the committee under such plan to take
actions in connection with corporate transactions, reorganizations
and other similar events.
(c) Terminations Triggering Severance. In addition to the entitlements
set forth in subparagraph (a) above, in the event that (x) your
employment is terminated by the Company for any reason other than
for Cause or your Disability prior to expiration of the Term, or
(y) you terminate your employment for Good Reason prior to
expiration of the Term, or (z) a Change in Control occurs prior to
expiration of the Term and within 18 months after the Change in
Control your employment is either terminated by the Company other
than for Cause or Disability (including upon expiration of the
Term pursuant to notice that is provided by the Company following
a Change in Control pursuant to paragraph 1 above), or you
terminate your employment for Good Reason, you will be entitled to
receive the severance benefits described in subparagraph (d)
below.
(d) Severance Benefits. Upon a termination of your employment
described in subparagraph (c) above, and subject to satisfaction
of the conditions set forth in subparagraph (f) below, you shall
be entitled to (i) a cash payment equal to 5 times your Base
Salary in effect at the time of such termination of employment,
one-half of which shall be payable in accordance with the
Company's normal payroll practices over the one year period
following your termination of employment, and the remainder of
which shall be payable in one lump sum at the end of such one year
period, (ii) a cash payment equal to the Prior Year Cash Bonus as
described in subparagraph (b) above, (iii) a cash payment equal to
the portion of the Annual Bonus, if any, that would have been paid
to you in cash for the fiscal year in which such termination
occurs, payable at such time and in such amount that would have
been paid had your employment not so terminated, but prorated for
the portion of the fiscal year that you were actually employed,
and (iv) continued health coverage for the two year period
following such termination of employment on the same basis that
such coverage is provided to senior executives of the Company
during such period. In addition, upon a termination of your
employment pursuant to clauses (x) and (y) of subparagraph (c)
above, each Service-Based Stock Award will continue to vest on the
same basis as it would have vested had you remained employed for
the one year period following such termination, and upon a
termination of your employment pursuant to clause (z) of
subparagraph (c) above, each Service-Based Stock Award shall fully
vest and each Performance-Based Stock Award shall vest on the
assumption that targeted level of performance would have been
achieved (or, if greater, performance that reasonably could be
expected to be achieved based on actual performance through the
date of the Change in Control), and such vesting shall be prorated
to reflect the portion of the performance period that you were
actually employed.
(e) Expiration of the Term. If your employment with the Company is
terminated upon expiration of the Term, i.e. upon the third
anniversary of the IPO or any
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subsequent anniversary following the provision of notice as
provided in paragraph 1 above, regardless of which party provided
the notice or initiated the termination, you shall not be entitled
to the severance benefits described in subparagraph (d) above,
except where expiration of the Term occurs within 18 months
following a Change in Control pursuant to notice that is provided
by the Company following a Change in Control pursuant to paragraph
1 above. However, any unvested Stock Awards (both Time-Based Stock
Awards and Performance-Based Stock Awards) outstanding at the time
of such termination of employment shall continue to vest on the
same basis as such awards would have vested had you remained
employed for the period commencing on the date of such termination
and ending on the date that you engage in Competitive Activities
(as defined in paragraph 12 below), provided that you provide a
written acknowledgment to the Company prior to each vesting date
that you have not engaged in Competitive Activities. Any Stock
Award that is a share option shall remain exercisable for the one
year period following the later of the date of such termination of
employment, or the date such share option vests pursuant to the
preceding sentence, subject to the provisions of the applicable
plan pursuant to which such share option was granted governing the
rights of the committee under such plan to take actions in
connection with corporate transactions, reorganizations and other
similar events.
(f) Conditions. Your entitlement to receive, or continue to receive,
the severance benefits, vesting and extended exercisability set
forth in subparagraphs (d) and (e) above shall be conditioned upon
(i) your execution of a release of claims in favor of all members
of the Company Group in substantially the form attached as Exhibit
A, and such release becoming irrevocable, as provided in such
release, and (ii) your compliance with paragraphs 10 through 13
below. In the event of your breach of any of the provisions of
such paragraphs, no further severance payments or benefits will be
provided, and any unvested Stock Awards shall be immediately
forfeited.
(g) No Mitigation. The amount and duration of the severance payments
provided in subparagraph (d) above shall not be subject to a duty
to mitigate and shall not be reduced by the amount of compensation
that you receive from another employer, whether as a director,
employee or consultant; provided, however, the Company's
obligation set forth above to continue your health coverages will
terminate no later than the date you become eligible for
comparable coverage under another group health plan, and you agree
to notify the Company of your eligibility for any such coverage.
(h) Offset. The Company may offset from any amount payable under
subparagraph (d) above any amount you owe to any member of the
Company Group.
(i) Definitions. For purposes of this Letter Agreement, the following
terms shall have the meaning set forth below:
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"Cause" shall mean a finding by of a majority of the Company's
Board of Directors (excluding you, if you are a director) at a
meeting in which you will have an opportunity to participate that
you have:
(i) materially failed, refused or neglected to perform your
job functions (other than by reason of a physical or
mental impairment) that continued after you have been
provided adequate and specific notice thereof;
(ii) failed to comply with any material term of this Letter
Agreement or any material term of any written Company
policy that is applicable and has been communicated to
you, which failure continued after you have been
provided adequate and specific notice thereof;
(iii) committed an act of fraud or embezzlement against any
member of the Company Group; or
(iv) been convicted of, or entered a plea of guilty or nolo
contendere to, a felony or misdemeanor involving moral
turpitude.
"Disability" shall mean your continuous inability by reason of a
physical or mental illness, injury or impairment to perform the
duties assigned to you for a period of six consecutive calendar
months.
"Change in Control" shall mean:
(i) the acquisition by any person (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange
Act of 1934 (the "Exchange Act")), excluding Primus
Guaranty or any of its subsidiaries or any employee
benefit plan sponsored by any of the foregoing, of
beneficial ownership (within the meaning of Rule 13d-3
under the Exchange Act) of securities of Primus Guaranty
representing 30% or more of the voting power with
respect to the election of directors, except that 50%
shall be substituted for 30% where such person
beneficially owned Shares immediately prior to the time
of the IPO, or is controlled by or is under common
control with, any such beneficial owner of the Shares;
(ii) the cessation for any reason of the individuals who
constitute the Board of Directors of Xxxxxx Xxxxxxxx as
of the effective date of the IPO (the "Incumbent Board")
to constitute at least a majority of the members of the
Board of Directors of Xxxxxx Xxxxxxxx, provided that any
individual becoming a director subsequent to the
effective date of the IPO whose election, or nomination
for election by Xxxxxx Xxxxxxxx's stockholders, was
approved by a vote of at least a majority of the
directors then comprising the Incumbent Board (other
than any individual whose nomination for election to
membership on Xxxxxx Xxxxxxxx's Board of Directors was
not endorsed by Xxxxxx Xxxxxxxx's management prior to,
or at the time of, such individual's initial nomination
for election) shall be,
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for purposes of this Letter Agreement, considered as
though such person were a member of the Incumbent Board;
or
(iii) the consummation of a merger, consolidation,
recapitalization, reorganization, sale or disposition of
all or a substantial portion of the Primus Guaranty's
assets, a reverse stock split of outstanding voting
securities, or the issuance of shares of stock of Primus
Guaranty in connection with the acquisition of the stock
or assets of another entity, provided, however, that a
Change in Control shall not occur under this clause
(iii) if consummation of the transaction would result in
more than 50% of the total voting power with respect to
the election of directors represented by the voting
securities of Xxxxxx Xxxxxxxx (or, if not Primus
Guaranty, the entity that succeeds to all or
substantially all of Xxxxxx Xxxxxxxx's business)
outstanding immediately after such transaction being
beneficially owned by all or substantially all of the
holders of outstanding voting securities of Primus
Guaranty immediately prior to the transaction, with the
voting power of each such continuing holder relative to
other such continuing holders not substantially altered
in the transaction.
"Good Reason" shall mean:
(iv) any material breach by the Company of its obligations
under this Letter Agreement, after you have given the
Company written notice and an opportunity to cure such
breach;
(v) a material and adverse change or diminution of your job
duties or responsibilities as an officer of any member
of the Company Group, after you have given the Company
written notice and an opportunity to cure such change or
diminution; or
(vi) a relocation of your principal place of employment by
more than 50 miles from New York City.
8. Special Tax Gross-Up
(a) Gross-Up. You shall be entitled to a payment in an amount that, on
an after-tax basis (including federal income and excise taxes,
social security and Medicare taxes and state and local income
taxes) equals the excise tax imposed on you under Section 4999 of
the Code (the "Excise Tax") by reason of amounts payable under
this Letter Agreement, as well as other amounts payable outside
this Letter Agreement by any member of the Company Group that are
described in Section 280G(b)(2)(A)(i) of the Code. For purposes of
this subsection, you shall be deemed to pay federal, state and
local income taxes at the highest applicable marginal rate of
taxation.
(b) Cut-Back. Notwithstanding paragraph 8(a), no payment shall be made
thereunder, and amounts payable under this Letter Agreement and,
if necessary,
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amounts payable outside of this Letter Agreement by any member of
the Company Group that are described in Section 280G(b)(2)(A)(i)
of the Code, shall be reduced to the extent necessary to avoid any
portion of any such payment being treated as a "parachute payment"
within the meaning of Section 280G(b)(2) of the Code if, after
such reduction, you would retain at least 90% of the amount that
would otherwise be payable without regard to this paragraph 8(b).
Reductions to be made under this paragraph 8(b) shall first be
applied to amounts payable in cash, then to non-cash benefits
other than acceleration of vesting, and then to acceleration of
vesting.
(c) Determinations. Determinations of the Excise Tax and the amount of
the payment or reduction to be made pursuant to paragraph 8(a) or
(b) shall be made by the Company. If it is subsequently determined
by the Internal Revenue Service ("IRS") that the Excise Tax is
greater than the amount so determined, the Company shall
recalculate the payment or reduction to be made pursuant to
paragraph 8(a) or (b), and make any appropriate payment to you.
The Company, at its cost, may, on your behalf, challenge any
assessment or imposition of any such excise tax by the IRS, and
you shall reasonably assist and cooperate with the Company, at the
Company's expense, with respect to any such challenge. Should you
receive a refund of any excise tax previously paid, you shall
repay to the Company the portion of any gross-up payment made in
respect of the Excise Tax so refunded and you agree that you will
with respect to the applicability of the Excise Tax, take a
position consistent with that of the Company at all times.
9. Return of Property. You agree that upon termination of your employment
with the Company for any reason, you will immediately resign all
officer and director positions you may have with any member of the
Company Group. You further agree that you will as promptly as
practicable deliver to the Company all documents, correspondence,
memoranda, notes, records, reports, plans, designs, studies and any
other papers or items made or received by you in connection with your
employment with the Company (including without limitation documents
prepared by you or which may have come into your possession in the
course of your employment hereunder) that are reasonably necessary to
the on-going functioning of the Company (whether or not constituting
confidential information), and all computer equipment, disks and
software, keys, credit cards, books and other property of the Company
then in your possession.
10. Proprietary Information. You understand that your work with the Company
will involve access to and creation of confidential (including trade
secrets) and proprietary information of any member of the Company Group
(collectively "Proprietary Information") and recognize that it is in
the legitimate business interest of any member of the Company Group to
restrict your disclosure or use of Proprietary Information. You
therefore agree that you will maintain the confidentiality of, and will
never use or disclose, or authorize any other person or entity to use
or disclose, any Proprietary Information, other than in connection with
your employment as necessary to further the business objectives of the
Company or as may be required by law or legal process or as may be
required for you to enforce your rights under this Letter Agreement or
as a stockholder of Primus Guaranty. The term Proprietary Information
includes, by way of
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example and without limitation, matters of a technical nature, such as
software design and specifications, financial models, scientific, trade
and engineering secrets, "know-how", formulas, secret processes,
drawings, works of authorship, machines, inventions, computer programs
(including documentation of such programs), services, materials, patent
applications, new product plans, other plans, technical information,
technical improvements, manufacturing techniques, specifications,
manufacturing and test data, progress reports and research projects,
and matters of a business nature, such as business plans, prospects,
financial information, proprietary information about costs, profits,
markets, sales, lists of customers and suppliers of any member of the
Company Group, the management, operation and planning of any member of
the Company Group, procurement and promotional information, credit and
financial data concerning customers or suppliers of any member of the
Company Group, and other information of a similar nature to the extent
not available to the public, and plans for future development, but does
not include any information that has been publicly disclosed or was
known to you prior to accepting employment with the Company.
11. Innovations. You agree to promptly and fully disclose to the Company
all ideas, inventions, discoveries, creations, designs, materials,
works of authorship, trademarks, and other technology and rights (and
any related improvements or modifications thereof), whether patentable
or not, copyrightable or not, or otherwise protectable or not under any
form of legal protection afforded to intellectual property
(collectively, "Innovations"), relating to any activities of any member
of the Company Group, conceived or developed by you alone or with
others during the Employment Period or any prior term of employment
with any member of the Company Group, whether or not conceived during
regular business hours. Such Innovations shall be the sole property of
the Company. To the extent possible, such Innovations shall each be
considered a Work Made For Hire by you for the Company within the
meaning of the U.S. Copyright Act. To the extent such Innovations may
not be considered such a Work Made For Hire, you hereby assign to the
Company, without additional consideration, any right, title, or
interest you may now have in such Innovations, and going forward, you
agree to automatically assign to the Company at the time of creation of
the Innovations, without additional consideration, any right, title, or
interest you may have in such Innovations. You will (whether during or
after your employment with the Company) execute such written
instruments and do other such acts as may be necessary in the
reasonable opinion of the Company to obtain a patent, register a
copyright, or otherwise protect or enforce the Company's rights in such
Innovations. You agree to assist the Company in obtaining or
maintaining for itself at its own expense United States and foreign
patents, copyrights, trade secret protection or other protection of any
and all Innovations.
12. Competing Businesses. You agree that, in consideration of the mutual
covenants contained herein, and other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, during the
Employment Period and, if your employment is terminated under
circumstances described in paragraph 7(c), for a period of 12 months
thereafter, you will not directly or indirectly, on your own behalf or
as a partner, officer, director, employee, agent, consultant or
stockholder (other than as the holder of 1% or less of the voting
capital stock of any corporation with a class of equity securities
registered under Section 12(b) or 12(g) of the Securities Exchange Act
of 1934,
9
as amended) engage in or render services to any person or entity
engaged in the development or sale of financial products related to
credit risk transfer, or that is a dealer with respect to such
products, where your activities will relate primarily to financial
products offered by any member of the Company Group at the time of your
termination of employment ("Competitive Activities"). In the event of a
termination of your employment other than pursuant to paragraph 7(c),
the Company may elect, by providing you written notice within 10 days
of such termination, to provide you with a payment equal to 2.5 times
your Base Salary, payable in accordance with the Company's normal
payroll practices over the one year period following your termination
of employment, and continued vesting of your Service-Based Stock Awards
during such one year period, and in exchange therefor you agree not to
engage in Competitive Activities during such one year period. The
Company may, at any time during such one year period, cease making such
payments, at which time you will be relieved of your obligation not to
engage in Competitive Activities. The period following your termination
of employment during which this paragraph 12 applies is referred to as
the "Restricted Period". If, in any judicial proceeding, a court shall
refuse to enforce this covenant because the time limit is too long or
because it is more extensive than necessary to protect the business and
goodwill of the Company, it is understood and agreed between the
parties that for purposes of such proceeding such time limitation and
areas of enforcement shall be reformed to the extent necessary to
permit enforcement of such covenant.
13. Business Relationships. You acknowledge that the relationships of all
members of the Company Group with their employees, customers and
vendors are valuable business assets. You agree that, during the
Employment Period and during the Restricted Period, you will not
directly or indirectly (for yourself or for any third party) divert or
attempt to divert from any member of the Company Group any business,
employee, customer or vendor, through solicitation or otherwise.
14. Nondisparagement. You agree that you will not issue any communication
or statement that disparages any member of the Company Group, except if
testifying truthfully under oath pursuant to subpoena or other legal
process or otherwise responding to or providing disclosures required by
law in connection with an investigation by a governmental or law
enforcement agency. The Company will not, and will use reasonable
efforts to cause its senior executive officers to not, issue any
communication or statement that disparages you, except if testifying
truthfully under oath pursuant to subpoena or other legal process or
otherwise responding to or providing disclosure required by law in
connection with an investigation by a governmental or law enforcement
agency. Notwithstanding the foregoing, nothing in this paragraph 14
shall be construed so as to preclude any member of the Company Group
from fairly and accurately discussing, reporting or communicating,
orally or in written form, concerning the performance of the business
of any member of the Company Group during your employment.
15. Enforcement. You agree that: (i) the covenants set forth in paragraphs
10 through 13 are reasonable in all respects, including, where
applicable, geographical and temporal scope, and (ii) the Company would
not have entered into this Letter Agreement but for your covenants
contained therein, and (iii) the covenants contained therein have been
made in order to induce the Company to enter into this Letter
Agreement. If, at the time of
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enforcement of paragraphs 10 through 13, a court shall hold that the
duration, scope or area restrictions stated herein are unreasonable
under circumstances then existing, the parties agree that the maximum
duration, scope or area reasonable under such circumstances shall be
substituted for the stated duration, scope or area and that the court
shall be allowed to revise the restrictions contained herein to cover
the maximum period, scope and area permitted by law. You recognize and
affirm that in the event of your breach of any provision of paragraphs
10 through 13, money damages would be inadequate and the Company would
have no adequate remedy at law. Accordingly, you agree that in the
event of a breach or a threatened breach by you of any of the
provisions of paragraphs 10 through 13, the Company, in addition and
supplementary to other rights and remedies granted by law existing in
its favor (including recovery of damages and costs (including
reasonable attorneys' fees)), may apply to any court of law or equity
of competent jurisdiction for specific performance and/or injunctive or
other relief in order to enforce or prevent any violations of the
provisions hereof (without posting a bond or other security).
16. Indemnification. To the fullest extent permitted by law, the Company
will indemnify you and hold you harmless from all claims arising from
any action taken by you, or your failure to act, within the scope of
your authority as an officer or director of any member of the Company
Group, unless the action or omission is fraudulent or constitutes
willful misconduct or gross negligence. You shall also be covered under
any directors & officers liability insurance policy secured by the
Company.
17. Withholding. The Company shall have the right to withhold from any
amount payable hereunder an amount necessary in order for the Company
to satisfy any withholding tax obligation it may have under applicable
law.
18. Legal Fees. The Company agrees to reimburse you for your legal fees
incurred in connection with the negotiation and review of this Letter
Agreement, up to a maximum of $10,000, upon the presentation to the
Company by you of appropriate substantiation of such fees.
19. No Conflicts; Proper Authorization. You represent and warrant to the
Company that your acceptance of continued employment and the
performance of your duties for the Company will not conflict with or
result in a violation or breach of, or constitute a default under any
contract, agreement or understanding to which you are or were a party
or of which you are aware and that there are no restrictions,
covenants, agreements or limitations on your right or ability to enter
into and perform the terms of this Letter Agreement. The Company
represents and warrants to you that the terms of this Letter Agreement
have been fully authorized and approved by the Board of Directors of
the Company.
20. Governing Law. The terms of this Letter Agreement and any action
arising thereunder, shall be governed by and construed in accordance
with the domestic laws of the State of New York, without giving effect
to any choice of law or conflict of law provision or rule (whether of
the State of New York or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of New
York.
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21. Dispute Resolution. Except for any claims or controversy relating to
the enforcement of the restrictive covenants set forth in paragraphs 9
through 14 which may be brought in any court of competent jurisdiction,
any other disputes arising out of this Letter Agreement, including
claims of violations of federal or state discrimination statutes or
public policy, shall be resolved pursuant to binding arbitration before
a panel of three arbitrators serving under the Commercial Arbitration
Rules of the American Arbitration Association ("AAA"). In event of a
dispute, a written request for arbitration shall be submitted to the
New York, New York office of the AAA. The award of the arbitrators
shall be final and binding and judgment upon the award may be entered
in any court having jurisdiction thereof. Except as otherwise provided
above, this procedure shall be the exclusive means of settling any
disputes that may arise under this Letter Agreement. All fees and
expenses of the arbitrators and all other expenses of the arbitration,
except for attorneys' fees and witness expenses, shall be shared
equally by you and the Company. Each party shall bear its own witness
expenses and attorneys fees, provided, however, the Company will
reimburse you for your legal fees in connection with any such dispute
where you are found to be the prevailing party by the arbitrator and/or
court.
22. Entire Agreement. This Letter Agreement supersedes all previous and
contemporaneous communications, agreements and understandings, whether
oral or written, between you, on the one hand, and any member of the
Company Group or any of their predecessors, on the other hand
(including the employment letter between you and Primus Corporate
Services Inc., dated March 12, 2002 (the "March 12, 2002 Agreement"),
and constitutes the sole and entire agreement between you and the
Company pertaining to the subject matter hereof. Notwithstanding the
above, the March 12, 2002 Agreement shall remain in effect if this
Letter Agreement becomes null and void pursuant to paragraph 1 hereof.
23. Survival. You acknowledge that the provisions of paragraphs 9 through
15, 16, 20 and 21 shall survive termination of this Letter Agreement
upon expiration of the Term.
24. Counterparts. This Letter Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same
agreement, and shall become a binding agreement when one or more
counterparts have been signed by each party and delivered to the other
party.
25. Notices. Any notice, request, or instruction to be given hereunder
shall be in writing and shall be deemed given when personally delivered
or three days after being sent by United States certified mail, postage
prepaid, with return receipt requested to, the parties at their
respective addresses set forth below:
To the Company:
Primus Asset Management, Inc.
000 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
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To the Executive:
Xx. Xxxxxx X. Xxxxxx
00 Xxxxxxxxx Xxxxxx
Xxx, Xxx Xxxx 00000
26. Opportunity to Consult with Counsel. You acknowledge and affirm that
you have had the opportunity to consult with an attorney prior to
signing this Letter Agreement.
* * * *
If the foregoing is acceptable to you, kindly sign and return to me one copy of
this letter, and this letter shall constitute a binding agreement between you
and the Company.
Sincerely yours,
Primus Asset Management, Inc.
By: /s/ Xxxxxxx Xxxx
--------------------------------
Name: Xxxxxxx Xxxx
Title: Secretary
AGREED TO AND ACCEPTED:
/s/ Xxxxxx X. Xxxxxx
-----------------------------------------------------
Xxxxxx X. Xxxxxx
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EXHIBIT A
RELEASE
I, Xxxxxx X. Xxxxxx, the undersigned, agree to accept the compensation,
payments, benefits and other consideration provided for in paragraph 7(d) [or
(e)] of the employment letter agreement between me and Primus Asset Management,
Inc. (the "Company") dated August 16, 2004 (the "Letter Agreement") in full
resolution and satisfaction of, and hereby IRREVOCABLY AND UNCONDITIONALLY
RELEASE, REMISE AND FOREVER DISCHARGE the Company and Releasees from any and all
agreements, promises, liabilities, claims, demands, rights and entitlements of
any kind whatsoever, in law or equity, whether known or unknown, asserted or
unasserted, fixed or contingent, apparent or concealed, to the maximum extent
permitted by law ("Claims"), which I, my heirs, executors, administrators,
successors or assigns ever had, now have or hereafter can, shall or may have
for, upon, or by reason of any matter, cause or thing whatsoever existing,
arising, occurring or relating to my employment and/or termination thereof with
the Company and Releasees, or my status as a stockholder of the Company and
Releasees, at any time on or prior to the date I execute this Release,
including, without limitation, any and all Claims arising out of or relating to
compensation, benefits, any and all contract claims, tort claims, fraud claims,
claims for bonuses, commissions, sales credits, etc., defamation, disparagement,
or other personal injury claims, claims for accrued vacation pay, claims under
any federal, state or municipal wage payment, discrimination or fair employment
practices law, statute or regulation, and claims for costs, expenses and
attorneys' fees with respect thereto. This release and waiver includes, without
limitation, any and all rights and claims under Title VII of the Civil Rights
Act of 1964, the Civil Rights Acts of 1866, 1871 and 1991, the Employee
Retirement Income Security Act, the Age Discrimination in Employment Act
(including but not limited to the Older Workers Benefit Protection Act), the
Americans with Disabilities Act, the National Labor Relations Act, the Family
and Medical Leave Act, the Equal Pay Act, the Xxxxxxxx-Xxxxx Act, [add
applicable state laws and/or Bermuda laws relating to employment] and all
amendments to the foregoing, and any other federal, state or local statute,
ordinance, regulation or constitutional provision regarding employment,
compensation, employee benefits, termination of employment or discrimination in
employment. Notwithstanding the above, I do not release my right to any right to
indemnification I may have as a director, officer or employee pursuant to
applicable law and/or the Company's certificate of incorporation nor do I
release any rights to any earned and vested benefits to which I am entitled
under the terms of any employee benefit plan maintained by the Company or any of
its affiliates.
I represent and affirm (i) that I have not filed any Claim against the
Company or Releasees and (ii) that to the best of my knowledge and belief, there
are no outstanding Claims within the meaning of this paragraph.
For the purpose of implementing a full and complete release and
discharge of Claims, I expressly acknowledge that this Release is intended to
include in its effect, without limitation, all the Claims described in the
preceding paragraphs, whether known
or unknown, apparent or concealed, and that this Release contemplates the
extinction of all such Claims, including Claims for attorney's fees. I expressly
waive any right to assert after the execution of this Release that any such
Claim has, through ignorance or oversight, been omitted from the scope of the
Release.
For purposes of this Release, the term "the Company and Releasees"
includes the Company and its past, present and future direct and indirect
parents, subsidiaries, affiliates, divisions, predecessors, successors, and
assigns, and their past, present and future officers, directors, shareholders,
representatives, agents, attorneys and employees, in their official and
individual capacities, and all other related individuals and entities, jointly
and individually, and this Release shall inure to the benefit of and shall be
binding and enforceable by all such entities and individuals.
I understand that I have a period of up to 21 days from my receipt of
this Release to review and consider this Release. I further understand that once
I have signed this Release, I may revoke it at any time during the 7 days
following its execution by delivering a written notice of revocation to the
Company, attention General Counsel. I further understand that if I fail to
execute and return this Release to the Company, attention General Counsel, prior
to the expiration of such 21 day period, or revoke my execution of the Release
during such 7 day period, I will not be entitled to the compensation, payments,
benefits and other consideration provided for in paragraph 7(d) [or (e)] of the
Letter Agreement.
I ACKNOWLEDGE THAT I HAVE READ THIS
RELEASE AND I UNDERSTAND
AND ACCEPT ITS TERMS
------------------------------ ---------------------
Xxxxxx X. Xxxxxx Date
Sworn to before me this
___ day of ________, 20__
----------------------------
Notary Public
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