EXHIBIT 10.1
EMPLOYMENT AGREEMENT
AGREEMENT by and between Annuity and Life Re (Holdings), Ltd. (the
"Company") and Xxxx X. Xxxxx (the "Executive") dated as of the 3rd day of April,
2003.
WHEREAS, the Board of Directors of the Company (the "Board") has
determined that it is in the best interests of the Company and its shareholders
to employ the Executive as the Company's President and Chief Executive Officer
and to have the Executive become a member of the Board;
WHEREAS, the Company desires to employ the Executive and to enter into an
agreement embodying the terms of such employment; and
WHEREAS, the Executive desires to enter into this Agreement and to accept
such employment, subject to the terms and provisions of this Agreement;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the receipt of
which is mutually acknowledged, the Company and the Executive (individually a
"Party" and together the "Parties") agree as follows:
1. Effective Date. The "Effective Date" shall mean February 28, 2003.
2. Employment Period. The Company hereby agrees to employ the Executive,
and the Executive hereby agrees to be employed by the Company subject to the
terms and conditions of this Agreement, for the period commencing on the
Effective Date and ending on the third anniversary thereof (the "Initial Term"),
provided that, commencing on February 28, 2006, the employment period shall be
extended one year on each successive anniversary until, at any time on or after
such date, the Company or the Executive delivers a written notice (a "Notice of
Non-Renewal"), no later than ninety-days prior to the end of the then-current
term to the other Party that the employment period shall expire at the end of
the then-current term (the Initial Term as so extended, the "Employment
Period").
3. Terms of Employment.
(a) Position and Duties. (i) During the Employment Period, (A) the
Executive shall serve as the President and Chief Executive Officer of the
Company and shall be responsible for the general management of the Company, with
such authority, duties and responsibilities as are commensurate with such
positions and as may be consistent with such positions (taking into account the
duties and responsibilities of the non-executive Chairman of the Board, if any),
reporting directly to the Board, and (B) the Executive's principal location of
employment shall be at the principal headquarters of the Company; provided, that
the Executive may be required under reasonable business circumstances to travel
outside of such location in connection with
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performing his duties under this Agreement. In addition, the Company shall cause
the Executive to be appointed as a member of the Board as of the Effective Date,
and following such date, the Executive shall remain on the Board, subject to
Section 4(f), and shall perform his duties as a director of the Company
conscientiously and faithfully.
(ii) The Executive agrees that during the Employment Period,
he shall devote substantially all of his business time, energies and talents to
serving as the Company's President and Chief Executive Officer, perform his
duties conscientiously and faithfully subject to the reasonable and lawful
directions of the Board, and in accordance with each of the Company's corporate
governance and ethics guidelines, conflict of interests policies and code of
conduct (collectively, the "Company Policies") applicable to all Company
employees or senior executives generally and copies of which have been or will
be provided to the Executive within a reasonable period of time following the
adoption of the particular Company Policy. During the Employment Period, it
shall not be a violation of this Agreement for the Executive, subject to the
requirements of Section 8, to (A) serve on corporate, civic or charitable boards
or committees, (B) deliver lectures or fulfill speaking engagements and (C)
manage personal investments, so long as such activities do not materially
inhibit or interfere with the performance of the Executive's responsibilities as
the President and Chief Executive Officer or as a director of the Company in
accordance with this Agreement.
(b) Compensation.
(i) Base Salary; Cost of Living Allowance. During the
Employment Period, the Executive shall receive an annualized base salary
("Annual Base Salary") of not less than $500,000, payable pursuant to the
Company's normal payroll practices. During the Employment Period, the current
Annual Base Salary shall be reviewed for increase only (and once increased shall
never be decreased) at such time as the salaries of senior officers of the
Company are reviewed generally, provided that, the Executive's first such review
shall occur no earlier than calendar year 2004. The Company will also pay the
Executive a cost of living allowance for residing in Bermuda of $10,000 per
month.
(ii) Annual Bonus. For each fiscal year completed during the
Employment Period, the Executive shall be eligible to receive an annual cash
bonus ("Annual Bonus") based upon performance targets that are established as
soon as practicable by mutual agreement between the Executive and the
compensation committee of the Board, provided that, the Executive's target
Annual Bonus shall be at least 50% of his Annual Base Salary (the "Target
Bonus") and his maximum Annual Bonus shall be at least 150% of his Annual Base
Salary.
(iii) Retirement Benefits.
(A) General. The Executive shall become a participant in
any qualified or nonqualified retirement plans maintained by the Company.
(B) Certain Terminations During Initial Term. In the
event that, prior to the end of the Initial Term, the Executive (i) resigns
without Good Reason (as defined in Section 4(c)) or (ii) is terminated for Cause
(as defined in Section 4(b)), the Executive
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shall not be entitled to receive any retirement benefits, and the Company shall
not be obligated to pay such benefits to the Executive.
(iv) Restricted Share Award; Signing Bonus. Provided that
Executive makes a timely election under Internal Revenue Code section 83(b) with
respect to the award under this paragraph, he shall be paid a signing bonus of
$100,000 upon filing such election. The Executive shall be granted on the date
hereof 200,000 shares of restricted stock in the Company. The restriction for
this grant will cover a three-year period from the date of the grant and the
restriction will lapse with one-third of the restricted shares becoming
unrestricted after each of the three years. Except as specifically set forth
herein, the grant shall have the same terms and conditions as similar grants
that have been made by the Company to senior executivies generally, as such
terms are set forth in the grant agreement attached as Exhibit A.
(v) Stock Option Awards. On the date hereof, the Executive
shall be granted options to purchase 250,000 shares of Common Stock under the
Company's Initial Stock Option Plan (the "Plan") at $1.00 per share (the
"Option"). Except as specifically set forth herein, the Options shall have the
same terms and conditions as similar grants that have been made by the Company
to senior executives generally, as such terms are set forth in the award
agreement attached as Exhibit B.
(vi) Other Benefits. During the Employment Period, the
Executive shall be entitled to participate in all welfare, perquisites, fringe
benefit, and other benefit plans, practices, policies and programs, as may be in
effect from time to time, for senior executives of the Company generally.
(vii) Expenses. During the Employment Period, the Executive
shall be entitled to receive prompt reimbursement for business expenses
reasonably incurred by the Executive in accordance with the Company's policies,
as may be in effect from time to time, for its senior executives generally.
(viii) Vacation. During the Employment Period, the Executive
shall be entitled to paid vacation in accordance with the Company's policies, as
may be in effect from time to time, for its senior executives generally.
(c) Other Entities. The Executive agrees to serve, without
additional compensation, as an officer and director for each of the Company's
subsidiaries, partnerships, joint ventures, limited liability companies and
other affiliates, including entities in which the Company has a significant
investment (collectively, the Company and such entities, the "Affiliated
Group"), as determined by the Company, provided, that such service does not
materially interfere with the Executive's performance of his duties and
responsibilities as the President and Chief Executive Officer of the Company. As
used in this Agreement, the term "affiliates" shall include any entity
controlled by, controlling, or under common control with the Company.
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4. Termination of Employment.
(a) Death or Disability. The Executive's employment shall terminate
automatically upon the Executive's death during the Employment Period. If the
Company determines in good faith that the Disability of the Executive has
occurred during the Employment Period (pursuant to the definition of Disability
set forth below), it may provide the Executive with written notice in accordance
with Section 11(b) of this Agreement of its intention to terminate the
Executive's employment. In such event, the Executive's employment with the
Company shall terminate effective on the 30th day after receipt of such notice
by the Executive (the "Disability Effective Date"), provided that, within the
30-day period after such receipt, the Executive shall not have returned to
full-time performance of the Executive's duties. For purposes of this Agreement,
"Disability" shall mean the inability of the Executive to perform his duties
with the Company on a full-time basis for six consecutive months as a result of
incapacity due to mental or physical illness which is determined to be total and
permanent by a licensed physician mutually selected by (i) the Company or its
insurers and (ii) the Executive or the Executive's legal representative. If the
Parties cannot agree on a licensed physician, each Party shall select a licensed
physician and the two physicians shall select a third who shall be the approved
licensed physician for this purpose.
(b) Cause. The Company may terminate the Executive's employment
during the Employment Period with or without Cause. For purposes of this
Agreement, "Cause" shall mean:
(i) the Executive's willful and continued failure to
substantially perform his duties under this Agreement, other than any such
failure resulting from incapacity due to physical or mental illness, which
failure has continued after a written demand for substantial performance, signed
by a duly authorized member of the Board, is delivered to the Executive,
specifying the manner in which the Executive has failed to substantially
perform; or
(ii) the Executive's willful engagement in any malfeasance,
fraud, dishonesty or gross misconduct, each of which must (x) be in connection
with his position as the President and Chief Executive Officer of the Company
(or as a director of the Company or an officer or director of any member of the
Affiliated Group) and (y) materially damage the Company economically or
otherwise; or
(iii) the Executive's conviction of, or plea of guilty or nolo
contendere to, a felony; or
(iv) the Executive's breach of Section 12(c) of this Agreement
that materially damages or could reasonably be expected to materially damage the
Company economically or otherwise; or
(v) the Executive's material breach of Section 8 or Section
12(b) of this Agreement.
For purposes of this provision, no act or failure to act on the part of the
Executive shall be
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considered "willful" unless it is done, or omitted to be done, by the Executive
in bad faith and without reasonable belief that the Executive's act or omission
was in the best interests of the Company. A termination of employment of the
Executive shall not be deemed to be for Cause unless and until there shall have
been delivered to the Executive a copy of a resolution duly adopted by the
affirmative vote of not less than two-thirds of the entire membership of the
Board (not including the Executive) at a meeting of the Board called and held
for such purpose (after at least ten days' written notice is provided to the
Executive and the Executive is given an opportunity, together with counsel, to
be heard before the Board), finding that, in the good faith opinion of the
Board, the Executive is guilty of the conduct described in subparagraph (i),
(ii), (iii), (iv) or (v) above, and specifying the particulars thereof in
detail.
(c) Good Reason. The Executive's employment may be terminated by the
Executive for Good Reason. If (x) an event or circumstance set forth in clauses
(i) through (viii) below shall have occurred and the Executive provides the
Company with written notice thereof within a reasonable period of time after the
Executive has knowledge of the occurrence or existence of such event or
circumstance, which notice shall specifically identify the event or circumstance
that the Executive believes constitutes Good Reason, (y) the Company fails to
correct the circumstance or event so identified within 15 days after the receipt
of such notice, and (z) the Executive resigns within 90 days after the date of
delivery of the notice referred to in clause (x) above, the Executive shall be
considered to have resigned for Good Reason. For purposes of this Agreement,
"Good Reason" shall mean, in the absence of the Executive's express written
consent (and except in consequence of a prior termination of the Executive's
employment), the occurrence of any of the following:
(i) a reduction by the Company in the Executive's highest
Annual Base Salary or a reduction in the Executive's Target Bonus as a
percentage of the Executive's Annual Base Salary; or
(ii) the failure of the Executive to be appointed to any of
the positions described in Section 3(a)(i) or his removal from any such position
(other than pursuant to Section 4(g) or pursuant to a termination of the
Executive's employment for death, Disability or Cause); or
(iii) a material diminution in the Executive's duties or
responsibilities (other than as a result of the Executive's physical or mental
incapacity) or the assignment to the Executive of duties or responsibilities
materially inconsistent with the Executive's position and status as the
President and Chief Executive Officer of the Company; provided, however, that
the Executive acknowledges that he will continue to serve as the Company's Chief
Financial Officer until such time as the Board elects to retain another
individual for such position and such individual has in fact been retained; or
(iv) a material change in the Executive's reporting
relationship so that the Executive no longer reports solely to the Board in his
positions as President and Chief Executive Officer; or
(v) a breach by the Company of any of its material obligations
to the
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Executive under this Agreement; or
(vi) the Company requiring the Executive's principal location
of employment to be at any office or location other than Bermuda (except to the
extent agreed to or requested by the Executive); or
(vii) a breach by the Company of Section 10 or Section 12(a)
of this Agreement; or
(viii) any failure by the Company to comply with and satisfy
Section 9(b) of this Agreement.
(d) Notice of Termination. Any termination by the Company for Cause,
or by the Executive for Good Reason, shall be communicated by Notice of
Termination to the other Party hereto given in accordance with Section 11(b) of
this Agreement. For purposes of this Agreement, a "Notice of Termination" means
a written notice which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
the Executive's employment under the provision so indicated and (iii) if the
Date of Termination (as defined below) is other than the date of receipt of such
notice, specifies the termination date (which date shall be not more than thirty
days after the giving of such notice). The failure by the Executive or the
Company to set forth in the Notice of Termination any fact or circumstance which
contributes to a showing of Good Reason or Cause shall not waive any right of
the Executive or the Company, respectively, hereunder or preclude the Executive
or the Company, respectively, from asserting such fact or circumstance in
enforcing the Executive's or the Company's rights hereunder.
(e) Date of Termination. "Date of Termination" means (i) if the
Executive's employment is terminated by the Company for Cause, or by the
Executive for Good Reason, the date of receipt of the Notice of Termination or
any later date specified therein within 30 days of such notice, as the case may
be, (ii) if the Executive's employment is terminated by the Company other than
for Cause or Disability, or if the Executive voluntarily resigns without Good
Reason, the date on which the terminating Party notifies the other Party of such
termination, (iii) if the Executive's employment is terminated by reason of
death, the date of death of the Executive, (iv) if the Executive's employment is
terminated by the Company due to Disability, the Disability Effective Date, or
(v) if the Executive's employment is terminated by the Executive or the Company
as a result of a Notice of Non-Renewal, the second anniversary of such notice.
(f) Resignation from All Positions. Notwithstanding any other
provision of this Agreement, upon the termination of the Executive's employment
for any reason, unless otherwise requested by the Board, the Executive shall
immediately resign from all positions that he holds or has ever held with the
Company and any other member of the Affiliated Group (and with any other
entities with respect to which the Company has requested the Executive to
perform services), including, without limitation, the Board and all boards of
directors of any member of the Affiliated Group. The Executive hereby agrees to
execute any and all
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documentation to effectuate such resignations upon request by the Company, but
he shall be treated for all purposes as having so resigned upon termination of
his employment, regardless of when or whether he executes any such
documentation.
(g) Except in matters where Executive is individually a defendant or
the subject of an investigation, following termination of his employment for any
reason, in the event that Executive is requested by the Company to cooperate in
any litigation or investigation regarding the Company, or is compelled to do so
by any legal process, the Company shall pay Executive the sum of $2,500 for each
day or portion of a day Executive performs any such services, to the extent
permitted by applicable law.
5. Obligations of the Company upon Termination.
(a) Good Reason; Other Than for Cause. If, during the Employment
Period, (1) the Company shall terminate the Executive's employment other than
for Cause, death or Disability, (2) the Executive shall terminate employment for
Good Reason:
(i) the Company shall pay to the Executive in a lump sum in
cash within 30 days (except as specifically provided in Sections 5(a)(i)(A)(3))
after the Date of Termination the aggregate of the following amounts:
A. the sum of (1) the Executive's accrued but unpaid Annual
Base Salary and any accrued vacation pay through the Date of Termination, (2)
the Executive's business expenses that are reimbursable pursuant to Section
3(b)(vii) but have not been reimbursed by the Company as of the Date of
Termination, (3) the Executive's Annual Bonus for the fiscal year immediately
preceding the fiscal year in which the Date of Termination occurs if such bonus
has been determined but not paid as of the Date of Termination (at the time such
Annual Bonus would otherwise have been paid); and
B. one year's Base Salary and full relocation back to any city
in the United States;
(ii) any stock options, restricted stock, performance shares
and any other stock-based long-term incentive compensation award held by the
Executive (whether granted under this Agreement or otherwise) shall vest
immediately (with option exercisability continuing until the first to occur of
the fifth anniversary of the Date of Termination or the end of the scheduled
option term)
The Parties agree that any amounts due under this Section 5(a) are in the nature
of severance payments considered to be reasonable by the Company and are not in
the nature of a penalty.
(b) Cause; Other than for Good Reason. If the Executive's employment
shall be terminated for Cause or the Executive terminates his employment without
Good Reason during the Employment Period (including by providing to the Company
a Notice of Non-Renewal), this Agreement shall terminate without further
obligations to the Executive other than the obligation to pay to the Executive
an amount equal to the amount set forth in clauses (1) and
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(2) of Section 5(a)(i)(A) above and the timely payment or provision of the Other
Benefits, including any applicable life insurance benefits.
(c) Death. If the Executive's employment is terminated by reason of
the Executive's death during the Employment Period, this Agreement shall
terminate without further obligations to the Executive's legal representatives
under this Agreement, other than the obligation to pay to the Executive's
beneficiaries an amount equal to the amount set forth in clauses (1), (2) and
(3) of Section 5(a)(i)(A) above and the timely payment or provision of the Other
Benefits, including any applicable life insurance benefits.
(d) Disability. If the Executive's employment is terminated by
reason of the Executive's Disability during the Employment Period, this
Agreement shall terminate without further obligations to the Executive, other
than the obligation to pay or provide to the Executive the Executive's Retiree
Health Benefits, an amount equal to the amount set forth in clauses (1), (2) and
(3) of Section 5(a)(i)(A) above, and the timely payment or provision of Other
Benefits, including any applicable disability benefits.
6. Non-Exclusivity of Rights. Except as specifically provided otherwise,
nothing in this Agreement shall prevent or limit the Executive's continuing or
future participation in any plan, program, policy or practice provided by the
Company, or any of its subsidiaries for which the Executive is otherwise
eligible, nor, subject to Section 11(f), shall anything herein limit or
otherwise affect such rights as the Executive may have under any contract or
agreement with the Company or its subsidiaries. Amounts which are vested
benefits or which the Executive is otherwise entitled to receive under any plan,
policy, practice or program of or any contract or agreement with the Company or
its subsidiaries at or subsequent to the Date of Termination shall be payable in
accordance with such plan, policy, practice or program or contract or agreement
except as explicitly modified by this Agreement.
7. Full Settlement. The Company's obligation to make the payments provided
for in this Agreement and otherwise to perform its obligations hereunder shall
not be affected by any set-off, counterclaim, recoupment, defense, or other
claim, right or action that the Company may have against the Executive or
others. In no event shall the Executive be obligated to seek other employment or
take any other action by way of mitigation of the amounts payable to the
Executive under any of the provisions of this Agreement and such amounts shall
not be reduced as a result of a mitigation duty whether or not the Executive
obtains other employment. In the event of any dispute between the Company and
the Executive under this Agreement during or after termination of the
Executive's employment, the Company agrees to pay, to the full extent permitted
by law, all professional fees, costs and expenses which the Executive may
reasonably incur as a result of any such contest.
8. Covenants.
(a) Confidential Information. The Executive shall hold in a
fiduciary capacity for benefit of the Affiliated Group, all secret or
confidential information, knowledge or data relating to the Affiliated Group and
its businesses (including, without limitation, any proprietary and not publicly
available information concerning any processes, methods, trade secrets, research
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or secret data, costs, names of users or purchasers of their respective products
or services, business methods, operating procedures or programs or methods of
promotion and sale) that the Executive has obtained or obtains during the
Executive's employment by the Affiliated Group that is not public knowledge
(other than as a result of the Executive's violation of this Section 8(a))
("Confidential Information"). For the purposes of this Section 8(a), information
shall not be deemed to be publicly available merely because it is embraced by
general disclosures or because individual features or combinations thereof are
publicly available. The Executive shall not communicate, divulge or disseminate
Confidential Information at any time during or after the Executive's employment
with the Affiliated Group, except with prior written consent of the Company, or
as otherwise required by law or legal process or as such disclosure or use may
be required in the course of the Executive performing his duties and
responsibilities as the President and Chief Executive Officer of the Company.
Notwithstanding the foregoing provisions, if the Executive is required to
disclose any such confidential or proprietary information pursuant to applicable
law or a subpoena or court order, the Executive shall promptly notify the
Company in writing of any such requirement so that the Company or the
appropriate member of the Affiliated Group may seek an appropriate protective
order or other appropriate remedy or waive compliance with the provisions
hereof. The Executive shall reasonably cooperate with the Affiliated Group to
obtain such a protective order or other remedy. If such order or other remedy is
not obtained prior to the time the Executive is required to make the disclosure,
or the Company waives compliance with the provisions hereof, the Executive shall
disclose only that portion of the confidential or proprietary information which
he is advised by counsel that he is legally required to so disclose. All
records, files, memoranda, reports, customer lists, drawings, plans, documents
and the like that the Executive uses, prepares or comes into contact with during
the course of the Executive's employment shall remain the sole property of the
Company and/or the Affiliated Group, as applicable, and shall be turned over to
the Company upon termination of the Executive's employment.
(b) Non-Recruitment of Affiliated Group Employees. The Executive
shall not, at any time during the Restricted Period (as defined in this Section
8(b)), without the prior written consent of the Company, directly or indirectly,
contact, solicit, recruit, or employ (whether as an employee, officer, director,
agent, consultant or independent contractor) any person who is or was at any
time during the previous twelve months an employee, representative, officer or
director of any member of the Affiliated Group. Further, during the Restricted
Period, the Executive shall not take any action that could reasonably be
expected to have the effect of encouraging or inducing any employee,
representative, officer or director of any member of the Affiliated Group to
cease their relationship with any member of the Affiliated Group for any reason,
except for terminations of employment in the ordinary course of business. This
Section 8(b) shall not apply to recruitment of employees for the Affiliated
Group and shall not apply to the Executive's personal administrative staff who
perform secretarial-type functions. The "Restricted Period" shall mean the
period of Executive's employment with the Company and its subsidiaries and the
additional period ending on the second anniversary of the Date of Termination.
(c) Remedies. The Executive acknowledges and agrees that the terms
of Section 8: (i) are reasonable in light of all of the circumstances, (ii) are
sufficiently limited to
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protect the legitimate interests of the Company and its subsidiaries, (iii)
impose no undue hardship on the Executive and (iv) are not injurious to the
public. The Executive further acknowledges and agrees that (x) the Executive's
breach of the provisions of Section 8 will cause the Company irreparable harm,
which cannot be adequately compensated by money damages, and (y) if the Company
elects to prevent the Executive from breaching such provisions by obtaining an
injunction against the Executive, there is a reasonable probability of the
Company's eventual success on the merits. The Executive consents and agrees that
if the Executive commits any such breach or threatens to commit any breach, the
Company shall be entitled to temporary and permanent injunctive relief from a
court of competent jurisdiction, without posting any bond or other security and
without the necessity of proof of actual damage, in addition to, and not in lieu
of, such other remedies as may be available to the Company for such breach,
including the recovery of money damages. If any of the provisions of Section 8
are determined to be wholly or partially unenforceable, the Executive hereby
agrees that this Agreement or any provision hereof may be reformed so that it is
enforceable to the maximum extent permitted by law. If any of the provisions of
this Section 8 are determined to be wholly or partially unenforceable in any
jurisdiction, such determination shall not be a bar to or in any way diminish
the Company's right to enforce any such covenant in any other jurisdiction.
9. Successors. (a) This Agreement is personal to the Executive and without
the prior written consent of the Company shall not be assignable by the
Executive other than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
legal representatives. This Agreement shall inure to the benefit of and be
binding upon the Company and its successors and assigns.
(b) No rights or obligations of the Company under this Agreement may
be assigned or transferred by the Company except that such rights or obligations
may be assigned or transferred pursuant to a merger or consolidation in which
the Company is not the continuing entity, or the sale or liquidation of all or
substantially all or a substantial portion of the assets of the Company;
provided, however, that the assignee or transferee is the successor to all or
substantially all or a substantial portion of the assets of the Company and such
assignee or transferee assumes the liabilities, obligations and duties of the
Company, as contained in this Agreement, either contractually or as a matter of
law. The Company shall cause any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all or a
substantial portion of its business and/or assets to assume expressly and agree
to perform this Agreement within 15 days after such succession in the same
manner and to the same extent that the Company would be required to perform it
if no such succession had taken place. A breach of this Section 9(b) shall be
deemed to be Good Reason under Section 4(c)(viii). As used in this Agreement,
"Company" shall mean the Company as hereinbefore defined and any successor to
its business and/or assets as aforesaid which assumes and agrees to perform this
Agreement by operation of law, or otherwise.
10. Indemnification. The Company shall indemnify the Executive as an
officer, director and employee of the Company and any member of the Affiliated
Group and in the same amounts to the maximum extent permitted under the
Company's by-laws and applicable law. The Company shall maintain directors' and
officers' liability insurance coverage during the Executive's employment and
thereafter for the duration of any period of limitations during which
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any action, if any, may be brought against the Executive for his service as an
officer, director or employee of the Company and any member of the Affiliated
Group and in the same amounts, and on the same terms and conditions as
applicable to other former senior executives and directors of the Company.
11. Miscellaneous. (a) This Agreement shall be governed by and construed
in accordance with the laws of the State of New York, without reference to
principles of conflict of laws. The Parties hereto irrevocably agree to submit
to the jurisdiction and venue of the courts of the State of New York, in any
action or proceeding brought with respect to or in connection with this
Agreement. The captions of this Agreement are not part of the provisions hereof
and shall have no force or effect. This Agreement may not be amended or modified
otherwise than by a written agreement executed by the Parties hereto or their
respective successors and legal representatives.
(b) All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other Party or by registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:
If to the Executive:
Xxxx X. Xxxxx
At the most recent address on file for the Executive at the Company.
If to the Company:
Annuity and Life Re (Holdings), Ltd.
Xxxxxxxxxx Xxxxx
0 Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 11
Bermuda
or to such other address as either Party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.
(d) Notwithstanding any other provision of this Agreement, the
Company may withhold from any amounts payable or benefits provided under this
Agreement any Federal, state, and local taxes as shall be required to be
withheld pursuant to any applicable law or regulation.
(e) The Executive's or the Company's failure to insist upon strict
compliance
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with any provision of this Agreement or the failure to assert any right the
Executive or the Company may have hereunder, shall not be deemed to be a waiver
of such provision or right or any other provision or right of this Agreement.
(f) From and after the Effective Date, this Agreement shall
supersede any other employment, severance, retention or change-in-control
agreement between the Parties with respect to the subject matter hereof
excepting only any stock option or restricted stock agreements or awards
whereunder the Executive is the optionee or shareholder.
12. Representations. (a) The Company hereby represents and warrants to the
Executive that it is fully authorized and empowered to enter into this Agreement
and to perform its obligations hereunder and that the performance of its
obligations under this Agreement will not violate any agreement between it and
any other person, firm or organization.
(b) The Executive hereby represents and warrants to the Company that
the Executive is not party to any contract, understanding, agreement or policy,
whether or not written that would be breached by the Executive's entering into,
or performing services under, this Agreement by the Executive.
(c) The Executive further represents that he has disclosed to the Company
in writing all material (i) threatened claims that (x) are unresolved and still
outstanding as of the Effective Date and (y) have been received by the Executive
in writing during the 24 months prior to the Effective Date, (ii) existing
claims, and (iii) pending claims, in each case, against him of which he is
aware, if any, as a result of his employment with any previous employer or his
membership on any boards of directors which could be reasonably expected to be
materially damaging to the Executive monetarily, reputationally or otherwise.
IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand
and, pursuant to the authorization from its Board of Directors, the Company has
caused these presents to be executed in its name and on its behalf, all as of
the day and year first above written.
/s/ Xxxx X. Xxxxx
---------------------------
Xxxx X. Xxxxx
By: /s/ Xxxxxx X. Xxxxxxx
------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Director
-12-
EXHIBIT A
RESTRICTED STOCK AGREEMENT
This RESTRICTED STOCK AGREEMENT, dated as of the 3rd day of April,
2003 (the "Award Date"), is between Annuity and Life Re (Holdings), Ltd., a
Bermuda corporation (the "Company"), and Xxxx X. Xxxxx (the "Grantee"), an
employee of the Company.
The Company desires to award the Grantee shares of restricted stock
as provided in this Agreement, in accordance with the provisions of the Annuity
and Life Re (Holdings), Ltd. Restricted Stock Plan (the "Plan"), a copy of which
has been provided to the Grantee;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
set forth and for other good and valuable consideration, the legal sufficiency
of which is hereby acknowledged, the parties hereto, intending to be legally
bound hereby, agree as follows:
1. Grant of Award. The Company hereby awards to the Grantee a
restricted stock award (the "Award") under the Plan for an aggregate of Two
Hundred Thousand (200,000) common shares of the Company ("Common Shares"),
subject to adjustment as provided by Section 8 of the Plan. The Award is in all
respects limited and conditioned as provided in this Agreement and by the Plan.
The Plan and Grantee's rights under the Plan may be amended from time to time.
The terms of the Plan shall control in the event of any conflict with any other
terms of this Restricted Stock Agreement.
2. Vesting. Unless earlier terminated or vested in accordance with
the provisions of the Plan, the Common Shares covered by the Award shall vest in
Grantee in three equal annual installments commencing on the first anniversary
of the Award Date.
3. Stock Certificates. Certificates for Common Shares subject to the
Award shall be registered in the Grantee's name (or, if the Grantee so requests,
in the name of the Grantee and the Grantee's spouse, jointly with a right of
survivorship) and shall be delivered to the Grantee as soon as practicable. With
respect to shares in which the Grantee is not vested on the Award Date, the
Grantee shall, immediately upon receipt thereof, deposit all certificates for
such unvested Common Shares, together with a stock power executed in favor of
the Company, with the Company. Certificates for such unvested Common Shares
shall be held by the Company until the Grantee becomes vested in such Common
Shares. The certificate may include a legend setting forth restrictions on
transfer.
4. Dividends; Rights as Shareholder in Unvested Common Shares. The
Grantee shall be entitled to receive dividends on unvested Common Shares subject
to the Award (if any), shall have the right to vote such unvested Common Shares,
and shall have all other shareholder's rights in such unvested Common Shares,
with the exception that (i) the Grantee shall not be entitled to delivery of the
stock certificates until he or she becomes vested in the Common Shares and (ii)
the Company shall retain custody of the certificates representing the unvested
Common Shares until the Grantee becomes vested in such Common Shares, at which
time such certificates shall be delivered to the Grantee. The Grantee's rights
to such unvested Common Shares in the event the Grantee's employment with the
Company (or any related company) is terminated shall be governed by the Plan,
except as otherwise set forth in that certain Employment Agreement dated as of
the date hereof by and between the Grantee and the Company.
5. Transferability. The Grantee may not assign or transfer, in whole
or in part, Common Shares subject to this Award in which the Grantee is not
vested, other than by will or by the laws of descent and distribution.
6. Withholding of Taxes. The obligation of the Company to deliver
Common Shares upon vesting shall be subject to applicable tax withholding
requirements. If the vesting of the Award is subject to the withholding
requirements of applicable tax laws, the Grantee, subject to the provisions of
the Plan and such additional withholding rules ("Withholding Rules") as shall be
adopted by the Committee, may satisfy the withholding tax, in whole or in part,
by electing to have the Company withhold Common Shares to the extent such
shares are vested. Such Common Shares shall be valued, for this purpose, at
their Fair Market Value (as defined in the Plan) on the date the Award is
includible in income by the Grantee under applicable tax laws (the
"Determination Date"). Such election must be made in compliance with and subject
to the Withholding Rules, and the Company may limit the number of Common Shares
withheld to the extent necessary to avoid adverse accounting consequences.
7. Governing Law. This Restricted Stock Agreement shall be construed
in accordance with, and its interpretation shall be governed by, applicable
United States laws, and otherwise by Bermuda law (without reference to
principles of conflict of laws).
IN WITNESS WHEREOF, the Company has caused this Restricted Stock
Agreement to be duly executed by its duly authorized officer, and the Grantee
has hereunto set his hand, all on the day and year first above written.
ANNUITY AND LIFE RE (HOLDINGS), LTD.
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Director
GRANTEE:
/s/ Xxxx X. Xxxxx
----------------------------------
Xxxx X. Xxxxx
EXHIBIT B
April 3, 2003
Xx. Xxxx X. Xxxxx
c/o Annuity and Life Re (Holdings), Ltd.
Xxxxxxxxxx Xxxxx, 0 Xxxxxxxx Xxxxxx
Xxxxxxxx XX 11
Bermuda
Dear Xxx:
I am pleased to inform you that on April 3, 2003, pursuant to the terms of the
Annuity and Life Re (Holdings), Ltd. Initial Stock Option Plan (the "Plan"), you
were granted options to purchase Two Hundred Fifty Thousand (250,000) common
shares of Annuity and Life Re (Holdings), Ltd. (the "Company") at an exercise
price of $1.00 per share. The exercise price for the options shall be payable in
cash or its equivalent.
The options herein granted will become exercisable as follows:
Date First Exercisable Number of Shares
---------------------- ----------------
April 3, 2004 83,333
April 3, 2005 83,333
April 3, 2006 83,334
Once the options become exercisable, they will remain exercisable until
they are exercised or until they terminate. Unless earlier terminated pursuant
to the terms of the Plan, all options herein granted shall terminate on April 3,
2013. Under certain conditions more specifically set forth in the Plan or in
that certain Employment Agreement dated as of the date hereof by and between you
and the Company, the time at which the options become exercisable may be
accelerated.
To the extent exercisable under the provisions of this letter agreement
and the Plan, the options may be exercised from time to time by written notice
to the Company of your election to exercise the options. Any such notice of
exercise shall specify the number of common shares to be purchased by the
exercise of the options and shall be accompanied by the purchase price for such
common shares.
Further terms governing the options granted to you herein are set forth in
the Plan, which is incorporated by reference herein. In the event of any
conflict between this letter agreement and the Plan, the Plan shall control.
The options granted to you herein are intended to be non-qualified stock
options. You are advised to consult with your tax advisor for the tax
consequences of the grant of the options, exercise of the options and the sale
of common shares purchased by exercise of the options.
If you wish to accept the grant of the options as provided above and in
the Plan, please so indicate by signing this letter in the space provided below.
Upon signing the letter, you and the Company shall be legally bound hereby under
Bermuda law.
Very truly yours,
ANNUITY AND LIFE RE (HOLDINGS), LTD.
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxx, Director
Accepted and Agreed:
/s/ Xxxx X. Xxxxx
----------------------------
Xxxx X. Xxxxx
