Exhibit 99.1
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT made and entered into as of the 27th day of August
2004 ("the Effective Date") by and among PXRE Reinsurance Ltd., a Bermuda
company, (together with its successors and assigns permitted under this
Employment Agreement, the "Company"), and XXX X. XXXXXXXXXXX (the "Executive").
W I T N E S S E T H:
WHEREAS, the Executive currently is the President and Chief Operating
Officer of the Company; and
WHEREAS, the Company desires to continue the employment of the
Executive as its President and Chief Operating Officer and to enter into an
employment agreement to set forth the terms of such continued employment (this
"Agreement"); and
WHEREAS, the Executive desires to enter into this Agreement and to
accept such continued 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. EMPLOYMENT AND DUTIES
1.1. General. The Company hereby agrees to continue to employ the
Executive, and the Executive hereby agrees to continue to serve the Company, as
President and Chief Operating Officer of the Company, commencing as of the
Effective Date upon the terms and subject to the conditions herein contained.
The Executive shall perform such other duties and services for the Company and
its affiliates, commensurate with the Executive's position, as may be designated
from time to time by the Chief Executive Officer. The Executive agrees to use
his reasonable best efforts to serve the Company faithfully and to the best of
his ability. The Executive shall report directly to the Chief Executive Officer.
1.2. Extent of Services. The Executive shall have all of the powers,
duties and responsibilities customary to his office in a company the size and
nature of the Company and as are reasonably necessary to the operations of the
Company as may be assigned to him from time to time by the Chief Executive
Officer consistent with his position of President and Chief Operating Officer.
Except as may otherwise be approved in advance by the Chief Executive Officer,
and except during vacation periods and reasonable periods of absence due to
sickness, personal injury or other disability, the Executive shall devote
substantially all of his working time throughout his period of employment with
the Company to the services required of him under this Agreement.
Notwithstanding the foregoing, the Executive shall be permitted to engage in
charitable and civic activities, manage his personal investments (provided that
in doing so the Executive does not place himself in a position of conflict with
the interests of the Company) and serve, with the prior approval of the Board in
each instance, on advisory boards or boards of directors of other entities,
provided in all instances that such activities do not interfere with the
performance of his duties hereunder. During the Employment Term, the Executive's
services hereunder shall be performed at the offices of the Company in Bermuda,
subject to necessary and reasonable travel requirements of his position and
duties hereunder.
1.3. Term of Employment. The Executive's employment under this
Agreement shall commence as of the Effective Date and shall continue until the
earlier of the second anniversary of the Effective Date and the date of
termination of the Executive's employment pursuant to Section 4 or 5; provided
that, unless earlier terminated as provided in Sections 4 and 5 hereof, the
Executive's employment under this Agreement shall be automatically extended from
and after the second anniversary of the Effective Date for additional one year
periods; provided further, if the term of this Agreement is extended as herein
described and the Executive or the Company shall thereafter determine to
terminate the term of this Agreement, the party so terminating the term of this
Agreement shall give written notice to the other party not less than 120 days
prior to the anniversary of the Effective Date which would xxxx the commencement
of an additional twelve month period, and under such circumstances the
Executive's employment pursuant to this Agreement shall end on such anniversary
of the Effective Date and providing such notice of non-renewal in and of itself
shall not be deemed to be a termination of the Executive's employment hereunder,
including a termination without cause or for good reason. The date on which the
Executive's employment hereunder terminates in accordance with Section 4 is the
"Termination Date, and the period commencing on the Effective Date and ending on
earlier of the Termination Date or the expiration of the term of this Agreement
is hereinafter referred to as the "Employment Term".
1.4. In the event the Company serves notice of non-renewal, the Company
may direct that until the end of the Employment Term:
1.4.1 The Executive shall perform no duties; and/or
1.4.2 The Executive shall refrain from contacting any
customers, clients, advertisers, suppliers, agents, professional
advisors, brokers, or employees of the Company;
1.4.3 The Executive shall not enter all or any premises of the
Company.
2. COMPENSATION
2.1. Base Salary. From the Effective Date through the end of the
Executive's employment hereunder, the Executive shall be entitled to receive a
base salary ("Base Salary") at a rate of US$370,000 per annum, payable in
arrears in equal installments in accordance with the Company's payroll
practices, with such increases as may be granted to the Executive in accordance
with Section 2.2. Once increased, such higher amount shall constitute the
Executive's annual Base Salary.
2.2. Annual Review. The Executive's Base Salary shall be reviewed by
the Chief Executive Officer, based upon the Executive's performance, not less
often than annually, and may be increased but not decreased during the
Employment Term.
2.3. Annual Incentive Bonus Plan. Subject to the provisions of Section
4 and Section 5, the Executive shall be entitled to participate annually during
the Employment Term in PXRE Group Ltd.'s 2004 Incentive Bonus Compensation Plan
(the "Bonus Plan"), or such substitute plan as shall be established from time to
time by the Company (which substitute plan shall not be materially less
favorable to the Executive than the Bonus Plan) providing for the payment of
annual bonuses to key employees of the Company, subject to the terms and
conditions of the Bonus Plan or such substitute plan, as the case may be. The
Executive's target bonus in respect of the year 2004 shall be not less than 55%
of his Base Salary and shall be payable within 60 days after the end of the
fiscal year, whether or not the Executive is employed by the Company on the date
of payment. The determination of annual bonus amounts payable to the Executive
in years 2005 and subsequent shall be made in accordance with the terms of the
Bonus Plan as that Plan may be amended from time to time.
2.4. Equity Grants. Subject to the provisions of Section 4 and the next
succeeding sentences of this Section 2.4, the Executive shall be entitled to
participate annually during the Employment Term on a basis no less favourable
than other similarly-situated executives, in the PXRE Group Ltd's 2002 Officer
Incentive Plan (the "Equity Incentive Plan"), or such substitute plan as shall
be established from time to time by the Company or any affiliate providing for
the grant of stock options and/or restricted shares of PXRE Group Ltd.'s or any
affiliate's stock to key employees of the Company, subject to the terms and
conditions of the Equity Incentive Plan or such substitute plan, as the case may
be. The Company and the Executive agree that for purposes of determining
restricted share grants to the Executive under the Equity Incentive Plan, the
relevant multiple shall be no less than 1.40 of Base Salary.
2.5. Severance Plan. During the Employment Term, the Executive will not
be eligible to participate in the Company's Amended and Restated Severance Plan
for Certain Executives.
2.6. Housing; Automobile. During the Employment Term, the Executive
shall be entitled to receive such allowance for housing and the provision of an
automobile as has been previously provided to the Executive, and the Company
shall otherwise provide to the Executive such additional benefits consistent
with the Executive's residence in Bermuda as has heretofore been provided to the
Executive by the Company.
3. EMPLOYEE BENEFITS, VACATION AND EXPENSE REIMBURSEMENTS
3.1. In General. During the Employment Term (and thereafter to the
extent provided herein), the Executive and his dependents shall be included to
the extent eligible thereunder in all pension, including any supplemental
executive retirement plan 401(k), health, medical, life, disability or other
similar plans or benefits which shall be established by the Company or any
affiliate from time to time for, or made available to, its executives on a basis
no less favorable than provided other similarly-situated executives.
3.2. During the Employment Term, the Executive shall be entitled to the
number of paid vacation days (but not less than four weeks per annum) and
floating holidays that is consistent with those provided to similarly situated
executives of the Company, and in no event less than the number of such days
provided to the Executive immediately before the Effective Date, subject to and
in accordance with the vacation and holiday policies of the Company as in effect
from time to time.
3.3. During the Employment Term, the Executive is authorized to incur
reasonable business expenses in carrying out his duties and responsibilities
under this Agreement, and the Company shall reimburse him for all such
reasonable business expenses reasonably incurred in connection with carrying out
the business of the Company, subject to and in accordance with the terms and
conditions of the policies applicable to similarly situated senior executives of
the Company regarding such expenses as in effect from time to time. The Company
shall reimburse the Executive for his reasonable legal and other professional
fees and expenses incurred in the negotiation, preparation and execution of this
Agreement.
4. TERMINATION OF EMPLOYMENT
4.1. Termination Without Cause; Resignation for Good Reason.
4.1.1. General. Subject to the provisions of Sections 4.1.2
and 4.1.3, if the Executive's employment is terminated by the Company
without Cause (as defined in Section 4.3), or if the Executive
terminates his employment hereunder for Good Reason (as defined in
Section 4.4), the Company shall pay the Executive severance pay in an
amount equal to two times his Base Salary (at a rate in effect on the
date of such termination or, if a reduction in Base Salary is the basis
for termination for Good Reason, then the Base Salary in effect
immediately prior to such reduction). Such severance pay shall be
payable at such intervals as the same would have been paid had the
Executive remained in the active service of the Company during the
24-month period following termination of employment (the "Severance
Period"). In addition, the Executive and his dependents shall continue
to participate in the benefit plans described in Section 3.1 (or be
provided with comparable benefits) and receive any housing or
automobile allowance as described in Section 2.6 for a period of one
year from the date of termination or resignation pursuant to this
Section 4.1.1. The Executive shall have no further right to receive any
other compensation or benefits after such termination or resignation of
employment except as determined in accordance with the terms of the
employee benefit plans or programs of the Company, except that he shall
receive payment for earned but unused vacation. In the event of any
termination of the Executive's employment under this Section 4.1.1, all
options, restricted shares and other equity grants held by the
Executive shall immediately vest in full and, all vested options shall
remain exercisable in accordance with the terms of the applicable
equity plan, including, without limitation, the Equity Incentive Plan
and the 1992 Officer Incentive Plan, as applicable, provided that,
notwithstanding Section 2.4(b)(ii)(2) of the Equity Incentive Plan and
the 1992 Officer Incentive Plan or any other provision that would
shorten the exercise period as a result of termination, such vested
options shall remain exercisable in accordance with their original
term.
4.1.2. Conditions Applicable to the Severance Period. In the
event the Executive's employment is terminated without cause or the
Executive resigns with good reason, Sections 7.1 and 7.2 shall apply
during the period ending on the first anniversary of the Termination
Date; provided that no additional compensation or benefits, other than
as payable pursuant to Section 4.1.1, shall be due to the Executive.
If, during the Severance Period, the Executive materially breaches his
obligations under Section 6 or Section 7 of this Agreement, the Company
may terminate the Severance Period, after written notice to the
Executive and, if curable, failure of the Executive after such written
notice to cure such alleged breach in a timely manner, and cease to
make any further payments or provide any employee benefits described in
Section 4.1.1.
4.1.3. Death During Severance Period. In the event of the
Executive's death during the Severance Period, all remaining severance
pay due to the Executive under Section 4.1.1 shall be payable
immediately to the Executive's designated beneficiary.
4.1.4. Date of Termination. The date of termination of
employment without Cause shall be the date specified in a written
notice of termination to the Executive. The date of resignation for
Good Reason shall be the date specified in the written notice of
resignation from the Executive to the Company; provided, however, that
no such written notice shall be effective unless the cure period
specified in Section 4.4 has expired without the Company having
corrected the event or events subject to cure. If no date of
resignation is specified in the written notice from the Executive to
the Company, the date of termination shall be the first day following
the expiration of such cure period.
4.2. Termination for Cause; Resignation Without Good Reason.
4.2.1. General. If, prior to the expiration of the Employment
Term, the Executive's employment is terminated by the Company for
Cause, or the Executive resigns from his employment hereunder other
than for Good Reason, the Executive shall be entitled only to payment
of his Base Salary as then in effect through and including the date of
termination or resignation together with payment for earned but unused
vacation. The Executive shall have no further right to receive any
other severance, compensation or employee benefits after such
termination or resignation of employment, except as determined in
accordance with the terms of the employee benefit plans or programs,
policies, arrangements of, or other agreements with the Company or any
affiliate or to the extent the Company elects to enforce Section 7.1
and 7.2 hereof. A voluntary resignation of the Executive shall not be
deemed to be a breach of this Agreement.
4.2.2. Date of Termination. Subject to the proviso of Section
4.3, the date of termination for Cause shall be the date specified in a
written notice of termination to the Executive. The date of resignation
without Good Reason shall be the date specified in the written notice
of resignation from the Executive to the Company, or if no date is
specified therein, 10 business days after receipt by the Company of
written notice of resignation from the Executive.
4.2.3. Imposition of Non-Compete Provisions. In the event the
Executive's employment is terminated for cause or the Executive resigns
without good reason, and in the event the Company pursuant to Section
7.1 and Section 7.2 directs performance of the Non Competition and
Non-Solicitation Covenants during the period ending on the first
anniversary of the Termination Date, the Board and the Executive shall
execute a mutual release, on terms satisfactory to the Company, and the
Company shall pay consideration to the Executive in an amount equal to
the sum of (i) two times his Base Salary, (ii) one times any housing or
automobile allowance provided under Section 2.6 above, and (iii) the
Executive and his dependents shall continue to participate in the
benefit plans described in Section 3.1 or be provided comparable
benefits, such consideration being payable at regular intervals, and
the Company being entitled to cease such payments in the event the
Executive materially breaches his obligations under the covenants.
4.3. Cause. Termination for "Cause" shall mean termination of the
Executive's employment because of: (a) any willful act or omission that
constitutes a material breach by the Executive of any of his obligations under
this Agreement; (b) the willful and continued failure or refusal of the
Executive to substantially perform the material duties required of him as an
employee of the Company; (c) any willful material violation by the Executive of
any law or regulation applicable to the business of the Company or any of its
subsidiaries or affiliates, or the Executive's conviction of or plea of guilty
or nolo contendere to a felony other than a traffic violation or a crime
involving moral turpitude, or any willful perpetration by the Executive of a
common law fraud; or (d) any other willful misconduct by the Executive that is
injurious to the financial condition or business reputation of, or is otherwise
materially injurious to, the Company or any of its subsidiaries or affiliates;
provided, however, that if any such Cause relates to the Executive's obligations
under this Agreement and is susceptible to cure, the Company shall not terminate
the Executive's employment hereunder unless the Company first gives the
Executive written notice of its intention to terminate and of the grounds for
such termination, and the Executive has not, within 10 business days following
receipt of the notice, cured such event giving rise to Cause. For purposes of
this Section 4.3, an "affiliate" of a person or other entity shall mean a person
or other entity that directly or indirectly controls, is controlled by, or is
under common control with, the person or entity specified.
4.4. Good Reason. For purposes of this Agreement, "Good Reason" shall
mean any of the following (occurring without the Executive's prior consent): (a)
a decrease in the Executive's Base Salary, or Target Bonus opportunity or a
failure by the Company to pay material compensation due and payable to the
Executive in connection with his employment; (b) the failure by the Company to
obtain an agreement from a successor to assume and agree to perform this
Agreement in accordance with the third sentence of Section 12, (c) the
assignment to the Executive of any duties inconsistent in any material respect
with the Executive's position (including status, offices, titles and reporting
requirements), authority, duties or responsibilities as contemplated by Section
1 above or any other action by the Company which results in a material
diminution in such position, authority, duties or responsibilities, other than
an isolated, insubstantial and inadvertent action that is not taken in bad faith
and is remedied by the Company within 10 days after receipt of notice thereof
given by the Executive; (e) the Company's requiring the Executive to be based at
any office or location other than an office located in Bermuda, Edison, New
Jersey (or its immediate surrounding area) or New York City or its surrounding
area; (f) any action by the Company that materially reduces the fringe benefits
or perquisites provided to the Executive or the Executive's eligibility to
participate in any employee benefit plan of the Company unless the Executive is
provided with equal or more favorable fringe benefits, perquisites or employee
benefits, as the case may be; and (g) any material breach by the Company or any
affiliate of any other provision of this Agreement not covered by any other
clause of this Section 4.4; or provided, however, that if any such Good Reason
is susceptible to cure by the Company, the Executive may not resign for Good
Reason unless the Executive first gives the Company written notice of his
intention to resign and of the grounds for such resignation, and the Company has
not, within 10 business days following receipt of the notice, cured such Good
Reason, or in the event that such Good Reason is susceptible to cure but now
fully within such 10 business day period, the Company has not taken all
reasonable steps within such 10 business day period to cure such Good Reason as
promptly as practicable thereafter, but in no event less than 20 business days
after such written notice from the Executive.
4.5. General Release by Executive. Notwithstanding any provision of
this Agreement to the contrary, the Executive acknowledges and agrees that the
obligation of the Company to pay any compensation and benefits under this
Section 4 is expressly conditioned upon the Executive's timely execution of and
agreement to be bound by a general release of any and all claims (other than
claims for compensation and benefits payable under this Section 4) arising out
of or relating to the Executive's employment and termination of employment. Such
general release shall be made in a form reasonably satisfactory to the Company
and shall run to the Company, its affiliates, and their respective officers,
directors, employees, agents, successors and assigns.
5. DEATH OR DISABILITY
In the event of termination of the Executive's employment by reason of
death or Permanent Disability (as hereinafter defined), the Executive (or his
estate, or legal representative as applicable) shall be entitled to (a) Base
Salary, (b) payment of any earned but unpaid bonus and (c) a pro rata (within
the meaning of the Bonus Plan) for the year in which such termination by reason
of death or Permanent Disability occurs and benefits determined under Sections 2
and 3 through the date of termination, and (e) any other payments, benefits or
rights in accordance with this Agreement or any applicable plan, program,
policy, arrangement of, or other agreement with, the Company or any affiliate
(provided that in no event shall the Executive be entitled to duplication of any
payment or benefit and all options, restricted share and other equity grants
shall vest and remain exercisable in accordance with the terms of applicable
equity plans, including, without limitation, the Equity Incentive Plan and 1992
Officer Incentive Plan, as applicable. Other payments, benefits shall be
determined in accordance with the benefit plans maintained by the Company, and
the Company shall have no further obligation hereunder. For purposes of this
Agreement, "Permanent Disability" means a physical or mental disability or
infirmity of the Executive that prevents the normal performance of substantially
all his duties as an employee of the Company, which disability or infirmity
shall exist, or in the opinion of an independent physician shall exist or is
reasonably likely to exist, for any continuous period of 180 days.
6. CONFIDENTIALITY
6.1. Confidentiality. The Executive agrees that during the Employment
Term and thereafter he will not, except in the performance of his obligations to
the Company hereunder or as may otherwise be approved in advance by the Board,
directly or indirectly, disclose or use (except for the direct benefit of the
Company) any confidential information that he may learn or has leaned by reason
of his association with the Company, any client or any of their respective
subsidiaries and affiliates. The term "confidential information" includes all
data, analyses, reports, interpretations, forecasts, documents and information
concerning or otherwise reflecting information and concerning the Company and
its affairs, including, without limitation, with respect to clients, products,
policies, procedures, methodologies, trade secrets and other intellectual
property, systems, personnel, confidential reports, technical information,
financial information, business transactions, business plans, prospects or
opportunities, but shall exclude any portion of such information that (a) was
acquired by the Executive prior to his employment by, or other association with
the Company (b) is or becomes generally available to the public or is generally
known in the industry or industries in which the Company operates, in each case
other than as a result of disclosure by the Executive in violation of this
Section 6.1 or (c) the Executive is required to disclose under any applicable
laws, regulations or directives of any government agency, tribunal or authority
having jurisdiction in the matter or under subpoena or other process of law or
(d) is disclosed in connection with any litigation, arbitration or mediation
involving this Agreement or any other agreement with the Company or any
affiliates, including but not limited to, enforcement of such agreements.
6.2. Exclusive Property. The Executive confirms that all confidential
information with respect to the Company is and shall remain the exclusive
property of the Company. All business records, papers and documents kept or made
by the Executive relating to the business of the Company shall be and remain the
property of the Company, except for such papers customarily deemed to be the
personal copies of the Executive.
6.3. Injunctive Relief. Without intending to limit the remedies
available to the Company, the Executive acknowledges that a material breach of
any of the covenants contained in this Section 6 may result in material and
irreparable injury to the Company and its affiliates and subsidiaries for which
there is no adequate remedy at law, that it will not be possible to measure
damages for such injuries precisely and that, in the event of such a breach or
threat thereof, the Company shall be entitled to seek a temporary restraining
order or a preliminary or permanent injunction restraining the Executive from
engaging in activities prohibited by this Section 6 or such other relief as may
be required specifically to enforce any of the covenants in this Section 6. If
for any reason it is held that the restrictions under this Section 6 are not
reasonable or that consideration therefor is inadequate, such restrictions shall
be interpreted or modified to include as much of the duration and scope
identified in this Section 6 as will render such restrictions valid and
enforceable.
7. PROHIBITED ACTIVITY
7.1. Non-Competition Covenant. The Executive covenants and agrees that
during the Employment Term and, upon written action of the Company directing the
same, during the period ending on the first anniversary of the Termination Date,
he shall not at any time, without the prior written consent of the Company,
directly or indirectly, whether for his own account or as a shareholder (other
than as permitted by Section 7.3 below), partner, joint venturer, employee,
consultant, lender, advisor, and/or agent, of any person, firm, corporation, or
other entity:
7.1.1. engage in activities or businesses that are
substantially in competition with the Company or any of its affiliates
(in each case for the purposes of this Section 7, the term "Company"
shall be deemed to include any successor entity to the Company)
("Competitive Activities"), including (A) the provision of reinsurance
products and services, including without limitation property
catastrophe reinsurance and retrocessional coverage, except that if any
activities or businesses were not engaged in by the Company during the
period of time that the Executive was employed by the Company and are
not engaged in by the Company at the time the Executive's employment by
the Company is terminated (collectively "Permitted Activities"), the
Executive may engage in any Permitted Activities notwithstanding
anything contained in this Agreement, (B) soliciting any customer or
prospective customer of the Company or any of its affiliates to
purchase any products or services of the type provided by the Company
or any of such affiliates, as applicable, from anyone other than the
Company or any of such affiliates, as applicable, and (C) assisting any
person or entity in any way to do, or attempt to do, anything
prohibited by clause (A) or (B) above;
7.1.2. perform any action, activity or course of conduct that
is substantially detrimental to the business of the Company or any of
its affiliates (other than engaging in Permitted Activities) or
business reputation of the Company or any of its affiliates; or
7.1.3. establish any new business that engages in Competitive
Activities.
Provided however it is understood and agreed that, in the event the term of this
Agreement expires pursuant to Section 1.3, and in the event the Company directs
performance of the Non Competition Covenant during the period ending on the
first anniversary of the expiry of the Employment Term, the Board and the
Executive shall execute a mutual release, on terms satisfactory to the Company,
and the Company shall pay consideration to the Executive in an amount equal to
the sum of (i) two times his Base Salary, (ii) one times any housing or
automobile allowances provided under Section 2.6 above, and (iii) the Executive
and his dependents shall continue to participate in the benefit plans described
in Section 3.1 (or be provided with comparable benefits), such consideration
being payable at regular intervals, and the Company being entitled to cease such
payments in the event the Executive materially breaches his obligations under
the covenants.
7.2. Non-Solicitation Covenant. The Executive also covenants and agrees
that during the Employment Term and during the period ending on the first
anniversary of the Termination Date, he shall not at any time, without the prior
written consent of the Company, directly or indirectly, whether for his own
account or as a shareholder (other than as permitted by Section 7.3 below),
partner, joint venturer, employee, consultant, lender, advisor, and/or agent, of
any person, firm, corporation, or other entity, solicit, recruit or hire any
persons who are then (or who were during the immediately preceding nine months)
employees of the Company or any of its affiliates, or solicit or encourage any
employee of the Company or any of its affiliates to leave the employment of the
Company or any of such affiliates, as applicable.
7.3. Exception. Notwithstanding anything to the contrary contained in
this Section 7, the Company hereby agrees that the foregoing covenant shall not
be deemed breached by the Executive as a result of the ownership by such
Executive of less than an aggregate of 3% of any class of securities of an
entity engaged, directly or indirectly, in Competitive Activities; provided that
such securities are listed on a national securities exchange or are quoted on
the NASDAQ National Market System.
7.4. Reasonableness of Limitations. The Executive declares that the
foregoing limitations are reasonable and properly required for the adequate
protection of the business and the goodwill of the Company. In the event any
such time limitation is deemed to be unreasonable by any court of competent
jurisdiction, the Executive agrees to the reduction of such time limitation to
such period which such court shall deem reasonable.
7.5. Injunctive Relief. Without intending to limit the remedies
available to the Company, the Executive acknowledges that a breach of any of the
covenants contained in this Section 7 may result in material and irreparable
injury to the Company and its affiliates and subsidiaries for which there is no
adequate remedy at law, that it will not be possible to measure damages for such
injuries precisely and that, in the event of such a breach or threat thereof,
the Company shall be entitled to seek a temporary restraining order or a
preliminary or permanent injunction restraining the Executive from engaging in
activities prohibited by this Section 7 or such other relief as may be required
specifically to enforce any of the covenants in this Section 7. If for any
reason it is held that the restrictions under this Section 7 are not reasonable
or that consideration therefore is inadequate, such restrictions shall be
interpreted or modified to include as much of the duration and scope identified
in this Section 7 as will render such restrictions valid and enforceable.
8. MITIGATION
Executive shall not be required to mitigate the amount of any
payment, benefit or entitlement provided for pursuant to this Agreement or
otherwise by seeking other employment, and shall not be required to mitigate the
amount of there shall be no offset against any such payment, benefit or
entitlement if he does obtain other employment.
9. REPRESENTATION
The Company represents and warrants that it is fully
authorized and empowered to enter into this Agreement and that the performance
of its obligations under this Agreement will not violate any agreement between
it and any other person, firm or organization. The Executive represents and
warrants that no agreement exists between him and any other person, firm or
organization that would be violated by the performance of his obligations under
this Agreement.
10. GROSS-UP PAYMENT
(a) In the event it is determined that any payment, benefit,
entitlement or distribution of any type to or for the benefit of the Executive,
pursuant to this Agreement or otherwise, by the Company, any person or entity
who or which acquires ownership or effective control of the Company, or
ownership of a substantial portion of the assets of the Company within the
meaning of section 260G of the Code and the regulations thereunder, or any
affiliate of the Company or such person or entity (the "Total Payments") would
be subject to the excise tax imposed by section 4999 of the Code or any similar
tax that may hereafter be imposed together with any interest or penalties with
respect to such excise tax (such excise tax, together with any such interest and
penalties, are collectively referred to as the "Excise Tax"), then the Executive
shall be entitled to receive an additional payment (a "Gross-Up Payment") in an
amount such that, after payment by the Executive of all taxes (including any
interest or penalties imposed with respect to such taxes), including any income
taxes (and any interest and penalties imposed with respect thereto) Excise Tax,
imposed upon the Gross-Up Payment, the Executive retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the Total Payments. The
Company's obligation to make Gross-Up Payments under this Section 10 shall not
be conditioned upon the Executive's termination of employment.
(b) All mathematical determinations and determinations as to whether
any of the Total Payments are "parachute payments" (within the meaning of
Section 280G of the Code), in each case which determinations are required to be
made under this paragraph, including whether a Gross-Up Payment is required, the
amount of such Gross-Up Payment, and amounts relevant to the last sentence of
this paragraph, shall be made by an independent accounting firm retained by the
Company as selected by the Executive from among the largest five accounting
firms in the United States (the "Accounting Firm"). The Accounting Firm shall
provide to the Company and to the Executive its determination (the
"Determination"), together with detailed supporting calculations regarding the
amount of any Gross-Up Payment and any other relevant matter, within ten days
after termination receipt of notice from the Executive's, or at that there has
been a Total Payment or such earlier time following termination of employment as
is requested by the Company or by the Executive reasonably believes that any of
the Total Payments may be subject to the Excise Tax). If the Accounting Firm
determines that no Excise Tax is payable by the Executive, it shall furnish the
Executive with a written statement that such Accounting Firm has concluded that
no Excise Tax is payable (including the basis for such conclusion) and that the
Executive has "substantial authority" within the meaning of Treasury Regulation
Section 1.6662-4(d) not to report any Excise Tax on the Executive's federal
income tax return. If a Gross-Up Payment is determined to be payable, it shall
be paid to the Executive within ten days after the Determination is delivered to
the Company or the Executive. Any determination by the Accounting Firm shall be
binding upon the Company and the Executive, absent manifest error. All fees and
expenses of the Accounting Firm shall be paid by the Company.
(c) As a result of uncertainty in the application of Section 4999 of
the Code at the time of the initial determination by the Accounting Firm
hereunder, it is possible that Gross-Up Payments not made by the Company and the
Executive should have been made ("Underpayment"), or that Gross-Up Payments will
have been made by the Company and the Executive that should not have been made
("Overpayments"). In either such event, the Accounting Firm shall determine the
amount of the Underpayment or Overpayment that has occurred. In the case of an
Underpayment, the Company promptly shall pay, or cause to be paid, the amount of
such Underpayment to or for the benefit of the Executive. In the case of an
Overpayment, the Executive shall, at the direction and expense of the Company,
take such steps as are reasonably necessary (including the filing of returns and
claims for refund), follow reasonable instructions from and procedures
established by, the Company, and otherwise reasonably cooperate with the Company
to correct such Overpayment; provided, however, that (1) Executive shall not in
any event be obligated to return to the Company an amount greater than the net
after-tax portion of the Overpayment that he has retained or recovered as a
refund from the applicable taxing authorities and (2) this provision shall be
interpreted in a manner consistent with the intent of Section 10(a) above, which
is to make the Executive whole, on an after-tax basis, from the application of
the Excise Tax, it being understood that the correction of an Overpayment may
result in the Executive repaying to the Company an amount that is less than the
Overpayment. Any payment to be made to correct an Underpayment or Overpayment,
as the case may be, (the "Correcting Payment") shall be accompanied by an
interest payment on the Correcting Payment at an annual rate of 8% for the
period from the date of the Gross-Up Payment through the date of payment of the
Correcting Payment.
11. SEVERABILITY
Each provision of this Agreement shall be interpreted in such manner as
to be effective and valid under applicable law, but if any provision of this
Agreement is held to be prohibited by or invalid under applicable law, such
provision will be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.
12. SUCCESSORS ASSIGNABILITY
This Agreement shall be binding upon and inure to the benefit of the
parties and their respective successors, heirs (and in the case of the
Executive) and assigns. The Company's rights and obligations under this
Agreement shall not be assignable by the Company except as incident to a
reorganization, merger or consolidation, or transfer of all or substantially all
the Company's business and properties (or portion thereof in which the Executive
is employed). The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all the business of the Company to expressly assume and agree to
perform this Agreement 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.
Neither this Agreement nor any rights hereunder shall be assignable or otherwise
subject to hypothecation by the Executive.
13. ENTIRE AGREEMENT
This Agreement contains the entire understanding and agreement between
the Parties concerning the subject matter hereof and, subject to the occurrence
of the Effective Date, supersedes all prior agreements, understandings,
discussions, negotiations and undertakings, whether written or oral, between the
Parties with respect thereto.
14. WITHHOLDING
The payment of any amount pursuant to this Agreement shall be subject
to applicable withholding and payroll taxes, and such other deductions as may be
required under the Company's employee benefit plans, if any.
15. GOVERNING LAW/JURISDICTION
This Agreement shall be governed by, and construed in accordance with,
the laws of Bermuda without regard to any conflict of law rules that might apply
the laws of any other jurisdiction.
16. AMENDMENT OR WAIVER
No provision in this Agreement may be amended unless such amendment is
agreed to in writing and signed by the Executive and an officer of the Company
specifically authorized to execute such amendment by the Board. No waiver by any
Party of any breach by another Party of any condition or provision contained in
this Agreement to be performed by such other Party shall be deemed a waiver of a
similar or dissimilar condition or provision at the same or any prior or
subsequent time. Any waiver must be in writing and signed by the Executive and
an officer of the Company specifically authorized to execute such waiver by the
Board.
17. SURVIVORSHIP
The respective rights and obligations of the Parties hereunder shall
survive any termination of the Executive's employment or the expiration of the
Employment Term to the extent necessary to the intended preservation of such
rights and obligations.
18. BENEFICIARIES/REFERENCES
The Executive shall be entitled, to the extent permitted under any
applicable law and under the terms of any applicable plan or program, to select
and change a beneficiary or beneficiaries to receive any compensation or benefit
payable hereunder following the Executive's death by giving the Company written
notice thereof. In the event of the Executive's death or a judicial
determination of his incompetence, reference in this Agreement to the Executive
shall be deemed, where appropriate, to refer to his beneficiary, estate or other
legal representative.
19. NOTICES
All notices or communications hereunder shall be in writing, addressed
as follows:
If to the Company:
PXRE Reinsurance Ltd.
000 Xxxxx Xxx Xxxx
Xxxxxxxx XX 00
Bermuda
Fax: 000-000-0000
Attn: Chairman
If to the Executive:
Xx. Xxx X. Xxxxxxxxxxx
Xxxxxxx
00 Xxxxxxx Xxxx
Paget PG1
Bermuda
All such notices shall be conclusively deemed to be received and shall
be effective, (a) if sent by hand delivery or courier service, upon receipt, (b)
if sent by telecopy or facsimile transmission, upon confirmation of receipt by
the sender of such transmission or (c) if sent by registered or certified mail,
on the fifth day after the day on which such notice is mailed.
20. HEADINGS
The headings of the sections contained in this Agreement are for
convenience only and shall not be deemed to control or affect the meaning or
construction of any provision of this Agreement.
21. COUNTERPARTS
This Agreement may be executed in two or more counterparts.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first written above.
PXRE REINSURANCE LTD.
By:
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Name: Xxxxxxx X. Xxxxx
Title: Chief Executive Officer
THE EXECUTIVE
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Xxx X. Xxxxxxxxxxx
