AMENDED AND RESTATED EMPLOYMENT AGREEMENT
Exhibit 10.3
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT
This AMENDED AND RESTATED EMPLOYMENT AGREEMENT is made and entered into as of this 5th day of
November 2009 by and between Allied World Assurance Company Holdings, Ltd, a Bermuda corporation
(the “Company”), and Xxxx Xxxxxxx, Xx. (“Employee”).
W I T N E S S E T H:
WHEREAS, Darwin Professional Underwriters, Inc. (“Darwin”), an affiliate of the
Company, and Employee previously entered into an employment agreement as of June 27, 2008 (the
“Former Employment Agreement”) embodying the terms of Employee’s employment; and
WHEREAS, Employee and the Company now desire to enter into a new agreement embodying the
amended and restated terms of Employee’s employment as set forth herein (this “Agreement”),
with the intent that this Agreement shall upon its mutual execution and delivery supersede the
Former Employment Agreement and cause the Former Employment Agreement to be of no further force or
effect, and Employee’s employment shall be governed solely by and subject solely to this Agreement;
NOW, THEREFORE, in consideration of the promises and mutual covenants contained herein and for
other good and valuable consideration, the receipt and sufficiency of which are mutually
acknowledged, the Company and Employee hereby agree as follows:
Section 1. Definitions.
(a) “Accrued Obligations” shall mean (i) all accrued but unpaid Base Salary through
the date of termination of Employee’s employment; (ii) any unpaid or unreimbursed expenses incurred
in accordance with Company policy, including amounts due under Section 7 hereof to the extent
incurred prior to termination of employment; (iii) any benefits provided under the Company’s
employee benefit plans upon a termination of employment, in accordance with the terms therein,
including rights to equity in the Company pursuant to any plan or grant; and (iv) rights to
indemnification by virtue of Employee’s position as an employee.
(b) “Agreement” shall have the meaning set forth in the recitals hereto.
(c) “Annual Bonus” shall have the meaning set forth in Section 4(b) below.
(d) “Base Salary” shall mean the salary provided for in Section 4(a) or any increased
salary granted to Employee pursuant to Section 4(a) below.
(e) “Board” shall mean the Board of Directors of the Company.
(f) “Cause” shall mean (i) Employee’s willful failure (except where due to physical or
mental incapacity), willful neglect or willful refusal to substantially perform his duties; (ii)
any willful or intentional act of Employee with regard to any member of the Company
Group that has the effect of injuring the reputation or business of any member of the Company
Group in a material manner; (iii) Employee’s conviction of, or plea of guilty or nolo
contendere to, the commission of a criminal act that would constitute a felony in the United
States; (iv) the commission by Employee of an act of fraud, embezzlement or material dishonesty
against any member of the Company Group (other than a good faith expense account dispute); or (v)
Employee’s breach of any material provision of this Agreement.
(g) “Change in Control” shall mean and be deemed to occur if (i) any “person” (as
such term is defined in Section 3(a)(9) and as used in Sections 13(d) and 14(d) of the Exchange
Act), excluding any member of the Company Group, a trustee or any fiduciary holding securities
under an employee benefit plan of any member of the Company Group, an underwriter temporarily
holding the Company’s securities pursuant to an offering of such securities or a corporation owned,
directly or indirectly, by shareholders of the Company in substantially the same proportion as
their ownership of the Company, is or becomes the “beneficial owner” as defined in Rule 13d-3 under
the Exchange Act, directly or indirectly, of securities of the Company representing 50% or more of
the combined voting power of the Company’s then outstanding securities (“Voting
Securities”); (ii) during any period of not more than two years, individuals who constitute the
Board as of the beginning of the period and any new director (other than a director designated by a
person who has entered into an agreement with the Company to effect a transaction described in
clause (i) or (iii) of this sentence) whose election by the Board or nomination for election by the
Company’s shareholders was approved by a vote of at least two-thirds (2/3) of the directors then
still in office who either were directors at such time or whose election or nomination for election
was previously so approved, cease for any reason to constitute a majority thereof; (iii) the
shareholders of the Company approve a merger, consolidation, amalgamation or reorganization or a
court of competent jurisdiction approves a scheme of arrangement of the Company, other than a
merger, consolidation, amalgamation, reorganization or scheme of arrangement which would result in
the Voting Securities of the Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into Voting Securities of the surviving
entity) at least 50% of the combined voting power of the Voting Securities of the Company or such
surviving entity outstanding immediately after such merger, consolidation, amalgamation,
reorganization or scheme of arrangement; or (iv) the shareholders of the Company approve a plan of
complete liquidation of the Company or any agreement for the sale or disposition by the Company of
all or substantially all of its assets.
(h) “Code” shall mean the United States Internal Revenue Code of 1986, as amended.
(i) “Commencement Date” shall mean October 20, 2008.
(j) “Company” shall have the meaning set forth in the preamble hereto.
(k) “Company Group” means the Company together with any direct or indirect subsidiary.
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(l) “Competitive Activities” shall mean any business activities in which any member of
the Company Group is engaged, or has committed plans to engage, during the Term of Employment.
(m) “Confidential Information” shall have the meaning set forth in Section 9(a) below.
(n) “Delay Period” shall have the meaning set forth in Section 16.
(o) “Developments” shall have the meaning set forth in Section 9(e) below.
(p) “Disability” shall mean any physical or mental disability or infirmity that has
prevented the performance of Employee’s duties in all material respects for a period of one hundred
eighty (180) consecutive calendar days.
(q) “Employee” shall have the meaning set forth in the preamble hereto.
(r) “Good Reason” shall mean, without Employee’s written consent, (i) a material
diminution in Employee’s employment duties or responsibilities, or the assignment to Employee of
duties that are materially inconsistent with his position; (ii) any reduction in Base Salary or an
established Annual Bonus (if any); (iii) a change in Employee’s principal place of employment
beyond a 35 mile radius from the location in Section 3(c); or (iv) any breach by the Company of any
material provision of this Agreement.
(s) “Interfering Activities” shall mean (i) encouraging, soliciting or inducing, or in
any manner attempting to encourage, solicit or induce, any Person employed by, as agent of, or a
service provider to, any member of the Company Group, to terminate (or, in the case of an agent or
service provider, reduce) such Person’s employment, agency or service, as the case may be, with any
member of the Company Group; provided, that the foregoing shall not be violated by general
advertising not targeted at employees of any member of the Company Group nor by serving as a
reference upon an employee’s request with regard to an entity with which Employee is not
affiliated; or (ii) encouraging, soliciting or inducing, or in any manner attempting to encourage,
solicit or induce any customer, supplier (including insurance brokers), licensee or other business
relation of any member of the Company Group to cease doing business with or reduce the amount of
business conducted with any member of the Company Group, or in any way interfere with the
relationship between any such customer, supplier (including insurance brokers), licensee or
business relation and any member of the Company Group.
(t) “Non-Interference Period” shall mean the period commencing on the Commencement
Date and ending on the twelve (12) month anniversary of the date of termination.
(u) “Non-Compete Period” shall mean the period commencing on the Commencement Date
and:
(i) in the case of Employee’s termination of employment hereunder by the Company for
Cause, ending on the date of such termination;
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(ii) in the case of Employee’s termination of employment hereunder by the Company
without Cause or by Employee for Good Reason, ending on the twelve (12) month anniversary of
the date of such termination; or
(iii) in the case of Employee’s termination of employment hereunder by the Employee
without Good Reason or as a result of his Disability, ending on the date of such
termination; provided, however, that the Company may elect to extend the Non-Compete Period
up to an additional twelve (12) months following the date of such termination by providing
Employee written notice of such election within five (5) business days following such
termination specifying the applicable period of extension, in which case, the Company (or
the applicable member of the Company Group paying Employee his Base Salary at such
termination date) shall be required to continue, through the end of the Non-Compete Period,
as so extended, (A) to pay Employee his Base Salary, in accordance with the Company’s (or
the applicable member of the Company Group’s) regular payroll practices, and (B) to provide
participation under the Company’s or the applicable member of the Company Group’s health and
other insurance plans, or if such continued participation in is not permissible, provide
Employee with coverage that is economically equivalent to Employee through alternative
arrangements, or the cash value of such coverage, in a manner that places the Employee in a
net economic position that is at least equivalent to the position in which the Employee
would have been had such alternative arrangements not been used by the Company or the
applicable member of the Company Group.
(v) “Person” shall mean any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust (charitable or non-charitable),
unincorporated organization or other form of business entity.
(w) “Release Expiration Date” shall have the meaning set forth in Section 8(g) below.
(x) “Severance Term” shall mean the twelve (12) month period immediately following
Employee’s termination by the Company without Cause or by Employee with Good Reason.
(y) “Term of Employment” shall mean the period specified in Section 2 below.
(z) “Voting Securities” shall have the meaning set forth in Section 1(g).
Section 2. Acceptance and Term of Employment.
The Company agrees to employ Employee and Employee agrees to serve the Company on the terms
and conditions set forth herein. The Term of Employment shall commence on the Commencement Date
and shall continue until Employee is terminated as provided in Section 8 hereof.
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Section 3. Position, Duties and Responsibilities; Place of Performance.
(a) During the Term of Employment, Employee shall be employed and serve as the Executive Vice
President, Chief Corporate Strategy Officer of the Company (together with such other position or
positions consistent with Employee’s title as the Board or the officer of the Company Group to
which Employee reports shall specify from time to time) and shall have such duties typically
associated with such title. Subject to the foregoing, Employee also agrees to serve as an officer
and/or director of any other member of the Company Group, in each case without additional
compensation.
(b) Subject to the terms and conditions set forth in this Agreement, Employee shall devote his
full business time, attention and efforts to the performance of his duties under this Agreement and
shall not engage in any other business or occupation during the Term of Employment, including,
without limitation, any activity that (x) conflicts with the interests of any member of the Company
Group, (y) interferes with the proper and efficient performance of his duties for the Company or
(z) interferes with the exercise of his judgment in the Company’s best interests. Notwithstanding
the foregoing, nothing herein shall preclude Employee from (i) serving, with the prior written
consent of the Company, as a member of the board of directors or advisory boards (or their
equivalents in the case of a non-corporate entity) of non-competing businesses and charitable
organizations, (ii) engaging in charitable activities and community affairs, and (iii) subject to
the terms and conditions set forth in Section 9 hereof, managing his personal investments and
affairs; provided, however, that the activities set out in clauses (i), (ii) and (iii) shall be
limited by Employee so as not to materially interfere, individually or in the aggregate, with the
performance of his duties and responsibilities hereunder.
(c) Employee’s principal place of employment shall be at the Company’s Farmington,
Connecticut, office, although Employee understands and agrees that he may be required to travel
from time to time for business reasons.
Section 4. Compensation.
During the Term of Employment, Employee shall be entitled to the following compensation:
(a) Base Salary. Employee shall be paid an annualized Base Salary, payable in
accordance with the regular payroll practices of the Company, or the applicable member of the
Company Group paying Employee his Base Salary, of not less than $350,000, subject to increase, if
any, as may be approved in writing by the Company, but not to decrease from the then current Base
Salary.
(b) Annual Bonus. Employee shall be eligible for an annual incentive bonus award
determined by the Company in respect of each fiscal year during the Term of Employment (the
“Annual Bonus”). The Annual Bonus shall be earned and payable in accordance with the terms
of the Company’s annual bonus plan as in effect from time to time.
(c) Equity Plan Participation. During the Term of Employment, Employee shall be
eligible to participate in the equity incentive plans maintained by the Company.
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(d) Change in Control Acceleration. Notwithstanding any contrary terms of any Company
equity plan or other agreement pursuant to which equity-based awards have been granted to Employee,
upon the occurrence of a Change in Control, all such equity-based awards shall fully vest
immediately prior to such Change in Control.
Section 5. Employee Benefits.
During the Term of Employment, Employee shall be entitled to participate in health, insurance,
retirement and other perquisites and benefits generally provided to other similarly situated U.S.
employees of the Company Group that are made available and as are in effect from time to time.
Employee shall also be entitled to the same number of holidays, vacation and sick days as are
generally allowed to similarly situated U.S. employees of the Company Group in accordance with the
Company Group policy in effect from time to time.
Section 6. “Key-Man” Insurance.
At any time during the Term of Employment, the Company shall have the right to insure the life
of Employee for the sole benefit of the Company, in such amounts, and with such terms, as it may
determine. All premiums payable thereon shall be the obligation of the Company. Employee shall
have no interest in any such policy, but agrees to reasonably cooperate with the Company in taking
out such insurance by submitting to physical examinations, supplying all information reasonably
required by the insurance company, and executing all necessary documents, provided that no
financial obligation or liability is imposed on Employee by any such documents.
Section 7. Reimbursement of Business Expenses.
Employee is authorized to incur reasonable business expenses in carrying out his duties and
responsibilities under this Agreement and the Company and/or the applicable member of the Company
Group paying Employee his Base Salary shall promptly reimburse him for all such reasonable business
expenses incurred in connection with carrying out the business of the Company, subject to
documentation in accordance with the policy of the Company or the applicable member of the Company
Group providing such reimbursement, as in effect from time to time.
Section 8. Termination of Employment.
(a) General. The Term of Employment shall terminate upon the earliest to occur of (i)
Employee’s death, (ii) a termination by reason of a Disability, (iii) a termination by the Company
with or without Cause, and (iv) a termination by Employee with or without Good Reason. Upon any
termination of Employee’s employment for any reason, except as may otherwise be requested by the
Company in writing and agreed upon in writing by Employee, Employee shall resign from any and all
directorships, committee memberships or any other positions Employee holds with any member of the
Company Group. Notwithstanding anything herein to the contrary, the payment (or commencement of a
series of payments) hereunder of any nonqualified deferred compensation (within the meaning of
Section 409A of the Code) upon a termination of employment shall be delayed until such time as
Employee has also undergone a “separation from service” as defined in Treas. Reg. 1.409A-1(h), at
which time such
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nonqualified deferred compensation (calculated as of the date of Employee’s termination of
employment hereunder) shall be paid (or commence to be paid) to Employee on the schedule set forth
in this Section 8 as if Employee had undergone such termination of employment (under the same
circumstances) on the date of his ultimate “separation from service.”
(b) Termination due to Death or Disability. Employee’s employment shall terminate
automatically upon his death. The Company may terminate Employee’s employment immediately upon the
occurrence of a Disability, such termination to be effective upon Employee’s receipt of written
notice of such termination. In the event Employee’s employment is terminated due to his death or
Disability, Employee or his estate or his beneficiaries, as the case may be, shall be entitled to:
(i) The Accrued Obligations;
(ii) Any unpaid Annual Bonus in respect to any completed fiscal year which has ended
prior to the date of such termination, such amount to be paid at the same time it would
otherwise be paid to Employee had no such termination occurred, but in no event later than
the last day of the Company’s fiscal year in which such termination occurs;
(iii) A pro rata Annual Bonus (determined using any target Annual Bonus if such
termination occurs during the fiscal year in which the Commencement Date falls, and using
the highest Annual Bonus paid or payable for the two immediately prior fiscal years for
terminations after the fiscal year in which the Commencement Date falls) based on the number
of days elapsed from the commencement of such fiscal year through and including the date of
such termination, such amount to be paid within five (5) business days of such termination;
and
(iv) Vesting, as of the date of such termination, in the number of equity-based awards,
if any, which would otherwise have vested during the one (1) year period immediately
following such termination (without regard to any subsequent vesting events).
Except as set forth in this Section 8(b), following Employee’s termination by reason of his death
or Disability, Employee shall have no further rights to any compensation or any other benefits
under this Agreement.
(c) Termination by the Company for Cause.
(i) A termination for Cause shall not take effect unless the provisions of this
subsection (i) are complied with. Employee shall be given not less than fifteen (15) days
prior written notice by the Company of the intention to terminate his employment for Cause,
such notice to state in detail the particular act or acts or failure or failures to act that
constitute the grounds on which the proposed termination for Cause is based. Employee shall
have fifteen (15) days after the date that such written notice has been given to Employee in
which to cure such act or acts or failure or failures to act, to the extent such cure is
possible. If he fails to cure such act or acts or failure or failures to act, the
termination shall be effective on the date immediately following the expiration of
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the fifteen (15) day notice period. If cure is not possible, the termination shall be
effective on the date of receipt of such notice by Employee. During any cure period
provided hereunder, the Company may, in its sole and absolute discretion, prohibit Employee
from entering the premises of any member of the Company Group or otherwise performing his
duties hereunder, and any such prohibition shall in no event constitute an event pursuant to
which Employee may terminate employment with Good Reason; provided, however, that if cure is
possible, and Employee can reasonably demonstrate to the Company that he desires to enter
the premises of any member of the Company Group or to otherwise perform his duties hereunder
solely to attempt to cure the act or acts or failure or failures to act that constitute the
grounds on which the proposed termination for Cause is based, Employee shall be permitted to
enter the premises of any member of the Company Group or otherwise to perform his duties
hereunder solely for the purposes of curing such act or acts or failure or failures to act.
(ii) In the event the Company terminates Employee’s employment for Cause, he shall be
entitled only to the Accrued Obligations. Following such termination of Employee’s
employment for Cause, except as set forth in this Section 8(c)(ii), Employee shall have no
further rights to any compensation or any other benefits under this Agreement.
(d) Termination by the Company without Cause. The Company may terminate Employee’s
employment at any time without Cause, effective upon Employee’s receipt of written notice of such
termination. In the event Employee’s employment is terminated by the Company without Cause (other
than due to death or Disability), Employee shall be entitled to:
(i) The Accrued Obligations;
(ii) Any unpaid Annual Bonus in respect to any completed fiscal year which has ended
prior to the date of such termination, such amount to be paid at the same time it would
otherwise be paid to Employee had no such termination occurred, but in no event later than
the last day of the Company’s fiscal year in which such termination occurs;
(iii) An amount equal to the sum of his then current Base Salary and Annual Bonus
(determined using any established target Annual Bonus if such termination occurs during the
fiscal year in which the Commencement Date falls, and using the highest Annual Bonus paid or
payable for the two immediately prior fiscal years for terminations after the fiscal year in
which the Commencement Date falls), payable in substantially equal monthly installments over
the Severance Term, it being agreed that each installment of Base Salary and Annual Bonus
payable hereunder or under Section 8(e) shall be deemed to be a separate payment for
purposes of Section 409A of the Code;
(iv) Continuation of participation under the Company’s or the applicable member of the
Company Group’s health and other insurance plans during the Severance Term, or if such
continued participation in is not permissible, provide Employee with coverage that is
economically equivalent to Employee through alternative arrangements, or the cash value of
such coverage, in a manner that places the Employee
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in a net economic position that is at least equivalent to the position in which the
Employee would have been had such alternative arrangements not been used by the Company or
the applicable member of the Company Group; and
(v) Vesting, as of the date of such termination, in the number of equity-based awards,
if any, which would otherwise have vested during the Severance Term (without regard to any
subsequent vesting events).
Notwithstanding the foregoing, the payments and benefits described in subsections (ii) through (iv)
above shall immediately cease, and the Company and any member of the Company Group shall have no
further obligations to Employee with respect thereto, in the event that Employee breaches any
provision of Section 9 hereof.
Following such termination of Employee’s employment by the Company without Cause, except as
set forth in this Section 8(d), Employee shall have no further rights to any compensation or any
other benefits under this Agreement.
(e) Termination by Employee with Good Reason. Employee may terminate his employment
with Good Reason by providing the Company fifteen (15) days prior written notice setting forth in
reasonable specificity the event that constitutes Good Reason, which written notice, to be
effective, must be provided to the Company within ninety (90) days of the occurrence of such event.
During such fifteen (15) day notice period, the Company shall have a cure right (if curable), and
if not cured within such period, Employee’s termination will be effective upon the date immediately
following the expiration of the fifteen (15) day notice period, and Employee shall be entitled to
the same payments and benefits as provided in Section 8(d) above for a termination without Cause,
it being agreed that Employee’s right to any such payments and benefits shall be subject to the
same terms and conditions as described in Section 8(d) above. Following such termination of
Employee’s employment by Employee with Good Reason, except as set forth in this Section 8(e),
Employee shall have no further rights to any compensation or any other benefits under this
Agreement.
(f) Termination by Employee without Good Reason. Employee may terminate his
employment without Good Reason by providing the Company thirty (30) days prior written notice of
such termination. In the event of a termination of employment by Employee under this Section 8(f),
Employee shall be entitled only to the Accrued Obligations. In the event of termination of
Employee’s employment under this Section 8(f), the Company may, in its sole and absolute
discretion, by written notice accelerate such date of termination and still have it treated as a
termination without Good Reason. Following such termination of Employee’s employment by Employee
without Good Reason, except as set forth in this Section 8(f), and, if applicable, such additional
compensation and benefits described in Section 1(u)(iii), Employee shall have no further rights to
any compensation or any other benefits under this Agreement.
(g) Release. Notwithstanding any provision herein to the contrary, the Company may
require that, prior to payment of any amount or provision of any benefit pursuant to subsections
(d) or (e) of this Section 8, Employee shall have executed a general release in favor of the
Company and any other member of the Company Group and related parties in the
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form as is reasonably required by the Company, and any waiting periods contained in such
release shall have expired. Such release, if required by the Company, shall be delivered to
Employee within twenty (20) business days following the termination of Employee’s employment
hereunder, and failure to deliver such release within such twenty (20) business day period shall be
deemed constitute a waiver of such requirement. Assuming delivery of the release by the Company,
if Employee fails to execute such release on or prior to the Release Expiration Date, Employee
shall not be entitled to any payments or benefits pursuant to (d) or (e) of this Section 8 (other
than the Accrued Obligations). Notwithstanding anything contained in this subsection (g) to the
contrary, in any case where the date of termination and last day of the applicable waiting period
fall in two separate taxable years, any payments required to be made to Employee that are treated
as deferred compensation for purposes of Section 409A of the Code shall be made in the later
taxable year at times provided by this Section 8. For purposes of this Agreement, “Release
Expiration Date” means the date which is twenty-one (21) days following the date upon which the
Company delivers to Employee the release contemplated herein, or in the event that such termination
of employment is “in connection with an exit incentive or other employment termination program” (as
such phrase is defined in the Age Discrimination in Employment Act of 1967), the date that is
forty-five (45) days following such delivery date.
Section 9. Restrictive Covenants.
Employee acknowledges and agrees that (A) the agreements and covenants contained in this
Section 9 are (i) reasonable and valid in geographical and temporal scope and in all other
respects, and (ii) essential to protect the value of the business and assets of the Company Group;
and (B) by his employment with the Company, Employee will obtain knowledge, contacts, know-how,
training and experience and there is a substantial probability that such knowledge, contacts,
know-how, training and experience could be used to the substantial advantage of a competitor of the
Company Group and to the Company Group’s substantial detriment.
(a) Confidential Information. At any time during and after the end of the Term of
Employment, without the prior written consent of the Company, except to the extent required by an
order of a court having jurisdiction or under subpoena from an appropriate government agency, in
which event, Employee shall, to the extent legally permitted, consult with the Company prior to
responding to any such order or subpoena, and except as he in good faith believes necessary or
desirable in the performance of his duties hereunder, Employee shall not disclose to or use for the
benefit of any third party any confidential or proprietary trade secrets, customer lists, drawings,
designs, information regarding product development (including types of insurance products),
marketing plans, sales plans, management organization information, operating policies (including
underwriting policies and risk assessment policies) or manuals, business plans, financial records,
packaging design or other financial, commercial, business or technical information (i) relating to
any member of the Company Group, or (ii) that any member of the Company Group may receive belonging
to suppliers, customers or others who do business with any member of the Company Group (including
insurance brokers) as a result of his position with any member of the Company Group (collectively,
“Confidential Information”). Employee’s obligation under this Section 9(a) shall not apply
to any information that is publicly available or hereafter becomes publicly available, in each case
without the breach by Employee of this Section 9(a).
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(b) Non-Competition. Employee covenants and agrees that during the Non-Compete
Period, with respect to Bermuda (including any province thereof), any State of the United States of
America or any other jurisdiction in which any member of the Company Group engages (or has
committed plans to engage) in business during the Term of Employment, or, following termination of
Employee’s employment, was engaged in business (or had committed plans to engage) at the time of
such termination of employment, Employee shall not, directly or indirectly, individually or
jointly, own any interest in, operate, join, control or participate as a partner, director,
principal, officer, or agent of, enter into the employment of, act as a consultant to, or perform
any services for any Person (other than any member of the Company Group), that engages in any
Competitive Activities. Notwithstanding anything herein to the contrary, this Section 9(b) shall
not prevent Employee from acquiring as an investment securities representing not more than three
percent (3%) of the outstanding voting securities of any publicly-held corporation or from being a
passive investor in any mutual fund, hedge fund, private equity fund or similar pooled account so
long as Employee’s interest therein is less than three percent (3%) and he has no role in selecting
or managing investments thereof.
(c) Non-Interference. During the Non-Interference Period, Employee shall not,
directly or indirectly, for his own account or for the account of any other Person, engage in
Interfering Activities.
(d) Return of Documents. In the event of the termination of Employee’s employment for
any reason, Employee shall deliver to the Company all of (i) the property of any member of the
Company Group, and (ii) the documents and data of any nature and in whatever medium of any member
of the Company Group, and he shall not take with him any such property, documents or data or any
reproduction thereof, or any documents containing or pertaining to any Confidential Information.
(e) Works for Hire. Employee agrees that the Company shall own all right, title and
interest throughout the world in and to any and all inventions, original works of authorship,
developments, concepts, know-how, improvements or trade secrets, whether or not patentable or
registerable under copyright or similar laws, which Employee may solely or jointly conceive or
develop or reduce to practice, or cause to be conceived or developed or reduced to practice during
the Term of Employment, whether or not during regular working hours, provided they either (i)
relate at the time of conception or development to the actual or demonstrably proposed business or
research and development activities of any member of the Company Group; (ii) result from or relate
to any work performed for any member of the Company Group; or (iii) are developed through the use
of Confidential Information and/or Company resources or in consultation with personnel of any
member of the Company Group (collectively referred to as “Developments”). Employee hereby
assigns all right, title and interest in and to any and all of these Developments to the Company.
Employee agrees to assist the Company, at the Company’s expense (but for no other consideration of
any kind), to further evidence, record and perfect such assignments, and to perfect, obtain,
maintain, enforce and defend any rights specified to be so owned or assigned. Employee hereby
irrevocably designates and appoints the Company and its agents as attorneys-in-fact to act for and
on Employee’s behalf to execute and file any document and to do all other lawfully permitted acts
to further the purposes of the foregoing with the same legal force and effect as if executed by
Employee. In addition, and not in contravention of any of the foregoing, Employee acknowledges
that all original works of authorship which are made by
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him (solely or jointly with others) within the scope of employment and which are protectable
by copyright are “works made for hire,” as that term is defined in the United States Copyright Act
(17 USC Sec. 101) or any similar Bermuda law or regulation. To the extent allowed by law, this
includes all rights of paternity, integrity, disclosure and withdrawal and any other rights that
may be known as or referred to as “moral rights.” To the extent Employee retains any such moral
rights under applicable law, Employee hereby waives such moral rights and consents to any action
consistent with the terms of this Agreement with respect to such moral rights, in each case, to the
full extent of such applicable law. Employee will confirm any such waivers and consents from time
to time as requested by the Company.
(f) Blue Pencil. If any court of competent jurisdiction shall at any time deem the
duration or the geographic scope of any of the provisions of this Section 9 unenforceable, the
other provisions of this Section 9 shall nevertheless stand and the duration and/or geographic
scope set forth herein shall be deemed to be the longest period and/or greatest size permissible by
law under the circumstances, and the parties hereto agree that such court shall reduce the time
period and/or geographic scope to a permissible duration or size.
Section 10. Breach of Restrictive Covenants.
Without limiting the remedies available to the Company, Employee acknowledges that a breach of
any of the covenants contained in Section 9 hereof may result in material irreparable injury to the
Company Group 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 obtain a temporary restraining order and/or a preliminary or permanent
injunction, without the posting of a bond or the necessity of proving irreparable harm or injury as
a result of such breach or threatened breach of Section 9 hereof, restraining Employee from
engaging in activities prohibited by Section 9 hereof or such other relief as may be required
specifically to enforce any of the covenants in Section 9 hereof. Notwithstanding any other
provision to the contrary, the Non-Compete Period, in the case of the covenants contained in
Section 9(b), and the Non-Interference Period, in the case of the covenants contained in Section
9(c), shall be tolled during any period of violation of any of such covenants and during any other
period required for litigation during which the Company seeks to enforce such covenants against
Employee or another Person with whom Employee is affiliated if it is ultimately determined that
Employee was in breach of such covenants.
Section 11. Representations and Warranties of Employee.
Employee represents and warrants to the Company that:
(a) Employee’s employment will not conflict with or result in his breach of any agreement to
which he is a party or otherwise may be bound;
(b) Employee has not violated, and in connection with his employment with the Company will not
violate, any non-solicitation, non-competition or other similar covenant or agreement of a prior
employer by which he is or may be bound; and
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(c) In connection with Employee’s employment with the Company, he will not use any
confidential or proprietary information that he may have obtained in connection with employment
with any prior employer.
Section 12. Indemnification.
Subject to the terms and conditions of the Memorandum of Association and Bye-laws of the
Company (in each case, as in effect from time to time), the Company agrees to indemnify and hold
Employee harmless to the fullest extent permitted by the laws of the United States, as in effect at
the time of the subject act or omission. In connection therewith, Employee shall be entitled to
the protection of any insurance policies which the Company elects to maintain generally for the
benefit of the Company’s directors and officers, against all costs, charges and expenses whatsoever
incurred or sustained by Employee in connection with any action, suit or proceeding to which he may
be made a party by reason of his being or having been a director, officer or employee of the
Company. This provision shall survive any termination of Employee’s employment hereunder.
Section 13. Taxes.
The Company may withhold from any payments made under this Agreement all applicable taxes,
including, but not limited to, income, employment and social insurance taxes, as shall be required
by law.
Section 14. No Mitigation or Set Off.
Employee shall not be required to mitigate the amount of any payment provided for pursuant to
this Agreement by seeking other employment or otherwise and the amount of any payment provided for
pursuant to this Agreement shall not be reduced by any compensation earned as a result of
Employee’s other employment or otherwise.
Section 15. Successors and Assigns; No Third-Party Beneficiaries.
(a) The Company. This Agreement shall inure to the benefit of and be enforceable by,
and may be assigned by the Company to, any purchaser of all or substantially all of the Company’s
business or assets or any successor to the Company (whether direct or indirect, by purchase,
merger, consolidation or otherwise). The Company will require, as applicable, in a writing
delivered to Employee, any such purchaser, successor or assignee 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 purchase, succession or assignment had taken place. The Company may make
no other assignment of this Agreement or its obligations hereunder.
(b) Employee. Employee’s rights and obligations under this Agreement shall not be
transferable by Employee by assignment or otherwise, without the prior written consent of the
Company; provided, however, that if Employee shall die, all amounts then payable to Employee
hereunder shall be paid in accordance with the terms of this Agreement to Employee’s devisee,
legatee or other designee or, if there be no such designee, to Employee’s estate.
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(c) No Third-Party Beneficiaries. Except as otherwise set forth in Section 8(b) or
Section 15(b) hereof, nothing expressed or referred to in this Agreement will be construed to give
any Person other than the Company and Employee any legal or equitable right, remedy or claim under
or with respect to this Agreement or any provision of this Agreement.
Section 16. Delay in Payment.
Notwithstanding any provision in this Agreement to the contrary, but taking into account
Treas. Reg. 1.409A-1(b) (9) (iii), any payment of nonqualified deferred compensation otherwise
required to be made hereunder to Employee at any date as a result of the termination of Employee’s
employment shall be delayed for such period of time as may be necessary to meet the requirements of
Section 409A(a)(2)(B)(i) of the Code (the “Delay Period”). On the earliest date on which
such payments can be made after the Delay Period, there shall be paid to the Employee, in a single
cash lump sum, an amount equal to the aggregate amount of all payments delayed pursuant to the
preceding sentence. Notwithstanding the foregoing, to the extent that the first sentence applies
to the provision of any ongoing health and other insurance plan benefits, Employee shall pay the
full cost for such health and other insurance plan benefits during the Delay Period and the Company
shall pay Employee an amount equal to the amount of such premiums paid by Employee during the Delay
Period within ten (10) days after the end of the Delay Period.
Section 17. Waiver and Amendments.
Any waiver, alteration, amendment or modification of any of the terms of this Agreement shall
be valid only if made in writing and signed by each of the parties hereto. No waiver by either of
the parties hereto of their rights hereunder shall be deemed to constitute a waiver with respect to
any subsequent occurrences or transactions hereunder unless such waiver specifically states that it
is to be construed as a continuing waiver.
Section 18. Severability.
If any covenants or such other provisions of this Agreement are found to be invalid or
unenforceable by a final determination of a court of competent jurisdiction: (a) the remaining
terms and provisions hereof shall be unimpaired, and (b) the invalid or unenforceable term or
provision hereof shall be deemed replaced by a term or provision that is valid and enforceable and
that comes closest to expressing the intention of the invalid or unenforceable term or provision
hereof.
Section 19. Governing Law.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK (WITHOUT GIVING EFFECT TO THE CHOICE OF LAW PRINCIPLES THEREOF) APPLICABLE TO CONTRACTS
MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE.
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Section 20. Dispute Resolution.
Any controversy arising out of or relating to this Agreement or the breach hereof (other than
claims for injunctive relief pursuant to Section 10 hereof) shall be settled by binding arbitration
in accordance with the Employment Dispute Resolution Rules of the American Arbitration Association
(before a single arbitrator) and judgment upon the award rendered may be entered in any court
having jurisdiction thereof. The costs of any such arbitration proceedings shall be borne equally
by the Company and Employee; provided, however, that the arbitrator shall have the right to award
to either party reasonable attorneys’ fees and costs expended in the course of such arbitration or
enforcement of the awarded rendered thereunder. Any award made by such arbitrator shall be final,
binding and conclusive on the parties for all purposes, and judgment upon the award rendered by the
arbitrators may be entered in any court having jurisdiction thereof.
Section 21. Notices.
(a) Every notice or other communication relating to this Agreement shall be in writing, and
shall be mailed to or delivered to the party for whom it is intended at such address as may from
time to time be designated by it in a notice mailed or delivered to the other party as herein
provided, provided that, unless and until some other address be so designated, all notices or
communications by Employee to the Company shall be mailed or delivered to the Company at its
principal executive office, with a copy sent to the General Counsel of the Company, and all notices
or communications by the Company to Employee may be given to Employee personally or may be mailed
to Employee at Employee’s last known address, as reflected in the Company’s records.
(b) Any notice so addressed shall be deemed to be given: (i) if delivered by hand, on the
date of such delivery; (ii) if mailed by courier or by overnight mail, on the first business day
following the date of such mailing; and (iii) if mailed by registered or certified mail, on the
third business day after the date of such mailing.
Section 22. Section Headings.
The headings of the sections and subsections of this Agreement are inserted for convenience
only and shall not be deemed to constitute a part thereof, affect the meaning or interpretation of
this Agreement or of any term or provision hereof.
Section 23. Entire Agreement.
This Agreement constitutes the entire understanding and agreement of the parties hereto
regarding the employment of Employee. This Agreement supersedes all prior negotiations,
discussions, correspondence, communications, understandings and agreements between the parties
relating to the subject matter of this Agreement.
Section 24. Survival of Operative Sections.
Upon any termination of Employee’s employment, the provisions of Section 8 through Section 26
of this Agreement (together with any related definitions set forth in Section 1
hereof) shall survive to the extent necessary to give effect to the provisions thereof.
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Section 25. Currency.
All sums of money expressed in this Agreement are in the lawful money of the United States of
America.
Section 26. Counterparts.
This Agreement may be executed in two or more counterparts, each of which shall be deemed to
be an original but all of which together shall constitute one and the same instrument. The
execution of this Agreement may be by actual or facsimile signature.
[Signatures to appear on the following page.]
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first above
written.
| ALLIED WORLD ASSURANCE COMPANY HOLDINGS, LTD |
||||
| By: | /s/ Xxxxx Xxxxxxxxx | |||
| Name: | Xxxxx Xxxxxxxxx | |||
| Title: | President and Chief Executive Officer | |||
| EMPLOYEE |
||||
| By: | /s/ Xxxx Xxxxxxx, Xx. | |||
| Xxxx Xxxxxxx, Xx. | ||||
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