Exhibit 10.4
EMPLOYMENT AGREEMENT
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AGREEMENT made effective as of the 1st day of December, 1997, between
European Specialty Group Holding AG (the "Company") and Xxxxxxx Xxxx (the
"Executive").
WHEREAS, the Company wishes to retain the services of the Executive
and recognizes that the Executive's contribution to the growth and success of
the Company will be substantial; and
WHEREAS, the Executive is willing to commit himself to serve the
Company, on the terms and conditions herein provided;
NOW, THEREFORE, in order to effect the foregoing, the Company and the
Executive wish to enter into an employment agreement on the terms and conditions
set forth below. Accordingly, in consideration of the premises and the
respective covenants and agreements of the parties herein contained, and
intending to be legally bound hereby, the parties hereto agree as follows:
1. Employment. The Company hereby agrees to employ the Executive,
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and the Executive hereby agrees to be employed by the Company, on the terms and
conditions set forth herein.
2. Term. The term of the Executive's employment hereunder shall
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commence as of the date hereof and shall continue until the close of business on
September 1, 2000, subject to earlier termination in accordance with the terms
of this Agreement (the "Term"). The Term shall be automatically extended for
successive one year periods thereafter unless either of the parties notifies the
other in writing of its intention not to so extend the Term at least one year
prior to the commencement of the next scheduled one year extension.
3. Position and Duties.
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(a) Title and Duties. The Executive shall serve as the Chief
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Financial Officer of the Company and ESG Re Limited (the "Parent") and shall
have such duties, authority and responsibilities as are normally associated with
and appropriate for such positions. The Executive shall report directly to the
Board of Directors of the Parent (the "Board") and the Supervisory Board of the
Company. The Executive shall devote substantially all of his working time and
efforts to the business and affairs of the Company. Executive shall not serve
on the Board of Directors of any unaffiliated companies, including but not
limited to, any charitable organization or chamber of commerce without the
written consent of the Board.
(b) Office and Facilities. The Executive shall be provided with
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appropriate office and secretarial facilities and any other location that the
Company reasonably deems necessary to have an office and support services in
order for the Executive to perform his duties to the Company. The Executive
shall serve as a director of the Company and shall agree to serve on other
committees of the Company or any other affiliated company, without additional
compensation, if requested by the Board.
4. Compensation.
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(a) Base Salary. During the Term, the Company shall pay to the
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Executive an annual base salary of US$200,000. The Executive's base salary
shall be paid in substantially equal installments on a basis consistent with the
Company's payroll practices. The Executive's base salary, as in effect at any
time, is hereinafter referred to as the "Base Salary." The Compensation
Committee of the Board (the "Compensation Committee") shall review Executive's
performance on an annual basis and may increase the Executive's Base Salary, in
its sole discretion, as it deems appropriate.
(b) Annual Bonus. The Compensation Committee may award the
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Executive an annual bonus, at such time and in such amount as the Compensation
Committee, in its sole discretion, deems appropriate.
5. Employee Benefits.
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(a) Benefit Plans. The Executive shall be entitled to
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participate in all employee benefit plans, perquisite and fringe benefit
arrangements of the Company generally made available by the Company to its
executives, subject to, and on a basis consistent with the terms, conditions and
administration of such plans and arrangements.
(b) Expenses. The Executive shall be entitled to receive prompt
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reimbursement for all reasonable and customary expenses incurred by the
Executive in performing services hereunder, including all expenses of travel and
living expenses while away from home on business at the request of and in the
service of the Company or the Parent or any of its affiliates and promoting the
business of the Company, provided that such expenses are incurred and accounted
for in accordance with the policies and procedures established by the Company.
(c) Vacation. The Executive shall be entitled to vacations and
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holidays on a basis consistent with that offered to other senior executive
officers of the Company.
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6. Termination of Employment. The Company and the Executive may each
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terminate the Executive's employment hereunder and the Term for any reason.
(a) Termination by the Company without Cause or by the Executive
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for Good Reason. If the Company shall terminate the Executive's employment
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without "Cause" (as defined in Section 6(f)), or if the Executive resigns
for Good Reason (as defined in Section 6(f)) then, the Executive shall be
entitled to his Base Salary for the greater of (1) the remainder of the
Term, or (2) one year, subject to and conditioned upon the Executive's
compliance with Sections 7 and 8 hereof. Options shall be treated in the
manner provided for in the applicable Award Agreement.
Except as expressly provided above, the Company will have no further
obligations to the Executive hereunder following the Executive's termination of
employment under the circumstances described in this Section 6(a).
(b) Termination due to Non-Renewal of the Term or Death or
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Disability. If the Executive's employment is terminated due to the non-renewal
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of the Term or due to the Executive's death or Disability (as defined in Section
6(f)), the Executive shall be entitled to a lump sum cash payment equal to the
Executive's Base Salary through the date of termination. Options shall be
treated in the manner provided for in the applicable Award Agreement.
Except as expressly provided above, the Company will have no further
obligations to the Executive hereunder following the Executive's termination of
employment under the circumstances described in this Section 6(b).
(c) Termination by the Company for Cause or by Executive Other
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than for Good Reason. If the Executive's employment is terminated by the Company
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for Cause or by the Executive other than for Good Reason, the Executive shall be
entitled to a lump sum cash payment equal to his Base Salary through the date of
termination. Options shall be treated in the manner provided for in the
applicable Award Agreement.
Except as expressly provided above, the Company will have no further
obligations to the Executive hereunder following the Executive's termination of
employment under the circumstances described in this Section 6(c).
(d) Termination Within One Year of a Change in Control. If the
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Company terminates the Executive's employment without Cause or the Executive
terminates his employment for Good Reason within one year following a Change in
Control, the Executive shall be entitled, in addition to the compensation
otherwise payable upon his termination of employment pursuant to Section 6(a)
above, to a lump sum payment which, when added to the present value of all other
benefits
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or payments to which the Executive is entitled which would constitute "Parachute
Payments" (as defined in Section 280G of the U.S. Internal Revenue Code of 1986,
as amended (the "Code")); equals 2.99 times the Executive's "Base Amount" (as
defined in Section 280G of the Code).
(e) Notice of Termination. Any termination of the Executive's
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employment by the Company or by the Executive (other than termination pursuant
to the Executive's death) shall be communicated by written Notice of Termination
to the other party hereto in accordance with Section 11 hereof. If the Company
terminates the Executive's employment for Cause or if the Executive resigns for
Good Reason, the "Notice of Termination" shall mean a notice which shall
indicate the specific termination provision in this Agreement relied upon and
shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Executive's employment under the
provision so indicated. For purposes of this Agreement, the date of the
Executive's termination of employment shall be deemed to be the date of receipt
of the Notice of Termination.
(f) Definitions. For purpose of this Agreement:
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(i) "Cause" shall mean
(1) Executive's breach of any material term of this
Agreement, including, but not limited to, the covenants set forth in
Sections 7 and 8 hereof;
(2) Executive's failure or refusal to perform his
duties hereunder or to perform specific directives of the Board, provided
that such directives do not violate any applicable law or industry
standards;
(3) Dishonesty of Executive affecting the Company, the
Parent or any affiliates;
(4) Alcoholism or use of drugs or any controlled
substances which interferes with the performance of Executive's duties and
responsibilities under this Agreement ;
(5) Any gross or willful conduct of Executive resulting
in substantial loss to or theft from any of the Company, the Parent or any
affiliate; or substantial damage to the Company's reputation or theft from
the Company; or
(6) Executive is charged with a felony or other serious
crime, whether or not related to the business of the Company, including but
not limited to, any crime related to tax evasion, bribery, theft, political
payoffs, etc.
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(ii) "Change in Control" shall mean the occurrence of any of
the following: (i) the sale, lease, transfer or other disposition, in one or a
series of related transactions, of all or substantially all of the assets of the
Company other than to the Company or any of its Affiliates, or (ii) a merger or
sale of the Company pursuant to which the shareholders of the Company
immediately prior to such merger or sale do not own a majority of the stock of
the Company or the surviving corporation immediately after such merger or sale.
(iii) "Disability" shall mean the Executive's adjudication
as mentally incompetent, or mental or physical disability preventing Executive
from performing his duties under this Employment Agreement for a period of 180
consecutive days.
(iv) "Good Reason" shall mean (1) a material diminution in
the Executive's duties or the assignment to the Executive of a title or duties
inconsistent with his position as Chief Financial Officer of the Company, (2) a
material reduction in the Executive's salary, or (3) a failure of the Company to
comply with any material provision of this Agreement.
7. Confidentiality. Executive will not at any time (whether during
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or after his employment with the Company) disclose or use for his own benefit or
purposes or the benefit or purposes of any other person, firm, partnership,
joint venture, association, corporation or other business organization, entity
or enterprise other than the Company, the Parent and any of their subsidiaries
or affiliates, any trade secrets, information, data, or other confidential
information relating to customers, development programs, costs, marketing,
trading, investment, sales activities, promotion, credit and financial data,
financing methods, plans, or the business and affairs of the Company, the
Parent, or of any subsidiary or affiliate of the Company, provided that the
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foregoing shall not apply to information which is not unique to the Company, the
Parent or any of its subsidiaries or affiliates or which is generally known to
the industry or the public other than as a result of Executive's breach of this
covenant. Executive agrees that upon termination of his employment with the
Company and the Parent for any reason, he will return to the Company and the
Parent immediately all memoranda, books, papers, plans, information, letters and
other data, and all copies thereof or therefrom, in any way relating to the
business of the Company and its affiliates, except that he may retain personal
notes, notebooks and diaries. Executive further agrees that he will not retain
or use for his account at any time any trade names, trademarks or other
proprietary business designations used or owned in connection with the business
of the Company, the Parent or their affiliates.
8. Equitable Relief. Executive acknowledges and agrees that the
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Company's remedies at law for a breach or threatened breach of any of the
provisions of Section 7 would be inadequate and, in recognition of this fact,
Executive agrees that, in the event of such a breach or threatened breach, in
addition to any remedies at
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law, the Company, without posting any bond or security, shall be entitled to
obtain equitable relief in the form of specific performance, temporary
restraining order, temporary or permanent injunction or any other equitable
remedy which may then be available.
9. Successors; Binding Agreement.
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(a) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets 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. As used in this Agreement, "Company" shall mean the Company as
herein defined and any successor to its business and/or assets as aforesaid
which executes and delivers the agreement provided for in this Section 9 or
which otherwise becomes bound by all the terms and provisions of this Agreement
by operation of law.
(b) This Agreement and all rights of the Executive hereunder
shall inure to the benefit of and be enforceable by the Executive's personal or
legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If the Executive should die while any
amounts are payable to him hereunder all such amounts unless otherwise provided
herein, shall be paid in accordance with the terms of this Agreement to the
Executive's devisee, legatee, or other designee or, if there be no such
designee, to the Executive's estate.
10. Notice. For the purposes of this Agreement, notices, demands and
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all other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when personally delivered with receipt
acknowledged or after having been received by certified or registered mail,
return receipt requested, postage prepaid, addressed as follows:
If to the Executive:
Xx. Xxxxxxx Xxxx
Kampstr. 111
42787 Xxxx
Germany
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If to the Company:
European Specialty Group Holding AG
Fleethof
Xxxxxxxxxxxxxx 0-0
Xxxxxxx, Xxxxxxx
Attention: CEO
With a Copy to:
ESG Re Limited
Skandia International House
00 Xxxxxx Xxxxxx
Xxxxxxxx, XX00,
Xxxxxxx
Attention: Chairman
or to such other address as any party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.
11. Miscellaneous. No provisions of this Agreement may be modified,
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waived or discharged unless such waiver, modification or discharge is agreed to
in writing signed by the Executive and such officer of the Company as may be
specifically designated by the Supervisory Board or the Board as the case may
be. No waiver by either party hereto at any time of any breach by the other
party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. The validity, interpretation, construction and performance of
this Agreement shall be governed by the laws of Germany without regard to its
conflicts of law principles.
12. Validity. The invalidity or unenforceability of any provision or
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provisions of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.
13. Counterparts. This Agreement may be executed in one or more
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counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
14. Withholding. The Company may withhold from any amounts payable
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under this Agreement such federal, state and local and foreign taxes as may be
required to be withheld pursuant to applicable law or regulation.
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15. Entire Agreement. This Agreement sets forth the entire agreement
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of the parties hereto in respect of the subject matter contained herein and
supersedes all prior agreements, promises, covenants, arrangements,
communications, representations or warranties, whether oral or written, by any
officer, employee or representative of any party hereto, including any prior
employment agreements.
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed and the Executive has hereunto set his hand, effective as of the 1st
day of December, 1997.
EUROPEAN SPECIALTY GROUP HOLDING AG
By: /s/ Xxxxxxxx X. Wand
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Name: Xxxxxxxx X. Wand
Title: Chief Executive Officer
/s/ Xxxxxxx Xxxx
_____________________________________
Executive: Xxxxxxx Xxxx
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