Exhibit 10.78
[LETTERHEAD OF TRENWICK GROUP LTD.]
March 25, 2003
Xx. X. Xxxxxxx Xxxxxx
00 Xxxxxxx Xxxx
Xxxx Xxxxxxxx, XX 00000-0000
Re: Amended and Restated Agreement
Dear Xx. Xxxxxx:
This amendment to your letter agreement (this "Agreement") will confirm the
amended and restated understanding between Trenwick Group Ltd. (the "Company")
and you, pursuant to which you have been engaged by the Company to provide
services as its Acting Chairman of the Board of Directors and Acting Chief
Executive Officer.
(1) You shall perform the duties and activities customarily associated with
the Chairman and Chief Executive Officer of the Company and you shall have
full authority to conduct the affairs of the Company during the term of
this Agreement. Your duties shall include but not be limited to the
ability to enter into contracts and other agreements binding the Company,
hiring and dismissal of employees, engagement of independent contractors
to work for the Company, and representation of the Company before
regulatory authorities and rating agencies.
(2) The term of this Agreement and your engagement hereunder shall extend from
August 15, 2002 through the earliest of (a) your death or disability, (b)
the mutual agreement of you and the Company or (c) thirty calendar days
following delivery of written notice of termination of this Agreement by
you or the Company.
Notwithstanding expiration or termination of this Agreement, it is agreed
that the provisions concerning confidentiality (Section 6),
indemnification (Sections 5 and 8), ownership of work product (Section 7),
dispute resolution (Section 10) and the Company's obligations to pay fees
and reimburse expenses earned or incurred prior to the termination of this
Agreement (Section 3) shall survive any such expiration or termination.
(3) As base compensation for the services hereunder, the Company will pay you,
(a) for the period from August 15, 2002 through December 31, 2002, a
monthly fee of $50,000, which shall be paid in arrears on or before the
15th calendar day of each month following the month in which such fee is
earned and (b) commencing on and after January 1, 2003 until the date of
termination of this Agreement, a monthly fee of $75,000, which shall be
paid in advance at the beginning of each calendar month.
In addition to the foregoing, the Company will pay you incentive
compensation in accordance with the provisions of Schedule A which is
attached hereto and is incorporated in all respects into and as part of
this Agreement.
The Company shall reimburse you monthly for your reasonable out-of-pocket
expenses incurred or accrued during the period of or in connection with
your engagement notwithstanding the termination of this Agreement. You
shall report and account for your expenses monthly on the Company's
standard expense account forms and be reimbursed by the Company within 30
calendar days of submission of such expense account forms to the Company.
(4) You shall not be entitled to any Company benefits or other benefits as may
accrue to a full or part-time employee of the Company.
(5) In performing services and duties hereunder, you shall do so as an
independent contractor and you are not, and are not to be deemed, an
employee of the Company or any other person acting on behalf of the
Company. You shall be responsible for meeting any legal requirements
imposed on you or any person acting on your behalf as a result of this
Agreement, including but not limited to the filing of income tax returns
and the payment of taxes; and you agree to indemnify the Company for the
failure to do so, if the Company is required to make any such payment
otherwise due by you.
(6) To the extent that you obtain non-public information about the Company's
or its affiliates' business practices and plans, including but not limited
to, business strategies, marketing strategies, technical information,
systems information, product development, service development and
customers ("Confidential Information"), then all such Confidential
Information disclosed to you shall be received by you in confidence for
purposes of this Agreement. You shall not disclose, disseminate, publish,
communicate or divulge any Confidential Information to anyone outside the
Company, or to any employee of the Company not having reasonable need for
access to such information, unless the Company expressly consents to such
disclosure in writing or as may be required by law. You agree that all
Confidential Information within your possession upon termination of this
Agreement shall be returned promptly to the Company. You understand and
agree that money damages will not be sufficient as a remedy for any breach
of this Section and that the Company shall be entitled to equitable
relief, including injunction and specific performance, as a remedy for any
breach of this Section.
(7) All work product created by you on behalf of the Company during the term
of this Agreement shall be the sole property of the Company, and you shall
not have any license or other right, express or implied, to such work
product.
(8) In consideration for your work on behalf of the Company and its
subsidiaries, the Company and its subsidiaries shall indemnify and hold
you harmless from and against any and all claims, damages or liabilities
arising out of your engagement as Acting Chairman and Acting Chief
Executive Officer, unless a judgment or other final adjudication
establishes that your acts or omissions were in bad faith or involved
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intentional misconduct or a knowing violation of law. Costs and expenses
(including attorney's fees) incurred by you in defending or investigating
any action, suit, proceeding or investigation shall be paid by the
Company, in advance of final disposition of such matter, upon receipt of
your written undertaking to repay any such amounts if it is ultimately
determined that you are not entitled to indemnification hereunder. The
Company's subsidiaries shall also confirm their agreement to be jointly
and severally liable to you for the obligations set forth in this
paragraph 8.
(9) For the purposes of this Agreement, notices, demands and all other
communications shall be in writing and shall be deemed to have been duly
given when delivered to the recipient at one of the following addresses:
If to you:
00 Xxxxxxx Xxxx
Xxxx Xxxxxxxx, XX 00000
If to the Company:
Xxx Xxxxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: General Counsel
or to such other address as any party may have furnished to the other in
writing.
(10) Except as otherwise set forth in Section 6 herein with respect to the
Company's remedy for any breach of Section 6, all controversies, claims,
or disputes arising out of or related to this Agreement, shall be settled
by arbitration in the State of Connecticut, as the sole and exclusive
remedy of either party, and judgment upon such award rendered by the
arbitrator(s) may be entered in any court of competent jurisdiction. In
the event that a court of competent jurisdiction determines that
arbitration is not appropriate for the adjudication of any claim, you
hereby waive your right to a jury trial.
One arbitrator shall be chosen by you, the other by the Company, and an
umpire shall be chosen by the two arbitrators, all of whom shall be active
or retired disinterested executive officers of insurance or reinsurance
companies. In the event that either party shall fail to choose an
arbitrator within 30 days following a written request by the other party
to do so, the requesting party may choose two arbitrators who shall in
turn choose an umpire. If the two arbitrators fail to agree on the
selection of an umpire within 30 days following their appointment, each
arbitrator shall name three nominees, of whom the other shall decline two,
and the decision shall be made by drawing lots.
Each party shall bear the expense of its own arbitrator, and shall jointly
and equally bear with the other the expense of the umpire.
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(11) If any provision of this Agreement shall, to any extent, now or hereafter
be or become invalid or unenforceable, the remainder of this Agreement
shall not be affected thereby and every other provision of this Agreement
shall be valid and enforceable, to the fullest extent permitted by law.
(12) No provision of this Agreement may be modified, waived or discharged
unless such waiver, modification or discharge is agreed to in writing
signed by the parties. No waiver by either party 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.
(13) This Agreement (including Schedule A hereto) sets forth the entire
agreement 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, without limitation, the letter agreement of August 26, 2002 by
and between you and the Company as amended by letter agreement dated
December 31, 2002.
(14) Neither party to this Agreement can assign his or its rights or
obligations under this Agreement without the prior written consent of the
other party to this Agreement.
(15) This Agreement shall be governed by and construed in accordance with the
laws of the State of Connecticut without regard to the conflicts of law
provisions thereof. This Agreement may be signed in any number of
counterparts, each of which shall be an original, but all of which
together shall constitute one and the same instrument.
If the foregoing correctly sets forth the understanding and agreement between
you and the Company, please sign and return one original executed copy of this
Agreement.
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Trenwick Group Ltd.
/s/ Xxxxxxx X. Xxxxx, Xx.
----------------------------------------
By: Xxxxxxx X. Xxxxx, Xx.
Chairman of the Compensation
Committee
Confirmed and Agreed as of the date first written above:
/s/ X. Xxxxxxx Xxxxxx
-----------------------------
X. Xxxxxxx Xxxxxx
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Schedule A
1. Cash Incentive Bonus. Subject to the terms of this Agreement, the Company
hereby agrees that you shall be granted a bonus in the aggregate amount of
$600,000 (the "Cash Incentive Bonus"). The Cash Incentive Bonus shall be
payable to you subject to and in accordance with the requirements of this
Agreement.
2. Payment Dates. The Cash Incentive Bonus shall become payable in increments
of (i) $200,000 on or before March 28, 2003 and (ii) $200,000 on each of
June 30, and December 31, 2003. The Cash Incentive Bonus shall be payable
only to the extent that you have not voluntarily terminated your
engagement with the Company (other than to become an employee thereof) or
been terminated for Cause (as defined herein) by the Company prior to the
originally scheduled date of payment of the Cash Incentive Bonus. In the
event there is a Change in Control (as defined herein) any portion of the
Cash Incentive Bonus which has not yet been paid to you shall be due and
payable to you on the date of such Change in Control, provided that you
have not voluntarily terminated your engagement (other than to be come an
employee thereof) or been terminated for Cause by the Company prior to the
date of such Change in Control.
3. Change in Control. For purposes of this Schedule A, a "Change in Control"
shall be deemed to have occurred upon the earliest to happen of the
following:
(a) The acquisition, in one or more transactions, of beneficial ownership
(within the meaning of Rule 13d-3 under the Securities Exchange Act of
1934 (the "Exchange Act") by any person or entity or any group of persons
or entities who constitute a group (within the meaning of Rule 13d-3 of
the Exchange Act), other than a trustee or other fiduciary holding
securities under an employee benefit plan of the Company or a subsidiary,
of any securities of the Company if, as a result of such acquisition, such
person, entity or group either (i) beneficially owns (within the meaning
of Rule 13d-3 under the Exchange Act), directly or indirectly, more than
50% of the Company's outstanding voting securities entitled to vote on a
regular basis for a majority of the members of the Board or (ii) otherwise
has the ability to elect, directly or indirectly, a majority of the
members of the Board;
(b) A change in the composition of the Board such that a majority of the
members of the Board are not Continuing Directors. A "Continuing Director"
means, as of any date of determination, any member of the Board who (i)
was a member of the Board on the date of this Agreement, or (ii) was
nominated and elected to such Board with the affirmative vote of a
majority of the Continuing Directors who were members of the Board at the
time of such nomination or election; or
(c) The shareholders of the Company approve (i) a merger or consolidation of
the Company with any other corporation, other than a merger or
consolidation which
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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 total voting power represented by the voting
securities of the Company or such surviving entity outstanding immediately
after such merger or consolidation, or (ii) a plan of complete liquidation
of the Company or an agreement for the sale or disposition by the Company
(in one or more transactions) of all or substantially all of the Company's
assets.
provided, however, that a "Change of Control" shall not be deemed to have
occurred in the case of (a) or (b) above from the issuance of equity
securities (or a right to receive such equity securities) to any class of
debt or equity securities or other debt obligations of Group or any direct
or indirect subsidiary thereof which are outstanding as of January 1,
2003, upon conversion thereof or in connection with any negotiated
restructuring or other consensual modification, amendment or waiver of any
of the terms of such securities or obligations.
4. Cause. For purposes of this Schedule A, "Cause" shall mean: (A) the
commission by you of any felonious act or crime involving moral turpitude,
dishonesty, theft or unethical business conduct, (B) the willful and
continued failure of you (after not less than fifteen days notice to you
by the Company of such failure and an opportunity to cure) to
substantially perform your duties (other than as a result of incapacity
due to physical or mental injury or illness) which duties you have been
directed in writing to perform by the Board; (C) willful misconduct or
gross negligence by you in the performance of your duties, or (D) willful
failure by you to comply with the policies or procedures of the Company
applicable to you. No action or failure to act by you shall be considered
"willful" if it is done by you in good faith and with the reasonable
belief that your actions or omissions are in the interests of the Company,
or are consistent with your fiduciary or legal obligations, and are in
compliance with applicable law and regulation.
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