CRM HOLDINGS, LTD. Employment Agreement for James Scardino
Employment Agreement for Xxxxx Xxxxxxxx
1.
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Term | 1 | ||||
2.
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Position, Duties and Responsibilities | 1 | ||||
3.
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Base Salary | 2 | ||||
4.
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Incentive Awards | 2 | ||||
5.
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Other Payments | 2 | ||||
6.
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Employee Benefit Programs | 2 | ||||
7.
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Disability | 3 | ||||
8.
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Reimbursement of Business and Other Expenses | 3 | ||||
9.
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Termination of Employment | 3 | ||||
10.
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Confidentiality; Litigation Cooperation; Non-disparagement | 6 | ||||
11.
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Non-competition | 7 | ||||
12.
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Non-solicitation | 7 | ||||
13.
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Remedies | 8 | ||||
14.
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Resolution of Disputes | 8 | ||||
15.
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Indemnification | 8 | ||||
16.
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Miscellaneous | 9 |
AGREEMENT, made and entered into as of the 1st day of January, 2007 (“Effective
Date”) by and between CRM Holdings, Ltd., a Bermuda company (together with its subsidiaries from
time to time and its successors and assigns, “CRM”), and Xxxxx Xxxxxxxx (the “Executive”).
1. Term.
The term of Executive’s employment under this Agreement shall commence on Effective Date and
end on the third anniversary of such date (the “Term”), unless terminated earlier in accordance
herewith. The Original Term shall be automatically renewed for successive one-year terms (the
"Renewal Terms”) unless at least 30 days prior to the expiration of the Original Term or any
Renewal Term, either Party notifies the other Party in writing that he or it is electing to
terminate this Agreement at the expiration of the then current Term. “Term” shall mean the
Original Term and all Renewal Terms.
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3. Base Salary.
Effective January 1, 2007, Executive shall be paid an annualized salary (“Base Salary”) of
$300,000, subject to Executive 2006 performance evaluation and annual adjustments, in accordance
with CRM’s normal pay practices. The Base Salary shall be reviewed by the Compensation Committee
(the “Compensation Committee”) of the Board of Directors (the “Board”) no less than annually.
4. Incentive Awards.
Executive shall be eligible to receive up to 50% of Base Salary (“Annual Bonus”), dependent
upon achievement of individual performance objectives, company profitability and stock price. The
Annual Bonus shall be paid in restricted stock upon terms and conditions contained in the Company’s
equity incentive program currently in existence. The Compensation Committee in their discretion
may pay any portion of the annual bonus in cash.
(c) Relocation Expenses: CRM shall make Executive’s monthly
rental payments for the rental property located in Poughkeepsie, New York.
Housing costs for the first year of employment shall be considered temporary relocation to
Executive. The second year and each year thereafter of housing costs shall be deemed additional
income to Executive.
During the Term, Executive shall be entitled to participate in CRM’s employee benefit plans
and programs as such plans or programs may be in effect from time to time, including, without
limitation, health, medical and dental coverage (together, “Welfare Benefits”).
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(a) If Executive becomes “Disabled” (as defined below) during the Term, Executive shall
receive 60% of his Base Salary, at the annual rate in effect on the commencement date of his
eligibility for CRM’s long-term disability benefits
(“Commencement Date”) for a period beginning on the Commencement Date and ending with the
earlier to occur of (A) Executive’s attainment of age 65, or (B) Executive’s commencement of
retirement benefits from CRM. If Executive ceases to be Disabled 180 days thereafter, he may elect
to resume such position by written notice to CRM within 15 days after CRM delivers its request. If
he resumes such position, he shall thereafter be entitled to his Base Salary at the annual rate in
effect for the year he resumes his position and a Pro Rata Annual Incentive (as defined). If he
ceases to be disabled 180 days thereafter and does not offer to resume his position in accordance
with the preceding sentence, he shall be treated as if he voluntarily terminated his employment as
of the date Executive ceases to be disabled. If Executive is not offered his position by CRM after
he ceases to be Disabled during the Term, he shall be treated as if his employment was terminated
without Cause as of the date Executive ceases to be Disabled.
(b) Executive shall be entitled to a Pro Rata Annual Incentive assuming Target performance for
the year in which the termination occurs, such bonuses payable in a lump sum not later than 15 days
after the Commencement Date. Executive shall not be entitled to any annual incentive award with
respect to the period following the termination. If Executive recommences his position in
accordance with Section 8(a), he shall be entitled to a Pro Rata Annual Incentive assuming Target
performance for the year he resumes such position.
(c) During the period Executive is Disabled, he shall be treated as an employee for purposes
of all employee benefits, plans and programs in which he was participating on the Commencement
Date, except for any annual salary increases or any new long-term incentive plan grants during any
Disability period.
For purposes of this Agreement, “Disability” means Executive’s inability, due to physical,
mental, or emotional injury or limitation, to substantially perform the usual and customary duties
of his employment, for a period of 180 consecutive days.
(d) The benefits provided for in this Section 8 are instead of, and not in addition to, any
benefits provided for by the Company’s long-term disability policy, for which Executives waives
payment upon complete satisfaction of the Company’s obligations to him under this Section 7.
Executive is authorized to incur reasonable expenses in carrying out his duties and
responsibilities under this Agreement, and CRM shall reimburse him for all such reasonable business
expenses, subject to documentation in accordance with CRM’s applicable policies.
(i) Base Salary through the date of Executive’s death;
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(ii) the balance of any incentive awards earned as of December 31 of the prior
year (but not yet paid), (together, with unpaid Base Salary, “Accrued Amounts”);
(iii) Pro Rata Annual Incentive for the year in which the date of termination
(“Termination Date”) occurs assuming Target performance (“Pro Rata Annual
Incentive”):
(iv) immediate vesting of all unvested and outstanding stock options, (and the
right to exercise all such stock options for one year), the removal of any and all
restrictions regarding any restricted stock or deferred stock units, and the vesting
and settlement of any performance awards at target award levels (together, “Equity
Acceleration”);and
(v) other or additional benefits then due or earned in accordance with
applicable plans and programs of CRM (“Entitlements”).
(i) In the event CRM terminates Executive’s employment for Cause, Executive’s
sole remedies under this Agreement shall be to receive his Accrued Amounts and any
Entitlements. Executive shall not be entitled to receive any Severance Pay (as
defined) or Welfare Benefits continuation, and his equity awards will be settled in
accordance with the terms and conditions of the applicable grant agreements.
(ii) “Cause” shall mean Executive’s:
(A) breach of Sections 10, 11 or 12 of this Agreement;
(B) conviction of, or plea of nolo contendre to, any felony, or any act that is
materially and demonstrably injurious to CRM’s financial condition or reputation;
(C) engaging in conduct constituting gross neglect or misconduct in carrying
out his duties under this Agreement and that is demonstrably injurious to CRM’s
financial condition or reputation; or
(D) act or series of acts constituting misconduct resulting in a restatement of
the Company’s financial statements due to material non-compliance with any financial
reporting requirement within the meaning of Section 304 of The Xxxxxxxx-Xxxxx Act of
2002.
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(i) all Accrued Amounts; (ii) a Pro Rata Annual Incentive for the year in which
the Termination Date occurs; (iii) all Entitlements, and (iv) continuation of
Welfare Benefits for 12 months;
(ii) immediate vesting of all unvested stock options and the removal of any and
all restrictions regarding any restricted stock, and
(iii) In addition, Executive shall be entitled to receive severance pay
(“Severance Pay”) in cash equal to the sum of (A) the Base Salary amount immediately
prior to the Termination Date (unless a reduction in Base Salary is the reason for a
Good Reason termination, in which case, the Base salary amount prior to any such
reduction), plus (B) Executive’s Annual Incentive opportunity (assuming Target
performance) for the year in which the termination occurs.
(A) any failure by CRM to perform any material obligation under, or breach by
CRM of any material provision of, this Agreement that is not cured within 30 days;
(B) a relocation of CRM’s corporate offices outside a 50-mile radius of CRM’s
then corporate offices and which would increase Executive’s commute by 50 miles; or
(C) any failure to secure the agreement of any successor corporation (or other
entity) to CRM to fully assume CRM’s obligations under this Agreement.
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For purposes of this Agreement, “Confidential Information” shall mean all information
concerning the business of CRM relating to any of their products, product development, trade
secrets, customers, suppliers, finances, and business plans and strategies. Excluded from the
definition of Confidential Information is information (i) that is or becomes part of the public
domain, other than through the breach of this Agreement by Executive or (ii) regarding CRM’s
business or industry properly acquired by Executive in the course of his career as an executive in
CRM’s industry and independent of Executive’s employment by CRM. For this purpose, information
known or available generally within the trade or industry of CRM shall be deemed to be known or
available to the public.
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(a) During the Restriction Period (as defined in Section 11(b) below), Executive shall not
engage in Competition with CRM or any Subsidiary. “Competition” shall mean engaging in any
activity ,directly or indirectly, for a Competitor of CRM or any Subsidiary, whether as an
employee, consultant, principal, agent, officer, director, partner, shareholder (except as a less
than one percent shareholder of a publicly traded company) or otherwise. A “Competitor” shall mean
any corporation or other entity which competes with the business conducted by CRM or any
Subsidiary, as determined on the date of termination of Executive’s employment. If Executive
commences employment or becomes a consultant, principal, agent, officer, director, partner, or
shareholder of any entity that is not a Competitor at the time Executive initially becomes employed
or becomes a consultant, principal, agent, officer, director, partner, or shareholder of the
entity, future activities of such entity shall not result in a violation of this provision unless
(x) such activities were contemplated by Executive at the time Executive initially became employed
or becomes a consultant, principal, agent, officer, director, partner, or shareholder of the entity
or (y) Executive commences directly or indirectly overseeing or managing the activities of an
entity which becomes a Competitor during the Restriction Period, which activities are competitive
with the activities of CRM. Executive shall not be deemed indirectly overseeing or managing the
activities of such Competitor which are competitive with the activities of CRM so long as he does
not regularly participate in discussions with regard to the conduct of the competing business.
(b) For the purposes of this Section 11, “Restriction Period” shall mean the period beginning
with the Effective Date and ending 12 months following the Termination Date.
12. Non-solicitation.
During the period beginning with the Effective Date and ending 12 months following the
Termination Date, Executive shall not induce employees of CRM to terminate their employment, nor
shall Executive solicit or encourage any of CRM’s customers, or any corporation or other entity in
a joint venture relationship (directly or indirectly) with CRM, to terminate or diminish their
relationship with CRM or to violate any agreement with any of them. During such period, Executive
shall not hire, either directly or through any employee, agent or representative, any employee of
CRM or any person who was employed by CRM within 180
days of such hiring.
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13. Remedies.
If Executive breaches any of the provisions contained in Sections 10, 11 or 12 above, CRM (a)
subject to Section 15, shall have the right to immediately terminate all payments and benefits due
under this Agreement and (b) shall have the right to seek injunctive relief. Executive
acknowledges that such a breach of Sections 10,11 or 12 would cause irreparable injury and that
money damages would not provide an adequate remedy for CRM; provided, however, the foregoing shall
not prevent Executive from contesting the issuance of any such injunction on the ground that no
violation or threatened violation of Section 10, 11 or 12 has occurred.
Any controversy or claim arising out of or relating to this Agreement or any breach or
asserted breach hereof or questioning the validity and binding effect hereof arising under or in
connection with this Agreement, (other than seeking injunctive relief under Section 13), shall be
resolved by binding arbitration, to be held at an office closest to CRM’s principal offices in
accordance with the rules and procedures of the American Arbitration Association. Judgment upon
the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof.
Pending the resolution of any arbitration or court proceeding, CRM shall continue payment of all
amounts and benefits due Executive under this Agreement. All costs and expenses of any arbitration
or court proceeding (including fees and disbursements of counsel) shall be borne by the respective
party incurring such costs and expenses, but CRM shall reimburse Executive for such reasonable
costs and expenses in the event he substantially prevails in such arbitration or court proceeding.
15. Indemnification.
(a) Company Indemnity. CRM agrees that if Executive is made a party, or is threatened
to be made a party, to any action, suit or proceeding, whether civil, criminal, administrative or
investigative (a “Proceeding”), by reason of the fact that he is or was a director, officer or
employee of CRM or is or was serving at the request of CRM as a director, officer, member, employee
or agent of another corporation, partnership, joint venture, trust or other enterprise, including
service with respect to employee benefit plans, whether or not the basis of such Proceeding is
Executive’s alleged action in an official capacity while serving as a director, officer, member,
employee or agent, Executive shall be indemnified and held harmless by CRM to the fullest extent
legally permitted or authorized by CRM’s by-laws or resolutions of CRM’s Board or, if greater, by
the laws of the State of New York against all cost, expense, liability and loss (including, without
limitation, attorney’s fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or
to be paid in settlement) reasonably incurred or suffered by Executive in connection therewith, and
such indemnification shall continue as to Executive even if he has ceased to be a director, member,
officer, employee or agent of CRM or other entity and shall inure to the benefit of Executive’s
heirs, executors and administrators. CRM shall advance to Executive all reasonable costs and
expenses to be incurred by him in connection with a Proceeding within 20 days after receipt by CRM
of a written request for such advance. Such request shall include an undertaking by Executive to
repay the amount of such advance if it shall ultimately be determined that he is not entitled to
be indemnified against such costs and expenses. The provisions of this Section 16(a) shall
not be deemed exclusive of any other rights of indemnification to which Executive may be entitled
or which may be granted to him, and it shall be in addition to any rights of indemnification to
which he may be entitled under any policy of insurance.
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(i) Governing Law/Jurisdiction. This Agreement shall be governed by and construed and
interpreted in accordance with the laws of New York without reference to principles of conflict of
laws. CRM and Executive hereby consent to the jurisdiction of any or all of the following courts
for purposes of resolving any dispute under this Agreement: (i) the United States District Court
for New York or (ii) any of the courts of the State of New York. CRM and Executive further agree
that any service of process or notice requirements in any such proceeding shall be satisfied if the
rules of such court relating thereto have been substantially satisfied. CRM and Executive hereby
waive, to the fullest extent permitted by applicable law, any objection which it or he may now or
hereafter have to such jurisdiction and any defense of inconvenient forum.
If to CRM: | CRM Holdings, Ltd. | |||
Xxxxxxx Xxxxxxxxxxxxx Xxxxx | ||||
00 Xxxxxx Xxxxxx | ||||
Xxxxxxxx XX 00 Xxxxxxx |
If to Executive: | Xx. Xxxxx Xxxxxxxx |
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(l) 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.
CRM HOLDINGS, LTD |
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By: | /s/ Xxxxxx X. Xxxxxx, Xx. | |||
Name: | Xx. Xxxxxx X. Xxxxxx, Xx. | |||
Title: | Co-CEO | |||
By: | /s/ Xxxxx X. Xxxxxxxx | |||
Name: | Xx. Xxxxx X. Xxxxxxxx | |||
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EXHIBIT A
Defined Terms
(a) | “Accrued Amounts” has the meaning set forth in Section 9(a). | |
(b) | “Base Salary” has the meaning set forth in Section 3. | |
(c) | “Cause” shall have meaning set forth in Section 9(b). | |
(d) | “Commencement Date” has the meaning set forth in Section 7(a). | |
(e) | “Compensation Committee” has the meaning set forth in Section 3. | |
(f) | “Competitor” or “Competition” has the meaning set forth in Section 11(a). | |
(g) | “Confidential Information” has the meaning set forth in Section 10(a). | |
(h) | “Disability” has the meaning set forth in Section 7(c). | |
(i) | “Entitlements” has the meaning set forth in Section 9(a). | |
(j) | “Good Reason” has the meaning set forth in Section 9(e). | |
(k) | “Proceeding” has the meaning set forth in Section 15(a). | |
(l) | “Pro Rata Annual Incentive” has the meaning set forth in Section 9(a). | |
(m) | “Restriction Period” has the meaning set forth in Section 11(b). | |
(n) | “Severance Pay” has the meaning set forth in Section 9(d). | |
(o) | “Target” means the target level of performance and associated Annual Incentive designated by the Compensation Committee with respect to Executive for that relevant operating period. | |
(p) | “Term” has the meaning set forth in Section 1. | |
(q) | “Termination Date” has the meaning set forth in Section 9(a). | |
(r) | “Welfare Benefits” has the meaning set forth in Section 6. |
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