EXHIBIT 10.3
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is dated as of August 1, 1999 (the
"Effective Date"), and is entered into between Maximus Capital Holdings, Ltd.,
(the "Company"), and Xxxxxx Xxxxxx ("Executive").
WHEREAS, the Company desires to secure the employment of Executive in
accordance herewith; and
WHEREAS, Executive is willing to be employed by the Company on the
terms and conditions set forth herein; and
WHEREAS, the parties now desire to enter into this Agreement setting
forth the terms and conditions of the employment relationship of Executive with
the Company;
NOW, THEREFORE, in consideration of the mutual premises, covenants and
agreements set forth below, it is hereby agreed as follows:
ARTICLE I.
EMPLOYMENT, DUTIES AND RESPONSIBILITIES
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1.1 Employment.
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(a) The Company shall employ Executive as President and Chief
Executive Officer of the Company. Executive agrees to devote his full business
time, efforts and energies to the performance of his duties hereunder. Executive
agrees to serve on the Board of Directors of the Company (the "Board") as a
director and/or on the board of any affiliate as a director and/or serve as an
officer of any affiliate at a level commensurate with his position as may be
reasonably requested by the Board without additional compensation. Executive
further agrees to serve as the principal representative of any Bermuda insurance
or reinsurance subsidiary of the Company, for the purposes of the Bermuda
Insurance Act 1978 (as amended). Executive's principal office location and the
executive offices of the Company shall be in Bermuda. Notwithstanding the
foregoing, to the extent the following do not materially interfere with the
performance of Executive's duties hereunder, Executive shall be permitted to (i)
manage his personal affairs; (ii) be involved with charitable and professional
activities and (iii) with the consent of the Board, which consent shall not be
unreasonably withheld, conditioned or delayed, serve on the board of directors
of non-charitable entities.
(b) Executive agrees that, so long as he is employed by the
Company, he will not own, directly or indirectly, any controlling or substantial
stock or other beneficial interest in any business enterprise which is engaged
in, or competitive with, any business engaged in by the Company. Notwithstanding
the foregoing, Executive (i) shall be permitted to maintain his equity holdings
in his prior employer and (ii) may own, directly or indirectly, up to one
percent (1%) of the outstanding capital stock or debt of any business having a
class of capital stock that is traded on any national stock exchange or on the
over-the-counter market and upon approval of the Board or as otherwise set forth
on Exhibit B attached hereto on the Effective Date, may be a passive investor in
investment entities so long as his interest therein is less than one percent
(1%).
1.2 Duties and Responsibilities. Executive shall have such authority,
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duties and responsibilities as are customary and consistent with his position
and such other duties and responsibilities as are determined from time to time
by the Board and commensurate with his position. During the Term, Executive
shall report solely and directly to the Board.
ARTICLE II.
TERM
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2.1 Term. The term of employment under this Agreement (the "Initial Term")
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shall commence on August 1, 1999 (the "Commencement Date") and subject to
earlier termination under Section 5, continue for a period of five (5) years;
provided, that, commencing on the fifth anniversary of the Commencement Date,
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the Initial Term shall automatically renew for successive one year periods (the
"Additional Term"), subject to earlier termination under Section 5, unless
either party provides written notice of non-renewal to the other at least ninety
(90) days prior to the end of the Initial Term or the then Additional Term. The
Initial Term and any Additional Term shall be referred to under this Agreement
as the "Term". Upon termination of the Term or as soon thereafter as possible,
howsoever terminated, Executive shall deliver to the Company and each affiliate
of Company, if applicable, letters of resignation from directorships,
officerships and any appointment as principal representative (referred to in
Section 1.1 above). This obligation shall survive termination of the Executive's
employment.
ARTICLE III.
COMPENSATION
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3.1 Salary, Bonuses and Benefits. As compensation and consideration for
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the performance by Executive of his obligations under this Agreement, Executive
shall be entitled to the following (subject, in each case, to the provisions of
Article V hereof):
(a) The Company shall pay Executive a base salary during the
Term, payable in accordance with the normal payment procedures of the Company as
it may exist from time to time and subject to such withholdings and other normal
employee deductions as may be required by law, at the rate of $550,000 (U.S.)
per annum. The Company agrees to review such compensation not less frequently
than annually during the Term commencing in January 2000. Once increased, the
base salary shall not be reduced. The base salary as increased from time to time
shall be referred to herein as "Base Salary". In addition to the foregoing, the
Company shall make a one-time payment of $ 46,000 (U.S.) to Executive as soon as
administratively feasible following the Effective Date.
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(b) Executive shall participate during the Term in such pension,
life insurance, health, disability and major medical insurance plans, and in
such other employee benefit plans and programs and fringes and perquisites, for
the benefit of the employees of the Company, as may be maintained from time to
time during the Term, in each case to the extent and in the manner available to
other senior executives or officers of the Company and subject to the terms and
provisions of such plans or programs. Notwithstanding the foregoing, prior to
the Company being financed by the contemplated private placement (the "Private
Placement"), Executive shall be entitled to such health, disability and life
insurance benefits comparable to those he received from his prior employer. In
addition Executive shall receive such automobile allowance as he was provided by
his prior employer, the payment of country club dues not to exceed $10,000
(U.S.) annually, and the payment of a housing allowance not to exceed $10,000
(U.S.) per month, or, if more favorable to Executive in the aggregate, as
otherwise provided by the Company for senior executive officers of the Company.
Notwithstanding the foregoing, Executive's housing allowance shall be no less
than any other executive officer of the Company.
(c) For each calendar year that begins during the Term (the
"Bonus Year"), the Company shall pay a bonus to Executive based on
pre-established performance goals established by the Board with a target bonus
of 100% of Base Salary and a range from 0% to 250% of Base Salary (the "Bonus");
provided, that, for the 1999 calendar year, such Bonus shall be pro-rated for
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the portion of the year worked by Executive from and after the Commencement
Date. Notwithstanding the foregoing, the minimum Bonus for the 1999 calendar
year shall be $350,000 (U.S.).
(d) Executive shall be entitled to four weeks of paid vacation in
accordance with the Company policy as it may exist from time to time (but not
necessarily consecutive vacation weeks) during each year of the Term.
(e) Executive shall be paid a deferred hiring bonus payment of
$750,000 (U.S.) (the "Deferred Compensation") within ninety (90) days of the
earlier of (i) Executive's termination of employment for any reason or (ii) the
fifth anniversary of the Closing (as defined below). The Deferred Compensation
payment shall be credited with interest at an annual cumulative rate equal to
5.96% from the Effective Date.
(f) (i) Upon the closing of the Private Placement (the
"Closing"), the Company shall issue to Executive warrants to purchase shares of
the Company's class A common stock (the "Common Stock"), consistent with the
terms set forth in this paragraph (f). The amount of such warrants shall
represent 2% of the outstanding Common Stock, exclusive of all warrants, of the
Company upon completion of the Private Placement, such percentage to be
calculated in the same manner as for Xxxxx Holdings II, L.L.C. and Capital Z
Investments, L.P. (the "Investors") in such Private Placement; provided, that,
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if the total promotional warrant pool available to the Investors and the
management is less than 19% of the outstanding Common Stock, exclusive of
warrants, Executive's warrants shall be reduced on a pro rata basis in the same
proportion as the Investors. The term of the warrants shall be the same as that
of the Investors. The warrant shall vest 20% on the date of grant and an
additional 20% on each of the first, second, third and fourth anniversaries of
the date of grant; provided, that, Executive is then employed. The exercise
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price per share shall be equal to the per share price paid by the Original
Investors (as defined below) in the Private Placement.
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(ii) In the event Executive's employment is terminated by the
Company with Cause or by Executive without Good Reason (both as defined below),
all unvested warrants shall immediately terminate and any vested warrants shall
remain exercisable for sixty (60) days following such termination; provided,
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that, Executive shall have at least thirty (30) business days following any
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underwriter's lock-up period imposed prior to or during such sixty (60) day
period to exercise his vested warrants, but in no event beyond the term.
(iii)In the event of Executive's death, or if Executive's
employment under this Agreement is terminated by the Company for Disability (as
defined below), or without Cause or by Executive for Good Reason, all of the
warrants that would have vested within twelve (12) months of such termination
shall immediately become vested, and all other unvested warrants shall
immediately terminate.
If a termination of employment under this subparagraph (iii)
occurs prior to an Initial Public Offering (as defined below), vested warrants
shall remain exercisable for two (2) years following such termination; provided,
that, if an Initial Public Offering should occur following such termination,
then such warrants shall remain exercisable for the lessor of six (6) months
(one (1) year in the event of death or Disability) following such Initial Public
Offering or the remaining exercise period, but in no event beyond the term of
the warrants.
If a termination of employment under this subparagraph (iii)
occurs after an Initial Public Offering, all vested warrants shall remain
exercisable for six (6) months (one (1) year in the event of death or
Disability) following such termination, but in no event beyond the term of the
warrant. In the event of any termination of employment under this subparagraph
(iii), Executive shall have at least thirty (30) business days following any
underwriter's lock-up period imposed prior to or during any warrant exercise
period to exercise his vested warrants.
(iv) In the event of a Change in Control (as defined below), all
unvested warrants shall become immediately vested.
For purposes of this Agreement, prior to an Initial Public
Offering, a Change in Control shall mean (i) a sale, assignment, transfer or
other disposition of securities in one or more related transactions where the
Investors and other shareholders of the Company as of the Closing (together with
the Investors, the "Original Investors") cease to beneficially own 51% or more
of the total combined voting power of the Company's outstanding securities; (ii)
a merger, consolidation, reorganization or similar corporate event in which the
Original Investors cease to beneficially own 51% or more of the total combined
voting power of the Company's outstanding securities or 51% or more of the total
combined voting power of the resultant corporation or entity if the Company does
not survive such transaction; (iii) the sale, transfer, assignment or other
disposition of all or substantially all of the Company's property, assets or
business to one or more unrelated parties. Notwithstanding the foregoing, no
Change in Control shall be deemed to occur as a result of an Initial Public
Offering of the Company or any necessary actions taken, as determined by the
Board, in order to effectuate such Initial Public Offering.
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Following an Initial Public Offering, the term Change in Control
shall mean (i) a sale, assignment, transfer or other disposition of securities
in one or more related transactions where the shareholders immediately prior to
such transaction cease to beneficially own 51% or more of the total combined
voting power of the Company's outstanding securities; (ii) a merger,
consolidation, reorganization or similar corporate event in which the
shareholders immediately prior to such transaction cease to beneficially own 51%
or more of the total combined voting power of the Company's outstanding
securities or 51% or more of the total combined voting power of the resultant
corporation or entity if the Company does not survive such transaction; or (iii)
the sale, transfer, assignment or other disposition of all or substantially all
of the Company's property, assets or business to one or more unrelated parties.
The term Initial Public Offering shall mean an initial public
offering of the Company's Common Stock pursuant to a registration statement
(other than on Form S-8 or successor forms) filed with, and declared effective
by, the Securities and Exchange Commission.
(v) Upon an Initial Public Offering, Executive shall receive an
additional warrant of 2% of the shares of Common Stock to be sold in the Initial
Public Offering, exclusive of all warrants, of the Company upon completion of
the Initial Public Offering, such percentage to be calculated in the same manner
as for the Investors in such Initial Public Offering; provided, that, if the
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total promotional warrant pool available to the Investors and the management is
less than 19% of the Common Stock to be sold in the Initial Public Offering,
exclusive of warrants, Executive's warrants shall be reduced on a pro rata basis
in the same proportion as the Investors. The exercise price of such warrants
shall be the same as the exercise price for the Investors. The warrants shall
have terms and conditions consistent with those set forth above in subparagraphs
(i) through (iv), above.
(g) (i) Except as otherwise provided in clause (ii) of this
paragraph (g) below, the Company shall pay Executive a signing bonus of
$1,800,000 (U.S.) (the "Signing Bonus"), provided, however, in the event
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Executive's prior employer vests (wholly or partially) his existing unvested
stock options or restricted stock or permits such options or restricted stock to
vest in accordance with their terms, such Signing Bonus shall be reduced (or
repaid, as the case may be), but not below zero, on a dollar for dollar basis,
by an amount equal to (A) in the case of options, the product of (1) and (2),
where (1) is the number of option shares accelerated (or permitted to continue
to vest) and (2) is the difference between the fair market value of the stock
when such option shares can be sold and $38 (U.S.) and (B) in the case of
restricted stock, the product of the number of shares of restricted stock
accelerated or permitted to vest and the fair market value of the shares when it
may be sold.
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(ii) Notwithstanding clause (i) of this paragraph (g) above, as
soon as administratively feasible following the Effective Date, the Company
shall advance Executive $550,000 (U.S.) of the Signing Bonus and withhold the
remaining $1,250,000 (U.S.) (the "Holdback Amount"). If Executive's actual
withholding or repayment obligation is less than the Holdback Amount as
determined in accordance with clause (i) of this paragraph (g), Executive shall
promptly be paid the difference between such Holdback Amount and his actual
liability, plus interest on such difference calculated at the AFR (as defined
below), upon certification from Executive that he is entitled to such amounts.
If such Holdback Amount is less than Executive's actual withholding or repayment
obligation, as determined in accordance with clause (i) of this paragraph (g),
he shall promptly repay the Company the difference between his actual liability
and the Holdback Amount as contemplated in clause (i) above. Executive's
obligation to repay the Company under this paragraph (g), if any, shall be made
upon the earlier to occur of the Closing or March 31, 2000.
(h) Within three years after the Commencement Date and provided
Executive is then employed, at such time or times as elected by Executive, the
Company shall make available to Executive, a loan or loans in an aggregate
amount not to exceed $5,000,000 (U.S.), a minimum of $2,000,000 (U.S.) of such
loan to be used to purchase shares of Company Common Stock ("Purchased Shares")
in the Private Placement at the Closing, with a price per share paid by the
Investors in the Private Placement at the Closing, such loan to be governed by
the terms and conditions as outlined in additional documentation and not
inconsistent with the terms hereof; provided that, in the case of multiple
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loans, the loan amount shall be at least equal to $100,000 (U.S.) (the "Loan").
With respect to the proceeds of the Loan not used to buy Purchased Shares,
Executive shall use such proceeds solely to pay any tax liability that he may
have associated with the vesting of restricted stock and exercise of stock
options granted by his prior employer, the repayment of existing loans from his
prior employer, to purchase additional shares in the Company under such terms as
are agreed to by Executive and the Company, or such other purpose(s) as the
Company may agree to in its sole discretion.
Each Loan shall be five years with no amortization. The interest
rate on each Loan shall be the applicable federal rate (as defined in Section
1274(d) of the Internal Revenue Code of 1986, as amended (the "Code")) (the
"AFR") in effect on the date of each Loan, accrued and payable annually. The
Loan shall be 100% fully recourse against Executive and shall be fully secured
by the Purchased Shares, if any. Following an Initial Public Offering and except
as provided below, upon Executive's termination of employment for any reason,
the Loan shall become due and payable within six (6) months (one (1) year in the
event of death or Disability) following such termination. If terminated prior to
an Initial Public Offering and except as provided below, the Loan shall be
repaid as provided above except that any portion of the Loan that relates to the
Purchased Shares shall be repaid upon the earlier of (i) disposition of the
Purchased Shares or (ii) two (2) years from the date of termination.
Notwithstanding the foregoing, in the event Executive's employment is terminated
by the Company with Cause or Executive terminates his employment without Good
Reason, the Loan must be repaid within sixty (60) days following any such
termination. If Executive disposes of any of the Purchased Shares (if
permitted), upon repayment of the Loan relating to such shares, the Company
shall release such shares from its security interest.
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(i) If at the Closing, Executive shall be eligible under the
eligibility criteria applicable to all investors in Xxxxx Global Investment, LP
("MGI"), to invest in MGI, the Company shall, on that date or as soon as
administratively feasible following such date, loan Executive $750,000 (U.S.) to
purchase an interest in MGI (the "Initial Purchase Loan"). The Initial Purchase
Loan will have a term of five years, and will be fully recourse and fully
secured against the MGI interest. Interest on the Initial Purchase Loan will be
calculated at the AFR, accrued and payable annually. The Initial Purchase Loan
shall be repaid within sixty (60) days following the earlier of Executive's
termination of employment for any reason or five (5) years from the Closing
date. Notwithstanding Section 6.1 hereof, in the event that Executive shall
fails to timely repay the Initial Purchase Loan, the Company shall have the
right to off-set the unpaid balance (including interest) of the Initial Purchase
Loan from any other amounts it owes Executive and such off-set shall not be
deemed to be a breach of the Company's obligations to Executive under this
Agreement.
3.2 Expenses. The Company will reimburse Executive for reasonable
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business-related expenses incurred by him in connection with the performance of
his duties hereunder during the Term in accordance with the Company's policies
relating to business-related expenses as in effect from time to time during the
Term.
3.3 Put; Registration Rights and Transfer Restrictions. (a) If prior to an
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Initial Public Offering, Executive may require the Company to purchase any or
all shares of Common Stock owned by Executive for at least six (6) months (by
purchase or pursuant to the exercise of warrants) for book value (as calculated
under generally accepted accounting principles by the Company's auditors) within
two (2) years of termination of employment for any reason (other than a
termination by the Company for Cause or by Executive without Good Reason) (the
"Put"). Such Put shall automatically expire upon an Initial Public Offering
whether or not Executive is then employed. Payment of the purchase price in
connection with any such Put shall be in the form of cash and shall be made
within forty-five (45) days following Executive's exercise of such Put.
(b) Executive shall have the same registration and transfer
rights and restrictions as the Investors, including, but not limited to,
drag-along and tag-along rights; provided, that, registration rights will be
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subject to any underwriter's cut-back.
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ARTICLE IV.
EXCLUSIVITY, ETC.
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4.1 Restrictive Covenants.
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(a) Return of Property and Nondisclosure. Upon termination or
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expiration of his employment, Executive will promptly deliver to the Company all
data, lists, information, memoranda, documents and all other property belonging
to the Company or containing "Confidential Information" (as defined below),
including, among other things, that which relates to services performed by
Executive for the Company or any affiliate, or was created or obtained by
Executive while performing services for the Company or any affiliate or by
virtue of Executive's relationship with the Company or any affiliate, except
that Executive shall have no obligation to deliver to the Company his rolodex,
calendars and any documents containing Executive's personal contacts or
information. Except (i) as required in order to perform his obligations under
this Agreement, (ii) as may otherwise be required by law or any legal process,
or (iii) as is necessary in connection with any adversarial proceeding against
the Company (in which case Executive shall use his reasonable best efforts in
cooperating with the Company in obtaining a protective order against disclosure
by a court of competent jurisdiction), Executive shall not, without the express
prior written consent of the Company, disclose or divulge to any other person or
entity, or use or modify for use, directly or indirectly, in any way, for any
person or entity any of the Company's or any affiliate's Confidential
Information at any time (during or after Executive's employment). For purposes
of this Agreement, "Confidential Information" of the Company shall mean any
valuable, competitively sensitive data and information related to the Company's
or any affiliate's business including, without limitation Trade Secrets (as
defined below) that are not generally known by or readily available to the
Company's or any affiliate's competitors or any affiliate's other than as a
result of an improper disclosure directly or indirectly by Executive. "Trade
Secrets" shall mean information or data of the Company or any affiliate's
including, but not limited to, technical or non-technical data, financial
information, programs, devices, methods, techniques, drawings, processes,
financial plans, product plans, or lists of actual or potential customers or
suppliers, that: (A) derive economic value, actual or potential, from not being
generally known to, and not being readily ascertainable by proper means by,
other persons who can obtain economic value from their disclosure or use; and
(B) are the subject of efforts that are reasonable under the circumstances to
maintain their secrecy.
(b) Post-Employment Property. Executive agrees that any and all
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intellectual property that Executive invents, discovers, originates, makes,
conceives, creates or authors either solely or jointly with others and that is
the result of or is substantially derived from Confidential Information shall be
the sole and exclusive property of the Company unless in the public domain.
Executive shall promptly and fully disclose all such property to the Company,
shall provide the Company with any information that it may reasonably request
about such property and shall execute such agreements, assignments or other
instruments as may be reasonably requested by the Company to reflect such
ownership by the Company.
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(c) Protection of the Business; Nonsolicitation. During the Term
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and until the second anniversary of Executive's Date of Termination (as defined
below) for any reason, Executive will not anywhere within the geographical areas
in which the Company or any subsidiary (the "Designated Entities") are
conducting their business operations or providing services as of the Date of
Termination, pursue any Company or subsidiary project known to Executive and
which the Designated Entities are actively pursuing, developing or attempting to
develop as of the Date of Termination (or within six (6) months prior to the
Date of Termination) while the Company is (or is contemplating actively)
pursuing such project directly or indirectly, alone, in association with or as a
shareholder, principal, agent, partner, officer, director, employee or
consultant of any other organization. During the Term and until the second
anniversary of Executive's Date of Termination, Executive shall not solicit any
officer, employee (other than secretarial staff) or consultant of any of the
Designated Entities to leave the employ of any of the Designated Entities.
(d) Non-Disparage. The parties acknowledge and agree that they
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will not defame or publicly criticize the services, business, integrity,
veracity or personal or professional reputation of the other party, and in the
case of the Company, its officers, directors, partners, employees, affiliates,
or agents thereof in either a professional or personal manner, except that the
foregoing shall not limit normal competitive activities.
(e) Blue Pencil. If, at any time, the provisions of this Section
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4.1 shall be determined to be invalid or unenforceable under any applicable law,
by reason of being vague or unreasonable as to area, duration or scope of
activity, this Section 4.1 shall be considered divisible and shall become and be
immediately amended to only such area, duration and scope of activity as shall
be determined to be reasonable and enforceable by the court or other body having
jurisdiction over the matter; and Executive and the Company agree that this
Section 4.1 as so amended shall be valid and binding as though any invalid or
unenforceable provision had not been included herein.
4.2 Remedies. Executive acknowledges that the Company's remedy at law for
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a breach by him of the provisions of this Article IV will be inadequate.
Accordingly, in the event of a breach or threatened breach by Executive of any
provision of this Article IV, the Company shall be entitled to seek injunctive
relief in Bermuda or elsewhere in addition to any other remedy it may have. If
any of the provisions of, or covenants contained in, this Article IV are
hereafter construed to be invalid or unenforceable in any jurisdiction, the same
shall not affect the remainder of the provisions or the enforceability thereof
in any other jurisdiction, which shall be given full effect, without regard to
the invalidity or unenforceability in such other jurisdiction. If any of the
provisions of, or covenants contained in, this Article IV are held to be
unenforceable in any jurisdiction because of the duration or geographical scope
thereof, the parties agree that the court making such determination shall have
the power to reduce the duration or geographical scope of such provision or
covenant and, in its reduced form, such provision or covenant shall be
enforceable; provided, however, that the determination of such court shall not
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affect the enforceability of this Article IV in any other jurisdiction.
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ARTICLE V.
TERMINATION
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5.1 Termination by the Company with Cause. The Company shall have the
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right to terminate Executive's employment at any time with "Cause" by providing
a Notice of Termination to Executive not more than thirty (30) days after the
Board's actual knowledge of the Cause event, and such termination shall not be
deemed to be a breach of this Agreement. For purposes of this Agreement, "Cause"
shall mean (i) habitual drug or alcohol use which impairs the ability of
Executive to perform his duties hereunder; (ii) Executive's conviction during
the Term by a court of competent jurisdiction, or a pleading of "no contest" or
guilty to a felony or the equivalent if outside the United States; (iii)
Executive's engaging in fraud, embezzlement or any other illegal conduct with
respect to the Company which acts are materially harmful to, either financially,
or to the business reputation of, the Company; (iv) Executive's willful
violation of Article IV hereof; (v) Executive's willful failure or refusal to
perform his duties hereunder (other than such failure caused by Executive's
Disability or while on vacation), after a written demand for performance is
delivered to Executive by the Board that specifically identifies the manner in
which the Board believes that Executive has failed or refused to perform his
duties, or (vi) Executive otherwise breaches any material provision this
Agreement which is not cured, if curable, within 30 days after written notice
thereof. Executive will be given the opportunity within five (5) calendar days
of receipt of such notice to meet with the Board to defend such act or acts or
failure to act. No act or failure to act by Executive shall be deemed "willful"
unless done, or omitted to be done, (i) by Executive not in good faith and (ii)
without a reasonable belief that his action or omission was in the best interest
of the Company. However, acts or failures to act will be deemed to be "willful"
if Executive is specifically directed to take (or not take) such action by the
Board, unless Executive in good faith believes such directives are illegal and
Executive promptly notifies the Board thereof.
5.2. Death. In the event Executive dies during the Term, his employment
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shall automatically terminate effective on the date of his death and such
termination shall not be deemed to be a breach of this Agreement.
5.3. Disability. In the event that Executive shall suffer a mental or
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physical disability which shall have prevented him from performing his material
duties hereunder for a period of at least one-hundred eighty (180) consecutive
days or one-hundred eighty (180) non-consecutive days within any 365 day period,
the Company shall have the right to terminate Executive's employment for
"Disability," such termination to be effective upon the giving of notice thereof
to Executive in accordance with Section 6.3 hereof and such termination shall
not be deemed to be a breach of this Agreement. In such event, Executive's
employment hereunder shall terminate effective on the 30th day after receipt of
such notice by the Executive (the "Disability Effective Date"); provided, that,
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the Executive shall not have returned to full-time performance of his duties
hereunder within thirty (30) days following receipt of such notice.
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5.4. Good Reason. Executive may terminate his employment with the Company
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for "Good Reason" within thirty (30) days after Executive has knowledge of the
occurrence, without Executive's written consent, of one of the following events
that has not been cured, if curable, within thirty (30) days after a Notice of
Termination has been given by Executive to the Company and such termination
shall not be deemed to be a breach of this Agreement. For purposes of this
Agreement, "Good Reason" shall mean: (i) any material and adverse change to
Executive's duties or authority which are inconsistent with his title and
position set forth herein, (ii) a diminution of Executive's title or position;
(iii) the relocation of Executive's office outside of Bermuda; (iv) a reduction
of Executive's Base Salary; (v) a material reduction of Executive's benefits
provided under Section 3.1 other than a reduction permitted under terms and
conditions of the applicable Company policy or benefit plan; or (vi) a failure
by the Company to comply with any other material provisions of this Agreement.
5.5. Without Good Reason. Executive may terminate his employment with the
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Company without Good Reason by giving written notice to the Company as provided
in Section 6.3. Such notice must be provided to the Company at least thirty (30)
days prior to such termination. Such termination shall not be deemed to be a
breach of this Agreement.
5.6. Without Cause. The Company shall have the right to terminate
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Executive's employment hereunder without Cause by providing Executive with a
notice of termination, and such termination shall not in and of itself be, nor
shall it be deemed to be, a breach of this Agreement.
5.7. Expiration of the Term. Executive's employment shall terminate upon
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the expiration of the Term, and such termination shall not in and of itself be,
nor shall it be deemed to be, a breach of this Agreement. Notwithstanding the
foregoing, in the event such termination is a result of the Company providing a
notice of non-renewal of the Term under Section 2.1 of this Agreement, Executive
shall be entitled to the benefits set forth in Section 5.10 (c).
5.8. Notice of Termination. Any termination of Executive's employment by
---------------------
the Company for Cause, or by Executive for Good Reason, shall be communicated by
Notice of Termination to the other party hereto given in accordance with Section
6.3 of this Agreement. For purposes of this Agreement, a "Notice of Termination"
means a written notice which (i) indicates the specific termination provision in
this Agreement relied upon, (ii) to the extent applicable, sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of Executive's employment under the provision so indicated and (iii)
if the Date of Termination (as defined below) is other than the date of receipt
of such notice, specifies the termination date. The failure by Executive or the
Company to set forth in the Notice of Termination any fact or circumstance which
contributes to a showing of Good Reason or Cause shall not waive any right of
Executive or the Company, respectively, hereunder or preclude Executive or the
Company, respectively, from asserting such fact or circumstance in enforcing
Executive's or the Company's rights hereunder.
11
5.9. Date of Termination. "Date of Termination means (i) if Executive's
--------------------
employment is terminated by the Company for Cause or by Executive for Good
Reason, the date of receipt of the Notice of Termination or any later date
specified therein (but not more than thirty (30) days), as the case may be
(although such Date of Termination shall retroactively cease to apply if the
circumstances providing the basis of termination for Cause or Good Reason are
cured in accordance with Section 5.1 or 5.4 of this Agreement, respectively),
(ii) if Executive's employment is terminated by the Company other than for Cause
or Disability, the Date of Termination shall be the date set forth in the Notice
of Termination (iii) if Executive's employment is terminated by Executive
without Good Reason, the Date of Termination shall be the date set forth in the
Notice of Termination, but no sooner than thirty (30) days after such Notice of
Termination is received by the Company and (iv) if Executive's employment is
terminated by reason of death or Disability, the Date of Termination shall be
the date of Executive's death or the Disability Effective Date, as the case may
be.
5.10. Compensation upon Termination. In the event of the termination of
-------------------------------
Executive's employment during or of the end of the Term, the Company shall
provide Executive with the payments and benefits set forth below. Executive
acknowledges and agrees that the payments set forth in this Section 5.10 and
Section 5.11 constitute liquidated damages for any claim of breach of contract
under this Agreement as it relates to termination of his employment during the
Term. Notwithstanding the foregoing, if Executive is entitled to the payments
set forth in Section 5.10(b), Section 5.10(c), Section 5.10(d) or Section 5.11
of this Agreement, Executive shall execute and agree to be bound by an agreement
relating to the waiver and general release of any and all claims (other than
claims for the compensation and benefits payable under Section 5.10(b), Section
5.10(c), Section 5.10(d), or Section 5.11, as the case may be) arising out of or
relating to Executive's employment and termination of employment (the
"Release"). Such Release shall be made substantially in the form attached hereto
as Exhibit A, subject to such changes as may be required to preserve the intent
thereof for changes in applicable law.
(a) In the event of termination of Executive's employment by the
Company for Cause or by Executive without Good Reason, or by reason of
expiration of the Term in accordance with Executive's notice of non-renewal of
the term to the Company under Section 2.1 of this Agreement, the Company shall
pay Executive his accrued, but unpaid Base Salary and unpaid business expenses
through Date of Termination and to the extent not already paid, the Deferred
Compensation. To the extent required by law or as otherwise provided by Company
policy, Executive shall also be paid his accrued, but unpaid vacation pay
through the Date of Termination.
(b) In the event of Executive's death or the termination of his
employment due to Disability, the Company shall pay to Executive (or his
beneficiary(ies) or estate, as the case may be) an amount equal to the sum of
(i) his accrued, but unpaid Base Salary through the date of termination of
employment, (ii) earned, but unpaid Bonus for the year prior to the year of
termination, (iii) a pro-rata portion of his Bonus for the year of death or
termination for Disability, as determined in the good faith opinion on the Board
based on the relative achievement of performance targets through the Date of
Termination, (iv) accrued vacation pay through the Date of Termination and (v),
to the extent not already paid, the Deferred Compensation (the sum of the
amounts in clauses (i) through (v) hereof referred to as "Accrued Amounts"), as
soon as practicable following the Date of Termination, except as provided in
Section 3.1(e) hereof. Executive shall be entitled to any other rights,
compensation and/or benefits as may be due to Executive in accordance with the
terms and provisions of any agreements, plans or programs of the Company.
12
(c) In the event Executive's employment is terminated pursuant to
Section 5.4 or Section 5.6 or if the Company delivers notice of non-renewal of
the Term under Section 2.1 effective at the end of a Term, the Company shall pay
Executive, the Accrued Amounts and a cash payment equal to $1,500,000 (U.S.)
(the "Severance Amount"); provided, however, that if the Date of Termination is
-------- -------
on or after the tenth anniversary of the Commencement Date, the Severance Amount
shall be equal to $550,000 (U.S.); provided, further, however, that if the Date
-------- ------- -------
of Termination is between the fifth and tenth anniversary of the Commencement
Date, the Severance Amount shall be equal to a pro-rata amount, calculated on a
daily basis, between $550,000 (U.S.) and $1,500,000 (U.S.), with $1,500,000
(U.S.) corresponding to a termination on the fifth anniversary and $550,000
(U.S.) corresponding to a termination on the tenth anniversary. Notwithstanding
the foregoing, if such termination should occur following Change in Control, in
lieu of the Severance Amount, Executive shall receive a lump sum payment equal
to two times his then current Base Salary and last paid Bonus, if any.
(d) Additional Payments.
---------- --------
(i) Anything in this Agreement to the contrary notwithstanding,
in the event that any payment, award, benefit or distribution (or any
acceleration of any payment, award, benefit or distribution) by the Company or
any entity which effectuates a change in ownership or effective control of the
Company or a change in the ownership of a substantial portion of the assets of
the Company, in either case, within the meaning of Section 280G(b)(2)(A)(i) of
the Code and the regulations promulgated thereunder (a "Change in Ownership"),
to or for the benefit of Executive (the "Payments") would be subject to the
excise tax imposed by Section 4999 of the Code, or any interest or penalties are
incurred by Executive with respect to such excise tax (such excise tax, together
with any such interest and penalties, are hereinafter collectively referred to
as the "Excise Tax"), then, the Company shall pay to Executive an additional
payment (a "Gross-Up Payment") in an amount such that after payment by Executive
of all taxes (including any Excise Tax) imposed upon the Gross-Up Payment,
Executive retains an amount of the Gross-Up Payment equal to the sum of (x) the
Excise Tax imposed upon the Payments and (y) the product of any deductions
13
disallowed because of the inclusion of the Gross-Up Payment in Executive's
adjusted gross income and the highest applicable marginal rate of federal income
taxation for the calendar year in which the Gross-Up Payment is to be made. For
purposes of determining the amount of the Gross-Up Payment, Executive shall be
deemed to (A) pay federal income taxes at the highest marginal rates of federal
income taxes at the highest marginal rate of taxation for the calendar year in
which the Gross-Up Payment is to be made, (B) pay applicable state and local
income taxes at the highest marginal rate of taxation for the calendar year in
which the Gross-Up Payment is to be made, net of the maximum reduction in
federal income taxes which could be obtained from deduction of such state and
local taxes and (C) have otherwise allowable deductions for federal income tax
purposes at least equal to those which could be disallowed because of the
inclusion of the Gross-Up Payment in Executive's adjusted gross income.
Notwithstanding the foregoing provisions of this Section 5.10(d)(i), if it shall
be determined that Executive is entitled to a Gross-Up Payment, but that the
Payments would not be subject to the Excise Tax if the Payments were reduced by
an amount that is less than $50,000 (U.S.), then the amounts payable to
Executive under this Agreement shall be reduced (but not below zero) to the
maximum amount that could be paid to Executive without giving rise to the Excise
Tax (the "Safe Harbor Cap"), and no Gross-Up Payment shall be made to Executive.
The reduction of the amounts payable hereunder, if applicable, shall be made by
reducing first the payments under Section 5.10(c), unless an alternative method
of reduction is elected by Executive. For purposes of reducing the Payments to
the Safe Harbor Cap, only amounts payable under this Agreement (and no other
Payments) shall be reduced. If the reduction of the amounts payable hereunder
would not result in a reduction of the Payments to the Safe Harbor Cap, no
amounts payable under this Agreement shall be reduced pursuant to this
provision.
(ii) Subject to the provisions of Section 5.10(d)(i), all
determinations required to be made under this Section 5.10(d), including whether
and when a Gross-Up Payment is required, the amount of such Gross-Up Payment and
the assumptions to be utilized in arriving at such determinations, shall be made
by the public accounting firm that is retained by the Company as of the date
immediately prior to the Change in Ownership (the "Accounting Firm") which shall
provide detailed supporting calculations both to the Company and Executive
within fifteen (15) business days of the receipt of notice from the Company or
Executive that there has been a Payment, or such earlier time as is requested by
the Company (collectively, the "Determination"). In the event that the
Accounting Firm is serving as accountant or auditor for the individual, entity
or group effecting the Change in Ownership, Executive may appoint another U.S.
nationally recognized public accounting firm to make the determinations required
hereunder (which accounting firm shall then be referred to as the Accounting
Firm hereunder). All fees and expenses of the Accounting Firm shall be borne
solely by the Company and the Company shall enter into any agreement requested
by the Accounting Firm in connection with the performance of the services
hereunder. The Gross-Up Payment under this Section 5.10(d) with respect to any
Payments made to Executive shall be made no later than thirty (30) days
following such Payment. If the Accounting Firm determines that no Excise Tax is
payable by Executive, it shall furnish Executive with a written opinion to such
effect, and to the effect that failure to report the Excise Tax, if any, on
Executive's applicable federal income tax return should not result in the
imposition of a negligence or similar penalty. In the event the Accounting Firm
determines that the Payments shall be reduced to the Safe Harbor Cap, it shall
furnish Executive with a written opinion to such effect. The Determination by
the Accounting Firm shall be binding upon the Company and Executive.
14
(iii)As a result of the uncertainty in the application of Section
4999 of the Code at the time of the Determination, it is possible that Gross-Up
Payments which will not have been made by the Company should have been made
("Underpayment") or Gross-Up Payments are made by the Company which should not
have been made ("Overpayment"), consistent with the calculations required to be
made hereunder. In the event that Executive thereafter is required to make
payment of any Excise Tax or additional Excise Tax, the Accounting Firm shall
determine the amount of the Underpayment that has occurred and any such
Underpayment (together with interest at the rate provided in Section
1274(b)(2)(B) of the Code) shall be promptly paid by the Company to or for the
benefit of Executive. In the event the amount of the Gross-Up Payment exceeds
the amount necessary to reimburse Executive for his Excise Tax, the Accounting
Firm shall determine the amount of the Overpayment that has been made and any
such Overpayment (together with interest at the rate provided in Section
1274(b)(2) of the Code) shall be promptly paid by Executive (to the extent he
has received a refund if the applicable Excise Tax has been paid to the Internal
Revenue Service) to or for the benefit of the Company. Executive shall
cooperate, to the extent his expenses are reimbursed by the Company, with any
reasonable requests by the Company in connection with any contest or disputes
with the Internal Revenue Service in connection with the Excise Tax.
(e) Except as provided in this Agreement, Executive's rights upon
termination of employment with respect to incentive awards shall be governed by
the terms and conditions of the plan and any agreements or as established by the
Company with respect to such awards.
(f) Except as provided in this Section 5.10 or Section 5.11,
Executive shall not be entitled to compensation as a result of any termination
of his employment with the Company.
5.11 Non-Capitalization Severance. Notwithstanding any other provision of
-----------------------------
this Agreement to the contrary, including, but not limited to Section 5.10(c),
(a) in the event the Company fails to have an equity capitalization of at least
$450 million (U.S.) by December 31, 1999 or the Board determines in its good
faith to extend such date, by such extended date (not to be past March 31, 2000)
(the "Capitalization Date") and upon the election of the Executive within thirty
(30) days following such Capitalization Date or (b) upon the Board's election if
the Private Placement does not occur, the Company shall pay Executive $1,100,000
(U.S.) in a lump sum (the "Non-Capitalization Severance"); provided, that,
-------- ----
Executive agrees to provide the Company, Xxxxx Holdings II, L.L.C. and Capital Z
Investments, L.P. with consulting services of a reasonable nature, which they
may reasonably require and which will not interfere with Executive's ability to
find subsequent employment as an employee or consultant. Notwithstanding the
preceding, if within twenty-four (24) months following Executive's or the
Company's election under this Section 5.11, Executive is re-employed (whether as
an employee or independent contractor) in a position providing salary and
benefits that are comparable to the salary and benefits to which the Executive
is entitled under Section 3 of this Agreement, the consulting services shall
cease and Executive shall repay an amount of the Non-Capitalization Severance,
between $0 (U.S.) and $1,100,000 (U.S.), pro-rated for each day in the
twenty-four (24) month period, with $1,100,000 corresponding to immediate
re-employment upon termination and $0 (U.S.) corresponding to re-employment on
or after twenty-four (24) months following termination. Upon such election, the
Agreement shall be terminated, other than as provided in Section 6.9 or Section
6.12, and the Company shall have no further obligations thereunder except as
otherwise provided in this Section 5.11.
15
ARTICLE VI.
MISCELLANEOUS
-------------
6.1 Mitigation; Offset. Except as specifically provided hereunder,
--------------------
Executive shall not be required to mitigate damages resulting from his
termination of employment and the amounts payable to Executive pursuant to this
Agreement shall not be offset or reduced by any other compensation earned by
Executive, except to the extent provided by the Signing Bonus.
6.2 Benefit of Agreement; Assignment; Beneficiary.
---------------------------------------------
(a) This Agreement shall inure to the benefit of and be binding
upon the Company and its successors, including, without limitation, any
assignment to a corporation or person which may acquire all or substantially all
of the Company's assets or business, or with or into which the Company may be
consolidated or merged. This Agreement shall also inure to the benefit of, and
be enforceable by, Executive and his personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees. If Executive should die while any amount would still be payable to
Executive hereunder if he had continued to live, all such amounts shall be paid
in accordance with the terms of this Agreement to Executive's beneficiary,
devisee, legatee or other designee, or if there is no such designee, to
Executive's estate.
(b) The Company shall require any successor (whether direct or
indirect, by operation of law, 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.
6.3 Notices. Any notice required or permitted hereunder shall be in
-------
writing and shall be sufficiently given if personally delivered or if sent by
telegram or telex or by registered or certified mail, postage prepaid, with
return receipt requested, addressed: (a) in the case of the Company to its
principal executive offices, Attention: Corporate Secretary, or to such other
-------------------
address and/or to the attention of such other person as the Company shall
designate by written notice to Executive; and (b) in the case of Executive, to
the Company's address or to such other address as Executive shall designate by
written notice to the Company. Any notice given hereunder shall be deemed to
have been given at the time of receipt thereof by the person to whom such notice
is given, if in person, or two (2) days following depositing such notice in the
mail or its equivalent.
16
6.4 Entire Agreement; Amendment. This Agreement contains the entire
-----------------------------
agreement of the parties hereto with respect to the terms and conditions of
Executive's employment during the term and supersedes any and all prior
agreements and understandings, whether written or oral, between the parties
hereto with respect to compensation due for services rendered hereunder. This
Agreement may not be changed or modified except by an instrument in writing
signed by both of the parties hereto.
6.5 Waiver. The waiver by either party of a breach of any provision of
------
this Agreement shall not operate or be construed as a continuing waiver or as a
consent to or waiver of any subsequent breach hereof.
6.6 Headings. The Article and Section headings herein are for convenience
--------
of reference only, do not constitute a part of this Agreement and shall not be
deemed to limit or affect any of the provisions hereof.
6.7 Governing Law. This Agreement shall be governed by, and construed and
-------------
interpreted in accordance with, the laws of the State of New York without
reference to the principles of conflict of laws.
6.8. Agreement to Take Actions. Each party hereto shall execute and deliver
-------------------------
such documents, certificates, agreements and other instruments, and shall take
such other actions, as may be reasonably necessary or desirable in order to
perform his or its obligations under this Agreement or to effectuate the
purposes hereof.
6.9. Survivorship. The respective rights and obligations of the parties
------------
hereunder shall survive any termination of this Agreement to the extent
necessary to the intended preservation of such rights and obligations,
including, but not limited to, Article IV.
6.10.Validity. The invalidity or unenforceability of any provision or
--------
provisions of this Agreement shall not affect the validity or enforceability of
any other provision or provisions of this Agreement which shall remain in full
force and effect.
6.11.Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
6.12.Indemnification. The Company will indemnify and hold Executive
---------------
harmless both during and after the Term to the fullest extent permitted by law
with regard to actions or inactions in relation to the Executive's duties as a
director and officer of the Company and will, during and after the Term,
maintain adequate directors and officers insurance for Executive to cover any
such liability (but in no event less than that maintained for any other director
or officer of the Company).
17
0.00.Xxxxx Fees; Arbitration. The Company shall reimburse Executive up to
------------------------
$15,000 (U.S.) for legal fees and expenses reasonably incurred as a result of
the negotiation of this Agreement and related documents. Except as otherwise
provided in Article IV of this Agreement, if any contest or dispute arises
between the parties with respect to this Agreement, such contest or dispute
shall be submitted to binding arbitration for resolution in Bermuda in
accordance with the rules and procedures of the American Arbitration Association
then in effect; provided, that, any dispute relating to the guarantee provided
herein under Section 6.14 shall be settled by binding arbitration for resolution
in New York City. The decision of the arbitrator shall be final and binding on
both parties, and any court of competent jurisdiction may enter judgment upon
the award. Each party shall pay its own legal fees and expenses incurred in
connection therewith. Notwithstanding the foregoing, following a Change in
Control, the Company shall reimburse Executive for his reasonable legal fees and
expenses incurred in any such dispute if the arbitrator so decides and Executive
is successful on any material claims raised in such dispute.
6.14.Guarantee. Xxxxx Holdings II, L.L.C. and Capital Z Investors, L.P.
---------
(the "Guarantors") hereby jointly and severely irrevocably guarantee to
Executive the prompt performance and payment of the obligations of the Company
to Executive under Sections 3.1(g) and 5.11 of this Agreement. This is a
guarantee of performance and payment and not of collection only, and recourse
may be had in the first instance against the Guarantors without first proceeding
against the Company. The obligations of the Guarantors under this guarantee
shall not be affected or impaired by reason of the happening from time to time
of any of the following with respect to the Agreement, although without notice
to or the consent of the Guarantor: (i) the waiver by the Executive or the
Company of the performance or observance of any provision of the Agreement
(other than this Section 6.14); (ii) the modification or amendment (whether
material or otherwise) of any of the obligations of the Company or the Executive
under the Agreement (other than this Section 6.14); (iii) any failure, omission
or delay on the part of the Executive to enforce, assert or exercise any right
conferred on the Executive in the Agreement or otherwise; or (iv) any
bankruptcy, insolvency or reorganization of, any arrangement or assignment for
benefit of creditors by, or any trusteeship with respect to the Company or any
of its assets. The Guarantors shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business, assets or stock of Guarantors to expressly
assume the guarantee and to fulfill the obligations hereunder as if no
succession had taken place.
6.15.Withholding. All payments hereunder shall be subject to any required
-----------
withholding of Federal, state and local taxes pursuant to any applicable law or
regulation.
6.16 Representation. Executive represents and warrants to the Company that
--------------
(i) to the best of his knowledge, neither the execution and delivery of this
Agreement nor the performance of his duties hereunder violates or will violate
the provisions of any other agreement to which he is a party or by which he is
bound other than potential confidentiality issues under Bermuda law and (ii) he
has Bermuda status under the meaning of Bermuda law. During Executive's
18
employment with the Company, he will not disclose, nor will the Company ask him
to disclose any confidential information relating to his prior employer. In
addition, except as provided in the preceding sentence, Executive shall fully
disclose and make available to the Company, the terms of any agreements or
arrangements, between Executive and his prior employer entered into prior to or
during the Term, and any correspondence and any other information that may be
requested by the Company that relates to Executive's employment prior to the
Effective Date with his prior employer or termination thereof. In addition,
Executive shall fully disclose the terms of any severance arrangements entered
into with his prior employer (whether or not in writing), subject to any
confidentiality provisions contained therein; provided, that, Executive shall
-------- ----
negotiate in good faith with his prior employer to make the relevant terms of
such severance disclosable to the Company. In the event that such terms are
confidential and non-disclosable, Executive shall certify that he has repaid the
Company the amounts contemplated under Section 3.1(g) hereof.
19
IN WITNESS WHEREOF, each of the parties hereto has duly executed this
Agreement effective as of the date first above written.
MAXIMUS CAPITAL HOLDINGS, LTD.
By: /s/ Xxxx Xxxxx
----------------------------------------
Name:
Title:
/s/ Xxxxxx X. Xxxxxx
----------------------------------------
Executive
Only with respect to the guarantee set forth in Section 6.14 hereof:
XXXXX HOLDINGS II, L.L.C.
By: /s/ Xxxx Xxxxx
----------------------------------------
Name:
Title:
CAPITAL Z INVESTMENTS, L.P.
By: Xxxxxxxx Xxxxx
----------------------------------------
Name:
Title:
20
Addendum 1
To Employment Agreement
Dated August 1, 1999
Whereas, Executive along with Xxxxx Holdings, LLC and Capital Z Partners, LLC
desires to have Western General Insurance Ltd. purchase 4,000,000 million common
shares of the Company; and
Whereas, Western General Insurance Ltd. is going to be granted warrants in the
Company;
Now, therefore it is hereby agreed as follows:
Executive agrees to reduce the 2.0% amount of warrant factor to 1.8% in clauses
1.1(f)(i) and 1.1(f)(v) of the Agreement for the first $600 million of capital
raised in private placements under 1.1(f)(i) and/or the Company's IPO under
1.1(f)(v) and such reduction shall not be deemed to be a breach of the Agreement
by the Company. Once $600 million of capital has been raised the warrant factor
shall return to 2.0%.
Accepted and agreed December 15, 1999.
/s/ Xxxxxx X. Xxxxxx /s/ Xxxxx X. Xxxxx
------------------------------ ------------------------------
Xxxxxx X. Xxxxxx Maximus Capital Holdings Ltd.
21
Addendum 2
To Employment Agreement
Dated August 1, 1999
Whereas, Executive desires to invest his Deferred Hiring Bonus under Section
3.1e of the Employment Agreement in Xxxxx Diversified Strategies, Ltd. from
January 1, 2000 to December 31, 2000, and from February 1, 2001 onward in The
Ocean Fund Ltd.;
Now, therefore it is hereby agreed that the Executives' Deferred Hiring Bonus
under Section 3.1e of the Employment Agreement be invested as described above
and that the return from this investment substitute for the fixed return under
Section 3.1e.
/s/ Xxxxxx X. Xxxxxx /s/ Xxxxx X. Xxxxx
------------------------------ ------------------------------
Xxxxxx X. Xxxxxx Max Re Capital, Ltd.
Dated: April 12, 2001
--------------
22
