Exhibit 10 (iii)
DATED December 5, 2001
OVERSEAS PARTNERS LTD.
- and -
XXXX XXXXXXXX
---------------------------------------
EMPLOYMENT AGREEMENT
----------------------------------------
2
T H I S A G R E E M E N T is made the 5th day of December 0000
X X X X X X N :
OVERSEAS PARTNERS LTD. whose registered office is situated at Xxxxxxxxxx Xxxxx,
0 Xxx-Xx-Xxxxx Xxxx, Xxxxxxxx XX 00, Xxxxxxx (xxx "Company"); and
XXXX XXXXXXXX of "The Binnacle", 00 Xxxxx Xxxx #0, Xxxx Xxxxxx (xxx
"Executive").
W H E R E B Y I T I S AGREED as follows:
1. Definitions and Interpretations
In addition to the words and expressions hereinbefore defined the
following words and expressions shall have the meanings hereinafter
ascribed to them;
"Associated Company" means any company which is from time to time a
subsidiary or a holding company (as those
expressions are defined by Section 86 of the
Companies Act 1981) of the Company.
the "Board" means the Board of Directors from time to time of
the Company.
"Commencement Date" means the 14/th/ day of November 2000.
"Employment" means the employment of the Executive with the
Company Pursuant to this Agreement.
3
"Common Share Capital" means all the Common Shares of the Company in
issue from time to time.
"Termination Date" means the date on which the Employment with the
Company ceases either for reason of the
conclusion of the fixed term of the Employment
or for reason of the termination of the
Employment in accordance with the provisions of
this Agreement.
2. Term of Appointment
a. The Company hereby appoints the Executive and the Executive hereby
agrees to act as Executive Vice President and Chief Claims Officer of
the Company for an initial Term of Appointment of a period of three
(3) years unless this Agreement is: (i) sooner terminated in
accordance with paragraph 5 below, or (ii) extended as provided in
paragraph 2(b) below.
b. Commencing on the third anniversary of the Commencement Date and on
each annual anniversary of such date, (each a "Renewal Date"), this
Agreement, and the Term of Appointment herein granted, shall be
automatically extended so as to terminate on the first annual
anniversary of each Renewal Date, unless either the Company or the
Executive shall give the other written notice, not less than 60 days
prior to any Renewal Date, of the election not to so extend this
Agreement, in which case this Agreement shall terminate on such
Renewal Date.
3. Powers and Duties
During the period of Employment under this Agreement the Executive:
(a) shall report to the Chief Executive Officer of the Company or
designee thereof (the "CEO") and shall exercise such powers and
perform such
4
duties (not being duties inappropriate to his status) as Executive
Vice President and Chief Claims Officer as may from time to time be
vested in or assigned to him by the CEO and shall comply with all
reasonable directions from time to time given to him by the CEO and
with all rules and regulations from time to time laid down by the
Company concerning its employees as the CEO or the Board of Directors
of the Company (the "Board") may from time to time determine.
(b) shall devote his full attention and business time to the business and
affairs of the Company, provided, however, that nothing in this
Agreement shall preclude the Executive from engaging in activities
involving professional, educational, charitable, religious and
community organizations, managing his personal investments, and
serving on the board of directors of such companies and organizations
as agreed to from time to time by the Board, to the extent that the
foregoing do not materially inhibit the performance of the Executive's
duties under this Agreement or conflict in any material way with the
business and affairs of the Company.
(c) use his best efforts to perform faithfully and efficiently, and to
discharge the dealings and responsibilities assumed by him under this
Agreement.
4. Remuneration and Benefits
The Executive shall be paid by way of remuneration a salary and bonus
and such other benefits (if any) as the CEO and the Compensation
Committee of the Board (the "Compensation Committee") may from time to
time determine as follows:
a) The Executive shall be paid by way of remuneration for his services
during the Employment hereunder: (i) a base salary at the rate of
$20,000 per month through February 28, 2001 and at the rate of
$20,833.33 per month thereafter and (ii) such bonuses or additional
remuneration (if any) as the CEO, with ratification by the
Compensation Committee, may from time to time determine in accordance
with the "Overseas Partners Ltd. Incentive
5
Plan" (in development at the Commencement Date) based upon (x) for the
2000 bonus year, a target award of 60% of annual base salary, a
minimum award of 30% of annual base salary, and a maximum award of 90%
of annual base salary (using the Executive's annual base salary in
effect at the end of calendar year 2000) and (y) for bonus years after
2001, a target award of 75% of annual base salary, a minimum award of
38% of annual base salary, and a maximum award of 113% of annual base
salary (using the Executive's annual base salary in effect at the end
of the calendar year to which the bonus relates), in each case
determined by the performance of the Company and the Executive as
adjudged by the CEO and ratified by the Compensation Committee.
Notwithstanding the foregoing, for the 2001 bonus year, the Executive
shall receive a guaranteed bonus of $187,500. The CEO and Compensation
Committee shall review the Executive's base salary and potential bonus
award, on an annual basis to determine, in its sole discretion, if and
to what extent an increase in base salary and/or the awarding of a
bonus or additional remuneration is warranted. The annual review will
be completed by March 1 of each year.
Such salary shall be paid by equal monthly installments in arrears on
the last day of every month and shall accrue from day to day.
b) The Executive shall be entitled to receive grants of restricted stock,
stock options and/or stock appreciation rights on an annual basis
under the Company's Incentive Compensation Plan for the time being in
force, subject to the rules applicable to the Plan as established,
amended or varied from time to time by the Board or such other Plan as
is in force from time to time, and as amended from time to time, as
the case may be. The grants referred to in the preceding sentence
shall be based on a target future value of 125% of annual base salary
then in effect.
6
c) In connection with the commencement of the Executive's employment
hereunder, the Executive received a cash signing bonus of $100,000
and, in addition, a $20,000 payment to assist with relocation
expenses.
d) In addition to public holidays the Executive will be entitled to
thirty (30) days vacation in every calendar year. Unless and until his
Employment under this Agreement terminates under any provision herein,
salary will continue to be payable during vacations. Vacation days not
taken in any calendar year may be carried forward at the sole
discretion of the Compensation Committee.
e) Subject to production, if requested, of medical certificates
satisfactory to the Company, salary will not cease to be payable by
reason only of the Executive's incapacity to work due to sickness or
accident (unless and until his Employment under the Agreement shall be
terminated under any provision herein) but the Company may reduce
salary during incapacity by an amount equal to the benefit (excluding
any lump sum benefit) which the Executive would be entitled to claim
during such incapacity under any sickness or accident insurance policy
paid for entirely by the Company (whether or not such benefit is
claimed by the Executive).
f) The Executive shall be entitled to participate in the Overseas
Partners Ltd And Subsidiaries Retirement Plan (401(k)).
g) The Executive is entitled to all other benefits outlined in the
Overseas Partners Ltd./Overseas Partners Re Ltd. Company Handbook,
which are not specifically identified in this Agreement.
h) The Company shall, during the continuance of the Employment of the
Executive (including any period of notice) pay a housing allowance of
$7,000 per month to defray the Executive's housing cost here in
Bermuda. The first of such payment shall be made on the 25/th/ day of
November 2000 representing the housing allowance for November in
arrears. All
7
subsequent payments shall be on the 25/th/ day of each month, in
arrears for the month in question.
5. Termination of Employment
a) The Employment may be terminated prior to the scheduled expiration of
the Term of Appointment: (i) by the Company with or without "cause"
(as defined below), (ii) by the Executive with or without "good
reason" (as defined below) or (iii) due to the death or total and
permanent disability of the Executive in accordance with the
applicable long-term policies of the Company in which the Executive
participates.
b) In the event that the Executive wishes to resign from the Company
without "good reason" prior to the scheduled expiration of the Term of
Appointment, the Executive shall provide the Company with three (3)
months' advance written notice and, in such case, the Company may
terminate the Executives employment prior to the end of such three (3)
month period provided that the Company makes the payments to the
Executive described in paragraph (e) below. A termination of the
Employment by the Company as provided in the preceding sentence shall
not be deemed a termination without "cause" or give the Executive
grounds to terminate his employment for "good reason" for purposes of
paragraph (c) below.
c) In the event that the Employment is terminated pursuant to paragraph
(a) above (i) by the Company without "cause" or (ii) by the Executive
with "good reason", the Executive shall be entitled to receive, in
addition to accrued salary and benefits (including a pro-rata
calculation of earned vacation days) payable to the Executive through
the Termination Date, (i) a lump sum payment, payable within 14
business days from the Termination Date, equal to: (A) the Executive's
monthly base salary (as determined in paragraph4(a)) x 24, plus, (B)
the Executive's bonus
8
entitlement (as determined in paragraph 4(a)), based upon target
levels set by the Company for the year in which the Executive's
termination occurs and pro-rated for the period from January 1 of the
year in which the termination occurs to the Termination Date, (ii)
lump sum payment of the Executive's monthly housing allowance (as that
amount is determined in paragraph 4(g) above) equivalent to 2 months;
and (iii) payment of actual expenses (up to a maximum of a sum of
$30,000) towards the cost incurred during the course of relocating
from Bermuda, provided such relocation occurs within 6 months
following termination of Employment.
The Company's obligation to make the payments in this paragraph 5(c)
shall be conditioned on the Executive's execution of a General Release
Agreement in accordance with the Company's customary practice.
d) In the event of the termination of the Employment for one of the
reasons described in paragraph (c) above, all outstanding grants of
restricted stock, stock options and stock appreciation rights
previously granted to the Executive by the Company will automatically
become fully vested as of the date of such termination,
notwithstanding anything to the contrary contained in the terms or
provisions of the Company's Incentive Compensation Plan.
e) In the event that the Employment is terminated pursuant to paragraph
(a) above: (i) by the Company for "cause", (ii) by the Executive
without "good reason" or (iii) due to the death or disability of the
Executive; the Executive shall be entitled to receive only his accrued
salary and benefits (including a pro-rata calculation of earned
vacation days) payable through the Termination Date or otherwise
payable under plans maintained by the Company in accordance with their
terms and nothing else. In addition, in the event that the Executive
terminates his Employment with the Company without "good reason" in
accordance with paragraph 5(b) of this Agreement, the Company shall be
required (even if the Company
9
subsequently elects to terminate the Employment of the Executive prior
to the effective date of his termination in accordance with paragraph
5(b) of this Agreement) to continue to provide the Executive with his
salary and benefits until the earlier of the effective date of his
termination and the end of the Term of Appointment.
f) In the event the Company does not extend this Agreement in accordance
with paragraph 2(b), and the Executive's employment has not terminated
for any other reason then, notwithstanding any other provision of this
paragraph 5, the Executive shall be entitled to receive, in addition
to accrued salary and benefits (including a pro-rata calculation of
earned vacation days) payable to the Executive through the Termination
Date, a lump sum payment, payable within 14 business days from the
Termination Date, equal to: (i) the Executive's monthly base salary
(as determined in paragraph 4(a)) x 12, plus, (ii) the Executive's
bonus entitlement (as determined in paragraph 4(a)), based upon target
levels set by the Company for the year in which the Executive's
termination occurs. In addition, the Executive shall be entitled to
receive a payment of the bonus earned by the Executive for the year in
which the Executive's termination occurs (as determined in paragraph
4(a)) within 60 days of the end of such year, based on performance
during such year and prorated for the period from January 1 of the
year in which the termination occurs to the Termination Date. Further,
the Executive shall be entitled to receive (i) a lump sum payment of
the Executive's monthly housing allowance (as that amount is
determined in paragraph 4(g) above) equivalent to 2 months; and (ii)
payment of actual expenses (up to a maximum of a sum of $30,000)
towards the cost incurred during the course of relocating from
Bermuda, provided such relocation occurs within 6 months following
termination of Employment.
g) For purposes of this Agreement:
10
(i) "cause" means (a) an act or acts of personal dishonesty taken by
the Executive and intended to result in the material personal
enrichment of the Executive at the expense of the Company and its
Associated Companies, excluding for this purpose any isolated,
insubstantial or inadvertent action not taken in bad faith which
is remedied by the Executive in a reasonable period of time after
receipt of reasonably prompt written notice thereof from the
Company, (b) repeated violations by the Executive of his
obligations under this Agreement which are demonstrably willful
and deliberate and which are not remedied in a reasonable period
of time by the Executive after receipt of reasonably prompt
written notice thereof from the Company, or, (c) the Executive's
conviction of a felony involving moral turpitude; and
(ii) "good reason" means (a) the sale or other disposition by the
Company of all or substantially all of its reinsurance
operations, (b) the change in control of the Company through the
acquisition (whether by purchase, transfer, merger, renunciation
or otherwise) of any interest in any shares, if, upon completion
of such acquisition the third party, together with persons acting
in concert with the third party, would hold more than fifty
percent of the Common Share Capital of the Company, (c) repeated
violations by the Company of its obligations under this Agreement
which are demonstrably willful and deliberate and which are not
remedied in a reasonable period of time by the Company after
receipt of reasonably prompt written notice thereof from the
Executive, (d) without the Executive's consent, the Company
reduces the Executive's current base salary, reduces the
Executive's then current target total annual compensation,
reduces the Executive's housing allowance, or reduces any of the
benefits provided to the Executive under paragraphs 4(e) or (f)
of this Agreement, (e) a
11
diminution in the Executive's duties or responsibilities or the
assignment of the Executive of any duties inconsistent in any
adverse respect with the Executive's then current duties and
responsibilities or, (f) the Work Permit of the Executive is
terminated by the Government of Bermuda.
h) (i) The Employment, following the initial Term of Appointment and
during any extended Term of Appointment, may be terminated prior
to the scheduled expiration of the extended Term of Appointment:
(i) by the company with or without "cause" (as defined in
paragraph 5(g)(i) above, (ii) by the Executive with or without
"good reason" (as defined in paragraph 5(g)(ii) above), or (iii)
due to the death or disability of the Executive in accordance
with the applicable programs and policies of the Company.
(ii) In the event that the Executive wishes to resign from the Company
without "good reason" prior to the scheduled expiration of any
extended Term of Appointment, the Executive shall comply with the
provisions of paragraph 5(b) above.
(iii) In the event that Employment is terminated pursuant to paragraph
5h(i) above: (i) by the Company without "cause", or (ii) by the
Executive with "good reason", the Executive shall be entitled to
receive, in addition to accrued salary and benefits (including a
pro-rata calculation of earned vacation days) payable to the
Executive through the Termination Date, (i) a lump sum payment,
payable within 14 business days from the Termination Date, equal
to: (A) the Executive's monthly base salary (as determined in
paragraph 4(a)) x 24, plus, (B) the Executive's bonus entitlement
(as determined in paragraph 4(a)), based upon target levels set
by the Company for the year in which the Executive's termination
occurs and pro-rated for the period from January 1 of the year in
which the
12
termination occurs to the Termination Date, (ii) lump sum payment
of the Executive's monthly housing allowance (as that amount is
determined in paragraph 4(g) above) equivalent to 2 months; and
(iii) payment of actual expenses (up to a maximum of a sum of
$30,000) towards the cost incurred during the course of
relocating from Bermuda, provided such relocation occurs within 6
months following termination of Employment.
(iv) In the event that the Employment is terminated during any
additional Term of Appointment, pursuant to paragraph 5h(i)
above: (i) by the Company for "cause", (ii) by the Executive
without "good reason", or (iii) due to the death or disability of
the Executive, the Executive shall be entitled to receive only
his accrued salary and benefits (including a pro-rata calculation
of earned vacation days) payable to the Termination Date or
otherwise payable under plans maintained by the Company in
accordance with their terms and nothing else. In all other
respects, the Executive's termination under the provisions of
this paragraph shall be in accordance with provisions of
paragraph 5(e) and (g) above.
6. Non-Competition
The Executive shall not during the continuance of the Employment (unless
otherwise agreed in writing by the Company) undertake any other business or
profession or be or become an executive or agent of any other company, firm
or person or assist or have any financial interest in any other business or
profession, if such business or profession is in competition with the
business of the Company or any Associated Company but nothing in this
paragraph shall preclude the Executivefrom holding or acquiring less than
5% of the voting shares or other equity securities of any other company
which are listed or dealt in on any recognized stock exchange by way of
bona fide investment.
13
7. Non-Solicitation
The Executive covenants with the Company that he shall not during the
continuance of the Employment or for a period of two (2) years after
the Termination Date on his own behalf or on the behalf of any other
person, firm or company directly or indirectly endeavor to entice away
from the Company any person who is then employed by the Company and was
so employed by the Company during the continuance of the Employment.
8. Confidential Information
The Executive shall not, either during the continuance of his
Employment hereunder and up to two years after the termination of the
Agreement, use to the detriment or prejudice of the Company, except in
the proper course of his duties, divulge to any person any trade secret
or any other information of a confidential nature concerning the
business or affairs of the Company which may have come to his knowledge
during the Employment.
9. Board Information
The Executive shall at all times promptly give to the Board (in writing
if so requested) all such information and explanations as they may
require in connection with matters relating to his Employment hereunder
or with the business of the Company.
10. Return of Papers etc.
The Executive shall promptly upon the request of the Board following
his termination of Employment deliver up to the Company all lists of
clients or customers, correspondence and all other documents, papers
and records which may have been prepared by him or have come into his
possession in the course of his Employment, and the Executive shall not
be entitled to and shall not retain any copies thereof. Title and
copyright therein shall vest in the Company.
14
11. Misrepresentation
The Executive shall not at any time after the termination of his
Employment hereunder wrongfully represent himself as being employed by
or connected with the Company or any Associated Company.
12. Notices
Any notice in writing to be served hereunder shall be given personally
to the Executive or to the Secretary of the Company (as the case may
be) or shall be couriered or posted by registered mail to the Company
(for the attention of its Secretary) at its registered office for the
time being or to the Executive either at his address given above or at
his last known address. Any such notice sent by post shall be deemed
served three days after it is posted and in proving such service it
shall be sufficient to prove that the notice was properly addressed and
put in the post or couriered.
13. Indemnity and Insurance
The Company hereby agrees to indemnify and hold the Executive harmless
for any acts or omissions arising out of the course and scope of his
Employment with the Company to the fullest extent permitted by
applicable law.
14. Other Agreements
The Executive acknowledges and warrants that there are no agreements or
arrangements whether written, oral or implied between the Company and
the Executive relating to the Employment of the Executive other than
those expressly set out in the Agreement and that he is not entering
into the Agreement in reliance on any representation not expressly set
out herein.
15. Successors and Assigns
15
The Company shall require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially
all of its business or assets to expressly assume this Agreement and
agree to perform under this Agreement in the same manner and to the
same extent that the Company would be required to perform if no such
succession had taken place. In addition, the Company may assign this
Agreement (and all of its rights and obligations hereunder) to any of
its wholly-owned subsidiaries. As used in this Agreement, the term
"Company" shall mean any successor or subsidiary that assumes and
agrees to perform this Agreement or which otherwise becomes bound by
all the terms and provisions of this Agreement by operation of law.
16. Governing Law
The Agreement shall be governed by and construed under Bermuda law and
each of the parties hereto submits to the jurisdiction of the Bermuda
Courts as regards any claim or matter arising under the Agreement.
17. Expenses
The Company will reimburse the Executive for legal fees and expenses
incurred in connection with the negotiation, execution and delivery of
this Employment Agreement for an amount up to $5,000.
16
IN WITNESS WHEREOF the parties hereto have set their hands and seals the date
first above written.
SIGNED by ) /s/ Xxxx X. Xxxxxxxx
on behalf of the Company ) /s/ X. Xxxxxxxx Leader
in the presence of:- )
SIGNED by the Executive ) /s/ Xxxx Xxxxxxxx
in the presence of:- ) /s/ Xxxxxx Xxxxxxxxx
