SEPARATION OF EMPLOYMENT AGREEMENT AND GENERAL RELEASE
Exhibit 10.1
This Separation of Employment Agreement and General Release (the “Agreement”) is made
as of September 23, 2005, by and among ANNUITY AND LIFE RE (HOLDINGS), LTD., a Bermuda corporation
(“Holdings”), and ANNUITY AND LIFE REASSURANCE, LTD., a Bermuda corporation (“Annuity
Reassurance” and together with Holdings, “Employer”), and XXXX X. XXXXX
(“Executive”).
WITNESSETH
WHEREAS Executive is employed as President and Chief Executive Officer of Employer pursuant to
that certain Amended and Restated Employment Agreement by and among Holdings, Annuity Reassurance
and Executive, dated as of July 28, 2003 (the “Employment Agreement”); and
WHEREAS Executive and Employer mutually desire to terminate amicably Executive’s employment
with Employer; and
WHEREAS Executive and Employer desire to set forth the terms and conditions for the
termination of their employment relationship and to resolve all other matters between them.
AGREEMENTS
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows:
1. (a) Executive, for and in consideration of the undertakings of Employer set forth herein, does
hereby permanently and irrevocably sever his employment relationship with Employer effective as of
September 16, 2005, and Executive does hereby remise, release and forever discharge Employer, its
subsidiaries and affiliated entities, and each of its and their officers, directors, shareholders,
employees, attorneys, insurers and other agents, and its and their respective successors and
assigns, heirs, executors, administrators and representatives (hereinafter referred to collectively
as the “Employer Releasees”) of and from any and all rights, obligations, promises,
agreements, losses, controversies, claims, actions, causes of action, suits, debts, claims and
demands, and expenses, including without limitation attorneys’ fees and costs, of any nature
whatsoever, in law or in equity, whether known or unknown, asserted or unasserted, which Executive
ever had, now has, or hereafter may have against the Employer Releasees, or any of them, relating
to Executive’s service as a director of Employer or any other member of the Affiliated Group (as
defined in the Employment Agreement), Executive’s employment relationship with Employer, the
Employment Agreement or Executive’s separation from Employer that arose or occurred at any time up
to and including the date hereof, including,
but not limited to, any claims relating to Executive’s
service as a director of Employer or any other member of the Affiliated Group, Executive’s employment relationship with Employer, the
Employment Agreement or Executive’s separation from Employer arising under any foreign, Island of
Bermuda or United States federal, state or local statutes, ordinances or common law principles,
including without limitation the Employment Xxx 0000 (Bermuda), the Human Rights Xxx 0000
(Bermuda), Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the
Americans with Disabilities Act, the Employee Retirement Income Security Act of 1974, the Family
and Medical Leave Act of 1993, the New York State Human Rights Law, the New York City Human Rights
Law, and other employee-protective law of any jurisdiction that may apply.
(b) Employer does hereby remise, release and forever discharge Executive of and from any and
all rights, obligations, promises, agreements, losses, controversies, claims, actions, causes of
action, suits, debts, claims and demands, and expenses, including without limitation attorneys’
fees and costs, of any nature whatsoever, in law or in equity, whether known or unknown, asserted
or unasserted, which Employer ever had, now has, or hereafter may have against Executive, relating
to Executive’s service as a director of Employer or any other member of the Affiliated Group (as
defined in the Employment Agreement), Executive’s employment relationship with Employer, the
Employment Agreement or Executive’s separation from Employer that arose or occurred at any time up
to and including the date hereof, including, but not limited to, any claims relating to Executive’s
service as a director of Employer or any other member of the Affiliated Group, Executive’s
employment relationship with Employer, the Employment Agreement or Executive’s separation from
Employer arising under any foreign, Island of Bermuda or United States federal, state or local
statutes, ordinances or common law principles, including without limitation the Employment Xxx 0000
(Bermuda), the Human Rights Xxx 0000 (Bermuda), Title VII of the Civil Rights Act of 1964, the Age
Discrimination in Employment Act, the Americans with Disabilities Act, the Employee Retirement
Income Security Act of 1974, the Family and Medical Leave Act of 1993, the New York State Human
Rights Law, the New York City Human Rights Law, and other employee-protective law of any
jurisdiction that may apply. Notwithstanding the foregoing, Employer does not release Executive
from any claims involving knowing misrepresentation, fraud, theft, intentional wrongdoing,
intentional breach of fiduciary duty, and/or intentional misappropriation of Employer’s property.
2. Effective as of September 16, 2005, Executive does hereby resign from his position as a member
of the Board of Directors of Employer and from all positions that he holds or has ever held with
Employer and any other member of the Affiliated Group (as defined in the Employment Agreement) and
with any other entity with respect to which Employer has requested Executive to perform services.
3. In consideration of this Agreement, Employer shall pay to Executive the following amounts:
(a) Within five business days following the date on which this Agreement becomes irrevocable,
(i) a lump sum severance payment in cash of US$540,000, plus all accrued but unpaid salary of
Executive through September 16, 2005, if any, and (ii) a lump sum payment
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in cash of US$200,000 in respect of Executive’s releases, waivers and covenants contained in this Agreement.
(b) If the Closing, as such term is defined in that certain Master Agreement, dated as of
August 10, 2005, by and among Annuity Reassurance, Annuity and Life Reassurance America, Inc.,
Prudential Select Life Insurance Company of America and Wilton Reinsurance Bermuda Limited (as it
may be amended from time to time) (the “Master Agreement”), occurs, a lump sum in cash of
US$1,160,000 (the “Closing Payment”) within five business days following the date of the
Closing. Executive acknowledges and agrees that the Closing Payment shall only be payable by
Employer if the Closing actually occurs; provided, however, that if (i) a Competing Acquisition
Proposal (as that term is defined in the Master Agreement) is formally proposed to Employer’s Board
of Directors on or before February 28, 2006 and the Master Agreement has not otherwise been
terminated at the time such proposal is presented to the Board, (ii) the Board elects to terminate
the Master Agreement so that Employer can pursue that Competing Acquisition Proposal in lieu of the
transactions contemplated by the Master Agreement and (iii) the final closing of such Competing
Acquisition Proposal occurs, then Employer shall pay the Closing Payment to Executive within five
business days following the date of the closing of such Competing Acquisition Proposal. Employer
represents that it is not, as of the date of this Agreement, pursuing a Competing Acquisition
Proposal.
4. As of the date of this Agreement, all restricted stock held by Executive shall immediately vest,
and all stock options held by Executive shall become immediately exercisable and shall remain
exercisable until the earlier of (a) fifth anniversary of the date of this Agreement or (b) the end
of the otherwise applicable term of such stock options.
5. Except as specifically set forth in this Agreement, it is expressly understood that Employer
does not have, and will not have, any obligation to provide Executive at any time in the future
with any payments, benefits or considerations. It is further understood that, notwithstanding any
other provision of this Agreement, Employer may withhold from any amounts payable under this
Agreement any foreign, federal, state and local taxes as shall be required to be withheld pursuant
to any applicable law or regulation.
6. (a) Neither Executive nor any person, organization or other entity on Executive’s behalf, will
file, charge, claim, xxx or cause or permit to be filed, charged or claimed, any civil action, suit
or legal proceeding for personal relief (including any action for damages, injunctive, declaratory,
monetary or other relief and any application or claim before any Bermuda employment tribunal)
against the Employer Releasees involving any matter occurring at any time in the past up to and
including the date of this Agreement or involving any continuing effects of any acts or practices
which may have arisen or occurred prior to the date of this Agreement. If Executive or any such
person, organization, or other entity should bring a claim described in the previous sentence, such
party will not accept any personal relief in any such action. This Section 6 shall not operate to
waive any rights that may not legally be waived, nor shall it preclude Executive from bringing an
action to challenge this Agreement. Executive affirms that, as of this date, he has not taken or
initiated any action encompassed by this Section 6, including instituting any proceedings before
any Bermuda employment tribunal. Executive acknowledges that
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Employer is entering into this Agreement in specific reliance upon the representations, warranties and undertakings made by
Executive in this Agreement and that, without prejudice to any other remedy Employer may have under this Agreement or otherwise, to the extent
permitted by law, Employer shall be entitled to the immediate repayment of all amounts paid to
Executive under Section 3 of this Agreement should any of Executive’s representations, warranties
or undertakings in this Section 6 be breached.
(b) Neither Employer nor any person, organization or other entity on Employer’s behalf, will
file, charge, claim, xxx or cause or permit to be filed, charged or claimed, any civil action, suit
or legal proceeding for relief (including any action for damages, injunctive, declaratory, monetary
or other relief and any application or claim before any Bermuda employment tribunal) against
Executive involving any matter occurring at any time in the past up to and including the date of
this Agreement or involving any continuing effects of any acts or practices which may have arisen
or occurred prior to the date of this Agreement. If Employer or any such person, organization, or
other entity should bring a claim described in the previous sentence, Employer will not accept any
relief in any such action. This Section 6 shall not operate to waive any rights that may not
legally be waived, nor shall it preclude Employer from bringing an action to challenge this
Agreement or for any claims involving Executive’s knowing misrepresentation, fraud, theft,
intentional wrongdoing, intentional breach of fiduciary duty, and/or intentional misappropriation
of Employer’s property. Employer affirms that, as of this date, neither it nor any person,
organization or other entity on the Employer’s behalf has taken or initiated any action encompassed
by this Section 6, including instituting any proceedings before any Bermuda employment tribunal.
Employer acknowledges that Employee is entering into this Agreement in specific reliance upon the
representations, warranties and undertakings made by Employer in this Agreement.
7. In further consideration of the agreements of Employer as set forth herein:
(a) Executive shall continue to be bound by the terms of each of the covenants contained in
Section 9 of the Employment Agreement. Executive expressly acknowledges that damages alone may be
an inadequate remedy for any breach or violation of this Section 7(a) and that Employer, in
addition to all other remedies, shall be entitled as a matter of right to equitable relief,
including injunctions and specific performance, in any court of competent jurisdiction, without
posting any bond or other security and without the necessity of proof of actual damage, in addition
to, and not in lieu of, such other remedies as may be available to Employer for such breach,
including the recovery of money damages.
(b) Executive shall cooperate fully with Employer and its counsel with respect to any matter
(including any litigation, arbitration, investigation, or governmental proceeding) relating to
matters with which Executive was involved during the term of his employment with Employer,
including full disclosure of all relevant information and truthfully testifying on Employer’s
behalf in connection with any such proceeding or investigation. Executive will render such
cooperation in a timely manner and at such times and places as may be mutually agreeable to the
parties. Executive agrees that he will promptly notify Employer if he is contacted for an
interview or if he receives a subpoena in any matter relating in any way to
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matters with which he was involved during his employment with Employer. Employer shall, to the extent permitted by
applicable law, pay Executive the sum of $2,500 for each day on which Executive provides at least
two hours of substantive service to Employer in fulfillment of his obligations under this Section 7(b), including reasonable travel time directly related to the performance of
such services.
8. This Agreement will be governed by and construed according to the laws of the State of New York.
9. In case any one or more of the provisions contained of this Agreement shall, for any reason, be
held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect the other provisions of this Agreement, which shall be construed
as if such invalid, illegal or unenforceable provision had never been contained herein. No waiver
by either party of any breach of this Agreement shall be a waiver of any preceding or succeeding
breach. No waiver by either party of any right under this Agreement shall be construed as a waiver
of any other right.
10. Executive recognizes that his employment relationship with Employer is hereby permanently and
irrevocably severed and that Employer has no obligation, contractual or otherwise, to hire, rehire
or re-employ him in the future.
11. This Agreement is not and shall not be construed to be an admission of any violation of any
United States federal, state or local statute or regulation, any statute or regulation of the
Island of Bermuda, or of any duty (contractual or otherwise) owed by either party to the other, and
this Agreement is made voluntarily to provide an amicable conclusion of Executive’s employment
relationship with Employer.
12. Executive has not communicated or disclosed, and shall not hereafter communicate or disclose,
the terms of this Agreement to any persons with the exception of members of his immediate family,
his attorneys, and his accountant or tax advisor, each of whom shall be informed of this
confidentiality obligation and shall be bound by its terms. Neither party shall disparage in any
way to any third party the professional or personal reputation or character of the other,
including, in the case of Employer, any member of the Affiliated Group, or its or their affiliated
corporations or entities, or any of their officers, directors, employees, agents or
representatives.
13. Executive hereby certifies that he has read the terms of this Agreement, that he has been
informed by Employer through this document that he should discuss this Agreement with an attorney
of his own choice and that he has had an opportunity to do so, and that he understands the terms
and effects of this Agreement. Executive further certifies that he has the intention of releasing
all claims recited herein in exchange for the consideration described herein, which he acknowledges
as adequate and satisfactory to him. Neither Employer nor any of its agents, representatives or
attorneys has made any representations to Executive concerning the terms or effects of this
Agreement other than those contained herein.
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14. Executive acknowledges that he has returned to Employer all documents and other property of
Employer in his possession, under his control or to which he may have access, other
than the Master Agreement referenced in Section 3(b) above. Such property includes, but is not
limited to, computers, records, files, memoranda, reports, customer lists, drawings, plans,
documents, keys, equipment, credit cards, compact disks and other portable media and the like that
Executive has used, prepared or come into contact with during the course of his employment with
Employer. Notwithstanding anything to the contrary set forth in this Agreement, Executive shall be
permitted to maintain the three computers provided to him by Employer during the course of his
employment and all related peripheral equipment currently in the Executive’s possession; provided,
however, that Executive shall, within three business days following the date of this Agreement,
make such equipment available to a designated representative of the Employer for a period not to
exceed ten business days so that Employer may duplicate or destroy all electronic files, records,
emails, or other media related to Employer contained on such equipment. Executive hereby
represents and warrants that he has not, since August 29, 2005, deleted or destroyed any electronic
files, records, emails or other media contained on such equipment, and agrees that he shall not,
from the date of this Agreement through the date on which such equipment is made available to the
representative of Employer, delete or destroy any electronic files, records, emails or other media
contained on such equipment.
15. The parties to this Agreement irrevocably hereby submit to the exclusive jurisdiction and venue
of the United States federal courts or the courts of the State of New York in New York City in any
action or proceeding brought with respect to or in connection with this Agreement. Each party
hereby waives any objection based on forum non conveniens and waives any objection to venue of any
action instituted hereunder in such courts.
16. This Agreement constitutes the entire agreement of the parties with respect to the subject
matter hereof. The Employment Agreement is hereby terminated and has no continuing force or effect
other than Section 9 of the Employment Agreement, which shall continue. In the event of conflict
between this Agreement and Section 9 of the Employment Agreement, the provisions of this Agreement
shall prevail.
17. Executive acknowledges that he has been informed that he has the right to consider this
Agreement for a period of at least 21 days prior to entering into this Agreement. Executive
further acknowledges that he has the right to revoke this Agreement within 7 days of its execution
by giving written notice of such revocation by hand delivery or fax to Holdings, Attention:
Chairman of the Board, within the 7 day period. Notwithstanding the foregoing, Employer shall have
no obligation to make any payment described in paragraph 3 or provide any benefit described in the
Agreement until the Agreement becomes final and irrevocable. Executive acknowledges that, in the
event he revokes the Agreement, the Agreement is null and void, and Executive shall not be entitled
to receive any of the payments or benefits described herein.
[Signature page follows]
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IN WITNESS WHEREOF, and intending to be legally bound hereby, the parties have executed the
foregoing Agreement as of the date first written above.
| WITNESS: |
/s/ Xxxxxx X. Xxxxx |
/s/ Xxxx X. Xxxxx
|
||||
| ANNUITY AND LIFE RE (HOLDINGS), LTD. | ||||||
| WITNESS: | /s/ Xxxx Xxxx Xxxxxxxx |
By: | /s/ Xxxx X. Xxxxxxxx
| |||
| Name: | Xxxx X. Xxxxxxxx
| |||||
| Title: | Chief Financial Officer and Secretary |
|||||
| ANNUITY AND LIFE REASSURANCE, LTD. | ||||||
| WITNESS: | /s/ Xxxx Xxxx Xxxxxxxx |
By: | /s/ Xxxx X. Xxxxxxxx
| |||
| Name: | Xxxx X. Xxxxxxxx
| |||||
| Title: | Chief Financial Officer and Secretary
| |||||
[Signature page to Separation of Employment Agreement and General Release]
