EMPLOYMENT AGREEMENT
This Employment Agreement is dated as of February 4, 1998 and
is entered into between Renaissance Reinsurance Ltd., a Bermuda company (the
"Company"), and Xxxxxxx X. Xxxxx ("Executive").
WHEREAS, Executive is currently employed as Senior Vice
President of the Company pursuant to an agreement dated May 27, 1997 (the "Prior
Agreement"); and
WHEREAS, Executive and the Company desire to replace the Prior
Agreement and to embody in this Agreement new terms and conditions under which
Executive shall continue to be employed by the Company.
NOW, THEREFORE, the parties hereby agree:
ARTICLE I.
Employment, Duties and Responsibilities
1.01. Employment. During the Term (as defined below),
Executive shall serve as President and Chief Operating Officer of the Company
and Executive Vice President of its parent, RenaissanceRe Holdings Ltd.
("Holdings"). Executive agrees to devote his full time and efforts to promote
the interests of the Company.
1.02. Duties and Responsibilities. Executive shall have such
duties and responsibilities as specified by the Company's Board of Directors
(the "Company's Board") from time to time and as are consistent with his
position.
1.03. Base of Operation. Executive's principal base of
operation for the performance of his duties and responsibilities under this
Agreement shall be the offices of the Company in Hamilton, Bermuda; provided,
however, that Executive shall perform such duties and responsibilities outside
of Bermuda as shall from time to time be reasonably necessary to fulfill his
obligations hereunder. Executive's performance of any duties and
responsibilities outside of Bermuda shall be conducted in a manner consistent
with any guidelines provided to Executive by Holdings' Board of Directors (the
"Holdings Board").
ARTICLE II.
Term
2.01. Term. Subject to Article V, the employment of Executive
under this Agreement shall be for a term (the "Term") commencing as of the date
first written above and continuing until June 30, 2003, unless sooner terminated
as provided herein.
ARTICLE III.
Compensation and Expenses
3.01. Salary, Incentive Awards and Benefits. As compensation and
consideration for the performance by Executive of his obligations under this
Agreement, Executive shall be entitled, during the Term, to the following
(subject, in each case, to the provisions of ARTICLE V hereof):
(a) Salary; Bonus. The Company shall pay Executive a base
salary at a rate to be determined by the Company's Board, upon recommendation of
the Chief Executive Officer of the Company, payable in accordance with the
normal payment procedures of the Company and subject to such withholding and
other normal employee deductions as may be required by law. Bonuses shall be
payable at the discretion of the Company.
(b) Restricted Stock. Executive shall participate in the
Second Amended and Restated 1993 Stock Incentive Plan RenaissanceRe Holdings
Ltd., as amended through the date hereof and hereafter from time to time (the
"Plan"). Executive is hereby granted 75,000 shares of restricted common stock of
Holdings (the "Restricted Stock") under the Plan. The Restricted Stock shall
vest at the rate of 20% per year on a cumulative basis, commencing on June 30,
1999, and shall be subject to the terms of the Plan and a Restricted Stock
Agreement with respect to the Restricted Stock to be entered into at even date
herewith.
(c) Benefits. Executive shall be eligible to participate
in such life insurance, health, disability and major medical insurance benefits,
and in such other employee benefit plans and programs for the benefit of the
employees and officers 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
officers of the Company and subject to the terms and provisions of such plan or
program.
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(d) Vacation. Executive shall be entitled to reasonable
paid vacation periods, not to exceed five weeks for each full year during the
Term, to be taken at his discretion, in a manner consistent with his obligations
to the Company under this Agreement, and subject, with respect to timing, to the
reasonable approval of the Chief Executive Officer of the Company.
(e) Indemnification/Liability Insurance. The Company shall
indemnify Executive as required by the Bye-laws, and may maintain customary
insurance policies providing for indemnification of Executive.
3.02. Expenses; Perquisites. During the Term, the Company shall
provide Executive with the following expense reimbursements and perquisites:
(a) Business Expenses. The Company will reimburse
Executive for reasonable business-related expenses incurred by him in connection
with the performance of his duties hereunder, subject, however, to the Company's
policies relating to business-related expenses as in effect from time to time.
(b) Automobile. The Company shall provide Executive with
an automobile with a value comparable to automobiles customarily provided to
executive officers of comparable Bermuda-based companies.
(c) Tax Gross-Up. To the extent that benefits provided to
Executive under subsection 3.02(b) of this Agreement result in imputed income
and a resulting increased income tax liability to Executive, the Company shall
pay Executive a tax reimbursement benefit in an amount such that, after
deduction of all income taxes payable with respect to such tax reimbursement
benefit, the amount retained by Executive will be equal to the amount of such
increased income tax liability.
ARTICLE IV.
Exclusivity, Etc.
4.01. Exclusivity; Non-Competition. Executive agrees to perform
his duties, responsibilities and obligations hereunder efficiently and to the
best of his ability. Executive agrees that he will devote his entire working
time, care and attention and best efforts to such duties, responsibilities and
obligations throughout the Term. Executive also agrees that during the Term he
will not engage in any business activities that are competitive with the
business activities of the Company or any of its divisions, subsidiaries or
affiliates.
4.02. Other Business Ventures. Executive agrees that during the
Term he will not own, directly or indirectly, any controlling or substantial
stock or other beneficial interest in
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any business enterprise which is engaged in business activities that are
competitive with the business activities of the Company or any of its divisions,
subsidiaries or affiliates. The preceding sentence notwithstanding, Executive
may own, directly or indirectly, up to 1% of the outstanding capital stock of
any business having a class of capital stock which is traded on any major stock
exchange or in a national over-the-counter market.
4.03. Confidential Information. Executive agrees that he will
not, at any time during or after the Term, make use of or divulge to any other
person, firm or corporation any trade or business secret, process, method or
means, or any other confidential information concerning the business or policies
of the Company or any of its divisions, subsidiaries or affiliates, which he may
have learned in connection with his employment hereunder. For purposes of this
Agreement, a "trade or business secret, process, method or means, or any other
confidential information" shall mean any information designated as confidential
by the Company's Board and as to which Executive receives notice, provided that
Executive shall be obligated to confer periodically with and assist the
Company's Board in determining which information should, in the best interests
of the Company, be so designated. Executive's obligation under this Section 4.03
shall not apply to any information which (i) is known publicly; (ii) is in the
public domain or hereafter enters the public domain without the fault of
Executive; (iii) is known to Executive prior to his receipt of such information
from the Company, as evidenced by written records of Executive or (iv) is
hereafter disclosed to Executive by a third party not under an obligation of
confidence to the Company. Executive agrees not to remove from the premises of
the Company, except as an employee of the Company in pursuit of the business of
the Company or except as specifically permitted in writing by the Company's
Board, any document or other object containing or reflecting any such
confidential information. Executive recognizes that all such documents and
objects, whether developed by him or by someone else, will be the sole exclusive
property of the Company. Upon termination of his employment hereunder, Executive
shall forthwith deliver to the Company all such confidential information,
including without limitation all lists of customers, correspondence, accounts,
records and any other documents or property made or held by him or under his
control in relation to the business or affairs of the Company or its
subsidiaries or affiliates, and no copy of any such confidential information
shall be retained by him.
4.04. Non-Competition Obligations. During the Term and, other
than in the case of the death or disability of Executive, upon any termination
of the employment of Executive, Executive shall not, until the earlier of (x)
two years from the date of such termination or (y) June 30, 2004 (the
"Non-Competition Period"), directly or indirectly, whether as an employee
consultant, independent contractor, partner, joint venturer or otherwise, (A)
engage in any business activities
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reasonably determined by the Company's Board to be competitive, to a material
extent, with any substantial type or kind of business activities conducted by
the Company or any of its divisions, subsidiaries or affiliates at the time of
such termination; (B) on behalf of any person or entity engaged in business
activities competitive with the business activities of the Company or any of its
divisions, subsidiaries or affiliates, solicit or induce, or in any manner
attempt to solicit or induce, any person employed by, or as agent of, the
Company or any of its divisions, subsidiaries or affiliates to terminate such
person's contract of employment or agency, as the case may be, with the Company
or with any such division, subsidiary or affiliate or (C) divert, or attempt to
divert, any person, concern, or entity from doing business with the Company or
any of its divisions, subsidiaries or affiliates, nor will he attempt to induce
any such person, concern or entity to cease being a customer or supplier of the
Company or any of its divisions, subsidiaries or affiliates. The preceding
sentence notwithstanding, in the case of (i) a voluntary termination of
employment by Executive prior to a "Change in Control," or a voluntary
termination following a "Change in Control" which is not for "Good Reason" (each
as hereinafter defined), or (ii) a termination by the Company for Cause (as
hereinafter defined), the Company may elect, within 14 days after the date of
such termination, to waive Executive's non-competition obligations, in which
case it shall not be required to make payments to Executive during the
Non-Competition Period, as provided in Section 5.05(a).
4.05. Remedies. Executive acknowledges that the Company's remedy
at law for 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
injunctive relief 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
affect the enforceability of this Article IV in any other jurisdiction.
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ARTICLE V.
Termination
5.01. Termination for Cause. The Company shall have the right to
terminate Executive's employment at any time for "Cause". For purposes of this
Agreement, "Cause" shall mean (a) Executive's failure to substantially perform
his duties under this Agreement, (b) the engaging by Executive in misconduct
which is injurious to the Company or any of its divisions, subsidiaries or
affiliates, monetarily or otherwise, (c) the commission by Executive of an act
of fraud or embezzlement against the Company or any of its divisions,
subsidiaries or affiliates, (d) the conviction of Executive of a felony, or (e)
Executive's material breach of the provisions of any of Sections 4.01, 4.02 or
4.03 of this Agreement, provided Executive has received prior written notice of
such breach.
5.02. Death. In the event Executive dies during the Term,
Executive's employment shall automatically terminate, such termination to be
effective on the date of Executive's death.
5.03. Disability. In the event that Executive suffers a
disability which prevents him from substantially performing his duties under
this Agreement for a period of at least 90 consecutive days, or 180
non-consecutive days within any 365-day period, and Executive becomes eligible
for the Company's long-term disability plan, the Company shall have the right to
terminate Executive's employment, such termination to be effective upon the
giving of notice to Executive in accordance with Section 6.03 of this Agreement.
5.04. Termination Without Cause. The Company may at any time
terminate Executive's employment for reasons other than Cause.
5.05. Effect of Termination.
(a) Obligations of Company. In the event of any
termination of Executive's employment hereunder, the Company shall pay Executive
any earned but unpaid base salary. In addition, except as provided in Section
5.06, upon a termination of Executive's employment for any reason other than
Executive's death or disability, the Company shall continue to pay Executive
during the Non-Competition Period, his then current base salary, and an amount
equal to the highest regular annual bonus paid or payable to Executive over the
preceding three fiscal years (excluding any extraordinary or non-recurring
bonus), such amounts to be payable in equal monthly installments commencing on
the date which is one month after the date of such termination. The preceding
sentence notwithstanding, in the event of a termination of employment described
in the last sentence of Section 4.04 of this Agreement, if the Company elects to
waive Executive's non-competition obligations within 14 days after the
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date of such termination, the Company shall not be required to make such
additional payments.
(b) Restricted Stock. Except as otherwise provided in
Section 5.06(B) hereof, Executive's rights with respect to Restricted Stock upon
any termination of his employment with the Company shall be governed exclusively
by the terms and conditions of the Plan and any agreements executed by Executive
in connection with the Restricted Stock.
(c) Obligations of Executive. Executive may terminate his
employment at any time by 10 days' written notice to the Company. Executive
shall have no obligations to the Company under this Agreement after the
termination of his employment, except and to the extent Sections 4.03, 4.04 or
4.05 shall apply.
5.06. Termination Following a Change in Control. In the event
that a Change in Control occurs (as hereinafter defined) and, on or within two
years following the date of such Change in Control, Executive's employment is
terminated by the Company without Cause, or Executive terminates his employment
voluntarily for "Good Reason" (as hereinafter defined), then
(A) in lieu of the payments described in the second sentence of Section
5.05(a), the Company shall pay Executive, within fifteen days following the date
of such termination, a lump sum cash amount equal to two times the sum of:
(i) Executive's annual base salary at the highest rate in
effect during the Term; and
(ii) the highest regular annual bonus paid or payable to
Executive over the preceding three fiscal years (excluding
any extraordinary or non-recurring bonus) and
(B) notwithstanding anything to the contrary in the Plan, the portion of
the Restricted Stock that had not yet vested shall not vest as of the date of
such Change in Control but shall become fully vested as of the date of such
termination.
For purposes of this Agreement, "Good Reason" means
(i) any action taken or failed to be taken by the
Company or any of its officers which, without Executive's prior written
consent, changes Executive's position (including titles), authority,
duties or responsibilities from those in effect prior to the Change in
Control, or reduces Executive's ability to carry out such duties and
responsibilities;
(ii) any failure by the Company to comply with any
of the provisions of Section 3 of this Agreement,
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other than an insubstantial or inadvertent failure which is remedied by
the Company promptly after receipt of notice thereof from Executive;
(iii) the Company's requiring Executive to be
employed at any location more than 35 miles further from his current
principal residence than the location at which Executive was employed
immediately preceding the Change in Control; or
(iv) any failure by the Company to obtain the
assumption of and agreement to perform this Agreement by a successor as
contemplated by Section 6.02(b) of this Agreement.
For purposes of this Agreement, "Change in Control" means the
acquisition by any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) (a "Person") of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of securities representing more
than 50% of the value and voting power of all of the outstanding equity
securities of Holdings (the "Outstanding Equity Securities"); provided, however,
that the following acquisitions shall not constitute a Change in Control: (i)
any acquisition by Holdings, (ii) any acquisition by one or more of the
"Investors" (as such term is defined in the Plan) or any entity directly or
indirectly controlling, controlled by, or under common control with, one or more
of the Investors (an "Investor Affiliate"), or (iii) any acquisition by a
corporation pursuant to a merger, consolidation or other similar transaction (a
"Corporate Event") if, as a result of such Corporate Event, (A) substantially
all of the individuals and entities who were the beneficial owners,
respectively, of the Outstanding Equity Securities immediately prior to such
Corporate Event beneficially own, directly or indirectly, securities
representing more than 50% of the value and voting power of the then outstanding
equity securities of the corporation resulting from such Corporate Event
(including a corporation which, as a result of such transaction, owns Holdings
or all or substantially all of Holdings' assets either directly or through one
or more subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Corporate Event, of the Outstanding Equity Securities,
and (B) no Person other than (1) one or more of the Investors or any Investor
Affiliate, or (2) any corporation resulting from such Corporate Event,
beneficially owns, directly or indirectly, securities representing more than 50%
of the value and voting power of the then outstanding equity securities of the
corporation resulting from such Corporate Event.
Except as specifically provided in this Section 5.06, the effect
of a termination of Executive's employment following a
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Change in Control shall be governed by the provisions of Section of 5.05.
ARTICLE VI.
Miscellaneous
6.01. Life Insurance. Executive agrees that the Company or any
of its divisions, subsidiaries or affiliates may apply for and secure and own
insurance on Executive's life (in amounts determined by the Company). Executive
agrees to cooperate fully in the application for and securing of such insurance,
including the submission by Executive to such physical and other examinations,
and the answering of such questions and furnishing of such information by
Executive, as may be required by the carrier(s) of such insurance.
Notwithstanding anything to the contrary contained herein, neither the Company
nor any of its divisions, subsidiaries or affiliates shall be required to obtain
any insurance for or on behalf of Executive.
6.02. Benefit of Agreement; Assignment; Beneficiary. (a) This
Agreement shall inure to the benefit of and be binding upon the Company and its
successors and assigns, including, without limitation, any 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.
(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.
6.03. 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
Renaissance Reinsurance Ltd., Renaissance House, East Broadway, Hamilton,
Bermuda, Attention: 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 Executive at his then current
home address as shown on the Company's books, 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.
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6.04. Entire Agreement; Amendment. This Agreement contains the
entire agreement of the parties hereto with respect to the terms and conditions
of Executive's employment 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 including, without
limitation, the Prior Agreement. This Agreement may not be changed or modified
except by an instrument in writing signed by both of the parties hereto.
6.05. 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.
6.06. 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.
6.07. Enforcement. If any action at law or in equity is brought
by either party hereto to enforce or interpret any of the terms of this
Agreement, the prevailing party shall be entitled to reimbursement by the other
party of the reasonable costs and expenses incurred in connection with such
action (including reasonable attorneys' fees), in addition to any other relief
to which such party may be entitled. Executive shall have no right to enforce
any of his rights hereunder by seeking or obtaining injunctive or other
equitable relief and acknowledges that damages are an adequate remedy for any
breach by the Company of this Agreement.
6.08. Governing Law. This Agreement shall be governed by, and
construed and interpreted in accordance with, the internal laws of Bermuda
without reference to the principles of conflict of laws. The parties submit to
the non-exclusive jurisdiction of the courts of Bermuda.
6.09. Agreement to Take Actions. Each party to this Agreement
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.
6.10. No Mitigation; No Offset. Executive shall not be required
to mitigate damages or the amount of any payment provided for under this
Agreement by seeking (and, without limiting the generality of this sentence, no
payment otherwise required under this Agreement shall be reduced on account of)
other employment or otherwise, and payments under this Agreement shall not be
subject to offset in respect of any claims which the Company may have against
Executive.
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6.11. Attorneys' Fees. Each party to this Agreement will bear its
own expenses in connection with any dispute or legal proceeding between the
parties arising out of the subject matter of this Agreement, including any
proceeding to enforce any right or provision under this Agreement.
6.12. Termination; Survivorship. This Agreement shall terminate
upon termination of Executive's employment, except that the respective rights
and obligations of the parties under this Agreement as set forth herein shall
survive any termination of this Agreement to the extent necessary to the
intended preservation of such rights and obligations.
6.13. 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.
6.14. Other Agreements. Executive represents and warrants to the
Company that 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.
6.15. Subsidiaries, etc. (a) The obligations of the Company under
this Agreement may be satisfied by any subsidiary or affiliate of the Company
for which Executive serves as an employee under this Agreement, to the extent
such obligations relate to Executive's employment by such subsidiary or
affiliate.
(b) The rights of the Company under this Agreement may be
enforced by any Subsidiary or affiliate of the Company for which Executive
serves as an employee under this Agreement, to the extent such rights relate to
Executive's employment by such subsidiary or affiliate.
6.16. 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.
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IN WITNESS WHEREOF, the Company and Executive have duly executed this Agreement
as of the date first above written.
RENAISSANCE REINSURANCE LTD.
By: /s/ Xxxx X. Xxxxxx
-----------------------------------
Name: Xxxx X. Xxxxxx
Title: Senior Vice President and
Chief Financial Officer
/s/ Xxxxxxx X. Xxxxx
------------------------------------------
Xxxxxxx X. Xxxxx
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