EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT made and entered into as of the 1st day of
September 2004 ("the Effective Date") by and among PXRE Reinsurance Ltd., a
Bermuda company, (together with its successors and assigns permitted under this
Employment Agreement, the "Company"), and XXXX X. XXXX (the "Executive").
W I T N E S S E T H:
WHEREAS, the Executive currently is the Executive Vice President,
International Treaty of the Company; and
WHEREAS, the Company desires to continue the employment of the
Executive as its Executive Vice President, International Treaty and to enter
into an employment agreement to set forth the terms of such continued employment
(this "Agreement"); and
WHEREAS, the Executive desires to enter into this Agreement and to
accept such continued employment, subject to the terms and provisions of this
Agreement.
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the receipt of
which is mutually acknowledged, the Company and the Executive (individually a
"Party" and together the "Parties") agree as follows:
1. EMPLOYMENT AND DUTIES
1.1. General. The Company hereby agrees to continue to employ
the Executive, and the Executive hereby agrees to continue to serve the
Company, as Executive Vice President, International Treaty of the
Company, commencing as of the Effective Date upon the terms and subject
to the conditions herein contained. The Executive shall perform such
other duties and services for the Company and its affiliates,
commensurate with the Executive's position, as may be designated from
time to time by the President and Chief Operating Officer. The
Executive agrees to use his reasonable best efforts to serve the
Company faithfully and to the best of his ability. The Executive shall
report directly to the President and Chief Operating Officer.
1.2. Extent of Services. The Executive shall have all of the
powers, duties and responsibilities customary to his office in a
company the size and nature of the Company and as are reasonably
necessary to the operations of the Company as may be assigned to him
from time to time by the President and Chief Operating Officer
consistent with his position of Executive Vice President, International
Treaty. Except as may otherwise be approved in advance by the President
and Chief Operating Officer, and except during vacation periods and
reasonable periods of absence due to sickness, personal injury or other
disability, the Executive shall devote substantially all of his working
time throughout his period of employment with the Company to the
services required of him under this Agreement. Notwithstanding the
foregoing, the Executive shall be permitted to engage in charitable and
civic activities, manage his personal investments (provided that in
doing so the Executive does not place himself in a position of conflict
with the interests of the Company) and serve, with the prior approval
of the Board in each instance, on advisory boards or boards of
directors of other entities, provided in all instances that such
activities do not interfere with the performance of his duties
hereunder. During the Employment Term, the Executive's services
hereunder shall be performed at the offices of the Company in Bermuda,
subject to necessary and reasonable travel requirements of his position
and duties hereunder.
1.3. Term of Employment. The Executive's employment under this
Agreement shall commence as of the Effective Date and shall continue
until the earlier of the second anniversary of the Effective Date and
the date of termination of the Executive's employment pursuant to
Section 4 or 5; provided that, unless earlier terminated as provided in
Sections 4 and 5 hereof, the Executive's employment under this
Agreement shall be automatically extended from and after the second
anniversary of the Effective Date for additional one year periods;
provided further, if the term of this Agreement is extended as herein
described and the Executive or the Company shall thereafter determine
to terminate the term of this Agreement, the party so terminating the
term of this Agreement shall give written notice to the other party not
less than 120 days prior to the anniversary of the Effective Date which
would xxxx the commencement of an additional twelve month period, and
under such circumstances the Executive's employment pursuant to this
Agreement shall end on such anniversary of the Effective Date and
providing such notice of non-renewal in and of itself shall not be
deemed to be a termination of the Executive's employment hereunder,
including a termination without cause or for good reason. The date on
which the Executive's employment hereunder terminates in accordance
with Section 4 is the "Termination Date, and the period commencing on
the Effective Date and ending on earlier of the Termination Date or the
expiration of the term of this Agreement is hereinafter referred to as
the "Employment Term".
1.4. In the event the Company serves notice of non-renewal,
the Company may direct that until the end of the Employment Term:
1.4.1 The Executive shall perform no duties; and/or
1.4.2 The Executive shall refrain from contacting any
customers, clients, advertisers, suppliers, agents, professional
advisors, brokers, or employees of the Company;
1.4.3 The Executive shall not enter all or any premises of the
Company.
2. COMPENSATION
2.1. Base Salary. From the Effective Date through the end of
the Executive's employment hereunder, the Executive shall be entitled
to receive a base salary ("Base Salary") at a rate of US$320,000 per
annum, payable in arrears in equal installments in accordance with the
Company's payroll practices, with such increases as may be granted to
the Executive in accordance with Section 2.2. Once increased, such
higher amount shall constitute the Executive's annual Base Salary.
2.2. Annual Review. The Executive's Base Salary shall be
reviewed by the Chief Executive Officer, based upon the Executive's
performance, not less often than annually, and may be increased but not
decreased during the Employment Term.
2.3. Annual Incentive Bonus Plan. Subject to the provisions of
Section 4 and Section 5, the Executive shall be entitled to participate
annually during the Employment Term in PXRE Group Ltd.'s 2004 Incentive
Bonus Compensation Plan (the "Bonus Plan"), or such substitute plan as
shall be established from time to time by the Company (which substitute
plan shall not be materially less favorable to the Executive than the
Bonus Plan) providing for the payment of annual bonuses to key
employees of the Company, subject to the terms and conditions of the
Bonus Plan or such substitute plan, as the case may be. The Executive's
target bonus in respect of the year 2004 shall be not less than 55% of
his Base Salary and shall be payable within 60 days after the end of
the fiscal year, whether or not the Executive is employed by the
Company on the date of payment. The determination of annual bonus
amounts payable to the Executive in years 2005 and subsequent shall be
made in accordance with the terms of the Bonus Plan as that Plan may be
amended from time to time.
2.4. Equity Grants. Subject to the provisions of Section 4 and
the next succeeding sentences of this Section 2.4, the Executive shall
be entitled to participate annually during the Employment Term on a
basis no less favourable than other similarly-situated executives, in
the PXRE Group Ltd's 2002 Officer Incentive Plan (the "Equity Incentive
Plan"), or such substitute plan as shall be established from time to
time by the Company or any affiliate providing for the grant of stock
options and/or restricted shares of PXRE Group Ltd.'s or any
affiliate's stock to key employees of the Company, subject to the terms
and conditions of the Equity Incentive Plan or such substitute plan, as
the case may be. The Company and the Executive agree that for purposes
of determining restricted share grants to the Executive under the
Equity Incentive Plan, the relevant multiple shall be no less than 1.40
of Base Salary.
2.5. Severance Plan. During the Employment Term, the Executive
will not be eligible to participate in the Company's Amended and
Restated Severance Plan for Certain Executives.
2.6. Housing; Automobile. During the Employment Term, the
Executive shall be entitled to receive such allowance for housing and
the provision of an automobile as has been previously provided to the
Executive, and the Company shall otherwise provide to the Executive
such additional benefits consistent with the Executive's residence in
Bermuda as has heretofore been provided to the Executive by the
Company.
3. EMPLOYEE BENEFITS, VACATION AND EXPENSE REIMBURSEMENTS
3.1. In General. During the Employment Term (and thereafter to
the extent provided herein), the Executive and his dependents shall be
included to the extent eligible thereunder in all pension, including
any supplemental executive retirement plan 401(k), health, medical,
life, disability or other similar plans or benefits which shall be
established by the Company or any affiliate from time to time for, or
made available to, its executives on a basis no less favorable than
provided other similarly-situated executives.
3.2. During the Employment Term, the Executive shall be
entitled to the number of paid vacation days (but not less than four
weeks per annum) and floating holidays that is consistent with those
provided to similarly situated executives of the Company, and in no
event less than the number of such days provided to the Executive
immediately before the Effective Date, subject to and in accordance
with the vacation and holiday policies of the Company as in effect from
time to time.
3.3. During the Employment Term, the Executive is authorized
to incur reasonable business expenses in carrying out his duties and
responsibilities under this Agreement, and the Company shall reimburse
him for all such reasonable business expenses reasonably incurred in
connection with carrying out the business of the Company, subject to
and in accordance with the terms and conditions of the policies
applicable to similarly situated senior executives of the Company
regarding such expenses as in effect from time to time. The Company
shall reimburse the Executive for his reasonable legal and other
professional fees and expenses incurred in the negotiation, preparation
and execution of this Agreement.
4. TERMINATION OF EMPLOYMENT
4.1. Termination Without Cause; Resignation for Good Reason.
4.1.1. General. Subject to the provisions of
Sections 4.1.2 and 4.1.3, if the Executive's employment is
terminated by the Company without Cause (as defined in Section
4.3), or if the Executive terminates his employment hereunder
for Good Reason (as defined in Section 4.4), the Company shall
pay the Executive severance pay in an amount equal to two
times his Base Salary (at a rate in effect on the date of such
termination or, if a reduction in Base Salary is the basis for
termination for Good Reason, then the Base Salary in effect
immediately prior to such reduction). Such severance pay shall
be payable at such intervals as the same would have been paid
had the Executive remained in the active service of the
Company during the 24-month period following termination of
employment (the "Severance Period"). In addition, the
Executive and his dependents shall continue to participate in
the benefit plans described in Section 3.1 (or be provided
with comparable benefits) and receive any housing or
automobile allowance as described in Section 2.6 for a period
of one year from the date of termination or resignation
pursuant to this Section 4.1.1. The Executive shall have no
further right to receive any other compensation or benefits
after such termination or resignation of employment except as
determined in accordance with the terms of the employee
benefit plans or programs of the Company, except that he shall
receive payment for earned but unused vacation. In the event
of any termination of the Executive's employment under this
Section 4.1.1, all options, restricted shares and other equity
grants held by the Executive shall immediately vest in full
and, all vested options shall remain exercisable in accordance
with the terms of the applicable equity plan, including,
without limitation, the Equity Incentive Plan and the 1992
Officer Incentive Plan, as applicable, provided that,
notwithstanding Section 2.4(b)(ii)(2) of the Equity Incentive
Plan and the 1992 Officer Incentive Plan or any other
provision that would shorten the exercise period as a result
of termination, such vested options shall remain exercisable
in accordance with their original term.
4.1.2. Conditions Applicable to the Severance
Period. In the event the Executive's employment is terminated
without cause or the Executive resigns with good reason,
Sections 7.1 and 7.2 shall apply during the period ending on
the first anniversary of the Termination Date; provided that
no additional compensation or benefits, other than as payable
pursuant to Section 4.1.1, shall be due to the Executive. If,
during the Severance Period, the Executive materially breaches
his obligations under Section 6 or Section 7 of this
Agreement, the Company may terminate the Severance Period,
after written notice to the Executive and, if curable, failure
of the Executive after such written notice to cure such
alleged breach in a timely manner, and cease to make any
further payments or provide any employee benefits described in
Section 4.1.1.
4.1.3. Death During Severance Period. In the event
of the Executive's death during the Severance Period, all
remaining severance pay due to the Executive under Section
4.1.1 shall be payable immediately to the Executive's
designated beneficiary.
4.1.4. Date of Termination. The date of termination
of employment without Cause shall be the date specified in a
written notice of termination to the Executive. The date of
resignation for Good Reason shall be the date specified in the
written notice of resignation from the Executive to the
Company; provided, however, that no such written notice shall
be effective unless the cure period specified in Section 4.4
has expired without the Company having corrected the event or
events subject to cure. If no date of resignation is specified
in the written notice from the Executive to the Company, the
date of termination shall be the first day following the
expiration of such cure period.
4.2. Termination for Cause; Resignation Without Good Reason.
4.2.1. General. If, prior to the expiration of the
Employment Term, the Executive's employment is terminated by
the Company for Cause, or the Executive resigns from his
employment hereunder other than for Good Reason, the Executive
shall be entitled only to payment of his Base Salary as then
in effect through and including the date of termination or
resignation together with payment for earned but unused
vacation. The Executive shall have no further right to receive
any other severance, compensation or employee benefits after
such termination or resignation of employment, except as
determined in accordance with the terms of the employee
benefit plans or programs, policies, arrangements of, or other
agreements with the Company or any affiliate or to the extent
the Company elects to enforce Section 7.1 and 7.2 hereof. A
voluntary resignation of the Executive shall not be deemed to
be a breach of this Agreement.
4.2.2. Date of Termination. Subject to the proviso
of Section 4.3, the date of termination for Cause shall be the
date specified in a written notice of termination to the
Executive. The date of resignation without Good Reason shall
be the date specified in the written notice of resignation
from the Executive to the Company, or if no date is specified
therein, 10 business days after receipt by the Company of
written notice of resignation from the Executive.
4.2.3. Imposition of Non-Compete Provisions. In the
event the Executive's employment is terminated for cause or
the Executive resigns without good reason, and in the event
the Company pursuant to Section 7.1 and Section 7.2 directs
performance of the Non Competition and Non-Solicitation
Covenants during the period ending on the first anniversary of
the Termination Date, the Board and the Executive shall
execute a mutual release, on terms satisfactory to the
Company, and the Company shall pay consideration to the
Executive in an amount equal to the sum of (i) two times his
Base Salary, (ii) one times any housing or automobile
allowance provided under Section 2.6 above, and (iii) the
Executive and his dependents shall continue to participate in
the benefit plans described in Section 3.1 or be provided
comparable benefits, such consideration being payable at
regular intervals, and the Company being entitled to cease
such payments in the event the Executive materially breaches
his obligations under the covenants.
4.3. Cause. Termination for "Cause" shall mean termination of
the Executive's employment because of: (a) any willful act or omission
that constitutes a material breach by the Executive of any of his
obligations under this Agreement; (b) the willful and continued failure
or refusal of the Executive to substantially perform the material
duties required of him as an employee of the Company; (c) any willful
material violation by the Executive of any law or regulation applicable
to the business of the Company or any of its subsidiaries or
affiliates, or the Executive's conviction of or plea of guilty or nolo
contendere to a felony other than a traffic violation or a crime
involving moral turpitude, or any willful perpetration by the Executive
of a common law fraud; or (d) any other willful misconduct by the
Executive that is injurious to the financial condition or business
reputation of, or is otherwise materially injurious to, the Company or
any of its subsidiaries or affiliates; provided, however, that if any
such Cause relates to the Executive's obligations under this Agreement
and is susceptible to cure, the Company shall not terminate the
Executive's employment hereunder unless the Company first gives the
Executive written notice of its intention to terminate and of the
grounds for such termination, and the Executive has not, within 10
business days following receipt of the notice, cured such event giving
rise to Cause. For purposes of this Section 4.3, an "affiliate" of a
person or other entity shall mean a person or other entity that
directly or indirectly controls, is controlled by, or is under common
control with, the person or entity specified.
4.4. Good Reason. For purposes of this Agreement, "Good
Reason" shall mean any of the following (occurring without the
Executive's prior consent): (a) a decrease in the Executive's Base
Salary, or Target Bonus opportunity or a failure by the Company to pay
material compensation due and payable to the Executive in connection
with his employment; (b) the failure by the Company to obtain an
agreement from a successor to assume and agree to perform this
Agreement in accordance with the third sentence of Section 12, (c) the
assignment to the Executive of any duties inconsistent in any material
respect with the Executive's position (including status, offices,
titles and reporting requirements), authority, duties or
responsibilities as contemplated by Section 1 above or any other action
by the Company which results in a material diminution in such position,
authority, duties or responsibilities, other than an isolated,
insubstantial and inadvertent action that is not taken in bad faith and
is remedied by the Company within 10 days after receipt of notice
thereof given by the Executive; (e) the Company's requiring the
Executive to be based at any office or location other than an office
located in Bermuda, Edison, New Jersey (or its immediate surrounding
area) or New York City or its surrounding area; (f) any action by the
Company that materially reduces the fringe benefits or perquisites
provided to the Executive or the Executive's eligibility to participate
in any employee benefit plan of the Company unless the Executive is
provided with equal or more favorable fringe benefits, perquisites or
employee benefits, as the case may be; and (g) any material breach by
the Company or any affiliate of any other provision of this Agreement
not covered by any other clause of this Section 4.4; or provided,
however, that if any such Good Reason is susceptible to cure by the
Company, the Executive may not resign for Good Reason unless the
Executive first gives the Company written notice of his intention to
resign and of the grounds for such resignation, and the Company has
not, within 10 business days following receipt of the notice, cured
such Good Reason, or in the event that such Good Reason is susceptible
to cure but now fully within such 10 business day period, the Company
has not taken all reasonable steps within such 10 business day period
to cure such Good Reason as promptly as practicable thereafter, but in
no event less than 20 business days after such written notice from the
Executive.
4.5. General Release by Executive. Notwithstanding any
provision of this Agreement to the contrary, the Executive acknowledges
and agrees that the obligation of the Company to pay any compensation
and benefits under this Section 4 is expressly conditioned upon the
Executive's timely execution of and agreement to be bound by a general
release of any and all claims (other than claims for compensation and
benefits payable under this Section 4) arising out of or relating to
the Executive's employment and termination of employment. Such general
release shall be made in a form reasonably satisfactory to the Company
and shall run to the Company, its affiliates, and their respective
officers, directors, employees, agents, successors and assigns.
5. DEATH OR DISABILITY
In the event of termination of the Executive's employment by reason of
death or Permanent Disability (as hereinafter defined), the Executive (or his
estate, or legal representative as applicable) shall be entitled to (a) Base
Salary, (b) payment of any earned but unpaid bonus and (c) a pro rata (within
the meaning of the Bonus Plan) for the year in which such termination by reason
of death or Permanent Disability occurs and benefits determined under Sections 2
and 3 through the date of termination, and (e) any other payments, benefits or
rights in accordance with this Agreement or any applicable plan, program,
policy, arrangement of, or other agreement with, the Company or any affiliate
(provided that in no event shall the Executive be entitled to duplication of any
payment or benefit and all options, restricted share and other equity grants
shall vest and remain exercisable in accordance with the terms of applicable
equity plans, including, without limitation, the Equity Incentive Plan and 1992
Officer Incentive Plan, as applicable. Other payments, benefits shall be
determined in accordance with the benefit plans maintained by the Company, and
the Company shall have no further obligation hereunder. For purposes of this
Agreement, "Permanent Disability" means a physical or mental disability or
infirmity of the Executive that prevents the normal performance of substantially
all his duties as an employee of the Company, which disability or infirmity
shall exist, or in the opinion of an independent physician shall exist or is
reasonably likely to exist, for any continuous period of 180 days.
6. CONFIDENTIALITY
6.1. Confidentiality. The Executive agrees that during the
Employment Term and thereafter he will not, except in the performance
of his obligations to the Company hereunder or as may otherwise be
approved in advance by the Board, directly or indirectly, disclose or
use (except for the direct benefit of the Company) any confidential
information that he may learn or has leaned by reason of his
association with the Company, any client or any of their respective
subsidiaries and affiliates. The term "confidential information"
includes all data, analyses, reports, interpretations, forecasts,
documents and information concerning or otherwise reflecting
information and concerning the Company and its affairs, including,
without limitation, with respect to clients, products, policies,
procedures, methodologies, trade secrets and other intellectual
property, systems, personnel, confidential reports, technical
information, financial information, business transactions, business
plans, prospects or opportunities, but shall exclude any portion of
such information that (a) was acquired by the Executive prior to his
employment by, or other association with the Company (b) is or becomes
generally available to the public or is generally known in the industry
or industries in which the Company operates, in each case other than as
a result of disclosure by the Executive in violation of this Section
6.1 or (c) the Executive is required to disclose under any applicable
laws, regulations or directives of any government agency, tribunal or
authority having jurisdiction in the matter or under subpoena or other
process of law or (d) is disclosed in connection with any litigation,
arbitration or mediation involving this Agreement or any other
agreement with the Company or any affiliates, including but not limited
to, enforcement of such agreements.
6.2. Exclusive Property. The Executive confirms that all
confidential information with respect to the Company is and shall
remain the exclusive property of the Company. All business records,
papers and documents kept or made by the Executive relating to the
business of the Company shall be and remain the property of the
Company, except for such papers customarily deemed to be the personal
copies of the Executive.
6.3. Injunctive Relief. Without intending to limit the
remedies available to the Company, the Executive acknowledges that a
material breach of any of the covenants contained in this Section 6 may
result in material and irreparable injury to the Company and its
affiliates and subsidiaries for which there is no adequate remedy at
law, that it will not be possible to measure damages for such injuries
precisely and that, in the event of such a breach or threat thereof,
the Company shall be entitled to seek a temporary restraining order or
a preliminary or permanent injunction restraining the Executive from
engaging in activities prohibited by this Section 6 or such other
relief as may be required specifically to enforce any of the covenants
in this Section 6. If for any reason it is held that the restrictions
under this Section 6 are not reasonable or that consideration therefor
is inadequate, such restrictions shall be interpreted or modified to
include as much of the duration and scope identified in this Section 6
as will render such restrictions valid and enforceable.
7. PROHIBITED ACTIVITY
7.1. Non-Competition Covenant. The Executive covenants and
agrees that during the Employment Term and, upon written action of the
Company directing the same, during the period ending on the first
anniversary of the Termination Date, he shall not at any time, without
the prior written consent of the Company, directly or indirectly,
whether for his own account or as a shareholder (other than as
permitted by Section 7.3 below), partner, joint venturer, employee,
consultant, lender, advisor, and/or agent, of any person, firm,
corporation, or other entity:
7.1.1. engage in activities or businesses that are
substantially in competition with the Company or any of its
affiliates (in each case for the purposes of this Section 7,
the term "Company" shall be deemed to include any successor
entity to the Company) ("Competitive Activities"), including
(A) the provision of reinsurance products and services,
including without limitation property catastrophe reinsurance
and retrocessional coverage, except that if any activities or
businesses were not engaged in by the Company during the
period of time that the Executive was employed by the Company
and are not engaged in by the Company at the time the
Executive's employment by the Company is terminated
(collectively "Permitted Activities"), the Executive may
engage in any Permitted Activities notwithstanding anything
contained in this Agreement, (B) soliciting any customer or
prospective customer of the Company or any of its affiliates
to purchase any products or services of the type provided by
the Company or any of such affiliates, as applicable, from
anyone other than the Company or any of such affiliates, as
applicable, and (C) assisting any person or entity in any way
to do, or attempt to do, anything prohibited by clause (A) or
(B) above;
7.1.2. perform any action, activity or course of
conduct that is substantially detrimental to the business of
the Company or any of its affiliates (other than engaging in
Permitted Activities) or business reputation of the Company or
any of its affiliates; or
7.1.3. establish any new business that engages in
Competitive Activities.
Provided however it is understood and agreed that, in the event the term of this
Agreement expires pursuant to Section 1.3, and in the event the Company directs
performance of the Non Competition Covenant during the period ending on the
first anniversary of the expiry of the Employment Term, the Board and the
Executive shall execute a mutual release, on terms satisfactory to the Company,
and the Company shall pay consideration to the Executive in an amount equal to
the sum of (i) two times his Base Salary, (ii) one times any housing or
automobile allowances provided under Section 2.6 above, and (iii) the Executive
and his dependents shall continue to participate in the benefit plans described
in Section 3.1 (or be provided with comparable benefits), such consideration
being payable at regular intervals, and the Company being entitled to cease such
payments in the event the Executive materially breaches his obligations under
the covenants.
7.2. Non-Solicitation Covenant. The Executive also covenants
and agrees that during the Employment Term and during the period ending
on the first anniversary of the Termination Date, he shall not at any
time, without the prior written consent of the Company, directly or
indirectly, whether for his own account or as a shareholder (other than
as permitted by Section 7.3 below), partner, joint venturer, employee,
consultant, lender, advisor, and/or agent, of any person, firm,
corporation, or other entity, solicit, recruit or hire any persons who
are then (or who were during the immediately preceding nine months)
employees of the Company or any of its affiliates, or solicit or
encourage any employee of the Company or any of its affiliates to leave
the employment of the Company or any of such affiliates, as applicable.
7.3. Exception. Notwithstanding anything to the contrary
contained in this Section 7, the Company hereby agrees that the
foregoing covenant shall not be deemed breached by the Executive as a
result of the ownership by such Executive of less than an aggregate of
3% of any class of securities of an entity engaged, directly or
indirectly, in Competitive Activities; provided that such securities
are listed on a national securities exchange or are quoted on the
NASDAQ National Market System.
7.4. Reasonableness of Limitations. The Executive declares
that the foregoing limitations are reasonable and properly required for
the adequate protection of the business and the goodwill of the
Company. In the event any such time limitation is deemed to be
unreasonable by any court of competent jurisdiction, the Executive
agrees to the reduction of such time limitation to such period which
such court shall deem reasonable.
7.5. Injunctive Relief. Without intending to limit the
remedies available to the Company, the Executive acknowledges that a
breach of any of the covenants contained in this Section 7 may result
in material and irreparable injury to the Company and its affiliates
and subsidiaries for which there is no adequate remedy at law, that it
will not be possible to measure damages for such injuries precisely and
that, in the event of such a breach or threat thereof, the Company
shall be entitled to seek a temporary restraining order or a
preliminary or permanent injunction restraining the Executive from
engaging in activities prohibited by this Section 7 or such other
relief as may be required specifically to enforce any of the covenants
in this Section 7. If for any reason it is held that the restrictions
under this Section 7 are not reasonable or that consideration therefore
is inadequate, such restrictions shall be interpreted or modified to
include as much of the duration and scope identified in this Section 7
as will render such restrictions valid and enforceable.
8. MITIGATION
Executive shall not be required to mitigate the amount of any payment,
benefit or entitlement provided for pursuant to this Agreement or otherwise by
seeking other employment, and shall not be required to mitigate the amount of
there shall be no offset against any such payment, benefit or entitlement if he
does obtain other employment.
9. REPRESENTATION
The Company represents and warrants that it is fully authorized and
empowered to enter into this Agreement and that the performance of its
obligations under this Agreement will not violate any agreement between it and
any other person, firm or organization. The Executive represents and warrants
that no agreement exists between him and any other person, firm or organization
that would be violated by the performance of his obligations under this
Agreement.
10. GROSS-UP PAYMENT
(a) In the event it is determined that any payment, benefit,
entitlement or distribution of any type to or for the benefit of the Executive,
pursuant to this Agreement or otherwise, by the Company, any person or entity
who or which acquires ownership or effective control of the Company, or
ownership of a substantial portion of the assets of the Company within the
meaning of section 260G of the Code and the regulations thereunder, or any
affiliate of the Company or such person or entity (the "Total Payments") would
be subject to the excise tax imposed by section 4999 of the Code or any similar
tax that may hereafter be imposed together with any interest or penalties with
respect to such excise tax (such excise tax, together with any such interest and
penalties, are collectively referred to as the "Excise Tax"), then the Executive
shall be entitled to receive an additional payment (a "Gross-Up Payment") in an
amount such that, after payment by the Executive of all taxes (including any
interest or penalties imposed with respect to such taxes), including any income
taxes (and any interest and penalties imposed with respect thereto) Excise Tax,
imposed upon the Gross-Up Payment, the Executive retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the Total Payments. The
Company's obligation to make Gross-Up Payments under this Section 10 shall not
be conditioned upon the Executive's termination of employment.
(b) All mathematical determinations and determinations as to whether
any of the Total Payments are "parachute payments" (within the meaning of
Section 280G of the Code), in each case which determinations are required to be
made under this paragraph, including whether a Gross-Up Payment is required, the
amount of such Gross-Up Payment, and amounts relevant to the last sentence of
this paragraph, shall be made by an independent accounting firm retained by the
Company as selected by the Executive from among the largest five accounting
firms in the United States (the "Accounting Firm"). The Accounting Firm shall
provide to the Company and to the Executive its determination (the
"Determination"), together with detailed supporting calculations regarding the
amount of any Gross-Up Payment and any other relevant matter, within ten days
after termination receipt of notice from the Executive's, or at that there has
been a Total Payment or such earlier time following termination of employment as
is requested by the Company or by the Executive reasonably believes that any of
the Total Payments may be subject to the Excise Tax). If the Accounting Firm
determines that no Excise Tax is payable by the Executive, it shall furnish the
Executive with a written statement that such Accounting Firm has concluded that
no Excise Tax is payable (including the basis for such conclusion) and that the
Executive has "substantial authority" within the meaning of Treasury Regulation
Section 1.6662-4(d) not to report any Excise Tax on the Executive's federal
income tax return. If a Gross-Up Payment is determined to be payable, it shall
be paid to the Executive within ten days after the Determination is delivered to
the Company or the Executive. Any determination by the Accounting Firm shall be
binding upon the Company and the Executive, absent manifest error. All fees and
expenses of the Accounting Firm shall be paid by the Company.
(c) As a result of uncertainty in the application of Section 4999 of
the Code at the time of the initial determination by the Accounting Firm
hereunder, it is possible that Gross-Up Payments not made by the Company and the
Executive should have been made ("Underpayment"), or that Gross-Up Payments will
have been made by the Company and the Executive that should not have been made
("Overpayments"). In either such event, the Accounting Firm shall determine the
amount of the Underpayment or Overpayment that has occurred. In the case of an
Underpayment, the Company promptly shall pay, or cause to be paid, the amount of
such Underpayment to or for the benefit of the Executive. In the case of an
Overpayment, the Executive shall, at the direction and expense of the Company,
take such steps as are reasonably necessary (including the filing of returns and
claims for refund), follow reasonable instructions from and procedures
established by, the Company, and otherwise reasonably cooperate with the Company
to correct such Overpayment; provided, however, that (1) Executive shall not in
any event be obligated to return to the Company an amount greater than the net
after-tax portion of the Overpayment that he has retained or recovered as a
refund from the applicable taxing authorities and (2) this provision shall be
interpreted in a manner consistent with the intent of Section 10(a) above, which
is to make the Executive whole, on an after-tax basis, from the application of
the Excise Tax, it being understood that the correction of an Overpayment may
result in the Executive repaying to the Company an amount that is less than the
Overpayment. Any payment to be made to correct an Underpayment or Overpayment,
as the case may be, (the "Correcting Payment") shall be accompanied by an
interest payment on the Correcting Payment at an annual rate of 8% for the
period from the date of the Gross-Up Payment through the date of payment of the
Correcting Payment.
11. SEVERABILITY
Each provision of this Agreement shall be interpreted in such manner as
to be effective and valid under applicable law, but if any provision of this
Agreement is held to be prohibited by or invalid under applicable law, such
provision will be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.
12. SUCCESSORS ASSIGNABILITY
This Agreement shall be binding upon and inure to the benefit of the
parties and their respective successors, heirs (and in the case of the
Executive) and assigns. The Company's rights and obligations under this
Agreement shall not be assignable by the Company except as incident to a
reorganization, merger or consolidation, or transfer of all or substantially all
the Company's business and properties (or portion thereof in which the Executive
is employed). The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all the business 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.
Neither this Agreement nor any rights hereunder shall be assignable or otherwise
subject to hypothecation by the Executive.
13. ENTIRE AGREEMENT
This Agreement contains the entire understanding and agreement between
the Parties concerning the subject matter hereof and, subject to the occurrence
of the Effective Date, supersedes all prior agreements, understandings,
discussions, negotiations and undertakings, whether written or oral, between the
Parties with respect thereto.
14. WITHHOLDING
The payment of any amount pursuant to this Agreement shall be subject
to applicable withholding and payroll taxes, and such other deductions as may be
required under the Company's employee benefit plans, if any.
15. GOVERNING LAW/JURISDICTION
This Agreement shall be governed by, and construed in accordance with,
the laws of Bermuda without regard to any conflict of law rules that might apply
the laws of any other jurisdiction.
16. AMENDMENT OR WAIVER
No provision in this Agreement may be amended unless such amendment is
agreed to in writing and signed by the Executive and an officer of the Company
specifically authorized to execute such amendment by the Board. No waiver by any
Party of any breach by another Party of any condition or provision contained in
this Agreement to be performed by such other Party shall be deemed a waiver of a
similar or dissimilar condition or provision at the same or any prior or
subsequent time. Any waiver must be in writing and signed by the Executive and
an officer of the Company specifically authorized to execute such waiver by the
Board.
17. SURVIVORSHIP
The respective rights and obligations of the Parties hereunder shall
survive any termination of the Executive's employment or the expiration of the
Employment Term to the extent necessary to the intended preservation of such
rights and obligations.
18. BENEFICIARIES/REFERENCES
The Executive shall be entitled, to the extent permitted under any
applicable law and under the terms of any applicable plan or program, to select
and change a beneficiary or beneficiaries to receive any compensation or benefit
payable hereunder following the Executive's death by giving the Company written
notice thereof. In the event of the Executive's death or a judicial
determination of his incompetence, reference in this Agreement to the Executive
shall be deemed, where appropriate, to refer to his beneficiary, estate or other
legal representative.
19. NOTICES
All notices or communications hereunder shall be in writing, addressed
as follows:
If to the Company:
PXRE Reinsurance Ltd.
000 Xxxxx Xxx Xxxx
Xxxxxxxx XX00
Xxxxxxx
Fax: 000-000-0000
Attn: Chairman
If to the Executive:
Xx. Xxxx X. Xxxx
Xxxxxxx Xxxxxxx
Harbour Gardens
Paget PG1
Bermuda
All such notices shall be conclusively deemed to be received and shall
be effective, (a) if sent by hand delivery or courier service, upon receipt, (b)
if sent by telecopy or facsimile transmission, upon confirmation of receipt by
the sender of such transmission or (c) if sent by registered or certified mail,
on the fifth day after the day on which such notice is mailed.
20. HEADINGS
The headings of the sections contained in this Agreement are for
convenience only and shall not be deemed to control or affect the meaning or
construction of any provision of this Agreement.
21. COUNTERPARTS
This Agreement may be executed in two or more counterparts.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first written above.
PXRE REINSURANCE LTD.
By:
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Name: Xxxxxxx X. Xxxxx
Title: Chief Executive Officer
THE EXECUTIVE
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Xxxx X. Xxxx
