Exhibit 10.2
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is dated as of December 15,1999 (the
"Effective Date"), and is entered into between Maximus Capital Holdings, Ltd.,
(the "Company") and W. Xxxx Xxxxxxx ("Executive").
WHEREAS, the Company desires to secure the employment of
Executive in accordance herewith; and
WHEREAS, Executive is willing to be employed by the Company on
the terms and conditions set forth herein; and
WHEREAS, the parties now desire to enter into this Agreement
setting forth the terms and conditions of the employment relationship of
Executive with the Company;
NOW, THEREFORE, in consideration of the mutual premises,
covenants and agreements set forth below, it is hereby agreed as follows:
ARTICLE I.
EMPLOYMENT, DUTIES AND RESPONSIBILITIES
1.1 Employment.
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(a) The Company shall employ Executive as Executive Vice-
President, Property & Casualty Operations of the Company. Executive agrees to
devote his full business time, efforts and energies to the performance of his
duties hereunder. Executive's principal office location and the executive
offices of the Company shall be in Bermuda. Notwithstanding the foregoing, to
the extent the following do not materially interfere with the performance of
Executive's duties hereunder, Executive shall be permitted to (i) manage his
personal affairs; (ii) be involved with charitable and professional activities
and (iii) with the consent of the Board, serve on the board of directors of non-
charitable entities.
(b) Executive agrees that, so long as he is employed by the
Company, he will not own, directly or indirectly, any controlling or substantial
stock or other beneficial interest in any business enterprise which is engaged
in, or competitive with, any business engaged in by the Company. Notwithstanding
the foregoing, Executive may own, directly or indirectly, up to three percent
(3%) of the outstanding capital stock or debt of any business having a class of
capital stock that is traded on any national stock exchange or on the over-the-
counter market and upon approval of the Board or as otherwise set forth on
Exhibit B attached hereto on the Effective Date, may be a passive investor in
investment entities so long as his interest therein is less than one percent
(1%).
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1.2 Duties and Responsibilities. Executive shall have such
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authority, duties and responsibilities as are customary and consistent with his
position and such other duties and responsibilities as are determined from time
to time by the Company and commensurate with his position.
ARTICLE II.
TERM
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2.1 Term. The term of employment under this Agreement (the
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"Initial Term") shall commence on December 15, 1999 (the "Commencement Date")
and subject to earlier termination under Section 5, continue for a period of
four (4) years; provided, that, commencing on the fourth anniversary of the
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Commencement Date, the Initial Term shall automatically renew for successive one
year periods (the "Additional Term"), subject to earlier termination under
Section 5, unless either party provides written notice of non-renewal to the
other at least ninety (90) days prior to the end of the Initial Term or the then
Additional Term. The Initial Term and any Additional Term shall be referred to
under this Agreement as the "Term". Upon termination of the Term or as soon
thereafter as possible, howsoever terminated, Executive shall deliver to the
Company and each affiliate of Company, if applicable, letters of resignation
from directorships, officerships and any appointment as a representative. This
obligation shall survive termination of the Executive's employment.
ARTICLE III.
COMPENSATION
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3.1 Salary, Bonuses and Benefits. As compensation and
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consideration for the performance by Executive of his obligations under this
Agreement, Executive shall be entitled to the following (subject, in each case,
to the provisions of Article V hereof):
(a) The Company shall pay Executive a base salary
during the Term, payable in accordance with the normal payment procedures of the
Company as it may exist from time to time and subject to such withholdings and
other normal employee deductions as may be required by law, at the rate of
$400,000 (U.S.) per annum. The Company shall periodically review such
compensation for increase in its sole discretion. Once increased, the base
salary shall not be reduced. The base salary as increased from time to time
shall be referred to herein as "Base Salary".
(b) Executive shall participate during the Term in
such pension, life insurance, health, disability and major medical insurance
plans, and in such other employee benefit plans and programs and fringes and
perquisites, for the benefit of the employees of the Company, as may be
maintained from time to time during the Term, in each case to the extent and in
the manner available to other senior executives or officers of the Company and
subject to the terms and provisions of such plans or programs. In addition
Executive shall receive an automobile allowance, the payment of country club
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dues not to exceed $6,000 (U.S.) annually, and the payment of a housing
allowance not to exceed $8,000 (U.S.) per month.
(c) For each calendar year that begins during the
Term (the "Bonus Year"), the Company shall pay a bonus to Executive based on
pre-established performance goals established by the Board with a target bonus
of 75% of Base Salary and a range from 0% to 200% of Base Salary (the "Bonus");
provided, that, for the 1999 calendar year, such Bonus shall be pro-rated for
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the portion of the year worked by Executive from and after the Commencement
Date. Such performance criteria shall be weighted 70% on Company performance and
30% on Executive's performance.
(d) Executive shall be entitled to four weeks of
paid vacation in accordance with the Company policy as it may exist from time to
time (but not necessarily consecutive vacation weeks) during each year of the
Term.
(e) Executive shall be reimbursed for up to four (4)
business class airline tickets per year for each of Executive and his immediate
family to return to Toronto, Canada.
(f) (i) Upon the closing (or as soon as
administratively feasible thereafter) of the financing of the Company currently
contemplated by the private placement (the "Private Placement"), the Company
shall issue to Executive warrants to purchase 160,000 shares of the Company's
class A common stock (the "Common Stock"), consistent with the terms set forth
in this paragraph (f). The term of the warrants shall be the same as that of
Xxxxx Holdings II, L.L.C. and Capital Z Investments, L.P. (the "Investors"). The
warrant shall vest 20% on the date of grant and an additional 20% on each of the
first, second, third and fourth anniversaries of the date of grant; provided,
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that, Executive is then employed. The exercise price per share shall be equal to
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the per share price paid by the Original Investors (as defined below) in the
Private Placement.
(ii) In the event Executive's employment is
terminated by the Company with Cause or by Executive without Good Reason (both
as defined below), all unvested warrants shall immediately terminate and any
vested warrants shall remain exercisable for thirty (30) days following such
termination; provided, that, Executive shall have at least thirty (30) business
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days following any underwriter's lock-up period imposed prior to or during such
thirty (30) day period to exercise his vested warrants, but in no event beyond
the term.
(iii) In the event of Executive's death, or if
Executive's employment under this Agreement is terminated by the Company for
Disability (as defined below), or without Cause or by Executive for Good Reason
or the Company fails to renew Executive's work permit in Bermuda and his
employment terminate pursuant to Section 5.7 hereof, all of the warrants that
would have vested within twelve (12) months of such termination shall
immediately become vested, and all other unvested warrants shall immediately
terminate.
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If a termination of employment under this
subparagraph (iii) occurs prior to an Initial Public Offering (as defined
below), vested warrants shall remain exercisable for two (2) years following
such termination; provided, that, if an Initial Public Offering should occur
following such termination, then such warrants shall remain exercisable for the
lessor of six (6) months (one (1) year in the event of death or Disability)
following such Initial Public Offering or the remaining exercise period, but in
no event beyond the term of the warrants.
If a termination of employment under this
subparagraph (iii) occurs after an Initial Public Offering, all vested warrants
shall remain exercisable for six (6) months (one (1) year in the event of death
or Disability) following such termination, but in no event beyond the term of
the warrant. In the event of any termination of employment under this
subparagraph (iii), Executive shall have at least thirty (30) business days
following any underwriter's lock-up period imposed prior to or during any
warrant exercise period to exercise his vested warrants.
(iv) In the event of a Change in Control (as
defined below), all unvested warrants shall become immediately vested.
For purposes of this Agreement, prior to an
Initial Public Offering, a Change in Control shall mean (i) a sale, assignment,
transfer or other disposition of securities in one or more related transactions
where the Investors and other shareholders of the Company as of the Closing
(together with the Investors, the "Original Investors") cease to beneficially
own 51% or more of the total combined voting power of the Company's outstanding
securities; (ii) a merger, consolidation, reorganization or similar corporate
event in which the Original Investors cease to beneficially own 51% or more of
the total combined voting power of the Company's outstanding securities or 51%
or more of the total combined voting power of the resultant corporation or
entity if the Company does not survive such transaction; (iii) the sale,
transfer, assignment or other disposition of all or substantially all of the
Company's property, assets or business to one or more unrelated parties.
Notwithstanding the foregoing, no Change in Control shall be deemed to occur as
a result of an Initial Public Offering of the Company or any necessary actions
taken, as determined by the Board, in order to effectuate such Initial Public
Offering.
Following an Initial Public Offering, the term
Change in Control shall mean (i) a sale, assignment, transfer or other
disposition of securities in one or more related transactions where the
shareholders immediately prior to such transaction cease to beneficially own 51%
or more of the total combined voting power of the Company's outstanding
securities; (ii) a merger, consolidation, reorganization or similar corporate
event in which the shareholders immediately prior to such transaction cease to
beneficially own 51% or more of the total combined voting power of the Company's
outstanding securities or 51% or more of the total combined voting power of the
resultant corporation or entity if the Company does not survive such
transaction; or (iii) the sale, transfer, assignment or other disposition of all
or substantially all of the Company's property, assets or business to one or
more unrelated parties.
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The term Initial Public Offering shall mean an
initial public offering of the Company's Common Stock pursuant to a registration
statement (other than on Form S-8 or successor forms) filed with, and declared
effective by, the Securities and Exchange Commission.
(v) Upon an Initial Public Offering and
provided Executive is then employed, Executive may receive an additional warrant
at the discretion of the Compensation Committee of the Board of Directors of the
Company; provided, that, such award shall be equal to at least 0.2% of the
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shares of Common Stock to be sold in the Initial Public Offering, exclusive of
all warrants, of the Company upon completion of the Initial Public Offering,
such percentage to be calculated in the same manner as for the Investors in such
Initial Public Offering. The exercise price of such warrants shall be the same
as the exercise price for the Investors. The warrants shall have terms and
conditions consistent with those set forth above in subparagraphs (i) through
(iv), above.
(g) The Company shall pay Executive a signing bonus
of $600,000 (U.S.) (the "Signing Bonus") upon the earlier of (i) December 22,
1999 or (ii) the closing of the Private Placement (the "Closing").
(h) Upon the Closing, and provided Executive is then
employed, the Company shall make available to Executive, a loan not to exceed
$2,400,000 (U.S.), to be used to purchase shares of Company Common Stock
("Purchased Shares") in the Private Placement at the Closing, with a price per
share paid by the President and CEO of the Company in the Private Placement at
the Closing, such loan to be governed by the terms and conditions as outlined in
additional documentation and not inconsistent with the terms hereof (the
"Loan").
The Loan shall be five years with no amortization. The
interest rate on each Loan shall be the applicable federal rate (as defined in
Section 1274(d) of the Internal Revenue Code of 1986, as amended (the "Code"))
(the "AFR") in effect on the date of each Loan, accrued and payable annually.
The Loan shall be 100% fully recourse against Executive and shall be fully
secured by the Purchased Shares. Following an Initial Public Offering and except
as provided below, upon Executive's termination of employment for any reason,
the Loan shall become due and payable within sixty (60) days (one (1) year in
the event of death or Disability) following such termination. If terminated
prior to an Initial Public Offering, the Loan shall be repaid upon the earlier
of (i) disposition of the Purchased Shares or (ii) one (1) year from the date of
termination. Notwithstanding the foregoing, in the event Executive's employment
is terminated by the Company with Cause or Executive terminates his employment
without Good Reason, the Loan must be repaid within thirty (30) days following
any such termination. If Executive disposes of any of the Purchased Shares (if
permitted), upon repayment of the Loan relating to such shares, the Company
shall release such shares from its security interest.
3.2 Expenses. The Company will reimburse Executive for
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reasonable business-related expenses incurred by him in connection with the
performance of his duties hereunder during the Term in accordance with the
Company's policies relating to business-related expenses as in effect from time
to time during the Term.
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3.3 Put; Registration Rights and Transfer Restrictions.
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(a) If prior to an Initial Public Offering, Executive
may require the Company to purchase any or all shares of Common Stock owned by
Executive for at least six (6) months (by purchase or pursuant to the exercise
of warrants) for book value (as calculated under generally accepted accounting
principles by the Company's auditors) within one (1) year of termination of
employment for any reason (other than a termination by the Company for Cause or
by Executive without Good Reason) (the "Put"). Such Put shall automatically
expire upon an Initial Public Offering whether or not Executive is then
employed. Payment of the purchase price in connection with any such Put shall be
in the form of cash and shall be made within forty-five (45) days following
Executive's exercise of such Put.
(b) Executive shall have the same registration and
transfer rights and restrictions as the Investors, including, but not limited
to, drag-along and tag-along rights; provided, that, registration rights will be
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subject to any underwriter's cut-back.
ARTICLE IV.
EXCLUSIVITY, ETC.
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4.1 Restrictive Covenants.
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(a) Return of Property and Nondisclosure. Upon
termination or expiration of his employment, Executive will promptly deliver to
the Company all data, lists, information, memoranda, documents and all other
property belonging to the Company or containing "Confidential Information" (as
defined below), including, among other things, that which relates to services
performed by Executive for the Company or any affiliate, or was created or
obtained by Executive while performing services for the Company or any affiliate
or by virtue of Executive's relationship with the Company or any affiliate,
except that Executive shall have no obligation to deliver to the Company his
rolodex, calendars and any documents containing Executive's personal contacts or
information. Except (i) as required in order to perform his obligations under
this Agreement, (ii) as may otherwise be required by law or any legal process,
or (iii) as is necessary in connection with any adversarial proceeding against
the Company (in which case Executive shall use his reasonable best efforts in
cooperating with the Company in obtaining a protective order against disclosure
by a court of competent jurisdiction), Executive shall not, without the express
prior written consent of the Company, disclose or divulge to any other person or
entity, or use or modify for use, directly or indirectly, in any way, for any
person or entity any of the Company's or any affiliate's Confidential
Information at any time (during or after Executive's employment). For purposes
of this Agreement, "Confidential Information" of the Company shall mean any
valuable, competitively sensitive data and information related to the Company's
or any affiliate's business including, without limitation Trade Secrets (as
defined below) that are not generally known by or readily available to the
Company's or any affiliate's competitors or any affiliate's other than as a
result of an improper disclosure directly or indirectly by Executive. "Trade
Secrets" shall mean information or data of the Company or any affiliate's
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including, but not limited to, technical or non-technical data, financial
information, programs, devices, methods, techniques, drawings, processes,
financial plans, product plans, or lists of actual or potential customers or
suppliers, that: (A) derive economic value, actual or potential, from not being
generally known to, and not being readily ascertainable by proper means by,
other persons who can obtain economic value from their disclosure or use; and
(B) are the subject of efforts that are reasonable under the circumstances to
maintain their secrecy.
(b) Post-Employment Property. Executive agrees that
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any and all intellectual property that Executive invents, discovers, originates,
makes, conceives, creates or authors either solely or jointly with others and
that is the result of or is substantially derived from Confidential Information
shall be the sole and exclusive property of the Company unless in the public
domain. Executive shall promptly and fully disclose all such property to the
Company, shall provide the Company with any information that it may reasonably
request about such property and shall execute such agreements, assignments or
other instruments as may be reasonably requested by the Company to reflect such
ownership by the Company.
(c) Protection of the Business; Nonsolicitation.
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During the Term and until the second anniversary of Executive's Date of
Termination (as defined below) for any reason (the "Restricted Period") (other
than upon expiration of the Term in which case the Restricted Period shall be
until the first anniversary of Executive's Date of Termination), Executive will
not anywhere within the geographical areas in which the Company or any
subsidiary (the "Designated Entities") are conducting their business operations
or providing services as of the Date of Termination, pursue any Company or
subsidiary project known to Executive and which the Designated Entities are
actively pursuing, developing or attempting to develop as of the Date of
Termination (or within six (6) months prior to the Date of Termination) while
the Company is (or is contemplating actively) pursuing such project directly or
indirectly, alone, in association with or as a shareholder, principal, agent,
partner, officer, director, employee or consultant of any other organization.
During the Restricted Period, Executive shall not solicit any officer, employee
(other than secretarial staff) or consultant of any of the Designated Entities
to leave the employ of any of the Designated Entities.
(d) Non-Disparage. The parties acknowledge and agree
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that they will not defame or publicly criticize the services, business,
integrity, veracity or personal or professional reputation of the other party,
and in the case of the Company, its officers, directors, partners, employees,
affiliates, or agents thereof in either a professional or personal manner,
except that the foregoing shall not limit normal competitive activities.
(e) Blue Pencil. If, at any time, the provisions of
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this Section 4.1 shall be determined to be invalid or unenforceable under any
applicable law, by reason of being vague or unreasonable as to area, duration or
scope of activity, this Section 4.1 shall be considered divisible and shall
become and be immediately amended to only such area, duration and scope of
activity as shall be determined to be reasonable and enforceable by the court or
other body having jurisdiction over the matter; and Executive and the Company
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agree that this Section 4.1 as so amended shall be valid and binding as though
any invalid or unenforceable provision had not been included herein.
4.2 Remedies. Executive acknowledges that the Company's remedy at
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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 seek injunctive
relief in Bermuda or elsewhere in addition to any other remedy it may have. If
any of the provisions of, or covenants contained in, this Article IV are
hereafter construed to be invalid or unenforceable in any jurisdiction, the same
shall not affect the remainder of the provisions or the enforceability thereof
in any other jurisdiction, which shall be given full effect, without regard to
the invalidity or unenforceability in such other jurisdiction. If any of the
provisions of, or covenants contained in, this Article IV are held to be
unenforceable in any jurisdiction because of the duration or geographical scope
thereof, the parties agree that the court making such determination shall have
the power to reduce the duration or geographical scope of such provision or
covenant and, in its reduced form, such provision or covenant shall be
enforceable; provided, however, that the determination of such court shall not
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affect the enforceability of this Article IV in any other jurisdiction.
ARTICLE V.
TERMINATION
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5.1 Termination by the Company with Cause. The Company shall have
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the right to terminate Executive's employment at any time with "Cause" by
providing a Notice of Termination to Executive not more than ninety (90) days
after the Board's actual knowledge of the Cause event, and such termination
shall not be deemed to be a breach of this Agreement. For purposes of this
Agreement, "Cause" shall mean (i) habitual drug or alcohol use which impairs the
ability of Executive to perform his duties hereunder; (ii) Executive's
conviction during the Term by a court of competent jurisdiction, or a pleading
of "no contest" or guilty to a felony or the equivalent if outside the United
States; (iii) Executive's engaging in fraud, embezzlement or any other illegal
conduct with respect to the Company which acts are materially harmful to, either
financially, or to the business reputation of, the Company; (iv) Executive's
willful violation of Article IV hereof; (v) Executive's willful failure or
refusal to perform his duties hereunder (other than such failure caused by
Executive's Disability or while on vacation), after a written demand for
performance is delivered to Executive by the Board that specifically identifies
the manner in which the Board believes that Executive has failed or refused to
perform his duties, or (vi) Executive otherwise breaches any material provision
this Agreement which is not cured, if curable, within 30 days after written
notice thereof.
5.2 Death. In the event Executive dies during the Term, his
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employment shall automatically terminate effective on the date of his death and
such termination shall not be deemed to be a breach of this Agreement.
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5.3 Disability. In the event that Executive shall suffer a mental
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or physical disability which shall have prevented him from performing his
material duties hereunder for a period of at least one hundred twenty (120)
consecutive days or one-hundred eighty (180) non-consecutive days within any 365
day period, the Company shall have the right to terminate Executive's employment
for "Disability," such termination to be effective upon the giving of notice
thereof to Executive in accordance with Section 6.3 hereof and such termination
shall not be deemed to be a breach of this Agreement. In such event, Executive's
employment hereunder shall terminate effective on the 30th day after receipt of
such notice by the Executive (the "Disability Effective Date"); provided, that,
the Executive shall not have returned to full-time performance of his duties
hereunder within thirty (30) days following receipt of such notice.
5.4 Good Reason. Executive may terminate his employment with the
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Company for "Good Reason" within thirty (30) days after Executive has knowledge
of the occurrence, without Executive's written consent, of one of the following
events that has not been cured, if curable, within thirty (30) days after a
Notice of Termination has been given by Executive to the Company and such
termination shall not be deemed to be a breach of this Agreement. For purposes
of this Agreement, "Good Reason" shall mean: (i) any material and adverse change
to Executive's duties or authority which are inconsistent with his title and
position set forth herein, (ii) a material diminution of Executive's title or
position; (iii) the relocation of Executive's office outside of Bermuda; (iv) a
reduction of Executive's Base Salary; (v) a material reduction of Executive's
benefits provided under Section 3.1 other than a reduction permitted under terms
and conditions of the applicable Company policy or benefit plan; or (vi) a
willful failure by the Company to comply with any other material provisions of
this Agreement.
5.5 Without Good Reason. Executive may terminate his employment
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with the Company without Good Reason by giving written notice to the Company as
provided in Section 6.3. Such notice must be provided to the Company at least
thirty (30) days prior to such termination. Such termination shall not be deemed
to be a breach of this Agreement.
5.6 Without Cause. The Company shall have the right to terminate
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Executive's employment hereunder without Cause by providing Executive with a
notice of termination, and such termination shall not in and of itself be, nor
shall it be deemed to be, a breach of this Agreement.
5.7 Expiration of the Term. Executive's employment shall terminate
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upon the expiration of the Term, including expiration resulting from the Company
or Executive giving the notice contemplated by Section 2.1 hereof, and such
termination shall not in and of itself be, nor shall it be deemed to be, a
breach of this Agreement. For all purposes of this Agreement, if the Company
cannot renew Executive's work permit in Bermuda and Executive is no longer able
to provide services for the Company as a result thereof, the Agreement shall be
deemed to expire as of such date and such expiration shall be deemed to be the
result of the Company providing Executive with a notice of non-renewal.
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5.8 Notice of Termination. Any termination of Executive's
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employment by the Company for Cause, or by Executive for Good Reason, shall be
communicated by Notice of Termination to the other party hereto given in
accordance with Section 6.3 of this Agreement. For purposes of this Agreement, a
"Notice of Termination" means a written notice which (i) indicates the specific
termination provision in this Agreement relied upon, (ii) to the extent
applicable, sets forth in reasonable detail the facts and circumstances claimed
to provide a basis for termination of Executive's employment under the provision
so indicated and (iii) if the Date of Termination (as defined below) is other
than the date of receipt of such notice, specifies the termination date. The
failure by Executive or the Company to set forth in the Notice of Termination
any fact or circumstance which contributes to a showing of Good Reason or Cause
shall not waive any right of Executive or the Company, respectively, hereunder
or preclude Executive or the Company, respectively, from asserting such fact or
circumstance in enforcing Executive's or the Company's rights hereunder.
5.9 Date of Termination. "Date of Termination means (i) if
Executive's employment is terminated by the Company for Cause or by Executive
for Good Reason, the date of receipt of the Notice of Termination or any later
date specified therein (but not more than thirty (30) days), as the case may be
(although such Date of Termination shall retroactively cease to apply if the
circumstances providing the basis of termination for Cause or Good Reason are
cured in accordance with Section 5.1 or 5.4 of this Agreement, respectively),
(ii) if Executive's employment is terminated by the Company other than for Cause
or Disability, the Date of Termination shall be the date set forth in the Notice
of Termination (iii) if Executive's employment is terminated by Executive
without Good Reason, the Date of Termination shall be the date set forth in the
Notice of Termination, but no sooner than thirty (30) days after such Notice of
Termination is received by the Company and (iv) if Executive's employment is
terminated by reason of death or Disability, the Date of Termination shall be
the date of Executive's death or the Disability Effective Date, as the case may
be.
5.10 Compensation upon Termination. In the event of the termination
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of Executive's employment during or at the end of the Term, the Company shall
provide Executive with the payments and benefits set forth below. Executive
acknowledges and agrees that the payments set forth in this Section 5.10 and
Section 5.11 constitute liquidated damages for any claim of breach of contract
under this Agreement as it relates to termination of his employment during the
Term. Notwithstanding the foregoing, if Executive is entitled to the payments
set forth in Section 5.10(b), Section 5.10(c), Section 5.10(d) or Section 5.11
of this Agreement, Executive shall execute and agree to be bound by an agreement
relating to the waiver and general release of any and all claims (other than
claims for the compensation and benefits payable under Section 5.10(b), Section
5.10(c), Section 5.10(d) or Section 5.11, as the case may be) arising out of or
relating to Executive's employment and termination of employment (the
"Release"). Such Release shall be made substantially in the form attached hereto
as Exhibit A, subject to such changes as may be required to preserve the intent
thereof for changes in applicable law.
(a) In the event of termination of Executive's employment by
the Company for Cause or by Executive without Good Reason, or by reason of
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expiration of the Term due to Executive providing the notice not to renew the
Term as contemplated by Section 2.1 hereof, the Company shall pay Executive his
accrued, but unpaid Base Salary and unpaid business expenses through Date of
Termination. To the extent required by law or as otherwise provided by Company
policy, Executive shall also be paid his accrued, but unpaid vacation pay
through the Date of Termination.
(b) In the event of Executive's death or the termination of
his employment due to Disability, the Company shall pay to Executive (or his
beneficiary(ies) or estate, as the case may be) an amount equal to the sum of
(i) his accrued, but unpaid Base Salary through the date of termination of
employment, (ii) earned, but unpaid Bonus for the year prior to the year of
termination, (iii) a pro-rata portion of his Bonus for the year of death or
termination for Disability, as determined in the good faith opinion on the Board
based on the relative achievement of performance targets through the Date of
Termination and (iv) accrued vacation pay through the Date of Termination (the
sum of the amounts in clauses (i) through (iv) hereof referred to as "Accrued
Amounts"), as soon as practicable following the Date of Termination. Executive
shall be entitled to any other rights, compensation and/or benefits as may be
due to Executive in accordance with the terms and provisions of any agreements,
plans or programs of the Company.
(c) Subject to Section 5.11 of this Agreement, in the event
Executive's employment is terminated pursuant to Section 5.4 or Section 5.6, the
Company shall pay Executive, the Accrued Amounts and continue to pay Executive
his Base Salary for twenty-four months following such termination (the
"Severance Amount"). Notwithstanding the foregoing, if such termination should
occur following a Change in Control, in lieu of the Severance Amount, Executive
shall receive a lump sum payment equal to two times his then current Base Salary
and last paid Bonus, if any.
(d) Subject to Section 5.11 of this Agreement in the event
Executive's employment is terminated by the expiration of the Term because the
Company has failed to renew Executive's work permit or has provided Executive
the notice contemplated by Section 2.1 hereof, the Company shall pay Executive
the Accrued Amounts and continue to pay Executive his Base Salary for twelve
(12) months following such termination; provided, that, the Company's
obligations under this clause (d) shall cease if Executive finds other
employment during such twelve (12) month period.
(e) Except as provided in this Agreement, Executive's rights
upon termination of employment with respect to incentive awards and stock
options shall be governed by the terms and conditions of the plan and any
agreements or as established by the Company with respect to such awards.
(f) Except as provided in this Section 5.10 or Section 5.11,
Executive shall not be entitled to compensation as a result of any termination
of his employment with the Company.
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5.11 Non-Capitalization Severance. Notwithstanding any other
provision of this Agreement to the contrary, including, but not limited to
Section 5.10(c) or Section 5.10(d), in the event the Company fails to have the
Closing on December 22, 1999 or such later date as the Board determines (the
"Capitalization Date"), the Company may elect within thirty (30) days following
such Capitalization Date to terminate this Agreement and Executive's employment
hereunder, and the Company shall continue to pay Executive his Base Salary for
twelve (12) months following such termination; provided, that, if Executive
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finds other employment during such period, the Company's obligations hereunder
shall cease. Upon such election, Executive's rights under this Agreement and the
Company's obligations hereunder shall be solely governed by this Section 5.11
(other than Article IV (excluding Section 4.1(b) thereof) of this Agreement
which shall survive such termination) and the Company shall have no further
obligation to Executive under this Agreement.
ARTICLE VI.
MISCELLANEOUS
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6.1 Mitigation; Offset. Except as specifically provided
------------------
hereunder, Executive shall not be required to mitigate damages resulting from
his termination of employment and the amounts payable to Executive pursuant to
this Agreement shall not be offset or reduced by any other compensation earned
by Executive except as otherwise necessary to secure repayment of the Loan.
6.2 Benefit of Agreement; Assignment; Beneficiary.
---------------------------------------------
(a) This Agreement shall inure to the benefit of and
be binding upon the Company and its successors, including, without limitation,
any assignment to a corporation or person which may acquire all or substantially
all of the Company's assets or business, or with or into which the Company may
be consolidated or merged. This Agreement shall also inure to the benefit of,
and be enforceable by, Executive and his personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees. If Executive should die while any amount would still be payable to
Executive hereunder if he had continued to live, all such amounts shall be paid
in accordance with the terms of this Agreement to Executive's beneficiary,
devisee, legatee or other designee, or if there is no such designee, to
Executive's estate.
(b) The Company shall require any successor (whether
direct or indirect, by operation of law, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company to expressly assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform it
if no such succession had taken place.
6.3 Notices. Any notice required or permitted hereunder shall be
-------
in writing and shall be sufficiently given if personally delivered or if sent by
telegram or telex or by registered or certified mail, postage prepaid, with
return receipt requested, addressed: (a) in the case of the Company to its
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principal executive offices, Attention: Corporate Secretary, or to such other
-------------------
address and/or to the attention of such other person as the Company shall
designate by written notice to Executive; and (b) in the case of Executive, to
the Company's address or to such other address as Executive shall designate by
written notice to the Company. Any notice given hereunder shall be deemed to
have been given at the time of receipt thereof by the person to whom such notice
is given, if in person, or two (2) days following depositing such notice in the
mail or its equivalent.
6.4 Entire Agreement; Amendment. This Agreement contains the
---------------------------
entire agreement of the parties hereto with respect to the terms and conditions
of Executive's employment during the term and supersedes any and all prior
agreements and understandings, whether written or oral, between the parties
hereto with respect to compensation due for services rendered hereunder. This
Agreement may not be changed or modified except by an instrument in writing
signed by both of the parties hereto.
6.5 Waiver. The waiver by either party of a breach of any
------
provision of this Agreement shall not operate or be construed as a continuing
waiver or as a consent to or waiver of any subsequent breach hereof.
6.6 Headings. The Article and Section headings herein are for
--------
convenience of reference only, do not constitute a part of this Agreement and
shall not be deemed to limit or affect any of the provisions hereof.
6.7 Governing Law. This Agreement shall be governed by, and
-------------
construed and interpreted in accordance with, the laws of the State of New York
without reference to the principles of conflict of laws. Notwithstanding the
foregoing, to the extent that Bermuda law restricts the ability of the Company
to fully comply with the express terms of this Agreement, the Company may modify
this Agreement to the extent necessary to comply with such law and such
modification shall not be deemed to be a breach of this Agreement by the
Company.
6.8 Agreement to Take Actions. Each party hereto shall execute and
-------------------------
deliver such documents, certificates, agreements and other instruments, and
shall take such other actions, as may be reasonably necessary or desirable in
order to perform his or its obligations under this Agreement or to effectuate
the purposes hereof.
6.9 Survivorship. The respective rights and obligations of the
------------
parties hereunder shall survive any termination of this Agreement to the extent
necessary to the intended preservation of such rights and obligations,
including, but not limited to, Article IV.
6.10 Validity. The invalidity or unenforceability of any provision
--------
or provisions of this Agreement shall not affect the validity or enforceability
of any other provision or provisions of this Agreement which shall remain in
full force and effect.
6.11 Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
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6.12 Indemnification. The Company will indemnify and hold
---------------
Executive harmless both during and after the Term to the fullest extent
permitted by law with regard to actions or inactions in relation to the
Executive's duties as an officer of the Company and will, during and after the
Term, maintain adequate directors and officers insurance for Executive to cover
any such liability (but in no event less than that maintained for other officer
of the Company).
6.13 Arbitration. Except as otherwise provided in Article IV of
-----------
this Agreement, if any contest or dispute arises between the parties with
respect to this Agreement, such contest or dispute shall be submitted to binding
arbitration for resolution in Bermuda in accordance with the rules and
procedures of the American Arbitration Association then in effect. The decision
of the arbitrator shall be final and binding on both parties, and any court of
competent jurisdiction may enter judgment upon the award. Each party shall pay
its own legal fees and expenses incurred in connection therewith regardless of
outcome.
6.14 Withholding. All payments hereunder shall be subject to any
-----------
required withholding of Federal, state and local taxes pursuant to any
applicable law or regulation.
6.15 Representation. Executive represents and warrants to the
--------------
Company that (i) 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.
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IN WITNESS WHEREOF, each of the parties hereto has duly executed this
Agreement effective as of the date first above written.
MAXIMUS CAPITAL HOLDINGS, LTD.
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxx
Title: CEO
/s/ W. Xxxx Xxxxxxx
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Executive
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