Exhibit 10(hhh)
DATED December 20, 2001
OVERSEAS PARTNERS LTD.
- and -
XXXX XXXXXXX
_______________________________________
EMPLOYMENT AGREEMENT
_______________________________________
2
THIS AGREEMENT is made the 20th day of December 2001
BETWEEN:
OVERSEAS PARTNERS LTD. whose registered office is situated at Xxxxxxxxxx Xxxxx,
0 Xxx-Xx-Xxxxx Xxxx, Xxxxxxxx XX 00, Xxxxxxx (xxx "Company"); and
XXXX XXXXXXX of "Windward", 00 Xxxxx Xxxxx Xxxx, Xxxxxx (xxx "Executive").
WHEREBY IT IS AGREED as follows:
1. Definitions and Interpretations
In addition to the words and expressions hereinbefore defined the
following words and expressions shall have the meanings hereinafter
ascribed to them;
"Associated Company" means any company which is from time to time a
subsidiary or a holding company (as those
expressions are defined by Section 86 of the
Companies Act 1981) of the Company.
the "Board" means the Board of Directors from time to time of
the Company.
"Commencement Date" means the 1/st/ day of January 2000.
"Employment" means the employment of the Executive with the
Company pursuant to this Agreement.
3
"Common Share Capital" means all the Common Shares of the Company in
issue from time to time.
"Termination Date" means the date on which the Employment with
the Company ceases either for reason of the
conclusion of the fixed term of the Employment or
for reason of the termination of the Employment in
accordance with the provisions of this Agreement.
2. Term of Appointment
a. The Company hereby appoints the Executive and the Executive hereby
agrees to act as Executive Vice President and Chief Financial Officer
of the Company for an initial Term of Appointment of a period of three
(3) years unless this Agreement is: (i) sooner terminated in
accordance with paragraph 5 below, or (ii) extended as provided in
paragraph 2(b) below.
b. Commencing on the third anniversary of the Commencement Date and
on each annual anniversary of such date, (each a "Renewal Date"), this
Agreement, and the Term of Appointment herein granted, shall be
automatically extended so as to terminate on the first annual
anniversary of each Renewal Date, unless either the Company or the
Executive shall give the other written notice, not less than 60 days
prior to any Renewal Date, of the election not to so extend this
Agreement, in which case this Agreement shall terminate on such
Renewal Date.
3. Powers and Duties
During the period of Employment under this Agreement the Executive:
(a) shall report to the Chief Executive Officer of the Company or
designee thereof (the "CEO") and shall exercise such powers and
perform such
4
duties (not being duties inappropriate to his status) as Executive
Vice President and Chief Financial Officer as may from time to time be
vested in or assigned to him by the CEO and shall comply with all
reasonable directions from time to time given to him by the CEO and
with all rules and regulations from time to time laid down by the
Company concerning its employees as the CEO or the Board of Directors
of the Company (the "Board") may from time to time determine.
(b) shall devote his full attention and business time to the business and
affairs of the Company, provided, however, that nothing in this
Agreement shall preclude the Executive from engaging in activities
involving professional, educational, charitable, religious and
community organizations, managing his personal investments, and
serving on the board of directors of such companies and organizations
as agreed to from time to time by the Board, to the extent that the
foregoing do not materially inhibit the performance of the Executive's
duties under this Agreement or conflict in any material way with the
business and affairs of the Company.
(c) use his best efforts to perform faithfully and efficiently, and to
discharge the dealings and responsibilities assumed by him under this
Agreement.
4. Remuneration and Benefits
The Executive shall be paid by way of remuneration a salary and bonus and
such other benefits (if any) as the CEO and the Compensation Committee of
the Board (the "Compensation Committee") may from time to time determine as
follows:
a) The Executive shall be paid by way of remuneration for his services
during the Employment hereunder: (i) a base salary at the rate of
$20,000 per month through February 28, 2001 and at the rate of $25,000
per month thereafter and (ii) such bonuses or additional remuneration
(if any) as the CEO, with ratification by the Compensation Committee,
may from time to time determine in accordance with the "Overseas
Partners Ltd. Incentive
5
Plan" (in development at the Commencement Date) based upon a
target award of 100% of annual base salary, a minimum award of
50% of annual base salary, and a maximum award of 150% of annual
base salary (using the Executive's annual base salary in effect
at the end of the calendar year to which the bonus relates), in
each case determined by the performance of the Company and the
Executive as adjudged by the CEO and ratified by the Compensation
Committee. The CEO and Compensation Committee shall review the
Executive's base salary and potential bonus award, on an annual
basis to determine, in its sole discretion, if and to what extent
an increase in base salary and/or the awarding of a bonus or
additional remuneration is warranted. The annual review will be
completed by March 1 of each year.
Such salary shall be paid by equal monthly installments in
arrears on the last day of every month and shall accrue from day
to day.
b) The Executive shall be entitled to receive grants of restricted
stock, stock options and/or stock appreciation rights on an
annual basis under the Company's Incentive Compensation Plan for
the time being in force, subject to the rules applicable to the
Plan as established, amended or varied from time to time by the
Board or such other Plan as is in force from time to time, and as
amended from time to time, as the case may be. The grants
referred to in the preceding sentence shall be based on a target
future value of 150% of annual base salary then in effect.
In connection with the commencement of the Executive's employment
hereunder, the Executive received 49,079 shares of restricted
stock, which shares were granted effective August 15, 2001 and
will vest on December 31, 2002, subject to the terms and
conditions of the Restricted Stock Agreement and the Overseas
Partners Ltd. Incentive Compensation Plan, pursuant to which such
award was granted.
6
c) In addition to public holidays the Executive will be entitled
to thirty (30) days vacation in every calendar year. Unless
and until his Employment under this Agreement terminates under
any provision herein, salary will continue to be payable
during vacations. Vacation days not taken in any calendar year
may be carried forward at the sole discretion of the
Compensation Committee.
d) Subject to production, if requested, of medical certificates
satisfactory to the Company, salary will not cease to be
payable by reason only of the Executive's incapacity to work
due to sickness or accident (unless and until his Employment
under the Agreement shall be terminated under any provision
herein) but the Company may reduce salary during incapacity by
an amount equal to the benefit (excluding any lump sum
benefit) which the Executive would be entitled to claim during
such incapacity under any sickness or accident insurance
policy paid for entirely by the Company (whether or not such
benefit is claimed by the Executive).
e) The Executive shall be entitled to participate in the Overseas
Partners Ltd And Subsidiaries Retirement Plan (401(k)).
f) The Executive is entitled to all other benefits outlined in
the Overseas Partners Ltd./Overseas Partners Re Ltd. Company
Handbook, which are not specifically identified in this
Agreement.
g) The Company shall, during the continuance of the Employment of
the Executive (including any period of notice) pay a housing
allowance of $8,000 per month to defray the Executive's
housing cost here in Bermuda. The first of such payment shall
be made on the 25th day of January 2000 representing the
housing allowance for January in arrears. All subsequent
payments shall be on the 25th day of each month, in arrears
for the month in question.
7
5. Termination of Employment
a) The Employment may be terminated prior to the scheduled
expiration of the initial Term of Appointment: (i) by the
Company with or without "cause" (as defined below), (ii) by
the Executive with or without "good reason" (as defined below)
or (iii) due to the death or total and permanent disability of
the Executive in accordance with the applicable long-term
policies of the Company in which the Executive participates.
b) In the event that the Executive wishes to resign from the
Company without "good reason" prior to the scheduled
expiration of the initial Term of Appointment, the Executive
shall provide the Company with three (3) months' advance
written notice and, in such case, the Company may terminate
the Executives employment prior to the end of such three (3)
month period provided that the Company makes the payments to
the Executive described in paragraph (e) below. A termination
of the Employment by the Company as provided in the preceding
sentence shall not be deemed a termination without "cause" or
give the Executive grounds to terminate his employment for
"good reason" for purposes of paragraph (c) below.
c) In the event that the Employment is terminated pursuant to
paragraph (a) above (i) by the Company without "cause" or (ii)
by the Executive with "good reason", the Executive shall be
entitled to receive, in addition to accrued salary and
benefits (including a pro-rata calculation of earned vacation
days) payable to the Executive through the Termination Date,
the following payments, each of which shall be paid in a lump
sum within 14 business days from the Termination Date: (i) an
amount equal to the Executive's bonus entitlement (as
determined in paragraph 4(a)), based upon the target level set
by the Company for the year in which the Executive's
termination occurs and pro-rated for the period from January 1
of the year in which the termination occurs to the Termination
Date, (ii) an
8
amount equal to the product of 24 times the Executive's
monthly base salary (as determined in paragraph 4(a)), and
(iii) an amount equal to the product of 2 times the
Executive's bonus entitlement (as determined in paragraph
4(a)), based upon the target level set by the Company for the
year in which the Executive's termination occurs. In addition,
in the event of a termination of Employment described in this
paragraph 5(c), the Executive shall receive continuation of
his monthly housing allowance (as that amount is determined in
paragraph 4(g) above) for 24 months; provided, however that
such continued payment of the Executive's monthly housing
allowance shall cease if the Executive obtains full-time
employment or leaves Bermuda.
The Company's obligation to make the payments in this
paragraph 5(c) shall be conditioned on the Executive's
execution of a General Release Agreement in accordance with
the Company's customary practice.
d) In the event of the termination of the Employment for one of
the reasons described in paragraph (c) above, all outstanding
grants of restricted stock, stock options and stock
appreciation rights previously granted to the Executive by the
Company will automatically become fully vested as of the date
of such termination, notwithstanding anything to the contrary
contained in the terms or provisions of the Company's
Incentive Compensation Plan.
c) In the event that the Employment is terminated pursuant to
paragraph (a) above: (i) by the Company for "cause", (ii) by
the Executive without "good reason" or (iii) due to the death
or disability of the Executive; the Executive shall be
entitled to receive only his accrued salary and benefits
(including a pro-rata calculation of earned vacation days)
payable through the Termination Date or otherwise payable
under plans maintained by the Company in accordance with their
terms and nothing else. In addition, in the event that the
Executive terminates his Employment with the Company
9
without "good reason" in accordance with paragraph 5(b) of this
Agreement, the Company shall be required (even if the Company
subsequently elects to terminate the Employment of the Executive
prior to the effective date of his termination in accordance with
paragraph 5(b) of this Agreement) to continue to provide the
Executive with his salary and benefits until the earlier of the
effective date of his termination and the end of the Term of
Appointment.
f) In the event the Company does not extend this Agreement in
accordance with paragraph 2(b), and the Executive's employment
has not terminated for any other reason then, notwithstanding any
other provision of this paragraph 5, the Executive shall be
entitled to receive, in addition to accrued salary and benefits
(including a pro-rata calculation of earned vacation days)
payable to the Executive through the Termination Date, a lump sum
payment, payable within 14 business days from the Termination
Date, equal to: (i) the Executive's monthly base salary (as
determined in paragraph 4(a)) x 12, plus, (ii) the Executive's
target bonus (as determined in paragraph 4(a)) set by the Company
for the year in which the Executive's termination occurs. The
Executive shall also be entitled to receive a payment of the
bonus earned by the Executive for the year in which the
Executive's termination occurs (as determined in paragraph 4(a))
based on performance during such year. Such bonus payment shall
be paid within 60 days of the end of such year and shall be
pro-rated for the period from January 1 of the year in which the
termination occurs to the Termination Date. In addition, in the
event of a termination of Employment described in this paragraph
5(f), the Executive shall receive continuation of his monthly
housing allowance (as that amount is determined in paragraph 4(g)
above) for 12 months; provided, however that such continued
payment of the Executive's monthly housing allowance shall cease
if the Executive obtains full-time employment or leaves Bermuda.
10
g) For purposes of this Agreement:
(i) "cause" means (a) an act or acts of personal dishonesty taken by
the Executive and intended to result in the material personal
enrichment of the Executive at the expense of the Company and its
Associated Companies, excluding for this purpose any isolated,
insubstantial or inadvertent action not taken in bad faith which
is remedied by the Executive in a reasonable period of time after
receipt of reasonably prompt written notice thereof from the
Company, (b) repeated violations by the Executive of his
obligations under this Agreement which are demonstrably willful
and deliberate and which are not remedied in a reasonable period
of time by the Executive after receipt of reasonably prompt
written notice thereof from the Company, or, (c) the Executive's
conviction of a felony involving moral turpitude; and
(ii) "good reason" means (a) the sale or other disposition by the
Company of all or substantially all of its reinsurance
operations, (b) the change in control of the Company through the
acquisition (whether by purchase, transfer, merger, renunciation
or otherwise) of any interest in any shares, if, upon completion
of such acquisition the third party, together with persons acting
in concert with the third party, would hold more than fifty
percent of the Common Share Capital of the Company, (c) repeated
violations by the Company of its obligations under this Agreement
which are demonstrably willful and deliberate and which are not
remedied in a reasonable period of time by the Company after
receipt of reasonably prompt written notice thereof from the
Executive, (d) without the Executive's consent, the Company
reduces the Executive's current base salary, reduces the
Executive's then current target total annual compensation,
reduces the Executive's
11
housing allowance, or reduces any of the benefits provided
to the Executive under paragraphs 4(e) or (f) of this
Agreement, (e) a diminution in the Executive's duties or
responsibilities or the assignment of the Executive of any
duties inconsistent in any adverse respect with the
Executive's then current duties and responsibilities or, (f)
the Work Permit of the Executive is terminated by the
Government of Bermuda.
h) (i) The Employment, following the initial Term of Appointment
and during any extended Term of Appointment, may be
terminated prior to the scheduled expiration of the extended
Term of Appointment: (i) by the company with or without
"cause" (as defined in paragraph 5(g)(i) above, (ii) by the
Executive with or without "good reason" (as defined in
paragraph 5(g)(ii) above), or (iii) due to the death or
disability of the Executive in accordance with the
applicable programs and policies of the Company.
(ii) In the event that the Executive wishes to resign from
the Company without "good reason" prior to the scheduled
expiration of any extended Term of Appointment, the
Executive shall comply with the provisions of paragraph 5(b)
above.
iii) In the event that Employment is terminated pursuant to
paragraph 5h(i) above: (i) by the Company without "cause",
or (ii) by the Executive with "good reason", the Executive
shall be entitled to receive, in addition to accrued salary
and benefits (including a pro-rata calculation of earned
vacation days) payable to the Executive through the
Termination Date, the following payments, each of which
shall be paid in a lump sum within 14 business days from the
Termination Date: (i) an amount equal to the Executive's
bonus entitlement (as determined in paragraph 4(a)), based
upon the target level set by the Company for the year in
which the
12
Executive's termination occurs and pro-rated for the period from
January 1 of the year in which the termination occurs to the
Termination Date, (ii) an amount equal to the product of 24 times
the Executive's monthly base salary (as determined in paragraph
4(a)), and (iii) an amount equal to the product of 2 times the
Executive's bonus entitlement (as determined in paragraph 4(a)),
based upon the target level set by the Company for the year in
which the Executive's termination occurs. In addition, in the
event of a termination of Employment described in this paragraph
5(h)(iii), the Executive shall receive continuation of his
monthly housing allowance (as that amount is determined in
paragraph 4(g) above) for 24 months; provided, however that such
continued payment of the Executive's monthly housing allowance
shall cease if the Executive obtains full-time employment or
leaves Bermuda.
(iv) In the event that the Employment is terminated during any
additional Term of Appointment, pursuant to paragraph 5h(i)
above: (i) by the Company for "cause", (ii) by the Executive
without "good reason", or (iii) due to the death or disability of
the Executive, the Executive shall be entitled to receive only
his accrued salary and benefits (including a pro-rata calculation
of earned vacation days) payable to the Termination Date or
otherwise payable under plans maintained by the Company in
accordance with their terms and nothing else. In all other
respects, the Executive's termination under the provisions of
this paragraph shall be in accordance with provisions of
paragraph 5(e) and (g) above.
6. Non-Competition
The Executive shall not during the continuance of the Employment (unless
otherwise agreed in writing by the Company) undertake any other business or
13
profession or be or become an executive or agent of any other company,
firm or person or assist or have any financial interest in any other
business or profession, if such business or profession is in
competition with the business of the Company or any Associated Company
but nothing in this paragraph shall preclude the Executive from
holding or acquiring less than 5% of the voting shares or other equity
securities of any other company which are listed or dealt in on any
recognized stock exchange by way of bona fide investment.
7. Non-Solicitation
The Executive covenants with the Company that he shall not during the
continuance of the Employment or for a period of two (2) years after
the Termination Date on his own behalf or on the behalf of any other
person, firm or company directly or indirectly endeavor to entice away
from the Company any person who is then employed by the Company and was
so employed by the Company during the continuance of the Employment.
8. Confidential Information
The Executive shall not, either during the continuance of his
Employment hereunder and up to two years after the termination of the
Agreement, use to the detriment or prejudice of the Company, except in
the proper course of his duties, divulge to any person any trade secret
or any other information of a confidential nature concerning the
business or affairs of the Company which may have come to his knowledge
during the Employment.
9. Board Information
The Executive shall at all times promptly give to the Board (in writing
if so requested) all such information and explanations as they may
require in connection with matters relating to his Employment hereunder
or with the business of the Company.
14
10. Return of Papers etc.
The Executive shall promptly upon the request of the Board following
his termination of Employment deliver up to the Company all lists of
clients or customers, correspondence and all other documents, papers
and records which may have been prepared by him or have come into his
possession in the course of his Employment, and the Executive shall not
be entitled to and shall not retain any copies thereof. Title and
copyright therein shall vest in the Company.
11. Misrepresentation
The Executive shall not at any time after the termination of his
Employment hereunder wrongfully represent himself as being employed by
or connected with the Company or any Associated Company.
12. Notices
Any notice in writing to be served hereunder shall be given personally
to the Executive or to the Secretary of the Company (as the case may
be) or shall be couriered or posted by registered mail to the Company
(for the attention of its Secretary) at its registered office for the
time being or to the Executive either at his address given above or at
his last known address. Any such notice sent by post shall be deemed
served three days after it is posted and in proving such service it
shall be sufficient to prove that the notice was properly addressed and
put in the post or couriered.
13. Indemnity and Insurance
The Company hereby agrees to indemnify and hold the Executive harmless
for any acts or omissions arising out of the course and scope of his
Employment with the Company to the fullest extent permitted by
applicable law.
14. Other Agreements
15
The Executive acknowledges and warrants that there are no agreements or
arrangements whether written, oral or implied between the Company and
the Executive relating to the Employment of the Executive other than
those expressly set out in the Agreement and that he is not entering
into the Agreement in reliance on any representation not expressly set
out herein.
15. Successors and Assigns
The Company shall require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially
all of its business or assets to expressly assume this Agreement and
agree to perform under this Agreement in the same manner and to the
same extent that the Company would be required to perform if no such
succession had taken place. In addition, the Company may assign this
Agreement (and all of its rights and obligations hereunder) to any of
its wholly-owned subsidiaries. As used in this Agreement, the term
"Company" shall mean any successor or subsidiary that assumes and
agrees to perform this Agreement or which otherwise becomes bound by
all the terms and provisions of this Agreement by operation of law.
16. Governing Law
The Agreement shall be governed by and construed under Bermuda law and
each of the parties hereto submits to the jurisdiction of the Bermuda
Courts as regards any claim or matter arising under the Agreement.
17. Expenses
The Company will reimburse the Executive for legal fees and expenses
incurred in connection with the negotiation, execution and delivery of
this Employment Agreement for an amount up to $5,000.
IN WITNESS WHEREOF the parties hereto have set their hands and seals the date
first above written.
SIGNED by ) /s/ Xxxx X. Xxxxxxxx
on behalf of the Company )
in the presence of:- ) /s/ X. Xxxxxxxx Leader
SIGNED by the Executive ) /s/ Xxxx X. Xxxxxxx
in the presence of:- ) /s/ X. Xxxxxxxx Leader
