EXHIBIT 10.2
July 23, 2002
Xxxxx X. Xxxx
Re: Consulting and Separation Agreement
Dear Xxx:
This consulting and separation agreement (this "Letter Agreement") confirms your
retirement and the resulting termination of your status as an officer, director
and employee of and with PXRE Group Ltd. (the "Company"), and each of the
Company's direct and indirect subsidiaries (including, without limitation, PXRE
Reinsurance Company), such retirement and termination to be effective upon
September 30, 2002 (the "Retirement Date"). In order to be eligible to receive
the benefits set forth in Section 4 of this Letter Agreement, you must execute
it no later than August 14, 2002.
For good and valuable consideration, the receipt of which is hereby
acknowledged, you and the Company mutually agree as follows:
1. Retirement and Resignation as Employee, Officer and Director. Your
execution of this Letter Agreement hereby confirms in writing your
desire to retire and terminate your status as an employee, director and
officer of the Company and any and all of its subsidiaries, effective
as of the Retirement Date.
2. Retirement Benefits. Pursuant to the various benefit plans of the
Company and its subsidiaries, as a result of your retirement, this will
confirm that you are entitled to the following benefits, subject, in
each case, to applicable statutory deductions and withholdings:
(a) Incentive Plan. Pursuant to, and subject to the terms of, the
1992 Officer Incentive Plan:
i) All following Non-Qualified Options and Restricted
Shares (as such terms are defined in such plan) will
immediately vest upon the Retirement Date:
---------------------- -------------------- ------------------------
Type of Security No. of Securities Date of Grant
---------------------- -------------------- ------------------------
Non-Qualified Options 25,000 2/08/2000
---------------------- -------------------- ------------------------
Non-Qualified Options 26,250 2/12/2001
---------------------- -------------------- ------------------------
Non-Qualified Options 40,000 12/10/2001
---------------------- -------------------- ------------------------
Non-Qualified Options 35,000 2/12/2002
---------------------- -------------------- ------------------------
Restricted Shares 2,500 2/08/2000
---------------------- -------------------- ------------------------
Restricted Shares 7,500 2/12/2001
---------------------- -------------------- ------------------------
ii) All of the foregoing Non-Qualified Options and any
Non-Qualified Options that vested prior to the date
of this Letter Agreement may be exercised by you at
any time between the Retirement Date and the third
anniversary date of the Retirement Date.
(b) Bonus Plan. Pursuant to, and subject to the terms of, the
Restated Employee Annual Incentive Bonus Plan, you will be
entitled to receive 9/12ths of the Cash and Restricted Share
Bonuses (as defined and calculated under such plan) payable to
Executive Vice Presidents under such plan with respect to the
2002 fiscal year, provided that, as a result of your
retirement, the Restricted Share Bonus, if any, shall be
payable in cash rather than Restricted Shares. In accordance
with, and subject to terms of, the Restated Employee Annual
Incentive Bonus Plan, any bonuses payable thereunder shall be
paid to you no later than February 28, 2003.
(c) Employee Stock Purchase Plan. In accordance with the terms of
the Employee Stock Purchase Plan, your account balance under
such plan will be applied to purchase Shares at the Option
Price on July 1, 2002, the last Exercise Date (as such terms
are defined thereunder). Any remaining balance in your account
under such plan will be refunded and all payroll deductions
will cease as of July 1, 2002.
(d) Pension Plan. Given your length of service with the Company,
you are not entitled to receive any benefits under the PXRE
Reinsurance Company Retirement Plan.
(e) 401 K Plan. Pursuant to the terms of the PXRE Reinsurance
Company 401(k) Plan, you are fully vested in all employer
contributions made by the Company to your account maintained
thereunder as a result of your length of service. Please
consult with Xxxxx Xxxxxxx to discuss the various options
available to you for maintenance or distribution of your
401(k) account.
(f) SERP. Pursuant to, and subject to the terms of, the PXRE
Reinsurance Company Supplemental Executive Retirement Plan
("SERP"), you are not entitled to any Supplemental Plan
Benefits under Part B of the SERP due to insufficient Years of
Credited Service. You are, however, entitled to receive an
amount equal to the full amount of your Participant's Account
under Part C of the SERP, including any Employer Contributions
made pursuant to Section 6.2 of the SERP. Pursuant to Section
6.4(a) of the Plan, you have elected to receive such amount in
a lump sum payable upon the Retirement Date.
3. Consulting Services. From the Retirement Date until September 30, 2003
(the "Consulting Period"), you agree to make yourself available for
consultation with the Company and its subsidiaries to provide, as
requested, advice and information with respect to the business of the
Company and its subsidiaries, especially with respect to the Company's
financial affairs. You shall be entitled to a cash payment in the
amount of $15,000 per month, payable monthly during the Consulting
Period.
2
4. Additional Payments and Benefits. In addition to the retirement related
benefits under Section 2, you shall be entitled to the following
payments and benefits, subject, in each case, to applicable statutory
deductions and withholdings. Your right to receive and retain these
payments and benefits shall be subject to your material compliance with
the terms of this Letter Agreement (including, but not limited to,
Sections 7 and 8 hereof).
(a) Upon the Retirement Date, you shall be paid the $90,000
retention bonus that would have been payable to you on January
31, 2003 pursuant to the Retention Bonus Letter Agreement
dated as of December 12, 2001 if you had remained in the
Company's employ until January 31, 2003.
(b) If any Cash and Restricted Share Bonuses are payable pursuant
to the Restated Employee Annual Incentive Bonus Plan with
respect to the 2002 fiscal year, you will be entitled to
receive the remaining 3/12ths of the Cash and Restricted Share
Bonuses (as defined and calculated under such plan) payable to
Executive Vice Presidents under such plan that would not be
otherwise be payable to you under such plan due to your
retirement, provided that, as a result of your retirement, the
Restricted Share Bonus, if any, shall be payable in cash
rather than Restricted Shares. Such bonuses, if payable, shall
be paid to you no later than February 28, 2003.
(c) The balance due from you to PXRE Reinsurance Company under the
Promissory Note dated September 13, 2001 will be forgiven on
the Retirement Date.
5. Cessation of all other Compensation and Benefits. From and after the
Retirement Date, and except as otherwise expressly set forth in this
Letter Agreement, you will not receive compensation, payments or
benefits of any kind from the Company or its subsidiaries, and you
expressly acknowledge and agree that, except with respect to the
payments and benefits specifically set forth in this Letter Agreement,
you are not entitled to any compensation, payment or benefit
whatsoever, including, without limitation, any right to payment under
Amended and Restated Severance Plan for Certain Executives of PXRE
Group Ltd.
6. Payment is in Consideration of Release and Other Continuing
Obligations. You understand and agree that the payments provided for in
Section 4 of this Letter Agreement are being provided to you in
consideration for your acceptance and execution of, and in reliance
upon your agreements in, this Letter Agreement, including but not
limited to the release contained herein.
7. Non-Disparagement. You agree that you will not, directly or indirectly,
disparage (whether in writing or orally) the Company or the Releasees
(as defined below) in any manner whatsoever at any time.
3
8. Confidential Information. Except as may be required by the lawful order
of a court or agency of competent jurisdiction, or except to the extent
that you have express authorization from the Company, you hereby agree
to keep secret and confidential indefinitely all non-public information
(including, without limitation, information regarding any pending or
threatened litigation, arbitrations or disputes) concerning the Company
or its subsidiaries which was acquired by or disclosed to you during
the course of your employment with the Company and its subsidiaries, or
during the course of your consultation with the Company following your
retirement, and to not to disclose same, either directly or indirectly,
to any other person, firm or business entity, or use it in any way. To
the extent that you obtained information on behalf of the Company or
its Subsidiaries that may be subject to attorney-client privilege as to
the Company's attorneys, you agree to take reasonable steps to maintain
the confidentiality of such information and to preserve such privilege.
9. Release.
You hereby agree to accept the compensation, payments and
benefits provided for in Section 4 hereof in full resolution and
satisfaction of, and hereby IRREVOCABLY AND UNCONDITIONALLY RELEASE,
REMISE AND FOREVER DISCHARGE the Company, its past, present and future
direct and indirect parents, subsidiaries, affiliates, divisions,
predecessors, successors, and assigns, and their respective current and
former officers, directors, shareholders, representatives, agents and
employees, in their official and individual capacities, jointly and
individually (the "Releasees") from, any and all agreements, promises,
liabilities, claims and demands of any kind whatsoever, in law or
equity, whether known or unknown, suspected or unsuspected, fixed or
contingent, apparent or concealed, which you, your respective heirs,
executors, administrators, successors or assigns ever had, now have or
in the future may have, including, without limitation, any and all
claims arising out of or relating to your employment, your compensation
and benefits with the Company and/or the termination thereof, your
status as a stockholder of the Company and any and all contract, tort
or fraud claims, claims for defamation or other personal injury, claims
under any federal, state or municipal wage payment, discrimination or
fair employment practices law, statute or regulation and claims for
costs, expenses and attorneys' fees with respect thereto, arising from
the beginning of the world through the effective date of this Letter
Agreement, in each case, against the Company or any of the Releasees,
other than any claims with respect to the Company's breach of this
Letter Agreement. However, it is agreed that you do not waive your
rights for coverage or indemnification under any directors & officers
policy, or pursuant to the certificate of incorporation or the by-laws
of the Company for acts or omissions occurring during your employment.
THIS RELEASE AND WAIVER INCLUDES, WITHOUT LIMITATION, ANY AND ALL
CLAIMS UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT, 29 U.S.C.
Section 000-000 (xxx "XXXX").
You represent and warrant as of the date hereof (i) that you
have not filed any claim or demand for relief against the Company or
Releasees, (ii) that there are no outstanding claims, or other claims
or demands for relief within the meaning of this Section 9, and (iii)
that there has been no assignment of any such claims.
10. Future Cooperation. You agree that upon the Company's reasonable
request (whether during or after the Consulting Period), you will use
reasonable efforts to assist and cooperate with the Company and the
Releasees in connection with the defense or prosecution of any claim
that may be made against or by the Company or the Releasees, or in
connection with any ongoing or future investigation or dispute or claim
of any kind involving the Company or the Releasees, including any
proceeding before any arbitral, administrative, regulatory,
self-regulatory, judicial, legislative, or other body or agency. You
will not be paid any additional amounts for any assistance that you
provide, although you will be entitled to reimbursement for reasonable
out-of-pocket expenses.
4
11. Successors and Assigns. This Letter Agreement shall inure to the
benefit of and shall be binding upon the parties hereto and their
respective successors and assigns, including but not limited to (i)
with respect to the Company, any entity with which the Company may
merge or consolidate or to which the Company may sell substantially all
of its assets, and (ii) with respect to you, your executors,
administrators, heirs and legal representatives. In the event of your
death, all amounts due hereunder shall be accelerated and immediately
payable to your estate.
12. Severability; Headings. In the event that any provision of this Letter
Agreement shall be held by a court of proper jurisdiction to be
invalid, void or voidable or otherwise unenforceable, the balance of
this Letter Agreement shall continue in full force and effect unless
such construction would clearly be contrary to the intentions of the
parties or would result in an unconscionable injustice. The headings of
the sections and paragraphs of this Letter Agreement are for
convenience of reference only and shall not constitute a part hereof.
13. Miscellaneous: Choice of Law. This Letter Agreement may be executed in
several counterparts, each or which shall be deemed to be an original
but all of which together will constitute one and the same instrument.
This Letter Agreement constitutes the entire agreement, and supersedes
all prior agreements, of the parties hereto relating to the subject
matter hereof, and there are no written or oral terms or
representations made by either party other than those contained herein
and therein. This Letter Agreement cannot be modified, altered or
amended except by a writing signed by all the parties. No waiver by
either party of any provision or condition of this Letter Agreement at
any time shall be deemed a waiver of such provision or condition at any
prior or subsequent time or of any provision or condition at the same
or any prior or subsequent time. This Letter Agreement shall be
governed by and construed in accordance with the domestic laws of the
State of New Jersey, without giving effect to any choice of law or
conflict of law provision or rule (whether of the State of New Jersey
or any other jurisdiction) that would cause the application of the laws
of any jurisdiction other than the State of New Jersey.
14. Facsimile Signatures Valid. Execution of this Letter Agreement with
signatures transmitted via facsimile shall be considered valid.
* * * *
5
If this Letter Agreement conforms to your understanding and is acceptable to
you, please indicate your agreement by signing and dating the enclosed copy of
this Letter Agreement where indicated and returning it to the Company. You
acknowledge and agree that you have been provided with the opportunity to have a
period of at least 21 days in which to review and consider this Letter
Agreement, and you have used such review period to the extent desired by you.
After your execution of this Letter Agreement, you will then be permitted to
revoke this Letter Agreement in writing at any time during the period of seven
days following the execution thereof. In the event that you execute this Letter
Agreement, this Letter Agreement will not be effective or enforceable, and no
payments will be made hereunder, until the seven-day revocation period has
expired; upon the expiration of such seven day period after your execution (and
assuming no revocation), this Letter Agreement shall become effective. In the
event that you fail to execute this letter by November 8, 2002, or if you
execute this Letter Agreement and subsequently elect to revoke this Letter
Agreement in writing pursuant to the terms hereof within such seven day
revocation period, this Letter Agreement will be of no force or effect, and no
party to this Letter Agreement will have any rights or obligations hereunder.
Sincerely,
By: /s/ Xxxxxxx X. Xxxxx
----------------------------
Xxxxxxx X. Xxxxx
President & Chief Operating Officer
THIS LETTER AGREEMENT IS A LEGAL DOCUMENT. YOU SHOULD CONSULT WITH AN ATTORNEY
PRIOR TO SIGNING THIS LETTER AGREEMENT.
BY SIGNING THIS LETTER AGREEMENT YOU ACKNOWLEDGE THAT YOU ARE COMPETENT, THAT
YOU HAVE BEEN PROVIDED WITH THE OPPORTUNITY TO HAVE A PERIOD OF AT LEAST 21 DAYS
IN WHICH TO REVIEW AND CONSIDER THIS LETTER AGREEMENT WITH AN ATTORNEY OF YOUR
CHOICE AND YOU HAVE USED SUCH REVIEW PERIOD TO THE EXTENT YOU DESIRED, THAT YOU
HAVE READ AND UNDERSTAND AND VOLUNTARILY ACCEPT THIS LETTER AGREEMENT AS FULLY
AND FINALLY RESOLVING, WAIVING AND RELEASING ANY AND ALL CLAIMS WHICH YOU MAY
HAVE AGAINST THE COMPANY AND RELEASEES (AS DEFINED HEREIN), INCLUDING ANY AND
ALL CLAIMS UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT, THAT NO PROMISES OR
INDUCEMENTS HAVE BEEN MADE TO YOU EXCEPT AS SET FORTH IN THIS LETTER AGREEMENT,
AND THAT YOU HAVE SIGNED THIS LETTER AGREEMENT FREELY AND VOLUNTARILY, INTENDING
TO BE LEGALLY BOUND BY ITS TERMS. THE FOREGOING IS A SUMMARY DESCRIPTION OF THE
GENERAL IMPORT OF THIS INSTRUMENT AND DOES NOT ALTER OR AMEND THE DETAILED
PROVISIONS CONTAINED IN THE BODY HEREOF.
ACCEPTED AND AGREED:
/s/ Xxxxx X. Xxxx Date: July 26, 2002
----------------------------- ------------------
6
