1
EMPLOYMENT AGREEMENT
BY AND BETWEEN
SAGE LIFE ASSURANCE OF AMERICA, INC.
AND
XXXXX X. XXXXXXX
EFFECTIVE: April 1, 2000
2
EMPLOYMENT AGREEMENT
TABLE OF CONTENTS
PAGES
-----
1. EMPLOYMENT........................................................................................... 1
1.1 General Duties and Title......................................................................... 1
1.2 Full-Time Position............................................................................... 2
2. TERM................................................................................................. 2
3. REMUNERATION......................................................................................... 2
4. LONG TERM CAPITAL INCENTIVE COMPENSATION............................................................. 2
5. WITHHOLDING.......................................................................................... 3
6. INSURANCE AND OTHER BENEFIT PLANS.................................................................... 3
7. VACATIONS............................................................................................ 3
8. BUSINESS EXPENSES.................................................................................... 3
9. INDEMNIFICATION...................................................................................... 4
10. TERMINATION OF EMPLOYMENT............................................................................ 4
10.1 Termination by the Company for Cause........................................................... 4
10.2 Definition of Cause............................................................................ 5
10.3 Determination of For Cause Termination......................................................... 5
10.4 Termination by the Company Without Cause....................................................... 6
10.5 Compulsary Relocation following a Change of Control............................................ 6
10.6 Voluntary Termination by the Executive......................................................... 6
10.7 Disability Termination......................................................................... 7
10.8 Termination Due to Executive's Death........................................................... 7
11. RESTRICTIVE CONVENANTS; CONFIDENTIALITY; OWNERSHIP OF PROCEEDS OF EMPLOYMENT....................... 8
11.1 Solicitation of Employees; Customers; Agents or Representatives etc............................ 8
11.2 Confidential Records........................................................................... 8
11.3 Ownership of Proceeds of Employment............................................................ 9
11.4 Survival....................................................................................... 9
11.5 Enforceability; Remedies....................................................................... 9
12. MISCELLANEOUS PROVISIONS............................................................................. 9
12.1 Severability................................................................................... 9
12.2 Execution in Counterparts...................................................................... 10
12.3 Notices........................................................................................ 10
12.4 Entire Agreement and Subsequent Amendments..................................................... 11
12.5 Applicable Law................................................................................. 11
12.6 Headings....................................................................................... 11
12.7 Binding Effect; Successors and Assigns........................................................ 11
12.8 Waiver......................................................................................... 11
12.9 Warranty and Capacity to Contract.............................................................. 12
12.10 Arbitration................................................................................... 12
12.11 Remedies...................................................................................... 12
12.12 Survival...................................................................................... 12
3
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") dated as of this April 1, 2000 (the
"Effective Date") by and among Sage Life Assurance of America, Inc. (the
"Company") a Delaware life insurance corporation, and Xxxxx X. Xxxxxxx an
individual currently residing at 000 Xxxxxx Xxxxx Xxxx, Xxx Xxxxxx, Xxxxxxxxxxx
("Executive").
WITNESSETH THAT
WHEREAS, the Company desires to employ Executive in accordance with the terms of
this Agreement and Executive desires to be so employed by the Company;
WHEREAS, the parties desire to set forth the employment understanding and terms
and conditions of employment in a written agreement; and Executive wishes to
accept such employment upon the terms and subject to the conditions hereinafter
set forth;
NOW THEREFORE, in consideration of the mutual promises contained herein, the
parties hereto hereby agree as follows:
1. EMPLOYMENT
1.1 GENERAL DUTIES AND TITLE
On the Effective Date the Company hereby employs Executive with the
title/s designated in Exhibit A (the "Position Description") attached
hereto and forming a part of this Agreement.
Executive's primary responsibilities and duties are as described in
Exhibit A. The primary responsibilities and duties of the Executive may
be altered or amended by either (i) the mutual agreement of the Company
and the Executive; or (ii) the establishment of new or modified duties,
as determined by the Company after consultation with the Chairman of Sage
Group Limited or the Board of Directors of the Company (the "Board"). Any
modifications or alterations to the duties assigned to the Executive will
be consistent with the education, background and experience of the
Executive. Executive shall faithfully and diligently perform for the
Company all such duties. Executive shall report to and take direction
primarily from the Chairman of the Sage Group Limited and the Board.
Executive agrees to act in the capacity of a member or officer of such
boards as he may be appointed without remuneration other than the
remuneration to which Executive is otherwise entitled under this
Agreement.
Services rendered by Executive shall be rendered in accordance with
recognized insurance and financial industry standards and recognized
codes of conduct or ethics. Executive shall further promote and enhance
the business purposes of the Company by entertainment and other means,
including participation in professional organizations and activities,
attendance at insurance or financial industry conventions and seminars,
and membership in insurance or financial industry societies.
1
4
1.2 FULL-TIME POSITION
Executive during the Term will devote Executive's best efforts, attention
and skills to the business and affairs of the Company on a full-time
basis, and shall devote all of Executive's business time and effort to
the performance of the duties hereunder.
2. TERM
The employment of Executive hereunder shall commence on the Effective
Date and shall continue until this Agreement is terminated as provided in
Section 10 hereof.
3. REMUNERATION
The Company (or an affiliate acting on behalf of the Company) will pay to
Executive as compensation for services to be rendered under Section 1
hereof, the following amounts:
(a) Monthly Base Salary
A base salary ("Base Salary") at the monthly equivalent rate of
Three Hundred and Sixty Three Thousand Dollars ($363,000) per
annum, reviewable annually in April of each year, commencing with
the first review being conducted for the performance period
beginning on the Effective Date and terminating March 31, 2001.
(b) Short Term Incentive Bonus Payments
The Executive will be entitled to participate in the Company's
Short Term Incentive Bonus Plan periodically established by the
Company for the benefit of eligible and selected executive
employees. Payments under the Short Term Incentive Bonus Plan are
not due and payable until declared payable by the Board.
The award of the bonus will be based upon the Executive's
achievement against objective performance criteria periodically
established by the Company. The satisfaction of the objective
performance criteria will be determined by the Company in it's
discretion.
4. LONG TERM CAPITAL INCENTIVE COMPENSATION
Executive will be eligible to participate in the Long Term Capital
Incentive Compensation Plan of the Sage Insurance Group, Inc., the
operating group parent of the Company. Executive's rights of
participation in such Long Term Capital Incentive Compensation Plan will
be determined by the Board from time to time. The summarised terms of the
Long Term Incentive Compensation Plan are set out in Exhibit B attached
hereto.
Executive will continue to participate in the South African executive
incentive plans in terms of the rules of those plans, whereunder
allocations are at Sage Group Limited's discretion.
2
5
5. WITHHOLDING
Executive agrees that the Company shall withhold from any and all
payments required to be made to Executive pursuant to this Agreement all
actual or potential Federal, State, local and/or other taxes the Company
determines are required or potentially will be required, to be withheld
in accordance with applicable statutes and/or regulations from time to
time in effect.
6. INSURANCE AND OTHER BENEFIT PLANS
Executive shall be entitled during the period of employment with the
Company, to participate in (i) the life insurance and disability
insurance plans available to executives of the Company, including such
accidental death or other benefits as may be provided under such plans,
and (ii) the health and dental and vision plans available to officers
(and their immediate families) of the Company, and (iii) such other
employee benefit plans, including all employee welfare benefit plans and
employee pension benefit plans, that currently are or will be made
generally available to executives and salaried employees of the Company.
Descriptions of the current benefit plans are set forth in Exhibit C.
Participation by or inclusion of the Executive in any benefit plan
maintained by the Company shall be provided only to the extent that the
Executive is eligible under the terms and conditions of the applicable
plan and, if required pursuant to the plan, the employee meets any
insurance underwriting or other conditions validly required by the
provider or carrier of the plan or the contracts, policies, or other
terms of eligibility or participation issued in connection with the plan.
7. VACATIONS
Executive shall be entitled to be absent from Executive's duties with the
Company by reason of vacation for such periods as are consistent with the
policy of the Company with respect to executive officers generally, which
policy is more fully described in Exhibit C. In addition, the Executive
shall be entitled to such national and religious holidays as generally
approved by the Company.
8. BUSINESS EXPENSES
The Company recognizes that, in connection with Executive's performance
of his duties, functions and responsibilities hereunder, Executive will
incur certain reasonable and necessary expenses. The Company agrees to
promptly reimburse Executive for all such reasonable business expenses,
which are incurred solely in connection with the Company's business, upon
the presentation of statements setting forth the nature and amount of
such expenses in reasonable detail, in accordance with the Company's
generally applicable guidelines and procedures from time to time.
To the extent that it is subsequently determined by the Company, using
reasonable standards generally applicable to chief executive officers in
like capacities, that any expense reimbursed by the Company to the
Executive is not a reasonable or necessary business expense of the
Company, and such determination is based upon false, misleading,
incorrect or inadequate documentation supplied by the Executive,
3
6
the Executive shall be liable to the Company for the amount of such
excess reimbursement.
9. INDEMNIFICATION
The Company has an obligation to indemnify Executive for general
directors and/or officers liability in the normal course of Executive's
services on Company business, but shall limit the indemnification
provided hereunder to the indemnification provided in accordance with the
terms and conditions of the indemnification provisions allowed by law,
and consistent with the provisions of an insurance coverage as the
Company has secured for this purpose. The use of the standards applicable
under the Company's insurance coverage or policy shall not, however,
limit the obligation of the Company to indemnify the Executive for claims
or expenses either below the annual or periodic deductible limit in the
policy or in excess of the policy limits.
The Company shall be obligated to pay the claims or expenses of the
Executive required under this Section 9, including defence cost, directly
to the third party to whom payment is due and owing, without the
necessity of the Executive making such payment and seeking reimbursement
from the Company.
Indemnification for the Executive shall only be permitted if the
Executive, in connection with the action, suit of proceeding subject to
indemnification, acted in good faith and in a manner the Executive and
the Board would normally have reasonably believed to be in or not opposed
to the best interests of the Company, and, with respect to any criminal
action or proceeding, the Executive had no reasonable cause to believe
the Executive's conduct was unlawful. To the extent that the Executive is
successful on the merits or otherwise in defence of any action, suit, or
proceeding, or in defence of any claim, issue or matter brought against
the Executive, the Executive shall be indemnified by the Company against
all expenses, including defence and legal fees, reasonable incurred by
the Executive.
The provisions of this Section 9 shall survive the termination or
expiration of Executive's employment under this Agreement irrespective of
the reason for such termination, provided that nothing herein shall be
construed to provide Executive with any greater coverage or coverage for
any period longer than Executive would have been entitled to receive
under the terms of such insurance policy referred to herein (other than
deductible and policy dollar limits).
10. TERMINATION OF EMPLOYMENT
10.1 TERMINATION BY THE COMPANY FOR CAUSE
In the event that Executive is removed from office by the Company for
cause (as hereinafter defined), the employment of Executive under this
Agreement shall terminate and Executive shall be entitled to receive only
the monthly Base Salary for the period to the date of such removal.
No other or further payment of benefits under this Agreement will be due
upon Termination for Cause, except as required by law, or under the
Company's insurance and other employee benefit plans and the procedures
referred to in Sections 6 and 8.
4
7
10.2 DEFINITION OF CAUSE
For purposes of this Agreement, the term "cause" shall mean (i) any
wilful material neglect by Executive, or material failure by Executive to
perform the duties and responsibilities of the Executive's office or
offices (other than any such failures resulting from Executive's
incapacity due to illness or injury), or (ii) any malfeasance or gross
misconduct by Executive in connection with the performance of any of the
duties or responsibilities or otherwise which would, in the view of a
reasonable person, be materially prejudicial to the interests of the
Company or any of its affiliates if Executive were retained in the
respective office or offices, including without limitation, conviction of
a felony, or (iii) actual indictment for, or formal admission to a felony
or crime of moral turpitude, dishonesty, breach of trust or unethical
business conduct or any crime involving the Company, or (iv) repeated
material failure to adhere to the policies and directions of the Board of
Directors, or failure to devote all of Executive's business time and
efforts to the business of the Company and the duties and
responsibilities hereunder, and with respect to 10.2.(i) or 10.2.(ii) or
10.2.(iv) herein, there has been a failure to cure such breach or a
failure to modify Executive's conduct within 30 days of receiving written
notice of such breach specifying the factual reasons supporting the
proposed dismissal for cause.
10.3 DETERMINATION OF FOR CAUSE TERMINATION
A determination of a for cause termination shall be made by the Company
as follows:
(a) The Chairman of the Sage Group Limited and the Chairman of the
Company shall first make a preliminary determination that the
Executive should be reviewed for discharge for cause. The Company
will not be required to provide any preliminary notice to the
Executive of its intention to investigate the possible discharge
of the Executive for cause.
(b) After investigating the circumstances surrounding the possible for
cause termination of the Executive, the Company, through its
Chairman, may immediately relieve or suspend the Executive from
the Executive's by providing notice to the Executive. Upon notice
of the suspension, the Executive shall immediately vacate the
premises and remove all personal property from the premises of the
Company. The Company shall have the absolute right to review any
and all material in the possession of the Executive on the Company
premises to determine those items, which are proprietary to the
Company. After sorting the appropriate items, all personal items
shall be delivered to the Executive at the location designation
reasonably selected by the Executive.
(c) After concluding its investigation, the Company, through the
Chairman of the Sage Group Limited and the Chairman of the
Company, shall make a determination whether the Executive should
be discharged for cause. The determination for discharge for cause
shall be timely communicated in writing, to the Executive.
5
8
10.4 TERMINATION BY THE COMPANY WITHOUT CAUSE
The Company expressly reserves the right to terminate the employment, or
materially reduce the responsibilities, of Executive at any time for no
reason or for any reason.
In the event that Executive's employment is so terminated or altered
under this Section, Executive shall be entitled to receive:
a) Twenty four (24) monthly payments of the current monthly Base
Salary, paid pursuant to the Company's normal payroll practices;
and,
b) A proportionate bonus based on the most recent annual payment
under the short term incentive plan, for the months of service
since such previous annual payment was earned.
In addition to the above payments if permitted under the appropriate plan
documentation and if allowed by law, all health, dental and life
insurance coverage provided to Executive under the employee benefit plans
will be extended for such period as the Company is obligated to make
monthly Base Salary payments to Executive in terms of this Section,
unless Executive becomes covered by other employer plans. If coverage
extensions are not permitted by law or under the plans, the Company shall
pay to the Executive periodic bonuses equal to the insurance premium cost
which would have been required as if the Executive were covered under the
plan.
Any unvested employer contributions attributable to Executive under any
pension plan, shall be accelerated and deemed vested as of the date of
termination of employment without cause. If the acceleration of vesting
is not permitted by law or under the terms of the plan, the Company
shall, in lieu of accelerated vesting, pay a bonus to the Executive in
the amount of the account forfeiture under the plan.
Any unvested allocations or options granted to Executive under the terms
of the Long Term Capital Incentive Compensation Plan shall be treated in
the same manner as a retirement under the rules of the Plan.
10.5 COMPULSORY RELOCATION FOLLOWING A CHANGE OF CONTROL
If the Sage Group Limited should cease to have effective control of the
Company, and during the subsequent twenty four (24) months the effective
place of business of the Company is changed by its new controlling
shareholders such that the Executive would, in the view of a reasonable
man, have to relocate to effectively continue his responsibilities, then
Executive shall elect in writing to (i) agree to work from such new
premises, undertaking if so desired by Executive a relocation paid for by
the Company in terms of its policy for executive relocations; or, (ii)
upon giving 90 days written notice to the Company, terminate his
employment for cause and receive the payments provided for under Section
10.4 above.
10.6 VOLUNTARY TERMINATION BY THE EXECUTIVE
Executive shall be entitled, with not less than three (3) month's written
notice, to voluntarily terminate employment with the Company. If
Executive elects such termination, Executive shall be entitled to receive
the Executive's monthly Base
6
9
Salary defined under Section 3 and benefits defined under Section 6 until
the end of such notice period. Executive shall also be entitled to
exercise any vested rights under Sections 4, 6 and 7.
Even though the Executive is required to give not less than three (3)
months advance written notice, the Company shall have the option to
require that the Executive discontinue service on behalf of the Company
at any time upon receipt of advance written notice of the Executive's
election to terminate; provided, however, that in such event the Company
shall be required to continue the Base Salary and benefit payments
through the three (3) month notice period.
10.7 DISABILITY TERMINATION
The Executive's employment shall terminate if the Executive becomes so
disabled as to be unable to perform the services of character
contemplated by this Agreement, and such disability continues for a
period of ninety (90) consecutive days. The Executive's employment shall
terminate at the conclusion of the 90-consecutive day disability. In such
event, the Executive shall be entitled to receive the Executive's monthly
Base Salary defined under Section 3 and benefits defined under Section 6
until the end of the 90-consecutive day disability period. At the end of
the 90-consecutive day disability period, Executive shall be entitled to
a proportionate bonus based on the most recent annual payment under the
short term incentive plan, for the months of service until disablement
since such previous annual payment was earned. Executive shall also be
entitled to exercise any vested rights under Sections 4, 6 and 7.
For purposes of this Agreement the term "disability" or "disabled" shall
mean a physical or mental condition resulting in a bodily injury or
disease or mental disorder which renders the Executive incapable of
engaging in substantial gainful activity of the character contemplated by
this Agreement and which can be expected to be of a long and continued
duration. The disability of the Executive shall be determined by the
Board based upon competent medical authority. The determination of a
disability may be made by the Board independent of such determination
being made under any other disability insurance plan sponsored or funded
by the Company.
10.8 TERMINATION DUE TO EXECUTIVE'S DEATH
This Agreement shall terminate if the Executive shall die, in which event
the Executive's estate or personal representative shall not be entitled
to continue to receive Base Salary payments permitted under Section 3 or
other benefits permitted under this Agreement, other than the monthly
Base Salary for the period until death and those benefit continuation
requirement imposed as a matter of law. With respect to other benefit
entitlement under the Long Term Incentive Plan, bonus plan or other
similar plans, the Executive's estate shall only be permitted to such
rights or benefits as otherwise provided in those plan documents. The
Executive's estate shall be entitled to a proportionate sum based on the
most recent annual payment to the deceased Executive under the short term
incentive plan, for the months of service until death since such previous
annual payment was earned.
7
10
11. RESTRICTIVE CONVENANTS; CONFIDENTIALITY; OWNERSHIP OF PROCEEDS OF
EMPLOYMENT
11.1 SOLICITATION OF EMPLOYEES; CUSTOMERS; AGENTS OR REPRESENTATIVES ETC.
Executive agrees that, during the term of employment hereunder, and for a
period of two (2) year after the Company no longer employs Executive,
Executive shall not, directly or indirectly:
(a) solicit, entice, persuade or induce any individual who is then or
has been within the preceding six-month period, an employee of the
Company or any of its subsidiaries or affiliates, to terminate his
or her employment with the Company or any of its subsidiaries or
affiliates, or to become employed by or enter into contractual
relations with any other individual or entity, and the Executive
shall not approach any such employee for any such purpose or
authorize or knowingly approve the taking of any such actions by
any other individual or entity; or,
(b) except in accordance with Executive's duties hereunder, solicit,
entice, persuade or induce any individual or entity which is then,
or has within the preceding twelve month period been, a customer,
distributor or supplier, or policy owner, agent or representative
of the Company or its subsidiaries or affiliates to terminate or
materially reduce his, her or its contractual or other
relationship with the Company or any of its subsidiaries or
affiliates, and the Executive shall not approach any such
customer, distributor, supplier, policy owner, agent or
representative for such purpose or authorize or knowingly approve
the taking of any such actions by any other individual or entity.
(c) For purposes of this Agreement, where the Executive has been
Terminated without Cause under Section 10.4, such restrictive
period of one (1) year shall extend, if later, until the end of
monthly payments under Section 10.4.
11.2 CONFIDENTIAL RECORDS
In the course of employment, Executive will have access to confidential
information, records, data, specifications, and other knowledge owned by
the Company or its subsidiaries or affiliates. Executive agrees that at
no time during or after the term of employment shall the Executive remove
or cause to be removed from the premises of the Company or its
subsidiaries or affiliates, any record, file, memorandum, document,
equipment or like item relating to the business of the Company or its
subsidiaries or affiliates except in furtherance of Executive's duties
hereunder, and immediately following the termination of Executive's
employment hereunder or at any other time at the request of the Board of
Directors, all such records, files, memoranda, documents, equipment and
like items then in Executive's possession will promptly be returned to
the Company. Executive further agrees that, during and after the term of
employment, Executive shall not without the written consent of the
Company or a person authorized thereby, disclose to any person, other
than an employee of the Company its subsidiaries or affiliates or a
person to whom disclosure is reasonably necessary or appropriate in
connection with the performance by Executive of duties as an executive of
the Company, any confidential information
8
11
obtained by Executive while in the employ of the Company with respect to
any business methods, plans, policies, products and/or personnel of the
Company or its subsidiaries or affiliates, the disclosure, including
speaking with the press, of which would, in the view of a reasonable
person, be injurious or damaging to the business of the Company or its
subsidiaries, or affiliates, provided, however, that confidential
information shall not include any information known generally to the
public (other than as a result of unauthorized disclosure by Executive),
or any information of a type not otherwise considered confidential by
persons engaged in the same business or a business similar to that
conducted by the Company.
11.3 OWNERSHIP OF PROCEEDS OF EMPLOYMENT
Executive acknowledges that the Company shall be the sole owner of all
the fruits and proceeds of the Executive's services hereunder, including
without limitation all ideas, concepts, formats, suggestions,
developments, arrangements, designs, packages, programs, promotions and
other properties relating to the businesses of the Company, which
Executive may create in connection with and during the term of employment
hereunder, free and clear of any claims by the Executive of any kind or
character whatsoever (other than Executive's right to compensation and
benefits hereunder).
11.4 SURVIVAL
The provisions of this Section 11 shall survive any termination or
expiration of Executive's employment under this Agreement, irrespective
of the reason therefore.
11.5 ENFORCEABILITY; REMEDIES
The parties hereto agree that a breach by Executive of any of the
provisions of Section 11. hereof will cause the Company great and
irreparable injury and damage. By reason of this, Executive acknowledges
that, in the event of a breach by Executive of any of the provisions of
Section 11 hereof, the Company shall be entitled, in addition and as a
supplement to any other rights or remedies it may have at law, to the
remedies of injunction, specific performance and other equitable relief.
This section 11 shall not, however, be construed as a waiver of any of
the rights which the Company may have for damages or otherwise.
12. MISCELLANEOUS PROVISIONS
12.1 SEVERABILITY
Executive acknowledges and agrees that (i) Executive has had an
opportunity to seek advice of counsel in connection with this agreement
and (ii) the Restrictive Covenants are reasonable in temporal and
geographic scope and in all other respects. If in any jurisdiction any
term or provision hereof is determined to be invalid or unenforceable,
(a) the remaining terms and provisions hereof shall be unimpaired, (b)
any such invalidity or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction, and the remaining provisions hereof shall be given full
force and effect without regard to the invalid portions. The Employer and
the Executive intend to and hereby confer jurisdiction to endorse the
9
12
Restrictive Covenants upon the Courts of any jurisdiction within the
geographical scope of the covenants.
12.2 EXECUTION IN COUNTERPARTS
This Agreement may be executed in one or more counterparts, and by the
different parties hereto in separate counterparts, each of which shall be
deemed to be an original but all of which taken together shall constitute
one and the same agreement (and all signatures need not appear on any one
counterpart),and this Agreement shall become effective when one or more
counterparts has been signed by each of the parties hereto and delivered
to each of the other parties hereto.
12.3 NOTICES
Any notice or other communication in connection with this Agreement shall
be deemed to be delivered if in writing (or in the form of a fax)
addressed as provided below and if either (a) actually delivered at said
address, or (b) in the case of a letter, three business days shall have
elapsed after the same shall have been deposited in the US mail, postage
prepaid and registered or certified, and (c) in the case of fax, one
business day shall have elapsed after dispatch.
If to the Company, to it at the following address:
Sage Life Assurance of America, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxx
XXXXXXXXXXX 00000
FAX (000) 000-0000
Attention: Chairman of the Board
with a copy to:
Xxxxxx X Xxxxxxx
Secretary, Sage Insurance Group Inc.
c/x XxXxxxxx Xxxxxx, Xxxxxxx & Partners
00 Xxxxxxx Xxxxxx, 00xx Xxxxx
XXXXX XXXXXX XX 00000-0000
FAX (000) 000-0000
H. Xxxxx Xxxxx
Chairman: Sage Group Limited
00 Xxxxxx Xxxxxx
XXXXXXXXXXXX, 0000, XXXXX XXXXXX
FAX (0000000) 000-0000
or at such other address as the Company shall have specified by written
notice actually received by the addresser.
10
13
If to Executive, to Executive at the address provided in the preamble or
at such other address as Executive shall have specified by written notice
actually received by the addresser.
12.4 ENTIRE AGREEMENT AND SUBSEQUENT AMENDMENTS
This Agreement constitutes the entire agreement between the Company and
Executive relating to Executive's employment and supersedes all prior
agreements and understandings of the parties hereto, whether oral or
written with respect to the subject matter herein.
This Agreement may be amended or altered only by the written agreement of
the Company and Executive.
12.5 APPLICABLE LAW
This Agreement shall be governed by and construed in accordance with the
laws of the State of Connecticut without regard to principles of conflict
of law.
12.6 HEADINGS
The descriptive headings of the several sections of this Agreement are
inserted for the sole purpose of convenience of reference, and do not
constitute part of this Agreement or in any way limit or affect the
meaning or interpretation of any of the terms or provisions of this
Agreement.
12.7 BINDING EFFECT; SUCCESSORS AND ASSIGNS
This Agreement shall be binding upon and shall inure to the benefit of:
(a) the Company and its successors and assigns; and
(b) Executive and to the benefit of Executive's heirs, executors,
administrators and legal representatives. Executive's duties and
obligations hereunder are personal and shall not be assignable or
delegable in any manner whatsoever.
The Company may assign the obligations under this Agreement (subject to a
right of recourse by Executive to the Company in the event of any default
under the obligations to Executive hereunder), to an affiliate or to any
intermediate parent of the Company.
12.8 WAIVER
The failure of either of the parties hereto at any time, to enforce any
of the provisions of this agreement shall not be deemed or construed to
be a waiver of any such provision, nor to in any way affect the validity
of this agreement or any provision hereof or the right of either of the
parties hereto, to thereafter enforce each and every provision of this
Agreement. No waiver of any breach of any of the provisions of this
Agreement shall be effective unless set forth in a written instrument
executed by the party against whom or which enforcement of such waiver is
sought, and no waiver of
11
14
any such breach shall be construed or deemed to be a waiver of any other
or subsequent breach.
12.9 WARRANTY AND CAPACITY TO CONTRACT
The Company and Executive hereby represent and warrant to the other that:
(a) they have full power and authority to execute this Agreement, and
to perform their respective obligations hereunder;
(b) such execution, delivery and performance will not (and with the
giving of notice or lapse of time or both would not) result in any
breach of any agreements or other obligations to which Executive
or the Company is otherwise bound; and
(c) this Agreement is a valid binding obligation on Executive and the
Company.
12.10 ARBITRATION
Except to the extent necessary for Executive or the Company to enforce
rights under Section 12.9 above or for the Company to enforce its rights
under Section 11 above, any case or controversy arising among the parties
hereto under this Agreement, or the subject matter hereof, shall be
settled by binding arbitration in Stamford, Connecticut under the then
prevailing rules of the American Arbitration Association. The decision of
the arbitrators shall be final and binding and the party against whom the
award is rendered ("the non-prevailing party") shall be specifically
instructed in any such award to pay all reasonable attorney's fees,
disbursements of the prevailing party's legal counsel, arbitration costs,
expenses and filing fees incurred by the prevailing party in the
arbitration proceeding. The American Arbitration Association shall
appoint three (3) arbitrators to preside at the said arbitration
proceeding and the arbitrators will determine in their decision and
award, which is the prevailing party, which is the non-prevailing party,
the amount of the fees and expenses of the prevailing party and the
amount of the arbitration expenses. The arbitrators will render their
award, upon the concurrence of at least two (2) of their number, no later
than thirty (30) days after the conclusion of the arbitration
proceedings. Judgment may be entered on the award of the arbitrators and
may be enforced in any court of competent jurisdiction.
12.11 REMEDIES
All remedies hereunder are cumulative, are in addition to any other
remedies provided by law and may be exercised concurrently or separately,
and the exercise of any one remedy shall not be deemed to be an election
of such remedy exclusively or to preclude the exercise of any other
remedy. No failure or delay in exercising any right or remedy shall
operate as a waiver thereof or modify the terms of this Agreement.
12.12 SURVIVAL
Anything contained in this Agreement to the contrary notwithstanding, the
provisions of Section 10; and Section 11; and Section 12.1; and the other
provisions of this Section 12 (to the extent necessary to effectuate the
survival of Section 12) shall
12
15
survive termination of this Agreement and any termination of Executive's
contract hereunder.
IN WITNESS WHEREOF, this Agreement has been executed and delivered by the
parties hereto as of the date first written above.
BY XXXXX X. XXXXXXX ("Executive")
Executed at __________________________________ on___________________ 2000
____________________________________
XXXXX X. XXXXXXX
BY SAGE GROUP LIMITED, ULTIMATE CONTROLLING SHAREHOLDER OF THE COMPANY.
Executed at __________________________________ on___________________ 2000
____________________________________
CHAIRMAN: H. XXXXX XXXXX
13
16
EXHIBIT A - POSITION DESCRIPTION
TITLES: President & Chief Executive Officer: Sage Life Assurance of
America, Inc.
President & Chief Executive Officer: Sage Insurance Group,
Inc.
Chief Executive Officer: Sage Life (Bermuda) Limited
President & Chief Executive Officer: Sage Life Investment
Trust
President & Chief Executive Officer: Sage Life Assurance
Company of New York
REPORTING LINES: Chairman and Board of Directors: Sage Group Limited and Sage
Life Holdings Limited (South Africa)
Chairman and Board of Directors: all companies ran by
Executive with non-executive board members (currently Sage
Life Assurance of America, Inc., Sage Insurance Group, Inc.,
Sage Life Investment Trust & Sage Life Assurance Company of
New York)
RESPONSIBILITIES AND DUTIES WITH REGARD TO COMPANIES MANAGED BY EXECUTIVE
- Formulating and implementing agreed strategic direction and
business plans
- Managing and motivating executives and staff
- Co-ordinating liaison with Sage South Africa
- Co-ordinating liaison with Swiss Re Life & Health (North America)
and other strategic partners of companies referred to above
14
17
EXHIBIT B - TERMS OF LONG TERM INCENTIVE PLAN
1. Sage Insurance Group Inc. (SIGI) to be recapitalized at March 31, 2000,
to reflect capitalized costs of establishing business (including
permanent investments, acquisition costs, development costs, operating
costs and lost interest).
2. Minimum of 10% equity participation for management and staff in SIGI.
Minimum of 6% of initial capitalization to founding executives: Xxx
Xxxxxx, Xxxxx Xxxxxxx and Xxxxx Xxxxxxx.
3. Founding executives:
3.1. Allocated founding 6% options over two years from April 1, 1999,
initial allocation to be 4% (split to be notified), followed by 2%
balance in April 1, 2000.
3.2. Strike price on all (founding) options to be set at "ground floor"
price (i.e., Sage Group Limited's investment to establish and
capitalize operation, including expenses written off and lost
interest - audited by Ernst & Young).
3.3. Initial 4% allocation starts to vest from March 31, 2000 over a
five year period (in recognition of past service), i.e., 20%
vesting per year, subsequent 2% allocation starts to vest 2 years
after allocation over a five year period.
4. Grants to other staff at strike price based on fair market value of
company, as determined by the external auditors , at the time (but no
less than "ground floor" price used for founding executives), begin
vesting two years after grant over a five year period, i.e., 20% vesting
per year.
5. Exercising options
5.1. Five years to exercise options from date of full and final
vesting, i.e., ten years to exercise from first vesting;
5.2. Partial or whole exercise of vested options at any time before end
of this period.
5.3. A minimum of 50% of shares can be put to the controlling
shareholder at fair market value at end of the tenth year from
when first employed if there is no readily available market for
the shares, balance of 50% to be considered by controlling
shareholder on case-by-case basis.
5.4. Special vesting/exercising rights attach in event of death,
disability or retirement:
a. death: if (1) SIGI still private company, beneficiaries
vest immediately and have up to three years to exercise
options partially or in full; if (2) SIGI is a public
company, beneficiaries vest immediately and have up to one
year to exercise options partially or in full. Shares held
under alternative convertible debenture plan can continue
to vest in terms of plan schedule,
b. disability and retirement: immediate vesting and right to
exercise options immediately or over five years (or balance
of exercise period on options already vested at that time),
c. beneficiary can request company's board to consider
alternative arrangements, board will not unreasonably deny
request unless it would be detrimental to the company.
6. External auditors will determine fair market value where no readily
available market value.
7. Alternative convertible debenture plan to be elected within one year of
grant
15
18
7.1. Company advances loan to participants to fund purchase of
convertible debentures. Debentures convert on same basis as stock
options. Unlike options, conversion (equivalent to option
exercise) is not currently taxable, final disposal of the
resulting stock would currently be subject to normal capital gains
tax rules.
7.2. Interest paid on loan by employee at official tax rate.
7.3. Interest paid on convertible debentures by company at official tax
rate.
8. Initial grants will be in options (or convertible debentures if so
selected by the participant). When additional capital is introduced into
SIGI, participants under the long term incentive plan will be afforded
the opportunity to obtain additional convertible debentures to maintain
their percentage interest in the company held under the long term
incentive plan. The company will provide financing described under 7. to
participants electing to take up the additional convertible debentures.
16
19
EXHIBIT C - BENEFITS
MAJOR MEDICAL - provided by Oxford Health Plans - non-gatekeeper plan - company
pays 75% - employee pays 25% - plan premiums are currently age-based
DENTAL - provided by Guardian Dental Plans - company pays 75% - employee pays
25%
VISION PLAN - US Life - company paid - covers all family members. Covers eye
exam every 2 years and eyeware allowance of $125.00 -
LIFE INSURANCE - 3x annual base salary, paid for by company. First $300,000
currently provided under US Life group policy. Balance provided in the form of
individual policy from Northwestern Mutual Life.
RETIREMENT PLAN - 10.5% company contribution of base annual salary to IRS cap of
considered compensation of $170,000 (or such other compensation limit
established by the IRS). 1 year waiting period - 3 yr. 100% vesting (Principal -
17 Investment Options). 10.5% company contribution on base annual salary in
excess IRS compensation cap - paid into deferred compensation plan (Rabbi
trust), investments self directed through deferred compensation Schwab account.
401(k) SAVINGS - can defer up to IRS cap of $10,500 - no company match.
(Principal - 17 Investment Options)
SHORT TERM DISABILITY - 90 day salary continuance - paid for by the company.
LONG TERM DISABILITY - 90 day elimination period - 70% of base monthly salary to
maximum benefit of $10,000 per month. (Northwestern Mutual Life)
VACATION LEAVE - Officers of company - 4 weeks per annum - accrued monthly -
carry-forwards allowed for extended leave or cash-out. Required to take minimum
of 2 weeks per annum.
CASUAL ABSENCE - 6 days per annum for personal business or casual illness -
accrued monthly - carry forwards allowed
HOLIDAYS - 10 paid holidays per annum - included 1 Floating Holiday to be taken
at the employee's choice
PARKING - Company paid.
17
