EMPLOYMENT AGREEMENT
Exhibit 10.66
EMPLOYMENT AGREEMENT (“Agreement”) dated as of January 8, 2008 between Scottish Holdings, Inc.
(the “Company”) and Xxxxxx Xxxx (the “Employee”) (together, the “Parties”).
WHEREAS, the Parties wish to establish the terms of Employee’s continued employment with
the Company.
Accordingly, the Parties agree as follows:
1. Employment and Acceptance. The Company shall employ the Employee, and Employee
shall accept employment, subject to the terms of this Agreement, on May 1, 2007 (the “Effective
Date”).
2. Term. Subject to earlier termination pursuant to Section 5 of this Agreement, this
Agreement and the employment relationship hereunder shall continue from the Effective Date until
the second anniversary of the Effective Date and shall renew for one (1) year intervals thereafter
unless either party shall have given at least sixty (60) days advanced written notice to the other
that it does not wish to extend the Term. As used in this Agreement, the “Term” shall refer to the
period beginning on the Effective Date and ending on the date the Employee’s employment terminates
in accordance with this Section 2 or Section 5. In the event of the Employee’s termination of
employment during the Term, the Company’s obligation to continue to pay all base salary, as
adjusted, bonus and other benefits then accrued shall terminate except as may be provided for in
Section 5 of this Agreement.
3. Duties and Title.
3.1 Title. The Company shall employ the Employee to render exclusive and full-time services to the Company and its subsidiaries. The Employee shall serve in
the capacity of Chief Restructuring Officer, and shall report solely and directly to the Chief
Executive Officer of the Company. The Employee shall also serve during the Term in executive
positions for one or more of the Company’s subsidiaries and affiliates for no additional
consideration.
3.2 Duties. The Employee will have such authority and responsibilities and will perform such executive duties as are customarily performed by a Chief
Restructuring Officer of a company in similar lines of business as the Company and its subsidiaries
or as may be assigned to Employee by the Chief Executive Officer of the Company. The Employee will
devote all his full working-time and attention to the performance of such duties and to the
promotion of the business and interests of the Company and its subsidiaries.
3.3 Location. The Employee shall perform his full-time services to the Company and its
subsidiaries in the Company’s Charlotte, NC office; provided that the Employee shall be
required to travel as necessary to perform his duties hereunder.
4. Compensation and Benefits by the Company. As compensation for all services rendered
pursuant to this Agreement, the Company shall provide the Employee the following during the Term:
4.1 Base Salary. During the Term, the Company will pay to the
Employee an annual base salary of $350,000, payable in accordance with the customary payroll
practices of the Company. The Employee’s annual base salary shall be reviewed annually and may be
increased by the Company at its discretion during the Term. The Employee’s base salary, as
increased from time to time shall be referred to herein as “Base Salary”.
4.2 Bonuses. During the Term, the Employee shall be eligible to receive an annual
bonus (“Bonus”) under a plan established by the Company in the amount determined by the Board of
Directors of the Company (the “Board”) based upon achievement of performance measures established
by the Company and approved by the Board. The Employee’s target bonus shall be 75% of Base Salary
(the “Target Bonus”).
4.3 Participation in Employee Benefit Plans. The Employee shall be entitled during the
Term, if and to the extent eligible, to participate in all of the applicable benefit plans of the
Company, which may be available to other senior executives of the Company. The Company may at any
time or from time to time amend, modify, suspend or terminate any employee benefit plan, program or
arrangement for any reason without the Employee’s consent if such amendment, modification,
suspension or termination is consistent with the amendment, modification, suspension or termination
for other executives of the Company. Notwithstanding the foregoing, the Employee shall be entitled
to 20 days of vacation for the 2007 calendar year, the carry-over of such vacation days shall be in
accordance with the vacation policy of the Company.
4.4 Equity Compensation. During the Term, the Employee shall
be eligible to participate in an equity incentive compensation plan established by the Company or
an affiliate of the Company (the “Equity Incentive Plan”) pursuant to the terms of the Equity
Incentive Plan and any applicable agreements thereunder as determined from time to time by the
Board.
4.5 Expense Reimbursement. During the Term, the Employee
shall be entitled to receive reimbursement for all appropriate business expenses incurred by him in
connection with his duties under this Agreement in accordance with the policies of the Company as
in effect from time to time.
4.6 Relocation. Should the Employee decide to relocate his
primary residence to Charlotte, N.C., the Company shall (a) reimburse the Employee (on a tax
neutral grossed up basis) for expenses reasonably incurred by the Employee (not to exceed $75,000
in the aggregate) in connection with such relocation, in accordance with the relocation policies of
the Company (the “Relocation Expenses”), and (b) pay to the Employee a one-time relocation bonus of
$25,000. In addition, the Company shall provide the Employee with temporary housing and a rental
car in Charlotte, N.C. and transportation to Charlotte, N.C. through the earlier of November 30,
2007 or such time as the Employee has relocated his primary residence to Charlotte, N.C. If the
Employee has not relocated his primary residence to Charlotte, N.C. by November 30, 2007, the
Company shall reimburse the Employee for his temporary housing starting December 1, 2007, such
reimbursed amounts not to exceed $75,000 in the aggregate (the “Housing Expenses”). In the event
that the Employee relocates his primary residence to Charlotte, N.C. subsequent to December 1,
2007, the Company shall reimburse the Employee for the Relocation Expenses in an amount not to
exceed the difference of $75,000 minus the aggregate amount of Housing Expenses reimbursed by the
Company. For purposes of
- 2 -
this Section 4.6, the Employee shall not be deemed to have relocated his primary residence to
Charlotte, N.C. until such date on which (i) he has sold his previous primary residence in New York
City or (ii) he has purchased a new primary residence in Charlotte, N.C.
5. Termination of Employment.
5.1 By the Company for Cause or by the Employee or Due to Death. If: (i) the
Employee’s employment terminates due to his death; (ii) the Company terminates the Employee’s
employment with the Company for Cause (as defined below) or (iii) the Employee terminates his
employment for any reason, the Employee, or the Employee’s legal representatives (as appropriate),
shall be entitled to receive the following (the “Accrued Benefits”):
(a) the Employee’s accrued but unpaid Base Salary and benefits set forth in Section 4.3, if
any, to the date of termination;
(b) the unpaid portion of the Bonus, if any, relating to the
calendar
year prior to the calendar year of the Employee’s death, termination by the Company for Cause or
by the Employee, payable in accordance with Section 4.2; and
(c) expenses reimbursable under Section 4.5 incurred but not yet reimbursed to the Employee
to the date of termination.
For the purposes of this Agreement, “Cause” means, as determined by the Board (or its
designee), with respect to conduct during the Employee’s employment with the Company, whether or
not committed during the Term, (i) commission of a felony by Employee; (ii) acts of dishonesty by
Employee resulting or intending to result in personal gain or enrichment at the expense of the
Company or its subsidiaries; (iii) Employee’s material breach of his obligations under this
Agreement; (iv) conduct by Employee in connection with his duties hereunder that is fraudulent,
unlawful or grossly negligent; (v) engaging in personal conduct by Employee (including but not
limited to employee harassment or discrimination, the use or possession at work of any illegal
controlled substance) which seriously discredits or damages the Company or its subsidiaries; (vi)
contravention of specific lawful direction from the person or entity to whom the Employee reports
or continuing inattention to or continuing failure to adequately perform the duties to be performed
by Employee under the terms of Section 3.2 of this Agreement or (vii) breach of the Employee’s
covenants set forth in Section 6 below before termination of employment; provided, that, the
Employee shall have fifteen (15) days after notice from the Company to cure the deficiency leading
to the Cause determination (except with respect to (i) above), if curable. A termination for
“Cause” shall be effective immediately (or on such other date set forth by the Company).
5.2 By the Company Without Cause or due to Disability. If during the Term the Company
terminates Employee’s employment without Cause (which may be done at any time without prior notice)
or due to the Employee’s Disability (as defined below), upon execution without revocation of a
valid release agreement in a form reasonably acceptable to the Company, the Employee shall be
entitled to receive:
(a) the Accrued Benefits;
- 3 -
(b) an amount equal to the sum of the Employee’s Base Salary and Target Bonus, payable in a
lump sum, less standard income and payroll tax withholding and other authorized deductions; and
(c) reimbursement of the employer portion of the cost (consistent with the Company’s policy
for active employees) of continuation coverage of group health coverage pursuant to the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”) for twelve (12) months
or such earlier date that the Employee is covered under another group health plan, subject to the
terms of the plans and applicable law.
The Company shall have no obligation to provide the benefits set forth above in the event that
Employee breaches the provisions of Section 6.
For the purposes of this Agreement, “Disability” means a determination by the Company in
accordance with applicable law that as a result of a physical or mental injury or illness, the
Employee is unable to perform the essential functions of his job with or without reasonable
accommodation for a period of (i) ninety (90) consecutive days; or (ii) one hundred eighty (180)
days in any one (1) year period.
5.3 No Mitigation; No Offset. The Employee shall be under no
obligation to seek other employment after his termination of employment with the Company and the
obligations of the Company to the Employee which arise upon the termination of his employment
pursuant to this Section 5 shall not be subject to mitigation or offset.
5.4 Removal from any Boards and Position. If the Employee’s
employment is terminated for any reason under this Agreement, he shall be deemed to resign (i) if a
member, from the Board or board of directors of any subsidiary of the Company or any other board to
which he has been appointed or nominated by or on behalf of the Company and (ii) from any position
with the Company or any subsidiary of the Company, including, but not limited to, as an officer of
the Company and any of its subsidiaries.
5.5 Nondisparagement. The Employee agrees that he will not at any time (whether during
or after the Term) publish or communicate to any person or entity any Disparaging (as defined
below) remarks, comments or statements concerning the Company, its parents, subsidiaries and
affiliates, and their respective present and former members, partners, directors, officers,
shareholders, employees, agents, attorneys, successors and assigns. “Disparaging” remarks, comments
or statements are those that impugn the character, honesty, integrity or morality or business
acumen or abilities in connection with any aspect of the operation of business of the individual or
entity being disparaged.
6. Restrictions and Obligations of the Employee.
6.1 Confidentiality. (a) During the course of the Employee’s
employment by the Company (prior to and during the Term), the Employee has had and will have access
to certain trade secrets and confidential information relating to the Company and its subsidiaries
(the “Protected Parties”) which is not readily available from sources outside the Company. The
confidential and proprietary information and, in any material respect, trade secrets of the
Protected Parties are among their most valuable assets, including but not limited to, their
customer, supplier and vendor lists, databases, competitive strategies, computer programs,
- 4 -
frameworks, or models, their marketing programs, their sales, financial, marketing, training and
technical information, their product development (and proprietary product data) and any other
information, whether communicated orally, electronically, in writing or in other tangible forms
concerning how the Protected Parties create, develop, acquire or maintain their products and
marketing plans, target their potential customers and operate their retail and other businesses.
The Protected Parties invested, and continue to invest, considerable amounts of time and money in
their process, technology, know-how, obtaining and developing the goodwill of their customers,
their other external relationships, their data systems and data bases, and all the information
described above (hereinafter collectively referred to as “Confidential Information”), and any
misappropriation or unauthorized disclosure of Confidential Information in any form would
irreparably harm the Protected Parties. The Employee acknowledges that such Confidential
Information constitutes valuable, highly confidential, special and unique property of the Protected
Parties. The Employee shall hold in a fiduciary capacity for the benefit of the Protected Parties
all Confidential Information relating to the Protected Parties and their businesses, which shall
have been obtained by the Employee during the Employee’s employment by the Company or its
subsidiaries and which shall not be or become public knowledge (other than by acts by the Employee
or representatives of the Employee in violation of this Agreement). Except as required by law or an
order of a court or governmental agency with jurisdiction, the Employee shall not, during the
period the Employee is employed by the Company or its subsidiaries or at any time thereafter,
disclose any Confidential Information, directly or indirectly, to any person or entity for any
reason or purpose whatsoever, nor shall the Employee use it in any way, except in the course of the
Employee’s employment with, and for the benefit of, the Protected Parties or to enforce any rights
or defend any claims hereunder or under any other agreement to which the Employee is a party,
provided that such disclosure is relevant to the enforcement of such rights or defense of such
claims and is only disclosed in the formal proceedings related thereto. The Employee shall take all
reasonable steps to safeguard the Confidential Information and to protect it against disclosure,
misuse, espionage, loss and theft. The Employee understands and agrees that the Employee shall
acquire no rights to any such Confidential Information.
(b) All files, records, documents, drawings, specifications, data, computer programs,
evaluation mechanisms and analytics and similar items relating thereto or to the Business (for the
purposes of this Agreement, “Business” shall be as defined in Section 6.3 hereof), as well as all
customer lists, specific customer information, compilations of product research and marketing
techniques of the Company and its subsidiaries, whether prepared by the Employee or otherwise
coming into the Employee’s possession, shall remain the exclusive property of the Company and its
subsidiaries, and the Employee shall not remove any such items from the premises of the Company and
its subsidiaries, except in furtherance of the Employee’s duties under any employment agreement.
(c) It is understood that while employed by the Company or its
subsidiaries, the Employee will promptly disclose to it, and assign to it the Employee’s interest
in any invention, improvement or discovery made or conceived by the Employee, either alone or
jointly with others, which arises out of the Employee’s employment. At the Company’s request and
expense, the Employee will assist the Company and its subsidiaries during the period of the
Employee’s employment by the Company or its subsidiaries and thereafter in connection with any
controversy or legal proceeding relating to such invention, improvement or discovery and in
obtaining domestic and foreign patent or other protection covering the same.
- 5 -
(d) As requested by the Company and at the Company’s expense, from time
to time and upon the termination of the Employee’s employment with the Company for any reason, the
Employee will promptly deliver to the Company and its subsidiaries all copies and embodiments, in
whatever form, of all Confidential Information in the Employee’s possession or within his control
(including, but not limited to, memoranda, records, notes, plans, photographs, manuals, notebooks,
documentation, program listings, flow charts, magnetic media, disks, diskettes, tapes and all other
materials containing any Confidential Information) irrespective of the location or form of such
material. If requested by the Company, the Employee will provide the Company with written
confirmation that all such materials have been delivered to the Company as provided herein.
6.2 Non-Solicitation or Hire. During the Term and for a period of twelve (12) months
following the termination of the Employee’s employment for any reason, the Employee shall not
directly or indirectly solicit or attempt to solicit or induce, directly or indirectly, (a) any
party who is a customer of the Company or its subsidiaries, or who was a customer of the Company or
its subsidiaries at any time during the twelve (12) month period immediately prior to the date the
Employee’s employment terminates, for the purpose of marketing, selling or providing to any such
party any services or products offered by or available from the Company or its subsidiaries
(provided that if the Employee intends to solicit any such party for any other purpose, he shall
notify the Company of such intention and receive prior written approval from the Company), (b) any
supplier to or customer or client of the Company or any subsidiary to terminate, reduce or alter
negatively its relationship with the Company or any subsidiary or in any manner interfere with any
agreement or contract between the Company or any subsidiary and such supplier, customer or client
or (c) any employee of the Company or any of its subsidiaries or any person who was an employee of
the Company or any of its subsidiaries during the twelve (12) month period immediately prior to the
date the Employee’s employment terminates to terminate such employee’s employment relationship with
the Protected Parties in order, in either case, to enter into a similar relationship with the
Employee, or any other person or any entity in competition with the Business of the Company or any
of its subsidiaries.
6.3 Non-Competition. During the Term and for a period of twelve (12) months following the
termination of Employee’s employment by the Company (for any reason), the Employee shall not,
whether individually, as a director, manager, member, stockholder, partner, owner, employee,
consultant or agent of any business, or in any other capacity, other than on behalf of the Company
or a subsidiary, organize, establish, own, operate, manage, control, engage in, participate in,
invest in, permit his name to be used by, act as a consultant or advisor to, render services for
(alone or in association with any person, firm, corporation or business organization), or otherwise
assist any person or entity that engages in or owns, invests in, operates, manages or controls any
venture or enterprise which engages or proposes to engage in the reinsurance business or any other
business conducted by the Company or any of its subsidiaries on the date of the Employee’s
termination of employment or within twelve (12) months of the Employee’s termination of employment
in the geographic locations where the Company and its subsidiaries engage or propose to engage in
such business (the “Business”). Notwithstanding the foregoing, nothing in this Agreement shall
prevent the Employee from owning for passive investment purposes not intended to circumvent this
Agreement, less than five percent (5%) of the publicly traded common equity securities of any
company engaged in the Business (so long as the Employee has no power to manage, operate, advise,
consult with or control the competing enterprise and no power, alone or in conjunction
- 6 -
with other affiliated parties, to select a director, manager, general partner, or similar governing
official of the competing enterprise other than in connection with the normal and customary voting
powers afforded the Employee in connection with any permissible equity ownership).
6.4 Property. The Employee acknowledges that all originals and
copies of materials, records and documents generated by him or coming into his possession during
his employment by the Company or its subsidiaries are the sole property of the Company and its
subsidiaries (“Company Property”). During the Term, and at all times thereafter, the Employee shall
not remove, or cause to be removed, from the premises of the Company or its subsidiaries, copies of
any record, file, memorandum, document, computer related information or equipment, or any other
item relating to the business of the Company or its subsidiaries, except in furtherance of his
duties under the Agreement. When the Employee’s employment with the Company terminates, or upon
request of the Company at any time, the Employee shall promptly deliver to the Company all copies
of Company Property in his possession or control.
7. Remedies; Specific Performance. The Parties acknowledge and agree that the
Employee’s breach or threatened breach of any of the restrictions set forth in Section 6 will
result in irreparable and continuing damage to the Protected Parties for which there may be no
adequate remedy at law and that the Protected Parties shall be entitled to equitable relief,
including specific performance and injunctive relief as remedies for any such breach or threatened
or attempted breach. The Employee hereby consents to the grant of an injunction (temporary or
otherwise) against the Employee or the entry of any other court order against the Employee
prohibiting and enjoining him from violating, or directing him to comply with any provision of
Section 6. The Employee also agrees that such remedies shall be in addition to any and all
remedies, including damages, available to the Protected Parties against him for such breaches or
threatened or attempted breaches. In addition, without limiting the Protected Parties’ remedies for
any breach of any restriction on the Employee set forth in Section 6, except as required by law,
the Employee shall not be entitled to any payments set forth in Section 5.2 hereof if the Employee
has breached the covenants applicable to the Employee contained in Section 6, the Employee will
immediately return to the Protected Parties any such payments previously received under Section 5.2
upon such a breach, and, in the event of such breach, the Protected Parties will have no obligation
to pay any of the amounts that remain payable by the Company under Section 5.2.
8. Other Provisions.
8.1 Notices. Any notice or other communication required or which
may be given hereunder shall be in writing and shall be delivered personally, telegraphed, telexed,
sent by facsimile transmission or sent by certified, registered or express mail, postage prepaid or
overnight mail and shall be deemed given when so delivered personally, telegraphed, telexed, or
sent by facsimile transmission or, if mailed, four (4) days after the date of mailing or one (1)
day after overnight mail, as follows:
(a) If the Company, to:
Scottish Holdings, Inc.
00000 Xxxxxxxxxx Xxxxxxxxx Xxxxx,
Xxxxx 000
Xxxxxxxxx, XX 00000
00000 Xxxxxxxxxx Xxxxxxxxx Xxxxx,
Xxxxx 000
Xxxxxxxxx, XX 00000
- 7 -
Attention: General Counsel
Telephone:
Fax:
Telephone:
Fax:
(b) If the Employee, to the Employee’s home address reflected in the Company’s records.
8.2 Entire Agreement. This Agreement contains the entire
agreement between the Parties with respect to the subject matter hereof and supersedes all prior
agreements, written or oral, with respect thereto.
8.3 Representations and Warranties by Employee. The Employee represents and warrants
that he is not a party to or subject to any restrictive covenants, legal restrictions or other
agreements in favor of any entity or person which would in any way preclude, inhibit, impair or
limit the Employee’s ability to perform his obligations under this Agreement, including, but not
limited to, non-competition agreements, non-solicitation agreements or confidentiality agreements.
8.4 Waiver_and Amendments. This Agreement may be amended, modified, superseded,
canceled, renewed or extended, and the terms and conditions hereof may be waived, only by a written
instrument signed by the Parties or, in the case of a waiver, by the party waiving compliance. No
delay on the part of any party in exercising any right, power or privilege hereunder shall operate
as a waiver thereof, nor shall any waiver on the part of any right, power or privilege hereunder,
nor any single or partial exercise of any right, power or privilege hereunder, preclude any other
or further exercise thereof or the exercise of any other right, power or privilege hereunder.
8.5 Governing Law, Dispute Resolution and Venue.
(a) This Agreement shall be governed and construed in accordance
with the laws of the State of New York applicable to agreements made and not to be performed
entirely within such state, without regard to conflicts of laws principles.
(b) The parties agree irrevocably to submit to the exclusive
jurisdiction of the federal courts or, if no federal jurisdiction exists, the state courts,
located in the City of New York, Borough of Manhattan, for the purposes of any suit, action or
other proceeding brought by any party arising out of any breach of any of the provisions of this
Agreement and hereby waive, and agree not to assert by way of motion, as a defense or otherwise,
in any such suit, action, or proceeding, any claim that it is not personally subject to the
jurisdiction of the above-named courts, that the suit, action or proceeding is brought in an
inconvenient forum, that the venue of the suit, action or proceeding is improper, or that the
provisions of this Agreement may not be enforced in or by such courts. In addition, the parties
agree to waive trial by jury.
8.6
Assignability by the Company and the Employee. This
Agreement, and the rights and obligations hereunder, may not be assigned by the Company or the
Employee without written consent signed by the other party; provided that the Company may assign
the Agreement to any successor that continues the business of the Company.
- 8 -
8.7 Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original but all of which shall constitute one and
the same instrument.
8.8 Headings. The headings in this Agreement are for convenience of reference only and
shall not limit or otherwise affect the meaning of terms contained herein.
8.9 Severability. If any term, provision, covenant or restriction of this Agreement,
or any part thereof, is held by a court of competent jurisdiction of any foreign, federal, state,
county or local government or any other governmental, regulatory or administrative agency or
authority to be invalid, void, unenforceable or against public policy for any reason, the remainder
of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force
and effect and shall in no way be affected or impaired or invalidated. The Employee acknowledges
that the restrictive covenants contained in Section 6 are a condition of this Agreement and are
reasonable and valid in temporal scope and in all other respects.
8.10 Judicial Modification. If any court determines that any of the covenants in
Section 6, or any part of any of them, is invalid or unenforceable, the remainder of such covenants
and parts thereof shall not thereby be affected and shall be given full effect, without regard to
the invalid portion. If any court determines that any of such covenants, or any part thereof, is
invalid or unenforceable because of the geographic or temporal scope of such provision, such court
shall reduce such scope to the minimum extent necessary to make such covenants valid and
enforceable.
8.11 Tax Withholding. The Company or other payor is authorized to withhold from any
benefit provided or payment due hereunder, the amount of withholding taxes due any federal, state
or local authority in respect of such benefit or payment and to take such other action as may be
necessary in the opinion of the Board to satisfy all obligations for the payment of such
withholding taxes.
- 9 -
IN WITNESS WHEREOF, the Parties hereto, intending to be legally bound hereby, have executed
this Agreement as of the day and year first above mentioned.
| EMPLOYEE |
||||
| /s/ Xxxxxx Xxxx | ||||
| Xxxxxx Xxxx | ||||
| SCOTTISH HOLDINGS, INC. |
||||
| By: | /s/ Xxxxx Xxxxxxxx | |||
| Name: | Xxxxx Xxxxxxxx | |||
| Title: | Chief Executive Officer | |||
- 10 -
